Document:

<PAGE>

                                                                  EXHIBIT 10(aj)

                                                                  EXECUTION COPY

                                  $150,000,000

                                CREDIT AGREEMENT

                          Dated as of November 2, 2000

                                      Among

                      INTERNATIONAL RECTIFIER CORPORATION,

                                   AS COMPANY,

                                       and

                        THE INITIAL LENDERS NAMED HEREIN,

                                   BNP PARIBAS

                     as SOLE ARRANGER, ADMINISTRATIVE AGENT,
                            and INITIAL ISSUING BANK

<PAGE>

                             TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                 Page
                                                                                                                 ----
<S>                                                                                                           <C>
ARTICLE I

         SECTION 1.01 Certain Defined Terms.......................................................................1

         SECTION 1.02 Computation of Time Periods; Other Definitional Provisions.................................20

         SECTION 1.03 Accounting Terms...........................................................................20

ARTICLE II

         SECTION 2.01 The Advances and the Letters of Credit.....................................................20

         SECTION 2.02 Making the Revolving Credit Advances.......................................................21

         SECTION 2.03 Issuance of and Drawings and Reimbursement Under Letters of Credit.........................23

         SECTION 2.04 The Competitive Bid Advances...............................................................24

         SECTION 2.05 Repayment of Advances......................................................................27

         SECTION 2.06 Termination or Reduction of the Commitments................................................28

         SECTION 2.07 Prepayments................................................................................28

         SECTION 2.08 Interest on Revolving Credit Advances and Letter of Credit Advances........................29

         SECTION 2.09 Fees.......................................................................................30

         SECTION 2.10 Conversion of Revolving Credit Advances....................................................31

         SECTION 2.11 Increased Costs, Etc.......................................................................32

         SECTION 2.12 Payments and Computations..................................................................34

         SECTION 2.13 Taxes......................................................................................35

         SECTION 2.14 Sharing of Payments, Etc...................................................................37

         SECTION 2.15 Use of Proceeds............................................................................38

         SECTION 2.16 Evidence of Debt...........................................................................38

</TABLE>

<PAGE>

                                      (ii)

<TABLE>
<CAPTION>
                                                                                                                 Page
                                                                                                                 ----
<S>                                                                                                           <C>
ARTICLE III

         SECTION 3.01 Conditions Precedent to Effectiveness of Section 2.01, 2.03 and 2.04.......................39

         SECTION 3.02 Initial Loan to Each Designated Subsidiary.................................................42

         SECTION 3.03 Conditions Precedent to Each Revolving Credit Borrowing and Issuance.......................42

         SECTION 3.04 Conditions Precedent to Each Competitive Bid Borrowing.....................................43

         SECTION 3.05 Determinations Under Section 3.01..........................................................44

ARTICLE IV

         SECTION 4.01 Representations and Warranties of the Company..............................................44

ARTICLE V

         SECTION 5.01 Affirmative Covenants......................................................................48

         SECTION 5.02 Negative Covenants.........................................................................52

         SECTION 5.03 Reporting Requirements.....................................................................57

         SECTION 5.04 Financial Covenants........................................................................59

ARTICLE VI

         SECTION 6.01 Events of Default..........................................................................60

         SECTION 6.02 Actions in Respect of the Letters of Credit upon Default...................................63

ARTICLE VII

         SECTION 7.01 Unconditional Guaranty.....................................................................63

         SECTION 7.02 Guaranty Absolute..........................................................................63

         SECTION 7.03 Waivers and Acknowledgments................................................................64

         SECTION 7.04 Subrogation................................................................................65

         SECTION 7.05 Subordination..............................................................................66

         SECTION 7.06 Survival...................................................................................66

</TABLE>

<PAGE>

                                     (iii)

<TABLE>
<CAPTION>
                                                                                                                 Page
                                                                                                                 ----
<S>                                                                                                           <C>
ARTICLE VIII

         SECTION 8.01 Authorization and Action...................................................................67

         SECTION 8.02 Agents' Reliance, Etc......................................................................67

         SECTION 8.03 BNP Paribas and Affiliates.................................................................67

         SECTION 8.04 Lender Party Credit Decision...............................................................68

         SECTION 8.05 Indemnification............................................................................68

         SECTION 8.06 Successor Agents...........................................................................69

         SECTION 8.07 Other Agents...............................................................................69

ARTICLE IX

         SECTION 9.01 Amendments, Etc............................................................................70

         SECTION 9.02 Notices, Etc...............................................................................70

         SECTION 9.03 No Waiver; Remedies........................................................................71

         SECTION 9.04 Costs and Expenses.........................................................................71

         SECTION 9.05 Right of Set-off...........................................................................72

         SECTION 9.06 Binding Effect.............................................................................72

         SECTION 9.07 Assignments, Designations and Participations...............................................72

         SECTION 9.08 Confidentiality............................................................................76

         SECTION 9.09 Execution in Counterparts..................................................................76

         SECTION 9.10 No Liability of the Issuing Bank...........................................................76

         SECTION 9.11 Designated Subsidiaries....................................................................76

         SECTION 9.12 Jurisdiction, Etc..........................................................................77

         SECTION 9.13 Governing Law..............................................................................77

         SECTION 9.14 Judgment...................................................................................77

</TABLE>

<PAGE>

                                      (iv)
<TABLE>
<CAPTION>
                                                                                                                 Page
                                                                                                                 ----
<S>                                                                                                           <C>
         SECTION 9.15 Substitution of Currency...................................................................78

         SECTION 9.16 Waiver of Jury Trial.......................................................................79

</TABLE>

<PAGE>

                                      (v)
<TABLE>
<CAPTION>

<S>                               <C>
SCHEDULES

Schedule I                 -        Commitments and Applicable Lending Offices

Schedule 3.01(a)(ii)(A)(2)          Condition subsequent Non-U.S. Subsidiary Guarantors

Schedule 3.01(a)(iii)      -        Condition precedent U.S. Subsidiary Guarantors

Schedule 3.01(a)(iv)       -        Condition precedent Non-U.S. Subsidiary Guarantors

Schedule 3.01(a)(vii)      -        Secretary of State Certificates

Schedule 4.01(b)           -        Subsidiaries of Loan Parties

Schedule 4.01(d)           -        Authorizations, Approvals, Actions, Notices and Filings

Schedule 4.01(h)           -        Litigation

Schedule 4.01(l)(i)        -        Environmental Compliance

Schedule 4.01(l)(ii)       -        Properties on NPL, CERCLIS or analogous list

Schedule 4.01(l)(iii)      -        Release of Hazardous Materials

Schedule 4.01(m)           -        Existing Liens

Schedule 5.02(e)(iv)       -        Sales of Assets

Schedule 5.02(f)(vi)       -        Investments

</TABLE>

<PAGE>

                                      (vi)

EXHIBITS

Exhibit A-1      -     Form of Revolving Credit Note

Exhibit A-2      -     Form of Competitive Bid Note

Exhibit B-1      -     Form of Notice of Revolving Credit Borrowing

Exhibit B-2      -     Form of Notice of Competitive Bid Borrowing

Exhibit C        -     Form of Assignment and Acceptance

Exhibit D-1      -     Form of Designation Letter

Exhibit F-1      -     Form of Security Agreement

Exhibit F-2      -     Form of U.S Subsidiary Guaranty

Exhibit F-3      -     Form of Non-U.S Subsidiary Guaranty

Exhibit I-1      -     Form of Opinion(s) of Outside Counsel to the Loan Parties

Exhibit I-2      -     Form of Opinion of General Counsel to the Loan Parties

Exhibit J        -     Form of Opinion of Local Counsel to the Loan Parties

Exhibit M        -     Form of Designation Agreement

<PAGE>

                                CREDIT AGREEMENT

          CREDIT AGREEMENT dated as of November 2, 2000 among International
Rectifier Corporation, a Delaware corporation (the "COMPANY"), the banks,
financial institutions and other institutional lenders listed on the signature
pages hereof as the Initial Lenders (the "INITIAL LENDERS"), BNP Paribas ("BNP
PARIBAS"), as the syndication agent and sole arranger ("SYNDICATION AGENT" and
"SOLE ARRANGER"), as the initial issuing bank (the "INITIAL ISSUING BANK") and
as administrative agent (together with any successors appointed pursuant to
Article VIII, the "ADMINISTRATIVE AGENT") for the Lender Parties (as hereinafter
defined).

                             PRELIMINARY STATEMENTS:

          (1)       The Company has requested that the Lender Parties lend to
the Company up to $150,000,000 in a multicurrency facility in order to provide
working capital for the Company and its Subsidiaries and for other general
corporate purposes permitted by this Agreement.

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

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

                                   ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

          SECTION 1.01 CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

          "ACQUISITION EXPENDITURES" means, for any period, all cash
     expenditures made, directly or indirectly, by the Company or any of its
     Subsidiaries for Permitted Acquisitions.

          "ADMINISTRATIVE AGENT" has the meaning specified in the recital of
     parties to this Agreement.

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

<PAGE>

                                       2

          "ADVANCE" means a Revolving Credit Advance, a Letter of Credit Advance
     or a Competitive Bid Advance.

          "AFFILIATE" means, as to any Person, any other Person that, directly
     or indirectly, controls, is controlled by or is under common control with
     such Person or is a director or officer of such Person. For purposes of
     this definition, the term "control" (including the terms "controlling",
     "controlled by" and "under common control with") of a Person means the
     possession, direct or indirect, of the power to vote 5% or more of the
     Voting Interests of such Person or to direct or cause the direction of the
     management and policies of such Person, whether through the ownership of
     Voting Interests, by contract or otherwise.

          "AGENTS" means the Administrative Agent, the Syndication Agent and any
     Person appointed by the Administration Agent pursuant to Section 8.07, and
     "AGENT" means any of them, as the case may be.

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

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

<PAGE>

                                       3

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

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------
               Leverage                    Base Rate          Eurocurrency Rate
                Ratio                       Advances              Advances
                                                          Revolving Credit Facility
------------------------------------------------------------------------------------
<S>                                     <C>              <C>
LEVEL I
         less than 0.50 to 1.00              0.25%                 1.25%
------------------------------------------------------------------------------------
LEVEL II
         less than 1.50 to 1.00 but          0.375%                1.375%
         greater than or equal to
         0.50 to 1.00
------------------------------------------------------------------------------------
LEVEL III
         less than 2.50 to 1.00 but          0.625%                1.625%
         greater than or equal to
         1.50 to 1.00
------------------------------------------------------------------------------------
LEVEL IV
         greater than or equal to            1.125%                2.125%
         2.50 to 1.00
------------------------------------------------------------------------------------

</TABLE>

     The Applicable Margin for each Advance shall be determined by reference to
     the Leverage Ratio in effect from time to time; PROVIDED, HOWEVER, that (i)
     no change in the Applicable Margin shall be effective until three Business
     Days after the date on which the Administrative Agent receives the
     financial information required to be delivered pursuant to Section 5.03(b),
     (ii) the Applicable Margin shall be at Level IV for so long as the Company
     has not submitted to the Administrative Agent the information described in
     clause (i) of this proviso as and when required under Section 5.03(b) and
     (iii) the Applicable Margin shall be not less than that for Level II for
     any date prior to January 1, 2001.

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

          "ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
     into by a Lender Party and an Eligible Assignee and accepted by the
     Administrative Agent, in accordance with Section 9.07 and in substantially
     the form of Exhibit C hereto.

          "AVAILABLE AMOUNT" of any Letter of Credit means, at any time, the
     maximum amount available to be drawn under such Letter of Credit at such
     time (assuming compliance at such time with all conditions to drawing).

          "BASE RATE" means a fluctuating interest rate per annum in effect from
     time to time, which rate per annum shall at all times be equal to the
     higher of:

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

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

<PAGE>

                                       4

          "BASE RATE ADVANCE" means a Revolving Credit Advance that bears
     interest as provided in Section 2.08(a)(i).

          "BNP PARIBAS" has the meaning specified in the recital of parties to
     this Agreement.

          "BORROWER" means the Company or any Designated Subsidiary, as the
     context requires.

          "BORROWING" means a Revolving Credit Borrowing or a Competitive Bid
     Borrowing.

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

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

          "CAPITALIZED LEASES" means all leases that have been or should be, in
     accordance with GAAP, recorded as capitalized leases.

          "CASH EQUIVALENTS" means assets that are reported by the Company as
     cash, cash equivalents or short-term investments in its most recent
     quarterly report on Form-10Q or annual report on Form-10K filed with the
     Securities and Exchange Commission and, in the case of such short-term
     investments rated at least "Baa3-" or "Prime-3" (or the then equivalent
     grade) by Moody's or "BBB-" or "A-1" (or the then equivalent grade) by S&P
     or "BBB-" or "F3" (or the then equivalent) by Fitch IBCA, Inc.

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

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

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

<PAGE>

                                       5

     were replaced by individuals (x) elected by 66-2/3% of the remaining
     members of the board of directors of the Company or (y) nominated for
     election by a majority of the remaining members of the board of directors
     of the Company and thereafter elected as directors by the shareholders of
     the Company); or (c) any Person or two or more Persons acting in concert
     shall have acquired by contract or otherwise, or shall have entered into a
     contract or arrangement that, upon consummation, will result in its or
     their acquisition of control over Voting Interests of the Company (or other
     securities convertible into such Voting Interests) representing 35% or more
     of the combined voting power of all Voting Interests of the Company.

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

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

          "COMMITMENT" means a Revolving Credit Commitment or a Letter of Credit
     Commitment.

          "COMMITTED CURRENCIES" means lawful currency of the United Kingdom of
     Great Britain and Northern Ireland, lawful currency of the Federal Republic
     of Germany, lawful currency of the Republic of France, lawful currency of
     Japan, the lawful currency of the European Economic and Monetary Union, the
     lawful currency of the Italian Republic, the lawful currency of the
     Republic of Singapore.

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

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

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

          "CONFIDENTIAL INFORMATION" means information that any Loan Party
     furnishes to the Administrative Agent or any Lender Party or the
     Administrative Agent or that any Lender Party otherwise obtains on a
     confidential basis, but does not include any such information that is or
     becomes generally available to the public or that is or becomes available
     to the Administrative Agent or such Lender Party from a source other than
     the Loan Parties or an agent of a Loan Party.

          "CONSOLIDATED" refers, with respect to any Person, to the
     consolidation of accounts of such Person and its Subsidiaries in accordance
     with GAAP.

<PAGE>

                                       6

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

          "CONVERSION", "CONVERT" and "CONVERTED" each refer to a conversion of
     Revolving Credit Advances of one Type into Revolving Credit Advances of the
     other Type pursuant to Section 2.10.

          "DEBT" of any Person means, without duplication, (a) all indebtedness
     of such Person for borrowed money, (b) all Obligations, contingent or
     otherwise, of such Person for the deferred purchase price of property or
     services (other than trade payables not overdue by more than 90 days, and
     that do not exceed $3,000,000 in the aggregate for all such trade payables,
     that are incurred in the ordinary course of such Person's business), (c)
     all Obligations, contingent or otherwise, of such Person evidenced by
     notes, bonds, debentures or other similar instruments, (d) all Obligations,
     contingent or otherwise, of such Person created or arising under any
     conditional sale or other title retention agreement with respect to
     property acquired by such Person (even though the rights and remedies of
     the seller or lender under such agreement in the event of default are
     limited to repossession or sale of such property), (e) all Obligations,
     contingent or otherwise, of such Person as lessee under Capitalized Leases,
     (f) all Obligations, contingent or otherwise, of such Person under
     acceptance, letter of credit or similar facilities, (g) all Obligations of
     such Person to purchase, redeem, retire, defease or otherwise make any
     payment in cash in respect of any Equity Interests in such Person or any
     other Person or any warrants, rights or options to acquire such capital
     stock valued, in the case of Redeemable Preferred Interests, at the greater
     of its voluntary or involuntary liquidation preference PLUS accrued and
     unpaid dividends, (h) all Contingent Obligations of such Person, (i) any
     Obligation of such Person under a synthetic lease, tax retention operating
     lease, off-balance sheet loan or similar off-balance sheet financing if the
     transaction giving rise to such Obligation is considered indebtedness for
     borrowed money for tax purposes but is classified as an operating lease in
     accordance with GAAP, less the amount of any cash held by the respective
     credit provider as cash collateral to secure the Obligations of such Person
     under any synthetic lease and (j) all indebtedness and other payment
     Obligations referred to in clauses (a) through (i) above of another Person
     secured by (or for which the holder of such Debt has an existing right,
     contingent or

<PAGE>

                                       7

     otherwise, to be secured by) any Lien on property (including, without
     limitation, accounts and contract rights) owned by such Person, even though
     such Person has not assumed or become liable for the payment of such
     indebtedness or other payment Obligations.

