Document:

exv10w39

 

Exhibit 10.39

EXECUTION
COPY

U.S. $100,000,000

364-DAY CREDIT AGREEMENT

Dated as of September 14, 2006

Between

APPLIED MATERIALS, INC.

as Borrower

and

CITICORP USA, INC.

as Lender

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
	 	 	1	 
	SECTION 1.01 Certain Defined Terms
	 	 	1	 
	SECTION 1.02 Computation of Time Periods
	 	 	12	 
	SECTION 1.03 Accounting Terms
	 	 	12	 
	ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES
	 	 	12	 
	SECTION 2.01 The Revolving Credit Advances
	 	 	12	 
	SECTION 2.02 Making the Revolving Credit Advances
	 	 	12	 
	SECTION 2.03 Fees
	 	 	13	 
	SECTION 2.04 Termination or Reduction of the Commitment
	 	 	13	 
	SECTION 2.05 Repayment of Revolving Credit Advances
	 	 	13	 
	SECTION 2.06 Interest on Revolving Credit Advances
	 	 	13	 
	SECTION 2.07 Interest Rate Determination
	 	 	14	 
	SECTION 2.08 Optional Conversion of Revolving Credit Advances
	 	 	14	 
	SECTION 2.09 Optional Prepayments of Revolving Credit Advances
	 	 	15	 
	SECTION 2.10 Increased Costs
	 	 	15	 
	SECTION 2.11 Illegality
	 	 	15	 
	SECTION 2.12 Payments and Computations
	 	 	16	 
	SECTION 2.13 Taxes
	 	 	16	 
	SECTION 2.14 Evidence of Debt
	 	 	18	 
	SECTION 2.15 Use of Proceeds
	 	 	18	 
	ARTICLE III CONDITIONS TO EFFECTIVENESS AND LENDING
	 	 	18	 
	SECTION 3.01 Conditions Precedent to Effectiveness of Section 2.01
	 	 	18	 
	SECTION 3.02 Conditions Precedent to Each Revolving Credit Advance
	 	 	19	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES
	 	 	20	 
	SECTION 4.01 Representations and Warranties of the Borrower
	 	 	20	 
	ARTICLE V COVENANTS OF THE BORROWER
	 	 	22	 
	SECTION 5.01 Affirmative Covenants
	 	 	22	 
	SECTION 5.02 Negative Covenants
	 	 	26	 
	SECTION 5.03 Financial Covenant
	 	 	28	 
	ARTICLE VI EVENTS OF DEFAULT
	 	 	29	 
	SECTION 6.01 Events of Default
	 	 	29	 
	ARTICLE VII MISCELLANEOUS
	 	 	31	 

i

 

	 	 	 	 	 
	 	 	Page
	SECTION 7.01 Amendments, Etc
	 	 	31	 
	SECTION 7.02 Notices, Etc
	 	 	31	 
	SECTION 7.03 No Waiver; Remedies
	 	 	32	 
	SECTION 7.04 Costs and Expenses
	 	 	32	 
	SECTION 7.05 Right of Set-off
	 	 	33	 
	SECTION 7.06 Binding Effect
	 	 	33	 
	SECTION 7.07 Confidentiality
	 	 	33	 
	SECTION 7.08 Governing Law
	 	 	34	 
	SECTION 7.09 Execution in Counterparts
	 	 	34	 
	SECTION 7.10 Jurisdiction, Etc
	 	 	34	 
	SECTION 7.11 Patriot Act Notice
	 	 	34	 
	SECTION 7.12 Assignments
	 	 	34	 
	SECTION 7.13 Waiver of Jury Trial
	 	 	35	 
	 
	 	 	 	 
	Schedules
	 	 	 	 
	Schedule 5.01(a)  — Existing Liens*
	 	 	 	 
	Schedule 5.02(a)(xii)  — Special Unencumbered Property*
	 	 	 	 
	 
	 	 	 	 
	Exhibits
	 	 	 	 
	Exhibit A  —  Form of Revolving Credit Note
	 	 	 	 
	Exhibit B  —  Form of Notice of Revolving Credit Advance
	 	 	 	 
	Exhibit C  —  Form of Opinion of Vice President, Legal Services of the Borrower*
	 	 	 	 
	Exhibit D      Form of Opinion of Orrick, Herrington & Sutcliffe, LLP*
	 	 	 	 

 

			
	*	 	These schedules and exhibits have not been filed herewith. The Company agrees to furnish
supplementally any omitted materials to the Securities and Exchange Commission upon request.

ii

 

364-DAY CREDIT AGREEMENT

Dated as of September 14, 2006

          APPLIED MATERIALS, INC., a Delaware corporation, and CITICORP USA, INC. agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

          SECTION 1.01 Certain Defined Terms.

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

          “Adjusted CD Rate” means, for any Interest Period for each Adjusted CD Rate Advance,
an interest rate per annum equal to the sum of:

          (a) the rate per annum obtained by dividing (i) the rate of interest determined by the Lender
to be the bid rates per annum, at 9:00 A.M. (New York City time) (or as soon thereafter as
practicable) two Business Days before the first day of such Interest Period, of New York
certificate of deposit dealers of recognized standing selected by the Lender for the purchase at
face value of certificates of deposit of Citibank in an amount substantially equal to such Adjusted
CD Rate Advance and with a maturity equal to such Interest Period, by (ii) a percentage equal to
100% minus the Adjusted CD Rate Reserve Percentage (as defined below) for such Interest Period,
plus

          (b) the Assessment Rate (as defined below) for such Interest Period.

          The “Adjusted CD Rate Reserve Percentage” for any Interest Period for each Adjusted CD
Rate Advance means the reserve percentage applicable on the first day of such Interest Period under
regulations issued from time to time by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal
Reserve System in New York City with deposits exceeding $5 billion with respect to liabilities
consisting of or including (among other liabilities) U.S. dollar nonpersonal time deposits in the
United States with a maturity equal to such Interest Period and in an amount of $100,000. The
“Assessment Rate” for any Interest Period for each Adjusted CD Rate Advance means the
annual assessment rate estimated by the Lender on the first day of such Interest Period for
determining the then current annual assessment payable by Citibank to the Federal Deposit Insurance
Corporation (or any successor) for insuring U.S. dollar deposits of Citibank in the United States.

          “Adjusted CD Rate Advance” means a Revolving Credit Advance that bears interest as
provided in Section 2.06(a)(iii).

          “Affiliate” means, as to any Person, other than in respect of the Borrower or any of
its direct or indirect Subsidiaries, any other Person that, directly or indirectly, controls, is
controlled by or is under common control with such Person. For purposes of this definition, the
term “control” (including the terms “controlling”, “controlled by” and “under common control with”)
of a Person means the
possession, direct or indirect, of the power to vote, for purposes of Section 5.02(f) 10%, and
for all other purposes 5%, or more of the Voting Stock of such Person or to direct or cause the
direction of the

1

 

management and policies of such Person, whether through the ownership of Voting
Stock, by contract or otherwise.

          “Applicable Lending Office” means the Lender’s Domestic Lending Office in the case of
a Base Rate Advance, the Lender’s Eurodollar Lending Office in the case of a Eurodollar Rate
Advance and the Lender’s CD Lending Office in the case of an Adjusted CD Rate Advance.

          “Applicable Margin” means, as of any date, a percentage per annum determined by
reference to the Public Debt Rating in effect on such date as set forth below:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Applicable Margin	 	Applicable Margin	 	Applicable Margin
	Public Debt Rating	 	for Base Rate	 	for Eurodollar Rate	 	for Adjusted CD
	S&P/Moody’s	 	Advances	 	Advances	 	Rate Advances
	Level 1

A+/A1 or above
	 	 	***	 	 	 	*	**	 	 	*	**
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Level 2

A/A2
	 	 	***	 	 	 	*	**	 	 	*	**
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Level 3

A-/A3
	 	 	***		 	 	*	**	 	 	*	**
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Level 4 

BBB+/Baa1
	 	 	***		 	 	*	**	 	 	*	**
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Level 5 

Lower than
Level 4 or
unrated
	 	 	***		 	 	*	**	 	 	*	**

          “Applicable Percentage” means, as of any date, a percentage per annum
determined by reference to the Public Debt Rating in effect on such date as set forth below:

	 	 	 	 	 
	Public Debt Rating	 	 
	S&P/Moody’s	 	Applicable Percentage
	Level 1

A+/A1 or above
	 	 	***	 
	 
	 	 	 	 
	Level 2 

A/A2
	 	 	***	
	 
	 	 	 	 
	Level 3 

A-/A3
	 	 	***	
	 
	 	 	 	 
	Level 4 

BBB+/Baa1
	 	 	***	
	 
	 	 	 	 
	Level 5 

Lower than Level 4 or unrated
	 	 	***	

          “Applicable Utilization Fee” means (a) when the aggregate Revolving Credit
Advances are equal to or less than 33% of the Commitment, a percentage per annum equal to 0%, and
(b) when the

 

			
	***	 	 information has
been omitted and filed separately with the Commission. Confidential treatment
has been requested with respect to the omitted portions.

2

 

aggregate Revolving Credit Advances exceed 33% of the Commitment, a percentage per annum equal
to 0.125%.

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

          (a) the rate of interest announced publicly by Citibank in New York, New York, from time to
time, as Citibank’s base rate;

          (b) the sum (adjusted to the nearest 1/4 of 1% or, if there is no nearest 1/4 of 1%, to the
next higher 1/4 of 1%) of (i) 1/2 of 1% per annum, plus (ii) the rate obtained by dividing
(A) the latest three-week moving average of secondary market morning offering rates in the United
States for three-month certificates of deposit of major United States money market banks, such
three-week moving average (adjusted to the basis of a year of 360 days) being determined weekly on
each Monday (or, if such day is not a Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday by Citibank on the basis of such rates reported by
certificate of deposit dealers to and published by the Federal Reserve Bank of New York or, if such
publication shall be suspended or terminated, on the basis of quotations for such rates received by
Citibank from three New York certificate of deposit dealers of recognized standing selected by
Citibank, by (B) a percentage equal to 100% minus the average of the daily percentages specified
during such three-week period by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement) for Citibank with respect to
liabilities consisting of or including (among other liabilities) three-month U.S. dollar
non-personal time deposits in the United States, plus (iii) the average during such
three-week period of the annual assessment rates estimated by Citibank for determining the then
current annual assessment payable by Citibank to the Federal Deposit Insurance Corporation (or any
successor) for insuring U.S. dollar deposits of Citibank in the United States; and

          (c) 1/2 of one percent per annum above the Federal Funds Rate.

          “Base Rate Advance” means a Revolving Credit Advance that bears interest as provided
in Section 2.06(a)(i).

          “Benefit Arrangement” means at any time an employee benefit plan within the meaning of
Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and which is maintained or
otherwise contributed to by any member of the ERISA Group.

          “Borrower” means Applied Materials, Inc., a Delaware corporation.

          “Business Day” means a day of the year on which banks are not required or authorized
by law to close in New York City and, if the applicable Business Day relates to any Eurodollar Rate
Advances, on which dealings are carried on in the London interbank market.

          “Capitalized Lease” means any lease the obligation for rentals with respect to which
is required to be capitalized on a Consolidated balance sheet of the lessee and its Subsidiaries in
accordance with GAAP.

          “Capitalized Rentals” of any Person means at any date the amount at which the
aggregate rentals due and to become due under all Capitalized Leases under which such Person is a
lessee would be reflected as a liability on a Consolidated balance sheet of such Person.

3

 

          “CD Lending Office” means the office of the Lender specified as its “CD Lending
Office” opposite its name on Schedule I hereto, or such other office of the Lender as the Lender
may from time to time specify to the Borrower.

          “Citibank” means Citibank, N.A.

          “Closing Date” means September 17, 2006 or such other date as may be agreed upon by
the Borrower and Lender.

          “Commitment” means the amount set forth opposite the Lender’s name on the signature
pages hereof, as such amount may be reduced pursuant to Section 2.04.

          Communications” shall have the meaning set forth in Section 7.02(b).

          “Consolidated” refers to the consolidation of accounts in accordance with GAAP.

          “Consolidated Debt” means all Debt of the Borrower and its Subsidiaries, determined in
accordance with GAAP on a consolidated basis after eliminating intercompany items.

          “Consolidated Net Tangible Assets” means, at any date, the total amount of all
Tangible Assets of the Borrower and its Subsidiaries after deducting therefrom all liabilities
which in accordance with GAAP would be included on their consolidated balance sheet, except
Consolidated Debt.

          “Consolidated Total Assets” means, at any date, the total assets of the Borrower and
its Subsidiaries on a consolidated basis determined in accordance with GAAP.

          “Convert”, “Conversion” and “Converted” each refers to a conversion of
Revolving Credit Advances of one Type into Revolving Credit Advances of the other Type pursuant to
Section 2.07 or 2.08.

          “Debt” of any Person means, without duplication, (a) all Indebtedness of such Person
for borrowed money, (b) all obligations of such Person for the deferred and unpaid purchase price
of property or services (other than trade payables and accrued expenses incurred in the ordinary
course of such Person’s business), (c) all Indebtedness of such Person evidenced by notes, bonds,
debentures or other similar evidences of indebtedness, (d) all obligations of such Person created
or arising under any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such property) including,
without limitation, obligations secured by Liens arising from the sale or transfer of notes or
accounts receivable; provided that Debt shall not include any sale or transfer of notes or
accounts receivable whether or not precautionary Liens are filed or recorded in connection with
such sale or transfer of such notes or accounts receivable, if and only if such sale or transfer
(A) is accounted for as true sale under GAAP and (B) pursuant to which there is no recourse (other
than recourse for breach of customary representations and warranties or in connection with any such
sales or transfers) to the seller of such notes or accounts receivable (as evidenced by there being
no accounting reserve taken or required to be taken, which in the event a reserve is taken, the
amount of Debt shall be deemed to be the amount of such reserve), and provided,
further, that all trade payables and accrued expenses constituting current liabilities
shall be excluded, (e) all Capitalized Rentals, (f) reimbursement obligations of such Person in
respect of credit enhancement instruments, which reimbursement obligations are then due and payable
by such Person, (g) all Debt of others referred to in clauses (a) through (f) above or clause (h)
below guaranteed directly or indirectly in any manner by such Person, or in effect guaranteed
directly or indirectly by such Person through an agreement (1) to pay

4

 

or purchase such Debt or to advance or supply funds for the payment or purchase of such Debt,
(2) to purchase, sell or lease (as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such Debt or to assure the
holder of such Debt against loss, (3) to supply funds to or in any other manner invest in the
debtor (including any agreement to pay for property or services irrespective of whether such
property is received or such services are rendered) or (4) otherwise to assure a creditor against
loss, and (h) all Debt referred to in clauses (a) through (g) above secured by (or for which the
holder of such Debt has an existing right, contingent or otherwise, to be secured by) any Lien on
property (including, without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such Debt, including,
without limitation, obligations secured by Liens arising from the sale or transfer of notes,
accounts receivable or other assets; provided, however, that obligations of such
Person secured by Liens on notes, accounts receivable or other assets sold or transferred in a
transaction which is accounted for as a true sale under GAAP shall not be Debt under this
definition.

The Borrower’s obligations under operating leases and Off-Balance Sheet Leases shall be excluded
from this definition of Debt; provided that (A) no such exclusion shall be made if and to
the extent that GAAP would require such obligations to be classified as debt for borrowed money and
(B) in any event the term “Debt” shall include the Excess Lease Financed Amount (if any).

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

          “Domestic Lending Office” means the office of the Lender specified as its “Domestic
Lending Office” opposite its name on Schedule I hereto, or such other office of the Lender as the
Lender may from time to time specify to the Borrower.

          “EBITDA” means, for any period, Net Income plus, to the extent deducted in determining
such Net Income, the sum of (a) Interest Expense, (b) income tax expense, (c) depreciation expense,
(d) amortization expense, (e) one-time non-cash charges related to asset impairments and
restructuring activities, and (f) cash and non-cash portions of discontinued operations and
extraordinary items, all determined on a Consolidated basis for the Borrower and its Subsidiaries
in accordance with GAAP.

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

          “Eligible Assignee” means (i) a Lender, (ii) an Affiliate of a Lender, and (iii) any
other Person that has a rating for any class of non-credit enhanced long-term senior unsecured debt
of not lower than A by S&P or A2 by Moody’s and is approved by Borrower, such approval not to be
unreasonably withheld or delayed.

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

          “Environmental Laws” means any and all federal, state, local and foreign statutes,
laws, regulations, ordinances, rules, judgments, orders, decrees, injunctions and other
governmental restrictions

5

 

relating to the environment or the effect of the environment on human health or to emissions,
discharges or releases of pollutants, contaminants, Hazardous Substances or wastes into the
environment including, without limitation, ambient air, surface water, ground water or land, or
otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Hazardous Substances or wastes or the clean-up
or other remediation thereof.

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

          “Equity Affiliate” means any Person in which the Borrower or any of its Subsidiaries
holds an equity investment that is accounted for under the equity method.

          “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, or any
successor statute.

          “ERISA Affiliate” means any member of the ERISA Group.

          “ERISA Group” means the Borrower, any Subsidiary and all members of a controlled group
of corporations and all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower or any Subsidiary, are treated as a single employer under Section
414 of the Internal Revenue Code.

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

          “Eurodollar Lending Office” means the office of the Lender specified as its
“Eurodollar Lending Office” opposite its name on Schedule I hereto, or such other office of the
Lender as the Lender may from time to time specify to the Borrower.

          “Eurodollar Rate” means, for any Interest Period for each Eurodollar Rate Advance, an
interest rate per annum equal to the rate per annum obtained by dividing (a) the rate per annum
(rounded upward to the nearest whole multiple of 1/16 of 1% per annum) appearing on Dow Jones
Markets Telerate Page 3750 (or any successor page) as the London interbank offered rate for
deposits in U.S. dollars at approximately 11:00 A.M. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period or, if for any
reason such rate is not available, the rate per annum at which deposits in U.S. dollars are offered
by the principal office of Citibank in London, England to prime banks in the London interbank
market at 11:00 A.M. (London time) two Business Days before the first day of such Interest Period
in an amount substantially equal to such Eurodollar Rate Advance to be outstanding during such
Interest Period and for a period equal to such Interest Period by (b) a percentage equal to 100%
minus the Eurodollar Rate Reserve Percentage for such Interest Period.

          “Eurodollar Rate Advance” means a Revolving Credit Advance that bears interest as
provided in Section 2.06(a)(ii).

          “Eurodollar Rate Reserve Percentage” for any Interest Period for any Eurodollar Rate
Advance means the reserve percentage applicable two Business Days before the first day of such
Interest Period under regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve requirement) for a member
bank of the Federal Reserve System in New York City with respect to liabilities or assets
consisting of or including

6

 

Eurocurrency Liabilities (or with respect to any other category of liabilities that includes
deposits by reference to which the interest rate on Eurodollar Rate Advances is determined) having
a term equal to such Interest Period.

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

          “Excess Lease Financed Amount” means the amount (if any) by which the Lease Financed
Amount exceeds (a) $300,000,000 at any time when the Borrower’s Public Debt Rating is lower than
BBB+ by S&P or Baa1 by Moody’s or (b) $600,000,000 at any time when the Borrower’s Public Debt
rating is at least BBB+ by S&P or Baa1 by Moody’s.

          “Federal Funds Rate” means, for any period, a fluctuating interest rate per annum
equal for each day during such period to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day on such transactions received by the
Lender from three Federal funds brokers of recognized standing selected by it.

          “Funded Debt” means, with respect to any Person for such Person and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP, at the time of determination, the sum
of the outstanding principal amount of all Debt which would be reflected as liabilities on the
balance sheet of such Person, other than the following items which shall not be included in Funded
Debt: (a) Debt or other obligations of others guaranteed by such Person and its Subsidiaries; (b)
all reimbursement obligations (whether contingent or otherwise) in respect of the undrawn portion
of letters of credit, bankers’ acceptances, surety or other bonds, and similar instruments
(including, without limitation, those outstanding with respect to letters of credit); and (c) all
liabilities in respect of unfunded vested benefits under any Plan.

          “GAAP” means at any time generally accepted accounting principles as then in effect,
applied on a basis consistent (except for changes concurred in by the Borrower’s independent public
accountants) with the most recent audited consolidated financial statements of the Borrower and its
Subsidiaries delivered to the Lender; provided that, if the Borrower notifies the Lender
that the Borrower wishes to amend any covenant in Article V or any definition of a term used in any
such covenant to eliminate the effect of any change in generally accepted accounting principles on
the operation of such covenant (or if the Lender notifies the Borrower that it wishes to amend any
such covenant or definition for such purpose), then, for purposes of such covenant or definition
only, “GAAP” shall mean GAAP as in effect immediately before the relevant change in generally
accepted accounting principles became effective, until either such notice is withdrawn or such
covenant or definition is amended in a manner satisfactory to the Borrower and the Lender.

