Document:

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                                                                     EXHIBIT 4.5

                                CREDIT AGREEMENT

      THIS CREDIT AGREEMENT, dated as of March 8, 2002, is entered into by and
among:

            (1) FLEXTRONICS INTERNATIONAL USA, INC., a California corporation
      ("Borrower");

            (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 "Lenders");

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

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

            (5) DEUTSCHE BANC ALEX. BROWN INC., BANK OF AMERICA, N.A., CITICORP
      USA, INC. and FLEET NATIONAL BANK, as co-syndication agents (collectively,
      in such capacity, the "Co-Syndication Agents");

            (6) THE BANK OF NOVA SCOTIA, as senior managing agent (in such
      capacity, the "Senior Managing Agent");

            (7) BNP PARIBAS and CREDIT SUISSE FIRST BOSTON, as managing agents
      (collectively, in such capacity, the "Managing Agents"); and

            (8) FLEET NATIONAL BANK, as the issuer of letters of credit under
      Subparagraph 2.01(b), (in such capacity, the "Issuing Bank").

                                    RECITALS

      A. Borrower has requested Lenders to provide certain credit facilities to
Borrower.

      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:

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
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      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 FIL, Borrower or any of FIL's other 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 letter agreement dated as of
      January 11, 2002 between FIL and Agent.

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

            "Agreement" shall mean this Credit Agreement.

            "Applicable Lending Office" shall mean, with respect to any Lender
      and any Borrowing, (i) in the case of any Base Rate Loan, such Lender's
      Domestic Lending Office, and (ii) in the case of any LIBOR Loan, such
      Lender's Euro-Dollar 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 each 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 Margins 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 mean Borrower's offices located at
      2090 Fortune Drive, San Jose, California.

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

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

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

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

            "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).

            "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 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.

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

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            "Borrowing" shall mean any Facility A Borrowing or any Facility B
      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 if such
      Business Day is related to a Borrowing consisting of LIBOR Loans, dealings
      in Dollar deposits 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).

            "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 the Subordinated Indenture shall occur or exist.

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

            "Closing Date" shall mean March 8, 2002.

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

            "Combined Total Commitment" shall mean the sum of (a) the Total
      Facility A Commitment and Total Facility B Commitment plus (b) the "Total
      Facility A Commitment" and the "Total Facility B Commitment" under the FIL
      Credit Agreement.

            "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.

            "Commitment Fees" shall mean, collectively, the Facility A
      Commitment Fees and the Facility B Commitment Fees.

            "Commitments" shall mean, collectively, the Facility A Commitments
      and the Facility B Commitments.

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

            "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

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      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, Lender Rate Contracts and
      the Agent's Fee Letter, the FIL Credit Documents, all other documents,
      instruments and agreements delivered to Agent or any Lender pursuant to
      Section III; and all other documents, instruments and agreements delivered
      by Borrower, any Guarantor or any of its or FIL's Subsidiaries to Agent,
      the Issuing Bank or any Lender in connection with this Agreement on or
      after the date of this Agreement.

            "Credit Event" shall mean (a) the making of any initial funding of
      any Loan (and not the selection of a new Interest Period for such Loan or
      the conversion of such Loan pursuant to Subparagraph 2.03(b)(iii))
      provided that such continuation or conversion does not increase the
      principal amount thereof) or (b) the issuance of any Letter of Credit or
      any amendment of any Letter of Credit which increases its stated amount or
      extends it expiration date.

            "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) The EBITDA of FIL and its Subsidiaries for such period.

            "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.

            "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
      and has continued in such failure for three (3) Business Days after
      written notice from Agent.

            "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, same day or immediately available funds.

            "Domestic Lending Office" shall mean, with respect to any Lender and
      its Base Rate Loans, (a) initially, its 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

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      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 Base Rate Loans will thereafter be maintained and for the account
      of which all payments of principal of, and interest on, such Lender's Base
      Rate Loans will thereafter be made.

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

            "EBITDA" shall mean, with respect to FIL for any 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 and its Subsidiaries for
            such period before provision for income taxes;

                                      plus

                  (b) The sum (to the extent deducted in calculating net income
            or loss in clause (a) above) of (i) all Interest Expenses of FIL and
            its Subsidiaries accruing during such period, (ii) all depreciation
            and amortization expenses of FIL and its Subsidiaries accruing
            during such period and (iii) other noncash charges for such period,
            including accrued charges until such time that such accrued charges
            become cash payments;

                                      plus

                  (c) An amount, not to exceed $50,000,000 in any consecutive
            four fiscal quarters, equal to the sum (to the extent deducted in
            calculating net income or loss in clause (a) above) of all cash
            charges associated with merger-related expenses and restructuring
            costs paid in such period (in each case calculated in accordance
            with GAAP) incurred by FIL and/or its Subsidiaries in connection
            with any merger, acquisition, or restructuring entered into by FIL
            and/or any of its Subsidiaries which are otherwise permitted under
            this Agreement and the FIUI Credit Agreement.

      For purposes of Subparagraph 5.03(a) (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
      of 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 and, if applicable, the rules of the
      Securities and Exchange Commission, as if such acquisition occurred as of
      the first day of the relevant period.

            "Eligible Assignee" shall mean (a) a commercial bank, (b) a
      subsidiary, affiliate or branch of a Lender, or (c) any other financial
      institution that makes or purchases commercial loans in the ordinary
      course of business, in each case having a combined capital and surplus of
      at least $100,000,000.

            "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 FIL,
      Borrower, any Material Subsidiary or any ERISA Affiliate, other than a
      Multiemployer Plan.

            "Environmental Laws" shall mean all the Governmental Rules relating
      to the protection of human health and the environment, including all
      Governmental Rules pertaining to the reporting, licensing, permitting,
      transportation, storage, disposal, 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 or handling of Hazardous Materials.

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            "Equity Securities" of any Person shall mean (a) all common stock,
      preferred stock, participations, shares, partnership interests or other
      equity interests in 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 FIL, Borrower or any Material Subsidiary under Section 414
      of the IRC.

            "Euro-Dollar Lending Office" shall mean, with respect to any Lender
      and LIBOR Loans, (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 LIBOR Loans will thereafter be maintained
      and for the account of which all payments of principal of, and interest
      on, such Lender's LIBOR Loans will thereafter be made.

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

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

            "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 FIUI Credit Agreement" shall mean the Credit Agreement
      dated as of April 3, 2000, as amended, among FIUI, FHUI, ABN AMRO and
      other lending institutions, and ABN AMRO, as agent for itself and such
      other lending institutions.

            "Existing FIUI Credit Documents" shall mean the "Credit Documents"
      as defined in the Existing FIL Credit Agreement.

            "Facility" shall mean Facility A or Facility B.

            "Facility A" shall mean the revolving credit facility and letter of
      credit subfacility provided to Borrower pursuant to Subparagraph 2.01(a).

            "Facility A Borrowing" shall mean a borrowing consisting of all the
      Facility A Loans of the same Type (and same Interest Period if LIBOR
      Loans) made by Facility A Lenders on the same date pursuant to the same
      Notice of Borrowing. Any reference to a Facility A Borrowing shall include
      all of the Facility A Loans constituting such Facility A Borrowing.

            "Facility A Commitment" shall mean, with respect to each Lender, the
      Dollar amount set forth under the caption "Facility A 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.

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

            "Facility A Lender" shall mean, at any time, any Lender then having
      a Facility A Commitment, a Facility A Loan outstanding or a participation
      in a Letter of Credit issued and outstanding.

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

            "Facility A Maturity Date" shall mean March 8, 2005.

            "Facility A Proportionate Share" shall mean:

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

                  (b) With respect to any Facility A Lender at any time after
            the termination of the Facility A 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 Facility A 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 Facility A 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.

            "Facility B" shall mean the revolving credit facility provided to
      Borrower pursuant to Subparagraph 2.01(c).

            "Facility B Borrowing" shall mean a borrowing consisting of all the
      Facility B Loans of the same Type (and same Interest Period if LIBOR
      Loans) made by Facility B Lenders on the same date pursuant to the same
      Notice of Borrowing. Any reference to a Facility B Borrowing shall include
      all of the Facility B Loans constituting such Facility B Borrowing.

            "Facility B Commitment" shall mean, with respect to each Lender, the
      Dollar amount set forth under the caption "Facility B 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.

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

            "Facility B Lender" shall mean, at any time, any Lender then having
      a Facility B Commitment or a Facility B Loan outstanding.

            "Facility B Loan" shall have the meaning given to that term in
      Subparagraph 2.01(c)(i).

            "Facility B Maturity Date" shall mean March 7, 2003.

            "Facility B Proportionate Share" shall mean:

                  (a) With respect to any Facility B Lender at any time prior to
            the termination of the Facility B Commitments, the ratio (expressed
            as a percentage rounded to the eighth digit to the

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            right of the decimal point) of (i) such Lender's Facility B
            Commitment at such time to (ii) the Total Facility B Commitment at
            such time; and

                  (b) With respect to any Facility B Lender at any time after
            the termination of the Facility B Commitments, the ratio (expressed
            as a percentage rounded to the eighth digit to the right of the
            decimal point) of (i) the aggregate principal amount of such
            Lender's Facility B Loans outstanding at such time to (ii) the sum
            of the aggregate principal amount of all Facility B Loans
            outstanding at such time.

            "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 means, 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.

            "FHUI" shall mean Flextronics Holding USA, Inc. (formerly known as
      The DII Group, Inc.), a Delaware corporation.

            "FIL" shall mean Flextronics International Ltd., a Singapore
      corporation.

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

            "FIL Credit Documents" shall mean the FIL Credit Agreement and all
      agreements, documents and instruments delivered to the agent or any Lender
      under the FIL Credit Agreement.

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

            "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) The EBITDA of FIL and its Subsidiaries for such period;

                                       to

                  (b) The remainder of:

                        (i) The sum of (A) all Interest Expenses of FIL and its
                  Subsidiaries for such period, plus (B) fifty percent (50%) of
                  the aggregate principal amount of all Loans outstanding under
                  Facility B and all loans outstanding under "Facility B" of the
                  FIL Credit Agreement on the last day of such period, plus (C)
                  the current portion of the long-

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                  term Indebtedness of FIL and its Subsidiaries on the last day
                  of such period (other than the Loans outstanding under
                  Facility B and loans outstanding under Facility B of the FIL
                  Credit Agreement),

                                      minus

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

            "Foreign Plan" shall mean any employee benefit plan maintained by
      FIL, Borrower or any of FIL's other 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.

            "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,
      without limitation, the Federal Deposit Insurance Corporation, the Federal
      Reserve Board, the Comptroller of the Currency, 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.

            "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 of FIL, the Eligible Material
      Subsidiaries and other Subsidiaries of FIL 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).

            "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)
      in each case to the extent constituting Indebtedness (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, or (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, or (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

                                       9
<PAGE>
      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 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 not past due);

                  (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;

                  (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.

            "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 Borrower or 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 Expenses" 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 expenses 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 Borrower pursuant to Subparagraph 2.02(a)
      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
      Borrower pursuant

                                       10
<PAGE>
      to Subparagraph 2.03(b)(ii) which commences on the last day of the
      immediately preceding time period and ends on the last day of that time
      period.

            "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
      (8) of the introductory paragraph hereof.

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

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

            "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.

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

            "Lenders" 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.

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

            "Letter of Credit" shall have the meaning given to that term in
      Subparagraph 2.01(b)(i).

            "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 Dollars
      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 Dollars 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 Dollars are offered to Agent in the London interbank
      market or (ii) the rate at which deposits in Dollars 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
      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.

                                       11
<PAGE>
            "LIBOR Loan" shall mean any Loan bearing interest based upon the
      LIBO Rate.

            "Lien" shall mean, with respect to any property, any security
      interest, mortgage, pledge, lien, charge or other encumbrance in, of, or
      on such property or the income therefrom, including, without limitation,
      the interest of a vendor or lessor under a conditional sale agreement,
      Capital Lease or other title retention agreement, or any agreement to
      provide any of the foregoing.

            "Loan" shall mean a Facility A Loan or a Facility B Loan.

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

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

            "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 FIL and its
      Subsidiaries taken as a whole, or Borrower and its Subsidiaries taken as a
      whole; (b) the ability of Borrower to pay or perform its Obligations in
      accordance with the terms of this Agreement and the other Credit Documents
      or the ability of FIL to pay or perform its obligations in accordance with
      the terms of the FIL 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, (i) any Subsidiary of FIL that (A) had revenues during the
      immediately preceding fiscal year equal to or greater than five percent
      (5%) of the consolidated total revenues of FIL and all of its Subsidiaries
      during such preceding year or (B) 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 and all of its Subsidiaries on such date, in each case as
      set forth or reflected in the audited Financial Statements provided
      pursuant to Subparagraph 5.01(a)(i) hereof; (ii) with respect to any
      Subsidiary of FIL added or created during such year, (A) 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 and all of its Subsidiaries
      during such preceding year or (B) 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 and all of its Subsidiaries
      (including the assets of such added or created Subsidiary or Subsidiaries)
      on such date; and (iii) FLX Cyprus Limited, a Cyprus corporation.

            "maturity" shall mean, with respect to any Loan, Reimbursement
      Obligation, interest, fee or other amount payable by 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.

            "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 FIL,
      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

                                       12
<PAGE>
      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.

            "Net Worth" shall mean, with respect to FIL at any time, the
      remainder at such time, determined on a consolidated basis in accordance
      with GAAP, of (a) the total assets of FIL and its Subsidiaries, minus (b)
      the total liabilities of FIL and its Subsidiaries.

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

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

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

            "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 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),
      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 Borrower or
      payable by Borrower thereunder.

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

            "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).

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

            "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 Schedule II.

            "Pricing Level" shall mean either Level 1, Level 2, Level 3, Level 4
      or Level 5, which shall be determined for each Facility based upon FIL's
      corresponding Senior Debt Rating 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 occurs.

            "Proportionate Share" shall mean:

                                       13
<PAGE>
                  (a) With respect to any Lender and Facility A at any time,
            such Lender's Facility A Proportionate Share at such time;

                  (b) With respect to any Lender and Facility B at any time,
            such Lender's Facility B Proportionate Share at such time;

                  (c) With respect to any Lender without reference to either
            Facility:

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

                        (ii) With respect to any Lender at any time after the
                  termination of the Facility B Commitments and prior to the
                  termination of the Facility A Commitments, the ratio
                  (expressed as a percentage rounded to the eighth digit to the
                  right of the decimal point) of (i) the sum of such Lender's
                  Facility A Commitment and the principal amount of such
                  Lender's Loans (if any) outstanding under Facility B at such
                  time to (ii) the sum of the Total Facility A Commitment and
                  the aggregate principal amount of all Loans (if any)
                  outstanding under Facility B at such time; and

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

            "Rate Contracts" shall mean swap agreements (as that term is defined
      in Section 101 of the Federal Bankruptcy Reform Act of 1978, as amended)
      and any other agreements or arrangements designed to provide protection
      against fluctuations in interest rates, currency exchange rates or
      commodity prices.

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

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

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

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

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

                                       14
<PAGE>
      defaulting Lenders whose Proportionate Shares as so determined then equal
      or exceed fifty-one percent (51%).)

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

            "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 Total Facility A Commitment and the Total
      Facility B Commitment the aggregate amounts of the Defaulting Lenders'
      Facility A Commitments and B 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, with respect to any day in an
      Interest Period for any Borrowing consisting of LIBOR Loans, the aggregate
      of the reserve requirement rates (expressed as a decimal) in effect on
      such day for eurodollar funding (currently referred to as "Eurocurrency
      liabilities" in Regulation D of the Federal Reserve Board) maintained by a
      member bank of the Federal Reserve System. As used herein, the term
      "reserve requirement" shall include, without limitation, any basic,
      supplemental or emergency reserve requirements imposed on any Lender by
      any Governmental Authority.

            "Responsible Officer" shall mean, with respect to Borrower,
      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 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, the Issuing Bank or any Lender to secure the
      Obligations.

            "Senior Debt Rating" shall mean with respect to FIL as of any date
      of determination, the ratings applicable on such date to FIL's senior
      unsecured long-term debt.

            "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, (i) any Subsidiary of FIL that (A) had revenues during the
      immediately preceding fiscal year equal to or greater than

                                       15
<PAGE>
      $10,000,000, or (B) had net worth on the last day of the immediately
      preceding fiscal year equal to or greater than $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 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., as trustee, (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, (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 E 300,000,000, and (d) any other document, instrument or agreement
      evidencing the subordinated indebtedness thereunder.

            "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 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 Borrower and its 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" means, 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 Facility A Commitment" shall mean, at any time, the sum at
      such time of Facility A Lenders' Facility A Commitments. The Total
      Facility A Commitment on the date of this Agreement is $266,666,666.67.

            "Total Facility B Commitment" shall mean, at any time, the sum at
      such time of Facility B Lenders' Facility B Commitments. The Total
      Facility B Commitment on the date of this Agreement is $133,333,333.33.