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

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

          "DESIGNATED SUBSIDIARY" means any Subsidiary of the Company designated
     for borrowing privileges under this Agreement pursuant to Section 9.11.

          "DESIGNATION AGREEMENT" means a designation agreement entered into by
     a Lender (other than a Designated Bidder) and a Designated Bidder, and
     accepted by the Administrative Agent, in substantially the form of Exhibit
     M.

          "DESIGNATION LETTER" means, with respect to any Designated Subsidiary,
     a letter in the form of Exhibit D-1 hereto signed by such Designated
     Subsidiary and the Company.

          "DOLLARS" and the "$" sign each means lawful currency of the United
     States of America.

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

          "EBITDA" means, for any period, the sum, determined on a Consolidated
     basis, of (a) net income (or net loss), (b) Interest Expense, (c) income
     tax expense, (d) depreciation expense, (e) amortization expense, (f)
     noncash charges incurred in connection with stock options granted to
     employees of the Company, (g) extraordinary, non-recurring, non-cash
     transactional or unusual losses deducted in calculating net income less
     extraordinary, non-recurring, non-cash transactional or unusual gains added
     in calculating net income, and (h) Transaction Fees and Expenses, in each
     case of the Company determined in accordance with GAAP for such period;
     PROVIDED, HOWEVER, there shall be excluded from EBITDA, to the extent
     therein included, all non-cash foreign currency and Hedge Agreement losses
     and all non-cash foreign currency and Hedge Agreement gains.

          "EFFECTIVE DATE" has the meaning specified in Section 3.01.

          "ELIGIBLE ASSIGNEE" means (a) with respect to any Facility: (i) a
     Lender Party; (ii) an Affiliate of a Lender Party or an Approved Fund;
     (iii) a commercial bank organized under the laws of the United States, or
     any State thereof, and having a combined capital and surplus of at least
     $500,000,000; (iv) a savings and loan association or savings bank organized
     under the laws of the United States, or any State thereof, and having a
     combined capital and surplus of at least

<PAGE>

                                       8

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

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

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

          "ENVIRONMENTAL PERMIT" means any permit, approval, identification
     number, license or other authorization required under any Environmental
     Law.

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

          "EQUIVALENT" in Dollars of any Committed Currency or any Foreign
     Currency on any date means the equivalent in Dollars of such Committed
     Currency or Foreign Currency, as the case may be, determined by using the
     quoted spot rate at which the Administrative Agent's principal office in
     London offers to exchange Dollars for such Committed Currency or Foreign

<PAGE>

                                       9

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

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

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

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

          "EUROCURRENCY LENDING OFFICE" means, with respect to any Lender Party,
     the office of such Lender Party specified as its "Eurocurrency Lending
     Office" opposite its name on Schedule I hereto or in the Assignment and
     Acceptance pursuant to which it became a Lender Party (or, if no such
     office is specified, its Domestic Lending Office), or such other office of
     such Lender Party as such Lender Party may from time to time specify to the
     Company and the Administrative Agent.

          "EUROCURRENCY LIABILITIES" has the meaning specified in Regulation D
     of the Board of Governors of the Federal Reserve System, as in effect from
     time to time.

          "EUROCURRENCY RATE" means, for any Interest Period for all
     Eurocurrency Rate Advances comprising part of the same Revolving Credit
     Borrowing, an interest rate per annum equal to the rate per annum obtained
     by dividing (a) the average of the respective rates per annum (rounded
     upward to the next whole multiple of 1/16th of 1%) posted by each of the
     principal London offices

<PAGE>

                                       10

     of banks posting rates as displayed on the Telerate Markets screen, page
     3750 or such other page as may replace such page on such service for the
     purpose of displaying the London interbank offered rate of major banks for
     deposits in Dollars or the applicable Committed Currency, at approximately
     11:00 A.M. (London time) two Business Days before the first day of such
     Interest Period for deposits in an amount substantially equal to BNP
     Paribas' Eurocurrency Rate Advance comprising part of such Revolving Credit
     Borrowing to be outstanding during such Interest Period (or, if BNP Paribas
     shall not have such a Eurocurrency Rate Advance, $1,000,000 or the
     Equivalent thereof in Dollars) and for a period equal to such Interest
     Period by (b) a percentage equal to 100% minus the Eurocurrency Rate
     Reserve Percentage for such Interest Period.

          "EUROCURRENCY RATE ADVANCE" means a Revolving Credit Advance
     denominated in Dollars or a Committed Currency that bears interest as
     provided in Section 2.08(a)(ii).

          "EUROCURRENCY RATE RESERVE PERCENTAGE" for any Interest Period for all
     Eurocurrency Rate Advances or LIBO Rate Advances comprising part of the
     same Borrowing means the reserve percentage applicable two Business Days
     before the first day of such Interest Period under regulations issued from
     time to time by the Board of Governors of the Federal Reserve System (or
     any successor) for determining the maximum reserve requirement (including,
     without limitation, any emergency, supplemental or other marginal reserve
     requirement) for a member bank of the Federal Reserve System in New York
     City with respect to liabilities or assets consisting of or including
     Eurocurrency Liabilities (or with respect to any other category of
     liabilities that includes deposits by reference to which the interest rate
     on Eurocurrency Rate Advances or LIBO Rate Advances is determined) having a
     term equal to such Interest Period.

          "EVENTS OF DEFAULT" has the meaning specified in Section 6.01.

          "FACILITY" means the Revolving Credit Facility or the Letter of Credit
     Facility.

          "FEDERAL FUNDS RATE" means, for any period, a fluctuating interest
     rate per annum equal for each day during such period (i) to the rate
     published by the Telerate Markets service on page five of its daily report
     as the "ASK" rate as of 10:00 A.M. (New York City time) for such day (or,
     if such day is not a Business Day, for the immediately preceding Business
     Day) or (ii) if the Telerate Markets service shall cease to publish or
     otherwise shall not publish such rates for any day that is a Business Day,
     to the weighted average of the rates on overnight Federal funds
     transactions with members of the Federal Reserve System arranged by Federal
     funds brokers, as published for such day (or, if such day is not a Business
     Day, for the next preceding Business Day) by the Federal Reserve Bank of
     New York, or, if such rate is not so published for any day that is a
     Business Day, the average of the quotations for such day for such
     transactions received by the Administrative Agent from three Federal funds
     brokers of recognized standing selected by it.

          "FEE LETTERS" means each agreement entered into between the any Loan
     Party and the Administrative Agent or the Issuing Bank with respect to the
     payment of fees or other amounts relating to the Facilities.

          "FISCAL QUARTER" means a fiscal quarter ending on or about March 31,
     June 30, September 30 or December 31 of each year.

          "FISCAL YEAR" means a fiscal year of the Company and its Consolidated
     Subsidiaries ending on or about June 30 in any calendar year.

<PAGE>

                                       11

          "FIXED CHARGE COVERAGE RATIO" means, with respect to any Person for
     any Rolling Period, the ratio of (a) (i) Consolidated EBIDTA for such
     Person and its Subsidiaries for such Rolling Period minus (ii) Capital
     Expenditures of such Person and its Subsidiaries made during such Rolling
     Period to (b) Fixed Charges of such Person and its Subsidiaries for such
     Rolling Period.

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

          "FIXED RATE ADVANCES" has the meaning specified in Section 2.04(a)(i),
     which Advances shall be denominated in any Foreign Currency.

          "FOREIGN CURRENCY" means any lawful currency (other than Dollars or a
     Committed Currency) that is freely transferable or convertible into
     Dollars.

          "FUNDED DEBT" of any Person means Debt of such Person (other than Debt
     described in clauses (f), (h), and (j) of the definition thereof).

          "GAAP" has the meaning specified in Section 1.03.

          "GUARANTIES" means the U.S. Guaranty and the Non U.S. Guaranty.

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

          "HEDGE AGREEMENTS" means interest rate swap, cap or collar agreements,
     interest rate future or option contracts, currency swap agreements,
     currency future or option contracts and other hedging agreements.

          "INDEMNIFIED COSTS" has the meaning specified in Section 8.05(a).

          "INDEMNIFIED PARTY" has the meaning specified in Section 9.04(b).

          "INITIAL EXTENSION OF CREDIT" means the earlier to occur of the
     initial Borrowing hereunder and the initial issuance of a Letter of Credit
     hereunder.

          "INITIAL ISSUING BANK" has the meaning specified in the recital of
     parties to this Agreement.

          "INITIAL LENDERS" has the meaning specified in the recital of parties
     to this Agreement.

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

          "INTEREST EXPENSE" means, with respect to any Person for any period,
     interest expense (including the interest component on obligations under
     Capitalized Leases but excluding capitalized interest), whether paid or
     accrued, on all Debt of such Person and its Subsidiaries for

<PAGE>

                                       12

     such period, including, without limitation and without duplication, (a)
     interest expense in respect of Debt resulting from Advances, (b)
     commissions, discounts and other fees and charges payable in connection
     with letters of credit (including, without limitation, any Letters of
     Credit), (c) accretion of original issue discount, and (d) all other
     noncash interest but excluding amortization with respect to deferred
     financing fees (including, without limitation, deferred financing fees in
     connection with this Agreement or the Subordinated Notes).

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

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

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

               (c)  whenever the last day of any Interest Period would otherwise
          occur on a day other than a Business Day, the last day of such
          Interest Period shall be extended to occur on the next succeeding
          Business Day, PROVIDED, HOWEVER, that, if such extension would cause
          the last day of such Interest Period to occur in the next following
          calendar month, the last day of such Interest Period shall occur on
          the immediately preceding Business Day; and

               (d)  whenever the first day of any Interest Period occurs on a
          day of an initial calendar month for which there is no numerically
          corresponding day in the calendar month that succeeds such initial
          calendar month by the number of months equal to the number of months
          in such Interest Period, such Interest Period shall end on the last
          Business Day of such succeeding calendar month.

          "INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
     amended from time to time, and the regulations promulgated and rulings
     issued thereunder.

          "INVESTMENT" means (i) any loan or advance to any Person, any purchase
     or other acquisition of any Equity Interests or Debt or the assets
     comprising a division or business unit or a substantial part or all of the
     business of any Person, any capital contribution to any Person or any other
     direct or indirect investment in any Person, including, without limitation,
     any acquisition by way of a merger or consolidation (or similar
     transaction) and any arrangement pursuant to which the investor incurs Debt
     of the types referred to in clause (h) or (j) of the definition of "DEBT"
     in respect of any Person, or (ii) any purchase or acquisition of
     intellectual

<PAGE>

                                       13

     property or rights to use intellectual property other than in the ordinary
     course of business and other than any such purchase or acquisition in which
     the consideration consists solely of Equity Interests of the Company.

          "ISSUING BANK" means the Initial Issuing Bank and each Eligible
     Assignee to which a Letter of Credit Commitment hereunder has been assigned
     pursuant to Section 9.07, for so long as such Initial Issuing Bank or
     Eligible Assignee, as the case may be, shall have a Letter of Credit
     Commitment.

          "L/C CASH COLLATERAL ACCOUNT" has the meaning specified in the
     Preliminary Statements to the Security Agreement.

          "L/C RELATED DOCUMENTS" has the meaning specified in Section
     2.05(b)(ii)(A).

          "LENDER PARTY" means any Lender or the Issuing Bank.

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

          "LETTER OF CREDIT ADVANCE" means an advance made by the Issuing Bank
     or any Lender pursuant to Section 2.03(c).

          "LETTER OF CREDIT AGREEMENT" has the meaning specified in Section
     2.03(a).

          "LETTER OF CREDIT COMMITMENT" means, with respect to the Issuing Bank
     at any time, the amount set forth opposite the Issuing Bank's name on
     Schedule I hereto under the caption "Letter of Credit Commitment" or, if
     the Issuing Bank has entered into an Assignment and Acceptance, set forth
     for the Issuing Bank in the Register maintained by the Administrative Agent
     pursuant to Section 9.07(d) as the Issuing Bank's "Letter of Credit
     Commitment", as such amount may be reduced at or prior to such time
     pursuant to Section 2.06.

          "LETTER OF CREDIT FACILITY" means, at any time, an amount equal to the
     amount of the Issuing Bank's Letter of Credit Commitment at such time, as
     such amount may be reduced at or prior to such time pursuant to Section
     2.06.

          "LETTERS OF CREDIT" has the meaning specified in Section 2.01(b).

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

          "LIBO RATE" means, for any Interest Period for all LIBO Rate Advances
     comprising part of the same Competitive Bid Borrowing, an interest rate per
     annum equal to the rate per annum obtained by dividing (a) the rate per
     annum (rounded upward to the nearest whole multiple of 1/16 of 1% per
     annum) appearing on Telerate Markets Page 3750 (or any successor page) as
     the London interbank offered rate for deposits in the applicable Foreign
     Currency at approximately 11:00 A.M. (London time) two Business Days prior
     to the first day of such Interest Period for a term comparable to such
     Interest Period in an amount substantially equal to the amount that

<PAGE>

                                       14

     would be BNP Paribas' ratable share of such Borrowing if such Borrowing
     were to be a Revolving Credit Borrowing to be outstanding during such
     Interest Period and for a period equal to such Interest Period by (b) a
     percentage equal to 100% minus the Eurocurrency Rate Reserve Percentage for
     such Interest Period.

          "LIBO RATE ADVANCES" means a Competitive Bid Advance denominated in
     any Foreign Currency and bearing interest based on the LIBO Rate.

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

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

          "LOAN PARTIES" means the Company, the Designated Subsidiaries, the US
     Guarantors and the Non-US Guarantors.

          "LOCAL RATE ADVANCE" means a Competitive Bid Advance denominated in
     any Foreign Currency sourced from the jurisdiction of issuance of such
     Foreign Currency and bearing interest at a fixed rate.

          "MARGIN STOCK" has the meaning specified in Regulation U.

          "MATERIAL ADVERSE CHANGE" means any material adverse change in the
     business, condition (financial or otherwise), operations, performance,
     properties or prospects of (i) the Company, (ii) the Loan Parties taken as
     a whole, or (iii) the Company and its Subsidiaries taken as a whole.

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

          "MOODY'S" means Moody's Investors Service, Inc.

          "MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in Section
     4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is
     making or accruing an obligation to make contributions, or has within any
     of the preceding five plan years made or accrued an obligation to make
     contributions.
<PAGE>

                                       15

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

          "NET CASH" means, as at any date of determination, the aggregate
     amount of Cash Equivalents owned by the Company and its Subsidiaries as at
     such date, LESS the aggregate amount of (x) any cash of the Company or its
     Subsidiaries held by the respective credit provider as cash collateral to
     secure the Obligations of the Company or its Subsidiaries under any
     synthetic lease and (y) all outstanding Senior Funded Debt.

          "NET TANGIBLE ASSETS" means, as at any date of determination, the
     aggregate amount of assets, LESS the aggregate amount of intangible assets,
     owned by the Company and its Subsidiaries as at such date.

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

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

          "NON-U.S. SUBSIDIARY" means any Subsidiary of the Company which is not
     a U.S. Subsidiary.

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

          "NOTICE OF COMPETITIVE BID BORROWING" has the meaning specified in
     Section 2.04(a).

          "NOTICE OF REVOLVING CREDIT BORROWING" has the meaning specified in
     Section 2.02(a).

          "NOTICE OF ISSUANCE" has the meaning specified in Section 2.03(a).

          "NPL" means the National Priorities List under CERCLA.

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

<PAGE>

                                       16

     under any Loan Document and (b) the obligation of such Loan Party to
     reimburse any amount in respect of any of the foregoing that any Lender
     Party, in its sole discretion, may elect to pay or advance on behalf of
     such Loan Party.

          "OECD" means the Organization for Economic Cooperation and
     Development.

          "OTHER TAXES" has the meaning specified in Section 2.13(b).

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

          "PERMITTED ACQUISITION" means the purchase or acquisition of all or
     substantially all of the stock or assets, or a business unit or division,
     of a Permitted Business by the Company.

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

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

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

          "PLAN" means a Single Employer Plan or a Multiple Employer Plan.

          "PLEDGED SHARES" has the meaning specified in Section 1(a)(ii) of the
     Security Agreement.

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

          "PRO FORMA BASIS" with respect to any determination of EBITDA for any
     Rolling Period means the EBITDA of the Company and its Subsidiaries
     determined as provided in the definition of EBITDA, except that if one or
     more Permitted Acquisitions shall have been consummated after the first day
     of such Rolling Period or the determination is being made pursuant to
     Section 5.02(f)(v), then the EBITDA for such Rolling Period shall include
     the EBITDA of all entities or business units acquired in such Permitted
     Acquisitions (and, in the case of a determination pursuant to Section
     5.02(f)(v), the entity or business unit to be acquired) as if such
     Permitted

<PAGE>

                                       17

     Acquisitions or proposed Permitted Acquisitions were consummated on the
     first day of such Rolling Period. For the purpose of this definition,
     whenever pro forma effect is to be given to an acquisition of assets, the
     amount of income or earnings related thereto and the amount of Interest
     Expense associated with any Funded Debt incurred in connection therewith,
     or any other calculation under this definition, the pro forma calculations
     will be certified by the chief financial officer of the Company.