          “Hazardous Substances” means any substance or waste defined as “toxic” or “hazardous”
under any Environmental Laws, including, without limitation, petroleum, its derivatives,
by-products and other hydrocarbons.

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

7

 

          “Indebtedness” of any Person means and includes all obligations of such Person which
in accordance with GAAP should be classified upon a balance sheet of such Person as liabilities of
such Person.

          “Intangible Assets” means at any date the total amount of all assets of the Borrower
and its Subsidiaries that are properly classified as “intangible assets” in accordance with GAAP
and, in any event, shall include, without limitation, goodwill, patents, trade names, trademarks,
copyrights, franchises, experimental expense, organization expense, unamortized debt discount and
expense, and deferred charges other than prepaid insurance, prepaid leases and prepaid taxes and
current deferred taxes which are classified on the balance sheet of the Borrower and its
Subsidiaries as a current asset in accordance with GAAP and in which classification the Borrower’s
independent public accountants concur; provided that the foregoing Intangible Assets shall
be deemed to be in an amount equal to zero at all times during which such Intangible Assets, in the
aggregate, are less than 2% of stockholders’ equity of the Borrower.

          “Interest Expense” of any Person for any period means the aggregate amount of interest
or fees paid, accrued or scheduled to be paid or accrued in respect of any Debt (including the
interest portion of rentals under Capitalized Leases) and all but the principal component of
payments in respect of conditional sales, equipment trust or other title retention agreements paid,
accrued or scheduled to be paid or accrued by such Person during such period, net of interest
income, determined in accordance with GAAP.

          “Interest Period” means, for each Eurodollar Rate Advance or Adjusted CD Rate Advance,
the period commencing on the date of such Revolving Credit Advance or the date of the Conversion of
any Revolving Credit Advance into such an Revolving Credit Advance and ending on the last day of
the period selected by the Borrower pursuant to the provisions below and, thereafter, with respect
to Eurodollar Rate Advances or Adjusted CD Rate Advances, each subsequent period commencing on the
last day of the immediately preceding Interest Period and ending on the last day of the period
selected by the Borrower pursuant to the provisions below. The duration of each such Interest
Period shall be one, two, three or six months in the case of a Eurodollar Rate Advance, and 30, 60,
90, 120 or 180 days in the case of an Adjusted CD Rate Advance, in each case, as the Borrower may,
upon notice received by the Lender not later than 11:00 A.M. (New York City time) on the third
Business Day prior to the first day of such Interest Period, select; provided,
however, that:

     (i) the Borrower may not select any Interest Period that ends after the Termination
Date;

     (ii) Interest Periods commencing on the same date for Eurodollar Rate Advances or
Adjusted CD Rate Advances shall be of the same duration;

     (iii) whenever the last day of any Interest Period would otherwise occur on a day other
than a Business Day, the last day of such Interest Period shall be extended to occur on the
next succeeding Business Day, provided, however, in the case of an Interest
Period for a Eurodollar Rate Advance that, if such extension would cause the last day of
such Interest Period to occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day; and

     (iv) in the case of an Interest Period for a Eurodollar Rate Advance, whenever the
first day of any Interest Period occurs on a day of an initial calendar month for which
there is no numerically corresponding day in the calendar month that succeeds such initial
calendar month

8

 

by the number of months equal to the number of months in such Interest Period, such
Interest Period shall end on the last Business Day of such succeeding calendar month.

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

          “Lease Financed Amount” means, with respect to Off-Balance Sheet Leases, (a) in the
case of the Existing Off-Balance Sheet Lease, the sum of the aggregate outstanding principal amount
of the Loans (as defined therein) and the outstanding Investment Amounts (as defined therein) or
(b) in the case of any other Off-Balance Sheet Lease, the sum of the comparable amounts as defined
therein.

          “Lender” means Citigroup USA, Inc. and any Eligible Assignee thereof, as applicable.

          “Lender’s Account” means the account of the Lender maintained by the Lender at
Citibank at its office at 399 Park Avenue, New York, New York 10043, Account No. 4058-0062,
Attention: Steven Curcio, Global Loans.

          “Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated
Funded Debt, to (b) Consolidated EBITDA for the most recently completed four consecutive fiscal
quarters ending on or prior to such date, in each case for the Borrower and its Subsidiaries as of
such date.

          “Lien” means any lien, security interest or other charge or encumbrance of any kind,
or any other type of preferential arrangement, including, without limitation, the lien or retained
security title of a conditional vendor and any easement, right of way or other encumbrance on title
to real property.

Off Balance Sheet Leases and the arrangements set forth therein shall be excluded from this
definition; provided that:

          (a) if any portion of the Lease Financed Amount is included in Debt under the last sentence of
the definition of Debt, then for purposes of Section 5.03, Off-Balance Sheet Leases and the
arrangements set forth therein shall be deemed to create a Lien securing the Excess Lease Financed
Amount; and

          (b) if Off-Balance Sheet Leases and the arrangements set forth therein create a lien on any
property or assets other than (i) the property and assets leased pursuant to Off-Balance Sheet
Leases, (ii) rights of the Borrower as sublessor of any portion of such property and assets and
(iii) Permitted Lease Collateral, such lien shall not be excluded from this definition.

          “Margin Stock” means “margin stock” as such term is defined in Regulation U.

          “Material Adverse Effect” means any material adverse change in the business, condition
(financial or otherwise) or operations of the Borrower or the Borrower and its Subsidiaries taken
as a whole.

          “Material Debt” means Debt (other than the Note) of the Borrower and/or one or more of
its Subsidiaries, arising in one or more related or unrelated transactions, in an aggregate
principal or face amount exceeding $75,000,000.

          “Material Financial Obligations” means a principal or face amount of Debt and/or
payment obligations (calculated after giving effect to any applicable netting agreements) in
respect of

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Hedge Agreements of the Borrower and/or one or more of its Subsidiaries, arising in one or
more related or unrelated transactions, exceeding in the aggregate $75,000,000.

          “Material Plan” means, at any time, a Plan or Plans having aggregate Unfunded
Liabilities in excess of $75,000,000.

          “Minority Interests” means any shares of stock of any class of a Subsidiary (other
than directors’ qualifying shares as required by law) that are not owned by the Borrower and/or one
or more of its Subsidiaries.

          “Moody’s” means Moody’s Investors Service, Inc. or its successors.

          “Multiemployer Plan” means, at any time, an employee pension benefit plan within the
meaning of Section 4001(a)(3) of ERISA to which any member of the ERISA Group is then making or
accruing an obligation to make contributions or has within the preceding five plan years made
contribution, including for these purposes any Person which ceased to be a member of the ERISA
Group during such five year period.

          “Net Income” of any Person means, for any period, net income before (i) extraordinary
items, (ii) the results of discontinued operations and (iii) the effect of any cumulative change in
accounting principles, determined in accordance with GAAP.

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

          “Off-Balance Sheet Leases” means one or more lease agreements and related agreements
entered into by the Borrower or any of its Subsidiaries form time to time, in each case in a
transaction which the Borrower or such Subsidiary intends to be treated as an “operating lease” for
financial reporting purposes but as a loan for one or more of the following purposes: (a) federal,
state and local income or franchise tax, (b) bankruptcy, (c) real estate law and (d) commercial law
(including uniform commercial law).

          “Patriot Act” means the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56.

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

          “Permitted Lease Collateral” means any cash or cash equivalents securing the
obligations of the Borrower or its Subsidiaries in any Off-Balance Sheet Lease.

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

          “Plan” means, at any time, an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Internal Revenue Code and either (i) is maintained, or
contributed to, by any member of the ERISA Group for employees of any member of the ERISA Group or
(ii) has at any time within the preceding five years been maintained, or contributed to, by any
Person which was at such time a member of the ERISA Group for employees of any Person which was at
such time a member of the ERISA Group.

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          “Public Debt Rating” means, as of any date for S&P, the lowest rating that has been
most recently announced by S&P for any class of non-credit enhanced long-term senior unsecured debt
issued by the Borrower and, as of any date for Moody’s, the lowest rating that has been most
recently announced by Moody’s for any class of non-credit enhanced long-term senior unsecured debt
issued by the Borrower. For purposes of the foregoing, (a) if only one of S&P and Moody’s shall
have in effect a Public Debt Rating, the Applicable Margin and the Applicable Percentage shall be
determined by reference to the available rating; (b) if neither S&P nor Moody’s shall have in
effect a Public Debt Rating, the Applicable Margin and the Applicable Percentage will be set in
accordance with Level 5 under the definition of “Applicable Margin” or “Applicable
Percentage”, as the case may be; (c) if the ratings established by S&P and Moody’s shall fall
within different levels, the Applicable Margin and the Applicable Percentage shall be based upon
the higher rating; (d) if any rating established by S&P or Moody’s shall be changed, such change
shall be effective as of the date on which such change is first announced publicly by the rating
agency making such change; and (e) if S&P or Moody’s shall change the basis on which ratings are
established, each reference to the Public Debt Rating announced by S&P or Moody’s, as the case may
be, shall refer to the then equivalent rating by S&P or Moody’s, as the case may be.

          “Reportable Event” means any “reportable event” as defined in section 4043 of ERISA
for which the 30-day notice requirement has not been waived under applicable regulations.

          “Revolving Credit Advance” means an advance by the Lender to the Borrower and refers
to a Base Rate Advance, a Eurodollar Rate Advance or an Adjusted CD Rate Advance (each of which
shall be a “Type” of Revolving Credit Advance).

          “Revolving Credit Note” means a promissory note of the Borrower payable to the order
of the Lender, delivered pursuant to a request made under Section 2.14 in substantially the form of
Exhibit A hereto, evidencing the aggregate indebtedness of the Borrower to the Lender resulting
from the Revolving Credit Advances.

          “S&P” means Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. or its
successors.

          “SEC” means the Securities and Exchange Commission.

          “Subsidiary” means, as to any Person, any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are at the time directly or
indirectly owned by such Person; unless otherwise specified, “Subsidiary” means a Subsidiary of the
Borrower.

          “Tangible Assets” means, at any date, Consolidated Total Assets (less depreciation,
depletion and other properly deductible valuation reserves) after deducting (but without
duplication) Intangible Assets.

          “Termination Date” means the earlier of (a) September 16, 2007, and (b) the date of
termination of the Commitment pursuant to Section 2.04 or 6.01.

          “Unfunded Liabilities” means, with respect to any Plan at any time, the amount (if
any) by which (i) the value of all benefit liabilities under such Plan, determined on a plan
termination basis using the assumptions prescribed by the PBGC for purposes of Section 4044 of
ERISA, exceeds (ii) the fair market value of all Plan assets allocable to such liabilities under
Title IV of ERISA (excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan,

11

 

but only to the extent that such excess represents a potential liability of a member of the
ERISA Group to the PBGC or any other Person under Title IV of ERISA.

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

          SECTION 1.02 Computation of Time Periods. In this Agreement in the computation of
periods of time from a specified date to a later specified date, the word “from” means “from and
including” and the words “to” and “until” each mean “to but excluding”.

          SECTION 1.03 Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP.

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES

          SECTION 2.01 The Revolving Credit Advances. The Lender agrees, on the terms and
conditions hereinafter set forth, to make Revolving Credit Advances to the Borrower from time to
time on any Business Day during the period from the Effective Date until the Termination Date in an
aggregate amount not to exceed at any time outstanding the Lender’s Commitment. Each Revolving
Credit Advance shall be in an amount of $10,000,000 or an integral multiple of $1,000,000 in excess
thereof. Within the limits of the Lender’s Commitment, the Borrower may borrow under this Section
2.01, prepay pursuant to Section 2.09 and reborrow under this Section 2.01.

          SECTION 2.02 Making the Revolving Credit Advances. (a) Each Revolving Credit Advance
shall be made on notice, given not later than (i) 1:00 P.M. (New York City time) on the third
Business Day prior to the date of the proposed Revolving Credit Advance in the case of a Eurodollar
Rate Advance, (ii) 1:00 P.M. (New York City time) on the second Business Day prior to the date of
the proposed Revolving Credit Advance in the case of an Adjusted CD Rate Advance or (iii) 12:00
noon (New York City time) on the date of the proposed Revolving Credit Advance in the case of a
Base Rate Advance, by the Borrower to the Lender. Each such notice of a Revolving Credit Advance
(a “Notice of Revolving Credit Advance”) shall be by telephone or email, confirmed immediately in
writing, telecopier or email in substantially the form of Exhibit B hereto, specifying therein the
requested (I) date of such Revolving Credit Advance, (II) Type of Revolving Credit Advances, (III)
amount of such Revolving Credit Advance, and (IV) in the case of a Eurodollar Rate Advance or
Adjusted CD Rate Advance, initial Interest Period for each such Revolving Credit Advance. The
Lender shall, before 2:00 P.M. (New York City time) on the date of such Revolving Credit Advance
and upon fulfillment of the applicable conditions set forth in Article III, make such Advance
available to the Borrower at such account as is mutually agreed to.

          (b) Anything in subsection (a) above to the contrary notwithstanding, (i) the Borrower may not
select Eurodollar Rate Advances or Adjusted CD Rate Advances if the amount thereof is less than
$10,000,000 or if the obligation of the Lender to make Eurodollar Rate Advances shall then be
suspended pursuant to Section 2.07 or 2.11 and (ii) there may not be more than six separate
Eurodollar Rate Advances outstanding at any time.

          (c) Each Notice of Revolving Credit Advance shall be irrevocable and binding on the Borrower.

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          SECTION 2.03 Fees. The Borrower agrees to pay to the Lender a facility fee on the
amount of the Lender’s Commitment from the date hereof until the Termination Date at a rate per
annum equal to the Applicable Percentage in effect from time to time, payable in arrears quarterly
on the last day of each March, June, September and December, commencing December 31, 2006, and on
the Termination Date.

          SECTION 2.04 Termination or Reduction of the Commitment. The Borrower shall have the
right, upon at least three Business Days’ notice to the Lender, to terminate in whole or reduce in
part, the unused portions of the Commitment of the Lender, provided that each partial reduction
shall be in the aggregate amount of $10,000,000 or an integral multiple of $1,000,000 in excess
thereof. Once terminated or reduced, the Commitment may not be reinstated.

          SECTION 2.05 Repayment of Revolving Credit Advances. The Borrower shall repay to the
Lender on the Termination Date the aggregate principal amount of the Revolving Credit Advances then
outstanding.

          SECTION 2.06 Interest on Revolving Credit Advances.

          (a) Scheduled Interest. The Borrower shall pay interest on the unpaid principal
amount of each Revolving Credit Advance from the date of such Revolving Credit Advance until such
principal amount shall be paid in full, at the following rates per annum:

          (i) Base Rate Advances. During such periods as such Revolving Credit Advance
is a Base Rate Advance, a rate per annum equal at all times to the sum of (x) the Base Rate
in effect from time to time plus (y) the Applicable Margin in effect from time to
time plus (z) the Applicable Utilization Fee, if any, in effect from time to time,
payable in arrears quarterly on the last day of each March, June, September and December
during such periods and on the date such Base Rate Advance shall be Converted or paid in
full.

          (ii) Eurodollar Rate Advances. During such periods as such Revolving Credit
Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Revolving Credit Advance to the sum of (x) the Eurodollar Rate for
such Interest Period for such Revolving Credit Advance plus (y) the Applicable
Margin in effect from time to time plus (z) the Applicable Utilization Fee, if any,
in effect from time to time, payable in arrears on the last day of such Interest Period and,
if such Interest Period has a duration of more than three months, on each day that occurs
during such Interest Period every three months from
the first day of such Interest Period and on the date such Eurodollar Rate Advance
shall be Converted or paid in full.

          (iii) Adjusted CD Rate Advances. During such periods as such Revolving Credit
Advance is an Adjusted CD Rate Advance, a rate per annum equal at all times during each
Interest Period for such Revolving Credit Advance to the sum of (x) the Adjusted CD Rate for
such Interest Period for such Revolving Credit Advance plus (y) the Applicable
Margin in effect from time to time plus (z) the Applicable Utilization Fee, if any,
in effect from time to time, payable in arrears on the last day of such Interest Period and,
if such Interest Period has a duration of more than 90 days, on each day that occurs during
such Interest Period every 90 days from the first day of such Interest Period and on the
date such Adjusted CD Rate Advance shall be Converted or paid in full.

          (b) Default Interest. Upon the occurrence and during the continuance of an Event of
Default, the Borrower shall pay interest on (i) the unpaid principal amount of each Revolving
Credit

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Advance, payable in arrears on the dates referred to in clause (a)(i), (a)(ii) or (a)(iii)
above, at a rate per annum equal at all times to 2% per annum above the rate per annum required to
be paid on such Revolving Credit Advance pursuant to clause (a)(i), (a)(ii) or (a)(iii) above and
(ii) to the fullest extent permitted by law, the amount of any interest, fee or other amount
payable hereunder that is not paid when due, from the date such amount shall be due until such
amount shall be paid in full, payable in arrears on the date such amount shall be paid in full and
on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required
to be paid on Base Rate Advances pursuant to clause (a)(i) above.

          SECTION 2.07 Interest Rate Determination.

          (a) If, with respect to any Eurodollar Rate Advances, the Lender notifies the Borrower that
the Eurodollar Rate for any Interest Period for such Revolving Credit Advances will not adequately
reflect the cost to the Lender of making, funding or maintaining Eurodollar Rate Advances for such
Interest Period, (i) each Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance, and (ii) the obligation of the
Lender to make, or to Convert Revolving Credit Advances into, Eurodollar Rate Advances shall be
suspended until the Lender shall notify the Borrower that the circumstances causing such suspension
no longer exist.

          (b) If the Borrower shall fail to select the duration of any Interest Period for any
Eurodollar Rate Advances or Adjusted CD Rate Advances in accordance with the provisions contained
in the definition of “Interest Period” in Section 1.01, such Revolving Credit Advances will
automatically, on the last day of the then existing Interest Period therefor, be Converted into
Base Rate Advances.

          (c) On the date on which the aggregate unpaid principal amount of Eurodollar Rate Advances or
Adjusted CD Rate Advances shall be reduced, by payment or prepayment or otherwise, to less than
$10,000,000, such Revolving Credit Advances shall automatically Convert into Base Rate Advances.

          (d) Upon the occurrence and during the continuance of any Event of Default, (i) each
Eurodollar Rate Advance and each Adjusted CD Rate Advance will automatically, on the last day of
the then existing Interest Period therefor Convert into a Base Rate Advance and (ii) the obligation
of the Lender to make, or to Convert Advances into, Eurodollar Rate Advances or Adjusted CD Rate
Advances shall be suspended.

          SECTION 2.08 Optional Conversion of Revolving Credit Advances. The Borrower may on
any Business Day, upon notice given to the Lender not later than 12:00 noon (New York City time) on
the third Business Day prior to the date of the proposed Conversion and subject to the provisions
of Sections 2.07 and 2.11, Convert all Revolving Credit Advances of one Type into Revolving Credit
Advances of another Type; provided, however, that any Conversion of Eurodollar Rate Advances or
Adjusted CD Rate Advances into Advances of another type shall be made only on the last day of an
Interest Period for such Advances, any Conversion of Base Rate Advances into Eurodollar Rate
Advances or Adjusted CD Rate Advances shall be in an amount not less than the minimum amount
specified in Section 2.02(b) and no Conversion of any Revolving Credit Advances shall result in
more separate Eurodollar Rate Advances than permitted under Section 2.02(b). Each such notice of a
Conversion shall, within the restrictions specified above, specify (i) the date of such Conversion,
(ii) the Revolving Credit Advances to be Converted, and (iii) if such Conversion is into Eurodollar
Rate Advances or Adjusted CD Rate Advances, the duration of the initial Interest Period for each
such Revolving Credit Advance. Each notice of Conversion shall be irrevocable and binding on the
Borrower.

14

 

          SECTION 2.09 Optional Prepayments of Revolving Credit Advances. The Borrower may,
upon notice at least two Business Days’ prior to the date of such prepayment, in the case of
Eurodollar Rate Advances or Adjusted CD Rate Advances, and not later than 12:00 noon (New York City
time) on the date of such prepayment, in the case of Base Rate Advances, to the Lender stating the
proposed date and aggregate principal amount of the prepayment, and if such notice is given the
Borrower shall, prepay the outstanding principal amount of the Revolving Credit Advances in whole
or in part, together with accrued interest to the date of such prepayment on the principal amount
prepaid; provided, however, that (x) each partial prepayment shall be in an aggregate principal
amount of $10,000,000 or an integral multiple of $1,000,000 in excess thereof and (y) in the event
of any such prepayment of a Eurodollar Rate Advance or an Adjusted CD Rate Advance, the Borrower
shall be obligated to reimburse the Lender in respect thereof pursuant to Section 7.04(c).