            "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:

                                       16
<PAGE>
                  (a) With respect to the Facility A Commitment at any time, the
            remainder of (i) the Total Facility A Commitment at such time minus
            (ii) (A) the aggregate principal amount of all Facility A 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;

                  (b) With respect to the Facility B Commitment at any time, the
            remainder of (i) the Total Facility B Commitment at such time minus
            (ii) the aggregate principal amount of all Facility B Loans
            outstanding at such time; and

                  (c) With respect to the Total Combined Commitment at any time,
            the remainder of (i) the Total Combined Commitment at such time
            minus (ii) the sum of (A) the Unused Facility A Commitment as
            determined pursuant to clause (a) above, (B) the Unused Facility B
            Commitment as determined pursuant to clause (b) above, (C) the
            "Unused Facility A Commitment" under the FIL Credit Agreement as
            determined pursuant to clause (a) of the definition of "Unused" set
            forth in Paragraph 1.01 thereof and (D) the "Unused Facility B
            Commitment" under the FIL Credit Agreement as determined pursuant to
            clause (b) of the definition of "Unused" set forth in Paragraph 1.01
            thereof.

      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, Borrower, 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 FIL's financial condition to substantially
the same criteria as were effective prior to such change in GAAP; provided,
however, that, until Borrower, 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. Any calculations performed under this Credit
Agreement that are based on the total assets or total revenues of FIL and its
Subsidiaries shall be determined based on the March 31 fiscal year end
consolidated pro forma financial statements of FIL; except with respect to the
definition of "Material Subsidiary" herein, which shall be calculated based on a
nine (9) month pro forma basis.

      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 California
without reference to conflicts of law rules.

      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, Borrower, 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
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
Borrower, Lenders and Agent and supersede any and all prior agreements,
negotiations, correspondence, understandings and communications among the
parties, whether written

                                       17
<PAGE>
or oral, respecting the subject matter hereof (excluding the Agent's Fee Letter
but including the commitment letter dated as of January 11, 2002 between FIL and
ABN AMRO).

      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 therein and
      thereto 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.

            (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) Facility A Loans.

                  (i) Availability. Subject to the terms and conditions of this
            Agreement (including the amount limitations set forth in Paragraph
            2.05), each Facility A Lender severally agrees to advance to
            Borrower from time to time during the period beginning on the
            Closing Date and ending on the Facility A Maturity Date its pro rata
            share of such revolving loans in Dollars as Borrower may request
            under Facility A (individually, a "Facility A Loan"); provided,
            however, that no Lender shall have any obligation to make a
            requested Facility A Loan if, after giving effect to such Loan, the
            aggregate principal amount of all such Lender's Facility A Loans
            then outstanding plus such Lender's Proportionate Share of the
            aggregate amount available for drawing

                                       18
<PAGE>
            under all Letters of Credit outstanding at such time plus such
            Lender's Proportionate Share of the aggregate amount of all
            Reimbursement Obligations outstanding at such time would exceed such
            Lender's Facility A Commitment at such time. All Facility A Loans
            shall be made on a pro rata basis by Facility A Lenders in
            accordance with their respective Facility A Proportionate Shares,
            with each Facility A Borrowing to be comprised of a Facility A Loan
            made by each Facility A Lender equal to such Facility A Lender's
            Proportionate Share of such Facility A Borrowing. Except as
            otherwise provided herein, Borrower may borrow, repay and reborrow
            Facility A Loans until the Facility A Maturity Date.

                  (ii) Scheduled Payments. Borrower shall repay the principal
            amount of the Facility A Loans in full on the Facility A Maturity
            Date. Borrower shall pay accrued interest on the unpaid principal
            amount of each Facility A Loan in arrears (A) in the case of a Base
            Rate Loan, on the last 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 Facility A Loans, upon
            prepayment (to the extent thereof) and at maturity.

            (b) Letter of Credit Subfacility.

                  (i) Availability. 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 Borrower from time
            to time during the period beginning on the Closing Date and ending
            on the date thirty (30) days prior to the Facility A Maturity Date
            such standby letters of credit under Facility A as Borrower may
            request under this Subparagraph 2.01(b) (individually, a "Letter of
            Credit"); provided, however, as follows:

                        (A) The aggregate amount available for drawing under all
                  Letters of Credit at any time outstanding shall not exceed
                  $50,000,000;

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

                        (C) Each Letter of Credit shall expire on or prior to
                  the date one year after the date of its issuance (but in no
                  event later than the Facility A Maturity Date); and

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

            Except as otherwise provided herein, Borrower 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 Facility A Maturity Date.

                  (ii) LC Application. Borrower 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 $1,000,000);

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

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

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<PAGE>
                        (D) The documentary conditions for drawing under the
                  requested Letter of Credit; and

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

            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 Borrower shall
            promptly deliver to Issuing Bank the original of any LC Application
            initially delivered by facsimile. Agent shall promptly notify each
            Facility A 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 thereto (including, without limitation, terms
            with respect to fees and covenants), the terms of this Agreement
            shall control.

                  (iii) Disbursement and Reimbursement.

                        (A) Disbursement. Issuing Bank shall notify 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, Borrower 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 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 for each
                  day from and including the date such Drawing Payment is made
                  but excluding the date such Reimbursement Payment is made)
                  shall instead be due on the next succeeding Business Day after
                  Borrower receives such notice; provided, further, that
                  Borrower shall make such Reimbursement Payment to, or cause
                  such Reimbursement Payment to be made to, Agent for the
                  benefit of the Facility A Lenders if, prior to the time such
                  Reimbursement Payment is made, Issuing Bank has notified
                  Borrower that it has requested the Facility 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 Facility A Lender
                  which has paid its Proportionate Share of the Drawing Payment,
                  such Facility A 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
                  Borrower to reimburse Issuing Bank or the Facility A 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, without limitation (1) the passage
                  of the Facility A Maturity Date, (2) any lack of validity or
                  enforceability of any of the Credit Documents, (3) the
                  existence of any claim, setoff,

                                       20
<PAGE>
                  defense or other right which Borrower 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
                  Facility A 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
                  Borrower, 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
                  Facility A 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 any drawing
                  under such Letter of Credit or (8) any delay, extension of
                  time, renewal, compromise or other indulgence or modification
                  granted or agreed to by Issuing Bank, Agent or any Facility A
                  Lender, with or without notice to or approval by Borrower,
                  with respect to Borrower's indebtedness under this Agreement;
                  provided, however, that this Subparagraph 2.01(b)(iii)(C)
                  shall not abrogate any right which Borrower 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) Facility A Lender Participations; Facility A Loan
            Funding.

                        (A) Participation Agreement. Each Facility A 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
                  Facility A 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 Borrower), 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
                  Facility A 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 from a
                  Reimbursement Payment by Borrower unless such Reimbursement
                  Payment has been thereafter recovered by Borrower or any other
                  Person. Agent shall promptly notify each Facility A Lender of
                  the contents of each such request and of such Facility A
                  Lender's Proportionate Share of the applicable portion of such
                  Drawing Payment. Promptly following receipt of such notice
                  from Agent, each Facility A Lender shall pay to Agent, for the
                  benefit of Issuing Bank, such Facility A Lender's
                  Proportionate Share of the applicable portion of such Drawing
                  Payment.

                        (C) Funding Through Facility A Loans. If, at any time
                  prior to the Facility A Maturity Date, any Reimbursement
                  Obligations are outstanding, Agent may or, upon the written
                  request of Issuing Bank (if 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
                  Facility A Borrowing in an amount not exceeding the aggregate
                  amount of such

                                       21
<PAGE>
                  outstanding Reimbursement Obligations and use the proceeds of
                  such Facility A Borrowing to repay all or a portion of such
                  Reimbursement Obligations. Agent shall initiate such a
                  Facility A Borrowing by delivering to each Facility A Lender
                  (with a copy to Borrower) a written notice which specifies the
                  aggregate amount of outstanding Reimbursement Obligations, the
                  amount of the Facility A Borrowing (which initially shall
                  consist of Base Rate Loans), the date of such Facility A
                  Borrowing and the amount of the Facility A Loan to be made by
                  such Facility A Lender as part of such Facility A Borrowing.
                  Each Facility A Lender shall make available to Agent funds in
                  the amount of its Facility A Loan as provided in Subparagraph
                  2.10(a). After receipt of such funds, Agent shall promptly
                  disburse such funds to Issuing Bank and the Facility A
                  Lenders, as appropriate, in payment of the outstanding
                  Reimbursement Obligations.

                        (D) Obligations Absolute. Each Facility A 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 Facility A
                  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 Facility A 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 Facility
                  A Lender or 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 Facility A
                  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, Borrower agrees
            that none of Issuing Bank, Agent or any Facility A 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 Borrower for acts or
            events described in clauses (A) through (E) above, to the extent,
            but only to the extent, of any damages suffered by Borrower
            (excluding consequential damages) which Borrower proves 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 Borrower to the
            extent permitted by law. Borrower hereby waives 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

                                       22
<PAGE>
            Credit but which varies with respect to punctuation, capitalization,
            spelling or similar matters of form.

                  (vi) Reports of Issuing Bank. Issuing Bank shall, on a monthly
            basis if requested by Agent, provide to Agent 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. Promptly upon receipt, Agent shall provide such
            information to the Facility A Lenders.

            (c) Facility B Loans.

                  (i) Availability. Subject to the terms and conditions of this
            Agreement (including the amount limitations set forth in Paragraph
            2.05), each Facility B Lender severally agrees to advance to
            Borrower from time to time during the period beginning on the
            Closing Date and ending on the Facility B Maturity Date its pro rata
            share of such revolving loans in Dollars as Borrower may request
            under Facility B (individually, a "Facility B Loan"); provided,
            however, that no Facility B Lender shall have any obligation to make
            a requested Facility B Loan if, after giving effect to such Loan,
            the aggregate principal amount of such Lender's Facility B Loans
            then outstanding would exceed such Lender's Facility B Commitment at
            such time. All Facility B Loans shall be made on a pro rata basis by
            Facility B Lenders in accordance with their respective Facility B
            Proportionate Shares, with each Facility B Borrowing to be comprised
            of a Facility B Loan made by each Facility B Lender equal to such
            Facility B Lender's Proportionate Share of such Facility B
            Borrowing. Except as otherwise provided herein, Borrower may borrow,
            repay and reborrow Facility B Loans until the Facility B Maturity
            Date.

                  (ii) Scheduled Payments. Borrower shall repay the principal
            amount of the Facility B Loans in full on the Facility B Maturity
            Date. Borrower shall pay accrued interest on the unpaid principal
            amount of each Facility B Loan in arrears (A) in the case of a Base
            Rate Loan, on the last 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 Facility B Loans, upon
            prepayment (to the extent thereof) and at maturity.

      2.02. Notice of Borrowing. Borrower 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) Whether such Borrowing is a Borrowing under Facility A or
      Facility B;

            (b) The principal amount of such Borrowing, which shall be in the
      minimum amount of $5,000,000 or an integral multiple of $1,000,000 in
      excess thereof;

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

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

            (e) The date of such Borrowing, which shall be a Business Day.

Borrower shall give each Notice of Borrowing to Agent at least three (3)
Business Days before the date of the requested Borrowing in the case of a
Borrowing consisting of LIBOR Loans and at least one (1) Business Day before the
date of the requested Borrowing in the case of a Borrowing consisting of Base
Rate Loans. Each Notice of Borrowing shall be signed by a Responsible Officer of
Borrower and delivered by first-class mail or facsimile to

                                       23
<PAGE>
Agent at the office or facsimile number and during the hours specified in
Paragraph 8.01; provided, however, that Borrower 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. Borrower 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

                  (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. Each LIBOR Loan
      Borrowing shall be in a minimum amount of $5,000,000 or an integral
      multiple of $1,000,000 in excess thereof.

            (b) Terms.

                  (i) LIBOR Loan Interest Periods. The initial and each
            subsequent Interest Period selected by 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; (C)
            no Interest Period for a Facility A Borrowing shall end after the
            Facility A Maturity Date; and (D) no Interest Period of a Facility B
            Borrowing shall end after the Facility B Maturity Date.

                  (ii) Notice of Interest Period Selection. 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 three (3) Business Days prior to the last day
            of each Interest Period for a Borrowing consisting of LIBOR Loans of
            the Interest Period selected by 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 Borrower shall promptly
            deliver to Agent the original of any Notice of Interest Period
            Selection initially delivered by facsimile. If 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. 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 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. Borrower
            may elect different options with respect to different portions of
            the affected Borrowing, in which

                                       24
<PAGE>
            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.

      2.04. Purpose. Borrower shall use the proceeds of the initial Loan to
repay on the Closing Date all indebtedness outstanding under the Existing FIUI
Credit Agreement, and thereafter Borrower shall use the proceeds of the Loans
and for their respective working capital and general corporate needs (including
capital expenditures).

      2.05. Amount Limitations, Commitment Reductions, Etc.

            (a) Commitment Limitations. The aggregate principal amount of all
      Facility A Loans 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
      shall not exceed the Total Facility A Commitment at such time. The
      aggregate principal amount of all Facility B Loans outstanding at any time
      shall not exceed the Total Facility B Commitment at such time.

            (b) Reduction or Cancellation of Commitments. Upon five (5) Business
      Days prior written notice to Agent, Borrower may permanently reduce the
      Total Facility A Commitment and/or the Total Facility B Commitment by the
      amount of Five Million Dollars ($5,000,000) or integral multiples in
      excess thereof, or cancel the Total Facility A Commitment and/or the Total
      Facility B Commitment in its entirety; provided, however, that:

                  (i) Borrower may not reduce the Total Facility A Commitment
            prior to the Facility A Maturity Date, if, after giving effect to
            such reduction, the aggregate principal amount of all Facility A
            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 Facility A Commitment;

                  (ii) Borrower may not reduce the Total Facility B Commitment
            prior to the Facility B Maturity Date if, after giving effect to
            such reduction, the aggregate principal amount of all Facility B
            Loans then outstanding would exceed the Total Facility B Commitment;

                  (iii) Borrower may not cancel the Total Facility A Commitment
            prior to the Facility A Maturity Date, if, after giving effect to
            such cancellation, any Facility A Loan, Reimbursement Obligation or
            Letter of Credit would then remain outstanding; and

                  (iv) Borrower may not cancel the Total Facility B Commitment
            prior to the Facility B Maturity Date, if, after giving effect to
            such cancellation, any Facility B Loan would then remain
            outstanding.

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

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

                                       25
<PAGE>
      2.06. Fees.

            (a) Agent's Fee. Borrower 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. Borrower shall pay to Agent:

                  (i) For the ratable benefit of Facility A Lenders as provided
            in Subparagraph 2.11(a)(vi), commitment fees in Dollars (the
            "Facility A Commitment Fees") equal to the Commitment Fee Percentage
            of the daily average Unused amount of the Total Facility A
            Commitment for the period beginning on the date of this Agreement
            and ending on the Facility A Maturity Date; and

                  (ii) For the ratable benefit of Facility B Lenders as provided
            in Subparagraph 2.11(a)(vii), commitment fees in Dollars (the
            "Facility B Commitment Fees") equal to the Commitment Fee Percentage
            of the daily average Unused amount of the Total Facility B
            Commitment for the period beginning on the date of this Agreement
            and ending on the Facility B Maturity Date.

      Borrower shall pay the Commitment Fees in arrears on the last day of each
      March, June, September and December (commencing March 31, 2002) and on the
      Facility A Maturity Date and the Facility B Maturity Date, as the case may
      be (or if the Total Facility A Commitment or Total Facility B Commitment
      is cancelled on a date prior to the Facility A Maturity Date or the
      Facility B Maturity Date, as the case may be, on such prior date).

            (c) Letter of Credit Fees.

                  (i) Letter of Credit Usage Fees. Borrower shall pay to Agent,
            for the ratable benefit of the Facility A Lenders as provided in
            Subparagraph 2.11(a)(vi), 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). Borrower shall pay the LC Usage Fees
            quarterly in arrears on the last day in each March, June, September
            and December (commencing March 31, 2002) 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).

                  (ii) Letter of Credit Issuance Fees. Borrower 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). Borrower 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, 2002) 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, Borrower 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.

                                       26
<PAGE>
      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),
      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.

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

                  (i) Borrower delivers to Agent prior written notice of such
            prepayment, which notice shall be delivered (A) not less than three
            (3) Business Days prior to the prepayment of any Borrowing
            consisting of LIBOR Loans; and (B) 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 $5,000,000 or an integral multiple of
            $1,000,000 in excess thereof.

            (c) Mandatory Prepayments.

                  (i) If, at any time, the aggregate principal amount of all
            Facility A 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) or 2.05(c), Borrower 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. Borrower hereby grants to Agent for the benefit
            of the Lenders, a security interest in such funds and in such
            account.

                  (ii) If, at any time, the aggregate principal amount of all
            Facility B Loans then outstanding exceeds any limitations set forth
            in Subparagraphs 2.05(a) or 2.05(c), Borrower shall immediately
            prepay such Facility B Loans in such amounts as Agent shall
            determine are necessary to eliminate such excess.

            (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 Borrower.

      2.08. Other Payment Terms.

            (a) Place and Manner.

                  (i) Borrower 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 and
            such Lender's Applicable Lending Office.

                  (ii) Borrower shall make all payments hereunder in same day or
            immediately available funds and without deduction or offset not
            later than 11:00 a.m. (California time) and on the date due. Agent
            shall promptly disburse to each Lender each payment received by
            Agent for the account of such Lender.