          "PRO RATA SHARE" of any amount means, with respect to any Lender at
     any time, the product of such amount TIMES a fraction the numerator of
     which is the amount of such Lender's Revolving Credit Commitment at such
     time (or, if the Commitments shall have been terminated, the Revolving
     Credit Commitment as in effect immediately prior to such termination) and
     the denominator of which is the Revolving Credit Facility at such time (or,
     if the Commitments shall have been terminated, the Revolving Credit
     Facility as in effect immediately prior to such termination).

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

          "REGISTER" has the meaning specified in Section 9.07(h).

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

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

          "RESPONSIBLE OFFICER" means any executive officer of the Company.

          "REVOLVING CREDIT ADVANCE" has the meaning specified in Section
     2.01(a).

          "REVOLVING CREDIT BORROWING" means a borrowing consisting of
     simultaneous Revolving Credit Advances of the same Type made to a Borrower
     by each of the Lenders pursuant to Section 2.01.

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

          "REVOLVING CREDIT FACILITY" means, at any time, the aggregate amount
     of the Lenders' Revolving Credit Commitments at such time.

          "REVOLVING CREDIT NOTE" means a promissory note of a Borrower payable
     to the order of any Lender, delivered pursuant to a request made under
     Section 2.16 in substantially the form of Exhibit A-1, evidencing the
     aggregate indebtedness of such Borrower to such Lender resulting

<PAGE>

                                       18

     from the Revolving Credit Advances and Letter of Credit Advances made by
     such Lender to such Borrower.

          "ROLLING PERIOD" means, for any Fiscal Quarter, the consecutive four
     Fiscal Quarters ending on the last day of such Fiscal Quarter, PROVIDED
     that any calculation of the Leverage Ratio or Fixed Charge Ratio or
     determination of EBITDA required to be made hereunder for a Rolling Period
     that ends on September 30, 2000, December 31 2000 or March 31, 2001,
     respectively, shall be made for the period commencing July 1, 2000 and
     ending on such date and shall be annualized.

          "SECURED OBLIGATIONS" has the meaning specified in the Security
     Agreement.

          "SECURED PARTIES" means the Agents and the Lender Parties.

          "SECURITY AGREEMENT" has the meaning specified in Section 3.01(a)(ii).

          "SENIOR FUNDED DEBT" means the aggregate amount of all Funded Debt
     minus all subordinated debt referred to in Section 5.02(b)(i)(D).

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

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

          "SOLE ARRANGER" has the meaning specified in the recital of parties to
     this Agreement.

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

          "STANDBY LETTER OF CREDIT" means any Letter of Credit issued under the
     Letter of Credit Facility, other than a Trade Letter of Credit.

<PAGE>

                                       19

          "S&P" means Standard & Poor's Ratings Group, a division of the McGraw
     Hill Companies, Inc

          "SUBORDINATED NOTES" means the 4-1/4 % Convertible Subordinated Notes
     due 2007 issued by the Company.

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

          "SYNDICATION AGENT" has the meaning specified in the recital of
     parties to this Agreement.

          "TANGIBLE NET WORTH" means Consolidated Net Tangible Assets LESS
     Consolidated total liabilities.

          "TAXES" has the meaning specified in Section 2.13(a).

          "TERMINATION DATE" means the earlier of (x) November 6, 2003 and (y)
     the date of termination in whole of the Letter of Credit Commitment and the
     Revolving Credit Commitments pursuant to Section 2.06 or 6.01.

          "TRADE LETTER OF CREDIT" means any Letter of Credit that is issued
     under the Letter of Credit Facility for the benefit of a supplier of
     inventory to the Company or any of its Subsidiaries to effect payment for
     such inventory.

          "TRANSACTION" means the transactions contemplated by the Loan
     Documents.

          "TYPE" refers to the distinction between Advances bearing interest at
     the Base Rate and Advances bearing interest at the Eurocurrency Rate.

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

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

<PAGE>

                                       20

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

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

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

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

          "WITHDRAWAL LIABILITY" has the meaning specified in Part I of Subtitle
     E of Title IV of ERISA.

          SECTION 1.02 COMPUTATION OF TIME PERIODS; OTHER DEFINITIONAL
     PROVISIONS. In this Agreement and the other Loan Documents, in the
     computation of periods of time from a specified date to a later specified
     date, the word "from" means "from and including" and the words "to" and
     "until" each mean "to but excluding". References in the Loan Documents to
     any agreement or contract "as amended" shall mean and be a reference to
     such agreement or contract as amended, amended and restated, supplemented
     or otherwise modified from time to time in accordance with its terms.

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

                                   ARTICLE II

                        AMOUNTS AND TERMS OF THE ADVANCES
                            AND THE LETTERS OF CREDIT

          SECTION 2.01 THE ADVANCES AND THE LETTERS OF CREDIT. (a) THE REVOLVING
CREDIT ADVANCES. Each Lender severally agrees, on the terms and conditions
hereinafter set forth, to make advances (each a "REVOLVING CREDIT ADVANCE") to
any Borrower from time to time on any Business Day during the period from the
date hereof until the Termination Date in an amount (based in respect of any
Revolving Credit Advances to be denominated in a Committed Currency on the
Equivalent in Dollars determined on the date of delivery of the applicable
Notice of Revolving Credit Borrowing) for each such Revolving Credit Advance not
to exceed such Lender's Unused Revolving Credit Commitment at such time. Each
Revolving Credit Borrowing shall be in an aggregate amount of $2,500,000 or an
integral multiple of $250,000 in excess thereof (or the Equivalent thereof in
any Committed Currency determined on the date of delivery of the applicable
Notice of Revolving Credit Borrowing) and shall consist of Revolving Credit
Advances made simultaneously by the Lenders ratably according to their Revolving
Credit Commitments. Within the limits of each Lender's Unused Revolving Credit
Commitment in effect

<PAGE>

                                       21

from time to time, the Borrowers may borrow under this Section 2.01(a), prepay
pursuant to Section 2.07(a) and reborrow under this Section 2.01(a).

          (b) LETTERS OF CREDIT. The Issuing Bank agrees, on the terms and
conditions hereinafter set forth, to issue letters of credit (the "LETTERS OF
CREDIT") in Dollars or any Committed Currency for the account of any Borrower
from time to time on any Business Day during the period from the date hereof
until 60 days before the Termination Date in an aggregate Available Amount
(based in respect of any Letters of Credit to be denominated in a Committed
Currency on the Equivalent in Dollars determined on the date of delivery of the
applicable Notice of Issuance) (i) for all Letters of Credit not to exceed at
any time the lesser of (x) the Letter of Credit Facility at such time and (y)
the Issuing Bank's Letter of Credit Commitment at such time and (ii) for each
such Letter of Credit not to exceed Unused Revolving Credit Commitments of the
Lenders at such time. No Letter of Credit shall have an expiration date
(including all rights of the applicable Borrower or the beneficiary to require
renewal) later than the earlier of 60 days before the Termination Date and (A)
in the case of a Standby Letter of Credit, one year after the date of issuance
thereof and (B) in the case of a Trade Letter of Credit, 180 days after the date
of issuance thereof. Within the limits of the Letter of Credit Facility, and
subject to the limits referred to above, the Borrowers may request the issuance
of Letters of Credit under this Section 2.01(b), repay any Letter of Credit
Advances resulting from drawings thereunder pursuant to Section 2.05(b) and
request the issuance of additional Letters of Credit under this Section 2.01(b).

          SECTION 2.02 MAKING THE REVOLVING CREDIT ADVANCES. (a) Except as
otherwise provided in Section 2.10(b) or Section 2.03, each Revolving Credit
Borrowing shall be made on notice, given not later than (x) 10:00 A.M. (Los
Angeles, California time) on the third Business Day prior to the date of the
proposed Revolving Credit Borrowing in the case of a Revolving Credit Borrowing
consisting of Eurocurrency Rate Advances denominated in Dollars, (y) 4:00 P.M.
(London time) on the fourth Business Day prior to the date of the proposed
Revolving Credit Borrowing in the case of a Revolving Credit Borrowing
consisting of Eurocurrency Rate Advances denominated in any Committed Currency,
or (z) 10:00 A.M. (Los Angeles, California time) on the first Business Day prior
to the date of the proposed Revolving Credit Borrowing in the case of a
Revolving Credit Borrowing consisting of Base Rate Advances, by the applicable
Borrower to the Administrative Agent, which shall give to each Lender prompt
notice thereof by telecopier. Each such notice of a Revolving Credit Borrowing
(a "NOTICE OF REVOLVING CREDIT BORROWING") shall be in writing, or by
telecopier, in substantially the form of Exhibit B-1 hereto, specifying therein
the requested (i) date of such Revolving Credit Borrowing, (ii) Type of
Revolving Credit Advances comprising such Revolving Credit Borrowing, (iii)
aggregate amount of such Revolving Credit Borrowing and (iv) in the case of a
Revolving Credit Borrowing consisting of Eurocurrency Rate Advances, initial
Interest Period and currency for each such Revolving Credit Advance. Each Lender
shall, before 11:00 A.M. (Los Angeles, California time) on the date of such
Revolving Credit Borrowing, in the case of a Revolving Credit Borrowing
consisting of Revolving Credit Advances denominated in Dollars, and before 11:00
A.M. (London time) on the date of such Revolving Credit Borrowing, in the case
of a Revolving Credit Borrowing consisting of Eurocurrency Rate Advances
denominated in any Committed Currency, make available for the account of its
Applicable Lending Office to the Administrative Agent at the applicable Agent's
Account, in same day funds, such Lender's ratable portion of such Revolving
Credit Borrowing. After the Administrative Agent's receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the Borrower making such
Notice of Revolving Credit Borrowing by crediting such Borrower's Account;
PROVIDED, HOWEVER, that, in the case of any Revolving Credit Borrowing, the
Administrative Agent shall first make a portion of such funds equal to the
aggregate principal amount of any Letter of Credit Advances made by the Issuing
Bank and by any other Lender to or for the benefit of such Borrower and
outstanding on the date of such Revolving Credit Borrowing in the same currency,
PLUS interest accrued and unpaid thereon to and as of such date, available to
the Issuing Bank and such other Lenders for repayment of such Letter of Credit
Advances.

<PAGE>

                                       22

          (b) Anything in subsection (a) above to the contrary notwithstanding,
(i) the Borrowers may not select Eurocurrency Rate Advances (other than for
Interest Periods of one month, subject to the provisions of Section 9.04(c)) for
the initial Revolving Credit Borrowing hereunder and for the period from the
date of such initial Revolving Credit Borrowing to the earlier of (x) three
months from such date and (y) the completion of syndication of the Facilities
(as shall be specified by the Administrative Agent in a written notice to the
Company) or for any Revolving Credit Borrowing if the aggregate amount of such
Revolving Credit Borrowing is less than $1,000,000 or if the obligation of the
Lenders to make Eurocurrency Rate Advances shall then be suspended pursuant to
Section 2.10 or 2.11 and (ii) with respect to Revolving Credit Borrowings
consisting of Eurocurrency Rate Advances, the Revolving Credit Advances may not
be outstanding as part of more than six separate Revolving Credit Borrowings in
the aggregate.

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

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

          (e) The failure of any Lender to make the Revolving Credit Advance to
be made by it as part of any Revolving Credit Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its Revolving Credit
Advance on the date of such Revolving Credit Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the Revolving Credit
Advance to be made by such other Lender on the date of any Revolving Credit
Borrowing.

<PAGE>

                                       23

          SECTION 2.03 ISSUANCE OF AND DRAWINGS AND REIMBURSEMENT UNDER
LETTERS OF CREDIT. (a) REQUEST FOR ISSUANCE. Each Letter of Credit shall be
issued upon notice, given not later than 10:00 A.M. (Los Angeles, California
time) on the fifth Business Day prior to the date of the proposed issuance of
such Letter of Credit, by the applicable Borrower to the Issuing Bank, which
shall give to the Administrative Agent prompt notice thereof by telecopier.
Each such notice of issuance of a Letter of Credit (a "NOTICE OF ISSUANCE")
shall be by telecopier, specifying therein the requested (A) date of such
issuance (which shall be a Business Day), (B) Available Amount and currency
of such Letter of Credit, (C) expiration date of such Letter of Credit, (D)
name and address of the beneficiary of such Letter of Credit and (E) form of
such Letter of Credit, and shall be accompanied by such application and
agreement for letter of credit as the Issuing Bank may specify to such
Borrower for use in connection with such requested Letter of Credit (a
"LETTER OF CREDIT AGREEMENT"). If the requested form of such Letter of Credit
is acceptable to the Issuing Bank in its sole discretion, the Issuing Bank
will, upon fulfillment of the applicable conditions set forth in Article III,
make such Letter of Credit available to the applicable Borrower at its office
referred to in Section 9.02 or as otherwise agreed with such Borrower in
connection with such issuance. In the event and to the extent that the
provisions of any Letter of Credit Agreement shall conflict with this
Agreement, the provisions of this Agreement shall govern.

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

          (c) DRAWING AND REIMBURSEMENT. The payment by the Issuing Bank of a
draft drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by the Issuing Bank of a Letter of Credit Advance, which,
if such payment is made in a Committed Currency, shall be immediately
redenominated into Dollars and, in any case, shall be a Base Rate Advance, in
the amount of such draft. In the event of any drawing under a Letter of Credit,
the Issuing Bank shall promptly notify the Administrative Agent, and the
Administrative Agent shall promptly notify each Lender and each Lender shall
purchase from the Issuing Bank, and the Issuing Bank shall sell and assign to
each such Lender, such Lender's Pro Rata Share of such outstanding Letter of
Credit Advance as of the date of such purchase, by making available for the
account of its Applicable Lending Office to the Administrative Agent for the
account of the Issuing Bank, by deposit to the Administrative Agent's Account,
in same day funds, an amount equal to the portion of the outstanding principal
amount of such Letter of Credit Advance to be purchased by such Lender. Promptly
after receipt thereof, the Administrative Agent shall transfer such funds to the
Issuing Bank. Each Borrower hereby agrees to each such sale and assignment. Each
Lender agrees to purchase its Pro Rata Share of an outstanding Letter of Credit
Advance on (i) the Business Day on which notice of the drawing under the related
Letter of Credit is given by the Issuing Bank, provided such notice is given not
later than 10:00 A.M. (Los Angeles, California time) on such Business Day or
(ii) the first Business Day next succeeding such demand if such notice is given
after such time. Upon any such assignment by the Issuing Bank to any other
Lender of a portion of a Letter of Credit Advance, the Issuing Bank represents
and warrants to such other Lender that the Issuing Bank is the legal and
beneficial owner of such interest being assigned by it, free and clear of any
liens, but makes no other representation or warranty and assumes no
responsibility with respect to such Letter of Credit Advance, the Loan Documents
or any Loan Party. If and to the extent that any Lender shall not have so made
the amount of such Letter of Credit Advance available to the Administrative
Agent, such Lender agrees to pay to the Administrative Agent forthwith on demand
such amount together with interest thereon, for each day from the date of demand
by the Issuing Bank until the date such amount is paid to the Administrative
Agent, at the Federal Funds Rate for its account or the account of the Issuing
Bank, as applicable. If such Lender shall pay to the Administrative Agent such
amount for the account of the

<PAGE>

                                       24

Issuing Bank on any Business Day, such amount so paid in respect of principal
shall constitute a Letter of Credit Advance made by such Lender on such Business
Day for purposes of this Agreement, and the outstanding principal amount of the
Letter of Credit Advance made by the Issuing Bank shall be reduced by such
amount on such Business Day.

          (d) FAILURE TO MAKE LETTER OF CREDIT ADVANCES. The failure of any
Lender to make the Letter of Credit Advance to be made by it on the date
specified in Section 2.03(c) shall not relieve any other Lender of its
obligation hereunder to make its Letter of Credit Advance on such date, but no
Lender shall be responsible for the failure of any other Lender to make the
Letter of Credit Advance to be made by such other Lender on such date.

