Document:

Exhibit 10(a)

INDEPENDENT AUDITORS' CONSENT

We  consent  to the  incorporation  by  reference  in this  Amendment  No. 14 to
Registration  Statement No. 811-7885 under the Investment Company Act of 1940 of
Quantitative  Master  Series Trust (the  "Trust") on Form N-1A of our reports on
each  Series  (each a portfolio  constituting  the Trust) and on each Fund (each
Fund is a part of Merrill Lynch Index Funds,  Inc.) listed  below,  appearing in
the  December  31,  2003  Annual  Reports  of the  respective  Funds,  which are
incorporated in Part B of this Registration Statement.

Name                                                          Date of our Report
----                                                          ------------------

Merrill Lynch S&P 500 Index Fund                              February 13, 2004
Master S&P 500 Index Series                                   February 13, 2004
Merrill Lynch Small Cap Index Fund                            February 13, 2004
Master Small Cap Index Series                                 February 13, 2004
Merrill Lynch Aggregate Bond Index Fund                       February 13, 2004
Master Aggregate Bond Index Series                            February 13, 2004
Merrill Lynch International Index Fund                        February 13, 2004
Master International Index Series                             February 13, 2004

We also consent to the incorporation by reference in this Registration Statement
of our reports on each Series listed below,  which are incorporated in Part B of
this Registration Statement.

Name                                                          Date of our Report
----                                                          ------------------

Master Mid Cap Index Series                                   February 13, 2004
Master Extended Market Index Series                           February 13, 2004
Master Enhanced S&P 500 Series                                February 20, 2004
Master Enhanced Small Cap Series                              February 20, 2004
Master Enhanced International Series                          February 20, 2004

/s/ Deloitte & Touche LLP.

Princeton, New Jersey
April 27, 2004Exhibit 10(b)

                       CONSENT OF SHEARMAN & STERLING LLP

      We hereby consent to the reference to our firm included in Part A and Part
B of Amendment No. 14 to the Registration Statement on Form N-1A (811-7885) of
Quantitative Master Series Trust.

                                                     /s/ Shearman & Sterling LLP
                                                     ---------------------------
                                                         Shearman & Sterling LLP

New York, New York
April 28, 2004<PAGE>

                                                                    EXHIBIT 4.07

================================================================================

                                CREDIT AGREEMENT
                                      among

                       FLEXTRONICS INTERNATIONAL LTD. and
                              DESIGNATED BORROWERS
                                       and

                            THE LENDERS NAMED HEREIN
                                       and

                               ABN AMRO BANK N.V.,
            as Co-Lead Arranger, Bookrunner and Agent for the Lenders
                                       and

                              FLEET NATIONAL BANK,
             as Co-Lead Arranger, Syndication Agent and Issuing Bank
                                       and

                               CITICORP USA, INC.,
           DEUTSCHE BANC SECURITIES INC., CREDIT SUISSE FIRST BOSTON,
                    BANK OF AMERICA, N.A., and SCOTIA CAPITAL
                            as Co-Syndication Agents
                                       and

                  BNP PARIBAS and KEYBANK NATIONAL ASSOCIATION
                            as Senior Managing Agents
                                       and

               LEHMAN COMMERCIAL PAPER INC., ROYAL BANK OF CANADA,
                     HSBC BANK USA, UBS AG, STAMFORD BRANCH
                               as Managing Agents
                                  March 3, 2004

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                     PAGE
<S>                                                                                                                  <C>
SECTION I.     INTERPRETATION................................................................................          2

      1.01.    Definitions...................................................................................          2

      1.02.    GAAP..........................................................................................         17

      1.03.    Headings......................................................................................         18

      1.04.    Plural Terms..................................................................................         18

      1.05.    Governing Law.................................................................................         18

      1.06.    English Language..............................................................................         18

      1.07.    Construction..................................................................................         18

      1.08.    Entire Agreement..............................................................................         18

      1.09.    Calculation of Interest and Fees..............................................................         18

      1.10.    References....................................................................................         18

      1.11.    Other Interpretive Provisions.................................................................         19

SECTION II.    CREDIT FACILITIES.............................................................................         19

      2.01.    Loans and Letters of Credit...................................................................         19

      2.02.    Notice of Borrowing...........................................................................         24

      2.03.    Interest......................................................................................         24

      2.04.    Purpose.......................................................................................         26

      2.05.    Amount Limitations, Commitment Reductions, Etc................................................         26

      2.06.    Fees..........................................................................................         26

      2.07.    Prepayments...................................................................................         27

      2.08.    Other Payment Terms...........................................................................         28

      2.09.    Loan Accounts; Notes..........................................................................         29

      2.10.    Loan Funding..................................................................................         30

      2.11.    Pro Rata Treatment............................................................................         30

      2.12.    Change of Circumstances.......................................................................         31

      2.13.    Taxes on Payments.............................................................................         33

      2.14.    Funding Loss Indemnification..................................................................         35

      2.15.    Security......................................................................................         35

      2.16.    Replacement of Lenders........................................................................         36

SECTION III.   CONDITIONS PRECEDENT..........................................................................         36

      3.01.    Initial Conditions Precedent..................................................................         36

      3.02.    Conditions Precedent to Each Credit Event.....................................................         37

      3.03.    Covenant to Deliver...........................................................................         37

      3.04.    Conditions Precedent to Adding Designated Borrower............................................         37

SECTION IV.    REPRESENTATIONS AND WARRANTIES................................................................         37

      4.01.    Borrowers' Representations and Warranties.....................................................         37
</TABLE>

                                       i

<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                                     PAGE
<S>                                                                                                                  <C>
      4.02.    Reaffirmation.................................................................................         42

SECTION V.     COVENANTS.....................................................................................         42

      5.01.    Affirmative Covenants.........................................................................         42

      5.02.    Negative Covenants............................................................................         45

      5.03.    Financial Covenants...........................................................................         50

SECTION VI.    DEFAULT.......................................................................................         51

      6.01.    Events of Default.............................................................................         51

      6.02.    Remedies......................................................................................         53

      6.03.    Lender Rate Contract Remedies.................................................................         53

SECTION VII.   THE AGENT AND RELATIONS AMONG LENDERS.........................................................         53

      7.01.    Appointment, Powers and Immunities............................................................         53

      7.02.    Reliance by Agent.............................................................................         54

      7.03.    Defaults......................................................................................         54

      7.04.    Indemnification...............................................................................         54

      7.05.    Non-Reliance..................................................................................         54

      7.06.    Resignation or Removal of Agent...............................................................         55

      7.07.    Agent in its Individual Capacity..............................................................         55

      7.08.    Co-Arrangers, Co-Syndication Agents, Senior Managing Agents Managing Agents and
                  Documentation Agent........................................................................         55

SECTION VIII.  MISCELLANEOUS.................................................................................         55

      8.01.    Notices.......................................................................................         55

      8.02.    Expenses......................................................................................         57

      8.03.    Indemnification...............................................................................         57

      8.04.    Waivers; Amendments...........................................................................         57

      8.05.    Successors and Assigns........................................................................         58

      8.06.    Set-off; Security Interest....................................................................         60

      8.07.    No Third Party Rights.........................................................................         61

      8.08.    Partial Invalidity............................................................................         61

      8.09.    Jury Trial....................................................................................         61

      8.10.    Counterparts..................................................................................         61

      8.11.    Borrowers' Liabilities........................................................................         61

      8.12.    Confidentiality...............................................................................         61

      8.13.    Consent to Jurisdiction.......................................................................         61

      8.14.    Usury.........................................................................................         62

      8.15.    Hong Kong Branch; Full Recourse Obligations...................................................         62
</TABLE>

                                       ii

<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                                                     PAGE
<S>                                                                                                                  <C>
EXHIBITS

A        Notice of Borrowing

B        Form of Note

C        Form of Guaranty

D        Form of Assignment Agreement
</TABLE>

                                       iii

<PAGE>

                                CREDIT AGREEMENT

         THIS CREDIT AGREEMENT, dated as of March 3, 2004, is entered into by
and among:

                  (1)      FLEXTRONICS INTERNATIONAL LTD., a Singapore
         corporation ("FIL") acting, subject to Paragraph 8.15 hereof, through
         its Hong Kong branch, and each of the Subsidiaries of FIL designated as
         borrowers from time to time, as approved by each Lender (as defined
         below), the Issuing Bank and Guarantors hereunder (such subsidiaries to
         be referred to herein collectively as "Designated Borrowers");

                  (2)      Each of the financial institutions from time to time
         listed in Schedule I hereto, as amended from time to time (such
         financial institutions to be referred to herein collectively as the
         "Lenders");

                  (3)      ABN AMRO BANK N.V. ("ABN AMRO"), as administrative
         agent for the Lenders (in such capacity, "Agent") and as sole
         bookrunner (in such capacity, the "Bookrunner");

                  (4)      ABN AMRO and FLEET NATIONAL BANK, as co-lead
         arrangers (collectively, in such capacity, the "Co-Arrangers");

                  (5)      DEUTSCHE BANK SECURITIES INC., BANK OF AMERICA, N.A.,
         CITICORP USA, INC., CREDIT SUISSE FIRST BOSTON and SCOTIA CAPITAL as
         co-syndication agents (collectively, in such capacity, the
         "Co-Syndication Agents");

                  (6)      BNP PARIBAS and KEYBANK NATIONAL ASSOCIATION, as
         senior managing agents (collectively, in such capacity, the "Senior
         Managing Agents");

                  (7)      LEHMAN COMMERCIAL PAPER INC., UBS AG, STAMFORD
         BRANCH, HSBC BANK USA and ROYAL BANK OF CANADA as managing agents
         (collectively, in such capacity, the "Managing Agents");

                  (8)      FLEET NATIONAL BANK, as documentation agent (in such
         capacity, the "Documentation Agent"); and

                  (9)      FLEET NATIONAL BANK, as the issuer of letters of
         credit hereunder, (in such capacity, the "Issuing Bank").

                                    RECITALS

         A.       FIL has requested Lenders to provide certain credit facilities
to FIL and Designated Borrowers (collectively, "Borrowers").

         B.       Lenders are willing to provide such credit facilities upon the
terms and subject to the conditions set forth herein.

                                    AGREEMENT

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

<PAGE>

SECTION I. INTERPRETATION.

         1.01.    Definitions. Unless otherwise indicated in this Agreement or
any other Credit Document, each term set forth below, when used in this
Agreement or any other Credit Document, shall have the respective meaning given
to that term below or in the provision of this Agreement or other document,
instrument or agreement referenced below.

                  "ABN AMRO" shall have the meaning given to that term in clause
         (3) of the introductory paragraph hereof.

                  "Affiliate" shall mean, with respect to any Person, each other
         Person that (a) directly or indirectly, owns or controls, whether
         beneficially or as a trustee, guardian or other fiduciary, ten percent
         (10%) or more of any class of Equity Securities of such Person or (b)
         that controls, is controlled by or is under common control with such
         Person or any Affiliate of such Person; provided, however, that in no
         case shall Agent or any Lender be deemed to be an Affiliate of any
         Borrower or any of FIL's Subsidiaries for purposes of this Agreement.
         For the purpose of this definition, "control" of a Person shall mean
         the possession, directly or indirectly, of the power to direct or cause
         the direction of its management or policies, whether through the
         ownership of voting securities, by contract or otherwise.

                  "Agent" shall have the meaning given to that term in clause
         (3) of the introductory paragraph hereof.

                  "Agent's Fee Letter" shall mean the fee letter agreement dated
         as of January 20, 2004 between FIL and Agent.

                  "Agent's Fees" shall have the meaning given to that term in
         Subparagraph 2.06(a) hereof.

                  "Agreement" shall mean this Credit Agreement.

                  "Alternative Currency" shall mean any Currency (other than
         United States Dollars).

                  "Applicable Lending Office" shall mean, with respect to any
         Lender and any Borrowing, such Lender's Lending Office.

                  "Applicable Margin" shall mean, with respect to any Borrowing
         at any time, the per annum margin which is determined pursuant to the
         Pricing Grid and added to the Base Rate or LIBO Rate, as the case may
         be, for such Borrowing; provided, however, that the Applicable Margin
         determined pursuant to the Pricing Grid shall be increased by two
         percent (2.00%) per annum on the date an Event of Default occurs and
         shall continue at such increased rate unless and until such Event of
         Default is cured or waived in accordance with this Agreement. The
         Applicable Margin shall be determined as provided in the Pricing Grid
         (subject to the proviso in the preceding sentence) and may change as
         provided in the Pricing Grid.

                  "Applicable Payment Office" shall have the meaning given to
         that term in Subparagraph 2.13(b).

                  "Applicable Rate Page" shall mean, with respect to any
         Currency at any time, the applicable Telerate Page on which appears the
         London Interbank Offered Rate for deposits in such currency at such
         time or, if no such page is then available, the applicable Reuters
         Screen Page on which such information then appears.

                  "Approved Fund" shall mean any Fund that is administered or
         managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity
         or an Affiliate of an entity that administers or manages a Lender.

                  "Assignee Lender" shall have the meaning given to that term in
         Subparagraph 8.05(c) hereof.

                  "Assignment" shall have the meaning given to that term in
         Subparagraph 8.05(c) hereof.

                                       2

<PAGE>

                  "Assignment and Assumption" shall have the meaning given to
         that term in Subparagraph 8.05(c) hereof.

                  "Assignment Effective Date" shall have, with respect to each
         Assignment and Assumption, the meaning set forth therein.

                  "Assignor Lender" shall have the meaning given to that term in
         Subparagraph 8.05(c) hereof.

                  "Base Rate" shall mean, on any day, the greater of (a) the
         Prime Rate in effect on such date and (b) the Federal Funds Rate for
         such day plus one-half of one percent (0.50%).

                  "Base Rate Borrowing" shall mean any Borrowing consisting of
         Base Rate Loans.

                  "Base Rate Loan" shall mean any Loan bearing interest based
         upon the Base Rate.

                  "Borrowers" shall have the meaning given to that term in
         Recital A.

                  "Borrowing" shall mean a borrowing consisting of all the Loans
         of the same Currency and Type (and same Interest Period if LIBOR Loans)
         made, converted or continued by Lenders on the same date. Any reference
         to a Borrowing shall include all the Loans constituting such Borrowing.

                  "Business Day" shall mean any day on which commercial banks
         are not authorized or required to close in San Francisco, California,
         New York, New York, or Chicago, Illinois, other than Saturday or
         Sunday, and (a) if such Business Day is related to a Borrowing in
         United States Dollars, dealings in Dollar deposits are carried out in
         the London interbank market and commercial banks are open for business
         in London or (b) if such Business Day is related to a Borrowing in an
         Alternative Currency, dealings in such Currency are carried out in the
         London interbank market and commercial banks are open for business in
         London.

                  "Capital Adequacy Requirement" shall have the meaning given to
         that term in Subparagraph 2.12(d) hereof.

                  "Capital Leases" shall mean any and all lease obligations
         that, in accordance with GAAP, are required to be capitalized on the
         books of a lessee.

                  "Change of Control" shall mean, with respect to FIL, (i) the
         acquisition after the date hereof by any person or group of persons
         (within the meaning of Section 13 or 14 of the Securities Exchange Act
         of 1934 (as amended, the "Exchange Act")) of (A) beneficial ownership
         (within the meaning of Rule 13d-3 promulgated by the Securities and
         Exchange Commission under the Exchange Act) of fifty percent (50%) or
         more of the outstanding Equity Securities of FIL entitled to vote for
         members of the board of directors, or (B) all or substantially all of
         the assets of FIL; (ii) during any period of twelve (12) consecutive
         calendar months, individuals who are directors of FIL on the first day
         of such period ("Initial Directors") and any directors of FIL who are
         specifically approved by two-thirds of the Initial Directors and
         previously-approved Directors shall cease to constitute a majority of
         the Board of Directors of FIL before the end of such period; or (iii)
         any other event or condition constituting a "Change of Control" (or
         similar defined term) under any Subordinated Indenture shall occur or
         exist.

                  "Change of Law" shall have the meaning given to that term in
         Subparagraph 2.12(b) hereof.

                  "Closing Date" shall mean March 3, 2004.

                  "Co-Arrangers" shall have the meaning given to that term in
         clause (4) of the introductory paragraph hereof.

                                       3

<PAGE>

                  "Combined Commitment" shall mean, with respect to any Lender
         under this Agreement at any time, the sum of (a) such Lender's
         Commitment at such time and (b) such Lender's "Commitment" as defined
         in the FIUI Credit Agreement at such time.

                  "Combined Proportionate Share" shall mean:

                           (a)      With respect to any Lender under this
                  Agreement or under the FIUI Credit Agreement at any time prior
                  to the termination of the Commitments, the ratio (expressed as
                  a percentage rounded to the eighth digit to the right of the
                  decimal point) of (i) such Lender's Combined Commitment at
                  such time to (ii) the Combined Total Commitment at such time;
                  and

                           (b)      With respect to any Lender under this
                  Agreement or under the FIUI Credit Agreement at any time after
                  the termination of the Commitments, the ratio (expressed as a
                  percentage rounded to the eighth digit to the right of the
                  decimal point) of (i) the sum at such time of (A) the
                  aggregate principal amount of all Loans owed to such Lender
                  and outstanding at such time under this Agreement, (B) such
                  Lender's pro rata share of the aggregate amount available for
                  drawing under all Letters of Credit outstanding at such time
                  under this Agreement, (C) such Lender's pro rata share of the
                  aggregate amount of all Reimbursement Obligations outstanding
                  at such time under this Agreement, (D) the aggregate principal
                  amount of all Loans owed to such Lender and outstanding at
                  such time under the FIUI Credit Agreement, (E) such Lender's
                  pro rata share of the aggregate amount available for drawing
                  under all Letters of Credit outstanding at such time under the
                  FIUI Credit Agreement and (F) such Lender's pro rata share of
                  the aggregate amount of all Reimbursement Obligations
                  outstanding at such time under the FIUI Credit Agreement to
                  (ii) the sum at such time of (A) the aggregate principal
                  amount of all Loans outstanding at such time under this
                  Agreement, (B) the aggregate amount available for drawing
                  under all Letters of Credit outstanding at such time under
                  this Agreement, (C) the aggregate amount of all Reimbursement
                  Obligations outstanding at such time under this Agreement, (D)
                  the aggregate principal amount of all Loans outstanding at
                  such time under the FIUI Credit Agreement, (E) the aggregate
                  amount available for drawing under all Letters of Credit
                  outstanding at such time under the FIUI Credit Agreement and
                  (F) the aggregate amount of all Reimbursement Obligations
                  outstanding at such time under the FIUI Credit Agreement.

                  "Combined Total Commitment" shall mean the sum of (a) the
         Total Commitment and (b) the "Total Commitment" as defined in the FIUI
         Credit Agreement.

                  "Combined Required Lenders" shall mean, at any time, Lenders
         under this Agreement and Lenders under the FIUI Credit Agreement whose
         Combined Proportionate Shares equal or exceed fifty-one percent (51%)
         at such time, except at any time any Lender under this Agreement or
         under the FIUI Credit Agreement is a Defaulting Lender. (For the
         purposes of determining "Required Lenders" at any time any Lender is a
         Defaulting Lender, the "Combined Proportionate Shares" of
         non-defaulting Lenders shall be determined excluding from the
         Commitment the aggregate amounts of the Defaulting Lenders'
         Commitments; and "Combined Required Lenders" shall mean non-defaulting
         Lenders whose Combined Proportionate Shares as so determined then equal
         or exceed fifty-one percent (51%).)

                  "Commitment" shall mean, with respect to each Lender, the
         Dollar amount set forth under the caption "Commitment" opposite such
         Lender's name on Part A of Schedule I, or, if changed, such Dollar
         amount as may be set forth for such Lender in the Register.

                  "Commitment Fees" shall have the meaning given to that term in
         Subparagraph 2.06(b) hereof.

                  "Commitment Fee Percentage" shall mean the per annum
         percentage which is used to calculate the Commitment Fees. The
         Commitment Fee Percentage shall be determined as provided in the
         Pricing Grid and may change as provided in the Pricing Grid.

                                       4

<PAGE>

                  "Commitment Letter" shall mean the commitment letter agreement
         dated as of January 20, 2004 between FIL and ABN AMRO.

                  "Compliance Certificate" shall have the meaning given to that
         term in Subparagraph 5.01(a)(iii) hereof.

                  "Consolidated Tangible Assets" shall mean, with respect to
         FIL, the aggregate amount of assets (determined on a consolidated basis
         and in accordance with GAAP) after deducting therefrom all goodwill,
         trade names, trademarks, patents, licenses, unamortized debt discount
         and expense, treasury stock and other like intangibles (in each case,
         determined on a consolidated basis and in accordance with GAAP).

                  "Contingent Obligation" shall mean, without duplication, with
         respect to any Person, (a) any Guaranty Obligation of that Person and
         (b) any direct or indirect obligation or liability, contingent or
         otherwise, of that Person (i) in respect of any Surety Instrument
         issued for the account of that Person or as to which that Person is
         otherwise liable for reimbursement of drawings or payments or (ii) in
         respect to any Rate Contract that is not entered into in connection
         with a bona fide hedging operation that provides offsetting benefits to
         such Person. The amount of any Contingent Obligation shall (subject, in
         the case of Guaranty Obligations, to the last sentence of the
         definition of "Guaranty Obligation") be deemed equal to the maximum
         reasonably anticipated liability in respect thereof (subject to
         reduction as the underlying liability so guaranteed is reduced from
         time to time), and shall, with respect to item (b)(ii) of this
         definition, be marked to market on a current basis.

                  "Contractual Obligation" of any Person shall mean, any
         indenture, note, lease, loan agreement, security, deed of trust,
         mortgage, security agreement, guaranty, instrument, contract, agreement
         or other form of contractual obligation or undertaking to which such
         Person is a party or by which such Person or any of its property is
         bound.

                  "Co-Syndication Agents" shall have the meaning given to that
         term in clause (5) of the introductory paragraph hereof.

                  "Credit Documents" shall mean and include this Agreement, the
         LC Applications, the Notes, the Security Documents, the Agent's Fee
         Letter, the FIUI Credit Documents, all other documents, instruments and
         agreements delivered to the Agent pursuant to Section III hereof and
         all other documents, instruments and agreements delivered by any
         Borrower, any Guarantor or any of FIL's Subsidiaries to Agent or the
         Issuing Bank in connection with this Agreement on or after the date of
         this Agreement.

                  "Credit Event" shall mean (a) any Borrowing or (b) the
         issuance, amendment, renewal or extension of any Letter of Credit.

                  "Currencies" shall mean United States Dollars, United Kingdom
         pounds and Euros.

                  "Debt/EBITDA Ratio" shall mean, with respect to FIL for any
         period, the ratio, determined on a consolidated basis in accordance
         with GAAP, of:

                           (a)      The total Indebtedness of FIL and its
                  Subsidiaries on the last day of such period; provided,
                  however, that in computing the foregoing sum, there shall be
                  excluded therefrom any Indebtedness to the extent the proceeds
                  of which are (i) legally segregated from FIL's or such
                  Subsidiaries' other assets and (ii) either (A) only held in
                  the form of cash or cash equivalents or (B) used by FIL or its
                  Subsidiaries for any such purpose as may be approved in
                  advance from time to time by the Required Lenders;

                                       to

                           (b)      EBITDA for such period.

                                       5

<PAGE>

                  "Default" shall mean an Event of Default or any event or
         circumstance not yet constituting an Event of Default which, with the
         giving of any notice or the lapse of any period of time or both, would
         become an Event of Default.

                  "Defaulted Amount" shall have the meaning given to that term
         in the definition of "Defaulting Lender" hereof.

                  "Defaulting Lender" shall mean a Lender which has failed to
         fund its portion of any Borrowing which it is required to fund under
         this Agreement (such amount, the "Defaulted Amount") and has continued
         in such failure for three (3) Business Days after written notice from
         Agent, provided that any Defaulting Lender shall cease to be a
         Defaulting Lender upon (x) its funding the Defaulted Amount or (y) the
         termination of the Commitments.

                  "Designated Borrower" shall have the meaning given to that
         term in clause (1) of the introductory paragraph hereof.

                  "Documentation Agent" shall have the meaning given to that
         term in clause (8) of the introductory paragraph hereof.

                  "Dollar Equivalent" shall mean, as to any amount denominated
         in an Alternative Currency as of any date of determination, the amount
         of Dollars that would be required to purchase the amount of such
         Alternative Currency based upon the spot selling rate at which ABN
         AMRO's London office offers to sell such Alternative Currency for
         Dollars in the London foreign exchange market at approximately 11:00
         a.m. London time on such date for delivery two (2) Business Days later.

                  "Dollars" and "$" shall mean, unless otherwise indicated, the
         lawful currency of the United States of America and, in relation to any
         payment under this Agreement, in same day or immediately available
         funds.

                  "Drawing Payment" shall have the meaning given to that term in
         Subparagraph 2.01(b)(iii)(A) hereof.

                  "EBITDA" shall mean, with respect to FIL for any consecutive
         four quarter-period, the sum, determined on a consolidated basis in
         accordance with GAAP, of the following:

                           (a)      The net income or net loss of FIL for such
                  period before provision for income taxes;

                                      plus

                           (b)      The sum (without duplication and to the
                  extent deducted in calculating net income or loss in clause
                  (a) above) of (i) all Interest Expense of FIL accruing during
                  such period, (ii) all depreciation and amortization expenses
                  of FIL accruing during such period and (iii) other noncash
                  charges for such period; provided, however, that cash payments
                  made in any future period in respect of such noncash charges
                  shall be subtracted from EBITDA in the period when such
                  payments are made;

                                      plus

                           (c)      An amount, not to exceed Fifty Million
                  Dollars ($50,000,000) in any consecutive four-quarter period,
                  equal to the sum (without duplication and to the extent
                  deducted in calculating net income or loss in clause (a)
                  above) of (i) all charges (other than non-cash charges added
                  pursuant to clause (b) above) associated with merger- or
                  acquisition-related expenses and restructuring costs paid in
                  such period (in each case calculated in accordance with GAAP)
                  incurred by FIL in connection with any merger, acquisition or
                  restructuring entered into

                                       6

<PAGE>

                  by FIL and any of its Subsidiaries which is otherwise
                  permitted under this Agreement and the FIUI Credit Agreement;

                                      plus

                           (d)      For the consecutive four-quarter period
                  ended on or prior to the date that is one year after the later
                  of (i) the Closing Date and (ii) the Nortel Closing Date (or
                  September 30, 2004, if the Nortel Closing Date shall not have
                  occurred by such date), an amount, not to exceed Fifty Million
                  Dollars ($50,000,000), equal to the sum (without duplication
                  and to the extent deducted in calculating net income or loss
                  in clause (a) above) of (i) all charges (other than non-cash
                  charges added pursuant to clause (b)) associated with merger-
                  or acquisition-related expenses and restructuring costs paid
                  in such period (in each case calculated in accordance with
                  GAAP) incurred by FIL in connection with New Program
                  Acquisitions and (ii) all charges (other than non-cash charges
                  added pursuant to clause (b) above) paid in such period
                  (calculated in accordance with GAAP) in connection with the
                  closing of any plant or similar facility that is directly
                  related to any New Program Acquisition;

                                      plus

                           (e)      For the consecutive four-quarter periods
                  ended on March 31, 2004 and June 30, 2004, an amount, not to
                  exceed One Hundred Ten Million Dollars ($110,000,000), equal
                  to the charges (without duplication and to the extent deducted
                  in calculating net income or loss in clause (a) above)
                  incurred by FIL in connection with the early redemption by FIL
                  of its 9.875% Senior Subordinated Notes due 2010, to the
                  extent such charges constitute a "Loss on Early Extinguishment
                  of Debt" (as such term is defined under GAAP).

                  For purposes of Subparagraph 5.03(a) only (and not for
                  purposes of Subparagraph 5.03(b)), if FIL or any of its
                  Subsidiaries acquires (whether by purchase, merger,
                  consolidation or otherwise) all or substantially all of the
                  assets or property of any other Person, during any period in
                  respect of which EBITDA is to be determined, such EBITDA shall
                  be determined on a pro forma basis in accordance with GAAP as
                  if such acquisition occurred as of the first day of such
                  period.

                  "Eligible Assignee" shall mean (a) a Lender, (b) an Affiliate
         of a Lender, (c) an Approved Fund, and (d) any other Person (other than
         a natural person) approved by (i) Agent, (ii) Issuing Bank, and (iii)
         unless an Event of Default has occurred under clause (a), (f) or (g) of
         Paragraph 6.01 and is continuing, Borrower (each such approval not to
         be unreasonably withheld or delayed), provided that notwithstanding the
         foregoing, "Eligible Assignee" shall not include any Borrower or any
         Borrower's Affiliates or Subsidiaries.

                  "Eligible Material Subsidiary" shall mean, at any time, any
         Material Subsidiary that is not then an Ineligible Material Subsidiary.

                  "Employee Benefit Plan" shall mean any employee benefit plan
         within the meaning of section 3(3) of ERISA maintained or contributed
         to by any Borrower, any Material Subsidiary or any ERISA Affiliate,
         other than a Multiemployer Plan.

                  "Environmental Laws" shall mean all the Governmental Rules and
         Contractual Obligations relating to the protection of human health and
         the environment, including those pertaining to the reporting,
         licensing, permitting, investigation or remediation of emissions,
         discharges, releases, or threatened releases of Hazardous Materials
         into the air, surface water, groundwater, or land, or relating to the
         manufacture, processing, distribution, use, treatment, storage,
         disposal, transportation, handling of, or exposure to, Hazardous
         Materials.

                  "Equity Securities" of any Person shall mean (a) all common
         stock, preferred stock, participations, shares, partnership interests,
         membership interests, beneficial interests in a trust or other equity
         interests in

                                       7

<PAGE>

         and of such Person (regardless of how designated and whether or not
         voting or non-voting) and (b) all warrants, options and other rights to
         acquire any of the foregoing.

                  "ERISA" shall mean the Employee Retirement Income Security Act
         of 1974, as the same may from time to time be amended or supplemented,
         including any rules or regulations issued in connection therewith.

                  "ERISA Affiliate" shall mean any Person which is treated as a
         single employer with any Borrower or any Material Subsidiary under
         Section 414 of the IRC.

                  "Euro" shall mean the single currency of participating member
         states of the European Union.

                  "Event of Default" shall have the meaning given to that term
         in Paragraph 6.01 hereof.

                   "Excluded Taxes" shall mean all Taxes measured by or imposed
         upon the overall net income of any Lender or one of its Applicable
         Lending Offices and all franchise taxes imposed upon any Lender, in
         each case imposed (i) by the jurisdiction under the laws of which such
         Lender or one of its Applicable Lending Offices is organized or is
         located, or in which its principal executive office is located, or any
         nation within which such jurisdiction is located or any political
         subdivision thereof or (ii) by reason of any connection between the
         jurisdiction imposing such tax and such Lender or one of its Applicable
         Lending Offices other than a connection arising solely from such Lender
         having executed, delivered or performed its obligations under, or
         received payment under or enforced, this Agreement or any of the other
         Credit Documents.

                  "Existing FIL Credit Agreement" shall mean the Credit
         Agreement dated as of March 8, 2002, as amended, among FIL, ABN AMRO
         and other lending institutions, and ABN AMRO, as agent for itself and
         such other lending institutions.

                  "Existing Letter of Credit" shall mean each letter of credit
         previously issued for the account of any Borrower that (a) is
         outstanding on the Closing Date and (b) is listed on Schedule 2.01.

                  "Existing Secured Indebtedness" shall mean the secured
         Indebtedness existing on the Closing Date specified on Schedule
         5.02(a).

                  "Federal Funds Rate" shall mean, for any day, the rate per
         annum set forth in the weekly statistical release designated as
         H.15(519), or any successor publication, published by the Federal
         Reserve Board (including any such successor publication, "H.15 (519)")
         for such day opposite the caption "Federal Funds (Effective)". If on
         any relevant day, such rate is not yet published in H.15 (519), the
         rate for such day shall be the rate set forth in the daily statistical
         release designated as the Composite 3:30 p.m. Quotations for U.S.
         Government Securities, or any successor publication, published by the
         Federal Reserve Bank of New York (including any such successor
         publication, the "Composite 3:30 p.m. Quotations") for such day under
         the caption "Federal Funds Effective Rate". If on any relevant day,
         such rate is not yet published in either H.15 (519) or the Composite
         3:30 p.m. Quotations, the rate for such day shall be the arithmetic
         mean, as determined by Agent, of the rates quoted to Agent for such day
         by three (3) Federal funds brokers of recognized standing selected by
         Agent for overnight federal funds transactions.

                  "Federal Reserve Board" shall mean the Board of Governors of
         the Federal Reserve System of the United States of America.

                  "FIL" shall have the meaning given to that term in clause (1)
         of the introductory paragraph hereof.

                  "Financial Statements" shall mean, with respect to any
         accounting period for any Person, statements of income, shareholders'
         equity and cash flows of such Person for such period, and a balance
         sheet of such Person as of the end of such period, setting forth in
         each case in comparative form figures for the corresponding period in
         the preceding fiscal year if such period is less than a full fiscal
         year or, if such

                                       8

<PAGE>

         period is a full fiscal year, corresponding figures from the preceding
         annual audit, all prepared in reasonable detail and in accordance with
         GAAP.

                  "FIUI" shall mean Flextronics International USA, Inc., a
         California corporation.

                  "FIUI Credit Agreement" shall mean the Credit Agreement dated
         the date hereof among FIUI, as the borrower, each of the financial
         institutions from time to time party thereto and ABN AMRO, as agent, as
         amended or restated from time to time.

                  "FIUI Credit Documents" shall mean the FIUI Credit Agreement
         and all agreements, documents and instruments delivered to the agent
         under the FIUI Credit Agreement.

                  "Fixed Charge Coverage Ratio" shall mean, with respect to FIL
         for any period, the ratio, determined on a consolidated basis in
         accordance with GAAP, of:

                           (a)      EBITDA for such period;

                                       to

                           (b)      The sum of (A) all Interest Expense of FIL
                  for such period plus (B) the current portion of the long-term
                  Indebtedness of FIL on the last day of such period (other than
                  Loans outstanding under this Agreement and loans outstanding
                  under the FIUI Credit Agreement) plus (C) for any period
                  ending on or after March 3, 2007, seventy-five percent (75%)
                  of the aggregate principal amount of (i) all Loans outstanding
                  under this Agreement and (ii) all loans outstanding under the
                  FIUI Credit Agreement;

                                      minus

                                    (ii)     All interest income earned by FIL
                           during such period.

                  "Foreign Plan" shall mean any employee benefit plan maintained
         by any Borrower or any of its Subsidiaries which is mandated or
         governed by any Governmental Rule of any Governmental Authority other
         than the United States.

                  "Foreign Subsidiary" shall mean any Subsidiary of FIL that is
         organized under the laws of a jurisdiction other than the United States
         or a state thereof.

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

                  "GAAP" shall mean generally accepted accounting principles and
         practices as in effect in the United States of America from time to
         time, consistently applied, subject to Paragraph 1.02 hereof.

                  "Governmental Authority" shall mean any domestic or foreign
         national, state or local government, any political subdivision thereof,
         any department, agency, authority or bureau of any of the foregoing, or
         any other entity exercising executive, legislative, judicial,
         regulatory or administrative functions of or pertaining to government,
         including the Federal Deposit Insurance Corporation, the Federal
         Reserve Board, the Comptroller of the Currency of the United States of
         America, any central bank or any comparable authority.

                  "Governmental Charges" shall mean, with respect to any Person,
         all levies, assessments, fees, claims or other charges imposed by any
         Governmental Authority upon such Person or any of its property or
         otherwise payable by such Person.

                                       9

<PAGE>

                  "Governmental Rule" shall mean any law, rule, regulation,
         ordinance, order, code interpretation, judgment, decree, directive,
         guidelines, policy or similar form of decision of any Governmental
         Authority.

                  "Guarantor" shall mean each Eligible Material Subsidiary and
         each other Subsidiary that has executed the Guaranty or otherwise
         become a party thereto.

                  "Guaranty" shall have the meaning given to that term in
         Subparagraph 2.15(a) hereof.