                                       27
<PAGE>
            (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.

            (c) Currency of Payment.

                  (i) Borrower shall pay principal of, interest on and all other
            amounts related to each Borrowing in Dollars. Borrower shall pay
            Commitment Fees and all other amounts payable under this Agreement
            and the other Credit Documents in Dollars.

                  (ii) If any amounts required to be paid by Borrower 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 Borrower 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, Borrower
            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 Borrower 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 Borrower 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 Borrower
      under this Agreement or the other Credit Documents (including, without
      limitation, 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, 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 the Base Rate plus two percent
      (2.00%), such rate to change from time to time as the Base 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 Borrower at least one (1) Business Day prior to the date on which any
      payment is due to Lenders hereunder that Borrower will not make such
      payment in full, Agent shall be entitled to assume that 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 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 the
      Federal Funds Rate for the first three (3) days and the Base Rate
      thereafter. 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.

                                       28
<PAGE>
      2.09. Loan Accounts; Notes.

            (a) Loan Accounts. The obligation of 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 and amount 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 and amount 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 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
      Borrower's 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 Borrower. Each Lender shall,
      before 11:00 a.m. (New York 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 Borrower no later than 1:00 p.m.
      (California time) in immediately available funds. Agent shall disburse the
      proceeds of each Borrowing as directed by 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 applicable 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 2.08(a), and Agent may on such
      date, in reliance upon such assumption, disburse or otherwise credit to
      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 the Federal
      Funds Rate for the first three (3) days and the Base Rate thereafter. A
      certificate of Agent submitted to any Lender with respect to any amount
      owing by such Lender under this Subparagraph 2.08(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, Borrower shall repay such amount to Agent, on demand, together
      with interest thereon, for each day from the date such amount was
      disbursed to 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.

                                       29
<PAGE>
      2.11. Pro Rata Treatment.

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

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

                  (ii) Each Borrowing under Facility B and reduction of the
            Total Facility B Commitments shall be made or shared among Facility
            B Lenders pro rata according to their respective Facility B
            Proportionate Shares;

                  (iii) 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;

                  (iv) 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;

                  (v) Each Reimbursement Payment shall be shared among the
            Facility A 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;

                  (vi) Each payment of Facility A Commitment Fees and LC Usage
            Fees shall be shared among Facility A 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 (A) their
            respective Facility A Proportionate Shares and (B) in the case of
            each Facility A Lender which becomes a Facility A Lender hereunder
            after the date hereof and before the Facility A Maturity Date, the
            date upon which such Facility A Lender so became a Facility A
            Lender;

                  (vii) Each payment of Facility B Commitment Fees shall be
            shared among Facility B Lenders (except for Defaulting Lenders) pro
            rata according to (A) their respective Facility B Proportionate
            Shares and (B) in the case of each Facility B Lender which becomes a
            Facility B Lender hereunder after the date hereof and before the
            Facility B Maturity Date, the date upon which such Facility B Lender
            so became a Facility B Lender;

                  (viii) 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

                  (ix) 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
      setoff, 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, with respect to the Facility A Lenders, Reimbursement
      Obligations) such Lender shall forthwith purchase from such other Lenders
      such participations in their Loans (or, with respect to the Facility A
      Lenders, 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

                                       30
<PAGE>
      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. Borrower agrees that any Lender so purchasing a participation
      from another Lender pursuant to this Subparagraph 2.11 (b) may, to the
      fullest extent permitted by law, exercise all its rights of payment
      (including the right of setoff) with respect to such participation as
      fully as if such Lender were the direct creditor of 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, Agent
      shall determine (which determination shall be conclusive and binding upon
      Borrower absent manifest error) that (i) the LIBO Rate for such Interest
      Period cannot be adequately and reasonably determined due to other
      circumstances affecting the London interbank market, or (ii) the rate of
      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 Borrower and the applicable
      Lenders. After the giving of any such notice and until Agent shall
      otherwise notify Borrower that the circumstances giving rise to such
      condition no longer exist, Borrower's right to obtain, continue or convert
      to Borrowings at the LIBO Rate shall be suspended. Any LIBOR Borrowings
      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, such Lender shall immediately notify Agent and Borrower of
      such Change of Law. Upon receipt of such notice, (i) Borrower's right to
      obtain, continue or convert to LIBOR Loans shall be suspended until such
      time as Agent shall notify Borrower and the applicable Lenders that the
      circumstances giving rise to such suspension no longer exist, and (ii)
      Borrower shall, if so requested by such Lender, immediately repay such
      LIBOR Loans if such Lender shall notify 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 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

                                       31
<PAGE>
                  (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 Borrower 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 Borrower shall have no obligation to make any payment to any
      demanding party under this Subparagraph 2.10(c) on account of any such
      increased costs or reduced amounts unless Borrower receives 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 evidence of such costs or
      amounts. The obligations of Borrower 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), Borrower 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 Borrower 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 Borrower receives 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 Borrower 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 Borrower to pay any amount pursuant to
      Subparagraph 2.12(c) or Subparagraph 2.12(d) shall notify Borrower 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 Borrower 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 Borrower is 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 Borrower is 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 Borrower 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

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<PAGE>
      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 Borrower, as promptly as possible
      thereafter, Borrower 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 Borrower showing payment thereof. If
      Borrower fails 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, Borrower 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
      Borrower under this Paragraph 2.13 (i) shall be subject to the mitigation
      provisions contained in Paragraph 8.03 and (ii) shall survive the payment
      and performance of the Obligations and the termination of this Agreement.

            (b) Withholding Exemption Certificates. 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 United States of America shall notify Borrower whether such
      Lender is entitled to receive payments on its Loans under this Agreement
      from Borrower's Applicable Payment Office for the account of such Lender's
      Applicable Lending Office without deduction or withholding of any income
      taxes imposed (or with reduced deduction or withholding of any such taxes)
      imposed by the jurisdiction of such Borrower's Applicable Payment Office
      and promptly deliver to such Borrower such certificates and other evidence
      as such Borrower shall reasonably request to establish such fact.. Each
      such Lender further agrees (A) promptly to notify Borrower 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 (B) if such Lender is still legally
      entitled to do so, then on or before the date that any certificate or
      other form delivered by such Lender under this Subparagraph 2.13(b)
      expires, to deliver to Borrower and Agent a new certificate or form,
      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 fails
      to provide to Agent and 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 such 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
      file any certificate or document requested in writing by Borrower
      reflecting a reduced rate of withholding 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 need
      for or materially reduce the amount of any such additional amounts which
      may thereafter accrue and if, in the reasonable opinion 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.

            (d) Tax Returns. Nothing contained in this Paragraph 2.13 shall
      require Agent or any Lender to make available any of its tax returns (or
      any other information relating to its taxes which it deems to be
      confidential).

            (e) 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 Borrower 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

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<PAGE>
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) or (c) fail to pay when due any
principal or interest on any LIBOR Loan, 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 Borrower 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 Borrower receives notice of such costs or losses from the
demanding party within twelve (12) months after such costs or losses have been
incurred or realized. Borrower understands that such costs and losses may
include, without limitation, 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 Borrower,
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 Borrower shall constitute prima
facie evidence of such costs and losses. The obligations of Borrower 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 FIL and 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, as soon as practicable and in any
      event within forty-five (45) days of the Closing Date, FIL shall deliver,
      or cause to be delivered, to Agent, (A) a Subsidiary Joinder in the form
      of Attachment 1 to the Guaranty, appropriately completed and duly executed
      by each of (i) FLX Cyprus Limited, (ii) Flextronics (Malaysia) Sdn Bhd and
      (iii) IEC Holdings Ltd., (B) 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 (C) 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.

                  (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, Borrower 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,
            Agent shall if requested by FIL release such Subsidiary from its
            obligations under the Guaranty.

            (c) Further Assurances. Borrower 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 Subparagraph 2.15(a) 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. Borrower 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, Borrower
      covenants and agrees that it will ensure that the aggregate revenues of
      the Subsidiaries that have

                                       34
<PAGE>
      executed and delivered the Guaranty pursuant to this Agreement and the FIL
      Credit Agreement for each year will equal or exceed 53% of the
      consolidated total revenues of FIL and all of its Subsidiaries as
      reflected for such year in FIL's annual audited Financial Statements.

      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 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 Borrower, 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 Borrower seeks to exercise such right, they must do so within sixty (60) days
after 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 Borrower; and
provided, further, that no Lender shall be replaced under this Agreement unless
such Lender is also replaced under the FIL 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, 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.

SECTION III. CONDITIONS PRECEDENT.

      3.01. Initial Conditions Precedent. The obligations of the applicable
Lenders to make the Loans comprising the initial Borrowing 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.

      3.02. Conditions Precedent to Each Credit Event. The occurrence of each
Credit Event (including the initial Borrowing and the issuance of the initial
Letter of Credit) is subject to the further conditions that:

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

            (b) With respect to each Credit Event involving the making of a Loan
      or the issuance of a Letter of Credit, 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 FIL, Borrower and
            FIL's 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 Borrower to Agent of each Notice of Borrowing and each LC
Application shall be deemed to be a representation and warranty by Borrower that
each of the statements set forth above in this Subparagraph 3.03(b) is true and
correct as of the date of such notice.

      3.03. Covenant to Deliver. Borrower agrees (not as a condition but as a
covenant) to deliver to Agent (as applicable) each item required to be delivered
to Agent as a condition to the occurrence of any Credit Event if

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<PAGE>
such Credit Event occurs. Borrower expressly agrees 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 Borrower's obligation to deliver such item.

SECTION IV. REPRESENTATIONS AND WARRANTIES.

      4.01. Borrower's Representations and Warranties. In order to induce Agent
and Lenders to enter into this Agreement, Borrower hereby represents and
warrants to Agent and Lenders as follows:

            (a) Due Incorporation, Qualification, etc. Each of Borrower and its
      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 to have a Material Adverse Effect.

            (b) Authority. The execution, delivery and performance by Borrower
      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.

            (c) Enforceability. Each Credit Document executed, or to be
      executed, by Borrower and each Guarantor has been, or will be, duly
      executed and delivered by such Person and constitutes, or 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 Borrower 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 Borrower 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. None of FIL, Borrower, any other
      Guarantor any of FIL's other 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, such
      violation or default is reasonably or substantially likely to have a
      Material Adverse Effect. Without limiting the generality of the foregoing,
      none of FIL, Borrower, any other Guarantor or any of FIL's other
      Subsidiaries (A) has violated any Environmental Laws, (B) to the knowledge
      of Borrower, any Guarantor or any of FIL's Subsidiaries, has any liability
      under any Environmental Laws or (C) has received notice or other
      communication of an investigation or, to the knowledge of 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 to have a Material Adverse Effect. No Default has
      occurred and is continuing.

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<PAGE>
            (g) Litigation. No actions (including derivative actions), suits,
      proceedings or investigations are pending or, to the knowledge of
      Borrower, threatened against 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 Borrower or any Guarantor of the Credit
      Documents or the transactions contemplated thereby.

            (h) Title; Possession Under Leases. 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 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.

            (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, 2001, 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 FIL, 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 FIL, 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 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 FIL, Borrower
            or any ERISA Affiliate of any material liability, fine or penalty.
            Each Employee Benefit Plan, related trust agreement, arrangement and
            commitment of FIL, 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 FIL, Borrower nor any ERISA Affiliate nor, to
            the knowledge or 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 FIL, Borrower nor any ERISA Affiliate
            contributes to or has any material contingent obligations to any
            Multiemployer Plan. Neither FIL, Borrower nor any ERISA Affiliate
            has incurred any material liability (including secondary liability)
            to any

                                       37
<PAGE>
            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 FIL, 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 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 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 to have a Material Adverse Effect. Each
            Foreign Plan reasonably complies in all material respects with all
            applicable Governmental Rules.

            (k) Other Regulations. None of FIL, 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. FIL, 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 likely to have a Material Adverse Effect.

            (m) Governmental Charges. FIL, 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. FIL,
      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 to have a Material Adverse Effect if
      unpaid.

            (n) Margin Stock. Borrower does not own any Margin Stock which, in
      the aggregate, would constitute a substantial part of the assets of
      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, 2001 and as thereafter updated on a quarterly basis by
      Borrower 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, 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. The only Material Subsidiaries on the date
      of this Agreement are Flextronics International

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<PAGE>
      USA, Inc., Flextronics International Latin America (L) Ltd., Flextronics
      International Sweden AB, Flextronics International Kft. and Flextronics
      Hungaria Kft. 1.

            (p) Solvency, Etc. FIL, Borrower, 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. Borrower has taken all actions necessary for the
      Obligations to constitute "Designated Senior Debt" for the purposes of and
      as defined in the Subordinated Indenture. Borrower 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 any senior debt under all Subordinated
      Indentures.

            (r) No Withholding, Etc. Except as otherwise disclosed by a Borrower
      to the Agent from time to time, Borrower does not have 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 Borrower or any or Guarantor 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.

            (s) Foreign Subsidiaries.

                  (i) No Immunities, etc. Each Foreign Subsidiary that is a
            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,

                                       39
<PAGE>
            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 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 Borrower or such 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 (provided any notification or
            authorization described in immediately preceding clause (A) 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 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 FIL, Borrower, 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 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,
      FIL's and Borrower's best estimates of the future performance of FIL,
      Borrower, the Guarantors and FIL's Subsidiaries.

      4.02. Reaffirmation. 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 involving the making
of a Loan or the issuance of a Letter of Credit (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 Borrower of all Obligations, Borrower will comply,
and will cause compliance, with the following affirmative covenants, unless
Required Lenders shall otherwise consent in writing:

            (a) Financial Statements, Reports, etc. 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 financial officer, treasurer or
            controller 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 and its
            Subsidiaries (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 reasonably
            acceptable to Agent) 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;

                                       40
<PAGE>
                  (iii) Contemporaneously with the quarterly and year-end
            Financial Statements required by the foregoing clauses (i) and (ii),
            a compliance certificate of the chief financial officer, treasurer
            or controller of FIL and Borrower (a "Compliance Certificate") which
            (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 FIL and Borrower 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 for FIL;

                  (iv) As soon as possible and in no event later than five (5)
            Business Days after any officer of 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 FIL, Borrower or any of FIL's
            Subsidiaries involving potential monetary damages payable by FIL,
            Borrower or any of FIL's Subsidiaries of $10,000,000 or more (alone
            or in the aggregate); (C) any other event or condition which is
            reasonably and substantially likely to have a Material Adverse
            Effect; or (D) any Default; the statement of the chief financial
            officer, treasurer or controller of FIL and Borrower setting forth
            details of such event, condition or Default and the action which FIL
            and Borrower propose 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 FIL,
            Borrower or any of FIL's Subsidiaries with the United States
            Securities and Exchange Commission (including, without limitation,
            all 10-Q, 10-K and 8-K reports); and (B) all reports, proxy
            statements and financial statements sent or made available by FIL,
            Borrower 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 directly or indirectly by FIL 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 Borrower changes its legal name or the address
            of its chief executive office, written notice setting forth
            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 FIL, Borrower or
            FIL's Subsidiaries, and compliance by 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 at 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. The Agent 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.

                                       41
<PAGE>
            (b) Books and Records. FIL, Borrower and FIL's other 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. FIL, Borrower and FIL's other 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 FIL, Borrower and FIL's other
      Subsidiaries, to examine the books and records of FIL, Borrower and FIL's
      other Subsidiaries and make copies thereof and to discuss the affairs,
      finances and business of FIL, Borrower and FIL's other 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).

            (d) Insurance. FIL, Borrower and FIL's other 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. FIL,
      Borrower and FIL's other 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 FIL, Borrower or FIL's
      other Subsidiaries and (iii) subject to any subordination provisions
      applicable thereto, all other Indebtedness, which in each case, 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. Borrower shall use the proceeds of the Loans
      only for the respective purposes set forth in Section II. Borrower shall
      not 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 Borrower, any Lender
      or Agent in a violation of Regulations T, U or X issued by the Federal
      Reserve Board.

            (g) General Business Operations. FIL, Borrower and FIL's other
      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 to have a Material Adverse Effect.

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

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

                                       42
<PAGE>

                  (a) Indebtedness. None of FIL, Borrower nor any of FIL's other
         Subsidiaries shall create, incur, assume or permit to exist any
         Indebtedness except for the following ("Permitted Indebtedness"):

                           (i) Indebtedness that is not secured by a Lien in any
                  asset or property of any of FIL, Borrower or any of FIL's
                  other Subsidiaries;

                           (ii) (A) Indebtedness under Capital Leases or under
                  purchase money loans incurred by FIL, Borrower or any of FIL's
                  other Subsidiaries to finance the acquisition, construction,
                  development or improvement by such Person of real property,
                  fixtures, 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;

                           (iii) 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;

                           (iv) Indebtedness of Borrower or any Guarantor to FIL
                  or any Eligible Material Subsidiary or Indebtedness of any
                  Eligible Material Subsidiary to FIL, Borrower, 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

                           (v) Other Indebtedness that is secured by a Lien on
                  any assets or property of any of FIL, Borrower or any of FIL's
                  other 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), outstanding during any fiscal
                  quarter of FIL does not exceed ten percent (10%) of the
                  consolidated assets of FIL and its Subsidiaries on the last
                  day of the immediately preceding fiscal quarter.