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

          (i)  Each Borrower may request a Competitive Bid Borrowing under this
     Section 2.04 by delivering to the Administrative Agent, by telecopier or
     telex, a notice of a Competitive Bid Borrowing (a "NOTICE OF COMPETITIVE
     BID BORROWING"), in substantially the form of Exhibit B-2 hereto,
     specifying therein the requested (A) date of such proposed Competitive Bid
     Borrowing, (B) aggregate amount of such proposed Competitive Bid Borrowing,
     (C) interest rate basis and day count convention to be offered by the
     Lenders, (D) currency of such proposed Competitive Bid Borrowing, (E) in
     the case of a Competitive Bid Borrowing consisting of LIBO Rate Advances,
     Interest Period, or in the case of a Competitive Bid Borrowing consisting
     of Local Rate Advances, maturity date for repayment of each Local Rate
     Advance to be made as part of such Competitive Bid Borrowing (which
     maturity date may not be earlier than the date occurring seven days after
     the date of such Competitive Bid Borrowing or later than the earlier of (I)
     180 days after the date of such Competitive Bid Borrowing and (II) the
     Termination Date), (F) interest payment date or dates relating thereto, (G)
     location of such Borrower's account to which funds are to be advanced and
     (H) other terms (if any) to be applicable to such Competitive Bid
     Borrowing, not later than (x) 10:00 A.M. (London time) at least four
     Business Days prior to the date of the proposed Competitive Bid Borrowing,
     if such Borrower shall instead specify in the Notice of Competitive Bid
     Borrowing that the rates of interest to be offered by the Lenders shall be
     fixed rates per annum (the Advances comprising any such Competitive Bid
     Borrowing being referred to herein as "FIXED RATE ADVANCES") that the
     Advances comprising such proposed Competitive Bid Borrowing shall be either
     Fixed Rate Advances or Local Rate Advances and (y) 10:00AM (London time) at
     least four Business Days prior to the date of the proposed Competitive Bid
     Borrowing, if such Borrower shall instead specify in the Notice of
     Competitive Bid Borrowing that the Advances comprising such Competitive Bid
     Borrowing shall be LIBO Rate Advances. Each Notice of Competitive Bid
     Borrowing shall be irrevocable and binding on the Borrower giving such
     Notice. Any Notice of Competitive Bid Borrowing by a Designated Subsidiary
     shall be given to the Administrative Agent in accordance with the preceding
     sentence through the Company on behalf of such Designated Subsidiary. The
     Administrative Agent shall in turn promptly notify each Lender of each
     request for a Competitive Bid Borrowing received by it from any Borrower by
     sending such Lender a copy of the related Notice of Competitive Bid
     Borrowing.

<PAGE>

                                       25

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

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

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

                    (y)  accept one or more of the offers made by any Lender or
          Lenders pursuant to paragraph (ii) above, in its sole discretion, by
          giving notice to the Administrative Agent, of the amount of each
          Competitive Bid Advance (which amount shall be equal to or greater
          than the minimum amount, and equal to or less than the maximum amount,
          notified to such Borrower by the Administrative Agent, on behalf of
          such Lender for such Competitive Bid Advance pursuant to paragraph
          (ii) above) to be made by each Lender as part of such Competitive Bid
          Borrowing, and reject any remaining offers made by Lenders pursuant to
          paragraph (ii) above by giving the Administrative Agent notice to that
          effect. The Borrower requesting such Competitive Bid Borrowing shall
          accept the offers made by any Lender or Lenders to make Competitive
          Bid Advances in order of the lowest to the highest rates of interest
          offered by such Lenders. If two or more Lenders have offered the same
          interest rate, the amount to be borrowed at such interest rate will be
          allocated among such Lenders in proportion to the amount that each
          such Lender offered at such interest rate.

<PAGE>

                                       26

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

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

          (vi) If the Borrower requesting such Competitive Bid Borrowing
     notifies the Administrative Agent that it accepts one or more of the offers
     made by any Lender or Lenders pursuant to paragraph (iii)(y) above, such
     notice of acceptance shall be irrevocable and binding on such Borrower. The
     Borrower requesting such Competitive Bid Borrowing shall indemnify each
     Lender against any loss, cost or expense incurred by such Lender as a
     result of any failure to fulfill on or before the date specified in the
     related Notice of Competitive Bid Borrowing for such Competitive Bid
     Borrowing the applicable conditions set forth in Article III, including,
     without limitation, any loss (including loss of anticipated profits), cost
     or expense incurred by reason of the liquidation or reemployment of
     deposits or other funds acquired by such Lender to fund the Competitive Bid
     Advance to be made by such Lender as part of such Competitive Bid Borrowing
     when such Competitive Bid Advance, as a result of such failure, is not made
     on such date.

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

<PAGE>

                                       27

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

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

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

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

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

          (b) LETTER OF CREDIT ADVANCES. (i) Each Borrower shall repay to the
Administrative Agent for the account of the Issuing Bank and each other Lender
that has made a Letter of Credit Advance to or for the benefit of such Borrower
on the earlier of demand by the Administrative Agent and the Termination Date
the outstanding principal amount of each Letter of Credit Advance to or for the
benefit of such Borrower made by each of them.

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

<PAGE>

                                       28

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

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

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

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

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

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

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

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

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

          SECTION 2.06 TERMINATION OR REDUCTION OF THE COMMITMENTS. (a)
OPTIONAL. The Company may, upon at least five Business Days' notice to the
Administrative Agent, terminate in whole or reduce in part the unused portions
of the Letter of Credit Facility and the Unused Revolving Credit Commitments;
PROVIDED, HOWEVER, that each partial reduction of a Facility shall be in an
aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess
thereof.

          (b) MANDATORY. The Letter of Credit Facility shall be automatically
and permanently reduced from time to time on the date of each reduction in the
Revolving Credit Facility by the amount, if any, by which each such Facility
exceeds the Revolving Credit Facility after giving effect to such reduction of
the Revolving Credit Facility.

          SECTION 2.07 PREPAYMENTS. (a) OPTIONAL. Any Borrower may, upon at
least one Business Day's notice in the case of Base Rate Advances made to such
Borrower and three Business

<PAGE>

                                       29

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

          (b)  MANDATORY. (i) The Borrowers shall, on each Business Day, prepay
an aggregate principal amount of the Revolving Credit Advances comprising part
of the same Revolving Credit Borrowings and the Letter of Credit Advances equal
to the amount by which (A) the sum of the aggregate principal amount of (or the
Equivalent thereof of Dollars) (x) the Revolving Credit Advances, (y) the
Competitive Bid Advances and (z) the Letter of Credit Advances then outstanding
PLUS the aggregate Available Amount of all Letters of Credit (or the Equivalent
thereof of Dollars) then outstanding exceeds (B) the Revolving Credit Facility.

          (ii) The Borrowers shall, on each Business Day, pay to the
Administrative Agent for deposit in the L/C Cash Collateral Account an amount
sufficient to cause the aggregate amount on deposit in such Account to equal the
amount by which the aggregate Available Amount of all Letters of Credit then
outstanding exceeds the Letter of Credit Facility on such Business Day.

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

          (iv) Prepayments of the Revolving Credit Facility made pursuant to
this subsection (b) shall be applied FIRST to prepay Letter of Credit Advances
then outstanding until such Advances are paid in full, and SECOND to prepay
Revolving Credit Advances then outstanding comprising part of the same
Borrowings until such Advances are paid in full, and THIRD deposited in the L/C
Cash Collateral Account to cash collateralize 100% of the Available Amount of
the Letters of Credit then outstanding. Upon the drawing of any Letter of Credit
for which funds are on deposit in the L/C Cash Collateral Account, such funds
shall be applied to reimburse the Issuing Bank or Lenders, as applicable.

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

          SECTION 2.08 INTEREST ON REVOLVING CREDIT ADVANCES AND LETTER OF
CREDIT ADVANCES. (a) SCHEDULED INTEREST. The Borrowers shall pay interest on the
unpaid principal amount of each Advance

<PAGE>

                                       30

(other than a Competitive Bid Advance) owing to each Lender from the date of
such Advance until such principal amount shall be paid in full, at the following
rates per annum:

               (i)  BASE RATE ADVANCES. During such periods as such Advance is a
     Base Rate Advance, a rate per annum equal at all times to the sum of (A)
     the Base Rate in effect from time to time PLUS (B) the Applicable Margin in
     effect from time to time, payable in arrears quarterly on March 31, June
     30, September 30 and December 31 during such periods, on the date of any
     prepayment thereof to the extent required under Section 2.07 and on the
     Termination Date.

               (ii) EUROCURRENCY RATE ADVANCES. During such periods as such
     Advance is a Eurocurrency Rate Advance, a rate per annum equal at all times
     during each Interest Period for such Advance to the sum of (A) the
     Eurocurrency Rate for such Interest Period for such Advance PLUS (B) the
     Applicable Margin, payable in arrears on the last day of such Interest
     Period and, if such Interest Period has a duration of more than three
     months, on each day that occurs during such Interest Period every three
     months from the first day of such Interest Period and on the date such
     Eurocurrency Rate Advance shall be Converted or paid in full.

          (b)  DEFAULT INTEREST. Upon the occurrence and during the continuance
of any Event of Default the Administrative Agent may, and upon the request of
the Required Lenders shall, require that the Borrowers pay interest on (i) the
unpaid principal amount of each Advance (other than a Competitive Bid Advance)
owing to each Lender, payable in arrears on the dates referred to in clause
(a)(i) or (a)(ii) above and on demand, at a rate per annum equal at all times to
2% per annum above the rate per annum required to be paid on such Advance
pursuant to clause (a)(i) or (a)(ii) above and (ii) to the fullest extent
permitted by law, the amount of any interest, fee or other amount payable under
the Loan Documents that is not paid when due, from the date such amount shall be
due until such amount shall be paid in full, payable in arrears on the date such
amount shall be paid in full and on demand, at a rate per annum equal at all
times to 2% per annum above the rate per annum required to be paid, in the case
of interest, on the Type of Advance on which such interest has accrued pursuant
to clause (a)(i) or (a)(ii) above and, in all other cases, on Base Rate Advances
pursuant to clause (a)(i) above; PROVIDED, HOWEVER, that following acceleration
of the Advances pursuant to Section 6.01, interest shall accrue and be payable
at the rate required by this Section 2.08(b), whether or not requested by the
Administrative Agent or the Required Lenders. In addition, following a final
court judgment in favor of any Lender Party with respect to any Obligation of
the Loan Parties under the Loan Documents, interest shall accrue at the higher
of the statutory judgment rate or the rate specified in the preceding sentence,
payable on demand.

          SECTION 2.09 FEES. (a) COMMITMENT FEE. The Company shall pay to the
Administrative Agent for the account of the Lenders a commitment fee, from the
date hereof in the case of each Initial Lender and from the effective date
specified in the Assignment and Acceptance pursuant to which it became a Lender
in the case of each other Lender until the Termination Date, payable in arrears
quarterly on March 31, June 30, September 30 and December 31, commencing
December 31, 2000, and on the Termination Date, at a percentage rate per annum
on the average daily Unused Revolving Credit Commitment of such Lender, (which
shall be calculated for the purposes of this Section 2.09(a) disregarding clause
(b)(iii) of the definition of "Unused Revolving Credit Commitment), which rate
shall be (x) prior to June 30, 2001, equal to 0.375%, and (y) thereafter,
determined by reference to the Leverage Ratio of the Company and its
Subsidiaries for the Rolling Period ended on or most recently prior to such date
as set forth below:

<TABLE>
<CAPTION>

-----------------------------------------------------------------
               Leverage                      Commitment Fee
                Ratio
-----------------------------------------------------------------
<S>                                        <C>
LEVEL I
         less than 1.50 to 1.00                  0.375%
-----------------------------------------------------------------

</TABLE>

<PAGE>

                                       31

<TABLE>
<CAPTION>

-----------------------------------------------------------------
LEVEL II
<S>                                         <C>
         greater than or equal to                0.50%
1.50 to 1.00
--------------------------------------- -------------------------

</TABLE>

          (b) LETTER OF CREDIT FEES, ETC. (i) Each Borrower shall pay to the
Administrative Agent for the account of each Lender a commission, payable in
arrears quarterly on March 31, June 30, September 30 and December 31, commencing
December 31, 2000, and on the Termination Date, on such Lender's Pro Rata Share
of the average daily aggregate Available Amount during such quarter of all
Letters of Credit issued for the benefit of such Borrower outstanding from time
to time at the Applicable Margin for Eurocurrency Rate Advances under the
Revolving Credit Facility.

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

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

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

          (b)  MANDATORY. (i) If, with respect to any Eurocurrency Rate
Advances, any Lender notifies the Administrative Agent that (i) such Lender is
unable to obtain matching deposits in the London inter-bank market at or about
11:00 A.M. (London time) on the second Business Day before the making of a
Borrowing denominated in Dollars or the third Business Day before the making of
a Borrowing denominated in any Committed Currency in sufficient amounts to fund
such Lender's Revolving Credit Advances as a part of such Borrowing during its
Interest Period or (ii) the Eurocurrency Rate for any Interest Period for such
Advances will not adequately reflect the cost to such Lender of making, funding
or maintaining such Lender's Eurocurrency Rate Advances for such Interest
Period, the Administrative Agent shall forthwith so notify the applicable
Borrower and the Lenders, whereupon (A) such Borrower will, on the last day of
the then existing Interest Period therefor, (1) if such Eurocurrency Rate
Advances are denominated in Dollars, either (x) prepay such Advances or (y)
Convert such Advances into Base Rate Advances and (2) if such Eurocurrency Rate
Advances are denominated in any Committed Currency, either (x) prepay such
Advances or (y) redenominate such Advances into an Equivalent amount of Dollars
and Convert such Advances into Base Rate Advances and (B) the obligation of the
Lenders to

<PAGE>

                                       32

make, or to Convert Revolving Credit Advances into, Eurocurrency Rate Advances
shall be suspended until the Administrative Agent shall notify the Company and
the Lenders that the circumstances causing such suspension no longer exist;
PROVIDED that, if the circumstances set forth in clause (ii) above are
applicable, the applicable Borrower may elect, by notice to the Administrative
Agent and the Lenders, to continue such Advances in such Committed Currency for
Interest Periods of not longer than one month, which Advances shall thereafter
bear interest at a rate per annum equal to the Applicable Margin PLUS, for each
Lender, the cost to such Lender (expressed as a rate per annum) of funding its
Eurocurrency Rate Advances by whatever means it reasonably determines to be
appropriate. Each such Lender shall certify its cost of funds for each Interest
Period to the Administrative Agent and the applicable Borrower as soon as
practicable (but in any event not later than ten Business Days after the first
day of such Interest Period).

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

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

          (iv) Upon the occurrence and during the continuance of any Event of
Default and upon notice from the Administrative Agent to the Company, (A) if
such Eurocurrency Rate Advances are denominated in Dollars, be Converted into
Base Rate Advances and (B) if such Eurocurrency Rate Advances are denominated in
any Committed Currency, be redenominated into an Equivalent amount of Dollars
and be Converted into Base Rate Advances and (ii) the obligation of the Lenders
to make, or to Convert Advances into, Eurocurrency Rate Advances shall be
suspended; PROVIDED that the applicable Borrower may elect, by notice to the
Administrative Agent and the Lenders within one Business Day of such notice, to
continue such Advances in such Committed Currency, whereupon the Administrative
Agent may require that each Interest Period relating to such Eurocurrency Rate
Advances shall bear interest at the Overnight Eurocurrency Rate for a period of
three Business Days and thereafter, each such Interest Period shall have a
duration of not longer than one month. "OVERNIGHT EUROCURRENCY RATE" means the
rate per annum applicable to an overnight period beginning on one Business Day
and ending on the next Business Day equal to the sum of 1%, the Applicable
Interest Rate Margin and the average, rounded upward to the nearest whole
multiple of 1/16 of 1%, if such average is not such a multiple, of the
respective rates per annum quoted by each Reference Bank to the Administrative
Agent on request as the rate at which it is offering overnight deposits in the
relevant currency in amounts comparable to such Reference Bank's Eurocurrency
Rate Advances.

          SECTION 2.11 INCREASED COSTS, ETC. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority including, without limitation, any agency
of the European Union or similar monetary or multinational authority (whether or
not having the force of law), there shall be any increase in the cost to any
Lender Party of agreeing to make or of making, funding or maintaining
Eurocurrency Rate Advances or LIBO Rate Advances or of agreeing to issue or of

<PAGE>

                                       33

issuing or maintaining or participating in Letters of Credit or of agreeing to
make or of making or maintaining Letter of Credit Advances (excluding, for
purposes of this Section 2.11, any such increased costs resulting from (x) Taxes
or Other Taxes (as to which Section 2.13 shall govern) and (y) changes in the
basis of taxation of overall net income or overall gross income by the United
States or by the foreign jurisdiction or state under the laws of which such
Lender Party is organized or has its Applicable Lending Office or any political
subdivision thereof), then the Company shall from time to time, upon demand by
such Lender Party (with a copy of such demand to the Administrative Agent), pay
to the Administrative Agent for the account of such Lender Party additional
amounts sufficient to compensate such Lender Party for such increased cost;
PROVIDED, HOWEVER, that a Lender Party claiming additional amounts under this
Section 2.11(a) agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to designate a different
Applicable Lending Office if the making of such a designation would avoid the
need for, or reduce the amount of, such increased cost that may thereafter
accrue and would not, in the reasonable judgment of such Lender Party, be
otherwise disadvantageous to such Lender Party. A certificate as to the amount
of such increased cost, submitted to the Company by such Lender Party, shall be
conclusive and binding for all purposes, absent manifest error.