          SECTION 2.10 Increased Costs. (a) If, due to either (i) the introduction of or any
change in or in the interpretation of any law or regulation after the Effective Date or (ii) the
compliance with any guideline or request from any central bank or other governmental authority
(whether or not having the force of law) after the Effective Date, there shall be any increase in
the cost to the Lender of agreeing to make or making, funding or maintaining Eurodollar Rate
Advances or Adjusted CD Rate Advances (excluding for purposes of this Section 2.10 any such
increased costs resulting from (I) Taxes or Other Taxes (as to which Section 2.13 shall govern) and
(II) changes in the basis of taxation of overall net income or overall gross income by the United
States or by the foreign jurisdiction or state under the laws of which the Lender is organized or
has its Applicable Lending Office or any political subdivision thereof), then the Borrower shall
from time to time, upon demand by the Lender, pay to the Lender additional amounts sufficient to
compensate the Lender for such increased cost. A certificate as to the amount of such increased
cost, submitted to the Borrower by the Lender, shall be conclusive and binding for all purposes,
absent manifest error.

          (b) If the Lender determines that compliance with any law or regulation or any guideline or
request from any central bank or other governmental authority (whether or not having the force of
law) affects or would affect the amount of capital required or expected to be maintained by the
Lender or any corporation controlling the Lender and that the amount of such capital is increased
by or based upon the existence of the Lender’s commitment to lend hereunder and other commitments
of this type, then, upon demand by the Lender, the Borrower shall pay to the Lender, from time to
time as
specified by the Lender, additional amounts sufficient to compensate the Lender or such
corporation in the light of such circumstances, to the extent that the Lender reasonably determines
such increase in capital to be allocable to the existence of the Lender’s commitment to lend
hereunder. A certificate as to such amounts submitted to the Borrower by the Lender shall be
conclusive and binding for all purposes, absent manifest error.

          (c) If the Lender fails to give the Borrower any prompt notice required by this Section 2.10,
the Borrower shall not be required to indemnify and compensate the Lender under this Section 2.10
for any amounts attributable to the event or factual circumstance required to be disclosed in such
notice and arising during or with respect to any period ending more than 90 days before notice
thereof has been delivered to the Borrower, provided that this subsection (c) shall in no
way limit the right of the Lender to demand or receive compensation to the extent that such
compensation relates to any law, rule, regulation, interpretation, administration, request or
directive (or any change therein) which by its terms has retroactive application if such notice is
given within 90 days after the date of enactment or effectiveness of such retroactive law, rule,
regulation, interpretation, administration, request or directive (or change therein).

          SECTION 2.11 Illegality. Notwithstanding any other provision of this Agreement, if
the Lender shall notify the Borrower that the introduction of or any change in or in the
interpretation of

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any law or regulation makes it unlawful, or any central bank or other
governmental authority asserts that it is unlawful, for the Lender or its Eurodollar Lending Office
to perform its obligations hereunder to make Eurodollar Rate Advances or to fund or maintain
Eurodollar Rate Advances hereunder, (a) each Eurodollar Rate Advance will automatically, upon such
demand, Convert into a Base Rate Advance and (b) the obligation of the Lender to make Eurodollar
Rate Advances or to Convert Revolving Credit Advances into Eurodollar Rate Advances shall be
suspended until the Lender shall notify the Borrower that the circumstances causing such suspension
no longer exist.

          SECTION 2.12 Payments and Computations. (a) The Borrower shall make each payment
hereunder not later than 11:00 A.M. (New York City time) on the day when due to the Lender at the
Lender’s Account in same day funds.

          (b) All computations of interest based on the Base Rate shall be made by the Lender on the
basis of a year of 365 or 366 days, as the case may be, all computations of interest based on the
Eurodollar Rate, the Adjusted CD Rate or the Federal Funds Rate and of facility fees shall be made
by the Lender on the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for which such
interest or facility fees are payable. Each determination by the Lender of an interest rate
hereunder shall be conclusive and binding for all purposes, absent manifest error.

          (c) Whenever any payment hereunder or under the Revolving Credit Note shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the computation of payment of
interest or facility fee, as the case may be; provided, however, that, if such
extension would cause payment of interest on or principal of Eurodollar Rate Advances to be made
in the next following calendar month, such payment shall be made on the next preceding Business
Day.

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

          (b) In addition, the Borrower shall pay any present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies that arise from any payment made
hereunder or under the Revolving Credit Note or from the execution, delivery or registration of,
performing under, or otherwise with respect to, this Agreement or the Revolving Credit Note
(hereinafter referred to as “Other Taxes”).

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          (c) The Borrower shall indemnify the Lender for and hold it harmless against the full amount
of Taxes or Other Taxes (including, without limitation, taxes of any kind imposed by any
jurisdiction on amounts payable under this Section 2.13) imposed on or paid by the Lender and any
liability (including penalties, interest and expenses) arising therefrom or with respect thereto.
This indemnification shall be made within 30 days from the date the Lender makes written demand
therefor.

          (d) Within 30 days after the date of any payment of Taxes, the Borrower shall furnish to the
Lender, at its address referred to in Section 7.02, the original or a certified copy of a receipt
evidencing such payment. In the case of any payment hereunder or under the Revolving Credit Note
by or on behalf of the Borrower through an account or branch outside the United States or by or on
behalf of the Borrower by a payor that is not a United States person, if the Borrower determines
that no Taxes are payable in respect thereof, the Borrower shall furnish, or shall cause such payor
to furnish, to the Lender, at such address, an opinion of counsel acceptable to the Lender stating
that such payment is exempt from Taxes. For purposes of this subsection (d) and subsection (e),
the terms “United States” and “United States person” shall have the meanings
specified in Section 7701 of the Internal Revenue Code.

          (e) If the Lender is organized under the laws of a jurisdiction outside the United States from
time to time thereafter as requested in writing by the Borrower (but only so long as the Lender
remains lawfully able to do so), shall provide the Borrower with two original Internal Revenue
Service forms W-8BEN or W-8EC1, as appropriate, or any successor or other form prescribed by the
Internal Revenue Service, certifying that the Lender is exempt from or entitled to a reduced rate
of United States withholding tax on payments pursuant to this Agreement or the Revolving Credit
Note. If the form provided by the Lender at the time the Lender first becomes a party to this
Agreement indicates a United States interest withholding tax rate in excess of zero, withholding
tax at such rate shall be considered excluded from Taxes unless and until the Lender provides the
appropriate forms certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such form;
provided, however, that, if at the date the Lender assignee becomes a party to this
Agreement, the assignor was entitled to payments under subsection (a) in respect of United
States withholding tax with respect to interest paid at such date, then, to such extent, the
term Taxes shall include (in addition to withholding taxes that may be imposed in the future or
other amounts otherwise includable in Taxes) United States withholding tax, if any, applicable with
respect to the assignee on such date. If any form or document referred to in this subsection (e)
requires the disclosure of information, other than information necessary to compute the tax payable
and information required on the date hereof by Internal Revenue Service form W-8BEN or W-8EC1, that
the Lender reasonably considers to be confidential, the Lender shall give notice thereof to the
Borrower and shall not be obligated to include in such form or document such confidential
information.

          (f) For any period with respect to which the Lender has failed to provide the Borrower with
the appropriate form described in Section 2.13(e) (other than if such failure is
due to a change in law occurring subsequent to the date on which a form originally was required to
be provided, or if such form otherwise is not required under subsection (e) above), the Lender
shall not be entitled to indemnification under Section 2.13(a) or (c) with respect to Taxes imposed
by the United States by reason of such failure; provided, however, that should the
Lender become subject to Taxes because of its failure to deliver a form required hereunder, the
Borrower shall take such steps as the Lender shall reasonably request to assist the Lender to
recover such Taxes.

          (g) If the Lender claims any additional amounts payable pursuant to this Section 2.13, it
agrees to use reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Eurodollar Lending Office if the making of such a
change would avoid the need for, or reduce the amount of, any such additional amounts that may

17

 

thereafter accrue and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to the Lender.

          SECTION 2.14 Evidence of Debt. (a) The Lender shall maintain in accordance with its
usual practice an account or accounts evidencing the indebtedness of the Borrower to the Lender
resulting from each Revolving Credit Advance from time to time, including the amounts of principal
and interest payable and paid to the Lender from time to time hereunder in respect of Revolving
Credit Advances. The Borrower agrees that upon notice by the Lender to the Borrower to the effect
that a Revolving Credit Note is required or appropriate in order for the Lender to evidence
(whether for purposes of pledge, enforcement or otherwise) the Revolving Credit Advances owing to,
or to be made by, the Lender, the Borrower shall promptly execute and deliver to the Lender a
Revolving Credit Note payable to the order of the Lender in a principal amount up to the Commitment
of the Lender.

          (b) Entries made in good faith by the Lender in its account or accounts pursuant to subsection
(a) above, shall be prima facie evidence of the amount of principal and interest
due and payable or to become due and payable from the Borrower to the Lender, under this Agreement,
absent manifest error; provided, however, that the failure of the Lender to make an
entry, or any finding that an entry is incorrect, in such account or accounts shall not limit or
otherwise affect the obligations of the Borrower under this Agreement.

          SECTION 2.15 Use of Proceeds. The proceeds of the Revolving Credit Advances shall be
available (and the Borrower agrees that it shall use such proceeds) solely for general corporate
purposes of the Borrower and its Subsidiaries, including commercial paper backstop.

ARTICLE III

CONDITIONS TO EFFECTIVENESS AND LENDING

          SECTION 3.01 Conditions Precedent to Effectiveness of Section 2.01. Section 2.01 of
this Agreement shall become effective on and as of the first date (the “Effective Date”) on which
the following conditions precedent have been satisfied:

          (a) There shall have occurred no material adverse change in the properties, business, profits
or condition (financial or otherwise) of the Borrower or of the Borrower and its Subsidiaries taken
as a whole since October 30, 2005, except as disclosed in the Borrower’s filings with the SEC or as
disclosed in writing to the Lender prior to the date hereof.

          (b) Except as set forth under the heading “Legal Proceedings” in the Borrower’s 2005 Form 10-K
and other SEC filings filed by Borrower prior to the Effective Date, there shall exist no action,
suit or proceeding pending against, or to the knowledge of the Borrower threatened against or
affecting, the Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official (i) in which there is a reasonable possibility of an adverse
determination which would have a Material Adverse Effect, or (ii) which in any manner draws into
question the validity of this Agreement or the Revolving Credit Note.

          (c) All governmental and third party consents and approvals necessary in connection with the
transactions contemplated hereby shall have been obtained (without the imposition of any conditions
that are not acceptable to the Lender) and shall remain in effect, and no law, regulation or
provision in an existing agreement shall be applicable in the reasonable judgment of the Lender
that restrains, prevents or imposes materially adverse conditions upon the transactions
contemplated hereby.

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          (d) The Borrower shall have notified the Lender in writing as to the proposed Effective Date.

          (e) The Borrower shall have paid all accrued fees and expenses of the Lender (including the
accrued fees and expenses of counsel to the Lender) as agreed separately in writing by the parties
to such agreement.

          (f) On the Effective Date, the following statements shall be true:

          (i) The representations and warranties contained in Section 4.01 are correct on and as
of the Effective Date, and

          (ii) No event exists that constitutes a Default or Event of Default.

          (g) The Lender shall have received on or before the Effective Date the following, each dated
such day, in form and substance satisfactory to it:

          (i) The Revolving Credit Note to the order of the Lender to the extent requested by the
Lender pursuant to Section 2.14.

          (ii) Certified copies of the general resolutions of the Board of Directors of the
Borrower which authorize the Borrower to enter into this Agreement and the Revolving
Credit Note, and of all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement and the Revolving Credit
Note.

          (iii) A certificate of the Secretary or an Assistant Secretary of the Borrower
certifying the names and true signatures of the officers of the Borrower authorized to sign
this Agreement and the Revolving Credit Note and the other documents to be delivered
hereunder.

          (iv) A favorable opinion of the Vice President, Legal Services of the Borrower,
substantially in the form of Exhibit C hereto and as to such other matters as the Lender may
reasonably request.

          (v) A favorable opinion of Orrick, Herrington & Sutcliffe, L.L.P., counsel for the
Borrower, substantially in the form of Exhibit D hereto and as to such other matters as the
Lender may reasonably request.

          SECTION 3.02 Conditions Precedent to Each Revolving Credit Advance. The obligation of
the Lender to make a Revolving Credit Advance shall be subject to the conditions precedent that the
Effective Date shall have occurred and on the date of such Revolving Credit Advance (a) the
following statements shall be true (and each of the giving of the applicable Notice of Revolving
Credit Advance and the acceptance by the Borrower of the proceeds of such Revolving Credit Advance
shall constitute a representation and warranty by the Borrower that on the date of such Revolving
Credit Advance such statements are true):

          (i) the representations and warranties contained in Section 4.01 (other than Section
4.01(d)(ii)) are correct on and as of the date of such Revolving Credit Advance, before and
after giving effect to such Revolving Credit Advance and to the application of the proceeds
therefrom, as though made on and as of such date, and

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          (ii) no event has occurred and is continuing, or would result from such Revolving
Credit Advance or from the application of the proceeds therefrom, that constitutes a
Default;

and (b) the Lender shall have received such other approvals, opinions or documents as it may
reasonably request.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

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

          (a) Corporate Existence and Power. Each of the Borrower and each Subsidiary:

          (i) is a corporation duly organized and validly existing under the laws of its
jurisdiction of incorporation;

          (ii) has all requisite power and authority and all necessary licenses and permits to
own and operate its properties and to carry on its business as now conducted and as
presently proposed to be conducted, except where failures to have such licenses and
permits would not, in the aggregate, have a Material Adverse Effect; and

          (iii) is duly licensed or qualified and is in good standing as a foreign corporation in
each jurisdiction wherein the nature of the business transacted by it or the nature of the
property owned or leased by it makes such licensing or qualification necessary, except where
failures to be so licensed, qualified or in good standing would not, in the aggregate, have
a Material Adverse Effect.

          (b) Corporate and Governmental Authorization; No Contravention. The execution,
delivery and performance by the Borrower of this Agreement and the Revolving Credit Note are within
the Borrower’s corporate powers, have been duly authorized by all necessary corporate action,
require no action by or in respect of, or filing with, any governmental body, agency or official
and do not contravene, or constitute a default under, any provision of applicable law or regulation
or of the certificate of incorporation or by-laws of the Borrower or of any agreement, judgment,
injunction, order, decree or other instrument binding upon the Borrower or any of its Subsidiaries
or result in the creation or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.

          (c) Binding Effect. This Agreement constitutes a valid and binding agreement of the
Borrower and the Revolving Credit Note, when executed and delivered in accordance with this
Agreement, will constitute a valid and binding obligation of the Borrower, in each case enforceable
in accordance with its terms, except as limited by (i) bankruptcy, insolvency or similar laws
affecting creditors’ rights generally and (ii) general principles of equity.

          (d) Financial Information. (i) The consolidated balance sheet of the Borrower and
its Subsidiaries as of October 30, 2005, and the related consolidated statements of operations and
cash flows for the fiscal year then ended, reported on by KPMG LLP and set forth in the Borrower’s
2005 Form 10-K (or an exhibit thereto), a copy of which has been obtained by each of the Lenders,
fairly present, in conformity with generally accepted accounting principles, the consolidated
financial position

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of the Borrower and its Subsidiaries as of such date and their consolidated
results of operations and cash flows for such fiscal year.

          (ii) There has been no material adverse change since October 30, 2005, in the business,
financial position or results of operations of the Borrower and its Subsidiaries, considered
as a whole, except as disclosed in the Borrower’s filings with the SEC prior to the
Effective Date.

          (e) Litigation. Except as set forth under the heading “Legal Proceedings” in the
Borrower’s 2005 Form 10-K and as disclosed in any SEC filings of the Borrower made prior to the
Effective Date, and then only to the extent that there have been no adverse developments with
respect to such “Legal Proceedings” since such Form 10-K or in such SEC filings, there is no
action, suit or proceeding pending against, or to the knowledge of the Borrower any investigation,
action, suit or proceeding threatened against or affecting, the Borrower or any of its Subsidiaries
before any court or arbitrator or any governmental body, agency or official (i) in which there is a
reasonable possibility of an adverse determination which would have a Material Adverse Effect, or
(ii) which in any manner draws into question the validity of this Agreement or the Revolving Credit
Note.

          (f) Compliance with ERISA. Each member of the ERISA Group has fulfilled its
obligations under the minimum funding standards of ERISA and the Internal Revenue Code with respect
to each Plan and is in compliance in all material respects with the presently applicable provisions
of ERISA and the Internal Revenue Code with respect to each Plan. No member of the ERISA Group has
(i) sought a waiver of the minimum funding standard under Section 412 of the Internal Revenue Code
in respect of any Plan, (ii) failed to make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement, or made any amendment to any Plan or
Benefit Arrangement, which has resulted or could result in the imposition of a Lien or the posting
of a bond or other security under ERISA or the Internal Revenue Code which will violate Section
5.02(a) hereof or (iii) incurred any unpaid liability in excess of $75,000,000 under Title IV of
ERISA other than a liability to the PBGC for premiums under Section 4007 of ERISA.

          (g) Environmental Matters. The Borrower has a process of conducting periodic internal
reviews relating to compliance by the Borrower and its Subsidiaries with Environmental Laws and
liabilities thereunder. On the basis of such reviews and other business processes, except as set
forth in the Borrower’s 2005 Form 10-K, nothing has come to the attention of the Borrower which
would lead it to believe that costs associated with compliance with Environmental Laws or
liabilities thereunder (including, without limitation, any capital or operating expenses required
for cleanup, closure of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential liabilities to third
parties) would have a Material Adverse Effect.

          (h) Taxes. All federal and state income tax returns required to be filed by the
Borrower or any Subsidiary in any jurisdiction have, in fact, been filed and all other tax returns
required to be filed in any other jurisdiction have, in fact, been filed, except where the failure
to so file in such jurisdictions (other than in connection with federal or state income tax
returns) would not have a Material Adverse Effect, and all taxes, assessments, fees and other
governmental charges upon the Borrower or any Subsidiary or upon any of their respective
properties, income or franchises, which are shown to be due and payable in such returns, have been
paid. For all taxable years ending on or before October 1997, the Federal income tax liability of
the Borrower and its Subsidiaries has been satisfied and either the period of limitations on
assessment of additional Federal income tax has expired or the Borrower and its Subsidiaries have
entered into an agreement with the Internal Revenue Service closing conclusively the

21

 

total tax
liability for the taxable year. The provisions for taxes on the books of the Borrower and each
Subsidiary are adequate for all open years, and for its current fiscal period.

          (i) No Regulatory Restrictions on Advances. The Borrower is not (i) primarily engaged
in a business or businesses of investing, reinvesting, owning, holding or trading in securities;
(ii) a “holding company” or a “subsidiary company” of a holding company within the meaning of the
Public Utility Holding Company Act of 2005, as amended; or (iii) otherwise subject to any
regulatory scheme applicable to it which restricts its ability to incur debt under this Agreement.

          (j) Full Disclosure. All written information heretofore furnished by the Borrower to
the Lender for purposes of or in connection with this Agreement or any transaction contemplated
hereby does not, and all such written information hereafter furnished by the Borrower to the Lender
will not, contain any untrue statement of a material fact or in the aggregate omit a material fact
necessary to make the statements therein not misleading on the date as of which such information is
stated or certified. There is no fact peculiar to the Borrower or its Subsidiaries which the
Borrower has not disclosed to the Lender in writing which has had or, so far as the Borrower can
now reasonably foresee, will have a Material Adverse Effect.

ARTICLE V

COVENANTS OF THE BORROWER

          SECTION 5.01 Affirmative Covenants. So long as any Revolving Credit Advance shall remain unpaid or the Lender shall have any
Commitment hereunder, the Borrower will:

          (a) Compliance with Laws, Etc. Comply, and cause each Subsidiary to comply, in all
material respects with all applicable laws, ordinances, rules, regulations, and requirements of
governmental authorities (including, without limitation, Environmental Laws and ERISA and the rules
and regulations thereunder) except (A) where the necessity of compliance therewith is contested in
good faith by appropriate proceedings or (B) where the violation of which, individually or in the
aggregate, would not reasonably be expected to (x) result in a Material Adverse Effect or (y) if
such violation is not remedied, result in any Lien not permitted under Section 5.02(a).

