Document:

Exhibit 4.19

 

SILICON VALLEY BANCSHARES

 

Officers’ Certificate and Company Order

relating to the

7% Junior Subordinated Deferrable Interest Debentures Due October 15, 2033

of Silicon Valley Bancshares

 

Pursuant to the
Indenture, dated as of October 30, 2003 (the “Indenture”), between
Silicon Valley Bancshares, a Delaware corporation (the “Company”), and
Wilmington Trust Company, as trustee (the “Debenture Trustee”), and resolutions adopted
by the Pricing Committee of the Company’s Board of Directors on October 23,
2003; this Officers’ Certificate is being delivered to the Debenture Trustee to
establish the terms of one series of securities (the “Securities”) in
accordance with Section 3.1 of the Indenture, to establish the form of the
Securities of such series in accordance with Section 2.1 of the Indenture,
to request the authentication and delivery of the Securities of such series
pursuant to Section 3.3 of the Indenture and to comply with the provisions
of Section 1.2 of the Indenture. 
This Officers’ Certificate shall be treated for all purposes under the
Indenture as a supplemental indenture thereto.

 

Capitalized terms used
but not otherwise defined herein shall have the meanings assigned to them in
the Indenture.

 

I.              Establishment of
Series of Securities pursuant to Section 3.1 of the Indenture.

 

There are hereby
established pursuant to Section 3.1 of the Indenture a series of
Securities which shall have the following terms:

 

A.            The Securities of such
series shall bear the title “7% Junior Subordinated Deferrable Interest
Debentures Due October 15, 2033.”

 

B.            The aggregate
principal amount of such series of Securities to be issued pursuant to this
Officers’ Certificate and Company Order shall be limited to $51,546,400 (except
for Securities authenticated and delivered upon registration of, transfer of,
or in exchange for, or in lieu of, other Securities of such series pursuant to
Sections 3.4, 3.5, 3.6, 9.6 or 11.6 of the Indenture and except for any
Securities which, pursuant to Section 3.3 of the Indenture, are deemed
never to have been authenticated and delivered thereunder).

 

C.            The date on which the
principal of the Securities is due and payable shall be October 15,
2033.  The Company may shorten the
Stated Maturity of the Securities as provided in Section 3.14 of the
Indenture.

 

D.            The Securities shall
bear interest at the rate of 7% per annum (based upon a 360-day year of twelve
30-day months), from and including the date of original issuance or from and
including the most recent Interest Payment Date to which interest has been paid
or duly provided for, as the case may be, payable quarterly in arrears on the
15th day of January, April, July and October

 

 

in each year (each, an “Interest Payment Date”),
commencing January 15, 2004, until the principal thereof is paid or made
available for payment.  The date 15 days
prior to an Interest Payment Date shall be the “Regular Record Date” for the interest
payable on such Interest Payment Date. 
Accrued interest that is not paid on such applicable Interest Payment
Date will bear additional interest on the amount thereof (to the extent
permitted by law) at a rate per annum of 7% thereof compounded quarterly.

 

In addition, so long as
no Event of Default with respect to the Securities has occurred or is continuing,
the Company has the rights set forth in Section 3.11 of the Indenture at
any time during the term of such Securities to defer the payment of interest at
any time or from time to time for a period not exceeding 20  consecutive quarterly periods with respect
to each Extension Period, provided  that no Extension Period may
extend beyond the Stated Maturity.  At
the end of such Extension Period, the Company must pay all interest then
accrued and unpaid (together with interest thereon at the annual rate of 7%,
compounded quarterly, to the extent permitted by applicable law).

 

E.             Principal of and
interest on the Securities will be payable, and, except as provided in
Section 3.5 of the Indenture with respect to a Global Security (as defined
below), the transfer of the Securities will be registrable and Securities will
be exchangeable for Securities bearing identical terms and provisions at the
corporate trust office of Wilmington Trust Company in Wilmington, Delaware.

 

F.             The Securities will
be redeemable in whole at any time and in part from time to time, at the option
of the Company at any time on or after October 30, 2008, subject to the
Company having received prior regulatory approval if then so required, at a
redemption price equal to the accrued and unpaid interest on the Securities so
redeemed to the date fixed for redemption, plus 100% of the principal amount
thereof.

 

In
addition, upon the occurrence of a Tax Event, an Investment Company Event or a
Capital Treatment Event in respect of a SVB Trust, the Company may, at its
option and subject to receipt of prior regulatory approval if then required
under applicable capital guidelines or policies, redeem the Securities in whole
(but not in part) at any time within 90 days of the occurrence of such Tax
Event, Investment Company Event or a Capital Treatment Event, at a redemption
price equal to the accrued and unpaid interest on the Securities so redeemed to
the date fixed for redemption, plus 100% of the principal amount thereof.

 

G.            The Company shall not
be obligated to redeem or purchase any Securities pursuant to any sinking fund
or analogous provisions or at the option of the Holder.

 

H.            The Securities will be
issued only in fully registered form and the authorized minimum denomination of
the Securities shall be $25.00 and any integral multiple of $25.00 in excess
thereof.

 

I.              The Securities shall
be denominated, and payments of principal of (and premium, if any) and interest
on the Securities of such series will be made, in United States dollars.

 

2

 

J.             The Securities shall
be subject to the Events of Default specified in Section 5.1, paragraphs
(a) through (e), of the Indenture.

 

K.            The portion of the
principal amount of the Securities which shall be payable upon declaration of
acceleration of maturity thereof shall not be other than the principal amount
thereof.

 

L.             The Securities will
be issued in fully registered form, without coupons.  The Securities will not be issued in bearer form.

 

M.           The amount of payments
of principal of and any premium on the Securities will not be determined with
reference to an index.

 

N.            The Securities shall
not be issued in the form of a temporary Global Security (as defined below).

 

O.            The Securities will
initially be deposited with, and on behalf of, The Depository Trust Company,
New York, New York, as Depositary, and will be represented by a global security
(a “Global Security”)
registered in the name of a nominee of the Depositary.  If, and so long as the Depositary or its nominee
is the registered holder of any Global Security, the Depositary or its nominee,
as the case may be, will be considered the sole Holder of the Securities of
such series represented by such Global Security for all purposes under the
Indenture and the Securities.

 

P.             The Trustee shall be
Paying Agent.

 

Q.            The Securities will
not be convertible into any other securities or property of the Company.  The Securities of any series may not be
exchanged for Securities of any other series.

 

R.            The Trust Agreement,
the Amended and Restated Trust Agreement and the Guarantee Agreement are in the
forms attached hereto as Exhibit A, Exhibit B, and Exhibit C
respectively.

 

S.             The Securities are
subordinate and subject in right of payment to the prior payment in full of all
amounts then due and payable in respect of all Senior Debt, as provided in the
Indenture.

 

II.            Establishment of
Forms of Securities Pursuant to Section 2.1 of Indenture.

 

It is hereby established
pursuant to Section 2.1 of the Indenture that the Securities shall be
substantially in the form attached as Exhibit D hereto.

 

III.           Order for the
Authentication and Delivery of Securities Pursuant to Section 3.3 of the
Indenture.

 

It is
hereby ordered pursuant to Section 3.3 of the Indenture that the Trustee authenticate,
in the manner provided by the Indenture, Securities in the aggregate principal
amount of $51,546,400

 

3

 

registered in the name of
Cede & Co., as the nominee of The Depository Trust Company, which
Securities have been heretofore duly executed by the proper officers of the
Company and delivered to you as provided in the Indenture, and to deliver said
authenticated Securities to Wilmington Trust Company or its custodian on
October 30, 2003.

 

IV.           Other Matters.

 

Attached as Exhibit E
hereto are true and correct copies of resolutions adopted by the Board of
Directors of the Company at a meeting on September 11, 2003.  Attached as Exhibit F hereto are true
and correct copies of resolutions adopted by the Pricing Committee of the Board
of Directors of the Company at a meeting on October 23, 2003.  Such resolutions have not been further
amended, modified or rescinded and remain in full force and effect; and such
resolutions (together with this Officers’ Certificate) are the only resolutions
or other action adopted by the Company’s Board of Directors or any committee
thereof or by any Authorized Officers relating to the offering and sale of the
Securities.

 

The undersigned have read
the pertinent sections of the Indenture including the related definitions
contained therein.  The undersigned have
examined the resolutions adopted by the Board of Directors and the Pricing
Committee of the Board of Directors of the Company.  In the opinion of the undersigned, the undersigned have made such
examination or investigation as is necessary to enable the undersigned to
express an informed opinion as to whether or not the conditions precedent to
the establishment of (i) a series of Securities, (ii) the forms of
such Securities and (iii) authentication of such series of Securities,
contained in the Indenture have been complied with.  In the opinion of the undersigned, such conditions (including
covenants, compliance with which constitutes a condition precedent) have been complied
with.

 

[The remainder of this page is intentionally left
blank]

 

4

 

IN WITNESS WHEREOF, the undersigned have executed this
Certificate this 30th day of October, 2003.

 

	
   

  	
  SILICON VALLEY BANCSHARES

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kenneth P. Wilcox

  	
   

  
	
   

  	
   

  	
  Name: Kenneth P. Wilcox

  	
   

  
	
   

  	
   

  	
  Title:   President and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paulette Mehas

  	
   

  
	
   

  	
   

  	
  Name: Paulette Mehas

  	
   

  
	
   

  	
   

  	
  Title:   Treasurer

  	
   

  
						

 

 

[Signature Page to
Officers’ Certificate and Company Order]Exhibit
10.1

 

EXECUTION COPY

 

$150,000,000

 

CREDIT AGREEMENT

 

Dated as of November 7, 2003

 

Among

 

INTERNATIONAL RECTIFIER CORPORATION,

 

as Company,

 

THE
INITIAL LENDERS NAMED HEREIN,

 

 

WELLS FARGO BANK, N.A.,

 

UNION BANK OF CALIFORNIA

 

as Co-Syndication Agents,

 

COMERICA
BANK,

 

FLEET BANK

 

as Co-Documentation Agents

 

and

 

BNP PARIBAS

 

as Sole Arranger,
Administrative Agent,
 and Initial Issuing Bank

 

 

TABLE OF CONTENTS

 

 

	
  ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 1.01
  Certain Defined Terms

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 1.02
  Computation of Time Periods; Other Definitional Provisions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 1.03
  Accounting Terms

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES
  AND THE LETTERS OF CREDIT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 2.01 The
  Advances and the Letters of Credit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 2.02
  Making the Revolving Credit Advances

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 2.03
  Issuance of and Drawings and Reimbursement Under Letters of Credit

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 2.04 The
  Competitive Bid Advances

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 2.05
  Repayment of Advances

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 2.06
  Termination or Reduction of the Commitments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 2.07
  Prepayments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 2.08
  Interest on Revolving Credit Advances and Letter of Credit Advances

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 2.09 Fees

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 2.10
  Conversion of Revolving Credit Advances

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 2.11
  Increased Costs, Etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 2.12
  Payments and Computations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 2.13
  Taxes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 2.14
  Sharing of Payments, Etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 2.15 Use
  of Proceeds

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 2.16
  Evidence of Debt

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III CONDITIONS OF LENDING AND
  ISSUANCES OF LETTERS OF CREDIT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 3.01
  Conditions Precedent to Effectiveness

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 3.02
  Initial Loan to Each Designated Subsidiary

  	
   

  

 

i

 

	
   

  	
   

  	
  SECTION 3.03
  Conditions Precedent to Each Revolving Credit Borrowing and Issuance

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 3.04 Conditions
  Precedent to Each Competitive Bid Borrowing

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 3.05
  Determinations Under Section 3.01

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV REPRESENTATIONS AND WARRANTIES

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 4.01
  Representations and Warranties of the Company

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V COVENANTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 5.01 Affirmative Covenants

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 5.02
  Negative Covenants

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 5.03
  Reporting Requirements

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 5.04
  Financial Covenants

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI
  EVENTS OF DEFAULT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 6.01
  Events of Default

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 6.02
  Actions in Respect of the Letters of Credit upon Default

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII
  GUARANTY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 7.01
  Unconditional Guaranty

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 7.02
  Guaranty Absolute

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 7.03
  Waivers and Acknowledgments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 7.04
  Subrogation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 7.05
  Subordination

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 7.06
  Survival

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII
  THE AGENTS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 8.01
  Authorization and Action

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 8.02 Agents’ Reliance, Etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 8.03 BNP
  Paribas and Affiliates

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 8.04
  Lender Party Credit Decision

  	
   

  

 

ii

 

	
   

  	
   

  	
  SECTION 8.05
  Indemnification

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 8.06
  Successor Agents

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 8.07
  Other Agents

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 9.01 Amendments, Etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 9.02
  Notices, Etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 9.03 No
  Waiver; Remedies

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 9.04
  Costs and Expenses

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 9.05
  Right of Set-off

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 9.06
  Binding Effect

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 9.07
  Assignments, Designations and Participations

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 9.08
  Confidentiality

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 9.09
  Execution in Counterparts

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 9.10 No
  Liability of the Issuing Bank

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 9.11
  Designated Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 9.12
  Jurisdiction, Etc

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 9.13
  Governing Law

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 9.14
  Judgment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 9.15
  Substitution of Currency

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SECTION 9.16
  Waiver of Jury Trial

  	
   

  

 

iii

 

	
  SCHEDULES

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule I

  	
   

  	
  -

  	
   

  	
  Commitments and Applicable Lending Offices

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 2.01(b)

  	
   

  	
  -

  	
   

  	
  Existing Letters of Credit

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 3.01(a)(ii)(A)(2)

  	
   

  	
   

  	
   

  	
  Non-U.S. Subsidiary Guarantors (whose shares will be
  delivered after the Effective Date)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 3.01(a)(vi)

  	
   

  	
  -

  	
   

  	
  Secretaries of State/Significant Subsidiaries

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 4.01(b)

  	
   

  	
  -

  	
   

  	
  Subsidiaries of Loan Parties

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 4.01(d)

  	
   

  	
  -

  	
   

  	
  Authorizations, Approvals, Actions, Notices and
  Filings

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 4.01(h)

  	
   

  	
  -

  	
   

  	
  Litigation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 4.01(l)(i)

  	
   

  	
  -

  	
   

  	
  Environmental Compliance

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 4.01(l)(ii)

  	
   

  	
  -

  	
   

  	
  Properties on NPL, CERCLIS or analogous list

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 4.01(l)(iii)

  	
   

  	
  -

  	
   

  	
  Release of Hazardous Materials

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 4.01(m)

  	
   

  	
  -

  	
   

  	
  Existing Liens

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 5.02(e)(iv)

  	
   

  	
  -

  	
   

  	
  Sales of Assets

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule 5.02(f)(vi)

  	
   

  	
  -

  	
   

  	
  Investments

  

 

iv

 

EXHIBITS

 

	
  Exhibit A-1

  	
   

  	
  -

  	
   

  	
  Form of Revolving
  Credit Note

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A-2

  	
   

  	
  -

  	
   

  	
  Form of Competitive Bid
  Note

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit B-1

  	
   

  	
  -

  	
   

  	
  Form of Notice of
  Revolving Credit Borrowing

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit B-2

  	
   

  	
  -

  	
   

  	
  Form of Notice of
  Competitive Bid Borrowing

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit C

  	
   

  	
  -

  	
   

  	
  Form of Assignment and
  Acceptance

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit D

  	
   

  	
  -

  	
   

  	
  Form of Designation
  Letter

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit E-1

  	
   

  	
  -

  	
   

  	
  Form of Security
  Agreement

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit E-2

  	
   

  	
  -

  	
   

  	
  Form of U.S Subsidiary
  Guaranty

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit E-3

  	
   

  	
  -

  	
   

  	
  Form of Non-U.S
  Subsidiary Guaranty

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit F-1

  	
   

  	
  -

  	
   

  	
  Form of Opinion of
  Outside Counsel to the Loan Parties

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit F-2

  	
   

  	
  -

  	
   

  	
  Form of Opinion of
  General Counsel to the Loan Parties

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit G

  	
   

  	
  -

  	
   

  	
  Form of Compliance
  Certificate

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit H

  	
   

  	
  -

  	
   

  	
  Form of Designation
  Agreement

  

 

v

 

CREDIT AGREEMENT

 

CREDIT AGREEMENT dated as of November 7, 2003,
among International Rectifier Corporation, a Delaware corporation (the “Company”), the banks,
financial institutions and other institutional lenders listed on the signature
pages hereof as the Initial Lenders (the “Initial Lenders”), Wells Fargo Bank, N.A. and Union Bank
of California as co-syndication agents (the “Syndication Agents”), Comerica Bank and
Fleet Bank as co-documentation agents (the “Documentation Agents”), BNP Paribas, as
the sole arranger (the “Sole Arranger”), as the initial issuing bank (the “Initial Issuing Bank”)
and as administrative agent (together with any successors appointed pursuant to
Article VIII, the “Administrative Agent”) for the Lender Parties (as
hereinafter defined).

 

PRELIMINARY STATEMENTS:

 

(1)                                  The
Company has requested that the Lender Parties lend to the Company up to
$150,000,000 in a multicurrency facility in order to refinance existing
advances under the Amended and Restated
Credit Agreement dated as of November 2, 2000, as amended, among the
Borrowers, the lenders party thereto and BNP Paribas, as agent (the “Existing Credit Agreement”)
and to provide working capital for the Company and its Subsidiaries and for
other general corporate purposes permitted by this Agreement.

 

(2)                                  The
Lender Parties have indicated their willingness to agree to lend such amounts
on the terms and conditions of this Agreement.

 

NOW, THEREFORE, in consideration of the premises and
of the mutual covenants and agreements contained herein, the parties hereto
hereby 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):

 

“Acquisition
Expenditures” means, for any period, all cash expenditures made,
directly or indirectly, by the Company or any of its Subsidiaries for Permitted
Acquisitions.

 

“Administrative Agent”
has the meaning specified in the recital of parties to this Agreement.

 

“Administrative Agent’s
Account” means (a) in the case of Advances denominated in
Dollars, the account of the Administrative Agent maintained by the
Administrative Agent at the Federal Reserve Bank of New York, 33 Liberty
Street, New York, New York 10048, ABA No. 026007689, for further credit to
Account No. 750420-701-03 Reference: 
International Rectifier Corporation, (b) in the case of Advances
denominated in any Foreign Currency, the account of the Administrative Agent
designated in writing from time to time by the Administrative Agent to the
Company and the Lenders for such purpose and (c) in any such case, such
other account of the Administrative Agent as is designated in writing from time
to time by the Administrative Agent to the Company and the Lenders for such
purpose or such other account maintained by the

 

 

Administrative Agent and designated by the Administrative Agent in a
written notice to the Lender Parties and the Company.

 

“Advance”
means a Revolving Credit Advance, a Letter of Credit Advance or a Competitive
Bid Advance.

 

“Affiliate”
means, as to any Person, any other Person that, directly or indirectly,
controls, is controlled by or is under common control with such Person or is a
director or officer of 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 5% or more of
the Voting Interests of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of Voting
Interests, by contract or otherwise.

 

“Agents”
means the Administrative Agent, the Syndication Agents, the Documentation
Agents and any Person appointed by the Administrative Agent pursuant to
Section 8.07, and “Agent” means any of them, as the case may be.

 

“Agreement Value”
means, for each Hedge Agreement, on any date of determination, an amount
determined by the Administrative Agent equal to:  (a) in the case of a Hedge Agreement documented pursuant to the
Master Agreement (Multicurrency-Cross Border) published by the International
Swap and Derivatives Association, Inc. (the “Master Agreement”), the amount, if any, that
would be payable by any Loan Party or any of its Subsidiaries to its
counterparty to such Hedge Agreement, as if (i) such Hedge Agreement was being
terminated early on such date of determination, (ii) such Loan Party or
Subsidiary was the sole “Affected Party”, and (iii) the Administrative Agent
was the sole party determining such payment amount (with the Administrative Agent
making such determination pursuant to the provisions of the form of Master
Agreement); or (b) in the case of a Hedge Agreement traded on an exchange, the
mark-to-market value of such Hedge Agreement, which will be the unrealized loss
on such Hedge Agreement to the Loan Party or Subsidiary of a Loan Party party
to such Hedge Agreement determined by the Administrative Agent based on the
settlement price of such Hedge Agreement on such date of determination; or (c)
in all other cases, the mark-to-market value of such Hedge Agreement, which
will be the unrealized loss on such Hedge Agreement to the Loan Party or
Subsidiary of a Loan Party party to such Hedge Agreement determined by the
Administrative Agent as the amount, if any, by which (i) the present value of
the future cash flows to be paid by such Loan Party or Subsidiary exceeds (ii)
the present value of the future cash flows to be received by such Loan Party or
Subsidiary pursuant to such Hedge Agreement; capitalized terms used and not
otherwise defined in this definition shall have the respective meanings set
forth in the above described Master Agreement.

 

“Applicable Lending
Office” means, with respect to each Lender Party, such Lender
Party’s Domestic Lending Office in the case of a Base Rate Advance and such
Lender Party’s Eurocurrency Lending Office in the case of a Eurocurrency Rate
Advance and, in the case of a Competitive Bid Advance, the office of such
Lender notified by such Lender to the Administrative Agent as its Applicable
Lending Office with respect to such Competitive Bid Advance.

 

 

“Applicable
Margin” means, for any date, a percentage per annum determined
by reference to the Senior Leverage Ratio of the Company and its Subsidiaries
for the Rolling Period ended on or most recently prior to such date as set
forth below:

 

	
  Senior
  Leverage

  Ratio

  	
   

  	
  Base Rate

  Advances

  	
   

  	
  Eurocurrency Rate

  Advances

  	
   

  
	
  Level I

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  less than 0.20 to 1.00

  	
   

  	
  0.75

  	
  %

  	
  1.75

  	
  %

  
	
  Level II

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  less than 0.60 to 1.00 but greater than or equal to
  0.20 to 1.00

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Level III

  	
   

  	
  1.00

  	
  %

  	
  2.00

  	
  %

  
	
  less than 1.00 to 1.00 but greater than or equal to
  0.60 to 1.00

  	
   

  	
  1.50

  	
  %

  	
  2.50

  	
  %

  
	
  Level IV

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  greater than or equal to 1.00 to 1.00

  	
   

  	
  2.00

  	
  %

  	
  3.00

  	
  %

  

 

The Applicable Margin for each Advance shall be determined by reference
to the Senior Leverage Ratio in effect from time to time; provided, however, that (i)
no change in the Applicable Margin shall be effective until three Business Days
after the date on which the Administrative Agent receives the financial
information required to be delivered pursuant to Section 5.03(b), (ii) the
Applicable Margin shall be at Level IV for so long as the Company has not
submitted to the Administrative Agent the information described in clause (i)
of this proviso as and when required under Section 5.03(b) and (iii) the
Applicable Margin shall be at Level II until the earlier of (A)
November 14, 2003 and (B) three Business Days after the Administrative
Agent receives the information described in clause (i) of this proviso for the
period ending September 30, 2003.

 

“Approved Fund”
means, with respect to any Lender that is a fund that invests in bank loans,
any other fund that invests in bank loans and is advised or managed by the same
investment advisor as such Lender or by an Affiliate of such investment
advisor.

 

“Assignment and
Acceptance” means an assignment and acceptance entered into by a
Lender Party and an Eligible Assignee and accepted by the Administrative Agent,
in accordance with Section 9.07 and in substantially the form of
Exhibit C hereto.

 

“Available Amount”
of any Letter of Credit means, at any time, the maximum amount available to be
drawn under such Letter of Credit at such time (assuming compliance at such
time with all conditions to drawing).

 

“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 higher of:

 

(a)                                  the
rate of interest announced publicly by BNP Paribas in New York,
New York, from time to time, as its prime rate (and such term shall not be
construed to be its best or most favorable rate); or

 

(b)                                 0.50%
per annum above the Federal Funds Rate.

 

 

“Base Rate Advance”
means a Revolving Credit Advance that bears interest as provided in
Section 2.08(a)(i).

 

“Borrower”
means the Company or any Designated Subsidiary, as the context requires.

 

“Borrowing”
means a Revolving Credit Borrowing or a Competitive Bid Borrowing.

 

“Business Day”
means a day of the year on which banks are not required or authorized by law to
close in New York City or San Francisco, California and, if the applicable
Business Day relates to any Eurocurrency Rate Advances or LIBO Rate Advances,
on which dealings are carried on in the London interbank market and banks are
open for business in London and in the country of issue of the currency of such
Eurocurrency Rate Advance or LIBO Rate Advance (or, in the case of an Advance
denominated in the Euro, in Frankfurt, Germany) and, if the applicable Business
Day relates to any Local Rate Advances on which banks are open for business in
the country of issue of the currency of such Local Rate Advance.

 

“Capital Expenditures”
means, for any Person for any period, all cash expenditures made, directly or
indirectly, by such Person or any of its Subsidiaries during such period for
equipment, fixed assets, real property or improvements, or for replacements or
substitutions therefor or additions thereto, that have been or should be, in
accordance with GAAP, reflected as additions to property, plant or equipment on
a Consolidated balance sheet of such Person, provided,
however, that Capital
Expenditures shall not include Acquisition Expenditures.

 

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

 

“Cash Equivalents”
means assets that are reported by the Company as cash equivalents or
investments in its most recent quarterly report on Form-10Q or annual report on
Form-10K filed with the Securities and Exchange Commission and, in the case of
such investments rated at all times at least “Baa3-” or “Prime-3” (or the then
equivalent grade) by Moody’s or “BBB-” or “A-3” (or the then equivalent grade)
by S&P or “BBB-” or “F3” (or the then equivalent grade) by Fitch IBCA, Inc.

 

“CERCLA”
means the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended from time to time.

 

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

 

“Change of Control”
means the occurrence of any of the following: 
(a) any Person or two or more Persons acting in concert shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934),
directly or indirectly, of Voting Interests of the Company (or other securities
convertible into such Voting Interests) representing 35% or more of the
combined voting power of all Voting Interests of the Company; or (b) during any
period of up to 24 consecutive months, commencing after the date of this
Agreement, individuals who at the beginning of such 24-month period were
directors of the Company shall cease (other than due to death or disability)
for any reason to constitute a majority of the board of directors of the
Company (except to the extent that individuals who at the beginning of such
24-month period were replaced by individuals (x) elected by 662/3%
of the remaining members of the board of directors of the Company or (y)
nominated for election by a majority of the remaining members

 

 

of the board of directors of the Company and thereafter elected as
directors by the shareholders of the Company); or (c) any Person or two or more
Persons acting in concert shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon consummation, will
result in its or their acquisition of control over Voting Interests of the
Company (or other securities convertible into such Voting Interests)
representing 35% or more of the combined voting power of all Voting Interests
of the Company.

 

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

 

“Collateral Documents”
means each Security Agreement (including any Security Agreement delivered under
Section 5.01(j)) and each other agreement (including, without limitation,
each pledge agreement, charge or mortgage by the Company for which the
collateral is shares of any Non-U.S. Subsidiary) that creates or purports to
create a Lien in favor of the Administrative Agent for the benefit of the
Secured Parties.

 

“Commitment”
means, with respect to any Lender at any time, the Dollar amount set forth
opposite such Lender’s name on Schedule I hereto under the caption
“Commitment” or, if such Lender has entered into one or more Assignment and
Acceptances, the Dollar amount set forth for such Lender in the Register maintained
by the Administrative Agent pursuant to Section 9.07(h) as such Lender’s
“Commitment”, as such amount may be reduced at or prior to such time pursuant
to Section 2.06.

 

“Committed Currencies”
means lawful currency of the United Kingdom of Great Britain and Northern
Ireland, lawful currency of Japan, the lawful currency of the European Economic
and Monetary Union, and the lawful currency of the Republic of Singapore.

 

“Competitive Bid
Advance” means an advance by a Lender to any Borrower, which may
only be made in a Foreign Currency, as part of a Competitive Bid Borrowing
resulting from the competitive bidding procedure described in Section 2.04
and refers to a Fixed Rate Advance, a LIBO Rate Advance or a Local Rate
Advance.

 

“Competitive Bid
Borrowing” means a borrowing consisting of simultaneous
Competitive Bid Advances from each of the Lenders whose offer to make one or
more Competitive Bid Advances as part of such borrowing has been accepted under
the competitive bidding procedure described in Section 2.04.

 

“Competitive Bid Note”
means a promissory note of a Borrower payable to the order of any Lender, in
substantially the form of Exhibit A-2 hereto, evidencing the indebtedness
of such Borrower to such Lender resulting from a Competitive Bid Advance made
by such Lender to such Borrower.

 

“Competitive Bid
Reduction” means the reduction in the aggregate Commitments
resulting from the aggregate outstanding principal amount of all Competitive
Bid Advances as provided in clause (b)(iii) of the definition of “Unused
Commitment.”

 

“Confidential
Information” means information that any Loan Party furnishes to
the Administrative Agent or any Lender Party or that the Administrative Agent
or any Lender Party otherwise obtains on a confidential basis, but does not
include any such information that is or

 

 

becomes generally available to the public or that is or becomes
available to the Administrative Agent or such Lender Party from a source other
than the Loan Parties or an agent of a Loan Party.

 

“Consolidated”
refers, with respect to any Person, to the consolidation of accounts of such
Person and its Subsidiaries in accordance with GAAP.

 

“Contingent Obligation”
means, with respect to any Person, any Obligation or arrangement of such Person
to guarantee or intended to guarantee any Debt, leases, dividends or other
payment Obligations (“primary obligations”) of any other Person (the “primary obligor”) in
any manner, whether directly or indirectly, including, without limitation, (a)
the direct or indirect guarantee, endorsement (other than for collection or
deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the Obligation of a primary
obligor, (b) the Obligation to make take-or-pay or similar payments, if
required, regardless of nonperformance by any other party or parties to an
agreement or (c) any Obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting
direct or indirect security therefor, (ii) to advance or supply funds
(A) for the purchase or payment of any such primary obligation or
(B) to maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, assets, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (iv) otherwise to
assure or hold harmless the holder of such primary obligation against loss in
respect thereof.  The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for which such Person may be liable pursuant to the terms of the
instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.

 

“Conversion”,
“Convert” and “Converted” each refer
to a conversion of Revolving Credit Advances of one Type into Revolving Credit
Advances of the other Type pursuant to Section 2.10.

 

“Debt”
of any Person means, without duplication, (a) all indebtedness of such
Person for borrowed money and all Obligations of the Loan Parties under this
Agreement (except for
reimbursement obligations in respect of Letters of Credit issued to support any
liability that would not be classified as indebtedness in accordance with GAAP),
(b) all Obligations, contingent or otherwise, of such Person for the
deferred purchase price of property or services (other than trade payables not
overdue by more than 120 days, and that do not exceed $10,000,000 in the
aggregate for all such trade payables, that are incurred in the ordinary course
of such Person’s business), (c) all Obligations, contingent or otherwise,
of such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all Obligations, contingent or otherwise, 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), (e) all
Obligations, contingent or otherwise, of such Person as lessee under
Capitalized Leases, (f) all Obligations, contingent or otherwise, of such
Person under acceptance, letter of credit or similar facilities, (g)  all
Obligations of such Person to purchase, redeem, retire, defease or otherwise
make any payment in cash in respect of any Equity Interests in such Person or
any other Person or any warrants, rights or options to acquire such capital
stock valued, in the case of Redeemable Preferred Interests, at the greater of
its voluntary or involuntary liquidation

 

 

preference  plus accrued
and unpaid dividends, (h) all Contingent Obligations of such Person, (i)
any Obligation of such Person under a synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing if the
transaction giving rise to such Obligation is considered indebtedness for
borrowed money for tax purposes but is classified as an operating lease in
accordance with GAAP, less the amount of any cash held by the respective credit
provider as cash collateral to secure the Obligations of such Person under any
synthetic lease and (j) all indebtedness and other payment Obligations
referred to in clauses (a) through (i) above of another Person 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
indebtedness or other payment Obligations.

 

“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.

 

“Designated Bidder”
means (a) an Eligible Assignee or (b) a special purpose corporation
that is engaged in making, purchasing or otherwise investing in commercial
loans in the ordinary course of its business and that issues (or the parent of
which issues) commercial paper rated at least “Prime-1” (or the then equivalent
grade) by Moody’s or ”A-1” (or the then equivalent grade) by S&P that,
in the case of either clause (a) or (b), (i) is organized under the laws
of the United States or any State thereof, (ii) shall have become a party
hereto pursuant to Section 9.07(e), (f) and (g) and (iii) is not
otherwise a Lender.

 

“Designated Subsidiary”
means any Subsidiary of the Company designated for borrowing privileges under
this Agreement pursuant to Section 9.11.

 

“Designation Agreement”
means a designation agreement entered into by a Lender (other than a Designated
Bidder) and a Designated Bidder, and accepted by the Administrative Agent, in
substantially the form of Exhibit H.

 

“Designation Letter”
means, with respect to any Designated Subsidiary, a letter in the form of
Exhibit D hereto signed by such Designated Subsidiary and the Company.

 

“Documentation
Agents” has the meaning specified in the recital of parties to
this Agreement.

 

“Dollars” and the “$” sign each means lawful currency of the United States
of America.

 

“Domestic Lending
Office” means, with respect to any Lender Party, the office of
such Lender Party specified as its “Domestic Lending Office” opposite its name
on Schedule I hereto or in the Assignment and Acceptance pursuant to which
it became a Lender Party, as the case may be, or such other office of such
Lender Party as such Lender Party may from time to time specify to the Company
and the Administrative Agent.

 

“EBITDA”
means, for any period, the sum, determined on a Consolidated basis, of (a) net
income (or net loss), (b) Interest Expense, (c) income tax expense,
(d) depreciation expense, (e) amortization expense, (f) non-cash
charges incurred in connection with stock options granted to employees of the
Company, and (g) (i) all non-cash, extraordinary, non-recurring, transactional
or unusual losses deducted in calculating net income less (ii) all non-cash, extraordinary, non-recurring,
transactional or unusual gains added in calculating net income in each case of
the Company determined in accordance with GAAP for such period; provided, however,
there shall

 

 

be excluded from EBITDA, to the extent therein included, all non-cash
foreign currency and Hedge Agreement losses and all non-cash foreign currency
and Hedge Agreement gains.

 

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

 

“Eligible
Assignee” means (a) with respect to the Facility:  (i) a Lender Party; (ii) an Affiliate of a
Lender Party or an Approved Fund; (iii) a commercial bank organized under the
laws of the United States, or any State thereof, and having a combined capital
and surplus of at least $500,000,000; (iv) a savings and loan association or
savings bank organized under the laws of the United States, or any State
thereof, and having a combined capital and surplus of at least $500,000,000;
(v) a commercial bank organized under the laws of any other country that is a
member of the OECD or has concluded special lending arrangements with the
International Monetary Fund associated with its General Arrangements to Borrow
or a political subdivision of any such country, and having a combined capital
and surplus of at least $500,000,000, so long as such bank is acting through a
branch or agency located in the United States; (vi) a finance company,
insurance company or other financial institution or fund (whether a
corporation, partnership, trust or other entity) that is engaged in making,
purchasing or otherwise investing in commercial loans in the ordinary course of
its business and having a combined capital and surplus of at least $250,000,000;
and (vii) any other Person approved by the Administrative Agent and, unless a
Default has occurred and is continuing at the time any assignment is effected
pursuant to Section 9.07, the Company, any such approval in either case
not to be unreasonably withheld or delayed, provided that a Person shall become
an Eligible Assignee referred to in subclauses (iii) through (vii) above with
the approval of the Issuing Bank in its sole discretion, and (b) with respect
to any additional Issuing Bank, a Person that is an Eligible Assignee under
subclause (iii) or (v) of clause (a) of this definition and is approved by the
Administrative Agent and, unless a Default has occurred and is continuing at
the time any assignment is effected pursuant to Section 9.07, the Company,
such approval not to be unreasonably withheld or delayed; provided, however,
that neither any Loan Party nor any Affiliate of a Loan Party shall qualify as
an Eligible Assignee under this definition.

 

“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, any Environmental Permit or Hazardous Material or arising
from alleged injury or threat 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 third party for
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief.

 

“Environmental Law”
means any federal, state, local or foreign statute, law, ordinance, rule,
regulation, code, order, writ, judgment, injunction, decree or judicial or
agency interpretation, policy or guidance relating to pollution or protection
of the environment, health, safety or natural resources, including, without
limitation, those relating to the use, handling, transportation, treatment,
storage, disposal, release or discharge of Hazardous Materials.

 

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

 

“Equity Interests”
means, with respect to any Person, shares of capital stock of (or other
ownership or profit interests in) such Person, warrants, options or other
rights for the purchase or other acquisition from such Person of shares of
capital stock of (or other ownership or profit

 

 

interests in) such Person, securities convertible into or exchangeable
for shares of capital stock of (or other ownership or profit interests in) such
Person or warrants, rights or options for the purchase or other acquisition from
such Person of such shares (or such other interests), and other ownership or
profit interests in such Person (including, without limitation, partnership,
member or trust interests therein), whether voting or nonvoting, and whether or
not such shares, warrants, options, rights or other interests are authorized or
otherwise existing on any date of determination.

 

“Equivalent”
in Dollars of any Committed Currency or any Foreign Currency on any date means
the equivalent in Dollars of such Committed Currency or Foreign Currency, as
the case may be, determined by using the quoted spot rate at which the
Administrative Agent’s principal office in London offers to exchange Dollars
for such Committed Currency or Foreign Currency in London prior to 4:00 P.M.
(London time) (unless otherwise indicated by the terms of this Agreement) on
such date as is required pursuant to the terms of this Agreement, and the
“Equivalent” in any Committed Currency or Foreign Currency, as the case may be,
of Dollars means the equivalent in such Committed Currency or Foreign Currency,
as the case may be, of Dollars determined by using the quoted spot rate at
which the Administrative Agent’s principal office in London offers to exchange
such Committed Currency or Foreign Currency, as the case may be, for Dollars in
London prior to 4:00 P.M. (London time) (unless otherwise indicated by the
terms of this Agreement) on such date as is required pursuant to the terms of
this Agreement.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time
to time, and the regulations promulgated and rulings issued thereunder.

 

“ERISA Affiliate”
means any Person that for purposes of Title IV of ERISA is a member of the
controlled group of any Loan Party, or under common control with any Loan
Party, within the meaning of Section 414 of the Internal Revenue Code.

 

“ERISA Event”
means (a) (i) the occurrence of a reportable event, within the meaning of
Section 4043 of ERISA, with respect to any Plan unless the 30-day notice
requirement with respect to such event has been waived by the PBGC; or (ii) the
requirements of subsection (1) of Section 4043(b) of ERISA (without
regard to subsection (2) of such Section) are met with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a
Plan, and an event described in paragraph (9), (10), (11), (12) or (13) of
Section 4043(c) of ERISA is reasonably expected to occur with respect to
such Plan within the following 30 days; (b) the application for a minimum funding
waiver with respect to a Plan; (c) the provision by the administrator of
any Plan of a notice of intent to terminate such Plan, pursuant to
Section 4041(a)(2) of ERISA (including any such notice with respect to a
plan amendment referred to in Section 4041(e) of ERISA); (d) the cessation
of operations at a facility of any Loan Party or any ERISA Affiliate in the
circumstances described in Section 4062(e) of ERISA; (e) the
withdrawal by any Loan Party or any ERISA Affiliate from a Multiple Employer Plan
during a plan year for which it was a substantial employer, as defined in
Section 4001(a)(2) of ERISA; (f) the conditions for imposition of a
lien under Section 302(f) of ERISA shall have been met with respect to any
Plan; (g) the adoption of an amendment to a Plan requiring the provision
of security to such Plan, pursuant to Section 307 of ERISA; or
(h) the institution by the PBGC of proceedings to terminate a Plan
pursuant to Section 4042 of ERISA, or the occurrence of any event or
condition described in Section 4042 of ERISA that constitutes grounds for
the termination of, or the appointment of a trustee to administer, such Plan.

 

“Eurocurrency Lending
Office” means, with respect to any Lender Party, the office of
such Lender Party specified as its “Eurocurrency Lending Office” opposite its
name on Schedule I hereto or in the Assignment and Acceptance pursuant to
which it became a Lender

 

 

Party (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender Party as such Lender Party may
from time to time specify to the Company and the Administrative Agent.

 

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

 

“Eurocurrency Rate”
means, for any Interest Period for all Eurocurrency Rate Advances comprising
part of the same Revolving Credit Borrowing, an interest rate per annum equal
to the rate per annum obtained by dividing (a) the average of the
respective rates per annum (rounded upward to the next whole multiple of 1/16th
of 1%) posted by each of the principal London offices of banks posting rates as
displayed on the Telerate Markets screen, page 3750 or such other page as may
replace such page on such service for the purpose of displaying the London
interbank offered rate of major banks for deposits in Dollars or the applicable
Committed Currency, at approximately 11:00 A.M. (London time) two Business
Days before the first day of such Interest Period for deposits in an amount
substantially equal to BNP Paribas’ Eurocurrency Rate Advance comprising part
of such Revolving Credit Borrowing to be outstanding during such Interest
Period (or, if BNP Paribas shall not have such a Eurocurrency Rate Advance,
$1,000,000 or the Equivalent thereof in Dollars) and for a period equal to such
Interest Period by (b) a percentage equal to 100% minus the Eurocurrency
Rate Reserve Percentage for such Interest Period.

 

“Eurocurrency Rate
Advance” means a Revolving Credit Advance denominated in Dollars
or a Committed Currency that bears interest as provided in
Section 2.08(a)(ii).

 

“Eurocurrency Rate
Reserve Percentage” for any Interest Period for all Eurocurrency
Rate Advances or LIBO Rate Advances comprising part of the same Borrowing 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 Eurocurrency Liabilities (or with respect to
any other category of liabilities that includes deposits by reference to which
the interest rate on Eurocurrency Rate Advances or LIBO Rate Advances is
determined) having a term equal to such Interest Period.

 

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

 

“Existing Credit
Agreement” has the meaning specified in the preliminary
statements to this Agreement.

 

“Existing
Letters of Credit” means all letters of credit issued under the
Existing Credit Agreement and outstanding on the Effective Date and listed on
Schedule 2.01(b) hereto.

 

“Facility”
means, at any time, the aggregate amount of the Lenders’ Commitments at such
time.

 

“Federal Funds Rate”
means, for any period, a fluctuating interest rate per annum equal for each day
during such period (i) to the rate published by the Telerate Markets service on
page five of its daily report as the “ASK” rate as of 10:00 A.M. (New York City
time) for such day (or, if such day is not a Business Day, for the immediately
preceding Business Day) or (ii) if the Telerate Markets service shall cease to
publish or otherwise shall not publish such rates for any

 

 

day that is a Business Day, 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 for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.

 

“Fee Letters”
means each agreement entered into between any Loan Party and the Administrative
Agent or the Issuing Bank with respect to the payment of fees or other amounts
relating to the Facilities.

 

“Fiscal Quarter”
means a fiscal quarter ending on or about March 31, June 30,
September 30 or December 31 of each year.

 

“Fiscal Year”
means a fiscal year of the Company and its Consolidated Subsidiaries ending on
or about June 30 in any calendar year.

 

“Fixed Charge Coverage
Ratio” means, with respect to any Person for any Rolling Period,
the ratio of (a) (i) Consolidated EBIDTA for such Person and its Subsidiaries
for such Rolling Period minus (ii) Capital Expenditures of such Person and its
Subsidiaries made during such Rolling Period to (b) Fixed Charges of such
Person and its Subsidiaries for such Rolling Period.

 

“Fixed Charges”
means, for the Company and its Subsidiaries on a Consolidated basis, for any
period, the sum of Interest Expense, income taxes that have been paid in cash
and all regularly scheduled principal payments of Funded Debt made during such
period.

 

“Fixed Rate Advances”
has the meaning specified in Section 2.04(a)(i), which Advances shall be
denominated in any Foreign Currency.

 

“Foreign Currency”
means any lawful currency (other than Dollars or a Committed Currency) that is
freely transferable or convertible into Dollars.

 

“Funded Debt”
of any Person means Debt of such Person (other than Debt described in clauses
(f), (h) and (j) of the definition thereof).

 

“GAAP”
has the meaning specified in Section 1.03.

 

“Guaranties”
means the U.S. Guaranty and the Non-U.S. Guaranty.

 

“Hazardous Materials”
means (a) petroleum or petroleum products, by-products or breakdown
products, radioactive materials, asbestos-containing materials, polychlorinated
biphenyls and radon gas and (b) any other chemicals, materials or
substances designated, classified or regulated as hazardous or toxic or as a
pollutant or contaminant under any Environmental Law.

 

“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 hedging agreements.

 

 

“Indemnified Costs”
has the meaning specified in Section 8.05(a).

 

“Indemnified Party”
has the meaning specified in Section 9.04(b).

 

“Initial Extension of
Credit” means the earlier to occur of the initial Borrowing
hereunder and the initial issuance of a Letter of Credit hereunder.

 

“Initial Issuing Bank”
has the meaning specified in the recital of parties to this Agreement.