                  "Guaranty Obligation" shall mean, with respect to any Person,
         subject to the last sentence of this definition, any direct or indirect
         liability of that Person with respect to any indebtedness, lease,
         dividend, letter of credit or other obligation (other than endorsements
         of instruments for collection or deposits in the ordinary course of
         business) (the "primary obligations") of another Person (the "primary
         obligor"), including any obligation of that Person, whether or not
         contingent, (a) to purchase, repurchase or otherwise acquire such
         primary obligations or any property constituting direct or indirect
         security therefor, (b) to advance or provide funds (i) for the payment
         or discharge of any such primary obligation, or (ii) to maintain
         working capital or equity capital of the primary obligor or otherwise
         to maintain the net worth or solvency or any balance sheet item, level
         of income or financial condition of the primary obligor, (c) to
         purchase property, securities or services primarily for the purpose of
         assuring the owner of any such primary obligation of the ability of the
         primary obligor to make payment of such primary obligation or (d)
         otherwise to assure or hold harmless the holder of any such primary
         obligation against loss in respect thereof. The amount of any Guaranty
         Obligation shall be deemed equal to the stated or determinable amount
         of the primary obligation in respect of which such Guaranty Obligation
         is made or, if not stated or if indeterminable, the maximum reasonably
         anticipated liability in respect thereof (subject to reduction as the
         underlying liability so guaranteed is reduced from time to time);
         provided, however, that with respect to (1) any Guaranty Obligation by
         FIL or any of its Subsidiaries in respect of a primary obligation of
         FIL or any of its Subsidiaries and (2) any Guaranty Obligation of FIL
         or any of its Subsidiaries in respect of the primary obligation of a
         lessor in connection with a synthetic lease transaction entered into by
         FIL or any of its Subsidiaries, such Guaranty Obligation shall, in each
         case, be deemed to be equal to the maximum reasonably anticipated
         liability in respect thereof which shall be deemed to be limited to an
         amount that actually becomes past due from time to time with respect to
         such primary obligation.

                  "Hazardous Materials" shall mean all pollutants, contaminants
         and other materials, substances and wastes which are hazardous, toxic,
         caustic, harmful or dangerous to human health or the environment,
         including petroleum and petroleum products and byproducts, radioactive
         materials, asbestos and polychlorinated biphenyls.

                  "Indebtedness" of any Person shall mean, without duplication,
         the following (each, unless otherwise noted, determined in accordance
         with GAAP):

                           (a)      All obligations of such Person evidenced by
                  notes, bonds, debentures or other similar instruments and all
                  other obligations of such Person for borrowed money (including
                  obligations to repurchase receivables and other assets sold
                  with recourse);

                           (b)      All obligations of such Person for the
                  deferred purchase price of property or services (including
                  obligations under letters of credit and other credit
                  facilities which secure or finance such purchase price, and
                  the capitalized amount reported for income tax purposes with
                  respect to obligations under "synthetic" leases but excluding
                  accounts payable for property or services or the deferred
                  purchase price of property to the extent due within one year);

                           (c)      All obligations of such Person under
                  conditional sale or other title retention agreements with
                  respect to property (other than inventory) acquired by such
                  Person (to the extent of the value of such property if the
                  rights and remedies of the seller or lender under such
                  agreement in the event of default are limited solely to
                  repossession or sale of such property);

                           (d)      All obligations of such Person as lessee
                  under or with respect to Capital Leases;

                                       10

<PAGE>

                           (e)      All Guaranty Obligations of such Person with
                  respect to the Indebtedness of any other Person, and all other
                  Contingent Obligations of such Person; and

                           (f)      All obligations of other Persons of the
                  types described in clauses (a) - (e) above to the extent
                  secured by (or for which any holder of such obligations has an
                  existing right, contingent or otherwise, to be secured by) any
                  Lien in any property (including accounts and contract rights)
                  of such Person, even though such Person has not assumed or
                  become liable for the payment of such obligations.

The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to
the extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.

                  "Ineligible Material Subsidiary" shall mean, at any time, any
         Material Subsidiary (a) that is then prohibited by any applicable
         Governmental Rule from acting as a Guarantor under the Guaranty, (b)
         that then would incur, or would cause FIL to incur, a significant
         increase in its tax liabilities or similar liabilities or obligations
         as a result of acting as a Guarantor under the Guaranty or (c) that is
         a Foreign Subsidiary as to which the representations and warranties set
         forth in Subparagraph 4.01(s) would not be true and correct were it to
         execute the Guaranty.

                  "Interest Expense" shall mean, with respect to any Person for
         any period, the sum, determined on a consolidated basis in accordance
         with GAAP, of (a) all interest expense of such Person during such
         period (including interest attributable to Capital Leases) plus (b) all
         fees in respect of outstanding letters of credit paid, accrued or
         scheduled for payment by such Person during such period.

                  "Interest Period" shall mean, with respect to any LIBOR
         Borrowing, the time period selected by the applicable Borrower pursuant
         to Subparagraph 2.02(c) which commences on the date of such Borrowing
         and ends on the last day of such time period, and thereafter, each
         subsequent time period selected by the applicable Borrower pursuant to
         Subparagraph 2.03(b)(ii).

                  "Investment" of any Person shall mean any loan or advance of
         funds by such Person to any other Person (other than advances to
         employees of such Person for moving and travel expenses, drawing
         accounts and similar expenditures in the ordinary course of business),
         any purchase or other acquisition of any Equity Securities or
         Indebtedness of any other Person, any capital contribution by such
         Person to or any other investment by such Person in any other Person
         (including any Guaranty Obligations of such Person and any indebtedness
         of such Person of the type described in clause (f) of the definition of
         "Indebtedness" on behalf of any other Person); provided, however, that
         Investments shall not include (a) accounts receivable or other
         indebtedness owed by customers of such Person which are current assets
         and arose from sales of inventory in the ordinary course of such
         Person's business or (b) prepaid expenses of such Person incurred and
         prepaid in the ordinary course of business.

                  "IRC" shall mean the Internal Revenue Code of 1986, as amended
         from time to time.

                  "Issuing Bank" shall have the meaning given to that term in
         clause (9) of the introductory paragraph hereof.

                  "LC Application" shall have the meaning given to that term in
         Subparagraph 2.01(b)(ii) hereof.

                  "LC Issuance Fees" shall have the meaning given to that term
         in Subparagraph 2.06(c)(ii) hereof.

                  "LC Usage Fee Rate" shall mean with respect to any Letter of
         Credit as of any date of determination, the per annum rate for Letters
         of Credit determined pursuant to the Pricing Grid as such rate may
         change as provided in the Pricing Grid.

                                       11

<PAGE>

                  "LC Usage Fees" shall have the meaning given to that term in
         Subparagraph 2.06(c)(i) hereof.

                  "Lender" shall have the meaning given to that term in clause
         (2) of the introductory paragraph hereof. Where the context so permits,
         "Lenders" shall include the Issuing Bank and Lenders under the FIUI
         Credit Agreement.

                  "Lender Rate Contract" shall mean any Rate Contract entered
         into by any Borrower or any of FIL's Subsidiaries with a Lender or its
         Affiliates with respect to Obligations arising under this Agreement.

                  "Lending Office" shall mean, with respect to any Lender and
         any Borrowing, (a) initially, such Lender's office designated as such
         in Part B of Schedule I (or, in the case of any Lender which becomes a
         Lender by an assignment pursuant to Subparagraph 8.05(c), its office
         designated as such in the applicable Assignment and Assumption) and (b)
         subsequently, such other office or offices as such Lender may designate
         to Agent as the office at which such Lender's Loans will thereafter be
         maintained and for the account of which all payments of principal of,
         and interest on, such Lender's Loans will thereafter be made.

                  "Letter of Credit" shall mean any standby letter of credit
         (including any Existing Letter of Credit) issued pursuant to this
         Agreement.

                  "LIBO Rate" shall mean, with respect to any Interest Period
         for any LIBOR Borrowing, a rate per annum equal to the quotient
         (rounded upward if necessary to the nearest 1/100 of one percent) of
         (a) the arithmetic mean of the rates per annum appearing on the
         Applicable Rate Page for the Currency of such Borrowing on the second
         Business Day prior to the first day of such Interest Period at or about
         11:00 A.M. (London time) (for delivery of such Currency on the first
         day of such Interest Period) for a term comparable to such Interest
         Period, divided by (b) one minus any applicable Reserve Requirement in
         effect from time to time. If for any reason rates are not available as
         provided in clause (a) of the preceding sentence, the rate to be used
         in clause (a) shall be, at the Agent's discretion, (i) the rate per
         annum at which deposits in the applicable Currency are offered to Agent
         in the London interbank market or (ii) the rate at which deposits in
         the applicable Currency are offered to Agent in, or by Agent to major
         banks in, any offshore interbank market selected by Agent, in each case
         on the second Business Day prior to the commencement of such Interest
         Period at or about 10:00 A.M. (New York City time) (for delivery on the
         first day of such Interest Period) for a term comparable to such
         Interest Period and in an amount approximately equal to the amount of
         the Loan to be made or funded by Agent as part of such Borrowing. The
         LIBO Rate shall be adjusted automatically as to all LIBOR Loans
         outstanding as of the effective date of any change in the Reserve
         Requirement.

                  "LIBOR Borrowing" shall mean any Borrowing consisting of LIBOR
         Loans.

                  "LIBOR Loan" shall mean any Loan bearing interest based upon
         the LIBO Rate.

                  "Lien" shall mean, with respect to any property or asset, (a)
         any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance,
         charge or security interest in, on or of such property or asset or the
         income therefrom, including any agreement to provide any of the
         foregoing, (b) the interest of a vendor or a lessor under any
         conditional sale agreement, Capital Lease or title retention agreement
         (or any financing lease having substantially the same economic effect
         as any of the foregoing) relating to such asset and (c) in the case of
         securities, any purchase option, call or similar right of a third party
         with respect to such securities.

                  "Loan" shall have the meaning given to that term in
         Subparagraph 2.01(a)(i) hereof.

                  "Loan Account" shall have the meaning given to that term in
         Subparagraph 2.09(a) hereof.

                  "Managing Agents" shall have the meaning given to that term in
         clause (7) of the introductory paragraph hereof.

                                       12

<PAGE>

                  "Margin Stock" shall have the meaning given to that term in
         Regulation U issued by the Federal Reserve Board.

                  "Material Adverse Effect" shall mean a material adverse effect
         on (a) the business, assets, operations or financial condition of any
         Borrower and FIL's Subsidiaries, taken as a whole, (b) the ability of
         any Borrower to pay or perform its Obligations in accordance with the
         terms of this Agreement and the other Credit Documents, (c) the ability
         of the Guarantors (taken as a whole) to pay or perform the Obligations
         in accordance with the terms of this Agreement and the other Credit
         Documents or (d) the rights and remedies of Agent or any Lender under
         this Agreement, the other Credit Documents or any related document,
         instrument or agreement.

                  "Material Subsidiary" shall mean, at any time during any
         fiscal year of FIL, (a) any Subsidiary of FIL that (i) had revenues
         during the immediately preceding fiscal year equal to or greater than
         five percent (5%) of the consolidated total revenues of FIL during such
         preceding year or (ii) held assets, excluding investments in
         Subsidiaries, on the last day of the immediately preceding fiscal year
         equal to or greater than ten percent (10%) of the consolidated total
         assets of FIL on such date, in each case as set forth or reflected in
         the audited Financial Statements provided pursuant to Subparagraph
         5.01(a)(ii) hereof, (b) with respect to any Subsidiary of FIL added or
         created during such year, (i) any Subsidiary of FIL that had revenues,
         determined on a pro forma basis as of the most recent twelve months for
         which financial statements are available, greater than five percent
         (5%) of the consolidated total revenues of FIL during such preceding
         year or (ii) held assets, excluding investments in Subsidiaries,
         determined on a pro forma basis on the last day of the immediately
         preceding month equal to or greater than ten percent (10%) of the
         consolidated total assets of FIL (including the assets of such added or
         created Subsidiary or Subsidiaries) on such date.

                  "maturity" shall mean, with respect to any Loan, Reimbursement
         Obligation, interest, fee or other amount payable by any Borrower under
         this Agreement or the other Credit Documents, the date such Loan,
         Reimbursement Obligation, interest, fee or other amount becomes due,
         whether upon the stated maturity or due date, upon acceleration or
         otherwise.

                  "Maturity Date" shall mean March 3, 2008.

                  "Moody's" shall mean Moody's Investors Service, Inc. and any
         successor thereto that is a nationally recognized rating agency.

                  "Multiemployer Plan" shall mean any multiemployer plan within
         the meaning of section 3(37) of ERISA maintained or contributed to by
         any Borrower, any Material Subsidiary or any ERISA Affiliate.

                  "Net Proceeds" shall mean, with respect to any issuance and
         sale of securities by any Person (a) the aggregate cash proceeds
         received by such Person from such sale less (b) the sum of (i) the
         actual amount of the reasonable fees and commissions payable to Persons
         other than such Person making the sale or any Affiliate of such Person
         and (ii) the reasonable legal expenses and other costs and expenses
         directly related to such sale that are to be paid by such Person.

                  "New Program Acquisition" shall mean a transaction or series
         of related transactions in which FIL or any of its Subsidiaries
         acquires assets from any other Person and also enters into an agreement
         to manufacture products for such Person (or an Affiliate thereof).

                  "Non-Excluded Taxes" shall mean all Taxes other than Excluded
         Taxes.

                  "Nortel" shall mean Nortel Networks Corporation and any of its
         Subsidiaries or Affiliates.

                  "Nortel Closing Date" shall mean the date that is the earliest
         date on which FIL or any of its Subsidiaries consummate a transaction
         or series of related transactions in which FIL or such Subsidiary (i)
         acquires any assets of Nortel for an aggregate principal amount of more
         than Ten Million Dollars ($10,000,000) and (ii) enters into an
         agreement with Nortel to manufacture Nortel products.

                                       13

<PAGE>

                  "Note" shall have the meaning given to that term in
         Subparagraph 2.09(b) hereof.

                  "Notice of Borrowing" shall have the meaning given to that
         term in Paragraph 2.02 hereof.

                  "Notice of Interest Period Selection" shall have the meaning
         given to that term in Subparagraph 2.03(b)(ii).

                  "Obligations" shall mean and include all loans, advances,
         debts, liabilities, and obligations, howsoever arising, owed by any
         Borrower individually or all Borrowers jointly and severally to Agent
         or any Lender of every kind and description (whether or not evidenced
         by any note or instrument and whether or not for the payment of money),
         direct or indirect, absolute or contingent, due or to become due, now
         existing or hereafter arising pursuant to the terms of this Agreement
         or any of the other Credit Documents, including all interest, fees,
         charges, expenses, attorneys' fees and accountants' fees chargeable to
         Borrowers or payable by Borrowers thereunder.

                  "Overnight Rate" shall mean, for any amount payable in an
         Alternative Currency on any day, the per annum interest rate at which
         overnight deposits in such Alternative Currency in an amount
         approximately equal to such amount would be offered for such day by ABN
         AMRO's London Office to major banks in the London interbank market.

                  "Participant" shall have the meaning given to that term in
         Subparagraph 8.05(b) hereof.

                  "PBGC" shall mean the Pension Benefit Guaranty Corporation, or
         any successor thereto.

                  "Permitted Indebtedness" shall have the meaning given to that
         term in Subparagraph 5.02(a) hereof.

                  "Permitted Liens" shall have the meaning given to that term in
         Subparagraph 5.02(b) hereof.

                  "Person" shall mean and include an individual, a partnership,
         a corporation (including a business trust), a joint stock company, an
         unincorporated association, a limited liability company, a joint
         venture, a trust or other entity or a Governmental Authority.

                  "Pricing Grid" shall mean the pricing grid set forth on
         Schedule II and the accompanying explanation thereto.

                  "Pricing Level" shall mean either Level 1, Level 2, Level 3,
         Level 4 or Level 5, which shall be determined as set forth in the
         Pricing Grid as such Pricing Levels may change as provided in the
         Pricing Grid.

                  "Prime Rate" shall mean the per annum rate publicly announced
         by ABN AMRO from time to time at its Chicago office as its "prime
         rate." The Prime Rate is determined by ABN AMRO from time to time as a
         means of pricing credit extensions to some customers and is neither
         directly tied to any external rate of interest or index nor necessarily
         the lowest rate of interest charged by ABN AMRO at any given time for
         any particular class of customers or credit extensions. Any change in
         the Base Rate resulting from a change in the Prime Rate shall become
         effective on the Business Day on which each change in the Prime Rate is
         announced as being effective.

                  "Proportionate Share" shall mean:

                           (a)      With respect to any Lender at any time prior
                  to the termination of the Commitments, the ratio (expressed as
                  a percentage rounded to the eighth digit to the right of the
                  decimal point) of (i) such Lender's Commitments at such time
                  to (ii) the Total Commitment at such time; and

                                       14

<PAGE>

                           (b)      With respect to any Lender at any time after
                  the termination of the Commitments, the ratio (expressed as a
                  percentage rounded to the eighth digit to the right of the
                  decimal point) of (i) the sum at such time of (A) the
                  aggregate principal amount of all Loans owed to such Lender
                  and outstanding at such time, (B) such Lender's pro rata share
                  of the aggregate amount available for drawing under all
                  Letters of Credit outstanding at such time and (c) such
                  Lender's pro rata share of the aggregate amount of all
                  Reimbursement Obligations outstanding at such time to (ii) the
                  sum at such time of (A) the aggregate principal amount of all
                  Loans outstanding at such time, (B) the aggregate amount
                  available for drawing under all Letters of Credit outstanding
                  at such time and (C) the aggregate amount of all Reimbursement
                  Obligations outstanding at such time.

                  "Rate Contracts" shall mean any agreement with respect to any
         swap, forward, future or derivative transaction or option or similar
         agreement involving, or settled by reference to, one or more rates,
         currencies, commodities, equity or debt instruments or securities, or
         economic, financial or pricing indices or measures of economic,
         financial or pricing risk or value or any similar transaction or any
         combination of these transactions, provided that no phantom stock or
         similar plan providing for payments only on account of services
         provided by current or former directors, officers, employees or
         consultants of any Borrower or its Subsidiaries shall be a Rate
         Contract.

                  "Register" shall have the meaning given to that term in
         Subparagraph 8.05(d) hereof.

                  "Reimbursement Obligation" shall have the meaning given to
         that term in Subparagraph 2.01(b)(iii)(C) hereof.

                  "Reimbursement Payment" shall have the meaning given to that
         term in Subparagraph 2.01(b)(iii)(B) hereof.

                  "Reportable Event" shall have the meaning given to that term
         in ERISA and applicable regulations thereunder.

                  "Required Lenders" shall mean, at any time, Lenders whose
         Proportionate Shares equal or exceed fifty-one percent (51%) at such
         time, except at any time any Lender is a Defaulting Lender. (For the
         purposes of determining "Required Lenders" at any time any Lender is a
         Defaulting Lender, the "Proportionate Shares" of non-defaulting Lenders
         shall be determined excluding from the Commitment the aggregate amounts
         of the Defaulting Lenders' Commitments, and "Required Lenders" shall
         mean non-defaulting Lenders whose Proportionate Shares as so determined
         then equal or exceed fifty-one percent (51%).)

                  "Requirement of Law" applicable to any Person shall mean (a)
         the Articles or Certificate of Incorporation and By-laws, Partnership
         Agreement or other organizational or governing documents of such
         Person, (b) any Governmental Rule applicable to such Person, (c) any
         license, permit, approval or other authorization granted by any
         Governmental Authority to or for the benefit of such Person or (d) any
         judgment, decision or determination of any Governmental Authority or
         arbitrator, in each case applicable to or binding upon such Person or
         any of its property or to which such Person or any of its property is
         subject.

                  "Reserve Requirement" shall mean (a) with respect to any day
         in an Interest Period for any portion of a Borrowing in Dollars, the
         aggregate of the reserve requirement rates, if any (expressed as a
         decimal), in effect on such day for funding in Dollars maintained by
         commercial banks in the United States, (b) with respect to any day in
         an Interest Period for any portion of a Borrowing in United Kingdom
         pounds, the aggregate of the reserve requirement rates, if any
         (expressed as a decimal), in effect on such day for funding in United
         Kingdom pounds maintained by commercial banks which lend in United
         Kingdom pounds, or (c) with respect to any day in an Interest Period
         for any portion of a Borrowing in Euros, the aggregate of the reserve
         requirement rates, if any (expressed as a decimal), in effect on such
         day for funding in Euros maintained by commercial banks which lend in
         Euros. As used herein, the term "reserve requirement" shall include any
         basic, supplemental or emergency reserve requirements imposed on any
         Lender by any Governmental Authority.

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<PAGE>

                  "Responsible Officer" shall mean, with respect to any
         Borrower, such Borrower's Chief Executive Officer, Chief Financial
         Officer, Treasurer, Vice President - Finance, Controller, Assistant
         Treasurer, Director of Treasury Operations, Corporate Secretary or any
         other officer of any Borrower designated from time to time by its Board
         of Directors to execute and deliver any document, instrument or
         agreement hereunder.

                  "S&P" shall mean Standard & Poor's Rating Services, and any
         successor thereto that is a nationally recognized rating agency.

                  "Security Documents" shall mean and include (i) the Guaranty
         and (ii) all other instruments, agreements, certificates, opinions and
         documents delivered to Agent or the Issuing Bank to secure the
         Obligations.

                  "Senior Debt Rating" shall mean with respect to FIL as of any
         date of determination, (i) the "Senior Implied Rating" of Moody's and
         (ii) the "Corporate Credit Rating" of S&P.

                  "Senior Managing Agent" shall have the meaning given to that
         term in clause (6) of the introductory paragraph hereof.

                  "Significant Subsidiary" shall mean, at any time during any
         fiscal year of FIL, (a) any Subsidiary of FIL that (i) had revenues
         during the immediately preceding fiscal year equal to or greater than
         Ten Million Dollars ($10,000,000) or (ii) had net worth on the last day
         of the immediately preceding fiscal year equal to or greater than Ten
         Million Dollars ($10,000,000).

                  "Solvent" shall mean, with respect to any Person on any date,
         that on such date (a) the fair value of the property of such Person is
         greater than the fair value of the liabilities (including contingent,
         subordinated, matured and unliquidated liabilities) of such Person, (b)
         such Person does not intend to, and does not believe that it will,
         incur debts or liabilities beyond such Person's ability to pay as such
         debts and liabilities mature and (c) such Person is not engaged in or
         about to engage in business or transactions for which such Person's
         property would constitute an unreasonably small capital.

                  "Subordinated Indebtedness" shall mean Indebtedness of any
         Borrower or any Subsidiary of a Borrower that is subordinated to the
         Obligations.

                  "Subordinated Indenture" shall mean, collectively, (a) the
         Indenture dated as of October 15, 1997 by and between FIL and State
         Street Bank and Trust Company of California, N.A., with respect to up
         to $150,000,000 of 8 3/4% Senior Subordinated Notes due 2007, (b) the
         Indenture dated as of June 29, 2000 by and between FIL and Chase
         Manhattan Bank and Trust Company, National Association with respect to
         up to $1,000,000,000 of 9 7/8% Senior Subordinated Notes due 2010, (c)
         the Indenture dated as of June 29, 2000 by and between FIL and Chase
         Manhattan Bank and Trust Company, National Association with respect to
         up to (euro) 300,000,000 of 9 3/4% Senior Subordinated Notes due 2010,
         (d) the Indenture dated as of May 9, 2003 by and between FIL and
         JPMorgan Trust Company, National Association with respect to up to
         $400,000,000 of 6 1/2% Senior Subordinated Notes due 2013, (e) the
         Indenture dated as of August 5, 2003 by and between FIL and JPMorgan
         Trust Company, National Association with respect to up to $500,000,000
         of 1% Convertible Subordinated Notes due 2010 and (f) any other
         document, instrument or agreement evidencing Subordinated Indebtedness.

                  "Subsidiary" of any Person shall mean (a) any corporation of
         which more than 50% of the issued and outstanding Equity Securities
         having ordinary voting power to elect a majority of the Board of
         Directors of such corporation (irrespective of whether at the time
         capital stock of any other class or classes of such corporation shall
         or might have voting power upon the occurrence of any contingency) is
         at the time directly or indirectly owned or controlled by such Person,
         by such Person and one or more of its other Subsidiaries or by one or
         more of such Person's other Subsidiaries, (b) any partnership, joint
         venture, limited liability company or other association of which more
         than 50% of the equity interest having the power to vote, direct or
         control the management of such partnership, joint venture or other
         association is at

                                       16

<PAGE>

         the time owned and controlled by such Person, by such Person and one or
         more of the other Subsidiaries or by one or more of such Person's other
         Subsidiaries or (c) any other Person included in the Financial
         Statements of such Person on a consolidated basis. (All references in
         this Agreement and the other Credit Documents to Subsidiaries of FIL
         shall, unless otherwise indicated, include any of the other Borrowers
         and their Subsidiaries.)

                  "Surety Instruments" shall mean all letters of credit
         (including standby and commercial), banker's acceptances, bank
         guaranties, shipside bonds, surety bonds and similar instruments.

                  "Taxes" shall mean all present and future income, stamp,
         documentary and other taxes and duties, and all other levies, imposts,
         charges, fees, deductions and withholdings, now or hereafter imposed,
         levied, collected, withheld or assessed by any Governmental Authority.

                  "Total Assets" shall mean with respect to any date of
         determination, the total assets of FIL shown on FIL's consolidated
         balance sheet in accordance with GAAP on the last day of the fiscal
         quarter prior to the date of determination.

                  "Total Commitment" shall mean, at any time, the sum at such
         time of Lenders' Commitments. The Total Commitment on the date of this
         Agreement is Five Hundred Fifty Million Dollars ($550,000,000.00).

                  "Type" shall mean, with respect to any Loan or any Borrowing
         at any time, the classification of such Loan or Borrowing by the type
         of interest rate it then bears, whether an interest rate based upon the
         Base Rate or LIBO Rate.

                  "Unused" shall mean:

                           (a)      With respect to the Total Commitment at any
                  time, the remainder of (i) the Total Commitment at such time
                  minus (ii) the sum of the Dollar amount or Dollar Equivalent
                  (as applicable) of (A) the aggregate principal amount of all
                  Loans outstanding at such time, (B) the aggregate amount
                  available for drawing under all Letters of Credit outstanding
                  at such time and (C) the aggregate amount of all Reimbursement
                  Obligations outstanding at such time (the sum of clause (ii)
                  being referred to as the "Used Commitment");

                           (b)      With respect to the Combined Total
                  Commitment at any time, the remainder of (i) the Combined
                  Total Commitment at such time minus (ii) the sum of (A) the
                  Used Commitment (as determined pursuant to clause (a) above)
                  and (B) the "Used Commitment" as defined in the FIUI Credit
                  Agreement.

                  "Used Commitment" shall have the meaning given to that term in
         clause (a) of the definition of "Unused" in Paragraph 1.01 hereof.

                  "Wholly-Owned Subsidiary" shall mean any Subsidiary of which
         more than 90% of the issued and outstanding Equity Interests are owned,
         directly or indirectly, by FIL.

         1.02.    GAAP. Unless otherwise indicated in this Agreement or any
other Credit Document, all accounting terms used in this Agreement or any other
Credit Document shall be construed, and all accounting and financial
computations hereunder or thereunder shall be computed, in accordance with GAAP.
If GAAP changes during the term of this Agreement such that any covenants
contained herein would then be calculated in a different manner or with
different components, Borrowers, Lenders and Agent agree to negotiate in good
faith to amend this Agreement in such respects as are necessary to conform those
covenants as criteria for evaluating Borrower's financial condition to
substantially the same criteria as were effective prior to such change in GAAP;
provided, however, that, until Borrowers, Lenders and Agent so amend this
Agreement, all such covenants shall be calculated in accordance with GAAP as in
effect immediately prior to such change.

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<PAGE>

         1.03.    Headings. Headings in this Agreement and each of the other
Credit Documents are for convenience of reference only and are not part of the
substance hereof or thereof.

         1.04.    Plural Terms. All terms defined in this Agreement or any other
Credit Document in the singular form shall have comparable meanings when used in
the plural form and vice versa.

         1.05.    Governing Law. Unless otherwise expressly provided in any
Credit Document, this Agreement and each of the other Credit Documents shall be
governed by and construed in accordance with the laws of the State of New York.

         1.06.    English Language. This Agreement and the other Credit
Documents are executed and shall be construed in the English language. All
instruments, agreements, certificates, opinions and other documents to be
furnished or communications to be given or made under this Agreement or any
other Credit Document shall be in the English language.

         1.07.    Construction. This Agreement is the result of negotiations
among, and has been reviewed by, Borrowers, each Lender, Agent and their
respective counsel. Accordingly, this Agreement shall be deemed to be the
product of all parties hereto, and no ambiguity shall be construed in favor of
or against any Borrower, any Lender or Agent.

         1.08.    Entire Agreement. This Agreement and each of the other Credit
Documents, taken together, constitute and contain the entire agreement of
Borrowers, Lenders and Agent and supersede any and all prior agreements,
negotiations, correspondence, understandings and communications among the
parties, whether written or oral, respecting the subject matter hereof
(excluding the Agent's Fee Letter and the reimbursement and indemnification
obligations in the Commitment Letter).

         1.09.    Calculation of Interest and Fees. All calculations of interest
and fees under this Agreement and the other Credit Documents for any period (a)
shall include the first day of such period and exclude the last day of such
period and (b) shall be calculated on the basis of a year of 360 days for actual
days elapsed, except that during any period any Loan bears interest based upon
the Prime Rate, such interest shall be calculated on the basis of a year of 365
or 366 days, as appropriate, for actual days elapsed.

         1.10.    References.

                  (a)      References in this Agreement to "Recitals,"
         "Sections," "Paragraphs," "Subparagraphs," "Exhibits" and "Schedules"
         are to recitals, sections, paragraphs, subparagraphs, exhibits and
         schedules in and to this Agreement unless otherwise indicated.

                  (b)      References in this Agreement or any other Credit
         Document to any document, instrument or agreement (i) shall include all
         exhibits, schedules and other attachments thereto, (ii) shall include
         all documents, instruments or agreements issued or executed in
         replacement thereof if such replacement is permitted hereby, and (iii)
         shall mean such document, instrument or agreement, or replacement or
         predecessor thereto, as amended, modified and supplemented from time to
         time and in effect at any given time if such amendment, modification or
         supplement is permitted hereby.

                  (c)      References in this Agreement or any other Credit
         Document to any Governmental Rule (i) shall include any successor
         Governmental Rule, (ii) shall include all rules and regulations
         promulgated under such Governmental Rule (or any successor Governmental
         Rule), and (iii) shall mean such Governmental Rule (or successor
         Governmental Rule) and such rules and regulations, as amended,
         modified, codified or reenacted from time to time and in effect at any
         given time.

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<PAGE>

                  (d)      References in this Agreement or any other Credit
         Document to any Person in a particular capacity (i) shall include any
         permitted successors to and assigns of such Person in that capacity and
         (ii) shall exclude such Person individually or in any other capacity.

         1.11.    Other Interpretive Provisions. The words "hereof," "herein"
and "hereunder" and words of similar import when used in this Agreement or any
other Credit Document shall refer to this Agreement or such other Credit
Document, as the case may be, as a whole and not to any particular provision of
this Agreement or such other Credit Document, as the case may be. The words
"include" and "including" and words of similar import when used in this
Agreement or any other Credit Document shall not be construed to be limiting or
exclusive. In the event of any inconsistency between the terms of this Agreement
and the terms of any other Credit Document, the terms of this Agreement shall
govern.

SECTION II. CREDIT FACILITIES.

         2.01.    Loans and Letters of Credit.

                  (a)      Loans.

                           (i)      Availability. Subject to the terms and
                  conditions of this Agreement (including the amount limitations
                  set forth in Paragraph 2.05), each Lender severally agrees to
                  advance to Borrowers from time to time during the period from
                  and including the Closing Date to but excluding the Maturity
                  Date its pro rata share of such revolving loans in Currencies
                  as Borrowers may request (individually, a "Loan"); provided,
                  however, that no Lender shall have any obligation to make a
                  requested Loan if, after giving effect to such Loan, the
                  Dollar amount or Dollar Equivalent (as applicable) on the date
                  such Loan is to be made of (i) such Lender's Loans then
                  outstanding plus (ii) such Lender's Proportionate Share of the
                  aggregate amount available for drawing under all Letters of
                  Credit outstanding at such time plus (iii) such Lender's
                  Proportionate Share of the aggregate amount of all
                  Reimbursement Obligations outstanding at such time would
                  exceed such Lender's Commitment at such time. The failure of
                  any Lender to make any Loan required to be made by it shall
                  not relieve any other Lender of its obligations hereunder. The
                  Commitments of the Lenders are several and no Lender shall be
                  responsible for any other Lender's failure to make Loans as
                  required. All Loans shall be made on a pro rata basis by
                  Lenders in accordance with their respective Proportionate
                  Shares, with each Borrowing to be comprised of a Loan made by
                  each Lender equal to such Lender's Proportionate Share of such
                  Borrowing. Except as otherwise provided herein, Borrowers may
                  borrow, repay and reborrow Loans until the Maturity Date.

                           (ii)     Scheduled Payments. Borrowers shall repay
                  the principal amount of the Loans in full on the Maturity
                  Date. Borrowers shall pay accrued interest on the unpaid
                  principal amount of each Loan in arrears (A) in the case of a
                  Base Rate Loan, on the last Business Day of the month of each
                  March, June, September and December, (B) in the case of a
                  LIBOR Loan, on the last day of each Interest Period therefor
                  (and, if any such Interest Period is equal to or longer than
                  three (3) months, every three (3) months), and (C) in the case
                  of all Loans, upon prepayment (to the extent thereof) and at
                  maturity.

                  (b)      Letter of Credit Subfacility.

                           (i)      Availability. Upon the satisfaction (or
                  waiver in accordance with Paragraph 8.04) of the conditions
                  specified in Paragraph 3.01 on the Closing Date, each Existing
                  Letter of Credit will automatically, without any action on the
                  part of any Person, be deemed to be a Letter of Credit issued
                  hereunder for the account of the applicable Borrower for all
                  purposes of this Agreement and the other Credit Documents. In
                  addition, subject to the terms and conditions of this
                  Agreement (including the amount limitations set forth in
                  Paragraph 2.05), Issuing Bank agrees to issue on behalf of
                  Borrowers from time to time during the period beginning on the
                  Closing Date

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<PAGE>

                  and ending on the date that is thirty (30) days prior to the
                  Maturity Date such Letters of Credit as any Borrower may
                  request under this Subparagraph 2.01(b); provided, however, as
                  follows:

                                    (A)      The aggregate amount available for
                           drawing under all Letters of Credit at any time
                           outstanding shall not exceed the Dollar amount or
                           Dollar Equivalent (as applicable) of One Hundred
                           Twenty-Five Million Dollars ($125,000,000);

                                    (B)      Each Letter of Credit shall be an
                           irrevocable standby letter of credit in Dollars or an
                           Alternative Currency;

                                    (C)      Each Letter of Credit shall expire
                           on or prior to the date that is one year after the
                           date of its issuance; provided, however, that in no
                           event shall any Letter of Credit, including any
                           Existing Letter of Credit, expire later than the date
                           that is thirty (30) days prior to the Maturity Date);
                           and

                                    (D)      Each Letter of Credit shall be in a
                           form reasonably acceptable to Issuing Bank.

                  Except as otherwise provided herein, Borrowers may request
                  Letters of Credit, cause or allow Letters of Credit to expire
                  and request additional Letters of Credit until the date thirty
                  (30) days prior to the Maturity Date.

                           (ii)     LC Application. Borrowers shall request each
                  Letter of Credit by delivering to Agent and Issuing Bank an
                  irrevocable written application in a form reasonably
                  acceptable to Issuing Bank, appropriately completed (an "LC
                  Application"), which specifies, among other things:

                                    (A)      The available amount of the
                           requested Letter of Credit (which amount available
                           (1) shall be equal to the maximum amount which may
                           over time be drawn under the Letter of Credit and (2)
                           shall not be less than One Million Dollars
                           ($1,000,000) (or the Dollar Equivalent thereof)), and
                           the Currency of such requested Letter of Credit;

                                    (B)      The name and address of the
                           beneficiary of the requested Letter of Credit;

                                    (C)      The expiration date of the
                           requested Letter of Credit;

                                    (D)      The documentary conditions for
                           drawing under the requested Letter of Credit;

                                    (E)      The date of issuance for the
                           requested Letter of Credit, which shall be a Business
                           Day; and

                                    (F)      The applicable Borrower for such
                           Letter of Credit.