          (b) Payment of Obligations. Pay and discharge, and cause each Subsidiary to pay and
discharge, at or before maturity, all their respective material obligations and liabilities,
including, without limitation, tax liabilities, except where the same may be contested in good
faith by appropriate proceedings, and maintain, and cause each Subsidiary to maintain, in
accordance with GAAP, appropriate reserves for the accrual of any of the same.

          (c) Maintenance of Property; Insurance. (i) Keep, and cause each Subsidiary to keep,
all property useful and necessary in its business in good working order and condition, ordinary
wear and tear excepted; provided that nothing in this Section 5.01(c)(i) shall prevent the
abandonment of any property if such abandonment does not result in any Default hereunder and the
Borrower determines, in the exercise of its reasonable business judgment, that such abandonment is
in the interest of the Borrower.

          (ii) Maintain, and cause each Subsidiary to maintain, insurance coverage by financially
sound and reputable insurers and in such forms and amounts and against such risks as are
customary for corporations of established reputation engaged in the same or a similar
business and owning and operating similar properties in similar locations.

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          (d) Preservation of Corporate Existence, Etc. Preserve, renew and keep in full force
and effect, and cause each Subsidiary to preserve, renew and keep in full force and effect, their
respective corporate existence and their respective rights, privileges and franchises, except to
the extent that failures to maintain their respective rights, privileges and franchises could not,
in the aggregate, reasonably be expected to have a Material Adverse Effect; provided that
nothing in this Section 5.01(d) shall prohibit (A) the merger of a Subsidiary into the Borrower or
the merger or consolidation of a Subsidiary with or into another Person if the corporation
surviving such consolidation or merger is a Subsidiary and if, in each case, after giving effect
thereto, no Default shall have occurred and be continuing or (B) the termination of the corporate
existence of any Subsidiary if such termination does not result in any Default hereunder and the
Borrower determines, in the exercise of its reasonable business judgment, that such termination is
in the interest of the Borrower.

          (e) Visitation Rights. Permit the Lender (i) to visit and inspect during normal
business hours (at the expense of such Lender unless an Event of Default has occurred and is
continuing), under the Borrower’s guidance and, so long as no Default shall have occurred and be
continuing, upon not less than three Business Days’ prior notice, any of the properties of the
Borrower or any Subsidiary, (ii) to examine (to the extent material to ascertaining compliance with
the terms and provisions hereof or to the extent reasonably related to the financial condition or
material operations of the Borrower or a Subsidiary) all of their books of account, records,
reports and other papers, and to make copies and extracts therefrom (other than attorney-client
privileged and attorney work-product documents) and (iii) to the extent material to ascertaining
compliance with the terms and provisions hereof or to the extent reasonably related to the
financial condition or material operations of the Borrower or a Subsidiary, to discuss their
respective affairs, finances and accounts with their respective officers, employees (who are
managers or officers), and independent public accountants and by this provision the Borrower
authorizes said accountants to discuss with the Lender the finances and affairs of the Borrower and
its Subsidiaries; provided that the Lender shall have given prior written notice to the
Borrower of its intention to discuss such finances and affairs with such accountants and have given
the Borrower the opportunity to participate in such discussions, all at such reasonable times and
as often as may be reasonably requested. Notwithstanding the above, the Borrower may, if and to
the extent required by applicable law, deny such access or information to the Lender.

          (f) Keeping of Books. Keep, and cause each of its Subsidiaries to keep, proper books
of record and account, in which full, true and correct entries shall be made of all dealings and
transactions in relation to its business and activities in accordance with generally accepted
accounting principles in effect from time to time.

          (g) Reporting Requirements. Deliver in writing or by email to the Lender (except as
stated in clauses (i), (ii), (iv), (vi) and (vii) below and Section 7.01(b)) or make available
electronically:

          (i) as soon as available and in any event within 45 days after the end of each
quarterly fiscal period (except the last) of each fiscal year, copies of:

     (A) a consolidated balance sheet of the Borrower and its Subsidiaries
as of the close of such quarterly fiscal period, setting forth in
comparative form the consolidated figures as of the close of the fiscal year
then most recently ended,

     (B) consolidated statements of operations of the Borrower and its
Subsidiaries for such quarterly fiscal period and for the portion of the
fiscal year ending with such quarterly fiscal period, in each case setting
forth in comparative

23

 

form the consolidated figures for the corresponding
period and portion of the preceding fiscal year and

     (C) a consolidated statement of cash flows of the Borrower and its
Subsidiaries for the portion of the fiscal year ending with such quarterly
fiscal period, setting forth in comparative form the consolidated figures
for the corresponding period of the preceding fiscal year,

it being agreed that (1) delivery of such financial statements shall be deemed to be
a representation by the Borrower that such financial statements fairly present, in
conformity with GAAP, the consolidated financial position of the Borrower and its
Subsidiaries as of the close of such quarterly fiscal period and their consolidated
results of operations and cash flows for the portion of the fiscal year ending at
the end of such quarterly fiscal period (subject to normal year-end adjustments) and
(2) the Borrower may satisfy the requirements of this Section 5.01(a)(i) by filing
its Quarterly Report on Form 10-Q with the SEC; provided that such Form 10-Q
satisfies the foregoing requirements of this paragraph (i);

          (ii) as soon as available and in any event within 90 days after the close of each
fiscal year of the Borrower, copies of:

     (A) a consolidated balance sheet of the Borrower and its Subsidiaries
as of the close of such fiscal year, and

     (B) consolidated statements of operations and cash flows of the
Borrower and its Subsidiaries for such fiscal year,

in each case setting forth in comparative form the consolidated figures for the two
preceding fiscal years, all in reasonable detail and accompanied by a report thereon
of a firm of independent public accountants of recognized national standing selected
by the Borrower to the effect that the consolidated financial statements present
fairly, in all material respects, the consolidated financial position of the
Borrower and its Subsidiaries as of the end of the fiscal year being reported on and
their consolidated results of operations and cash flows for said year in conformity
with GAAP and that the examination of such accountants in connection with such
financial statements has been conducted in accordance with generally accepted
auditing standards, it being agreed that the Borrower may satisfy the requirements
of this Section 5.01(a)(ii) by filing its Annual Report on Form 10-K with the SEC;
provided that such Form 10-K (including the exhibits filed therewith)
satisfies the requirements of this paragraph (ii);

          (iii) promptly upon receipt thereof, one copy of each interim or special audit made by
independent accountants of the books of the Borrower or any Subsidiary and any management
letter received from such accountants, in all cases, material to the financial condition or
operations of the Borrower or of the Borrower and its Subsidiaries taken as a whole;

          (iv) promptly upon their becoming available, one copy of each financial statement,
report, notice or proxy statement sent by the Borrower to stockholders generally and of each
regular or periodic report, and any registration statement or prospectus (other than those
on Form S-8) filed by the Borrower or any Subsidiary with any securities exchange or the SEC
or any successor agency; provided that the filing of such document with the SEC
shall satisfy such requirement, and copies of any orders in any proceedings to which the
Borrower or any of its

24

 

Subsidiaries is a party, issued by any governmental agency, Federal
or state, having jurisdiction over the Borrower or any of its Subsidiaries, which orders are
material to the financial condition or operations of the Borrower or the Borrower and its
Subsidiaries taken as a whole;

          (v) promptly upon the occurrence thereof, written notice of (A) a Reportable Event with
respect to any Plan; (B) the institution of any steps by the Borrower, any ERISA Affiliate,
the PBGC or any other person to terminate any Plan if such termination were to result in a
liability of the Borrower or any Subsidiary to the PBGC in an amount which could materially
and adversely affect the condition, financial or otherwise, of the Borrower or of the
Borrower and its Subsidiaries taken as a whole; (C) the institution of any steps by the
Borrower or any ERISA Affiliate to withdraw from any Plan or any Multiemployer Plan if such
withdrawal would result in a liability of the Borrower or any Subsidiary in an amount which
could materially and adversely affect the condition, financial or otherwise, of the Borrower
or of the Borrower and its Subsidiaries taken as a whole; (D) a “prohibited transaction”
within the meaning of Section 406 of ERISA (which has not been exempted under or pursuant to
Section 408 of ERISA) in connection with any Plan if such “prohibited transaction” would
result in a liability of the Borrower or any Subsidiary in an amount which could materially
and adversely affect the condition, financial or otherwise, of the Borrower or of the
Borrower and its Subsidiaries taken as a whole; (E) any increase in the contingent liability
of the Borrower or any Subsidiary with respect to any post-retirement welfare liability in
an amount that could have a Material Adverse Effect; or (F) the taking of any action by, or
the threat in writing of the taking of any action by, the Internal Revenue Service, the
Department of Labor or the PBGC with respect to any of the foregoing;

          (vi) within the periods provided in paragraphs (i) and (ii) above, a certificate of an
authorized financial officer of the Borrower stating that such officer has reviewed the
provisions of this Agreement and (A) setting forth the information and computations (in
sufficient detail) required in order to establish whether the Borrower was in compliance
with the requirements of Sections 5.02(a) and 5.03 at the end of the period covered by the
financial statements then being furnished and (B) stating whether there existed as of the
date of such financial statements and whether, to the best of such officer’s knowledge,
there exists on the date of the certificate or existed at any time during the period covered
by such financial statements any Default and, if any such condition or event exists on the
date of the certificate, specifying the nature and period of existence thereof and the
action the Borrower is taking and proposes to take with respect thereto; provided,
that the email of such certificate in accordance with Section 7.01(b) shall satisfy the
delivery requirements of this paragraph;

          (vii) within the period provided in paragraph (ii) above, a certificate of the
accountants who render an opinion with respect to such financial statements, stating (A)
that they have reviewed this Agreement, and (B) whether, in making their audit, such
accountants have become aware of any Default under Section 6.01 insofar as any such terms or
provisions pertain to or involve accounting matters or determinations, and if any such
condition or event then exists specifying the nature and period of existence thereof;
provided, that the email of such certificate in accordance with Section 7.01(b)
shall satisfy the delivery requirements of this paragraph;

          (viii) within five days after any officer of the Borrower obtains knowledge of any
Default, if such Default is then continuing, a certificate of the chief financial officer or
the chief accounting officer of the Borrower setting forth the details thereof and the
action which the Borrower is taking and proposes to take with respect thereto;

25

 

          (ix) promptly upon any change in the Public Debt Rating, a notice reporting such change
and stating the date on which such change was publicly announced by the relevant rating
agency; and

          (x) from time to time such additional information regarding the financial position or
business of the Borrower and its Subsidiaries as the Lender may reasonably request.

          SECTION 5.02 Negative Covenants. So long as any Revolving Credit shall remain unpaid
or the Lender shall have any Commitment hereunder, the Borrower will not:

          (a) Liens, Etc. Create, incur or suffer to exist, or permit any of its Subsidiaries
to create, incur or suffer to exist, any Lien on or with respect to any of its properties, whether
now owned or hereafter acquired, or upon any income or profits therefrom, or acquire or agree to
acquire, or permit any Subsidiary to acquire, any property or assets upon conditional sales
agreements or other title retention devices, except:

          (i) Liens for property taxes and assessments or governmental charges or levies and
Liens securing claims or demands of mechanics and materialmen, provided that payment
thereof is not at the time required by Section 5.01(a) or (b);

          (ii) any Lien of or resulting from any judgment or award; provided that either
(A) the amount secured thereby does not exceed $75,000,000 or (B) if the amount secured
thereby does exceed $75,000,000, the time for the appeal or petition for rehearing of such
judgment or award shall not have expired, or the Borrower or a Subsidiary shall in good
faith be prosecuting an appeal or proceeding for a review thereof, and execution of such
judgment or award shall be stayed pending such appeal or proceeding for review;

          (iii) Liens incidental to the conduct of business conducted by the Borrower and its
Subsidiaries in the ordinary course of business or the ownership of properties and assets
owned by the Borrower and its Subsidiaries (including Liens in connection with worker’s
compensation, unemployment insurance and other like laws, warehousemen’s and attorneys’
liens and statutory landlords’ liens) and Liens to secure the performance of bids, tenders
or trade contracts, or to secure statutory obligations, surety or appeal bonds or other
Liens of like general nature incurred in the ordinary course of business of the Borrower and
its Subsidiaries and not in connection with the borrowing of money, provided in each
case, the obligation secured is not overdue or, if overdue, is being contested in good faith
by appropriate actions or proceedings;

          (iv) survey exceptions or encumbrances, encroachments, easements or reservations, or
rights of others for rights-of-way, utilities and other similar purposes, zoning
restrictions, declarations of covenants, conditions and restrictions, other title exceptions
or other restrictions as to the use of real properties, which are necessary or appropriate
in the good faith judgment of the Borrower for the conduct of the business of the Borrower
and its Subsidiaries and which, individually or in the aggregate, do not in any event
materially impair their use in the operation of the business of the Borrower or of the
Borrower and its Subsidiaries taken as a whole;

          (v) Liens securing Indebtedness of a Subsidiary to the Borrower or to another
Subsidiary;

          (vi) Liens existing as of the Effective Date and reflected in Schedule 5.02(a) hereto,
including any renewals, extensions or replacements of any such Lien, provided that:

26

 

     (A) no additional property is encumbered in connection with any such
renewal, extension or replacement of any such Lien; and

     (B) there is no increase in the aggregate principal amount of Debt
secured by any such Lien from that which was outstanding or permitted to be
outstanding with respect to such Lien as of the Effective Date or the date
of such renewal, extension or replacement, whichever is greater;

          (vii) Liens incurred after the Effective Date given to secure the payment of the
purchase price and/or other direct costs incurred in connection with the acquisition,
construction, improvement or rehabilitation of assets including Liens incurred by the
Borrower or any Subsidiary securing Debt incurred in connection with industrial development
bond and pollution control financings, including Liens existing on such assets at the time
of acquisition thereof or at the time of acquisition by the Borrower or a Subsidiary of any
business entity (including a Subsidiary) then owning such assets, whether or not such
existing Liens were given to secure the payment of the purchase price of the assets to which
they attach, provided that (A) except in the case of Liens existing on assets at the
time of acquisition of a Subsidiary then owning such assets, the Lien shall be created
within twelve (12) months of the later of the acquisition of, or the completion of the
construction or improvement in respect of, such assets and shall attach solely to the assets
acquired, purchased, or financed, or (B) except in the case of Liens existing on assets at
the time of acquisition of a Subsidiary then owning such assets or Liens in connection with
industrial development bond or pollution control financings, at the time of the incurrence
of such
Lien, the aggregate amount remaining unpaid on all Debt secured by Liens on such assets
whether or not assumed by the Borrower or a Subsidiary shall not exceed an amount equal to
75% of the lesser of the total purchase price or fair market value, at the time such Debt is
incurred, of such assets (as determined in good faith by the Board of Directors of the
Borrower;

          (viii) Liens arising from the sale or transfer of accounts receivable and notes of the
Borrower and its Subsidiaries, provided that the Borrower and its Subsidiaries shall
receive adequate consideration therefor;

          (ix) Liens on notes or accounts receivable sold or transferred in a transaction which
is accounted for as a true sale under GAAP;

          (x) Liens securing Debt, to the extent that such Liens are not otherwise permitted by
this Section 5.02(a), provided that immediately after giving effect to the
incurrence of any such Lien, the sum of the aggregate principal amount of all outstanding
Debt secured by Liens permitted solely by reason of this Sections 5.02(a)(x) shall not
exceed 15% of Consolidated Net Tangible Assets; and

          (xi) Liens incurred in connection with any renewals, extensions or refundings of any
Debt secured by Liens described in Sections 5.02(a)(vii), (viii), (ix) or (x),
provided that there is no increase in the aggregate principal amount of Debt secured
thereby and no additional property is encumbered.

In the event that any property of the Borrower or its Subsidiaries is subjected to a lien in
violation of this Section 5.02(a), but no other provision of this Agreement (the Indebtedness
secured by such lien being referred to as “Prohibited Secured Indebtedness”), such
violation shall not constitute an Event of Default hereunder if the Borrower, substantially
simultaneously with the incurrence of such lien, makes or causes to be made a provision whereby the
Revolving Credit Note will be secured equally and ratably with all Prohibited Secured Indebtedness
and delivers to the Lender an opinion to that effect, and, in any case, the

27

 

 Revolving Credit Note
shall have the benefit, to the full extent that, and with such priority as, the Lender may be
entitled to under applicable law, of an equitable lien to secure the Revolving Credit Note on such
property of the Borrower or its Subsidiaries that secures Prohibited Secured Indebtedness. The
opinion referred to in the preceding sentence shall be addressed to the Lender, shall contain such
qualifications and limitations as are reasonably acceptable to the Lender and shall be delivered by
counsel of nationally recognized standing selected by the Borrower and satisfactory to the Lender.
Such counsel shall be deemed to be satisfactory to the Lender unless, during the 15 day period
after the Lender has received written notice identifying such counsel, the Lender shall have
objected to such selection in writing to the Borrower.

          Notwithstanding any of the foregoing provisions of this Section 5.02(a) including, without
limitation, the terms and provisions of the preceding paragraph of this Section 5.02(a), the
Borrower shall not, and shall not permit any Subsidiary to, create or incur, or suffer to be
incurred or to exist, any Lien (other than Liens described in Section 5.02(a)(i) through (iv),
inclusive) upon any land, property or buildings (or any interest therein) described as Special
Unencumbered Property in Schedule 5.02(a)(xii) hereto.

          (b) Consolidations, Mergers and Sales of Assets. Consolidate or merge with or into
any other Person or sell, lease or otherwise transfer, directly or indirectly, all or substantially
all of its assets to any other Person; provided that the Borrower may merge with another
Person if immediately after giving effect to such merger (x) no Default shall exist, and (y) the
Borrower is the surviving entity.

          (c) Accounting Changes. Make or permit, or permit any of its Subsidiaries to make or
permit, any change in accounting policies or reporting practices, except as required or permitted
by GAAP.

          (d) Change in Nature of Business. Engage, or permit any of its Subsidiaries to
engage, in any business if, as a result, the primary business, taken on a consolidated basis, which
would then be engaged in by the Borrower and its Subsidiaries would be substantially changed from
the business of the manufacture of capital equipment for the electronics and solar industries.

          (e) Use of Proceeds. Use proceeds of the Revolving Credit Advances made under this
Agreement, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of
buying or carrying Margin Stock unless, at all times when any such proceeds are used to buy or
carry Margin Stock, not more than 25% of the value (as determined by any reasonable method) of the
assets (either of the Borrower only or of the Borrower and its Subsidiaries on a consolidated
basis) which are subject to any restriction in Sections 5.02(a) or 5.02(b) consists of Margin
Stock.

          (f) Transactions with Affiliates. Enter into or be a party to, or permit any
Subsidiary to enter into or be a party to, any transaction or arrangement with any Affiliate
(including, without limitation, the purchase from, sale to or exchange of property with, or the
rendering of any service by or for, any Affiliate), except in the ordinary course of and pursuant
to the reasonable requirements of the Borrower’s or such Subsidiary’s (as the case may be) business
and upon fair and reasonable terms no less favorable to the Borrower or such Subsidiary than would
be obtained in a comparable arm’s-length transaction with a Person other than an Affiliate.

          SECTION 5.03 Financial Covenant. So long as any Revolving Credit Advance shall remain
unpaid or the Lender shall have any Commitment hereunder, the Borrower will maintain as of the

28

 

last
day of each fiscal quarter, determined on the basis of the most recently completed four consecutive
fiscal quarters ending on such day, a Consolidated Leverage Ratio of not greater than *** .

ARTICLE VI

EVENTS OF DEFAULT

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

          (a) the Borrower shall fail to pay any principal of any Revolving Credit Advance when due or
shall fail to pay any interest, fee, or other amount payable hereunder within three Business Days
or five days after it becomes due, whichever is later;

          (b) any representation, warranty, certification or statement made by the Borrower in this
Agreement or in any certificate, financial statement or other document delivered pursuant to this
Agreement shall prove to have been incorrect in any material respect when made (or deemed made);

          (c) the Borrower shall fail to perform or observe any other term, covenant or agreement
contained in this Agreement on its part to be performed or observed (other than clause (a) above)
if such failure shall remain unremedied for 30 days after written notice thereof shall have been
given to the Borrower by the Lender;

          (d) the Borrower or any Subsidiary shall fail to make any payment in respect of any Material
Financial Obligations when due or within any applicable grace period;

          (e) any event or condition shall occur which results in the acceleration of the maturity of
any Material Debt or enables (after the lapse of any cure period and the receipt of any required
notices) the holder of such Debt or any Person acting on such holder’s behalf to accelerate the
maturity thereof;

          (f) the Borrower or any Subsidiary shall 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 seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding commenced against it, or
shall make a general assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall admit in writing its inability to pay its debts generally, or
shall take any corporate action to authorize any of the foregoing; provided that no event
otherwise constituting an Event of Default under this clause (f) shall be an Event of Default if
the total assets of all entities with respect to which an event has occurred which would otherwise
have constituted an Event of Default under this clause (f) or clause (g) do not exceed $75,000,000
in the aggregate;

          (g) an involuntary case or other proceeding shall be commenced against the Borrower or any
Subsidiary seeking liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the

 

			
	***	 	information has been omitted and filed
separately with the Commission. Confidential treatment has been requested with
respect to the omitted portions.