                  (b) Liens. None of FIL, Borrower or any of FIL's other
         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 (ii) (but only
                  to the extent such Liens are on the assets so financed, the
                  proceeds thereof and any improvements thereon), (iii), (iv) or
                  (v) of Subparagraph 5.02(a);

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

                                       43
<PAGE>
                  being contested in good faith by appropriate proceedings
                  diligently conducted and with respect to which adequate
                  reserves are being maintained in accordance with generally
                  accepted accounting principles 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 FIL, Borrower or any of
                  FIL's other Subsidiaries 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 generally accepted accounting principles 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 FIL, Borrower or any of FIL's other
                  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 FIL 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 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, FIL, Borrower or any of FIL's other 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 FIL, Borrower or any of FIL's
         other 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

                                       44
<PAGE>
         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 of FIL and its
         Subsidiaries 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 FIL, Borrower or any Subsidiary from FIL,
         Borrower or any 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 FIL, Borrower or any
         of FIL's other 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) FIL, Borrower and any of FIL's other Subsidiaries
                  may merge with each other, provided that (A) in any such
                  merger involving Borrower, Borrower is the surviving
                  corporation and (B) no Default has occurred and is continuing
                  on the date of, or will result after giving effect to, any
                  such merger; and

                           (ii) FIL, Borrower and FIL's other 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 FIL, Borrower or such Subsidiary
                           or (2) any business reasonably related thereto; and

                                    (C) FIL, Borrower or such Subsidiary possess
                           the power to direct or cause the direction of the
                           management and policies of such Person.

                  (e) Investments. None of FIL, Borrower or any of FIL's other
         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 listed in Schedule 5.02(e) existing
                  or committed on the Closing Date;

                           (iii) Investments received by FIL, Borrower and FIL's
                  other 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 FIL, Borrower, the Material
                  Subsidiaries and the Guarantors directly or indirectly in each
                  other;

                                       45
<PAGE>
                           (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 FIL, Borrower and FIL's other
                  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);
                  and

                           (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 FIL,
                           Borrower and FIL's other Subsidiaries for all such
                           Investments 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 FIL, Borrower or any
         of FIL's other Subsidiaries shall pay any dividends or make any
         distributions on its Equity Securities; purchase, redeem, retire,
         defease or otherwise acquire for value any of its Equity Securities;
         return any capital to any holder of its Equity Securities as such; make
         any distribution of assets, Equity Securities, obligations 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 FIL, Borrower or any of FIL's other
                  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 FIL, Borrower or any of FIL's
         other 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 FIL, Borrower 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

                                       46
<PAGE>
                  subject FIL, 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 FIL, Borrower or any of FIL's other
                  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 FIL, Borrower or any
         of FIL's other Subsidiaries shall enter into any Contractual Obligation
         with any Affiliate (other than FIL, Borrower or one of FIL's other
         Subsidiaries) or engage in any other transaction with any such
         Affiliate except (A) upon terms at least as favorable to FIL, 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, 2001, 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).

                  (j) Accounting Changes. None of FIL, Borrower or any of FIL's
         other 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 FIL, Borrower
         or any of FIL's other 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 $25,000,000 or net worth
         on the last day of the immediately preceding fiscal year equal to or
         greater than $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 Borrower 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 contained in (A) 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 FIL, Borrower or any of FIL's other
         Subsidiaries will designate or permit to exist any other Indebtedness
         as "Designated Senior Debt" for the purposes of and as defined in of
         the 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 Borrower of all Obligations, Borrower will cause FIL
to comply 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 to be greater than 3.25 to 1.00 for any consecutive four-quarter
         period ending on the last day of any fiscal quarter.

                                       47
<PAGE>
                  (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.

                  (c) Net Worth. FIL shall not permit its Net Worth on the last
         day of any fiscal quarter (such date to be referred to herein as a
         "determination date") to be less than the sum on such determination
         date of the following:

                           (i) $2,982,000,000;

                                      plus
                                      ----

                           (ii) Fifty percent (50%) of FIL's consolidated
                  quarterly net income (ignoring any quarterly losses) for each
                  fiscal quarter ending after December 31, 2001 through and
                  including the fiscal quarter ending on the determination date;

                                      plus
                                      ----

                           (iii) Fifty percent (50%) of the Net Proceeds of all
                  Equity Securities issued by FIL and its Subsidiaries (to
                  Persons other than FIL or its Subsidiaries) during any period
                  after the Closing Date and ending on the determination date.

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. Borrower shall (i) fail to pay when due any
         principal of any Loan or any Reimbursement Payment, or (ii) except at
         final maturity 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. FIL, Borrower or any of FIL's other
         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. FIL, Borrower or any of FIL's other
         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) Borrower's written
         acknowledgement of such failure and (ii) Agent's or any Lender's
         written notice to Borrower 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
         Borrower shall have commenced to cure such failure within such thirty
         (30) day period and shall thereafter diligently pursue such cure to
         completion, 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 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

                                       48
<PAGE>
         delivered to Borrower 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) 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 Borrower that such
         representation, warranty, certificate, information or other statement
         was false, incorrect, incomplete or misleading in any material respect;
         or

                  (e) Cross-Default. (i) FIL, 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 shall continue beyond any
         period of grace provided with respect thereto, if the amount of such
         Indebtedness exceeds $40,000,000 or the effect of such failure is to
         cause, or permit the holder or holders thereof to cause, Indebtedness
         of FIL, Borrower, any Guarantor and any Material Subsidiary (other than
         the Obligations) in an aggregate amount exceeding $40,000,000 to become
         due (whether at scheduled maturity, by required prepayment, upon
         acceleration or otherwise); or (ii) FIL, 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 FIL,
         Borrower, any Guarantor and any Material Subsidiary (other than the
         Obligations) in an aggregate amount exceeding $40,000,000 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. FIL, 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, 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 FIL, 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 FIL,
         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 FIL, Borrower and/or FIL's other
         Subsidiaries to pay an aggregate amount of $25,000,000 or more
         (exclusive of amounts covered by insurance issued by an insurer not an
         Affiliate of FIL or Borrower and otherwise satisfying the requirements
         set forth in Subparagraph 5.01(d) to which the insurer does not dispute
         coverage) shall be rendered against FIL, Borrower and/or FIL's other
         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 FIL, Borrower or any of FIL's
         other 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

                                       49
<PAGE>
         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 FIL, Borrower or any other
         Guarantor not to be, a legal, valid and binding obligation of FIL,
         Borrower or any other 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 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 Borrower, (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 Borrower 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 Borrower to deliver to Agent funds 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, (1) 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 (2) all outstanding Obligations payable by Borrower 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 FIL, Borrower or any of
FIL's other 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

                                       50
<PAGE>
by FIL, Borrower or any other 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 FIL, Borrower or any other 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
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 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 Borrower
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 FIL,
Borrower and FIL's other 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 FIL, Borrower or any other 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 FIL,
Borrower or any of FIL's Subsidiaries; (b) have any duty or responsibility to
provide any Lender with any credit or other information concerning FIL, Borrower
or any of FIL's Subsidiaries which may come into the possession of Agent, except
for notices, reports and other documents

                                       51
<PAGE>
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 FIL, Borrower, any of FIL's Subsidiaries or
any officer, employee or agent of FIL, Borrower or any of FIL's Subsidiaries 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 FIL, Borrower or any
other Guarantor to perform its obligations under this Agreement or any other
Credit Document.

         7.06. Resignation or Removal of Agent. Agent may resign at any time by
giving thirty (30) days prior written notice thereof to Borrower 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 Borrower; provided, however, that Borrower shall have
no right to approve a successor Agent if a Default has occurred and is
continuing. 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 and Issuing Bank in their 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 FIL,
Borrower and any of FIL's other 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 Agent and
Managing Agents. The Co-Arrangers, the Co-Syndication Agents, the Senior
Managing Agent and the Managing Agents 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 Agent" and "Managing Agents" implies no fiduciary
responsibility on the part of any Co-Arranger, Co-Syndication Agent, Senior
Managing Agent and Managing Agents to any Person, and the use of such title does
not impose on any Co-Arranger, Co-Syndication Agent, Senior Managing Agent and
Managing Agents 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
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
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.

                                       52
<PAGE>
                  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) 409-7390
                                    Fax. No: (212) 409-7497

                                    With a copy in each case to:

                                    ABN AMRO Bank N.V.
                                    1 California Street, 2nd Floor
                                    San Francisco, CA  94111
                                    Attn:  Peter Hsu
                                    Tel: (415) 983-2964
                                    Fax: (415) 983-2960

                                    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:  Angela Moore
                                           MA DE 10009H
                                    Telephone:  (617) 434-5059
                                    Fax No:  (617) 434-1709

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

Each Notice of Borrowing, Notice of Interest Period Selection and LC Application
shall be given by Borrower to Agent, and in the case of an LC Application, to
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 Borrower 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. Borrower agrees 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,

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<PAGE>
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, without limitation,
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 FIL, Borrower or any of FIL's other
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
Borrower 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, Borrower
agrees 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 without limitation any use by 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 Borrower or with respect
to which Borrower has 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 Borrower (but only to the extent of indemnity payments made,
or additional amounts paid, by Borrower 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 Borrower shall, upon the
written request of such Lender, agree to repay the amount paid over to Borrower
(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 Borrower under this Paragraph 8.03
shall survive the payment and performance of the Obligations and the termination
of this Agreement.

         8.04. Waivers; Amendments. (a) Any term, covenant, agreement or
condition of this Agreement or any other Credit Document which relates solely to
Facility A may be amended or waived, and any consent under this Agreement or any
other Credit Document which relates solely to Facility A may be given, if such
amendment, waiver or consent is in writing and is signed by Borrower and the
Required Facility A Lenders (or Agent on behalf of the Required Facility A
Lenders with the written approval of the Required Facility A Lenders); (b) any
term, covenant, agreement or condition of this Agreement or any other Credit
Document which relates solely to Facility B may be amended or waived, and any
consent under this Agreement or any other Credit Document which relates solely
to Facility B may be given, if such amendment, waiver or consent is in writing
and is signed by Borrower and the Required Facility B Lenders (or Agent on
behalf of the Required Facility B Lenders with the written approval of the
Required Facility B Lenders); and (c) any term, covenant, agreement or condition
of this Agreement or any other Credit Document which does not relate solely to
Facility A or Facility B may be amended or waived, and any consent under this
Agreement or any other Credit Document which does not relate solely to Facility
A or Facility B may be given, if such amendment, waiver or consent is in writing
and is signed by Borrower and the Required Lenders (or Agent on behalf of the
Required Lenders with the written approval of the Required Lenders); provided,
however that:

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

                                       54
<PAGE>
         interest on the Facility A Loans or any Letter of Credit, the Facility
         A Commitment Fees or any other fees or amounts payable for the account
         of all Facility A Lenders hereunder or postpone, delay or extend the
         scheduled date for payment of any such principal, interest, fees or
         amounts with respect to Facility A need not be approved by any Facility
         B Lender but must be in writing and signed or approved in writing by
         all Facility A Lenders;

                  (ii) Any amendment, waiver or consent which would (A) increase
         the Total Facility B Commitment, (B) postpone, delay or extend the
         Facility B Maturity Date, (C) reduce the principal of or interest on
         the Facility B Loans, the Facility B Commitment Fees or any other fees
         or amounts payable for the account of all Facility B Lenders hereunder
         or postpone, delay or extend the scheduled date for payment of any such
         principal, interest, fees or amounts with respect to Facility B need
         not be approved by any Facility A Lender but must be in writing and
         signed or approved in writing by all Facility B Lenders;

                  (iii) Any amendment, waiver or consent which would (A) reduce
         the principal of or interest on the Loans or any fees or other amounts
         payable for the account of all Lenders hereunder or extend the
         scheduled date for payment of any such principal, interest, fees or
         amounts, (B) reduce any fees or other amounts payable for the account
         of all Lenders hereunder or postpone, delay or extend the scheduled
         date for payment of any such fees or amounts, (C) amend this Paragraph
         8.04, (D) amend the definition of Currencies or Required Lenders, or
         (E) 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;

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

                  (v) Any amendment, waiver or consent which affects the rights
         or obligations of the Issuing Bank must be 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 Borrower,
         Lenders, Agent, all future holders of the Notes and their respective
         successors and permitted assigns, except that 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 Borrower 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

                                       55
<PAGE>
         order for such Lender to agree in writing to any amendment, waiver or
         consent of a type specified in Subparagraph 8.04(a), Subparagraph
         8.04(b), Subparagraph 8.04(c) or Subparagraph 8.04(d) 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. Borrower also agrees 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.

                  (c) Assignments. Any Lender may, at any time, sell and assign
         to any other Lender or 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 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 Facility A Lender may make any
                  Assignment of its Facility A Commitment and Facility A Loans
                  to any Assignee Lender if, after giving effect to such
                  Assignment, the Facility A Commitment (or, after the
                  termination of the Facility A Commitments, the Facility A
                  Loans) of such Lender or such Assignee Lender would be less
                  than Two Million Five Hundred Thousand Dollars ($2,500,000),
                  except that a Facility A Lender may make an Assignment which
                  reduces its Facility A Commitment (or, after the termination
                  of the Facility A Commitments, its Facility A Loans) to zero
                  without the written consent of FIL and Agent;

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

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

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

                                       56
<PAGE>
                           (vi) Without the written consent of Agent and, if no
                  Default has occurred and is continuing, FIL, no Lender may
                  make any Assignment of its Facility A Commitment and Facility
                  A 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 "Facility A
                  Commitment" and "Facility A Loans" under the FIL Credit
                  Agreement; and

                           (vii) Without the written consent of Agent and, if no
                  Default has occurred and is continuing, FIL, no Lender may
                  make any Assignment of its Facility B Commitment and Facility
                  B 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 "Facility B
                  Commitment" and "Facility B Loans" under the FIL Credit
                  Agreement.

         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 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, and 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. On or prior to the Assignment Effective Date
         determined pursuant to each Assignment and Assumption, Borrower, at its
         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
         Borrower 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 Borrower, 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 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 Borrower, Agent and
         Issuing Bank) together with payment to Agent by Assignor Lender of a
         registration and processing fee of $3,000, 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 Borrower. Agent may, from time to time at its election,
         prepare and deliver to Lenders and Borrower a revised Schedule I
         reflecting the names, addresses and respective Commitments or Loans of
         all Lenders then parties hereto.

                                       57
<PAGE>
                  (f) Confidentiality. Subject to Paragraph 8.12, Agent and
         Lenders may disclose the Credit Documents and any financial or other
         information relating to Borrower 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
         all or a portion of its rights under this Agreement and the other
         Credit Documents to a Federal Reserve Bank. No such assignment shall
         relieve the assigning Lender from its obligations under this Agreement
         and the other Credit Documents.

         8.06. Setoff; Security Interest.

                  (a) Setoff. 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 Borrower, any such
         notice and consent being expressly waived by Borrower 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 Borrower any amount owing from such Lender to Borrower.
         The aforesaid right of set-off may be exercised by such Lender against
         a or against any trustee in bankruptcy, debtor in possession, assignee
         for the benefit of creditors, receiver or execution, judgment or
         attachment creditor of Borrower or against anyone else claiming through
         or against 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 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.

                  (b) Security Interest. As security for the Obligations,
         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 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 BORROWER, 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. Reserved.

         8.12. Confidentiality. Neither any Lender nor Agent shall disclose to
any Person any information with respect to FIL, Borrower, any Guarantor or any
of FIL's other 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

                                       58
<PAGE>
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 Assignee Lender or
Participant or any prospective Assignee Lender or Participant, provided that
such Assignee Lender or Participant or prospective Assignee Lender or
Participant agrees to be bound by this Paragraph 8.12; or (i) otherwise with the
prior consent of 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 Borrower promptly of such
summons or subpoena if not prohibited by any Requirement of Law and, if
requested by Borrower and not disadvantageous to such Lender or Agent, to
cooperate with Borrower in obtaining a protective order restricting such
disclosure, and (ii) any disclosure made in violation of this Agreement shall
not affect the obligations of FIL, Borrower or any other Guarantor under this
Agreement and the other Credit Documents.

         8.13. Consent to Jurisdiction. Borrower irrevocably submits to the
non-exclusive jurisdiction of the courts of the State of California and the
courts of the United States of America located in the Northern District of
California 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 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 Subparagraph 8.13 shall affect the right
of Agent or any Lender to commence legal proceedings or otherwise sue Borrower
in any other appropriate jurisdiction, or concurrently in more than one
jurisdiction, or to serve process, pleadings and other papers upon Borrower in
any manner authorized by the laws of any such jurisdiction. 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.
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 California 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 Borrower or to post a bond or to take similar action.

         8.14. Usury. In no event shall any provision of this Agreement or any
other Credit Document ever obligate Borrower to pay or allow any Lender to
collect interest on any Loan or any other Obligation of 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 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 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 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
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 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 Borrower, then the
Lenders shall refund to 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, Borrower
shall not be required to pay any unearned interest on any

                                       59
<PAGE>
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.

                      [The first signature page follows.]