          (b) If any Lender Party determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) effective after
the date hereof affects or would affect the amount of capital required or
expected to be maintained by such Lender Party or any corporation controlling
such Lender Party and that the amount of such capital is increased by or based
upon the existence of such Lender Party's commitment to lend or to issue or
participate in Letters of Credit hereunder and other commitments of such type or
the issuance or maintenance of or participation in the Letters of Credit (or
similar contingent obligations), then, upon demand by such Lender Party (with a
copy of such demand to the Administrative Agent), the Company shall pay to the
Administrative Agent for the account of such Lender Party, from time to time as
specified by such Lender Party, additional amounts sufficient to compensate such
Lender Party in the light of such circumstances, to the extent that such Lender
Party reasonably determines such increase in capital to be allocable to the
existence of such Lender Party's commitment to lend or to issue or to
participate in Letters of Credit hereunder or to the issuance or maintenance of
or participation in any Letters of Credit. A certificate as to such amounts
submitted to the Company by such Lender Party shall be conclusive and binding
for all purposes, absent manifest error.

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

          (d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurocurrency
Lending Office to perform its obligations hereunder to make Eurocurrency Rate
Advances or LIBO Rate Advances or to continue to fund or maintain Eurocurrency
Rate Advances in Dollars or any Committed Currency or LIBO Rate Advances in any
Foreign Currency or to fund or maintain Eurocurrency Rate Advances in Dollars or
any Committed Currency or LIBO Rate Advances in any Foreign Currency hereunder,
then, on notice thereof and demand therefor by such Lender to the Company
through the Administrative Agent (i) each Eurocurrency Rate Advance or LIBO Rate
Advance, as the case may be,

<PAGE>

                                       34

will automatically, upon such demand, (A) if such Eurocurrency Rate Advance is
denominated in Dollars, be Converted into a Base Rate Advance, and (B) if such
Eurocurrency Rate Advance or LIBO Rate Advance is denominated in any Committed
Currency or Foreign Currency, be redenominated into an Equivalent amount of
Dollars and be Converted into a Base Rate Advance or an Advance that bears
interest at the rate set forth in Section 2.08(a)(i), as the case may be, and
(ii) the obligation of the Lenders to make Eurocurrency Rate Advances or LIBO
Rate Advances, or to Convert Revolving Credit Advances into, Eurocurrency Rate
Advances shall be suspended until the Administrative Agent shall notify the
Company that such Lender has determined that the circumstances causing such
suspension no longer exist; PROVIDED, HOWEVER, that, before making any such
demand, such Lender agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a different
Eurocurrency Lending Office if the making of such a designation would allow such
Lender or its Eurocurrency Lending Office to continue to perform its obligations
to make Eurocurrency Rate Advances or to continue to fund or maintain
Eurocurrency Rate Advances and would not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender.

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

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

                                       35

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

          (d) All computations of interest on Revolving Credit Advances
comprising Eurocurrency Rate Advances, fees and Letter of Credit commissions
shall be made by the Administrative Agent on the basis of a year of 360 days in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest, fees or
commissions are payable. Computations of interest on Revolving Credit Advances
comprising Base Rate Advances and Letter of Credit Advances shall be made by the
Administrative Agent on the basis of a year of 365 days in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest is payable. Computations in
respect of Competitive Bid Advances shall be made by the Administrative Agent or
the Administrative Agent, as the case may be, as specified in the applicable
Notice of Competitive Bid Borrowing (or, in each case of Advances denominated in
Foreign Currencies where market practice differs, in accordance with market
practice). Each determination by the Administrative Agent of an interest rate,
fee or commission hereunder shall be conclusive and binding for all purposes,
absent manifest error.

          (e) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest or commitment or letter of credit fee or
commission, as the case may be; PROVIDED, HOWEVER, that, if such extension would
cause any payment to be made in the next following calendar month, such payment
shall be made on the next preceding Business Day and such adjustment of time
shall in such case be reflected in the computation of payment of interest or
commitment fee, as the case may be.

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

          SECTION 2.13 TAXES. (a) Any and all payments by the Borrowers
hereunder or under the Notes shall be made, in accordance with Section 2.12,
free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender Party
and the Administrative Agent, taxes that are imposed on its overall net
income by the United States and taxes that are imposed on its overall net
income (and franchise taxes imposed in lieu thereof) by the state or foreign
jurisdiction under the laws of which such Lender Party or the Administrative
Agent (as the case may be) is organized or any political subdivision thereof
and, in the case of each Lender Party, taxes that are imposed on its overall
net income (and franchise taxes in lieu thereof) by the state or foreign
jurisdiction of such Lender Party's Applicable Lending Office or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,

<PAGE>

                                       36

deductions, charges, withholdings and liabilities in respect of payments
hereunder or under the Notes being hereinafter referred to as "TAXES"). If
any Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder to any Lender Party or the Administrative Agent,
(i) the sum payable by such Borrower shall be increased as may be necessary
so that after such Borrower and the Administrative Agent have made all
required deductions (including deductions applicable to additional sums
payable under this Section 2.13) such Lender Party or the Administrative
Agent, as the case may be, receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Borrower shall make all
such deductions and (iii) such Borrower shall pay the full amount deducted to
the relevant taxation authority or other governmental authority in accordance
with applicable law.

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

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

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

          (e) Each Lender Party organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date of its execution and
delivery of this Agreement in the case of each Initial Lender or Initial Issuing
Bank, as the case may be, and on the date of the Assignment and Acceptance
pursuant to which it becomes a Lender Party in the case of each other Lender
Party, and from time to time thereafter if requested in writing by the Company
or the Administrative Agent (but only so long thereafter as such Lender Party
remains lawfully able to do so), provide the Administrative Agent and the
Company with two original Internal Revenue Service forms W-8ECI or W-8BEN or (in
the case of a Lender Party that has certified in writing to the Administrative
Agent that it is not a "bank" as defined in Section 881(c)(3)(A) of the Internal
Revenue Code) form W-8 (and, if such Lender Party delivers a form W-8, a
certificate representing that such Lender Party is not a "bank" for purposes of
Section 881(c) of the Internal Revenue Code, is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of the
Company and is not a controlled foreign corporation related to the Company
(within the meaning of Section 864(d)(4) of the Internal Revenue Code)), as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, certifying that such Lender Party is exempt from or entitled to a
reduced rate of United States withholding tax on payments pursuant to this
Agreement or the Notes or, in the case of a Lender Party providing a form W-8,
certifying that such Lender Party is a foreign corporation, partnership, estate
or trust. If the forms

<PAGE>

                                       37

provided by a Lender Party at the time such Lender Party first becomes a party
to this Agreement indicate a United States interest withholding tax rate in
excess of zero, withholding tax at such rate shall be considered excluded from
Taxes unless and until such Lender Party provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such
forms; PROVIDED, HOWEVER, that if, at the effective date of the Assignment and
Acceptance pursuant to which a Lender Party becomes a party to this Agreement,
the Lender Party assignor was entitled to payments under subsection (a) of this
Section 2.13 in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender Party assignee on such date. If any form
or document referred to in this subsection (e) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form W-8ECI,
W-8BEN or W-8 (or the related certificate described above), that the applicable
Lender Party reasonably considers to be confidential, such Lender Party shall
give notice thereof to the Company and shall not be obligated to include in such
form or document such confidential information.

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

          SECTION 2.14 SHARING OF PAYMENTS, ETC. If any Lender Party shall
obtain at any time any payment (whether voluntary, involuntary, through the
exercise of any right of set-off, or otherwise, other than as a result of an
assignment pursuant to Section 9.07) (a) on account of Obligations due and
payable to such Lender Party hereunder and under the Notes at such time in
excess of its ratable share (according to the proportion of (i) the amount of
such Obligations due and payable to such Lender Party at such time to (ii) the
aggregate amount of the Obligations due and payable to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time obtained by all the Lender Parties at such time or (b) on account
of Obligations owing (but not due and payable) to such Lender Party hereunder
and under the Notes at such time in excess of its ratable share (according to
the proportion of (i) the amount of such Obligations owing to such Lender Party
at such time to (ii) the aggregate amount of the Obligations owing (but not due
and payable) to all Lender Parties hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lender Parties hereunder and under the Notes at such time obtained by all of the
Lender Parties at such time, such Lender Party shall forthwith purchase from the
other Lender Parties such interests or participating interests in the
Obligations due and payable or owing to them, as the case may be, as shall be
necessary to cause such purchasing Lender Party to share the excess payment
ratably with each of them; PROVIDED, HOWEVER, that (A) if all or any portion of
such excess payment is thereafter recovered from such purchasing Lender Party,
such purchase from each other Lender Party shall be rescinded and such other
Lender Party shall repay to the purchasing Lender Party the purchase price to
the extent of such Lender Party's ratable share (according to the proportion of
(i) the purchase price paid to such Lender Party to (ii) the aggregate purchase
price paid to all Lender Parties) of such recovery together with an amount equal
to such Lender Party's ratable share (according to the proportion of (i) the
amount of such other Lender Party's required repayment to (ii) the total amount
so recovered from the purchasing Lender Party) of any interest or other amount
paid or payable by the purchasing Lender Party in respect of the total

<PAGE>

                                       38

amount so recovered and (B) any amounts owed or owing to any Lender Party as a
result of a Competitive Bid Advance or under a Competitive Bid Note shall be
disregarded from each computation set forth in this Section 2.14. Each Borrower
agrees that any Lender Party so purchasing an interest or participating interest
from another Lender Party pursuant to this Section 2.14 may, to the fullest
extent permitted by law, exercise all its rights of payment (including the right
of set-off) with respect to such interest or participating interest, as the case
may be, as fully as if such Lender Party were the direct creditor of such
Borrower in the amount of such interest or participating interest, as the case
may be.

          SECTION 2.15 USE OF PROCEEDS. The proceeds of the Advances and
issuances of Letters of Credit shall be available (and the Borrowers agree that
they shall use such proceeds and Letters of Credit) solely to pay transaction
fees and expenses, provide working capital for the Company and its Subsidiaries
and for general corporate purposes permitted by the Loan Documents.

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

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

          (c) Entries made in good faith by the Administrative Agent in the
Register pursuant to subsection (b) above, and by each Lender Party in its
account or accounts pursuant to subsection (a) above, shall be PRIMA FACIE
evidence of the amount of principal and interest due and payable or to become
due and payable from each Borrower to, in the case of the Register, each Lender
Party and, in the case of such account or accounts, such Lender Party, under
this Agreement, absent manifest error; PROVIDED, HOWEVER, that the failure of
the Administrative Agent or such Lender Party to make an entry, or any finding
that an entry is incorrect, in the Register or such account or accounts shall
not limit or otherwise affect the obligations of any Borrower under this
Agreement.

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

                                  ARTICLE III

                            CONDITIONS OF LENDING AND
                         ISSUANCES OF LETTERS OF CREDIT

<PAGE>

          SECTION 3.01 CONDITIONS PRECEDENT TO EFFECTIVENESS OF SECTION 2.01,
2.03 AND 2.04. Sections 2.01, 2.03 and 2.04 of this Agreement shall be come
effective on and as of the first date (the "EFFECTIVE DATE") on which the
following conditions precedent have been satisfied:

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

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

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

                    (A)  (1) certificates representing the Pledged Shares in
               respect of each U.S. Guarantor which is a Significant Subsidiary,
               if any, (2) certificates representing 65% of the Pledged Shares
               in respect of each Non-U.S. Guarantor which is a Significant
               Subsidiary (other than those set out on Schedule
               3.01(a)(ii)(A)(2), if any), and (3) in respect of the Pledged
               Shares referred to in both (1) and (2), undated stock powers
               executed in blank,

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

                    (C)  completed requests for information, dated on or before
               the Effective Date, listing the financing statements referred to
               in clause (B) above and all other effective financing statements
               filed in the jurisdictions referred to in clause (B) above that
               name any Loan Party or its Subsidiaries as debtor, together with
               copies of such other financing statements,

                    (D)  evidence of the completion of all other recordings and
               filings of or with respect to the Security Agreement that the
               Administrative Agent may deem necessary or desirable in order to
               perfect and protect the security interest created thereunder,

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

                    (F)  evidence that all other action that the Administrative
               Agent may deem necessary or desirable in order to perfect and
               protect the liens and security

<PAGE>

                                       40

               interests created under the Security Agreement has been taken,
               including the registration of the Pledged Shares of the Non-U.S.
               Subsidiaries which are Significant Subsidiaries.

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

               (iv) [Not used.]

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

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

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

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

               (ix) A certificate of the Secretary of each Loan Party certifying
          the names and true signatures of the officers of such Persons
          authorized to sign each Loan Document to which it is or is to be a
          party and the other documents to be delivered hereunder and
          thereunder.

<PAGE>

                                       41

               (x)  Such financial, business and other information regarding
          each Loan Party and its Subsidiaries as the Lender Parties shall have
          requested, including, without limitation, information as to possible
          contingent liabilities, tax matters, environmental matters,
          obligations under Plans, Multiemployer Plans and Welfare Plans,
          collective bargaining agreements and other arrangements with
          employees, audited annual financial statements dated June 30, 1998,
          June 30, 1999, June 30, 2000 and forecasts prepared by management, in
          form and substance satisfactory to the Lender Parties, of balance
          sheets, income statements and cash flow statements on a monthly basis
          for the first year following the Effective Date and on an annual basis
          for each year thereafter until the Termination Date.

               (xi) A letter, in form and substance satisfactory to the
          Administrative Agent, from the Company to PricewaterhouseCoopers LLP,
          its independent certified public accountants, advising such
          accountants that the Administrative Agent and the Lender Parties have
          been authorized to exercise all rights of the Company to require such
          accountants to disclose any and all financial statements and any other
          information of any kind that they may have with respect to the Company
          and its Subsidiaries and directing such accountants to comply with any
          reasonable request of the Administrative Agent or any Lender Party for
          such information.

               (xii) Favorable opinions of O'Melveny & Myers, New York and
          California counsel for the Loan Parties and L. Michael Russell,
          Executive Vice President, Secretary and General Counsel of the Loan
          Parties, in substantially the form of Exhibits I-1 and I-2.

          (b)  The Lender Parties shall be satisfied with the corporate and
     legal structure and capitalization of the Company and its Subsidiaries,
     both before and after giving effect to the Transaction, including the terms
     and conditions of the charter, bylaws and each class of capital stock of
     the Loan Parties and their Subsidiaries and of each agreement or instrument
     relating to such structure or capitalization.

          (c)  Before giving effect to the Transaction and the other
     transactions contemplated by this Agreement, there shall have occurred no
     Material Adverse Change since June 30, 2000.

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

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

<PAGE>

                                       42

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

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

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

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

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

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

          (e)  The Designation Letter of such Designated Subsidiary,
     substantially in the form of Exhibit D-1 hereto.

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

          (g)  A favorable opinion of local counsel to each Non-U.S. Guarantor,
     to the extent required by Section 9.11(b).

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

          SECTION 3.03 CONDITIONS PRECEDENT TO EACH REVOLVING CREDIT BORROWING
AND ISSUANCE. The obligation of each Lender to make a Revolving Credit Advance
on the occasion of each Revolving Credit Borrowing, and the obligation of the
Issuing Bank to issue a Letter of Credit, shall be subject to the further
conditions precedent that on the date of such Revolving Credit Borrowing or
issuance:

          (a)  the following statements shall be true (and each of the giving of
     the applicable Notice of Revolving Credit Borrowing, Notice of Issuance and
     the acceptance by any Borrower of the proceeds of such Revolving Credit
     Borrowing or of such Letter of Credit shall constitute a

<PAGE>

                                       43

     representation and warranty by such Borrower that both on the date of such
     notice and on the date of such Revolving Credit Borrowing or issuance such
     statements are true):

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

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

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

          SECTION 3.04 CONDITIONS PRECEDENT TO EACH COMPETITIVE BID BORROWING.
The obligation of each Lender that is to make a Competitive Bid Advance on the
occasion of a Competitive Bid Borrowing to make such Competitive Bid Advance as
part of such Competitive Bid Borrowing is subject to the conditions precedent
that:

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

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

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

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

<PAGE>

                                       44

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

              (iii) no event has occurred and no circumstance exists as a
          result of which the information concerning the Company that has been
          provided to the Administrative Agent and each Lender by the Company in
          connection herewith would include an untrue statement of a material
          fact or omit to state any material fact or any fact necessary to make
          the statements contained therein, in the light of the circumstances
          under which they were made, not misleading.