29

 

appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days; or an order for relief shall be entered against
the Borrower or any Subsidiary under the federal bankruptcy laws as now or hereafter in effect;
provided that no event otherwise constituting an Event of Default under this clause (g)
shall be an Event of Default if the total assets of all entities with respect to which an event has
occurred which would otherwise have constituted an Event of Default under clause (f) or this clause
(g) do not exceed $75,000,000 in the aggregate;

          (h) any ERISA Affiliate shall fail to pay when due (or in the case of an ERISA Affiliate
acquired by the Borrower or a Subsidiary after the due date thereof, within 30 days after such
ERISA Affiliate is so acquired) an amount or amounts aggregating in excess of $75,000,000 which it
shall have become liable to pay under Title IV of ERISA; or notice of intent to terminate a
Material Plan shall be filed under Title IV of ERISA by any ERISA Affiliate, any plan administrator
or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of
ERISA to terminate, to impose liability (other than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to administer any Material Plan; or there shall
occur a complete or partial withdrawal from, or a default, within the meaning of Section 4219(c)(5)
of ERISA, with respect to, one or more Multiemployer Plans which could cause one or more ERISA
Affiliates to incur a current payment obligation in excess of $50,000,000;

          (i) final judgments or orders for the payment of money in excess of $75,000,000 in the
aggregate (excluding amounts with respect to which a financially sound and reputable insurer has
admitted liability) shall be rendered against the Borrower or any Subsidiary and such
judgments or orders shall continue unsatisfied and unstayed for a period of 30 consecutive days; or

          (j) either (i) any person or group of persons (within the meaning of Section 13 or 14 of the
Exchange Act) shall have acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the SEC under said Act) of 30% or more of the outstanding shares of Voting Stock of
the Borrower; or (ii) during any period of 12 consecutive calendar months, commencing before or
after the date of this Agreement, individuals who were directors of the Borrower on the first day
of such period (the “Initial Directors”) shall cease for any reason to constitute a
majority of the board of directors of the Borrower unless the Persons replacing such individuals
were nominated or elected by a majority of the directors (x) who were Initial Directors at the time
of such nomination or election and/or (y) who were nominated or elected by a majority of directors
who were Initial Directors at the time of such nomination or election;

then, and in any such event, the Lender (i) may, by notice to the Borrower, declare the obligation
of the Lender to make Revolving Credit Advances to be terminated, whereupon the same
shall forthwith terminate, and (ii) may, by notice to the Borrower, declare the Revolving Credit
Advances, all interest thereon and all other amounts payable under this Agreement to be forthwith
due and payable, whereupon the Revolving Credit Advances, all such interest and all such amounts
shall become and be forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower; provided,
however, that in the case of any of the Events of Default specified in clause (f) or (g)
above with respect to the Borrower, without any notice to the Borrower or any other act by the
Lender, the Commitment shall thereupon terminate and the Revolving Credit Advances (together with
accrued interest thereon) shall immediately become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly waived by the
Borrower.

30

 

ARTICLE VII

MISCELLANEOUS

          SECTION 7.01 Amendments, Etc. No amendment or waiver of any provision of this
Agreement or the Revolving Credit Note, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed by the Borrower and
the Lender, and then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.

          SECTION 7.02 Notices, Etc. (a) Except to the extent set forth in Section 7.02(b) and
in the proviso to this Section 7.02(a), all notices and other communications provided under this
Agreement shall be in writing (including telecopier or email communication) and mailed, telecopied,
emailed or delivered (x) if to the Borrower, at its address at 3050 Bowers Avenue, Santa Clara,
California 95054, Attention: Robert Friess; Telecopier: 408-986-7825; email:
Robert_Friess@amat.com; provided, that if such notice is to be delivered pursuant to Section 6.01,
7.05, 7.01 or 7.07, then such notice shall be delivered by mail or express delivery (and not
delivered electronically or by telecopy) at the address above to the Attention of: Robert Friess,
Treasurer (or his successor) and Joseph Sweeney, Group Vice President, Legal Affairs and
Intellectual Property (or his successor), or at such other address as shall be designated by
Borrower in a written notice to the other parties; and (y) if to the Lender, at its Domestic
Lending Office specified opposite its name on Schedule I hereto or at such other address as shall
be designated by such party in a
written notice to the Borrower, provided that materials required to be delivered pursuant to
Sections 5.01(g)(vi) and (vii) shall be delivered as specified in Section 7.02(b) or as otherwise
specified to the Borrower by the Lender from time to time. All such notices and communications
shall, when mailed, telecopied or e-mailed, be effective when deposited in the mails, telecopied,
or confirmed by e-mail, respectively, except that notices and communications to the Lender pursuant
to Article II or III shall not be effective until received by the Lender. Delivery by telecopier
of an executed counterpart of any amendment or waiver of any provision of this Agreement or the
Revolving Credit Note or of any Exhibit hereto to be executed and delivered hereunder shall be
effective as delivery of a manually executed counterpart thereof.

          (b) So long as Citibank or any of its Affiliates is the Lender, the Borrower hereby agrees
that, unless otherwise requested by the Lender, it will provide to the Lender all information,
documents and other materials that it is obligated to furnish to the Lender pursuant to this
Agreement, including, without limitation, all notices, financial statements, financial and other
reports, certificates and other required information materials, but excluding any such
communication that (i) relates to a request for an amendment or for a new, or a conversion of an
existing, borrowing or other extension of credit (including any election of an interest rate or
interest period relating thereto), (ii) relates to the payment of any principal or other amount due
under this Agreement prior to the scheduled date therefor, (iii) provides notice of any default or
event of default under this Agreement, (iv) is required to be delivered to satisfy any condition
precedent to the effectiveness of this Agreement and/or any borrowing or other extension of credit
hereunder or (v) initiates or responds to legal process (all such non-excluded information being
referred to herein collectively as the “Communications”) by transmitting the Communications
in an electronic/soft medium (provided such Communications contain any required signatures) in a
format acceptable to the Lender to oploanswebadmin@citigroup.com (or such other e-mail address
designated by the Lender from time to time).

          Each party hereto agrees that any electronic communication referred to in this Section 7.02(b)
shall be deemed delivered upon the posting of a record of such communication (properly addressed to
such party at the e-mail address provided to the Lender) as “sent” in the e-mail system of the
sending party or, in the case of any such communication to the Lender, upon the posting of a record
of

31

 

such communication as “received” in the e-mail system of the Lender; provided that if such
communication is not so received by the Lender during the normal business hours (Eastern Standard
Time) of the Lender, such communication shall be deemed delivered at the opening of business on the
next Business Day for the Lender.

          SECTION 7.03 No Waiver; Remedies. No failure on the part of the Lender to exercise,
and no delay in exercising, any right hereunder or under the Revolving Credit Note shall operate as
a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or
further exercise thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.

          SECTION 7.04 Costs and Expenses. (a) The Borrower shall pay (i) all out-of pocket
expenses of the Lender, including reasonable fees and disbursements of special counsel for the
Lender, in connection with the preparation of this Agreement (subject to any limits agreed upon in
writing by the Borrower and the Lender), any waiver or consent hereunder or any amendment hereof or
any Default or alleged Default hereunder and (ii) if an Event of Default occurs, all out-of pocket
expenses incurred by the Lender, including (without duplication) the reasonable fees and
disbursements of outside counsel and the allocated cost of inside
counsel, in connection with such Event of Default and collection, bankruptcy, insolvency and
other enforcement proceedings resulting therefrom.

          (b) The Borrower agrees to indemnify and hold harmless the Lender and each of its Affiliates
and their officers, directors, employees, agents and advisors (each, an “Indemnified
Party”) from and against any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of or in connection
with or by reason of (including, without limitation, in connection with any investigation,
litigation or proceeding or preparation of a defense in connection therewith) (i) the Revolving
Credit Note, this Agreement, any of the transactions contemplated herein or the actual or proposed
use of the proceeds of the Revolving Credit Advances or (ii) the actual or alleged presence of
Hazardous Substances on any property of the Borrower or any of its Subsidiaries or any
Environmental Action relating in any way to the Borrower or any of its Subsidiaries, except to the
extent such claim, damage, loss, liability or expense resulted from such Indemnified Party’s gross
negligence or willful misconduct. In the case of an investigation, litigation or other proceeding
to which the indemnity in this Section 7.04(b) applies, such indemnity shall be effective whether
or not such investigation, litigation or proceeding is brought by the Borrower, its directors,
shareholders or creditors or an Indemnified Party or any other Person or any Indemnified Party is
otherwise a party thereto and whether or not the transactions contemplated hereby are consummated.
The Borrower also agrees not to assert any claim for special, indirect, consequential or punitive
damages against the Lender, any of its Affiliates, or any of their respective directors, officers,
employees, attorneys and agents, on any theory of liability, arising out of or otherwise relating
to the Revolving Credit Note, this Agreement, any of the transactions contemplated herein or the
actual or proposed use of the proceeds of the Revolving Credit Advances.

          (c) If any payment of principal with respect to any Eurodollar Rate Advance or Adjusted CD
Rate Advance, or any such Revolving Credit Advance is Converted to a different Type of Revolving
Credit Advance (pursuant to Section 2.07(d) or (e), 2.09 or 2.11, acceleration of the maturity of
the Revolving Credit Advances pursuant to Section 6.01 or for any other reason) other than on the
last day of the Interest Period for such Revolving Credit Advance, or if the Borrower fails to
borrow, prepay, Convert or continue any such Revolving Credit Advance after notice has been given
to the Lender in accordance with Section 2.02(a), 2.05, 2.08 or 2.09, the Borrower shall reimburse
the Lender for any resulting loss or expense (with interest if appropriate) incurred by it or by an
existing or prospective assignee or participant in the related Revolving Credit Advance, including
(without limitation) any loss

32

 

incurred in obtaining, liquidation or employing deposits from third
parties, but excluding loss of margin for the period after any such payment or failure to borrow,
prepay, Convert or continue; provided that such Lender shall have delivered to the Borrower
a certificate as to the amount of such loss or expense, which certificate shall show in reasonable
detail the basis for calculating such amount and shall be conclusive in the absence of manifest
error.

          (d) Without prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations of the Borrower contained in Sections 2.10, 2.13 and 7.04 shall survive
the payment in full of principal, interest and all other amounts payable hereunder and under the
Revolving Credit Note.

          SECTION 7.05 Right of Set-off. Upon (i) the occurrence and during the continuance of
any Event of Default and (ii) the declaration of the Revolving Credit Advances due and payable
pursuant to the provisions of Section 6.01, the Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing by the Lender
or such Affiliate to or for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Agreement and the Revolving Credit
Note, without limitation of clauses (i) and (ii) above, whether or not the Lender shall have made
any demand under this Agreement or the Revolving Credit Note and although such obligations may be
unmatured. The Lender agrees promptly to notify the Borrower after any such set-off and
application, provided that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Lender and its Affiliates under this Section are in
addition to other rights and remedies (including, without limitation, other rights of set-off) that
the Lender and its Affiliates may have.

          SECTION 7.06 Binding Effect. This Agreement shall become effective (other than
Section 2.01, which shall only become effective upon satisfaction of the conditions precedent set
forth in Section 3.01) when it shall have been executed by the Borrower and the Lender and
thereafter shall be binding upon and inure to the benefit of the Borrower and the Lender and their
respective successors and assigns, except that the Borrower shall not have the right to assign its
rights hereunder or any interest herein without the prior written consent of the Lender.

          SECTION 7.07 Confidentiality. (a) The Lender agrees (on behalf of itself and each of
its Affiliates, directors, employees and representatives) to use reasonable precautions to keep
confidential, in accordance with safe and sound banking practices, any non-public information
supplied to it by the Borrower pursuant to this Agreement after such information is identified by
the Borrower as being confidential, provided that nothing herein shall limit the disclosure of any
such information (i) to the extent required by statute, rule, regulation or judicial process,
provided that the Borrower is given prompt written notice (to the extent permitted by law) that
such disclosure is required, (ii) to counsel for the Lender, (iii) to bank examiners, auditors or
accountants, (iv) in connection with any litigation to which the Lender is a party, provided that
the Borrower has been given prompt prior written notice (to the extent permitted by law) of such
proposed disclosure or (v) to any assignee or participant (or prospective assignee or participant)
so long as such assignee or participant (or prospective assignee or participant), or any actual or
proposed contractual counterparty (or its advisors) to any securitization, hedge, or other
derivative transaction relating to the parties’ obligations hereunder, agrees in writing to be
bound by the terms of this Section 7.07.

          (b) Notwithstanding anything herein to the contrary, the Borrower, and the Lender may disclose
to any and all persons, without limitation of any kind, the U.S. tax treatment and tax structure of
the Agreement and all materials of any kind (including opinions or other tax analyses) that are

33

 

provided to a Borrower or the Lender, as the case may be, relating to such U.S. tax treatment and
tax structure.

          SECTION 7.08 Governing Law. This Agreement and the Revolving Credit Note shall be
governed by, and construed in accordance with, the laws of the State of New York.

          SECTION 7.09 Execution in Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall constitute one and
the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by telecopier or electronic mail (in pdf
format) shall be effective as delivery of a manually executed counterpart of this Agreement.

          SECTION 7.10 Jurisdiction, Etc. (a) Each of the parties hereto hereby irrevocably
and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising out of or relating to
this Agreement or the Revolving Credit Note, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect
of any such action or proceeding may be heard and determined in any such New York State court or,
to the extent permitted by law, in such federal court. The Borrower hereby further irrevocably
consents to the service of process in any action or proceeding in such courts by the mailing
thereof by any parties hereto by registered or certified mail, postage prepaid, to the Borrower at
its address specified pursuant to Section 7.02. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law, provided that this
sentence shall not limit the right of any party hereto to appeal any judgment. Nothing in this
Agreement shall affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or the Revolving Credit Note in the courts of any
jurisdiction.

          (b) Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection that it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to this Agreement or the
Revolving Credit Note in any New York State or federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.

          SECTION 7.11 Patriot Act Notice. The Lender hereby notifies the Borrower that
pursuant to the requirements of the Patriot Act, it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow the Lender to identify the Borrower in accordance
with the Patriot Act. The Borrower shall, and shall cause each of its Subsidiaries to, provide, to
the extent commercially reasonable, such information and take such actions as are reasonably
requested by the Lender in order to assist the Lender in maintaining compliance with the Patriot
Act.

          SECTION 7.12 Assignments. The Lender may assign, in whole, not in part, all its
rights and obligations under this Agreement and the Note, including, without limitation, the
Commitment, Advances owing to it and the Note, with five (5) days prior written notice to the
Borrower; provided, however, each assignment shall be made to an Eligible Assignee
and pursuant to an assignment and assumption agreement in form reasonably acceptable to the Lender,
such Eligible Assignee and the Borrower. Upon such execution, delivery, and acceptance, from and
after the effective date specified in each assignment agreement, (x) the assignee thereunder shall
be a party hereto and, to the extent that

34

 

rights and obligations hereunder have been assigned to it
pursuant to such agreement, have the rights and obligations of the Lender hereunder and (y) the
Lender assignor thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such agreement, relinquish its rights and be released from its
obligations under this Agreement and, the original Lender shall cease to be a party hereto.

          SECTION 7.13 Waiver of Jury Trial. Each of the Borrower and the Lender hereby
irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether
based on contract, tort or otherwise) arising out of or relating to this Agreement or the Revolving
Credit Note or the actions of the Lender in the negotiation, administration, performance or
enforcement thereof.

35

 

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

	 	 	 	 	 
	 	APPLIED MATERIALS, INC.

 	 
	 	By  	/s/ Nancy H. Handel
 	 
	 	 	Name:  	Nancy H. Handel 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	 	 
	 	By  	                  /s/ Robert M. Friess
 	 
	 	 	Name:  	Robert M. Friess 	 
	 	 	Title:  	Vice President, Treasurer 	 
	 
	 	CITICORP USA, INC.

 	 
	 	By  	/s/ Kathryn D. Song
 	 
	 	 	Name:  	Kathryn D. Song 	 
	 	 	Title:  	Vice President 	 
	 

CREDIT AGREEMENT SIGNATURE PAGE

 

SCHEDULE I

COMMITMENTS AND APPLICABLE LENDING OFFICES

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Domestic	 	Eurodollar	 	CD
	 	 	Revolving Credit	 	Lending	 	Lending	 	Lending
	Name of Initial Lender	 	Commitment	 	Office	 	Office	 	Office
	Citicorp USA, Inc.

	 	$	100,000,000	 	 	399 Park Avenue,

New York, NY 10043
	 	399 Park Avenue,

New York, NY 10043
	 	399 Park Avenue,

New York, NY 10043

 

EXHIBIT
A - FORM OF

REVOLVING CREDIT

PROMISSORY NOTE

	 
			
	U.S.$100,000,000 	 	Dated:                     , 2006

          FOR VALUE RECEIVED, the undersigned, APPLIED MATERIALS, INC., a Delaware corporation (the
“Borrower”), HEREBY PROMISES TO PAY to the order of CITICORP USA, INC. (the
“Lender”) for the account of its Applicable Lending Office on the Termination Date (each as
defined in the Credit Agreement referred to below) the principal sum of U.S.$100,000,000 or, if
less, the aggregate principal amount of the Revolving Credit Advances made by the Lender to the
Borrower pursuant to the 364-Day Credit Agreement dated as of September 14, 2006, among the
Borrower and the Lender (as amended or modified from time to time, the “Credit Agreement”;
the terms defined therein being used herein as therein defined) outstanding on such date.

          The Borrower promises to pay interest on the unpaid principal amount of each Revolving Credit
Advance from the date of such Revolving Credit Advance until such principal amount is paid in full,
at such interest rates, and payable at such times, as are specified in the Credit Agreement.

          Both principal and interest are payable in lawful money of the United States of America as
provided in the Credit Agreement, in same day funds. Each Revolving Credit Advance owing to the
Lender by the Borrower pursuant to the Credit Agreement, and all payments made on account of
principal thereof, shall be recorded by the Lender and, prior to any transfer hereof, endorsed on
the grid attached hereto which is part of this Promissory Note.

          This Promissory Note is the Revolving Credit Note referred to in, and is entitled to the
benefits of, the Credit Agreement. The Credit Agreement, among other things, (i) provides for the
making of Revolving Credit Advances by the Lender to the Borrower from time to time in an aggregate
amount not to exceed at any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from each such Revolving Credit Advance being evidenced by
this Promissory Note and (ii) contains provisions for acceleration of the maturity hereof upon the
happening of certain stated events and also for prepayments on account of principal hereof prior to
the maturity hereof upon the terms and conditions therein specified.

	 	 	 	 	 
	 	APPLIED MATERIALS, INC.

 	 
	 	By  	 	 
	 	 	Title: 	 
	 	 	 	 
	 

A-1

 

EXHIBIT B
- FORM OF

 NOTICE OF
REVOLVING

 CREDIT ADVANCE

Citicorp USA, Inc.

Two Penns Way

New Castle, Delaware 19720

[Date]

Attention: Bank Loan Syndications Department

Ladies and Gentlemen:

     The undersigned, APPLIED MATERIALS, INC., refers to the 364-Day Credit Agreement, dated as of
September 14, 2006, (as amended or modified from time to time, the “Credit Agreement”, the
terms defined therein being used herein as therein defined), among the undersigned and you and
hereby gives you notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement that the
undersigned hereby requests a Revolving Credit Advance under the Credit Agreement, and in that
connection sets forth below the information relating to such Revolving Credit Advance (the
“Proposed Revolving Credit Advance”) as required by Section 2.02(a) of the Credit
Agreement:

     (i) The Business Day of the Proposed Revolving Credit Advance is                     , 200_.

     (ii) The Type of Revolving Credit Advances is [Base Rate Advances] [Eurodollar Rate
Advances] [Adjusted CD Rate Advances].

     (iii) The amount of the Proposed Revolving Credit Advance is $                    .

     [(iv) The initial Interest Period for each [Eurodollar Rate Advance] [Adjusted CD Rate
Advance] is ___month[s].]

