Document:

<PAGE>

                                                                    EXHIBIT 4.08
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                                CREDIT AGREEMENT
                                      among

                       FLEXTRONICS INTERNATIONAL USA, INC.
                                       and

                            THE LENDERS NAMED HEREIN
                                       and

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

                              FLEET NATIONAL BANK,

             as Co-Lead Arranger, Syndication Agent and Issuing Bank
                                       and

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

                  BNP PARIBAS and KEYBANK NATIONAL ASSOCIATION
                           as Senior Managing Agents
                                      and

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

                                  March 3, 2004

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

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                                TABLE OF CONTENTS

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                                                                                                               PAGE
<S>                                                                                                            <C>
SECTION I.        INTERPRETATION.................................................................................1

         1.01.    Definitions....................................................................................1

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

         1.03.    Headings......................................................................................17

         1.04.    Plural Terms..................................................................................17

         1.05.    Governing Law.................................................................................17

         1.06.    English Language..............................................................................17

         1.07.    Construction..................................................................................17

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

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

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

         1.11.    Other Interpretive Provisions.................................................................18

SECTION II.       CREDIT FACILITIES.............................................................................18

         2.01.    Loans and Letters of Credit...................................................................18

         2.02.    Notice of Borrowing...........................................................................23

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

         2.04.    Purpose.......................................................................................25

         2.05.    Amount Limitations, Commitment Reductions, Etc................................................25

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

         2.07.    Prepayments...................................................................................26

         2.08.    Other Payment Terms...........................................................................27

         2.09.    Loan Accounts; Notes..........................................................................28

         2.10.    Loan Funding..................................................................................29

         2.11.    Pro Rata Treatment............................................................................29

         2.12.    Change of Circumstances.......................................................................30

         2.13.    Taxes on Payments.............................................................................32

         2.14.    Funding Loss Indemnification..................................................................33

         2.15.    Security......................................................................................34

         2.16.    Replacement of Lenders........................................................................34

SECTION III.      CONDITIONS PRECEDENT..........................................................................35

         3.01.    Initial Conditions Precedent..................................................................35

         3.02.    Conditions Precedent to Each Credit Event.....................................................35

         3.03.    Covenant to Deliver...........................................................................35

SECTION IV.       REPRESENTATIONS AND WARRANTIES................................................................35

         4.01.    Borrower's Representations and Warranties.....................................................35
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                                        i

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                               TABLE OF CONTENTS
                                  (CONTINUED)

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                                                                                                               PAGE
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         4.02.    Reaffirmation.................................................................................40

SECTION V.        COVENANTS.....................................................................................40

         5.01.    Affirmative Covenants.........................................................................40

         5.02.    Negative Covenants............................................................................43

         5.03.    Financial Covenants...........................................................................48

SECTION VI.       DEFAULT.......................................................................................49

         6.01.    Events of Default.............................................................................49

         6.02.    Remedies......................................................................................51

         6.03.    Lender Rate Contract Remedies.................................................................51

SECTION VII.      THE AGENT AND RELATIONS AMONG LENDERS.........................................................51

         7.01.    Appointment, Powers and Immunities............................................................51

         7.02.    Reliance by Agent.............................................................................52

         7.03.    Defaults......................................................................................52

         7.04.    Indemnification...............................................................................52

         7.05.    Non-Reliance..................................................................................52

         7.06.    Resignation or Removal of Agent...............................................................53

         7.07.    Agent in its Individual Capacity..............................................................53

         7.08.    Co-Arrangers, Co-Syndication Agents, Senior Managing Agents Managing Agents and
                  Documentation Agent...........................................................................53

SECTION VIII.     MISCELLANEOUS.................................................................................53

         8.01.    Notices.......................................................................................53

         8.02.    Expenses......................................................................................55

         8.03.    Indemnification...............................................................................55

         8.04.    Waivers; Amendments...........................................................................55

         8.05.    Successors and Assigns........................................................................56

         8.06.    Set-off; Security Interest....................................................................58

         8.07.    No Third Party Rights.........................................................................59

         8.08.    Partial Invalidity............................................................................59

         8.09.    Jury Trial....................................................................................59

         8.10.    Counterparts..................................................................................59

         8.11.    Confidentiality...............................................................................59

         8.12.    Consent to Jurisdiction.......................................................................59

         8.13.    Usury.........................................................................................60
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                                       ii

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                               TABLE OF CONTENTS
                                  (CONTINUED)

EXHIBITS                                                                    PAGE

A        Notice of Borrowing

B   -    Form of Note

C        Form of Guaranty

D   -    Form of Assignment Agreement

                                       iii

<PAGE>

                                CREDIT AGREEMENT

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

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

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

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

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

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

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

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

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

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

                                    RECITALS

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

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

                                    AGREEMENT

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

SECTION I. INTERPRETATION.

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

<PAGE>

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

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

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

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

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

                  "Agreement" shall mean this Credit Agreement.

                  "Applicable Lending Office" shall mean, with respect to any
         Lender and any Borrowing, (i) in the case of any Base Rate Loan, such
         Lender's Domestic Lending Office, and (ii) in the case of any LIBOR
         Loan, such Lender's Euro-Dollar Lending Office

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

                  "Applicable Payment Office" shall mean Borrower's offices
         located at 2090 Fortune Drive, San Jose, California.

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

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

                  "Business Day" shall mean any day on which commercial banks
         are not authorized or required to close in San Francisco, California,
         New York, New York, or Chicago, Illinois, other than Saturday or
         Sunday, and if such Business Day is related to a Borrowing consisting
         of LIBOR Loans, dealings in Dollar deposits are carried out in the
         London interbank market and commercial banks are open for business in
         London.

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

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

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

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

                  "Closing Date" shall mean March 3, 2004.

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

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

                  "Combined Proportionate Share" shall mean:

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

<PAGE>

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

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

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

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

                                       to

                           (b) EBITDA for such period.

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

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

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

<PAGE>

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

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

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

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

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

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

                                      plus

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

                                      plus

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

                                      plus

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

<PAGE>

                  with GAAP) in connection with the closing of any plant or
                  similar facility that is directly related to any New Program
                  Acquisition;

                                      plus

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

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

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

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

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

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

                  "Equity Securities" of any Person shall mean (a) all common
         stock, preferred stock, participations, shares, partnership interests,
         membership interests, beneficial interests in a trust or other equity
         interests in and of such Person (regardless of how designated and
         whether or not voting or non-voting) and (b) all warrants, options and
         other rights to acquire any of the foregoing.

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

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

                  "Euro-Dollar Lending Office" shall mean, with respect to any
         Lender and LIBOR Loans, (a) initially, such Lender's office designated
         as such in Part B of Schedule I (or, in the case of any Lender which
         becomes a Lender by an assignment pursuant to Subparagraph 8.05(c), its
         office designated as such in the applicable Assignment and Assumption)
         and (b) subsequently, such other office or offices as such Lender may
         designate to Agent as the office at which such Lender's LIBOR Loans
         will thereafter be

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

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

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

                           (a)      EBITDA for such period;

                                       to

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

                                      minus

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

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

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

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

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

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

                           (f) All obligations of other Persons of the types
                  described in clauses (a) - (e) above to the extent secured by
                  (or for which any holder of such obligations has an existing
                  right,

<PAGE>

                  contingent or otherwise, to be secured by) any Lien in any
                  property (including accounts and contract rights) of such
                  Person, even though such Person has not assumed or become
                  liable for the payment of such obligations.

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

                  "Material Adverse Effect" shall mean a material adverse effect
         on (a) the business, assets, operations or financial condition of FIL
         and its Subsidiaries taken as a whole, or Borrower and its
         Subsidiaries, taken as a whole, (b) the ability of Borrower to pay or
         perform its Obligations in accordance

<PAGE>

         with the terms of this Agreement and the other Credit Documents or the
         ability of FIL to pay or perform its obligations in accordance with the
         terms of the FIL Credit Documents, (c) the ability of the Guarantors
         (taken as a whole) to pay or perform the Obligations in accordance with
         the terms of this Agreement and the other Credit Documents or (d) the
         rights and remedies of Agent or any Lender under this Agreement, the
         other Credit Documents or any related document, instrument or
         agreement.

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

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

                  "Maturity Date" shall mean March 3, 2008.

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

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

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

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

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

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

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

                  "Proportionate Share" shall mean:

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

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

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

                  "Subsidiary" of any Person shall mean (a) any corporation of
         which more than 50% of the issued and outstanding Equity Securities
         having ordinary voting power to elect a majority of the Board of
         Directors of such corporation (irrespective of whether at the time
         capital stock of any other class or classes of such corporation shall
         or might have voting power upon the occurrence of any contingency) is
         at the time directly or indirectly owned or controlled by such Person,
         by such Person and one or more of its other Subsidiaries or by one or
         more of such Person's other Subsidiaries, (b) any partnership, joint
         venture, limited liability company or other association of which more
         than 50% of the equity interest having the power to vote, direct or
         control the management of such partnership, joint venture or other
         association is at the time owned and controlled by such Person, by such
         Person and one or more of the other Subsidiaries or by one or more of
         such Person's other Subsidiaries or (c) any other Person included in
         the Financial Statements of such Person on a consolidated basis. (All
         references in this Agreement and the other Credit Documents to
         Subsidiaries of FIL shall, unless otherwise indicated, include Borrower
         and its Subsidiaries.)

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

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

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

<PAGE>

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

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

                  "Unused" shall mean:

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

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

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

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

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

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

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

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

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

<PAGE>

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

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

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

         1.10.    References.

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

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

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

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

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

SECTION II. CREDIT FACILITIES.

         2.01.    Loans and Letters of Credit.

                  (a)      Loans.
<PAGE>

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

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

                  (b)      Letter of Credit Subfacility.

                            (i)     Availability. Upon the satisfaction (or
                  waiver in accordance with Paragraph 8.04) of the conditions
                  specified in Paragraph 3.01 on the Closing Date, each Existing
                  Letter of Credit will automatically, without any action on the
                  part of any Person, be deemed to be a Letter of Credit issued
                  hereunder for the account of the applicable Borrower for all
                  purposes of this Agreement and the other Credit Documents. In
                  addition, subject to the terms and conditions of this
                  Agreement (including the amount limitations set forth in
                  Paragraph 2.05), Issuing Bank agrees to issue on behalf of
                  Borrower from time to time during the period beginning on the
                  Closing Date and ending on the date that is thirty (30) days
                  prior to the Maturity Date such Letters of Credit as any
                  Borrower may request under this Subparagraph 2.01(b);
                  provided, however, as follows:

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

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

                           (iii)    Disbursement and Reimbursement.

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

                                    (B)      Time of Reimbursement. On the day
                           each Drawing Payment is to be made by Issuing Bank,
                           Borrower shall make or cause to be made to Issuing
                           Bank a payment in the amount of such Drawing Payment
                           (a "Reimbursement Payment"); provided, however, that
                           if Borrower does not receive notice from Issuing Bank
                           by 10:00 a.m. (California time) that a Reimbursement
                           Payment is due, such Reimbursement Payment (together
                           with interest thereon accruing at the Federal Funds
                           Rate from and including the date such Drawing Payment
                           is made but excluding the next succeeding Business
                           Day) shall instead be due on the next succeeding
                           Business Day after Borrower receives such notice,
                           provided that Borrower shall make such Reimbursement
                           Payment

<PAGE>

                           to, or cause such Reimbursement Payment to be made
                           to, Agent for the benefit of the Lenders if, prior to
                           the time such Reimbursement Payment is made, Issuing
                           Bank has notified Borrower that it has requested the
                           Lenders pursuant to Subparagraph 2.01(b)(iv) to pay
                           to Issuing Bank their respective Proportionate Shares
                           of the Drawing Payment made by Issuing Bank. If any
                           such Reimbursement Payment is made to Agent, Agent
                           shall promptly pay to each Lender which has paid its
                           Proportionate Share of the Drawing Payment, such
                           Lender's Proportionate Share of the Reimbursement
                           Payment and shall promptly pay to Issuing Bank the
                           balance of such Reimbursement Payment.

                                    (C)      Reimbursement Obligation Absolute.
                           The obligation of Borrower to reimburse Issuing Bank
                           or the Lenders, as the case may be, for Drawing
                           Payments (such obligation, together with the
                           obligation to pay interest thereon, to be referred to
                           herein collectively as a "Reimbursement Obligation")
                           shall be absolute, unconditional and irrevocable, and
                           shall be performed strictly in accordance with the
                           terms of this Agreement under and without regard to
                           any circumstances, including, (1) the passage of the
                           Maturity Date, (2) any lack of validity or
                           enforceability of any of the Credit Documents, (3)
                           the existence of any claim, set-off, defense or other
                           right which Borrower may have at any time against any
                           beneficiary or any transferee of any Letter of Credit
                           (or any Persons for whom any such beneficiary or
                           transferee may be acting), Issuing Bank, Agent, any
                           other Lender or any other Person, whether in
                           connection with this Agreement, the transactions
                           contemplated herein or in the other Credit Documents,
                           or in any unrelated transaction, (4) any breach of
                           contract or dispute between Borrower, any beneficiary
                           or any transferee of any Letter of Credit (or any
                           Persons for whom any such beneficiary or transferee
                           may be acting), Issuing Bank, any Agent, any Lender
                           or any other Person, (5) any demand, statement or
                           other document presented under any Letter of Credit
                           proving to be forged, fraudulent, invalid or
                           insufficient in any respect or any statement therein
                           being untrue or inaccurate in any respect, (6)
                           payment by Issuing Bank under any Letter of Credit
                           against presentation of a demand for payment which
                           does not comply with the terms of such Letter of
                           Credit, (7) any non-application or misapplication by
                           any beneficiary or any transferee of any Letter of
                           Credit (or any Persons for whom any such beneficiary
                           or transferee may be acting) of the proceeds of any
                           drawing under such Letter of Credit, (8) any delay,
                           extension of time, renewal, compromise or other
                           indulgence or modification granted or agreed to by
                           Issuing Bank, Agent or any Lender, with or without
                           notice to or approval by Borrower, with respect to
                           Borrower's indebtedness under this Agreement or (9)
                           any other act or omission to act or delay of any kind
                           of the Issuing Bank, Agent, any Lender or any other
                           person, in any other event or circumstance
                           whatsoever, whether or not similar to any of the
                           foregoing that might, but for the provisions of this
                           Subparagraph 2.01(b)(iii)(C), constitute a legal or
                           equitable discharge of, or provide a right of set-off
                           against, Borrower's respective obligations hereunder;
                           provided, however, that this Subparagraph
                           2.01(b)(iii)(C) shall not abrogate any right which
                           Borrower may have to seek to enjoin any drawing under
                           any Letter of Credit or to recover damages from
                           Issuing Bank pursuant to Subparagraph 2.01(c)(v).

                           (iv)     Lender Participations; Loan Funding.

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

                                    (B)      Participation Funding. Issuing Bank
                           may request the Lenders to fund their participations
                           in Letters of Credit by paying to Issuing Bank all or
                           any portion of any Drawing Payment made or to be made
                           by Issuing Bank under any Letter of Credit.