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

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

          SECTION 4.01 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company represents and warrants as follows:

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

          (b)  Set forth on Schedule 4.01(b) hereto is a complete and accurate
     list of all Subsidiaries of each Loan Party (designating whether such
     Subsidiary is a U.S. Subsidiary or a Non-U.S. Subsidiary), showing as of
     the date hereof (as to each such Subsidiary) the jurisdiction of its
     incorporation, the number of shares of each class of its Equity Interests
     authorized, and the number outstanding, on the date hereof and the
     percentage of the outstanding shares of each such class of its Equity
     Interests owned (directly or indirectly) by such Loan Party and the number
     of shares covered by all outstanding options, warrants, rights of
     conversion or purchase and similar rights at the date hereof. All of the
     outstanding Equity Interests in each Loan Party's Subsidiaries, to the
     extent owned by the Company and its Subsidiaries, have been validly issued,
     are fully paid (except for directors' qualifying shares) and non-assessable
     and are owned by such Loan Party or one or more of its Subsidiaries free
     and clear of all Liens (other than Permitted Liens), except those created
     under the Collateral Documents. Each such Subsidiary (i) is a corporation
     duly organized, validly existing and in good standing under the laws of the
     jurisdiction of its

<PAGE>

                                       45

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

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

          (d)  No authorization or approval or other action by, and no notice to
     or filing with, any governmental authority or regulatory body or any other
     third party is required for (i) the due execution, delivery, recordation,
     filing or performance by any Loan Party or its Subsidiaries of any Loan
     Document to which it is or is to be a party, or for the consummation of the
     Transaction, (ii) the grant by any Loan Party or its Subsidiaries of the
     Liens granted by it pursuant to the Collateral Documents, (iii) the
     perfection or maintenance of the Liens created under the Collateral
     Documents (including the first priority nature thereof) or (iv) the
     exercise by the Administrative Agent or any Lender Party of its rights
     under the Loan Documents or the remedies in respect of the Collateral
     pursuant to the Collateral Documents, except for the authorizations,
     approvals, actions, notices and filings listed on Schedule 4.01(d) hereto.

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

          (f)  (i) The Consolidated balance sheet of the Company and its
     Subsidiaries as at June 30, 2000, and the related Consolidated statements
     of income and cash flow of the Company and its Subsidiaries for the fiscal
     year then ended, accompanied, as to the Consolidated financial statements,
     by an unqualified opinion of PricewaterhouseCoopers LLP, independent public
     accountants, duly certified by the chief financial officer of the Company,
     copies of which have been furnished to each Lender Party, fairly present,
     subject to year-end audit adjustments, the Consolidated financial condition
     of the Company and its Subsidiaries as at such dates and the Consolidated
     results of the operations of the Company and its Subsidiaries for the
     periods ended

<PAGE>

                                       46

     on such dates, all in accordance with generally accepted accounting
     principles applied on a consistent basis, and

               (ii) since June 30, 2000 there has occurred no Material Adverse
     Change.

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

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

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

          (j)  All filings and other actions necessary or desirable to perfect
     and protect the security interest in the Collateral created under the
     Collateral Documents and to the extent required thereby have been duly made
     or taken and are in full force and effect and the Collateral Documents
     create for the benefit of the Secured Parties a valid and, together with
     such filings and other actions, perfected first priority security interest
     in the Collateral securing the payment of the Secured Obligations, and all
     filings and other actions necessary or desirable to perfect and protect
     such security interest have been duly taken by the Loan Parties to the
     extent required by this Section 4.01. The Loan Parties or their
     Subsidiaries are the legal and beneficial owners of the Collateral free and
     clear of any Lien (other than Permitted Liens), except for the liens and
     security interests created or permitted under the Loan Documents.

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

          (l)  (i) Except as set forth on Schedule 4.01(l)(i), the operations
     and properties of each Loan Party and each of its Subsidiaries comply in
     all material respects with all applicable Environmental Laws and
     Environmental Permits, except for such non-compliance that could not

<PAGE>

                                       47

     reasonably be expected to result in material liability, all past written
     claims of non-compliance with such Environmental Laws and Environmental
     Permits have been resolved without ongoing material obligations or material
     costs, and no circumstances exist that could be reasonably likely to (x)
     form the basis of an Environmental Action against any Loan Party or any of
     its Subsidiaries or any of its properties that could have a Material
     Adverse Effect or (y) cause any such property to be subject to any material
     restrictions on ownership, occupancy, use or transferability under any
     Environmental Law.

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

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

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

                                   ARTICLE V

                                    COVENANTS
<PAGE>

                                       48

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

          (a) COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its
     Subsidiaries to comply, in all material respects, with all applicable laws,
     rules, regulations and orders, such compliance to include, without
     limitation, compliance with ERISA and Environmental Laws.

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

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

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

          (e) PRESERVATION OF CORPORATE EXISTENCE, ETC. Preserve and maintain,
     and cause each of its Significant Subsidiaries to preserve and maintain,
     its corporate existence, rights (charter and statutory), permits, licenses,
     approvals, privileges and franchises; PROVIDED, HOWEVER, that the Company
     may consummate any merger or consolidation permitted under Section 5.02(d)
     and PROVIDED FURTHER that neither the Company nor any of its Subsidiaries
     shall be required to preserve any right, permit, license, approval,
     privilege or franchise if the Board of Directors of the Company or such
     Subsidiary shall determine that the preservation thereof is no longer
     desirable in the conduct of the business of the Company or such Subsidiary,
     as the case may be, and that the loss thereof is not disadvantageous in any
     material respect to the Company, such Subsidiary or the Lender Parties.

          (f) VISITATION RIGHTS. At any reasonable time during regular business
     hours and from time to time (but not unreasonably frequently), upon
     reasonable prior notice, permit the Administrative Agent or any of the
     Lender Parties or any agents or representatives thereof, to

<PAGE>

                                       49

     examine and make copies of and abstracts from the records and books of
     account of, and visit the properties of, the Company and any of its
     Significant Subsidiaries, and to discuss the affairs, finances and accounts
     of the Company and any of its Significant Subsidiaries with any of the
     officers or directors designated by the Company or a Significant
     Subsidiary, as the case may be, and with their independent certified public
     accountants.

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

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

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

          (j) COVENANT TO GUARANTEE OBLIGATIONS AND GIVE SECURITY. Upon (x) the
     request of the Administrative Agent, (y) the formation or acquisition of
     any new direct or indirect Significant Subsidiary of any Loan Party, or (z)
     any direct or indirect Subsidiary of any Loan Party becoming a Significant
     Subsidiary (excluding, in the case of (y) and (z), any Significant
     Subsidiary that is a Non-U.S. Subsidiary if the effect of such undertaking
     would have material adverse tax consequences to the Loan Parties taken as a
     whole), then the Company shall, in each case at the Company's expense:

                (i)  within 30 days after such request, formation, acquisition,
          or Subsidiary becoming a Significant Subsidiary, cause each such (A)
          U.S. Subsidiary that is a Significant Subsidiary and each direct and
          indirect Significant Subsidiary of such Significant Subsidiary to duly
          execute and deliver to the Administrative Agent a guaranty or guaranty
          supplement to the U.S. Guaranty, in form and substance satisfactory to
          the Administrative Agent, guaranteeing all of the Loan Parties'
          Obligations under the Loan Documents, and (B) Non-U.S. Subsidiary that
          is a Significant Subsidiary to duly execute and deliver to the
          Administrative Agent a guaranty or guaranty supplement to the Non-U.S.
          Guaranty, in form and substance satisfactory to the Administrative
          Agent; PROVIDED, that no guaranty or guaranty supplement may be
          required (if acceptable to the Administrative Agent) from a Non-U.S.
          Subsidiary that is a Significant Subsidiary if the execution and
          delivery thereof would result in material adverse tax consequences to
          the Loan Parties taken as a whole;

               (ii) promptly upon such request, formation, acquisition or
          Subsidiary becoming a Significant Subsidiary, that concerns any
          Subsidiary that is a U.S. Subsidiary pledge or cause its Subsidiaries
          to pledge to the Administrative Agent on behalf of the Secured
          Parties, 100% of the total outstanding shares or other ownership
          interests of such Person owned by the Company or its Subsidiaries;

<PAGE>

                                       50

              (iii) within 30 days after such request, formation, acquisition
          or Subsidiary becoming a Significant Subsidiary, duly execute and
          deliver, and cause each such Significant Subsidiary (other than any
          Significant Subsidiary organized or located outside of the United
          States) to take whatever action (including, without limitation, the
          filing of Uniform Commercial Code financing statements) may be
          necessary or advisable in the opinion of the Administrative Agent to
          vest in the Administrative Agent (or in any representative of the
          Administrative Agent designated by it) valid and subsisting Liens on
          the shares or other ownership interests referred to in clause (ii)
          above, enforceable against all third parties in accordance with their
          terms;

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

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

               (vi) promptly upon such request, formation or acquisition related
          to any subsidiary that is a Non-U.S. Subsidiary, or upon a Non-U.S.
          Subsidiary becoming a Significant Subsidiary, pledge or cause its
          Subsidiaries to pledge to the Administrative Agent on behalf of the
          Secured Parties, 65% of the total outstanding shares or other
          ownership interests of such Non-U.S. Subsidiary owned by the Company
          or its Subsidiaries;

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

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

<PAGE>

                                       51

          now or hereafter intended to be granted to the Administrative Agent
          and the Lender Parties under any Loan Document or under any other
          instrument executed in connection with any Loan Document to which any
          Loan Party or any of its Subsidiaries is or is to be a party, and
          cause each of its Subsidiaries to do so; and

          (l)  CONDITIONS SUBSEQUENT. On or before the date that is 30 days
     after the Effective Date or, if earlier, upon the designation of a Non-U.S.
     Subsidiary as a Designated Subsidiary under Section 9.11:

                (i)  to the extent requested by the Administrative Agent, use
          its best efforts to obtain the certificates representing 65% of the
          Pledged Shares in respect of the Non-U.S. Guarantors set out on
          Schedule 3.01(a)(ii)(A)(2) (and to take such other action to perfect
          the security interest in those Pledged Shares) together with undated
          stock powers executed in blank.

               (ii) deliver the following to the Administrative Agent:

                    (A)  The Non-U.S. Guaranty duly executed by all Non-U.S
               Subsidiaries that are Significant Subsidiaries, as requested by
               the Administrative Agent.

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

                    (C)  A copy of a certificate of the Secretary of State (or
               other similar document) of the jurisdiction of incorporation of
               each Non-U.S. Subsidiary that is a Significant Subsidiary, dated
               not more than 30 days after the Effective Date, in each case
               listing the charter of such Significant Subsidiary and each
               amendment thereto on file in his office and certifying that (A)
               such charter is a true and correct copy thereof, (B) such
               amendments are the only amendments to such charter on file in his
               office, (C) such Person has paid all franchise taxes to the date
               of such certificate and (D) such Person is duly incorporated and
               in good standing under the laws of the State of the jurisdiction
               of its incorporation.

                    (D)  A certificate of each Non-U.S. Subsidiary that is a
               Significant Subsidiary, signed on behalf of each such Person by
               its Executive Vice President and its Secretary or by two
               Directors or a Director and a Secretary, dated not more than 30
               days after the Effective Date (the statements made in which
               certificate shall be true on and as of such date), certifying as
               to (A) the absence of any amendments to the charter of such
               Person since the date of the Secretary of State's certificate (or
               similar document) referred to in Section 3.01(a)(vi), (B) a true
               and correct copy of the bylaws of such Person as in effect on the
               date on which the resolutions referred to in Section 3.01(a)(v)
               were adopted and on such date of delivery, (C) the due
               incorporation and good standing or valid existence of such Person
               as a corporation organized under the laws of the jurisdiction of
               its incorporation and the absence of any proceeding for the
               dissolution or liquidation of such Person, (D) the completeness
               and accuracy of the representations and

<PAGE>

                                       52

               warranties contained in the Loan Documents as though made on and
               as of such date of delivery and (E) the absence of any event
               occurring and continuing, or resulting from the Initial Extension
               of Credit, that constitutes a Default.

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

                    (F)  A favorable opinion of local counsel to each Non-U.S.
               Subsidiary that is a Significant Subsidiary, in form and
               substance satisfactory to the Administrative Agent.

          (m) SYNDICATION. Take all actions which the Administrative Agent or
     the Syndication Agent may reasonably request to assist it in forming a
     syndicate acceptable to it including, but not be limited to: (i) making
     senior management of the Loan Parties and representatives of the Loan
     Parties available to participate in informational meetings with potential
     lenders at such times and places as such Agents may reasonably request; and
     (ii) timely providing such Agents with all information reasonably deemed
     necessary by it to successfully complete the syndication, including,
     without limitation, a summary of the operating prospects (including
     financial projections) of the Company and its Subsidiaries.

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

          (a)  LIENS, ETC. Create, incur, assume or suffer to exist, or permit
     any of its Subsidiaries to create, incur, assume or suffer to exist, any
     Lien on or with respect to any of its properties of any character
     (including, without limitation, accounts) whether now owned or hereafter
     acquired, or sign or file or suffer to exist, or permit any of its
     Subsidiaries to sign or file or suffer to exist, under the Uniform
     Commercial Code of any jurisdiction, a financing statement that names the
     Company or any of its Subsidiaries as debtor, or sign or suffer to exist,
     or permit any of its Subsidiaries to sign or suffer to exist, any security
     agreement authorizing any secured party thereunder to file such financing
     statement, or assign, or permit any of its Subsidiaries to assign any
     accounts or other right to receive income, EXCLUDING, HOWEVER, from the
     operation of the foregoing restrictions, the following:

                (i)  Liens created under the Loan Documents;

               (ii) Permitted Liens;

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

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

                (v)  purchase money Liens upon or in real property, equipment
          and other fixed assets acquired or held by the Company or any of its
          Subsidiaries in the ordinary

<PAGE>

                                       53

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

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

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

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

               (ix) Liens in respect of Debt permitted by Section 5.02(b)(i)(E),
          PROVIDED that such Liens are granted on assets owned solely by the
          obligor of such Debt.

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

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

                    (A)  Debt under the Loan Documents;

                    (B)  Debt to a Loan Party or any Subsidiary of a Loan Party,
               PROVIDED, HOWEVER that any such Debt owed by a Non-U.S.
               Subsidiary shall be used solely to fund working capital
               requirements of such Non-U.S. Subsidiary arising in the ordinary
               course of its business;

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

                    (D)  Debt that is fully subordinated to the Facilities and
               all other amounts owing or owed from time to time under the Loan
               Documents on such

<PAGE>

                                       54

               terms as to subordination that are acceptable to the
               Administrative Agent and the Required Lenders, including, without
               limitation, the Subordinated Notes;

                    (E)  Debt secured by receivables, PROVIDED, HOWEVER that, at
               any time, the sum of the aggregate outstanding principal amount
               of all Debt secured by receivables and the aggregate value of all
               then outstanding receivables sold or securitized as permitted
               under Section 5.02(e)(vii), shall not exceed the higher of
               $75,000,000 or 5% of Net Tangible Assets of the Company and its
               Subsidiaries on a consolidated basis (determined as of the end of
               the Fiscal Quarter immediately preceding the date of
               determination);

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

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

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

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

                (i)  the Company or any Subsidiary of the Company may merge into
          or consolidate with any Person PROVIDED, HOWEVER, that (x) immediately
          prior to such merger or consolidation such other Person conducts a
          business that is substantially similar to the business currently
          conducted by the Company and its Subsidiaries and the surviving Person
          is the Company or a Subsidiary of the Company and (y) after giving
          effect to such merger or consolidation Net Cash shall not be less than
          $200,000,000, except for any merger or consolidation in which the
          consideration consists exclusively of Equity Interests in the Company;

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

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

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

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

<PAGE>

                                       55

          (e) SALES, ETC., OF ASSETS. Sell, lease, transfer or otherwise dispose
     of, or permit any of its Subsidiaries to sell, lease, transfer or otherwise
     dispose of, any assets, or grant any option or other right to purchase,
     lease or otherwise acquire any assets, except:

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

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

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

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

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

               (vi) sales of assets (other than current assets) in an aggregate
          amount not to exceed 10% of the total Tangible Net Worth of the
          Company and its Significant Subsidiaries (on a consolidated basis) as
          determined at the time of each such proposed sale; PROVIDED that (x)
          such sales are for fair market value and (y) not less than 85% of the
          consideration received from any such sale consists of cash or Debt
          assumed by the purchaser, and

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

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

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

               (ii) additional equity investments by the Company in (1) U.S.
          Guarantors or Non-U.S. Guarantors, or (2) wholly-owned U.S.
          Subsidiaries other than U.S. Guarantors, or (3) majority-owned
          Non-U.S. Subsidiaries of the Company, PROVIDED, HOWEVER, that the
          aggregate amount invested under clauses (2) and (3) above from the
          date hereof is not to exceed 10% of the total Tangible Net Worth of
          the Company and its Subsidiaries (on a consolidated basis) as
          determined at the time of each such proposed investment;

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

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

<PAGE>

                                       56

               (v)  Investments by the Company or a Subsidiary of the Company in
          Permitted Acquisitions; PROVIDED that:

                    (A)  after making any such Permitted Acquisition Net Cash
               shall not be less than $200,000,000, except where the
               consideration for such Permitted Acquisition consists exclusively
               of Equity Interests in the Company;

                    (C)  the Company shall have furnished the Administrative
               Agent with a schedule in form satisfactory to the Administrative
               Agent of the computations used by the Company in determining
               compliance with such requirements; and

                    (D)  immediately before and after giving effect thereto, no
               Default shall have occurred and be continuing or would result
               therefrom;

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

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

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

               (ix) other Investments, PROVIDED that after making any such
          Investment Net Cash shall not be less than $200,000,000, except where
          the consideration for such Permitted Acquisition consists exclusively
          of Equity Interests in the Company, and PROVIDED FURTHER, in the case
          of Investments referred to in clause (i) of the definition thereof,
          that the Company shall retain control of the entity in which the
          Investments are made.