     The undersigned hereby certifies that the following statements are true on the date hereof,
and will be true on the date of the Proposed Revolving Credit Advance:

     (A) the representations and warranties contained in Section 4.01 of the Credit
Agreement (except the representations set forth in subsection (d)(i) thereof and in
subsection (e)(i) thereof) are correct, before and after giving effect to the Proposed
Revolving Credit Advance and to the application of the proceeds therefrom, as though made on
and as of such date; and

     (B) no event has occurred and is continuing, or would result from such Proposed
Revolving Credit Advance or from the application of the proceeds therefrom, that constitutes
a Default.

	 	 	 	 	 
	 	Very truly yours,

APPLIED MATERIALS, INC.

 	 
	 	By  	 	 
	 	Title: 	 	 
	 	 	 	 
	 

B-1exv10w40

 

Exhibit 10.40

GOLDMAN
SACHS & CO. | 85 BROAD STREET | NEW YORK, NEW YORK 10004 | TEL: 212-902-1000

Opening Transaction

	 	 	 
	To:

	 	Applied Materials, Inc.
	 

	 	3050 Bowers Avenue
	 

	 	Santa Clara, CA 95054
	 
	 	 
	From:

	 	Goldman, Sachs & Co.
	 
	 	 
	Subject:

	 	Accelerated Share Buyback
	 
	 	 
	Date:

	 	September 18, 2006

          This master confirmation (“Master Confirmation”) dated as September 18, 2006, is intended to
supplement the terms and provisions of certain Transactions (each, a “Transaction”) entered into
from time to time between Goldman, Sachs & Co. (“GS&Co.”) and Applied Materials, Inc.
(“Counterparty”). This Master Confirmation, taken alone, is neither a commitment by either party
to enter into any Transaction nor evidence of a Transaction. The terms of any particular
Transaction shall be set forth in a Supplemental Confirmation in the form of Annex A hereto, which
references this Master Confirmation (the “Supplemental Confirmation”). This Master Confirmation
and each Supplemental Confirmation together shall constitute a “Confirmation” as referred to in the
Agreement specified below.

          The definitions and provisions contained in the 2002 ISDA Equity Derivatives Definitions (the
“Equity Definitions”), as published by the International Swaps and Derivatives Association, Inc.,
are incorporated into this Master Confirmation. This Master Confirmation and each Supplemental
Confirmation evidence a complete binding agreement between the Counterparty and GS&Co. as to the
subject matter and terms of each Transaction to which this Master Confirmation and the related
Supplemental Confirmation relate and shall supersede all prior or contemporaneous written or oral
communications with respect thereto.

          This Master Confirmation and each Supplemental Confirmation supplement, form a part of, and
are subject to an agreement in the form of the 1992 ISDA Master Agreement (Multicurrency-Cross
Border) (the “Agreement”) as if GS&Co. and Counterparty had executed the Agreement on the date of
this Master Confirmation (but without any Schedule except for (i) the election of Loss and Second
Method, New York law (without regard to the conflicts of law principles) as the governing law and
US Dollars (“USD”) as the Termination Currency, (ii) the election that subparagraph (ii) of Section
2(c) will not apply to Transactions and (iii) the replacement of the word “third” in the last line
of Section 5(a)(i) with the word “first”).

          All provisions contained or incorporated by reference in the Agreement shall govern this
Master Confirmation and each Supplemental Confirmation relating to a Transaction except as
expressly modified herein or in the related Supplemental Confirmation.

          If, in relation to any Transaction to which this Master Confirmation and related Supplemental
Confirmation relate, there is any inconsistency between the Agreement, this Master Confirmation,
any Supplemental Confirmation and the Equity Definitions, the following will prevail for purposes
of such Transaction in the order of precedence indicated: (i) such Supplemental Confirmation; (ii)
this Master Confirmation; (iii) the Agreement; and (iv) the Equity Definitions.

          1. On the fifth Clearance System Business Day following the Trade Date for each Transaction,
GS&Co. will deliver to Counterparty a number of Shares equal to the Number of Shares for the
relevant Transaction, and Counterparty will pay to GS&Co. cash in immediately available funds in an
amount to be specified in the Supplemental Confirmation (the “Initial Purchase Price”) equal to the
product of the Initial Share Price (as set forth below) and the Number of Shares. Each Transaction
is intended to be in substance and effect an adjustment to the Initial Purchase Price. Solely for
the purposes of the Equity Definitions, each Transaction

 

 

constitutes a Share Forward Transaction. Set forth below are the terms and conditions which,
together with the terms and conditions set forth in each Supplemental Confirmation (in respect of
each relevant Transaction), shall govern each such Transaction.

	 	 	 	 	 
	General Terms:
	 
	 	 	 	 
	 

	 	Trade Date:
	 	For each Transaction, as set forth in the Supplemental Confirmation.
	 
	 	 	 	 
	 

	 	Seller:
	 	Counterparty
	 
	 	 	 	 
	 

	 	Buyer:
	 	GS&Co.
	 
	 	 	 	 
	 

	 	Shares:
	 	Common Stock, $0.01 par value of Counterparty, (Ticker: AMAT)
	 
	 	 	 	 
	 

	 	Number of Shares:
	 	For each Transaction, as set forth in the Supplemental Confirmation.
	 
	 	 	 	 
	 

	 	Initial Share Price
	 	For each Transaction, as set forth in the Supplemental Confirmation, to be the
Relevant Price as of the Trade Date.
	 
	 	 	 	 
	 

	 	Forward Price:
	 	For each Transaction, the Initial Share Price for such Transaction.
	 
	 	 	 	 
	 

	 	Prepayment:
	 	Not Applicable
	 
	 	 	 	 
	 

	 	Variable Obligation:
	 	Not Applicable
	 
	 	 	 	 
	 

	 	Exchange:
	 	NASDAQ Global Select Market
	 
	 	 	 	 
	 

	 	Related Exchange(s):
	 	All Exchanges
	 
	 	 	 	 
	 

	 	Market Disruption Event:
	 	The definition of “Market Disruption Event” in Section 6.3(a) of the Equity
Definitions is hereby amended by replacing the words “at any time during the
one-hour period that ends at the relevant Valuation Time” in the third line
thereof with the words “at any time on any Scheduled Trading Day during the
Valuation Period or” after the word “material”.
	 
	 	 	 	 
	 

	 	Counterparty Additional

Payment Amount:
	 	For each Transaction, as set forth in the Supplemental Confirmation.
	 
	 	 	 	 
	Valuation:	 	 
	 
	 	 	 	 
	 

	 	Valuation Period:
	 	Each Scheduled Trading Day during the period commencing on and including the
first succeeding Scheduled Trading Day following the Trade Date, to and
including the Valuation Date (but excluding any day(s) on which the Valuation
Period is suspended in accordance with Section 5 herein).
	 
	 	 	 	 
	 

	 	 	 	Notwithstanding anything to the contrary in the Equity Definitions, to the
extent that any Scheduled Trading Day in the Valuation Period is a Disrupted
Day, the Calculation Agent may postpone the Valuation Date. In such event, the
Calculation Agent must determine whether (i) such Disrupted Day is a Disrupted
Day in full, in which case such Disrupted

-2-

 

	 	 	 	 	 
	 

	 	 	 	Day shall not be included for purposes
of determining the Settlement Price, or (ii) such Disrupted Day is a Disrupted
Day only in part, in which case the VWAP Price for such Disrupted Day shall be
determined by the Calculation Agent based on Rule 10b-18 eligible transactions
in the Shares on such Disrupted Day effected before the relevant Market
Disruption Event occurred and/or after the relevant Market Disruption Event
ended, and the weighting of the VWAP Prices for the relevant Scheduled Trading
Days during the Valuation Period shall be adjusted by the Calculation Agent for
purposes of determining the Settlement Price, with such adjustments based on,
among other factors, the duration of any Market Disruption Event and the volume,
historical trading patterns and price of the Shares.
	 
	 	 	 	 
	 

	 	 	 	If a Disrupted Day occurs during the Valuation Period, and each of the nine
immediately following Scheduled Trading Days is a Disrupted Day, then the
Calculation Agent, in its reasonable discretion, may either (i) determine the
VWAP Price for such ninth Scheduled Trading Day and adjust the weighting of the
VWAP Prices for the relevant Scheduled Trading Days during the Valuation Period
as it deems appropriate for purposes of determining the Settlement Price based
on, among other factors, the duration of any Market Disruption Event and the
volume, historical trading patterns and price of the Shares or (ii) disregard
such day for purposes of determining the Settlement Price and further postpone
the Valuation Date as it deems appropriate to determine the VWAP Price.
	 
	 	 	 	 
	 

	 	Valuation Date:
	 	For each Transaction, the date set forth in the Supplemental Confirmation (as
the same may be postponed in accordance with the provisions hereof).
	 
	 	 	 	 
	Settlement Terms:	 	 
	 
	 	 	 	 
	 

	 	Settlement Currency:
	 	USD
	 
	 	 	 	 
	 

	 	Settlement Method Election:
	 	Applicable; provided that (a) Section 7.1 of the Equity Definitions is hereby
amended by deleting the word “Physical” in the sixth line thereof and replacing
it with the words “Net Share” and deleting the word “Physical” in the last line
thereof and replacing it with the word “Cash” and (b) in the event that GS&Co.
would deliver to the Counterparty an amount of Shares under Net Share
Settlement, Cash Settlement shall be applicable in lieu of Net Share Settlement.
	 
	 	 	 	 
	 

	 	Electing Party:
	 	Counterparty
	 
	 	 	 	 
	 

	 	Settlement Method Election Date:
	 	The fifth Scheduled Trading Day immediately prior to the Valuation Date.
	 
	 	 	 	 
	 

	 	Default Settlement Method:
	 	Cash Settlement
	 
	 	 	 	 
	 

	 	Forward Cash Settlement Amount:
	 	An amount in the Settlement Currency equal to the sum of (a) the Number of
Shares multiplied by an amount equal to (i) the

-3-

 

	 	 	 	 	 
	 

	 	 	 	Settlement Price minus (ii) the
Forward Price plus (b) the Counterparty Additional Payment Amount.
	 
	 	 	 	 
	 

	 	Settlement Price:
	 	The arithmetic mean of the VWAP Prices of the Shares for each Scheduled Trading
Day in the Valuation Period minus the Settlement Price Adjustment Amount.
	 
	 	 	 	 
	 

	 	Settlement Price Adjustment Amount:
	 	For each Transaction, as set forth in the Supplemental Confirmation.
	 
	 	 	 	 
	 

	 	VWAP Price:
	 	For any Exchange Business Day, as determined by the Calculation Agent based on
the NASDAQ Volume Weighted Average Price per Share for the regular trading
session (including any extensions thereof) for such Exchange Business Day
(without regard to pre-open or after hours trading outside of any regular
trading session for such Exchange Business Day), as published by Bloomberg at
4:15 p.m. New York time on such Exchange Business Day, on Bloomberg page “AMAT.Q
<Equity> AQR_SEC” (or any successor thereto). For purposes of calculating the
VWAP Price, the Calculation Agent will include only those trades that are
reported during the period of time during which Counterparty could purchase its
own shares under Rule 10b-18(b)(2), and pursuant to the conditions of Rule
10b-18(b)(3) each under the Exchange Act (as defined herein) (such trades, “Rule
10b-18 eligible transactions”).
	 
	 	 	 	 
	 

	 	Counterparty’s Contact Details
for Purpose of Giving Notice:
	 	Telephone No.: 408-235 4880

Facsimile No.: 408-563 4710

Attention: Robert Friess

Corporpate Treasury
	 
	 	 	 	 
	 

	 	 	 	Mailing Address: 2881 Scott Blvd., M/S 2047

P.O.Box 58039

Santa Clara, CA 95050
	 
	 	 	 	 
	 

	 	GS&Co.’s Contact Details for
Purpose of Giving Notice:
	 	Telephone No.: (212) 902-8996

Facsimile No.: (212) 902-0112

Attention: Equity Operations: Options and Derivatives
	 
	 	 	 	 
	 

	 	 	 	With a copy to:

Tracey McCabe

Equity Capital Markets

One New York Plaza

New York, NY 10004

Telephone No.: (212) 357-0428

Facsimile No.: (212) 902-3000
	 
	 	 	 	 
	Net Share Settlement:	 	 
	 
	 	 	 	 
	 

	 	Net Share Settlement Procedures:
	 	Net Share Settlement shall be made in accordance with the procedures attached
hereto as Annex B.

-4-

 

	 	 	 	 	 
	 

	 	Net Share Settlement Price:
	 	The Relevant Price on the Net Share Valuation Date, as reduced by the per Share
amount of the underwriting discount and/or commissions agreed to pursuant to the
equity underwriting agreement contemplated by the Net Share Settlement
Procedures.
	 
	 	 	 	 
	 

	 	Valuation Time:
	 	As provided in Section 6.1 of
the Equity Definitions; provided that Section 6.1
of the Equity Definitions is hereby amended by inserting the words “Net Share
Valuation Date,” before the words “Valuation Date” in the first and third lines
thereof.
	 
	 	 	 	 
	 

	 	Net Share Valuation Date:
	 	The Exchange Business Day immediately following the Valuation Date.
	 
	 	 	 	 
	 

	 	Net Share Settlement Date:
	 	The third Exchange Business Day immediately following the Valuation Date.
	 
	 	 	 	 
	 

	 	Reserved Shares:
	 	Initially, 62,800,000 Shares. The Reserved Shares for each Transaction may be
increased or decreased in a Supplemental Confirmation.
	 
	 	 	 	 
	 

	 	Relevant Price:
	 	As provided in Section 1.23(b) of
the Equity Definitions; provided that Section
1.23(b) of the Equity Definitions is hereby amended by replacing each occurrence
therein of “the Valuation Date or Averaging Date, as the case may be,” with the
term “such day.”
	 
	 	 	 	 
	Share Adjustments:	 	 
	 
	 	 	 	 
	 

	 	Potential Adjustment Event:
	 	Notwithstanding anything to the contrary in Section 11.2(e) of the Equity
Definitions, an Extraordinary Dividend shall not constitute a Potential
Adjustment Event.
	 
	 	 	 	 
	 

	 	Extraordinary Dividend:
	 	For any calendar quarter, any dividend or distribution on the Shares with an
ex-dividend date occurring during such calendar quarter (other than any dividend
or distribution of the type described in Section 11.2(e)(i) or Section
11.2(e)(ii)(A) or (B) of the Equity Definitions) (a “Dividend”) the amount or
value of which (as determined by the Calculation Agent), when aggregated with
the amount or value (as determined by the Calculation Agent) of any and all
previous Dividends with ex-dividend dates occurring in the same calendar
quarter, exceeds the Ordinary Dividend Amount.
	 
	 	 	 	 
	 

	 	Ordinary Dividend Amount:
	 	For each Transaction, as set forth in the Supplemental Confirmation.
	 
	 	 	 	 
	 

	 	Method of Adjustment:
	 	Calculation Agent Adjustment
	 
	 	 	 	 
	Extraordinary Events:	 	 
	 
	 	 	 	 
	Consequences of Merger Events:	 	 
	 
	 	 	 	 
	 

	 	(a) Share-for-Share:
	 	Calculation Agent Adjustment

-5-

 

	 	 	 	 	 
	 

	 	(b) Share-for-Other:
	 	Cancellation and Payment on that portion of the Other Consideration that
consists of cash; Calculation Agent Adjustment on the remainder of the Other
Consideration.
	 
	 	 	 	 
	 

	 	(c) Share-for-Combined:
	 	Component Adjustment
	 
	 	 	 	 
	 

	 	Determining Party:
	 	Calculation Agent
	 
	 	 	 	 
	Tender Offer:
	 	Applicable
	 
	 	 	 	 
	Consequences of Tender Offers:	 	 
	 
	 	 	 	 
	 

	 	(a) Share-for-Share:
	 	Calculation Agent Adjustment
	 
	 	 	 	 
	 

	 	(b) Share-for-Other:
	 	Cancellation and Payment on that portion of the Other Consideration that
consists of cash; Calculation Agent Adjustment on the remainder of the Other
Consideration.
	 
	 	 	 	 
	 

	 	(c) Share-for-Combined:
	 	Component Adjustment
	 
	 	 	 	 
	 

	 	Determining Party:
	 	Calculation Agent
	 
	 	 	 	 
	Nationalization, Insolvency or Delisting:

	 	Cancellation and Payment;
provided that in addition to the provisions of Section
12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if
the Exchange is located in the United States and the Shares are not immediately
re-listed, re-traded or re-quoted on any of the New York Stock Exchange, the
American Stock Exchange or The NASDAQ National Market (or their respective
successors); and if the Shares are immediately re-listed, re-traded or re-quoted
on any such exchange or quotation system, such exchange or quotation system
shall be deemed to be the Exchange.
	 
	 	 	 	 
	Additional Disruption Events:	 	 
	 
	 	 	 	 
	

	 	(a) Change in Law:
	 	Applicable
	 
	 	 	 	 
	

	 	(b) Insolvency Filing:
	 	Applicable
	 
	 	 	 	 
	

	 	 (c) Loss of Stock Borrow:
	 	Applicable; provided that Sections 12.9(a)(vii) and 12.9(b)(iv) of the Equity
Definitions are amended by deleting the words “at a rate equal to or less than
the Maximum Stock Loan Rate” and replacing them with “at a rate of return to the
stock borrower equal to or greater than zero”.
	 
	 	 	 	 
	 

	 	Hedging Party:
	 	GS&Co.
	 
	 	 	 	 
	 

	 	Determining Party:
	 	GS&Co.
	 
	 	 	 	 
	Non-Reliance:

	 	Applicable
	 
	 	 	 	 
	Agreements and Acknowledgements

	 	 
	Regarding Hedging Activities:

	 	Applicable
	 
	 	 	 	 
	Additional Acknowledgements:

	 	Applicable

-6-

 

	 	 	 	 	 
	Net Share Settlement Upon

Early Termination:

	 	Counterparty shall have the right, in its sole discretion, in lieu of making any
payment required to be made by it (the “Early Termination
Amount”) (x) pursuant
to Sections 6(d) and 6(e) of the Agreement following the occurrence of an Early
Termination Date in respect of the Agreement or (y) pursuant to Section 12.7 or
12.9 of the Equity Definitions (except with respect to any portion of the
consideration for the Shares consisting of cash in the event of a Merger Event
or Tender Offer) following the occurrence of an Extraordinary Event, elect to
settle its obligation to pay the Early Termination Amount in Shares in
accordance with the terms, and subject to the conditions, for Net Share
Settlement herein by giving written notice to GS&Co. of such election on the day
that the notice fixing an Early Termination Date is effective or the date on
which the Transaction(s) are cancelled or terminated pursuant to Article 12 of
the Equity Definitions (the “Cancellation Date”). If Counterparty elects Net
Share Settlement under such circumstances: (a) the Net Share Valuation Date
shall be (x) the date specified in the notice fixing an Early Termination Date,
which shall be either the Exchange Business Day that such notice is effective or
the first Exchange Business Day immediately following the Exchange Business Day
that such notice is effective or (y) the Cancellation Date, as the case may be,
(b) the Net Share Settlement Date shall be deemed to be the Exchange Business
Day immediately following the Early Termination Date or the Cancellation Date,
as the case may be and (c) all references to Forward Cash Settlement Amount in
Annex B hereto shall be deemed references to the Early Termination Amount or the
Cancellation Amount, as the case may be.
	 
	 	 	 	 
	Transfer:

	 	Notwithstanding anything to the contrary in the Agreement, GS&Co. may assign,
transfer and set over all rights, title and interest, powers, privileges and
remedies of GS&Co. under any Transaction, in whole or in part, to an affiliate
of GS&Co. that is guaranteed by The Goldman Sachs Group, Inc. without the
consent of Counterparty.
	 
	 	 	 	 
	GS&Co. Payment Instructions:

	 	Chase Manhattan Bank New York

For A/C Goldman, Sachs & Co.

A/C # 930-1-011483

ABA: 021-000021
	 
	 	 	 	 
	Counterparty Payment Instructions:

	 	To be provided by Counterparty

          2. Calculation Agent: GS&Co. All determinations made by the Calculation Agent shall
be made in good faith and in a commercially reasonable manner. Following any calculation by the
Calculation Agent hereunder, upon a prior written request by the Counterparty, the Calculation
Agent will provide to the Counterparty by e-mail to the e-mail address provided by the Counterparty
in such a prior written request a report (in a commonly used file format for the storage and
manipulation of financial data) displaying in reasonable detail the basis for such calculation.

-7-

 

          3. Representations, Warranties and Covenants of GS&Co. and Counterparty.

          (a) Each party represents and warrants that it (i) is an “eligible contract participant”, as
defined in the U.S. Commodity Exchange Act, as amended and (ii) is entering into each Transaction
hereunder as principal (and not as agent or in any other capacity, fiduciary or otherwise) and not
for the benefit of any third party.