 

“Initial Lenders”
has the meaning specified in the recital of parties to this Agreement.

 

“Insufficiency”
means, with respect to any Plan, the amount, if any, of its unfunded benefit
liabilities, as defined in Section 4001(a)(18) of ERISA.

 

“Interest Expense”
means, with respect to any Person for any period, interest expense (including
the interest component on obligations under Capitalized Leases but excluding
capitalized interest), whether paid or accrued, on all Debt of such Person and
its Subsidiaries for such period, including, without limitation and without
duplication, (a) interest expense in respect of Debt resulting from Advances,
(b) commissions, discounts and other fees and charges payable in connection
with letters of credit (including, without limitation, any Letters of Credit), (c)
accretion of original issue discount, and (d) all other noncash interest but
excluding amortization with respect to deferred financing fees (including,
without limitation, deferred financing fees in connection with this Agreement
or the Subordinated Notes).

 

“Interest Period”
means, for each Eurocurrency Rate Advance comprising part of the same Revolving
Credit Borrowing and each LIBO Rate Advance comprising part of the same
Competitive Bid Borrowing, the period commencing on the date of such
Eurocurrency Rate Advance or LIBO Rate Advance or the date of the Conversion of
any Base Rate Advance into such Eurocurrency Rate Advance, and ending on the
last day of the period selected by the applicable Borrower pursuant to the
provisions below and, thereafter, with respect to Eurocurrency 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 such
Borrower pursuant to the provisions below. 
The duration of each such Interest Period shall be one, two, three or
six months, as the applicable Borrower may, upon notice received by the
Administrative Agent not later than 10:00 A.M. (Los Angeles, California time)
on the third Business Day prior to the first day of such Interest Period,
select; provided,
however, that:

 

(a)                                  no
Borrower may select any Interest Period that ends after the Termination Date;

 

(b)                                 Interest
Periods commencing on the same date for Eurocurrency Rate Advances comprising
part of the same Revolving Credit Borrowing or for LIBO Rate Advances
comprising part of the same Competitive Bid Borrowing shall be of the same
duration;

 

(c)                                  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, 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 immediately preceding Business
Day; and

 

(d)                                 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 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.

 

“Investment”
means (i) any loan or advance to any Person, any purchase or other
acquisition of any Equity Interests or Debt or the assets comprising a division
or business unit or a substantial part or all of the business of any Person,
any capital contribution to any Person or any other direct or indirect
investment in any Person, including, without limitation, any acquisition by way
of a merger or consolidation (or similar transaction) and any arrangement
pursuant to which the investor incurs Debt of the types referred to in
clause (h) or (j) of the definition of “Debt” in respect of any Person, or
(ii) any purchase or acquisition of intellectual property or rights to use
intellectual property other than in the ordinary course of business and other
than any such purchase or acquisition in which the consideration consists
solely of Equity Interests of the Company.

 

“Issuing Bank”
means the Initial Issuing Bank and each Eligible Assignee which agrees to issue
Letters of Credit hereunder pursuant to Section 9.07, for so long as such
Initial Issuing Bank or Eligible Assignee, as the case may be, shall have a
Commitment.

 

“L/C Cash Collateral
Account” has the meaning specified in the Preliminary Statements
to the Security Agreement.

 

“L/C Related Documents”
has the meaning specified in Section 2.05(b)(ii)(A).

 

“Lender Party”
means any Lender or the Issuing Bank.

 

“Lenders”
means the Initial Lenders and each Person that shall become a Lender hereunder
pursuant to Section 9.07(a), (b) and (c) and, except when used in
reference to a Revolving Credit Advance, a Revolving Credit Borrowing, a
Revolving Credit Note, a Commitment or a related term, each Designated Bidder,
for so long as such Initial Lender or Person shall be a party to this
Agreement.

 

“Letter of Credit
Advance” means an advance made by the Issuing Bank or any Lender
pursuant to Section 2.03(c).

 

“Letter of Credit
Agreement” has the meaning specified in Section 2.03(a).

 

“Letters of Credit”
has the meaning specified in Section 2.01(b).

 

“Leverage Ratio”
means, with respect to any Person for any Rolling Period, the ratio of (a)
Consolidated Funded Debt as of the last day of such Rolling Period to (b)
Consolidated EBITDA of such Person and its Subsidiaries for such Rolling
Period.

 

 

“LIBO Rate”
means, for any Interest Period for all LIBO Rate Advances comprising part of
the same Competitive Bid Borrowing, 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
Telerate Markets Page 3750 (or any successor page) as the London interbank
offered rate for deposits in the applicable Foreign Currency 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 in an amount
substantially equal to the amount that would be BNP Paribas’ ratable share of
such Borrowing if such Borrowing were to be a Revolving Credit Borrowing 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 Eurocurrency Rate
Reserve Percentage for such Interest Period.

 

“LIBO Rate Advances”
means a Competitive Bid Advance denominated in any Foreign Currency and bearing
interest based on the LIBO Rate.

 

“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.

 

“Loan Documents”
means (a) for purposes of this Agreement and the Notes, if any, and any
amendment, supplement or modification hereof or thereof, (i) this Agreement,
(ii) the Notes, (iii) the Collateral Documents, (iv) each Letter of Credit
Agreement, (v) the Guaranties, and (vi) the Fee Letters and (b) for purposes of
the Collateral Documents and for all other purposes other than for purposes of
this Agreement and the Notes, (i) this Agreement, (ii) the Notes, if any, (iii)
the Collateral Documents, (iv) each Letter of Credit Agreement, (v) the
Guaranties, (vi) the Fee Letters, and (vii) any other agreement, document or
instrument issued pursuant to or in connection with any of the foregoing, and
in each case as amended, amended and restated, supplemented or otherwise
modified from time to time.

 

“Loan Parties”
means the Company, the Designated Subsidiaries, the U.S. Guarantors and the
Non-U.S. Guarantors.

 

“Local Rate Advance”
means a Competitive Bid Advance denominated in any Foreign Currency sourced
from the jurisdiction of issuance of such Foreign Currency and bearing interest
at a fixed rate.

 

“Margin Stock”
has the meaning specified in Regulation U.

 

“Material Adverse
Change” means any material adverse change in the business,
condition (financial or otherwise), operations, performance, properties or
prospects of (i) the Company, (ii) the Loan Parties taken as a whole, or (iii)
the Company and its Subsidiaries taken as a whole.

 

“Material Adverse
Effect” means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrowers, the U.S. Guarantors and the Non-U.S.
Guarantors taken as a whole, (b) the rights and remedies of the
Administrative Agent or any Lender Party under any Loan Document or
(c) the ability of (i) the Company, (ii) the Loan Parties taken as a
whole, or (iii) the Company and its Subsidiaries taken as a whole to perform
their Obligations under any Loan Document to which they are or are to become
parties.

 

 

“Moody’s”
means Moody’s Investors Service, Inc.

 

“Multiemployer Plan”
means a multiemployer plan, as defined in Section 4001(a)(3) of ERISA, to
which any Loan Party or any ERISA Affiliate is making or accruing an obligation
to make contributions, or has within any of the preceding five plan years made
or accrued an obligation to make contributions.

 

“Multiple Employer Plan”
means a single employer plan, as defined in Section 4001(a)(15) of ERISA,
that (a) is maintained for employees of any Loan Party or any ERISA
Affiliate and at least one Person other than the Loan Parties and the ERISA
Affiliates or (b) was so maintained and in respect of which any Loan Party
or any ERISA Affiliate could have liability under Section 4064 or 4069 of
ERISA in the event such plan has been or were to be terminated.

 

“Net Cash”
means, as at any date of determination, the aggregate amount of cash and Cash
Equivalents of the Company and its Subsidiaries as at such date, plus
the aggregate Unused Commitment, less the aggregate amount of (x) any
cash and Cash Equivalents of the Company or its Subsidiaries which are
collateral for Obligations of the Company or its Subsidiaries under any
synthetic lease and (y) all outstanding Senior Funded Debt.

 

“Net Tangible
Assets” means, as at any date of determination, the aggregate
amount of assets, less the aggregate amount of intangible assets, owned
by the Company and its Subsidiaries as at such date.

 

“Non-U.S. Guarantors”
means all Non-U.S. Subsidiaries of the Company that are Significant
Subsidiaries and each other Non-U.S. Subsidiary that is or becomes a
Significant Subsidiary that shall be required to execute and deliver a guaranty
pursuant to Section 5.01(j) (subject to the proviso thereto),
Section 5.01(k) or Section 5.01(l).

 

“Non-U.S. Guaranty”
means a guaranty made by each Non-U.S. Subsidiary of the Company that is a
Significant Subsidiary in favor of the Administrative Agent subject to the
proviso to Section 5.01(j), in substantially the form of Exhibit E-3
(together with each other guaranty made by a Non-U.S. Subsidiary of the Company
delivered pursuant to Section 5.01(j) (subject to the proviso thereto) or
(k), in each case as amended, amended and restated, supplemented or otherwise
modified from time to time in accordance with its terms).

 

“Non-U.S. Subsidiary”
means any Subsidiary of the Company which is not a U.S. Subsidiary.

 

“Note”
means a Revolving Credit Note, to the extent required to be issued pursuant to
Section 2.16, or a Competitive Bid Note.

 

“Notice of Competitive
Bid Borrowing” has the meaning specified in
Section 2.04(a).

 

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

 

“Notice of Issuance”
has the meaning specified in Section 2.03(a).

 

“NPL”
means the National Priorities List under CERCLA.

 

 

“Obligation”
means, with respect to any Person, any payment, performance or other obligation
of such Person of any kind, including, without limitation, any liability of
such Person on any claim, whether or not the right of any creditor to payment
in respect of such claim is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, disputed, undisputed, legal, equitable, secured or
unsecured, and whether or not such claim is discharged, stayed or otherwise
affected by any proceeding referred to in Section 6.01(f).  Without limiting the generality of the
foregoing, the Obligations of any Loan Party under the Loan Documents include
(a) the obligation to pay principal, interest, Letter of Credit
commissions, charges, expenses, fees, attorneys’ fees and disbursements,
indemnities and other amounts payable by such Loan Party under any Loan
Document and (b) the obligation of such Loan Party to reimburse any amount
in respect of any of the foregoing that any Lender Party, in its sole
discretion, may elect to pay or advance on behalf of such Loan Party.

 

“OECD”
means the Organization for Economic Cooperation and Development.

 

“Other Subordinated
Debt” has the meaning specified in Section 5.02(b)(i)(E).

 

“Other Taxes”
has the meaning specified in Section 2.13(b).

 

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

 

“Permitted Acquisition”
means the purchase or acquisition of all or substantially all of the stock or
assets, or a business unit or division, of a Permitted Business by the Company.

 

“Permitted Business”
means the businesses conducted by the Company and its Subsidiaries on the date
hereof and any business related, ancillary or complementary thereto (as
determined in good faith by the board of directors of the Company).

 

“Permitted Liens”
means such of the following as to which no enforcement, collection, execution,
levy or foreclosure proceeding shall have been commenced:  (a) Liens for taxes, assessments and
governmental charges or levies to the extent not then required to be paid under
Section 5.01(b) hereof; (b) Liens imposed by law, such as
materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s Liens and other
similar Liens arising in the ordinary course of business securing obligations
that (i) are not overdue for a period of more than 30 days and (ii) either
individually or when aggregated with all other Permitted Liens outstanding on
any date of determination, do not materially affect the use or value of the
property to which they relate; and (c) pledges or deposits to secure
obligations under workers’ compensation laws or similar legislation or to
secure public or statutory obligations; and (d) easements, rights of way
and other encumbrances on title to real property that do not render title to
property encumbered thereby unmarketable or materially adversely affect the use
of such property for its present purposes.

 

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

 

“Plan”
means a Single Employer Plan or a Multiple Employer Plan.

 

“Pledged Shares”
has the meaning specified in Section 1(a)(ii) of the Security Agreement.

 

 

“Preferred Interests”
means, with respect to any Person, Equity Interests issued by such Person that
are entitled to a preference or priority over any other Equity Interests issued
by such Person upon any distribution of such Person’s property and assets,
whether by dividend or upon liquidation.

 

“Pro Forma Basis”
with respect to any determination of EBITDA for any Rolling Period means the
EBITDA of the Company and its Subsidiaries determined as provided in the
definition of EBITDA, except that if one or more Permitted Acquisitions shall
have been consummated after the first day of such Rolling Period or the
determination is being made pursuant to Section 5.02(f)(v), then the
EBITDA for such Rolling Period shall include the EBITDA of all entities or
business units acquired in such Permitted Acquisitions (and, in the case of a
determination pursuant to Section 5.02(f)(v), the entity or business unit
to be acquired) as if such Permitted Acquisitions or proposed Permitted
Acquisitions were consummated on the first day of such Rolling Period.  For the purpose of this definition, whenever
pro forma effect is to be given to an acquisition of assets, the amount of
income or earnings related thereto and the amount of Interest Expense
associated with any Funded Debt incurred in connection therewith, or any other
calculation under this definition, the pro forma calculations will be certified
by a Responsible Officer of the Company.

 

“Pro Rata Share”
of any amount means, with respect to any Lender at any time, the product of
such amount times a fraction the numerator of which is the amount of
such Lender’s Commitment at such time (or, if the Commitments shall have been
terminated, the Commitment as in effect immediately prior to such termination)
and the denominator of which is the Facility at such time (or, if the
Commitments shall have been terminated, the Facility as in effect immediately
prior to such termination).

 

“Redeemable”
means, with respect to any Equity Interest, any Debt or any other right or
Obligation, any such Equity Interest, Debt, right or Obligation that
(a) the issuer has undertaken to redeem at a fixed or determinable date or
dates, whether by operation of a sinking fund or otherwise, or upon the
occurrence of a condition not solely within the control of the issuer or
(b) is redeemable at the option of the holder.

 

“Register”
has the meaning specified in Section 9.07(h).

 

“Regulation U”
means Regulation U of the Board of Governors of the Federal Reserve
System, as in effect from time to time.

 

“Required Lenders”
means, at any time, Lenders owed or holding at least 51% in interest of the
Commitments or, if no Commitments remain, at least 51% in interest of the
aggregate unpaid principal amount (based on the Equivalent in Dollars at such
time) of the Advances.

 

“Responsible Officer”
means any executive officer of the Company.

 

“Revolving Credit
Advance” has the meaning specified in Section 2.01(a).

 

“Revolving Credit
Borrowing” means a borrowing consisting of simultaneous
Revolving Credit Advances of the same Type made to a Borrower by each of the
Lenders pursuant to Section 2.01.

 

“Revolving Credit Note”
means a promissory note of a Borrower payable to the order of any Lender,
delivered pursuant to a request made under Section 2.16 in substantially
the form of

 

 

Exhibit A-1, evidencing the aggregate indebtedness of such
Borrower to such Lender resulting from the Revolving Credit Advances and Letter
of Credit Advances made by such Lender to such Borrower.

 

“Rolling Period”
means, for any Fiscal Quarter, the consecutive four Fiscal Quarters ending on
the last day of such Fiscal Quarter.

 

“Secured Obligations”
has the meaning specified in the Security Agreement.

 

“Secured Parties”
means the Agents and the Lender Parties.

 

“Security Agreement”
has the meaning specified in Section 3.01(a)(ii).

 

“Senior Funded
Debt” means the aggregate amount of all Funded Debt minus all
subordinated debt referred to in Sections 5.02(b)(i)(D) and (E).

 

“Senior Leverage
Ratio” means, with respect to any Person for any Rolling Period,
the ratio of (a) Consolidated Senior Funded Debt as of the last day of such
Rolling Period to (b) Consolidated EBITDA of such Person and its Subsidiaries
for such Rolling Period.

 

“Significant Subsidiary”
means, at any time, a Subsidiary that is wholly owned (ignoring directors’
qualifying shares), directly or indirectly, by the Company that (i) together
with its Subsidiaries if any has total assets greater than $20,000,000
(determined as of the last day of the most recent Fiscal Quarter), (ii)
together with its Subsidiaries has EBITDA equal to 10% or more of the
Consolidated EBITDA of the Company and its Subsidiaries for the most recently
ended Rolling Period or (iii) has become a party to a Guaranty.

 

“Single Employer Plan”
means a single employer plan, as defined in Section 4001(a)(15) of ERISA,
that (a) is maintained for employees of any Loan Party or any ERISA
Affiliate and no Person other than the Loan Parties and the ERISA Affiliates or
(b) was so maintained and in respect of which any Loan Party or any ERISA
Affiliate could have liability under Section 4069 of ERISA in the event such
plan has been or were to be terminated.

 

“Sole Arranger”
has the meaning specified in the recital of parties to this Agreement.

 

“Solvent”
and “Solvency” mean, with
respect to any Person on a particular date, that on such date (a) the fair
value of the property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person, (b) the present fair salable value of the assets of such Person is
not less than the amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured, (c) such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person’s ability to pay such debts and liabilities as they
mature and (d) such Person is not engaged in business or a transaction,
and is not about to engage in business or a transaction, for which such
Person’s property would constitute an unreasonably small capital.  The amount of contingent liabilities at any
time shall be computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.

 

“Standby Letter of
Credit” means any Letter of Credit issued under the Facility,
other than a Trade Letter of Credit.

 

 

“S&P”
means Standard & Poor’s Ratings Group, a division of the McGraw Hill
Companies, Inc.

 

“Subordinated
Notes” means the 41/4 %  Convertible Subordinated Notes due 2007
issued by the Company.

 

“Subsidiary”
of any Person means any corporation, partnership, joint venture, limited
liability company, trust or estate of which (or in which) more than 50% of
(a) the issued and outstanding capital stock having ordinary voting power
to elect a majority of the Board of Directors of such corporation (irrespective
of whether at the time capital stock of any other class or classes of such
corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such limited
liability company, partnership or joint venture or (c) the beneficial
interest in such trust or estate, is at the time directly or indirectly owned
or controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person’s other Subsidiaries.

 

“Syndication
Agents” has the meaning specified in the recital of parties to
this Agreement.

 

“Tangible Net
Worth” means Consolidated Net Tangible Assets less
Consolidated total liabilities.

 

“Taxes”
has the meaning specified in Section 2.13(a).

 

“Termination Date”
means the earlier of (x) November 6, 2006 and (y) the date of termination
in whole of the Commitments pursuant to Section 2.06 or 6.01.

 

“Total Capitalization”
means, for the Company and its Subsidiaries on a Consolidated basis, the sum of
Funded Debt plus shareholders’ equity.

 

“Trade Letter of Credit”
means any Letter of Credit that is issued under the Facility for the benefit of
a supplier of inventory to the Company or any of its Subsidiaries to effect
payment for such inventory.

 

“Transaction”
means the transactions contemplated by the Loan Documents.

 

“Type”
refers to the distinction between Advances bearing interest at the Base Rate
and Advances bearing interest at the Eurocurrency Rate.

 

“Unused Commitment”
means, with respect to any Lender at any time, (a) such Lender’s
Commitment at such time minus (b) the sum of (i) the aggregate
principal amount (or the Equivalent thereof in Dollars) of all Revolving Credit
Advances and Letter of Credit Advances made by such Lender (in its capacity as
a Lender) and outstanding at such time, plus (ii) such Lender’s Pro
Rata Share of (A) the aggregate Available Amount of all Letters of Credit
outstanding (or the Equivalent thereof in Dollars) at such time, and
(B) the aggregate principal amount of all Letter of Credit Advances made
by the Issuing Bank pursuant to Section 2.03(c) and outstanding at such
time, plus (iii) such Lender’s Pro Rata Share of the aggregate
principal amount of all Competitive Bid Advances (or the Equivalent thereof in
Dollars) made by the Lenders pursuant to Section 2.04 and outstanding at
such time.

 

 

“U.S. Guarantors”
means all U.S. Subsidiaries of the Company that are Significant Subsidiaries
and each other U.S. Subsidiary that is or becomes a Significant Subsidiary that
shall be required to execute and deliver a guaranty pursuant to
Section 5.01(j) or Section 5.01(k).

 

“U.S. Guaranty”
means a guaranty made by each U.S. Subsidiary that is a Significant Subsidiary
in favor of the Administrative Agent, in substantially the form of Exhibit E-2
(together with each other guaranty made by a U.S. Subsidiary that is a
Significant Subsidiary delivered pursuant to Section 5.01(j), in each case
as amended, amended and restated, supplemented or otherwise modified from time
to time in accordance with its terms).

 

“U.S. Subsidiary”
means any Subsidiary of the Company organized under the laws of the United
States or one of the States of the United States.

 

“Voting Interests”
means shares of capital stock issued by a corporation, or equivalent Equity
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.

 

“Welfare Plan”
means a welfare plan, as defined in Section 3(1) of ERISA, that is
maintained for employees of any Loan Party or in respect of which any Loan
Party could have a liability.

 

“Withdrawal Liability”
has the meaning specified in Part I of Subtitle E of Title IV of
ERISA.

 

SECTION 1.02  Computation of Time Periods; Other
Definitional Provisions.  In this
Agreement and the other Loan Documents, 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”.  References in the Loan
Documents to any agreement or contract “as amended” shall mean and be a
reference to such agreement or contract as amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with its
terms.

 

SECTION 1.03  Accounting Terms.  All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 4.01(f) (“GAAP”).

 

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES

AND THE LETTERS OF CREDIT

 

SECTION 2.01  The Advances and the Letters of Credit.  (a)  The Revolving Credit
Advances.  Each Lender severally
agrees, on the terms and conditions hereinafter set forth, to make advances
(each a “Revolving Credit
Advance”) to any Borrower from time to time on any Business Day
during the period from the date hereof until the Termination Date in an amount
(based in respect of any Revolving Credit Advances to be denominated in a
Committed Currency on the Equivalent in Dollars determined on the date of
delivery of the applicable Notice of Revolving Credit Borrowing) for each such
Revolving Credit Advance not to exceed such Lender’s Unused Commitment at such
time.  Each Revolving Credit Borrowing
shall be in an aggregate amount of $2,500,000 or an integral multiple of
$250,000 in excess thereof (or the Equivalent thereof in any Committed Currency
determined on the date

 

 

of delivery of the applicable Notice of Revolving
Credit Borrowing) and shall consist of Revolving Credit Advances made
simultaneously by the Lenders ratably according to their Commitments.  Within the limits of each Lender’s Unused
Commitment in effect from time to time, the Borrowers may borrow under this Section 2.01(a),
prepay pursuant to Section 2.07(a) and reborrow under this
Section 2.01(a).

 

(b)                                 Letters of Credit.  The Issuing Bank agrees, on the terms and
conditions hereinafter set forth, to issue letters of credit (the “Letters of Credit”) in Dollars or any Committed Currency
for the account of any Borrower from time to time on any Business Day during
the period from the date hereof until 15 days before the Termination Date in an
aggregate Available Amount (based in respect of any Letters of Credit to be
denominated in a Committed Currency on the Equivalent in Dollars determined on
the date of delivery of the applicable Notice of Issuance) for any such Letter
of Credit, after giving effect to such issuance, not to exceed the Unused
Commitments of the Lenders at such time. 
To the extent any Letter of Credit is outstanding on the Termination
Date, the Borrowers will deposit in the L/C Cash Collateral Account an amount
in cash not less than 105% of the face amount of all such Letters of Credit; provided that in no event may the
aggregate face amount of all such Letters of Credit whose duration extends
beyond the Termination Date be more than $100,000,000.  No Letter of Credit shall have an expiration
date later than (i) in the case of a Standby Letter of Credit, one year after
the date of issuance thereof and (ii) in the case of a Trade Letter of Credit,
180 days after the date of issuance thereof. 
Within the limits of the Facility, and subject to the limits referred to
above, the Borrowers may request the issuance of Letters of Credit under this Section 2.01(b),
repay any Letter of Credit Advances resulting from drawings thereunder pursuant
to Section 2.05(b) and request the issuance of additional Letters of
Credit under this Section 2.01(b). 
All Existing Letters of Credit will be deemed for all purposes Letters
of Credit hereunder.

 

SECTION 2.02  Making the Revolving Credit Advances.  (a)  Except as otherwise provided
in Section 2.10(b) or Section 2.03, each Revolving Credit Borrowing
shall be made on notice, given not later than (x) 10:00 A.M. (Los Angeles,
California time) on the third Business Day prior to the date of the proposed
Revolving Credit Borrowing in the case of a Revolving Credit Borrowing
consisting of Eurocurrency Rate Advances denominated in Dollars, (y) 4:00 P.M.
(London time) on the fourth Business Day prior to the date of the proposed
Revolving Credit Borrowing in the case of a Revolving Credit Borrowing
consisting of Eurocurrency Rate Advances denominated in any Committed Currency,
or (z) 10:00 A.M. (Los Angeles, California time) on the first Business Day
prior to the date of the proposed Revolving Credit Borrowing in the case of a
Revolving Credit Borrowing consisting of Base Rate Advances, by the applicable
Borrower to the Administrative Agent, which shall give to each Lender prompt
notice thereof by telecopier, provided,
that the Revolving Credit Borrowing made on the Effective Date shall be in an
amount equal to EUR 14,100,000 and shall consist of Eurocurrency Rate Advances
with the first Interest Period therefor terminating on [December 31,
2003].  Each such notice of a Revolving
Credit Borrowing (a “Notice of Revolving Credit Borrowing”) shall be in
writing, or by telecopier, in substantially the form of Exhibit B-1 hereto,
specifying therein the requested (i) date of such Revolving Credit
Borrowing, (ii) Type of Revolving Credit Advances comprising such
Revolving Credit Borrowing, (iii) aggregate amount of such Revolving
Credit Borrowing and (iv) in the case of a Revolving Credit Borrowing
consisting of Eurocurrency Rate Advances, initial Interest Period and currency
for each such Revolving Credit Advance. 
Each such Notice of Revolving Credit Borrowing shall be appropriately
completed and signed by a Responsible Officer of the Borrower (or any
individual designated by such Responsible Officer in writing to the
Administrative Agent).  Each Lender
shall, before 11:00 A.M. (Los Angeles, California time) on the date of
such Revolving Credit Borrowing, in the case of a Revolving Credit Borrowing
consisting of Revolving Credit Advances denominated in Dollars, and before
11:00 A.M. (London time) on the date of such Revolving Credit Borrowing,
in the case of a Revolving Credit Borrowing consisting of Eurocurrency Rate
Advances denominated in any Committed Currency, make available for the account
of its Applicable Lending Office to the Administrative Agent at the applicable
Agent’s Account, in same day funds, such Lender’s ratable portion of such
Revolving

 

 

Credit Borrowing. 
After the Administrative Agent’s receipt of such funds and upon
fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the Borrower making such
Notice of Revolving Credit Borrowing by crediting such Borrower’s Account; provided,
however, that, in the case of any Revolving Credit Borrowing, the
Administrative Agent shall first make a portion of such funds equal to the
aggregate principal amount of any Letter of Credit Advances made by the Issuing
Bank and by any other Lender to or for the benefit of such Borrower and
outstanding on the date of such Revolving Credit Borrowing in the same
currency, plus interest accrued and unpaid thereon to and as of such
date, available to the Issuing Bank and such other Lenders for repayment of
such Letter of Credit Advances.

 

(b)                                 Anything in
subsection (a) above to the contrary notwithstanding, (i) the
Borrowers may not select Eurocurrency Rate Advances for any Revolving Credit
Borrowing if the aggregate amount of such Revolving Credit Borrowing is less
than $2,500,000 or if the obligation of the Lenders to make Eurocurrency Rate
Advances shall then be suspended pursuant to Section 2.10 or 2.11 and
(ii) with respect to Revolving Credit Borrowings consisting of
Eurocurrency Rate Advances, the Revolving Credit Advances may not be
outstanding as part of more than six separate Revolving Credit Borrowings in
the aggregate.

 

(c)                                  Each Notice of
Revolving Credit Borrowing shall be irrevocable and binding on the Borrower
giving such Notice.  In the case of any
Revolving Credit Borrowing that the related Notice of Revolving Credit
Borrowing specifies is to be comprised of Eurocurrency Rate Advances, the
applicable Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to fulfill on or
before the date specified in such Notice of Revolving Credit Borrowing for such
Revolving Credit Borrowing the applicable conditions set forth in
Article III, including, without limitation, any loss, cost or expense
incurred by reason of the liquidation or reemployment of deposits or other
funds acquired by such Lender to fund the Revolving Credit Advance to be made
by such Lender as part of such Revolving Credit Borrowing when such Revolving
Credit Advance, as a result of such failure, is not made on such date.

 

(d)                                 Unless the
Administrative Agent shall have received notice from a Lender prior to the date
of any Revolving Credit Borrowing that such Lender will not make available to
the Administrative Agent such Lender’s ratable portion of such Revolving Credit
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Revolving
Credit Borrowing in accordance with subsection (a) or (b) of this
Section 2.02 and the Administrative Agent may, in reliance upon such
assumption, make available to the applicable Borrower on such date a
corresponding amount.  If and to the
extent that such Lender shall not have so made such ratable portion available
to the Administrative Agent, such Lender and the applicable Borrower severally
agree to repay or pay to the Administrative Agent forthwith on demand such
corresponding amount and to pay interest thereon, for each day from the date
such amount is made available to such Borrower until the date such amount is
repaid or paid to the Administrative Agent, at (i) in the case of such
Borrower, the higher of (A) the interest rate applicable at the time to
Revolving Credit Advances comprising such Revolving Credit Borrowing and (B)
the cost of funds incurred by the Administrative Agent in respect of such
amount and (ii) in the case of such Lender, (A) the Federal Funds Rate in
the case of Revolving Credit Advances denominated in Dollars or (B) the cost of
funds incurred by the Administrative Agent in respect of such amount in the
case of Revolving Credit Advances denominated in Committed Currencies.  If such Lender shall pay to the
Administrative Agent such corresponding amount, such amount so paid in respect
of principal shall constitute such Lender’s Revolving Credit Advance as part of
such Revolving Credit Borrowing for all purposes.

 

(e)                                  The failure of any
Lender to make the Revolving Credit Advance to be made by it as part of any
Revolving Credit Borrowing shall not relieve any other Lender of its
obligation, if any,

 

 

hereunder to make its Revolving Credit Advance on the date of such
Revolving Credit Borrowing, but no Lender shall be responsible for the failure
of any other Lender to make the Revolving Credit Advance to be made by such
other Lender on the date of any Revolving Credit Borrowing.

 

SECTION 2.03  Issuance of and Drawings and
Reimbursement Under Letters of Credit. 
(a)  Request for Issuance.  Each Letter of Credit shall be issued upon notice, given not
later than 10:00 A.M. (Los Angeles, California time) on the third Business Day
prior to the date of the proposed issuance of such Letter of Credit, by the
applicable Borrower to the Issuing Bank, which shall give to the Administrative
Agent prompt notice thereof by telecopier. 
Each such notice of issuance of a Letter of Credit (a “Notice of Issuance”)
shall be by telecopier, specifying therein the requested (A) date of such
issuance (which shall be a Business Day), (B) Available Amount and
currency of such Letter of Credit, (C) expiration date of such Letter of
Credit, (D) name and address of the beneficiary of such Letter of Credit
and (E) form of such Letter of Credit, and shall be accompanied by such
application and agreement for letter of credit as the Issuing Bank may specify
to such Borrower for use in connection with such requested Letter of Credit (a
“Letter of Credit Agreement”),and
further shall be appropriately completed and signed by a Responsible Officer of
the Borrower (or any individual designated by such Responsible Officer in
writing to the Administrative Agent). 
If the requested form of such Letter of Credit is acceptable to the
Issuing Bank in its sole discretion, the Issuing Bank will, upon fulfillment of
the applicable conditions set forth in Article III, make such Letter of
Credit available to the applicable Borrower at its office referred to in
Section 9.02 or as otherwise agreed with such Borrower in connection with
such issuance.  In the event and to the
extent that the provisions of any Letter of Credit Agreement shall conflict
with this Agreement, the provisions of this Agreement shall govern.

 

(b)                                 Letter of Credit
Reports.  The Issuing Bank shall
furnish (A) to the Administrative Agent on the first Business Day of each
week a written report summarizing issuance and expiration dates of Letters of
Credit issued during the previous week and drawings during such week under all
Letters of Credit, (B) to each Lender on the first Business Day of each
calendar quarter a written report summarizing issuance and expiration dates of
Letters of Credit issued during the preceding quarter and drawings during such
calendar quarter under all Letters of Credit and (C) to the Administrative
Agent and each Lender on the first Business Day of each calendar quarter a
written report setting forth the average daily aggregate Available Amount
during the preceding calendar quarter of all Letters of Credit.

 

(c)                                  Drawing and
Reimbursement.  The payment by the
Issuing Bank of a draft drawn under any Letter of Credit shall constitute for
all purposes of this Agreement the making by the Issuing Bank of a Letter of
Credit Advance, which, if such payment is made in a Committed Currency, shall
be immediately redenominated into Dollars and, in any case, shall be a Base
Rate Advance, in the amount of such draft. 
In the event of any drawing under a Letter of Credit, the Issuing Bank
shall promptly notify the Administrative Agent, and the Administrative Agent
shall promptly notify each Lender and each Lender shall purchase from the
Issuing Bank, and the Issuing Bank shall sell and assign to each such Lender,
such Lender’s Pro Rata Share of such outstanding Letter of Credit Advance as of
the date of such purchase, by making available for the account of its
Applicable Lending Office to the Administrative Agent for the account of the
Issuing Bank, by deposit to the Administrative Agent’s Account, in same day
funds, an amount equal to the portion of the outstanding principal amount of
such Letter of Credit Advance to be purchased by such Lender.  Promptly after receipt thereof, the
Administrative Agent shall transfer such funds to the Issuing Bank.  Each Borrower hereby agrees to each such
sale and assignment.  Each Lender agrees
to purchase its Pro Rata Share of an outstanding Letter of Credit Advance on
(i) the Business Day on which notice of the drawing under the related
Letter of Credit is given by the Issuing Bank, provided such notice is given
not later than 10:00 A.M. (Los Angeles, California time) on such Business
Day or (ii) the first Business Day next succeeding such demand if such
notice is given after such time.  Upon
any such assignment by the Issuing Bank to any other Lender of a portion of a
Letter of Credit Advance, the Issuing Bank represents and warrants to such
other Lender that the Issuing Bank is

 

 

the legal and beneficial owner of such interest being assigned by it,
free and clear of any liens, but makes no other representation or warranty and
assumes no responsibility with respect to such Letter of Credit Advance, the
Loan Documents or any Loan Party.  If
and to the extent that any Lender shall not have so made the amount of such
Letter of Credit Advance available to the Administrative Agent, such Lender
agrees to pay to the Administrative Agent forthwith on demand such amount
together with interest thereon, for each day from the date of demand by the
Issuing Bank until the date such amount is paid to the Administrative Agent, at
the Federal Funds Rate for its account or the account of the Issuing Bank, as
applicable.  If such Lender shall pay to
the Administrative Agent such amount for the account of the Issuing Bank on any
Business Day, such amount so paid in respect of principal shall constitute a
Letter of Credit Advance made by such Lender on such Business Day for purposes
of this Agreement, and the outstanding principal amount of the Letter of Credit
Advance made by the Issuing Bank shall be reduced by such amount on such
Business Day.

 

(d)                                 Failure to Make
Letter of Credit Advances.  The
failure of any Lender to make the Letter of Credit Advance to be made by it on
the date specified in Section 2.03(c) shall not relieve any other Lender
of its obligation hereunder to make its Letter of Credit Advance on such date,
but no Lender shall be responsible for the failure of any other Lender to make
the Letter of Credit Advance to be made by such other Lender on such date.

 

SECTION 2.04  The Competitive Bid Advances.  (a)  Each Lender severally agrees
that each Borrower may request Competitive Bid Borrowings denominated in
Foreign Currencies under this Section 2.04 from time to time on any
Business Day during the period from the date hereof until the date occurring 30
days prior to the Termination Date in the manner set forth below, provided, however,
that (x) the aggregate principal amount of the Advances then outstanding (based
in respect of any Advance denominated in a Foreign Currency or a Committed
Currency on the Equivalent in Dollars at the time such Competitive Bid
Borrowing is requested) plus (y) the aggregate Available Amount of all
Letters of Credit outstanding at such time shall not exceed the Facility.

 

(i)                                     Each Borrower may
request a Competitive Bid Borrowing under this Section 2.04 by delivering
to the Administrative Agent, by telecopier, a notice of a Competitive Bid
Borrowing (a “Notice of Competitive Bid Borrowing”),
in substantially the form of Exhibit B-2 hereto, specifying therein the
requested (A) date of such proposed Competitive Bid Borrowing,
(B) aggregate amount of such proposed Competitive Bid Borrowing,
(C) interest rate basis and day count convention to be offered by the
Lenders, (D) currency of such proposed Competitive Bid Borrowing,
(E) in the case of a Competitive Bid Borrowing consisting of LIBO Rate
Advances, Interest Period, or in the case of a Competitive Bid Borrowing
consisting of Local Rate Advances, maturity date for repayment of each Local
Rate Advance to be made as part of such Competitive Bid Borrowing (which
maturity date may not be earlier than the date occurring seven days after the
date of such Competitive Bid Borrowing or later than the earlier of
(I) 180 days after the date of such Competitive Bid Borrowing and
(II) the Termination Date), (F) interest payment date or dates
relating thereto, (G) location of such Borrower’s account to which funds
are to be advanced and (H) other terms (if any) to be applicable to such
Competitive Bid Borrowing, not later than (x) 10:00 A.M. (London
time) at least four Business Days prior to the date of the proposed Competitive
Bid Borrowing, if such Borrower shall specify in the Notice of Competitive Bid
Borrowing that the rates of interest to be offered by the Lenders shall be
fixed rates per annum (the Advances comprising any such Competitive Bid
Borrowing being referred to herein as “Fixed Rate Advances”)
or Local Rate Advances and (y) 10:00AM (London time) at least four Business
Days prior to the date of the proposed Competitive Bid Borrowing, if such
Borrower shall specify in the Notice of Competitive Bid Borrowing that the
Advances comprising such Competitive Bid Borrowing shall be LIBO Rate
Advances.  Each Notice of Competitive
Bid Borrowing shall be appropriately completed and signed by a Responsible
Officer of the Borrower

 

 

(or any individual designated by such
Responsible Officer in writing to the Administrative Agent).  Each Notice of Competitive Bid Borrowing
shall be irrevocable and binding on the Borrower giving such Notice.  Any Notice of Competitive Bid Borrowing by a
Designated Subsidiary shall be given to the Administrative Agent in accordance
with the preceding sentence through the Company on behalf of such Designated
Subsidiary.  The Administrative Agent
shall in turn promptly notify each Lender of each request for a Competitive Bid
Borrowing received by it from any Borrower by sending such Lender a copy of the
related Notice of Competitive Bid Borrowing.

 

(ii)                                  Each Lender may, if,
in its sole discretion, it elects to do so, irrevocably offer to make one or
more Competitive Bid Advances to the applicable Borrower as part of such proposed
Competitive Bid Borrowing at a rate or rates of interest specified by such
Lender in its sole discretion, by notifying the Administrative Agent (which
shall give prompt notice thereof to such Borrower), (A) before 12:00 noon
(London time) on the Business Day prior to the date of such proposed
Competitive Bid Borrowing, in the case of a Competitive Bid Borrowing
consisting of either Fixed Rate Advances or Local Rate Advances and
(B) before 12:00 noon (London time) on the third Business Day prior to the
date of such proposed Competitive Bid Borrowing, in the case of a Competitive
Bid Borrowing consisting of LIBO Rate Advances, of the minimum amount and
maximum amount of each Competitive Bid Advance which such Lender would be
willing to make as part of such proposed Competitive Bid Borrowing (which
amounts or the Equivalent thereof in Dollars, as the case may be, of such
proposed Competitive Bid may, subject to the proviso to the first sentence of
this Section 2.04(a), exceed such Lender’s Commitment, if any), the rate
or rates of interest therefor and such Lender’s Applicable Lending Office with
respect to such Competitive Bid Advance; provided
that if the Administrative Agent in its capacity as a Lender shall, in its sole
discretion, elect to make any such offer, it shall notify the applicable
Borrower of such offer at least 30 minutes before the time and on the date on
which notice of such election is to be given to the Administrative Agent, by
the other Lenders.  If any Lender shall
elect not to make such an offer, such Lender shall so notify the Administrative
Agent before 12:00 noon (London time) on the date on which notice of such
election is to be given to the Administrative Agent, by the other Lenders, and
such Lender shall not be obligated to, and shall not, make any Competitive Bid
Advance as part of such Competitive Bid Borrowing; provided that the failure by any Lender to give such notice
shall not cause such Lender to be obligated to make any Competitive Bid Advance
as part of such proposed Competitive Bid Borrowing.

 

(iii)                               The Borrower requesting
such Competitive Bid Borrowing shall, in turn, (A) before 3:00 P.M.
(London time) on the Business Day prior to the date of such proposed
Competitive Bid Borrowing, in the case of a Competitive Bid Borrowing
consisting of either Fixed Rate Advances or Local Rate Advances and
(B) before 3:00 P.M. (London time) on the third Business Day prior to the
date of such Competitive Bid Borrowing, in the case of a Competitive Bid
Borrowing consisting of LIBO Rate Advances, either:

 

(x)                                   cancel
such Competitive Bid Borrowing by giving the Administrative Agent notice to
that effect, or

 

(y)                                 accept
one or more of the offers made by any Lender or Lenders pursuant to paragraph
(ii) above, in its sole discretion, by giving notice to the Administrative
Agent, of the amount of each Competitive Bid Advance (which amount shall be
equal to or greater than the minimum amount, and equal to or less than the
maximum amount, notified to such Borrower by the Administrative Agent, on behalf
of such Lender for such Competitive Bid Advance pursuant to

 

 

paragraph (ii)
above) to be made by each Lender as part of such Competitive Bid Borrowing, and
reject any remaining offers made by Lenders pursuant to paragraph (ii)
above by giving the Administrative Agent notice to that effect.  The Borrower requesting such Competitive Bid
Borrowing shall accept the offers made by any Lender or Lenders to make
Competitive Bid Advances in order of the lowest to the highest rates of
interest offered by such Lenders.  If
two or more Lenders have offered the same interest rate, the amount to be
borrowed at such interest rate will be allocated among such Lenders in
proportion to the amount that each such Lender offered at such interest rate.

 

(iv)                              If the Borrower
requesting such Competitive Bid Borrowing notifies the Administrative Agent
that such Competitive Bid Borrowing is cancelled pursuant to
paragraph (iii)(x) above, the Administrative Agent shall give prompt
notice thereof to the Lenders and such Competitive Bid Borrowing shall not be
made.

 

(v)                                 If the Borrower
requesting such Competitive Bid Borrowing accepts one or more of the offers
made by any Lender or Lenders pursuant to paragraph (iii)(y) above, the
Administrative Agent shall in turn promptly notify (A) each Lender that
has made an offer as described in paragraph (ii) above, of the date and
aggregate amount of such Competitive Bid Borrowing and whether or not any offer
or offers made by such Lender pursuant to paragraph (ii) above have been
accepted by such Borrower, (B) each Lender that is to make a Competitive
Bid Advance as part of such Competitive Bid Borrowing, of the amount of each
Competitive Bid Advance to be made by such Lender as part of such Competitive
Bid Borrowing, and (C) each Lender that is to make a Competitive Bid
Advance as part of such Competitive Bid Borrowing, upon receipt, that the
Administrative Agent has received forms of documents appearing to fulfill the
applicable conditions set forth in Article III.  Each Lender that is to make a Competitive Bid Advance as part of
such Competitive Bid Borrowing shall, before 11:00 A.M. (London time), on
the date of such Competitive Bid Borrowing specified in the notice received
from the Administrative Agent pursuant to clause (A) of the preceding
sentence or any later time when such Lender shall have received notice from the
Administrative Agent pursuant to clause (C) of the preceding sentence,
make available for the account of its Applicable Lending Office to the
Administrative Agent at the Administrative Agent’s Account as shall have been
notified by the Administrative Agent to the Lenders prior thereto, in same day
funds, such Lender’s portion of such Competitive Bid Borrowing.  Upon fulfillment of the applicable
conditions set forth in Article III and after receipt by the
Administrative Agent of such funds, the Administrative Agent will make such
funds available to such Borrower at the location specified by such Borrower in
its Notice of Competitive Bid Borrowing. 
Promptly after each Competitive Bid Borrowing the Administrative Agent
will notify each Lender of the amount of the Competitive Bid Borrowing, the
consequent Competitive Bid Reduction and the dates upon which such Competitive
Bid Reduction commenced and will terminate.