                  The applicable Borrower shall give each LC Application to
                  Issuing Bank at least two (2) Business Days before the
                  proposed date of issuance of the requested Letter of Credit.
                  Each LC Application shall be delivered by first-class mail or
                  facsimile to Agent and Issuing Bank at their respective
                  offices or facsimile numbers and during the hours specified in
                  Paragraph 8.01; provided, however, that the applicable
                  Borrower shall promptly deliver to Issuing Bank the original
                  of any LC Application initially delivered by facsimile. Agent
                  shall promptly notify each Lender of the contents of each LC
                  Application. In the event of any conflict between the terms of
                  this Agreement and the terms of any LC Application or any
                  agreement (other than any Letter of Credit) related

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<PAGE>

                  thereto (including terms with respect to fees and covenants),
                  the terms of this Agreement shall control.

                           (iii)    Disbursement and Reimbursement.

                                    (A)      Disbursement. Issuing Bank shall
                           notify the requesting Borrower promptly upon receipt
                           by Issuing Bank of the presentment of any demand for
                           payment under any Letter of Credit, together with
                           notice of the amount of such payment and the date
                           such payment is to be made. Subject to the terms and
                           provisions of such Letter of Credit and applicable
                           law, Issuing Bank shall make such payment (a "Drawing
                           Payment") to the appropriate beneficiary. Upon
                           payment by Issuing Bank of each Drawing Payment, the
                           remaining available amount under such Letter of
                           Credit (if any) shall be reduced by the amount of
                           such payment.

                                    (B)      Time of Reimbursement. On the day
                           each Drawing Payment is to be made by Issuing Bank,
                           Borrowers shall make or cause to be made to Issuing
                           Bank a payment in the amount of such Drawing Payment
                           (a "Reimbursement Payment"); provided, however, that
                           if the requesting Borrower does not receive notice
                           from Issuing Bank by 10:00 a.m. (California time)
                           that a Reimbursement Payment is due, such
                           Reimbursement Payment (together with interest thereon
                           accruing at the Federal Funds Rate from and including
                           the date such Drawing Payment is made but excluding
                           the next succeeding Business Day) shall instead be
                           due on the next succeeding Business Day after the
                           requesting Borrower receives such notice, provided
                           that Borrowers shall make such Reimbursement Payment
                           to, or cause such Reimbursement Payment to be made
                           to, Agent for the benefit of the Lenders if, prior to
                           the time such Reimbursement Payment is made, Issuing
                           Bank has notified the applicable Borrower that it has
                           requested the Lenders pursuant to Subparagraph
                           2.01(b)(iv) to pay to Issuing Bank their respective
                           Proportionate Shares of the Drawing Payment made by
                           Issuing Bank. If any such Reimbursement Payment is
                           made to Agent, Agent shall promptly pay to each
                           Lender which has paid its Proportionate Share of the
                           Drawing Payment, such Lender's Proportionate Share of
                           the Reimbursement Payment and shall promptly pay to
                           Issuing Bank the balance of such Reimbursement
                           Payment.

                                    (C)      Reimbursement Obligation Absolute.
                           The obligation of Borrowers to reimburse Issuing Bank
                           or the Lenders, as the case may be, for Drawing
                           Payments (such obligation, together with the
                           obligation to pay interest thereon, to be referred to
                           herein collectively as a "Reimbursement Obligation")
                           shall be absolute, unconditional and irrevocable, and
                           shall be performed strictly in accordance with the
                           terms of this Agreement under and without regard to
                           any circumstances, including, (1) the passage of the
                           Maturity Date, (2) any lack of validity or
                           enforceability of any of the Credit Documents, (3)
                           the existence of any claim, set-off, defense or other
                           right which Borrowers may have at any time against
                           any beneficiary or any transferee of any Letter of
                           Credit (or any Persons for whom any such beneficiary
                           or transferee may be acting), Issuing Bank, Agent,
                           any other Lender or any other Person, whether in
                           connection with this Agreement, the transactions
                           contemplated herein or in the other Credit Documents,
                           or in any unrelated transaction, (4) any breach of
                           contract or dispute between Borrowers, any
                           beneficiary or any transferee of any Letter of Credit
                           (or any Persons for whom any such beneficiary or
                           transferee may be acting), Issuing Bank, any Agent,
                           any Lender or any other Person, (5) any demand,
                           statement or other document presented under any
                           Letter of Credit proving to be forged, fraudulent,
                           invalid or insufficient in any respect or any
                           statement therein being untrue or inaccurate in any
                           respect, (6) payment by Issuing Bank under any Letter
                           of Credit against presentation of a demand for
                           payment which does not comply with the terms of such
                           Letter of Credit, (7) any non-application or
                           misapplication by any beneficiary or any transferee
                           of any Letter of Credit (or any Persons for whom any
                           such beneficiary or transferee may be acting) of the
                           proceeds of

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<PAGE>

                           any drawing under such Letter of Credit, (8) any
                           delay, extension of time, renewal, compromise or
                           other indulgence or modification granted or agreed to
                           by Issuing Bank, Agent or any Lender, with or without
                           notice to or approval by Borrowers, with respect to
                           Borrowers' indebtedness under this Agreement or (9)
                           any other act or omission to act or delay of any kind
                           of the Issuing Bank, Agent, any Lender or any other
                           person, in any other event or circumstance
                           whatsoever, whether or not similar to any of the
                           foregoing that might, but for the provisions of this
                           Subparagraph 2.01(b)(iii)(C), constitute a legal or
                           equitable discharge of, or provide a right of set-off
                           against, Borrowers' respective obligations hereunder;
                           provided, however, that this Subparagraph
                           2.01(b)(iii)(C) shall not abrogate any right which
                           Borrowers may have to seek to enjoin any drawing
                           under any Letter of Credit or to recover damages from
                           Issuing Bank pursuant to Subparagraph 2.01(c)(v).

                           (iv)     Lender Participations; Loan Funding.

                                    (A)      Participation Agreement. Each
                           Lender severally, unconditionally and irrevocably
                           agrees with Issuing Bank to participate in the
                           extension of credit arising from the issuance of each
                           Letter of Credit in an amount equal to such Lender's
                           Proportionate Share of the stated amount of such
                           Letter of Credit from time to time, and the issuance
                           of each Letter of Credit shall be deemed a
                           confirmation by Issuing Bank of such participation in
                           such amount.

                                    (B)      Participation Funding. Issuing Bank
                           may request the Lenders to fund their participations
                           in Letters of Credit by paying to Issuing Bank all or
                           any portion of any Drawing Payment made or to be made
                           by Issuing Bank under any Letter of Credit. Issuing
                           Bank shall make such a request by delivering to Agent
                           (with a copy to Borrowers), at any time after the
                           drawing for which such payment is requested has been
                           made upon Issuing Bank, a written request for such
                           payment which specifies the amount of such Drawing
                           Payment and the date on which such Drawing Payment is
                           to be made or was made; provided, however, that
                           Issuing Bank shall not request the Lenders to make
                           any payment under this Subparagraph 2.01(b)(iv) in
                           connection with any portion of a Drawing Payment for
                           which Issuing Bank has been reimbursed in full from a
                           Reimbursement Payment by Borrowers unless such
                           Reimbursement Payment has been thereafter recovered
                           by Borrowers or any other Person. Agent shall
                           promptly notify each Lender of the contents of each
                           such request and of such Lender's Proportionate Share
                           of the applicable portion of such Drawing Payment.
                           Promptly following receipt of such notice from Agent,
                           each Lender shall pay to Agent, for the benefit of
                           Issuing Bank, such Lender's Proportionate Share of
                           the applicable portion of such Drawing Payment.

                                    (C)      Funding Through Loans. If, at any
                           time prior to the Maturity Date, any Reimbursement
                           Obligations are outstanding, Agent may or, upon the
                           written request of Issuing Bank (if one or more
                           Borrower is not then the subject of a bankruptcy
                           proceeding), shall (subject to the terms and
                           conditions of this Subparagraph 2.01(b)(iv)),
                           initiate a Borrowing in an amount not exceeding the
                           aggregate amount of such outstanding Reimbursement
                           Obligations and use the proceeds of such Borrowing to
                           repay all or a portion of such Reimbursement
                           Obligations. Agent shall initiate such a Borrowing by
                           delivering to each Lender (with a copy to the
                           applicable Borrower) a written notice which specifies
                           the aggregate amount of outstanding Reimbursement
                           Obligations, the amount of the Borrowing (which
                           initially shall consist of Base Rate Loans), the date
                           of such Borrowing and the amount of the Loan to be
                           made by such Lender as part of such Borrowing. Each
                           Lender shall make available to Agent funds in the
                           amount of its Loan as provided in Subparagraph
                           2.10(a). After receipt of such funds, Agent shall
                           promptly disburse such funds to Issuing Bank and the
                           Lenders, as appropriate, in payment of the
                           outstanding Reimbursement Obligations.

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<PAGE>

                                    (D)      Obligations Absolute. Each Lender's
                           obligations to fund its participations under this
                           Subparagraph 2.01(b)(iv) shall be absolute,
                           unconditional and irrevocable and shall not be
                           affected by (1) the passage of the Maturity Date, (2)
                           the occurrence or existence of any Default, (3) any
                           failure to satisfy any condition set forth in Section
                           III, (4) any event or condition which might have a
                           Material Adverse Effect, (5) the failure of any other
                           Lender to make any payment under this Subparagraph
                           2.01(b)(iv), (6) any right of offset, abatement,
                           withholding or reduction which such Lender may have
                           against Issuing Bank, Agent, any Lender or any
                           Borrower, (7) any event, circumstance or condition
                           set forth in Subparagraph 2.01(b)(iii) or
                           Subparagraph 2.01(b)(v), or (8) any other event,
                           circumstance or condition whatsoever, whether or not
                           similar to any of the foregoing; provided, however,
                           that nothing in this Subparagraph 2.01(b)(iv) shall
                           prejudice any right which any Lender may have against
                           Issuing Bank for any action by Issuing Bank which
                           constitutes gross negligence or willful misconduct.

                           (v)      Liability of Issuing Bank, Etc. Provided
                  that Issuing Bank has used reasonable care in examining all
                  documents presented to it in connection with a demand on any
                  Letter of Credit, Borrowers agree that none of Issuing Bank,
                  Agent or any Lender (nor any of their respective directors,
                  officers or employees) shall be liable or responsible for (A)
                  the use which may be made of any Letter of Credit or for any
                  acts or omissions of any beneficiary or transferee thereof in
                  connection therewith; (B) any reference which may be made to
                  this Agreement or to any Letter of Credit in any agreements,
                  instruments or other documents relating to obligations secured
                  by such Letter of Credit; (C) the validity, sufficiency or
                  genuineness of documents, or of any endorsement(s) thereon,
                  even if such documents should in fact prove to be in any or
                  all respects invalid, insufficient, fraudulent or forged or
                  any statement therein prove to be untrue or inaccurate in any
                  respect whatsoever; (D) payment by Issuing Bank against
                  presentation of documents which do not comply with the terms
                  of any Letter of Credit, including failure of any documents to
                  bear any reference or adequate reference to any Letter of
                  Credit; or (E) any other circumstances whatsoever in making or
                  failing to make payment under any Letter of Credit, except
                  only that Issuing Bank shall be liable to Borrowers for acts
                  or events described in clauses (A) through (E) above, to the
                  extent, but only to the extent, of any damages suffered by
                  Borrowers (excluding consequential damages) which Borrowers
                  prove were caused by (1) Issuing Bank's willful misconduct or
                  gross negligence in determining whether a drawing made under
                  any Letter of Credit complies with the terms and conditions
                  therefor stated in such Letter of Credit or (2) Issuing Bank's
                  willful misconduct or gross negligence in failing to pay under
                  any Letter of Credit after a drawing by the beneficiary
                  thereof strictly complying with the terms and conditions of
                  such Letter of Credit. Without limiting the foregoing, Issuing
                  Bank may accept a drawing that appears on its face to be in
                  order, without responsibility for further investigation. The
                  determination of whether a drawing has been made under any
                  Letter of Credit prior to its expiration or whether a drawing
                  made under any Letter of Credit is in proper and sufficient
                  form shall be made by Issuing Bank in its sole discretion,
                  which determination shall be conclusive and binding upon
                  Borrowers to the extent permitted by law. The parties hereto
                  expressly agree that, in the absence of willful misconduct or
                  gross negligence by the Issuing Bank (as finally determined by
                  a court of competent jurisdiction), the Issuing Bank shall be
                  deemed to have exercised reasonable care. Borrowers hereby
                  waive any right to object to any payment made under any Letter
                  of Credit with regard to a drawing that is in the form
                  provided in such Letter of Credit but which varies with
                  respect to punctuation, capitalization, spelling or similar
                  matters of form.

                           (vi)     Reports of Issuing Bank. Issuing Bank shall,
                  if requested by Agent or any Lender, provide to Agent on a
                  monthly basis such information regarding the Letters of Credit
                  as Agent may reasonably request, including the Letters of
                  Credit outstanding, the stated amounts of outstanding Letters
                  of Credit, the expiration dates of outstanding Letters of
                  Credit, the names of the beneficiaries of outstanding Letters
                  of Credit, the amounts of unpaid Reimbursement Obligations and
                  the amounts and times of Drawing Payments and Reimbursement
                  Payments. Upon request by any Lender, Agent shall provide such
                  information to the Lenders.

                                       23

<PAGE>

                           (vii)    Resignation or Removal of Issuing Bank.
                  Issuing Bank may resign at any time by giving thirty (30) days
                  prior written notice thereof to Borrowers and Lenders, and
                  Issuing Bank may be removed at any time with or without cause
                  by written agreement among Borrowers, Agent and the successor
                  Issuing Bank; provided, however, that Borrowers shall have no
                  right to approve a successor Issuing Bank if a Default has
                  occurred and is continuing. If no successor Issuing Bank shall
                  have been so appointed and shall have accepted such
                  appointment within thirty (30) days of after the retiring
                  Issuing Bank gives notice of its resignation, then the
                  retiring Issuing Bank may, on behalf of Lenders and Agent,
                  appoint a successor Issuing Bank, which shall be a bank with
                  an office in New York, New York, or an Affiliate of any such
                  bank. Upon the acceptance of any appointment as Issuing Bank
                  hereunder, Agent shall notify Lenders of such successor
                  Issuing Bank, which shall thereupon succeed to and become
                  vested with all the rights, powers, privileges and duties of
                  the retiring Issuing Bank. At the time any such replacement
                  shall become effective, Borrowers shall pay all unpaid fees
                  and expenses accrued for the account of the retiring Issuing
                  Bank pursuant to Subparagraphs 2.06(c)(ii) and (iii). After
                  the replacement of the retiring Issuing Bank, the retiring
                  Issuing Bank shall remain a party hereto and shall continue to
                  have all rights and obligations of the Issuing Bank under this
                  Agreement with respect to Letters of Credit issued by it prior
                  to such replacement, but it shall not be required to issue
                  additional Letters of Credit.

         2.02.    Notice of Borrowing. Borrowers shall request each Borrowing by
delivering to Agent an irrevocable written notice in the form of Exhibit A,
appropriately completed (a "Notice of Borrowing"), which specifies, among other
things:

                  (a)      The Currency and principal amount of such Borrowing,
         which shall be in the minimum Dollar amount or Dollar Equivalent of
         Five Million Dollars ($5,000,000) or an integral multiple of One
         Million Dollars ($1,000,000) in excess thereof, provided that
         Borrowings may be in an aggregate amount that is equal to the entire
         Unused amount of the Commitments;

                  (b)      Whether such requested Borrowing is to consist of
         Base Rate Loans or LIBOR Loans;

                  (c)      If such Borrowing is to consist of LIBOR Loans, the
         initial Interest Period selected by the applicable Borrower for such
         Borrowing in accordance with Subparagraph 2.03(b)(i);

                  (d)      The date of such Borrowing, which shall be a Business
         Day; and

                  (e)      The applicable Borrower for such Borrowing.

Borrowers shall give each Notice of Borrowing to Agent at least four (4)
Business Days before the date of the requested Borrowing in the case of a
Borrowing in an Alternative Currency, at three (3) Business Days before the date
of the requested Borrowing in the case of a Borrowing consisting of LIBOR Loans
in Dollars and at least one (1) Business Day before the date of the requested
Borrowing in the case of a Borrowing in Dollars consisting of Base Rate Loans.
Each Notice of Borrowing shall be signed by a Responsible Officer of the
applicable Borrower and delivered by first-class mail or facsimile to Agent at
the office or facsimile number and during the hours specified in Paragraph 8.01;
provided, however, that Borrowers shall promptly deliver to Agent the original
of any Notice of Borrowing initially delivered by facsimile. Agent shall
promptly notify each Lender of the contents of each Notice of Borrowing.

         2.03.    Interest.

                  (a)      Interest Rates. Borrowers shall pay interest on the
         unpaid principal amount of each Loan from the date of such Loan until
         the maturity thereof, at one of the following rates per annum:

                           (i)      During such periods as any Loan is a Base
                  Rate Loan, at a rate per annum on such Loan equal to the Base
                  Rate plus the Applicable Margin therefor, such rate to change
                  from time to time as the Applicable Margin or Base Rate shall
                  change; and

                                       24

<PAGE>

                           (ii)     During such periods as any Loan is a LIBOR
                  Loan, at a rate per annum on such Loan equal at all times
                  during each Interest Period for such Loan to the LIBO Rate for
                  such Interest Period plus the Applicable Margin therefor, such
                  rate to change from time to time as the Applicable Margin
                  shall change.

         All Loans in each Borrowing shall, at any given time prior to maturity,
         bear interest at one, and only one, of the above rates. Only Borrowings
         in Dollars may be Base Rate Loans. Each LIBOR Loan Borrowing shall be
         in a minimum amount of Five Million Dollars ($5,000,000) and an
         integral multiple of One Million Dollars ($1,000,000) in excess
         thereof.

                  (b)      Terms.

                           (i)      LIBOR Loan Interest Periods. The initial and
                  each subsequent Interest Period selected by a Borrower for any
                  Borrowing consisting of LIBOR Loans shall be one (1), two (2),
                  three (3) or six (6) months; provided, however, that (A) any
                  Interest Period which would otherwise end on a day which is
                  not a Business Day shall be extended to the next succeeding
                  Business Day unless such next Business Day falls in another
                  calendar month, in which case such Interest Period shall end
                  on the immediately preceding Business Day, (B) any Interest
                  Period which begins on the last Business Day of a calendar
                  month (or on a day for which there is no numerically
                  corresponding day in the calendar month at the end of such
                  Interest Period) shall end on the last Business Day of a
                  calendar month, and (C) no Interest Period for a Borrowing
                  shall end after the Maturity Date.

                           (ii)     Notice of Interest Period Selection. The
                  applicable Borrower shall notify Agent by an irrevocable
                  written notice in a form acceptable to Agent, appropriately
                  completed (a "Notice of Interest Period Selection"), at least
                  four (4) Business Days prior to the last day of each Interest
                  Period for any Borrowing in an Alternative Currency and at
                  least three (3) Business Days prior to the last day of each
                  Interest Period for a Borrowing in Dollars consisting of LIBOR
                  Loans of the Interest Period selected by such Borrower for the
                  next succeeding Interest Period for such Borrowing. Each
                  Notice of Interest Period Selection shall be given by
                  first-class mail or facsimile to the office or the facsimile
                  number and during the hours specified in Paragraph 8.01;
                  provided, however, that the applicable Borrower shall promptly
                  deliver to Agent the original of any Notice of Interest Period
                  Selection initially delivered by facsimile. If any Borrower
                  fails to notify Agent of the next Interest Period for a
                  Borrowing in accordance with this Subparagraph 2.03(b)(ii),
                  the next Interest Period for such Borrowing shall be one (1)
                  month, and if no Currency is specified, then the Borrowing
                  shall be deemed to continue in the same Currency as the
                  existing Loan. Agent shall promptly notify each Lender of the
                  contents of each Notice of Interest Period Selection.

                           (iii)    Conversion of Borrowings. Each Borrowing
                  initially shall be of the type specified in the applicable
                  Notice of Borrowing and, in the case of a LIBOR Loan, shall
                  have an initial Interest Period as specified in such Notice of
                  Borrowing. Thereafter, Borrower(s) may elect to convert such
                  Borrowing to a different type or to continue such Borrowing
                  and, in the case of a LIBOR Loan, may elect Interest Periods
                  therefor, all as provided in this Paragraph 2.03. Borrowers
                  may elect different options with respect to different portions
                  of the affected Borrowing, in which case each such portion
                  shall be allocated ratably among Lenders holding the Loans
                  comprising such Borrowing, and the Loans comprising each such
                  portion shall be considered a separate Borrowing.
                  Notwithstanding any contrary provision of this Agreement, (A)
                  in no event shall any Borrower be permitted to convert a Loan
                  in one Currency into a Loan of a different Currency (as
                  opposed to repaying such Loan and thereafter obtaining a new
                  Loan) and (B) if an Event of Default has occurred and is
                  continuing and Agent, at the written request of the Required
                  Lenders, so notifies the applicable Borrower, then (1) no
                  outstanding Borrowing may be converted to or continued as a
                  Borrowing consisting of LIBOR Loans in Dollars, (2) unless
                  repaid, each Borrowing consisting of LIBOR Loans in Dollars
                  shall be converted to a Borrowing consisting of Base Rate
                  Loans in Dollars at the end of the Interest Period applicable
                  thereto and (3) unless repaid, each Borrowing consisting of
                  LIBOR Loans in an Alternative Currency shall be continued

                                       25

<PAGE>

                  as a Borrowing consisting of LIBOR Loans in an Alternative
                  Currency with an Interest Period of one month's duration.

         2.04.    Purpose. Borrowers shall use any proceeds of any initial Loans
made on the Closing Date for (a) working capital and general corporate needs
(including capital expenditures, acquisitions permitted under Subparagraph
5.02(d) and investments permitted under Subparagraph 5.02(e), respectively) and
(b) repaying on the Closing Date all indebtedness outstanding under the Existing
FIL Credit Agreement, if any, and thereafter Borrowers shall use the proceeds of
the Loans for their respective working capital and general corporate needs
(including capital expenditures).

         2.05.    Amount Limitations, Commitment Reductions, Etc.

                  (a)      Commitment Limitations. The Dollar amount or Dollar
         Equivalent (as applicable) of the aggregate principal amount of all
         Loans outstanding plus the aggregate Dollar amount or Dollar Equivalent
         (as applicable) available for drawing under all Letters of Credit
         outstanding at such time plus the aggregate Dollar amount or Dollar
         Equivalent (as applicable) of all Reimbursement Obligations outstanding
         at such time shall not exceed the Total Commitment at such time.

                  (b)      Determination of Dollar Equivalent. For the purposes
         of applying the amount limitations set forth in Subparagraph 2.05(a)
         and calculating the Unused Total Commitment and the available amount
         under the Letter of Credit subfacility and for all other purposes
         herein, the Dollar Equivalent of each Loan and Letter of Credit in an
         Alternative Currency shall be determined by Agent on the date of such
         Loan or Letter of Credit, on the last day of each month and, if an
         Event of Default has occurred and is continuing, at any other time
         determined by Agent, and the Dollar Equivalent of such Loan and Letter
         of Credit at any time shall be the Dollar Equivalent most recently so
         determined by Agent. Each such determination by Agent shall, in the
         absence of manifest error, be conclusive and binding on the parties
         hereto.

                  (c)      Reduction or Cancellation of Commitments. Upon five
         (5) Business Days prior written notice to Agent, Borrowers may
         permanently reduce the Total Commitment by the Dollar amount or Dollar
         Equivalent (as applicable) amount of Five Million Dollars ($5,000,000)
         or integral multiples in excess thereof, or cancel the Total Commitment
         in its entirety; provided, however, that:

                           (i)      Borrowers may not reduce the Total
                  Commitment prior to the Maturity Date, if, after giving effect
                  to such reduction, the Dollar Equivalent of the aggregate
                  principal amount of all Loans then outstanding plus the
                  aggregate amount available for drawing under all Letters of
                  Credit outstanding at such time plus the aggregate amount of
                  all Reimbursement Obligations outstanding at such time would
                  exceed the Total Commitment; and

                           (ii)     Borrowers may not cancel the Total
                  Commitment prior to the Maturity Date, if, after giving effect
                  to such cancellation, any Loan, Reimbursement Obligation or
                  Letter of Credit would then remain outstanding.

         Unless sooner terminated pursuant to this Agreement, the Commitments
         shall terminate on the Maturity Date.

                  (d)      Effect of Commitment Reductions. From the effective
         date of any reduction of the Total Commitment, the Commitment Fees
         payable pursuant to Subparagraph 2.06(b) shall be computed on the basis
         of the Total Commitment as so reduced. Once reduced or cancelled, the
         Total Commitment may not be increased or reinstated without the prior
         written consent of all Lenders. Any reduction of the Total Commitment
         shall be applied ratably to reduce each Lender's Commitment in
         accordance with Subparagraph 2.11(a)(i).

         2.06.    Fees.

                                       26

<PAGE>

                  (a)      Agent's Fee. Borrowers shall pay to Agent, for its
         own account, agent's fees and other compensation in the amounts and at
         the times set forth in the Agent's Fee Letter (the "Agent's Fees").

                  (b)      Commitment Fees. Borrowers shall pay to Agent, for
         the ratable benefit of Lenders as provided in Subparagraph 2.11(a)(v),
         commitment fees in Dollars (the "Commitment Fees") equal to the
         Commitment Fee Percentage of the daily average Unused amount of the
         Total Commitment for the period beginning on the date of this Agreement
         and ending on the Maturity Date.

         Borrowers shall pay the Commitment Fees in arrears on the last day of
         each March, June, September and December (commencing March 31, 2004)
         and on the Maturity Date (or any portion of the Total Commitment or is
         cancelled on a date prior to the Maturity Date, on such prior date).

                  (c)      Letter of Credit Fees.

                           (i)      Letter of Credit Usage Fees. Borrowers shall
                  pay to Agent, for the ratable benefit of the Lenders as
                  provided in Subparagraph 2.11(a)(v), nonrefundable letter of
                  credit fees for the Letters of Credit (the "LC Usage Fees")
                  equal to the greater of (A) the applicable LC Usage Fee Rate
                  (as such rate changes from time to time) on the daily average
                  available amount of each Letter of Credit for the period
                  beginning on the date such Letter of Credit is issued and
                  ending on the date such Letter of Credit expires and (B) Five
                  Hundred Dollars ($500). Borrowers shall pay the LC Usage Fees
                  quarterly in arrears on the last day in each March, June,
                  September and December (commencing March 31, 2004) and on the
                  date the last Letter of Credit expires (or if a demand for
                  payment is made on the last outstanding Letter of Credit on a
                  date prior to the date the last Letter of Credit expires, on
                  such date).

                           (ii)     Letter of Credit Issuance Fees. Borrowers
                  shall pay to Agent, for the sole benefit of Issuing Bank,
                  nonrefundable issuance fees for the Letters of Credit (the "LC
                  Issuance Fees") equal to the greater of (A) 1/8th of one
                  percent (0.125%) per annum on the daily average undrawn amount
                  of each Letter of Credit for the period beginning on the date
                  such Letter of Credit is issued and ending on the date such
                  Letter of Credit expires and (B) one hundred fifty dollars
                  ($150). Borrowers shall pay the LC Issuance Fees for each
                  Letter of Credit quarterly in arrears on the last day in each
                  March, June, September and December (commencing March 31,
                  2004) and on the date the last Letter of Credit expires (or if
                  a demand for payment is made on the last outstanding Letter of
                  Credit on a date prior to the date the last Letter of Credit
                  expires, on such prior date).

                           (iii)    Other Letter of Credit Fees. In addition to
                  the LC Usage Fees and the LC Issuance Fees, Borrowers shall
                  pay to Agent, for the sole benefit of Issuing Bank, other
                  standard fees of Issuing Bank for drawings under, transfers of
                  and amendments to any Letter of Credit and other
                  administrative actions performed by Issuing Bank in connection
                  with any Letter of Credit, payable at such times and in such
                  amounts as are consistent with Issuing Bank's standard fee
                  policy at the time of such amendment or other action.

         2.07.    Prepayments.

                  (a)      Terms of all Prepayments. Upon the prepayment of any
         Loan (whether such prepayment is an optional prepayment under
         Subparagraph 2.07(b), a mandatory prepayment required by Subparagraph
         2.07(c) or a mandatory prepayment required by any other provision of
         this Agreement or the other Credit Documents, including a prepayment
         upon acceleration), the applicable Borrower shall pay to the Lender
         that made such Loan (i) all accrued interest to the date of such
         prepayment on the amount prepaid and (ii) if such prepayment is the
         prepayment of a LIBOR Loan on a day other than the last day of an
         Interest Period for such LIBOR Loan, all amounts payable to such Lender
         pursuant to Paragraph 2.14.

                                       27

<PAGE>

                  (b)      Optional Prepayments. At its option, any Borrower may
         prepay, in whole or in part, any Borrowing made to it, provided that:

                           (i)      Such Borrower delivers to Agent prior
                  written notice of such prepayment, which notice shall be
                  delivered (A) not less than four (4) Business Days prior to
                  the prepayment of any Borrowing consisting of LIBOR Loans in
                  an Alternative Currency, (B) not less than three (3), Business
                  Days prior to the prepayment of any Borrowing consisting of
                  LIBOR Loans in Dollars, and (C) not less than one (1) Business
                  Day prior to any prepayment of a Base Rate Borrowing; and

                           (ii)     Any prepayment in part shall be in a minimum
                  aggregate principal amount equal to the Dollar amount or
                  Dollar Equivalent (as applicable) of Five Million Dollars
                  ($5,000,000) or an integral multiple of One Million Dollars
                  ($1,000,000) in excess thereof, provided that prepayments may
                  be in an aggregate amount that is equal to the aggregate
                  amount of all Borrowings outstanding.

                  (c)      Mandatory Prepayments. If, at any time, the aggregate
         Dollar amount or Dollar Equivalent of the principal amount of all Loans
         then outstanding plus the aggregate amount available for drawing under
         all Letters of Credit outstanding at such time plus the aggregate
         amount of all Reimbursement Obligations outstanding at such time
         exceeds any limitations set forth in Subparagraphs 2.05(a), the
         applicable Borrower(s) shall immediately (A) prepay Loans then
         outstanding and/or pay any Reimbursement Obligations then outstanding
         to the extent necessary to eliminate such excess and (B) to the extent
         any excess still remains, provide to Agent cash collateral in the
         amount of such excess. Agent shall hold any such cash in a non-interest
         bearing account as collateral for the Obligations. Borrowers hereby
         grant to Agent for the benefit of the Lenders, a security interest in
         such funds and in such account.

                  (d)      Application of Prepayments. All prepayments of
         Borrowings shall, to the extent possible, be applied to prepay the Base
         Rate Borrowings or LIBOR Borrowings designated by any Borrower.

         2.08.    Other Payment Terms.

                  (a)      Place and Manner.

                           (i)      Borrowers shall make all payments due to
                  each Lender or Agent hereunder by payments to Agent at Agent's
                  New York office located at the address specified in Paragraph
                  8.01, with each such payment due to a Lender to be for the
                  account of such Lender.

                           (ii)     Borrowers shall make all payments hereunder
                  in the lawful Currency required by Subparagraph 2.08(c) and in
                  same day or immediately available funds and without deduction
                  or offset not later than 2:00 p.m. New York City time and on
                  the date due. Agent shall promptly disburse to each Lender
                  each payment received by Agent for the account of such Lender.

                  (b)      Date. Whenever any payment due hereunder shall fall
         due on a day other than a Business Day, such payment shall be made on
         the next succeeding Business Day, and such extension of time shall be
         included in the computation of interest or fees, as the case may be;
         provided, however, that payment of interest on LIBOR Loans shall be
         made on the last day of the applicable Interest Period (as specified in
         Subparagraph 2.03(b)(i)).

                  (c)      Currency of Payment.

                           (i)      Borrowers shall pay principal of, interest
                  on and all other amounts related to each Borrowing or
                  Reimbursement Payment in the Currency of such Borrowing or
                  Reimbursement Payment, as applicable. Borrowers shall pay
                  Commitment Fees and all other amounts payable

                                       28

<PAGE>

                  under this Agreement and the other Credit Documents in
                  Dollars. If, for any reason, any Borrower is prohibited by any
                  Governmental Rule from making any required payment hereunder
                  in an Alternative Currency, such Borrower shall make such
                  payment in Dollars in an amount equal to the Dollar Equivalent
                  of such Alternative Currency as determined by Agent.

                           (ii)     If any amounts required to be paid by
                  Borrowers under this Agreement, any other Credit Document or
                  any order, judgment or award given or rendered in relation
                  hereto or thereto has to be converted from the currency (the
                  "first currency") in which the same is payable hereunder or
                  thereunder into another currency (the "second currency") for
                  the purpose of (A) making or filing a claim or proof against
                  Borrowers with any Governmental Authority, (B) obtaining an
                  order or judgment in any court or other tribunal or (C)
                  enforcing any order or judgment given or made in relation
                  hereto, Borrowers shall, to the fullest extent permitted by
                  law, indemnify and hold harmless each of the Persons to whom
                  such amounts are payable from and against any loss suffered as
                  a result of any discrepancy between (1) the rate of exchange
                  used for such purpose to convert the amounts in question from
                  the first currency into the second currency and (2) the rate
                  or rates of exchange at which such Person may, using
                  reasonable efforts in the ordinary course of business,
                  purchase the first currency with the second currency upon
                  receipt of a sum paid to it in satisfaction, in whole or in
                  part, of any such order, judgment, claim or proof. The
                  foregoing indemnity shall constitute a separate obligation of
                  Borrowers distinct from their other obligations hereunder and
                  shall survive the giving or making of any judgment or order in
                  relation to all or any of such obligations. The obligations of
                  Borrowers under this Subparagraph 2.08(c) shall survive the
                  payment and performance of the Obligations and the
                  termination of this Agreement.

                  (d)      Late Payments. If any amount required to be paid by
         any Borrower under this Agreement or the other Credit Documents
         (including principal or interest payable on any Loan, any Reimbursement
         Payments or interest thereon, any fees or other amounts) remains unpaid
         after such amount is due, such Borrower shall pay interest on the
         aggregate, outstanding balance of such amount from the date due until
         such amount is paid in full at a per annum rate equal to (i) in the
         case any amount payable in Dollars, the Base Rate plus two percent
         (2.00%), such rate to change from time to time as the Base Rate shall
         change, and (ii) in the case of any amount payable in an Alternative
         Currency, the Overnight Rate for such amount plus three percent
         (3.00%), such rate to change from time to time as the Overnight Rate
         shall change.

                  (e)      Application of Payments. All payments hereunder shall
         be applied first to unpaid fees, costs and expenses then due and
         payable under this Agreement or the other Credit Documents, second to
         accrued interest then due and payable under this Agreement or the other
         Credit Documents and finally to reduce the principal amount of
         outstanding Loans and unpaid Reimbursement Obligations.

                  (f)      Failure to Pay Agent. Unless Agent shall have
         received notice from a Borrower at least one (1) Business Day prior to
         the date on which any payment is due to Lenders hereunder that such
         Borrower will not make such payment in full, Agent shall be entitled to
         assume that such Borrower has made or will make such payment in full to
         Agent on such date and Agent may, in reliance upon such assumption,
         cause to be paid to the applicable Lenders on such due date an amount
         equal to the amount then due such Lenders. If and to the extent such
         Borrower shall not have so made such payment in full to Agent, each
         such Lender shall repay to Agent forthwith on demand such amount
         distributed to such Lender together with interest thereon, for each day
         from the date such amount is distributed to such Lender until the date
         such Lender repays such amount to Agent, at a per annum rate equal to
         (i) the Federal Funds Rate for any amount in Dollars or (ii) the
         Overnight Rate for the first three (3) days and the Overnight Rate plus
         one percent (1%) thereafter for any amount in an Alternative Currency.
         A certificate of Agent submitted to any Lender with respect to any
         amount owing by such Lender under this Subparagraph 2.08(f) shall
         constitute prima facie evidence of such amount.