<PAGE>

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

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

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

                           (v)      Liability of Issuing Bank, Etc. Provided
                  that Issuing Bank has used reasonable care in examining all
                  documents presented to it in connection with a demand on any
                  Letter of Credit, Borrower agrees that none of Issuing Bank,
                  Agent or any Lender (nor any of their respective directors,
                  officers or employees) shall be liable or responsible for (A)
                  the use which may be made of any Letter of Credit or for any
                  acts or omissions of any beneficiary or transferee thereof in
                  connection therewith; (B) any reference which may be made to
                  this Agreement or to any Letter of Credit in any agreements,
                  instruments or other documents relating to obligations secured
                  by such Letter of Credit; (C) the validity, sufficiency or
                  genuineness of documents, or of any endorsement(s) thereon,
                  even if such documents should in fact prove to be in any or
                  all respects invalid, insufficient, fraudulent or forged or
                  any statement therein prove to be untrue or inaccurate in any
                  respect whatsoever; (D) payment by Issuing Bank against
                  presentation of documents which

<PAGE>

                  do not comply with the terms of any Letter of Credit,
                  including failure of any documents to bear any reference or
                  adequate reference to any Letter of Credit; or (E) any other
                  circumstances whatsoever in making or failing to make payment
                  under any Letter of Credit, except only that Issuing Bank
                  shall be liable to Borrower for acts or events described in
                  clauses (A) through (E) above, to the extent, but only to the
                  extent, of any damages suffered by Borrower (excluding
                  consequential damages) which Borrower proves were caused by
                  (1) Issuing Bank's willful misconduct or gross negligence in
                  determining whether a drawing made under any Letter of Credit
                  complies with the terms and conditions therefor stated in such
                  Letter of Credit or (2) Issuing Bank's willful misconduct or
                  gross negligence in failing to pay under any Letter of Credit
                  after a drawing by the beneficiary thereof strictly complying
                  with the terms and conditions of such Letter of Credit.
                  Without limiting the foregoing, Issuing Bank may accept a
                  drawing that appears on its face to be in order, without
                  responsibility for further investigation. The determination of
                  whether a drawing has been made under any Letter of Credit
                  prior to its expiration or whether a drawing made under any
                  Letter of Credit is in proper and sufficient form shall be
                  made by Issuing Bank in its sole discretion, which
                  determination shall be conclusive and binding upon Borrower to
                  the extent permitted by law. The parties hereto expressly
                  agree that, in the absence of willful misconduct or gross
                  negligence by the Issuing Bank (as finally determined by a
                  court of competent jurisdiction), the Issuing Bank shall be
                  deemed to have exercised reasonable care. Borrower hereby
                  waives any right to object to any payment made under any
                  Letter of Credit with regard to a drawing that is in the form
                  provided in such Letter of Credit but which varies with
                  respect to punctuation, capitalization, spelling or similar
                  matters of form.

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

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

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

                  (a)      The principal amount of such Borrowing, which shall
         be in the minimum amount of Five Million Dollars ($5,000,000) (provided
         that on the Closing Date the minimum Dollar amount or Dollar Equivalent
         shall be $3,000,000) or an integral multiple of One Million Dollars
         ($1,000,000) in excess

<PAGE>

         thereof, provided that Borrowings may be in an aggregate amount that is
         equal to the entire Unused amount of the Commitments;

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

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

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

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

         2.03.    Interest.

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

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

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

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

                  (b)      Terms.

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

                           (ii)     Notice of Interest Period Selection.
                  Borrower shall notify Agent by an irrevocable written notice
                  in a form acceptable to Agent, appropriately completed (a
                  "Notice of Interest Period Selection"), at least three (3)
                  Business Days prior to the last day of each Interest Period
                  for a Borrowing consisting of LIBOR Loans of the Interest
                  Period selected by Borrower for the next succeeding Interest
                  Period for such Borrowing. Each Notice of Interest Period
                  Selection

<PAGE>

                  shall be given by first-class mail or facsimile to the office
                  or the facsimile number and during the hours specified in
                  Paragraph 8.01; provided, however, that Borrower shall
                  promptly deliver to Agent the original of any Notice of
                  Interest Period Selection initially delivered by facsimile. If
                  Borrower fails to notify Agent of the next Interest Period for
                  a Borrowing in accordance with this Subparagraph 2.03(b)(ii),
                  the next Interest Period for such Borrowing shall be one (1)
                  month. Agent shall promptly notify each Lender of the contents
                  of each Notice of Interest Period Selection.

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

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

         2.05.    Amount Limitations, Commitment Reductions, Etc.

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

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

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

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

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

<PAGE>

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

         2.06.    Fees.

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

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

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

                  (c)      Letter of Credit Fees.

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

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

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

         2.07.    Prepayments.
<PAGE>

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

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

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

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

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

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

         2.08.    Other Payment Terms.

                  (a)      Place and Manner.

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

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

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

<PAGE>

                  (c)      Currency of Payment.

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

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

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

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

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

         2.09.    Loan Accounts; Notes.

                  (a)      Loan Accounts. The obligation of Borrower to repay
         the Loans made to it by each Lender and to pay interest thereon at the
         rates provided herein shall be evidenced by an account or accounts
         maintained by such Lender on its books (individually, a "Loan
         Account"), except that any Lender may

<PAGE>

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

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

         2.10.    Loan Funding.

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

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

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

         2.11.    Pro Rata Treatment.

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

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

<PAGE>

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

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

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

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

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

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

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

         2.12.    Change of Circumstances.

                  (a)      Inability to Obtain Funds, Determine Rates, Etc. If,
         on or before the first day of any Interest Period for any LIBOR
         Borrowing, Agent shall determine (which determination shall be
         conclusive and binding upon Borrower absent manifest error) that (i)
         the LIBO Rate for such Interest Period for such Borrowing cannot be
         adequately and reasonably determined due to other circumstances
         affecting the London interbank market or (ii) the rate of interest for
         such Borrowing does not adequately and fairly reflect the cost to
         Lenders of making or maintaining such Borrowing, Agent shall
         immediately give notice of such condition to Borrower and the
         applicable Lenders. After the giving of any such notice and until Agent
         shall otherwise notify Borrower that the circumstances giving rise to
         such condition no longer exist, Borrower's right to obtain, continue or
         convert to Borrowings at the LIBO Rate shall be suspended. Any

<PAGE>

         LIBOR Borrowings outstanding at the commencement of any such suspension
         shall be repaid at the end of the then current Interest Period for such
         Borrowings unless such suspension has then ended.

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

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

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

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

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

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

                  (d)      Capital Requirements. If, after the date of this
         Agreement, any Lender determines that (i) any Change of Law affects the
         amount of capital required or expected to be maintained by such Lender
         or any Person controlling such Lender (a "Capital Adequacy
         Requirement") and (ii) the amount of capital maintained by such Lender
         or such Person which is attributable to or based upon the Loans, the
         Letters of

<PAGE>

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

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

         2.13.    Taxes on Payments.

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

                  (b)      Withholding Exemption Certificates. On or prior to
         the Closing Date (or, with respect to any Lender which is not a party
         to this Agreement on the Closing Date, on or prior to the date any
         other Lender becomes a Lender hereunder), each Lender which is not
         organized under the laws of the United States of America shall notify
         Borrower whether such Lender is entitled to receive payments on its
         Loans under this Agreement from Borrower's Applicable

<PAGE>

         Payment Office for the account of such Lender's Applicable Lending
         Office without deduction or withholding of any income taxes (or with
         reduced deduction or withholding of any such taxes) imposed by the
         jurisdiction of such Borrower's Applicable Payment Office and promptly
         deliver to such Borrower and/or any other appropriate person(s) such
         certificates, forms and/or other documents certifying that such Lender
         is entitled to receive such payments without deduction or withholding
         of taxes (or with reduced deduction or withholding of any such taxes)
         as such Borrower shall reasonably request to establish such fact. Each
         such Lender further agrees (i) promptly to notify Borrower and Agent of
         any change of circumstances (including any change in any treaty, law or
         regulation or any change of such Lender's Applicable Lending Office)
         which would prevent such Lender from receiving such payments hereunder
         without any deduction or withholding of such taxes (or with reduced
         deduction or withholding of any such taxes) and (ii) if such Lender is
         still legally entitled to do so, then on or before the date that any
         certificate, form and/or other documents delivered by such Lender under
         this Subparagraph 2.13(b) expires or otherwise becomes inapplicable, to
         deliver to Borrower and Agent a new certificate, form and/or other
         documents, certifying that such Lender is entitled to receive such
         payments under this Agreement without deduction or withholding of such
         taxes (or with reduced deduction or withholding of any such taxes). If
         any Lender that is legally entitled to do so fails to provide to Agent
         and Borrower pursuant to this Subparagraph 2.13(b) (or, in the case of
         an Assignee Participant, Subparagraph 8.05(b)) any notifications,
         certificates or other evidence required by this provision, such Lender
         shall not be entitled to any indemnification under Subparagraph 2.13(a)
         for any Non-Excluded Taxes imposed on such Lender primarily as a result
         of such failure. Notwithstanding the foregoing, if such Lender is not
         entitled to receive payments on its Loans without deduction or
         withholding of taxes (or with reduced deduction or withholding of any
         such taxes) and cannot lawfully provide any such forms, it shall
         continue to be entitled to the benefits of Subparagraph 2.13(a).

                  (c)      Mitigation. If Agent or any Lender claims any
         additional amounts to be payable to it pursuant to this Paragraph 2.13,
         such Person shall provide to the appropriate Person(s) to the extent it
         may lawfully do so any certificate, forms, and/or other documents
         reasonably requested in writing by Borrower certifying that such Lender
         is entitled to receive a reduced rate of withholding if it is in fact
         so entitled or to change the jurisdiction of an Applicable Lending
         Office if the making of such a filing or such change in the
         jurisdiction of an Applicable Lending Office would avoid the need for
         or materially reduce the amount of any such additional amounts which
         may thereafter accrue and if, in the sole discretion of such Person, in
         the case of a change in the jurisdiction of an Applicable Lending
         Office, such change would not be disadvantageous to such Person or
         contrary to such Person's normal banking practices. Borrower hereby
         agrees to pay all reasonable documented costs and expenses incurred by
         the Lender in connection with any action taken pursuant to this
         Subparagraph 2.13(c). If Agent or any Lender does not provide the
         requisite certificate(s), form(s), or other document(s) or change the
         jurisdiction of its Applicable Lending Office, if not determined to be
         disadvantageous in its sole discretion, then Borrower shall not be
         obligated to pay any additional amounts that arise from such Agent or
         Lender's failure to comply with this Subparagraph 2.13(c).

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

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

         2.14.    Funding Loss Indemnification. If Borrower shall (a) repay,
prepay or convert any LIBOR Loan on any day other than the last day of an
Interest Period therefor (whether a scheduled payment, an optional prepayment or
conversion, a mandatory prepayment or conversion, a payment upon acceleration or
otherwise), (b) fail to borrow any LIBOR Loan after delivering the Notice of
Borrowing therefor to Agent (whether as a result of the failure to satisfy any
applicable conditions or otherwise), (c) pursuant to Paragraph 2.16, cause the
replacement of any Lender that has made or maintained any LIBOR Loan or (d) fail
to pay when due any principal or interest on any LIBOR Loan, Borrower shall,
within ten (10) Business Days after demand of such Lender, reimburse such Lender
for and hold such Lender harmless from all reasonable break funding costs and
losses incurred by such Lender as a result of such repayment, prepayment,
conversion or failure; provided, however, that Borrower shall have no obligation
to make any payment to any demanding party under this Paragraph 2.14 on account
of any such

<PAGE>

costs or losses unless Borrower receives notice of such costs or losses from the
demanding party within twelve (12) months after such costs or losses have been
incurred or realized. Borrower understands that such costs and losses may
include losses incurred by a Lender as a result of funding and other contracts
entered into by such Lender to fund a LIBOR Loan. Each Lender demanding payment
under this Paragraph 2.14 shall deliver to Borrower, with a copy to Agent, a
certificate of an officer of such demanding party setting forth the amount of
costs and losses for which demand is made, which certificate shall set forth in
reasonable detail the calculation of the amount demanded. Such a certificate so
delivered to Borrower shall constitute prima facie evidence of such costs and
losses. The obligations of Borrower under this Paragraph 2.14 shall survive the
payment and performance of the Obligations and the termination of this
Agreement.

         2.15.    Security.

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

                  (b)      Changes in Material Subsidiaries.

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

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

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

         2.16.    Replacement of Lenders. If any Lender shall (a) become a
Defaulting Lender more than one (1) time in a period of twelve (12) consecutive
months, (b) continue as a Defaulting Lender for more than three (3) Business
Days at any time, (c) suspend its obligation to make or maintain LIBOR Loans
pursuant to

<PAGE>

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

SECTION III. CONDITIONS PRECEDENT.

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

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

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

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

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

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

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

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

SECTION IV. REPRESENTATIONS AND WARRANTIES.

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

<PAGE>

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

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

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

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

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

                  (f)      No Violation or Default. None of FIL, Borrower, any
         other Guarantor nor any of FIL's other Subsidiaries is in violation of
         or in default with respect to (i) any Requirement of Law applicable to
         such Person or (ii) any Contractual Obligation of such Person, where,
         in each case or in the aggregate, such violation or default is
         reasonably and substantially likely to have a Material Adverse Effect.
         Without limiting the generality of the foregoing, none of FIL,
         Borrower, any other Guarantor or any of FIL's other Subsidiaries (i)
         has violated any Environmental Laws, (ii) to the knowledge of Borrower,
         any Guarantor or any of FIL's Subsidiaries, has any liability under any
         Environmental Laws or (iii) has received notice or other communication
         of an investigation or, to the knowledge of Borrower, any Guarantor or
         any of FIL's Subsidiaries, is under investigation by any Governmental
         Authority having authority to enforce Environmental Laws, where such
         violation, liability or investigation is reasonably and substantially
         likely (alone or in the aggregate) to have a Material Adverse Effect.
         No Default has occurred and is continuing.

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

<PAGE>

         or performance by Borrower or any Guarantor of the Credit Documents or
         the transactions contemplated thereby.

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

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

                  (j)      Employee Benefit Plans.

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

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

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

<PAGE>

                  ERISA or that any Multiemployer Plan intends to terminate or
                  has been terminated under section 4041A of ERISA.

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

                  (k)      Other Regulations. None of FIL, Borrower or any
         Material Subsidiary is subject to regulation under the Investment
         Company Act of 1940, the Public Utility Holding Company Act of 1935,
         the Federal Power Act, the Interstate Commerce Act, any state public
         utilities code or any other Governmental Rule that limits its ability
         to incur Indebtedness.

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

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

                  (n)      Margin Stock. Borrower does not own any Margin Stock
         which, in the aggregate, would constitute a substantial part of the
         assets of Borrower, and no proceeds of any Loan and no Letter of Credit
         will be used to purchase or carry, directly or indirectly, any Margin
         Stock or to extend credit, directly or indirectly, to any Person for
         the purpose of purchasing or carrying any Margin Stock.