 

(vi)                              If the Borrower
requesting such Competitive Bid Borrowing notifies the Administrative Agent
that it accepts one or more of the offers made by any Lender or Lenders
pursuant to paragraph (iii)(y) above, such notice of acceptance shall be
irrevocable and binding on such Borrower. 
The Borrower requesting such Competitive Bid Borrowing shall indemnify
each Lender against any loss, cost or expense incurred by such Lender as a
result of any failure to fulfill on or before the date specified in the related
Notice of Competitive Bid Borrowing for such Competitive Bid Borrowing the
applicable conditions set forth in Article III, including, without
limitation, any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other
funds acquired by such Lender to fund the

 

 

Competitive Bid Advance to be made by such
Lender as part of such Competitive Bid Borrowing when such Competitive Bid
Advance, as a result of such failure, is not made on such date.

 

(b)                                 Each Competitive Bid
Borrowing shall be in an aggregate amount of $2,500,000 (or the Equivalent
thereof in any Foreign Currency, determined as of the time of the applicable
Notice of Competitive Bid Borrowing) or an integral multiple of $1,000,000 (or
the Equivalent thereof in any Foreign Currency, determined as of the time of
the applicable Notice of Competitive Bid Borrowing) in excess thereof and,
following the making of each Competitive Bid Borrowing, the Borrowers and each
Lender shall be in compliance with the limitations set forth in the proviso to
the first sentence of subsection (a) above.

 

(c)                                  Within the limits and
on the conditions set forth in this Section 2.04, the Borrowers may from
time to time borrow under this Section 2.04, repay or prepay pursuant to
subsection (d) below, and reborrow under this Section 2.04, provided that a Competitive Bid Borrowing
shall not be made within three Business Days of the date of any other
Competitive Bid Borrowing.

 

(d)                                 Each Borrower shall
repay to the Administrative Agent for the account of each Lender that has made
a Competitive Bid Advance to such Borrower, on the maturity date of each
Competitive Bid Advance (such maturity date being that specified by such
Borrower for repayment of such Competitive Bid Advance in the related Notice of
Competitive Bid Borrowing delivered pursuant to subsection (a)(i) above
and provided in the Competitive Bid Note evidencing such Competitive Bid
Advance), the then unpaid principal amount of such Competitive Bid Advance.  No Borrower shall have any right to prepay
any principal amount of any Competitive Bid Advance unless, and then only on
the terms, specified by such Borrower for such Competitive Bid Advance in the
related Notice of Competitive Bid Borrowing delivered pursuant to
subsection (a)(i) above and set forth in the Competitive Bid Note
evidencing such Competitive Bid Advance.

 

(e)                                  Each Borrower shall
pay interest on the unpaid principal amount of each Competitive Bid Advance
made to it from the date of such Competitive Bid Advance to the date the
principal amount of such Competitive Bid Advance is repaid in full, at the rate
of interest for such Competitive Bid Advance specified by the Lender making
such Competitive Bid Advance in its notice with respect thereto delivered
pursuant to subsection (a)(ii) above, payable on the interest payment date
or dates specified by such Borrower for such Competitive Bid Advance in the
related Notice of Competitive Bid Borrowing delivered pursuant to
subsection (a)(i) above, as provided in the Competitive Bid Note
evidencing such Competitive Bid Advance. 
Upon the occurrence and during the continuance of an Event of Default,
each Borrower shall pay interest on the amount of unpaid principal of and
interest on each Competitive Bid Advance made to it owing to a Lender, payable
in arrears on the date or dates interest is payable thereon, at a rate per
annum equal at all times to 2% per annum above the rate per annum required
to be paid on such Competitive Bid Advance under the terms of the Competitive
Bid Note evidencing such Competitive Bid Advance unless otherwise agreed in
such Competitive Bid Note.

 

(f)                                    The indebtedness of
each Borrower resulting from each Competitive Bid Advance made to such Borrower
as part of a Competitive Bid Borrowing shall be evidenced by a separate
Competitive Bid Note of such Borrower payable to the order of the Lender making
such Competitive Bid Advance.

 

SECTION 2.05  Repayment of Advances.  (a)  Revolving Credit Advances.  Each Borrower shall repay to the Administrative
Agent for the ratable account of the Lenders on the Termination Date the
aggregate outstanding principal amount of the Revolving Credit Advances made to
it then outstanding.

 

 

(b)                                 Letter of Credit
Advances.  (i)  Each
Borrower shall repay to the Administrative Agent for the account of the Issuing
Bank and each other Lender that has made a Letter of Credit Advance to or for
the benefit of such Borrower on the earlier of demand by the Administrative
Agent and the Termination Date the outstanding principal amount of each Letter
of Credit Advance to or for the benefit of such Borrower made by each of them,
except for the payment by the Issuing Bank of a draft drawn under any Letter of
Credit after the Termination Date with respect to a Letter of Credit
outstanding after the Termination Date in accordance with Section 2.01(b),
in which case such repayment by such Borrower shall be made on demand by the
Administrative Agent.

 

(ii)                                  The Obligations of
each Borrower under this Agreement, any Letter of Credit Agreement and any
other agreement or instrument relating to any Letter of Credit shall be
unconditional and irrevocable, and shall be paid strictly in accordance with
the terms of this Agreement, such Letter of Credit Agreement and such other agreement
or instrument under all circumstances, including, without limitation, the
following circumstances:

 

(A)                              any lack of validity or
enforceability of any Loan Document, any Letter of Credit Agreement, any Letter
of Credit or any other agreement or instrument relating thereto (all of the
foregoing being, collectively, the “L/C Related Documents”);

 

(B)                                any change in the time,
manner or place of payment of, or in any other term of, all or any of the
Obligations of such Borrower in respect of any L/C Related Document or any
other amendment or waiver of or any consent to departure from all or any of the
L/C Related Documents;

 

(C)                                the existence of any
claim, set-off, defense or other right that such Borrower may have at any time
against any beneficiary or any transferee of a Letter of Credit (or any Persons
for whom any such beneficiary or any such transferee may be acting), the
Issuing Bank or any other Person, 
whether in connection with the transactions contemplated by the L/C
Related Documents or any unrelated transaction;

 

(D)                               any statement or any
other document presented under a Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;

 

(E)                                 payment by the Issuing
Bank under a Letter of Credit against presentation of a draft or certificate
that does not strictly comply with the terms of such Letter of Credit;

 

(F)                                 any exchange, release
or non-perfection of any Collateral or other collateral, or any release or amendment
or waiver of or consent to departure from the Guaranties or any other
guarantee, for all or any of the Obligations of such Borrower in respect of the
L/C Related Documents; or

 

(G)                                any other circumstance
or happening whatsoever, whether or not similar to any of the foregoing,
including, without limitation, any other circumstance that might otherwise
constitute a defense available to, or a discharge of, such Borrower or a
guarantor,

 

provided,
in each case, that payment by the Issuing Bank under the applicable Letter of
Credit shall not have constituted gross negligence or willful misconduct of the
Issuing Bank under the circumstances in question (as determined by a final
judgment of a court of competent jurisdiction).

 

 

(c)                                  Competitive Bid
Advances.  Each Borrower shall repay
any Competitive Bid Advance made to such Borrower in accordance with
Section 2.04(d).

 

SECTION 2.06  Termination or Reduction of the
Commitments.  The Company may, upon
at least five Business Days’ notice to the Administrative Agent, terminate in
whole or reduce in part the Unused Commitments; provided, however, that each
partial reduction of the Facility shall be in an aggregate amount of $5,000,000
or an integral multiple of $1,000,000 in excess thereof.

 

SECTION 2.07  Prepayments.  (a)  Optional.  Any Borrower may,  upon at least one Business Day’s notice in the case of Base Rate
Advances made to such Borrower and three Business Days’ notice in the case of
Eurocurrency Rate Advances made to such Borrower, in each case to the
Administrative Agent (received not later than 10:00 A.M. Los Angeles,
California time) stating the proposed date and aggregate principal amount of
the prepayment, and if such notice is given such Borrower shall, prepay the
outstanding aggregate principal amount of the Revolving Credit Advances
comprising part of the same Revolving Credit Borrowing in whole or ratably in
part, together with accrued interest to the date of such prepayment on the
aggregate principal amount prepaid unless such prepayment is with respect to a
Revolving Credit Advance which is a Base Rate Advance; provided, however, that
(x) each partial prepayment shall be in an aggregate principal amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof or the
Equivalent thereof in a Committed Currency (determined on the date notice of
prepayment is given) and (y) if any prepayment of a Eurocurrency Rate
Advance shall be made other than on the last day of an Interest Period
therefor, such Borrower shall also pay any amounts owing pursuant to
Section 9.04(c).  Each notice of
prepayment by a Designated Subsidiary shall be given to the Administrative
Agent through the Company.

 

(b)                                 Mandatory.  (i) To the extent that on any Business
Day (A) the sum of the aggregate principal amount of (or the Equivalent
thereof of Dollars) (x) the Revolving Credit Advances, (y) the Competitive Bid
Advances and (z) the Letter of Credit Advances then outstanding plus the
aggregate Available Amount of all Letters of Credit (or the Equivalent thereof of
Dollars) then outstanding exceeds (B) the Facility, the Borrowers shall
first prepay an aggregate principal amount of the Revolving Credit Advances
comprising part of the same Revolving Credit Borrowings and the Letter of
Credit Advances equal to such excess and, to the extent any such excess remains
after such payment, the Borrowers shall then pay to the Administrative Agent
for deposit in the L/C Cash Collateral Account an amount equal to such
remaining excess.

 

(ii)                                  If the Administrative
Agent notifies the Borrower that, on any interest payment date, the sum of (A)
the aggregate principal amount of all Advances denominated in Dollars then
outstanding plus (B) the Equivalent in Dollars (determined on the third
Business Day prior to such interest payment date) of the aggregate principal
amount of all Advances denominated in Committed Currencies and Foreign
Currencies then outstanding exceeds 105% of the aggregate Commitments of the
Lenders on such date, the Borrowers shall, within two Business Days after receipt
of such notice, prepay the outstanding principal amount of any Advances owing
by the Borrowers in an aggregate amount sufficient to reduce such sum to an
amount not to exceed 100% of the aggregate Commitments of the Lenders on such
date.

 

(iii)                               Prepayments of the
Facility made pursuant to this subsection (b) shall be applied first
to prepay Letter of Credit Advances then outstanding until such Advances are
paid in full, and second to prepay Revolving Credit Advances then
outstanding comprising part of the same Borrowings until such Advances are paid
in full, and third deposited in the L/C Cash Collateral Account to cash
collateralize 100% of the Available Amount of the Letters of Credit then
outstanding.  Upon the drawing of any
Letter of Credit for which funds are on deposit in the

 

 

L/C Cash Collateral Account, such funds shall
be applied to reimburse the Issuing Bank or Lenders, as applicable.

 

(iv)                              All prepayments under
this subsection (b) shall be made together with accrued interest to the
date of such prepayment on the principal amount prepaid, together with any
amounts owing pursuant to Section 9.04(c).

 

SECTION 2.08  Interest on Revolving Credit Advances and
Letter of Credit Advances. 
(a)  Scheduled Interest.  The Borrowers shall pay interest on the unpaid principal amount
of each Advance (other than a Competitive Bid Advance) owing to each Lender
from the date of such 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 Advance is a Base Rate Advance, a rate per annum equal at all times to the
sum of (A) the Base Rate in effect from time to time plus
(B) the Applicable Margin in effect from time to time, payable in arrears
quarterly on March 31, June 30, September 30 and
December 31 during such periods, on the date of any prepayment thereof to
the extent required under Section 2.07 and on the Termination Date.

 

(ii)                                  Eurocurrency Rate
Advances.  During such periods as
such Advance is a Eurocurrency Rate Advance, a rate per annum equal at all
times during each Interest Period for such Advance to the sum of (A) the
Eurocurrency Rate for such Interest Period for such Advance plus
(B) the Applicable Margin, 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 Eurocurrency
Rate Advance shall be Converted or paid in full.

 

(b)                                 Default Interest.  Upon the occurrence and during the
continuance of any Event of Default the Administrative Agent may, and upon the
request of the Required Lenders shall, require that the Borrowers pay interest
on (i) the unpaid principal amount of each Advance (other than a
Competitive Bid Advance) owing to each Lender, payable in arrears on the dates
referred to in clause (a)(i) or (a)(ii) above 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 such Advance pursuant to clause (a)(i) or (a)(ii) above and
(ii) to the fullest extent permitted by law, the amount of any interest,
fee or other amount payable under the Loan Documents 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, in the case of interest, on the Type of Advance on which
such interest has accrued pursuant to clause (a)(i) or (a)(ii) above and,
in all other cases, on Base Rate Advances pursuant to clause (a)(i) above; provided, however,
that following acceleration of the Advances pursuant to Section 6.01,
interest shall accrue and be payable at the rate required by this
Section 2.08(b), whether or not requested by the Administrative Agent or
the Required Lenders.  In addition,
following a final court judgment in favor of any Lender Party with respect to
any Obligation of the Loan Parties under the Loan Documents, interest shall
accrue at the higher of the statutory judgment rate or the rate specified in
the preceding sentence, payable on demand.

 

SECTION 2.09  Fees.  (a)  Commitment Fee.  The Company shall pay to the Administrative Agent for the account
of the Lenders a commitment fee, from the date hereof in the case of each
Initial Lender and from the effective date specified in the Assignment and
Acceptance pursuant to which it became a Lender in the case of each other
Lender until the Termination Date, payable in arrears quarterly on
March 31, June 30, September 30 and December 31, commencing
December 31, 2003, and on the Termination Date, at a percentage rate per
annum on the average daily Unused Commitment of such Lender, (which shall be
calculated for the purposes of this Section 2.09(a) disregarding
clause (b)(iii)

 

 

of the definition of “Unused Commitment”), which rate
shall be (x) until the earlier of (i) November 14, 2003 and (ii) three
Business Days after the Administrative Agent receives the certificate described
in Section 5.03(c) for the period ending September 30, 2003, equal to
0.50%, and (y) thereafter, determined by reference to the Senior Leverage Ratio
of the Company and its Subsidiaries for the Rolling Period ended on or most
recently prior to such date as set forth below:

 

	
  Senior
  Leverage

  Ratio

  	
   

  	
  Commitment Fee

  	
   

  
	
  Level I

  	
   

  	
   

  	
   

  
	
  less than 0.20 to 1.00

  	
   

  	
  0.375

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Level II

  	
   

  	
   

  	
   

  
	
  greater than or equal to 0.20 to 1.00

  	
   

  	
  0.50

  	
  %

  

 

(b)                                 Letter of Credit
Fees, Etc.  (i) Each Borrower
shall pay to the Administrative Agent for the account of each Lender a
commission, payable in arrears quarterly on March 31, June 30,
September 30 and December 31, commencing December 31, 2003, and
on the Termination Date, on such Lender’s Pro Rata Share of the average
daily aggregate Available Amount during such quarter of all Letters of Credit
issued for the benefit of such Borrower outstanding from time to time at the
Applicable Margin for Eurocurrency Rate Advances under the Facility.

 

(ii)                                  Each Borrower shall
pay to the Issuing Bank, for its own account, a fronting fee of 0.25% plus such
commissions, issuance fees, transfer fees and other fees and charges in
connection with the issuance or administration of each Letter of Credit issued
for the benefit of such Borrower as such Borrower and the Issuing Bank shall
agree.

 

(c)                                  Agents’ Fees.  The Company shall pay to the Administrative
Agent for its own account such fees as may from time to time be agreed between
the Company and the Administrative Agent.

 

SECTION 2.10  Conversion of Revolving Credit Advances.  (a)  Optional.  Any Borrower may on any Business Day, upon
notice given to the Administrative Agent not later than 10:00 A.M. (Los Angeles
California time) on the third Business Day prior to the date of the proposed
Conversion and subject to the provisions of Section 2.11, Convert all or
any portion of the Revolving Credit Advances denominated in Dollars made to it
of one Type comprising the same Borrowing into Revolving Credit Advances of the
other Type; provided,
however, that (x) if any Conversion of Eurocurrency Rate Advances
into Base Rate Advances is made other than on the last day of an Interest
Period for such Eurocurrency Rate Advances such Borrower shall also pay any
amounts owing pursuant to Section 9.04(c), (y) any Conversion of Base Rate
Advances into Eurocurrency Rate Advances shall be in an amount not less than
the minimum amount specified in Section 2.02(b), and (z) no Conversion of
any Revolving Credit Advances shall result in more separate Revolving Credit
Borrowings than permitted under Section 2.02(b).  Each such notice of 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 Eurocurrency Rate Advances, the duration of the initial Interest Period
for such Revolving Credit Advances. 
Each notice of Conversion shall be irrevocable and binding on the
Borrower requesting such Conversion.

 

(b)                                 Mandatory.  (i) If, with respect to any
Eurocurrency Rate Advances, any Lender notifies the Administrative Agent that
(i) such Lender is unable to obtain matching deposits in the London
inter-bank market at or about 11:00 A.M. (London time) on the second
Business Day before the making of a Borrowing denominated in Dollars or the
third Business Day before the making of a Borrowing denominated in any
Committed Currency in sufficient amounts to fund such Lender’s Revolving Credit

 

 

Advances as a part of such Borrowing during its Interest Period or
(ii) the Eurocurrency Rate for any Interest Period for such Advances will
not adequately reflect the cost to such Lender of making, funding or
maintaining such Lender’s Eurocurrency Rate Advances for such Interest Period,
the Administrative Agent shall forthwith so notify the applicable Borrower and
the Lenders, whereupon (A) such Borrower will, on the last day of the then
existing Interest Period therefor, (1) if such Eurocurrency Rate Advances
are denominated in Dollars, either (x) prepay such Advances or (y) Convert
such Advances into Base Rate Advances and (2) if such Eurocurrency Rate
Advances are denominated in any Committed Currency, either (x) prepay such
Advances or (y) redenominate such Advances into an Equivalent amount of
Dollars and Convert such Advances into Base Rate Advances and (B) the
obligation of the Lenders to make, or to Convert Revolving Credit Advances
into, Eurocurrency Rate Advances shall be suspended until the Administrative
Agent shall notify the Company and the Lenders that the circumstances causing
such suspension no longer exist; provided
that, if the circumstances set forth in clause (ii) above are applicable, the
applicable Borrower may elect, by notice to the Administrative Agent and the
Lenders, to continue such Advances in such Committed Currency for Interest
Periods of not longer than one month, which Advances shall thereafter bear
interest at a rate per annum equal to the Applicable Margin plus, for
each Lender, the cost to such Lender (expressed as a rate per annum) of funding
its Eurocurrency Rate Advances by whatever means it reasonably determines to be
appropriate.  Each such Lender shall
certify its cost of funds for each Interest Period to the Administrative Agent
and the applicable Borrower as soon as practicable (but in any event not later
than ten Business Days after the first day of such Interest Period).

 

(ii)                                  On the date on which
the aggregate unpaid principal amount of Eurocurrency Rate Advances comprising
any Borrowing shall be reduced, by payment or prepayment or otherwise, to less
than $1,000,000, such Advances shall automatically (A) if such
Eurocurrency Rate Advances are denominated in Dollars, Convert into Base Rate
Advances and (B) if such Eurocurrency Rate Advances are denominated in a
Committed Currency, be redenominated into an Equivalent amount of Dollars and
Convert into a Base Rate Advance.

 

(iii)                               If any Borrower shall
fail to select the duration of any Interest Period for any Eurocurrency Rate
Advances in accordance with the provisions contained in the definition of
“Interest Period” in Section 1.01, the Administrative Agent will forthwith
so notify such Borrower and the Lenders, whereupon each such Eurocurrency Rate
Advance will automatically, on the last day of the then existing Interest
Period therefor, (A) if such Eurocurrency Rate Advances are denominated in
Dollars, Convert into Base Rate Advances and (B) if such Eurocurrency Rate
Advances are denominated in a Committed Currency, be redenominated into an
Equivalent amount of Dollars and Convert into a Base Rate Advance.

 

(iv)                              Upon the occurrence and
during the continuance of any Event of Default and upon notice from the
Administrative Agent to the Company, (A) if any Eurocurrency Rate Advances
are denominated in Dollars, such Eurocurrency Rate Advances shall be Converted
into Base Rate Advances and (B) if any Eurocurrency Rate Advances are
denominated in any Committed Currency, such Eurocurrency Rate Advances shall be
redenominated into an Equivalent amount of Dollars and be Converted into Base
Rate Advances and (ii) the obligation of the Lenders to make, or to
Convert Advances into, Eurocurrency Rate Advances shall be suspended; provided that the applicable Borrower may
elect with respect to Eurocurrency Rate Advances which are denominated in any
Committed Currency, by notice to the Administrative Agent and the Lenders
within one Business Day of such notice, to continue such Advances in such
Committed Currency, whereupon the Administrative Agent may require that such
Eurocurrency Rate Advances shall bear interest at the Overnight Eurocurrency
Rate for a period of three Business Days and thereafter, such Eurocurrency Rate
Advances shall have Interest Periods of a duration of not longer than one
month.  “Overnight Eurocurrency Rate” means the rate
per annum applicable to an overnight period beginning on one Business Day and
ending on

 

 

the next Business Day equal to the sum of 1%,
the Applicable Margin and the average, rounded upward to the nearest whole
multiple of 1/16 of 1%, if such average is not such a multiple, of the
respective rates per annum quoted by the Administrative Agent on request as the
rate at which it is offering overnight deposits in the relevant currency in
amounts substantially equal to BNP Paribas’ Eurocurrency Rate Advances.

 

SECTION 2.11  Increased Costs, Etc.  (a)  If, due to either
(i) the introduction of or any change in or in the interpretation of any
law or regulation following the date hereof or (ii) the compliance with
any guideline or request from any central bank or other governmental authority
including, without limitation, any agency of the European Union or similar
monetary or multinational authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender Party of agreeing to make
or of making, funding or maintaining Eurocurrency Rate Advances or LIBO Rate
Advances or of agreeing to issue or of issuing or maintaining or participating
in Letters of Credit or of agreeing to make or of making or maintaining Letter
of Credit Advances (excluding, for purposes of this Section 2.11, any such
increased costs resulting from (x) Taxes or Other Taxes (as to which
Section 2.13 shall govern) and (y) 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 such Lender Party is
organized or has its Applicable Lending Office or any political subdivision
thereof), then the Company shall from time to time, upon demand by such Lender
Party (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender Party additional amounts
sufficient to compensate such Lender Party for such increased cost; provided, however,
that a Lender Party claiming additional amounts under this Section 2.11(a)
agrees to use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to designate a different Applicable Lending Office
if the making of such a designation would avoid the need for, or reduce the
amount of, such increased cost that may thereafter accrue and would not, in the
reasonable judgment of such Lender Party, be otherwise disadvantageous to such
Lender Party.  A certificate as to the
amount of such increased cost, submitted to the Company by such Lender Party,
shall be conclusive and binding for all purposes, absent manifest error.

 

(b)                                 If any Lender Party
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) effective after the date hereof affects or would
affect the amount of capital required or expected to be maintained by such
Lender Party or any corporation controlling such Lender Party and that the
amount of such capital is increased by or based upon the existence of such
Lender Party’s commitment to lend or to issue or participate in Letters of Credit
hereunder and other commitments of such type or the issuance or maintenance of
or participation in the Letters of Credit (or similar contingent obligations),
then, upon demand by such Lender Party (with a copy of such demand to the
Administrative Agent), the Company shall pay to the Administrative Agent for
the account of such Lender Party, from time to time as specified by such Lender
Party, additional amounts sufficient to compensate such Lender Party in the
light of such circumstances, to the extent that such Lender Party reasonably
determines such increase in capital to be allocable to the existence of such
Lender Party’s commitment to lend or to issue or to participate in Letters of
Credit hereunder or to the issuance or maintenance of or participation in any
Letters of Credit.  A certificate as to
such amounts submitted to the Company by such Lender Party shall be conclusive
and binding for all purposes, absent manifest error.

 

(c)                                  If, with respect to
any Eurocurrency Rate Advances any Lender notifies the Administrative Agent
that the Eurocurrency Rate for any Interest Period for such Revolving Credit
Advances will not adequately reflect the cost to such Lender of making, funding
or maintaining such Lender’s Eurocurrency Rate Advances for such Interest
Period, the Administrative Agent shall forthwith so notify the Company and the
Lenders, whereupon (i) each such Eurocurrency 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 Lenders to make, or to Convert Revolving Credit Advances
into, Eurocurrency Rate Advances shall be suspended until the Administrative
Agent shall notify the Company that such Lender has determined that the circumstances
causing such suspension no longer exist.

 

(d)                                 Notwithstanding any
other provision of this Agreement, if the introduction of or any change in or
in the interpretation of any law or regulation shall make it unlawful, or any
central bank or other governmental authority shall assert that it is unlawful,
for any Lender or its Eurocurrency Lending Office to perform its obligations
hereunder to make Eurocurrency Rate Advances or LIBO Rate Advances or to
continue to fund or maintain Eurocurrency Rate Advances in Dollars or any
Committed Currency or LIBO Rate Advances in any Foreign Currency or to fund or
maintain Eurocurrency Rate Advances in Dollars or any Committed Currency or
LIBO Rate Advances in any Foreign Currency hereunder, then, on notice thereof
and demand therefor by such Lender to the Company through the Administrative
Agent (i) each Eurocurrency Rate Advance or LIBO Rate Advance, as the case
may be, will automatically, upon such demand, (A) if such Eurocurrency Rate
Advance is denominated in Dollars, be Converted into a Base Rate Advance, and
(B) if such Eurocurrency Rate Advance or LIBO Rate Advance is denominated
in any Committed Currency or Foreign Currency, be redenominated into an
Equivalent amount of Dollars and be Converted into a Base Rate Advance and
(ii) the obligation of the Lenders to make Eurocurrency Rate Advances or
LIBO Rate Advances, or to Convert Revolving Credit Advances into, Eurocurrency
Rate Advances shall be suspended until the Administrative Agent shall notify
the Company that such Lender has determined that the circumstances causing such
suspension no longer exist; provided,
however, that, before making any
such demand, such Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a different
Eurocurrency Lending Office if the making of such a designation would allow
such Lender or its Eurocurrency Lending Office to continue to perform its
obligations to make Eurocurrency Rate Advances or to continue to fund or maintain
Eurocurrency Rate Advances and would not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender.

 

SECTION 2.12  Payments and Computations.  (a)  Each Borrower shall make each
payment hereunder irrespective of any right of counterclaim or set-off not
later than 10:00 A.M. (Los Angeles, California time) on the day when due
in Dollars to the Administrative Agent at the applicable Administrative Agent’s
Account in same day funds, except payments with respect to principal of, interest
on, and other amounts relating to, Advances denominated in a Committed Currency
or a Foreign Currency.  Each Borrower
shall make each payment hereunder with respect to principal of, interest on,
and other amounts relating to, Advances denominated in a Committed Currency or
a Foreign Currency, not later than 11:00 A.M. (at the Payment Office for
such Committed Currency or Foreign Currency, as the case may be) on the day
when due in such Committed Currency or Foreign Currency, as the case may be, to
the Administrative Agent, by deposit of such funds to the applicable
Administrative Agent’s Account in same day funds, with payments being received
by the Administrative Agent after such time being deemed to have been received
on the next succeeding Business Day. 
The Administrative Agent will promptly thereafter cause like funds to be
distributed (i) if such payment by such Borrower is in respect of
principal, interest, commitment fees or any other Obligation then payable
hereunder to more than one Lender Party, to such Lender Parties for the account
of their respective Applicable Lending Offices ratably in accordance with the
amounts of such respective Obligations then payable to such Lender Parties and
(ii) if such payment by such Borrower is in respect of any Obligation then
payable hereunder to one Lender Party, to such Lender Party for the account of
its Applicable Lending Office, in each case to be applied in accordance with
the terms of this Agreement.  Upon its
acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 9.07(d), from and
after the effective date of such Assignment and Acceptance, the Administrative
Agent shall make all payments hereunder in respect of the interest assigned
thereby to the Lender Party assignee thereunder, and the parties to such
Assignment and Acceptance shall make all

 

 

appropriate adjustments in such payments for periods
prior to such effective date directly between themselves.

 

(b)                                 If the Administrative
Agent receives funds for application to the Obligations under the Loan
Documents under circumstances for which the Loan Documents do not specify the
Advances to which, or the manner in which, such funds are to be applied, the
Administrative Agent may, but shall not be obligated to, elect to distribute
such funds to each Lender Party ratably in accordance with such Lender Party’s
proportionate share of the principal amount of all outstanding Advances and the
Available Amount of all Letters of Credit then outstanding, in repayment or
prepayment of such of the outstanding Advances or other Obligations owed to
such Lender Party, and for application to such principal installments, as the
Administrative Agent shall direct.

 

(c)                                  Each Borrower hereby
authorizes each Lender Party and each of its Affiliates, if and to the extent
payment owed to such Lender Party is not made when due hereunder to charge from
time to time, to the fullest extent permitted by law, against any or all of
such Borrower’s accounts with such Lender Party or such Affiliate any amount so
due.

 

(d)                                 All computations of
interest on Revolving Credit Advances comprising Eurocurrency Rate Advances,
fees and Letter of Credit commissions shall be made by the Administrative Agent
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, fees or commissions are payable.  Computations of interest on Revolving Credit
Advances comprising Base Rate Advances and Letter of Credit Advances shall be
made by the Administrative Agent on the basis of a year of 365 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 is payable.  Computations in respect of Competitive Bid
Advances shall be made by the Administrative Agent as specified in the
applicable Notice of Competitive Bid Borrowing (or, in each case of Advances
denominated in Foreign Currencies where market practice differs, in accordance
with market practice).  Each
determination by the Administrative Agent of an interest rate, fee or
commission hereunder shall be conclusive and binding for all purposes, absent
manifest error.

 

(e)                                  Whenever any payment
hereunder 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 commitment or letter of credit fee or commission, as the case may
be; provided,
however, that, if such extension would cause any payment to be made
in the next following calendar month, such payment shall be made on the next
preceding Business Day and such adjustment of time shall in such case be
reflected in the computation of payment of interest or commitment fee, as the
case may be.

 

(f)                                    Unless the
Administrative Agent shall have received notice from any Borrower prior to the
date on which any payment is due to any Lender Party hereunder that such
Borrower will not make such payment in full, the Administrative Agent may
assume that such Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each such Lender Party on such due date
an amount equal to the amount then due such Lender Party.  If and to the extent any Borrower shall not
have so made such payment in full to the Administrative Agent, each such Lender
Party shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender Party together with interest thereon, for each day
from the date such amount is distributed to such Lender Party until the date
such Lender Party repays such amount to the Administrative Agent, at (i) the
Federal Funds Rate in the case of Advances denominated in Dollars or (ii) the
cost of funds incurred by the Administrative Agent in respect of such amount in
the case of Advances denominated in Committed Currencies or Foreign Currencies.

 

 

SECTION 2.13  Taxes.  (a)  Any and all payments by the Borrowers hereunder or
under the Notes 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 each Lender Party and the Administrative
Agent, taxes that are imposed on its overall net income by the United States
and taxes that are imposed on its overall net income (and franchise taxes
imposed in lieu thereof) by the state or foreign jurisdiction under the laws of
which such Lender Party or the Administrative Agent (as the case may be) is
organized or any political subdivision thereof and, in the case of each Lender
Party, taxes that are imposed on its overall net income (and franchise taxes in
lieu thereof) by the state or foreign jurisdiction of such Lender Party’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 Notes being
hereinafter referred to as “Taxes”).  If any
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder to any Lender Party or the Administrative Agent,
(i) the sum payable by such Borrower shall be increased as may be
necessary so that after such Borrower and the Administrative Agent have made
all required deductions (including deductions applicable to additional sums
payable under this Section 2.13) such Lender Party or the Administrative
Agent, as the case may be, receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Borrower shall make
all such deductions and (iii) such Borrower shall pay the full amount
deducted to the relevant taxation authority or other governmental authority in
accordance with applicable law.

 

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

 

(c)                                  The Borrowers shall
indemnify each Lender Party and the Administrative Agent for and hold it
harmless against the full amount of Taxes and Other Taxes, and for the full
amount of taxes of any kind imposed by any jurisdiction on amounts payable
under this Section 2.13, imposed on or paid by such Lender Party or the
Administrative Agent (as the case may be) and any liability (including penalties,
additions to tax, interest and expenses) arising therefrom or with respect
thereto.  This indemnification shall be
made within 30 days from the date such Lender Party or the Administrative Agent
(as the case may be) makes written demand therefor.

 

(d)                                 Within 30 days after
the date of any payment of Taxes, the applicable Borrower shall furnish to the
Administrative Agent, at its address referred to in Section 9.02, the
original or a certified copy of a receipt evidencing such payment.  In the case of any payment hereunder or
under the Notes by or on behalf of any Borrower through an account or branch
outside the United States or on behalf of such Borrower by a payor that is not
a United States person, if such Borrower determines that no Taxes are payable
in respect thereof, such Borrower shall furnish, or shall cause such payor to
furnish, to the Administrative Agent, at such address, an opinion of counsel
acceptable to the Administrative Agent stating that such payment is exempt from
Taxes.  For purposes of subsections (d)
and (e) of this Section 2.13, the terms “United States”
and “United States person” shall have the meanings
specified in Section 7701 of the Internal Revenue Code.

 

(e)                                  Each Lender Party
organized under the laws of a jurisdiction outside the United States shall, on
or prior to the date of its execution and delivery of this Agreement in the
case of each Initial Lender or Initial Issuing Bank, as the case may be, and on
the date of the Assignment and Acceptance pursuant to which it becomes a Lender
Party in the case of each other Lender Party, and from time to time thereafter
if requested in writing by the Company or the Administrative Agent (but only so
long thereafter as such Lender Party remains lawfully able to do so), provide
the Administrative Agent and the Company with two original Internal Revenue
Service forms W-8ECI or W-8BEN or (in the case

 

 

of a Lender Party that has certified in writing to the Administrative
Agent that it is not a “bank” as defined in Section 881(c)(3)(A) of the
Internal Revenue Code) two original forms W-8BEN accompanied by a certificate
representing that such Lender Party is not a “bank” for purposes of
Section 881(c) of the Internal Revenue Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Internal
Revenue Code) of the Company and is not a controlled foreign corporation
related to the Company (within the meaning of Section 864(d)(4) of the
Internal Revenue Code)), as appropriate, or any successor or other form
prescribed by the Internal Revenue Service, certifying that such Lender Party
is exempt from or entitled to a reduced rate of United States withholding tax
on payments pursuant to this Agreement or the Notes.  If the forms provided by a Lender Party at the time such Lender
Party first becomes a party to this Agreement indicate 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 such Lender Party 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 forms; provided, however, that if, at the
effective date of the Assignment and Acceptance pursuant to which a Lender
Party becomes a party to this Agreement, the Lender Party assignor was entitled
to payments under subsection (a) of this Section 2.13 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
Lender Party 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-8ECI or W-8BEN (or the related certificate described above), that
the applicable Lender Party reasonably considers to be confidential, such
Lender Party shall give notice thereof to the Company and shall not be
obligated to include in such form or document such confidential information.

 

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

 

SECTION 2.14  Sharing of Payments, Etc.  If any Lender Party shall obtain at any time
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise, other than as a result of an assignment pursuant to
Section 9.07) (a) on account of Obligations due and payable to such
Lender Party hereunder and under the Notes at such time in excess of its
ratable share (according to the proportion of (i) the amount of such Obligations
due and payable to such Lender Party at such time to (ii) the aggregate
amount of the Obligations due and payable to all Lender Parties hereunder and
under the Notes at such time) of payments on account of the Obligations due and
payable to all Lender Parties hereunder and under the Notes at such time
obtained by all the Lender Parties at such time or (b) on account of
Obligations owing (but not due and payable) to such Lender Party hereunder and
under the Notes at such time in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations owing to such Lender
Party at such time to (ii) the aggregate amount of the Obligations owing
(but not due and payable) to all Lender Parties hereunder and under the Notes
at such time) of payments on account of the Obligations owing (but not due and
payable) to all Lender Parties hereunder and under the Notes at such time
obtained by all of the Lender Parties at such time, such Lender Party shall
forthwith purchase from the other Lender Parties such interests or
participating interests in the Obligations due and payable or owing to them, as
the case may be, as shall be necessary to cause such purchasing Lender Party to
share the excess payment ratably with each of them; provided,

 

 

however,
that (A) if all or any portion of such excess payment is thereafter recovered
from such purchasing Lender Party, such purchase from each other Lender Party
shall be rescinded and such other Lender Party shall repay to the purchasing
Lender Party the purchase price to the extent of such Lender Party’s ratable
share (according to the proportion of (i) the purchase price paid to such
Lender Party to (ii) the aggregate purchase price paid to all Lender
Parties) of such recovery together with an amount equal to such Lender Party’s
ratable share (according to the proportion of (i) the amount of such other
Lender Party’s required repayment to (ii) the total amount so recovered
from the purchasing Lender Party) of any interest or other amount paid or payable
by the purchasing Lender Party in respect of the total amount so recovered and
(B) any amounts owed or owing to any Lender Party as a result of a Competitive
Bid Advance or under a Competitive Bid Note shall be disregarded from each
computation set forth in this Section 2.14.  Each Borrower agrees that any Lender Party so purchasing an
interest or participating interest from another Lender Party pursuant to this
Section 2.14 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
interest or participating interest, as the case may be, as fully as if such
Lender Party were the direct creditor of such Borrower in the amount of such
interest or participating interest, as the case may be.

 

SECTION 2.15  Use of Proceeds.  The proceeds of the Advances and issuances
of Letters of Credit shall be available (and the Borrowers agree that they
shall use such proceeds and Letters of Credit) solely to repay outstanding
advances under the Existing Credit Agreement, pay transaction fees and
expenses, provide working capital for the Company and its Subsidiaries and for
general corporate purposes including, without limitation, capital expenditures
and acquisitions in each case to the extent not prohibited by the Loan
Documents.

 

SECTION 2.16  Evidence of Debt.  (a)  Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of each Borrower to such Lender resulting from each Advance owing
to such Lender from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.  Each Borrower agrees that upon notice by any
Lender Party to such Borrower (with a copy of such notice to the Administrative
Agent) to the effect that a Note is required or appropriate in order for such
Lender to evidence (whether for purposes of pledge, enforcement or otherwise)
the Revolving Credit Advances and Letter of Credit Advances owing to, or to be
made by, such Lender Party, such Borrower shall promptly execute and deliver to
such Lender a Revolving Credit Note payable to the order of such Lender Party
in a principal amount equal to the Commitment of such Lender Party.

 

(b)                                 The Register
maintained by the Administrative Agent pursuant to Section 9.07(h) shall
include a control account, and a subsidiary account for each Lender, in which
accounts (taken together) shall be recorded (i) the date and amount of
each Borrowing made hereunder, the Type of Advances comprising such Borrowing
and, if appropriate, the Interest Period applicable thereto, (ii) the
terms of each Assignment and Acceptance delivered to and accepted by it,
(iii) the amount of any principal or interest due and payable or to become
due and payable from each Borrower to each Lender Party hereunder, and (iv) the
amount of any sum received by the Administrative Agent from each Borrower
hereunder and each Lender Party’s share thereof.

 

(c)                                  Entries made in good
faith by the Administrative Agent in the Register pursuant to
subsection (b) above, and by each Lender Party 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 each Borrower to, in the case of the Register, each Lender
Party and, in the case of such account or accounts, such Lender Party, under
this Agreement, absent manifest error; provided, however, that the failure of the
Administrative Agent or such Lender Party to make an entry, or any finding that
an entry is incorrect, in the Register or such account or accounts shall not
limit or otherwise affect the obligations of any Borrower under this Agreement.

 

 

(d)                                 References herein or
in any other Loan Document to Revolving Credit Notes shall mean and be
references to the Revolving Credit Notes, if any, to the extent issued
hereunder.

 

ARTICLE III

CONDITIONS OF LENDING AND

ISSUANCES OF LETTERS OF CREDIT

 

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

 

(a)                                  The Administrative
Agent shall have received on or before the day of the Initial Extension of
Credit the following, each dated such day (unless otherwise specified), in form
and substance satisfactory to the Administrative Agent (unless otherwise
specified) and (except for any Notes) in sufficient copies for each Lender
Party:

 

(i)                                     Notes payable to
the order of the Lenders to the extent requested by any Lender pursuant to
Section 2.16.

 

(ii)                                  A security agreement
in substantially the form of Exhibit E-1 hereto (together with each other
security agreement and security agreement supplement delivered pursuant to
Section 5.01(j), in each case as amended, amended and restated,
supplemented or otherwise modified from time to time in accordance with its
terms, the “Security Agreement”), duly executed by
the Company and each U.S. Subsidiary that is a Significant Subsidiary, together
with:

 

(A)                              (1) certificates
representing the Pledged Shares in respect of each U.S. Guarantor which is a
Significant Subsidiary, if any, (2) certificates representing 65% of the
Pledged Shares in respect of each Non-U.S. Guarantor which is a Significant
Subsidiary (other than those set out on Schedule 3.01(a)(ii)(A)(2), if
any), and (3) in respect of the Pledged Shares referred to in both (1) and (2),
undated stock powers executed in blank, provided, that
any such certificates which have been delivered to the agent under the Existing
Credit Agreement shall be deemed delivered to the Administrative Agent
hereunder,

 

(B)                                evidence that proper
financing statements have been duly filed under the Uniform Commercial Code of
the States of all jurisdictions that the Administrative Agent may deem
necessary or desirable in order to perfect and protect the Liens created under
the Collateral Documents, covering the Collateral described in the Security
Agreement,

 

(C)                                evidence that
termination statements (Form UCC-3 or a comparable form), have been duly filed
on the Effective Date under the Uniform Commercial Code of all jurisdictions
that the Administrative Agent may deem desirable in order to terminate or amend
existing Liens on the Collateral described in the Security Agreement, and

 

(D)                               evidence that all other
action that the Administrative Agent may deem necessary or desirable in order
to perfect and protect the liens and security interests created under the
Security Agreement has been taken, including the registration of the

 

 

Pledged Shares of the Non-U.S. Subsidiaries
which are Significant Subsidiaries (other than those set out on
Schedule 3.01(a)(ii)(A)(2), if any).

 

(iii)                               The U.S. Guaranty duly
executed by all U.S Subsidiaries that are Significant Subsidiaries.

 

(iv)                              Certified copies of the
resolutions of the Board of Directors of the Company and each U.S. Subsidiary
that is a Significant Subsidiary approving the Transaction and each Loan
Document to which it is or is to be a party, and of all documents evidencing
other necessary corporate action and governmental approvals, if any, with
respect to the Transaction and each Loan Document to which it is or is to be a
party and of the transactions contemplated hereby.

 

(v)                                 A copy of a
certificate of the Secretary of State of the jurisdiction of incorporation of
the Company and each U.S. Subsidiary that is a Significant Subsidiary, dated
reasonably near the Effective Date, in each case listing the charter of Company
and such Significant Subsidiary and each amendment thereto on file in his
office and certifying that (A) such charter is a true and correct copy thereof,
(B) such amendments are the only amendments to such charter on file in his
office, (C) such Person has paid all franchise taxes to the date of such certificate
and (D) such Person is duly incorporated and in good standing under the
laws of the State of the jurisdiction of its incorporation.

 

(vi)                              A copy of a certificate
of the Secretary of State of the States listed on Schedule 3.01(a)(vi),
dated reasonably near the date of the Effective Date, with respect to the
Company and each Significant Subsidiary as listed on Schedule 3.01(a)(vi),
stating that such Person is duly qualified and in good standing as a foreign
corporation in such States and has filed all annual reports required to be
filed to the date of such certificate.

 

(vii)                           A certificate of the Company
and each Loan Party (other than any Loan Party that is a Non-U.S. Subsidiary),
dated the Effective Date (the statements made in which certificate shall be
true on and as of the Effective Date), certifying as to (A) the absence of
any amendments to the charter of such Person since the date of the Secretary of
State’s certificate referred to in Section 3.01(a)(v), (B) a true and
correct copy of the bylaws of such Person as in effect on the date on which the
resolutions referred to in Section 3.01(a)(iv) were adopted and on the
Effective Date, (C) the due incorporation and good standing or valid
existence of such Person as a corporation organized under the laws of the
jurisdiction of its incorporation and the absence of any proceeding for the
dissolution or liquidation of such Person, (D) the completeness and
accuracy of the representations and warranties contained in the Loan Documents
as though made on and as of the Effective Date and (E) the absence of any
event occurring and continuing, or resulting from the Initial Extension of
Credit, that constitutes a Default.

 

(viii)                        A certificate of the Secretary
of each Loan Party (other than any Loan Party that is a Non-U.S. Subsidiary)
certifying the names and true signatures of the officers of such Persons
authorized to sign each Loan Document to which it is or is to be a party and
the other documents to be delivered hereunder and thereunder.

 

(ix)                                Such financial,
business and other information regarding each Loan Party and its Subsidiaries
as the Lender Parties shall have reasonably requested, including, without
limitation, information as to possible contingent liabilities, tax matters,
environmental matters, obligations under Plans, Multiemployer Plans and Welfare
Plans and collective bargaining agreements and other arrangements with
employees.