         2.09.    Loan Accounts; Notes.

                                       29

<PAGE>

                  (a)      Loan Accounts. The obligation of each Borrower to
         repay the Loans made to it by each Lender and to pay interest thereon
         at the rates provided herein shall be evidenced by an account or
         accounts maintained by such Lender on its books (individually, a "Loan
         Account"), except that any Lender may request that its Loans be
         evidenced by a note or notes pursuant to Subparagraph 2.09(b). Each
         Lender shall record in its Loan Accounts (i) the date, amount and
         Currency of each Loan made by such Lender, (ii) the interest rates
         applicable to each such Loan thereof and the effective dates of all
         changes thereto, (iii) the Interest Period for each LIBOR Loan, (iv)
         the date, amount and Currency of each principal and interest payment on
         each Loan and (v) such other information as such Lender may determine
         is necessary for the computation of principal and interest payable to
         it by each Borrower hereunder; provided, however, that any failure by a
         Lender to make, or any error by any Lender in making, any such notation
         shall not affect Borrowers' Obligations hereunder. The Loan Accounts
         shall constitute prima facie evidence of the matters noted therein.

                  (b)      Notes. If any Lender so requests, such Lender's Loans
         under each Facility shall be evidenced by promissory notes in the form
         of Exhibit B (individually, a "Note"), which shall be (i) payable to
         the order of such Lender, (ii) dated the Closing Date, and (iii)
         otherwise appropriately completed.

         2.10.    Loan Funding.

                  (a)      Lender Funding and Disbursements to Borrowers. Each
         Lender shall, before 2:00 p.m. (New York City time) on the date of each
         Borrowing, make available to Agent at Agent's New York office specified
         in Paragraph 8.01, in immediately available funds, such Lender's
         applicable Proportionate Share of such Borrowing. After Agent's receipt
         of such funds and upon satisfaction of the applicable conditions set
         forth in Section III, Agent shall promptly disburse such funds to the
         applicable Borrower no later than 4:00 p.m. (New York City time) in
         immediately available funds. Agent shall disburse the proceeds of each
         Borrowing as directed by the applicable Borrower in the applicable
         Notice of Borrowing.

                  (b)      Lender Failure to Fund. Unless Agent shall have
         received notice from a Lender prior to the date of a Borrowing that
         such Lender will not make available to Agent such Lender's
         Proportionate Share of such Borrowing, Agent shall be entitled to
         assume that such Lender has made or will make such amount available to
         Agent on the date of such Borrowing in accordance with Subparagraph
         2.10(a), and Agent may on such date, in reliance upon such assumption,
         disburse or otherwise credit to the applicable Borrower a corresponding
         amount. If any Lender does not make the amount of its applicable
         Proportionate Share of a Borrowing available to Agent on or prior to
         the date of such Borrowing, such Lender shall pay to Agent, on demand,
         interest which shall accrue on such amount from the date of such
         Borrowing until such amount is paid to Agent at rates equal to (i) the
         Federal Funds Rate for any amount in Dollars or (ii) the Overnight Rate
         plus one percent (1%) for any amount in an Alternative Currency. A
         certificate of Agent submitted to any Lender with respect to any amount
         owing by such Lender under this Subparagraph 2.10(b) shall constitute
         prima facie evidence of such amount. If the amount of any Lender's
         applicable Proportionate Share of any Borrowing is not paid to Agent by
         such Lender within three (3) Business Days after the date of such
         Borrowing, the applicable Borrower shall repay such amount to Agent, on
         demand, together with interest thereon, for each day from the date such
         amount was disbursed to such Borrower until the date such amount is
         repaid to Agent, at the interest rate applicable at the time to the
         Loans comprising such Borrowing.

                  (c)      Lenders' Obligations Several. The failure of any
         Lender to make the Loan to be made by it as part of any Borrowing shall
         not relieve any other Lender of its obligation hereunder to make its
         Loan as part of such Borrowing, but no Lender shall be obligated in any
         way to make any Loan which another Lender has failed or refused to make
         or otherwise be in any way responsible for the failure or refusal of
         any other Lender to make any Loan required to be made by such other
         Lender.

         2.11.    Pro Rata Treatment.

                  (a)      Borrowings, Commitment Reductions, Etc. Except as
         otherwise provided herein:

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<PAGE>

                           (i)      Each Borrowing, each participation in each
                  Letter of Credit and reduction of the Total Commitment shall
                  be made or shared among Lenders pro rata according to their
                  respective Proportionate Shares;

                           (ii)     Each payment of principal on Loans in any
                  Borrowing shall be shared among Lenders which made or funded
                  the Loans in such Borrowing pro rata according to the
                  respective unpaid principal amounts of such Loans then owed to
                  such Lenders;

                           (iii)    Each payment of interest on Loans in any
                  Borrowing shall be shared among Lenders which made or funded
                  the Loans in such Borrowing pro rata according to (A) the
                  respective unpaid principal amounts of such Loans then owed to
                  such Lenders so made or funded by such Lenders and (B) the
                  dates on which such Lenders so made or funded such Loans;

                           (iv)     Each Reimbursement Payment shall be shared
                  among the Lenders (including Issuing Bank) which made or
                  funded the applicable Drawing Payment pro rata according to
                  the respective amounts of such Drawing Payment so made or
                  funded by such Lenders;

                           (v)      Each payment of Commitment Fees and LC Usage
                  Fees shall be shared among Lenders (except for Defaulting
                  Lenders but including, with respect to LC Usage Fees, Issuing
                  Bank in its capacity as a Lender) pro rata according to their
                  respective Proportionate Shares;

                           (vi)     Each payment of interest (other than
                  interest on Loans) shall be shared among Lenders and Agent
                  owed the amount upon which such interest accrues pro rata
                  according to (A) the respective amounts so owed such Lenders
                  and Agent and (B) the dates on which such amounts became owing
                  to such Lenders and Agent; and

                           (vii)    All other payments under this Agreement and
                  the other Credit Documents shall be for the benefit of the
                  Person or Persons specified.

                  (b)      Sharing of Payments, Etc. If any Lender shall obtain
         any payment (whether voluntary, involuntary, through the exercise of
         any right of set-off, or otherwise) on account of the Loan owed to it
         as part of any Borrowing in excess of its ratable share of payments on
         account of all Loans in such Borrowing obtained by all applicable
         Lenders entitled to such payments or Reimbursement Obligations, such
         Lender shall forthwith purchase from such other Lenders such
         participations in their Loans or Reimbursement Obligations as shall be
         necessary to cause such purchasing Lender to share the excess payment
         ratably with each of them; provided, however, that if all or any
         portion of such excess payment is thereafter recovered from such
         purchasing Lender, such purchase shall be rescinded and each other
         applicable Lender shall repay to the purchasing Lender the purchase
         price to the extent of such recovery together with an amount equal to
         such other Lender's ratable share (according to the proportion of (i)
         the amount of such other Lender's required repayment to (ii) the total
         amount so recovered from the purchasing Lender) of any interest or
         other amount paid or payable by the purchasing Lender in respect of the
         total amount so recovered. Each Borrower agrees that any Lender so
         purchasing a participation from another Lender pursuant to Subparagraph
         8.05(b) may, to the fullest extent permitted by law, exercise all its
         rights of payment (including the right of set-off) with respect to such
         participation as fully as if such Lender were the direct creditor of
         such Borrower in the amount of such participation.

         2.12.    Change of Circumstances.

                  (a)      Inability to Obtain Funds, Determine Rates, Etc. If,
         on or before the first day of any Interest Period for any LIBOR
         Borrowing in any Currency, Agent shall determine (which determination
         shall be conclusive and binding upon Borrowers absent manifest error)
         that (i) funds in the Currency of such Borrowing are not readily
         available in the amounts necessary for such Borrowing in the London
         interbank market, (ii) the LIBO Rate for such Interest Period for such
         Borrowing cannot be adequately and reasonably determined due to other
         circumstances affecting the London interbank market or (iii) the rate
         of

                                       31

<PAGE>

         interest for such Borrowing does not adequately and fairly reflect the
         cost to Lenders of making or maintaining such Borrowing, Agent shall
         immediately give notice of such condition to the applicable Borrowers
         and the applicable Lenders. After the giving of any such notice and
         until Agent shall otherwise notify the applicable Borrowers that the
         circumstances giving rise to such condition no longer exist, such
         Borrowers' right to obtain, continue or convert to Borrowings in the
         affected Currency shall be suspended. Any LIBOR Borrowings in the
         affected Currency outstanding at the commencement of any such
         suspension shall be repaid at the end of the then current Interest
         Period for such Borrowings unless such suspension has then ended.

                  (b)      Illegality. If, after the date of this Agreement, the
         adoption of any Governmental Rule, any change in any Governmental Rule
         or the application or requirements thereof (whether such change occurs
         in accordance with the terms of such Governmental Rule as enacted, as a
         result of amendment or otherwise), any change in the interpretation or
         administration of any Governmental Rule by any Governmental Authority,
         or compliance by any Lender with any request or directive (whether or
         not having the force of law) of any Governmental Authority (a "Change
         of Law") shall make it unlawful or impossible for any Lender to make or
         maintain any LIBOR Loan in any Currency, such Lender shall immediately
         notify Agent and the applicable Borrower of such Change of Law. Upon
         receipt of such notice, (i) such Borrower's right to obtain, continue
         or convert to LIBOR Loans in the affected Currency shall be suspended
         until such time as Agent shall notify such Borrower and the applicable
         Lenders that the circumstances giving rise to such suspension no longer
         exist, and (ii) such Borrower shall, if so requested by such Lender,
         immediately repay such LIBOR Loans in the affected Currency if such
         Lender shall notify such Borrower that such Lender may not lawfully
         continue to fund and maintain such LIBOR Loans. Any prepayment of LIBOR
         Loans made pursuant to the preceding sentence prior to the last day of
         an Interest Period for such LIBOR Loans shall be deemed a prepayment
         thereof for purposes of Paragraph 2.14.

                  (c)      Increased Costs. If, after the date of this
         Agreement, any Change of Law:

                           (i)      Shall subject any Lender to any tax, duty or
                  other charge with respect to any LIBOR Loan, or shall change
                  the basis of taxation of payments by any Borrower to any such
                  Lender on such a LIBOR Loan, or in respect to such a LIBOR
                  Loan, under this Agreement (except for changes in the rate of
                  taxation on the overall net income of such Lender imposed by
                  its jurisdiction of incorporation, the jurisdiction of its
                  Applicable Lending Office, or a jurisdiction in which such
                  Participant is doing business without regard to the
                  transactions contemplated by this Agreement); or

                           (ii)     Shall impose, modify or hold applicable any
                  reserve (excluding any Reserve Requirement or other reserve to
                  the extent included in the calculation of the LIBO Rate for
                  any Loans), special deposit or similar requirement against
                  assets held by, deposits or other liabilities in or for the
                  account of, advances or loans by, or any other acquisition of
                  funds by any Lender for any LIBOR Loan; or

                           (iii)    Shall impose on any Lender any other
                  condition related to any LIBOR Loan, any Letter of Credit or
                  such Lender's Commitments;

         And the effect of any of the foregoing is to increase the cost to such
         Lender of making, continuing or maintaining any such LIBOR Loan, any
         Letter of Credit or its Commitments or to reduce any amount receivable
         by such Lender hereunder; then Borrowers shall from time to time,
         within ten (10) Business Days after demand by such Lender, pay to such
         Lender additional amounts sufficient to reimburse such Lender for such
         increased costs or to compensate such Lender for such reduced amounts;
         provided, however, that Borrowers shall have no obligation to make any
         payment to any demanding party under this Subparagraph 2.12(c) on
         account of any such increased costs or reduced amounts unless Borrowers
         receive notice of such increased costs or reduced amounts from the
         demanding party within twelve (12) months after such increased costs or
         reduced amounts have been incurred or realized accompanied by a
         certificate executed by an officer of the applicable Lender setting
         forth in reasonable detail the basis and calculation of the amount of
         such increased costs or reduced amounts, which certificate shall
         constitute prima facie

                                       32

<PAGE>

         evidence of such costs or amounts. The obligations of Borrowers under
         this Subparagraph 2.12(c) shall survive the payment and performance of
         the Obligations and the termination of this Agreement.

                  (d)      Capital Requirements. If, after the date of this
         Agreement, any Lender determines that (i) any Change of Law affects the
         amount of capital required or expected to be maintained by such Lender
         or any Person controlling such Lender (a "Capital Adequacy
         Requirement") and (ii) the amount of capital maintained by such Lender
         or such Person which is attributable to or based upon the Loans, the
         Letters of Credit, the Commitments or this Agreement must be increased
         as a result of such Capital Adequacy Requirement (taking into account
         such Lender's or such Person's policies with respect to capital
         adequacy), Borrowers shall pay to such Lender or such Person, within
         ten (10) Business Days after demand of such Lender, such amounts as
         such Lender or such Person shall determine are necessary to compensate
         such Lender or such Person for the increased costs to such Lender or
         such Person of such increased capital; provided, however, that
         Borrowers shall have no obligation to make any payment to any demanding
         party under this Subparagraph 2.12(d) on account of any such increased
         costs unless Borrowers receive notice of such increased costs from the
         demanding party within twelve (12) months after such increased costs
         been incurred or realized accompanied by a certificate executed by an
         officer of the applicable Lender setting forth in reasonable detail the
         basis and calculation of the amount of such increased costs, which
         certificate shall constitute prima facie evidence of such costs. The
         obligations of Borrowers under this Subparagraph 2.12(d) shall survive
         the payment and performance of the Obligations and the termination of
         this Agreement.

                  (e)      Mitigation. Any Lender which becomes aware of (i) any
         Change of Law which will make it unlawful or impossible for such Lender
         to make or maintain any LIBOR Loan or (ii) any Change of Law or other
         event or condition which will obligate Borrowers to pay any amount
         pursuant to Subparagraph 2.12(c) or Subparagraph 2.12(d) shall notify
         Borrowers and Agent thereof as promptly as practical. If any Lender has
         given notice of any such Change of Law or other event or condition and
         thereafter becomes aware that such Change of Law or other event or
         condition has ceased to exist, such Lender shall notify Borrowers and
         Agent thereof as promptly as practical. Each Lender affected by any
         Change of Law which makes it unlawful or impossible for such Lender to
         make or maintain any LIBOR Loan or to which Borrowers are obligated to
         pay any amount pursuant to Subparagraph 2.12(c) or Subparagraph 2.12(d)
         shall use reasonable commercial efforts (including changing the
         jurisdiction of its Applicable Lending Offices) to avoid the effect of
         such Change of Law or to avoid or materially reduce any amounts which
         Borrowers are obligated to pay pursuant to Subparagraph 2.12(c) or
         Subparagraph 2.12(d) if, in the reasonable opinion of such Lender, such
         efforts would not be disadvantageous to such Lender or contrary to such
         Lender's normal banking practices.

         2.13.    Taxes on Payments.

                  (a)      Payments Free of Taxes. All payments made by
         Borrowers under this Agreement and the other Credit Documents shall be
         made free and clear of, and, except as provided herein, without
         deduction or withholding for or on account of, Non-Excluded Taxes. If
         any Non-Excluded Taxes are required to be withheld from any amounts
         payable to Agent or any Lender hereunder or under the other Credit
         Documents, the amounts so payable to Agent or such Lender shall be
         increased to the extent necessary to yield to Agent or such Lender
         (after payment of all Non-Excluded Taxes) interest or any such other
         amounts payable hereunder at the rates or in the amounts specified in
         this Agreement and the other Credit Documents. Whenever any
         Non-Excluded Taxes are payable by Borrowers, as promptly as possible
         thereafter, Borrowers shall send to Agent for its own account or for
         the account of such Lender, as the case may be, a certified copy of an
         original official receipt received by Borrowers showing payment
         thereof. If Borrowers fail to pay any Non-Excluded Taxes when due to
         the appropriate taxing authority or fails to remit to Agent the
         required receipts or other required documentary evidence, Borrowers
         shall indemnify Agent and Lenders for any taxes (including interest or
         penalties) that may become payable by Agent or any Lender as a result
         of any such failure. The obligations of Borrowers under this Paragraph
         2.13 (i) shall be subject to the indemnification provisions contained
         in Paragraph 8.03 and (ii) shall survive the payment and performance of
         the Obligations and the termination of this Agreement.

                                       33

<PAGE>

                  (b)      Withholding Exemption Certificates. Each Borrower may
         from time to time, by written notice to the Agent and each Lender,
         designate an office from which payments under this Agreement shall be
         made (an "Applicable Payment Office"). FIL's Applicable Payment Office
         shall be deemed to be in Hong Kong unless otherwise designated in
         writing by FIL. If a Borrower other than FIL does not designate an
         Applicable Payment Office, such Borrower's Applicable Payment Office
         shall be deemed to be located in the jurisdiction in which such
         Borrower is organized. On or prior to the Closing Date (or, with
         respect to any Lender which is not a party to this Agreement on the
         Closing Date, on or prior to the date any other Lender becomes a Lender
         hereunder), each Lender which is not organized under the laws of the
         jurisdiction of a Borrower's Applicable Payment Office shall notify the
         applicable Borrower whether such Lender is entitled to receive payments
         on its Loans under this Agreement from such Borrower's Applicable
         Payment Office for the account of such Lender's Lending Office without
         deduction or withholding of any income taxes (or with reduced deduction
         or withholding of any such taxes) imposed by the jurisdiction of such
         Borrower's Applicable Payment Office. If such Lender is so entitled, it
         shall promptly deliver to such Borrower and/or any other appropriate
         person(s) such certificates, forms and/or other documents as it may
         lawfully provide certifying that such Lender is entitled to receive
         such payments without deduction or withholding of taxes (or with
         reduced deduction or withholding of any such taxes) as such Borrower
         shall reasonably request to establish such fact. If such Lender is not
         entitled to receive payments on its Loans without deduction or
         withholding of taxes (or with reduced deduction or withholding of any
         such taxes) and cannot lawfully provide any such forms, it shall
         continue to be entitled to the benefits of Subparagraph 2.13(a). If,
         after the Closing Date, any Borrower designates an Applicable Payment
         Office that is different than such Borrower's then existing Applicable
         Payment Office, each Lender which is not organized under the laws of
         the jurisdiction of such new Applicable Payment Office shall, as soon
         as practicable and in any event within thirty (30) days of such
         designation (or if not practicable within such period, then as soon as
         practicable thereafter but in any event within a period of sixty (60)
         days of such designation), notify the applicable Borrower whether such
         Lender is entitled to receive payments on its Loans under this
         Agreement from such Borrower's new Applicable Payment Office for the
         account of such Lender's Lending Office without deduction or
         withholding of any income taxes (or with reduced deduction or
         withholding of any such taxes) imposed by the jurisdiction of such
         Borrower's new Applicable Payment Office and promptly deliver to such
         Borrower and/or any other appropriate person(s) such certificates,
         forms, and/or other documents as it may lawfully provide certifying
         that such Lender is entitled to receive such payments without deduction
         or withholding of taxes (or with reduced deduction or withholding of
         any such taxes) as such Borrower shall reasonably request to establish
         such fact. Each such Lender further agrees (i) promptly to notify the
         applicable Borrowers and Agent of any change of circumstances
         (including any change in any treaty, law or regulation or any change of
         such Lender's Applicable Lending Office) which would prevent such
         Lender from receiving such payments hereunder without any deduction or
         withholding of such taxes (or with reduced deduction or withholding of
         any such taxes) and (ii) if such Lender is still legally entitled to do
         so, then on or before the date that any certificate, form and/or other
         documents delivered by such Lender under this Subparagraph 2.13(b)
         expires or otherwise becomes inapplicable, to deliver to such Borrowers
         and Agent a new certificate, form and/or other documents, certifying
         that such Lender is entitled to receive such payments under this
         Agreement without deduction or withholding of such taxes (or with
         reduced deduction or withholding of any such taxes). If any Lender that
         may lawfully provide such certification fails to provide to Agent and
         the applicable Borrower pursuant to this Subparagraph 2.13(b) (or, in
         the case of an Assignee Participant, Subparagraph 8.05(b)) any
         notifications, certificates or other evidence required by this
         provision, such Lender shall not be entitled to any indemnification
         under Subparagraph 2.13(a) for any Non-Excluded Taxes imposed on such
         Lender primarily as a result of such failure.

                  (c)      Mitigation. If Agent or any Lender claims any
         additional amounts to be payable to it pursuant to this Paragraph 2.13,
         such Person shall provide to the appropriate Person(s) (or, with
         respect to any claim made by any Lender then a party to this Agreement
         as a result of the designation of a new Applicable Payment Office by
         any Borrower, such Person shall use reasonable commercial efforts to
         file) to the extent it may lawfully do so any certificate, forms,
         and/or other documents reasonably requested in writing by the
         applicable Borrower certifying that such Lender is entitled to receive
         a reduced rate of withholding if it is in fact so entitled or to change
         the jurisdiction of an Applicable Lending Office if the making of such
         a filing or such change in the jurisdiction of an Applicable Lending
         Office would avoid the

                                       34

<PAGE>

         need for or materially reduce the amount of any such additional amounts
         which may thereafter accrue and if, in the sole discretion of such
         Person, in the case of a change in the jurisdiction of an Applicable
         Lending Office, such change would not be disadvantageous to such Person
         or contrary to such Person's normal banking practices. Borrowers hereby
         agree to pay all reasonable documented costs and expenses incurred by
         the Lender in connection with any action taken pursuant to this
         Subparagraph 2.13(c). If Agent or any Lender that may lawfully do so
         does not provide the requisite certificate(s), form(s), or other
         document(s) or change the jurisdiction of its Applicable Lending
         Office, if not determined to be

                  (d)      disadvantageous in its sole discretion, then
         Borrowers shall not be obligated to pay any additional amounts that
         arise from such Agent or Lender's failure to comply with this
         Subparagraph 2.13(c).

                  (e)      Tax Returns. Nothing contained in this Paragraph 2.13
         or Paragraph 8.03 shall require Agent, any Lender or any of their
         respective Affiliates to make available any of its tax returns (or any
         other information relating to its taxes which it deems to be
         confidential) to any Borrower or any other Person.

                  (f)      Lender Rate Contracts. Nothing contained in this
         Paragraph 2.13 shall override or supercede any term or provision of any
         Lender Rate Contract regarding withholding taxes relating to Rate
         Contracts.

         2.14.    Funding Loss Indemnification. If any of the Borrowers shall
(a) repay, prepay or convert any LIBOR Loan on any day other than the last day
of an Interest Period therefor (whether a scheduled payment, an optional
prepayment or conversion, a mandatory prepayment or conversion, a payment upon
acceleration or otherwise), (b) fail to borrow any LIBOR Loan after delivering
the Notice of Borrowing therefor to Agent (whether as a result of the failure to
satisfy any applicable conditions or otherwise), (c) pursuant to Paragraph 2.16,
cause the replacement of any Lender that has made or maintained any LIBOR Loan
or (d) fail to pay when due any principal or interest on any LIBOR Loan, such
Borrower shall, within ten (10) Business Days after demand of such Lender,
reimburse such Lender for and hold such Lender harmless from all reasonable
break funding costs and losses incurred by such Lender as a result of such
repayment, prepayment, conversion or failure; provided, however, that Borrowers
shall have no obligation to make any payment to any demanding party under this
Paragraph 2.14 on account of any such costs or losses unless Borrowers receive
notice of such costs or losses from the demanding party within twelve (12)
months after such costs or losses have been incurred or realized. Borrowers
understand that such costs and losses may include losses incurred by a Lender as
a result of funding and other contracts entered into by such Lender to fund a
LIBOR Loan. Each Lender demanding payment under this Paragraph 2.14 shall
deliver to Borrowers, with a copy to Agent, a certificate of an officer of such
demanding party setting forth the amount of costs and losses for which demand is
made, which certificate shall set forth in reasonable detail the calculation of
the amount demanded. Such a certificate so delivered to Borrowers shall
constitute prima facie evidence of such costs and losses. The obligations of
Borrowers under this Paragraph 2.14 shall survive the payment and performance of
the Obligations and the termination of this Agreement.

         2.15.    Security.

                  (a)      Guaranties, Etc. The Obligations shall be secured by
         a Guaranty in the form of Exhibit C (the "Guaranty"), duly executed by
         all Eligible Material Subsidiaries and other Subsidiaries of FIL that
         have executed the Guaranty or otherwise elected to become a party
         thereto, with such changes thereto as may be appropriate based on the
         law of the applicable jurisdictions. In addition, on the Closing Date,
         FIL shall deliver, or cause to be delivered, to Agent, (A) favorable
         written opinions, addressed to Agent for the benefit of the Lenders,
         covering such legal matters as Agent and the Lenders may reasonably
         request and otherwise in form and substance satisfactory to Agent and
         the Lenders, from counsel for each of the above-referenced Subsidiaries
         and (B) such other instruments, agreements, certificates and documents
         as Agent may reasonably request to secure, maintain, protect and
         evidence the obligations of such Subsidiary under the Guaranty.

                  (b)      Changes in Material Subsidiaries.

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<PAGE>

                           (i)      If, at any time after the date of this
                  Agreement, any Subsidiary of FIL that is not a Guarantor under
                  the Guaranty shall become an Eligible Material Subsidiary, FIL
                  promptly shall deliver, or cause to be delivered, to Agent,
                  within sixty (60) days of becoming aware of any such event,
                  (A) a Subsidiary Joinder in the form of Attachment 1 to the
                  Guaranty, appropriately completed and duly executed by such
                  Subsidiary, and (B) such other instruments, agreements,
                  certificates, opinions and documents as Agent may reasonably
                  request to secure, maintain, protect and evidence the
                  obligations of such Subsidiary under the Guaranty.

                           (ii)     If, at any time after the date of this
                  Agreement, any Subsidiary of FIL that is a Guarantor under the
                  Guaranty shall cease to be, or shall not have become, an
                  Eligible Material Subsidiary by an action or circumstance not
                  otherwise prohibited by this Agreement, Agent shall, if
                  requested by FIL, release such Subsidiary from its obligations
                  under the Guaranty.

                  (c)      Further Assurances. Borrowers shall deliver, and
         shall cause the Guarantors to deliver, to Agent such other guaranties,
         guaranty supplements and other instruments, agreements, certificates,
         opinions and documents as Agent and any Lender may reasonably request
         to implement the provisions of Subparagraphs 2.15(a) and (b) and
         otherwise to establish, maintain, protect and evidence the rights
         provided to Agent, for the benefit of Agents and Lenders, pursuant to
         the Security Documents. Borrowers shall fully cooperate with Agent and
         Lenders and perform all additional acts reasonably requested by Agent
         or any Lender to effect the purposes of this Paragraph 2.15. Without
         limiting the generality of the foregoing, FIL covenants and agrees that
         it will ensure that the Subsidiaries that have executed and delivered
         the Guaranty pursuant to this Agreement and the FIUI Credit Agreement
         will have revenues or assets that constitute at least (i) 53% of
         consolidated total revenues of FIL or (ii) 60% of consolidated total
         assets of FIL, respectively, during each fiscal year of FIL, as
         reflected on the most recently delivered annual audited Financial
         Statements for FIL.

         2.16.    Replacement of Lenders. If any Lender shall (a) become a
Defaulting Lender more than one (1) time in a period of twelve (12) consecutive
months, (b) continue as a Defaulting Lender for more than three (3) Business
Days at any time, (c) suspend its obligation to make or maintain LIBOR Loans in
any Currency pursuant to Subparagraph 2.12(b) for a reason which is not
applicable to any other Lender or (d) demand any payment under Subparagraph
2.12(a), 2.12(c) or 2.12(d) for a reason which is not applicable to any other
Lender, then Agent may (or upon the written request of Borrowers, shall) replace
such Lender (the "affected Lender"), or cause such affected Lender to be
replaced, with another lender (the "replacement Lender") satisfying the
requirements of an Assignee Lender under Subparagraph 8.05(c), by having the
affected Lender sell and assign all of its rights and obligations under this
Agreement and the other Credit Documents to the replacement Lender pursuant to
Subparagraph 8.05(c); provided, however, that if Borrowers seek to exercise such
right, they must do so within sixty (60) days after any Borrower first knows or
should have known of the occurrence of the event or events giving rise to such
right, and neither Agent nor any Lender shall have any obligation to identify or
locate a replacement Lender for Borrowers; and provided, further, that no Lender
shall be replaced under this Agreement unless such Lender is also replaced under
the FIUI Credit Agreement. Upon receipt by any affected Lender of a written
notice from Agent stating that Agent is exercising the replacement right set
forth in this Paragraph 2.16, (a) such affected Lender shall sell and assign all
of its rights and obligations under this Agreement and the other Credit
Documents to the replacement Lender pursuant to an Assignment and Assumption and
Subparagraph 8.05(c) for a purchase price equal to the sum of the principal
amount of the affected Lender's Loans so sold and assigned, all accrued and
unpaid interest thereon and its ratable share of all fees to which it is
entitled and (b) Borrowers shall pay any amounts owed to such Lender by
Borrowers under this Agreement.

SECTION III. CONDITIONS PRECEDENT.

         3.01.    Initial Conditions Precedent. The obligations of the
applicable Lenders to make Loans and of Issuing Bank to issue the initial Letter
of Credit are subject to receipt by Agent, on or prior to the Closing Date, of
each item listed in Schedule 3.01, each in form and substance satisfactory to
Agent and each Lender, and with sufficient copies for, Agent and each Lender.

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         3.02.    Conditions Precedent to Each Credit Event. The occurrence of
each Credit Event is subject to the further conditions that:

                  (a)      Borrowers shall have delivered to Agent (and Issuing
         Bank, in the case of an LC Application) the Notice of Borrowing or LC
         Application, as the case may be, for such Credit Event in accordance
         with this Agreement; and

                  (b)      On the date such Credit Event is to occur and after
         giving effect to such Credit Event, the following shall be true and
         correct:

                           (i)      The representations and warranties of
                  Borrowers and their Subsidiaries set forth in Paragraph 4.01
                  and in the other Credit Documents are true and correct in all
                  material respects as if made on such date (except for
                  representations and warranties expressly made as of a
                  specified date, which shall be true as of such date); and

                           (ii)     No Default has occurred and is continuing or
                  will result from such Credit Event.

The submission by any of the Borrowers to Agent of each Notice of Borrowing and
each LC Application shall be deemed to be a representation and warranty by such
Borrower that each of the statements set forth above in this Subparagraph
3.02(b) is true and correct as of the date of such notice.

         3.03.    Covenant to Deliver. Borrowers expressly agree that the
occurrence of any such Credit Event prior to the receipt by Agent of any such
item (and Issuing Bank in the case of an LC Application) shall not constitute a
waiver by Agent or any Lender of Borrowers' obligation to deliver such item.

         3.04.    Conditions Precedent to Adding Designated Borrower. The
obligations of the applicable Lenders to make Loans to any Designated Borrower
or issue any Letters of Credit on behalf of any Designated Borrower are subject
to, on or prior to the date of such designation, the following: (a) receipt by
Agent of each item listed in Schedule 3.01 with respect to such Designated
Borrower, each in form and substance satisfactory to Agent and each Lender, and
with sufficient copies for, Agent and each Lender, (b) execution of an amendment
to this Agreement by each of the parties hereto, whereby Designated Borrower
shall agree to be bound by all of the terms herein and shall designate its
initial Applicable Payment Office, (c) written approval by all Lenders and
Guarantors party to this Agreement and any of the Credit Documents as to the
designation of the Designated Borrower, and (d) execution by Designated Borrower
and FIL of a Subsidiary Joinder to the Guaranty, substantially in the form of
Attachment 1 to Exhibit C hereto.

SECTION IV. REPRESENTATIONS AND WARRANTIES.

         4.01.    Borrowers' Representations and Warranties. In order to induce
Agent and Lenders to enter into this Agreement, Borrowers hereby represent and
warrant to Agent and Lenders as follows:

                  (a)      Due Incorporation, Qualification, etc. Each of
         Borrowers and their Subsidiaries (i) is a corporation duly organized,
         validly existing and, in any jurisdiction in which such legal concept
         is applicable, in good standing under the laws of its jurisdiction of
         organization, (ii) has the power and authority to own, lease and
         operate its properties and carry on its business as now conducted and
         (iii) is duly qualified and licensed to do business as a foreign
         corporation or branch in each jurisdiction where the failure to be so
         qualified or licensed is reasonably and substantially likely (alone or
         in the aggregate) to have a Material Adverse Effect.

                  (b)      Authority. The execution, delivery and performance by
         each of the Borrowers and each Guarantor of each Credit Document
         executed, or to be executed, by such Person and the consummation of the
         transactions contemplated thereby (i) are within the power of such
         Person and (ii) have been duly authorized by all necessary actions on
         the part of such Person.

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<PAGE>

                  (c)      Enforceability. Each Credit Document executed, or to
         be executed, by each of the Borrowers and each Guarantor has been, or
         will be, duly executed and delivered by such Person and constitutes, or
         when executed will constitute, a legal, valid and binding obligation of
         such Person, enforceable against such Person in accordance with its
         terms, except as limited by bankruptcy, insolvency or other laws of
         general application relating to or affecting the enforcement of
         creditors' rights generally and general principles of equity.

                  (d)      Non-Contravention. The execution and delivery by each
         of Borrowers and each Guarantor of the Credit Documents executed by
         such Person and the performance and consummation of the transactions
         contemplated thereby do not (i) violate any Requirement of Law
         applicable to such Person, (ii) violate any provision of, or result in
         the breach or the acceleration of, or entitle any other Person to
         accelerate (whether after the giving of notice or lapse of time or
         both), any Contractual Obligation of such Person or (iii) result in the
         creation or imposition of any Lien (or the obligation to create or
         impose any Lien) upon any property, asset or revenue of such Person.

                  (e)      Approvals. No consent, approval, order or
         authorization of, or registration, declaration or filing with, any
         Governmental Authority or other Person (including the shareholders of
         any Person) is required in connection with the execution and delivery
         of the Credit Documents executed by each of the Borrowers and each
         Guarantor and the performance or consummation of the transactions
         contemplated thereby, except such as (i) have been made or obtained and
         are in full force and effect or (ii) are being made or obtained in a
         timely manner and once made or obtained will be in full force and
         effect.

                  (f)      No Violation or Default. Neither any Borrower, nor
         any Guarantor nor any of FIL's Subsidiaries is in violation of or in
         default with respect to (i) any Requirement of Law applicable to such
         Person or (ii) any Contractual Obligation of such Person, where, in
         each case or in the aggregate, such violation or default is reasonably
         and substantially likely to have a Material Adverse Effect. Without
         limiting the generality of the foregoing, neither any Borrower, nor any
         Guarantor nor any of FIL's Subsidiaries (i) has violated any
         Environmental Laws, (ii) to the knowledge of any Borrower, any
         Guarantor or any of FIL's Subsidiaries, has any liability under any
         Environmental Laws or (iii) has received notice or other communication
         of an investigation or, to the knowledge of any Borrower, any Guarantor
         or any of FIL's Subsidiaries, is under investigation by any
         Governmental Authority having authority to enforce Environmental Laws,
         where such violation, liability or investigation is reasonably and
         substantially likely (alone or in the aggregate) to have a Material
         Adverse Effect. No Default has occurred and is continuing.

                  (g)      Litigation. No actions (including derivative
         actions), suits, proceedings or investigations are pending or, to the
         knowledge of any Borrower, threatened against any Borrower, any
         Guarantor or any of FIL's Subsidiaries at law or in equity in any court
         or before any other Governmental Authority which (i) based upon the
         written advice of such Person's outside legal counsel, is reasonably
         likely to be determined adversely and if so adversely determined is
         reasonably and substantially likely (alone or in the aggregate) to have
         a Material Adverse Effect or (ii) seeks to enjoin, either directly or
         indirectly, the execution, delivery or performance by any Borrower or
         any Guarantor of the Credit Documents or the transactions contemplated
         thereby.

                  (h)      Title; Possession Under Leases. Each Borrower, each
         Guarantor and each of FIL's Subsidiaries own and have good and
         indefeasible title, or a valid leasehold interest in, all their
         respective material properties and assets as reflected in the most
         recent Financial Statements delivered to Agent (except those assets and
         properties disposed of in the ordinary course of business or otherwise
         in compliance with this Agreement since the date of such Financial
         Statements) and all respective material assets and properties acquired
         by such Borrower, each Guarantor and FIL's Subsidiaries since such date
         (except those disposed of in the ordinary course of business or
         otherwise in compliance with this Agreement). Such assets and
         properties are subject to no Lien, except for Permitted Liens.