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

<PAGE>

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

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

                  (r)      No Withholding, Etc. Except as otherwise disclosed by
         a Borrower to the Agent from time to time, Borrower does not have
         actual knowledge of any requirement under any Governmental Rule to make
         any deduction or withholding of any nature whatsoever from any payment
         required to be made by Borrower or any or Guarantor hereunder or under
         any other Credit Document. Neither this Agreement nor any of the other
         Credit Documents is subject to any registration or stamp tax or any
         other similar or like taxes payable in any relevant jurisdiction.

                  (s)      Foreign Subsidiaries.

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

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

                           (iii)    Exchange Controls. The execution, delivery
                  and performance by Borrower of this Agreement and each of the
                  other Credit Documents executed by a Foreign Subsidiary is,
                  under

<PAGE>

                  applicable foreign exchange control regulations of the
                  jurisdiction in which Borrower or Foreign Subsidiary is
                  organized and existing, not subject to any notification or
                  authorization except (A) such as have been made or obtained or
                  (B) such as cannot be made or obtained until a later date and
                  are listed on Schedule 4.01(s) hereto (provided any
                  notification or authorization described in immediately
                  preceding clause (B) shall be made or obtained as soon as is
                  reasonably practicable).

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

                  (u)      Accuracy of Information Furnished. The Credit
         Documents and the other certificates, statements and information
         (excluding projections) furnished to Agent or any Lender by or on
         behalf of FIL, Borrower, the Guarantors and FIL's Subsidiaries in
         connection with the Credit Documents and the transactions contemplated
         thereby, taken as a whole, do not contain and will not contain any
         untrue statement of a material fact and do not omit and will not omit
         to state a material fact necessary to make the statements therein, in
         light of the circumstances under which they were made, not misleading.
         All projections have been based upon reasonable assumptions and
         represent, as of their respective dates of presentations, FIL's and
         Borrower's best estimates of the future performance of FIL, Borrower,
         the Guarantors and FIL's Subsidiaries.

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

SECTION V. COVENANTS.

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

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

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

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

<PAGE>

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

                           (iv)     As soon as possible and in no event later
                  than five (5) Business Days after any officer of Borrower
                  knows of the occurrence or existence of (A) any Reportable
                  Event under any Employee Benefit Plan or Multiemployer Plan,
                  (B) any actual or threatened litigation, suits, claims or
                  disputes against FIL, Borrower or any of FIL's Subsidiaries
                  involving potential monetary damages payable by FIL, Borrower
                  or any of FIL's Subsidiaries of Ten Million Dollars
                  ($10,000,000) or more (alone or in the aggregate), (C) any
                  other event or condition which is reasonably and substantially
                  likely (alone or in the aggregate) to have a Material Adverse
                  Effect, (D) any Default or (E) any event of the type described
                  in Subparagraph 6.01(f) or (g) with respect to any Subsidiary,
                  so long as such Subsidiary is determined at the time of such
                  event to be a Significant Subsidiary, the statement of the
                  chief executive officer, chief operating officer, chief
                  financial officer, treasurer, assistant treasurer, controller
                  or senior vice president of finance of such Borrower setting
                  forth details of such event, condition or Default and the
                  action which FIL and Borrower propose to take with respect
                  thereto;

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

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

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

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

         In lieu of furnishing to Agent hard copies of the quarterly Financial
         Statements described in clause (i) above and the annual Financial
         Statements and auditor's report described in clauses (ii)(A) and
         (ii)(B) above and the other documents referred to in clause (v) above,
         FIL may make such documents available to Lenders by posting such
         documents on its website located at www.flextronics.com and through the
         United States Securities and Exchange Commission's EDGAR system
         ("EDGAR") or by transmitting such

<PAGE>

         documents electronically to Lenders. Agent shall provide to any Lender
         hard copies of such documents upon request if such Lender does not have
         access to FIL's website or EDGAR.

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

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

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

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

                  (f)      Use of Proceeds. Borrower shall use the proceeds of
         the Loans and Letters of Credit only for the purposes set forth in
         Section II. Borrower shall not use any part of the proceeds of any Loan
         or any Letter of Credit, directly or indirectly, for the purpose of
         purchasing or carrying any Margin Stock or for the purpose of
         purchasing or carrying or trading in any securities under such
         circumstances as to involve Borrower, any Lender or Agent in a
         violation of Regulations T, U or X issued by the Federal Reserve Board.

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

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

<PAGE>

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

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

                  (k)      Flextronics Hungaria Kft. In the event that (x)
         Flextronics Hungaria Kft has not been liquidated or dissolved and (y)
         all or substantially all of the assets of Flextronics Hungaria Kft have
         not been transferred to Flextronics Cyprus Limited by June 30, 2004,
         then, within five (5) Business Days of such date, Borrower shall cause
         Flextronics Hungaria Kft to (i) complete and execute a Subsidiary
         Joinder and (ii) deliver or cause to be delivered such other
         instruments, agreements, certificates, opinions and documents as Agent
         may reasonably request.

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

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

                           (i)      Indebtedness created under the Credit
                  Documents;

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

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

<PAGE>

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

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

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

                           (ix)     Liens arising out of cash management,
                  netting or set off arrangements made between banks or
                  financial institutions and FIL or any of its Subsidiaries in
                  the ordinary course of business, or over any asset held with a
                  clearing house, or other Liens comprising rights of set-off
                  arising by operation of law or by agreement;

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

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

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

                           (vii)    Deposit accounts;

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

                           (ix)     Other Investments, provided that:

<PAGE>

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

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

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

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

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

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

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

                  (h)      Employee Benefit Plans.

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

                           (ii)     None of FIL, Borrower or any of FIL's other
                  Subsidiaries shall (A) engage in any transaction prohibited by
                  any Governmental Rule applicable to any Foreign Plan, (B) fail
                  to

<PAGE>

                  make full payment when due of all amounts due as contributions
                  to any Foreign Plan or (C) otherwise fail to comply with the
                  requirements of any Governmental Rule applicable to any
                  Foreign Plan, where singly or cumulatively, the above would be
                  reasonably and substantially likely to have a Material Adverse
                  Effect.

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

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

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

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

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

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

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

June 30, 2004                                                    3.50 : 1.00

September 30, 2004                                               3.50 : 1.00

December 31, 2004                                                3.50 : 1.00

March 31, 2005                                                   3.50 : 1.00
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
    Date                                                            Ratio
    ----                                                            -----
<S>                                                              <C>
June 30, 2005                                                    3.50 : 1.00

September 30, 2005                                               3.50 : 1.00

December 31, 2005                                                3.50 : 1.00

March 31, 2006                                                   3.25 : 1.00

June 30, 2006                                                    3.25 : 1.00

September 30, 2006                                               3.25 : 1.00

December 31, 2006                                                3.25 : 1.00

March 31, 2007                                                   3.25 : 1.00

June 30, 2007                                                    3.25 : 1.00

September 30, 2007                                               3.25 : 1.00

December 31, 2007                                                3.25 : 1.00
</TABLE>

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

SECTION VI. DEFAULT.

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

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

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

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

                  (d)      Representations and Warranties. Any representation,
         warranty, certificate, information or other statement (financial or
         otherwise) made or furnished by or on behalf of FIL or Borrower to
         Agent or any Lender in or in connection with this Agreement or any of
         the other Credit Documents, or as an

<PAGE>

         inducement to Agent or any Lender to enter into this Agreement, shall
         be false, incorrect, incomplete or misleading in any material respect
         when made (or deemed made) or furnished and either (i) Agent or any
         Lender has delivered to Borrower written notice thereof and such
         representation, warranty, certificate, information or other statement
         cannot be remedied or (ii) such representation, warranty, certificate,
         information or other statement continues to be false, incorrect,
         incomplete or misleading in any material respect thirty (30) days after
         the earlier of (A) Borrower's written acknowledgement that such
         representation, warranty, certificate, information or other statement
         was false, incorrect, incomplete or misleading in any material respect
         and (B) Agent's or any Lender's written notice to Borrower that such
         representation, warranty, certificate, information or other statement
         was false, incorrect, incomplete or misleading in any material respect;
         or

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

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

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

                  (h)      Judgments. (i) One or more judgments, orders, decrees
         or arbitration awards requiring FIL, Borrower and/or FIL's other
         Subsidiaries to pay an aggregate amount of Fifty Million Dollars
         ($50,000,000) or more (exclusive of amounts covered by insurance issued
         by an insurer not an Affiliate of FIL or Borrower and otherwise
         satisfying the requirements set forth in Subparagraph 5.01(d) to which
         the insurer does not dispute coverage) shall be rendered against FIL,
         Borrower and/or FIL's Subsidiaries in connection with any single or
         related series of transactions, incidents or circumstances and the same
         shall

<PAGE>

         not be satisfied, vacated or stayed for a period of sixty (60)
         consecutive days, (ii) any judgment, writ, assessment, warrant of
         attachment, tax lien or execution or similar process shall be issued or
         levied against a substantial part of the property of FIL, Borrower or
         any of FIL's Subsidiaries and the same shall not be released, stayed,
         vacated or otherwise dismissed within sixty (60) days after issue or
         levy or (iii) any other judgments, orders, decrees, arbitration awards,
         writs, assessments, warrants of attachment, tax liens or executions or
         similar processes which, alone or in the aggregate, are reasonably and
         substantially likely to have a Material Adverse Effect are rendered,
         issued or levied; or

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

                  (j)      Employee Benefit Plans. Any Reportable Event which
         constitutes grounds for the termination of any Employee Benefit Plan by
         the PBGC or for the appointment of a trustee by the PBGC to administer
         any Employee Benefit Plan shall occur, or any Employee Benefit Plan
         shall be terminated within the meaning of Title IV of ERISA or a
         trustee shall be appointed by the PBGC to administer any Employee
         Benefit Plan; or

                  (k)      Change of Control. Any Change of Control with respect
         to FIL shall occur; or

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

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

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

SECTION VII. THE AGENT AND RELATIONS AMONG LENDERS.

         7.01.    Appointment, Powers and Immunities. Each Lender hereby
appoints and authorizes Agent to act as its agent hereunder and under the other
Credit Documents with such powers as are expressly delegated to Agent

<PAGE>

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

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

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

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

         7.05.    Non-Reliance. Each Lender represents that it has,
independently and without reliance on Agent, or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of the business, prospects, management, financial condition and
affairs of FIL, Borrower and FIL's other Subsidiaries and its own decision to
enter into this Agreement and agrees that it will, independently and without
reliance upon Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
appraisals and decisions in taking or not taking action under this Agreement.

<PAGE>

Neither Agent nor any of its affiliates nor any of their respective directors,
officers, employees, agents or advisors shall (a) be required to keep any Lender
informed as to the performance or observance by FIL, Borrower or any other
Guarantor of the obligations under this Agreement or any other document referred
to or provided for herein or to make inquiry of, or to inspect the properties or
books of FIL, Borrower or any of FIL's other Subsidiaries, (b) have any duty or
responsibility to provide any Lender with any credit or other information
concerning FIL, Borrower or any of FIL's other Subsidiaries which may come into
the possession of Agent, except for notices, reports and other documents and
information expressly required to be furnished to Lenders by Agent hereunder or
(c) be responsible to any Lender for (i) any recital, statement, representation
or warranty made by FIL, Borrower, any of FIL's other Subsidiaries or any
officer, employee or agent of FIL, Borrower, or any of FIL's other Subsidiaries
in this Agreement or in any of the other Credit Documents, (ii) the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any Credit Document, or (iii) any failure by FIL, Borrower or any
other Guarantor to perform its obligations under this Agreement or any other
Credit Document.

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

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

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

SECTION VIII. MISCELLANEOUS.

         8.01.    Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Borrower, any Lender, Issuing Bank or Agent under this Agreement or the other
Credit Documents shall be in writing and faxed, mailed or delivered, if to
Borrower, Agent or Issuing Bank, at its respective facsimile number or address
set forth below or, if to any Lender, at the address or facsimile number
specified for such Lender in Part B of Schedule I (or to such other facsimile
number or address for any party as indicated in any notice given by that party
to the other parties). All such notices and communications

<PAGE>

shall be effective (a) when sent by an overnight courier service of recognized
standing, on the second Business Day following the deposit with such service,
(b) when delivered by hand, upon delivery, (c) when faxed, upon confirmation of
receipt, or (d) by any other means, upon receipt; provided, however, that any
notice delivered to Agent or Issuing Bank under Section II shall not be
effective until received by Agent or Issuing Bank.

                           Agent:           ABN AMRO Bank N.V.

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

                                            With a copy in each case to:

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

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

                           Issuing Bank:    Fleet National Bank

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

                           FIL:             Flextronics International Ltd.

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

<PAGE>

                           with copies to:

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

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

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

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

         8.03.    Indemnification. To the fullest extent permitted by law,
Borrower agrees to protect, indemnify, defend and hold harmless Agent, Lenders
and their Affiliates and their respective directors, officers, employees, agents
and advisors ("Indemnitees") from and against any and all liabilities, losses,
damages or expenses of any kind or nature (including, with respect to Taxes,
only those Taxes that constitute Non-Excluded Taxes) and from any suits, claims
or demands (including in respect of or for reasonable attorney's fees and other
expenses) arising on account of or in connection with any matter or thing or
action or failure to act by Indemnitees, or any of them, arising out of or
relating to the Credit Documents or any transaction contemplated thereby,
including any use by Borrower of any proceeds of the Loans or any Letter of
Credit, except to the extent such liability arises from the willful misconduct
or gross negligence of such Indemnitee. Each request for any indemnity payment
by an Indemnitee under this Paragraph 8.03 must be accompanied by a reasonably
detailed written explanation identifying the liability, loss, damage or expense
regarding which the indemnification is being requested and explaining the basis
for such indemnification claim. In addition, if any Lender determines
reasonably, in good faith, and in its sole discretion that it has received a
refund of, credit or benefit of a deduction resulting from, any Non-Excluded
Taxes to which it has been indemnified by Borrower or with respect to which
Borrower has paid additional amounts pursuant to this Paragraph 8.03 or
Paragraph 2.13, it shall pay the amount of such refund, credit or benefit of
such

<PAGE>

deduction to Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by Borrower with respect to the Non-Excluded Taxes
giving rise to such refund, credit or deduction), net of all incurred
out-of-pocket expenses of such Lender and without interest (other than interest
paid by the relevant Governmental Authority with respect to such refund, credit
or benefit of such deduction); provided, however, that Borrower shall, upon the
written request of such Lender, agree to repay the amount paid over to Borrower
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to such Lender in the event such Lender is required by
force of law to repay such refund, credit or benefit of such deduction to such
Governmental Authority. The obligations of Borrower under this Paragraph 8.03
shall survive the payment and performance of the Obligations and the termination
of this Agreement.

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

                  (i)      Any amendment, waiver or consent which would (A)
         increase the Total Commitment, (B) postpone, delay or extend the
         Maturity Date, (C) reduce the principal of or interest on any Loans or
         any Letter of Credit, the Commitment Fees or any other fees or amounts
         payable for the account of all Lenders hereunder (D) postpone, delay or
         extend the scheduled date for payment of any such principal, interest,
         fees or amounts, (E) amend this Paragraph 8.04, (F) amend the
         definition of Required Lenders or Combined Required Lenders or (G)
         release any Guarantor (except for releases as provided in Paragraph
         2.15), must be in writing and signed or approved in writing by all
         Lenders;

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

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

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

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

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

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

         8.05.    Successors and Assigns.

                  (a)      Binding Effect. This Agreement and the other Credit
         Documents shall be binding upon and inure to the benefit of Borrower,
         Lenders, Agent, all future holders of the Notes and their respective

<PAGE>

         successors and permitted assigns, except that Borrower may not assign
         or transfer any of its rights or obligations under any Credit Document
         without the prior written consent of Agent and each Lender.