 

 

(x)                                 Favorable opinions of
Sheppard, Mullin, Richter & Hampton LLP, counsel for the Loan Parties, and
Lawrence A. Michlovich, Assistant Secretary and Assistant General Counsel of
the Loan Parties, in substantially the form of Exhibits F-1 and F-2.

 

(b)                                 There shall have
occurred no Material Adverse Change since June 30, 2003.

 

(c)                                  Except as set forth
in Schedule 4.01(h), there shall exist no action, suit, investigation,
litigation or proceeding affecting the Company or any Loan Party or any of
their Subsidiaries pending or threatened before any court, governmental agency
or arbitrator that (i) could have a Material Adverse Effect or
(ii) purports to affect the legality, validity or enforceability of the
Transaction or any Loan Document or the consummation of the transactions
contemplated by the Loan Documents.

 

(d)                                 All governmental and
third party consents and approvals necessary in connection with the Transaction
and the other transactions contemplated by the Loan Documents shall have been
obtained (without the imposition of any conditions that are not acceptable to
the Lender Parties) and shall remain in effect; all applicable waiting periods
in connection with the Transaction and the other transactions contemplated by
the Loan Documents shall have expired without any action having been taken by
any competent authority, and no law or regulation shall be applicable in the
judgment of the Lender Parties, in each case that restrains, prevents or
imposes materially adverse conditions upon the Transaction and the other
transactions contemplated by the Loan Documents or the rights of the Loan
Parties freely to transfer or otherwise dispose of, or to create any Lien on,
any properties now owned or hereafter acquired by any of them.

 

(e)                                  Evidence that all
amounts due under the Existing Credit Agreement have been paid in full or will
be paid with the proceeds from the Borrowing made on the Effective Date, all
commitments thereunder have been terminated and all security interests and
guarantees granted in connection therewith have been released.

 

(f)                                    All accrued fees
and expenses of the Administrative Agent and the Lender Parties (including the
accrued fees and expenses of counsel to the Administrative Agent and of local
counsel to the Lender Parties) shall have been paid.

 

SECTION 3.02  Initial Loan to Each Designated
Subsidiary.  The obligation of each
Lender to make an initial Advance to each Designated Subsidiary following any
designation of such Designated Subsidiary as a Borrower hereunder pursuant to
Section 9.11 is subject to the Administrative Agent’s receipt on or before
the date of such initial Advance of each of the following, in form and
substance satisfactory to the Administrative Agent and dated such date, and
(except for the Revolving Credit Notes) in sufficient copies for each Lender:

 

(a)                                  The Revolving Credit
Notes of such Borrower to the order of the Lenders, to the extent requested by
any Lender pursuant to Section 2.16.

 

(b)                                 Certified copies of
the resolutions of the Board of Directors of such Borrower (with a certified
English translation if the original thereof is not in English) approving this
Agreement and the Notes of such Borrower, and of all documents evidencing other
necessary corporate action and governmental approvals, if any, with respect to
this Agreement and such Notes.

 

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

 

 

(d)                                 A certificate signed
by a Responsible Officer, dated as of the date of such initial Advance,
certifying that such Borrower shall have obtained all governmental and third
party authorizations, consents, approvals (including exchange control
approvals) and licenses required under applicable laws and regulations necessary
for such Borrower to execute and deliver this Agreement and the Notes and to
perform its obligations thereunder.

 

(e)                                  The Designation
Letter of such Designated Subsidiary, substantially in the form of Exhibit D
hereto.

 

(f)                                    A favorable opinion
of counsel (which may be in-house counsel) to such Designated Subsidiary, dated
the date of such initial Advance, in form and substance satisfactory to the
Administrative Agent.

 

(g)                                 Such other approvals,
opinions or documents as any Lender, through the Administrative Agent, may
reasonably request.

 

SECTION 3.03  Conditions Precedent to Each Revolving
Credit Borrowing and Issuance.  The
obligation of each Lender to make a Revolving Credit Advance on the occasion of
each Revolving Credit Borrowing, and the obligation of the Issuing Bank to
issue a Letter of Credit, shall be subject to the further conditions precedent
that on the date of such Revolving Credit Borrowing or issuance:

 

(a)                                  the following
statements shall be true (and each of the giving of the applicable Notice of
Revolving Credit Borrowing, Notice of Issuance and the acceptance by any
Borrower of the proceeds of such Revolving Credit Borrowing or of such Letter
of Credit shall constitute a representation and warranty by such Borrower that
both on the date of such notice and on the date of such Revolving Credit
Borrowing or issuance such statements are true):

 

(i)                                     the
representations and warranties contained in each Loan Document are correct in
all material respects on and as of such date, before and after giving effect to
such Revolving Credit Borrowing or issuance and to the application of the
proceeds therefrom, and additionally, if such Revolving Credit Borrowing shall
have been requested by a Designated Subsidiary, the representations and
warranties of such Designated Subsidiary contained in its Designation Letter as
though made on and as of such date other than any such representations or
warranties that, by their terms, refer to a specific date other than the date
of such Revolving Credit Borrowing or issuance, in which case as of such
specific date;

 

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

 

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

 

SECTION 3.04  Conditions Precedent to Each Competitive
Bid Borrowing.  The obligation of
each Lender that is to make a Competitive Bid Advance on the occasion of a
Competitive Bid Borrowing to make such Competitive Bid Advance as part of such
Competitive Bid Borrowing is subject to the conditions precedent that:

 

(a)                                  the Administrative
Agent shall have received the written confirmatory Notice of Competitive Bid
Borrowing with respect thereto;

 

 

(b)                                 on or before the date
of such Competitive Bid Borrowing, but prior to such Competitive Bid Borrowing,
the Administrative Agent shall have received a Competitive Bid Note payable to
the order of such Lender for each of the one or more Competitive Bid Advances
to be made by such Lender as part of such Competitive Bid Borrowing, in a
principal amount equal to the principal amount of the Competitive Bid Advance
to be evidenced thereby and otherwise on such terms as were agreed to for such
Competitive Bid Advance in accordance with Section 2.04; and

 

(c)                                  on the date of such
Competitive Bid Borrowing the following statements shall be true (and each of
the giving of the applicable Notice of Competitive Bid Borrowing and the
acceptance by such Borrower of the proceeds of such Competitive Bid Borrowing
shall constitute a representation and warranty by the Borrower requesting such
Competitive Bid Borrowing that on the date of such Competitive Bid Borrowing
such statements are true):

 

(i)                                     the
representations and warranties contained in each Loan Document are correct on
and as of the date of such Competitive Bid Borrowing, before and after giving
effect to such Competitive Bid Borrowing and to the application of the proceeds
therefrom, and, if such Competitive Bid Borrowing shall have been requested by
a Designated Subsidiary, the representations and warranties of such Designated
Subsidiary contained in its Designation Letter, as though made on and as of
such date, and

 

(ii)                                  no event has occurred
and is continuing, or would result from such Competitive Bid Borrowing or from
the application of the proceeds therefrom, that constitutes a Default.

 

SECTION 3.05  Determinations Under Section 3.01.  For purposes of determining compliance with
the conditions specified in Section 3.01, each Lender Party shall be
deemed to have consented to, approved or accepted or to be satisfied with each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to the Lender Parties unless an officer of the
Administrative Agent responsible for the transactions contemplated by the Loan
Documents shall have received notice from such Lender Party prior to the
Initial Extension of Credit specifying its objection thereto and if the Initial
Extension of Credit consists of a Borrowing, such Lender Party shall not have
made available to the Administrative Agent such Lender Party’s ratable portion
of such Borrowing.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

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

 

(a)                                  Each Loan Party and
its Subsidiaries (i) is a corporation or other business entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation, (ii) is duly qualified and in good standing
as a foreign organization in each other jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so qualify or
be licensed except where the failure to so qualify or be licensed could not be
reasonably likely to have a Material Adverse Effect and (iii) has all
requisite power and authority (including, without limitation, all governmental
licenses, permits and other approvals) to own or lease and operate its
properties and to carry on its business as now conducted and as proposed to be
conducted.

 

 

(b)                                 Set forth on
Schedule 4.01(b) hereto (as such schedule may be amended by the
Company from time to time) is a complete and accurate list of all Subsidiaries
of each Loan Party (designating whether such Subsidiary is a U.S. Subsidiary or
a Non-U.S. Subsidiary), showing (as to each such Subsidiary) the jurisdiction
of its incorporation, the number of shares of each class of its Equity
Interests authorized, the number outstanding, and the percentage of the
outstanding shares of each such class of its Equity Interests owned (directly
or indirectly) by such Loan Party and the number of shares covered by all
outstanding options, warrants, rights of conversion or purchase and similar
rights.  All of the outstanding Equity
Interests in each Loan Party’s Subsidiaries, to the extent owned by the Company
and its Subsidiaries, have been validly issued, are fully paid (except for
directors’ qualifying shares) and non-assessable and are owned by such Loan
Party or one or more of its Subsidiaries free and clear of all Liens (other
than Permitted Liens), except those created under the Collateral
Documents.  Each such Subsidiary
(i) is a corporation or other business entity duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
formation, (ii) is duly qualified and in good standing as a foreign organization
in each other jurisdiction in which it owns or leases property or in which the
conduct of its business requires it to so qualify or be licensed except where
the failure to so qualify or be licensed could not be reasonably likely to have
a Material Adverse Effect and (iii) has all requisite power and authority
(including, without limitation, all governmental licenses, permits and other
approvals) to own or lease and operate its properties and to carry on its
business as now conducted and as proposed to be conducted.

 

(c)                                  The execution,
delivery and performance by each Loan Party or its Subsidiaries of each Loan
Document to which it is or is to be a party (other than Loan Documents required
to be entered into pursuant to Sections 5.01(j) and 5.01(l) to the extent not
executed as of the date hereof), and the consummation of the Transaction, are
within such Person’s powers, have been duly authorized by all necessary action,
and do not (i) contravene such Person’s charter, bylaws or other
organizational documents, (ii) violate any law, rule, regulation
(including, without limitation, Regulation X of the Board of Governors of
the Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach of, or
constitute a default or require any payment to be made under, any material
contract, loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting any Loan Party, any of its Subsidiaries or
any of their properties or (iv) except for the Liens created under the
Loan Documents, result in or require the creation or imposition of any Lien
upon or with respect to any of the properties of any Loan Party or any of its
Subsidiaries.  No Loan Party or any of
its Subsidiaries is in violation of any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award or in breach of any
such contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument, the violation or breach of which could be reasonably likely
to have a Material Adverse Effect.

 

(d)                                 No authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or any other third party is required for (i) the
due execution, delivery, recordation, filing or performance by any Loan Party
or its Subsidiaries of any Loan Document to which it is or is to be a party
(other than Loan Documents required to be entered into pursuant to Sections
5.01(j) and 5.01(l) to the extent not executed as of the date hereof), or for
the consummation of the Transaction, (ii) the grant by any Loan Party or
its Subsidiaries of the Liens granted by it pursuant to the Collateral
Documents, (iii) the perfection or maintenance of the Liens created under
the Collateral Documents (including the first priority nature thereof) or
(iv) the exercise by the Administrative Agent or any Lender Party of its
rights under the Loan Documents or the remedies in respect of the Collateral
pursuant to the Collateral Documents, other than the filing or recording of any
UCC financing statements or the periodic filing of UCC continuation statements
in respect of UCC financing statements filed by or on behalf of the
Administrative Agent.

 

 

(e)                                  This Agreement has
been, and each other Loan Document when delivered hereunder will have been,
duly executed and delivered by each Loan Party party thereto.  This Agreement is, and each other Loan
Document when delivered hereunder will be, the legal, valid and binding
obligation of each Loan Party and its Subsidiaries party thereto, enforceable
against such Loan Party and such Subsidiaries in accordance with its terms.

 

(f)                                    (i) The
Consolidated balance sheet of the Company and its Subsidiaries as at
June 30, 2003, and the related Consolidated statements of income and cash
flow of the Company and its Subsidiaries for the fiscal year then ended,
accompanied, as to the Consolidated financial statements, by an unqualified
opinion of PricewaterhouseCoopers LLP, independent public accountants, duly
certified by a Responsible Officer, copies of which have been furnished to each
Lender Party, fairly present, subject to year-end audit adjustments, the
Consolidated financial condition of the Company and its Subsidiaries as at such
dates and the Consolidated results of the operations of the Company and its
Subsidiaries for the periods ended on such dates, all in accordance with
generally accepted accounting principles applied on a consistent basis, and

 

(ii)                                  since June 30,
2003 there has occurred no Material Adverse Change, except as reported in the
disclosures of the Company in its public filings with the United States
Securities and Exchange Commission prior to the date hereof.

 

(g)                                 The Consolidated
forecasted balance sheet, statements of income and statements of cash flow of
the Company and its Subsidiaries delivered to the Lender Parties pursuant to
Section 3.01(a)(x) or 5.03 were prepared in good faith on the basis of the
assumptions stated therein, which assumptions were fair in the light of
conditions existing at the time of delivery of such forecasts, and represented,
at the time of delivery and on the Effective Date, the Company’s best estimate
of the future financial performance of the Company and its Subsidiaries but subject
to the inherent uncertainties associated with all forecasts of future economic
performance.

 

(h)                                 Except as set forth in
Schedule 4.01(h), or in the disclosures of the Company in its public
filings with the United States Securities and Exchange Commission prior to the
date hereof, there is no action, suit, investigation, litigation or proceeding
affecting any Loan Party or any of its Subsidiaries, including any
Environmental Action, pending or, to the best knowledge of the Company,
threatened before any court, government agency or arbitrator that
(i) could be reasonably likely to have a Material Adverse Effect or
(ii) purports to affect the legality, validity or enforceability of any
Loan Document or the consummation of the transactions contemplated hereby.

 

(i)                                     No Loan Party or
Subsidiary of a Loan Party is engaged in the business of extending credit for
the purpose of purchasing or carrying Margin Stock (other than purchases of the
shares of common stock of the Company permitted by Section 5.02(g), all such
shares to be retired upon purchase), and no proceeds of any Advance or drawings
under any Letter of Credit will be used to purchase or carry any Margin Stock
or to extend credit to others for the purpose of purchasing or carrying any
Margin Stock.

 

(j)                                     All filings and
other actions necessary or desirable to perfect and protect the security
interest in the Collateral created under the Collateral Documents entered into
as of the date of this representation and to the extent required thereby have
been duly made or taken and are in full force and effect, subject to
Section 5.01(l), and the Collateral Documents entered into as of the date
of this representation create for the benefit of the Secured Parties a valid
and, together with such filings and other actions, perfected first priority
security interest in the Collateral securing the payment of the Secured
Obligations subject to Section 5.01(l), and all filings and other actions
necessary or desirable to perfect and protect such security interest have been
duly taken by the Loan Parties to the extent required by this

 

 

Section 4.01, subject to Section 5.01(l).  The Loan Parties or their Subsidiaries are
the legal and beneficial owners of the Collateral free and clear of any Lien
(other than Permitted Liens), except for the liens and security interests
created or permitted under the Loan Documents

 

(k)                                  Neither any Loan
Party nor any of its Subsidiaries is (i) an “investment company,” or an
“affiliated person” of, or “promoter” or “principal underwriter” for, an
“investment company,” as such terms are defined in the Investment Company Act
of 1940, as amended or (ii) a “holding company,” or a “subsidiary company” of a
“holding company” or an “affiliate” of a “holding company,” or of a “subsidiary
company” of a “holding company” as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended. 
Neither the making of any Advances, nor the issuance of any Letters of
Credit, nor the application of the proceeds or repayment thereof by any Borrower,
nor the consummation of the other transactions contemplated hereby, will
violate any provision of any such Act or any rule, regulation or order of the
Securities and Exchange Commission thereunder.

 

(l)                                     (i) Except as
set forth on Schedule 4.01(l)(i), the operations and properties of each
Loan Party and each of its Subsidiaries comply in all material respects with
all applicable Environmental Laws and Environmental Permits, except for such
non-compliance that could not reasonably be expected to result in material
liability, all past written claims of non-compliance with such Environmental
Laws and Environmental Permits have been resolved without ongoing material
obligations or material costs, and no circumstances exist that could be
reasonably likely to (x) form the basis of an Environmental Action against
any Loan Party or any of its Subsidiaries or any of its properties that could
have a Material Adverse Effect or (y) cause any such property to be
subject to any material restrictions on ownership, occupancy, use or
transferability under any Environmental Law.

 

(ii)                                  Except as set forth
on Schedule 4.01(l)(ii), none of the properties currently or formerly
owned or operated by any Loan Party or any of its Subsidiaries is listed or
proposed for listing on the NPL or on the CERCLIS or any analogous foreign,
state or local list; there are no and, to the knowledge of each Loan Party,
never have been any underground or aboveground storage tanks or any surface
impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials
are being or have been treated, stored or disposed on any property currently
owned or operated by any Loan Party or any of its Subsidiaries or, to the best
of its knowledge, on any property formerly owned or operated by any Loan Party
or any of its Subsidiaries, in each case that could reasonably be expected to
result in material liability; there is no asbestos or asbestos-containing
material on any property currently owned or operated by any Loan Party or any
of its Subsidiaries that could reasonably be expected to result in material
liability; and Hazardous Materials have not been released, discharged or
disposed of on any property currently or formerly owned or operated by any Loan
Party or any of its Subsidiaries, except for such releases, discharges or
disposals that could not reasonably be expected to result in material
liability.

 

(iii)                               Except as set forth on
Schedule 4.01(l)(iii), neither any Loan Party nor any of its Subsidiaries
is undertaking, either individually or together with other potentially
responsible parties, any investigation or assessment or remedial or response
action relating to any actual or threatened release, discharge or disposal of
Hazardous Materials at any site, location or operation, either voluntarily or
pursuant to the order of any governmental or regulatory authority or the
requirements of any Environmental Law which could reasonably be expected to
result in material liability; and all waste Hazardous Materials generated,
used, treated, handled or stored at, or transported to or from, any property
currently or formerly owned or operated by any Loan Party or any of its
Subsidiaries have been disposed of in a manner not reasonably expected to
result in material liability to any Loan Party or any of its Subsidiaries.

 

 

(m)                               Set forth on
Schedule 4.01(m) hereto, except for Liens otherwise permitted under
Section 5.02(a), is a complete and accurate list of all Liens on the
property or assets of any Loan Party or any Significant Subsidiary (other than
such Liens as may exist on the property or assets of Non-U.S. Subsidiaries that
secure obligations the aggregate principal amount of which does not exceed (x)
$5,000,000 for all such Liens on the property or assets of any Non-U.S.
Subsidiary or (y) $10,000,000 for all such Liens on the property or assets of
all Non-U.S. Subsidiaries), showing as of the date hereof the lienholder
thereof, the principal amount of the obligations secured thereby and the
property or assets of such Loan Party or such Significant Subsidiary subject
thereto.

 

ARTICLE V

COVENANTS

 

SECTION 5.01  Affirmative Covenants.  So long as any Advance or any other
Obligation of any Loan Party under or in respect of any Loan Document shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, the Company will:

 

(a)                                  Compliance with
Laws, Etc.  Comply, and cause each
of its Subsidiaries to comply with all applicable laws, rules, regulations and
orders, such compliance to include, without limitation, compliance with ERISA
and Environmental Laws, except where failure to comply would not have a
Material Adverse Effect.

 

(b)                                 Payment of Taxes,
Etc.  Pay and discharge, and cause
each of its Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all material taxes, assessments and governmental charges
or levies imposed upon it or upon its property and (ii) all lawful claims
that, if unpaid, might by law become a Lien upon its property which is not
otherwise permitted hereunder; provided, however, that neither the
Company nor any of its Subsidiaries shall be required to pay or discharge any
such tax, assessment, charge or claim that is being contested in good faith and
by proper proceedings and as to which appropriate reserves are being
maintained, unless and until any Lien resulting therefrom attaches to its
property and becomes enforceable against its other creditors.

 

(c)                                  Compliance with
Environmental Laws.  Comply, and
cause each of its Subsidiaries to comply, in all material respects, with all
applicable Environmental Laws and Environmental Permits; obtain and renew, and
cause each of its Subsidiaries to obtain and renew, all Environmental Permits
necessary for its operations and properties; and conduct, and cause each of its
Subsidiaries to conduct, any investigation, study, sampling and testing, and
undertake any cleanup, removal, remedial or other action necessary to remove
and clean up all Hazardous Materials from any of its properties, in accordance
with the requirements of all Environmental Laws; provided, however, that neither the Company nor any of its
Subsidiaries shall be required to undertake any such cleanup, removal, remedial
or other action to the extent that its obligation to do so is being contested
in good faith and by proper proceedings and appropriate reserves are being
maintained with respect to such circumstances.

 

(d)                                 Maintenance of
Insurance.  Maintain, and cause each
of its Subsidiaries to maintain insurance with responsible and reputable
insurance companies or associations, or arrangements for self-insurance if such
arrangements are in accordance with prudent industry practice, in each case in
such amounts and covering such risks as is usually carried by companies engaged
in similar businesses and owning similar properties in the same general areas
in which the Company or such Subsidiary operates.

 

(e)                                  Preservation of
Corporate Existence, Etc.  Preserve
and maintain, and cause each of its Significant Subsidiaries to preserve and
maintain, its corporate existence, rights (charter and

 

 

statutory), permits, licenses, approvals, privileges and franchises; provided,
however, that the Company may consummate any merger or consolidation
permitted under Section 5.02(d) and the Company may sell assets as permitted
under Section 5.02(e), and provided further that neither the Company
nor any of its Subsidiaries shall be required to preserve any right, permit,
license, approval, privilege or franchise if the Board of Directors of the
Company or such Subsidiary shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company or such
Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to the Company, such Subsidiary or the
Lender Parties.

 

(f)                                    Visitation
Rights.  At any reasonable time
during regular business hours and from time to time (but not unreasonably
frequently), upon reasonable prior notice, permit the Administrative Agent or
any of the Lender Parties or any agents or representatives thereof, to examine
and make copies of and abstracts from the records and books of account of, and
visit the properties of, the Company and any of its Significant Subsidiaries,
and to discuss the affairs, finances and accounts of the Company and any of its
Significant Subsidiaries with any of the officers or directors designated by
the Company or a Significant Subsidiary, as the case may be, and with their
independent certified public accountants.

 

(g)                                 Keeping of Books.  Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of the
Company and each such Subsidiary in accordance with generally accepted
accounting principles in effect from time to time.

 

(h)                                 Maintenance of
Properties, Etc.  Maintain and
preserve, and cause each of its Significant Subsidiaries to maintain and
preserve, all of its properties that are reasonably required in the conduct of
its business in good working order and condition, ordinary wear and tear
excepted.

 

(i)                                     Transactions
with Affiliates.  Conduct, and cause
each of its Subsidiaries to conduct, all transactions otherwise permitted under
the Loan Documents with any of their Affiliates on terms that are fair and
reasonable and no less favorable to the Company or such Subsidiary than it
would obtain in a comparable arm’s-length transaction with a Person not an
Affiliate, except for (i) transactions between Loan Parties, (ii) transactions
with Nihon Inter Electronics or any joint venture to which any Loan Party is
party or with members of such joint venture in respect of such joint venture,
to the extent such member would be deemed an Affiliate, and (iii) transactions
with Subsidiaries or Affiliates of the Company in which the Company owns not
less than 90% of all Equity Interests.

 

(j)                                     Covenant to
Guarantee Obligations and Give Security. 
Upon (y) the formation or acquisition of any new direct or indirect
Significant Subsidiary of any Loan Party, or (z) any direct or indirect
Subsidiary of any Loan Party becoming a Significant Subsidiary (excluding, in
the case of (y) and (z), any Significant Subsidiary that is a Non-U.S.
Subsidiary if the effect of such undertaking would have material adverse tax
consequences to the Loan Parties taken as a whole), then the Company shall, in
each case at the Company’s expense:

 

(i)                                     within 60 days, or
such later time as may be agreed to by the Administrative Agent in its sole
discretion, after such formation, acquisition, or Subsidiary becoming a
Significant Subsidiary, cause each such (A) 
U.S. Subsidiary that is a Significant Subsidiary and each direct and
indirect U.S. Subsidiary which is a Significant Subsidiary of such Significant
Subsidiary to duly execute and deliver to the Administrative Agent a guaranty
or guaranty supplement to the U.S. Guaranty, in form and substance satisfactory
to the Administrative Agent, guaranteeing all of the Loan Parties’ Obligations
under the Loan Documents (other than the obligations of the Company as
guarantor pursuant to Article VII of

 

 

this Agreement), and (B) Non-U.S. Subsidiary
that is a Significant Subsidiary to duly execute and deliver to the
Administrative Agent a guaranty or guaranty supplement to the Non-U.S.
Guaranty, in form and substance satisfactory to the Administrative Agent, and
(C) U.S. Subsidiary or Non-U.S. Subsidiary to make, with respect to itself and
to its entry into such guaranty or guaranty supplement referred to in clauses
(A) and (B) hereof, representations and warranties substantially similar to
those set forth in Sections 4.01(c) and (d); provided,
that no guaranty or guaranty supplement may be required (if acceptable to the
Administrative Agent) from a Non-U.S. Subsidiary that is a Significant
Subsidiary if the execution and delivery thereof would result in material
adverse tax consequences to the Loan Parties taken as a whole;

 

(ii)                                  within 60 days, or
such later time as may be agreed to by the Administrative Agent in its sole
discretion, after such formation, acquisition or Subsidiary becoming a
Significant Subsidiary, with respect to any Subsidiary that is a U.S.
Subsidiary pledge or cause its Subsidiaries to pledge to the Administrative
Agent on behalf of the Secured Parties, 100% of the total outstanding shares or
other ownership interests of such Subsidiary owned by the Company or its
Subsidiaries;

 

(iii)                               within 60 days, or
such later time as may be agreed to by the Administrative Agent in its sole
discretion, after such formation, acquisition or Subsidiary becoming a
Significant Subsidiary, duly execute and deliver, and cause each such
Significant Subsidiary (other than any Significant Subsidiary organized or
located outside of the United States) to take whatever action (including,
without limitation, the filing of Uniform Commercial Code financing statements)
may be necessary or advisable in the opinion of the Administrative Agent to
vest in the Administrative Agent (or in any representative of the
Administrative Agent designated by it) valid and subsisting Liens on the shares
or other ownership interests referred to in clause (ii) above, enforceable
against all third parties in accordance with their terms;

 

(iv)                              within 60 days, or
such later time as may be agreed to by the Administrative Agent in its sole
discretion, after such formation, acquisition or Subsidiary becoming a
Significant Subsidiary, deliver to the Administrative Agent, upon the request
of the Administrative Agent in its sole discretion, a signed copy of a favorable
opinion, addressed to the Administrative Agent and the other Secured Parties,
of counsel for the Loan Parties acceptable to the Administrative Agent as to
the matters contained in clauses (i), (ii) and (iii) above, as to such
guaranties, guaranty supplements and pledges being legal, valid and binding
obligations of the Company or its Subsidiaries enforceable in accordance with
their terms and as to such other matters as the Administrative Agent may
reasonably request;

 

(v)                                 at any time and from
time to time, promptly execute and deliver any and all further instruments and
documents and take all such other action as the Administrative Agent may deem
necessary or desirable in obtaining the full benefits of, or in perfecting and
preserving the Liens of, such guaranties, guaranty supplements or pledges; and

 

(vi)                              within 60 days, or such
later time as may be agreed to by the Administrative Agent in its sole
discretion, after such formation, acquisition, or Subsidiary becoming a
Significant Subsidiary, with respect to any subsidiary that is a Non-U.S.
Subsidiary and a Significant Subsidiary, pledge or cause its Subsidiaries to
pledge to the Administrative Agent on behalf of the Secured Parties, 65% of the
total outstanding shares or other ownership interests of such Non-U.S.
Subsidiary owned by the Company or its Subsidiaries,

 

provided,
that, no action shall be required to be taken by any Loan
Party with respect to this Section 5.01(j) if, with respect to any
Non-U.S. Subsidiary which is a Significant Subsidiary, in the event

 

 

that the Company and the
Administrative Agent agree in good faith that compliance with the provisions of
this Section 5.01(j) with respect to such Non-U.S. Subsidiary will be
commercially unreasonable or impracticable, including without limitation, after
giving consideration to the out-of-pocket expenses of obtaining the execution
of the Non-U.S. Guaranty by such Non-U.S. Subsidiary or the pledge of the
shares of such Non-U.S. Subsidiary.

 

(k)                                  Further Assurances.  (i) Promptly upon request by the
Administrative Agent, or any Lender Party through the Administrative Agent,
correct any material defect or error that may be discovered in any Loan
Document or in the execution, acknowledgment, filing or recordation thereof,
and

 

(ii)                                  promptly upon request
by the Administrative Agent, or any Lender Party through the Administrative
Agent, do, execute, acknowledge, deliver, record, re-record, file, re-file,
register and re-register any and all such further acts, deeds, conveyances,
pledge agreements, assignments, financing statements and continuations thereof,
termination statements, notices of assignment, transfers, certificates,
assurances and other instruments as the Administrative Agent, or any Lender
Party through the Administrative Agent, may reasonably require from time to
time in order to (A) carry out more effectively the purposes of the Loan
Documents, (B) to the fullest extent permitted by applicable law, subject any
Loan Party’s or any of its Subsidiaries’ properties, assets, rights or interests
to the Liens now or hereafter intended to be covered by any of the Collateral
Documents, (C) perfect and maintain the validity, effectiveness and priority of
any of the Collateral Documents and any of the Liens intended to be created
thereunder and (D) assure, convey, grant, assign, transfer, preserve, protect
and confirm more effectively unto the Administrative Agent and the Lender
parties the rights granted or now or hereafter intended to be granted to the
Administrative Agent and the Lender Parties under any Loan Document or under
any other instrument executed in connection with any Loan Document to which any
Loan Party or any of its Subsidiaries is or is to be a party, and cause each of
its Subsidiaries to do so.

 

(l)                                     Additional
Affirmative Covenants.  On or before
the date that is 60 days, or such later time as may be agreed to by the
Administrative Agent in its sole discretion, after the Effective Date or, if
earlier, upon the designation of a Non-U.S. Subsidiary as a Designated
Subsidiary under Section 9.11:

 

(i)                                     to the extent
requested by the Administrative Agent, use its best efforts to obtain the
certificates representing 65% of the Pledged Shares in respect of the Non-U.S.
Guarantors set out on Schedule 3.01(a)(ii)(A)(2) (and to take such other
action to perfect the security interest in those Pledged Shares including,
without limitation, the registration of such Pledged Shares as applicable)
together with undated stock powers executed in blank.

 

(ii)                                  deliver the following
to the Administrative Agent:

 

(A)                              The
Non-U.S. Guaranty duly executed by all Non-U.S Subsidiaries that are
Significant Subsidiaries.

 

(B)                                Certified copies of the
resolutions of the Board of Directors of each Non-U.S. Subsidiary that is a
Significant Subsidiary and which is required to enter into the Loan Documents
pursuant to this Section 5.01(l) approving the Transaction and each Loan
Document to which it is or is to be a party, and of all documents evidencing
other necessary corporate action and governmental approvals, if any, with
respect to the Transaction and each Loan Document to which it is or is to be a
party and of the transactions contemplated hereby.

 

 

(C)                                A copy of a certificate
of the Secretary of State (or other similar document) of the jurisdiction of
incorporation of each Non-U.S. Subsidiary that is a Significant Subsidiary, and
which is required to enter into the Loan Documents pursuant to this
Section 5.01(l) dated not more than 60 days (or such later date as agreed
to by the Administrative Agent) after the Effective Date, in each case listing
the charter of such Significant Subsidiary and each amendment thereto on file
in his office and certifying that (A) such charter is a true and correct copy
thereof, (B) such amendments are the only amendments to such charter on
file in his office, (C) such Person has paid all franchise taxes to the
date of such certificate and (D) such Person is duly incorporated and in
good standing under the laws of the State of the jurisdiction of its
incorporation.

 

(D)                               A certificate of each
Non-U.S. Subsidiary that is a Significant Subsidiary and which is required to
enter into the Loan Documents pursuant to this Section 5.01(l) dated not
more than 60 days (or such later date as agreed to by the Administrative Agent)
after the Effective Date (the statements made in which certificate shall be
true on and as of such date), certifying as to (A) the charter of such
Person being in full force and effect (and attaching a true and correct copy
thereof), (B) a true and correct copy of the bylaws of such Person as in
effect on the date on which the resolutions referred to in clause (B) above
were adopted and on such date of delivery, (C) the due incorporation and
good standing or valid existence of such Person as a corporation organized
under the laws of the jurisdiction of its incorporation and the absence of any
proceeding for the dissolution or liquidation of such Person, (D) the
completeness and accuracy of the representations and warranties contained in
the Loan Documents as though made on and as of such date of delivery
(including, with respect to itself and its entry into the Non-U.S. Guaranty,
the representations and warranties contained in Sections 4.01(c) and (d)) and
(E) the absence of any event occurring and continuing, or resulting from
the Initial Extension of Credit, that constitutes a Default.

 

(E)                                 A certificate of the
Secretary of each Non-U.S. Subsidiary that is a Significant Subsidiary and
which is required to enter into Loan Documents pursuant to this
Section 5.01(l) certifying the names and true signatures of the officers
of such Persons authorized to sign each Loan Document to which it is or is to
be a party and the other documents to be delivered hereunder and thereunder.

 

(F)                                 A favorable opinion of
local counsel to each Non-U.S. Subsidiary that is a Significant Subsidiary and
whose shares are pledged pursuant to this Section 5.01(l) or which
executes the Non-U.S. Guaranty.

 

(iii)                               deliver to the
Administrative Agent completed Schedules 4.01(b) and 4.01(m) to this Agreement,
which schedules conform to the requirements set forth in this Agreement.

 

SECTION 5.02  Negative Covenants.  So long as any as any Advance or any other
Obligation of any Loan Party under or in respect of any Loan Document shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party
shall have any Commitment hereunder, the Company will not, at any time:

 

(a)                                  Liens, Etc.  Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien on or with respect to any of its properties of any character (including,
without limitation, accounts) whether now owned or hereafter acquired, or

 

 

assign, or permit any of
its Subsidiaries to assign any accounts or other right to receive income, excluding,
however,
from the operation of the foregoing restrictions, the following:

 

(i)                                     Liens created
under the Loan Documents;

 

(ii)                                  Permitted Liens;

 

(iii)                               Liens existing on the
date hereof and described on Schedule 4.01(m) hereto;

 

(iv)                              Liens arising in
connection with Capitalized Leases permitted under Section 5.02(b)(i)(C); provided that no such Lien shall extend to
or cover any Collateral or assets other than the assets subject to such
Capitalized Leases;

 

(v)                                 purchase money Liens
upon or in real property, equipment and other fixed assets acquired or held by
the Company or any of its Subsidiaries in the ordinary course of business to
secure the purchase price of such property, equipment and other fixed assets or
to secure Debt incurred solely for the purpose of financing the acquisition of
any such property or equipment to be subject to such Liens, or Liens existing
on any such property or equipment at the time of acquisition (other than any
such Liens created in contemplation of such acquisition that do not secure the
purchase price), or extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount; provided, however, that no such Lien shall
extend to or cover any property other than the property, equipment and other
fixed assets being acquired, and no such extension, renewal or replacement
shall extend to or cover any property not theretofore subject to the Lien being
extended, renewed or replaced; and provided,
further that the aggregate
principal amount of the Debt secured by Liens permitted by this clause (v)
shall not exceed the amount permitted under Section 5.02(b)(i)(G) at any
time outstanding and that any such Debt shall not otherwise be prohibited by
the terms of the Loan Documents;

 

(vi)                              the filing of financing statements
solely as a precautionary measure in connection with operating leases;

 

(vii)                           other Liens securing Debt
outstanding in an aggregate principal amount not to exceed $10,000,000;

 

(viii)                        the replacement, extension or
renewal of any Lien permitted by clause (iii) above upon or in the same
property theretofore subject thereto or the replacement, extension or renewal
(without increase in the amount or change in any direct or contingent obligor)
of the Debt secured thereby;

 

(ix)                                Liens in respect of Debt
permitted by Section 5.02(b)(i)(F), provided that such Liens are granted on
assets owned solely by the obligor of such Debt; and

 

(x)                                   Rights granted to
the Welsh Development Agency in connection with the acquisition of certain
facilities located at Duffryn Drive, Newport, Wales, in regards to the sharing
of profits on the future sale of and related restrictions on such facilities.

 

(b)                                 Debt.  Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
Debt other than:

 

(i)                                     in the case of the
Loan Parties or any of their Subsidiaries,

 

 

(A)                              Debt under the Loan
Documents;

 

(B)                                Debt to a Loan Party or
any Subsidiary of a Loan Party, provided however
that any such Debt owed by a Non-U.S. Subsidiary shall be used only (1) to fund
working capital requirements or for other general corporate purposes of such
Non-U.S. Subsidiary (including, without limitation, capital expenditures), or
(2) for Permitted Acquisitions to the extent allowed under Sections 5.02(f)(v)
and 5.02(f)(ix) hereof;

 

(C)                                Capitalized Leases, provided, however that,
at any time, the sum of the aggregate outstanding principal component of all
Capitalized Leases, and the aggregate outstanding principal amount of all Debt
permitted under Section 5.02(b)(i)(G) shall not exceed the higher of
$75,000,000 or 5% of Net Tangible Assets of the Company and its Subsidiaries on
a consolidated basis (determined as of the end of the Fiscal Quarter
immediately preceding the date of determination);

 

(D)                               Debt under the
Subordinated Notes, or any Debt extending the maturity of, or refunding,
refinancing or replacing, in whole or in part, the Subordinated Notes; provided,  however, that
(A) the aggregate principal amount of such extended, refunding, refinancing or
replacement Debt shall not be increased above the principal amount thereof and
the premium, if any, thereon outstanding immediately prior to such extension,
refunding, refinancing or replacement, (B) such extended, refunding,
refinancing or replacement Debt shall not mature prior to the stated maturity
date or mandatory redemption date of the Subordinated Notes, and (C) such
extended, refunded, refinanced or replaced Debt shall be subordinated in right
of payment or otherwise to the obligations hereunder at least to the same
extent as the Subordinated Notes, and the other terms taken as a whole
governing such extended, refunded, refinanced or replaced Debt shall not be
materially less favorable to the Company than those governing the Subordinated Notes;

 

(E)                                 (I) Debt that is
subordinated in right of payment or otherwise to the obligations hereunder (the
“Other Subordinated Debt”) at least
to the same extent as the Subordinated Notes, and the other terms taken as a
whole governing such Debt shall not be materially less favorable to the Company
than those in the Subordinated Notes, and (II) any Debt extending the maturity
of, or refunding, refinancing or replacing, in whole or in part, the Other
Subordinated Debt; provided, however,
that such extended, refunding, refinancing or replacement Debt shall be
subordinated in right of payment or otherwise to the Obligations hereunder at
least to the same extent as the Subordinated Notes, and the other terms taken
as a whole governing such extended, refunded, refinanced or replaced Debt shall
not be materially less favorable to the Company than those governing the
applicable Other Subordinated Debt and provided, that
any Debt permitted under 5.02(b)(i)(E)(I) and (II) shall not mature prior to
the stated maturity date or mandatory redemption date of the Subordinated
Notes, and provided, that the total amount of Debt
under 5.02(b)(i)(D) and (E) shall not at any time exceed 50% of the Company’s
Total Capitalization;

 

(F)                                 Debt secured by
receivables, provided, however
that, at any time, the sum of the aggregate outstanding principal amount of all
Debt secured by receivables and the aggregate value of all then outstanding
receivables sold or securitized as permitted under Section 5.02(e)(vii),
shall not exceed the higher of $75,000,000 or 5% of Net Tangible Assets of the
Company and its Subsidiaries on a consolidated basis

 

 

(determined as of the end of the Fiscal
Quarter immediately preceding the date of determination); and

 

(G)                                other Debt, subject to
the proviso in Section 5.02(b)(i)(C) above.

 

(ii)                                  in the case of the
Company and any of its Subsidiaries, endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business.

 

(c)                                  Change in Nature
of Business.  Engage, or permit any
of its Subsidiaries to engage in any significant business other than the
manufacture, sale and distribution of semiconductors or products related to
semiconductors or any business that is a reasonable extension of the business
as currently conducted by the Company or its Subsidiaries.

 

(d)                                 Mergers, Etc.  Merge into or consolidate with any Person or
permit any Person to merge into it, or permit any of its Subsidiaries to do so,
except that:

 

(i)                                     the Company or any
Subsidiary of the Company may merge into or consolidate with any Person provided, however,
that (x) immediately prior to such merger or consolidation such other Person
conducts a business that is substantially similar to the business currently
conducted by the Company and its Subsidiaries and the surviving Person is the
Company or a Subsidiary of the Company and (y) after giving effect to such
merger or consolidation and any Investments permitted under
Section 5.02(f)(v), (i) the aggregate cash portion of the purchase price for
all such mergers and consolidations and such Investments does not exceed 25% of
the Company’s Total Capitalization and (ii) Net Cash shall not be less than
$275,000,000, except for any merger or consolidation in which the consideration
consists exclusively of Equity Interests in the Company;

 

(ii)                                  any Subsidiary of the
Company may merge into or consolidate with the Company so long as the surviving
Person is the Company;

 

(iii)                               any Subsidiary of the
Company may merge into or consolidate with a U.S. Subsidiary, so long as the
surviving Person is a wholly-owned U.S. Subsidiary of the Company;

 

(iv)                              any Non-U.S. Subsidiary
may merge into or consolidate with any other Non-U.S. Subsidiary provided that
if any Non-U.S. Guarantor is a party to such merger or consolidation, the
surviving Person shall be or become a Non-U.S. Guarantor subject to the proviso
to Section 5.01(j); or

 

(v)                                 any Subsidiary of the
Company formed solely to effectuate a sale or transfer of assets permitted by
Section 5.02(e) may merge into or consolidate with any Person in order to
effect such sale or transfer.

 

provided,
however, that in each of (i) through (v) above, immediately
before such merger or consolidation, and when considered on a Pro Forma Basis,
no Default shall have occurred and be continuing.

 

(e)                                  Sales, Etc., of
Assets.  Sell, lease, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease,
transfer or otherwise dispose of, any assets, or grant any option or other
right to purchase, lease or otherwise acquire any assets, except:

 

 

(i)                                     sales of inventory
(including, without limitation, sales of obsolete inventory) in the ordinary
course of its business,

 

(ii)                                  in a transaction
permitted by Section 5.02(d) or for transfers of assets between the
Company and its Subsidiaries permitted by Section 5.02(f),

 

(iii)                               sales, trade-ins or
dispositions of used equipment for fair value in the ordinary course of
business consistent with past practices,

 

(iv)                              sales of assets listed on
Schedule 5.02(e)(iv),

 

(v)                                 licenses of technology
in the ordinary course of business,

 

(vi)                              (other
than current assets) in an aggregate amount not to exceed 15% of the total
Tangible Net Worth of the Company and its Significant Subsidiaries (on a
consolidated basis) as determined at the time of each such proposed sale; provided that (x) such sales are for fair
market value and (y) not less than 85% of the consideration received from any
such sale consists of cash or Debt assumed by the purchaser, and

 

(vii)                           sales or securitization of
receivables, subject to the proviso in Section 5.02(b)(i)(F) above.

 

(f)                                    Investments.  Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment other than:

 

(i)                                     equity Investments
by the Company and its wholly-owned Subsidiaries in Subsidiaries outstanding on
the date hereof and in newly-formed Subsidiaries created for the purposes of
effecting a merger, consolidation, asset sale or Investment permitted
hereunder;

 

(ii)                                  additional
Investments by the Company in (1) U.S. Guarantors or Non-U.S. Guarantors, or
(2) wholly-owned U.S. Subsidiaries other than U.S. Guarantors, or (3) Non-U.S.
Subsidiaries of the Company, provided, however, that the aggregate
amount invested under clauses (2) and (3) above from the date hereof is not to
exceed 15% of the total Tangible Net Worth of the Company and its Subsidiaries
(on a consolidated basis) as determined at the time of each such proposed
investment;

 

(iii)                               Investments consisting
of Debt to the Company permitted by Section 5.02(b)(i)(B);

 

(iv)                              Investments by the
Company and its Subsidiaries in demand deposit accounts maintained in the
ordinary course of business with any Person of the type referred to in clause
(i), (ii), (iii), (iv) or (v) of the definition of “Eligible Assignee” and in
Cash Equivalents;

 

(v)                                 Investments by the
Company or a Subsidiary of the Company in Permitted Acquisitions, provided, however, that after making such
Permitted Acquisitions and giving effect to all mergers and acquisitions
permitted under Section 5.02(d)(i) (A) the aggregate cash portion of
the purchase price for all Permitted Acquisitions and such mergers and
acquisitions does not exceed 25% of the Company’s Total Capitalization,
(B) Net Cash shall not be less than $275,000,000 and (C) immediately
before and after giving effect thereto, no Default shall have occurred and be
continuing or would result therefrom;

 

 

(vi)                              Investments described on
Schedule 5.02(f)(vi) hereto (which shall set forth as of the date hereof
the amount, obligor or issuer and maturity, if any, thereof);

 

(vii)                           equity Investments received
in consideration by the Company or any Subsidiary for the licensing of
technology owned or licensed by the Company or such Subsidiary, respectively,
in the ordinary course of business on a basis consistent with past practice or
consistent with evolving industry practice;

 

(viii)                        loans and advances to employees
in the ordinary course of the business of the Company and its Subsidiaries as
presently conducted in an aggregate principal amount not to exceed $10,000,000
at any time outstanding; and

 

(ix)                                other Investments, provided that after making any such
Investment Net Cash shall not be less than $275,000,000, except where the
consideration for such Investment consists exclusively of Equity Interests in
the Company, and provided  further, in the case of Investments
referred to in clause (i) of the definition thereof, that the Company shall
retain control of the entity in which the Investments are made, except where
the purpose of the Investment is to create a joint venture to further the
Permitted Business.