                                       60
<PAGE>
         IN WITNESS WHEREOF, Borrower, Agent, Co-Arrangers, Co-Syndication
Agents, Senior Managing Agent, Managing Agents and Lenders have caused this
Agreement to be executed as of the day and year first above written.

BORROWER:                      FLEXTRONICS INTERNATIONAL USA, INC.

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

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

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                                      S-1
<PAGE>
CO-ARRANGERS:                  ABN AMRO BANK N.V.,
                               As a Co-Arranger

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               FLEET NATIONAL BANK,
                               As a Co-Arranger

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                                      S-2
<PAGE>
CO-SYNDICATION AGENTS:         DEUTSCHE BANC ALEX. BROWN INC.,
                               As a Co-Syndication Agent

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               BANK OF AMERICA, N.A.,
                               As a Co-Syndication Agent

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               CITICORP USA, INC.,
                               As a Co-Syndication Agent

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               FLEET NATIONAL BANK,
                               As a Co-Syndication Agent

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                                      S-3
<PAGE>
SENIOR MANAGING AGENT:         THE BANK OF NOVA SCOTIA,
                               As Senior Managing Agent

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

MANAGING AGENTS:               BNP PARIBAS,
                               As a Managing Agent

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               CREDIT SUISSE FIRST BOSTON,
                               As a Managing Agent

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                                      S-4
<PAGE>
ISSUING BANK:                  FLEET NATIONAL BANK,
                               As Issuing Bank

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                                      S-5
<PAGE>
LENDERS:                       ABN AMRO BANK N.V.,
                               As a Lender

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               AIB INTERNATIONAL FINANCE,
                               As a Lender

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               BANKERS TRUST COMPANY,
                               As a Lender

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               BANK OF AMERICA, N.A.,
                               As a Lender

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                                      S-6
<PAGE>
                                      S-7
<PAGE>
                               BEAR STEARNS CORPORATE LENDING INC.,
                               As a Lender

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               BNP PARIBAS,
                               As a Lender

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               CITICORP USA, INC.,
                               As a Lender

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               COMERICA BANK,
                               As a Lender

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                                      S-8
<PAGE>
                                      S-9
<PAGE>
                               CREDIT SUISSE FIRST BOSTON,
                               As a Lender

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               DANSKE BANK A/S,
                               As a Lender

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               FLEET NATIONAL BANK,
                               As a Lender

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               FUJI BANK LIMITED (MIZUHO FINANCIAL GROUP),
                               As a Lender

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                                      S-10
<PAGE>
                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                                      S-11
<PAGE>
                               GOLDMAN SACHS CREDIT PARTNERS L.P.,
                               As a Lender

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               LEHMAN COMMERCIAL PAPER INC.,
                               As a Lender

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               SKANDINAVISKA ENSKILDA BANKEN AB (PUBL),
                               As a Lender

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                                      S-12
<PAGE>
                               THE BANK OF NOVA SCOTIA,
                               As a Lender

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               UNION BANK OF CALIFORNIA, N.A.
                               As a Lender

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                               By:
                                  ----------------------------------------------
                                  Name:
                                       -----------------------------------------
                                  Title:
                                        ----------------------------------------

                                      S-13
<PAGE>
                                   SCHEDULE I

                              LENDER'S COMMITMENTS
<TABLE>
<CAPTION>
LENDER                                   FACILITY A COMMITMENT       FACILITY B COMMITMENT               TOTAL
----------------------------------       ---------------------       ---------------------           --------------
<S>                                      <C>                         <C>                             <C>
ABN AMRO Bank N.V.                           $30,416,666.67              $15,208,333.33              $45,625,000.00

AIB International Finance                     $5,000,000.00               $2,500,000.00              $7,500,000.00

Bankers Trust Company                        $28,000,000.00              $14,000,000.00              $42,000,000.00

Bank of America, N.A.                        $28,000,000.00              $14,000,000.00              $42,000,000.00

Bear Stearns Corporate Lending Inc.           $8,333,333.33               $4,166,666.67              $12,500,000.00

BNP Paribas                                  $13,500,000.00               $6,750,000.00              $20,250,000.00

Citicorp USA, Inc.                           $28,000,000.00              $14,000,000.00              $42,000,000.00

Comerica Bank                                 $3,333,333.33               $1,666,666.67              $5,000,000.00

Credit Suisse First Boston                   $16,666,666.67               $8,333,333.33              $25,000,000.00

Danske Bank A/S                               $8,333,333.33               $4,166,666.67              $12,500,000.00

Fleet National Bank                          $30,416,666.67              $15,208,333.33              $45,625,000.00

Fuji Bank, Limited (Mizuho                    $8,333,333.33               $4,166,666.67              $12,500,000.00
Financial Group)

Goldman Sachs Credit Partners L.P.            $8,333,333.33               $4,166,666.67              $12,500,000.00

Lehman Commercial Paper Inc.                  $8,333,333.33               $4,166,666.67              $12,500,000.00

Skandinaviska Enskilda Banken AB              $8,333,333.33               $4,166,666.67              $12,500,000.00
(publ)
</TABLE>

                                      I-1
<PAGE>
<TABLE>
<S>                                          <C>                         <C>                         <C>
The Bank of Nova Scotia                      $25,000,000.00              $12,500,000.00              $37,500,000.00

Union Bank of California, N.A.                $8,333,333.33               $4,166,666.67              $12,500,000.00
                                             --------------              --------------              --------------
TOTAL                                        $266,666,666.67             $133,333,333.33              $400,000,000
</TABLE>

                                      I-2
<PAGE>
                      PART B - ADDRESSES FOR NOTICES, ETC.

ABN AMRO BANK N.V.
------------------

Domestic Lending Office:

         ABN AMRO Bank N.V.
         208 South LaSalle Street Suite 1500
         Chicago, IL  60604

Eurodollar Lending Office:

         ABN AMRO Bank N.V.
         208 South LaSalle Street Suite 1500
         Chicago, IL  60604

Address for Notices:

         ABN AMRO Bank N.V.
         1 California Street, 2nd Floor
         San Francisco, CA 94111
         Attn: Peter Hsu
         Tel. No: (415) 983-2964
         Fax No: (415) 983-2960

         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

         With a copy of all documentation to:

         ABN AMRO Bank N.V.
         208 South LaSalle Street, Suite 1500
         Chicago, IL  60604-1003
         Attn:  Nick Blea
         Tel. No: (312) 992-5176
         Fax. No: (312) 992-5111

Wiring Instructions:

         ABN AMRO Bank N.V.
         New York, New York
         ABA:  026009580
         F/O ABN AMRO Bank , N.V., Chicago Branch CPU
         Account No.:  650001178941
         Reference:  Agency Services 00433489 Flextronics Intl. USA Inc.

                                      I-3
<PAGE>
AIB INTERNATIONAL FINANCE
-------------------------

Domestic and Eurodollar Lending Office:

         AIB International Finance
         International Corporate Banking
         AIB Bankcentre
         Ballsbridge, Dublin 4

Address for Notices of Borrowing and Notices of Interest Period Selection:

         AIB International Finance
         Business Support, AIB Bankcentre
         Ballsbridge, Dublin 4
         Attn:  Ian Finnegan
         Tel. No.:  (353) 1-6412297
         Fax No.:  (353) 1-6603529

Address for all other notices: (Credit Matters)

         AIB International Finance
         AIB International Centre
         IFSC, Dublin 1
         Attn:  Eimear Creaven/Patrick Lynam
         Tel. No.:  (353) 1-6412279
         Fax No.:  (353) 1-6603529

Wiring Instructions:

         Chase Manhattan Bank, New York
         ABA No.:  021000021
         Swift:  CHASUS33
         Account No.:  001-1-907599
         Account Name:  AIB Dublin
         Reference:  Flextronics International USA, Inc.
         Attn:  Ian Finnegan

                                      I-4
<PAGE>
BANKERS TRUST COMPANY
---------------------

Domestic and Eurodollar Lending Office:

         Bankers Trust Company
         31 W. 52nd Street
         New York, NY  10019

Address for Notices of Borrowing and Notices of Interest Period Selection:

         Bankers Trust Company
         90 Hudson Street, 5th Floor
         Jersey City, NJ  07302
         Attn:  Bilal Aman
         Tel. No.:  (201) 593-2173
         Fax No.:  (201) 593-2310

Address for all other notices: (Credit Matters)

         Bankers Trust Company
         31 W. 52nd Street
         New York, NY  10019
         Attn:  Alex Bici
         Tel. No.:  (646) 324-2199
         Fax No.:  (646) 324-7456

Wiring Instructions:

         Bankers Trust Company
         New York, NY
         RT/ABA No.:  021001033
         For further credit to:  Deutsche Bank, AG New York
         Account No.:  99401268
         Reference:  Flextronics International USA, Inc.
         Attn:  Bilal Aman

                                      I-5
<PAGE>
BANK OF AMERICA, N.A.
---------------------

Domestic and Eurodollar Lending Office:

         Bank of America, N.A.
         1850 Gateway Blvd.
         Concord, CA  94520

Address for Notices of Borrowing, Notices of Interest Period Selection and
Notices of Term Loan Conversion:

         Bank of America, N.A.
         Mail Code CA4-706-05-11
         1850 Gateway Blvd.
         Concord, CA  94520
         Attn:  Michelle L. Widmer
         Tel. No.:  (925) 675-8204
         Fax No.:  (888) 969-9280

Address for all other notices: (Credit Matters)

         Bank of America, N.A.
         Portfolio Management - Technology 3697
         555 California Street, 12th Floor
         Mail Code CA5-705-12-08
         San Francisco, CA  94104
         Attn:  James P. Johnson, Managing Director
         Tel. No.:  (415) 622-6177
         Fax No.:  (415) 622-4057

Wiring Instructions:

         Bank of America, N.A., Dallas Texas
         ABA No.:  111000012
         For further credit to Account No.:  3750836479
         Reference:  Flextronics International USA, Inc.
         Attn:  SBW004 Credit Services - Michelle L. Widmer

                                      I-6
<PAGE>
BEAR STEARNS CORPORATE LENDING INC

Domestic and Eurodollar Lending Office:

         Bear Stearns & Co. Inc.
         245 Park Avenue, 4th Floor
         New York, NY  10167

Address for Notices of Borrowing and Notices of Interest Period Selection:

         Bear Stearns & Co. Inc.
         245 Park Avenue, 4th Floor
         New York, NY  10167
         Attn:  Ms. Gloria Dombrowski
         Tel. No.:  (212) 272-6043
         Fax No.:  (212) 272-4844

Address for all other notices: (Credit Matters)

         Bear Stearns & Co. Inc.
         245 Park Avenue, 4th Floor
         New York, NY  10167
         Attn:  Victor F. Bulzacchelli
         Tel. No.:  (212) 272-3042
         Fax No.:  (212) 272-9184

Copy of documents to:

         Bear Stearns & Co. Inc.
         245 Park Avenue, 4th Floor
         New York, NY  10167
         Attn:  Kevin Cullen
         Tel. No.:  (212) 272-5742
         Fax No.:  (212) 272-9184

Wiring Instructions:

         Citibank, N.A.
         ABA No.:  0210-00089
         Account No.:  0925-3186
         Favor of:  Bear Stearns Securities, Corp.
         Further Credit to Account No.:  096-00220-28
         Reference:  Flextronics International USA, Inc.
         Attn:  Steve Resnick

                                      I-7
<PAGE>
BNP PARIBAS
-----------

Domestic and Eurodollar Lending Office:

         BNP Paribas
         180 Montgomery Street
         San Francisco, CA 94104

Address for Notices of Borrowing, Notices of Interest Period Selection and
Notices of Term Loan Conversion:

         BNP Paribas
         180 Montgomery Street
         San Francisco, CA 94104
         Attn:  Don Hart, Vice President - Treasury
         Tel. No.:  (415) 956-2511
         Fax No.:  (415) 989-9041
         Swift:  BNPAUS6S

Address for all other notices:

         BNP Paribas, Los Angeles Branch
         725 South Figueroa Street, Suite 2090
         Los Angeles, CA 90017
         Attn:  Robert Mimaki, Vice President - Corporate Banking High
                Technology Group
         Tel. No.:  (213) 688-6419
         Fax No.:  (213) 488-9602

With a copy to:

         BNP Paribas
         180 Montgomery Street
         San Francisco, CA 94104
         Attn:  Nancy Mak, Vice President - Loan Operations
         Tel. No.:  (415) 956-0707
         Fax No.:  (415) 956-4230
         Telex:  278900 BNPS UR

Wiring Instructions:

         The Federal Reserve Bank of New York
         ABA No.:  026007689 BNP Paribas
         /BNF/ BNP PARIBAS SAN FRANCISCO
         /ACA/ 14334000176
         For further credit to BNP Paribas Los Angeles
         /RFB/ Principal Payment (or Commitment Fee, Interest Payment, etc.)
         /OBI/ By order: Flextronics International USA. Inc.
         Attn:  Jenny Seow

                                      I-8
<PAGE>
CITICORP USA, INC.
------------------

Domestic and Eurodollar Lending Office:

         Citicorp USA, Inc.
         One Sansome Street, 25th Floor
         San Francisco, CA  94104

Address for Notices of Borrowing, Notices of Interest Period Selection and
Notices of Term Loan Conversion:

         Citicorp USA, Inc.
         2 Penn's Way, Suite 200
         New Castle, Delaware  19720
         Attn:  Karen Riley
         Tel. No.:  (302) 894-6084
         Fax No.:  (302) 894-6120

Address for all other notices (Credit Matters):

         Citicorp USA, Inc.
         One Sansome Street, 25th Floor
         San Francisco, CA  94104
         Attn:  Avram Spiegel
         Tel. No.:  (415) 627-6358
         Fax No.:  (415) 632-0307

Wiring Instructions:

         Citibank N.A.
         New York, New York
         ABA No.:  021-000-089
         For further credit to:  Technology
         Account No.:  40580062
         Reference:  Flextronics International USA, Inc.
         Attn:  Karen Riley

                                      I-9
<PAGE>
COMERICA BANK
-------------

Domestic and Eurodollar Lending Office:

         Comerica Bank
         One Detroit Center
         Detroit, Michigan

Address for Notices of Borrowing, Notices of Interest Period Selection and
Notices of Term Loan Conversion:

         Comerica Bank
         International Finance Department
         333 W. Santa Clara Street
         San Jose, CA  95113
         Attn:  Christina Hwang
         Tel. No.:  (408) 556-5221
         Fax No.:  (408) 556-5232

Address for all other notices:

         Comerica Bank
         International Finance Department
         333 W. Santa Clara Street
         San Jose, CA  95113
         Attn:  Devin Scattini
         Tel. No.:  (408) 556-5120
         Fax No.:  (408) 556-5232

Wiring Instructions:

         Comerica Bank
         One Detroit Center
         500 Woodward Avenue
         Detroit, Michigan
         RT/ABA No.:  072000096
         Account number: 02-21585-90010
         Reference:  Flextronics International USA, Inc.
         Attn:  Ms. Nicole Maguire

                                      I-10
<PAGE>
CREDIT SUISSE FIRST BOSTON
--------------------------

Domestic and Eurodollar Lending Office:

         Credit Suisse First Boston, Cayman Islands Branch
         Eleven Madison Avenue
         New York, NY  10010

Address for Notices of Borrowing and Notices of Interest Period Selection:

         Credit Suisse First Boston
         Eleven Madison Avenue
         New York, NY  10010
         Attn:  Ed Markowski / Nirmala Durgana
         Tel. No.:  (212) 538-3380 / 3525
         Fax No.:  (212) 538-3477 / 561-8926

Address for all other notices: (Credit Matters)

         Credit Suisse First Boston
         Eleven Madison Avenue
         New York, NY  10010
         Attn:  Robert Hetu / Mark Heron
         Tel. No.:  (212) 325-4542 / 9933
         Fax No.:  (212) 325-8309 / 8319

Wiring Instructions:

         The Bank of New York, New York, NY
         ABA No.:  021000018
         Account No.:  890-0329-262
         Account Name:  CSFB NY Loan Clearing
         Reference:  Flextronics International USA, Inc.

                                      I-11
<PAGE>
DANSKE BANK A/S

Domestic and Eurodollar Lending Office:

         Danske Bank A/S, Cayman Islands Branch
         299 Park Avenue, 14th Floor
         New York, NY  10171-1499

Address for Notices of Borrowing, Notices of Interest Period Selection and
Notices of Term Loan Conversion:

         Danske Bank A/S
         299 Park Avenue, 14th Floor
         New York, NY  10171-1499
         Attn:  Loan Administration
         Tel. No.:  (212) 984-8462
         Fax No.:  (212) 984-9570

Address for all business/credit matters:

         Danske Bank A/S
         299 Park Avenue, 14th Floor
         New York, NY  10171-1499
         Attn: Michael K. Crawford - Vice President
         Tel. No.:  (212) 984-8455
         Fax No.:  (212) 984-9567

Address for documentation matters:

         Danske Bank A/S
         299 Park Avenue, 14th Floor
         New York, NY  10171-1499
         Attn: George B. Wendell - Vice President
         Tel. No.:  (212) 984-8431
         Fax No.:  (212) 984-9566

Wiring Instructions:

         Danske Bank A/S
         New York, NY  10171
         ABA No.:  026003719 (Danske Bank, New York Branch)
         For:  Loan Administration
         Reference:  Flextronics International USA, Inc.