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

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

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

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

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

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

<PAGE>

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

Upon such execution, delivery, acceptance and recording of each Assignment and
Assumption, from and after the Assignment Effective Date determined pursuant to
such Assignment and Assumption, (A) each Assignee Lender thereunder shall be a
Lender hereunder with Commitments or Loans as set forth on Attachment 1 to such
Assignment and Assumption (under the caption "Commitments or Loans After
Assignment") and shall have the rights, duties and obligations of such a Lender
under this Agreement and the other Credit Documents and (B) the Assignor Lender
thereunder shall be a Lender with Commitments or Loans as set forth on
Attachment 1 to such Assignment and Assumption (under the caption "Commitments
or Loans After Assignment"), or, if the Commitments or Loans of the Assignor
Lender have been reduced to zero, the Assignor Lender shall cease to be a Lender
and to have any obligation to make any Loan; provided, however, that any such
Assignor Lender which ceases to be a Lender shall continue to be entitled to the
benefits of any provision of this Agreement which by its terms survives the
termination of this Agreement. Each Assignment and Assumption shall be deemed to
amend Schedule I to the extent, and only to the extent, necessary to reflect the
addition of each Assignee Lender, the deletion of each Assignor Lender which
reduces its Commitments or Loans to zero, or the resulting adjustment of
Commitments or Loans arising from the purchase by each Assignee Lender of all or
a portion of the rights and obligations of an Assignor Lender under this
Agreement and the other Credit Documents, as the case may be. On or prior to the
Assignment Effective Date determined pursuant to each Assignment and Assumption,
Borrower, at its own expense, shall, if requested by Assignee Lenders, execute
and deliver to Agent, in exchange for the surrendered Notes, if any, of the
Assignor Lender thereunder, new Notes to the order of each Assignee Lender
thereunder and, if the Assignor Lender is continuing as a Lender hereunder, new
Notes to the order of the Assignor Lender. The Notes surrendered by the Assignor
Lender shall be returned by Agent to Borrower marked "replaced". Each Assignee
Lender which becomes a Lender and was not previously such a Lender hereunder
shall, prior to becoming such a Lender, deliver such certificates and other
evidence as is required by Subparagraph 2.13(b).

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

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

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

                  (g)      Pledges to Federal Reserve Banks. Notwithstanding any
         other provision of this Agreement, any Lender may at any time assign or
         pledge all or a portion of its rights under this Agreement

<PAGE>

         and the other Credit Documents to a Federal Reserve Bank, and this
         Paragraph 8.05 shall not apply to any such pledge or assignment of a
         security interest. No such assignment shall relieve the assigning
         Lender from its obligations under this Agreement and the other Credit
         Documents.

         8.06.    Set-off; Security Interest.

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

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

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

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

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

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

         8.11.    Confidentiality. Neither any Lender nor Agent shall disclose
to any Person any information with respect to Borrower, any Guarantor or any of
FIL's Subsidiaries which is furnished pursuant to this Agreement or under the
other Credit Documents, except that any Lender or Agent may disclose any such
information (a) to its own directors, officers, employees, auditors, counsel and
other advisors and to its Affiliates, (b) to any other Lender or Agent, (c)
which is otherwise available to the public, (d) if required or appropriate in
any report, statement or testimony submitted to any Governmental Authority
having or claiming to have jurisdiction over such Lender or Agent, (e) if
required in response to any summons or subpoena, (f) in connection with any
enforcement by Lenders and Agent of their rights under this Agreement or the
other Credit Documents or any litigation among the parties relating to the
Credit Documents or the transactions contemplated thereby, (g) to comply with
any Requirement of Law applicable to such Lender or Agent, (h) to any actual or
prospective Assignee Lender, Participant or counterparty (or its advisors) to
any Rate Contract, provided that such Person agrees to be bound by this

<PAGE>

Paragraph 8.12, or (i) otherwise with the prior consent of Borrower; provided,
however, that (i) any Lender or Agent served with any summons or subpoena
demanding the disclosure of any such information shall use reasonable efforts to
notify Borrower promptly of such summons or subpoena if not prohibited by any
Requirement of Law and, if requested by Borrower and not disadvantageous to such
Lender or Agent, to cooperate with Borrower in obtaining a protective order
restricting such disclosure, and (ii) any disclosure made in violation of this
Agreement shall not affect the obligations of FIL, Borrower or any Guarantor
under this Agreement and the other Credit Documents.

         8.12.    Consent to Jurisdiction. Borrower irrevocably submits to the
non-exclusive jurisdiction of the courts of the State of New York and the courts
of the United States of America, in either case located in the City of New York,
and agrees that any legal action, suit or proceeding arising out of or relating
to this Agreement or any of the other Credit Documents may be brought against
such party in any such courts. Final judgment against Borrower in any such
action, suit or proceeding shall be conclusive and may be enforced in any other
jurisdiction by suit on the judgment, a certified or exemplified copy of which
shall be conclusive evidence of the judgment, or in any other manner provided by
law. Nothing in this Paragraph 8.13 shall affect the right of Agent or any
Lender to commence legal proceedings or otherwise sue Borrower in any other
appropriate jurisdiction, or concurrently in more than one jurisdiction, or to
serve process, pleadings and other papers upon Borrower in any manner authorized
by the laws of any such jurisdiction. Borrower agrees that process served either
personally or by registered mail shall, to the extent permitted by law,
constitute adequate service of process in any such suit. Without limiting the
foregoing, Borrower hereby appoints, in the case of any such action or
proceeding brought in the courts of or in the State of New York, CT Corporation,
with offices on the date hereof at 111 Eighth Avenue, New York, New York 10011,
to receive for it and on its behalf, service of process in the State of New York
with respect thereto, provided Borrower may appoint any other person, reasonably
acceptable to Agent, with offices in the State of New York to replace such agent
for service of process upon delivery to Agent of a reasonably acceptable
agreement of such new agent agreeing so to act. Borrower irrevocably waives to
the fullest extent permitted by applicable law (a) any objection which it may
have now or in the future to the laying of the venue of any such action, suit or
proceeding in any court referred to in the first sentence above, (b) any claim
that any such action, suit or proceeding has been brought in an inconvenient
forum, (c) its right of removal of any matter commenced by any other party in
the courts of the State of New York to any court of the United States of
America, (d) any immunity which it or its assets may have in respect of its
obligations under this Agreement or any other Credit Document from any suit,
execution, attachment (whether provisional or final, in aid of execution, before
judgment or otherwise) or other legal process, and (e) any right it may have to
require the moving party in any suit, action or proceeding brought in any of the
courts referred to above arising out of or in connection with this Agreement or
any other Credit Document to post security for the costs of Borrower or to post
a bond or to take similar action. The obligations of Borrower under this
Paragraph 8.13 shall survive the payment and performance of the Obligations and
the termination of this Agreement.

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

<PAGE>

                       [The first signature page follows.]

<PAGE>

                                                               SIGNATURE PAGE TO
                                                           FIUI CREDIT AGREEMENT

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

BORROWER:                             FLEXTRONICS INTERNATIONAL USA, INC.,

                                          By: __________________________________
                                              Name: ____________________________
                                              Title: ___________________________

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

                                          By: __________________________________
                                              Name: ____________________________
                                              Title: ___________________________

                                          By: __________________________________
                                              Name: ____________________________
                                              Title: ___________________________

<PAGE>

                                                               SIGNATURE PAGE TO
                                                           FIUI CREDIT AGREEMENT

Name of Institution: ___________________________________________________________

                                          by: __________________________________
                                              Name:
                                              Title:

                                          by: __________________________________
                                              Name:
                                              Title:

<PAGE>

                                    EXHIBIT A

                               NOTICE OF BORROWING

                                     [Date]

ABN AMRO Bank N.V.

   as Agent

[_________]

Attn: [_________]

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

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

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

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

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

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

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

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

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

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

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

                                          FLEXTRONICS INTERNATIONAL USA, INC.

                                          By: __________________________________
                                              Name: ____________________________
                                              Title: ___________________________

<PAGE>

                                    EXHIBIT B

                                  FORM OF NOTE

______________, ________                                          March __, 2004

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

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

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

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

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

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

                                          FLEXTRONICS INTERNATIONAL USA, INC.

                                          By: __________________________________
                                              Name: ____________________________
                                              Title: ___________________________

<PAGE>

                  LOANS AND PAYMENTS OF INTEREST AND PRINCIPAL

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

<PAGE>

                                    EXHIBIT C

                                FORM OF GUARANTY

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

                                    RECITALS

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

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

                                    AGREEMENT

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

         1.       DEFINITIONS AND INTERPRETATION.

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

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

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

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

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

                           "Debtor Relief Proceeding" shall mean any suit,
                  action, case or other proceeding commenced by, against or for
                  Borrower or its property seeking the dissolution, liquidation,
                  reorganization, rearrangement or other relief of Borrower or
                  its debts under any applicable bankruptcy, insolvency or
                  debtor relief law or other similar Governmental Rule now or
                  hereafter in effect or seeking the appointment of a receiver,
                  trustee, liquidator, custodian or other similar official for
                  Borrower or any substantial part of its property or any
                  general assignment by Borrower for the benefit of its
                  creditors, whether or not any such suit, action, case or other
                  proceeding is voluntary or involuntary.

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

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

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

         2.       GUARANTY.

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

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

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

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

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

                  (f)      No Discharge or Disbursement of Guaranty. Without
         limiting Paragraph 3 hereof, the obligations of each Guarantor
         hereunder shall not be subject to any reduction, limitation, impairment
         or termination for any reason (other than the indefeasible payment in
         full in cash of the Guaranteed Obligations), including any claim of
         waiver, release, surrender, alteration or compromise of any of the

<PAGE>

         Guaranteed Obligations, and shall not be subject to any defense or
         set-off, counterclaim, recoupment or termination whatsoever by reason
         of the invalidity, illegality or unenforceability of the Guaranteed
         Obligations or otherwise.

3.       AUTHORIZATIONS, WAIVERS, ETC.

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

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

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

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

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

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

                  (b)      Waivers. Each Guarantor hereby waives:

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

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

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

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

<PAGE>

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

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

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

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

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

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

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

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

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

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

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

                  (c)      Financial Condition of Borrower, Etc. Each Guarantor
         is fully aware of the financial condition and affairs of Borrower. Each
         Guarantor has executed this Guaranty without reliance upon any
         representation, warranty, statement or information concerning Borrower
         furnished to such Guarantor by Agent or any Lender and has,
         independently and without reliance on Agent or any Lender, and based on
         such documents and information as it has deemed appropriate, made its
         own appraisal of the financial

<PAGE>

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

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

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

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

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

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

         5.       CONTRIBUTION AMONG GUARANTORS. Guarantors desire to allocate
         among themselves, in a fair and equitable manner, their rights of
         contribution from each other when any payment is made by any Guarantor
         under this Guaranty. Accordingly, if any payment is made by any
         Guarantor under this Guaranty (a "Funding Guarantor") that exceeds its
         Fair Share, the Funding Guarantor shall be entitled to a contribution
         from each other Guarantor in the amount of such other Guarantor's Fair
         Share Shortfall, so that all such contributions shall cause each
         Guarantor's Aggregate Guaranty Payments to equal its Fair Share. The
         amounts payable as contributions hereunder shall be determined by the
         Funding Guarantor as of the date on which the related payment or
         distribution is made by the Funding Guarantor, and such determination
         shall be binding on the other Guarantors absent manifest error. The
         allocation and right of contribution among Guarantors set forth in this
         Paragraph 5 shall not be construed to limit in any way the liability of
         any Guarantor under this Guaranty or the amount of the Guaranteed
         Obligations.

<PAGE>

         6.       MISCELLANEOUS.

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

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

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

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

                  (b)      Payments.

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

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

                           (iii)    If any sum due from any Guarantor under this
                  Guaranty or any other Credit Document to which such Guarantor
                  is a party or any order, judgment or award given or rendered
                  in relation hereto or thereto has to be converted from the
                  currency (the "first currency") in which the same is payable
                  hereunder or thereunder into another currency (the "second
                  currency") for the purpose of (A) making or filing a claim or
                  proof against such Guarantor with any Governmental Authority,
                  (B) obtaining an order or judgment in any court or other
                  tribunal or (C) enforcing any order or judgment given or made
                  in relation hereto, such Guarantor shall, to the fullest
                  extent

<PAGE>

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

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

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

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

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

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

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

                  (f)      Cumulative Rights, etc. The rights, powers and
         remedies of Agent and Lenders under this Guaranty shall be in addition
         to all rights, powers and remedies given to Agent and Lenders by virtue
         of any applicable law, rule or regulation of any Governmental
         Authority, the Credit Agreement, any other Credit Document or any other
         agreement, all of which rights, powers, and remedies shall be
         cumulative and may be exercised successively or concurrently without
         impairing Agent's or any Lender's rights hereunder.

<PAGE>

                  (g)      Set-off; Security Interest.

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

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

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

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

<PAGE>

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

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

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

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

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

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

<PAGE>

                  (E) any right it may have to require the moving party in any
                  suit, action or proceeding brought in any of the courts
                  referred to above arising out of or in connection with this
                  Agreement or any other Credit Document to post security for
                  the costs of any Guarantor or to post a bond or to take
                  similar action.

         7.       LIMITATION ON GUARANTEE BY FLEXTRONICS MANUFACTURING FRANCE

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

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

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

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

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

                       [The first signature page follows.]

<PAGE>

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

                                     Name of Guarantor: ________________________

                                               By: _____________________________
                                                     Name: _____________________
                                                     Title: ____________________

                                               Address:
                                               [_________________________]
                                               [_________________________]
                                               [_________________________]
                                               Attn: [_______________________]
                                               Telephone:[___________________]
                                               Facsimile: [__________________]

<PAGE>

                                                                  SIGNATURE PAGE
                                                                TO FIUI GUARANTY

                                               ABN AMRO BANK N.V.,
                                               As Agent

                                               By: _____________________________
                                                   Name: _______________________
                                                   Title: ______________________

                                               By: _____________________________
                                                   Name: _______________________
                                                   Title: ______________________

<PAGE>

                                  ATTACHMENT 1

                               SUBSIDIARY JOINDER

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

                                    RECITALS

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

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

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

                                    AGREEMENT

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

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

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

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

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

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

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

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

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

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

<PAGE>

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

                                               [NEW SUBSIDIARY]

                                               By: _____________________________
                                                   Name: _______________________
                                                   Title: ______________________

                                               Address:
                                               [_________________________]
                                               [_________________________]
                                               [_________________________]
                                               Attn: [_______________________]
                                               Telephone:[(_____)_____-________]
                                               Facsimile:[(_____)_____-________]

                                               ABN AMRO BANK N.V.,
                                               As Agent

                                               By: _____________________________
                                                   Name: _______________________
                                                   Title: ______________________

<PAGE>

                                    EXHIBIT D

                                    [FORM OF]

                            ASSIGNMENT AND ASSUMPTION

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

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

1. Assignor Lender:            ______________________________
2. Assignee Lender:            ________________________________
3. Borrower:                   Flextronics International USA Inc.
4. Agent:                      ABN AMRO Bank N.V., as agent under the Credit
                               Agreement
5. Credit Agreement:           Credit Agreement dated as of March 3, 2004 (as
                               amended, supplemented or otherwise modified from
                               time to time), among Flextronics International
                               USA Inc., Lenders, Fleet National Bank, as
                               Issuing Bank, and Agent.