 

(g)                                 Restricted Payments.  Declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its Equity
Interests or subordinated debt now or hereafter outstanding, return any capital
to its stockholders, partners or members (or the equivalent Persons thereof) as
such, or permit any of its Subsidiaries to purchase, redeem, retire, defease or
otherwise acquire for value Equity Interests or subordinated debt of the
Company or to issue or sell any Equity Interests or subordinated debt of such
Subsidiary (other than sales of Equity Interests of such Subsidiary to joint
venture partners in connection with the formation of a joint venture to further
the Permitted Business), except that:

 

(i)                                     the Company may
(A) declare and pay dividends and distributions payable only in common stock of
the Company, (B) purchase, redeem, retire, defease or otherwise acquire shares
of its capital stock or subordinated debt for cash provided, however,
that the aggregate amount of cash used for such purchases, redemptions,
retirements, defeasances and acquisitions under this clause (B) from the date
hereof shall not exceed 35% of the Company’s Tangible Net Worth and provided further that (x) at the time of
any purchase, redemption, retirement, defeasance or acquisition under this
clause (B) or as a result of any such transaction, (1) no Default shall have
occurred and be continuing, (2) Net Cash shall not be less than $275,000,000,
and (3) Tangible Net Worth shall not be less than $500,000,000, (y) on the date
of any such transaction, and for a period of 30 days thereafter, there will be
no outstanding Borrowings and all Letters of Credit will be cash collateralized
by cash deposits in the L/C Cash Collateral Account in an amount not less than
100% of the face amount of all Letters of Credit, and (z) the purchase price
for any such acquisition of subordinated debt will be at a discount to par and
(C) redeem subordinated debt in connection with a conversion of any one or more
series of subordinated debt to Equity Interests of the Company, provided that holders of not less than 75%
the principal amount of such subordinated debt (in the aggregate for all series
redeemed at such time) elect to convert such subordinated debt to Equity
Interests and provided, further, that the aggregate amount of cash
used for such redemptions under this clause (C) from the date hereof shall not
exceed 35% of the Company’s Tangible Net Worth and that after giving effect to
such redemption Net Cash shall not be less than $275,000,000;

 

(ii)                                  any Subsidiary of the
Company may (A) declare and pay cash dividends to the Company, (B) declare and
pay cash dividends to any other wholly owned U.S. Subsidiary

 

 

of the Company of which it is a Subsidiary
and (C) accept capital contributions from its parent to the extent permitted
under Section 5.02(f); and

 

(iii)                               the Company may
additionally refund, refinance or replace subordinated debt as permitted by
Section 5.02(b)(i).

 

(h)                                 Accounting Changes.  Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (i) accounting policies or
reporting practices for Consolidated financial statements, except as required
by generally accepted accounting principles or to the extent such change is to an
alternative principle which in the judgment of the Company’s independent
accountant is preferable under the circumstances in accordance with Rule 10-01
of Regulation S-X promulgated by the Securities and Exchange Commission or (ii)
Fiscal Year.

 

(i)                                     Prepayments,
Etc., of Debt. 
(i)  Except to the extent not prohibited elsewhere in this
Agreement, prepay, redeem, purchase, defease or otherwise satisfy prior to the
scheduled maturity thereof in any manner, or make any payment in violation of
any subordination terms of, any subordinated debt referred to in Sections
5.02(b)(i)(D) and (E), or (ii) amend, modify or change any term or condition of
any subordinated debt referred to in Sections 5.02(b)(i)(D) and (E) where such
amendment, modification or change would accelerate the payment of any principal
amount of such subordinated debt or would alter the terms of its subordination
(including any definitions used therein) or subject any obligor in respect of
such subordinated debt to more burdensome or additional covenants or events of
default, or permit any of its Subsidiaries to do any of the foregoing.

 

(j)                                     Negative Pledge.  Enter into or suffer to exist, or permit any
of its Subsidiaries to enter into or suffer to exist, any agreement prohibiting
or conditioning the creation or assumption of any Lien upon any of its property
or assets other than (i) in favor of the Secured Parties, (ii) in connection
with any Debt secured by purchase money Liens and Capitalized Leases, to the
extent permitted under Section 5.02(a)(v) and Section 5.02(b)(i)(C),
respectively, and solely to the extent such agreement is limited to the
property covered by such Liens, or (iii) in favor of the Welsh Development
Agency on certain facilities located at Duffryn Drive, Newport, Wales.

 

(k)                                  Other Transactions.  Engage, or permit any of its Subsidiaries to
engage, in any transaction involving commodity options, or futures contracts or
any similar speculative transactions (including, without limitation,
take-or-pay contracts), but excluding Hedge Agreements designed to manage
interest rate or foreign exchange rate risk, consistent with prudent business
practice.

 

SECTION 5.03  Reporting Requirements.  So long as any Obligation of any Loan Party
under or in respect of any Loan Document shall remain unpaid, any Letter of
Credit shall be outstanding or any Lender Party shall have any Commitment
hereunder, the Company will furnish to the Administrative Agent and the Lender
Parties:

 

(a)                                  Default Notice.  As soon as possible and in any event within
five days after the occurrence of each Default continuing on the date of such
statement, a statement of a Responsible Officer setting forth details of such
Default and the action that the Borrower has taken and proposed to take with
respect thereto;

 

(b)                                 Quarterly
Financials.  As soon as available
and in any event within 45 days after the end of each Fiscal Quarter,
commencing with the quarter ending on or about September 30, 2003, a
Consolidated balance sheet of the Company and its Subsidiaries, in each case as
of the end of such quarter and Consolidated statements of income and, in the
case of the first three Fiscal Quarters of each Fiscal Year,  cash flow of the Company and its
Subsidiaries, in each case for the period commencing at the end

 

 

of the previous quarter and ending with the end of such quarter and
Consolidated statements of income and cash flow of the Company and its
Subsidiaries for the period commencing at the end of the previous Fiscal Year
and ending with the end of such quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding month and
Fiscal Year-to-date period of the preceding Fiscal Year and the corresponding
figures for the corresponding quarter and Fiscal Year-to-date period of the
annual forecast previously delivered pursuant to Section 5.03(e), all in
reasonable detail and duly certified by a Responsible Officer, together with
(i) a certificate of a Responsible Officer stating that no Default has occurred
and is continuing or, if a Default has occurred and is continuing, a statement
as to the nature thereof and the action that the Company has taken and proposes
to take with respect thereto; provided that to the extent that the
Company modifies the presentation of the financial statements referred to
herein to eliminate the line item “Operating profit (loss)”, thereafter in
addition to providing the financial statements referred to herein the Company
shall also set forth in the certificate to be delivered in accordance with
Section 5.03(c) for each Fiscal Quarter the operating income and expenses
for the respective Fiscal Quarter computed on the same basis as the calculation
of operating profit (loss) as of the date hereof.

 

(c)                                  Compliance
Certificates.  Together with the
quarterly financial statements referred to in Section 5.03(b) for the
quarters ending March, June, September and December in each Fiscal
Year and the annual financial statements referred to in Section 5.03(d), a
certificate signed by a Responsible Officer in the form of Exhibit G.

 

(d)                                 Annual Financials.  As soon as available and in any event within
90 days after the end of each Fiscal Year, a copy of the annual audit report
for such year for the Company and its Subsidiaries, including therein
Consolidated balance sheets of the Company and its Subsidiaries, in each case
as of the end of such Fiscal Year, and Consolidated statements of income and
cash flow of the Company and its Subsidiaries and of the Company and its
Subsidiaries, in each case for the period commencing at the end of the previous
Fiscal Year and ending with the end of such Fiscal Year, accompanied as to such
Consolidated statements, by an unqualified opinion of PricewaterhouseCoopers
LLP or other independent public accountants of recognized standing acceptable to
the Required Lenders, together with (i)  a copy of any management letter
prepared by such accounting firm with respect to such Fiscal Year and
distributed to the Company, (ii) a certificate of a Responsible Officer
stating that no Default has occurred and is continuing or, if a default has
occurred and is continuing, a statement as to the nature thereof and the action
that the Company has taken and proposes to take with respect thereto, (iii) in
the event of any change from GAAP in the generally accepted accounting
principles used in the preparation of such financial statements, a statement of
reconciliation conforming such financial statements to GAAP and (iv) a
certificate signed by a Responsible Officer in the form of Exhibit G.

 

(e)                                  Annual Forecasts.  As soon as available and in any event within
30 days after the end of each Fiscal Year, forecasts prepared by management of
the Company, in form satisfactory to the Administrative Agent, of Consolidated
balance sheets, income statements and cash flow statements on a quarterly basis
for the Fiscal Year following such Fiscal Year then ended.

 

(f)                                    Litigation.  Promptly after the commencement thereof and
service or other notification to the Company, notice of all actions, suits,
investigations, litigation and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting any Loan Party or any of its Subsidiaries of the type
described in Section 4.01(h).

 

(g)                                 Securities Reports.  Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and reports that
any Loan Party or any of its Subsidiaries sends to its stockholders, and copies
of all regular, periodic and special reports, and all registration statements
(other than on Form S-8), that any Loan Party or any of its Subsidiaries files
with the Securities and

 

 

Exchange Commission or any governmental authority that may be
substituted therefor, or with any national securities exchange.

 

(h)                                 Environmental
Conditions.  Promptly after the
assertion or occurrence thereof, notice of any Environmental Action against or
of any noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that could (i) reasonably be
expected to have a Material Adverse Effect or (ii) cause any property
owned by the Company or its Subsidiaries to be subject to any material
restrictions on ownership, occupancy, use or transferability under any
Environmental Law.

 

(i)                                     Other Information.  Such other information respecting the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any Loan Party or any of its Subsidiaries as any
Lender Party (through the Administrative Agent) may from time to time
reasonably request.

 

SECTION 5.04  Financial Covenants.  So long as any Advance or any other
Obligation of any Loan Party under or in respect of any Loan Document shall
remain unpaid, any Letter of Credit shall be outstanding or any Lender Party shall
have any Commitment hereunder, the Company will:

 

(a)                                  Senior Leverage
Ratio.  Maintain on a Consolidated
basis for itself and its Subsidiaries a Senior Leverage Ratio of not more than
1.25 to 1.00, which will be determined as of the last day of the Rolling Period
ending June 30, 2003 and as of the last day of each Rolling Period
thereafter.

 

(b)                                 Fixed Charge
Coverage Ratio.  Maintain on a
Consolidated basis for itself and its Subsidiaries a Fixed Charge Coverage
Ratio of not less than 1.15 to 1.00, which will be determined as of the last
day of the Rolling Period ending June 30, 2003 and as of the last day of
each Rolling Period thereafter.

 

(c)                                  Liquidity Ratio.  Maintain at all times for itself and its
Subsidiaries from the date hereof a ratio of the sum of cash (after deducting
the amount of any cash and Cash Equivalents of the Company and its Subsidiaries
which are collateral for Obligations of the Company and its Subsidiaries under
any synthetic lease) plus Cash Equivalents plus account
receivables, to current liabilities of not less than 1.0 to 1.0.

 

(d)                                 Limitation on
Losses.  Not have (i) an
operating loss for each of two consecutive Fiscal Quarters, or (ii) an
operating loss for a Fiscal Quarter which exceeds 3% of Tangible Net Worth as
at the last day of such Fiscal Quarter; provided,
however, that the foregoing shall not include losses recorded during
any Fiscal Quarter ending on or before December 31, 2004 up to an
aggregate amount of $30 million arising from the restructuring program
announced by the Company in the fourth calendar quarter of 2002.

 

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)                                  (i)  any
Borrower shall fail to pay any principal of any Advance when the same shall
become due and payable, or (ii) any Borrower shall fail to pay any
interest on any Advance or any

 

 

Loan Party shall fail to make any other payment under any Loan Document
within two Business Days of when the same shall become due and payable; or

 

(b)                                 any representation or
warranty made by any Loan Party or any of its Subsidiaries (or any of their
officers) under or in connection with any Loan Document shall prove to have
been incorrect in any material respect when made and either (i) such
representation or warranty cannot be remedied and the Administrative Agent has
given notice thereof to the Company or (ii) such representation or warranty
continues to be incorrect in a material respect for fifteen (15) days after (A)
the Company acknowledges in writing that such representation or warranty is
incorrect, or (B) written notice thereof is given to the Company by the
Administrative Agent or any Lender; or

 

(c)                                  any Loan Party shall
fail to perform or observe any term, covenant or agreement contained in
Section 5.01(e), (f), (i) or (j), 5.02, or 5.04, provided, however
that no Event of Default shall arise under this clause (c) as a result of the
noncompliance with Section 5.02(b), (f) or (k) in respect of a Person that
is acquired by the Company or a Subsidiary as permitted hereunder after the
date hereof if such noncompliance is cured within thirty (30) days following
the acquisition of such Person; or

 

(d)                                 any Loan Party shall
fail to perform or observe any term, covenant or agreement contained in
Section 5.03, where such failure continues for fifteen (15) days after (A)
the Company acknowledges such failure in writing, or (B) written notice of such
failure is given to the Company by the Administrative Agent or any Lender; or

 

(e)                                  any Loan Party shall
fail to perform or observe any term, covenant or agreement contained in any
Loan Document on its part to be performed or observed (other than those
referred to in clauses (a), (b), (c) or (d) of this Section 6.01) if such
failure shall remain unremedied for 30 days after the earlier of the date on
which (A) a Responsible Officer of the Company becomes aware of such failure or
(B) written notice thereof shall have been given to the Company by the
Administrative Agent or any Lender Party; or

 

(f)                                    any Loan Party or
any of its Subsidiaries shall fail to pay any principal of, premium or interest
on or any other amount payable in respect of any Debt or any Hedge Agreement of
such Loan Party or such Subsidiary (as the case may be) that is outstanding in
a principal amount, or in the case of any Hedge Agreement an Agreement Value,
of at least $5,000,000 either individually or in the aggregate for all such
Loan Parties and Subsidiaries (but excluding Debt outstanding hereunder) of
such Loan Party or such Subsidiary (as the case may be), when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Debt; or any other event shall occur or condition shall exist
under any agreement or instrument relating to any such Debt and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Debt or otherwise to cause, or
to permit the holder thereof to cause, such Debt to mature; or any such Debt
shall be declared to be due and payable or required to be prepaid or redeemed
(other than by a regularly scheduled required prepayment or redemption),
purchased or defeased, or an offer to prepay, redeem, purchase or defease such
Debt shall be required to be made, in each case prior to the stated maturity
thereof provided, however, that no Event of Default shall
arise under this clause (f) as a result of the nonpayment of any Debt or any
Hedge Agreement of any Person which is acquired by the Company or any of its
Subsidiaries as permitted hereunder after the date hereof so long as the
aggregate outstanding principal amount of such Debt, or Agreement Value of such
Hedge Agreement, does not exceed $25,000,000 and such nonpayment does not
continue for more than three (3) Business Days after the acquisition of such
Person; or

 

 

(g)                                 the Company, any Loan
Party which is a Significant Subsidiary or any of its Significant Subsidiaries
shall generally not pay its debts as such debts become due, or shall admit in
writing its inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be instituted
by or against the Company, any Loan Party that is a Significant Subsidiary or
any of their Significant Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against it (but not
instituted by it) that is being diligently contested by it in good faith,
either such proceeding shall remain undismissed or unstayed for a period of 60
days or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment of a
receiver, trustee, custodian or other similar official for, it or any
substantial part of its property) shall occur; or the Company, any Loan Party
that is a Significant Subsidiary or any of their Significant Subsidiaries shall
take any corporate action to authorize any of the actions set forth above in
this subsection (f); or

 

(h)                                 any judgments or
orders, either individually or in the aggregate, for the payment of money in
excess of $10,000,000 (to the extent not fully paid or discharged) shall be
rendered against any Loan Party or any of its Subsidiaries and either
(i) enforcement proceedings shall have been commenced by any creditor upon
such judgment or order and a stay of which proceedings has not been imposed within
30 days after the commencement thereof, or (ii) there shall be any
period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or

 

(i)                                     any non-monetary
judgment or order shall be rendered against any Loan Party or any of its
Subsidiaries that could reasonably be likely to have a Material Adverse Effect,
and there shall be any period of 30 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or

 

(j)                                     any provision of
any Loan Document after delivery thereof pursuant to Section 3.01 or
5.01(j) or (k) shall for any reason cease to be valid and binding on or
enforceable against any Loan Party to it, or any such Loan Party shall so state
in writing; or

 

(k)                                  any Collateral
Document or financing statement, after delivery thereof pursuant to
Section 3.01 or 5.01(j) or (k), shall for any reason (other than pursuant
to the terms thereof) cease to create a valid and perfected first priority lien
on and security interest in the Collateral purported to be covered thereby; or

 

(l)                                     a Change of
Control shall occur; or

 

(m)                               any ERISA Event shall
have occurred with respect to a Plan and the sum (determined as of the date of
occurrence of such ERISA Event) of the Insufficiency of such Plan and the
Insufficiency of any and all other Plans with respect to which an ERISA Event
shall have occurred and then exist (or the liability of the Loan Parties and
the ERISA Affiliates related to such ERISA Event) exceeds $5,000,000; or

 

(n)                                 any Loan Party or any
ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan
that it has incurred Withdrawal Liability to such Multiemployer Plan in an
amount that, when aggregated with all other amounts required to be paid to
Multiemployer Plans by the Loan

 

 

Parties and the ERISA
Affiliates as Withdrawal Liability (determined as of the date of such
notification), exceeds $5,000,000 or requires payments exceeding $1,000,000 per
annum; or

 

(o)                                 any Loan Party or any
ERISA Affiliate shall have been notified by the sponsor of a Multiemployer Plan
that such Multiemployer Plan is in reorganization or is being terminated,
within the meaning of Title IV of ERISA, and as a result of such
reorganization or termination the aggregate annual contributions of the Loan
Parties and the ERISA Affiliates to all Multiemployer Plans that are then in
reorganization or being terminated have been or will be increased over the
amounts contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs by an amount exceeding $5,000,000;

 

then, and in any such event, the Administrative Agent
(i) shall at the request, or may with the consent, of the Required
Lenders, by notice to the Company, declare the Commitments of each Lender Party
and the obligation of each Lender to make Advances (other than Letter of Credit
Advances by the Issuing Bank or a Lender pursuant to Section 2.03(c)) and
of the Issuing Bank to issue Letters of Credit to be terminated, whereupon the
same shall forthwith terminate, and (ii) shall at the request, or may with
the consent, of the Required Lenders, (A) by notice to the Company, declare the
Advances, all interest thereon and all other amounts payable under this
Agreement, the Notes, if any, and the other Loan Documents to be forthwith due
and payable, whereupon the 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 each Borrower and (B) by notice to each party required under the terms of
any agreement in support of which a Standby Letter of Credit is issued, request
that all Obligations under such agreement be declared to be due and payable; provided,
however, that in the event of an actual or deemed entry of an order
for relief with respect to any Loan Party or any of its Subsidiaries under the
Federal Bankruptcy Code or any similar statute in effect in any Non-U.S.
jurisdiction applicable to any such Loan Party or Subsidiary, (x) the
Commitments of each Lender Party and the obligation of each Lender to make
Advances (other than Letter of Credit Advances by the Issuing Bank or a Lender
pursuant to Section 2.03(c)) and of the Issuing Bank to issue Letters of
Credit shall automatically be terminated and (y) the Advances, all such
interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by each Borrower.

 

SECTION 6.02  Actions in Respect of the Letters of
Credit upon Default.  If any Event
of Default shall have occurred and be continuing, the Administrative Agent may,
and upon the request of the Required Lenders shall, irrespective of whether it
is taking any of the actions described in Section 6.01 or otherwise, make
demand upon the Company to, and forthwith upon such demand the Company will,
pay to the Administrative Agent on behalf of the Lender Parties in same day
funds at the Administrative Agent’s office designated in such demand, for
deposit in the L/C Cash Collateral Account, an amount equal to the aggregate
Available Amount of all Letters of Credit then outstanding.  If at any time the Administrative Agent
determines that any funds held in the L/C Cash Collateral Account are subject
to any right or claim of any Person other than the Administrative Agent and the
Lender Parties or that the total amount of such funds is less than the
aggregate Available Amount of all Letters of Credit, the Company will,
forthwith upon demand by the Administrative Agent, pay to the Administrative
Agent, as additional funds to be deposited and held in the L/C Cash Collateral
Account, an amount equal to the excess of (a) such aggregate Available
Amount over (b) the total amount of funds, if any, then held in the L/C
Cash Collateral Account that the Administrative Agent determines to be free and
clear of any such right and claim.  Upon
the drawing of any Letter of Credit for which funds are on deposit in the L/C
Cash Collateral Account, such funds shall be applied to reimburse the Issuing
Bank or Lenders, as applicable, to the extent permitted by applicable law.

 

 

ARTICLE VII

 

GUARANTY

 

SECTION 7.01  Unconditional Guaranty.  For valuable consideration, receipt whereof
is hereby acknowledged, and to induce each Lender to make Advances to the
Designated Subsidiaries and to induce the Administrative Agent to act
hereunder, the Company hereby unconditionally and irrevocably guarantees to
each Lender and the Administrative Agent the punctual payment when due, whether
at stated maturity, by acceleration or otherwise, of all obligations of any
Designated Subsidiary now or hereafter existing under this Agreement, whether
for principal, interest, fees, expenses, post-petition interest, indemnities or
otherwise (such obligations being the “Obligations”).  Without limiting the generality of the foregoing, the Company’s
liability shall extend to all amounts that constitute part of the Obligations
and would be owed by any Designated Subsidiary to the Administrative Agent or
any other Lender under this Agreement but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving any Designated Subsidiary.

 

SECTION 7.02  Guaranty Absolute.  The Company guarantees that the Obligations
will be paid strictly in accordance with the terms of this Agreement,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of any Lender or the
Administrative Agent with respect thereto. 
The obligations of the Company under this Article VII are
independent of the Obligations, and a separate action or actions may be brought
and prosecuted against the Company to enforce this Article VII,
irrespective of whether any action is brought against any Designated Subsidiary
or whether any Designated Subsidiary is joined in any such action or
actions.  The liability of the Company
under this guaranty shall be irrevocable, absolute and unconditional,
irrespective of, and the Company hereby irrevocably waives any defenses it may
now or hereafter have in any way relating to, any or all of the following:

 

(a)                                  any lack of validity
or enforceability of this Agreement or any other agreement or instrument
relating thereto;

 

(b)                                 any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Obligations, or any other amendment or waiver of or any consent to departure
from this Agreement;

 

(c)                                  any taking, exchange,
release or non-perfection of any collateral or any taking, release or amendment
or waiver of or consent to departure from any other guaranty, for all or any of
the Obligations;

 

(d)                                 any change,
restructuring or termination of the corporate structure or existence of any
Designated Subsidiary; or

 

(e)                                  any setoff or
counterclaim of any Designated Subsidiary or any defense which results from any
disability or other defense of a Designated Subsidiary or the cessation or stay
of enforcement from any cause whatsoever of the liability of a Designated
Subsidiary (including, without limitation, the lack of validity or
enforceability of any of the Loan Documents);

 

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

 

(g)                                 any statute of
limitations to the extent permitted by law;

 

 

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

 

(i)                                     the absence,
impairment or loss of any right of subrogation, reimbursement, exoneration,
contribution or indemnification or other right or remedy against a Designated
Subsidiary, any other guarantor of the Obligations or any security, whether
resulting from an election by the Administrative Agent or any Lender to
foreclose upon security by nonjudicial sale, or otherwise;

 

(j)                                     any other
circumstance which might otherwise constitute a defense available to, or a
discharge of, the Company, any Designated Subsidiary or a guarantor, other than
payment in full of a guaranteed obligation (except as provided for in the
immediately succeeding sentence).

 

This guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the
Obligations is rescinded or must otherwise be returned by any of the Lenders or
the Administrative Agent upon the insolvency, bankruptcy or reorganization of
any Designated Subsidiary or otherwise, all as though such payment had not been
made.

 

SECTION 7.03  Waivers and Acknowledgments.  (a)  The Company hereby expressly
waives promptness, diligence, notice of acceptance, presentment, demand for
payment, protest, any requirement that any right or power be exhausted or any
action be taken against any Designated Subsidiary or against any other
guarantor of all or any portion of the Advances, and all other notices and
demands whatsoever.

 

(b)                                 The Company hereby
waives any right to revoke this guaranty, and acknowledges that this guaranty
is continuing in nature and applies to all Obligations, whether existing now or
in the future.

 

(c)                                  The Company hereby
waives any right to be informed by the Administrative Agent or any Lender of
the financial condition of any Designated Subsidiary or any other guarantor of
the Obligations or any change therein or any other circumstances bearing upon
the risk of nonpayment or nonperformance of the Obligations.

 

(d)                                 The Company hereby
waives any right it may have to a fair value hearing to determine the size of a
deficiency judgment following any foreclosure on any security for the
Obligations.

 

(e)                                  Without limiting the
scope of any of the foregoing provisions of the Section 7.03, the Company
hereby further waives (i) all rights and defenses arising out of an election of
remedies by Agent or any Lender, even though that election of remedies, such as
a nonjudicial foreclosure with respect to security for any Obligation, has
destroyed the Company’s rights of subrogation and reimbursements against any
Designated Subsidiary by the operation of Section 580d of the California
Code of Civil Procedure or otherwise, (ii) all rights and defenses the Company
may have by reason of protection afforded to any Designated Subsidiary with
respect to the Obligations pursuant to the antideficiency or other laws of
California limiting or discharging the Obligations, including, without
limitation, Section 580a, 580b, 580d or 726 of the California Code of
Civil Procedure, and (III) all other rights and defenses available to the
Company by reason of Sections 2787 to 2855, inclusive, Section 2899 or
Section 3433 of the California Civil Code or Section 3605 of the
California Commercial Code.

 

(f)                                    The Company is
fully aware of the financial condition and affairs of each Designated
Subsidiary.  The Company has executed
this Agreement without reliance upon any representation, warranty, statement or
information concerning any Designated Subsidiary furnished to the Company by
the Administrative Agent or any Lender and has, independently, and without
reliance on the

 

 

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

 

(g)                                 The Company
acknowledges that it will receive substantial direct and indirect benefits from
the financing arrangements contemplated herein and that the waivers set forth
in this Article VII are knowingly made in contemplation of such benefits.

 

SECTION 7.04  Subrogation.  The Company will not exercise any rights
that it may now or hereafter acquire against any Designated Subsidiary or any
other insider guarantor that arise from the existence, payment, performance or
enforcement of the Obligations under this Agreement, including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution
or indemnification and any right to participate in any claim or remedy of the
Administrative Agent or any other Lender against a Designated Subsidiary or any
other insider guarantor or any collateral, whether or not such claim, remedy or
right arises in equity or under contract, statute or common law, including,
without limitation, the right to take or receive from a Designated Subsidiary
or any other insider guarantor, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account
of such claim, remedy or right, unless and until all of the Obligations and all
other amounts payable under this guaranty shall have been paid in full in cash
and the Commitments shall have expired or terminated.  If any amount shall be paid to the Company in violation of the
preceding sentence at any time prior to the later of the payment in full in
cash of the Obligations and all other amounts payable under this guaranty and
the Termination Date, such amount shall be held in trust for the benefit of the
Administrative Agent and the other Lenders and shall forthwith be paid to the
Administrative Agent to be credited and applied to the Obligations and all
other amounts payable under this guaranty, whether matured or unmatured, in
accordance with the terms of this Agreement, or to be held as collateral for
any Obligations or other amounts payable under this guaranty thereafter
arising.  If (i) the Company shall make
payment to the Administrative Agent or any other Lender of all or any part of
the Obligations, (ii) all the Obligations and all other amounts payable under
this guaranty shall be paid in full in cash and (iii) the Termination Date
shall have occurred, the Administrative Agent and the other Lenders will, at
the Company’s request and expense, execute and deliver to the Company
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to the Company of an interest
in the Obligations resulting from such payment by the Company.  The Company acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by this Agreement and that the waiver set forth in this
section is knowingly made in contemplation on such benefits.

 

SECTION 7.05  Subordination.  The Company hereby subordinates any and all
debts, liabilities and obligations owed to the Company by each Designated
Subsidiary (the “Subordinated
Obligations”) to the Obligations as provided in this
Section 7.05.

 

(a)                                  Prohibited
Payments.  Except during the continuance
of a Default the Company may receive regularly scheduled payments from each
Designated Subsidiary on account of Subordinated Obligations, as otherwise
permitted by Section 5.02.  After
the occurrence and during the continuance of any Default, however, unless the
Administrative Agent otherwise agrees, the Company shall not demand, accept or
take any action to collect payment on account of the Subordinated Obligations.

 

 

(b)                                 Prior Payment of
Obligations.  In any bankruptcy or
similar proceeding relating to any Designated Subsidiary, the Company agrees
that the Administrative Agent and the Lenders shall be entitled to receive
payment of all Obligations (including any and all interest and expenses
accruing after the commencement of such proceedings) before the Company
receives payment of any Subordinated Obligations.

 

(c)                                  Turn Over.  After the occurrence and during the
continuance of any Default (including the commencement and continuation of any
bankruptcy proceeding relating to any Designated Subsidiary), the Company
shall, if the Administrative Agent so requests, collect, enforce and receive
payments on account of the Subordinated Obligations as trustee for the
Administrative Agent and the Lenders and deliver such payments to the
Administrative Agent’s on account of the Obligations (including any and all
interest and expenses accruing after the commencement of the proceedings),
together with any necessary endorsements or other instruments of transfer, but
without reducing or affecting in any manner the liability of the Company under
the other provisions of the Guaranty in this Article VII.

 

(d)                                 Administrative
Agent Authorization.  After the
occurrence and during the continuance of any Default, the Administrative Agent
is authorized and empowered (but without any obligation to do so), in its
discretion, (i) in the name of the Company to collect and enforce, and to
submit claims in respect of, Subordinated Obligations and to apply any amount
received thereon to the Obligations (including any and all Interest and
Expenses accruing after the commencement of such proceedings), and (ii) to
require the Company (A) to collect and enforce, and to submit claims in respect
of, Subordinated Obligations and (B) to pay any amounts received on such
obligations to the Administrative Agent for application to the Obligations
(including any and all Interest and Expenses accruing after the commencement of
such proceedings).

 

SECTION 7.06  Survival.  This guaranty is a continuing guaranty and shall (a) remain
in full force and effect until payment in full (after the Termination Date) of
the Obligations and all other amounts payable under this guaranty, (b) be
binding upon the Company, its successors and assigns, (c) inure to the benefit
of and be enforceable by each Lender (including each assignee Lender pursuant
to Section 9.07) and the Administrative Agent and their respective
successors, transferees and assigns and (d) shall be reinstated if at any time
any payment to a Lender or the Administrative Agent hereunder is required to be
restored by such Lender or the Administrative Agent.  Without limiting the generality of the foregoing clause (c), each
Lender may assign or otherwise transfer its interest in any Advance to any
other person or entity, and such other person or entity shall thereupon become
vested with all the rights in respect thereof granted to such Lender herein or
otherwise.

 

ARTICLE VIII

 

THE AGENTS

 

SECTION 8.01  Authorization and Action.  Each Lender Party (in its capacities as a
Lender and the Issuing Bank (if applicable)) hereby appoints and authorizes the
Administrative Agent to execute and deliver the Collateral Documents (subject
to section 9.01) for the purpose of creating a security interest for the
benefit of each Lender Party and to take such action as agent on its behalf and
to exercise such powers and discretion under this Agreement and the other Loan
Documents as are delegated to the Administrative Agent by the terms hereof and
thereof, together with such powers and discretion as are reasonably incidental
thereto.  As to any matters not
expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of the Debt resulting from the Advances), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall
be fully protected in so acting or refraining from acting)

 

 

upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lender
Parties and all holders of Notes; provided, however, that the Administrative
Agent shall not be required to take any action that exposes the Administrative
Agent to personal liability or that is contrary to this Agreement or applicable
law.  The Administrative Agent agrees to
give to each Lender Party prompt notice of each notice given to it by the
Company pursuant to the terms of this Agreement.

 

SECTION 8.02  Agents’ Reliance, Etc.  No Agent nor any of its directors, officers,
agents or employees shall be liable for any action taken or omitted to be taken
by it or them under or in connection with the Loan Documents, except for its or
their own gross negligence or willful misconduct.  Without limitation of the generality of the foregoing, the
Agents:  (a) may treat the Lender
that made any Advance as the holder of the Debt resulting therefrom until such
Agent receives and accepts an Assignment and Acceptance entered into by such
Lender, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 9.07; (b) may consult with legal counsel (including counsel
for any Loan Party), independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any Lender Party and
shall not be responsible to any Lender Party for any statements, warranties or
representations (whether written or oral) made in or in connection with the
Loan Documents; (d) shall not have any duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or conditions
of any Loan Document on the part of any Loan Party or to inspect the property
(including the books and records) of any Loan Party; (e) shall not be
responsible to any Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; and (f) shall incur no liability
under or in respect of any Loan Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopy) believed
by it to be genuine and signed or sent by the proper party or parties.

 

SECTION 8.03  BNP Paribas and Affiliates.  With respect to its Commitments, the
Advances made by it and any Notes issued to it, BNP Paribas shall have the same
rights and powers under the Loan Documents as any other Lender Party and may
exercise the same as though it were not an Agent; and the term “Lender Party”
or “Lenders Parties” shall, unless otherwise expressly indicated, include BNP
Paribas in its individual capacity.  BNP
Paribas and its affiliates may accept deposits from, lend money to, act as
trustee under indentures of, accept investment banking engagements from and generally
engage in any kind of business with, any Loan Party, any of its Subsidiaries
and any Person who may do business with or own securities of any Loan Party or
any such Subsidiary, all as if BNP Paribas were not an Agent and without any
duty to account therefor to the Lender Parties.

 

SECTION 8.04  Lender Party Credit Decision.  Each Lender Party acknowledges that it has,
independently and without reliance upon any Agent or any other Lender Party and
based on the financial statements referred to in Section 4.01 and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement.  Each Lender Party also acknowledges that it
will, independently and without reliance upon any Agent or any other Lender
Party and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement.

 

SECTION 8.05  Indemnification.  (a)  Each Lender Party (other than
the Designated Bidders) severally agrees to indemnify each Agent (to the extent
not promptly reimbursed by the Borrowers) from and against such Lender Party’s
ratable share (determined as provided below) of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including, without
limitation, reasonable fees and expenses of counsel) that may be imposed on,
incurred by, or asserted against such Agent in any way

 

 

relating to or arising
out of the Loan Documents or any action taken or omitted by such Agent under
the Loan Documents (collectively the “Indemnified Costs”); provided, however, that no Lender Party
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Agent’s gross negligence or willful misconduct as found in
a final, non-appealable judgment by a court of competent jurisdiction.  Without limitation of the foregoing, each
Lender Party (other than the Designated Bidders) agrees to reimburse such Agent
promptly upon demand for its ratable share of any costs and expenses
(including, without limitation, fees and expenses of counsel) payable by the
Borrowers under Section 9.04, to the extent that such Agent is not
promptly reimbursed for such costs and expenses by the Borrower.

 

(b)                                 Each Lender (other
than the Designated Bidders) severally agrees to indemnify the Issuing Bank (to
the extent not promptly reimbursed by the Borrowers) from and against such
Lender’s ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever that
may be imposed on, incurred by, or asserted against the Issuing Bank in any way
relating to or arising out of the Loan Documents or any action taken or omitted
by the Issuing Bank under the Loan Documents; provided, however, that no
Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Issuing Bank’s gross negligence or willful
misconduct as found in a final, non-appealable judgment by a court of competent
jurisdiction.  Without limitation of the
foregoing, each Lender (other than the Designated Bidders) agrees to reimburse
the Issuing Bank promptly upon demand for its ratable share of any costs and
expenses (including, without limitation, fees and expenses of counsel) payable
by the Borrowers under Section 9.04, to the extent that the Issuing Bank
is not promptly reimbursed for such costs and expenses by the Borrowers.

 

(c)                                  For purposes of this
Section 8.05, the Lender Parties’ respective ratable shares of any amount
shall be determined, at any time, according to the sum of (i) the
aggregate principal amount of the Revolving Credit Advances and Letter of
Credit Advances outstanding at such time and owing to the respective Lender
Parties, (ii) their respective Pro Rata Shares of the aggregate Available
Amount of all Letters of Credit outstanding at such time and (iii) their
respective Unused Commitments at such time; provided that the aggregate principal
amount of Letter of Credit Advances owing to the Issuing Bank shall be
considered to be owed to the Lenders ratably in accordance with their
respective Commitments at such time.  In
the case of any investigation, litigation or proceeding giving rise to any
Indemnified Costs, this Section 8.05 applies whether any such
investigation, litigation or proceeding is brought by any Agent, any Lender,
any other Lender Party or a third party. 
The failure of any Lender Party (other than the Designated Bidders) to
reimburse any Agent or the Issuing Bank, as the case may be, promptly upon
demand for its ratable share of any amount required to be paid by the Lender
Parties to any Agent or the Issuing Bank, as the case may be, as provided
herein shall not relieve any other Lender Party of its obligation hereunder to
reimburse any Agent or the Issuing Bank, as the case may be, for its ratable
share of such amount, but no Lender Party shall be responsible for the failure
of any other Lender Party to reimburse any Agent or the Issuing Bank, as the case
may be, for such other Lender Party’s ratable share of such amount.  Without prejudice to the survival of any
other agreement of any Lender Party hereunder, the agreement and obligations of
each Lender Party contained in this Section 8.05 shall survive the payment
in full of principal, interest and all other amounts payable hereunder and
under the other Loan Documents.

 

SECTION 8.06  Successor Agents.  Any Agent may resign at any time by giving
written notice thereof to the Lender Parties and the Company and may be removed
at any time with or without cause by the Required Lenders.  Upon any such resignation or removal by the
Administrative Agent, the Required Lenders shall have the right to appoint a
successor Administrative Agent.  If no
successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted

 

 

such appointment, within
30 days after the retiring Administrative Agent’s giving of notice of
resignation or the Required Lenders’ removal of the retiring Administrative
Agent, then the retiring Administrative Agent may, on behalf of the Lender
Parties, appoint a successor Administrative Agent, which shall be a commercial
bank organized under the laws of the United States or of any State thereof and
having a combined capital and surplus of at least $250,000,000.  Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent and upon the
execution and filing or recording of such financing statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable, or as the Required Lenders may request, in order to continue the
perfection of the Liens granted or purported to be granted by the Collateral
Documents, such successor Administrative Agent shall succeed to and become
vested with all the rights, powers, discretion, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under the Loan Documents.  If within 45 days after written notice is
given of the retiring Administrative Agent’s resignation or removal under this
Section 8.06 no successor Administrative Agent shall have been appointed
and shall have accepted such appointment, then on such 45th day (i)
the retiring Administrative Agent’s resignation or removal shall become
effective, (ii) the retiring Administrative Agent shall thereupon be discharged
from its duties and obligations under the Loan Documents and (iii) the Required
Lenders shall thereafter perform all duties of the retiring Administrative
Agent under the Loan Documents until such time, if any, as the Required Lenders
appoint a successor Administrative Agent as provided above.  After any retiring Administrative Agent’s
resignation or removal hereunder as Administrative Agent shall become
effective, the provisions of this Article VIII shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.

 

SECTION 8.07  Other Agents.  Each Lender Party hereby acknowledges that
neither the Documentation Agents, the Syndication Agents nor any other Lender
Party designated as any “Agent” on the signature pages hereof other than the
Administrative Agent has any responsibilities or liability hereunder other than
in its capacity as a Lender, the titles Documentation Agent and Syndication
Agent being purely honorary in nature.

 

ARTICLE IX

 

MISCELLANEOUS

 

SECTION 9.01  Amendments, Etc.  No amendment or waiver of any provision of
this Agreement or any Revolving Credit Notes or any other Loan Document, nor
consent to any departure by any Borrower or any other Loan Party therefrom,
shall in any event be effective unless the same shall be in writing and signed
(or consented to in writing) by the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided,
however, that (a) no amendment,
waiver or consent shall, unless in writing and signed by all of the Lenders
(other than the Designated Bidders), do any of the following at any time:  (i) waive any of the conditions specified in
Section 3.01, (ii) change the percentage of (x) the Commitments, (y) the
aggregate unpaid principal amount of the Revolving Credit Advances and Letter
of Credit Advances or (z) the aggregate Available Amount of outstanding Letters
of Credit that, in each case, shall be required for the Lenders or any of them
to take any action hereunder, (iii) release all or substantially all of the
Collateral in any transaction or series of related transactions or permit the
creation, incurrence, assumption or existence of any Lien on all or
substantially all of the Collateral in any transaction or series of related
transactions to secure any Obligations other than Obligations owing to the
Secured Parties under the Loan Documents or (iv) amend this Section 9.01
and (b) no amendment, waiver or consent shall, unless in writing and signed by
the Required Lenders and each Lender that is directly affected by such
amendment, waiver or consent, (i) increase the Commitments of such Lender or
amend Section 2.14 so as to subject such Lender to additional Obligations,
(ii) reduce the principal of, or interest on, the Revolving Credit

 

 

Advances or Letter of
Credit Advances payable to such Lender or any fees or other amounts payable to
such Lender, (iii) postpone any date scheduled for any payment of principal of,
or interest on, the Advances payable to such Lender pursuant to
Section 2.04 or Section 2.08 or any date fixed for payment of fees or
other amounts payable to such Lender or (v) change the order of application of
any prepayment set forth in Section 2.07 in any manner that materially
adversely affects such Lender; provided
further that no amendment, waiver
or consent shall, unless in writing and signed by the Issuing Bank, in addition
to the Lenders required above to take such action, affect the rights or
obligations of the Issuing Bank under this Agreement; and provided  further
that no amendment, waiver or consent shall, unless in writing and signed by
each affected Agent in addition to the Lenders required above to take such
action, affect the rights or duties of such Agent under this Agreement or the
other Loan Documents.

 

SECTION 9.02  Notices, Etc.  All notices and other communications
provided for hereunder shall be in writing (including telecopy communication)
and mailed, telecopied or delivered by an overnight courier of nationally
recognized standing, if to the Company or any other Loan Party, at the address
of the Company at 233 Kansas Street, El Segundo, California 90245,
Attention:  Treasury Department,
telecopier number (310) 726-8597 (with a
copy to the attention of General Counsel, telecopier number (310) 726-8484);
if to any Initial Lender or any Initial Issuing Bank, at its Domestic Lending
Office specified opposite its name on Schedule I hereto; if to any other
Lender Party, at its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Lender Party; and if to the
Administrative Agent, for any notice other than any Notice of Borrowing, at its
address at 1 Front Street, San Francisco, California 94111,  Attention: 
Tjalling Terpstra, telecopier
number (415) 296-8954 (with a copy, for any notice to the Administrative
Agent hereunder other than any Notice of Borrowing, to the attention of
Tjalling Terpstra, Director, telecopier number (213) 488-9602); or, as to each
party, at such other address as shall be designated by such party in a written
notice to the other parties.  All such
notices and communications shall, when mailed, telecopied or sent by courier,
be effective when deposited in the mails, transmitted by telecopier, or
delivered to the overnight courier, respectively, except that notices and
communications to any Agent pursuant to Article II, III or VIII shall not
be effective until received by such Agent. 
Delivery by telecopier of an executed counterpart of any amendment or
waiver of any provision of this Agreement or the Notes or of any Exhibit hereto
to be executed and delivered hereunder shall be effective as delivery of a
manually executed counterpart thereof.