          (g)  RESTRICTED PAYMENTS. Declare or pay any dividends, purchase,
     redeem, retire, defease or otherwise acquire for value any of its Equity
     Interests now or hereafter outstanding, return any capital to its
     stockholders, partners or members (or the equivalent Persons thereof) as
     such, or permit any of its Subsidiaries to purchase, redeem, retire,
     defease or otherwise acquire for value Equity Interests of the Company or
     to issue or sell any Equity Interests of such Subsidiary, except that:

               (i)  the Company may (A) declare and pay dividends and
          distributions payable only in common stock of the Company, and (B)
          purchase, redeem, retire, defease or otherwise acquire shares of its
          capital stock for cash PROVIDED, HOWEVER, that the aggregate amount of
          all such purchases, redemptions, retirements, defeasances and
          acquisitions under this clause (B) from the date hereof is not to
          exceed $150,000,000, and PROVIDED FURTHER that at the time of any
          purchase, redemption, retirement, defeasance or acquisition under this
          clause (B) or as a result of any such action, (x) no Default shall
          have occurred and be continuing, and (y) Net Cash shall not be less
          than $200,000,000; and

<PAGE>

                                       57

               (ii) any Subsidiary of the Company may (A) declare and pay cash
          dividends to the Company, (B) declare and pay cash dividends to any
          other wholly owned U.S. Subsidiary of the Company of which it is a
          Subsidiary and (C) accept capital contributions from its parent to the
          extent permitted under Section 5.02(f).

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

          (i)  PREPAYMENTS, ETC., OF DEBT. (i) Prepay, redeem, purchase, defease
     or otherwise satisfy prior to the scheduled maturity thereof in any manner,
     or make any payment in violation of any subordination terms of, any
     subordinated debt referred to in Section 5.02(b)(i)(D), or (ii) amend,
     modify or change any term or condition of any subordinated debt referred to
     in Section 5.02(b)(i)(D) where such amendment, modification or change would
     accelerate the payment of any principal amount of such subordinated debt or
     would alter the terms of its subordination (including any definitions used
     therein) or subject any obligor in respect of such subordinated debt to
     more burdensome or additional covenants or events of default, or permit any
     of its Subsidiaries to do any of the foregoing.

          (j)  NEGATIVE PLEDGE. Enter into or suffer to exist, or permit any of
     its Subsidiaries to enter into or suffer to exist, any agreement
     prohibiting or conditioning the creation or assumption of any Lien upon any
     of its property or assets other than (i) in favor of the Secured Parties or
     (ii) in connection with any Debt secured by purchase money Liens and
     Capitalized Leases, to the extent permitted under Section 5.02(a)(v) and
     Section 5.02(b)(i)(C), respectively, and solely to the extent such
     agreement is limited to the property covered by such Liens.

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

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

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

          (b)  QUARTERLY FINANCIALS. As soon as available and in any event
     within 45 days after the end of each Fiscal Quarter, commencing with the
     quarter ending on or about September 30, 2000, a Consolidated balance
     sheets of the Company and its Subsidiaries, in each case as of the end of
     such quarter and Consolidated statements of income and, in the case of the
     first three Fiscal Quarters of each Fiscal Year, cash flow of the Company
     and its Subsidiaries, in each case for the period commencing at the end of
     the previous quarter and ending with the end of such

<PAGE>

                                       58

     quarter and Consolidated statements of income and cash flow of the Company
     and its Subsidiaries for the period commencing at the end of the previous
     Fiscal Year and ending with the end of such quarter, setting forth in each
     case in comparative form the corresponding figures for the corresponding
     month and Fiscal Year-to-date period of the preceding Fiscal Year and the
     corresponding figures for the corresponding quarter and Fiscal Year-to-date
     period of the annual forecast previously delivered pursuant to Section
     5.03(e), all in reasonable detail and duly certified by the chief financial
     officer of the Company, together with (i) a certificate of said officer
     stating that no Default has occurred and is continuing or, if a Default has
     occurred and is continuing, a statement as to the nature thereof and the
     action that the Company has taken and proposes to take with respect
     thereto.

          (c)  COMPLIANCE CERTIFICATES. Together with the quarterly financial
     statements referred to in Section 5.03(b) for the quarters ending March,
     June, September and December in each Fiscal Year and the annual financial
     statements referred to in Section 5.03(d), a schedule in form satisfactory
     to the Administrative Agent of the computations used by the Company in
     determining compliance with the covenants contained in Sections 5.04(a)
     through (d).

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

          (e)  ANNUAL FORECASTS. As soon as available and in any event no later
     than the end of each Fiscal Year, forecasts prepared by management of the
     Company, in form satisfactory to the Administrative Agent, of Consolidated
     balance sheets, income statements and cash flow statements on a quarterly
     basis for the Fiscal Year following such Fiscal Year then ended.

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

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

<PAGE>

                                       59

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

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

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

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

          (a)  LEVERAGE RATIO. Maintain on a Consolidated basis for itself and
     its Subsidiaries a Leverage Ratio for each Rolling Period ending on the
     date set forth below of not more than the amount set forth below for such
     Rolling Period:

<TABLE>
<CAPTION>

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

                        Rolling Period Ending In                           Ratio
          ----------------------------------------------------------------------------------
        <S>                                                            <C>
          September 30, 2000                                              3.50 to 1.00
          December 31, 2000                                               3.50 to 1.00
          ----------------------------------------------------------------------------------
          March 31, 2001                                                  3.00 to 1.00
          June 30, 2001                                                   3.00 to 1.00
          September 30, 2001                                              3.00 to 1.00
          December 31, 2001                                               3.00 to 1.00
          March 31, 2002                                                  3.00 to 1.00
          June 30, 2002                                                   3.00 to 1.00
          September 30, 2002                                              3.00 to 1.00
          December 31, 2002                                               3.00 to 1.00
          ----------------------------------------------------------------------------------

          March 31, 2003                                                  2.50 to 1.00
          June 30, 2003 and thereafter                                    2.50 to 1.00
          ----------------------------------------------------------------------------------
</TABLE>

          (b) FIXED CHARGE COVERAGE RATIO. Maintain on a Consolidated basis for
     itself and its Subsidiaries a Fixed Charge Coverage Ratio for each Rolling
     Period ending September 30, 2000 and thereafter of not less than 1.25 to
     1:00:

          (c) LIQUIDITY RATIO. Maintain at all times for itself and its
     Subsidiaries from the date hereof a ratio for cash (after deducting the
     amount of any cash of the Company and its Subsidiaries held by the
     respective credit provider as collateral to secure the Obligations of the
     Company and its Subsidiaries under any synthetic lease) PLUS Cash
     Equivalents PLUS account receivables to current liabilities of not less
     than 1.0 to 1.0.

<PAGE>

                                       60

          (d) LIMITATION ON LOSSES. Not have (i) an operating loss in each of
     two consecutive Fiscal Quarters, or (ii) an operating loss for a Fiscal
     Quarter which exceeds 3% of Tangible Net Worth as at the last day of such
     Fiscal Quarter.

                                   ARTICLE VI

                                EVENTS OF DEFAULT

          SECTION 6.01 EVENTS OF DEFAULT. If any of the following events
("EVENTS OF DEFAULT") shall occur and be continuing:

          (a)  (i) any Borrower shall fail to pay any principal of any Advance
     when the same shall become due and payable, or (ii) any Borrower shall fail
     to pay any interest on any Advance or any Loan Party shall fail or make any
     other payment under any Loan Document within two Business Days of when the
     same shall become due and payable; or

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

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

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

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

          (f)  any Loan Party or any of its Subsidiaries shall fail to pay any
     principal of, premium or interest on or any other amount payable in respect
     of any Debt or any Hedge Agreement of such Loan Party or such Subsidiary
     (as the case may be) that is outstanding in a principal amount, or in the
     case of any Hedge Agreement an Agreement Value, of at least $5,000,000
     either individually or in the aggregate for all such Loan Parties and
     Subsidiaries (but excluding Debt outstanding hereunder) of such Loan Party
     or such Subsidiary (as the case may be), when the same becomes due and
     payable (whether by scheduled maturity, required

<PAGE>

                                       61

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

          (g)  the Company, any Loan Party which is a Significant Subsidiary or
     any of its Significant Subsidiaries shall generally not pay its debts as
     such debts become due, or shall admit in writing its inability to pay its
     debts generally, or shall make a general assignment for the benefit of
     creditors; or any proceeding shall be instituted by or against the Company,
     any Loan Party that is a Significant Subsidiary or any of their Significant
     Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
     liquidation, winding up, reorganization, arrangement, adjustment,
     protection, relief, or composition of it or its debts under any law
     relating to bankruptcy, insolvency or reorganization or relief of debtors,
     or seeking the entry of an order for relief or the appointment of a
     receiver, trustee, or other similar official for it or for any substantial
     part of its property and, in the case of any such proceeding instituted
     against it (but not instituted by it) that is being diligently contested by
     it in good faith, either such proceeding shall remain undismissed or
     unstayed for a period of 30 days or any of the actions sought in such
     proceeding (including, without limitation, the entry of an order for relief
     against, or the appointment of a receiver, trustee, custodian or other
     similar official for, it or any substantial part of its property) shall
     occur; or the Company, any Loan Party that is a Significant Subsidiary or
     any of their Significant Subsidiaries shall take any corporate action to
     authorize any of the actions set forth above in this subsection (f); or

          (h)  any judgments or orders, either individually or in the aggregate,
     for the payment of money in excess of $5,000,000 (to the extent not fully
     paid or discharged) shall be rendered against any Loan Party or any of its
     Subsidiaries and either (i) enforcement proceedings shall have been
     commenced by any creditor upon such judgment or order or (ii) there shall
     be any period of 10 consecutive days during which a stay of enforcement of
     such judgment or order, by reason of a pending appeal or otherwise, shall
     not be in effect; or

          (i)  any non-monetary judgment or order shall be rendered against any
     Loan Party or any of its Subsidiaries that could reasonably be likely to
     have a Material Adverse Effect, and there shall be any period of 10
     consecutive days during which a stay of enforcement of such judgment or
     order, by reason of a pending appeal or otherwise, shall not be in effect;
     or

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

<PAGE>

                                       62

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

          (l)  a Change of Control shall occur; or

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

          (n)  any Loan Party or any ERISA Affiliate shall have been notified by
     the sponsor of a Multiemployer Plan that it has incurred Withdrawal
     Liability to such Multiemployer Plan in an amount that, when aggregated
     with all other amounts required to be paid to Multiemployer Plans by the
     Loan Parties and the ERISA Affiliates as Withdrawal Liability (determined
     as of the date of such notification), exceeds $5,000,000 or requires
     payments exceeding $1,000,000 per annum; or

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

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

<PAGE>

                                       63

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

                                  ARTICLE VII

                                    GUARANTY

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

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

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

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

<PAGE>

                                       64

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

                                       65

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

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

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

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

          SECTION 7.04 SUBROGATION. The Company will not exercise any rights
that it may now or hereafter acquire against any Designated Subsidiary or any
other insider guarantor that arise from the existence, payment, performance or
enforcement of the Obligations under this Agreement, including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution
or indemnification and any right to participate in any claim or remedy of the
Administrative Agent or any other Lender against a Designated Subsidiary or any
other insider guarantor or any collateral, whether or not such claim, remedy or
right arises in equity or under contract, statute or common law, including,
without limitation, the right to take or receive from a Designated Subsidiary or
any other insider guarantor, directly or indirectly, in cash or other property
or by set-off or in any other manner, payment or security on account of such
claim, remedy or right, unless and until all of the Obligations and all other
amounts payable under this guaranty shall have been paid in full in cash and the
Commitments shall have expired or terminated. If any amount shall be paid to the
Company in violation of the preceding sentence at any time prior to the later of
the payment in full in cash of the Obligations and all other amounts payable
under this guaranty and the Termination Date, such amount shall be held in trust
for the benefit of the Administrative Agent and the other Lenders and shall
forthwith be paid to the Administrative Agent to be credited and applied to the
Obligations and all other amounts payable under this guaranty, whether matured
or unmatured, in accordance with the terms of this Agreement, or to be held as
collateral for any Obligations or other amounts payable under this guaranty
thereafter arising. If (i) the Company shall

<PAGE>
                                       66

make payment to the Administrative Agent or any other Lender of all or any part
of the Obligations, (ii) all the Obligations and all other amounts payable under
this guaranty shall be paid in full in cash and (iii) the Termination Date shall
have occurred, the Administrative Agent and the other Lenders will, at the
Company's request and expense, execute and deliver to the Company appropriate
documents, without recourse and without representation or warranty, necessary to
evidence the transfer by subrogation to the Company of an interest in the
Obligations resulting from such payment by the Company. The Company acknowledges
that it will receive direct and indirect benefits from the financing
arrangements contemplated by this Agreement and that the waiver set forth in
this section is knowingly made in contemplation on such benefits.

          SECTION 7.05 SUBORDINATION. The Company hereby subordinates any and
all debts, liabilities and obligations owed to the Company by each Designated
Subsidiary (the "SUBORDINATED OBLIGATIONS") to the Obligations as provided in
this Section 7.05.

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

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

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

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

          SECTION 7.06 SURVIVAL. This guaranty is a continuing guaranty and
shall (a) remain in full force and effect until payment in full (after the
Termination Date) of the Obligations and all other amounts payable under this
guaranty, (b) be binding upon the Company, its successors and assigns, (c) inure
to the benefit of and be enforceable by each Lender (including each assignee
Lender pursuant to Section 9.07) and the Administrative Agent and their
respective successors, transferees and assigns and

<PAGE>

                                       67

(d) shall be reinstated if at any time any payment to a Lender or the
Administrative Agent hereunder is required to be restored by such Lender or the
Administrative Agent. Without limiting the generality of the foregoing clause
(c), each Lender may assign or otherwise transfer its interest in any Advance to
any other person or entity, and such other person or entity shall thereupon
become vested with all the rights in respect thereof granted to such Lender
herein or otherwise.

                                  ARTICLE VIII

                                   THE AGENTS

          SECTION 8.01 AUTHORIZATION AND ACTION. Each Lender Party (in its
capacities as a Lender and the Issuing Bank (if applicable)) hereby appoints and
authorizes the Administrative Agent to execute and deliver the Collateral
Documents (subject to section 9.01) for the purpose of creating a security
interest for the benefit of each Lender Party and to take such action as agent
on its behalf and to exercise such powers and discretion under this Agreement
and the other Loan Documents as are delegated to the Administrative Agent by the
terms hereof and thereof, together with such powers and discretion as are
reasonably incidental thereto. As to any matters not expressly provided for by
the Loan Documents (including, without limitation, enforcement or collection of
the Debt resulting from the Advances), the Administrative Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lender Parties and all holders of Notes;
PROVIDED, HOWEVER, that the Administrative Agent shall not be required to take
any action that exposes the Administrative Agent to personal liability or that
is contrary to this Agreement or applicable law. The Administrative Agent agrees
to give to each Lender Party prompt notice of each notice given to it by the
Company pursuant to the terms of this Agreement.