                                       38

<PAGE>

                  (i)      Financial Statements. The Financial Statements of FIL
         and its Subsidiaries which have been delivered to Agent, (i) are in
         accordance with the books and records of FIL and its Subsidiaries,
         which have been maintained in accordance with good business practice,
         (ii) have been prepared in conformity with GAAP and (iii) fairly
         present in all material respects the financial conditions and results
         of operations of FIL and its Subsidiaries as of the date thereof and
         for the period covered thereby. Neither FIL nor any of its Subsidiaries
         has any Contingent Obligations, liability for taxes or other
         outstanding obligations which are material in the aggregate, except as
         disclosed or reflected in the Financial Statements of FIL dated
         December 31, 2003, furnished by FIL to Agent prior to the date hereof,
         or in the Financial Statements delivered to Agent pursuant to (i) or
         (ii) of Subparagraph 5.01(a), or except as permitted under Section V of
         this Agreement.

                  (j)      Employee Benefit Plans.

                           (i)      Based on the latest valuation of each
                  Employee Benefit Plan that any Borrower or any ERISA Affiliate
                  maintains or contributes to, or has any obligation under
                  (which occurred within twelve months of the date of this
                  representation), the aggregate benefit liabilities of such
                  plan within the meaning of section 4001 of ERISA did not
                  materially exceed the aggregate value of the assets of such
                  plan. Neither any Borrower nor any ERISA Affiliate has any
                  material liability with respect to any post-retirement benefit
                  under any Employee Benefit Plan which is a welfare plan (as
                  defined in section 3(1) of ERISA), other than liability for
                  health plan continuation coverage described in Part 6 of Title
                  I(B) of ERISA, which liability for health plan contribution
                  coverage is not reasonably and substantially likely (alone or
                  in the aggregate) to have a Material Adverse Effect.

                           (ii)     Each Employee Benefit Plan complies, in both
                  form and operation, in all material respects, with its terms,
                  ERISA and the IRC, and no condition exists or event has
                  occurred with respect to any such plan which would result in
                  the incurrence by any Borrower or any ERISA Affiliate of any
                  material liability, fine or penalty. Each Employee Benefit
                  Plan, related trust agreement, arrangement and commitment of
                  any Borrower or any ERISA Affiliate is legally valid and
                  binding and is in all material respects in full force and
                  effect. No Employee Benefit Plan is being audited or
                  investigated by any government agency or is subject to any
                  pending or threatened claim or suit. Neither any Borrower nor
                  any ERISA Affiliate nor, to the knowledge or any Borrower, any
                  fiduciary of any Employee Benefit Plan has engaged in a
                  prohibited transaction under section 406 of ERISA or section
                  4975 of the IRC.

                           (iii)    Neither any Borrower nor any ERISA Affiliate
                  contributes to or has any material contingent obligations to
                  any Multiemployer Plan. Neither any Borrower nor any ERISA
                  Affiliate has incurred any material liability (including
                  secondary liability) to any Multiemployer Plan as a result of
                  a complete or partial withdrawal from such Multiemployer Plan
                  under section 4201 of ERISA or as a result of a sale of assets
                  described in section 4204 of ERISA. Neither any Borrower nor
                  any ERISA Affiliate has been notified that any Multiemployer
                  Plan is in reorganization or insolvent under and within the
                  meaning of section 4241 or section 4245 of ERISA or that any
                  Multiemployer Plan intends to terminate or has been terminated
                  under section 4041A of ERISA.

                           (iv)     All employer and employee contributions
                  required by any applicable Governmental Rule in connection
                  with all Foreign Plans have been made, or, if applicable,
                  accrued, in all material respects, in accordance with the
                  country-specific accounting practices. The fair market value
                  of the assets of each funded Foreign Plan, the liability of
                  each insurer for any Foreign Plan funded through insurance or
                  the book reserve established for any Foreign Plan, together
                  with any accrued contributions, is sufficient, except to the
                  extent that is not reasonably and substantially likely (alone
                  or in the aggregate) to have a Material Adverse Effect, to
                  procure or provide for the accrued benefit obligations, as of
                  the date hereof, with respect to all current and former
                  participants in such Foreign Plan according to the actuarial

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<PAGE>

                  assumptions and valuations most recently used to determine
                  employer contributions to such Foreign Plan, which actuarial
                  assumptions are commercially reasonable. Each Foreign Plan
                  required to be registered has been registered and has been
                  maintained in good standing with applicable Governmental
                  Authorities except to the extent that is not reasonably and
                  substantially likely (alone or in the aggregate) to have a
                  Material Adverse Effect. Each Foreign Plan reasonably complies
                  in all material respects with all applicable Governmental
                  Rules.

                  (k)      Other Regulations. No Borrower or any Material
         Subsidiary is subject to regulation under the Investment Company Act of
         1940, the Public Utility Holding Company Act of 1935, the Federal Power
         Act, the Interstate Commerce Act, any state public utilities code or
         any other Governmental Rule that limits its ability to incur
         Indebtedness.

                  (l)      Patent and Other Rights. Each Borrower and each of
         FIL's Subsidiaries own, license or otherwise have the full right to
         use, under validly existing agreements, without known conflict with any
         rights of others, all patents, licenses, trademarks, trade names, trade
         secrets, service marks, copyrights and all rights with respect thereto,
         which are required to conduct their businesses as now conducted, except
         such patents, licenses, trademarks, trade names, trade secrets, service
         marks, copyrights and all rights with respect thereto which if not
         validly owned or used would not be reasonably and substantially likely
         (alone or in the aggregate) to have a Material Adverse Effect.

                  (m)      Governmental Charges. Each Borrower and each of FIL's
         Subsidiaries have filed or caused to be filed all material tax returns,
         reports and declarations which are required to be filed by them. Each
         Borrower and each of FIL's Subsidiaries have paid, or made provision
         for the payment of, all taxes and other Governmental Charges which have
         or may have become due pursuant to said returns or otherwise and all
         other indebtedness, except such Governmental Charges or indebtedness,
         if any, which are being contested in good faith and as to which
         adequate reserves (determined in accordance with GAAP) have been
         provided or which are not reasonably and substantially likely (alone or
         in the aggregate) to have a Material Adverse Effect if unpaid.

                  (n)      Margin Stock. No Borrower owns any Margin Stock
         which, in the aggregate, would constitute a substantial part of the
         assets of such Borrower, and no proceeds of any Loan and no Letter of
         Credit will be used to purchase or carry, directly or indirectly, any
         Margin Stock or to extend credit, directly or indirectly, to any Person
         for the purpose of purchasing or carrying any Margin Stock.

                  (o)      Subsidiaries, Etc. Schedule 4.01(o) (on the Closing
         Date as of December 31, 2003 and as thereafter updated on a quarterly
         basis by Borrowers in a written notice to Agent no later than the date
         Financial Statements are required to be delivered pursuant to
         Subparagraph 5.01(a)) sets forth each of FIL's Significant Subsidiaries
         and Material Subsidiaries, its jurisdiction of organization, the
         percentages of shares owned directly or indirectly by FIL and whether
         FIL owns such shares directly or, if not, the Subsidiary of FIL that
         owns such shares.

                  (p)      Solvency, Etc. Each of the Borrowers, each Guarantor
         and each Material Subsidiary is Solvent and, after the execution and
         delivery of the Credit Documents and the consummation of the
         transactions contemplated thereby, will be Solvent.

                  (q)      Senior Debt. Borrowers have taken all actions
         necessary for the Obligations to constitute "Designated Senior Debt"
         for the purposes of and as defined in the Subordinated Indenture.

                  (r)      No Withholding, Etc. Except as otherwise disclosed by
         a Borrower to the Agent from time to time, no Borrower has actual
         knowledge of any requirement under any Governmental Rule to make any
         deduction or withholding of any nature whatsoever from any payment
         required to be made by any Borrowers hereunder or under any other
         Credit Document. Neither this Agreement nor any of the other Credit
         Documents is subject to any registration or stamp tax or any other
         similar or like taxes payable in any relevant jurisdiction.

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<PAGE>

                  (s)      Foreign Subsidiaries.

                           (i)      No Immunities, etc. Each Foreign Subsidiary
                  that is a Borrower or Guarantor is subject to civil and
                  commercial law with respect to its obligations under this
                  Agreement and the other Credit Documents, and the execution,
                  delivery and performance by each such Foreign Subsidiary of
                  this Agreement and the other Credit Documents constitute and
                  will constitute private and commercial acts and not public or
                  governmental acts. Neither such Foreign Subsidiary nor any of
                  its property, whether or not held for its own account, has any
                  immunity (sovereign or other similar immunity) from any suit
                  or proceeding, from jurisdiction of any court or, if
                  applicable in the relevant jurisdiction, from set-off or any
                  legal process (whether service or notice, attachment prior to
                  judgment, attachment in aid of execution of judgment,
                  execution of judgment or other similar immunity) under laws of
                  the jurisdiction in which such Foreign Subsidiary is organized
                  and existing in respect of its obligations under this
                  Agreement and the other Credit Documents. Each such Foreign
                  Subsidiary has waived every immunity (sovereign or otherwise)
                  to which it or any of its properties would otherwise be
                  entitled from any legal action, suit or proceeding, from
                  jurisdiction of any court and from set-off or any legal
                  process (whether service or notice, attachment prior to
                  judgment, attachment in aid of execution of judgment,
                  execution of judgment or otherwise) under the laws of the
                  jurisdiction in which such Foreign Subsidiary is organized and
                  existing in respect of its obligations under this Agreement
                  and the other Credit Documents. The waiver by each such
                  Foreign Subsidiary described in the immediately preceding
                  sentence is the legal, valid and binding obligation of such
                  Foreign Subsidiary.

                           (ii)     No Recordation Necessary. This Agreement and
                  each of the other Credit Documents executed by a Foreign
                  Subsidiary is in proper legal form under the law of the
                  jurisdiction in which such Foreign Subsidiary is organized and
                  existing for the enforcement hereof or thereof against such
                  Foreign Subsidiary under the law of such jurisdiction, and to
                  ensure the legality, validity, enforceability, priority or
                  admissibility in evidence of this Agreement and such other
                  Credit Documents. It is not necessary to ensure the legality,
                  validity, enforceability, priority or admissibility in
                  evidence of this Agreement or any other Credit Document
                  executed by a Foreign Subsidiary that this Agreement, any
                  other Credit Document or any other document be filed,
                  registered or recorded with, or executed or notarized before,
                  any court or other authority in the jurisdiction in which such
                  Foreign Subsidiary is organized and existing or that any
                  registration charge or stamp or similar tax be paid on or in
                  respect of this Agreement, any other Credit Document or any
                  other document, except for any such filing, registration or
                  recording, or execution or notarization, as has been made or
                  is not required to be made until this Agreement, any other
                  Credit Document or any other document is sought to be enforced
                  and for any charge or tax as has been timely paid.

                           (iii)    Exchange Controls. The execution, delivery
                  and performance by each Borrower of this Agreement and each of
                  the other Credit Documents executed by a Foreign Subsidiary
                  is, under applicable foreign exchange control regulations of
                  the jurisdiction in which each such Borrower or Foreign
                  Subsidiary is organized and existing, not subject to any
                  notification or authorization except (A) such as have been
                  made or obtained or (B) such as cannot be made or obtained
                  until a later date and are listed on Schedule 4.01(s) hereto
                  (provided any notification or authorization described in
                  immediately preceding clause (B) shall be made or obtained as
                  soon as is reasonably practicable).

                  (t)      No Material Adverse Effect. No event has occurred and
         no condition exists which, alone or in the aggregate, (i) has had (and
         continues to have) or (ii) is reasonably and substantially likely to
         have a Material Adverse Effect.

                  (u)      Accuracy of Information Furnished. The Credit
         Documents and the other certificates, statements and information
         (excluding projections) furnished to Agent or any Lender by or on
         behalf of Borrowers, the Guarantors and FIL's Subsidiaries in
         connection with the Credit Documents and the transactions contemplated
         thereby, taken as a whole, do not contain and will not contain any
         untrue

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         statement of a material fact and do not omit and will not omit to state
         a material fact necessary to make the statements therein, in light of
         the circumstances under which they were made, not misleading. All
         projections have been based upon reasonable assumptions and represent,
         as of their respective dates of presentations, Borrowers' best
         estimates of the future performance of Borrowers, the Guarantors and
         FIL's Subsidiaries.

         4.02.    Reaffirmation. Each Borrower shall be deemed to have
reaffirmed, for the benefit of the Lenders and Agent, each representation and
warranty contained in Paragraph 4.01 on and as of the date of each Credit Event
(except for representations and warranties expressly made as of a specified
date, which shall be true as of such date).

SECTION V. COVENANTS.

         5.01.    Affirmative Covenants. Until the termination of this Agreement
and the satisfaction in full by Borrowers of all Obligations, Borrowers will
comply, and will cause compliance by each Subsidiary, with the following
affirmative covenants, unless Required Lenders shall otherwise consent in
writing:

                  (a)      Financial Statements, Reports, etc. Each Borrower
         shall furnish to Agent the following, each in such form and such detail
         as Agent or the Required Lenders shall reasonably request:

                           (i)      As soon as available and in no event later
                  than fifty-five (55) days after the last day of each fiscal
                  quarter of FIL, a copy of the Financial Statements of FIL and
                  its Subsidiaries (prepared on a consolidated basis) for such
                  quarter and for the fiscal year to date, certified by the
                  chief executive officer, chief operating officer, chief
                  financial officer, treasurer, assistant treasurer, controller
                  or senior vice president of finance of FIL to present fairly
                  in all material respects the financial condition, results of
                  operations and other information reflected therein and to have
                  been prepared in accordance with GAAP (subject to normal
                  year-end audit adjustments);

                           (ii)     As soon as available and in no event later
                  than one hundred (100) days after the close of each fiscal
                  year of FIL, (A) copies of the audited Financial Statements of
                  FIL (prepared on a consolidated and consolidating basis) for
                  such year, audited by independent certified public accountants
                  of recognized national standing reasonably acceptable to
                  Agent, (B) copies of the unqualified opinions (or qualified
                  opinions (other than a "going concern" or like qualification
                  or exception or any qualification or exception as to the scope
                  of such audit) reasonably acceptable to Agent) of such
                  accountants and (C) if available from such accountants,
                  certificates of such accountants to Agent stating that in
                  making the examination necessary for their opinion they have
                  reviewed this Agreement and have obtained no knowledge of any
                  Default which has occurred and is continuing, or if, in the
                  opinion of such accountants, a Default has occurred and is
                  continuing, a statement as to the nature thereof;

                           (iii)    Contemporaneously with the quarterly and
                  year-end Financial Statements required by the foregoing
                  clauses (i) and (ii), a compliance certificate of the chief
                  executive officer, chief operating officer, chief financial
                  officer, treasurer, assistant treasurer, controller or senior
                  vice president of finance of Borrower (a "Compliance
                  Certificate") that (A) states that no Default has occurred and
                  is continuing, or, if any such Default has occurred and is
                  continuing, a statement as to the nature thereof and what
                  action Borrowers propose to take with respect thereto, and (B)
                  sets forth, for the quarter or year covered by such Financial
                  Statements or as of the last day of such quarter or year (as
                  the case may be), the calculation of the financial ratios and
                  tests provided in Paragraph 5.03;

                           (iv)     As soon as possible and in no event later
                  than five (5) Business Days after any officer of such Borrower
                  knows of the occurrence or existence of (A) any Reportable
                  Event under any Employee Benefit Plan or Multiemployer Plan,
                  (B) any actual or threatened litigation, suits, claims or
                  disputes against any Borrower or any of FIL's Subsidiaries
                  involving potential monetary damages payable by any Borrower
                  or FIL's Subsidiaries of Ten Million Dollars ($10,000,000) or

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<PAGE>

                  more (alone or in the aggregate), (C) any other event or
                  condition which is reasonably and substantially likely (alone
                  or in the aggregate) to have a Material Adverse Effect, (D)
                  any Default or (E) any event of the type described in
                  Subparagraph 6.01(f) or (g) with respect to any Subsidiary, so
                  long as such Subsidiary is determined at the time of such
                  event to be a Significant Subsidiary, the statement of the
                  chief executive officer, chief operating officer, chief
                  financial officer, treasurer, assistant treasurer, controller
                  or senior vice president of finance of such Borrower setting
                  forth details of such event, condition or Default and the
                  action which such Borrower proposes to take with respect
                  thereto;

                           (v)      As soon as available and in no event later
                  than five (5) Business Days after they are sent, made
                  available or filed, copies of (A) all registration statements
                  and reports filed by any of the Borrowers or any of FIL's
                  Subsidiaries with the United States Securities and Exchange
                  Commission (including all 10-Q, 10-K and 8-K reports) and (B)
                  all reports, proxy statements and financial statements sent or
                  made available by any of the Borrowers or any of FIL's
                  Subsidiaries to its security holders;

                           (vi)     As soon as possible and in no event later
                  than (A) fifty-five (55) days after the last day of each
                  fiscal quarter (or one hundred (100) days in the case of the
                  last fiscal quarter of each fiscal year), written notice of
                  any new Significant Subsidiary acquired or established during
                  such quarter or any other change in the information set forth
                  in Schedule 4.01(o) during such quarter and (B) ten (10) days
                  after the date that any entity becomes a Material Subsidiary,
                  written notice setting forth each Subsidiary of FIL that has
                  become a Material Subsidiary and indicating for each such new
                  Material Subsidiary whether such Material Subsidiary is an
                  Eligible Material Subsidiary or Ineligible Material
                  Subsidiary;

                           (vii)    As soon as available and in no event later
                  than five (5) Business Days after any Borrower changes its
                  legal name or the address of its chief executive office,
                  written notice setting forth such Borrower's new legal name
                  and/or new address; and

                           (viii)   Such other instruments, agreements,
                  certificates, opinions, statements, documents and information
                  relating to the operations or condition (financial or
                  otherwise) of such Borrower or FIL's Subsidiaries, and
                  compliance by such Borrower with the terms of this Agreement
                  and the other Credit Documents as Agent on behalf of itself or
                  one or more Lenders may from time to time reasonably request.

         In lieu of furnishing to Agent hard copies of the quarterly Financial
         Statements described in clause (i) above and the annual Financial
         Statements and auditor's report described in clauses (ii)(A) and
         (ii)(B) above and the other documents referred to in clause (v) above,
         FIL may make such documents available to Lenders by posting such
         documents on its website located at www.flextronics.com and through the
         United States Securities and Exchange Commission's EDGAR system
         ("EDGAR") or by transmitting such documents electronically to Lenders.
         FIL shall provide to any Lender hard copies of such documents upon
         request if such Lender does not have access to FIL's website or EDGAR.

                  (b)      Books and Records. Each Borrower and FIL's
         Subsidiaries shall at all times keep proper books of record and account
         which shall be complete and correct in all material respects in
         accordance with GAAP.

                  (c)      Inspections. Each Borrower and FIL's Subsidiaries
         shall permit Agent and each Lender, or any agent or representative
         thereof, upon reasonable notice and during normal business hours, to
         visit and inspect any of the properties and offices of such Borrower
         and FIL's Subsidiaries, to examine the books and records of such
         Borrower and FIL's Subsidiaries and make copies thereof and to discuss
         the affairs, finances and business of such Borrower and FIL's
         Subsidiaries with, and to be advised as to the same by, their officers,
         auditors and accountants, all at such times and intervals as Agent or
         any Lender may reasonably request (which visits and inspections shall
         be at the expense of Agent or such Lender unless a Default has occurred
         and is continuing).

                                       43

<PAGE>

                  (d)      Insurance. Each Borrower and FIL's Subsidiaries shall
         (i) carry and maintain insurance of the types and in the amounts
         customarily carried from time to time during the term of this Agreement
         by others engaged in substantially the same business as such Person and
         operating in the same geographic area as such Person, including fire,
         public liability, property damage and worker's compensation, (ii) carry
         and maintain each policy for such insurance with financially sound
         insurers and (iii) deliver to Agent from time to time, as Agent may
         request, schedules setting forth all insurance then in effect.

                  (e)      Taxes, Governmental Charges and Other Indebtedness.
         Each Borrower and FIL's Subsidiaries shall promptly pay and discharge
         when due (i) all taxes and other Governmental Charges prior to the date
         upon which penalties accrue thereon, (ii) all indebtedness which, if
         unpaid, could become a Lien upon the property of such Borrower or FIL's
         Subsidiaries and (iii) subject to any subordination provisions
         applicable thereto, all other Indebtedness, which in each case or in
         the aggregate, if unpaid, is reasonably and substantially likely to
         have a Material Adverse Effect, except such taxes, Governmental Charges
         or Indebtedness as may in good faith be contested or disputed, or for
         which arrangements for deferred payment have been made, provided that
         in each such case appropriate reserves are maintained in accordance
         with GAAP.

                  (f)      Use of Proceeds. Each Borrower shall use the proceeds
         of the Loans and Letters of Credit only for the purposes set forth in
         Section II. No Borrower shall use any part of the proceeds of any Loan
         or any Letter of Credit, directly or indirectly, for the purpose of
         purchasing or carrying any Margin Stock or for the purpose of
         purchasing or carrying or trading in any securities under such
         circumstances as to involve such Borrower, any Lender or Agent in a
         violation of Regulations T, U or X issued by the Federal Reserve Board.

                  (g)      General Business Operations. Each of the Borrowers
         and FIL's Subsidiaries shall (i) preserve and maintain its corporate
         existence and all of its rights, privileges and franchises reasonably
         necessary to the conduct of its business, (ii) conduct its business
         activities in compliance with all Requirements of Law and Contractual
         Obligations applicable to such Person and (iii) keep all property
         useful and necessary in its business in good working order and
         condition, ordinary wear and tear excepted, except, in each case, where
         any failure is not reasonably and substantially likely (alone or in the
         aggregate) to have a Material Adverse Effect.

                  (h)      Pari Passu Ranking. Each Borrower shall take, or
         cause to be taken, all actions necessary to ensure that the Obligations
         of such Borrower are and continue to rank at least pari passu in right
         of payment with all other unsecured and unsubordinated Indebtedness of
         such Borrower.

                  (i)      Designated Senior Debt. Borrowers shall take all
         additional actions that may be necessary for the Obligations to
         continue at all times to constitute "Designated Senior Debt" or
         otherwise to be entitled to all the benefits of being "senior debt"
         under each Subordinated Indenture for so long as any Indebtedness shall
         be outstanding under any such Subordinated Indenture.

                  (j)      Patriot Act. Promptly following a request therefor,
         each Borrower shall provide all documentation and other information
         that a Lender reasonably requests in order to comply with such Lender's
         ongoing obligations under applicable "know your customer" and
         anti-money laundering rules and regulations, including the Uniting and
         Strengthening America by Providing Appropriate Tools Required to
         Intercept and Obstruct Terrorism Act of 2001 (known as the USA Patriot
         Act), provided that any Lender requesting documentation or other
         information under this Subparagraph 5.01(j) shall provide any relevant
         supporting documentation reasonably requested by any Borrower
         responding to such request.

                  (k)      Flextronics Hungaria Kft. In the event that (x)
         Flextronics Hungaria Kft has not been liquidated or dissolved and (y)
         all or substantially all of the assets of Flextronics Hungaria Kft have
         not been transferred to Flextronics Cyprus Limited by June 30, 2004,
         then, within five (5) Business Days of such date, Borrowers shall cause
         Flextronics Hungaria Kft to (i) complete and execute a Subsidiary
         Joinder

                                       44

<PAGE>

         and (ii) deliver or cause to be delivered such other instruments,
         agreements, certificates, opinions and documents as Agent may
         reasonably request.

         5.02.    Negative Covenants. Until the termination of this Agreement
and the satisfaction in full by Borrowers of all Obligations, Borrowers will
comply, and will cause compliance, with the following negative covenants, unless
Required Lenders shall otherwise consent in writing:

                  (a)      Indebtedness. None of the Borrowers or any of FIL's
         Subsidiaries shall create, incur, assume or permit to exist any
         Indebtedness except for the following ("Permitted Indebtedness"):

                           (i)      Indebtedness created under the Credit
                  Documents;

                           (ii)     Indebtedness that is not secured by a Lien
                  in any asset or property of any of the Borrowers or any of
                  FIL's Subsidiaries;

                           (iii)    (A) Indebtedness under Capital Leases or
                  under purchase money loans incurred by Borrower or any of
                  FIL's Subsidiaries to finance the acquisition, construction,
                  development or improvement by such Person of real property,
                  fixtures, inventory or equipment or other tangible assets,
                  provided that in each case (1) such Indebtedness is incurred
                  by such Person at the time of, or not later than one hundred
                  twenty (120) days after, the acquisition by such Person of the
                  property so financed and (2) such Indebtedness does not exceed
                  the purchase price of the property (or the cost of
                  constructing, developing or improving the same) so financed,
                  and (B) Indebtedness under initial or successive refinancings
                  of any such Capital Leases or purchase money loans, provided
                  that the principal amount of any such refinancing does not
                  exceed the principal amount of the Indebtedness being
                  refinanced;

                           (iv)     Existing Secured Indebtedness, together with
                  initial or successive refinancings thereof, provided that (A)
                  the principal amount of any such refinancing does not exceed
                  the principal amount of the Indebtedness being refinanced
                  (except to the extent necessary to pay fees, expenses,
                  underwriting discounts and prepayment penalties in connection
                  therewith) and (B) the other terms and provisions of any such
                  refinancing with respect to maturity, redemption, prepayment,
                  default and subordination are no less favorable in any
                  material respect to Lenders than the Indebtedness being
                  refinanced;

                           (v)      Indebtedness of any Borrower or Guarantor to
                  any other Borrower or any Eligible Material Subsidiary or
                  Indebtedness of any Eligible Material Subsidiary to any
                  Borrower or any other Eligible Material Subsidiary or any
                  Guarantor, in each case to the extent otherwise permitted
                  pursuant to Subparagraph 5.02(e) and Subparagraph 5.02(i); and

                           (vi)     Other Indebtedness that is secured by a Lien
                  on any assets or property of any of the Borrowers or any of
                  FIL's Subsidiaries, provided that the aggregate principal
                  amount of all secured Indebtedness (other than Existing
                  Secured Indebtedness or Indebtedness secured by cash or cash
                  equivalents to the extent such cash or cash equivalents are
                  proceeds of such Indebtedness) and secured Rate Contracts
                  (whether or not constituting "Indebtedness") outstanding
                  during any fiscal quarter of FIL does not exceed the greater
                  of (i) Seven Hundred Fifty Million Dollars ($750,000,000) or
                  (ii) ten percent (10%) of Consolidated Tangible Assets on the
                  last day of the immediately preceding fiscal quarter, and
                  provided, further, that for purposes of this Subparagraph
                  5.02(a)(vi) only, the "principal amount" of the obligations of
                  any Person in respect of any Rate Contract at any time shall
                  be in the maximum aggregate amount (giving effect to any
                  netting agreements), if any, that such Person would be
                  required to pay if such Rate Contract were terminated at such
                  time.

                                       45

<PAGE>

                  (b)      Liens. None of the Borrowers or any of FIL's
         Subsidiaries shall create, incur, assume or permit to exist any Lien on
         or with respect to any of their assets or property of any character,
         whether now owned or hereafter acquired, except for the following Liens
         ("Permitted Liens"):

                           (i)      Liens that secure only Indebtedness which
                  constitutes Permitted Indebtedness under clause (iii) (but
                  only to the extent such Liens are on the assets so financed,
                  the proceeds thereof and any improvements thereon), (iv), (v)
                  or (vi) of Subparagraph 5.02(a) and Liens that secure Rate
                  Contracts that do not constitute Indebtedness, provided that
                  the aggregate principal amount of Indebtedness that
                  constitutes Permitted Indebtedness under clause (vi) of
                  Subparagraph 5.02(a) and secured Rate Contracts that do not
                  constitute Indebtedness shall not exceed the amount set forth
                  in Subparagraph 5.02(a)(vi);

                           (ii)     Liens in favor of any of the Borrowers, any
                  Eligible Material Subsidiary or any Guarantor on all or part
                  of the assets of Subsidiaries of any Borrower, any Eligible
                  Material Subsidiary or any Guarantor securing Indebtedness
                  owing by Subsidiaries of any of the Borrowers, Eligible
                  Material Subsidiary or any Guarantor, as the case may be, to
                  any of the Borrowers or to such other Eligible Material
                  Subsidiary or Guarantor;

                           (iii)    Liens to secure taxes, assessments and other
                  government charges in respect of obligations not overdue or
                  Liens on properties to secure claims for labor, material or
                  supplies in respect of obligations not overdue (taking into
                  account applicable grace periods) or which are being contested
                  in good faith by appropriate proceedings diligently conducted
                  and with respect to which adequate reserves are being
                  maintained in accordance with GAAP so long as such Liens are
                  not being foreclosed;

                           (iv)     deposits or pledges made in connection with,
                  or to secure payment of, workmen's compensation, unemployment
                  insurance, old age pensions or other social security
                  obligations and good faith deposits in connection with
                  tenders, contracts or leases to which any Borrower or any
                  Subsidiary is a party or deposits or pledges to secure, or in
                  lieu of, surety, penalty or appeal bonds, performance bonds or
                  other similar obligations;

                           (v)      Liens of carriers, landlords, warehousemen,
                  mechanics and materialmen, and other like Liens on properties
                  which would not have a Material Adverse Effect and are in
                  respect of obligations not overdue (taking into account
                  applicable grace periods), or which are being contested in
                  good faith by appropriate proceedings diligently conducted and
                  with respect to which adequate reserves are being maintained
                  in accordance with GAAP so long as such Liens are not being
                  foreclosed;

                           (vi)     encumbrances on real property consisting of
                  easements, rights of way, zoning restrictions, restrictions on
                  the use of real property and defects and irregularities in the
                  title thereto, landlord's or lessor's or lessee's Liens under
                  leases to which a Borrower or any of FIL's Subsidiaries is a
                  party (including "synthetic" leases), and other minor Liens or
                  encumbrances none of which interferes materially with the use
                  of the property, in each case which do not individually or in
                  the aggregate have a Material Adverse Effect;

                           (vii)    Liens in favor of the Agent for the benefit
                  of the Lenders and the Agent under the Credit Documents;

                           (viii)   Liens in favor of the agent for the benefit
                  of the lenders and the agent under the FIUI Credit Documents;

                           (ix)     Liens arising out of cash management,
                  netting or set off arrangements made between banks or
                  financial institutions and FIL or any of its Subsidiaries in
                  the ordinary course of

                                       46

<PAGE>

                  business, or over any asset held with a clearing house, or
                  other Liens comprising rights of set-off arising by operation
                  of law or by agreement;

                           (x)      Liens securing Indebtedness or other
                  obligations on cash or cash equivalents to the extent such
                  cash or cash equivalents represent proceeds from such
                  Indebtedness or other obligations;

                           (xi)     rights of third parties in equipment or
                  inventory consigned to or by, or otherwise owned by such third
                  party and which is being stored on property owned or leased
                  by, a Borrower or any of FIL's Subsidiaries;

                           (xii)    Liens created pursuant to attachment,
                  garnishee orders or other process in connection with
                  pre-judgment court proceedings; and

                           (xiii)   precautionary Liens over assets securitized
                  in connection with any securitized transaction permitted under
                  Subparagraph 5.02 (c).

                  (c)      Asset Dispositions. None of the Borrowers or any of
         FIL's Subsidiaries shall sell, lease, transfer or otherwise dispose of
         any of their assets or property, whether now owned or hereafter
         acquired, except for (i) assets or property sold, leased, transferred
         or otherwise disposed of in the ordinary course of business for fair
         market value, (ii) sales of accounts receivable in securitization or
         financing transactions, provided that the aggregate principal amount of
         any accounts receivable sold in any fiscal quarter of FIL shall not
         exceed thirty percent (30%) of the aggregate principal amount of
         accounts receivable originated by FIL and its Subsidiaries during such
         fiscal quarter, (iii) sales or transfers of duplicative or excess
         assets existing as a result of transactions otherwise permitted
         pursuant to Subparagraph 5.02(d), provided that the aggregate principal
         amount of any such duplicative assets sold or transferred in any fiscal
         year does not exceed five percent (5%) of all fixed assets (net of
         depreciation) held by FIL and its Subsidiaries as of the end of the
         immediately preceding fiscal quarter, (iv) sales or transfers of
         damaged, obsolete or worn out assets and scrap, in each case in the
         ordinary course of business, (v) sales or transfers of assets or
         property to any Borrower or any Subsidiary from any other Borrower or
         Subsidiary, (vi) assets sold and leasedback by FIL or its Subsidiaries
         in the ordinary course of business and (vii) dispositions of
         Investments permitted under Subparagraph 5.02(e) for a purchase price
         that is not less than fair market value of the Investments being sold.

                  (d)      Mergers, Acquisitions, Etc. None of the Borrowers or
         any of FIL's Subsidiaries shall consolidate with or merge into any
         other Person or permit any other Person to merge into them, acquire any
         Person as a new Subsidiary or acquire all or substantially all of the
         assets of any other Person, except for the following:

                           (i)      Borrowers and FIL's Subsidiaries may merge
                  with each other, provided that (A) (1) in any such merger
                  involving any Borrower, such Borrower is the surviving
                  corporation and (2) in any such merger involving a Guarantor,
                  the surviving corporation becomes a Guarantor and (B) in each
                  case, no Default has occurred and is continuing on the date
                  of, or will result after giving effect to, any such merger;
                  and

                           (ii)     Borrowers and FIL's Subsidiaries may acquire
                  any Person as a new Subsidiary or of all or substantially all
                  of the assets of any Person, provided that:

                                    (A)      No Default has occurred and is
                           continuing on the date of, or will result after
                           giving effect to, any such acquisition;

                                    (B)      Such Person is not primarily
                           engaged in any business substantially different from
                           (1) the present business of the acquiring Borrower or
                           Subsidiary or (2) any business reasonably related
                           thereto; and

                                       47

<PAGE>

                                    (C)      Borrowers or FIL's Subsidiaries
                           possess the power to direct or cause the direction of
                           the management and policies of such Person.

                  (e)      Investments. None of the Borrowers or any of FIL's
         Subsidiaries shall make any Investment except for the following:

                           (i)      Investments permitted by the investment
                  policy of FIL set forth in Schedule 5.02(e) or, if any changes
                  to the investment policy of FIL are hereafter duly approved by
                  the Board of Directors of FIL, in any subsequent investment
                  policy which is the most recent investment policy delivered by
                  FIL to Agent with a certificate of FIL's chief financial
                  officer to the effect that such investment policy has been
                  duly approved by FIL's Board of Directors and is then in
                  effect;

                           (ii)     Investments (x) listed in Schedule 5.02(e)
                  or (y) in Wholly-Owned Subsidiaries, in each case existing or
                  committed on the Closing Date;

                           (iii)    Investments received by Borrowers and FIL's
                  Subsidiaries in connection with the bankruptcy or
                  reorganization of customers and suppliers and in settlement of
                  delinquent obligations of, and other disputes with, customers
                  and suppliers arising in the ordinary course of business;

                           (iv)     Investments by Borrowers, the Material
                  Subsidiaries and the Guarantors directly or indirectly in each
                  other;

                           (v)      Investments consisting of loans to employees
                  and officers for travel, housing, relocation and other similar
                  expenses incurred in the ordinary course of business;

                           (vi)     Investments of Borrowers and FIL's
                  Subsidiaries in interest rate protection, currency swap and
                  foreign exchange arrangements, provided that all such
                  arrangements are entered into in connection with bona fide
                  hedging operations and not for speculation;

                           (vii)    Deposit accounts;

                           (viii)   Investments permitted by Subparagraph
                  5.02(d);

                           (ix)     Other Investments, provided that:

                                    (A)      No Default has occurred and is
                           continuing on the date of, or will result after
                           giving effect to, any such Investment; and

                                    (B)      The aggregate consideration paid by
                           Borrowers and FIL's Subsidiaries for all such
                           Investments pursuant to this clause (ix) in any
                           fiscal year (without duplication) does not exceed the
                           sum of (1) ten percent (10%) of the total assets of
                           FIL and its Subsidiaries at the end of the
                           immediately preceding fiscal quarter, plus (2)
                           seventy-five percent (75%) of the Net Proceeds
                           received from the issuance by FIL of any Equity
                           Securities of the type described in clause (a) of the
                           definition of "Equity Securities" during calendar
                           year 2001 or thereafter.