 

SECTION 9.03  No Waiver; Remedies.  No failure on the part of any Lender Party
or any Agent to exercise, and no delay in exercising, any right hereunder or
under any 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 9.04  Costs and Expenses.  (a)  The Company agrees to pay on
demand (i) all costs and expenses of the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification and amendment of, the Loan Documents (including, without
limitation, (A) all due diligence, collateral review, syndication,
transportation, computer, duplication, appraisal, audit, insurance, consultant,
search, filing and recording fees and expenses and (B) the reasonable fees
and expenses of counsel for the Administrative Agent with respect thereto, with
respect to advising the Administrative Agent as to its rights and
responsibilities, or the perfection, protection or preservation of rights or
interests, under the Loan Documents, with respect to negotiations with any Loan
Party or with other creditors of any Loan Party or any of its Subsidiaries
arising out of any Default or any events or circumstances that may give rise to
a Default and with respect to presenting claims in or otherwise participating
in or monitoring any bankruptcy, insolvency or other similar proceeding
involving creditors’ rights generally and any proceeding ancillary thereto) and
(ii) all costs and expenses of the Agents and the Lender Parties in
connection with the enforcement of the Loan Documents, whether in any action,
suit or

 

 

litigation, any
bankruptcy, insolvency or other similar proceeding affecting creditors’ rights
generally (including, without limitation, the reasonable fees and expenses of
counsel for the Administrative Agent and each Lender Party with respect
thereto).

 

(b)                                 The Borrowers agree to
indemnify, defend and save and hold harmless each Agent, each Lender Party and
each of their 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
Facilities, the actual or proposed use of the proceeds of the Advances or the
Letters of Credit, the Loan Documents or any of the transactions contemplated
thereby or (ii) the actual or alleged presence of Hazardous Materials on
any property of any Loan Party or any of its Subsidiaries or any Environmental
Action relating in any way to any Loan Party or any of its Subsidiaries, except
to the extent such Liabilities, obligations, losses, damages, penalties,
actions, judgments, suits are found in a final, non-appealable judgment by a
court of competent jurisdiction to have 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 9.04(b) applies, such indemnity shall be
effective whether or not such investigation, litigation or proceeding is
brought by any Loan Party, its directors, shareholders or creditors or an
Indemnified Party or any other Person, whether or not any Indemnified Party is
otherwise a party thereto and whether or not the Transaction is
consummated.  Each Borrower also agrees
not to assert any claim against any Agent, any Lender Party or any of their
Affiliates, or any of their respective officers, directors, employees, agents
and advisors, on any theory of liability, for special, indirect, consequential
or punitive damages arising out of or otherwise relating to the Facilities, the
actual or proposed use of the proceeds of the Advances or the Letters of
Credit, the Loan Documents or any of the transactions contemplated thereby.

 

(c)                                  If any payment of
principal of, or Conversion of, any Eurocurrency Rate Advances, LIBO Rate
Advance or Local Rate Advances is made by any Borrower to or for the account of
a Lender Party other than on the last day of the Interest Period for such
Advance, as a result of a payment or Conversion pursuant to Section 2.07,
2.10(b)(i) or 2.11(d), acceleration of the maturity of the Advances pursuant to
Section 6.01 or for any other reason or by an Eligible Assignee to a
Lender Party other than on the last day of the Interest Period for such Advance
upon an assignment of rights and obligations under this Agreement pursuant to
Section 9.07 as a result of a demand by the Company pursuant to
Section 9.07(a), such Borrower shall, upon demand by such Lender Party
(with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender Party any amounts required
to compensate such Lender Party for any additional losses, costs or expenses
that it may reasonably incur as a result of such payment, including, without
limitation, any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other
funds acquired by any Lender Party to fund or maintain such Advance.

 

(d)                                 If any Loan Party
fails to pay when due any costs, expenses or other amounts payable by it under
any Loan Document, including, without limitation, fees and expenses of counsel
and indemnities, such amount may be paid on behalf of such Loan Party by the
Administrative Agent or any Lender Party, in its sole discretion.

 

(e)                                  Without prejudice to
the survival of any other agreement of any Loan Party hereunder or under any
other Loan Document, the agreements and obligations of the Borrowers contained
in Sections 2.11 and 2.13 and this Section 9.04 shall survive the
payment in full of principal, interest and all other amounts payable hereunder
and under any of the other Loan Documents.

 

 

SECTION 9.05  Right of Set-off.  Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or
the granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Advances due and payable pursuant to the
provisions of Section 6.01, each Lender Party and each of its respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and otherwise 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 such Lender Party or such
Affiliate to or for the credit or the account of any Borrower against any and
all of the Obligations of such Borrower now or hereafter existing under this
Agreement and the Note or Notes (if any) held by such Lender Party,
irrespective of whether such Lender Party shall have made any demand under this
Agreement or such Note or Notes and although such Obligations may be
unmatured.  Each Agent and each Lender
Party agrees promptly to notify such Borrower after any such set-off and
application; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application.  The rights of each Lender Party and its
respective Affiliates under this Section are in addition to other rights
and remedies (including, without limitation, other rights of set-off) that such
Lender Party and its respective Affiliates may have.

 

SECTION 9.06  Binding Effect.  This Agreement shall become effective (other
than Section 2.01, 2.03 and 2.04, 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 Company and the Administrative Agent and
when the Administrative Agent shall have been notified by each Initial Lender
and the Initial Issuing Bank that such Initial Lender and the Initial Issuing
Bank has executed it and thereafter shall be binding upon and inure to the
benefit of the Company, the Administrative Agent and each Lender Party and
their respective successors and assigns, except that the Company shall not have
the right to assign its rights hereunder or any interest herein (other than in
pursuant to a Designation Letter) without the prior written consent of the
Lender Parties.

 

SECTION 9.07  Assignments, Designations and
Participations.  (a)  Each
Lender (other than the Designated Bidders) may and, so long as no Default has
occurred and is continuing, if demanded by the Company (following a demand by
such Lender pursuant to Section 2.11 or 2.13) shall upon at least 5
Business Days’ notice to such Lender and the Administrative Agent, assign to
one or more Eligible Assignees all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment or Commitments, the Revolving Credit Advances owing to it and any Revolving
Credit Note or Notes held by it); provided, however, that (i) each such
assignment shall be of a uniform, and not a varying, percentage of all rights
and obligations under this Agreement (other than any right to make Competitive
Bid Advances, Competitive Bid Advances owing to it and Competitive Bid Notes),
(ii) except in the case of an assignment to a Person that, immediately
prior to such assignment, was a Lender, an Affiliate of any Lender or an
Approved Fund of any Lender or an assignment of all of a Lender’s rights and
obligations under this Agreement, the aggregate amount of the Commitments being
assigned to such Eligible Assignee pursuant to such assignment (determined as
of the date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than $5,000,000 (or such lesser amount as shall be
approved by the Company and the Administrative Agent) and shall be in an
integral multiple of $500,000, (iii) each such assignment shall be to an
Eligible Assignee, (iv) each such assignment made as a result of a demand by
the Company pursuant to this Section 9.07(a) shall be arranged by the
Company after consultation with the Administrative Agent and shall be either an
assignment of all of the rights and obligations of the assigning Lender under
this Agreement or an assignment of a portion of such rights and obligations
made concurrently with another such assignment or other such assignments that
together cover all of the rights and obligations of the assigning Lender under this
Agreement, (v) no Lender shall be obligated to make any such assignment as
a result of a demand by the Company pursuant to this Section 9.07(a)
unless and until such Lender shall have received one or more payments from
either the Company or one or more Eligible Assignees in an aggregate amount at
least equal to the aggregate outstanding principal amount of the Advances owing
to

 

 

such Lender, together
with accrued interest thereon to the date of payment of such principal amount
and all other amounts payable to such Lender under this Agreement, (vi) no such
assignment shall be permitted without the consent of the Administrative Agent
(such consent not to be unreasonably withheld), (vii) unless a Default has
occurred and is continuing at the time any assignment is effected, no such
assignment to any Eligible Assignee referred to in clauses (iii) through (vi)
of the definition thereof or to an Approved Fund of any Lender referred to in
clause (ii) of the definition thereof shall be permitted without the consent of
the Company (such consent not to be unreasonably withheld), and (viii) the
parties to each such assignment shall execute and deliver to the Administrative
Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance, together with any Revolving Credit Note or Notes subject to such
assignment and a processing and recordation fee of $3,500.

 

(b)                                 Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in such Assignment and Acceptance, (x) the assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender or Issuing Bank, as the case may be, hereunder and
(y) the Lender or Issuing Bank assignor thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender’s or Issuing Bank’s rights
and obligations under this Agreement, such Lender or Issuing Bank shall cease
to be a party hereto).

 

(c)                                  By executing and
delivering an Assignment and Acceptance, each Lender Party assignor thereunder
and each assignee thereunder confirm to and agree with each other and the other
parties thereto and hereto as follows: 
(i) other than as provided in such Assignment and Acceptance, such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or any other Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, this Agreement
or any other Loan Document or any other instrument or document furnished
pursuant hereto or thereto; (ii) such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Company or any other Loan Party or the performance
or observance by any Loan Party of any of its obligations under any Loan
Document or any other instrument or document furnished pursuant thereto;
(iii) such assignee confirms that it has received a copy of this
Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Administrative Agent, such assigning Lender Party or
any other Lender Party and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in taking
or not taking action under this Agreement; (v) such assignee confirms that
it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Loan Documents as are delegated to the
Administrative Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed
by it as a Lender or Issuing Bank, as the case may be.

 

(d)                                 Upon its receipt of an
Assignment and Acceptance executed by an assigning Lender Party and an
assignee, together with any Revolving Credit Note or Notes requested by the
Assignee subject to such assignment, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form
of Exhibit C hereto, (i) accept such Assignment and

 

 

Acceptance,
(ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Company.

 

(e)                                  Each Lender (other
than the Designated Bidders) may designate one or more banks or other entities
to have a right to make Competitive Bid Advances as a Lender pursuant to
Section 2.04; provided, however, that (i) no such Lender
shall be entitled to make more than two (2) such designations, (ii) each
such Lender making one or more of such designations shall retain the right to
make Competitive Bid Advances as a Lender pursuant to Section 2.04,
(iii) each such designation shall be to a Designated Bidder and
(iv) the parties to each such designation shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, a
Designation Agreement.  Upon such
execution, delivery, acceptance and recording, from and after the effective
date specified in each Designation Agreement, the designee thereunder shall be
a party hereto with a right to make Competitive Bid Advances as a Lender
pursuant to Section 2.04 and the obligations related thereto.

 

(f)                                    By executing and
delivering a Designation Agreement, the Lender making the designation
thereunder and its designee thereunder confirm and agree with each other and
the other parties hereto as follows: 
(i) such Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to
be created under or in connection with, this Agreement or any other instrument
or document furnished pursuant hereto; (ii) such Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Company or the performance or observance by any
Borrower of any of its Obligations under this Agreement or any other instrument
or document furnished pursuant hereto; (iii) such designee confirms that
it has received a copy of this Agreement, together with copies of the financial
statements referred to in Section 4.01 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Designation Agreement; (iv) such designee
will, independently and without reliance upon the Administrative Agent, such
designating Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement;
(v) such designee confirms that it is a Designated Bidder; (vi) such
designee appoints and authorizes the Administrative Agent to take such action
as agent on its behalf and to exercise such powers and discretion under this
Agreement as are delegated to the Administrative Agent by the terms hereof,
together with such powers and discretion as are reasonably incidental thereto;
and (vii) such designee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.

 

(g)                                 Upon its receipt of a
Designation Agreement executed by a designating Lender and a designee
representing that it is a Designated Bidder, the Administrative Agent shall, if
such Designation Agreement has been completed and is substantially in the form
of Exhibit D-2 hereto, (i) accept such Designation Agreement,
(ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Company.

 

(h)                                 The Administrative
Agent shall maintain at its address referred to in Section 9.02 a copy of
each Assignment and Acceptance and each Designation Agreement delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lender Parties and, with respect to Lenders other than Designated Bidders,
the Commitment of, and principal amount of the Advances owing to, each Lender
Party from time to time (the “Register”).  The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Company, the Administrative Agent and the Lender Parties may treat each Person
whose name is recorded in the Register as a Lender

 

 

Party hereunder for all purposes of this Agreement.  The Register shall be available for
inspection by the Company or any Lender Party at any reasonable time and from
time to time upon reasonable prior notice.

 

(i)                                     Each Lender Party
may sell participations in or to all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitments, the Advances owing to it and any Note or Notes held by it) to any
Person other than any Loan Party or any of its Subsidiaries or Affiliates; provided,
however, that (i) such Lender Party’s obligations under this
Agreement (including, without limitation, its Commitments) shall remain
unchanged, (ii) such Lender Party shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) such
Lender Party shall remain the holder of such Advances and any such Note for all
purposes of this Agreement, (iv) each Borrower, each Agent and the other Lender
Parties shall continue to deal solely and directly with such Lender Party in
connection with such Lender Party’s rights and obligations under this Agreement
and (v) no participant under any such participation shall have any right to
approve any amendment or waiver of any provision of any Loan Document, or any
consent to any departure by any Loan Party therefrom, except to the extent that
such amendment, waiver or consent would reduce the principal of, or interest
on, the Advances or any fees or other amounts payable hereunder, in each case
to the extent subject to such participation, postpone any date fixed for any
payment of principal of, or interest on, the Advances or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, or release all or substantially all of the Collateral.

 

(j)                                     Any Lender Party
may, in connection with any assignment, designation or participation or
proposed assignment, designation or participation pursuant to this
Section 9.07, disclose to the assignee, designee or participant or
proposed assignee, designee or participant, any information relating to the
Company furnished to such Lender Party by or on behalf of the Company.

 

(k)                                  Notwithstanding any
other provision set forth in this Agreement, any Lender Party may at any time
create a security interest in all or any portion of its rights under this
Agreement (including, without limitation, the Advances owing to it and any Note
or Notes held by it) in favor of any Federal Reserve Bank in accordance with
Regulation A of the Board of Governors of the Federal Reserve System.

 

SECTION 9.08  Confidentiality.  Neither any Agent nor any Lender Party shall
disclose any Confidential Information to any Person without the consent of the
Company, other than (a) to such Agent’s or such Lender Party’s Affiliates
and Approved Funds and their officers, directors, employees, agents and
advisors and to actual or prospective Eligible Assignees and Participants (who
shall be bound by this provision as though a Lender Party), and then only on a
confidential basis, (b) as required by any law, rule or regulation or judicial
process, (c) as requested or required by any state, Federal or foreign authority
or examiner regulating such Lender Party and (d) to any rating agency when
required by it, provided that, prior to such disclosure, such rating agency
shall undertake to preserve the confidentiality of any Confidential Information
relating to the Loan Parties received by it from such Lender Party.  Notwithstanding
anything herein to the contrary, the Borrowers, each Lender and the Agent 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 provided to a Borrower, a
Lender or the Agent, as the case may be, relating to such U.S. tax treatment
and tax structure.  Without limitation
of the foregoing, each Agent and each Lender Party shall only use Confidential
Information for purposes of administration of the credit facilities provided
pursuant to this Agreement and in no event shall any Agent or Lender Party use
Confidential Information, or share it with any other Person, for the purpose of
trading in securities.

 

SECTION 9.09  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 by fax of an
executed counterpart of a signature page to this Agreement shall be effective as
delivery of an original executed counterpart of this Agreement.

 

SECTION 9.10  No Liability of the Issuing Bank.  The Borrower requesting any Letter of Credit
assumes all risks of the acts or omissions of any beneficiary or transferee of
such Letter of Credit with respect to its use of such Letter of Credit.  Neither the Issuing Bank nor any of its
officers or directors shall be liable or responsible for:  (a) the use that may be made of any
Letter of Credit or any acts or omissions of any beneficiary or transferee in
connection therewith; (b) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents should prove
to be in any or all respects invalid, insufficient, fraudulent or forged;
(c) payment by the Issuing Bank against presentation of documents that do
not comply with the terms of a Letter of Credit, including failure of any
documents to bear any reference or adequate reference to the Letter of Credit;
or (d) any other circumstances whatsoever in making or failing to make
payment under any Letter of Credit, except that such Borrower shall have a
claim against the Issuing Bank, and the Issuing Bank shall be liable to such
Borrower,  to the extent of any direct,
but not consequential, damages suffered by such Borrower that such Borrower
proves were caused by (i) the Issuing Bank’s willful misconduct or gross
negligence as determined in a final, non-appealable judgment by a court of
competent jurisdiction in determining whether documents presented under any
Letter of Credit comply with the terms of the Letter of Credit or (ii) the
Issuing Bank’s willful failure to make lawful payment under a Letter of Credit
after the presentation to it of a draft and certificates strictly complying
with the terms and conditions of the Letter of Credit. In furtherance and not
in limitation of the foregoing, the Issuing Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.

 

SECTION 9.11  Designated Subsidiaries.  (a)  Designation.  The Company may at any time, and from time
to time, by delivery to the Administrative Agent of a Designation Letter duly
executed by the Company and the respective Subsidiary and substantially in the
form of Exhibit D hereto, designate such Subsidiary as a “Designated
Subsidiary” for purposes of this Agreement and such Subsidiary shall thereupon
become a “Designated Subsidiary” for purposes of this Agreement and, as such,
shall have all of the rights and obligations of a Borrower hereunder.  The Administrative Agent shall promptly
notify each Lender of each such designation by the Company and the identity of
the respective Subsidiary.

 

(b)                                 Termination.  Upon the payment and performance in full of
all of the indebtedness, liabilities and obligations under this Agreement and
the Notes of any Designated Subsidiary then, so long as at the time no Notice
of Revolving Credit Borrowing or Notice of Competitive Bid Borrowing in respect
of such Designated Subsidiary is outstanding, such Subsidiary’s status as a
“Designated Subsidiary” shall terminate upon notice to such effect from the
Administrative Agent to the Lenders (which notice the Administrative Agent
shall give promptly, and only upon its receipt of a request therefor from the
Company).  Thereafter, the Lenders shall
be under no further obligation to make any Advance hereunder to such Designated
Subsidiary.

 

SECTION 9.12  Jurisdiction, Etc.  (a)  Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any California court or federal court of the
United States of America sitting in Los Angeles California, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement or any of the other Loan Documents to which it is a party, 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 California
court or, to the extent permitted by law, in such federal court.  Each of the parties hereto agrees that a
final judgment in any

 

 

such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.  Nothing in this Agreement shall affect any right that any party
may otherwise have to bring any action or proceeding relating to this Agreement
or any of the other Loan Documents 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 any of the other Loan Documents to which it is a
party in any California 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 9.13  Governing Law.  This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of
California.

 

SECTION 9.14  Judgment.  (a)  If for the purposes of obtaining judgment in any
court it is necessary to convert a sum due hereunder in Dollars into another
currency, the parties hereto agree, to the fullest extent that they may effectively
do so, that the rate of exchange used shall be that at which in accordance with
normal banking procedures the Administrative Agent could purchase Dollars with
such other currency at BNP Paribas’ principal office in London at 11:00 A.M.
(London time) on the Business Day preceding that on which final judgment is
given.

 

(b)                                 If for the purposes of
obtaining judgment in any court it is necessary to convert a sum due hereunder
in a Foreign Currency into Dollars, the parties agree to the fullest extent that
they may effectively do so, that the rate of exchange used shall be that at
which in accordance with normal banking procedures the Administrative Agent
could purchase such Foreign Currency with Dollars at BNP Paribas’ principal
office in London at 11:00 A.M. (London time) on the Business Day preceding that
on which final judgment is given.

 

(c)                                  The obligation of the
Borrowers in respect of any sum due from it in any currency (the “Primary Currency”) to any Lender Party or the
Administrative Agent hereunder shall, notwithstanding any judgment in any other
currency, be discharged only to the extent that on the Business Day following
receipt by such Lender Party or the Administrative Agent (as the case may be),
of any sum adjudged to be so due in such other currency, such Lender Party or
the Administrative Agent (as the case may be) may in accordance with normal
banking procedures purchase the applicable Primary Currency with such other
currency; if the amount of the applicable Primary Currency so purchased is less
than such sum due to such Lender Party or the Administrative Agent (as the case
may be) in the applicable Primary Currency, each Borrower agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify such Lender
Party or the Administrative Agent (as the case may be) against such loss, and
if the amount of the applicable Primary Currency so purchased exceeds such sum
due to any Lender Party or the Administrative Agent (as the case may be) in the
applicable Primary Currency, such Lender Party or the Administrative Agent (as
the case may be) agrees to remit to the applicable Borrower such excess.

 

SECTION 9.15  Substitution of Currency.  If a change in any Committed Currency or
Foreign Currency occurs pursuant to any applicable law, rule or regulation of
any governmental, monetary or multi-national authority, this Agreement
(including, without limitation, the definitions of Eurocurrency Rate and LIBO
Rate) will be amended to the extent determined by the Administrative Agent
(acting reasonably and in consultation with the Company) to be necessary to
reflect the change in currency and to put the Lender Parties and the Borrowers
in the same position, so far as possible, that they would have been in if no
change in such Committed Currency or Foreign Currency had occurred.

 

 

SECTION 9.16  Waiver of Jury Trial.  Each of the Loan Parties, each Agent and the
Lender Parties 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 any of the Loan Documents, the Advances, the
Letters of Credit or the actions of any Agent or any Lender Party in the
negotiation, administration, performance or enforcement thereof.

 

 

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.

 

	
   

  	
  Company

  
	
   

  	
   

  
	
   

  	
  INTERNATIONAL
  RECTIFIER CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

 

	
   

  	
  Sole Arranger, Administrative Agent and Initial

  Issuing Bank

  
	
   

  	
   

  
	
   

  	
  BNP
  PARIBAS

  as Sole Arranger, Administrative Agent and Initial

  Issuing Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Syndication
  Agents

  
	
   

  	
   

  
	
   

  	
  WELLS
  FARGO BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNION
  BANK OF CALIFORNIA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

 

	
   

  	
  Documentation Agents

  
	
   

  	
   

  
	
   

  	
  COMERICA BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FLEET
  BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

 

	
   

  	
  Initial Lenders

  
	
   

  	
   

  
	
   

  	
  BNP
  PARIBAS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COMERICA
  BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FLEET
  NATIONAL BANK

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HSBC
  BANK USA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MIZUHO
  CORPORATE BANK, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

 

 

	
   

  	
  THE
  NORTHERN TRUST COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNION
  BANK OF CALIFORNIA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WELLS
  FARGO BANK, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

 

Exhibit
E-1

 

SECURITY
AGREEMENT

 

SECURITY
AGREEMENT, dated as of November 7, 2003, made by the persons whose names
appear on the signature pages hereof as Grantors and Additional Grantors (as
defined in Section 14(c)(the “Grantors”, and each, individually, a “Grantor”), to BNP
PARIBAS, (“BNP Paribas”),
as administrative agent (together with any successor administrative agent
appointed pursuant to Article VIII of the Credit Agreement, (as defined
below) the “Agent”)
for the Secured Parties (as defined in the Credit Agreement).

 

PRELIMINARY STATEMENTS

 

(1)                                  International
Rectifier Corporation (the “Company”), is party to a Credit Agreement dated as of
November 7, 2003 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”; the capitalized terms defined therein
and not otherwise defined herein being used herein as therein defined) with the
Lender Parties party thereto, Wells Fargo Bank, N.A. and Union Bank of
California as Co-Syndication Agents, Comerica Bank and Fleet Bank as
Co-Documentation Agents, and BNP Paribas, as Sole Arranger, Administrative
Agent and Initial Issuing Bank.

 

(2)                                  Each
Grantor is the owner of the shares of stock or other ownership interests
(including, without limitation, interests arising as a member of a limited
liability company) set forth opposite such Grantor’s name and as otherwise
described in Schedule I hereto and issued by the corporations or other
entities indicated therein (collectively, the “Initial Pledged Shares”).

 

(3)                                  The
Company has opened a non-interest bearing cash collateral account with BNP
Paribas at its office at San Francisco, Account No. 00800-601507-001-44  (such account or such other account with BNP
Paribas as the Company may from time to time designate in accordance with this
Agreement, the “L/C Cash Collateral
Account”), in the name of the Company but under the sole control
and dominion of the Agent and subject to the terms of this Agreement.

 

(4)                                  It
is a condition precedent to the making of Advances by the Lenders and the
issuance of Letters of Credit by the Issuing Bank under the Credit Agreement,
that each of the Grantors shall have granted the assignment and security
interest and made the pledge and assignment contemplated by this Agreement.

 

(5)                                  Unless
otherwise defined in this Agreement or in the Credit Agreement, terms defined
in Article 8 or 9 of the Uniform Commercial Code in effect in the State of
California (“California Uniform
Commercial Code”) are used in this Agreement as such terms are
defined in such Article 8 or 9.

 

NOW,
THEREFORE, in consideration of the premises and in order to induce the

 

 

Lenders to make Advances
and the Issuing Bank to issue Letters of Credit under the Credit Agreement,
each of the Grantors hereby agrees with the Agent for its benefit and the
ratable benefit of the other Secured Parties as follows:

 

Section 1.                                            Grant of Security.  Each of the Grantors hereby assigns and pledges to the Agent for
its benefit and the ratable benefit of the other Secured Parties, and hereby
grants to the Agent for its benefit and the ratable benefit of the other
Secured Parties, a lien on and security interest in the following, in each
case, as to each type of property described below, whether now owned or
hereafter acquired by such Grantor, wherever located and whether now or
hereafter existing (collectively, the “Collateral”):

 

(a)                                  all
of such Grantor’s right, title and interest in and to all of the following
(collectively, the “Security Collateral”):

 

(i)                                     the
Initial Pledged Shares, together with the certificates representing such
Initial Pledged Shares, and all dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of such Initial Pledged Shares; and

 

(ii)                                  all
additional shares of stock or other ownership interests (including, without
limitation, interests arising as a member of a limited liability company) of
any issuer of any Initial Pledged Shares or of any Subsidiary that is, or
becomes after the date hereof, a Significant Subsidiary, from time to time
acquired by such Grantor in any manner, together with the certificates
representing such additional shares or ownership interests, and all dividends,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
shares or other ownership interests (together with the Initial Pledged Shares,
the “Pledged Shares”) provided,
however
that the Pledged Shares shall not include shares or other ownership interests
(or a portion thereof) of any issuer of Pledged Shares that is a Non-U.S.
Subsidiary to the extent that the inclusion of such shares or other ownership
interests (or portion thereof) would cause the shares or interests in such
issuer pledged hereunder to exceed 65% of the total of all shares or interests
in such issuer; and

 

(b)                                 all
of such Grantor’s right, title and interest in and to all of the following
(collectively, the “Account Collateral”):

 

(i)                                     the
L/C Cash Collateral Account;

 

(ii)                                  all
notes, certificates of deposit, deposit accounts, checks and other instruments
from time to time hereafter delivered to or otherwise possessed or required to
be delivered to or otherwise possessed, by the Agent for or on behalf of such
Grantor, including, without limitation, those delivered to or possessed in
substitution for or in addition to any or all of the then existing Account
Collateral; and

 

2

 

(iii)                               all interest, dividends,
distributions, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the then existing Account Collateral; and

 

(c)                                  all
proceeds of any and all of the foregoing Collateral (including, without
limitation, proceeds that constitute property of the types described in clauses
(a) or (b) of this Section 1) and, to the extent not otherwise included,
all (i) payments under insurance (whether or not the Agent is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral and (ii)
cash proceeds of any and all of the foregoing Collateral.

 

Section 2.                                            Security for Obligations.  This Agreement secures, in the case of each
Grantor, the payment of all Obligations of such Grantor now or hereafter
existing under or in respect of the Loan Documents, whether for principal,
reimbursement obligations, interest, premiums, penalties, fees,
indemnifications, expenses or otherwise (all such Obligations secured hereby
being the “Secured Obligations”).  Without limiting the generality of the
foregoing, this Agreement secures as to each Grantor the payment of all amounts
that constitute part of the Secured Obligations and that would be owed by such
Grantor to the Agent, or any of the other Secured Parties under the Loan
Documents but for the fact that such Secured Obligations are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving such Grantor or any other Grantor.

 

Section 3.                                            Grantor
Remains Liable.  Anything
contained herein to the contrary notwithstanding, (a) each of the Grantors
shall remain liable under the contracts and agreements (if any) included in the
Collateral to which it is a party to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by the Agent of any of its
rights hereunder shall not release any of the Grantors from any of their
respective duties or obligations under the contracts and agreements (if any)
included in the Collateral to which it is a party, and (c) neither of the
Agent, nor any of the other Secured Parties shall have any obligation or
liability under the contracts and agreements (if any) included in the
Collateral by reason of this Agreement or any other Loan Document, nor shall
any of the Secured Parties be obligated to perform any of the obligations or
duties of any Grantor thereunder or to take any action to collect or enforce
any claim for payment assigned hereunder.

 

Section 4.                                            Delivery and Control of Security
Collateral and Account Collateral .  (a)  Except as provided in
Section 4(c) below, all certificated securities and all instruments
representing or evidencing any Grantor’s interest in any Security Collateral or
Account Collateral (and, to the extent requested by the Agent, any other
Collateral) shall be delivered to and held by or on behalf of the Agent
pursuant hereto and shall be in suitable form for transfer by delivery, or
shall be accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to the Agent.  Upon the occurrence

 

3

 

and during the
continuation of an Event of Default, the Agent shall have the right and without
notice to any of the Grantors, to transfer to or register in the name of the
Agent or any of its nominees any or all of the Security Collateral and the
Account Collateral, subject only to the revocable rights specified in
Section 8(a).  In addition, the
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Security Collateral or Account Collateral for
certificates or instruments of smaller or larger denominations, subject to the
proviso to Section 1(a)(ii).

 

(b)                                 With
respect to any Security Collateral which is an uncertificated security (as defined
in the California Uniform Commercial Code) registered to the Grantor or held by
the Grantor other than as a security entitlement, the Grantor shall cause the
issuer thereof to either (i) register the Agent as owner of such security or
(ii) to agree in writing with such Grantor and the Agent that such issuer will
comply with instructions originated by the Agent with respect to such security
without further consent of such Grantor, such agreement to be in form and
substance satisfactory to the Agent.

 

(c)                                  With
respect to any Security Collateral that constitutes a security entitlement, the
applicable Grantor shall cause the securities intermediary with respect to such
security entitlement either (i) to identify in its records the Agent as the
entitlement holder (as defined in the California Uniform Commercial Code) with
respect to such security entitlement or (ii) to agree in writing with such
Grantor and the Agent that such securities intermediary will comply with
entitlement orders as defined in the California Uniform Commercial Code
originated by the Agent without further consent of such Grantor, such agreement
to be in form and substance satisfactory to the Agent.

 

Section 5.                                            Representations and Warranties.  Each of the Grantors represents and warrants
as follows:

 

(a)                                  Except
as expressly permitted by the Credit Agreement, and the other Loan Documents
and subject to limitations in the title acquired by the Grantor, such Grantor
is the legal and beneficial owner of the Collateral of such Grantor free and clear
of any Lien, except for the Liens and security interests created under this
Agreement and Permitted Liens.  No
effective financing statement or other instrument similar in effect covering
all or any part of such Collateral or listing such Grantor or any of its
Subsidiaries or any trade name of such Grantor or any of its Subsidiaries as
debtor is on file in any recording office, except such as may have been filed
in favor of the Agent relating to the Loan Documents or may have been filed in
connection with liens permitted by the Credit Agreement.

 

(b)                                 The
Pledged Shares owned by such Grantor have been duly authorized and validly
issued and are fully paid (except for directors’ qualifying shares) and
non-assessable.

 

4

 

(c)                                  The
Initial Pledged Shares owned by such Grantor constitute the percentage of the
issued and outstanding shares of stock of the issuers thereof indicated on
Schedule I hereto as of the date hereof.

 

(d)                                 Except
as otherwise permitted by the Credit Agreement or the other Loan Documents,
this Agreement, the pledge of the Security Collateral pursuant hereto and the
pledge and assignment of the certificates representing the Account Collateral
pursuant hereto create a valid and perfected first priority security interest
in the Collateral of such Grantor that can be perfected by the UCC financing
statement filings and deliveries of Security Collateral required hereby
securing the payment of the Secured Obligations of such Grantor, and all
filings and other actions necessary or desirable to perfect and protect such
security interest have been duly taken, except for the filing of financing and
continuation statements under the Uniform Commercial Code and except to the
extent that the pledge, assignment and security interest hereunder concerns
Pledged Shares issued by any Non-U.S. Subsidiary, in respect of which steps for
the perfection of the pledge, assignment and security interest hereunder shall
be taken as required by Section 5.01(j) and 5.01(l) of the Credit
Agreement.

 

(e)                                  No
consent of any other Person and no authorization, approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
or any other Person is required (i) for the grant by such Grantor of the
assignment and security interest granted hereby, for the pledge by such Grantor
of the Security Collateral pursuant hereto or for the execution, delivery or
performance of this Agreement by such Grantor, (ii) for the perfection or
maintenance of the pledge, assignment and security interest created hereunder
(including the first priority nature of such pledge, assignment and security
interest), except for the filing of financing and continuation statements under
the Uniform Commercial Code and except to the extent that the pledge,
assignment and security interest hereunder concerns Pledged Shares issued by
any Non-U.S. Subsidiary, in respect of which steps for the perfection of the
pledge, assignment and security interest hereunder shall be taken as required
by Section 5.01(j) and 5.01(l) of the Credit Agreement, or (iii) for the
exercise by the Agent of its voting or other rights provided for in this
Agreement or the remedies in respect of the Collateral pursuant to this
Agreement, except as may be required in connection with the disposition of any
portion of the Security Collateral by laws affecting the offering and sale of
securities generally and except to the extent that the pledge, assignment and
security interest hereunder concerns Pledged Shares issued by any Non-U.S.
Subsidiary, in respect of which action shall be taken as required by
Section 5.01(j) and 5.01(l) of the Credit Agreement.

 

(f)                                    Such
Grantor has independently and without reliance upon any Secured Party and based
on such documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement, and such Grantor has
established adequate means of obtaining from any other Loan Parties on a
continuing basis information pertaining to, and is now and on a continuing
basis will be completely familiar with, the financial condition, operations,
properties and prospects of such other Loan Parties.

 

5

 

Section 6.                                            Further Assurances.  (a) 
Each of the Grantors agrees that from time to time, at the expense of
such Grantor, such Grantor shall promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary
or desirable and that the Agent may reasonably request, in order to perfect and
protect any pledge, assignment or security interest granted or purported to be
granted hereby (including, without limitation, the first priority nature
thereof) or to enable the Agent to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. 
Without limiting the generality of the foregoing, each of the Grantors
shall:  (i) if any Collateral shall be
evidenced by a promissory note or other instrument or chattel paper, deliver
and pledge to the Agent for its benefit and the ratable benefit of the other
Secured Parties such note or instrument or chattel paper duly indorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Agent; (ii) deliver and pledge to the Agent
for its benefit and the ratable benefit of the other Secured Parties
certificates representing the Pledged Shares accompanied by undated stock
powers executed in blank and evidence that all other action that the Agent may
deem necessary or desirable in order to perfect and protect the liens and
security interests created under this Agreement has been taken; and (iii)
execute and file such financing or continuation statements, or amendments
thereto, and such other instruments or notices, as may be necessary or
desirable and that the Agent may reasonably request, in order to perfect and
preserve the pledge, assignment and security interests granted or purported to
be granted hereunder.

 

(b)                                 Each
of the Grantors hereby authorizes the Agent to file one or more financing or
continuation statements, and amendments thereto, relating to all or any part of
the Collateral without the signature of such Grantor where permitted by
law.  A photocopy or other reproduction
of this Agreement or any financing statement covering the Collateral or any
part thereof shall be sufficient as a financing statement where permitted by
law.

 

(c)                                  Each
of the Grantors shall furnish to the Agent from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Agent may reasonably request,
all in reasonable detail.

 

Section 7.                                            Voting Rights; Dividends; Etc..  (a) 
So long as no Event of Default shall have occurred and be continuing:

 

(i)                                     Each
of the Grantors shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Security Collateral of such Grantor or any
part thereof for any purpose not inconsistent with the terms of this Agreement
or the other Loan Documents; provided, however, that no Grantor
shall exercise or refrain from exercising any such right if, in the Agent’s
reasonable judgment, such action would have a material adverse effect on the
value of the Security Collateral or any part thereof.

 

(ii)                                  Each
of the Grantors shall be entitled to receive and retain, and to utilize free
and clear of the lien of this Agreement, any and all dividends, interest and
other

 

6

 

distributions
paid in respect of the Security Collateral of such Grantor if and to the extent
that the payment thereof is not otherwise prohibited by the terms of the Loan
Documents; provided,
however,
that any and all:

 

(A)                              dividends,
interest and other distributions paid or payable other than in cash in respect
of, and instruments and other property received, receivable or otherwise
distributed in respect of, or in exchange for, any Security Collateral,

 

(B)                                dividends
and other distributions paid or payable in cash in respect of any Security
Collateral in connection with a partial or total liquidation or dissolution or
in connection with a reduction of capital, capital surplus or paid-in-surplus,

 

(C)                                cash
paid, payable or otherwise distributed in respect of principal of, or in
redemption of, or in exchange for, any Security Collateral, and

 

(D)                               cash
dividends paid or payable in violation of the terms of the Credit Agreement,

 

shall
be, and shall be forthwith delivered to the Agent to hold as, Security
Collateral and, if received by any of the Grantors, shall be received in trust
for the benefit of the Agent, shall be segregated from other property or funds
of such Grantor and be forthwith delivered to the Agent as Security Collateral
in the same form as so received (with any necessary indorsement or assignment).

 

(iii)                               The Agent shall promptly
execute and deliver (or cause to be executed and delivered) to each of the
Grantors all such proxies and other instruments as such Grantor may reasonably
request for the purpose of enabling such Grantor to exercise the voting and
other rights that it is entitled to exercise pursuant to paragraph (i) above
and to receive the dividends or interest payments that it is authorized to
receive and retain pursuant to paragraph (ii) above.

 

(b)                                 Upon
the occurrence and during the continuance of an Event of Default:

 

(i)                                     All
rights of each of the Grantors to (A) exercise or refrain from exercising the
voting and other consensual rights that such Grantor would otherwise be
entitled to exercise pursuant to subparagraph (i) of Section 7(a) shall,
upon notice to such Grantor by the Agent, cease and (B) receive the dividends,
interest and other distributions that such Grantor would otherwise be
authorized to receive and retain pursuant to subparagraph (ii) of
Section 7(a) shall automatically cease, and all such rights shall
thereupon become vested in the Agent, which shall thereupon have the sole right
to exercise or refrain from exercising such voting and other consensual rights
and to receive and hold as Security Collateral such dividends, interest and
other distributions.

 

7

 

(ii)                                  All
dividends, interest and other distributions that are received by any of the
Grantors contrary to the provisions of clause (i) of this Section 7(b)
shall be received in trust for the benefit of the Agent, shall be segregated
from other funds of such Grantor and shall be forthwith paid over to the Agent
as Security Collateral in the same form as so received (with any necessary
indorsement).

 

Section 8.                                            Transfers and Other Liens;
Additional Shares. 
(a)  Each of the Grantors agrees
that it shall not (i) sell, assign (by operation of law or otherwise) or
otherwise dispose of, or grant any option with respect to, any of the
Collateral of such Grantor (other than sales, assignments, options and other
dispositions permitted under the terms of the Credit Agreement) or (ii) create
or suffer to exist any Lien upon or with respect to any of the Collateral of
such Grantor, except for the Liens created under this Agreement or permitted
under the terms of the Credit Agreement.

 

(b)                                 Each
of the Grantors agrees that it shall (i) cause each issuer of the Pledged
Shares owned by such Grantor not to issue any stock or other securities in addition
to or in substitution for the Pledged Shares issued by such issuer (except
directors’ qualifying shares), except to a Grantor, and (ii) pledge to
hereunder, immediately upon acquisition (directly or indirectly) thereof, any
and all additional shares of stock or other securities of each issuer of any
Pledged Shares provided, however that the Pledged Shares shall not
include shares or other ownership interests (or a portion thereof) of any
issuer of Pledged Shares that is a Non-U.S. Subsidiary to the extent that the
inclusion of such shares or other ownership interests (or portion thereof)
would cause the shares or interests in such issuer pledged hereunder to exceed
65% of the total of all shares or interests in such issuer.

 

Section 9.                                            Agent Appointed Attorney-in-Fact.  Each of the Grantors hereby irrevocably
appoints the Agent such Grantor’s attorney-in-fact, with full authority in the
place and stead of such Grantor and in the name of such Grantor or otherwise,
from time to time after the occurrence and during the continuance of an Event
of Default in the Agent’s discretion, to take any action and to execute any
instrument that the Agent may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation:

 

(i)                                     to
ask for, demand, collect, sue for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in respect
of any of the Collateral,

 

(ii)                                  to
receive, indorse and collect any drafts or other instruments, chattel paper and
documents in connection with Section 8(a) or 8(b) above, and

 

(iii)                               to file any claims, to
take any action or to institute any proceedings that the Agent may deem
necessary or desirable for the collection of any of the Collateral or otherwise
to enforce compliance with the rights of the Agent with respect to any of the
Collateral.

 

8

 

Section 10.                                      Agent May Perform.  If any of the Grantors fails to perform any
agreement contained herein, the Agent may, as the Agent deems reasonably
necessary to protect the Secured Parties’ security interest in the Collateral
or the value thereof, but without any obligation to do so and without further
notice, itself perform, or cause performance of, such agreement, and the
expenses of the Agent incurred in connection therewith shall be payable by such
Grantor under Section 13(b).

 

Section 11.                                      The Agent’s Duties.  The powers conferred on the Agent hereunder are solely to protect
its and the other Secured Parties’ interest in the Collateral and shall not
impose any duty upon it to exercise any such powers.  Except for the safe custody of any Collateral in its possession
and the accounting for moneys actually received by it hereunder, the Agent
shall have no duty as to any Collateral, as to ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Security Collateral, whether or not the Agent or any
other Secured Party has or is deemed to have knowledge of such matters, or as
to the taking of any necessary steps to preserve rights against any parties or
any other rights pertaining to any Collateral. 
The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which the Agent accords its
own property.  Anything contained herein
to the contrary notwithstanding, the Agent may from time to time, when the
Agent deems it to be necessary, appoint one or more subagents (each a “Subagent”) for the
Agent hereunder with respect to all or any part of the Collateral.  In the event that the Agent so appoints any
Subagent with respect to any Collateral, (1) the assignment and pledge of such
Collateral and the security interest granted in such Collateral by each Grantor
hereunder shall be deemed for purposes of this Agreement to have been made to
such Subagent for the ratable benefit of the Secured Parties, as security for
the Secured Obligations of such Grantor, (2) such Subagent shall automatically
be vested with all rights, powers, privileges, interests and remedies of the
Agent hereunder with respect to such Collateral and (3) the term “Agent,” when
used herein in relation to any rights, powers, privileges, interests and
remedies of the Agent with respect to such Collateral, shall include such
Subagent; provided,
however,
that no such Subagent shall be authorized to take any action with respect to
any such Collateral unless and except to the extent expressly authorized in
writing by the Agent.

 

Section 12.                                      Remedies.  If
any Event of Default shall have occurred and be continuing:

 

(a)                                  The
Agent may exercise in respect of the Collateral, in addition to other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party upon default under the California Uniform
Commercial Code (whether or not the California Uniform Commercial Code applies
to the affected Collateral), and also may (i) require any of the Grantors to,
and each of the Grantors hereby agrees that it shall at its own expense and
upon request of the Agent forthwith, assemble all or part of the Collateral as
directed by the Agent and make it available to the Agent at a place and time to
be designated by the Agent that is

 

9

 

reasonably convenient to
both parties, (ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private sale
or at any of the Agent’s offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Agent may deem commercially
reasonable, and (iii) occupy any premises owned or leased by any of the
Grantors where the Collateral or any part thereof is assembled or located for a
reasonable period in order to effectuate its rights and remedies hereunder or
under law, without obligation to such Grantor in respect of such
occupation.  Each of the Grantors agrees
that, to the extent notice of sale shall be required by law, at least ten days’
notice to the applicable Grantor of the time and place of any public sale or
the time after which any private sale is to be made shall constitute reasonable
notification.  The Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given.  The Agent may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.

 

(b)                                 Any
cash held by or on behalf of the Agent and all cash proceeds received by or on
behalf of the Agent in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral may, in the discretion of
the Agent, be held by or on behalf of the Agent as collateral for, and/or then
or at any time thereafter applied (after payment of any amounts payable to the
Agent pursuant to Section 13) in whole or in part by the Agent for its
benefit and the ratable benefit of the other Secured Parties against, all or
any part of the Secured Obligations in such order as the Agent shall
elect.  Any surplus of such cash or cash
proceeds held by or on behalf of the Agent and remaining after payment in full
of all of the Secured Obligations shall be paid over to the applicable Grantor
or to whomsoever may be lawfully entitled to receive such surplus.

 

(c)                                  All
payments received by any of the applicable Grantors in respect of the
Collateral shall be received in trust for the benefit of the Agent, shall be
segregated from other funds of such Grantor and shall be forthwith paid over to
the Agent in the same form as so received (with any necessary indorsement or
assignment).