          (b) Each party acknowledges that the offer and sale of each Transaction to it is intended to
be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), by
virtue of Section 4(2) thereof and the provisions of Regulation D promulgated thereunder
(“Regulation D”). Accordingly, each party represents and warrants to the other that (i) it has the
financial ability to bear the economic risk of its investment in each Transaction and is able to
bear a total loss of its investment, (ii) it is an “accredited investor” as that term is defined
under Regulation D, (iii) it will purchase each Transaction for investment and not with a view to
the distribution or resale thereof in a manner that would violate the Securities Act, and (iv) the
disposition of each Transaction is restricted under this Master Confirmation, the Securities Act
and state securities laws.

          4. Additional Representations, Warranties and Covenants of Counterparty.

          As of (i) the date hereof and (ii) the period of time from the Trade Date until the time that
each party has fully performed all of its obligations under the related Transaction, Counterparty
represents, warrants and covenants to GS&Co. that:

          (a) the purchase or writing of any Transaction and the transactions contemplated hereby do not
and will not violate Rule 13e-1 or Rule 13e-4 under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”);

          (b) it is not entering into any Transaction (i) on the basis of, and is not aware of, any
material non-public information with respect to the Shares (ii) in anticipation of, in connection
with, or to facilitate, a distribution of its securities, a self tender offer or a third-party
tender offer or (iii) to create actual or apparent trading activity in the Shares (or any security
convertible into or exchangeable for the Shares) or to otherwise manipulate the price of the Shares
(or any security convertible into or exchangeable for the Shares);

          (c) Counterparty is in compliance with its reporting obligations under the Exchange Act and
its most recent Annual Report on Form 10-K, together with all reports subsequently filed by it
pursuant to the Exchange Act, taken together and as amended and supplemented, do not, as of their
respective filing dates, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;

          (d) each Transaction is being entered into pursuant to a publicly disclosed Share buy-back
program and its Board of Directors has approved the use of the Transactions to effect the Share
buy-back program;

          (e) without limiting the generality of Section 13.1 of the Equity Definitions, Counterparty
acknowledges that GS&Co. is not making any representations or warranties with respect to the
treatment of any Transaction under FASB Statements 128, 133 (as amended), 149 or 150, EITF 00-19
(or any successor issue statements) or under the Financial Accounting Standards Board’s Liabilities
& Equity Project;

          (f) Counterparty is not, and will not be, engaged in a “distribution” of Shares or securities
that are convertible into, or exchangeable or exercisable for Shares for purposes of Regulation M
promulgated under the Exchange Act (“Regulation M”) (other than securities or activities excepted
from Regulation M by reason of Rules 101(b) and (c) and 102(b), (c) and (d) under the Exchange Act)
at any time during the Valuation Period, or the one Exchange Business Day immediately following the
Relevant Period, unless Counterparty has provided written notice to GS&Co. of such distribution (a
“Regulation M Distribution Notice”) not later than the Scheduled Trading Day immediately preceding
the first day of the relevant “restricted period” (as defined in Regulation M); Counterparty
acknowledges that any such notice may cause the Valuation Period to be extended or suspended
pursuant to Section 5 below; accordingly, Counterparty acknowledges that its delivery of such
notice must comply with the standards set forth in Section 6 below;

-8-

 

          (g) it shall report each Transaction as required under Regulation S-K and/or Regulation S-B
under the Exchange Act, as applicable;

          (h) on the Trade Date and on each day of the Valuation Period, (i) the assets of Counterparty
at their fair valuation exceed the liabilities of Counterparty, including contingent liabilities,
(ii) the capital of Counterparty is adequate to conduct the business of Counterparty and (iii)
Counterparty has the ability to pay its debts and obligations as such debts mature and does not
intend to, or does not believe that it will, incur debt beyond its ability to pay as such debts
mature;

          (i) it has not, and during any Valuation Period will not, enter into agreements similar to the
Transactions described herein where any initial hedge period (however defined) or the calculation
period (however defined) in such other transaction will overlap at any time (including as a result
of extensions in such initial hedge period or calculation period as provided in the relevant
agreements) with any Valuation Period under this Master Confirmation. In the event that the
initial hedge period or calculation period in any other similar transaction overlaps with any
Valuation Period under this Master Confirmation as a result of an extension of the Valuation Date
pursuant to Section 5 herein, Counterparty shall promptly amend such transaction to avoid any such
overlap; and

          (j) Counterparty is not and, after giving effect to the Transaction, will not be, required to
register as an “investment company” as such term is defined in the Investment Company Act of 1940,
as amended.

5. Suspension of Valuation Period.

          (a) If Counterparty concludes that it will be engaged in a distribution of the Shares for
purposes of Regulation M (other than securities or activities excepted from Regulation M by reason
of Rules 101(b) and (c) and 102(b), (c) and (d) under the Exchange Act), Counterparty agrees that
it will, on a day no later than the Scheduled Trading Day immediately preceding the start of the
relevant restricted period, provide GS&Co. with a Regulation M Distribution Notice. Upon the
effectiveness of such Regulation M Distribution Notice, GS&Co. shall halt any purchase of Shares in
connection with hedging any Transaction during the relevant “restricted period”. If on any
Scheduled Trading Day Counterparty delivers the Regulation M Distribution Notice in writing (and
confirms by telephone) by 8:30 a.m. New York Time (the “Notification Time”) then such notice shall
be effective as of such Notification Time. In the event that Counterparty delivers such Regulation
M Distribution Notice in writing and/or confirms by telephone after the Notification Time, then
such notice shall be effective as of 8:30 a.m. New York Time on the following Scheduled Trading Day
or as otherwise required by law or agreed between Counterparty and GS&Co. The Valuation Period
shall be suspended and the Valuation Date shall be postponed for each Scheduled Trading Day in such
restricted period.

          (b) In the event that GS&Co. concludes, in its reasonable discretion, that as a result of an
event, condition or circumstance arising after the Trade Date it is appropriate with respect to any
legal, regulatory or self-regulatory requirements or related policies and procedures (whether or
not such requirements, policies or procedures are imposed by law or have been voluntarily adopted
by GS&Co.), for it to refrain from purchasing Shares on any Scheduled Trading Day during the
Valuation Period, GS&Co. may by written notice to Counterparty elect to suspend the Valuation
Period for such number of Scheduled Trading Days as is specified in the notice. Unless GS&Co. is
under legal, regulatory, contractual or other obligation not to disclose the underlying reasons for
such a suspension, the notice (which may be verbal) shall specify the reason for GS&Co.’s election
to suspend the Valuation Period. The Valuation Period shall be suspended and the Valuation Date
shall be postponed for each Scheduled Trading Day occurring during any such suspension.

          (c) In the event that the Valuation Period is suspended pursuant to Section 5(a) or (b) above
during the regular trading session on the Exchange then the Calculation Agent in its reasonable
discretion shall, in calculating the Forward Price, extend the Valuation Period and make
adjustments to the weighting of each Rule 10b-18 eligible transaction in the Shares on the relevant
Exchange Business Days during the Valuation Period for purposes of determining the Forward Price,
with such adjustments based on, among other factors, the duration of any such suspension and the
volume, historical trading patterns and price of the Shares.

          6. 10b5-1 Plan. Counterparty represents, warrants and covenants to GS&Co. that for
each Transaction:

-9-

 

          (a) Counterparty is entering into this Master Confirmation and each Transaction hereunder in
good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1 under the
Exchange Act (“Rule 10b5-1”) or any antifraud or anti-manipulation provisions of the federal or
applicable state securities laws and that it has not entered into or altered and will not enter
into or alter any corresponding or hedging transaction or position with respect to the Shares.
Counterparty acknowledges that it is the intent of the parties that each Transaction entered into
under this Master Confirmation comply with the requirements of Rule 10b5-1(c)(1)(i)(A) and (B) and
each Transaction entered into under this Master Confirmation shall be interpreted to comply with
the requirements of Rule 10b5-1(c).

          (b) Counterparty will not seek to control or influence GS&Co. to make “purchases or sales”
(within the meaning of Rule 10b5-1(c)(1)(i)(B)(3)) under any Transaction entered into under this
Master Confirmation, including, without limitation, GS&Co.’s decision to enter into any hedging
transactions. Counterparty represents and warrants that it has consulted with its own advisors as
to the legal aspects of its adoption and implementation of this Master Confirmation and each
Supplemental Confirmation under Rule 10b5-1.

          (c) Counterparty acknowledges and agrees that any amendment, modification, waiver or
termination of this Master Confirmation or the relevant Supplement Confirmation must be effected in
accordance with the requirements for the amendment or termination of a “plan” as defined in Rule
10b5-1(c). Without limiting the generality of the foregoing, any such amendment, modification,
waiver or termination shall be made in good faith and not as part of a plan or scheme to evade the
prohibitions of Rule 10b-5, and no such amendment, modification, waiver or termination shall be
made at any time at which Counterparty or any officer, director, manager or similar person of
Counterparty is aware of any material non-public information regarding Counterparty or the Shares.

          7. Counterparty Purchases. Counterparty represents, warrants and covenants to GS&Co.
that, for each Transaction, Counterparty (or any “affiliated purchaser” as defined in Rule 10b-18
under the Exchange Act (“Rule 10b-18”)) shall not, without the prior written consent of GS&Co.,
directly or indirectly purchase any Shares (including by means of a derivative instrument), listed
contracts on the Shares or securities that are convertible into, or exchangeable or exercisable for
Shares (including, without limitation, any Rule 10b-18 purchases of blocks (as defined in Rule
10b-18)) during any Relevant Period, except for purchases from its employees that are not “Rule
10b-18 purchases” (as defined in Rule 10b-18(a)(13)). During this time, any such purchases by
Counterparty shall be made through GS&Co., or if not through GS&Co., with the prior written consent
of GS&Co., and in compliance with Rule 10b-18 or otherwise in a manner that Counterparty and GS&Co.
believe is in compliance with applicable requirements.

          8. Additional Termination Events. The declaration of any Extraordinary Dividend by
Counterparty during the Valuation Period for any Transaction shall constitute an Additional
Termination Event, with Counterparty as the sole Affected Party and all Transactions hereunder as
the Affected Transactions.

          9. [reserved]

          10. Automatic Termination Provisions. Notwithstanding anything to the contrary in
Section 6 of the Agreement:

          (a) If a Termination Price is specified in one or more Supplemental Confirmations, then an
Additional Termination Event with Counterparty as the sole Affected Party and all Transactions to
which such Supplemental Confirmations relate as Affected Transactions will automatically occur
without any notice or action by GS&Co. or Counterparty if the price of the Shares on the Exchange
at any time falls below such Termination Price. The Exchange Business Day that the price of the
Shares on the Exchange at any time falls below the Termination Price will be the “Early Termination
Date” for purposes of the Agreement.

          (b) Notwithstanding anything to the contrary in Section 6(d) of the Agreement, following the
occurrence of such an Additional Termination Event, GS&Co. will notify Counterparty of the amount
owing under Section 6(e) of the Agreement within a commercially reasonable time period (with such
period based upon the amount of time, determined by GS&Co. (or any of its Affiliates) in its
reasonable discretion, that it would take to unwind any of its Hedge Position(s) related to the
Transaction in a commercially reasonable manner based on

-10-

 

relevant market indicia). For purposes of the “Net Share Settlement Upon Early Termination”
provisions herein, the date that such notice is effective shall constitute the Net Share Valuation
Date and the Early Termination Date.

          11. Special Provisions for Merger Transactions. Notwithstanding anything to the
contrary herein or in the Equity Definitions, Counterparty shall,

          (a) prior to the opening of trading in the Shares on any day during any Relevant Period on
which Counterparty makes, or expects to be made, any public announcement (as defined in Rule 165(f)
under the Securities Act of 1933, as amended) of any Merger Transaction, notify GS&Co. of such
public announcement;

          (b) promptly notify GS&Co. following any such announcement that such announcement has been
made;

          (c) promptly provide GS&Co. with written notice specifying (i) Counterparty’s average daily
Rule 10b-18 Purchases (as defined in Rule 10b-18) during the three full calendar months immediately
preceding the Announcement Date that were not effected through GS&Co. or its affiliates and (ii)
the number of Shares purchased pursuant to the proviso in Rule 10b-18(b)(4) under the Exchange Act
for the three full calendar months preceding the Announcement Date. Such written notice shall be
deemed to be a certification by Counterparty to GS&Co. that such information is true and correct.
In addition, Counterparty shall promptly notify GS&Co. of the earlier to occur of the completion of
such transaction and the completion of the vote by target shareholders. Counterparty acknowledges
that any such notice may cause the terms of any Transaction to be adjusted or such Transaction to
be terminated; accordingly, Counterparty acknowledges that its delivery of such notice must comply
with the standards set forth in Section 6; and

          (d) GS&Co. in its reasonable discretion may (i) suspend the Valuation Period and postpone the
Valuation Date or (ii) treat the occurrence of such public announcement as an Additional
Termination Event with Counterparty as the sole Affected Party and the Transactions hereunder as
the Affected Transactions.

          “Merger Transaction” means any merger, acquisition or similar transaction involving a
recapitalization as contemplated by Rule 10b-18(a)(13)(iv) under the Exchange Act.

          12. Special Calculation and Settlement Following Early Termination and Extraordinary
Events. Notwithstanding anything to the contrary in this Master Confirmation or any
Supplemental Confirmation hereunder, in the event that an Extraordinary Event occurs that results
in the termination or cancellation of one or more Transactions or an Early Termination Date occurs
or is designated with respect to one or more Transactions (each an “Elected Transaction” and
collectively, the “Elected Transactions”), then GS&Co. may elect, in its sole discretion, by notice
to Counterparty, to have Counterparty deliver the Number of Early Settlement Shares to GS&Co. on
the date that such notice is effective and either (x) GS&Co. shall pay to Counterparty the Special
Termination Amount, if such amount is positive, or (y) Counterparty shall either (1) pay to GS&Co.
the absolute value of the Special Termination Amount, if such amount is negative, or (2) elect for
the provisions set forth opposite “Net Share Settlement Upon Early Termination” to apply except
that all references in such provision to “the Early Termination Amount” shall be replaced with
references to “the Special Termination Amount”. To the extent that Counterparty elects to deliver
Early Settlement Shares to GS&Co. accompanied by an effective Registration Statement (as defined in
Annex B and satisfactory to GS&Co. in its sole discretion) covering such Shares, Counterparty must
be in compliance with the conditions specified in (iii) though (ix) in Annex B hereto at the time
of such delivery. If Counterparty elects to deliver Unregistered Shares (as defined in Annex B) to
GS&Co., Counterparty and GS&Co. will negotiate in good faith on acceptable procedures and
documentation relating to the sale of such Unregistered Shares. Counterparty and GS&Co. agree that
the payment of the Special Termination Amount and the delivery of the Early Settlement Shares
satisfy in full any obligation of a party to make any payments pursuant to Section 6(e) of the
Agreement or Article 12 of the Equity Definitions, as the case may be, in respect of the Elected
Transactions.

          “Number of Early Settlement Shares” means a number of Shares (“Early Settlement Shares”) as
determined by GS&Co. in a good faith and commercially reasonable manner based on its or any of its
Affiliates’ Hedge Positions with respect to the Elected Transactions under this Master
Confirmation.

-11-

 

          “Special Termination Amount” means the sum of (a) the product of (i) the Number of Early
Settlement Shares multiplied by (ii) a per Share price (the “Early Termination Price”) determined
by GS&Co. in a good faith and commercially reasonable manner based on relevant market indicia,
including GS&Co.’s funding costs associated with Early Settlement Shares and costs incurred or
estimated to be incurred by GS&Co. in connection with the purchase and sale of Shares in order to
close out GS&Co.’s or any of its Affiliates’ Hedge Positions with respect to each Affected
Transaction and, in the event that Counterparty delivers Unregistered Shares to GS&Co., whether
GS&Co. and Counterparty have agreed on acceptable procedures and documentation relating to such
Unregistered Shares as described above and (b) any amount owing under Section 6(e) of the Agreement
or Article 12 of the Equity Definitions, as the case may be, in respect of the Elected Transactions
by GS&Co. to Counterparty (expressed as a positive number) or by Counterparty to GS&Co. (expressed
as a negative number).

          13. Acknowledgments. The parties hereto intend for:

          (a) Each Transaction to be a “securities contract” as defined in Section 741(7) of the U.S.
Bankruptcy Code (Title 11 of the United States Code) (the “Bankruptcy Code”), a “swap agreement” as
defined in Section 101(53B) of the Bankruptcy Code, or a “forward contract” as defined in Section
101(25) of the Bankruptcy Code, and the parties hereto to be entitled to the protections afforded
by, among other Sections, Sections 362(b)(6), 362(b)(17), 362(b)(27), 555, 556, 560 and 561 of the
Bankruptcy Code;

          (b) the Agreement to be a “master netting agreement” as defined in Section 101 (38A) of the
Bankruptcy Code;

          (c) a party’s right to liquidate or terminate any Transaction, net out or offset termination
values of payment amounts, and to exercise any other remedies upon the occurrence of any Event of
Default under the Agreement with respect to the other party to constitute a “contractual right” (as
defined in the Bankruptcy Code);

          (d) any cash, securities or other property transferred as performance assurance, credit
support or collateral with respect to each Transaction to constitute “margin payments” (as defined
in the Bankruptcy Code); and

          (e) all payments for, under or in connection with each Transaction, all payments for the
Shares and the transfer of such Shares to constitute “settlement payments” and “transfers” (as
defined in the Bankruptcy Code).

          14. Calculations on Early Termination and Set-Off.

          (a) Notwithstanding anything to the contrary in the Agreement or the Equity Definitions, the
calculation of any Settlement Amounts, Unpaid Amounts and amounts owed in respect of cancelled
Transactions under Article 12 of the Equity Definitions shall be calculated separately for (A) all
Terminated Transactions (it being understood that such term for purposes of this paragraph includes
Transactions cancelled pursuant to Article 12 of the Equity Definitions) in the Shares of the
Issuer that qualify as equity under applicable accounting rules (collectively, the “Equity Shares”)
as determined by the Calculation Agent and (B) all other Terminated Transactions under the
Agreement including, without limitation, Transactions in Shares other than those of the Issuer
(collectively, the “Other Shares”).

          (b) The parties agree to amend Section 6 of the Agreement by adding a new Section 6(f) thereto
as follows:

“(f) Upon the occurrence of an Event of Default or Termination Event with
respect to a party who is the Defaulting Party or the Affected Party or upon
the occurrence of an Extraordinary Event that results in the termination or
cancellation of any Transaction (such Defaulting Party, Affected Party or, in
the case of such an Extraordinary Event, either party, “X”), the other party
(“Y”) will have the right (but not be obliged) without prior notice to X or
any other person to set-off or apply any obligation of X owed to Y (or any
Affiliate of Y) (whether or not matured or contingent and whether or not
arising under the

-12-

 

Agreement, and regardless of the currency, place of payment or booking office
of the obligation) against any obligation of Y (or any Affiliate of Y) owed to
X (whether or not matured or contingent and whether or not arising under the
Agreement, and regardless of the currency, place of payment or booking office
of the obligation). Y will give notice to the other party of any set-off
effected under this Section 6(f).

Amounts (or the relevant portion of such amounts) subject to set-off may be
converted by Y into the Termination Currency at the rate of exchange at which
such party would be able, acting in a reasonable manner and in good faith, to
purchase the relevant amount of such currency. If any obligation is
unascertained, Y may in good faith estimate that obligation and set-off in
respect of the estimate, subject to the relevant party accounting to the other
when the obligation is ascertained. Nothing in this Section 6(f) shall be
effective to create a charge or other security interest. This Section 6(f)
shall be without prejudice and in addition to any right of set-off,
combination of accounts, lien or other right to which any party is at any time
otherwise entitled (whether by operation of law, contract or otherwise).”

          (c) Notwithstanding anything to the contrary in the foregoing, GS&Co. agrees not to set off or
net amounts due from Counterparty with respect to any Transaction against amounts due from GS&Co.
to Counterparty under obligations other than Equity Contracts. “Equity Contract” means any
transaction relating to Shares between the parties (or any of their affiliates) that qualifies as
‘equity’ under applicable accounting rules.

          15. Payment Date Upon Early Termination. Notwithstanding anything to the contrary in
Section 6(d)(ii) of the Agreement, all amounts calculated as being due in respect of an Early
Termination Date under Section 6(e) of the Agreement will be payable on the day that notice of the
amount payable is effective.

          16. Credit Support Documents. The parties hereto acknowledge that no Transaction
hereunder is secured by any collateral that would otherwise secure the obligations of Counterparty
herein or pursuant to the Agreement.

          17. Claim in Bankruptcy. GS&Co. agrees that in the event of the bankruptcy of
Counterparty, GS&Co. shall not have rights or assert a claim that is senior in priority to the
rights and claims available to the shareholders of the common stock of Counterparty.