6. Assigned Interest:          See Attachment 2.
[7. Assignment Effective Date: ______________](1)

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

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

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

<PAGE>

                                               ASSIGNOR LENDER
                                               [NAME OF ASSIGNOR]

                                               By:______________________________
                                                  Title:

                                               ASSIGNEE LENDER
                                               [NAME OF ASSIGNEE]

                                               By:______________________________
                                                  Title:

[Consented to and](2) Accepted:

[NAME OF AGENT], as Agent

By_________________________________
  Title:

[Consented to:](3)

[NAME OF RELEVANT PARTY]

By________________________________
  Title:

Consented to and Accepted:

FLEXTRONICS INTERNATIONAL LTD.

By_________________________________
  Title:

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

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

<PAGE>

                                  ATTACHMENT 1

                          TO ASSIGNMENT AND ASSUMPTION

                        STANDARD TERMS AND CONDITIONS FOR
                            ASSIGNMENT AND ASSUMPTION

         1. Representations and Warranties.

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

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

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

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

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

<PAGE>

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

<PAGE>

                                  ATTACHMENT 2

                          TO ASSIGNMENT AND ASSUMPTION

                                     PART A

<TABLE>
<CAPTION>
   Assignor Lender:       Commitments or Loans        Commitments or Loans After
                                Assigned                      Assignment
<S>                       <C>                         <C>
______________________   _______________________      __________________________

   ______________             $____________                  $____________

   Assignee Lenders:
______________________

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

<PAGE>

                                     PART B

[ASSIGNEE LENDER]
Domestic Lending Office:

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

Eurodollar Lending Office:

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

Address for Notices:

Wiring Instructions:<PAGE>

                                                                     EXHIBIT 4.2

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

                           BARRIER THERAPEUTICS, INC.

                 AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

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

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                               PAGE
<S>                                                                                            <C>
ARTICLE 1   GENERAL........................................................................      1
    1.1   Certain Definitions..............................................................      1
ARTICLE 2   REGISTRATION...................................................................      4
    2.1   Demand Registration..............................................................      4
    2.2   Piggyback Registrations..........................................................      6
    2.3   Form S-3 Registration............................................................      7
    2.4   Initial Public Offering..........................................................      8
    2.5   Expenses of Registration.........................................................      8
    2.6   Obligations of the Company.......................................................      8
    2.7   Furnishing Information...........................................................     11
    2.8   Indemnification..................................................................     11
    2.9   Assignment of Registration Rights................................................     13
    2.10  Amendment of Registration Rights.................................................     14
    2.11  Limitation on Subsequent Registration Rights.....................................     14
    2.12  "Market Stand-Off" Agreement; Agreement to Furnish Information...................     14
    2.13  Rule 144 Reporting...............................................................     15
ARTICLE 3   MISCELLANEOUS..................................................................     15
    3.1   Governing Law....................................................................     15
    3.2   Jurisdiction.....................................................................     15
    3.3   Survival.........................................................................     16
    3.4   Successors and Assigns...........................................................     16
    3.5   Entire Agreement.................................................................     16
    3.6   Severability.....................................................................     16
    3.7   Amendment and Waiver.............................................................     17
    3.8   Delays or Omissions..............................................................     17
    3.9   Notices..........................................................................     17
    3.10  Headings.........................................................................     17
    3.11  Counterparts.....................................................................     17
</TABLE>

                                        i
<PAGE>

                 AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

                  This AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (the
"Agreement") is entered into as of this ___ day of April, 2004, by and among
Barrier Therapeutics, Inc., a Delaware corporation (the "Company"), and the
Investors listed on Exhibit A hereto (collectively, the "Investors," and each as
"Investor").

                                    RECITALS

                  WHEREAS, the Company, the holders (the "Series A Investors")
of the Company's Series A Convertible Preferred Stock (the "Series A Preferred
Stock") and the holders (the "Series B Investors") of the Company's Series B
Convertible Preferred Stock (the "Series B Preferred Stock") have entered into
that certain Investor Rights Agreement dated as of May 7, 2002, as amended as of
October 23, 2003 in connection with the sale of the Company's Series C
Convertible Preferred Stock (the "Series C Preferred Stock") to add the holders
of Series C Preferred Stock (the "Series C Investors") as parties hereto (the
"Original Investor Rights Agreement"), pursuant to which the Company has granted
registration rights and certain other rights to the Series A Investors, the
Series B Investors and the Series C Investors;

                  WHEREAS, the Company has filed Registration Statement No.
333-112539 on Form S-1 (the "Registration Statement") relating to an initial
public offering of the Company's Common Stock (the "IPO") and the Company and
the Investors desire for Articles 3 and 4 of the Original Investor Rights
Agreement to terminate immediately prior to the consummation of the IPO (the
"Effective Time"); and

                  WHEREAS, this Agreement amends and restates in its entirety
the Original Investor Rights Agreement to become effective at the Effective
Time.

                  NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth herein, the
parties mutually agree as follows:

                                    ARTICLE 1

                                     GENERAL

         1.1      Certain Definitions. As used in this Agreement the following
terms shall have the following meanings:

                  "Affiliate", as applied to any individual or entity, shall
mean an individual or entity directly or indirectly (through one or more
intermediaries) controlling, controlled by or under common control with the
first individual or entity. As applied to an individual, "Affiliate" shall
include any member of such individual's immediate family or any trust for the
benefit of such family member or individual and as applied to any entity,
"Affiliate" shall include any subsidiary, parent, member, limited partner,
general partner, entity under common control of such general partner or its
members, partners or stockholders.

<PAGE>

                   "Common Stock" means the Company's authorized common stock
with $0.0001 par value per share.

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor Federal statute in effect, and the rules and
regulations of the SEC promulgated thereunder, all as the same may from time to
time be in effect.

                  "Form S-3" means such form promulgated under the Securities
Act as in effect on the date hereof or any successor registration form under the
Securities Act subsequently adopted by the SEC which permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the SEC.

                  "Holder" means any Person owning of record Registrable
Securities that have not been sold to the public or any assignee of record of
such Registrable Securities in accordance with Section 2.10 hereof.

                  "Initial Public Offering" means the Company's first firm
commitment underwritten public offering of its Common Stock registered under the
Securities Act.

                  "Other Shares" shall mean at any time those shares of Common
Stock which do not constitute Primary Shares or Registrable Securities.

                  "Person" shall be construed in the broadest sense and means
and includes a natural person, a partnership, a corporation, an association, a
joint stock company, a limited liability company, a trust, a joint venture, an
unincorporated organization and any other entity and any federal, state,
municipal, foreign or other government, governmental department, commission,
board, bureau, agency or instrumentality, or any private or public court or
tribunal.

                  "Primary Shares" shall mean, at any time, the authorized but
unissued shares of Common Stock or Common Stock held by the Company in its
treasury.

                  "Register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of
effectiveness of such registration statement or document.

                  "Registrable Securities" means (a) Common Stock issued or
issuable upon conversion of the Shares; (b) any other Common Stock held, or
hereafter acquired, by the Investors or issuable to the Investors pursuant to
options, warrants or convertible securities; and (c) any Common Stock issued as
(or issuable upon the conversion or exercise of any warrant, right or other
security which is issued as) a dividend or other distribution with respect to,
or in exchange for or in replacement of, such above-described securities.
Notwithstanding the foregoing, Registrable Securities shall not include any
securities sold by a Person to the public pursuant to a registration statement
which has been declared effective, or Rule 144 or sold in a private transaction
in which the transferor's rights under Article II of this Agreement are not
assigned, in each case where the restrictive legends and transfer registrations
with respect to the Common Stock are removed and the Common Stock in the hands
of the purchaser is freely transferable without any restriction or registration
under the Securities Act in any public or private transaction.

                                     - 2 -
<PAGE>

                  "Registrable Securities then outstanding" shall be the number
of shares determined by calculating the total number of shares of Common Stock
that are Registrable Securities and either (a) are then issued and outstanding
or (b) are issuable pursuant to then exercisable or convertible securities.

                  "Registration Expenses" mean all expenses incurred by the
Company in complying with Sections 2.2, 2.3 and 2.4 hereof, including, without
limitation, all registration and filing fees (including all expenses incident to
listing the Registrable Securities on a national securities exchange), printing
expenses, fees and disbursements of counsel for the Company, reasonable fees and
disbursements of the Stockholders' Counsel (as defined in Section 2.6(i)) (which
shall not exceed $50,000), blue sky fees and expenses and the expense of any
special audits incident to or required by any such registration (but excluding
the compensation of regular employees of the Company which shall be paid in any
event by the Company); provided, that no fees or disbursements of the JJDC
Counsel (as defined in Section 2.6(i)) shall be paid by the Company.

                  "Rule 144" shall mean Rule 144 promulgated under the
Securities Act or any successor rule thereto.

                  "Sale Of The Company" means (i) the sale of all or
substantially all of the Company's assets in one transaction or a series of
transactions, (ii) the sale or transfer of the outstanding capital stock of the
Company, or (iii) the merger or consolidation of the Company with or into
another Person or entity, in each case in clauses (ii) and (iii) above under
circumstances in which the holders of a majority in voting power of the
outstanding capital stock of the Company, immediately prior to such transaction,
own less than a majority in voting power of the outstanding capital stock of the
Company or the surviving or resulting corporation or acquirer, as the case may
be, immediately following such transaction. A sale (or multiple related sales)
of one or more Subsidiaries of the Company (whether by way of merger,
consolidation, reorganization or sale of all or substantially all assets or
securities) which constitutes all or substantially all of the consolidated
assets of the Company shall be deemed a Sale Of The Company.

                  "SEC" or "Commission" means the Securities and Exchange
Commission.

                  "Securities Act" means the Securities Act of 1933, as amended
or any successor Federal statute and the rules and regulations of the Commission
promulgated thereunder, all as the same may be in effect from time to time.

                  "Selling Expenses" mean all underwriting discounts and selling
commissions applicable to the sale.

                  "Shares" mean shares of the Company's Series A Preferred
Stock, Series B Preferred Stock and Series C Preferred Stock held, or hereafter
acquired, by the Investors and their permitted assigns.

                  "Stockholders Agreement" means the Company's Amended and
Restated Stockholders Agreement dated the date hereof.

                                     - 3 -
<PAGE>

                                    ARTICLE 2

                                  REGISTRATION

         2.1      Demand Registration.

                  (a)      Subject to the conditions of this Section 2.1, if the
Company receives a request from the Holders of at least fifty percent (50%) of
the Registrable Securities then outstanding (the "Initiating Holders") that the
Company register shares with an aggregate offering price of at least $5,000,000,
then the Company shall, within fifteen (15) days after the receipt thereof, give
written notice of such request to all non-Initiating Holders. A non-Initiating
Holder must notify the Company within thirty (30) days of receipt of such
written notice if such non-Initiating Holder so desires to have its Registrable
Securities registered. The Company will use best efforts to effect, as soon as
practicable, the registration of all Registrable Securities that the Holders
(both Initiating Holders and non-Initiating Holders) request to be registered.

                  (b)      If the Initiating Holders intend to distribute the
Registrable Securities by means of an underwriting, they shall so advise the
Company as a part of their demand pursuant to this Section 2.1 and the Company
shall include such information in the notice referred to in Section 2.2(a). In
such event, the right of any Holder to include its Registrable Securities in
such registration shall be conditioned upon participation in such underwriting.
The underwriter or underwriters for such offering shall be a nationally
recognized underwriter or underwriters selected by the Holders owning a majority
of the Registrable Securities requested to be included in such offering and
reasonably acceptable to the Company and such underwriter or underwriters shall
enter into a reasonable and customary underwriting agreement with the Company.
Notwithstanding any other provision of this Section 2.1, if the underwriter
advises the Company that marketing factors require a limitation of the number of
securities to be underwritten (including Registrable Securities) then the
Company shall so advise all participating Holders, and the number of shares that
may be included in the underwriting and registration shall be allocated pro rata
among the participating Holders in accordance with the number of Registrable
Securities held by such Holders; provided, however, that the number of shares of
Registrable Securities to be included in such underwriting and registration
shall not be reduced unless and until all other securities to be sold by the
Company and any Persons that are not Holders are first entirely excluded from
the underwriting and registration.

                  (c)      The Company shall not be required to effect a
registration pursuant to this Section 2.1:

                           (i)      prior to the earlier of (A) the fifth
anniversary of the Closing Date (as defined in the Series C Securities
Acquisition Agreement) and (B) six months following the effective date of the
registration statement pertaining to the Initial Public Offering;

                           (ii)     after the Company has effected two
registrations pursuant to this Section 2.1, and such registrations have been
declared or ordered effective and maintained effective for (A) one hundred
twenty (120) days beyond the effective date or (B) until all shares so
registered have been sold, whichever period is longer (provided, however, that
such two registrations shall not include any registration pursuant to this
Section 2.1 in which the number

                                     - 4 -
<PAGE>

of Registrable Securities registered is reduced by more than twenty percent
(20%) of the number of Registrable Securities that the Holders requested to be
registered);

                           (iii)    during the period starting with the date of
filing of and ending on the date ninety (90) days following the effective date
of a registration statement pertaining to any underwritten public offering made
pursuant to this Section 2.1 or in which the Holders were given the opportunity
to participate pursuant to Section 2.2 for not less than thirty percent (30%) of
the amount of the offering; provided that each registration statement was
declared or ordered effective and maintained effective for (A) one hundred
twenty (120) days beyond the effective date or (B) until all shares so
registered have been sold, whichever period is longer;

                           (iv)     if within ten (10) days of receipt of a
written request from the Initiating Holders pursuant to Section 2.1(a) the
Company shall furnish to the Initiating Holders a certificate signed by an
officer of the Company stating either (A) that in the good faith judgment of the
Board of Directors, it would be seriously detrimental to the Company and its
stockholders for such registration statement to be effected at such time or (B)
the Company intends to make its Initial Public Offering within sixty (60) days
of the date such request was received from the Initiating Holders, the Company
shall have the right to defer such filing for a period of not more than sixty
(60) days after receipt of the request of the Initiating Holders; provided,
that, such right to delay a request shall be exercised by the Company not more
than twice in any twelve (12) month period; provided, further, that the Company
shall not disclose any information that could be deemed material non-public
information of the Company to any of the Initiating Holders during such delayed
period; and

                           (v)      if the Initiating Holders propose to dispose
of shares of Registrable Securities that may be immediately registered on Form
S-3 pursuant to a request made pursuant to Section 2.3 below.