 

Section 13.                                      Indemnity and Expenses.  (a) 
Each of the Grantors agrees to defend, protect, indemnify and hold
harmless the Agent, each of the Secured Parties and each of their respective
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 reasonable expenses of
counsel) arising out of or resulting from this Agreement (including, without
limitation, enforcement of this Agreement), except to the extent that such
claims, losses or liabilities are found in a final judgment of a court of
competent jurisdiction to have resulted from such Indemnified Party’s gross
negligence or willful misconduct.

 

(b)                                 Each
of the Grantors will upon demand pay to the Agent the amount of any and all
expenses (including, without limitation, the reasonable fees and expenses of
its

 

10

 

counsel and of any
experts and agents) that the Agent may incur in connection with (i) the
administration of this Agreement, (ii) the custody, preservation, use or
operation of, or the sale of, collection from, or other realization upon, any
of the Collateral of such Grantor, (iii) the exercise or enforcement of any of
the rights of the Agent or any other Secured Party against such Grantor or (iv)
the failure by any of the Grantors to perform or observe any of the provisions
hereof.

 

Section 14.                                      Amendments;
Waivers; Etc..  (a)  No amendment or waiver of any provision of
this Agreement, and no consent to any departure by any of the Grantors
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Agent, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.

 

(b)                                 No
failure on the part of the Agent to exercise, and no delay in exercising, any
right, power or privilege hereunder shall operate as a waiver thereof or
consent thereto; nor shall any single or partial exercise of any such right,
power or privilege preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.

 

(c)                                  Upon
the execution and delivery by any Person of a security agreement supplement in
substantially the form of Exhibit A hereto (each a “Security Agreement Supplement”), (i) such
Person shall be referred to as an “Additional Grantor” and shall be and become a Grantor,
and each reference in this Agreement to “Grantor” shall also mean and be a reference
to such Additional Grantor and (ii) the Schedule attached to each Security
Agreement Supplement shall be incorporated into and become a part of and
supplement Schedules I hereto, and the Agent may attach such Schedule as a
supplement to Schedule I, and each reference to such Schedule shall
mean and be a reference to Schedule I, as supplemented pursuant hereto.

 

(d)                                 Delivery
by telecopies of an executed counterpart of any amendment or waiver of any
provision of this Agreement or of any Supplement or Schedule hereto shall
be effective as delivery of a manually executed counterpart thereof.

 

Section 15.                                      Addresses for Notices.  All notices and other communications
provided for hereunder shall be in writing (including telecopier communication)
and mailed, telecopied or delivered, addressed to the party at its address
specified in the Credit Agreement, or as to either a Borrower or the Agent, at
such other address as shall be designated by such party in a written notice to
the other parties and, as to each other party, at such other address as shall
be designated by such party in a written notice to the Borrowers and the
Agent.  All such notices and other
communications shall, when mailed or telecopied be effective when deposited in
the mails or transmitted by telecopier, respectively, except that notices and
communications to the Agent shall not be effective until received by the Agent.

 

Section 16.                                      Continuing Security Interest;
Assignments Under the Credit Agreement.  This Agreement shall create a continuing
security interest in the Collateral and shall

 

11

 

(a) remain in full force
and effect until the latest of the payment in full in cash of the Secured
Obligations (other than contingent obligations expressed to survive the
termination of the Credit Agreement or any other Loan Document) and the
Termination Date,  (b) be binding upon
each of the Grantors and each of their respective successors and assigns and
(c) inure, together with the rights and remedies of the Agent hereunder, to the
benefit of the Secured Parties and their respective successors, transferees and
assigns.  Without limiting the
generality of the foregoing clause (c), any Lender Party may assign or otherwise
transfer all or any portion of its rights and obligations under the Credit
Agreement (including, without limitation, all or any portion of its Commitment,
the Advances owing to it and any Note or Notes held by it) to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to such Lender Party herein or otherwise, in each case
as provided in Section 9.07 of the Credit Agreement.

 

Section 17.                                      Release and Termination.  (a) 
Upon any sale, lease, transfer or other disposition of any item of
Collateral in accordance with the terms of the Loan Documents, the Agent shall,
at the  applicable Grantor’s expense,
execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence the release of such item of Collateral from the
assignment and security interest granted hereby; provided, however,
that (i) at the time of such request and such release, no Default shall have
occurred and be continuing, (ii) such Grantor shall have delivered to the
Agent, at least ten Business Days prior to the date of the proposed release, a
written request for release describing the item of Collateral to the extent
required by the Credit Agreement and the terms of the sale, lease, transfer or
other disposition in reasonable detail (including, without limitation, the
price thereof and any expenses in connection therewith), and a certification by
such Grantor to the effect that the transaction is in compliance with the Loan
Documents and as to such other matters as the Agent may reasonably request,
(iii) to the extent that the proceeds of any such sale, lease or transfer or
other disposition are required to be applied in accordance with
Section 2.07 of the Credit Agreement, such proceeds shall be paid to, or
in accordance with the instructions of, the Agent at the closing thereof and
(iv) the Agent shall have approved such sale, lease, transfer or other
disposition in writing, except if such sale, lease, transfer or other
disposition is permitted under the Credit Agreement.

 

(b)                                 Upon
the latest of the payment in full of the Secured Obligations (other than
contingent obligations expressed to survive the termination of the Credit
Agreement or any other Loan Document) and the Termination Date, the pledge,
assignment and security interest granted hereby shall terminate and all rights
to the Collateral shall revert to the applicable Grantor.  Upon any such termination, the Agent shall,
at the applicable Grantor’s expense, execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such
termination.

 

(c)                                  If
all of the capital stock (or other equity interests) of one or more Grantor is
sold or otherwise disposed of (except to the Company or any of its
Subsidiaries) or liquidated in compliance with the requirements of the Credit
Agreement (or such sale or other disposition

 

12

 

or liquidation has been
approved in writing by the Required Lenders) and the proceeds of such sale,
disposition or liquidation are applied in accordance with the provisions of the
Credit Agreement, such Grantor shall be released from this Agreement and this
Agreement shall, as to each such Grantor or Grantors, automatically and
completely terminate, have no further force or effect and be forever discharged
(it being understood and agreed that the sale of one or more Persons that own,
directly or indirectly, all of the capital stock (or other equity interests) of
any Grantor shall be deemed to be a sale of such Grantor for purposes of this
Section 17(c)).  In such event, the
Agent shall, at the applicable Grantor’s expense, execute and deliver to such
Grantor such documents as such Grantor shall reasonably request to release from
the assignment and security interest granted hereby the items of Collateral
pledged and assigned by such Grantor.

 

Section 18.                                      Annual Collateral Audit.  Each Grantor agrees that, at the expense of
such Grantor, the Agent may conduct an appraisal and valuation of all the
Collateral of such Grantor not more frequently than once in any Fiscal Year.

 

Section 19.                                      Governing Law. 
This Agreement shall be governed by and construed in accordance with the
laws of the State of California, except to the extent that the validity or
perfection of the security interest hereunder, or remedies hereunder, in
respect of any particular Collateral are governed by the laws of a jurisdiction
other than the State of California.

 

Section 20.                                      Execution in Counterparts.  This Agreement may be executed in any number
of 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 shall be
effective as delivery of a manually executed counterpart of this Agreement.

 

[The remainder of this page is intentionally left blank.]

 

13

 

IN
WITNESS WHEREOF, each of the Grantors has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.

 

 

	
   

  	
  INTERNATIONAL
  RECTIFIER CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
  Address:  233 Kansas Street,

  
	
   

  	
  El Segundo,
  California  90245

  
	
   

  	
  Attention:  Treasury Department

  
	
   

  	
  Telecopier:  (310) 726-8439

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  UNISEM, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:  233 Kansas Street,

  
	
   

  	
  El Segundo,
  California  90245

  
	
   

  	
  Attention:  Treasury Department

  
	
   

  	
  Telecopier:  (310) 726-8439

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ADVANCED ANALOG,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
  Address:  233 Kansas Street,

  
	
   

  	
  El Segundo,
  California  90245

  
	
   

  	
  Attention:  Treasury Department

  
	
   

  	
  Telecopier:  (310) 726-8439

  

 

 

	
   

  	
  INTERNATIONAL
  RECTIFIER HIREL PRODUCTS, LLC,

  
	
   

  	
   

  
	
   

  	
  By: Zing
  Technologies, Inc.

  
	
   

  	
  Its: Manager and
  sole Member

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
  Address:  233 Kansas Street,

  
	
   

  	
  El Segundo,
  California  90245

  
	
   

  	
  Attention:  Treasury Department

  
	
   

  	
  Telecopier:  (310) 726-8439

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  IR PURCHASE
  COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
  Address:  233 Kansas Street,

  
	
   

  	
  El Segundo,
  California  90245

  
	
   

  	
  Attention:  Treasury Department

  
	
   

  	
  Telecopier:  (310) 726-8439

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ZING
  TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
  Address:  233 Kansas Street,

  
	
   

  	
  El Segundo,
  California  90245

  
	
   

  	
  Attention:  Treasury Department

  
	
   

  	
  Telecopier:  (310) 726-8439

  

 

 

SCHEDULE I

TO SECURITY

AGREEMENT

 

Pledged
Shares

 

	
  Grantor

  	
   

  	
  Issuer

  	
   

  	
  Class of

  Stock

  	
   

  	
  Par

  Value

  	
   

  	
  Stock

  Certificate

  Number(s)

  	
   

  	
  Number

  of Shares

  	
   

  	
  Percentage
  of

  Issued and

  Outstanding

  Shares of

  Issuer

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

*  Notwithstanding the number of shares
represented by the certificates, only 65% of the total shares represented by
the certificates are being pledged under this Security Agreement.

 

 

EXHIBIT A

TO SECURITY

AGREEMENT

 

 

FORM OF
SECURITY AGREEMENT SUPPLEMENT

 

 

                               , 200    

 

 

BNP Paribas, as Agent

1 Front Street, San
Francisco, California 94111

Attention:  Tjalling Terpstra

Telecopier
number  (415) 296-8954

With a copy to:  Tjalling Terpstra,

Telecopier
number (213) 488-9602

 

 

Security Agreement dated as of November 7, 2003

made by International Rectifier Corporation and the Grantors

named therein to BNP Paribas, as Agent

 

 

Ladies and Gentlemen:

 

Reference
is made to the above-captioned Security Agreement (as amended, supplemented or
otherwise modified, the “Security Agreement”). 
Unless otherwise defined herein, terms defined in the Security Agreement
are used herein as therein defined.

 

The
undersigned hereby agrees, as of the date first above written, to become a
Grantor under the Security Agreement as if it were an original party thereto
and agrees that each reference in the Security Agreement to a “Grantor” shall
also mean and be a reference to the undersigned.

 

The
undersigned hereby assigns and pledges to the Agent for its benefit and the
ratable benefit of the Agent, the Lenders and the Issuing Bank and hereby
grants to the Agent for its benefit and the ratable benefit of the Agent, the
Lenders and the Issuing Bank as collateral for the Secured Obligations a pledge
and assignment of, and a security interest in, all of the right, title and
interest of the undersigned in and to its Collateral, whether now owned or
hereafter acquired, in accordance with the Security Agreement.

 

 

The
undersigned has attached hereto a supplement to Schedule I to the Security
Agreement, and the undersigned hereby certifies that such supplement has been
prepared by the undersigned in substantially the form of Schedule I to the
Security Agreement and is accurate and complete as of the date first above
written.

 

The
undersigned hereby makes each representation and warranty set forth in
Section 5 of the Security Agreement as to itself and as to its Collateral
to the same extent as each other Grantor and hereby agrees to be bound as a
Grantor by all of the terms and provisions of the Security Agreement to the
same extent as all other Grantors.

 

This
letter shall be governed by and construed in accordance with the laws of the
State of California.

 

 

	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  [GRANTORS]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
  Address:

  

 

A-2

 

EXHIBIT
E-1

TO CREDIT

AGREEMENT

 

 

FORM OF
SECURITY AGREEMENT

 

Dated as of November 7, 2003

 

From

 

THE GRANTORS NAMED HEREIN,

 

as Grantors,

 

to

 

BNP PARIBAS,

 

as Agent

 

 

TABLE OF
CONTENTS

 

	
  Section 1.

  	
  Grant of
  Security

  	
   

  
	
  Section 2.

  	
  Security
  for Obligations

  	
   

  
	
  Section 3.

  	
  Grantor Remains Liable

  	
   

  
	
  Section 4.

  	
  Delivery
  and Control of Security Collateral and Account Collateral

  	
   

  
	
  Section 5.

  	
  Representations and
  Warranties

  	
   

  
	
  Section 6.

  	
  Further
  Assurances

  	
   

  
	
  Section 7.

  	
  Voting Rights;
  Dividends; Etc.

  	
   

  
	
  Section 8.

  	
  Transfers
  and Other Liens; Additional Shares

  	
   

  
	
  Section 9.

  	
  Agent Appointed
  Attorney-in-Fact

  	
   

  
	
  Section 10.

  	
  Agent
  May Perform

  	
   

  
	
  Section 11.

  	
  The
  Agent’s Duties

  	
   

  
	
  Section 12.

  	
  Remedies

  	
   

  
	
  Section 13.

  	
  Indemnity
  and Expenses

  	
   

  
	
  Section 14.

  	
  Amendments; Waivers; Etc.

  	
   

  
	
  Section 15.

  	
  Addresses
  for Notices

  	
   

  
	
  Section 16.

  	
  Continuing
  Security Interest; Assignments Under the Credit Agreement

  	
   

  
	
  Section 17.

  	
  Release
  and Termination

  	
   

  
	
  Section 18.

  	
  Annual
  Collateral Audit

  	
   

  
	
  Section 19.

  	
  Governing Law

  	
   

  
	
  Section 20.

  	
  Execution in Counterparts

  	
   

  
	
   

  	
   

  
	
  SCHEDULE

  
	
   

  
	
  Schedule I

  	
  -

  	
  Pledged Shares

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  -

  	
  Form of Security Agreement
  Supplement

  	
   

  
					

 

 

Exhibit E-2

 

U.S.
GUARANTY

 

U.S.
GUARANTY dated as of November 7, 2003, (the “Guaranty”) made by the Persons listed on the
signature pages hereof under the caption “Guarantors” and the Additional
Guarantors (as defined in Section 8(b)) (such Persons so listed and the
Additional Guarantors being, collectively, the “Guarantors” and, individually, each a “Guarantor”) in favor
of the Secured Parties (as defined in the Credit Agreement referred to below).

 

PRELIMINARY STATEMENT

 

International
Rectifier Corporation, a Delaware corporation (the “Company”), is party to a Credit Agreement
dated as of November 7, 2003 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”; the capitalized terms
defined therein and not otherwise defined herein being used herein as therein
defined) with the Lender Parties party thereto, Wells Fargo Bank, N.A. and
Union Bank of California as Co-Syndication Agents, Comerica Bank and Fleet Bank
as Co-Documentation Agents, BNP Paribas as Sole Arranger and Initial Issuing
Bank and BNP Paribas as Administrative Agent (the “Administrative Agent”).  Each Guarantor will derive substantial
direct and indirect benefits from the transactions contemplated by the Credit
Agreement.  It is a condition precedent
to the making of Advances and the issuance of Letters of Credit by the Lender
Parties under the Credit Agreement from time to time that each Guarantor shall
have executed and delivered this Guaranty.

 

NOW,
THEREFORE, in consideration of the premises and in order to induce the Lender
Parties to make Advances and to issue Letters of Credit under the Credit
Agreement from time to time, each Guarantor, jointly and severally with each
other Guarantor, hereby agrees as follows:

 

Section 1.                                            Guaranty; Limitation of Liability.  (a) 
Each Guarantor hereby absolutely, unconditionally and irrevocably
guarantees the punctual payment when due, whether at scheduled maturity or on
any date of a required prepayment or by acceleration, demand or otherwise, of
all Obligations of each other Loan Party now or hereafter existing under or in
respect of the Loan Documents (including, without limitation, any extensions,
modifications, substitutions, amendments or renewals of any or all of the
foregoing Obligations), whether direct or indirect, absolute or contingent, and
whether for principal, interest, premiums, fees, indemnities, contract causes
of action, costs, expenses or otherwise (such Obligations being the “Guaranteed Obligations”),
and agrees to pay any and all expenses (including, without limitation, fees and
expenses of counsel) incurred by the Administrative Agent or any other Secured
Party in enforcing any rights under this Guaranty or any other Loan
Document.  Without limiting the
generality of the foregoing, each Guarantor’s liability shall extend to all
amounts that constitute part of the Guaranteed Obligations and would be owed by
any other Loan Party to any Secured Party under or in respect of the Loan
Documents but for the fact that they are

 

 

unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving such other Loan Party.

 

(b)                                 Each
Guarantor, and by its acceptance of this Guaranty, the Administrative Agent and
each other Secured Party, hereby confirms that it is the intention of all such
Persons that this Guaranty and the Obligations of each Guarantor hereunder not
constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law
(as hereinafter defined), the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar foreign, federal or state law to the
extent applicable to this Guaranty and the Obligations of each Guarantor
hereunder.  To effectuate the foregoing
intention, the Administrative Agent, the other Secured Parties and the
Guarantors hereby irrevocably agree that the Obligations of each Guarantor
under this Guaranty at any time shall be limited to the maximum amount as will
result in the Obligations of such Guarantor under this Guaranty not
constituting a fraudulent transfer or conveyance.  For purposes hereof, “Bankruptcy Law” means any proceeding of the type
referred to in Section 6.01(f) of the Credit Agreement or Title 11, U.S.
Code, or any similar foreign, federal or state law for the relief of debtors.

 

(c)                                  Each
Guarantor hereby unconditionally and irrevocably agrees that in the event any
payment shall be required to be made to any Secured Party under this Guaranty
or any other guaranty, such Guarantor will contribute, to the maximum extent
permitted by law, such amounts to each other Guarantor and each other guarantor
so as to maximize the aggregate amount paid to the Secured Parties under or in
respect of the Loan Documents.

 

Section 2.                                            Guaranty Absolute.  Each Guarantor guarantees that the Guaranteed Obligations will be
paid strictly in accordance with the terms of the Loan Documents, regardless of
any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of any Secured Party with respect
thereto.  The Obligations of each
Guarantor under or in respect of this Guaranty are independent of the Guaranteed
Obligations or any other Obligations of any other Loan Party under or in
respect of the Loan Documents, and a separate action or actions may be brought
and prosecuted against each Guarantor to enforce this Guaranty, irrespective of
whether any action is brought against a Borrower or any other Loan Party or
whether a Borrower or any other Loan Party is joined in any such action or
actions.  The liability of each
Guarantor under this Guaranty shall be irrevocable, absolute and unconditional
irrespective of, and each Guarantor hereby irrevocably waives any defenses it
may now have or hereafter acquire in any way relating to, any or all of the
following:

 

(a)                                  any
lack of validity or enforceability of any Loan Document or any agreement or
instrument relating thereto;

 

(b)                                 any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Guaranteed Obligations or any other Obligations of any other Loan
Party under or in respect of the Loan Documents, or any other amendment or waiver
of or any

 

2

 

consent to departure from
any Loan Document, including, without limitation, any increase in the
Guaranteed Obligations resulting from the extension of additional credit to any
Loan Party or any of its Subsidiaries or otherwise;

 

(c)                                  any
taking, exchange, release or non-perfection of any Collateral or any other
collateral, or any taking, release or amendment or waiver of, or consent to
departure from, any other guaranty, for all or any of the Guaranteed
Obligations;

 

(d)                                 any
manner of application of Collateral or any other collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale or
other disposition of any Collateral or any other collateral for all or any of
the Guaranteed Obligations or any other Obligations of any Loan Party under the
Loan Documents or any other assets of any Loan Party or any of its
Subsidiaries;

 

(e)                                  any
change, restructuring or termination of the corporate structure or existence of
any Loan Party or any of its Subsidiaries;

 

(f)                                    any
failure of any Secured Party to disclose to any Loan Party any information
relating to the business, condition (financial or otherwise), operations,
performance, properties or prospects of any other Loan Party now or hereafter
known to such Secured Party (each Guarantor waiving any duty on the part of the
Secured Parties to disclose such information);

 

(g)                                 the
failure of any other Person to execute or deliver this Guaranty, any Guaranty
Supplement (as hereinafter defined) or any other guaranty or agreement or the
release or reduction of liability of any Guarantor or other guarantor or surety
with respect to the Guaranteed Obligations;

 

(h)                                 any
setoff or counterclaim of any Loan Party or any defense which results from any
disability or other defense of a Loan Party or the cessation or stay of
enforcement from any cause whatsoever of the liability of a Loan Party
(including, without limitation, the lack of validity or enforceability of any
of the Loan Documents);

 

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

 

(j)                                     any
statute of limitations to the extent permitted by law;

 

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

 

3

 

(l)                                     the
absence, impairment or loss of any right of subrogation, reimbursement,
exoneration, contribution or indemnification or other right or remedy against a
Loan Party, any other guarantor of the Obligations or any security, whether
resulting from an election by the Administrative Agent or any Lender to
foreclose upon security by non-judicial sale, or otherwise;

 

(m)                               any
other circumstance (including, without limitation, any statute of limitations)
or any existence of or reliance on any representation by any Secured Party that
might otherwise constitute a defense available to, or a discharge of, any Loan
Party or any other guarantor or surety.

 

This
Guaranty shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Guaranteed Obligations is rescinded or
must otherwise be returned by any Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of a Borrower or any other Loan Party
or otherwise, all as though such payment had not been made.

 

Section 3.                                            Waivers and Acknowledgments.  (a) 
Each Guarantor hereby unconditionally and irrevocably waives promptness,
diligence, notice of acceptance, presentment, demand for performance, notice of
nonperformance, default, acceleration, protest or dishonor and any other notice
with respect to any of the Guaranteed Obligations and this Guaranty and any
requirement that any Secured Party protect, secure, perfect or insure any Lien
or any property subject thereto or exhaust any right or take any action against
any Loan Party or any other Person or any Collateral.

 

(b)                                 Each
Guarantor hereby unconditionally and irrevocably waives any right to revoke
this Guaranty and acknowledges that this Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the future.

 

(c)                                  Each
Guarantor acknowledges that the Administrative Agent may, without notice to or
demand upon such Guarantor and without affecting the liability of such
Guarantor under this Guaranty, foreclose under any mortgage by nonjudicial
sale, and each Guarantor hereby waives any defense to the recovery by the
Administrative Agent and the other Secured Parties against such Guarantor of
any deficiency after such nonjudicial sale and any defense or benefits that may
be afforded by applicable law.

 

(d)                                 Each
Guarantor hereby waives any right to be informed by the Administrative Agent or
any Lender of the financial condition of any other Loan Party or any other
guarantor of the Guaranteed Obligations or any change therein or any other
circumstances bearing upon the risk of nonpayment or nonperformance of the
Guaranteed Obligations.

 

4

 

(e)                                  Each
Guarantor hereby waives any right it may have to a fair value hearing to
determine the size of a deficiency judgment following any foreclosure on any security
for the Guaranteed Obligations.

 

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

 

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

 

(h)                                 Each
Guarantor acknowledges that it will receive substantial direct and indirect
benefits from the financing arrangements contemplated by the Loan Documents and
that the waivers set forth in Section 2 and this Section 3 are
knowingly made in contemplation of such benefits.

 

Section 4.                                            Subrogation. 
Each Guarantor hereby unconditionally and irrevocably agrees not to
exercise any rights that it may now have or hereafter acquire against a
Borrower, any other Loan Party or any other insider guarantor that arise from
the existence, payment, performance or enforcement of such Guarantor’s
Obligations under or in respect of this

 

5

 

Guaranty or any other
Loan Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of any Secured Party against a Borrower, any
other Loan Party or any other insider guarantor or any Collateral, whether or
not such claim, remedy or right arises in equity or under contract, statute or
common law, including, without limitation, the right to take or receive from a
Borrower, any other Loan Party or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Guaranteed Obligations and all other amounts payable under this
Guaranty shall have been paid in full in cash, all Letters of Credit shall have
expired or been terminated and the Commitments shall have expired or been
terminated.  If any amount shall be paid
to any Guarantor in violation of the immediately preceding sentence at any time
prior to the latest of (a) the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Guaranty, (b) the Termination
Date and (c) the latest date of expiration or termination of all Letters of
Credit, such amount shall be received and held in trust for the benefit of the
Secured Parties, shall be segregated from other property and funds of such
Guarantor and shall forthwith be paid or delivered to the Administrative Agent
in the same form as so received (with any necessary endorsement or assignment)
to be credited and applied to the Guaranteed Obligations and all other amounts
payable under this Guaranty, whether matured or unmatured, in accordance with
the terms of the Loan Documents, or to be held as Collateral for any Guaranteed
Obligations or other amounts payable under this Guaranty thereafter
arising.  If (i) any Guarantor shall
make payment to any Secured Party of all or any part of the Guaranteed
Obligations, (ii) all of the Guaranteed Obligations and all other amounts
payable under this Guaranty shall have been paid in full in cash, (iii) the
Termination Date shall have occurred and (iv) all Letters of Credit shall have
expired or been terminated, the Secured Parties will, at such Guarantor’s
request and expense, execute and deliver to such Guarantor appropriate
documents, without recourse and without representation or warranty, necessary
to evidence the transfer by subrogation to such Guarantor of an interest in the
Guaranteed Obligations resulting from such payment made by such Guarantor
pursuant to this Guaranty.

 

Section 5.                                            Payments Free and Clear of Taxes, Etc.  (a) 
Any and all payments made by any Guarantor under or in respect of this
Guaranty or any other Loan Document shall be made, in accordance with
Section 2.12 of the Credit Agreement, free and clear of and without
deduction for any and all present or future Taxes.  If any Guarantor shall be required by law to deduct any Taxes
from or in respect of any sum payable under or in respect of this Guaranty or
any other Loan Document to any Secured Party, (i) the sum payable by such
Guarantor shall be increased as may be necessary so that after such Guarantor
and the Administrative Agent have made all required deductions (including
deductions applicable to additional sums payable under this Section 5),
such Secured Party receives an amount equal to the sum it would have received
had no such deductions been made, (ii) such Guarantor shall make all such
deductions and

 

6

 

(iii) such Guarantor
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.

 

(b)                                 In
addition, each Guarantor agrees to pay any present or future Other Taxes that
arise from any payment made by or on behalf of such Guarantor under or in
respect of this Guaranty or any other Loan Document or from the execution,
delivery or registration of, performance under, or otherwise with respect to,
this Guaranty and the other Loan Documents.

 

(c)                                  Each
Guarantor will indemnify each Secured Party for and hold it harmless against
the full amount of Taxes and Other Taxes, and for the full amount of taxes of
any kind imposed by any jurisdiction on amounts payable under this
Section 5, imposed on or paid by such Secured Party and any liability
(including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto.  This
indemnification shall be made within 30 days from the date such Secured Party
makes written demand therefor.

 

(d)                                 Within
30 days after the date of any payment of Taxes by or on behalf of any
Guarantor, such Guarantor shall furnish to the Administrative Agent, at its
address referred to in Section 9, the original or a certified copy of a
check or receipt evidencing such payment. 
In the case of any payment hereunder by or on behalf of any Guarantor
through an account or branch outside the United States or by or on behalf of
such Guarantor by a payor that is not a United States person, if such Guarantor
determines that no Taxes are payable in respect thereof, such Guarantor shall
furnish, or shall cause such payor to furnish, to the Administrative Agent, at
such address, an opinion of counsel acceptable to the Administrative Agent
stating that such payment is exempt from Taxes.  For purposes of subsections (d) and (e) of this Section 5,
the terms “United States”
and “United States person”
shall have the meanings specified in Section 7701 of the Internal Revenue
Code.

 

(e)                                  Upon
the reasonable request in writing of any Guarantor, each Secured Party
organized under the laws of a jurisdiction outside the United States shall, on
or prior to the date of its execution and delivery of the Credit Agreement in
the case of each Initial Lender or Initial Issuing Bank, as the case may be,
and on or prior to the date of the Assignment and Acceptance pursuant to which
it becomes a Secured Party in the case of each other Secured Party, and from
time to time thereafter upon the reasonable request in writing by any Guarantor
(but only so long thereafter as such Secured Party remains lawfully able to do
so), provide each of the Administrative Agent and such Guarantor with two
original Internal Revenue Service forms W-8ECI or W-8BEN or (in the case of a
Secured Party that has certified in writing to the Administrative Agent that it
is not a “bank” as defined in Section 881(c)(3)(A) of the Internal Revenue
Code) two original forms W-8BEN accompanied by 
a certificate representing that such Secured Party is not a “bank” for
purposes of Section 881(c) of the Internal Revenue Code, is not a
10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the
Internal Revenue Code) of the Company and is not a controlled foreign
corporation related to the Company (within the meaning of
Section 864(d)(4) of the Internal Revenue Code)), as appropriate, or any

 

7

 

successor or other form
prescribed by the Internal Revenue Service, certifying that such Secured Party
is exempt from or entitled to a reduced rate of United States withholding tax
on payments under the Credit Agreement or the Notes.  If the forms provided by a Secured Party at the time such Secured
Party first becomes a party to the Credit Agreement indicate 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 such Secured Party
provides the appropriate form 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 forms; provided, however, that if, in the
case of a Secured Party becoming a party to the Credit Agreement, at the date
of the Assignment and Acceptance pursuant to which a Secured Party becomes a
party to the Credit Agreement, the Secured Party assignor was entitled to
payments under subsection (a) of this Section 5 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
Secured Party assignee on such date.  If
any form or document referred to in this subsection (e) and requested by
any Guarantor pursuant to 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-8ECI
or W-8BEN (or the related certificate described above), that the applicable
Secured Party reasonably considers to be confidential, such Secured Party shall
give notice thereof to the applicable Guarantor and shall not be obligated to
include in such form or document such confidential information.

 

(f)                                    For
any period with respect to which a Secured Party has failed to provide any
Guarantor following such Guarantor’s request therefor pursuant to
subsection (e) above with the appropriate form described in
subsection (e) above (other  than if such failure is due to a change in
law occurring after the date on which a form originally was required to be
provided or if such form otherwise is not required under subsection (e)
above), such Secured Party shall not be entitled to indemnification under
subsection (a) or (c) of this Section 5 with respect to Taxes imposed
by the United States by reason of such failure; provided, however,
that should a Secured Party become subject to Taxes because of its failure to
deliver a form required hereunder, such Guarantor shall take such steps as such
Secured Party shall reasonably request to assist such Secured Party to recover
such Taxes.

 

Section 6.                                            Representations and Warranties.  Each Guarantor hereby makes each
representation and warranty made in the Loan Documents by the Company with
respect to such Guarantor and each Guarantor hereby further represents and
warrants as follows:

 

(a)                                  There
are no conditions precedent to the effectiveness of this Guaranty that have not
been satisfied or waived.

 

8

 

(b)                                 Such
Guarantor has, independently and without reliance upon any Secured Party and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Guaranty and each other
Loan Document to which it is or is to be a party, and such Guarantor has
established adequate means of obtaining from each other Loan Party on a
continuing basis information pertaining to, and is now and on a continuing
basis will be completely familiar with, the business, condition (financial or
otherwise), operations, performance, properties and prospects of such other
Loan Party.

 

Section 7.                                            Covenants. 
Each Guarantor covenants and agrees that, so long as any part of the
Guaranteed Obligations shall remain unpaid, any Letter of Credit shall be
outstanding, any Lender Party shall have any Commitment, such Guarantor will
perform and observe, and cause each of its Subsidiaries to perform and observe,
all of the terms, covenants and agreements set forth in the Loan Documents on
its or their part to be performed or observed or that the Company has agreed to
cause such Guarantor or such Subsidiaries to perform or observe.

 

Section 8.                                            Amendments, Guaranty Supplements,
Etc.  (a)  No amendment or waiver of any provision of
this Guaranty and no consent to any departure by any Guarantor therefrom shall
in any event be effective unless the same shall be in writing and signed by the
Administrative Agent and the Required Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or
consent shall, unless in writing and signed by all of the Secured Parties (a)
reduce or limit the obligations of any Guarantor hereunder, release any
Guarantor hereunder or otherwise limit any Guarantor’s liability with respect
to the Obligations owing to the Secured Parties under or in respect of the Loan
Documents except as provided in the next succeeding sentence, (b) postpone any
date fixed for payment hereunder or (c) change the number of Secured Parties or
the percentage of (x) the Commitments, (y) the aggregate unpaid principal
amount of the Advances or (z) the aggregate Available Amount of outstanding
Letters of Credit that, in each case, shall be required for the Secured Parties
or any of them to take any action hereunder. Upon the sale of a Guarantor to
the extent permitted in accordance with the terms of the Loan Documents, such
Guarantor shall be automatically released from this Guaranty.

 

(b)                                 Upon
the execution and delivery by any Person of a guaranty supplement in
substantially the form of Exhibit A hereto (each, a “Guaranty Supplement”), (i) such Person shall
be referred to as an “Additional Guarantor” and shall become and be a
Guarantor hereunder, and each reference in this Guaranty to a “Guarantor” shall also
mean and be a reference to such Additional Guarantor, and each reference in any
other Loan Document to a “Guarantor” or a “U.S. Guarantor” shall also mean and be a reference to
such Additional Guarantor, and (ii) each reference herein to “this Guaranty”, “hereunder”, “hereof” or words of
like import referring to this Guaranty, and each reference in any other Loan
Document to the

 

9

 

“Guaranty”, “U.S. Guaranty”, “thereunder”, “thereof” or words of like import referring to
this Guaranty, shall mean and be a reference to this Guaranty as supplemented
by such Guaranty Supplement.

 

Section 9.                                            Notices, Etc. 
All notices and other communications provided for hereunder shall be in
writing (including telegraphic or telecopy communication) and mailed,
telecopied or delivered to it, if to any Guarantor, addressed to it in care of
the Company at the Company’s address specified in Section 9.02 of the
Credit Agreement, if to any Agent or any Lender Party, at its address specified
in Section 9.02 of the Credit Agreement, or, as to any party, at such
other address as shall be designated by such party in a written notice to each
other party.  All such notices and other
communications shall, when mailed or telecopied, be effective when deposited in
the mails or transmitted by telecopier, respectively.  Delivery by telecopier of an executed counterpart of a signature
page to any amendment or waiver of any provision of this Guaranty or of any
Guaranty Supplement to be executed and delivered hereunder shall be effective
as delivery of an original executed counterpart thereof.

 

Section 10.                                      No Waiver; Remedies.  No failure on the part of any Secured Party
to exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
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 11.                                      Right of Set-off.  Upon (a) the occurrence and during the continuance of any Event
of Default and (b) the making of the request or the granting of the consent
specified by Section 6.01 of the Credit Agreement to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of said Section 6.01, each Agent and each Lender Party and each
of their respective 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 such Agent, such Lender
Party or such Affiliate to or for the credit or the account of any Guarantor
against any and all of the Obligations of such Guarantor now or hereafter
existing under the Loan Documents, irrespective of whether such Agent or such
Lender Party shall have made any demand under this Guaranty or any other Loan
Document and although such Obligations may be unmatured.  Each Agent and each Lender Party agrees
promptly to notify such Guarantor after any such set-off and application; provided,
however,
that the failure to give such notice shall not affect the validity of such
set-off and application.  The rights of
each Agent and each Lender Party and their respective Affiliates under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Agent, such Lender Party and
their respective Affiliates may have.

 

Section 12.                                      Indemnification.  (a)  Without limitation on
any other Obligations of any Guarantor or remedies of the Secured Parties under
this Guaranty, each Guarantor shall, to

 

10

 

the fullest extent
permitted by law, indemnify, defend and save and hold harmless each Secured
Party and each of their Affiliates and their respective officers, directors,
employees, agents and advisors (each, an “Indemnified Party”) from and against, and shall pay on
demand, 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
connection with or as a result of any failure of any Guaranteed Obligations to
be the legal, valid and binding obligations of any Loan Party enforceable
against such Loan Party in accordance with their terms.

 

(b)                                 In
no event shall any of the Indemnified Parties have any liability (whether
direct or indirect, in contract, tort or otherwise) to any of the Guarantors or
any of their respective Affiliates or any of their respective officers,
directors, employees, agents and advisors, for any special, indirect,
consequential or punitive damages arising out of or otherwise relating to the
Facility, the actual or proposed use of the proceeds of the Advances or the
Letters of Credit, the Transaction Documents or any of the transactions
contemplated by the Transaction Documents.

 

(c)                                  Without
prejudice to the survival of any of the other agreements of any Guarantor under
this Guaranty or any of the other Loan Documents, the agreements and
obligations of each Guarantor contained in Section 1(a) (with respect to
enforcement expenses), the last sentence of Section 2, Section 5 and
this Section 12 shall survive the payment in full of the Guaranteed
Obligations and all of the other amounts payable under this Guaranty.

 

Section 13.                                      Subordination. 
Each Guarantor hereby subordinates any and all debts, liabilities and
other Obligations owed to such Guarantor by each other Loan Party (the “Subordinated Obligations”)
to the Guaranteed Obligations to the extent and in the manner hereinafter set
forth in this Section 13:

 

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

 

(b)                                 Prior
Payment of Guaranteed Obligations. 
In any proceeding under any Bankruptcy Law relating to any other Loan
Party, each Guarantor agrees that the Secured Parties shall be entitled to
receive payment in full in cash of all Guaranteed Obligations (including all
interest and expenses accruing after the commencement of a proceeding under any
Bankruptcy Law, whether or not constituting an allowed claim in such proceeding
(“Post Petition Interest”))
before such Guarantor receives payment of any Subordinated Obligations.

 

11

 

(c)                                  Turn-Over.  After the occurrence and during the
continuance of any Default (including the commencement and continuation of any
proceeding under any Bankruptcy Law relating to any other Loan Party), each
Guarantor shall, if the Administrative Agent so requests, collect, enforce and
receive payments on account of the Subordinated Obligations as trustee for the
Secured Parties and deliver such payments to the Administrative Agent on
account of the Guaranteed Obligations (including all Post Petition Interest),
together with any necessary endorsements or other instruments of transfer, but
without reducing or affecting in any manner the liability of such Guarantor
under the other provisions of this Guaranty.

 

(d)                                 Administrative
Agent Authorization.  After the
occurrence and during the continuance of any Default (including the
commencement and continuation of any proceeding under any Bankruptcy Law
relating to any other Loan Party), the Administrative Agent is authorized and
empowered (but without any obligation to so do), in its discretion, (i) in the
name of each Guarantor, to collect and enforce, and to submit claims in respect
of, Subordinated Obligations and to apply any amounts received thereon to the
Guaranteed Obligations (including any and all Post Petition Interest), and (ii)
to require each Guarantor (A) to collect and enforce, and to submit claims in
respect of, Subordinated Obligations and (B) to pay any amounts received on
such obligations to the Administrative Agent for application to the Guaranteed
Obligations (including any and all Post Petition Interest).

 

Section 14.                                      Continuing Guaranty; Assignments
under the Credit Agreement. 
This Guaranty is a continuing guaranty and shall (a) remain in full
force and effect until the latest of (i) the payment in full in cash of the
Guaranteed Obligations and all other amounts payable under this Guaranty, (ii)
the Termination Date and (iii) the latest date of expiration or termination of
all Letters of Credit, (b) be binding upon the Guarantor, its successors and
assigns and (c) inure to the benefit of and be enforceable by the Secured
Parties and their successors, transferees and assigns.  Without limiting the generality of clause
(c) of the immediately preceding sentence, any Secured Party may assign or
otherwise transfer all or any portion of its rights and obligations under the
Credit Agreement (including, without limitation, all or any portion of its
Commitments, the Advances owing to it and the Note or Notes held by it) to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Secured Party herein or otherwise,
in each case as and to the extent provided in Section 9.07 of the Credit
Agreement.  No Guarantor shall have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Secured Parties.

 

Section 15.                                      Execution in Counterparts.  This Guaranty and each amendment, waiver and
consent with respect hereto may be executed in any number of counterparts and
by different parties thereto 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

 

12

 

agreement.  Delivery of an executed counterpart of a
signature page to this Guaranty by telecopier shall be effective as delivery of
an original executed counterpart of this Guaranty.

 

Section 16.                                      Governing Law; Jurisdiction; Waiver
of Jury Trial, Etc. 
(a)  This Guaranty shall be
governed by, and construed in accordance with, the laws of the State of
California.

 

(b)                                 Each
Guarantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any California State court or
federal court of the United States of America sitting in Los Angeles,
California, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Guaranty or any of the other Loan
Documents to which it is or is to be a party, or for recognition or enforcement
of any judgment, and each Guarantor hereby irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard
and determined in any such California State court or, to the extent permitted
by law, in such federal court.  Each
Guarantor agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. 
Nothing in this Guaranty or any other Loan Document shall affect any
right that any party may otherwise have to bring any action or proceeding
relating to this Guaranty or any other Loan Document in the courts of any
jurisdiction.

 

(c)                                  Each
Guarantor 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 Guaranty or any of the other Loan Documents to which it is or
is to be a party in any California State or federal court.  Each Guarantor hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such suit, action or proceeding in any such court.

 

13

 

(d)                                 EACH
GUARANTOR 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 ANY OF THE LOAN DOCUMENTS, THE ADVANCES OR THE
ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT THEREOF.

 

IN
WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly executed
and delivered by its officer thereunto duly authorized as of the date first
above written.

 

 

	
   

  	
  [GUARANTORS]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

EXHIBIT
A

TO U.S.

GUARANTY

 

 

FORM OF
GUARANTY SUPPLEMENT

 

 

                       , 200    

 

 

BNP Paribas, as Agent

1 Front Street, San
Francisco, California 94111

Attention:  Tjalling Tersptra

Telecopier
number (415) 296-8954

With a copy to:  Tjalling Terpstra,

Telecopier
number (213) 488-9602

 

 

Credit Agreement dated as
of November 7, 2003 among International Rectifier Corporation, a Delaware
corporation (the “Company”),
the Lender Parties party thereto, Wells Fargo Bank, N.A. and Union Bank of
California as Co-Syndication Agents, Comerica Bank and Fleet Bank as
Co-Documentation Agents, BNP Paribas as Sole Arranger and Initial Issuing Bank
and BNP Paribas as Administrative Agent.

 

 

Ladies and Gentlemen:

 

Reference
is made to the above-captioned Credit Agreement and to the U.S. Guaranty
referred to therein (such U.S. Guaranty, as in effect on the date hereof and as
it may hereafter be amended, supplemented or otherwise modified from time to
time, together with this Guaranty Supplement, being the “Guaranty”). 
The capitalized terms defined in the Guaranty or in the Credit Agreement
and not otherwise defined herein are used herein as therein defined.

 

Section 1.  Guaranty; Limitation of Liability.  (a) 
The undersigned hereby absolutely, unconditionally and irrevocably
guarantees the punctual payment when due, whether at scheduled maturity or on
any date of a required prepayment or by acceleration, demand or otherwise, of
all Obligations of each other Loan Party now or hereafter existing under or in
respect of the Loan Documents (including, without limitation, any extensions,
modifications, substitutions, amendments or renewals of any or all of the
foregoing Obligations), whether direct or indirect, absolute or contingent, and
whether for principal, interest, premium, fees, indemnities, contract causes of
action, costs, expenses or otherwise (such Obligations being the

 

 

“Guaranteed Obligations”), and agrees to pay
any and all expenses (including, without limitation, fees and expenses of
counsel) incurred by the Administrative Agent or any other Secured Party in
enforcing any rights under this Guaranty Supplement, the Guaranty or any other
Loan Document.  Without limiting the
generality of the foregoing, the undersigned?s liability shall extend to all
amounts that constitute part of the Guaranteed Obligations and would be owed by
any other Loan Party to any Secured Party under or in respect of the Loan
Documents but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
such other Loan Party.

 

(b)                                 The
undersigned, and by its acceptance of this Guaranty Supplement, the
Administrative Agent and each other Secured Party, hereby confirms that it is
the intention of all such Persons that this Guaranty Supplement, the Guaranty
and the Obligations of the undersigned hereunder and thereunder not constitute
a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
federal or state law to the extent applicable to this Guaranty Supplement, the
Guaranty and the Obligations of the undersigned hereunder and thereunder.  To effectuate the foregoing intention, the
Administrative Agent, the other Secured Parties and the undersigned hereby
irrevocably agree that the Obligations of the undersigned under this Guaranty
Supplement and the Guaranty at any time shall be limited to the maximum amount
as will result in the Obligations of the undersigned under this Guaranty
Supplement and the Guaranty not constituting a fraudulent transfer or
conveyance.

 

(c)                                  The
undersigned hereby unconditionally and irrevocably agrees that in the event any
payment shall be required to be made to any Secured Party under this Guaranty
Supplement, the Guaranty or any other guaranty, the undersigned will
contribute, to the maximum extent permitted by applicable law, such amounts to
each other Guarantor and each other guarantor so as to maximize the aggregate
amount paid to the Secured Parties under or in respect of the Loan Documents.