          18. Transactions by GS&Co. [***]

          19. Offices.

          (a) The Office of GS&Co. for each Transaction is: One New York Plaza, New York, New York
10004.

          (b) The Office of Counterparty for each Transaction is: 3050 Bowers Avenue, Santa Clara,
California 95054.

          20. Governing Law. The Agreement, this Master Confirmation and each Supplemental
Confirmation and all matters arising in connection with the Agreement, this Master Confirmation and
each Supplemental Confirmation shall be governed by, and construed and enforced in accordance with,
the laws of the State of New York (without reference to its choice of laws doctrine).

 

			
	***	 	information has been omitted and filed separately with the Commission.
Confidential treatment has been requested with respect to the omitted portions.

-13-

 

          21. Counterparts. This Master Confirmation may be executed in any number of
counterparts, all of which shall constitute one and the same instrument, and any party hereto may
execute this Master Confirmation by signing and delivering one or more counterparts.

          22. Arbitration.

          (a) All parties to this Confirmation are giving up the right to sue each other in court,
including the right to a trial by jury, except as provided by the rules of the arbitration forum in
which a claim is filed.

          (b) Arbitration awards are generally final and binding; a party’s ability to have a court
reverse or modify an arbitration award is very limited.

          (c) The ability of the parties to obtain documents, witness statements and other discovery is
generally more limited in arbitration than in court proceedings.

          (d) The arbitrators do not have to explain the reason(s) for their award.

          (e) The panel of arbitrators will typically include a minority of arbitrators who were or are
affiliated with the securities industry, unless Counterparty is a member of the organization
sponsoring the arbitration facility, in which case all arbitrators may be affiliated with the
securities industry.

          (f) The rules of some arbitration forums may impose time limits for bringing a claim in
arbitration. In some cases, a claim that is ineligible for arbitration may be brought in court.

          (g) The rules of the arbitration forum in which the claim is filed, and any amendments
thereto, shall be incorporated into this Confirmation.

          (h) Counterparty agrees that any and all controversies that may arise between Counterparty and
GS & Co., including, but not limited to, those arising out of or relating to the Agreement or any
Transaction hereunder, shall be determined by arbitration conducted before The New York Stock
Exchange, Inc. (“NYSE”) or NASD Dispute Resolution (“NASD-DR”), or, if the NYSE and NASD-DR decline
to hear the matter, before the American Arbitration Association, in accordance with their
arbitration rules then in force. The award of the arbitrator shall be final, and judgment upon the
award rendered may be entered in any court, state or federal, having jurisdiction.

          (i) No person shall bring a putative or certified class action to arbitration, nor seek to
enforce any pre-dispute arbitration agreement against any person who has initiated in court a
putative class action or who is a member of a putative class who has not opted out of the class
with respect to any claims encompassed by the putative class action until: (i) the class
certification is denied; (ii) the class is decertified; or (iii) Counterparty is excluded from the
class by the court.

          (j) Such forbearance to enforce an agreement to arbitrate shall not constitute a waiver of any
rights under this Confirmation except to the extent stated herein.

-14-

 

          23. Counterparty hereby agrees (a) to check this Master Confirmation carefully and immediately
upon receipt so that errors or discrepancies can be promptly identified and rectified and (b) to
confirm that the foregoing correctly sets forth the terms of the agreement between GS&Co. and
Counterparty with respect to any Transaction, by manually signing this Master Confirmation or this
page hereof as evidence of agreement to such terms and providing the other information requested
herein and immediately returning an executed copy to Equity Derivatives Documentation Department,
facsimile No. 212-428-1980/83.

	 	 	 	 	 
	 	Yours sincerely,

GOLDMAN, SACHS & CO.

 	 
	 	By:  	/s/ Conrad Langenegger
 	 
	 	 	Authorized Signatory 	 
	 	 	Name: 
Title:  	 Conrad Langenegger

Vice President,

Equity Derivatives Administration 	 
	 

Agreed and Accepted By:

	 	 	 	 
	

APPLIED MATERIALS, INC.

 	 
	By:  	/s/ Nancy H. Handel
 	 
	 	Name:  	Nancy H. Handel 	 
	 	Title:  	Senior Vice President and
Chief Financial Officer 	 
	 

-15-

 

ANNEX A

SUPPLEMENTAL CONFIRMATION

	 	 	 
	To:

	 	Applied Materials, Inc.
	 

	 	3050 Bowers Avenue
	 

	 	Santa Clara, CA 95054
	 
	 	 
	From:

	 	Goldman, Sachs & Co.
	 
	 	 
	Subject:

	 	Accelerated Share Buyback
	 
	 	 
	Ref. No:

	 	[Insert Reference No.]
	 
	 	 
	Date:

	 	September 18, 2006

The purpose of this Supplemental Confirmation is to confirm the terms and conditions of the
Transaction entered into between Goldman, Sachs & Co. (“GS&Co.”) and Applied Materials, Inc.
(“Counterparty” and together with GS&Co., the “Contracting Parties”) on the Trade Date specified
below. This Supplemental Confirmation is a binding contract between GS&Co. and Counterparty as of
the relevant Trade Date for the Transaction referenced below.

1. This Supplemental Confirmation supplements, forms part of, and is subject to the Master
Confirmation dated as of September 18, 2006 (the “Master Confirmation”) between the Contracting
Parties, as amended and supplemented from time to time. All provisions contained in the Master
Confirmation govern this Supplemental Confirmation except as expressly modified below.

2. The terms of the Transaction to which this Supplemental Confirmation relates are as follows:

	 	 	 
	Trade Date:

	 	[                    , 200_]
	Initial Share Price:

	 	USD [___] per Share.
	Valuation Date:

	 	[                    , 200_]
	Number of Shares:

	 	[                    ]
	Settlement Price Adjustment Amount

	 	USD[___]
	Ordinary Dividend Amount:

	 	For any calendar quarter, USD[___]
	Termination Price:

	 	USD[___] per Share
	Reserved Shares:

	 	[                    ] Shares
	Counterparty Additional Payment Amount:

	 	USD[                    ]

3. Counterparty represents and warrants to GS&Co. that neither it (nor any “affiliated purchaser”
as defined in Rule 10b-18 under the Exchange Act) have made any purchases of blocks pursuant to the
proviso in Rule 10b-18(b)(4) under the Exchange Act during the four full calendar weeks immediately
preceding the Trade Date.

4. This Supplemental Confirmation may be executed in any number of counterparts, all of which shall
constitute one and the same instrument, and any party hereto may execute this Supplemental
Confirmation by signing and delivering one or more counterparts.

    Counterparty hereby agrees (a) to check this Supplemental Confirmation carefully and
immediately upon receipt so that errors or discrepancies can be promptly identified and rectified
and (b) to confirm that the foregoing

A-1

 

 correctly sets forth the terms of the agreement between GS&Co. and Counterparty with respect
to this Transaction, by manually signing this Supplemental Confirmation or this page hereof as
evidence of agreement to such terms and providing the other information requested herein and
immediately returning an executed copy to Equity Derivatives Documentation Department, facsimile
No. 212-428-1980/83.

	 	 	 	 	 
	 	Yours sincerely,

GOLDMAN, SACHS & CO.

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 

	 	 	 	 
	Agreed and Accepted

APPLIED MATERIALS, INC.

 	 
	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 

A-2

 

ANNEX B

NET SHARE SETTLEMENT PROCEDURES

          The following Net Share Settlement Procedures shall apply to the extent that Counterparty
elects Net Share Settlement in accordance with the Master Confirmation:

          Net Share Settlement shall be made by delivery of the number of Shares equal in value to the
Forward Cash Settlement Amount (the “Settlement Shares”), with such Shares’ value based on the Net
Share Settlement Price, as determined by the Calculation Agent. Delivery of such Settlement Shares
shall be made free of any contractual or other restrictions in good transferable form on the Net
Share Settlement Date with Counterparty (i) representing and warranting to GS&Co. at the time of
such delivery that it has good, valid and marketable title or right to sell and transfer all such
Shares to GS&Co. under the terms of the related Transaction free of any lien charge, claim or other
encumbrance and (ii) making the representations and agreements contained in Section 9.11(ii)
through (iv) of the Equity Definitions to GS&Co. with respect to the Settlement Shares (except that
the representations and agreements contained in Section 9.11(ii) through (iv) of the Equity
Definitions shall be modified by excluding any representations therein relating to restrictions,
obligations, limitations or requirements under applicable securities laws as a result of the fact
the Counterparty is the issuer of the Settlement Shares). GS&Co. or any affiliate of GS&Co.
designated by GS&Co. (GS&Co. or such affiliate, “GS”) shall resell the Settlement Shares during a
period (the “Resale Period”) commencing no earlier than the Net Share Valuation Date. The Resale
Period shall end on the Exchange Business Day on which GS completes the sale of all Settlement
Shares or a sufficient number of Settlement Shares so that the realized net proceeds of such sales
exceed the Forward Cash Settlement Amount. Notwithstanding the foregoing, if resale by GS of the
Settlement Shares, as determined by GS in its reasonable discretion (i) occurs during a
distribution for purposes of Regulation M, and if GS would be subject to the restrictions of Rule
101 of Regulation M in connection with such distribution, the Resale Period will be postponed or
tolled, as the case may be, until the Exchange Business Day immediately following the end of any
“restricted period” as such term is defined in Regulation M with respect to such distribution under
Regulation M or (ii) conflict with any legal, regulatory or self-regulatory requirements or related
policies and procedures applicable to GS (whether or not such requirements, policies or procedures
are imposed by law or have been voluntarily adopted by GS), the Resale Period will be postponed or
tolled, as the case may be, until such conflict is no longer applicable. During the Resale Period,
if the realized net proceeds from the resale of the Settlement Shares exceed the Forward Cash
Settlement Amount, GS shall refund such excess in cash to Counterparty by the close of business on
the third Exchange Business Day immediately following the last day of the Resale Period. If the
Forward Cash Settlement Amount exceeds the realized net proceeds from such resale, Counterparty
shall transfer to GS by the open of the regular trading session on the Exchange on the third
Scheduled Trading Day immediately following the last day of the Resale Period the amount of such
excess (the “Additional Amount”) in cash or in the number of Shares (“Make-whole Shares”) in an
amount that, based on the Net Share Settlement Price on the last day of the Resale Period (as if
such day was the “Net Share Valuation Date” for purposes of computing such Net Share Settlement
Price), has a dollar value equal to the Additional Amount, as determined by the Calculation Agent.
The Resale Period shall continue to enable the sale of the Make-whole Shares. If Counterparty
elects to pay the Additional Amount in Shares, the requirements and provisions set forth below
shall apply. This provision shall be applied successively until the Additional Amount is equal to
zero.

Net Share Settlement of a Transaction is subject to the following conditions:

Counterparty at its sole expense shall:

     (i) as promptly as practicable (but in no event more than fifteen (15) Exchange
Business Days immediately following the Settlement Method Election Date or, in the case of
an election of Net Share Settlement upon the occurrence of an Extraordinary Event or an
Early Termination Date, no more than one Exchange Business Day immediately following either
the Cancellation Date or the Early Termination Date, as the case may be) file under the
Securities Act and use its reasonable efforts to make effective, as promptly as practicable,
a registration statement or supplement or amend an outstanding registration statement, in
any such case, in form and substance reasonably satisfactory to GS (the “Registration
Statement”) covering the offering and sale by GS of not less than 150% of the Shares

B-1

 

necessary to fulfill the Net Share Settlement delivery obligation by Counterparty
(determining the number of such Shares to be registered on the basis of the average of the
Settlement Prices on the fifteen (15) Exchange Business Days prior to the date of such
filing, amendment or supplement, as the case may be);

     (ii)
maintain the effectiveness of the Registration Statement until GS has sold all shares to be delivered by Counterparty in satisfaction of its Net Share Settlement
obligations;

     (iii) have afforded GS and its counsel and other advisers a reasonable opportunity to
conduct a due diligence investigation of Counterparty customary in scope for transactions in
which GS acts as underwriter of equity securities, and GS shall have been satisfied (with
the approval of its Commitments Committee in accordance with its customary review process)
with the results of such investigation;

     (iv) have negotiated and entered into an agreement with GS providing for such
covenants, conditions, representations and warranties, underwriting discounts, commissions,
indemnities and contribution rights as are customary for GS equity underwriting agreements,
together with customary certificates and opinions of counsel and letters of independent
auditors of Counterparty to be delivered to GS covering the shares to be delivered by
Counterparty in satisfaction of its Net Share Settlement obligations;

     (v) have delivered to GS such number of prospectuses relating thereto as GS shall have
reasonably requested and shall promptly update and provide GS with replacement prospectuses
as necessary to ensure the prospectus does not contain any untrue statement of a material
fact or any omission of a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances in which they were made, not
misleading;

     (vi) have retained for GS nationally-recognized underwriting counsel acceptable to GS
(in its sole discretion) with broad experience in similar registered securities offerings
and such counsel shall have agreed to act as such;

     (vii) have taken all steps necessary for the shares sold by GS to be listed or quoted
on the primary exchange or quotation system that the Shares are listed or quoted on;

     (viii) have paid all reasonable and actual out-of-pocket costs and expenses of GS and
all reasonable and actual fees and expenses of GS’s outside counsel and other independent
experts in connection with the foregoing; and

     (ix) take such action as is required to ensure that GS’s sale of the Shares does not
violate, or result in a violation of, the federal or state securities laws.

          In the event that the Registration Statement is not declared effective by the Securities
Exchange Commission (the “SEC”) or any of the conditions specified in (ii) through (ix) above are
not satisfied on or prior to the Valuation Date (or, in the case of an election of Net Share
Settlement upon the occurrence of an Extraordinary Event or an Early Termination Date, on or prior
to the first Exchange Business Day following either the Cancellation Date or the Early Termination
Date, as the case may be), then Counterparty may deliver Unregistered Shares (as defined below) to
GS in accordance with the following conditions. If GS and Counterparty can agree on acceptable
pricing, procedures and documentation relating to the sale of such Unregistered Shares (including,
without limitation, applicable requirements in (iii) through (ix) above and insofar as pertaining
to private offerings), then such Unregistered Shares shall be deemed to be the “Settlement Shares”
for the purposes of the related Transaction and the settlement procedure specified in this Annex B
shall be followed except that in the event that the Forward Cash Settlement Amount exceeds the
proceeds from the sale of such Unregistered Shares then for the purpose of calculating the number
of Make-whole Shares to be delivered by Counterparty, GS shall determine the discount to the Net
Share Settlement Price at which it can sell the Unregistered Shares. Notwithstanding the delivery
of the Unregistered Shares, Counterparty shall endeavor in good faith to have a registration
statement declared effective by the SEC as soon as practical. In the event that GS has not sold
sufficient Unregistered Shares

B-2

 

to satisfy Counterparty’s obligations to GS contained herein at the time that a Registration
Statement covering the offering and sale by GS of a number of Shares equal in value to not less
than 150% of the amount then owed to GS is declared effective (based on the Net Share Settlement
Price on the Exchange Business Day (as if such Exchange Business Day were the “Net Share Valuation
Date” for purposes of computing such Net Share Settlement Price) that the Registration Statement
was declared effective), GS shall return all unsold Unregistered Shares to Counterparty and
Counterparty shall deliver such number of Shares covered by the effective Registration Statement
equal to 100% of the amount then owed to GS based on such Net Share Settlement Price. Such
delivered shares shall be deemed to be the “Settlement Shares” for the purposes of the related
Transaction and the settlement procedure specified in this Master Confirmation (including the
obligation to deliver any Make-whole Shares, if applicable) shall be followed. In all cases GS
shall be entitled to take any and all required actions in the course of its sales of the Settlement
Shares, including without limitation making sales of the Unregistered Shares only to “Qualified
Institutional Buyers” (as such term is defined under the Securities Act), to ensure that the sales
of the Unregistered Shares and the Settlement Shares covered by the Registration Statement are not
integrated resulting in a violation of the securities laws and Counterparty agrees to take all
actions requested by GS in furtherance thereof.

          If GS and Counterparty cannot agree on acceptable pricing, procedures and documentation
relating to the sales of such Unregistered Shares then the number of Unregistered Shares to be
delivered to GS pursuant to the provisions above shall not be based on the Net Share Settlement
Price but rather GS shall determine the value attributed to each Unregistered Share in a
commercially reasonable manner and based on such value Counterparty shall deliver a number of
Shares equal in value to the Forward Cash Settlement Amount. For the purposes hereof “Unregistered
Shares” means Shares that have not been registered pursuant to an effective registration statement
under the Securities Act or any state securities laws (“Blue Sky Laws”) and that cannot be sold,
transferred, pledged or otherwise disposed of without registration under the Securities Act or
under applicable Blue Sky Laws unless such sale, transfer, pledge or other disposition is made in a
transaction exempt from registration thereunder.

          In the event that Counterparty delivers Shares pursuant to an election of Net Share Settlement
then Counterparty agrees to indemnify and hold harmless GS, its affiliates and its assignees and
their respective directors, officers, employees, agents and controlling persons (GS and each such
person being an “Indemnified Party”) from and against any and all losses, claims, damages and
liabilities (or actions in respect thereof), joint or several, to which such Indemnified Party may
become subject, under the Securities Act or otherwise, (i) relating to or arising out of any of the
Transactions contemplated by this Master Confirmation concerning the Shares or (ii) arising out of
or based upon any untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, prospectus, Registration Statement or other written material relating to
the Shares delivered to prospective purchasers, including in each case any amendments or
supplements thereto and including but not limited to any documents deemed to be incorporated in any
such document by reference (the “Offering Materials”), or arising out of or based upon any omission
or alleged omission to state in the Offering Materials a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that, in the case of this clause (ii), Counterparty will not be
liable to the extent that any loss, claim, damage or liability arises out of or is based upon any
untrue statement or omission or alleged untrue statement or omission in the Offering Materials made
in reliance upon and in conformity with written information furnished to Counterparty by GS
expressly for use in the Offering Materials, as expressly identified in a letter to be delivered at
the closing of the delivery of Shares by Counterparty to GS. The foregoing indemnity shall exclude
losses that GS incurs solely by reason of the proceeds from the sale of the Capped Number of Shares
being less than the Forward Cash Settlement Amount. Counterparty will not be liable under the
foregoing indemnification provision to the extent that any loss, claim, damage, liability or
expense is found in a nonappealable judgment by a court of competent jurisdiction to have resulted
from GS’s willful misconduct, gross negligence or bad faith in performing the services that are
subject of this Master Confirmation. If for any reason the foregoing indemnification is
unavailable to any Indemnified Party or insufficient to hold harmless any Indemnified Party, then
Counterparty shall contribute, to the maximum extent permitted by law, to the amount paid or
payable by the Indemnified Party as a result of such loss, claim, damage or liability. In
addition, Counterparty will reimburse any Indemnified Party for all expenses (including reasonable
counsel fees and expenses) as they are incurred (after notice to Counterparty) in connection with
the investigation of, preparation for or defense or settlement of any pending or threatened claim
or any action, suit or proceeding arising therefrom, whether or not such Indemnified Party is a
party thereto and whether or not such claim, action, suit or proceeding is initiated or brought by
or on behalf of Counterparty. Counterparty also agrees that no Indemnified Party shall have any
liability to Counterparty or any person asserting

B-3

 

claims on behalf of or in right of Counterparty in connection with or as a result of any
matter referred to in the Agreement or this Master Confirmation except to the extent that any
losses, claims, damages, liabilities or expenses incurred by Counterparty result from the gross
negligence, willful misconduct or bad faith of the Indemnified Party. This indemnity shall survive
the completion of any Transaction contemplated by this Master Confirmation and any assignment and
delegation of a Transaction made pursuant to this Master Confirmation or the Agreement shall inure
to the benefit of any permitted assignee of GS&Co.

          In no event shall the number of Settlement Shares (including, without duplication, any
Unregistered Shares) and any Make-whole Shares, be greater than the Reserved Shares minus the
amount of any Shares actually delivered under any other Transaction(s) under this Master
Confirmation (the result of such calculation, the “Capped Number”). Counterparty represents and
warrants (which shall be deemed to be repeated on each day that a Transaction is outstanding) that
the Capped Number is equal to or less than the number of Shares determined according to the
following formula:

A – B

	 	 	 	 	 
	Where
	 

	 	 	A = the number of authorized but unissued shares of the Issuer
that are not reserved for future issuance on the date of the determination of
the Capped Number; and
	 

	 

	 	 	 	B = the maximum number of Shares required to be delivered to third parties
if Counterparty elected Net Share Settlement of all transactions in the
Shares (other than Transactions in the Shares under this Master
Confirmation) with all third parties that are then currently outstanding and
unexercised.

B-4

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