                  (d)      A requested registration under this Section 2.1 may
be rescinded prior to such registration being declared effective by the
Commission by written notice to the Company from the Initiating Holder;
provided, however, that such rescinded registration shall not count as a
registration initiated pursuant to this Section 2.1 if the Company shall have
been reimbursed (pro rata by the Initiating Holders or in such other proportion
as they may agree) for all out-of-pocket expenses incurred by the Company in
connection with such rescinded registration; provided further, however, that
such Initiating Holders shall not be required to reimburse the Company if such
rescission shall have been caused by, or made in response to, the material
adverse effect of an event on the business, prospects, properties, condition
(financial or otherwise) or operations of the Company.

         2.2      Piggyback Registrations. If the Company at any time proposes
for any reason to register Primary Shares or Other Shares under the Securities
Act (other than (a) a rights offering, (b) a registration on Form S-4 or Form
S-8 promulgated under the Securities Act or any successor forms thereto, or (c)
in connection with the Company's Initial Public Offering), the Company shall
notify all Holders at least thirty (30) days prior to the filing of any
registration statement and will afford each Holder an opportunity to include in
such registration statement all or part of the Registrable Securities held by
such Holder on the same terms and conditions as the other shares participating
in the underwriting. Each Holder desiring to include Registrable

                                     - 5 -
<PAGE>

Securities in any such registration statement shall notify the Company within
twenty (20) days after delivery of the notice from the Company. Such notice
shall state the intended method of disposition of the Registrable Securities by
such Holder. If a Holder decides not to include all of its Registrable
Securities in any registration statement filed by the Company, such Holder shall
nevertheless continue to have the right to include any Registrable Securities in
any subsequent registration statement or registration statements as may be filed
by the Company, all upon the terms and conditions set forth herein.

                  (a)      Underwriting. If the registration statement under
which the Company gives notice under this Section 2.2 is for an underwritten
offering, the Company shall so advise the Holders. In such event, the right of
any Holder to be included in a registration pursuant to this Section 2.2 shall
be conditioned upon the Holder's participation in the underwriting.
Notwithstanding any other provision of the Agreement, if the underwriter
determines in good faith that marketing factors require a limitation of the
number of shares to be underwritten, the number of shares that may be included
in the underwriting shall be allocated as follows, first, the Primary Shares
being registered by the Company, second, the Registrable Securities requested to
be included in such registration by the Holders pro rata based on the total
number of Registrable Securities held by such Holders, and third, the Other
Shares requested to be registered by any other stockholder of the Company on a
pro rata basis based on the total number of shares held by such Persons. No such
reduction shall reduce the amount of securities of the selling Holders included
in the registration below thirty percent (30%) of the total amount of securities
included in such registration.

                  (b)      Right to Terminate Registration. The Company shall
have the right to terminate or withdraw any registration initiated by it under
this Section 2.1 prior to the effectiveness of such registration whether or not
any Holder has elected to include securities in such registration. The
Registration Expenses of such withdrawn registration shall be borne by the
Company in accordance with Section 2.4 hereof.

                  (c)      Inclusion of Common Holders. No stockholder of the
Company who is not a Holder shall be granted piggyback registration rights that
would reduce the number of shares that could be included by the Holders without
the consent of Holders owning at least two-thirds (2/3) of the Registrable
Securities.

         2.3      Form S-3 Registration.

                  (a)      If the Company shall receive from any Holder or
Holders a request that the Company effect a registration on Form S-3 or any
similar short-form registration statement with respect to all or a part of the
Registrable Securities, the Company shall:

                           (i)      promptly give notice of the proposed
registration, and any related qualification or compliance, to all other Holders
and shall offer to include in such proposed registration any Registrable
Securities requested to be included in such proposed registration by such
Holders who respond in writing to the Company's notice within 30 days after
delivery of such notice (which response shall specify the number of Registrable
Securities proposed to be included in such registration); and

                                     - 6 -
<PAGE>

                           (ii)     promptly effect such registration and all
such qualifications and compliances as would permit or facilitate the sale and
distribution of the Registrable Securities specified in such request, together
with the Registrable Securities of any other Holder or Holders joining in such
request by notice to the Company given within thirty (30) days after receipt of
such notice from the Company.

                  (b)      Notwithstanding anything to the contrary contained
herein, the Company shall not be obligated to effect any registration,
qualification or compliance pursuant to this Section 2.3:

                           (i)      if Form S-3 is not available for such
offering by the Holders;

                           (ii)     if the Holders, together with the holders of
any other securities of the Company entitled to inclusion in such registration,
propose to sell Registrable Securities and such other securities (if any) at an
aggregate price to the public of less than $1,000,000;

                           (iii)    if the Company shall furnish to the Holders
a certificate signed by the President or Chief Executive Officer of the Company
stating that in the good faith judgment of the Board of Directors, it would be
seriously detrimental to the Company and its stockholders for such Form S-3
registration to be effected at such time, in which event the Company shall have
the right to defer the filing of the Form S-3 registration statement for a
period of not more than thirty (30) days after receipt of the request of the
Holder or Holders under this Section 2.3; provided, that such right to delay a
request shall be exercised by the Company not more than twice in any twelve (12)
month period;

                           (iv)     if the Company has, within the twelve (12)
month period preceding the date of such request, already effected three (3)
registrations on Form S-3 for the Holders pursuant to this Section 2.3; or

                           (v)      in any particular jurisdiction in which the
Company would be required to qualify to do business or to execute a general
consent to service of process in effecting such registration, qualification or
compliance where it would not otherwise be required so to do.

                  (c)      Registrations effected pursuant to this Section 2.3
shall not be counted as demands for registration or registrations effected
pursuant to Section 2.1. If the initiating Holders intend to distribute
Registrable Securities pursuant to an underwriting, they shall so advise the
Company in the demand pursuant to Section 2.1(a).

                  (d)      After the Company's Initial Public Offering, the
Company will use commercially reasonable efforts to qualify for the registration
of its shares of Common Stock on Form S-3.

         2.4      Initial Public Offering. In connection with the Initial Public
Offering, the Company shall grant the Series A Investors, Series B Investors and
Series C Investors a right to purchase five percent (5%) of the shares (the "IPO
Shares") of Common Stock being offered in such public offering; provided,
however, that the Company shall not grant such right to an Investor if (i) with
respect to the Series C Investors only, the Initial Public Offering occurs prior

                                     - 7 -
<PAGE>

to the first anniversary of the date hereof or (ii) compliance with the
provisions of this Section 2.4 would violate Section 5 of the Securities Act.
Any shares offered and sold to Investors under this Section 2.4 shall be offered
to the Investors (with Investors permitted to reallocate all or any portion of
their respective IPO Shares to Affiliates) pro-rata based upon the number of
shares of Common Stock (on an as converted basis) held by each Investor divided
by the total number of shares of Common Stock held by all Investors. Shares not
accepted by an Investor or its Affiliates shall not be reallocated among those
Investors electing to purchase IPO Shares. In the event that an Investor is not
permitted to purchase IPO Shares as a result of the restrictions contained in
clause (i) or (ii) above, the Company shall sell to such Investor who is a
"qualified institutional buyer" (as such term is defined in Rule 144A
promulgated under the Securities Act) and to such Investor who is subject to
Regulation S (promulgated under the Securities Act) a number of shares of Common
Stock equal to its pro rata portion of IPO Shares at the same gross purchase
price as the IPO Shares. Nothing in this Section 2.4 shall limit any Investor or
any Affiliate of any Investor from purchasing shares of Common Stock in the
Initial Public Offering that are not IPO Shares.

         2.5      Expenses of Registration. Except as specifically provided
herein, all Registration Expenses incurred in connection with any registration
under Section 2.1, Section 2.2 or Section 2.3 herein shall be borne by the
Company. All Selling Expenses incurred in connection with any registrations
hereunder shall be borne by the Persons selling the securities in proportion to
the number of securities sold by such seller or sellers.

         2.6      Obligations of the Company. Whenever required to register any
Registrable Securities, the Company shall, as expeditiously as reasonably
possible:

                  (a)      Use commercially reasonable efforts to prepare and
file with the SEC a registration statement with respect to such Registrable
Securities and to cause such registration statement to become effective, and,
upon the request of the selling Holders of a majority of the Registrable
Securities registered thereunder, keep such registration statement effective for
up to 120 days for a registration pursuant to Section 2.1 and for up to 180 days
for a registration pursuant to Section 2.3 or, if earlier, until the Holder or
Holders have completed the distribution related thereto;

                  (b)      Use its reasonable best efforts to prepare and file
with the SEC such amendments and supplements to such registration statement and
the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to
the disposition of all securities covered by such registration statement for the
applicable period set forth in paragraph (a) above and to cause such amendments
and supplements to become and remain effective;

                  (c)      Furnish to the Holders and each underwriter such
number of copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other documents
as they may reasonably request in order to facilitate the disposition of
Registrable Securities;

                  (d)      Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall

                                     - 8 -
<PAGE>

be reasonably requested by the Holders and register such securities with or
obtain the approval of such other governmental authorities as may be necessary
by virtue of the business and operations of the Company to enable the seller or
sellers thereof to consummate the disposition of such Registrable Securities;
provided, that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions where it would not
otherwise be required so to do but for this subparagraph;

                  (e)      In the event of any underwritten public offering,
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, with the managing underwriter(s) of such offering;

                  (f)      Notify on a timely basis each Holder of Registrable
Securities covered by such registration statement at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing and promptly file such amendments and supplements as
may be necessary so that, as thereafter delivered to such Holders, such
prospectus shall not include an untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading and use its best efforts to cause each such amendment and
supplement to become and remain effective;

                  (g)      Use its best efforts to furnish, on the date that
such Registrable Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters, (i) an opinion, dated as of such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and (ii)
a letter dated as of such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten
public offering addressed to the underwriters;

                  (h)      Make available for inspection by the Holders, any
underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by any such
Holder or underwriter (collectively, the "Inspectors"), all pertinent financial,
business and other records, pertinent corporate documents and properties of the
Company (collectively, the "Records"), as shall be reasonably necessary to
enable them to exercise their due diligence responsibility, and cause the
Company's officers, directors and employees to supply all information (together
with the Records, the "Information") reasonably requested by any such Inspector
in connection with such Registration Statement (and any of the Information which
the Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, shall not be disclosed by the
Inspectors unless (A) the disclosure of such Information is necessary to avoid
or correct a misstatement or omission in the registration statement, (B) the
release of such Information is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction, (C) such Information has been made
generally available to the public, and (D) the seller of Registrable Securities
agrees that it

                                     - 9 -
<PAGE>

will, upon learning that disclosure of such Information is sought in a court of
competent jurisdiction, give notice to the Company and allow the Company, at the
Company's expense, to undertake appropriate action to prevent disclosure of the
Information deemed confidential);

                  (i)      At least five business days before filing any
registration statement that registers such Registrable Securities, a prospectus
relating thereto and any amendments or supplements relating to such registration
statement or prospectus, furnish to (A) a single counsel (who may be in-house
counsel to an Investor) (the "Stockholders' Counsel") designated by the holders
of a majority of the Registrable Securities being sold and (B) a single counsel
(the "JJDC Counsel"), designated by Johnson & Johnson Development Corporation
("JJDC") copies of all such documents proposed to be filed, which shall be
subject to reasonable approval of the Stockholders' Counsel and, with respect to
any sections thereof that reference or relate to the intellectual property,
products or businesses of, or otherwise relate to, JJDC or any of its
affiliates, the reasonable approval of the JJDC Counsel (it being understood
that such five-business-day period need not apply to successive drafts of the
same document proposed to be filed so long as such successive drafts are
supplied to such counsel in advance of the proposed filing by a period of time
that is customary and reasonable under the circumstances);

                  (j)      Notify the Stockholders' Counsel and the JJDC Counsel
promptly in writing (i) of any comments by the Commission with respect to such
registration statement or prospectus or any amendment or supplement thereto, or
any request by the Commission for the amending or supplementing thereof or for
additional information with respect thereto, (ii) of the issuance by the
Commission of any stop order suspending the effectiveness of such registration
statement or prospectus or any amendment or supplement thereto or the initiation
of any proceedings for that purpose and (iii) of the receipt by the Company of
any notification with respect to the suspension of the qualification of such
Registrable Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purposes;

                  (k)      provide a transfer agent and registrar (which may be
the same entity and which may be the Company) for such Registrable Securities;

                  (l)      list such Registrable Securities on any national
securities exchange on which the Common Stock is listed or, if the Common Stock
is not listed on a national securities exchange, use its best efforts to qualify
such Registrable Securities for inclusion on the automated quotation system of
the National Association of Securities Dealers, Inc. the "NASD"), National
Market System ("NMS"), or such other national securities exchange as the holders
of a majority of such Registrable Securities shall request included in such
registration; and

                  (m)      otherwise use commercially reasonable efforts to
comply with all applicable rules and regulations of the Commission, and make
available to its stockholders, as soon as reasonably practicable, earnings
statements which need not be audited covering a period of 12 months beginning
within three months after the effective date of the registration statement,
which earnings statements shall satisfy the provisions of Section 11(a) of the
Securities Act.

         2.7      Furnishing Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to Section 2.1, 2.2
or 2.3 that the selling Holders shall furnish to the Company such information
regarding themselves, the Registrable Securities held

                                     - 10 -
<PAGE>

by them and the intended method of disposition of such securities as shall be
reasonably required to effect the registration of their Registrable Securities.

         2.8      Indemnification. In the event any Registrable Securities are
included in a registration statement under Sections 2.1, 2.2 or 2.3:

                  (a)      To the extent permitted by law, the Company will
indemnify and hold harmless each Holder and the partners, officers, directors,
stockholders, employees and agents of each Holder, any underwriter (as defined
in the Securities Act) for such Holder and each Person, if any, who controls
such Holder or underwriter within the meaning of the Securities Act or the
Exchange Act, against any losses, claims, damages, or liabilities (joint or
several) to which they may become subject under the Securities Act, the Exchange
Act or other federal or state law, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
of the following statements, omissions or violations (collectively a
"Violation") by the Company: (i) any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, including
any preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, or any document incident to the registration
or qualification of any Registrable Securities, (ii) the omission or alleged
omission to state therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation
or alleged violation by the Company of the Securities Act, the Exchange Act, any
state securities law or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law in connection with the
offering covered by such registration statement; and the Company will pay as
incurred to each such Holder, partner, officer, director, stockholder, employee,
agent, underwriter or controlling Person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
indemnity agreement contained in this Section 2.8(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company, which consent shall
not be unreasonably withheld, nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, partner, officer, employee, agent,
director, stockholder, underwriter or controlling Person of such Holder.

                  (b)      To the extent permitted by law, each Holder will
(severally and not jointly), if Registrable Securities held by such Holder are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify and hold harmless the Company, each of
its directors, its officers, employees, agents and each Person, if any, who
controls the Company within the meaning of the Securities Act, any underwriter
and any other Holder selling securities under such registration statement or any
of such other Holder's partners, directors, officers or stockholders or any
Person who controls such Holder, against any losses, claims, damages or
liabilities to which the Company or any such Person may become subject under the
Securities Act, the Exchange Act or other federal or state law, insofar as such
losses, claims, damages or liabilities (or actions in respect thereto) arise out
of or are based upon any Violation, in each case to the extent (and only to the
extent) that such Violation occurs in reliance upon and in conformity with
written information furnished by such Holder under an

                                     - 11 -
<PAGE>

instrument duly executed by such Holder and stated to be specifically for use in
connection with such registration; and each such Holder will pay as incurred any
legal or other expenses reasonably incurred by the Company or any such Person in
connection with investigating or defending any such loss, claim, damage,
liability or action if it is judicially determined that there was such a
Violation; provided, however, that the indemnity agreement contained in this
Section 2.8(b) shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Holder, which consent shall not be unreasonably withheld;
provided further, that in no event shall any indemnity under this Section 2.8(b)
exceed the net proceeds from the offering actually received by such Holder.