                  (f)      Dividends, Redemptions, Etc. None of the Borrowers or
         any of FIL's Subsidiaries shall (i) pay any dividends or make any
         distributions (whether in cash, securities or other property) on its
         Equity Securities, including any payment to a sinking fund or similar
         deposit, (ii) purchase, redeem, retire, defease, cancel, terminate, or
         otherwise acquire for value any of its Equity Securities, (iii) return
         any capital to any holder of its Equity Securities as such or (iv) make
         any distribution of assets, Equity Securities, obligations,

                                       48

<PAGE>

         cash or securities to any holder of its Equity Securities as such, or
         set apart any sum for any such purpose, except as follows:

                           (i)      Any of the Borrowers or any of FIL's
                  Subsidiaries may pay dividends on its capital stock payable
                  solely in such Person's own capital stock, provided that, in
                  the case of any such dividend payable by an Ineligible
                  Material Subsidiary, such dividend is delivered and pledged to
                  Agent to the extent required by Subparagraph 2.15(b);

                           (ii)     Any Subsidiary of FIL may pay dividends to
                  or repurchase its capital stock from such Subsidiary's parent;
                  and

                           (iii)    FIL may pay dividends on its capital stock
                  payable in cash or repurchase its capital stock for cash,
                  provided that, in each case, no Default has occurred and is
                  continuing on the date of, or will result after giving effect
                  to, any such payment or repurchase.

                  (g)      Change in Business. None of the Borrowers or any of
         FIL's Subsidiaries shall engage to any material extent, either directly
         or indirectly, in any business substantially different from (i) their
         present business or (ii) any business reasonably related thereto.

                  (h)      Employee Benefit Plans.

                           (i)      None of the Borrowers or any ERISA Affiliate
                  shall (A) adopt or institute any Employee Benefit Plan that is
                  an employee pension benefit plan within the meaning of section
                  3(2) of ERISA, (B) take any action which will result in the
                  partial or complete withdrawal, within the meanings of
                  sections 4203 and 4205 of ERISA, from a Multiemployer Plan,
                  (C) engage or permit any Person to engage in any transaction
                  prohibited by section 406 of ERISA or section 4975 of the IRC
                  involving any Employee Benefit Plan or Multiemployer Plan
                  which would subject any Borrower or any ERISA Affiliate to any
                  tax, penalty or other liability including a liability to
                  indemnify, (D) incur or allow to exist any accumulated funding
                  deficiency (within the meaning of section 412 of the IRC or
                  section 302 of ERISA), (E) fail to make full payment when due
                  of all amounts due as contributions to any Employee Benefit
                  Plan or Multiemployer Plan, (F) fail to comply with the
                  requirements of section 4980B of the IRC or Part 6 of Title
                  I(B) of ERISA, or (G) adopt any amendment to any Employee
                  Benefit Plan which would require the posting of security
                  pursuant to section 401(a)(29) of the IRC, where singly or
                  cumulatively, the above would be reasonably and substantially
                  likely to have a Material Adverse Effect.

                           (ii)     None of the Borrowers or any of FIL's
                  Subsidiaries shall (A) engage in any transaction prohibited by
                  any Governmental Rule applicable to any Foreign Plan, (B) fail
                  to make full payment when due of all amounts due as
                  contributions to any Foreign Plan or (C) otherwise fail to
                  comply with the requirements of any Governmental Rule
                  applicable to any Foreign Plan, where singly or cumulatively,
                  the above would be reasonably and substantially likely to have
                  a Material Adverse Effect.

                  (i)      Transactions With Affiliates. None of the Borrowers
         or any of FIL's Subsidiaries shall enter into any Contractual
         Obligation with any Affiliate (other than one of the Borrowers or one
         of its Subsidiaries) or engage in any other transaction with any such
         Affiliate except (A) upon terms at least as favorable to such Borrower
         or such Subsidiary as an arms-length transaction with unaffiliated
         Persons, except as disclosed or reflected in the Financial Statements
         of FIL dated December 31, 2003, furnished by FIL to Agent prior to the
         date hereof, or in the Financial Statements delivered to Agent pursuant
         to clause (i) or (ii) of Subparagraph 5.01(a), or (B) in connection
         with transactions made pursuant to Subparagraphs 5.02(d) or 5.02(e).

                                       49

<PAGE>

                  (j)      Accounting Changes. None of the Borrowers or any of
         FIL's Subsidiaries shall change (i) their fiscal year (currently April
         1 through March 31) or (ii) their accounting practices except as
         required by GAAP.

                  (k)      Burdensome Contractual Obligations. None of the
         Borrowers or any of FIL's Subsidiaries will enter into any Contractual
         Obligation (excluding this Agreement and the other Credit Documents)
         that restricts the ability of any wholly-owned Subsidiary of FIL or any
         other Subsidiary of FIL that had revenues during the immediately
         preceding fiscal year equal to or greater than Twenty-Five Million
         Dollars ($25,000,000) or net worth on the last day of the immediately
         preceding fiscal year equal to or greater than Twenty-Five Million
         Dollars ($25,000,000), to pay or make dividends or distributions in
         cash or kind, to make loans, advances or other payments of whatsoever
         nature or to make transfers or distributions of all or any part of
         their assets to any of the Borrowers or to any Subsidiary of such
         Subsidiary; provided, however, that the foregoing shall not apply to
         (i) restrictions or conditions imposed by any Governmental Rule or (ii)
         customary restrictions and conditions (A) contained in licenses, leases
         and franchise agreements or (B) relating to the sale of a Subsidiary
         pending such sale so long as such restrictions and conditions apply
         only to the Subsidiary that is to be sold and such sale is otherwise
         permitted hereunder.

                  (l)      Senior Debt. None of the Borrowers or any of FIL's
         Subsidiaries will designate or permit to exist any other Indebtedness
         as "Designated Senior Debt" for the purposes of and as defined in each
         Subordinated Indenture, other than the Obligations arising under this
         Agreement and the other Credit Documents and obligations arising under
         facilities providing at least Fifty Million Dollars ($50,000,000) in
         the aggregate of loans or other debt or synthetic lease financing.

         5.03.    Financial Covenants. Until the termination of this Agreement
and the satisfaction in full by Borrowers of all Obligations, Borrowers will
comply, and will cause compliance, with the following financial covenants,
unless Required Lenders shall otherwise consent in writing:

                  (a)      Debt/EBITDA Ratio. FIL shall not permit its
         Debt/EBITDA Ratio as of any date set forth below to exceed the ratio
         set forth opposite such date:

<TABLE>
<CAPTION>
     Date                                                       Ratio
     ----                                                       -----
<S>                                                          <C>
March 31, 2004                                               3.50 : 1.00

June 30, 2004                                                3.50 : 1.00

September 30, 2004                                           3.50 : 1.00

December 31, 2004                                            3.50 : 1.00

March 31, 2005                                               3.50 : 1.00

June 30, 2005                                                3.50 : 1.00

September 30, 2005                                           3.50 : 1.00

December 31, 2005                                            3.50 : 1.00

March 31, 2006                                               3.25 : 1.00

June 30, 2006                                                3.25 : 1.00

September 30, 2006                                           3.25 : 1.00

December 31, 2006                                            3.25 : 1.00

March 31, 2007                                               3.25 : 1.00
</TABLE>

                                       50

<PAGE>

<TABLE>
<CAPTION>
     Date                                                       Ratio
     ----                                                       -----
<S>                                                          <C>
June 30, 2007                                                3.25 : 1.00
September 30, 2007                                           3.25 : 1.00
December 31, 2007                                            3.25 : 1.00
</TABLE>

                  (b)      Fixed Charge Coverage Ratio. FIL shall not permit its
         Fixed Charge Coverage Ratio to be less than 1.50 to 1.00 for any
         consecutive four-quarter period ending on the last day of any fiscal
         quarter.

SECTION VI. DEFAULT.

         6.01.    Events of Default. The occurrence or existence of any one or
more of the following shall constitute an "Event of Default" hereunder:

                  (a)      Non-Payment. Any Borrower shall (i) fail to pay when
         due any principal of any Loan or any Reimbursement Payment or (ii)
         except at the Maturity Date, when no grace period shall apply, fail to
         pay within five (5) Business Days after the same becomes due any
         interest, fee or other payment required under the terms of this
         Agreement or any of the other Credit Documents; or

                  (b)      Specific Defaults. Any Borrower or any of FIL's
         Subsidiaries shall fail to observe or perform any covenant, obligation,
         condition or agreement set forth in Paragraph 5.02 or Paragraph 5.03;
         or

                  (c)      Other Defaults. Any Borrower or any of FIL's
         Subsidiaries shall fail to observe or perform any other covenant,
         obligation, condition or agreement contained in this Agreement or the
         other Credit Documents and such failure shall continue for thirty (30)
         Business Days after the earlier of (i) any Borrower's written
         acknowledgement of such failure and (ii) Agent's or any Lender's
         written notice to Borrowers of such failure; provided, however, that in
         the event that such failure cannot reasonably be cured within such
         thirty (30) day period, and such failure relates to the observance or
         performance of any of the covenants, obligations, conditions or
         agreements contained in Subparagraph 4.01(f) hereof with respect to
         Hazardous Materials or any Environmental Laws or any judgment, consent
         decree, settlement or compromise in respect of any claim based thereon,
         it shall not constitute an Event of Default hereunder so long as
         Borrowers shall have commenced to cure such failure within such thirty
         (30) day period and shall thereafter diligently pursue such cure to
         completion, and provided, further, that such failure shall in all
         events be cured within one hundred and eighty days (180) days after
         Agent's or such Lender's written notice thereof; or

                  (d)      Representations and Warranties. Any representation,
         warranty, certificate, information or other statement (financial or
         otherwise) made or furnished by or on behalf of any Borrower to Agent
         or any Lender in or in connection with this Agreement or any of the
         other Credit Documents, or as an inducement to Agent or any Lender to
         enter into this Agreement, shall be false, incorrect, incomplete or
         misleading in any material respect when made (or deemed made) or
         furnished and either (i) Agent or any Lender has delivered to Borrowers
         written notice thereof and such representation, warranty, certificate,
         information or other statement cannot be remedied or (ii) such
         representation, warranty, certificate, information or other statement
         continues to be false, incorrect, incomplete or misleading in any
         material respect thirty (30) days after the earlier of (A) any
         Borrower's written acknowledgement that such representation, warranty,
         certificate, information or other statement was false, incorrect,
         incomplete or misleading in any material respect and (B) Agent's or any
         Lender's written notice to Borrowers that such representation,
         warranty, certificate, information or other statement was false,
         incorrect, incomplete or misleading in any material respect; or

                  (e)      Cross-Default. (i) Any Borrower, any Guarantor or any
         Material Subsidiary shall fail to make any payment on account of any
         Indebtedness of such Person (other than the Obligations) when due
         (whether at scheduled maturity, by required prepayment, upon
         acceleration or otherwise) and such failure

                                       51

<PAGE>

         shall continue beyond any period of grace provided with respect
         thereto, if the amount of such Indebtedness exceeds Fifty Million
         Dollars ($50,000,000) or the effect of such failure is to cause, or
         permit the holder or holders thereof to cause, Indebtedness of any
         Borrower, any Guarantor and any Material Subsidiary (other than the
         Obligations) in an aggregate amount exceeding Fifty Million Dollars
         ($50,000,000) to become due (whether at scheduled maturity, by required
         prepayment, upon acceleration or otherwise); or (ii) any Borrower, any
         Guarantor or any Material Subsidiary shall otherwise fail to observe or
         perform any agreement, term or condition contained in any agreement or
         instrument relating to any Indebtedness of such Person (other than the
         Obligations), or any other event shall occur or condition shall exist,
         if the effect of such failure, event or condition is to cause, or
         permit the holder or holders thereof to cause, Indebtedness of any
         Borrower, any Guarantor and any Material Subsidiary (other than the
         Obligations) in an aggregate amount exceeding Fifty Million Dollars
         ($50,000,000) to become due (and/or to be secured by cash collateral
         other than cash collateral obligations not arising from an event of
         default under any agreement or instrument relating to Indebtedness
         incurred in connection with a synthetic lease transaction or letters of
         credit); or

                  (f)      Insolvency, Voluntary Proceedings. Any Borrower or
         any Significant Subsidiary shall (i) apply for or consent to the
         appointment of a receiver, trustee, liquidator or custodian of itself
         or of all or a substantial part of its property, (ii) be unable, or
         admit in writing its inability, to pay its debts generally as they
         mature, (iii) make a general assignment for the benefit of its or any
         of its creditors, (iv) become insolvent (as such term may be defined or
         interpreted under any applicable statute), (v) commence a voluntary
         case or other proceeding seeking liquidation, reorganization or other
         relief with respect to itself or its debts under any bankruptcy,
         insolvency or other similar law now or hereafter in effect or consent
         to any such relief or to the appointment of or taking possession of its
         property by any official in an involuntary case or other proceeding
         commenced against it, or (vi) take any action for the purpose of
         effecting any of the foregoing; or FIL, any Designated Borrower or any
         Material Subsidiary shall be dissolved or liquidated in full or in
         part; or

                  (g)      Involuntary Proceedings. Proceedings for the
         appointment of a receiver, trustee, liquidator or custodian of any
         Borrower or any Significant Subsidiary or of all or a substantial part
         of the property thereof, or an involuntary case or other proceedings
         seeking liquidation, reorganization or other relief with respect to any
         Borrower or any Significant Subsidiary or the debts thereof under any
         bankruptcy, insolvency or other similar law now or hereafter in effect
         shall be commenced and an order for relief entered or such proceeding
         shall not be dismissed or discharged within sixty (60) days of
         commencement; or

                  (h)      Judgments. (i) One or more judgments, orders, decrees
         or arbitration awards requiring Borrowers and/or FIL's Subsidiaries to
         pay an aggregate amount of Fifty Million Dollars ($50,000,000) or more
         (exclusive of amounts covered by insurance issued by an insurer not an
         Affiliate of Borrowers and otherwise satisfying the requirements set
         forth in Subparagraph 5.01(d) to which the insurer does not dispute
         coverage) shall be rendered against Borrowers and/or FIL's Subsidiaries
         in connection with any single or related series of transactions,
         incidents or circumstances and the same shall not be satisfied, vacated
         or stayed for a period of sixty (60) consecutive days, (ii) any
         judgment, writ, assessment, warrant of attachment, tax lien or
         execution or similar process shall be issued or levied against a
         substantial part of the property of any Borrower or any of FIL's
         Subsidiaries and the same shall not be released, stayed, vacated or
         otherwise dismissed within sixty (60) days after issue or levy or (iii)
         any other judgments, orders, decrees, arbitration awards, writs,
         assessments, warrants of attachment, tax liens or executions or similar
         processes which, alone or in the aggregate, are reasonably and
         substantially likely to have a Material Adverse Effect are rendered,
         issued or levied; or

                  (i)      Credit Documents. Any Credit Document or any material
         term thereof shall cease to be, or be asserted by any Borrower or any
         Guarantor not to be, a legal, valid and binding obligation of any
         Borrower or any Guarantor enforceable in accordance with its terms; or

                  (j)      Employee Benefit Plans. Any Reportable Event which
         constitutes grounds for the termination of any Employee Benefit Plan by
         the PBGC or for the appointment of a trustee by the PBGC to

                                       52

<PAGE>

         administer any Employee Benefit Plan shall occur, or any Employee
         Benefit Plan shall be terminated within the meaning of Title IV of
         ERISA or a trustee shall be appointed by the PBGC to administer any
         Employee Benefit Plan; or

                  (k)      Change of Control. Any Change of Control shall occur;
         or

                  (l)      Material Adverse Effect. Any event(s) or condition(s)
         which is (are) reasonably and substantially likely to have a Material
         Adverse Effect shall occur or exist.

         6.02.    Remedies. At any time after the occurrence and during the
continuance of any Event of Default (other than an Event of Default referred to
in Subparagraph 6.01(f) or 6.01(g)), Agent may, with the consent of the Required
Lenders, or shall, upon instructions from the Required Lenders, by written
notice to Borrowers, (a) terminate the Commitments and the obligations of
Lenders to make Loans and to participate in Letters of Credit and of Issuing
Bank to issue Letters of Credit, and/or (b) declare all outstanding Obligations
payable by Borrowers to be immediately due and payable without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived, anything contained herein or in the Notes to the contrary
notwithstanding and (c) direct Borrowers to deliver to Agent cash collateral in
an amount equal to the aggregate stated amount of all Letters of Credit. Upon
the occurrence or existence of any Event of Default described in Subparagraph
6.01(f) or 6.01(g), immediately and without notice, (a) the Commitments and the
obligations of Lenders to make Loans and to participate in Letters of Credit,
and of the Issuing Bank to issue Letters of Credit shall automatically terminate
and (b) all outstanding Obligations payable by Borrowers hereunder shall
automatically become immediately due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived, anything contained herein or in the Notes to the contrary
notwithstanding. In addition to the foregoing remedies, upon the occurrence or
existence of any Event of Default, Agent may exercise any other right, power or
remedy available to it under any of the Credit Documents or otherwise by law,
either by suit in equity or by action at law, or both.

         6.03.    Lender Rate Contract Remedies. Notwithstanding any other
provision of this Section VI, each Lender or its Affiliate which has entered
into a Lender Rate Contract shall have the right, with prior notice to Agent,
but without the approval or consent of Agent or any other Lender, (a) to declare
an event of default, termination event or other similar event thereunder which
will result in the early termination of such Lender Rate Contract, (b) to
determine net termination amounts in accordance with the terms of such Lender
Rate Contract and to set-off amounts between Lender Rate Contracts of such
Lender, and (c) to prosecute any legal action against any Borrower or any of
FIL's Subsidiaries to enforce net amounts owing to such Lender or its Affiliate
under such Lender Rate Contracts.

SECTION VII. THE AGENT AND RELATIONS AMONG LENDERS.

         7.01.    Appointment, Powers and Immunities. Each Lender hereby
appoints and authorizes Agent to act as its agent hereunder and under the other
Credit Documents with such powers as are expressly delegated to Agent by the
terms of this Agreement and the other Credit Documents, together with such other
powers as are reasonably incidental thereto. Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement or in any
other Credit Document, be a trustee for any Lender or have any fiduciary duty to
any Lender. Notwithstanding anything to the contrary contained herein Agent
shall not be required to take any action which is contrary to this Agreement or
any other Credit Document or any applicable Governmental Rule. Neither Agent nor
any Lender shall be responsible to any other Lender for any recitals,
statements, representations or warranties made by any Borrower or any Guarantor
contained in this Agreement or in any other Credit Document, for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Credit Document or for any failure by any Borrower or any
Guarantor to perform their respective obligations hereunder or thereunder. Agent
may employ agents and attorneys-in-fact and shall not be responsible to any
Lender for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. Neither Agent nor any of its directors,
officers, employees, agents or advisors shall be responsible to any Lender for
any action taken or omitted to be taken by it or them hereunder or under any
other Credit Document or in connection herewith or therewith, except for its or
their own gross negligence or willful misconduct. Except as otherwise provided
under this

                                       53

<PAGE>

Agreement, Agent shall take such action with respect to the Credit Documents as
shall be directed by the Required Lenders.

         7.02.    Reliance by Agent. Agent shall be entitled to rely upon any
certificate, notice or other document (including any cable, telegram, facsimile
or telex) believed by it in good faith to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by Agent with reasonable care. As to any other matters not
expressly provided for by this Agreement, Agent shall not be required to take
any action or exercise any discretion, but shall be required to act or to
refrain from acting upon instructions of the Required Lenders and shall in all
cases be fully protected by Lenders in acting, or in refraining from acting,
hereunder or under any other Credit Document in accordance with the instructions
of the Required Lenders, and such instructions of the Required Lenders and any
action taken or failure to act pursuant thereto shall be binding on all of
Lenders.

         7.03.    Defaults. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default unless Agent has received a written
notice from a Lender or any Borrower, referring to this Agreement, describing
such Default and stating that such notice is a "Notice of Default". If Agent
receives such a notice of the occurrence of a Default, Agent shall give prompt
notice thereof to Lenders. Agent shall take such action with respect to such
Default as shall be reasonably directed by the Required Lenders; provided,
however, that until Agent shall have received such directions, Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default as it shall deem advisable in the best interest of
Lenders.

         7.04.    Indemnification. Without limiting the Obligations of Borrowers
hereunder, each Lender agrees to indemnify Agent, ratably in accordance with
their Proportionate Shares, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may at any time be imposed on, incurred
by or asserted against Agent in any way relating to or arising out of this
Agreement or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or the enforcement of any of the
terms hereof or thereof; provided, however, that no Lender shall be liable for
any of the foregoing to the extent they arise from Agent's gross negligence or
willful misconduct. Agent shall be fully justified in refusing to take or in
continuing to take any action hereunder unless it shall first be indemnified to
its satisfaction by Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
obligations of each Lender under this Paragraph 7.04 shall survive the payment
and performance of the Obligations, the termination of this Agreement and any
Lender ceasing to be a party to this Agreement (with respect to events which
occurred prior to the time such Lender ceased to be a Lender hereunder).

         7.05.    Non-Reliance. Each Lender represents that it has,
independently and without reliance on Agent, or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of the business, prospects, management, financial condition and
affairs of Borrowers and FIL's Subsidiaries and its own decision to enter into
this Agreement and agrees that it will, independently and without reliance upon
Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own appraisals and
decisions in taking or not taking action under this Agreement. Neither Agent nor
any of its affiliates nor any of their respective directors, officers,
employees, agents or advisors shall (a) be required to keep any Lender informed
as to the performance or observance by any Borrower or any Guarantor of the
obligations under this Agreement or any other document referred to or provided
for herein or to make inquiry of, or to inspect the properties or books of any
Borrower or any of FIL's Subsidiaries, (b) have any duty or responsibility to
provide any Lender with any credit or other information concerning any Borrower
or any of FIL's Subsidiaries which may come into the possession of Agent, except
for notices, reports and other documents and information expressly required to
be furnished to Lenders by Agent hereunder or (c) be responsible to any Lender
for (i) any recital, statement, representation or warranty made by any Borrower
or any officer, employee or agent of any Borrower in this Agreement or in any of
the other Credit Documents, (ii) the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any Credit
Document, or (iii) any failure by any Borrower or any Guarantor to perform its
obligations under this Agreement or any other Credit Document.

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<PAGE>

         7.06.    Resignation or Removal of Agent. Agent may resign at any time
by giving thirty (30) days prior written notice thereof to Borrowers and
Lenders, and Agent may be removed at any time with or without cause by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Agent, which Agent, if not a Lender,
shall be reasonably acceptable to Borrowers; provided, however, that Borrowers
shall have no right to approve a successor Agent if a Default has occurred and
is continuing. If no successor shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days of after the
retiring Agent gives notice of its resignation, then the retiring Agent may, on
behalf of the Lenders and the Issuing Bank, appoint a successor Agent, which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
at which point (and not earlier) the retiring Agent shall be discharged from the
duties and obligations thereafter arising hereunder. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this Section VII
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Agent.

         7.07.    Agent in its Individual Capacity. Agent, Issuing Bank and
their respective affiliates may make loans to, accept deposits from and
generally engage in any kind of banking or other business with Borrowers and any
of FIL's Subsidiaries and affiliates as though Agent was not Agent hereunder and
Issuing Bank was not Issuing Bank hereunder. With respect to Loans, if any, made
by Agent in its capacity as a Lender and Letters of Credit, if any, issued by
Issuing Bank in its capacity as Issuing Bank, Agent and Issuing Bank shall have
the same rights and powers under this Agreement and the other Credit Documents
as any other Lender and may exercise the same as though it were not Agent or
Issuing Bank, respectively, and the terms "Lender" and "Lenders" shall include
Agent in its capacity as a Lender and Issuing Bank in its capacity as a Lender,
respectively.

         7.08.    Co-Arrangers, Co-Syndication Agents, Senior Managing Agents
Managing Agents and Documentation Agent. The Co-Arrangers, the Co-Syndication
Agents, the Senior Managing Agents, the Managing Agents and the Documentation
Agent do not assume any responsibility or obligation under this Agreement or any
of the other Credit Documents or any duties as agents for the Lenders. The title
"Co-Arrangers", "Co-Syndication Agents", "Senior Managing Agents", "Managing
Agents" and "Documentation Agent" implies no fiduciary responsibility on the
part of any Co-Arranger, Co-Syndication Agent, Senior Managing Agents, Managing
Agents and the Documentation Agent to any Person, and the use of such title does
not impose on any Co-Arranger, Co-Syndication Agent, Senior Managing Agents,
Managing Agents and the Documentation Agent any duties or obligations under this
Agreement or any of the other Credit Documents.

SECTION VIII. MISCELLANEOUS.

         8.01.    Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or upon any
Borrower, any Lender, Issuing Bank or Agent under this Agreement or the other
Credit Documents shall be in writing and faxed, mailed or delivered, if to any
Borrower, Agent or Issuing Bank, at its respective facsimile number or address
set forth below or, if to any Lender, at the address or facsimile number
specified for such Lender in Part B of Schedule I (or to such other facsimile
number or address for any party as indicated in any notice given by that party
to the other parties). All such notices and communications shall be effective
(a) when sent by an overnight courier service of recognized standing, on the
second Business Day following the deposit with such service, (b) when delivered
by hand, upon delivery, (c) when faxed, upon confirmation of receipt, or (d) by
any other means, upon receipt; provided, however, that any notice delivered to
Agent or Issuing Bank under Section II shall not be effective until received by
Agent or Issuing Bank.

                               Agent:       ABN AMRO Bank N.V.

                                            Syndications Group
                                            55 East 52nd Street, 7th Floor
                                            New York, NY  10055
                                            U.S.A.
                                            Attn: John Darmanin

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<PAGE>

                                            Tel. No: (212) 409-7398
                                            Fax. No: (212) 409-7497

                                            With a copy in each case to:

                                            ABN AMRO Bank N.V.
                                            101 California Street, Suite 4300
                                            San Francisco, CA 94111
                                            Attn: William Davidson
                                            Tel: (415) 984-3734
                                            Fax: (415)984-3717

                                            ABN AMRO Bank N.V.
                                            Agency Services
                                            208 South LaSalle Street, Suite 1500
                                            Chicago, IL 60604-1003
                                            Attn: Joycelyn G. Gay
                                            Tel. No: (312) 992-5094
                                            Fax. No: (312) 601-3610

                      Issuing Bank:         Fleet National Bank

                                            100 Federal Street, 9th Floor
                                            Boston, MA 02110
                                            Attn: Teresa Garney
                                                       MA DE 10009H
                                            Telephone: (617) 434-4628
                                            Fax No: (617) 434-1709

                      FIL:                  Flextronics International Ltd.

                                            11 Ubi Road 1 #07-01/02
                                            Meiban Industrial Building
                                            Singapore 408723
                                            Attn: Chairman
                                            Telephone: + (65) 844-3366
                                            Fax No: + (65) 842-1103

                      with copies to:

                                            Flextronics International Ltd.
                                            2090 Fortune Drive
                                            San Jose, CA  95131
                                            Attn: Treasurer
                                            Tel. No: (408) 576-7233
                                            Fax. No: (408) 526-9215

                                            ABN AMRO Bank N.V.
                                            Agency Services
                                            208 South LaSalle Street, Suite 1500
                                            Chicago, IL 60604-1003
                                            Attn: Joycelyn G. Gay
                                            Tel. No: (312) 992-5094
                                            Fax. No: (312) 601-3610

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<PAGE>

Each Notice of Borrowing, Notice of Interest Period Selection and LC Application
shall be given by the applicable Borrower to Agent, and in the case of an LC
Application, to Agent and Issuing Bank, to the office of such Person located at
the address referred to above during such office's normal business hours;
provided, however, that any such notice received by any such Person after 11:00
a.m. (California time) on any Business Day shall be deemed received by such
Person on the next Business Day. In any case where this Agreement authorizes
notices, requests, demands or other communications by Borrowers to Agent,
Issuing Bank or any Lender to be made by telephone or facsimile, Agent, Issuing
Bank or any Lender may conclusively presume that anyone purporting to be a
person designated in any incumbency certificate or other similar document
received by Agent or a Lender is such a person.

         8.02.    Expenses. Borrowers jointly and severally agree to pay on
demand, whether or not any Loan is made or Letter of Credit is issued hereunder,
(a) all reasonable fees and expenses, including reasonable attorneys' fees and
expenses, incurred by Agent in connection with the syndication of the Loans, the
preparation, negotiation, execution and delivery of, and the exercise of its
duties under, this Agreement and the other Credit Documents, and the
preparation, negotiation, execution and delivery of amendments and waivers
hereunder and thereunder and (b) all reasonable fees and expenses, including
reasonable attorneys' fees and expenses, incurred by Agent and Lenders in the
enforcement or attempted enforcement of any of the Obligations or in preserving
any of Agent's or Lenders' rights and remedies (including all such fees and
expenses incurred in connection with any "workout" or restructuring affecting
the Credit Documents or the Obligations or any bankruptcy or similar proceeding
involving any Borrower or any of FIL's Subsidiaries). As used herein, the term
"reasonable attorneys' fees and expenses" shall include, without limitation,
allocable costs and expenses of Agent's and Lenders' in-house legal counsel and
staff. The obligations of Borrowers under this Paragraph 8.02 shall survive the
payment and performance of the Obligations and the termination of this
Agreement.

         8.03.    Indemnification. To the fullest extent permitted by law,
Borrowers jointly and severally agree to protect, indemnify, defend and hold
harmless Agent, Lenders and their Affiliates and their respective directors,
officers, employees, agents and advisors ("Indemnitees") from and against any
and all liabilities, losses, damages or expenses of any kind or nature
(including, with respect to Taxes, only those Taxes that constitute Non-Excluded
Taxes) and from any suits, claims or demands (including in respect of or for
reasonable attorney's fees and other expenses) arising on account of or in
connection with any matter or thing or action or failure to act by Indemnitees,
or any of them, arising out of or relating to the Credit Documents or any
transaction contemplated thereby, including any use by any Borrower of any
proceeds of the Loans or any Letter of Credit, except to the extent such
liability arises from the willful misconduct or gross negligence of such
Indemnitee. Each request for any indemnity payment by an Indemnitee under this
Paragraph 8.03 must be accompanied by a reasonably detailed written explanation
identifying the liability, loss, damage or expense regarding which the
indemnification is being requested and explaining the basis for such
indemnification claim. In addition, if any Lender determines reasonably, in good
faith, and in its sole discretion that it has received a refund of, credit or
benefit of a deduction resulting from, any Non-Excluded Taxes to which it has
been indemnified by Borrowers or with respect to which Borrowers have paid
additional amounts pursuant to this Paragraph 8.03 or Paragraph 2.13, it shall
pay the amount of such refund, credit or benefit of such deduction to Borrowers
(but only to the extent of indemnity payments made, or additional amounts paid,
by Borrowers with respect to the Non-Excluded Taxes giving rise to such refund,
credit or deduction), net of all incurred out-of-pocket expenses of such Lender
and without interest (other than interest paid by the relevant Governmental
Authority with respect to such refund, credit or benefit of such deduction);
provided, however, that Borrowers shall, upon the written request of such
Lender, agree to repay the amount paid over to Borrowers (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to
such Lender in the event such Lender is required by force of law to repay such
refund, credit or benefit of such deduction to such Governmental Authority. The
obligations of Borrowers under this Paragraph 8.03 shall survive the payment and
performance of the Obligations and the termination of this Agreement.

         8.04.    Waivers; Amendments. Any term, covenant, agreement or
condition of this Agreement or any other Credit Document may be amended or
waived, and any consent under this Agreement or any other Credit Document may be
given, if such amendment, waiver or consent is in writing and is signed by
Borrowers and the Combined Required Lenders; provided, however, that:

                           (i)      Any amendment, waiver or consent which would
                  (A) increase the Total Commitment, (B) postpone, delay or
                  extend the Maturity Date, (C) reduce the principal of or

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<PAGE>

                  interest on any Loan or any Letter of Credit, the Commitment
                  Fees or any other fees or amounts payable for the account of
                  all Lenders hereunder, (D) postpone, delay or extend the
                  scheduled date for payment of any such principal, interest,
                  fees or amounts, (E) amend this Paragraph 8.04, (F) amend the
                  definition of Currencies, Designated Borrowers, Required
                  Lenders or Combined Required Lenders or (G) release any
                  Guarantor (except for releases as provided in Paragraph 2.15),
                  must be in writing and signed or approved in writing by all
                  Lenders;

                           (ii)     Any amendment, waiver or consent which would
                  increase or decrease the Commitment of any Lender (except for
                  a pro rata decrease in the Commitments of all Lenders) must be
                  in writing and signed by such Lender;

                           (iii)    Any amendment, waiver or consent which would
                  alter Paragraph 2.11 in a manner that would alter the pro rata
                  sharing of payments required thereby must be in writing and
                  signed by all Lenders;

                           (iv)     Any amendment, waiver or consent which would
                  change any provision of any Credit Document in a manner that
                  by its terms adversely affects the rights in respect of
                  payments due to Lenders holding Loans under this Agreement
                  differently than those Lenders holding Loans under the FIUI
                  Credit Agreement must be in writing and signed by the Required
                  Lenders; and

                           (v)      Any amendment, waiver or consent which
                  affects the rights or obligations of the Issuing Bank must be
                  in writing and signed by the Issuing Bank; and

                           (vi)     Any amendment, waiver or consent which
                  affects the rights or obligations of Agent must be in writing
                  and signed by Agent.

No failure or delay by Agent or any Lender in exercising any right under this
Agreement or any other Credit Document shall operate as a waiver thereof or of
any other right hereunder or thereunder nor shall any single or partial exercise
of any such right preclude any other further exercise thereof or of any other
right hereunder or thereunder. Unless otherwise specified in such waiver or
consent, a waiver or consent given hereunder shall be effective only in the
specific instance and for the specific purpose for which given.

         8.05.    Successors and Assigns.

                  (a)      Binding Effect. This Agreement and the other Credit
         Documents shall be binding upon and inure to the benefit of Borrowers,
         Lenders, Agent, all future holders of the Notes and their respective
         successors and permitted assigns, except that any Borrower may not
         assign or transfer any of its rights or obligations under any Credit
         Document without the prior written consent of Agent and each Lender.

                  (b)      Participations. Any Lender may at any time sell to
         one or more banks or other financial institutions ("Participants")
         participating interests in any Loan owing to such Lender, any Note held
         by such Lender, any Commitment of such Lender or any other interest of
         such Lender under this Agreement and the other Credit Documents. In the
         event of any such sale by a Lender of participating interests, such
         Lender's obligations under this Agreement shall remain unchanged, such
         Lender shall remain solely responsible for the performance thereof,
         such Lender shall remain the holder of its Notes for all purposes under
         this Agreement and Borrowers and Agent shall continue to deal solely
         and directly with such Lender in connection with such Lender's rights
         and obligations under this Agreement. Any agreement pursuant to which
         any such sale is effected may require the selling Lender to obtain the
         consent of the Participant in order for such Lender to agree in writing
         to any amendment, waiver or consent of a type specified in Subparagraph
         8.04 (i), (ii) or (iii), to the extent applicable but may not otherwise
         require the selling Lender to obtain the consent of such Participant to
         any other amendment, waiver or consent hereunder. Borrowers also agree
         that any Lender which has transferred any participating interest in its
         Commitments or Loans shall, notwithstanding any such transfer, be
         entitled to the full benefits accorded such Lender under Paragraph
         2.12, Paragraph 2.13, and Paragraph 2.14, as if such Lender had not
         made such transfer.