                                      I-12
<PAGE>
FLEET NATIONAL BANK
-------------------

Domestic and Eurodollar Lending Office:

         Fleet National Bank
         100 Federal Street
         Boston, MA  02110

Address for Notices of Borrowing, Notices of Interest Period Selection and
Notices of Term Loan Conversion:

         Fleet National Bank
         100 Federal Street, 9th Floor
         Boston, MA  02110
         Attn:  Angela Moore, Loan Administrator
         Tel. No.:  (617) 434-5059
         Fax No.:  (617) 434-1709

Address for all other notices:

         Fleet National Bank
         435 Tasso Street, Suite 250
         Palo Alto, CA  94301
         Attn:  Lee A. Merkle-Raymond or Gregory Roux
         Tel. No.:  (650) 470-4130/4180
         Fax No.:  (650) 853-1425

Wiring Instructions:

         Fleet National Bank
         Boston, MA
         ABA No.:  011-000-138
         For further credit to:  Credit Services
         Account No.:  1510351-66156
         Reference:  Flextronics International USA, Inc.

                                      I-13
<PAGE>
FUJI BANK, LIMITED (MIZUHO FINANCIAL GROUP)
-------------------------------------------

Domestic and Eurodollar Lending Office:

         The Fuji Bank, Limited
         350 South Grand Avenue, Suite 1500
         Los Angeles, CA  90071

Address for Notices of Borrowing and Notices of Interest Period Selection:

         The Fuji Bank, Limited
         95 Christopher Columbus Drive, 16th Floor
         Jersey City, NJ  07302
         Attn:  Teri Smith
         Tel. No.:  (201) 432-1980
         Fax No.:  (201) 432-6805

Address for all other notices: (Credit Matters)

         The Fuji Bank, Limited
         350 South Grand Avenue, Suite 1500
         Los Angeles, CA  90071
         Attn:  Mano Mylvaganam, Vice President
         Tel. No.:  (213) 253-4130
         Fax No.:  (213) 253-4175

Wiring Instructions:

         The Fuji Bank, Limited, New York, NY
         ABA No.:  026009700
         For further credit to:  Loan Admin Dept - LA
         Account No.:  5204-001-515066
         Reference:  Flextronics International USA, Inc.
         Attn:  Teri Smith

                                      I-14
<PAGE>
GOLDMAN SACHS CREDIT PARTNERS, L.P.

Domestic and Eurodollar Lending Office:

         Goldman Sachs Credit Partners L.P.
         8 Broad Street - 6th Floor
         New York, NY  10004

Address for Notices of Borrowing and Notices of Interest Period Selection:

         Goldman Sachs Credit Partners L.P.
         8 Broad Street - 6th Floor
         New York, NY  10004
         Attn:  Sandra Stulberger / Erin Smith or Asa Klasson
         Tel. No.:  (212) 902-5977 / 357-9345 or 902-4694
         Fax No.:  (212) 357-4597 / 357-4597

Address for all other notices: (Credit Matters)

         c/o Goldman Sachs & Co.
         8 Broad Street - 6th Floor
         New York, NY  10004
         Attn:  Barbara Aaron / Sally Wenden
         Tel. No.:  (212) 357-3111 / 9735
         Fax No.:  (212) 428-1243

Wiring Instructions:

         Citibank, N.A.
         ABA No.:  021000089
         Account No.:  40717188
         Account Name:  Goldman Sachs Credit Partners
         Reference:  Flextronics International USA, Inc.
         Attn:  Bank Loan Operations - Sandra Stulberger

                                      I-15
<PAGE>
LEHMAN COMMERCIAL PAPER INC.

Domestic and Eurodollar Lending Office:

         (Through March 25, 2002)
         Lehman Commercial Paper Inc.
         101 Hudson Street
         Jersey City, NJ  07302

         (Thereafter)
         Lehman Commercial Paper Inc.
         745 7th Street, 16th Floor
         New York, NY  10019

Address for Notices of Borrowing and Notices of Interest Period Selection:

         (Through March 25, 2002)
         ------------------------
         Lehman Commercial Paper Inc.
         101 Hudson Street
         Jersey City, NJ  07302
         Attn:  Nancy Wong
         Tel. No.:  (201) 524-2248
         Fax No.:  (201) 524-4298

         (Thereafter)
         Lehman Commercial Paper Inc.
         745 7th Street, 16th Floor
         New York, NY  10019
         Attn:  TBA
         Tel. No.:  TBA
         Fax No.:  TBA

Address for all other notices: (Credit Matters)

         (Through March, 2002)
         c/o Simpson Thacher & Bartlett
         425 Lexington Avenue
         New York, NY  10017
         Attn:  Andrew Keith, Lehman Loan Portfolio Group Room #2533
         Tel. No.:  (212) 455-7569
         Fax No.:  (646) 758-4656

         (Thereafter)
         Lehman Commercial Paper Inc.
         745 7th Street, 23rd Floor
         New York, NY  10019

         Attn:  TBA
         Tel. No.:  TBA
         Fax No.:  TBA

                                      I-16
<PAGE>
Wiring Instructions:

         Citibank, N.A., New York, NY
         ABA No.:  021000089
         Account No.:  30434133
         Account Name:  LCPI Bank Loans
         Reference:  Flextronics International USA, Inc.

                                      I-17
<PAGE>
SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
---------------------------------------

Domestic and Eurodollar Lending Office:

         Skandinaviska Enskilda Banken AB (publ)
         Kungstradgardsgatan 8
         106 40 Stockholm, Sweden

Address for Notices of Borrowing and Notices of Interest Period Selection:

         Skandinaviska Enskilda Banken AB (publ)
         Karlavagen 108
         106 40 Stockholm, Sweden
         Attn:  Christine Pearson / Peter Bergengren
         Tel. No.:  46 8 7638642 / 46 8 7638586
         Fax No.:  46 8 6110384

Address for all other notices: (Credit Matters)

         Skandinaviska Enskilda Banken AB (publ)
         2 Cannon Street
         London EC4M 6XX, United Kingdom
         Attn:  Johan Sonander, Debt Capital Markets
         Tel. No.:  44 20 7246 4177
         Fax No.:  44 20 7236 4178

         With a copy to:

         Skandinaviska Enskilda Banken AB (publ)
         Ostergatan 39
         205 20 Malmo, Sweden
         Attn:  Max Lundberg, SEB Client Relationship Management
         Tel. No.:  (46) 40-6676088
         Fax No.:  (46) 40-305-480

Wiring Instructions:

         Bank of New York, New York, NY
         ABA No.:  021000018
         Account No.:  890 0443871
         Swift Code:  IRVTUS3N
         Reference:  Flextronics International Ltd.

                                      I-18
<PAGE>
THE BANK OF NOVA SCOTIA
-----------------------

Domestic and Eurodollar Lending Office:

         The Bank of Nova Scotia
         Atlanta Agency
         600 Peachtree Street, N.E., Suite 2700
         Atlanta, GA  30308

Address for Notices of Borrowing, Notices of Interest Period Selection and
Notices of Term Loan Conversion:

         The Bank of Nova Scotia
         Atlanta Agency
         600 Peachtree Street, N.E., Suite 2700
         Atlanta, GA  30308
         Attn:  Lily Hsie
         Tel. No.:  (404) 877-1523
         Fax No.:  (404) 888-8998

Address for all other notices:

         The Bank of Nova Scotia
         San Francisco Agency
         580 California Street, Suite 2100
         San Francisco, CA  94104
         Attn:  Christopher Osborn
         Tel. No.:  (415) 986-1100
         Fax No.:  (415) 397-0791

Wiring Instructions:

         The Federal Reserve Bank of New York
         New York, New York
         ABA No.:  026-002-532

         Account Name:  The Bank of Nova Scotia, 1 Liberty Plaza, New York,
                        New York  10006
         For further account of:  BNS San Francisco Agency Loan Servicing
                                  Account
         Account No.:  0610135
         Reference:  Flextronics International USA, Inc.

                                      I-19
<PAGE>
UNION BANK OF CALIFORNIA, N.A.
------------------------------

Domestic and Eurodollar Lending Office:

         Union Bank of California, N.A.
         99 Almaden Boulevard, Suite 200
         San Jose, CA  95113

Address for Notices of Borrowing and Notices of Interest Period Selection:

         Union Bank of California, N.A.
         601 Potrero Grande Drive
         Monterey Park, CA  91754
         Attn:  Shirley Davis, Commercial Loan Service Officer
         Tel. No.:  (323) 7202870
         Fax No.:  (323) 724-6198

Address for all other notices: (Credit Matters)

         Union Bank of California, N.A.
         99 Almaden Boulevard, Suite 200
         San Jose, CA  95113
         Attn:  Sarabelle Hitchner, Vice President
         Tel. No.:  (408) 279-7208
         Fax No.:  (408) 280-7163

Wiring Instructions:

         Union Bank of California, N.A.
         ABA No.:  122000496
         Account No.:  Wire Clearing Account 77070196431
         Reference:  Flextronics International USA, Inc.
         Attn:  Commercial Loan Operations

                                      I-20
<PAGE>
                                   SCHEDULE II

                                  PRICING GRID

                                   FACILITY A

<TABLE>
<CAPTION>
                                                     APPLICABLE         APPLICABLE
                                                       MARGIN              MARGIN
                                                        FOR                 FOR
                                                     LIBOR RATE          LIBOR RATE
                                                 BORROWINGS AND LC    BORROWINGS AND LC
                                    APPLICABLE     USAGE FEE WHEN      USAGE FEE WHEN
      FIL'S                           MARGIN       COMBINED TOTAL      COMBINED TOTAL
   SENIOR DEBT                          FOR        TOTAL COMMITMENT   TOTAL COMMITMENT     COMMITMENT FEE
     RATING          PRICING         BASE RATE         USAGE                USAGE              PERCENTAGE
                      LEVEL         BORROWINGS         IS < 33%               IS > 33%
                                                          -
<S>                  <C>            <C>          <C>                  <C>                  <C>
  > BBB / Baa2          1               0%              0.875%             1.000%             0.175%
  -

   BBB- / Baa3          2               0%              1.125%             1.250%             0.225%

    BB+ / Ba1           3               0%              1.250%             1.500%             0.250%

    BB / Ba2            4               0%              1.500%             1.750%             0.400%

   < BB- / Ba3          5               0%              1.750%             2.250%             0.500%
   -
</TABLE>

                                   FACILITY B

<TABLE>
<CAPTION>
                                                    APPLICABLE             APPLICABLE
                                                       MARGIN                MARGIN
                                                        FOR                   FOR
                                    APPLICABLE       LIBOR RATE            LIBOR RATE
       FIL'S                           MARGIN     BORROWINGS WHEN       BORROWINGS WHEN
      SENIOR                           FOR         COMBINED TOTAL       COMBINED TOTAL      COMMITMENT FEE
       DEBT          PRICING         BASE RATE    COMMITMENT USAGE     COMMITMENT USAGE       PERCENTAGE
      RATING          LEVEL         BORROWINGS          IS < 33%           IS > 33%
                                                           -
<S>                  <C>            <C>           <C>                  <C>                  <C>
  > BBB / Baa2          1               0%              0.875%             1.000%             0.125%
  -

   BBB- / Baa3          2               0%              1.125%             1.250%             0.175%

    BB+ / Ba1           3               0%              1.250%             1.500%             0.200%

    BB / Ba2            4               0%              1.500%             1.750%             0.250%

   < BB- / Ba3          5               0%              1.750%             2.250%             0.375%
   -
</TABLE>
<PAGE>
                                   EXPLANATION

The Applicable Margin with respect to the LIBOR Rate Loans, the LC Usage Fee (as
applicable) and the Commitment Fee Percentage will be determined based on FIL's
Senior Debt Rating assigned by S&P and Moody's as follows:

1.       In the event FIL does not have a Senior Debt Rating from either S&P or
         Moody's, then such rating agency will be deemed for purposes hereof to
         have established a Senior Debt Rating for FIL below BB- and Ba3,
         respectively.

2.       If the Senior Debt Rating established or deemed to have been
         established by S&P and Moody's are split within different categories
         above, then the lower rating shall apply (with Pricing Level 3 being
         lower than Pricing Level 2).

3.       Any change in FIL's Senior Debt Rating shall be effective on the date
         such change is first announced by the rating agency making such change.

In addition, the Applicable Margin with respect to LIBOR Rate Loans and the LC
Usage Fee (as applicable) will change based upon the Total Combined Commitment
usage. For example, if the Unused Total Combined Commitment is $450,000,000
(meaning that the Total Combined Commitment usage is $300,000,000 or 40%), the
two columns above applicable only when Total Combined Commitment usage is
greater than 33% shall apply.

                                      II-2
<PAGE>
                                  SCHEDULE 3.01

                          INITIAL CONDITIONS PRECEDENT

A.       PRINCIPAL CREDIT DOCUMENTS.

                  (1) The Credit Agreement, duly executed by Borrower, each
         Lender, Agent, each Co-Arranger, each Co-Syndication Agent, the Senior
         Managing Agent and each Managing Agent;

                  (2) Such Notes as Lenders shall request, each duly executed by
         Borrower; and

                  (3) The Guaranty, duly executed by each of the following
         Subsidiaries: (a) Flextronics International USA, Inc., (b) Flextronics
         International Latin America (L), Ltd., (c) Multilayer Technology, Inc.,
         (d) Flextronics USA, Inc., (e) Flextronics Enclosures, Inc., (f)
         Flextronics Manufacturing Mexico, SA de CV, (g) Flextronics
         Distribution, Inc., (h) Flextronics International Singapore Pte Ltd.,
         (i) Flextronics International Marketing (L) Ltd., (j) Flextronics
         Holding USA, Inc., (k) Flextronics Holdings UK Limited and (l)
         Flextronics Technology (Shah Alam) Sdn Bdh, each with such changes
         thereto as may be appropriate based on the law of the applicable
         jurisdictions.

B.       BORROWER AND MATERIAL SUBSIDIARY CORPORATE DOCUMENTS.

                  (1) The Certificate of Incorporation (or comparable
         certificate) of FIL, Borrower, each Eligible Material Subsidiary and
         any Subsidiary of FIL executing the Guaranty, certified as of a recent
         date prior to the Closing Date by the Secretary of State (or comparable
         public official) of its jurisdiction of incorporation (or, if any such
         Subsidiary is organized under the laws of any jurisdiction outside the
         United States, such other evidence as Agent may request to establish
         that such Person is duly organized and existing under the laws of such
         jurisdiction), together with an English translation thereof (if
         appropriate);

                  (2) To the extent such jurisdiction has the legal concept of a
         corporation being in good standing and a Governmental Authority in such
         jurisdiction issues any evidence of such good standing, a Certificate
         of Good Standing (or comparable certificate) for FIL, Borrower, each
         Eligible Material Subsidiary and any Subsidiary of FIL executing the
         Guaranty, certified as of a recent date prior to the Closing Date by
         the Secretary of State (or comparable public official) of its
         jurisdiction of incorporation (or, if any such Person is organized
         under the laws of any jurisdiction outside the United States, such
         other evidence as Agent may request to establish that such Person is
         duly qualified to do business and in good standing under the laws of
         such jurisdiction), together with an English translation thereof (if
         appropriate);

                  (3) A certificate of the Secretary or an Assistant Secretary
         (or comparable officer) of FIL, Borrower, each Eligible Material
         Subsidiary and any Subsidiary of FIL executing the Guaranty, dated the
         Closing Date, certifying (a) that attached thereto is a true and
         correct copy of the Bylaws of such Subsidiary as in effect on the
         Closing Date (or, if any such Subsidiary is organized under the laws of
         any jurisdiction outside the United States, any comparable document
         provided for in the respective corporate laws of that jurisdiction);
         (b) that attached thereto are true and correct copies of resolutions
         duly adopted by the Board of Directors of such Subsidiary (or other
         comparable enabling action) and continuing in effect, which (i)
         authorize the execution, delivery and performance by such Person of the
         Credit Documents to be executed by such Person and the consummation of
         the transactions contemplated thereby and (ii) designate the officers,
         directors and attorneys authorized so to execute, deliver and perform
         on behalf of such Person; and (c) that there are no proceedings for the
         dissolution or liquidation of such Person, together with a certified
         English translation thereof (if appropriate); and

                  (4) A certificate of the Secretary or an Assistant Secretary
         (or comparable officer) of FIL, Borrower, each Eligible Material
         Subsidiary and any Subsidiary of FIL executing the Guaranty, dated the
         Closing Date, certifying the incumbency, signatures and authority of
         the officers, directors and attorneys of

                                     3.01-1
<PAGE>
         such Person authorized to execute, deliver and perform the Credit
         Documents to be executed by such Person, together with a certified
         English translation thereof (if appropriate).