                  (c)      Promptly after receipt by an indemnified party under
this Section 2.8 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 2.8, deliver to
the indemnifying party a written notice of the commencement thereof and
generally summarize such action and the indemnifying party shall have the right
to participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties; and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be responsible for any
legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof. The failure to deliver written notice to
the indemnifying party within a reasonable time of the commencement of any such
action, if materially prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 2.8, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 2.8. Notwithstanding the
foregoing, if any indemnified party shall have reasonably concluded that there
may be one or more legal or equitable defenses available to such indemnified
party which are in addition to or conflict with those available to the
indemnifying party, or that such claim or litigation involves or could have an
effect upon matters beyond the scope of the indemnity provided in this Section
2.8, the indemnifying party shall not have the right to assume the defense of
such action on behalf of such indemnified party and such indemnifying party
shall reimburse such indemnified party and any Person controlling such
indemnified party for that portion of the fees and expenses of any one lead
counsel (plus appropriate special and local counsel) retained by the indemnified
party which are reasonably related to the matters covered by the indemnity
agreement provided in this Section 2.8.

                  (d)      If the indemnification provided for in this Section
2.8 is held by a court of competent jurisdiction to be unavailable to an
indemnified party with respect to any losses, claims, damages or liabilities
referred to herein, the indemnifying party, in lieu of indemnifying such
indemnified party thereunder, shall to the extent permitted by applicable law
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the Violation(s) that resulted
in such loss, claim, damage or liability, as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and of
the indemnified party shall be determined by a court of law by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission to state a material fact relates to information

                                     - 12 -
<PAGE>

supplied by the indemnifying party or by the indemnified party and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission; provided, that in no event shall the maximum
liability in respect of any contribution by a Holder pursuant to this Section
2.8(d) exceed the net proceeds from the offering actually received by such
Holder. No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.

                  (e)      The obligations of the Company and Holders under this
Section 2.8 shall survive the transfer of any Registrable Securities or the
completion of any offering of Registrable Securities in a registration statement
and the termination of this Agreement. No Indemnifying Party, in the defense of
any such claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.

         2.9      Assignment of Registration Rights. The right to cause the
Company to register Registrable Securities pursuant to this Section 2 may be
assigned by a Holder to a transferee or assignee of Registrable Securities which
(a) is a subsidiary, parent, general partner, limited partner, retired partner,
member, retired member or affiliate of a Holder, (b) is a Holder's spouse or
lineal descendant or trust for the benefit of an individual Holder or his or her
spouse or lineal descendant, (c) acquires at least 50,000 Registrable Securities
(as adjusted for stock splits and combinations) from such Holder, or (d)
acquires Registrable Securities from such Holder without consideration;
provided, that (i) the transferor shall, within twenty (20) days after such
transfer, furnish to the Company written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned and (ii) such transferee shall agree to
be subject to all restrictions set forth in this Agreement as evidenced by such
transferee's execution and delivery of an appropriate counterpart signature page
or joinder hereto.

         2.10     Amendment of Registration Rights. Any provision of this
Article 2 may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holders of
two-thirds (2/3) of the Registrable Securities then outstanding; provided,
however, that any such amendment, modification, or waiver that would adversely
affect the rights hereunder of an Investor, in its capacity as an Investor,
without similarly affecting the rights hereunder of all Investors of such class,
in their capacities as Investors of such class, shall not be effective as to
such Investor without its prior written consent. Any amendment or waiver
effected in accordance with this Section 2.10 shall be binding upon each Holder
and the Company. By acceptance of any benefits under this Article 2, Holders
hereby agree to be bound by the provisions hereunder.

         2.11     Limitation on Subsequent Registration Rights. After the date
of this Agreement, the Company shall not, without the prior written consent of
the Holders of at least two-thirds (2/3) of the Registrable Securities then
outstanding, enter into any agreement with any holder or prospective holder of
any securities of the Company that would grant such holder registration

                                     - 13 -
<PAGE>

rights on parity with or senior to those granted to the Holders hereunder or
which rights could be reasonably expected to conflict with the rights granted to
the Holders hereunder.

         2.12     "Market Stand-Off" Agreement; Agreement to Furnish
Information. Each Holder hereby agrees that such Holder shall not sell or
otherwise transfer or dispose of any Common Stock (or other securities) of the
Company held by such Holder (other than those included in the registration) for
a period specified by the representative of the underwriters of Common Stock (or
other securities) of the Company not to exceed ninety (90) days or, in the case
of the Initial Public Offering, one hundred eighty (180) days following the
effective date of a registration statement of the Company filed under the
Securities Act (the "Lock-up"); provided that:

                  (a)      such agreement shall apply only to a secondary public
offering in which such Holder is participating or to the Initial Public
Offering;

                  (b)      with respect to the Initial Public Offering, all (A)
officers and directors of the Company and (B) all stockholders of the Company
that own at least one-half percent (0.5%) of the Company's Common Stock (on an
as converted basis) enter into similar agreements and with respect to a
secondary public offering, all (X) officers and directors of the Company and (Y)
Holders selling shares in such offering enter into similar agreements; provided,
that if all such Persons are not subject to the Lock-up, the shares of Common
Stock that are subject to the Lock-up shall first be shares of Common Stock and
then shares of Series A Preferred Stock, Series B Preferred Stock and Series C
Preferred Stock (allocated amongst the Company's stockholders on a pro rata
basis); and

                  (c)      any amendment or modification that benefits any
stockholder or any termination, in either case with regard to the terms of any
Lock-up to which any stockholder of the Company is subject, shall similarly
affect the rights of all Holders.

         Each Holder participating in the applicable registration agrees to
execute and deliver such other agreements as may be reasonably requested by the
Company or the underwriter which are consistent with the foregoing or which are
necessary to give further effect thereto. In addition, if requested by the
Company or the representative of the underwriters of Common Stock (or other
securities) of the Company, each Holder participating in the applicable
registration shall provide, as soon as practicable after receipt of such
request, such information as may be reasonably required by the Company or such
representative in connection with the completion of any public offering of the
Company's securities pursuant to a registration statement filed under the
Securities Act. The obligations described in this Section 2.12 shall not apply
to a registration relating solely to employee benefit plans on Form S-1 or Form
S-8 or similar forms that may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. The Company may impose
stop-transfer instructions with respect to the shares of Common Stock (or other
securities) subject to the foregoing restriction until the end of said ninety
(90) day or one-hundred eighty (180) day period.

         2.13     Rule 144 Reporting. With a view to making available to the
Holders the benefits of certain rules and regulations of the SEC which may
permit the sale of the Registrable Securities to the public without
registration, the Company agrees to use its best efforts to:

                                     - 14 -
<PAGE>

                  (a)      Make and keep public information available, as those
terms are understood and defined in SEC Rule 144 or any similar or analogous
rule promulgated under the Securities Act, at all times after the effective date
of the first registration filed by the Company for an offering of its securities
to the general public;

                  (b)      File with the SEC, in a timely manner, all reports
and other documents required of the Company under the Exchange Act; and

                  (c)      So long as a Holder owns any Registrable Securities,
furnish to such Holder forthwith upon request: a written statement by the
Company as to its compliance with the reporting requirements of said Rule 144 of
the Securities Act, and of the Exchange Act (at any time after it has become
subject to such reporting requirements); a copy of the most recent annual or
quarterly report of the Company; and such other reports and documents as a
Holder may reasonably request in availing itself of any rule or regulation of
the SEC allowing it to sell any such securities without registration.

                  (d)      Termination of Registration Rights. No Holder shall
be entitled to exercise any right provided for in this Article 2 after such time
as all such Holder's Registrable Securities may be sold in a single sale without
regard to any volume limitations pursuant to Rule 144.

                                   ARTICLE 3

                                 MISCELLANEOUS

         3.1      Governing Law. This Agreement shall be governed by and
construed under the laws of the State of Delaware, without applying conflicts of
law principles.

         3.2      Jurisdiction. The parties hereto agree that any suit, action
or proceeding instituted against one or more of them with respect to this
Agreement (including any exhibits hereto) may be brought in any federal or state
court located in the State of New York. The parties hereto, by the execution and
delivery of this Agreement, irrevocably waive any obligation or any right of
immunity on the ground of venue, the convenience of the forum or the
jurisdiction of such courts, or from the execution of judgments resulting
therefrom, and the parties hereto irrevocably accept and submit to the
jurisdiction of the aforesaid courts in any suit, action or proceeding and
consent to the service of process by certified mail at the respective address of
the Company set forth on the signature pages hereof and of the Investors set
forth on Exhibit A or such other address as such party shall have designated in
writing to the other parties hereto.

         EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT.

         3.3      Survival. The representations, warranties, covenants, and
agreements made herein shall survive any investigation made by any Investor and
the closing of the transactions contemplated hereby. All statements as to
factual matters contained in any certificate or other instrument delivered by or
on behalf of the Company pursuant hereto in connection with the

                                     - 15 -
<PAGE>

transactions contemplated hereby shall be deemed to be representations and
warranties by the Company hereunder solely as of the date of such certificate or
instrument.

         3.4      Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
Person who shall be a holder of Registrable Securities from time to time;
provided, however, that prior to the receipt by the Company of adequate written
notice of the transfer of any Registrable Securities specifying the full name
and address of the transferee, the Company may deem and treat the Person listed
as the holder of such shares in its records as the absolute owner and holder of
such shares for all purposes, including the payment of dividends or any
redemption price.

         3.5      Entire Agreement. This Agreement, the Series C Securities
Acquisition Agreement and the Exhibits thereto and the Stockholders Agreement
and the other documents delivered pursuant hereto embodies the entire agreement
and understanding between the parties hereto with respect to the understanding
and agreement between the parties with regard to the subjects hereof and
supersedes all prior agreements and understandings relating to such subject
matter.

         3.6      Severability. It is the desire and intent of the parties
hereto that the provisions of this Agreement be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, in case any provision of the Agreement
shall be adjudicated by a court of competent jurisdiction to be invalid,
illegal, or unenforceable, such provision, as to such jurisdiction, shall be
ineffective, without affecting the validity, legality, and enforceability of the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.

         3.7      Amendment and Waiver.

                  (a)      Except as otherwise expressly provided, including in
Section 2.10 above, this Agreement may be amended or modified only upon the
consent of the Company and the holders of a majority of the Registrable
Securities; provided, however, that any such amendment, modification, or waiver
that would adversely affect the rights hereunder of any Investor, in its
capacity as an Investor, without similarly affecting the rights hereunder of all
Investors of such class, in their capacities as Investors of such class, shall
not be effective as to such Investor without its prior written consent.

                  (b)      Except as otherwise expressly provided, the
obligations of the Company under this Agreement may be waived only with the
consent of the holders of a majority of the Registrable Securities.

         3.8      Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any Holder, upon any breach,
default or noncompliance of the Company under this Agreement shall impair any
such right, power, or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar breach, default or noncompliance thereafter occurring. It is further

                                     - 16 -
<PAGE>

agreed that any waiver, permit, consent, or approval of any kind or character on
any Holder's part of any breach, default or noncompliance under the Agreement or
any waiver on such Holder's part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, by law, or otherwise afforded to Holders, shall be cumulative and not
alternative.

         3.9      Notices. All notices and consents required or permitted
hereunder must be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, (b) when sent by confirmed
facsimile upon receipt, (c) three business days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or (d)
one business day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All
communications shall be sent to the party to be notified at the respective
address of the Company set forth on the signature pages hereof and of the
Investors set forth on Exhibit A or at such other address as such party may
designate in writing to the other parties hereto.

         3.10     Headings. The headings of the sections, subsections, and
paragraphs of this Agreement have been added for convenience only and shall not
be deemed to be a part of this Agreement.

         3.11     Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

                            [SIGNATURE PAGES FOLLOW]

                                     - 17 -
<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have executed this
Investor Rights Agreement as of the date first above written.

                               COMPANY:

                               BARRIER THERAPEUTICS, INC.

                               By: _____________________________________________
                                   Geert Cauwenbergh
                                   Chief Executive Officer

                               Address:  600 College Road East
                                         Suite 3200
                                         Princeton, NJ 08540

                               INVESTOR:

                               MPM BIOVENTURES III, L.P.
                               By: MPM BioVentures III GP, L.P.,
                                     its General Partner
                               By: MPM BioVentures III LLC, its General Partner

                               By: _____________________________________________
                               Name:
                               Title: Series A Member

                               MPM BIOVENTURES III-QP, L.P.
                               By: MPM BioVentures III GP, L.P.,
                                     its General Partner
                               By: MPM BioVentures III LLC, its General Partner

                               By: _____________________________________________
                               Name:
                               Title: Series A Member

                               MPM BIOVENTURES III Parallel Fund, L.P.
                               By: MPM BioVentures III GP, L.P.,
                                     its General Partner
                               By: MPM BioVentures III LLC, its General Partner

                               By: _____________________________________________
                               Name:
                               Title: Series A Member

       [SIGNATURE PAGE TO AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]

<PAGE>

                               MPM BIOVENTURES III GMBH & CO.
                               BETEILIGUNGS KG
                               By: MPM BioVentures III GP, L.P., in its capacity
                                     as the Managing Limited Partner
                               By: MPM BioVentures III LLC, its General Partner

                               By: _____________________________________________
                               Name:
                               Title: Series A Member

                               MPM ASSET MANAGEMENT INVESTORS 2003 BVIII LLC

                               By: _____________________________________________
                               Name:
                               Title: Manager

                               MPM BIOEQUITIES FUND GMBH & CO. KG

                               By: MPM BioEquities GP, L.P., in its capacity
                                   as the Managing Limited Partner

                               By: MPM BioEquities GP LLC,
                                   its General Partner

                               By: _____________________________________________
                                   Robert W. Liptak
                                   Manager

                               MPM BIOEQUITIES MASTER FUND, LP

                               By: MPM BioEquities GP, L.P.,
                                   its General Partner

                               By: MPM BioEquities GP LLC,
                                   its General Partner

                               By: _____________________________________________
                                   Robert W. Liptak
                                   Manager

       [SIGNATURE PAGE TO AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]

<PAGE>

                               J.P. MORGAN PARTNERS (BHCA), L.P.

                               By: JPMP Master Fund Manager, L.P.,
                                   its general partner

                               By: JPMP Capital Corp.,
                                   its general partner

                               By: _____________________________________________
                                   Name:
                                   Title:

                               J.P. MORGAN PARTNERS GLOBAL INVESTORS, L.P.,

                               By: JPMP Global Investors, L.P.,
                                   its general partner

                               By: JPMP Capital Corp.,
                                   its general partner

                               By: _____________________________________________
                                   Name:
                                   Title:

                               J.P. MORGAN PARTNERS GLOBAL INVESTORS (CAYMAN),
                               L.P.