                                       58

<PAGE>

                  (c)      Assignments. Any Lender may, at any time, sell and
         assign to any Eligible Assignee (individually, an "Assignee Lender")
         all or a portion of its rights and obligations under this Agreement and
         the other Credit Documents (such a sale and assignment to be referred
         to herein as an "Assignment") pursuant to an assignment and assumption
         substantially in the form of Exhibit D (an "Assignment and
         Assumption"), executed by each Assignee Lender and such assignor Lender
         (an "Assignor Lender") and delivered to Agent for its acceptance and
         recording in the Register; provided, however, that:

                           (i)      Without the written consent of Agent,
                  Issuing Bank and, if no Default has occurred and is
                  continuing, FIL (which consent of Agent, Issuing Bank and FIL
                  shall not be unreasonably withheld), no Lender may make any
                  Assignment of its Commitment or Loans to any Assignee Lender
                  which is not, immediately prior to such Assignment, a Lender
                  hereunder or an Affiliate thereof;

                           (ii)     Without the written consent of Agent,
                  Issuing Bank and, if no Default has occurred and is
                  continuing, FIL (which consent of Agent, Issuing Bank and FIL
                  shall not be unreasonably withheld), no Lender may make any
                  Assignment of its Commitment and Loans to any Assignee Lender
                  if, after giving effect to such Assignment, the Commitment
                  (or, after the termination of the Commitments, the Loans) of
                  such Assignor Lender or such Assignee Lender would be less
                  than Two Million Five Hundred Thousand Dollars ($2,500,000),
                  except that a Lender may make an Assignment which reduces its
                  Commitment (or, after the termination of the Commitments, its
                  Loans) to zero without the written consent of FIL and the
                  Issuing Bank;

                           (iii)    Without the written consent of Agent,
                  Issuing Bank and, if no Default has occurred and is
                  continuing, FIL (which consent of Agent, Issuing Bank and FIL
                  shall not be unreasonably withheld), no Lender may make any
                  Assignment of its Commitment and Loans which does not assign
                  and delegate an equal pro rata interest in such Lender's
                  Commitment, Loans and all other rights, duties and obligations
                  of such Lender under this Agreement and the other Credit
                  Documents;

                           (iv)     Without the written consent of Agent,
                  Issuing Bank and, if no Default has occurred and is
                  continuing, FIL (which consent of Agent, Issuing Bank and FIL
                  shall not be unreasonably withheld), no Lender may make any
                  Assignment of its Commitment and Loans under this Agreement to
                  any Assignee Lender unless such Lender concurrently assigns
                  and delegates to such Assignee Lender an equal pro rata
                  interest in its "Commitment" and "Loans" under the FIUI Credit
                  Agreement; and

                           (v)      Without the written consent of Agent,
                  Issuing Bank and, if no Default has occurred and is
                  continuing, FIL (which consent of Agent, Issuing Bank and FIL
                  shall not be unreasonably withheld), no Lender may make any
                  Assignment of its Commitments and Loans to any Assignee Lender
                  in an aggregate principal amount of less than Five Million
                  Dollars ($5,000,000), except that a Lender may make an
                  Assignment which reduces its Commitment (or, after the
                  termination of the Commitments, its Loans) to zero without the
                  written consent of FIL and the Agent.

Upon such execution, delivery, acceptance and recording of each Assignment and
Assumption, from and after the Assignment Effective Date determined pursuant to
such Assignment and Assumption, (A) each Assignee Lender thereunder shall be a
Lender hereunder with Commitments or Loans as set forth on Attachment 1 to such
Assignment and Assumption (under the caption "Commitments or Loans After
Assignment") and shall have the rights, duties and obligations of such a Lender
under this Agreement and the other Credit Documents and (B) the Assignor Lender
thereunder shall be a Lender with Commitments or Loans as set forth on
Attachment 1 to such Assignment and Assumption (under the caption "Commitments
or Loans After Assignment"), or, if the Commitments or Loans of the Assignor
Lender have been reduced to zero, the Assignor Lender shall cease to be a Lender
and to have any obligation to make any Loan; provided, however, that any such
Assignor Lender which ceases to be a Lender shall continue to be entitled to the
benefits of any provision of this Agreement which by its terms survives the
termination of this Agreement. Each Assignment and Assumption shall be deemed to
amend

                                       59

<PAGE>

Schedule I to the extent, and only to the extent, necessary to reflect the
addition of each Assignee Lender, the deletion of each Assignor Lender which
reduces its Commitments or Loans to zero, or the resulting adjustment of
Commitments or Loans arising from the purchase by each Assignee Lender of all or
a portion of the rights and obligations of an Assignor Lender under this
Agreement and the other Credit Documents, as the case may be. On or prior to the
Assignment Effective Date determined pursuant to each Assignment and Assumption,
Borrowers, at their own expense, shall, if requested by Assignee Lenders,
execute and deliver to Agent, in exchange for the surrendered Notes, if any, of
the Assignor Lender thereunder, new Notes to the order of each Assignee Lender
thereunder and, if the Assignor Lender is continuing as a Lender hereunder, new
Notes to the order of the Assignor Lender. The Notes surrendered by the Assignor
Lender shall be returned by Agent to Borrowers marked "replaced". Each Assignee
Lender which becomes a Lender and was not previously such a Lender hereunder
shall, prior to becoming such a Lender, deliver such certificates and other
evidence as is required by Subparagraph 2.13(b).

                  (d)      Register. Agent shall maintain at its address
         referred to in Paragraph 8.01 a copy of each Assignment and Assumption
         delivered to it and a register (the "Register") for the recordation of
         the names and addresses of Lenders and the Commitments or Loans of each
         Lender from time to time. The entries in the Register shall be
         conclusive in the absence of manifest error, and Borrowers, Agent and
         Lenders may treat each Person whose name is recorded in the Register as
         the owner of the Commitments or Loans recorded therein for all purposes
         of this Agreement. The Register shall be available for inspection by
         any Borrower or any Lender at any reasonable time and from time to time
         upon reasonable prior notice.

                  (e)      Registration. Upon its receipt of an Assignment and
         Assumption executed by an Assignor Lender and an Assignee Lender (and,
         to the extent required by Subparagraph 8.05(c), by Borrowers, Agent and
         Issuing Bank) together with payment to Agent by Assignor Lender of a
         registration and processing fee of Three Thousand Five Hundred Dollars
         ($3,500), Agent shall (i) promptly accept such Assignment and
         Assumption and (ii) on the Effective Date determined pursuant thereto
         record the information contained therein in the Register and give
         notice of such acceptance and recordation to Lenders and Borrowers.
         Agent may, from time to time at its election, prepare and deliver to
         Lenders and Borrowers a revised Schedule I reflecting the names,
         addresses and respective Commitments or Loans of all Lenders then
         parties hereto.

                  (f)      Confidentiality. Subject to Paragraph 8.12, Agent and
         Lenders may disclose the Credit Documents and any financial or other
         information relating to Borrowers or any Subsidiary to each other or to
         any potential Participant or Assignee Lender.

                  (g)      Pledges to Federal Reserve Banks. Notwithstanding any
         other provision of this Agreement, any Lender may at any time assign or
         pledge all or a portion of its rights under this Agreement and the
         other Credit Documents to a Federal Reserve Bank, and this Paragraph
         8.05 shall not apply to any such pledge or assignment of a security
         interest. No such assignment shall relieve the assigning Lender from
         its obligations under this Agreement and the other Credit Documents.

         8.06.    Set-off; Security Interest.

                  (a)      Set-off. In addition to any rights and remedies of
         Lenders provided by law, each Lender shall have the right, with prior
         notice to Agent but without prior notice to or consent of Borrowers,
         any such notice and consent being expressly waived by Borrowers to the
         extent permitted by applicable law, upon the occurrence and during the
         continuance of an Event of Default, to set-off and apply against the
         Obligations of any Borrower any amount owing from such Lender to such
         Borrower. The aforesaid right of set-off may be exercised by such
         Lender against a Borrower or against any trustee in bankruptcy, debtor
         in possession, assignee for the benefit of creditors, receiver or
         execution, judgment or attachment creditor of such Borrower or against
         anyone else claiming through or against such Borrower or such trustee
         in bankruptcy, debtor in possession, assignee for the benefit of
         creditors, receiver, or execution, judgment or attachment creditor,
         notwithstanding the fact that such right of set-off may not have been
         exercised by such Lender at any prior time. Each Lender agrees promptly
         to notify the applicable Borrower after any such set-off and
         application made by such Lender, provided that the failure to give such
         notice shall not affect the validity of such set-off and application.

                                       60

<PAGE>

                  (b)      Security Interest. As security for the Obligations,
         each Borrower hereby grants to Agent and each Lender, for the benefit
         of all Lenders, a continuing security interest in any and all deposit
         accounts or moneys of such Borrower now or hereafter maintained with
         such Lender. Each Lender shall have all of the rights of a secured
         party with respect to such security interest.

         8.07.    No Third Party Rights. Nothing expressed in or to be implied
from this Agreement is intended to give, or shall be construed to give, any
Person, other than the parties hereto and their permitted successors and assigns
hereunder, any benefit or legal or equitable right, remedy or claim under or by
virtue of this Agreement or under or by virtue of any provision herein.

         8.08.    Partial Invalidity. If at any time any provision of this
Agreement is or becomes illegal, invalid or unenforceable in any respect under
the law or any jurisdiction, neither the legality, validity or enforceability of
the remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.

         8.09.    Jury Trial. EACH OF BORROWERS, LENDERS AND AGENT, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY CREDIT DOCUMENT.

         8.10.    Counterparts. This Agreement may be executed in any number of
identical counterparts, any set of which signed by all the parties hereto shall
be deemed to constitute a complete, executed original for all purposes.

         8.11.    Borrowers' Liabilities. All Borrowers are jointly and
severally liable for the payment and performance of all other Obligations under
this Agreement and the other Credit Documents, and Borrowers also are liable for
the payment and performance of all Obligations under this Agreement and the
other Credit Documents as provided in the Guaranty.

         8.12.    Confidentiality. Neither any Lender nor Agent shall disclose
to any Person any information with respect to Borrowers, any Guarantor or any of
FIL's Subsidiaries which is furnished pursuant to this Agreement or under the
other Credit Documents, except that any Lender or Agent may disclose any such
information (a) to its own directors, officers, employees, auditors, counsel and
other advisors and to its Affiliates, (b) to any other Lender or Agent, (c)
which is otherwise available to the public, (d) if required or appropriate in
any report, statement or testimony submitted to any Governmental Authority
having or claiming to have jurisdiction over such Lender or Agent, (e) if
required in response to any summons or subpoena, (f) in connection with any
enforcement by Lenders and Agent of their rights under this Agreement or the
other Credit Documents or any litigation among the parties relating to the
Credit Documents or the transactions contemplated thereby, (g) to comply with
any Requirement of Law applicable to such Lender or Agent, (h) to any actual or
prospective Assignee Lender, Participant or counterparty (or its advisors) to
any Rate Contract, provided that such Person agrees to be bound by this
Paragraph 8.12, or (i) otherwise with the prior consent of the applicable
Borrower; provided, however, that (i) any Lender or Agent served with any
summons or subpoena demanding the disclosure of any such information shall use
reasonable efforts to notify Borrowers promptly of such summons or subpoena if
not prohibited by any Requirement of Law and, if requested by Borrowers and not
disadvantageous to such Lender or Agent, to cooperate with Borrowers in
obtaining a protective order restricting such disclosure, and (ii) any
disclosure made in violation of this Agreement shall not affect the obligations
of Borrowers or any Guarantor under this Agreement and the other Credit
Documents.

         8.13.    Consent to Jurisdiction. Each Borrower irrevocably submits to
the non-exclusive jurisdiction of the courts of the State of New York and the
courts of the United States of America, in either case located in the City of
New York, and agrees that any legal action, suit or proceeding arising out of or
relating to this Agreement or any of the other Credit Documents may be brought
against such party in any such courts. Final judgment against any Borrower in
any such action, suit or proceeding shall be conclusive and may be enforced in
any other jurisdiction by suit on the judgment, a certified or exemplified copy
of which shall be conclusive evidence of the judgment, or in any other manner
provided by law. Nothing in this Paragraph 8.13 shall affect the right of Agent
or any Lender to

                                       61

<PAGE>

commence legal proceedings or otherwise sue any Borrower in any other
appropriate jurisdiction, or concurrently in more than one jurisdiction, or to
serve process, pleadings and other papers upon any Borrower in any manner
authorized by the laws of any such jurisdiction. Each Borrower agrees that
process served either personally or by registered mail shall, to the extent
permitted by law, constitute adequate service of process in any such suit.
Without limiting the foregoing, each Borrower hereby appoints, in the case of
any such action or proceeding brought in the courts of or in the State of New
York, CT Corporation, with offices on the date hereof at 111 Eighth Avenue, New
York, New York 10011, to receive for it and on its behalf, service of process in
the State of New York with respect thereto, provided each Borrower may appoint
any other person, reasonably acceptable to Agent, with offices in the State of
New York to replace such agent for service of process upon delivery to Agent of
a reasonably acceptable agreement of such new agent agreeing so to act. Each
Borrower irrevocably waives to the fullest extent permitted by applicable law
(a) any objection which it may have now or in the future to the laying of the
venue of any such action, suit or proceeding in any court referred to in the
first sentence above, (b) any claim that any such action, suit or proceeding has
been brought in an inconvenient forum, (c) its right of removal of any matter
commenced by any other party in the courts of the State of New York to any court
of the United States of America, (d) any immunity which it or its assets may
have in respect of its obligations under this Agreement or any other Credit
Document from any suit, execution, attachment (whether provisional or final, in
aid of execution, before judgment or otherwise) or other legal process, and (e)
any right it may have to require the moving party in any suit, action or
proceeding brought in any of the courts referred to above arising out of or in
connection with this Agreement or any other Credit Document to post security for
the costs of such Borrower or to post a bond or to take similar action. The
obligations of Borrower under this Paragraph 8.13 shall survive the payment and
performance of the Obligations and the termination of this Agreement.

         8.14.    Usury. In no event shall any provision of this Agreement or
any other Credit Document ever obligate any Borrower to pay or allow any Lender
to collect interest on any Loan or any other Obligation of a Borrower hereunder
at a rate greater than the maximum non-usurious rate permitted by applicable law
(herein referred to as the "highest lawful rate"), or obligate any Borrower to
pay any taxes, assessments, charges, insurance premiums or other amounts to the
extent that such payments, when added to the interest payable on the Loans or
any other Obligations, would be held to constitute the payment by a Borrower of
interest at a rate greater than the highest lawful rate. This provision shall
control over any provision to the contrary. Without limiting the generality of
the foregoing, in the event the maturity of all or any part of the principal
amount of the Obligations of a Borrower shall be accelerated for any reason,
then such principal amount so accelerated shall be credited with any interest
theretofore paid thereon in advance and remaining unearned at the time of such
acceleration. If, pursuant to the terms of this Agreement, any funds are applied
to the payment of any part of the principal amount of the Obligations of a
Borrower prior to the maturity thereof, then (a) any interest which would
otherwise thereafter accrue on the principal amount so paid by such application
shall be canceled and (b) the Obligations of such Borrower remaining unpaid
after such application shall be credited with the amount of all interest, if
any, theretofore collected on the principal amount so paid by such application
and remaining unearned at the date of said application; and if the funds so
applied shall be sufficient to pay in full all the Obligations of such Borrower,
then the Lenders shall refund to such Borrower all interest theretofore paid
thereon in advance and remaining unearned at the time of such acceleration.
Regardless of any other provision in this Agreement or any other Credit
Document, no Borrower shall be required to pay any unearned interest on any
Obligations or any portion thereof, or be required to pay interest thereon at a
rate in excess of the highest lawful rate construed by courts having competent
jurisdiction thereof.

         8.15.    Hong Kong Branch; Full Recourse Obligations. All Loans to FIL
shall be made to FIL at its Hong Kong branch located at Room 908 Dominion
Center, 43-59 Queens Road East, Wanchai, Hong Kong and all payments of principal
and interest by FIL will be made through its Hong Kong branch; provided,
however, that notwithstanding the foregoing, FIL acknowledges that the
Obligations hereunder are full recourse to Flextronics International Ltd., a
Singapore corporation, and are in no manner limited to any extent to any branch
thereof and shall in no manner impair the Agent's or any Lender's ability to
collect any Obligation from FIL.

                       [The first signature page follows.]

                                       62

<PAGE>

                                                               SIGNATURE PAGE TO
                                                            FIL CREDIT AGREEMENT

         IN WITNESS WHEREOF, Borrowers, Agent, Co-Arrangers, Co-Syndication
Agents, Senior Managing Agents, Managing Agents, Documentation Agent and Lenders
have caused this Agreement to be executed as of the day and year first above
written.

BORROWER:                                FLEXTRONICS INTERNATIONAL LTD.,

                                         By:____________________________________
                                            Name:_______________________________
                                            Title:______________________________

AGENT:                                   ABN AMRO BANK N.V.,
                                         As Agent

                                         By:____________________________________
                                            Name:_______________________________
                                            Title:______________________________

                                         By:____________________________________
                                            Name:_______________________________
                                            Title:______________________________

<PAGE>

                                                               SIGNATURE PAGE TO
                                                            FIL CREDIT AGREEMENT

Name of Institution:____________________________________________________________

                                         by:____________________________________
                                            Name:_______________________________
                                            Title:______________________________

                                         by:____________________________________
                                            Name:_______________________________
                                            Title:______________________________

<PAGE>

                                    EXHIBIT A

                               NOTICE OF BORROWING

                                     [Date]

ABN AMRO Bank N.V.

   as Agent

[_________]

Attn: [_________]

         1.       Reference is made to that certain Credit Agreement, dated as
of March 3, 2004 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among Flextronics International Ltd. ("FIL"),
each of the Subsidiaries of FIL designated as borrower from time to time in
accordance with the Credit Agreement (collectively, "Designated Borrowers"),
Lenders, Fleet National Bank, as Issuing Bank, and Agent. Lenders have agreed to
extend credit to FIL and Designated Borrowers (together, "Borrowers") upon the
terms and subject to the conditions set forth therein. Unless otherwise
indicated, all terms defined in the Credit Agreement have the same respective
meanings when used herein.

         2.       Pursuant to Paragraph 2.02 of the Credit Agreement, the
undersigned Borrower hereby irrevocably requests a Borrowing to be made upon the
following terms:

                           (a)      The Currency and principal amount of such
Borrowing are to be __________;

                           (b)      Such Borrowing is to consist of [Base Rate]
[LIBOR] Loans;

                           (c)      If such Borrowing is to consist of LIBOR
Loans, the initial Interest Period for such Borrowing is to be __________
month[s];

                           (d)      The date of such Borrowing is to be
__________, ____; and

                           (e)      The Applicable Payment Office is located at
_____________________________.

         3.       The undersigned Borrower hereby certifies to Lenders and Agent
that, on the date of this Notice of Borrowing and after giving effect to the
requested Borrowing:

                           (a)      The representations and warranties of
Borrowers and FIL's Subsidiaries set forth in Paragraph 4.01 of the Credit
Agreement and in the other Credit Documents are true and correct in all material
respects as if made on such date (except for representations and warranties
expressly made as of a specified date, which shall be true as of such date); and

                           (b)      No Default has occurred and is continuing or
will result from such Credit

Event.

         4.       Please disburse the proceeds of the requested Borrowing to
_____________.

<PAGE>

         IN WITNESS WHEREOF, the undersigned Borrower has executed this Notice
of Borrowing on the date set forth above.

                                        Name of Borrower:_______________________

                                        By:____________________________________
                                           Name:_______________________________
                                           Title:______________________________

                                        By:____________________________________
                                           Name:_______________________________
                                           Title:______________________________

                                      A-2

<PAGE>

                                    EXHIBIT B

                                  FORM OF NOTE

______________, ________                                          March __, 2004

         FOR VALUE RECEIVED, the undersigned ("Borrower"), hereby promises to
pay to the order of ____________________, a ____________________ ("Lender"),
pursuant to the Credit Agreement dated as of March 3, 2004 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among Flextronics International Ltd. ("FIL"), each of the Subsidiaries of FIL
designated as borrower from time to time in accordance with the Credit Agreement
(collectively, "Designated Borrowers"), Lenders, Fleet National Bank, as Issuing
Bank, and Agent, on or before the Maturity Date specified in the Credit
Agreement, (a) the aggregate outstanding principal balance of all Loans made by
Lender to Borrower and (b) interest on said sum, at the rates and on the dates
provided in the Credit Agreement. Terms used herein have the meanings assigned
to those terms in the Credit Agreement, unless otherwise defined herein.

         Borrower shall make all payments hereunder, for the account of Lender's
Applicable Lending Office or Offices, as the case may be, to Agent as indicated
in the Credit Agreement, in the lawful Currency required by the Credit Agreement
and in same day or immediately available funds.

         Borrower hereby authorizes Lender to record on the schedule(s) annexed
to this Note (i) the date, amount and Currency of each Loan made by such Lender,
(ii) the interest rates applicable to each such Loan thereof and the effective
dates of all changes thereto, (iii) the Interest Period for each LIBOR Loan,
(iv) the date, amount and Currency of each principal and interest payment on
each Loan and (v) such other information as such Lender may determine is
necessary for the computation of principal and interest payable to it by each
Borrower hereunder. Borrower agrees that all such notations shall constitute
prima facie evidence of the matters recorded on the schedules; provided,
however, that any failure by a Lender to make, or any error by any Lender in
making, any such recordation shall not affect Borrowers' Obligations hereunder.

         This Note is one of the Notes referred to in Paragraph 2.09(b) of the
Credit Agreement. This Note is subject to the terms of the Credit Agreement,
including the rights of prepayment and the rights of acceleration of maturity
set forth therein. In case an Event of Default shall occur and be continuing,
the principal of and accrued interest on this Note may become or be declared to
be due and payable in the manner and with the effect provided in the Credit
Agreement.

         The transfer, sale or assignment of any rights under or interest in
this Note is subject to the restrictions contained in the Credit Agreement,
including Paragraph 8.05 thereof.

         Borrower shall pay all reasonable fees and expenses, including
reasonable attorneys' fees, incurred by Lender in connection with the
enforcement or attempt to enforce any of Borrower's obligations hereunder not
performed when due. Borrower hereby waives notice of presentment, demand,
protest or notice of any other kind. This Note shall be governed by and
construed in accordance with the laws of the State of New York.

                                         [_____________]

                                         By:____________________________________
                                            Name:_______________________________
                                            Title:______________________________

<PAGE>

                  LOANS AND PAYMENTS OF INTEREST AND PRINCIPAL

<TABLE>
<CAPTION>
                        Loans                                                                Payments
---------------------------------------------------------       --------------------------------------------------------------------
                                                                                                     Amount of          Amount of
                           Amount of                                                               Interest Paid     Principal Paid
  Date     Currency          Loan         Interest Period       Date             Currency            or Prepaid        or Prepaid
------------------------------------------------------------------------------------------------------------------------------------
<S>        <C>             <C>            <C>                   <C>              <C>               <C>               <C>

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</TABLE>

                                      B-2

<PAGE>

                                    EXHIBIT C

                                FORM OF GUARANTY

         THIS GUARANTY, dated as of March 3, 2004, is executed by each of the
undersigned (each such entity and each entity which hereafter executes and
delivers a Subsidiary Joinder in substantially the form of Attachment 1 hereto
to be referred to herein as a "Guarantor"), in favor of ABN AMRO BANK N.V.,
acting as agent (in such capacity, and each successor thereto in such capacity,
"Agent") for the financial institutions which are from time to time parties to
the Credit Agreement referred to in Recital A below (collectively, "Lenders").

                                    RECITALS

         A.       Pursuant to a Credit Agreement dated as of March 3, 2004 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Flextronics International Ltd. ("FIL"), each of the
Subsidiaries of FIL designated as borrower from time to time in accordance with
the Credit Agreement (collectively, "Designated Borrowers"), Lenders, Fleet
National Bank, as Issuing Bank, and Agent. Lenders have agreed to extend credit
to FIL and Designated Borrowers (together, "Borrowers") upon the terms and
subject to the conditions set forth therein. Each Guarantor is a Subsidiary of
FIL, expects to derive substantial direct and indirect benefit from the
transactions contemplated by the Credit Agreement and is willing to execute and
deliver this Guaranty to induce the Lenders to enter into the transactions
contemplated by the Credit Agreement.

         B.       Lenders' obligations to extend credit to Borrowers under the
Credit Agreement are subject, among other conditions, to receipt by Agent of (1)
this Guaranty, duly executed by each existing Eligible Material Subsidiary and
each other Subsidiary required to execute the Guaranty pursuant to Subparagraph
2.15(c) of the Credit Agreement, and (2) Subsidiary Joinders, duly executed by
each future Eligible Material Subsidiary and each other Subsidiary required to
execute a Subsidiary Joinder pursuant to Subparagraph 2.15(c) of the Credit
Agreement.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, each Guarantor hereby agrees with Agent, for the ratable benefit
of the Lenders and Agent, as follows:

         1. DEFINITIONS AND INTERPRETATION.

                  (a) Definitions. When used in this Guaranty, the following
         terms shall have the following respective meanings:

                           "Agent" shall have the meaning given to that term in
                  the introductory paragraph hereof.

                           "Aggregate Guaranty Payments" shall mean, with
                  respect to any Guarantor at any time, the aggregate amount of
                  all payments made by such Guarantor under this Guaranty
                  (including under Paragraph 5 hereof) at or prior to such time.

                           "Borrowers" shall have the meaning given to that term
                  in the Recital A hereof.

                           "Credit Agreement" shall have the meaning given to
                  that term in the Recital A hereof.

                           "Debtor Relief Proceeding" shall mean any suit,
                  action, case or other proceeding commenced by, against or for
                  any Borrower or its property seeking the dissolution,
                  liquidation, reorganization, rearrangement or other relief of
                  such Borrower or its debts under any applicable bankruptcy,
                  insolvency or debtor relief law or other similar Governmental
                  Rule now or hereafter in effect or seeking the appointment of
                  a receiver, trustee, liquidator, custodian or other similar
                  official for such Borrower or any substantial part of its
                  property or any general assignment by any

<PAGE>

                  Borrower for the benefit of its creditors, whether or not any
                  such suit, action, case or other proceeding is voluntary or
                  involuntary.

                           "Disallowed Post-Commencement Interest and Expenses"
                  shall mean interest computed at the rate provided in the
                  Credit Agreement and claims for reimbursement, costs, expenses
                  or indemnities under the terms of any of the Credit Documents
                  accruing or claimed at any time after the commencement of any
                  Debtor Relief Proceeding if the claim for such interest,
                  reimbursement, costs, expenses or indemnities is not
                  allowable, allowed or enforceable against Borrowers in such
                  Debtor Relief Proceeding.

                           "Fair Share" shall mean, with respect to any
                  Guarantor at any time, an amount equal to (i) a fraction, the
                  numerator which is the Maximum Guaranty Amount of such
                  Guarantor and the denominator of which is the aggregate
                  Maximum Guaranty Amounts of all Guarantors, multiplied by (ii)
                  the aggregate amount paid by all Funding Guarantors under this
                  Guaranty at or prior to such time.

                           "Fair Share Shortfall" shall mean, with respect to
                  any Guarantor at any time, the amount, if any, by which the
                  Fair Share of such Guarantor at such time exceeds the
                  Aggregate Guaranty Payments of such Guarantor at such time.

                           "FIL" shall have the meaning given to that term in
                  the Recital A hereof.

                           "Funding Guarantor" shall have the meaning given to
                  that term in Paragraph 5 hereof.

                           "Guaranteed Obligations" shall mean and include, with
                  respect to any Guarantor, all loans, advances, debts,
                  liabilities, and obligations, howsoever arising, owed by any
                  Borrower (other than such Guarantor in its capacity as a
                  Borrower if such Guarantor is a Borrower) to Agent or any
                  Lender of every kind and description (whether or not evidenced
                  by any note or instrument and whether or not for the payment
                  of money), individual or joint and several, direct or
                  indirect, primary or secondary, absolute or contingent, due or
                  to become due, now existing or hereafter arising pursuant to
                  the terms of the Credit Documents and any Lender Rate Contract
                  that (A) is in effect on the Closing Date with a counterparty
                  that is a Lender or an Affiliate of a Lender as of the Closing
                  Date or (B) is entered into after the Closing Date with any
                  counterparty that is a Lender or an Affiliate of a Lender at
                  the time such Rate Contract is entered into, including the
                  Loans, Reimbursement Obligations with respect to Letters of
                  Credit, all indemnification obligations, interest, fees,
                  taxes, charges, reimbursements, expenses, attorneys' fees and
                  accountants' fees (including Disallowed Post-Commencement
                  Interest and Expenses and any other monetary obligations
                  incurred during the pendency of any Debtor Relief Proceeding)
                  chargeable to any Borrower or payable by any Borrower
                  thereunder.

                           "Guarantor" shall have the meaning given to that term
                  in the introductory paragraph hereof.

                           "Lenders" shall have the meaning given to that term
                  in the introductory paragraph hereof.

                           "Maximum Guaranty Amount" shall mean, with respect to
                  any Guarantor at any time, (i) the full amount of the
                  Guaranteed Obligations at such time or (ii) if any court of
                  competent jurisdiction determines in any action to enforce
                  this Guaranty that enforcement against such Guarantor for the
                  full amount of the Guaranteed Obligations is not lawful under
                  or would be subject to avoidance under Section 548 of the
                  United States Bankruptcy Code or any applicable provision of
                  any comparable law of any state or other jurisdiction, then
                  the maximum amount lawful and not subject to such avoidance.

                           "Subordinated Obligations" shall have the meaning
                  given to that term in Paragraph 4 hereof.

                                      C-2

<PAGE>

                           "Subsidiary Joinder" shall mean an instrument
                  substantially in the form of Attachment 1 hereto.

                  Unless otherwise defined herein, all other capitalized terms
used herein and defined in the Credit Agreement shall have the respective
meanings given to those terms in the Credit Agreement.

                  (b) Other Interpretive Provisions. The rules of construction
         set forth in Section I of the Credit Agreement shall, to the extent not
         inconsistent with the terms of this Guaranty, apply to this Guaranty
         and are hereby incorporated by reference. Each Guarantor acknowledges
         receipt of copies of the Credit Agreement and the other Credit
         Documents.

         2. GUARANTY.

                  (a) Payment Guaranty. Each Guarantor unconditionally
         guarantees, as a primary obligor and not merely as surety, and promises
         to pay and perform as and when due, whether at stated maturity, upon
         acceleration, upon one or more dates set for prepayment or otherwise,
         any and all of the Guaranteed Obligations, provided that with respect
         to Flextronics Manufacturing France, such guarantee shall be limited as
         provided in Paragraph 7 hereof. If (i) any Borrower fails to pay any
         Guaranteed Obligation or (ii) any Debtor Relief Proceeding relating to
         any Borrower is commenced, each Guarantor further unconditionally
         guarantees and promises to and will forthwith pay and perform, upon the
         demand of Agent, whether at stated maturity, upon acceleration, upon
         one or more dates set for prepayment or otherwise, any and all of the
         Guaranteed Obligations (including any and all Disallowed
         Post-Commencement Interest and Expenses) in accordance with the terms
         of the Credit Documents, whether or not such obligations are then due
         and payable by any Guarantor and whether or not such obligations are
         modified, reduced or discharged in such Debtor Relief Proceeding. This
         Guaranty is a guaranty of payment and not of collection.

                  (b) Continuing Guaranty. This Guaranty is an irrevocable
         continuing guaranty of the Guaranteed Obligations which shall continue
         in effect until (i) all the Guaranteed Obligations have been fully and
         indefeasibly paid in cash, (ii) the Lenders have no further commitment
         to lend under the Credit Agreement, (iii) the aggregate amount
         available for drawing under all Letters of Credit outstanding and all
         Reimbursement Obligations outstanding have been reduced to zero and
         (iv) the Issuing Bank has no further obligation to issue Letters of
         Credit under the Credit Agreement. If any payment on any Guaranteed
         Obligation is set aside, avoided, rescinded or otherwise recovered from
         Agent or any Lender, such recovered payment shall constitute a
         Guaranteed Obligation hereunder and, if this Guaranty was previously
         released or terminated, it automatically shall be fully reinstated, as
         if such payment was never made.

                  (c) Joint, Several and Independent Obligations. The liability
         of each Guarantor hereunder is joint and several and is independent of
         the Guaranteed Obligations. A separate action or actions may be brought
         and prosecuted against each Guarantor for the full amount of the
         Guaranteed Obligations irrespective of whether action is brought
         against any Borrower, any other Guarantor or any other guarantor of the
         Guaranteed Obligations or whether any Borrower, any other Guarantor or
         any other guarantor of the Guaranteed Obligations is joined in any such
         action or actions.

                  (d) Fraudulent Transfer Limitation. If, in any action to
         enforce this Guaranty, any court of competent jurisdiction determines
         that enforcement against any Guarantor for the full amount of the
         Guaranteed Obligations is not lawful under or would be subject to
         avoidance under Section 548 of the United States Bankruptcy Code or any
         applicable provision of any comparable law of any state or other
         jurisdiction, the liability of such Guarantor under this Guaranty shall
         be limited to the maximum amount lawful and not subject to such
         avoidance.

                  (e) Termination. Notwithstanding any termination of this
         Guaranty in accordance with Paragraph 2(a) hereof, this Guaranty shall
         continue to be in full force and effect and applicable to any
         Guaranteed Obligations arising thereafter which arise because prior
         payments of Guaranteed Obligations are rescinded or otherwise required
         to be surrendered by Agent or any Lender after receipt.

                                      C-3

<PAGE>

                  (f) No Discharge or Disbursement of Guaranty. Without limiting
         Paragraph 3 hereof, the obligations of each Guarantor hereunder shall
         not be subject to any reduction, limitation, impairment or termination
         for any reason (other than the indefeasible payment in full in cash of
         the Guaranteed Obligations), including any claim of waiver, release,
         surrender, alteration or compromise of any of the Guaranteed
         Obligations, and shall not be subject to any defense or set-off,
         counterclaim, recoupment or termination whatsoever by reason of the
         invalidity, illegality or unenforceability of the Guaranteed
         Obligations or otherwise.

         3. AUTHORIZATIONS, WAIVERS, ETC.

                  (a) Authorizations. Each Guarantor authorizes Agent and
         Lenders, in their discretion, without notice to or further assent from
         such Guarantor, irrespective of any change in the financial condition
         of any Borrower, such Guarantor, any other Guarantor or any other
         guarantor of the Guaranteed Obligations since the date hereof, and
         without affecting or impairing in any way the liability of such
         Guarantor hereunder, from time to time to:

                           (i)      Create new Guaranteed Obligations and renew,
                  compromise, extend, accelerate or otherwise change the time
                  for payment or performance of, or otherwise amend or modify
                  the Credit Documents or change the terms of, the Guaranteed
                  Obligations or any part thereof, including increase or
                  decrease of the rate of interest thereon;

                           (ii)     Take and hold security for the payment or
                  performance of the Guaranteed Obligations and exchange,
                  enforce, waive or release any such security; apply such
                  security and direct the order or manner of sale thereof; and
                  purchase such security at public or private sale;

                           (iii) Otherwise exercise any right or remedy Agent or
                  any Lender may have against any Borrower, such Guarantor, any
                  other Guarantor, any other guarantor of the Guaranteed
                  Obligations or any security, including the right to foreclose
                  upon any such security by judicial or nonjudicial sale;

                           (iv)     Settle, compromise with, release or
                  substitute any one or more makers, endorsers, Guarantors or
                  any other guarantor of the Guaranteed Obligations; and

                           (v)      Assign the Guaranteed Obligations, this
                  Guaranty or the other Credit Documents in whole or in part to
                  the extent provided in the Credit Agreement and the other
                  Credit Documents.