C.       FINANCIAL STATEMENTS, FINANCIAL CONDITION, ETC.

                  (1) A copy of the audited consolidated and consolidating
         Financial Statements of FIL and its Subsidiaries for the fiscal year
         ended March 31, 2001, audited by Arthur Andersen LLP, together with a
         copy of the unqualified opinion delivered by such accountants in
         connection with such Financial Statements;

                  (2) A copy of the unaudited Financial Statements of FIL and
         its Subsidiaries for the fiscal quarter ended December 31, 2001 and for
         the fiscal year to such date (prepared on a consolidated and
         consolidating basis), certified by the chief financial officer,
         treasurer, controller or principal accounting officer of FIL to present
         fairly 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);

                  (3) A copy of the 10-K report filed by FIL with the Securities
         and Exchange Commission for the fiscal year ended March 31, 2001;

                  (4) A copy of the 10-Q report filed by FIL with the Securities
         and Exchange Commission for the quarter ended December 31, 2001;

                  (5) The consolidated plan and forecast of FIL and its
         Subsidiaries for the fiscal year to end March 31, 2003 (reflecting
         among other events the anticipated Borrowings under this Agreement),
         including quarterly cash flow projections and quarterly projections of
         FIL's compliance with each of the covenants set forth in Paragraph 5.03
         of this Agreement; and

                  (6) Such other financial, business and other information
         regarding FIL, Borrower or any of FIL's other Subsidiaries as Agent or
         any Lender may reasonably request, including information as to possible
         contingent liabilities, tax matters, environmental matters and
         obligations for employee benefits and compensation.

D. OPINIONS. Favorable written opinions from each of the following counsel for
FIL, Borrower, Guarantors and FIL's other Subsidiaries, each dated the Closing
Date, addressed to Agent for the benefit of Agent and Lenders, covering such
legal matters as Agent may reasonably request and otherwise in form and
substance satisfactory to Agent:

                  (1) Fenwick & West, counsel for FIL and its Subsidiaries;

                  (2) Paul, Chong & Nathan, Malaysian counsel for FIL and
         Flextronics Technology (Shah Alam) Sdn Bdh;

                  (3) Mayer, Brown, Rowe & Maw, English counsel for FIL and its
         Subsidiaries;

                  (4) Foo, Teo & Associates, Labuan counsel for FIL and its
         Subsidiaries;

                  (5) Cuesta Campos Y Asociados, S.C., Mexican counsel for FIL
         and its Subsidiaries; and

                  (6) Allen & Gledhill, Singapore counsel for FIL and its
         Subsidiaries.

E.       OTHER ITEMS.

                                     3.01-2
<PAGE>
                  (1) A duly completed and timely delivered Notice of Borrowing
         for the applicable Borrowing;

                  (2) An organization chart for FIL and its Subsidiaries,
         setting forth the relationship among such Persons;

                  (3) Copy of Subordinated Indenture, certified to be true and
         complete by the Treasurer of FIL;

                  (4) Evidence that the Obligations of Borrower under this
         Agreement and the other Credit Documents constitute "Designated Senior
         Debt" under the Subordinated Indenture;

                  (5) Evidence that (a) the amounts owing to the lenders and
         agent under the Existing FIUI Credit Agreement on the Closing Date have
         been repaid in full and/or converted into Loans under this Agreement
         and (b) the commitments of the lenders and agent under the Existing
         FIUI Credit Agreement are terminated and of no further force and
         effect;

                  (6) A certificate of the Chief Financial Officer of FIL on
         behalf of Borrower, addressed to Agent and dated the Closing Date,
         certifying that:

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

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

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

                  (8) All fees and expenses of Agent's counsels through the
         Closing Date; and

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

                                     3.01-3
<PAGE>
                                SCHEDULE 4.01(o)

                                  SUBSIDIARIES

                          [TO BE PROVIDED BY BORROWER]

                                   4.01(o)-1
<PAGE>
                                SCHEDULE 5.02(a)
                          EXISTING SECURED INDEBTEDNESS

                          [TO BE PROVIDED BY BORROWER]

                                   5.02(a)-1
<PAGE>
                                SCHEDULE 5.02(e)

                              EXISTING INVESTMENTS

                          [TO BE PROVIDED BY BORROWER]

                                   5.02(e)-1
<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 8, 2002 (the "Credit Agreement"), among Flextronics International USA,
Inc. ("Borrower"), , the financial institutions listed in Schedule I to the
Credit Agreement (the "Lenders") and ABN AMRO Bank N.V., as agent for the
Lenders (in such capacity, "Agent"). 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, Borrower hereby
irrevocably requests a Borrowing to be made upon the following terms:

                  (a) The requested Borrowing is to be under Facility [__];

                  (b) The principal amount of such Borrowing is to be
         __________;

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

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

                  (e) The date of such Borrowing is to be __________, ____.

         3. 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 FIL, Borrower and
         FIL's other 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.

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

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

                                     FLEXTRONICS INTERNATIONAL USA, INC.

                                     By:
                                        ----------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                             -----------------------------------

                                      A-1
<PAGE>
                                      A-2
<PAGE>
                                    EXHIBIT B

                                  FORM OF NOTE

______________, ________                                       February __, 2002

         FOR VALUE RECEIVED, the undersigned ("Borrower"), hereby promises to
pay to the order of ____________________, a ____________________ ("Lender"), the
aggregate outstanding principal balance of all Loans made by Lender to Borrower
pursuant to the Credit Agreement referred to below (as amended from time to
time, the "Credit Agreement"), on or before the Facility [A][B] Maturity Date
specified in the Credit Agreement; and to pay interest on said sum, or such
lesser amount, at the rates and on the dates provided in the Credit Agreement.

         Borrower shall make all payments hereunder, for the account of Lender's
Applicable Lending Offices, to Agent as indicated in the Credit Agreement, in
the lawful currencies 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 the date and amount of each Loan, the Facility pursuant to which
made, and the date and amount of each payment or prepayment of principal made by
Borrower and agrees that all such notations shall constitute prima facie
evidence of the matters noted; provided, however, that the failure of Lender to
make any such notation shall not affect Borrower's obligations hereunder.

         This note is one of the Notes referred to in the Credit Agreement,
dated as of March 8, 2002, among Borrower, Lender and the other lenders from
time to time parties thereto (collectively, the "Lenders") and ABN AMRO, as
agent for the Lenders. 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. Terms used herein have the meanings assigned to
those terms in the Credit Agreement, unless otherwise defined herein.

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

                                      B-1
<PAGE>
         Borrower shall pay all reasonable fees and expenses, including
reasonable attorneys' fees, incurred by Lender in 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 California.

                                       [-------------]

                                        By:
                                           -----------------------------------
                                           Name:
                                                -------------------------------
                                           Title:
                                                 ------------------------------

                                      B-2
<PAGE>
<TABLE>
<CAPTION>
                         LOANS AND PAYMENTS OF PRINCIPAL
                                  Loans                                               Payments
               --------------------------------------------       -------------------------------------------------
                                                                                      Amount of
                                Amount of                                             Principal Paid
  Date         Currency            Loan           Facility           Currency           or Prepaid         Facility
<S>            <C>              <C>               <C>                <C>              <C>                  <C>
</TABLE>

                                      B-3
<PAGE>
                                    EXHIBIT C

                                FORM OF GUARANTY

         THIS GUARANTY, dated as of March 8, 2002, 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 8, 2002 (as amended
from time to time, the "Credit Agreement"), among Flextronics International USA,
Inc. ("Borrower"), Lenders and Agent, Lenders have agreed to extend certain
credit facilities to Borrower upon the terms and subject to the conditions set
forth therein. Each Guarantor is a Subsidiary of FIL and expects to derive
substantial direct and indirect benefit from the transactions contemplated by
the Credit Agreement.

         B. Lenders' obligations to extend the credit facilities to Borrower
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 (2) Subsidiary Joinders, duly executed by each future Eligible
Material Subsidiary.

                                    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 net amount of all payments made by
         such Guarantor under this Guaranty (including, without limitation,
         under Paragraph 5 hereof) at or prior to such time.

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

                  "Borrower" 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 Borrower or its
         property seeking the dissolution, liquidation, reorganization,
         rearrangement or other relief of 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 Borrower or any substantial part of its property or any general
         assignment by Borrower

                                      C-1
<PAGE>
         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 Borrower in such Debtor
         Relief Proceeding.

                  "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.

                  "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.

                  "FMM Process Agent" shall have the meaning given to that term
         in Subparagraph 6(l)(iii) hereof.

                  "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 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, absolute or contingent, due or
         to become due, now existing or hereafter arising pursuant to the terms
         of the Credit Documents, including all interest, fees, charges,
         expenses, attorneys' fees and accountants' fees chargeable to Borrower
         or payable by 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.

                                      C-2
<PAGE>
                  "Mexican Guarantor" shall mean Flextronics Manufacturing Mex,
         S.A. de C.V. and its successors or assigns.

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

                  "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 and promises to pay and perform as and when due, whether at
         stated maturity, upon acceleration or otherwise, any and all of the
         Guaranteed Obligations. If any Debtor Relief Proceeding relating to
         Borrower is commenced, each Guarantor further unconditionally
         guarantees and promises to pay and perform, upon the demand of Agent,
         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 all obligations of Lenders to extend credit to Borrower
         have terminated and all of the Guaranteed Obligations have been fully
         paid. If any payment on any Guaranteed Obligation is set aside, avoided
         or 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 Borrower, any other Guarantor or any other guarantor of the
         Guaranteed Obligations or whether 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 3 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>
3.       AUTHORIZATIONS, WAIVERS, ETC.

         (a) Authorizations. Each Guarantor authorizes Agent and Lenders, in
their discretion, without notice to such Guarantor, irrespective of any change
in the financial condition of 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 they may have
         against Borrower, such Guarantor, any other Guarantor, any other
         guarantor of the Guaranteed Obligations or any security, including,
         without limitation, 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 or guarantors 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 Borrower, any other Guarantor or any other guarantor of the
         Guaranteed Obligations, (B) proceed against or exhaust any security
         received from Borrower, such Guarantor, any other Guarantor or any
         other guarantor of the Guaranteed Obligations or otherwise marshal the
         assets of 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
         Borrower of the proceeds of any borrowing;

                  (iii) Any defense resulting from the absence, impairment or
         loss of any right of reimbursement, subrogation, contribution or other
         right or remedy of Guarantor against 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;

                  (iv) Any setoff or counterclaim of Borrower or any defense
         which results from any disability or other defense of Borrower or the
         cessation or stay of enforcement from any cause whatsoever of the
         liability of Borrower (including, without limitation, the lack of
         validity or enforceability of any of the Credit Documents);

                  (v) 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;

                                      C-4
<PAGE>
                  (vi) Until all obligations of Agent or any Lender to extend
         credit to Borrower have terminated and all of the Guaranteed
         Obligations have been fully paid, 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 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;

                  (vii) 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 incurring of new or
         additional Guaranteed Obligations and notices of any public or private
         foreclosure sale;

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

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

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

                  (xi) Until all obligations of Agent or any Lender to extend
         credit to Borrower have terminated and all of the Guaranteed
         Obligations have been fully paid, any right to revoke this Guaranty;

                  (xii) 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;

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

                  (xiv) 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.

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

                  (c) The Mexican Guarantor hereby expressly agrees that any
         rights or privileges that it might have under the laws of Mexico shall
         not be applicable to this Guaranty, including, but not limited to, any
         benefit of "orden," "excusion," "division," "quita," "novacion,"
         "prorroga," "espera" or "modificacion," provided in Articles 2813,
         2814, 2816, 2817, 2818, 2820, 2821, 2822, 2823, 2827, 2836, 2840, 2842,
         2844, 2845, 2846, 2847, 2848, and 2849 of the Civil Code of the Federal
         District of Mexico and the corresponding articles of the Civil Codes in
         all States of the United Mexican States ("Mexico"),

                                      C-5
<PAGE>
         which are not reproduced herein by express declaration that the
         contents of such articles are known to the Mexican Guarantor.

                  (d) Financial Condition of Borrower, Etc. Each Guarantor is
         fully aware of the financial condition and affairs of Borrower. Each
         Guarantor has executed this Guaranty without reliance upon any
         representation, warranty, statement or information concerning 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 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 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 Borrower (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 Borrower), each Guarantor may receive
         regularly scheduled payments from 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 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 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 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 Borrower), Agent is
         authorized and empowered (but without any obligation to so do), in its
         discretion, (i) in the name of each Guarantor, to collect and enforce,
         and to submit claims in respect of, Subordinated Obligations and to
         apply any amounts received thereon to the Guaranteed Obligations
         (including any and all 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")

                                      C-6
<PAGE>
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 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, if to
         Agent, at its facsimile number or address set forth below, or, 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 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 (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,
         first class postage prepaid and addressed through the United States
         Postal Service, upon receipt; (iii) when delivered by hand, upon
         delivery; and (iv) when faxed, upon confirmation of receipt.

                  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) 409-7390
                                    Fax. No: (212) 409-7497

                                    With copies to:
                                    ABN AMRO Bank N.V.
                                    101 California Street, Suite 4550
                                    San Francisco, CA  94111-5812
                                    U.S.A.
                                    Attn:  Mathew Harvey
                                    Tel No: (415) 984-3733
                                    Fax No: (415) 362-3524

         (b) Payments.

                  (i) Each Guarantor shall make all payments of the Guaranteed
         Obligations to Agent, or its order, 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 11:00
         a.m.(local time of the office of Agent at which such payment is to be
         made) 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 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 which would otherwise be payable in another currency
         in the lawful currency of the United States, such Guarantor shall pay
         to Agent the Dollar Equivalent of such amount.

                                      C-7
<PAGE>
                  (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 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 the Base Rate plus two percent (2.00%), such
         rate to change from time to time as the Base 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 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, without limitation, 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
Guarantor, any other Guarantor, Borrower, or any of their 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. 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
hereunder shall operate as a waiver thereof or of any other right nor shall any
single or partial exercise of any such right preclude any other further exercise
thereof or of any other right.

         (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 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.

                                      C-8
<PAGE>
Each Guarantor waives any right to require Agent or any Lender to proceed
against any Person or to pursue any remedy in Agent's or such Lender's power.

         (g) Setoff; Security Interest.

                  (i) 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 any Guarantor, any such
         notice and consent being expressly waived by each Guarantor 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 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 it 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.

                                      C-9
<PAGE>
         (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, any set of which signed by all the Guarantors shall be
deemed to constitute a complete, executed original for all purposes.

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

                  (i) This Guaranty shall be governed by and construed in
         accordance with the laws of the State of California, except for the
         purposes of any suit or legal action brought in Mexico in which case it
         shall be governed by the laws of Mexico.

                  (ii) Each Guarantor irrevocably submits to the non-exclusive
         jurisdiction of the courts of the State of California and the courts of
         the United States of America located in the Northern District of
         California and, in respect of the Mexican Guarantor, the Mexican
         Guarantor and the Agent, on behalf of Lenders, also irrevocably submit
         to the jurisdictions of the courts of the Federal District of Mexico,
         Mexico, and 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(l) 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. Subject to and except as
         otherwise provided in paragraph (iii) below in respect of the Mexican
         Guarantor, each Guarantor agrees that process served either personally
         or by registered mail shall, to the extent permitted by law,
         constitutes 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 California, CT Corporation, with offices on the date hereof at 818
         West Seventh Street, Los Angeles, California 90017, to receive for it
         and on its behalf, service of process in the State of California with
         respect thereto, provided each Guarantor may appoint any other person,
         reasonably acceptable to Agent, with offices in the State of California
         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 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 California 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 any Guarantor or to post a bond or to take similar action.

                  (iii) The Mexican Guarantor hereby irrevocably appoints CT
         Corporation, Los Angeles Agency, (the "FMM Process Agent"), with an
         office on the date hereof in 818 West Seventh Street, Los Angeles,
         California 90017, in the case of any action, suit or proceeding arising
         out of or relating to this Guaranty or any of the other Credit
         Documents brought in the courts of or

                                      C-10
<PAGE>
         in the State of California, as its agent to receive for it and on its
         behalf service of process in the State of California with respect
         thereto. Such service may be made by mailing or delivering a copy of
         such process to the Mexican Guarantor in care of the FMM Process Agent
         at the FMM Process Agent's above address, and the Guarantor hereby
         irrevocably authorizes and directs the FMM Process Agent to accept such
         service on its behalf; provided, that for any notice or service of
         process to be effective under Mexican law, such notice or service of
         process shall be deemed to have been given or made when delivered
         either (i) personally, return receipt requested, (ii) by courier
         delivery or certified mail, return receipt requested, or (iii) by
         facsimile followed by personal or courier delivery, return receipt
         requested. The Mexican Guarantor agrees that a final judgment in any
         such proceeding shall be conclusive and may be enforced in other
         jurisdictions by suit on the judgment or in any other manner provided
         by law. For purposes of perfecting the appointment of the FMM Process
         Agent under the applicable laws of Mexico, the Mexican Guarantor agrees
         to execute and deliver the power of attorney attached hereto as
         Attachment 2, formalized before a notary public in Mexico and duly
         recorded at the Public Registry of Commerce (Registro Publico de
         Comercio) of the corporate domicile of the Mexican Guarantor, and to
         execute and deliver any and all other documents (including Mexican
         notarial deeds) as may be required by the Agent in its sole discretion.

                       [The first signature page follows.]

                                      C-11
<PAGE>
                  IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to
be executed as of the day and year first above written.