                               By: JPMP Global Investors, L.P.,
                                   its general partner

                               By: JPMP Capital Corp.,
                                   its general partner

                               By: _____________________________________________
                                   Name:
                                   Title:

       [SIGNATURE PAGE TO AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]

<PAGE>

                               J.P. MORGAN PARTNERS GLOBAL INVESTORS A, L.P.

                               By: JPMP Global Investors, L.P.,
                                   its general partner

                               By: JPMP Capital Corp.,
                                   its general partner

                               By: _____________________________________________
                                   Name:
                                   Title:

                               J.P. MORGAN PARTNERS GLOBAL INVESTORS (CAYMAN)
                               II, L.P.

                               By: JPMP Global Investors, L.P.,
                                   its general partner

                               By: JPMP Capital Corp.,
                                   its general partner

                               By: _____________________________________________
                                   Name:
                                   Title:

       [SIGNATURE PAGE TO AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]

<PAGE>

                               TL VENTURES V L.P.

                               By: TL Ventures V Management L.P.,
                                   its general partner

                               By: TL Ventures V LLC,
                                   its manager

                               By: _____________________________________________
                                   Name:
                                   Title:

                               TL VENTURES V INTERFUND L.P.

                               By: TL Ventures V LLC,
                                   its general partner

                               By: _____________________________________________
                                   Name:
                                   Title:

       [SIGNATURE PAGE TO AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]

<PAGE>

                               KBC PRIVATE EQUITY FUND BIOTECH NV

                               By: _____________________________________________
                                   Name:
                                   Title:

                               KBC EQUITY FUND NV

                               By: _____________________________________________
                                   Name:
                                   Title:

                               KBC EQUITY FUND BIOTECHNOLOGY

                               By: _____________________________________________
                                   Name:
                                   Title:

                               KBC EQUITY FUND PHARMA

                               By: _____________________________________________
                                   Name:
                                   Title:

       [SIGNATURE PAGE TO AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]

<PAGE>

                               PERSEUS-SOROS BIOPHARMACEUTICAL FUND, LP

                               By: Perseus-Soros Partners, LLC, Its General
                               Partner

                               By: SFM Participation, L.P., Its Managing Member

                               By: SFM AH, LLC, Its General Partner

                               By: Soros Private Funds Management LLC, Its
                               Managing Member

                               _________________________________________________
                               By:
                               Title: Attorney-in-Fact

       [SIGNATURE PAGE TO AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]

<PAGE>

                               BAKER/TISCH INVESTMENTS, L.P.

                               By: Baker/Tisch Capital, L.P.,
                                   its general partner
                               By: Baker/Tisch Capital (GP), LLC,
                                   its general partner

                               By: _____________________________________________
                                   Felix Baker
                                   Managing Member

                               BAKER BROS. INVESTMENTS, L.P.

                               By: Baker Bros. Capital, L.P.,
                                   its general partner
                               By: Baker Bros. Capital (GP), LLC,
                                   its general partner

                               By: _____________________________________________
                                   Felix Baker
                                   Managing Member

                               BAKER BROS. INVESTMENTS II, L.P.

                               By: Baker Bros. Capital, L.P.,
                                   its general partner
                               By: Baker Bros. Capital (GP), LLC,
                                   its general partner

                               By: _____________________________________________
                                   Felix Baker
                                   Managing Member

       [SIGNATURE PAGE TO AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]

<PAGE>

                               BAKER BIOTECH FUND I, L.P.

                               By: Baker Biotech Capital, L.P.,
                                   its general partner
                               By: Baker Biotech Capital (GP), LLC,
                                   its general partner

                               By: _____________________________________________
                                   Felix Baker
                                   Managing Member

                               BAKER BIOTECH FUND II, L.P.

                               By: Baker Biotech Capital II, L.P.,
                                   its general partner
                               By: Baker Biotech Capital II (GP), LLC,
                                   is general partner

                               By: _____________________________________________
                                   Felix Baker
                                   Managing Member

       [SIGNATURE PAGE TO AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]

<PAGE>

                               JOHNSON & JOHNSON DEVELOPMENT CORPORATION

                               By: _____________________________________________
                                   Ting Pau Oei
                                   Vice President

                               JANSSEN PHARMACEUTICA PRODUCTS, L.P.

                               By: Janssen Pharmaceutica Inc.,
                                   its general partner

                               By: _____________________________________________
                                   Name:
                                   Title:

                               JOHNSON & JOHNSON CONSUMER COMPANIES, INC.

                               By: _____________________________________________
                                   Name:
                                   Title:

       [SIGNATURE PAGE TO AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]

<PAGE>

                                                                       EXHIBIT A

                                LIST OF INVESTORS

MPM BioVentures III, L.P.
MPM BioVentures III-QP, L.P.
MPM BioVentures III Parallel Fund, L.P.
MPM BioVentures III GMBH & Co. BETEILIGUNGS KG
MPM Asset Management Investors 2003 BVIII LLC
MPM BioEquities Fund GMBH & Co. KG, and
MPM BioEquities Master Fund, LP

Address:

                  111 Huntington Avenue
                  31st Floor
                  Boston, MA 02199
                  Facsimile: 617.425.9200
                  Attention: William Greene

              with a copy to:

                  Cooley Godward LLP
                  Five Palo Alto Square
                  3000 El Camino Real
                  Palo Alto, CA 94306-2155
                  Facsimile: 650.849.7400
                  Attention: James Kitch

J.P. Morgan Partners (BHCA), L.P.
Address:

                  1221 Avenue of the Americas
                  New York, NY 10020
                  Facsimile: (212) 899-3401
                  Attention: Official Notices Clerk
                  (fbo Srinivas Akkaraju)

              with a copy to:

                  O'Melveny & Myers LLP
                  30 Rockefeller Plaza
                  New York, NY 10112
                  Facsimile: (212) 728-5950
                  Attention: Phillip Isom, Esq.

                                       A-1
<PAGE>

J.P. Morgan Partners Global Investors, L.P.
Address:

                  1221 Avenue of the Americas
                  New York, NY 10020
                  Facsimile: (212) 899-3401
                  Attention: Official Notices Clerk
                  (fbo Srinivas Akkaraju)

              with a copy to:

                  O'Melveny & Myers LLP
                  30 Rockefeller Plaza
                  New York, NY 10112
                  Facsimile: (212) 728-5950
                  Attention: Phillip Isom, Esq.

J.P. Morgan Partners Global Investors (Cayman), L.P.
Address:

                  1221 Avenue of the Americas
                  New York, NY 10020
                  Facsimile: (212) 899-3401
                  Attention: Official Notices Clerk
                  (fbo Srinivas Akkaraju)

              with a copy to:

                  O'Melveny & Myers LLP
                  30 Rockefeller Plaza
                  New York, NY 10112
                  Facsimile: (212) 728-5950
                  Attention: Phillip Isom, Esq.

                                       A-2
<PAGE>

J.P. Morgan Partners Global Investors A, L.P.
Address:

                  1221 Avenue of the Americas
                  New York, NY 10020
                  Facsimile: (212) 899-3401
                  Attention: Official Notices Clerk
                  (fbo Srinivas Akkaraju)

              with a copy to:

                  O'Melveny & Myers LLP
                  30 Rockefeller Plaza
                  New York, NY 10112
                  Facsimile: (212) 728-5950
                  Attention: Phillip Isom, Esq.

J.P. Morgan Partners Global Investors (Cayman) II, L.P.
Address:

                  1221 Avenue of the Americas
                  New York, NY 10020
                  Facsimile: (212) 899-3401
                  Attention: Official Notices Clerk
                  (fbo Srinivas Akkaraju)

              with a copy to:

                  O'Melveny & Myers LLP
                  30 Rockefeller Plaza
                  New York, NY 10112
                  Facsimile: (212) 728-5950
                  Attention: Phillip Isom, Esq.

                                       A-3
<PAGE>

TL Ventures V L.P.
Address:

                  700 Building
                  435 Devon Park Drive
                  Wayne, PA 19087
                  Facsimile: (610) 975-9330
                  Attention: Devang V. Kantesaria

              with a copy to:

                  Dechert
                  Princeton Pike Corporate Center
                  997 Lenox Drive
                  Building 3, Suite 210
                  Lawrenceville, NJ 08648
                  Facsimile: (609) 620-3259
                  Attention: James J. Marino, Esq.

TL Ventures V Interfund L.P.
Address:

                  700 Building
                  435 Devon Park Drive
                  Wayne, PA 19087
                  Facsimile: (610) 975-9330
                  Attention: Devang V. Kantesaria

              with a copy to:

                  Dechert
                  Princeton Pike Corporate Center
                  997 Lenox Drive
                  Building 3, Suite 210
                  Lawrenceville, NJ 08648
                  Facsimile: (609) 620-3259
                  Attention: James J. Marino, Esq.

                                       A-4
<PAGE>

KBC Private Equity Fund Biotech NV
Address:          ALA
                  Havenlaan 2
                  1080 Brussels
                  BELGIUM
                  Facsimile: 32 2 429 59 29
                  Attention: Jo Vander Stuyft, Secretary of the Board

              with a copy to:

                  KBC Private Equity Fund Biotech NV
                  Havenlaan 12
                  1080 Brussels
                  BELGIUM
                  Facsimile: 32 2 429 05 25
                  Attention: Ruth Devenyns, Attorney in fact

KBC Equity Fund NV
Address:          ALA
                  Havenlaan 2
                  1080 Brussels
                  BELGIUM
                  Facsimile:32 2 429 59 29
                  Attention: Jo Vander Stuyft, Legal Adviser

              with a copy to:

                  KBC Equity Fund NV
                  Havenlaan 12
                  1080 Brussels
                  BELGIUM
                  Facsimile: 32 2 429 05 25
                  Attention: Ruth Devenyns, Attorney in fact

                                       A-5
<PAGE>

KBC Equity Fund Biotechnology
Address:          ALA
                  Havenlaan 2
                  1080 Brussels
                  BELGIUM
                  Facsimile: 32 2 429 59 29
                  Attention: Jo Vander Stuyft, Legal Adviser

              with a copy to:

                  KBC Equity Fund Biotechnology
                  Havenlaan 12
                  1080 Brussels
                  BELGIUM
                  Facsimile: 32 2 429 05 25
                  Attention: Ruth Devenyns, Attorney in fact

KBC Equity Fund Pharma
Address:          ALA
                  Havenlaan 2
                  1080 Brussels
                  BELGIUM
                  Facsimile: 32 2 429 59 29
                  Attention: Jo Vander Stuyft, Legal Adviser

              with a copy to:

                  KBC Equity Fund Pharma
                  Havenlaan 12
                  1080 Brussels
                  BELGIUM
                  Facsimile: 32 2 429 05 25
                  Attention: Ruth Devenyns, Attorney in fact

                                       A-6
<PAGE>

Perseus-Soros Biopharmaceutical Fund, L.P.
Address:          888 Seventh Avenue, 29th Floor
                  New York, NY 10106
                  Facsimile: (212) 651-6379
                  Attention: Dr. Andrew Schiff

              with a copy to:

                  Perseus-Soros Biopharmaceutical Fund, L.P.
                  c/o Soros Fund Management LLC
                  888 Seventh Avenue, 31st Floor
                  New York, NY 10106
                  Attention: Richard D. Holahan, Jr., Esq.

                  and

                  Paul, Weiss, Rifkind, Wharton & Garrison, LLP
                  1285 Avenue of the Americas
                  New York, NY 10019-6064
                  Facsimile: (212) 757-3990
                  Attention: Bruce A. Gutenplan, Esq.

Baker/Tisch Investments, L.P.
Address:          655 Madison Avenue, 19th Floor
                  New York, New York 10021
                  Facsimile: (212) 521-2245
                  Attention: Felix Baker

              with a copy to:

                  Baker Brothers Investments
                  655 Madison Avenue, 19th Floor
                  New York, New York 10021
                  Facsimile: (212) 521-2245
                  Attention: Leo Kirby

                                       A-7
<PAGE>

Baker Bros. Investments, L.P.
Address:          655 Madison Avenue, 19th Floor
                  New York, New York 10021
                  Facsimile: (212) 521-2245
                  Attention: Felix Baker

              with a copy to:

                  Baker Brothers Investments
                  655 Madison Avenue, 19th Floor
                  New York, New York 10021
                  Facsimile: (212) 521-2245
                  Attention: Leo Kirby

Baker Bros. Investments II, L.P.
Address:          655 Madison Avenue, 19th Floor
                  New York, New York 10021
                  Facsimile: (212) 521-2245
                  Attention: Felix Baker

              with a copy to:

                  Baker Brothers Investments
                  655 Madison Avenue, 19th Floor
                  New York, New York 10021
                  Facsimile: (212) 521-2245
                  Attention: Leo Kirby

Baker Biotech Fund I, L.P.
Address:          655 Madison Avenue, 19th Floor
                  New York, New York 10021
                  Facsimile: (212) 521-2245
                  Attention: Felix Baker

              with a copy to:

                  Baker Brothers Investments
                  655 Madison Avenue, 19th Floor
                  New York, New York 10021
                  Facsimile: (212) 521-2245
                  Attention: Leo Kirby

                                       A-8
<PAGE>

Baker Biotech Fund II, L.P.
Address:          655 Madison Avenue, 19th Floor
                  New York, New York 10021
                  Facsimile: (212) 521-2245
                  Attention: Felix Baker

              with a copy to:

                  Baker Brothers Investments
                  655 Madison Avenue, 19th Floor
                  New York, New York 10021
                  Facsimile: (212) 521-2245
                  Attention: Leo Kirby

Johnson & Johnson Consumer Companies, Inc.
Address:          c/o Johnson & Johnson Development Corporation
                  1 Johnson & Johnson Plaza
                  New Brunswick, NJ 08933
                  Facsimile: (732) 247-5309
                  Attention: Ting Pau Oei

              with a copy to:

                  Johnson & Johnson Law Department
                  1 Johnson & Johnson Plaza
                  New Brunswick, NJ 08933
                  Facsimile: (732) 524-2788
                  Attention: Sheldon Hirt

Janssen Pharmaceutica Products, L.P.
Address:          c/o Johnson & Johnson Development Corporation
                  1 Johnson & Johnson Plaza
                  New Brunswick, NJ 08933
                  Facsimile: (732) 247-5309
                  Attention: Ting Pau Oei

              with a copy to:

                  Johnson & Johnson Law Department
                  1 Johnson & Johnson Plaza
                  New Brunswick, NJ 08933
                  Facsimile: (732) 524-2788
                  Attention: Sheldon Hirt

                                       A-9
<PAGE>

Johnson & Johnson Development Corporation
Address:          1 Johnson & Johnson Plaza
                  New Brunswick, NJ 08933
                  Facsimile: (732) 247-5309
                  Attention: Ting Pau Oei

              with a copy to:

                  Johnson & Johnson Law Department
                  1 Johnson & Johnson Plaza
                  New Brunswick, NJ 08933
                  Facsimile: (732) 524-2788
                  Attention: Sheldon Hirt

                                      A-10

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