                  (b) Waivers. Each Guarantor hereby waives:

                           (i)      Any right to require Agent or any Lender to
                  (A) proceed against any Borrower, Person, any other Guarantor
                  or any other guarantor of the Guaranteed Obligations, (B)
                  proceed against, resort to or exhaust any security received
                  from, or any balance of any deposit account or credit on the
                  books of Agent or any Lender in favor of, any Person or
                  otherwise marshal the assets of any Borrower, such Guarantor,
                  any other Guarantor or any other guarantor of the Guaranteed
                  Obligations or (C) pursue any other remedy in Agent's or any
                  Lender's power whatsoever;

                           (ii)     Any defense arising by reason of the
                  application by any Borrower of the proceeds of any borrowing;

                           (iii)    Any defense resulting from the absence,
                  impairment or loss of any right of reimbursement, subrogation,
                  indemnification, contribution or other right or remedy of
                  Guarantor against any Borrower, any other Guarantor, any other
                  guarantor of the Guaranteed Obligations or any security,
                  whether resulting from an election by Agent or any Lender to
                  foreclose upon security by nonjudicial sale or otherwise;

                                      C-4

<PAGE>

                           (iv)     any defense based upon or relating to the
                  unenforceability of the Guaranteed Obligations or any part
                  thereof;

                           (v)      Any set-off or counterclaim of any Borrower
                  or any defense which results from any disability or other
                  defense of any Borrower or the cessation or stay of
                  enforcement from any cause whatsoever of the liability of any
                  Borrower (including the lack of validity or enforceability of
                  any of the Credit Documents);

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

                           (vii)    Until(A) all the Guaranteed Obligations have
                  been fully and indefeasibly paid in cash, (B) the Lenders have
                  no further commitment to lend under the Credit Agreement, (C)
                  the aggregate amount available for drawing under all Letters
                  of Credit outstanding and all Reimbursement Obligations
                  outstanding have been reduced to zero and (D) the Issuing Bank
                  has no further obligation to issue Letters of Credit under the
                  Credit Agreement, any right of subrogation, reimbursement,
                  indemnification or contribution and other similar right to
                  enforce any remedy which Agent, Lenders or any other Person
                  now has or may hereafter have against any Borrower on account
                  of the Guaranteed Obligations, and any benefit of, and any
                  right to participate in, any security now or hereafter
                  received by Agent, any Lender or any other Person on account
                  of the Guaranteed Obligations;

                           (viii)    All presentments, demands for performance,
                  notices of non-performance, notices delivered under the Credit
                  Documents, protests, notice of dishonor, and notices of
                  acceptance of this Guaranty and of the existence, creation or
                  incurrence of new or additional Guaranteed Obligations and
                  notices of any public or private foreclosure sale;

                           (ix)     The benefit of any statute of limitations to
                  the extent permitted by law;

                           (x)      Any appraisement, valuation, stay,
                  extension, moratorium redemption or similar law or similar
                  rights with respect to the marshaling of any assets;

                           (xi)     Any right to be informed by Agent or any
                  Lender of (A) the financial condition of any Borrower, any
                  other Guarantor or any other guarantor of the Guaranteed
                  Obligations or (B) any change therein or any other
                  circumstances bearing upon the risk of nonpayment or
                  nonperformance of the Guaranteed Obligations;

                           (xi)     Any right to be informed by Agent or any
                  Lender of (A) the financial condition of any Borrower, any
                  other Guarantor or any other guarantor of the Guaranteed
                  Obligations or (B) any change therein or any other
                  circumstances bearing upon the risk of nonpayment or
                  nonperformance of the Guaranteed Obligations;

                           (xii)    Until (A) all the Guaranteed Obligations
                  have been fully and indefeasibly paid in cash, (B) the Lenders
                  have no further commitment to lend under the Credit Agreement,
                  (C) the aggregate amount available for drawing under all
                  Letters of Credit outstanding and all Reimbursement
                  Obligations outstanding have been reduced to zero and (D) the
                  Issuing Bank has no further obligation to issue Letters of
                  Credit under the Credit Agreement, any right to revoke this
                  Guaranty;

                           (xiii)   Any defense arising from an election for the
                  application of Section 1111(b)(2) of the United States
                  Bankruptcy Code which applies to the Guaranteed Obligations;

                           (xiv)    Any defense based upon any borrowing or
                  grant of a security interest under Section 364 of the United
                  States Bankruptcy Code; and

                           (xv)     Any right it may have to a fair value
                  hearing to determine the size of a deficiency judgment
                  following any foreclosure on any security for the Guaranteed
                  Obligations.

                  (c) Financial Condition of Borrowers, Etc. Each Guarantor is
         fully aware of the financial condition and affairs of each Borrower.
         Each Guarantor has executed this Guaranty without reliance upon

                                      C-5

<PAGE>

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

         4. SUBORDINATION. Each Guarantor hereby subordinates any and all debts,
liabilities and obligations owed to such Guarantor by each Borrower, including
all rights of such Guarantor against any Borrower arising as a result of
payments pursuant to Paragraph 2(a) of this Guaranty by way of right of
subrogation, contribution, reimbursement, indemnity or otherwise (the
"Subordinated Obligations") to the Guaranteed Obligations as provided in this
Paragraph 4.

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

                  (b) Prior Payment of Guaranteed Obligations. In any Debtor
         Relief Proceeding relating to any Borrower, each Guarantor agrees that
         Agent and Lenders shall be entitled to receive payment of all
         Guaranteed Obligations (including any and all Disallowed
         Post-Commencement Interest and Expenses) before such Guarantor receives
         payment of any Subordinated Obligations.

                  (c) Turn-Over. After the occurrence and during the continuance
         of any Default (including the commencement and continuation of any
         Debtor Relief Proceeding relating to any Borrower), each Guarantor
         shall, if Agent so requests, collect, enforce and receive payments on
         account of the Subordinated Obligations as trustee for Agent and
         Lenders and deliver such payments to Agent on account of the Guaranteed
         Obligations (including any and all Disallowed Post-Commencement
         Interest and Expenses), together with any necessary endorsements or
         other instruments of transfer, but without reducing or affecting in any
         manner the liability of such Guarantor under the other provisions of
         this Guaranty.

                  (d) Agent Authorization. After the occurrence and during the
         continuance of any Default (including the commencement and continuation
         of any Debtor Relief Proceeding relating to any Borrower), Agent is
         authorized and empowered (but in no way obligated), in its discretion,
         (i) in the name of each Guarantor, to collect and enforce, and to
         submit claims in respect of, Subordinated Obligations and to apply any
         amounts received thereon to the Guaranteed Obligations (including any
         and all Disallowed Post-Commencement Interest and Expenses), and (ii)
         to require each Guarantor (A) to collect and enforce, and to submit
         claims in respect of, Subordinated Obligations and (B) to pay any
         amounts received on such obligations to Agent for application to the
         Guaranteed Obligations (including any and all Disallowed
         Post-Commencement Interest and Expenses).

         5. CONTRIBUTION AMONG GUARANTORS. Guarantors desire to allocate among
themselves, in a fair and equitable manner, their rights of contribution from
each other when any payment is made by any Guarantor under this Guaranty.
Accordingly, if any payment is made by any Guarantor under this Guaranty (a
"Funding Guarantor") that exceeds its Fair Share, the Funding Guarantor shall be
entitled to a contribution from each other Guarantor in the amount of such other
Guarantor's Fair Share Shortfall, so that all such contributions shall cause
each Guarantor's Aggregate Guaranty Payments to equal its Fair Share. The
amounts payable as contributions hereunder shall be determined by the Funding
Guarantor as of the date on which the related payment or distribution is made by
the Funding Guarantor, and such determination shall be binding on the other
Guarantors absent manifest error. The

                                      C-6

<PAGE>

allocation and right of contribution among Guarantors set forth in this
Paragraph 5 shall not be construed to limit in any way the liability of any
Guarantor under this Guaranty or the amount of the Guaranteed Obligations.

         6. MISCELLANEOUS.

                  (a) Notices. Except as otherwise provided herein, all notices,
         requests, demands, consents, instructions or other communications to or
         upon any Guarantor or Agent under this Guaranty or the other Credit
         Documents shall be in writing and faxed, mailed or delivered, (i) if to
         Agent, at its facsimile number or address set forth below, (ii) if to
         any Guarantor, at its facsimile number or address set forth below its
         signature below or in the respective Subsidiary Joinder for such
         Guarantor or (iii) to such other facsimile number or address for Agent
         or any Guarantor as indicated in any notice given by Agent or any
         Guarantor, as the case may be, to the other parties to this Guaranty.
         All such notices and communications shall be effective (i) when sent by
         any overnight courier service of recognized standing, on the second
         Business Day following the deposit with such service, (ii) when mailed
         via the United States Postal Service, first class and postage prepaid,
         upon receipt, (iii) when delivered by hand, upon delivery, and (iv)
         when faxed, upon confirmation of receipt.

                  (a)        Agent: ABN AMRO Bank N.V.

                                    Syndications Group
                                    55 East 52nd Street, 7th Floor
                                    New York, NY 10055
                                    U.S.A.
                                    Attn: John Darmanin
                                    Tel. No: (212) 409-7398
                                    Fax. No: (212) 409-7497

                                    With copies to:
                                    ABN AMRO Bank N.V.
                                    101 California Street, Suite 4300
                                    San Francisco, CA 94111
                                    U.S.A.
                                    Attn: Mathew Harvey
                                    Tel No: (415) 984-3733
                                    Fax No: (415) 984-3707

                  (b) Payments.

                           (i)      Each Guarantor shall make all payments of
                  the Guaranteed Obligations to Agent at the office of Agent and
                  at the times specified in the Credit Documents for the payment
                  of such Guaranteed Obligations. Each Guarantor shall make all
                  other payments hereunder at such office as Agent may
                  designate. Each payment shall be made in same-day or
                  immediately available funds not later than 2:00 p.m. (New York
                  City time) on the date due.

                           (ii)     Each Guarantor shall make all payments of
                  the Guaranteed Obligations hereunder in the currency in which
                  such Guaranteed Obligations are required to be paid by any
                  Borrower pursuant to the Credit Documents and shall make all
                  other payments hereunder in Dollars; provided, however, that,
                  if Agent shall request a Guarantor to pay any amount hereunder
                  in the lawful currency of the United States which would
                  otherwise be payable in another currency, such Guarantor shall
                  pay to Agent the Dollar Equivalent of such amount.

                           (iii)    If any sum due from any Guarantor under this
                  Guaranty or any other Credit Document to which such Guarantor
                  is a party or any order, judgment or award given or rendered
                  in relation hereto or thereto has to be converted from the
                  currency (the "first currency") in which the same is payable
                  hereunder or thereunder into another currency (the "second
                  currency") for the

                                      C-7

<PAGE>

                  purpose of (A) making or filing a claim or proof against such
                  Guarantor with any Governmental Authority, (B) obtaining an
                  order or judgment in any court or other tribunal or (C)
                  enforcing any order or judgment given or made in relation
                  hereto, such Guarantor shall, to the fullest extent permitted
                  by law, indemnify and hold harmless each of the Persons to
                  whom such sum is due from and against any loss suffered as a
                  result of any discrepancy between (1) the rate of exchange
                  used for such purpose to convert the amounts in question from
                  the first currency into the second currency and (2) the rate
                  or rates of exchange at which such Person may, using
                  reasonable efforts in the ordinary course of business,
                  purchase the first currency with the second currency upon
                  receipt of a sum paid to it in satisfaction, in whole or in
                  part, of any such order, judgment, claim or proof. The
                  foregoing indemnity shall constitute a separate obligation of
                  each Guarantor distinct from its other obligations hereunder
                  and shall survive the giving or making of any judgment or
                  order in relation to all or any of such obligations.

                           (iv)     If any amounts required to be paid by any
                  Guarantor under this Guaranty or any order, judgment or award
                  given or rendered in relation hereto remain unpaid after such
                  amounts are due, such Guarantor shall pay interest on the
                  aggregate outstanding balance of such amounts from the date
                  due until those amounts are paid in full at a per annum rate
                  equal to:

                                    (1)      In the case of amounts payable in
                           Dollars, the Base Rate plus two percent (2.00%), such
                           rate to change from time to time as the Base Rate
                           shall change; or

                                    (2)      In the case of amounts payable in
                           any other currency, the Overnight Rate for such
                           currency plus three percent (3.00%), such rate to
                           change from time to time as the Overnight Rate shall
                           change.

                  (c) Expenses. Each Guarantor shall pay on demand (i) all
         reasonable and documented fees and expenses, including reasonable
         attorneys' fees and expenses, incurred by Agent in connection with the
         preparation, execution and delivery of, and the exercise of its duties
         under, this Guaranty and the preparation, execution and delivery of any
         amendments and waivers hereunder and (ii) all reasonable and documented
         fees and expenses, including reasonable attorneys' fees and expenses,
         incurred by Agent and Lenders in connection with the enforcement or
         attempted enforcement of this Guaranty or any of the Guaranteed
         Obligations or in preserving any of Agent's or Lenders' rights and
         remedies (including all such fees and expenses incurred in connection
         with any "workout" or restructuring affecting the Credit Documents or
         the Guaranteed Obligations or any bankruptcy or similar proceeding
         involving such Guarantor, any other Guarantor, any Borrower, or any of
         their respective affiliates).

                  (d) Waivers; Amendments. This Guaranty may not be amended or
         modified, nor may any of its terms be waived, except by written
         instruments signed by each Guarantor and Agent and subject to any
         consent required in accordance with Paragraph 8.04 of the Credit
         Agreement. Each waiver or consent under any provision hereof shall be
         effective only in the specific instances for the purpose for which
         given. No failure or delay on Agent's or any Lender's part in
         exercising any right or power hereunder shall operate as a waiver
         thereof or of any other right nor shall any single or partial exercise
         of any such right or power, or any abandonment or discontinuance of
         steps to enforce such right or power, preclude any other further
         exercise thereof or of any other right or power.

                  (e) Successors and Assigns. This Guaranty shall be binding
         upon and inure to the benefit of Agent, Lenders, Guarantors and their
         respective successors and assigns; provided, however, that no Guarantor
         may assign or transfer any of its rights and obligations under this
         Guaranty without the prior written consent of Agent and Lenders, and
         provided, further, that Agent or any Lender may sell, assign and
         delegate their respective rights and obligations hereunder only as
         permitted by the Credit Agreement. All references in this Guaranty to
         any Person shall be deemed to include all permitted successors and
         assigns of such Person.

                  (f) Cumulative Rights, etc. The rights, powers and remedies of
         Agent and Lenders under this Guaranty shall be in addition to all
         rights, powers and remedies given to Agent and Lenders by virtue of any
         applicable law, rule or regulation of any Governmental Authority, the
         Credit Agreement, any other

                                      C-8

<PAGE>

         Credit Document or any other agreement, all of which rights, powers,
         and remedies shall be cumulative and may be exercised successively or
         concurrently without impairing Agent's or any Lender's rights
         hereunder.

                  (g) Set-off; Security Interest.

                           (i)      Upon the occurrence and during the
                  continuance of an Event of Default, in addition to any rights
                  and remedies of Lenders provided by law (including other
                  rights of set-off), each Lender shall have the right at any
                  time and from time to time, with prior notice to Agent but
                  without prior notice to or consent of any Guarantor, any such
                  notice and consent being expressly waived by each Guarantor to
                  the extent permitted by applicable law, to set-off and apply
                  against the obligations of each Guarantor any amount owing
                  from such Lender to such Guarantor. The aforesaid right of
                  set-off may be exercised by such Lender against a Guarantor or
                  against any trustee in bankruptcy, debtor in possession,
                  assignee for the benefit of creditors, receiver or execution,
                  judgment or attachment creditor of such Guarantor or against
                  anyone else claiming through or against such Guarantor or such
                  trustee in bankruptcy, debtor in possession, assignee for the
                  benefit of creditors, receiver, or execution, judgment or
                  attachment creditor, notwithstanding the fact that such right
                  of set-off may not have been exercised by such Lender at any
                  prior time. Each Lender agrees promptly to notify the
                  applicable Guarantor after any such set-off and application
                  made by such Lender, provided that the failure to give such
                  notice shall not affect the validity of such set-off and
                  application.

                           (ii)     As security for the obligations of each
                  Guarantor hereunder, each Guarantor hereby grants to Agent and
                  each Lender, for the benefit of all Lenders, a continuing
                  security interest in any and all deposit accounts or moneys of
                  such Guarantor now or hereafter maintained with such Lender.
                  Each Lender shall have all of the rights of a secured party
                  with respect to such security interest.

                  (h) Payments Free of Taxes. All payments made by each
         Guarantor under this Guaranty shall be made free and clear of, and
         without deduction or withholding for or on account of, all present and
         future Non-Excluded Taxes. If any Non-Excluded Taxes are required to be
         withheld from any amounts payable to Agent or any Lender hereunder, the
         amounts so payable to Agent or such Lender shall be increased to the
         extent necessary to yield to Agent or such Lender (after payment of all
         Non-Excluded Taxes) interest or any such other amounts payable
         hereunder at the rates or in the amounts specified in this Guaranty or
         the other Credit Documents, as applicable. If under the laws of the
         applicable jurisdiction, a payment by a Guarantor pursuant to this
         Subparagraph 6(h) to Agent or any Lender may be made without deduction
         or withholding of any Taxes (or with reduced deduction or withholding
         of any Taxes), the Agent and such Lender (as applicable) shall, upon
         written request by the applicable Guarantor, use reasonable efforts to
         file with the appropriate tax authorities and deliver to Guarantor such
         certificates and other evidence requested by Guarantor establishing
         Agent's or Lender's entitlement to such eliminated or reduced
         withholding. Whenever any Non-Excluded Taxes are payable by any
         Guarantor, as promptly as possible thereafter, such Guarantor shall
         send to Agent for its own account or for the account of such Lender, as
         the case may be, a certified copy of an original official receipt
         received by such Guarantor showing payment thereof. If Guarantors fail
         to pay any Non-Excluded Taxes when due to the appropriate taxing
         authority or fail to remit to Agent the required receipts or other
         required documentary evidence, Guarantors shall indemnify Agent and
         Lenders for any taxes (including interest or penalties) that may become
         payable by Agent or any Lender as a result of any such failure. The
         obligations of Guarantors under this Subparagraph 6(h) shall survive
         the payment and performance of the Guaranteed Obligations and the
         termination of this Guaranty. Nothing contained in this Subparagraph
         6(h) shall require Agent or any Lender to make available any of its tax
         returns (or any other information relating to its taxes which Agent or
         any Lender deems to be confidential).

                  (i) Partial Invalidity. If at any time any provision of this
         Guaranty is or becomes illegal, invalid or unenforceable in any respect
         under the law or any jurisdiction, neither the legality, validity or
         enforceability of the remaining provisions of this Guaranty nor the
         legality, validity or enforceability of such provision under the law of
         any other jurisdiction shall in any way be affected or impaired
         thereby. The parties shall endeavor in good-faith negotiations to
         replace any illegal, invalid or unenforceable

                                      C-9

<PAGE>

         provisions with valid provisions the economic effect of which comes as
         close as possible to that of any such illegal, invalid or unenforceable
         provisions.

                  (j) Jury Trial. EACH OF GUARANTORS, LENDERS AND AGENT, TO THE
         FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES
         ALL RIGHT TO TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY
         ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
         GUARANTY.

                  (k) Counterparts. This Guaranty may be executed in any number
         of identical counterparts, each of which shall be deemed to be an
         original and any set of which signed by all the Guarantors shall be
         deemed to constitute a complete, executed original for all purposes.

                  (l) Survival of Guaranty. All covenants, agreements,
         representations and warranties made by any Borrower or any Guarantor in
         the Credit Documents and in the certificates or other instruments
         prepared or delivered in connection with or pursuant to this Guaranty
         or any other Credit Document shall be considered to have been relied
         upon by the Lenders and shall survive the execution and delivery of the
         Credit Documents and the making of any Loans and issuance of any
         Letters of Credit, regardless of any investigation made by any Lender
         or on its behalf and notwithstanding that Agent, the Issuing Bank or
         any Lender may have had notice or knowledge of any Default or incorrect
         representation or warranty at the time any credit is extended under the
         Credit Agreement, and shall continue in full force and effect until (A)
         all the Guaranteed Obligations have been fully and indefeasibly paid in
         cash, (B) the Lenders have no further commitment to lend under the
         Credit Agreement, (C) the aggregate amount available for drawing under
         all Letters of Credit outstanding and all Reimbursement Obligations
         outstanding have been reduced to zero and (D) the Issuing Bank has no
         further obligation to issue Letters of Credit under the Credit
         Agreement.

                  (m) Governing Law, Consent to Jurisdiction, Etc.

                           (i)      This Guaranty shall be governed by and
                  construed in accordance with the laws of the State of New
                  York.

                           (ii)     Each Guarantor irrevocably submits to the
                  non-exclusive jurisdiction of the courts of the State of New
                  York and the courts of the United States of America located in
                  the City of New York. In addition, Each Guarantor agrees that
                  any legal action, suit or proceeding arising out of or
                  relating to this Guaranty or any of the other Credit Documents
                  may be brought against such party in any such courts. Final
                  judgment against a Guarantor in any such action, suit or
                  proceeding shall be conclusive and may be enforced in any
                  other jurisdiction by suit on the judgment, a certified or
                  exemplified copy of which shall be conclusive evidence of the
                  judgment, or in any other manner provided by law. Nothing in
                  this Subparagraph 6(m)(ii) shall affect the right of Agent or
                  any Lender to commence legal proceedings or otherwise sue any
                  Guarantor in any other appropriate jurisdiction, or
                  concurrently in more than one jurisdiction, or to serve
                  process, pleadings and other papers upon any Guarantor in any
                  manner authorized by the laws of any such jurisdiction. Each
                  Guarantor agrees that process served either personally or by
                  registered mail shall, to the extent permitted by law,
                  constitute adequate service of process in any such suit.
                  Without limiting the foregoing, each Guarantor hereby
                  appoints, in the case of any such action or proceeding brought
                  in the courts of or in the State of New York, CT Corporation,
                  with offices on the date hereof at 111 Eighth Avenue, New
                  York, New York 10011, to receive for it and on its behalf,
                  service of process in the State of New York with respect
                  thereto, provided that each Guarantor may appoint any other
                  person, reasonably acceptable to Agent, with offices in the
                  State of New York to replace such agent for service of process
                  upon delivery to Agent of a reasonably acceptable agreement of
                  such new agent agreeing so to act. Each Guarantor irrevocably
                  waives to the fullest extent permitted by applicable law (A)
                  any objection which it may have now or in the future to the
                  laying of the venue of any such action, suit or proceeding in
                  any court referred to in the first sentence of this
                  Subparagraph 6(m)(ii) above, (B) any claim that any such
                  action, suit or proceeding has been brought in an inconvenient
                  forum, (C) its right of removal of any matter commenced by any
                  other party in the courts of the State of New York to any
                  court of the United

                                      C-10

<PAGE>

                  States of America, (D) any immunity which it or its assets may
                  have in respect of its obligations under this Agreement or any
                  other Credit Document from any suit, execution, attachment
                  (whether provisional or final, in aid of execution, before
                  judgment or otherwise) or other legal process, and (E) any
                  right it may have to require the moving party in any suit,
                  action or proceeding brought in any of the courts referred to
                  above arising out of or in connection with this Agreement or
                  any other Credit Document to post security for the costs of
                  any Guarantor or to post a bond or to take similar action.

7. LIMITATION ON GUARANTEE BY FLEXTRONICS MANUFACTURING FRANCE

         (a) The liability of Flextronics Manufacturing France under this
Guaranty shall be limited at any time to 50% of the greater of:

                  (i)      the Net Asset Value of Flextronics Manufacturing
         France calculated on the basis of its audited financial statements
         dated as of March 31, 2003; and

                  (ii)     the Net Asset Value of the Flextronics Manufacturing
         France calculated on the basis of its audited financial statements
         available at the date on which demand is made pursuant to this
         Guaranty.

         (b) For the purposes of Subparagraph (a) above, "Net Asset Value" of
Flextronics Manufacturing France means the capitaux propres (as defined in
article 22 of the French decree no. 83-1020 of November 29, 1983) of Flextronics
Manufacturing France. A certificate of the statutory auditors of the Flextronics
Manufacturing France as to the Net Asset Value shall be conclusive evidence as
to the amount to which it relates.

         (c) The limitations set forth in this Paragraph 7 with respect to
Flextronics Manufacturing France shall in no way limit the Guaranty of any other
Guarantor hereunder. Without limiting Subparagraph 6(i), if at any time the
Guaranty of Flextronics Manufacturing France is or becomes illegal, invalid or
unenforceable in any respect, neither the legality, validity or enforceability
of this Guaranty against the other Guarantors shall in any way be affected or
impaired thereby.

                       [The first signature page follows.]

                                      C-11

<PAGE>

                                                                  SIGNATURE PAGE
                                                                 TO FIL GUARANTY

         IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed as of the day and year first above written.

                           Name of Guarantor:___________________________________

                                     By:________________________________________
                                        Name:___________________________________
                                        Title:__________________________________

                                     Address:

                                     [___________________________________]
                                     [___________________________________]
                                     [___________________________________]
                                     Attn: [__________________________________]
                                     Telephone:[______________________________]
                                     Facsimile: [_____________________________]

<PAGE>

                                                                  SIGNATURE PAGE
                                                                 TO FIL GUARANTY

                                     ABN AMRO BANK N.V.,
                                     As Agent

                                     By:________________________________________
                                        Name:___________________________________
                                        Title:__________________________________

                                     By:________________________________________
                                        Name:___________________________________
                                        Title:__________________________________

<PAGE>

                                  ATTACHMENT 1

                               SUBSIDIARY JOINDER

           THIS SUBSIDIARY JOINDER (this "Agreement"), dated as of ____________,
____, is executed by [NEW ELIGIBLE MATERIAL SUBSIDIARY OR OTHER SUBSIDIARY], a
_________ [insert type of entity] ("New Subsidiary") in favor of ABN AMRO BANK
N.V., acting as agent (in such capacity, and each successor thereto in such
capacity, "Agent") for the financial institutions which are from time to time
parties to the Credit Agreement referred to in Recital A below (collectively,
the "Lenders").

                                    RECITALS

A.       Pursuant to a Credit Agreement dated as of March 3, 2004 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among Flextronics International Ltd. ("FIL"), each of the Subsidiaries of FIL
designated as borrower from time to time in accordance with the Credit Agreement
(collectively, "Designated Borrowers"), Lenders, Fleet National Bank, as Issuing
Bank, and Agent. Lenders have agreed to extend credit to FIL and Designated
Borrowers (together, "Borrowers") upon the terms and subject to the conditions
set forth therein. Each Guarantor is a Subsidiary of FIL, expects to derive
substantial direct and indirect benefit from the transactions contemplated by
the Credit Agreement and is willing to execute and deliver this Subsidiary
Joinder to induce the Lenders to enter into the transactions contemplated by the
Credit Agreement.

B.       Lenders' obligations to extend credit to Borrowers under the Credit
Agreement are subject, among other conditions, to receipt by Agent of (1) a
Guaranty, dated as of March 3, 2004, duly executed by each existing Eligible
Material Subsidiary and each other Subsidiary required to execute the Guaranty
pursuant to Subparagraph 2.15(c) of the Credit Agreement, and (2) Subsidiary
Joinders, duly executed by each future Eligible Material Subsidiary and each
other Subsidiary required to execute the Subsidiary Joinder pursuant to
Subparagraph 2.15(c) of the Credit Agreement.

C.       New Subsidiary is a new Eligible Material Subsidiary or other
Subsidiary, expects to derive substantial direct and indirect benefit from the
transactions contemplated by the Credit Agreement and is willing to execute and
deliver this Subsidiary Joinder to induce the Lenders to enter into the
transactions contemplated by the Credit Agreement.

                                    AGREEMENT

           NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, New Subsidiary hereby agrees with Agent, for the ratable benefit
of the Lenders and Agent, as follows:

1.       DEFINITIONS AND INTERPRETATION. Unless otherwise defined herein, all
capitalized terms used herein and defined in the Guaranty shall have the
respective meanings given to those terms in the Guaranty. New Subsidiary
acknowledges receipt of copies of the Guaranty, the Credit Agreement and the
other Credit Documents.

2.       REPRESENTATIONS AND WARRANTIES. On and as of the date of this Agreement
(the "Effective Date") and for the ratable benefit of Agent and the Lenders, New
Subsidiary hereby makes each of the representations and warranties made by each
Guarantor in the Guaranty.

3.       AGREEMENT TO BE BOUND. New Subsidiary agrees that, on and as of the
Effective Date, it shall become a Guarantor under the Guaranty and shall be
bound by all the provisions of the Guaranty to the same extent as if New
Subsidiary had executed the Guaranty on the Closing Date. Each reference to a
"Guarantor" in the Guaranty shall be deemed to include the New Subsidiary.

4.       WAIVER. Without limiting the generality of the waivers in the Guaranty,
New Subsidiary specifically agrees to be bound by the Guaranty and waives any
right to notice of acceptance of its execution of this Agreement and of its
agreement to be bound by the Guaranty.

                                      D-1

<PAGE>

5.       GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.

6.       COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which, when
taken together, shall constitute one agreement.

7.       NOTICE. All communications and notices hereunder shall be given as
provided in Paragraph 6(a) of the Guaranty.

8.       EXPENSES. The New Subsidiary agrees to reimburse Agent for its
reasonable out-of-pocket expenses in connection with this Agreement, including
the reasonable fees, other charges and disbursements of counsel for the Agent.

9.       GUARANTY. Except as expressly supplemented hereby, the Guaranty shall
remain in full force and effect.

                                      D-2

<PAGE>

           IN WITNESS WHEREOF, New Subsidiary has caused this Agreement to be
executed by its duly authorized officer.

                                     [NEW SUBSIDIARY]

                                     By:________________________________________
                                        Name:___________________________________
                                        Title:__________________________________

                                     Address:

                                     [___________________________________]
                                     [___________________________________]
                                     [___________________________________]
                                     Attn: [__________________________________]
                                     Telephone: [(___) ___-____]
                                     Facsimile: [(___) ___-____]

                                     ABN AMRO BANK N.V.,
                                     As Agent

                                     By:________________________________________
                                        Name:___________________________________
                                        Title:__________________________________

                                      D-3

<PAGE>

                                    EXHIBIT D

                                    [FORM OF]

                            ASSIGNMENT AND ASSUMPTION

           This Assignment and Assumption (the "Assignment and Assumption") is
dated as of the Assignment Effective Date set forth below and is entered into by
and between [Insert name of Assignor Lender] (the "Assignor Lender") and [Insert
name of Assignee Lender] (the "Assignee Lender"). Capitalized terms used but not
defined herein shall have the meanings given to them in the Credit Agreement
identified below (as amended from time to time, the "Credit Agreement"), receipt
of a copy of which is hereby acknowledged by the Assignee Lender. The Standard
Terms and Conditions set forth in Attachment 1 attached hereto are hereby agreed
to and incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.

           For an agreed consideration, the Assignor Lender hereby irrevocably
sells and assigns to the Assignee Lender, and the Assignee Lender hereby
irrevocably purchases and assumes from the Assignor Lender, subject to and in
accordance with the Standard Terms and Conditions and the Credit Agreement, as
of the Assignment Effective Date inserted by the Agent as contemplated below,
(i) all of the Assignor Lender's rights and obligations in its capacity as a
Lender under the Credit Agreement and the other Credit Documents to the extent
related to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor Lender (including any Letters
of Credit or Guaranties) and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the
Assignor Lender (in its capacity as a Lender) against any Person, whether known
or unknown, arising under or in connection with the Credit Agreement, any other
Credit Document or the Loans and other transactions governed thereby or in any
way based on or related to any of the foregoing, including, but not limited to,
contract claims, tort claims, malpractice claims, statutory claims and all other
claims at law or in equity related to the rights and obligations sold and
assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as the "Assigned Interest"). Such sale and assignment is without
recourse to the Assignor Lender and, except as expressly provided in this
Assignment and Assumption, without representation or warranty by the Assignor
Lender.

1.       Assignor Lender:  ______________________________

2.       Assignee Lender:  ________________________________

3.       Borrower:         [Flextronics International Limited]

4.       Agent:            ABN AMRO Bank N.V., as agent under the Credit
                           Agreement

5.       Credit Agreement: Credit Agreement dated as of March 3, 2004 (as
                           amended, supplemented or otherwise modified from time
                           to time), among Flextronics International Ltd.
                           ("FIL"), each of the Subsidiaries of FIL designated
                           as borrower from time to time in accordance with the
                           Credit Agreement (collectively, the "Designated
                           Borrowers"), Lenders, Fleet National Bank, as Issuing
                           Bank, and Agent.

6.       Assigned Interest: See Attachment 2.

[7.      Assignment Effective Date:               ______________](1)

Assignment Effective Date: _____________ ___, 20___ [TO BE INSERTED BY AGENT AND
WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

----------------------
      (1) To be completed if the Assignor Lender and the Assignee Lender intend
that the minimum assignment amount is to be determined as of the Trade Date.

                                      D-4

<PAGE>

                                            ASSIGNOR LENDER
                                            [NAME OF ASSIGNOR]

                                            By:______________________________
                                               Title:

                                            ASSIGNEE LENDER
                                            [NAME OF ASSIGNEE]

                                            By:______________________________
                                               Title:

[Consented to and](2) Accepted:

[NAME OF AGENT], as Agent

By_________________________________
  Title:

[Consented to:](3)

[NAME OF RELEVANT PARTY]

By________________________________
  Title:

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

         (2) To be added only if the consent of the Agent is required by the
terms of the Credit Agreement.

         (3) To be added only if the consent of the Borrower and/or other
parties (e.g., Issuing Bank) is required by the terms of the Credit Agreement.

                                      D-5

<PAGE>

                                  ATTACHMENT 1

                          TO ASSIGNMENT AND ASSUMPTION

                        STANDARD TERMS AND CONDITIONS FOR
                            ASSIGNMENT AND ASSUMPTION

           1. Representations and Warranties.

           1.1 Assignor Lender. The Assignor Lender (a) represents and warrants
that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the
Assigned Interest is free and clear of any lien, encumbrance or other adverse
claim and (iii) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Credit Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Documents or any collateral thereunder, (iii) the
financial condition of the Borrower, any of its Subsidiaries or Affiliates or
any other Person obligated in respect of any Credit Document or any Obligation
or (iv) the performance or observance by the Borrower, any of its Subsidiaries
or Affiliates or any other Person of any of their respective Obligations under
any Credit Document.

           1.2. Assignee Lender. The Assignee Lender (a) represents and warrants
that (i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) it meets all requirements of an Eligible Assignee Lender under
the Credit Agreement (subject to receipt of such consents as may be required
under the Credit Agreement), (iii) from and after the Assignment Effective Date,
it shall be bound by the provisions of the Credit Agreement as a Lender
thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.01 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on the Agent or any other
Lender, and (v) if it is a lender not organized under the laws of the United
States, attached to the Assignment and Assumption is any documentation required
to be delivered by it pursuant to Section 2.13(b) of the Credit Agreement, duly
completed and executed by the Assignee Lender; and (b) agrees that (i) it will,
independently and without reliance on the Agent, the Assignor Lender or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Documents are required to be performed by it as a Lender.

           2. Payments. From and after the Assignment Effective Date, the Agent
shall make all payments in respect of the Assigned Interest (including payments
of principal, interest, fees and other amounts) to the Assignor Lender for
amounts which have accrued to but excluding the Assignment Effective Date and to
the Assignee Lender for amounts which have accrued from and after the Assignment
Effective Date.4

           3. General Provisions. This Assignment and Assumption shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment and Assumption may be

-------------------
         (4) The Agent should consider whether this method conforms to its
systems. In some circumstances, the following alternative language may be
appropriate: "From and after the Assignment Effective Date, the Agent shall make
all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignee Lender whether such
amounts have accrued prior to, on or after the Assignment Effective Date. The
Assignor Lender and the Assignee Lender shall make all appropriate adjustments
in payments by the Agent for periods prior to the Assignment Effective Date or
with respect to the making of this assignment directly between themselves."

                                      D-6

<PAGE>

executed in any number of counterparts, each of which shall be deemed an
original and all of which shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.

                                      D-7

<PAGE>

                                  ATTACHMENT 2

                          TO ASSIGNMENT AND ASSUMPTION

                                     PART A

<TABLE>
<S>                     <C>                                              <C>
                        ______________________________________________________________________________________
                        ______________________________________________________________________________________
                           Commitments or Loans Assigned                 Commitments or Loans After
Assignor Lender:                                                                 Assignment

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

 ______________                    $____________                                     $____________

Assignee Lenders:

----------------
 ______________                    $____________                                     $____________
 ______________                    $____________                                     $____________
 ______________                    $____________                                     $____________
 ______________                    $____________                                     $____________
</TABLE>

                                      D-8

<PAGE>

                                     PART B

[ASSIGNEE LENDER]
Domestic Lending Office:

           [________________________],
           [________________________],
           [________________________],

Eurodollar Lending Office:

           [________________________],
           [________________________],
           [________________________],

Address for Notices:

Wiring Instructions:

                                      D-9

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