                                      FLEXTRONICS INTERNATIONAL USA INC.

                                      By:
                                         ------------------------------------
                                            Name:
                                                 ----------------------------
                                            Title:
                                                  ---------------------------

                                      Address:
                                      2090 Fortune Drive
                                      San Jose, California 95131
                                      U.S.A.
                                      Attn: Treasurer
                                      Telephone: (408) 576-7233
                                      Facsimile: (408) 526-9215

                                      FLEXTRONICS HOLDING USA, INC.

                                      By:
                                         ------------------------------------
                                            Name:
                                                 ----------------------------
                                            Title:
                                                  ---------------------------

                                      Address:
                                      2090 Fortune Drive
                                      San Jose, California 95131
                                      U.S.A.
                                      Attn: Treasurer
                                      Telephone: (408) 576-7233
                                      Facsimile: (408) 526-9215

                                      FLEXTRONICS INTERNATIONAL LATIN AMERICA
                                      (L) LTD.

                                      By:
                                         ------------------------------------
                                            Name:
                                                 ----------------------------
                                            Title:
                                                  ---------------------------

                                      Address:
                                      Level 10, Wisma Oceanic
                                      Jalan OKK Awang Besar
                                      Labuan, F.T.
                                      Malaysia
                                      Attn: Bernard Liew Jin Yang
                                      Telephone: 65 876 9371
                                      Facsimile: 65 543 1888

                                      C-12
<PAGE>
                                      FLEX INTERNATIONAL MARKETING (L) LTD.

                                      By:
                                         ------------------------------------
                                            Name:
                                                 ----------------------------
                                            Title:
                                                  ---------------------------

                                      Address:
                                      Level 10, Wisma Oceanic
                                      Jalan OKK Awang Besar
                                      Labuan, F.T.
                                      Malaysia
                                      Attn: Bernard Liew Jin Yang
                                      Telephone: 65 876 9371
                                      Facsimile: 65 543 1888

                                     FLEXTRONICS MANUFACTURING MEX, S.A. DE C.V.

                                      By:
                                         ------------------------------------
                                            Name:
                                                 ----------------------------
                                            Title:
                                                  ---------------------------

                                      Address:
                                      Carretara Base Aerea Militar 5850
                                      Zappopan, Jalisco 4500
                                      Mexico
                                      Attn: Tom Mannion
                                      Telephone: (5233) 3818-9261
                                      Facsimile: (5233) 3818-9524

                                      FLEXTRONICS SINGAPORE PTE LTD.

                                      By:
                                         ------------------------------------
                                            Name:
                                                 ----------------------------
                                            Title:
                                                  ---------------------------

                                      Address:
                                      36 Robinson Road
                                      #18-01 City House
                                      Singapore  068877
                                      Attn: Bernard Liew Jin Yang
                                      Telephone: 65 876 9371
                                      Facsimile: 65 543 1888

                                      C-13
<PAGE>
                                      FLEXTRONICS HOLDINGS UK LIMITED

                                      By:
                                         ------------------------------------
                                            Name:
                                                 ----------------------------
                                            Title:
                                                  ---------------------------

                                      Address:
                                      50 Stratton Street
                                      London  W1X 6NX
                                      England
                                      Attn: ___________________
                                      Telephone: (___) ___-____
                                      Facsimile: (___) ___-____

                                      MULTILAYER TECHNOLOGY, INC.

                                      By:
                                         ------------------------------------
                                            Name:
                                                 ----------------------------
                                            Title:
                                                  ---------------------------

                                      Address:
                                      40 Parker Road
                                      Irvine, CA  92618
                                      Attn: Timothy L. Stewart
                                      Telephone: (408) 576-7000
                                      Facsimile: (408) 428-1341

                                      FLEXTRONICS USA, INC.

                                      By:
                                         ------------------------------------
                                            Name:
                                                 ----------------------------
                                            Title:
                                                  ---------------------------

                                      Address:
                                      6328 Monarch Park Place
                                      Niwot, CO  80503
                                      Attn: Timothy L. Stewart
                                      Telephone: (408) 576-7000
                                      Facsimile: (408) 428-1341

                                      C-14
<PAGE>
                                      FLEXTRONICS ENCLOSURES, INC.

                                      By:
                                         ------------------------------------
                                            Name:
                                                 ----------------------------
                                            Title:
                                                  ---------------------------

                                      Address:
                                      1901 S. Meyers Road, Suite 700
                                      Oak Brook Terrace, IL 60181
                                      Attn: Timothy L. Stewart
                                      Telephone: (408) 576-7000
                                      Facsimile: (408) 428-1341

                                      FLEXTRONICS DISTRIBUTION, INC.

                                      By:
                                         ------------------------------------
                                            Name:
                                                 ----------------------------
                                            Title:
                                                  ---------------------------

                                      Address:
                                      2241 Lundy Avenue
                                      San Jose, CA  95131
                                      Attn: Timothy L. Stewart
                                      Telephone: (408) 576-7000
                                      Facsimile: (408) 428-1341

                                     FLEXTRONICS TECHNOLOGY (SHAH ALAM) SDN BDH,

                                      By:
                                         ------------------------------------
                                            Name:
                                                 ----------------------------
                                            Title:
                                                  ---------------------------

                                      Address:
                                      No. 2 Jalan Astaka, U8/84
                                      Seksyen U*
                                      40150 Shal Alam, Selangor, Malaysia
                                      Attn: Bernard Liew Jin Yang
                                      Telephone: 65 876 9371
                                      Facsimile: 65 543 1888

                                      C-15
<PAGE>
                                  ATTACHMENT 1
                               SUBSIDIARY JOINDER

                  THIS SUBSIDIARY JOINDER (this "Agreement"), dated as of
____________, ____, is executed by [NEW ELIGIBLE MATERIAL SUBSIDIARY], a
_________ [corporation] [partnership] [etc.] ("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 8, 2002
(as amended from time to time, the "Credit Agreement"), among Flextronics
International USA, Inc. ("Borrower"), Lenders and Agent, Lenders have agreed to
extend certain credit facilities to Borrower upon the terms and subject to the
conditions set forth therein.

                  B. Lenders' obligations to extend the credit facilities to
Borrower under the Credit Agreement are subject, among other conditions, to
receipt by Agent of (1) a Guaranty, dated as of March 8, 2002, duly executed by
each existing Eligible Material Subsidiary and any other Subsidiary designated
as a Guarantor from time to time, and (2) Subsidiary Joinders, duly executed by
each future Eligible Material Subsidiary.

                  C. New Subsidiary is a new Eligible Material Subsidiary and
expects to derive substantial direct and indirect benefit from 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 the Agent
and 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.

                  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.

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

                                     C(1)-1
<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: [(___) ___-____]

                                     C(1)-2
<PAGE>
                                  ATTACHMENT 2

                                                    To be executed and delivered
                                            by the Guarantor in the presence of,
                                                         and to be certified by,
                                                         a Mexican Notary Public

FORM OF SPECIAL IRREVOCABLE POWER OF ATTORNEY

                  [__________________], S.A. DE C.V. (the "Grantor"), a sociedad
anonima de capital variable duly incorporated and validly existing under the
laws of the United Mexican States ("Mexico"), hereby grants an irrevocable power
of attorney for litigation and collections in favor of [____________________]
(the "Attorney-In-Fact"), in terms of the first paragraph of article 2554 of the
Civil Code for the Federal District of Mexico and the corresponding articles of
the Civil Codes of all States of Mexico. This power of attorney is limited in
its scope but is as broad as necessary and may be exercised in any jurisdiction,
so that the Attorney-In-Fact, in the name and on behalf of the Grantor, receives
any and all notices and service of process of any nature in connection with any
suits, actions, proceedings and judgments of all kinds, including, without
limitation, judicial, administrative or arbitration proceedings in any way
relating to the Guaranty Agreement (the "Guaranty Agreement") dated
[___________], 2000 entered into by and among the Grantor, the other Guarantors,
the Lenders party thereto and ABN AMRO Bank N.V. as agent. The Grantor hereby
appoints as its domicile to receive any notices relating thereto,
[_______________] United States of America, or any other domicile of the
Attorney-In-Fact notified to the Grantor. This Power of Attorney is granted in
satisfaction of a condition set forth in the Guaranty Agreement, and it is
therefore irrevocable, in accordance with article 2596 of the Civil Code for the
Federal District of Mexico and the corresponding Articles of the Civil Code of
all States of Mexico.

                                     C(2)-1
<PAGE>
                                  ATTACHMENT 2

                                                    To be executed and delivered
                                            by the Guarantor in the presence of,
                                                         and to be certified by,
                                                         a Mexican Notary Public

FORM SPECIAL IRREVOCABLE POWER OF ATTORNEY

"NUMERO
        ------------------------------------------------------------------------
LIBRO
      --------------------------------------------------------------------------
FOLIO
      --------------------------------------------------------------------------

                  En la Ciudad de [_________] a los [____________] dias de mes
de [___________] de mil novecientos noventa y nueve, yo, el Licenciado
[__________________________], titular de la Notaria numero [____________] del
[_______________], hago constar el PODER ESPECIAL IRREVOCABLE, que se consigna
al tenor de la siguiente:

                                 CLAUSULA UNICA

Por medio del presente instrumento, la sociedad denominada [__________________],
SOCIEDAD ANONIMA DE CAPITAL VARIABLE (la "Otorgante"), representada como ha
quedado dicho, otorga en favor de la sociedad denominada [_______________], un
poder especial irrevocable para pleitos y cobranzas, en los terminos de primer
parrafo del Articulo dos mil quinientos cincuenta y cuatro del Codigo Civil para
el Distrito Federal y correlativos de los Estados de la Republica, que es
limitado en cuanto a su objeto, pero tan amplio como sea necesario, para ser
ejercido en cualquier jurisdiccion y a efecto de que, en nombre y representacion
de la Otorgante, reciba toda clase de notificaciones y emplazamientos de
cualquier naturaleza en relacion con cualquier demanda, accion, procedimiento o
juicio, incluyendo sin limitacion alguna procedimientos judiciales,
administrativos o arbitrales, derivados del Contrato de Garantia (Guaranty
Agreement; el "Contrato de Garantia") de fecha [___] de [_______] de 2000,
celebrado entre la Otorgante, las acreditantes (Lenders) ahi descritas y ABN
AMRO Bank N.V. como agente administrativo. La Otorgante senala como domicilio
convencional para recibir cualesquiera de las notificaciones o emplazamientos
antes citados el ubicado en [___________________________], Estados Unidos de
America, o cualquier otro domicilio que en el futuro designe
[__________________________]. El presente poder es irrevocable, en virtud de que
se otorga en cumplimiento de una condicion prevista en el Contrato de Garantia
en terminos del Articule 2596 del Codigo Civil para el Distrito Federal y
correlativos de los Estados de la Republica.

                                   5.02(e)-1
<PAGE>
                                    EXHIBIT D

                            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 under the respective
facilities identified below (including without limitation any Letters of Credit
or Guaranties included in such facilities) 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 USA, Inc.

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

5.       Credit Agreement:          The Credit Agreement dated as of March 8,
                                    2002 among Borrower, each of the financial
                                    institutions from time to time listed in
                                    Schedule I thereto, Agent and Fleet National
                                    Bank, as co-lead arrangers, Deutsche Banc
                                    Alex. Brown Inc., Bank of America, N.A.,
                                    Citicorp USA, Inc. and Fleet National Bank,
                                    as co-syndication agents, The Bank of Nova
                                    Scotia, as senior managing agent, BNP
                                    Paribas and Credit Suisse First Boston, as
                                    managing agents and Fleet National Bank as
                                    the issuer of letters of credit.

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.]

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.
<PAGE>
The terms set forth in this Assignment and Assumption are hereby agreed to:

                                      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.

                                       2
<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, 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)

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-1
<PAGE>
         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 executed in any
number of counterparts, which together 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 California.

                                      D-2
<PAGE>
                                  ATTACHMENT 2

                          TO ASSIGNMENT AND ASSUMPTION

                                     PART A

<TABLE>
<CAPTION>
                                      Commitments or Loans                                   Commitments or Loans
                                            Assigned                                           After Assignment
                          ---------------------------------------------           -------------------------------------------
                                                         Facility B                                             Facility B
                             Facility A                 Commitment/                 Facility A                 Commitment/
                             Commitment                     Loan                    Commitment                     Loan
 Assignor Lender:

<S>                        <C>                         <C>                        <C>                         <C>
  --------------           $------------               $------------              $------------               $------------

Assignee Lenders:

  --------------           $------------               $------------              $------------               $------------
  --------------           $------------               $------------              $------------               $------------
  --------------           $------------               $------------              $------------               $------------
  --------------           $------------               $------------              $------------               $------------
</TABLE>

                                     D(1)-1
<PAGE>
                                     PART B

[ASSIGNEE LENDER]

Domestic Lending Office:

         [------------------------],
         [------------------------],
         [------------------------],

Eurodollar Lending Office:

         [------------------------],
         [------------------------],
         [------------------------],

Address for Notices:

Wiring Instructions:

                                     D(2)-1<PAGE>
                                                                    Exhibit 10.1

Nov. 14, 2001

Phil Rehkemper
19670 Scotland Drive
Saratoga, CA 95070

Dear Phil:

On behalf of Alliance Fiber Optic Products, Inc. (the "Company"), I am pleased
to invite you to join the Company as Chief Finance Office. In this position, you
will be expected to devote your full business time, attention, and energies to
the performance of your duties with the Company. The effective date of your
employment will be no later than Dec. 4, 2001, and you will be reporting
directly to CEO, Peter Chang.

The terms of this offer of employment are as follows:

1.      Compensation: As a full-time, regular, exempt employee, your annual
        salary will be One Hundred Sixty Five Thousand dollars ($165,000). The
        Company will pay you Six Thousand Three Hundred Forty Six dollar
        ($6,346) bi-weekly in accordance with the Company's standard payroll
        policies. Your salary will begin as of the effective date of employment.
        The first and last payment by the Company to you will be adjusted, if
        necessary, to reflect a commencement or termination date other than the
        first or last working day of a pay period.

2.      Benefits: You will be entitled, during the term of your employment, to
        the Company's standard PTO and benefits covering employees, as such may
        be in effect from time to time.

3.      Stock Options: Subject to action at the Company's next Board of
        Directors Compensation Committee meeting and in compliance with
        applicable state and federal securities laws, the Company will grant you
        an option to purchase two hundred eighty thousand shares of the
        Company's Common Stock pursuant to the AFOP 2000 Stock Incentive Plan
        (the "Plan"), a copy of which will be provided to you. The exercise
        price of the option will be the fair market value of the Company's
        Common Stock on the date of grant. The option will vest over four years
        with 25% of the shares subject to vesting at the end of each year of
        employment until all shares are vested, subject to all provisions of the
        Plan and an option agreement to be issued pursuant to the plan.

<PAGE>

Phil Rehkemper
Nov. 14, 2001
Page 2 of 3

4.      At-Will Employment: You should be aware that your employment with the
        Company is for no specified period and constitutes "at-will" employment.
        As a result, you are free to terminate your employment at any time, for
        any reason or for no reason. Similarly, the Company is free to terminate
        your employment at any time, for any reason or for no reason. In the
        event of termination of your employment, you will not be entitled to any
        payments, benefits, damages, awards, or compensation other than as may
        otherwise be available in accordance with the Company's established
        employee plans and policies at the time of termination.

5.      Severance: In the event that the Company is acquired by other companies
        or the Company replaces Peter Chang with new CEO, your employment with
        the Company (or its successor) is involuntarily terminated without
        cause, then AFOP will provide a severance package that consist of three
        month base salary plus 25% vesting of stock, if you have not yet vested
        25%.

6.      Immigration Laws: For purposes of federal immigration laws, you will be
        required to provide to the Company documentary evidence of your identity
        and eligibility for employment in the United States. Such documentation
        must be provided within three days of your employment, or your
        employment relationship with the Company will be terminated.

7.      New Hire Orientation: You will be attending a new hire orientation
        session Dec. 4, 2001. During this session, many items will be discussed
        including your benefits. You should bring the entire benefits package
        you received with this letter to this orientation, as we will ask you to
        sign all the documents during this session. We would also like to ask
        that you bring your I-9 documents to this session.

8.      Confidential Information Agreement: As a condition of accepting this
        offer of employment, you will be required to complete, sign and return
        the Company's standard form of Employee's Proprietary Information and
        Inventions Agreement.

9.      Arbitration Agreement: As a condition of accepting this offer of
        employment, you will be required to sign and return the Company's
        Arbitration Agreement.

<PAGE>

Phil Rehkemper
Nov. 14, 2001
Page 3 of 3

Phil, we look forward to you joining the Company. If the foregoing terms are
agreeable, please indicate your acceptance by signing the enclosed copy of this
letter in the space provided below and returning it to me. This offer of
employment is contingent upon the successful completion of our standard
background check. This offer will terminate if not accepted on or before Nov.
15, 2001.

Sincerely yours,

ALLIANCE FIBER OPTIC PRODUCTS, INC.

Peter C. Chang
Chief Executive Officer

ACCEPTED:

/s/ Phil Rehkemper
-----------------------------                      -----------------------------
Phil Rehkemper                                     Date

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