 

Section 2.  Obligations Under the Guaranty.  The undersigned hereby agrees, as of the
date first above written, to be bound as a Guarantor by all of the terms and
conditions of the Guaranty to the same extent as each of the other Guarantors
thereunder.  The undersigned further
agrees, as of the date first above written, that each reference in the Guaranty
to an “AdditionalGuarantor” or a “Guarantor” shall also
mean and be a reference to the undersigned, and each reference in any other
Loan Document to a “Guarantor”,
a “U.S. Guarantor” or a
“Loan Party” shall
also mean and be a reference to the undersigned.

 

Section 3.  Representations and Warranties.  The undersigned hereby makes each
representation and warranty set forth in Section 6 of the Guaranty to the
same extent as each other Guarantor.

 

A-2

 

Section 4.  Delivery by Telecopier.  Delivery of an executed counterpart of a
signature page to this Guaranty Supplement by telecopier shall be effective as
delivery of an original executed counterpart of this Guaranty Supplement.

 

Section 5.  Governing Law; Jurisdiction; Waiver of
Jury Trial, Etc.  (a) This Guaranty
Supplement shall be governed by, and construed in accordance with, the laws of
the State of California.

 

(b)                                 The
undersigned hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any California State court or any
federal court of the United States of America sitting in Los Angeles,
California, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Guaranty Supplement, the Guaranty
or any of the other Loan Documents to which it is or is to be a party, or for
recognition or enforcement of any judgment, and the undersigned hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in any such California State
court or, to the extent permitted by law, in such federal court.  The undersigned agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law.  Nothing in this Guaranty
Supplement or the Guaranty or any other Loan Document shall affect any right
that any party may otherwise have to bring any action or proceeding relating to
this Guaranty Supplement, the Guaranty or any of the other Loan Documents to
which it is or is to be a party in the courts of any other jurisdiction.

 

(c)                                  The
undersigned 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 Guaranty Supplement, the Guaranty or any of the other Loan
Documents to which it is or is to be a party in any California State or federal
court.  The undersigned hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such suit, action or proceeding in any
such court.

 

A-3

 

(d)                                 THE
UNDERSIGNED 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 ANY OF THE LOAN DOCUMENTS, THE ADVANCES OR THE
ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT THEREOF.

 

Very
truly yours,

 

 

	
   

  	
  [NAME OF ADDITIONAL GUARANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
  Address:

  

 

A-4

 

EXHIBIT
E-2

TO CREDIT

AGREEMENT

 

 

FORM OF
U.S.
GUARANTY

 

Dated as of November 7, 2003

 

From

 

THE GUARANTORS NAMED HEREIN

 

and

 

THE ADDITIONAL GUARANTORS REFERRED TO HEREIN

 

as  Guarantors

 

in favor of

 

THE SECURED PARTIES REFERRED TO IN

THE CREDIT AGREEMENT REFERRED TO HEREIN

 

 

TABLE OF
CONTENTS

 

	
  Section

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 1.

  	
  Guaranty; Limitation
  of Liability

  	
   

  
	
  Section 2.

  	
  Guaranty
  Absolute

  	
   

  
	
  Section 3.

  	
  Waivers and Acknowledgments

  	
   

  
	
  Section 4.

  	
  Subrogation

  	
   

  
	
  Section 5.

  	
  Payments Free and
  Clear of Taxes, Etc

  	
   

  
	
  Section 6.

  	
  Representations and
  Warranties

  	
   

  
	
  Section 7.

  	
  Covenants

  	
   

  
	
  Section 8.

  	
  Amendments,
  Guaranty Supplements, Etc

  	
   

  
	
  Section 9.

  	
  Notices, Etc

  	
   

  
	
  Section 10.

  	
  No
  Waiver; Remedies

  	
   

  
	
  Section 11.

  	
  Right of
  Set-off

  	
   

  
	
  Section 12.

  	
  Indemnification

  	
   

  
	
  Section 13.

  	
  Subordination

  	
   

  
	
  Section 14.

  	
  Continuing
  Guaranty; Assignments under the Credit Agreement

  	
   

  
	
  Section 15.

  	
  Execution in Counterparts

  	
   

  
	
  Section 16.

  	
  Governing
  Law; Jurisdiction; Waiver of Jury Trial, Etc

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  -

  	
  Form of Guaranty Supplement

  	
   

  

 

i

 

Exhibit E-3

 

NON-U.S.
GUARANTY

 

NON-U.S.
GUARANTY dated as of
                       
       , 20   , (this “Guaranty”) made by
the Persons listed on the signature pages hereof under the caption “Guarantors”
and the Additional Guarantors (as defined in Section 8(b)) (such Persons
so listed and the Additional Guarantors being, collectively, the “Guarantors” and,
individually, each a “Guarantor”) in favor of the Secured Parties (as defined
in the Credit Agreement referred to below).

 

PRELIMINARY STATEMENT

 

International
Rectifier Corporation, a Delaware corporation (the “Company”), is party to a Credit Agreement
dated as of November 7, 2003 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”; the capitalized terms
defined therein and not otherwise defined herein being used herein as therein
defined) with the Lender Parties party thereto, Wells Fargo Bank, N.A. and
Union Bank of California as Co-Syndication Agents, Comerica Bank and Fleet Bank
as Co-Documentation Agents, BNP Paribas as Sole Arranger and Initial Issuing
Bank and BNP Paribas as Administrative Agent (the “Administrative Agent”).  Each Guarantor will derive substantial
direct and indirect benefits from the transactions contemplated by the Credit
Agreement.  It is a condition precedent
to the making of Advances and issuance of Letters of Credit by the Lender
Parties under the Credit Agreement from time to time that each Guarantor shall
have executed and delivered this Guaranty.

 

NOW,
THEREFORE, in consideration of the premises and in order to induce the Lender
Parties to make Advances and to issue Letters of Credit under the Credit
Agreement from time to time, each Guarantor, jointly and severally with each
other Guarantor, hereby agrees as follows:

 

Section 1.                                            Guaranty; Limitation of Liability.  (a) 
Each Guarantor hereby absolutely, unconditionally and irrevocably
guarantees the punctual payment when due, whether at scheduled maturity or on
any date of a required prepayment or by acceleration, demand or otherwise, of
all Obligations of each other Loan Party that is organized under the laws of a
jurisdiction outside of the United States, now or hereafter existing (such Loan
Parties being collectively the “Foreign Loan Parties” and individually, each a “Foreign Loan Party”)
under or in respect of the Loan Documents (including, without limitation, any
extensions, modifications, substitutions, amendments or renewals of any or all
of the foregoing Obligations), whether direct or indirect, absolute or
contingent, and whether for principal, interest, premiums, fees, indemnities,
contract causes of action, costs, expenses or otherwise (such Obligations being
the “Guaranteed Obligations”),
and agrees to pay any and all expenses (including, without

 

 

limitation, fees and
expenses of counsel) incurred by the Administrative Agent or its assignees in
enforcing any rights under this Guaranty. 
Without limiting the generality of the foregoing, each Guarantor’s
liability shall extend to all amounts that constitute part of the Guaranteed
Obligations and would be owed by any other Foreign Loan Party to any Secured
Party under or in respect of the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other Foreign Loan Party.

 

(b)                                 Each
Guarantor, and by its acceptance of this Guaranty, the Administrative Agent and
each other Secured Party, hereby confirms that it is the intention of all such
Persons that this Guaranty and the Obligations of each Guarantor hereunder not
constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law
(as hereinafter defined), the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar foreign, federal or state law to the
extent applicable to this Guaranty and the Obligations of each Guarantor
hereunder.  To effectuate the foregoing
intention, the Administrative Agent, the other Secured Parties and the
Guarantors hereby irrevocably agree that the Obligations of each Guarantor
under this Guaranty at any time shall be limited to the maximum amount as will
result in the Obligations of such Guarantor under this Guaranty not
constituting a fraudulent transfer or conveyance.  For purposes hereof, “Bankruptcy Law” means any proceeding of the type
referred to in Section 6.01(g) of the Credit Agreement or Title 11, U.S.
Code, or any similar foreign, federal or state law for the relief of debtors.

 

(c)                                  Each
Guarantor hereby unconditionally and irrevocably agrees that in the event any
payment shall be required to be made to any Secured Party under this Guaranty,
such Guarantor will contribute, to the maximum extent permitted by law, such
amounts to each other Guarantor so as to maximize the aggregate amount paid to
the Secured Parties under or in respect of the Loan Documents.

 

(d)                                 Notwithstanding
the foregoing, (x) the obligation of any Guarantor organized under the laws of
Germany (each a “German Guarantor”)
shall terminate in the event that such Guarantor no longer has any obligation
outstanding under the Loan Documents (other than this Guaranty) or has any
other payment obligation to a Secured Party, (y) each German Guarantor and by
its acceptance of this Guaranty, each Secured Party, hereby agrees that the
obligations of any German Guarantor hereunder shall be limited to such amount
that would not result in a violation of GMBH-Gesetz Section 30 or any
other laws of Germany that pertain to the protection of capital of such German
Guarantor and (z) each Guarantor organized under the laws of Italy (each an “Italian Guarantor”)
and by its acceptance of this Guaranty, each Secured Party, hereby agrees that
the obligations of any Italian Guarantor shall be limited to the amount that is
equal to the value of the aggregate assets of such Italian Guarantor minus all
outstanding liabilities of such Italian Guarantor, in each case determined at
the time of the taking of any

 

2

 

action to enforce this
Guaranty against such Italian Guarantor or to require payment from such Italian
Guarantor hereunder.

 

Section 2.                                            Guaranty Absolute.  Each Guarantor guarantees that the Guaranteed Obligations will be
paid strictly in accordance with the terms of the Loan Documents, regardless of
any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of any Secured Party with respect
thereto.  The Obligations of each
Guarantor under or in respect of this Guaranty are independent of the
Guaranteed Obligations or any other Obligations of any other Loan Party under
or in respect of the Loan Documents, and a separate action or actions may be
brought and prosecuted against each Guarantor to enforce this Guaranty,
irrespective of whether any action is brought against any other Loan Party or
whether any other Loan Party is joined in any such action or actions.  The liability of each Guarantor under this
Guaranty shall be irrevocable, absolute and unconditional irrespective of, and
each Guarantor hereby irrevocably waives any defenses it may now have or
hereafter acquire in any way relating to, any or all of the following:

 

(a)                                  any
lack of validity or enforceability of any Loan Document or any agreement or
instrument relating thereto;

 

(b)                                 any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Guaranteed Obligations or any other Obligations of any other Loan
Party under or in respect of the Loan Documents, or any other amendment or
waiver of or any consent to departure from any Loan Document, including,
without limitation, any increase in the Guaranteed Obligations resulting from
the extension of additional credit to any Loan Party or any of its Subsidiaries
or otherwise;

 

(c)                                  any
taking, exchange, release or non-perfection of any Collateral or any other
collateral, or any taking, release or amendment or waiver of, or consent to
departure from, any other guaranty, for all or any of the Guaranteed
Obligations;

 

(d)                                 any
manner of application of Collateral or any other collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale or
other disposition of any Collateral or any other collateral for all or any of
the Guaranteed Obligations or any other Obligations of any Loan Party under the
Loan Documents or any other assets of any Loan Party or any of its Subsidiaries;

 

(e)                                  any
change, restructuring or termination of the corporate structure or existence of
any Loan Party or any of its Subsidiaries;

 

(f)                                    any
failure of any Secured Party to disclose to any Loan Party any information
relating to the business, condition (financial or otherwise), operations,
performance,

 

3

 

properties or prospects
of any other Loan Party now or hereafter known to such Secured Party (each
Guarantor waiving any duty on the part of the Secured Parties to disclose such
information);

 

(g)                                 the
failure of any other Person to execute or deliver this Guaranty, any Guaranty
Supplement (as hereinafter defined) or any other guaranty or agreement or the
release or reduction of liability of any Guarantor or other guarantor or surety
with respect to the Guaranteed Obligations;

 

(h)                                 any
setoff or counterclaim of any Loan Party or any defense which results from any
disability or other defense of a Loan Party or the cessation or stay of
enforcement from any cause whatsoever of the liability of a Loan Party
(including, without limitation, the lack of validity or enforceability of any
of the Loan Documents);

 

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

 

(j)                                     any
statute of limitations to the extent permitted by law;

 

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

 

(l)                                     the
absence, impairment or loss of any right of subrogation, reimbursement,
exoneration, contribution or indemnification or other right or remedy against a
Loan Party, any other guarantor of the Obligations or any security, whether
resulting from an election by the Administrative Agent or any Lender to
foreclose upon security by non-judicial sale, or otherwise; or

 

(m)                               any
other circumstance (including, without limitation, any statute of limitations)
or any existence of or reliance on any representation by any Secured Party that
might otherwise constitute a defense available to, or a discharge of, any Loan
Party or any other guarantor or surety.

 

This
Guaranty shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Guaranteed Obligations is rescinded or
must otherwise be returned by any Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of a Borrower or any other Loan Party
or otherwise, all as though such payment had not been made.

 

4

 

Section 3.                                            Waivers and Acknowledgments.  (a) 
Each Guarantor hereby unconditionally and irrevocably waives promptness,
diligence, notice of acceptance, presentment, demand for performance, notice of
nonperformance, default, acceleration, protest or dishonor and any other notice
with respect to any of the Guaranteed Obligations and this Guaranty and any
requirement that any Secured Party protect, secure, perfect or insure any Lien
or any property subject thereto or exhaust any right or take any action against
any Loan Party or any other Person or any Collateral.

 

(b)                                 Each
Guarantor hereby unconditionally and irrevocably waives any right to revoke
this Guaranty and acknowledges that this Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the future.

 

(c)                                  Each
Guarantor hereby unconditionally and irrevocably waives (i) any defense arising
by reason of any claim or defense based upon an election of remedies by any
Secured Party that in any manner impairs, reduces, releases or otherwise
adversely affects the subrogation, reimbursement, exoneration, contribution or
indemnification rights of such Guarantor or other rights of such Guarantor to
proceed against any of the other Loan Parties, any other guarantor or any other
Person or any Collateral and (ii) any defense based on any right of set-off or
counterclaim against or in respect of the Obligations of such Guarantor
hereunder.

 

(d)                                 Each
Guarantor acknowledges that the Administrative Agent may, without notice to or
demand upon such Guarantor and without affecting the liability of such
Guarantor under this Guaranty, foreclose under any mortgage by nonjudicial
sale, and each Guarantor hereby waives any defense to the recovery by the
Administrative Agent and the other Secured Parties against such Guarantor of
any deficiency after such nonjudicial sale and any defense or benefits that may
be afforded by applicable law.

 

(e)                                  Each
Guarantor hereby waives any right to be informed by the Administrative Agent or
any Lender of the financial condition of any other Loan Party or any other
guarantor of the Guaranteed Obligations or any change therein or any other
circumstances bearing upon the risk of nonpayment or nonperformance of the
Guaranteed Obligations.

 

(f)                                    Each
Guarantor hereby waives any right it may have to a fair value hearing to
determine the size of a deficiency judgment following any foreclosure on any
security for the Guaranteed Obligations.

 

(g)                                 Without
limiting the scope of any of the foregoing provisions of this Section 3,
each Guarantor hereby further waives (i) all rights and defenses arising out of
an election of remedies by the Administrative Agent or any Lender, even though
that election of remedies, such as a non-judicial foreclosure with respect to
security for any Guaranteed

 

5

 

Obligation, has destroyed
such Guarantor’s rights of subrogation and reimbursements against any other
Loan Party by the operation of Section 580d of the California Code of
Civil Procedure or otherwise, (ii) all rights and defenses such Guarantor may
have by reason of protection afforded to any other Loan Party with respect to
the Guaranteed Obligations pursuant to the antideficiency or other laws of
California limiting or discharging the Guaranteed Obligations, including,
without limitation, Section 580a, 580b, 580d or 726 of the California Code
of Civil Procedure, and (III) all other rights and defenses available to such
Guarantor by reason of Sections 2787 to 2855, inclusive, Section 2899 or
Section 3433 of the California Civil Code or Section 3605 of the
California Commercial Code.

 

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

 

(i)                                     Each
Guarantor acknowledges that it will receive substantial direct and indirect
benefits from the financing arrangements contemplated by the Loan Documents and
that the waivers set forth in Section 2 and this Section 3 are
knowingly made in contemplation of such benefits.

 

Section 4.                                            Subrogation. 
Each Guarantor hereby unconditionally and irrevocably agrees not to
exercise any rights that it may now have or hereafter acquire against a
Borrower, any other Loan Party or any other insider guarantor that arise from
the existence, payment, performance or enforcement of such Guarantor’s
Obligations under or in respect of this Guaranty or any other Loan Document,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in
any claim or remedy of any Secured Party against a Borrower, any other Loan
Party or any other insider guarantor or any Collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from a Borrower,
any other Loan Party or any other insider guarantor, directly or indirectly, in

 

6

 

cash or other property or
by set-off or in any other manner, payment or security on account of such
claim, remedy or right, unless and until all of the Guaranteed Obligations and
all other amounts payable under this Guaranty shall have been paid in full in
cash, all Letters of Credit shall have expired or been terminated and the
Commitments shall have expired or been terminated.  If any amount shall be paid to any Guarantor in violation of the
immediately preceding sentence at any time prior to the latest of (a) the
payment in full in cash of the Guaranteed Obligations and all other amounts
payable under this Guaranty, (b) the Termination Date and (c) the latest date
of expiration or termination of all Letters of Credit, such amount shall be
received and held in trust for the benefit of the Secured Parties, shall be
segregated from other property and funds of such Guarantor and shall forthwith
be paid or delivered to the Administrative Agent in the same form as so
received (with any necessary endorsement or assignment) to be credited and
applied to the Guaranteed Obligations and all other amounts payable under this
Guaranty, whether matured or unmatured, in accordance with the terms of the
Loan Documents, or to be held as Collateral for any Guaranteed Obligations or
other amounts payable under this Guaranty thereafter arising.  If (i) any Guarantor shall make payment to
any Secured Party of all or any part of the Guaranteed Obligations, (ii) all of
the Guaranteed Obligations and all other amounts payable under this Guaranty
shall have been paid in full in cash, (iii) the Termination Date shall have
occurred and (iv) all Letters of Credit shall have expired or been terminated,
the Secured Parties will, at such Guarantor’s request and expense, execute and
deliver to such Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation
to such Guarantor of an interest in the Guaranteed Obligations resulting from
such payment made by such Guarantor pursuant to this Guaranty.

 

Section 5.                                            Payments Free and Clear of Taxes, Etc.  (a) 
Any and all payments made by any Guarantor under or in respect of this
Guaranty or any other Loan Document shall be made, in accordance with
Section 2.12 of the Credit Agreement, free and clear of and without
deduction for any and all present or future Taxes.  If any Guarantor shall be required by law to deduct any Taxes
from or in respect of any sum payable under or in respect of this Guaranty or
any other Loan Document to any Secured Party, (i) the sum payable by such
Guarantor shall be increased as may be necessary so that after such Guarantor
and the Administrative Agent have made all required deductions (including
deductions applicable to additional sums payable under this Section 5),
such Secured Party receives an amount equal to the sum it would have received
had no such deductions been made, (ii) such Guarantor shall make all such
deductions and (iii) such Guarantor shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.

 

(b)                                 In
addition, each Guarantor agrees to pay any present or future Other Taxes that
arise from any payment made by or on behalf of such Guarantor under or in
respect of

 

7

 

this Guaranty or any
other Loan Document or from the execution, delivery or registration of,
performance under, or otherwise with respect to, this Guaranty and the other
Loan Documents.

 

(c)                                  Each
Guarantor will indemnify each Secured Party for and hold it harmless against
the full amount of Taxes and Other Taxes, and for the full amount of taxes of
any kind imposed by any jurisdiction on amounts payable under this
Section 5, imposed on or paid by such Secured Party and any liability
(including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto.  This
indemnification shall be made within 30 days from the date such Secured Party
makes written demand therefor.

 

(d)                                 The
obligations of each Guarantor under this Section are subject in all
respects to the limitations, qualifications and satisfaction of conditions set
forth in Section 2.13 of the Credit Agreement.

 

Section 6.                                            Representations and Warranties.  Each Guarantor hereby makes each
representation and warranty made in the Loan Documents by the Company with
respect to such Guarantor and each Guarantor hereby further represents and
warrants as follows:

 

(a)                                  There
are no conditions precedent to the effectiveness of this Guaranty that have not
been satisfied or waived.

 

(b)                                 Such
Guarantor has, independently and without reliance upon any Secured Party and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Guaranty and each other
Loan Document to which it is or is to be a party, and such Guarantor has
established adequate means of obtaining from each other Loan Party on a
continuing basis information pertaining to, and is now and on a continuing
basis will be completely familiar with, the business, condition (financial or
otherwise), operations, performance, properties and prospects of such other
Loan Party.

 

Section 7.                                            Covenants. 
Each Guarantor covenants and agrees that, so long as any part of the
Guaranteed Obligations shall remain unpaid, any Letter of Credit shall be
outstanding or any Lender Party shall have any Commitment, such Guarantor will
perform and observe, and cause each of its Subsidiaries to perform and observe,
all of the terms, covenants and agreements set forth in the Loan Documents on
its or their part to be performed or observed or that the Company has agreed to
cause such Guarantor or such Subsidiaries to perform or observe.

 

Section 8.                                            Amendments, Guaranty Supplements, Etc.  (a) 
No amendment or waiver of any provision of this Guaranty and no consent
to any departure by any Guarantor therefrom shall in any event be effective
unless the same shall be in writing and signed by the Administrative Agent and
the Required Lenders, and then such waiver or consent shall be

 

8

 

effective only in the
specific instance and for the specific purpose for which given, provided,
however,
that no amendment, waiver or consent shall, unless in writing and signed by all
of the Secured Parties (a) reduce or limit the obligations of any Guarantor
hereunder, release any Guarantor hereunder or otherwise limit any Guarantor’s
liability with respect to the Obligations owing to the Secured Parties under or
in respect of the Loan Documents except as provided in the next succeeding
sentence, (b) postpone any date fixed for payment hereunder or (c) change the
number of Secured Parties or the percentage of (x) the Commitments, (y) the
aggregate unpaid principal amount of the Advances or (z) the aggregate
Available Amount of outstanding Letters of Credit that, in each case, shall be
required for the Secured Parties or any of them to take any action
hereunder.  Upon the sale of a Guarantor
to the extent permitted in accordance with the terms of the Loan Documents,
such Guarantor shall be automatically released from this Guaranty.

 

(b)                                 Upon
the execution and delivery by any Person of a guaranty supplement in
substantially the form of Exhibit A hereto (each a “Guaranty Supplement”), (i) such Person shall
be referred to as an “Additional Guarantor” and shall become and be a
Guarantor hereunder, and each reference in this Guaranty to a “Guarantor” shall also
mean and be a reference to such Additional Guarantor, and each reference in any
other Loan Document to a “Guarantor” or a “Non-U.S. Guarantor” shall also mean and be a reference
to such Additional Guarantor, and (ii) each reference herein to “this Guaranty”, “hereunder”, “hereof” or words of
like import referring to this Guaranty, and each reference in any other Loan
Document to the “Guaranty”,
“Non-U.S. Guaranty”, “thereunder”, “thereof” or words of
like import referring to this Guaranty, shall mean and be a reference to this
Guaranty as supplemented by such Guaranty Supplement.

 

Section 9.                                            Notices, Etc. 
All notices and other communications provided for hereunder shall be in
writing (including telegraphic or telecopy communication) and mailed,
telecopied or delivered to it, if to any Guarantor, addressed to it in care of
the Company at the Company’s address specified in Section 9.02 of the
Credit Agreement, if to any Agent or Lender Party, at its address specified in
Section 9.02 of the Credit Agreement or, as to any party, at such other
address as shall be designated by such party in a written notice to each other
party.  All such notices and other
communications shall, when mailed, telegraphed or telecopied, be effective when
deposited in the mails, delivered to the telegraph company or transmitted by
telecopier, respectively.  Delivery by
telecopier of an executed counterpart of a signature page to any amendment or
waiver of any provision of this Guaranty or of any Guaranty Supplement to be
executed and delivered hereunder shall be effective as delivery of an original
executed counterpart thereof.

 

Section 10.                                      No Waiver; Remedies.  No failure on the part of any Secured Party
to exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor

 

9

 

shall any single or
partial exercise of any right hereunder 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 11.                                      Right of Set-Off.  Upon (a) the occurrence and during the continuance of any Event
of Default and (b) the making of the request or the granting of the consent
specified by Section 6.01 of the Credit Agreement to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of said Section 6.01, each Agent and each Lender Party and each
of their respective 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 such Agent, such Lender
Party or such Affiliate to or for the credit or the account of any Guarantor
against any and all of the Obligations of such Guarantor now or hereafter
existing under the Loan Documents, irrespective of whether such Agent or such
Lender Party shall have made any demand under this Guaranty or any other Loan
Document and although such Obligations may be unmatured.  Each Agent and each Lender Party agrees
promptly to notify such Guarantor after any such set-off and application; provided,
however,
that the failure to give such notice shall not affect the validity of such
set-off and application.  The rights of
each Agent and each Lender Party and their respective Affiliates under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Agent, such Lender Party and
their respective Affiliates may have.

 

Section 12.                                      Indemnification.  (a)  Without limitation of
any other Obligations of any Guarantor or remedies of the Secured Parties under
this Guaranty, each Guarantor shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless each Secured Party and each of
their Affiliates and their respective officers, directors, employees, agents
and advisors (each, an “Indemnified Party”) from and against, and shall pay on
demand, 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
connection with or as a result of any failure of any Guaranteed Obligations to
be the legal, valid and binding obligations of any Loan Party enforceable
against such Loan Party in accordance with their terms.

 

(b)                                 In
no event shall any of the Indemnified Parties have any liability (whether
direct or indirect, in contract, tort or otherwise) to any of the Guarantors or
any of their respective Affiliates or any of their respective officers, directors,
employees, agents and advisors, for any special, indirect, consequential or
punitive damages arising out of or otherwise relating to the Facility, the
actual or proposed use of the proceeds of the Advances or the Letters of
Credit, the Transaction Documents or any of the transactions contemplated by
the Transaction Documents.

 

10

 

(c)                                  Without
prejudice to the survival of any of the other agreements of any Guarantor under
this Guaranty or any of the other Loan Documents, the agreements and
obligations of each Guarantor contained in Section 1(a) (with respect to
enforcement expenses), the last sentence of Section 2, Section 5 and
this Section 12 shall survive the payment in full of the Guaranteed
Obligations and all of the other amounts payable under this Guaranty.

 

Section 13.                                      Subordination. 
Each Guarantor hereby subordinates any and all debts, liabilities and
other Obligations owed to such Guarantor by each other Loan Party (the “Subordinated Obligations”)
to the Guaranteed Obligations to the extent and in the manner hereinafter set
forth in this Section 13:

 

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

 

(b)                                 Prior
Payment of Guaranteed Obligations. 
In any proceeding under any Bankruptcy Law relating to any other Loan
Party, each Guarantor agrees that the Secured Parties shall be entitled to
receive payment in full in cash of all Guaranteed Obligations (including all
interest and expenses accruing after the commencement of a proceeding under any
Bankruptcy Law, whether or not constituting an allowed claim in such proceeding
(“Post Petition Interest”))
before such Guarantor receives payment of any Subordinated Obligations.

 

(c)                                  Turn-Over.  After the occurrence and during the
continuance of any Default (including the commencement and continuation of any
proceeding under any Bankruptcy Law relating to any other Loan Party), each Guarantor
shall, if the Administrative Agent so requests, collect, enforce and receive
payments on account of the Subordinated Obligations as trustee for the Secured
Parties and deliver such payments to the Administrative Agent on account of the
Guaranteed Obligations (including all Post Petition Interest), together with
any necessary endorsements or other instruments of transfer, but without
reducing or affecting in any manner the liability of such Guarantor under the
other provisions of this Guaranty.

 

(d)                                 Administrative
Agent.  After the occurrence and
during the continuance of any Default (including the commencement and
continuation of any proceeding under any Bankruptcy Law relating to any other
Loan Party), the Administrative Agent is authorized and empowered (but without
any obligation to so do), in its discretion, (i) in the name of each

 

11

 

Guarantor, to collect and
enforce, and to submit claims in respect of, Subordinated Obligations and to
apply any amounts received thereon to the Guaranteed Obligations (including any
and all Post Petition Interest), and (ii) to require each Guarantor (A) to
collect and enforce, and to submit claims in respect of, Subordinated
Obligations and (B) to pay any amounts received on such obligations to the
Borrowers or their assignees for application to the Guaranteed Obligations
(including any and all Post Petition Interest).

 

Section 14.                                      Continuing Guaranty; Assignments
under the Credit Agreement. 
This Guaranty is a continuing guaranty and shall (a) remain in full
force and effect until the latest of (i) the payment in full in cash of the
Guaranteed Obligations and all other amounts payable under this Guaranty, (ii)
the Termination Date and (iii) the latest date of expiration or termination of
all Letters of Credit, (b) be binding upon the Guarantor, its successors and
assigns and (c) inure to the benefit of and be enforceable by the Secured
Parties and their successors, transferees and assigns.  Without limiting the generality of clause
(c) of the immediately preceding sentence, any Secured Party may assign or
otherwise transfer all or any portion of its rights and obligations under the
Credit Agreement (including, without limitation, all or any portion of its
Commitments, the Advances owing to it and the Note or Notes held by it) to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to such Secured Party herein or otherwise,
in each case as and to the extent provided in Section 9.07 of the Credit
Agreement.  No Guarantor shall have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Secured Parties.

 

Section 15.                                      Execution in Counterparts.  This Guaranty and each amendment, waiver and
consent with respect hereto may be executed in any number of counterparts and
by different parties thereto 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 Guaranty
by telecopier shall be effective as delivery of an original executed
counterpart of this Guaranty.

 

Section 16.                                      Judgment. 
(a)  If for the purposes of
obtaining judgment in any court it is necessary to convert a sum due hereunder
in Dollars into another currency, the parties hereto agree, to the fullest
extent that they may effectively do so, that the rate of exchange used shall be
that at which in accordance with normal banking procedures the Administrative
Agent could purchase Dollars with such other currency at BNP Paribas’ principal
office in London at 11:00 A.M. (London time) on the Business Day preceding that
on which final judgment is given.

 

(b)                                 If
for the purposes of obtaining judgment in any court it is necessary to convert
a sum due hereunder in a foreign currency into Dollars, the parties agree to
the fullest extent that they may effectively do so, that the rate of exchange
used shall be that at which in

 

12

 

accordance with normal
banking procedures the Administrative Agent could purchase such foreign
currency with Dollars at BNP Paribas’ principal office in London at 11:00 A.M. (London
time) on the Business Day preceding that on which final judgment is given.

 

(c)                                  The
obligations of each Guarantor in respect of any sum due from it in any currency
(the “Primary Currency”)
to the Secured Parties hereunder and under the Loan Documents shall,
notwithstanding any judgment in any other currency, be discharged only to the
extent that on the Business Day following receipt by the Administrative Agent
of any sum adjudged to be so due in such other currency, the Administrative
Agent may in accordance with normal banking procedures purchase the applicable
Primary Currency with such other currency; if the amount of the applicable
Primary Currency so purchased is less than such sum due to the Administrative
Agent or other Secured Parties (as the case may be) in the applicable Primary
Currency, each Guarantor agrees, as a separate obligation and notwithstanding
any such judgment, to indemnify the Administrative Agent and the other Secured
Parties against such loss, and if the amount of the applicable Primary Currency
so purchased exceeds such sum due to the Administrative Agent or other Secured
Parties (as the case may be) in the applicable Primary Currency, the
Administrative Agent or other Secured Party (as the case may be) agrees to
remit to such Guarantor such excess.

 

Section 17.                                      Governing Law; Jurisdiction; Waiver
of Jury Trial, Etc.. 
(a)  This Guaranty shall be
governed by, and construed in accordance with, the laws of the State of
California.

 

(b)                                 Each
Guarantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any California State court or
federal court of the United States of America sitting in Los Angeles,
California, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Guaranty or any of the other Loan Documents
to which it is or is to be a party, or for recognition or enforcement of any
judgment, and each Guarantor hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such California State court or, to the extent permitted by
law, in such federal court.  Each
Guarantor agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.  Nothing in this Guaranty or any other Loan Document shall affect
any right that any party may otherwise have to bring any action or proceeding
relating to this Guaranty or any other Loan Document in the courts of any
jurisdiction.

 

(c)                                  Each
Guarantor 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 Guaranty or any

 

13

 

of the other Loan
Documents to which it is or is to be a party in any California State or federal
court.  Each Guarantor hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such suit, action or proceeding in any
such court.

 

(d)                                 Each
Guarantor hereby agrees that service of process in any such action or
proceeding brought in the any such California State court or in such federal
court may be made upon International Rectifier Corporation at its offices at
233 Kansas Street, El Segundo, California 90245 Attention: Executive Vice
President (the “Process Agent”)
and each Guarantor hereby irrevocably appoints the Process Agent its authorized
agent to accept such service of process, and agrees that the failure of the
Process Agent to give any notice of any such service shall not impair or affect
the validity of such service or of any judgment rendered in any action or
proceeding based thereon.  Each
Guarantor 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 Process Agent
at the address above.  Each Guarantor
party hereto agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.  Nothing in this Guaranty shall affect any right that any party
may otherwise have to bring any action or proceeding relating to this Guaranty
or the Loan Documents in the courts of any jurisdiction.  To the extent that each Guarantor has or
hereafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, each Guarantor hereby irrevocably waives such immunity in
respect of its obligations under this Guaranty.

 

14

 

(e)                                  EACH
GUARANTOR 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 ANY OF THE LOAN DOCUMENTS, THE ADVANCES OR THE
ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT THEREOF.

 

IN
WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly executed
and delivered by its officer thereunto duly authorized as of the date first
above written.

 

 

	
   

  	
  [GUARANTORS]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

EXHIBIT
A

TO
NON-U.S.

GUARANTY

 

 

FORM OF GUARANTY SUPPLEMENT

 

 

                          ,
200   

 

 

BNP Paribas, as
Administrative Agent

Attn. Tjalling Terpstra

1 Front Street

San Francisco, California 94111

Telecopier number (415) 296-8954

With a copy to:  Tjalling Terpstra,

Telecopier number (213) 488-9602

 

 

Credit Agreement dated as
of November 7, 2003 among International Rectifier Corporation, a Delaware
corporation (the “Company”),
the Lender Parties party thereto, Wells Fargo Bank, N.A. and Union Bank of
California as Co-Syndication Agents, Comerica Bank and Fleet Bank as
Co-Documentation Agents, BNP Paribas as Sole Arranger and Initial Issuing Bank
and BNP Paribas as Administrative Agent.

 

 

Ladies and Gentlemen:

 

Reference
is made to the above-captioned Credit Agreement and to the Non-U.S. Guaranty
referred to therein (such Non-U.S. Guaranty, as in effect on the date hereof
and as it may hereafter be amended, supplemented or otherwise modified from
time to time, together with this Guaranty Supplement, being the “Guaranty”).  The capitalized terms defined in the
Guaranty or in the Credit Agreement and not otherwise defined herein are used
herein as therein defined.

 

Section 1.  Guaranty; Limitation of Liability.  (a) 
The undersigned hereby absolutely, unconditionally and irrevocably
guarantees the punctual payment when due, whether at scheduled maturity or on
any date of a required prepayment or by acceleration, demand or otherwise, of
all Obligations of each other Loan Party that is organized under the laws of a
jurisdiction outside of the United States, now or hereafter existing under or
in respect of the Loan

 

 

Documents (including,
without limitation, any extensions, modifications, substitutions, amendments or
renewals of any or all of the foregoing Obligations), whether direct or
indirect, absolute or contingent, and whether for principal, interest, premium,
fees, indemnities, contract causes of action, costs, expenses or otherwise
(such Obligations being the “Guaranteed Obligations”), and agrees to pay any and all
expenses (including, without limitation, fees and expenses of counsel) incurred
by the Administrative Agent or any other Secured Party in enforcing any rights
under this Guaranty Supplement, the Guaranty or any other Loan Document.  Without limiting the generality of the
foregoing, the undersigned?s liability shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by any other
Loan Party that is organized under the laws of a jurisdiction outside of the
United States to any Secured Party under or in respect of the Loan Documents
but for the fact that they are unenforceable or not allowable due to the
existence of a bankruptcy, reorganization or similar proceeding involving such
other Loan Party.

 

(b)                                 The
undersigned, and by its acceptance of this Guaranty Supplement, the
Administrative Agent and each other Secured Party, hereby confirms that it is
the intention of all such Persons that this Guaranty Supplement, the Guaranty
and the Obligations of the undersigned hereunder and thereunder not constitute
a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform
Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
federal or state law to the extent applicable to this Guaranty Supplement, the
Guaranty and the Obligations of the undersigned hereunder and thereunder.  To effectuate the foregoing intention, the
Administrative Agent, the other Secured Parties and the undersigned hereby
irrevocably agree that the Obligations of the undersigned under this Guaranty
Supplement and the Guaranty at any time shall be limited to the maximum amount
as will result in the Obligations of the undersigned under this Guaranty
Supplement and the Guaranty not constituting a fraudulent transfer or
conveyance.

 

(c)                                  The
undersigned hereby unconditionally and irrevocably agrees that in the event any
payment shall be required to be made to any Secured Party under this Guaranty
Supplement, the Guaranty or any other guaranty, the undersigned will
contribute, to the maximum extent permitted by applicable law, such amounts to
each other Guarantor and each other guarantor so as to maximize the aggregate
amount paid to the Secured Parties under or in respect of the Loan Documents.

 

Section 2.  Obligations Under the Guaranty.  The undersigned hereby agrees, as of the
date first above written, to be bound as a Guarantor by all of the terms and
conditions of the Guaranty to the same extent as each of the other Guarantors
thereunder.  The undersigned further
agrees, as of the date first above written, that each reference in the Guaranty
to an “Additional Guarantor”
or a “Guarantor”
shall also mean and be a reference to the undersigned, and each

 

A-2

 

reference in any other
Loan Document to a “Guarantor”
, a “Non-U.S. Guarantor”
or a “Loan Party”
shall also mean and be a reference to the undersigned.

 

Section 3.  Representations and Warranties.  The undersigned hereby makes each representation
and warranty set forth in Section 6 of the Guaranty to the same extent as
each other Guarantor.

 

Section 4.  Delivery by Telecopier.  Delivery of an executed counterpart of a
signature page to this Guaranty Supplement by telecopier shall be effective as
delivery of an original executed counterpart of this Guaranty Supplement.

 

Section 5.  Judgment.  (a) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in Dollars into another currency, the
undersigned agrees, to the fullest extent that it may effectively do so, that
the rate of exchange used shall be that at which in accordance with normal
banking procedures the Administrative Agent could purchase Dollars with such
other currency at BNP Paribas’ principal office in London at 11:00 A.M. (London
time) on the Business Day preceding that on which final judgment is given.

 

(b)                                 If
for the purposes of obtaining judgment in any court it is necessary to convert
a sum due hereunder in a foreign currency into Dollars, the undersigned agrees
to the fullest extent that it may effectively do so, that the rate of exchange
used shall be that at which in accordance with normal banking procedures the
Administrative Agent could purchase such foreign currency with Dollars at BNP
Paribas’ principal office in London at 11:00 A.M. (London time) on the Business
Day preceding that on which final judgment is given.

 

(c)                                  The
obligations of the undersigned in respect of any sum due from it in any
currency (the “Primary Currency”)
to the Secured Parties hereunder and under the Loan Documents shall,
notwithstanding any judgment in any other currency, be discharged only to the
extent that on the Business Day following receipt by the Administrative Agent
of any sum adjudged to be so due in such other currency, the Administrative
Agent may in accordance with normal banking procedures purchase the applicable
Primary Currency with such other currency; if the amount of the applicable
Primary Currency so purchased is less than such sum due to the Administrative
Agent or other Secured Parties (as the case may be) in the applicable Primary
Currency, the undersigned agrees, as a separate obligation and notwithstanding
any such judgment, to indemnify the Administrative Agent and the other Secured
Parties against such loss, and if the amount of the applicable Primary Currency
so purchased exceeds such sum due to the Administrative Agent or other Secured
Parties (as the case may be) in the applicable Primary Currency, the
Administrative Agent or other Secured Party (as the case may be) agrees to
remit to the undersigned such excess.

 

A-3

 

Section 6.  Governing Law; Jurisdiction; Waiver of
Jury Trial, Etc.  (a)  This Guaranty Supplement shall be governed
by, and construed in accordance with, the laws of the State of California.

 

(b)                                 The
undersigned hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any California State court or any
federal court of the United States of America sitting in Los Angeles,
California, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Guaranty Supplement, the Guaranty
or any of the other Loan Documents to which it is or is to be a party, or for
recognition or enforcement of any judgment, and the undersigned hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in any such California State
court or, to the extent permitted by law, in such federal court.  The undersigned agrees that a final judgment
in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law.  Nothing in this Guaranty
Supplement or the Guaranty or any other Loan Document shall affect any right
that any party may otherwise have to bring any action or proceeding relating to
this Guaranty Supplement, the Guaranty or any of the other Loan Documents to
which it is or is to be a party in the courts of any other jurisdiction.

 

(c)                                  The
undersigned 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 Guaranty Supplement, the Guaranty or any of the other Loan
Documents to which it is or is to be a party in any California State or federal
court.  The undersigned hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such suit, action or proceeding in any
such court.

 

(d)                                 The
undersigned hereby agrees that service of process in any such action or
proceeding brought in the any such California State court or in such federal
court may be made upon International Rectifier Corporation at its offices at
233 Kansas Street, El Segundo, California 90245 Attention: Executive Vice
President (the “Process Agent”)
and the undersigned hereby irrevocably appoints the Process Agent its
authorized agent to accept such service of process, and agrees that the failure
of the Process Agent to give any notice of any such service shall not impair or
affect the validity of such service or of any judgment rendered in any action
or proceeding based thereon.  The
undersigned 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 Process Agent
at the address above.  The undersigned
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. 
Nothing in this Guaranty shall affect any right that any party may
otherwise have to

 

A-4

 

bring any action or
proceeding relating to this Guaranty or the Loan Documents in the courts of any
jurisdiction.  To the extent that the
undersigned has or hereafter may acquire any immunity from jurisdiction of any
court or from any legal process (whether through service or notice, attachment
prior to judgment, attachment in aid of execution, execution or otherwise) with
respect to itself or its property, the undersigned hereby irrevocably waives
such immunity in respect of its obligations under this Guaranty.

 

(e)                                  THE
UNDERSIGNED 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 ANY OF THE LOAN DOCUMENTS, THE ADVANCES OR THE
ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT THEREOF.

 

 

	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  [NAME OF
  ADDITIONAL GUARANTOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

A-5

 

EXHIBIT E-3

TO
CREDIT

AGREEMENT

 

 

FORM OF
NON-U.S.
GUARANTY

 

From

 

THE GUARANTORS NAMED HEREIN

 

and

 

THE ADDITIONAL GUARANTORS REFERRED TO HEREIN

 

as  Guarantors

 

in favor of

 

THE SECURED PARTIES REFERRED TO
IN 

THE CREDIT AGREEMENT REFERRED TO HEREIN

 

 

TABLE OF
CONTENTS

 

	
  Section 1.

  	
   

  	
  Guaranty; Limitation
  of Liability

  	
   

  
	
  Section 2.

  	
   

  	
  Guaranty
  Absolute

  	
   

  
	
  Section 3.

  	
   

  	
  Waivers and Acknowledgments

  	
   

  
	
  Section 4.

  	
   

  	
  Subrogation

  	
   

  
	
  Section 5.

  	
   

  	
  Payments Free and
  Clear of Taxes, Etc

  	
   

  
	
  Section 6.

  	
   

  	
  Representations and
  Warranties

  	
   

  
	
  Section 7.

  	
   

  	
  Covenants

  	
   

  
	
  Section 8.

  	
   

  	
  Amendments,
  Guaranty Supplements, Etc

  	
   

  
	
  Section 9.

  	
   

  	
  Notices, Etc

  	
   

  
	
  Section 10.

  	
   

  	
  No
  Waiver; Remedies

  	
   

  
	
  Section 11.

  	
   

  	
  Right of
  Set-Off

  	
   

  
	
  Section 12.

  	
   

  	
  Indemnification

  	
   

  
	
  Section 13.

  	
   

  	
  Subordination

  	
   

  
	
  Section 14.

  	
   

  	
  Continuing
  Guaranty; Assignments under the Credit Agreement

  	
   

  
	
  Section 15.

  	
   

  	
  Execution in Counterparts

  	
   

  
	
  Section 16.

  	
   

  	
  Judgment

  	
   

  
	
  Section 17.

  	
   

  	
  Governing
  Law; Jurisdiction; Waiver of Jury Trial, Etc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A 

  	
  -

  	
  Form of Guaranty Supplement

  	
   

  

 

i

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00058-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00058-of-00352.parquet"}]]