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

          SECTION 8.03 BNP PARIBAS AND AFFILIATES. With respect to its
Commitments, the Advances made by it and any Notes issued to it, BNP Paribas
shall have the same rights and powers under the Loan Documents as any other
Lender Party and may exercise the same as though it were not an Agent; and the
term "Lender Party" or "Lenders Parties" shall, unless otherwise expressly
indicated,

<PAGE>

                                       68

include BNP Paribas in its individual capacity. BNP Paribas and its affiliates
may accept deposits from, lend money to, act as trustee under indentures of,
accept investment banking engagements from and generally engage in any kind of
business with, any Loan Party, any of its Subsidiaries and any Person who may do
business with or own securities of any Loan Party or any such Subsidiary, all as
if BNP Paribas were not an Agent and without any duty to account therefor to the
Lender Parties.

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

          SECTION 8.05 INDEMNIFICATION. (a) Each Lender Party (other than the
Designated Bidders) severally agrees to indemnify each Agent (to the extent not
promptly reimbursed by the Borrowers) from and against such Lender Party's
ratable share (determined as provided below) of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including, without
limitation, reasonable fees and expenses of counsel) that may be imposed on,
incurred by, or asserted against such Agent in any way relating to or arising
out of the Loan Documents or any action taken or omitted by such Agent under the
Loan Documents (collectively the "INDEMNIFIED COSTS"); PROVIDED, HOWEVER, that
no Lender Party shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct as found in a final, non-appealable judgment by a court of
competent jurisdiction. Without limitation of the foregoing, each Lender Party
(other than the Designated Bidders) agrees to reimburse such Agent promptly upon
demand for its ratable share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrowers under Section
9.04, to the extent that such Agent is not promptly reimbursed for such costs
and expenses by the Borrower.

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

          (c)  For purposes of this Section 8.05, the Lender Parties' respective
ratable shares of any amount shall be determined, at any time, according to the
sum of (i) the aggregate principal amount of the Revolving Credit Advances and
Letter of Credit Advances outstanding at such time and owing to the respective
Lender Parties, (ii) their respective Pro Rata Shares of the aggregate Available
Amount of all Letters of Credit outstanding at such time and (iii) their
respective Unused Revolving Credit Commitments at such time; PROVIDED that the
aggregate principal amount of Letter of Credit Advances

<PAGE>

                                       69

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

          SECTION 8.06 SUCCESSOR AGENTS. Any Agent may resign at any time by
giving written notice thereof to the Lender Parties and the Company and may be
removed at any time with or without cause by the Required Lenders. Upon any such
resignation or removal by the Administrative Agent, the Required Lenders shall
have the right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Administrative Agent, then the retiring Administrative
Agent may, on behalf of the Lender Parties, appoint a successor Administrative
Agent, which shall be a commercial bank organized under the laws of the United
States or of any State thereof and having a combined capital and surplus of at
least $250,000,000. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent and upon the execution and
filing or recording of such financing statements, or amendments thereto, and
such other instruments or notices, as may be necessary or desirable, or as the
Required Lenders may request, in order to continue the perfection of the Liens
granted or purported to be granted by the Collateral Documents, such successor
Administrative Agent shall succeed to and become vested with all the rights,
powers, discretion, privileges and duties of the retiring Administrative Agent,
and the retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Documents. If within 45 days after written notice is
given of the retiring Administrative Agent's resignation or removal under this
Section 8.06 no successor Administrative Agent shall have been appointed and
shall have accepted such appointment, then on such 45th day (i) the retiring
Administrative Agent's resignation or removal shall become effective, (ii) the
retiring Administrative Agent shall thereupon be discharged from its duties and
obligations under the Loan Documents and (iii) the Required Lenders shall
thereafter perform all duties of the retiring Administrative Agent under the
Loan Documents until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided above. After any retiring
Administrative Agent's resignation or removal hereunder as Administrative Agent
shall become effective, the provisions of this Article VIII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.

          SECTION 8.07 OTHER AGENTS

          The Administrative Agent may, in its sole discretion appoint a
Documentation Agent, Syndication Agent or other Agent under this Agreement. Each
Lender Party hereby acknowledges that neither the Documentation Agent,
Syndication Agent nor any other Lender Party designated as any "Agent" on the
signature pages hereof other than the Administrative Agent has any
responsibilities or liability hereunder other than in its capacity as a Lender,
the titles Documentation Agent and Syndication Agent being purely honorary in
nature.

<PAGE>

                                       70

                                   ARTICLE IX

                                  MISCELLANEOUS

          SECTION 9.01 AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement or any Revolving Credit Notes or any other Loan Document, nor
consent to any departure by any Borrower or any other Loan Party therefrom,
shall in any event be effective unless the same shall be in writing and signed
(or, in the case of the Collateral Documents, consented to) by the Required
Lenders, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; PROVIDED, HOWEVER, that
(a) no amendment, waiver or consent shall, unless in writing and signed by all
of the Lenders (other than the Designated Bidders), do any of the following at
any time: (i) waive any of the conditions specified in Section 3.01, (ii) change
the percentage of (x) the Commitments, (y) the aggregate unpaid principal amount
of the Revolving Credit Advances and Letter of Credit Advances or (z) the
aggregate Available Amount of outstanding Letters of Credit that, in each case,
shall be required for the Lenders or any of them to take any action hereunder,
(iii) release all or substantially all of the Collateral in any transaction or
series of related transactions or permit the creation, incurrence, assumption or
existence of any Lien on all or substantially all of the Collateral in any
transaction or series of related transactions to secure any Obligations other
than Obligations owing to the Secured Parties under the Loan Documents or (iv)
amend this Section 9.01 and (b) no amendment, waiver or consent shall, unless in
writing and signed by the Required Lenders and each Lender that has a Commitment
under the Revolving Credit Facility and that is directly affected by such
amendment, waiver or consent, (i) increase the Commitments of such Lender or
amend Section 2.14 so as to subject such Lender to additional Obligations, (ii)
reduce the principal of, or interest on, the Revolving Credit Advances or Letter
of Credit Advances payable to such Lender or any fees or other amounts payable
to such Lender, (iii) postpone any date scheduled for any payment of principal
of, or interest on, the Advances payable to such Lender pursuant to Section 2.04
or Section 2.08 or any date fixed for payment of fees or other amounts payable
to such Lender or (v) change the order of application of any prepayment set
forth in Section 2.07 in any manner that materially adversely affects such
Lender; PROVIDED FURTHER that no amendment, waiver or consent shall, unless in
writing and signed by the Issuing Bank, in addition to the Lenders required
above to take such action, affect the rights or obligations of the Issuing Bank
under this Agreement; and PROVIDED FURTHER that no amendment, waiver or consent
shall, unless in writing and signed by each affected Agent in addition to the
Lenders required above to take such action, affect the rights or duties of such
Agent under this Agreement or the other Loan Documents.

          SECTION 9.02 NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telecopy communication)
and mailed, telecopied or delivered by an overnight courier of nationally
recognized standing, if to the Company or any other Loan Party, at the address
of the Company at 233 Kansas Street, El Segundo, California 90245, Attention:
Treasury Department, telecopier number (310) 726-8439 (with a copy to the
attention of General Counsel, telecopier number (310) 726-8484); if to any
Initial Lender or any Initial Issuing Bank, at its Domestic Lending Office
specified opposite its name on Schedule I hereto; if to any other Lender Party,
at its Domestic Lending Office specified in the Assignment and Acceptance
pursuant to which it became a Lender Party; and if to the Administrative Agent,
at its address at 180 Montgomery Street, California 94104, Attention: Thomas
Kunz and Paggie Wong, telecopier number (415) 956-4230 (with a copy, for any
notice to the Administrative Agent hereunder other than any Notice of Borrowing,
to the attention of Tjalling Terpstra, Vice President, telecopier number (213)
488-9602); or, as to each party, at such other address as shall be designated by
such party in a written notice to the other parties. All such notices and
communications shall, when mailed, telecopied or sent by courier, be effective
when deposited in the mails, transmitted by telecopier, or delivered to the
overnight courier, respectively, except that notices and communications to any
Agent pursuant to Article II, III or VIII shall not be effective until received
by such Agent. Delivery by telecopier of an executed counterpart of any
amendment or waiver of any

<PAGE>

                                       71

provision of this Agreement or the Notes or of any Exhibit hereto to be executed
and delivered hereunder shall be effective as delivery of a manually executed
counterpart thereof.

          SECTION 9.03 NO WAIVER; REMEDIES. No failure on the part of any Lender
Party or any Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.

          SECTION 9.04 COSTS AND EXPENSES. (a) The Company agrees to pay on
demand (i) all costs and expenses of the Administrative Agent in connection with
the preparation, execution, delivery, administration, modification and amendment
of, the Loan Documents (including, without limitation, (A) all due diligence,
collateral review, syndication, transportation, computer, duplication,
appraisal, audit, insurance, consultant, search, filing and recording fees and
expenses and (B) the reasonable fees and expenses of counsel for the
Administrative Agent with respect thereto, with respect to advising the
Administrative Agent as to its rights and responsibilities, or the perfection,
protection or preservation of rights or interests, under the Loan Documents,
with respect to negotiations with any Loan Party or with other creditors of any
Loan Party or any of its Subsidiaries arising out of any Default or any events
or circumstances that may give rise to a Default and with respect to presenting
claims in or otherwise participating in or monitoring any bankruptcy, insolvency
or other similar proceeding involving creditors' rights generally and any
proceeding ancillary thereto) and (ii) all costs and expenses of the Agents and
the Lender Parties in connection with the enforcement of the Loan Documents,
whether in any action, suit or litigation, any bankruptcy, insolvency or other
similar proceeding affecting creditors' rights generally (including, without
limitation, the reasonable fees and expenses of counsel for the Administrative
Agent and each Lender Party with respect thereto).

          (b)  The Borrowers agree to indemnify, defend and save and hold
harmless each Agent, each Lender Party and each of their Affiliates and their
officers, directors, employees, agents and advisors (each, an "INDEMNIFIED
PARTY") from and against any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of
counsel) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or by reason of
(including, without limitation, in connection with any investigation, litigation
or proceeding or preparation of a defense in connection therewith) (i) the
Facilities, the actual or proposed use of the proceeds of the Advances or the
Letters of Credit, the Loan Documents or any of the transactions contemplated
thereby or (ii) the actual or alleged presence of Hazardous Materials on any
property of any Loan Party or any of its Subsidiaries or any Environmental
Action relating in any way to any Loan Party or any of its Subsidiaries, except
to the extent such Liabilities, obligations, losses, damages, penalties,
actions, judgments, suits are found in a final, non-appealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct. In the case of an investigation,
litigation or other proceeding to which the indemnity in this Section 9.04(b)
applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by any Loan Party, its directors,
shareholders or creditors or an Indemnified Party or any other Person, whether
or not any Indemnified Party is otherwise a party thereto and whether or not the
Transaction is consummated. Each Borrower also agrees not to assert any claim
against any Agent, any Lender Party or any of their Affiliates, or any of their
respective officers, directors, employees, agents and advisors, on any theory of
liability, for special, indirect, consequential or punitive damages arising out
of or otherwise relating to the Facilities, the actual or proposed use of the
proceeds of the Advances or the Letters of Credit, the Loan Documents or any of
the transactions contemplated thereby.

          (c)  If any payment of principal of, or Conversion of, any
Eurocurrency Rate Advances, LIBO Rate Advance or Local Rate Advances is made by
any Borrower to or for the account

<PAGE>

                                       72

of a Lender Party other than on the last day of the Interest Period for such
Advance, as a result of an assignment in connection with a syndication
contemplated by Section 2.02(c), a payment or Conversion pursuant to Section
2.07, 2.10(b)(i) or 2.11(d), acceleration of the maturity of the Advances
pursuant to Section 6.01 or for any other reason or by an Eligible Assignee to a
Lender Party other than on the last day of the Interest Period for such Advance
upon an assignment of rights and obligations under this Agreement pursuant to
Section 9.07 as a result of a demand by the Company pursuant to Section 9.07(a),
such Borrower shall, upon demand by such Lender Party (with a copy of such
demand to the Administrative Agent), pay to the Administrative Agent for the
account of such Lender Party any amounts required to compensate such Lender
Party for any additional losses, costs or expenses that it may reasonably incur
as a result of such payment, including, without limitation, any loss (including
loss of anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by any Lender
Party to fund or maintain such Advance.

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

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

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

          SECTION 9.06 BINDING EFFECT. This Agreement shall become effective
(other than Section 2.01, 2.03 and 2.04, which shall only become effective upon
satisfaction of the conditions precedent set forth in Section 3.01) when it
shall have been executed by the Company and the Administrative Agent and when
the Administrative Agent shall have been notified by each Initial Lender and the
Initial Issuing Bank that such Initial Lender and the Initial Issuing Bank has
executed it and thereafter shall be binding upon and inure to the benefit of the
Company, the Administrative Agent and each Lender Party and their respective
successors and assigns, except that the Company shall not have the right to
assign its rights hereunder or any interest herein (other than in pursuant to a
Designation Letter) without the prior written consent of the Lender Parties.

          SECTION 9.07 ASSIGNMENTS, DESIGNATIONS AND PARTICIPATIONS. (a) Each
Lender (other than the Designated Bidders) may and, so long as no Default has
occurred and is continuing, if demanded

<PAGE>

                                       73

by the (following a demand by such Lender pursuant to Section 2.11 or 2.13)
shall upon at least 5 Business Days' notice to such Lender and the
Administrative Agent, assign to one or more Eligible Assignees all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment or Commitments, the Revolving
Credit Advances owing to it and any Revolving Credit Note or Notes held by it);
PROVIDED, HOWEVER, that (i) each such assignment shall be of a uniform, and not
a varying, percentage of all rights and obligations under this Agreement (other
than any right to make Competitive Bid Advances, Competitive Bid Advances owing
to it and Competitive Bid Notes), (ii) except in the case of an assignment to a
Person that, immediately prior to such assignment, was a Lender, an Affiliate of
any Lender or an Approved Fund of any Lender or an assignment of all of a
Lender's rights and obligations under this Agreement, the aggregate amount of
the Commitments being assigned to such Eligible Assignee pursuant to such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000 (or such
lesser amount as shall be approved by the Company and the Administrative Agent)
and shall be in an integral multiple of $500,000, (iii) each such assignment
shall be to an Eligible Assignee, (iv) each such assignment made as a result of
a demand by the Company pursuant to this Section 9.07(a) shall be arranged by
the Company after consultation with the Administrative Agent and shall be either
an assignment of all of the rights and obligations of the assigning Lender under
this Agreement or an assignment of a portion of such rights and obligations made
concurrently with another such assignment or other such assignments that
together cover all of the rights and obligations of the assigning Lender under
this Agreement, (v) no Lender shall be obligated to make any such assignment as
a result of a demand by the Company pursuant to this Section 9.07(a) unless and
until such Lender shall have received one or more payments from either the
Company or one or more Eligible Assignees in an aggregate amount at least equal
to the aggregate outstanding principal amount of the Advances owing to such
Lender, together with accrued interest thereon to the date of payment of such
principal amount and all other amounts payable to such Lender under this
Agreement, (vi) no such assignments shall be permitted without the consent of
the Administrative Agent until the Administrative Agent shall have notified the
Lender Parties that syndication of the Commitments hereunder has been completed,
and (vii) the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Revolving Credit Note or Notes
subject to such assignment and a processing and recordation fee of $3,500.

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

          (c)  By executing and delivering an Assignment and Acceptance, each
Lender Party assignor thereunder and each assignee thereunder confirm to and
agree with each other and the other parties thereto and hereto as follows: (i)
other than as provided in such Assignment and Acceptance, such assigning Lender
Party makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or any other Loan Document or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to
be created under or in connection with, this Agreement or any other Loan
Document or any other instrument or document furnished pursuant hereto or
thereto; (ii) such assigning Lender Party makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Company or any other Loan

<PAGE>

                                       74

Party or the performance or observance by any Loan Party of any of its
obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 4.01 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Administrative Agent, such assigning Lender Party or
any other Lender Party and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Loan Documents as are delegated to the
Administrative Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of this Agreement are required to be performed by it as a Lender or
Issuing Bank, as the case may be.

          (d)  Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Revolving Credit Note
or Notes requested by the Assignee subject to such assignment, the
Administrative Agent shall, if such Assignment and Acceptance has been completed
and is in substantially the form of Exhibit C hereto, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the Company.

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

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

<PAGE>

                                       75

under this Agreement as are delegated to the Administrative Agent by the terms
hereof, together with such powers and discretion as are reasonably incidental
thereto; and (vii) such designee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.

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

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

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

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

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

<PAGE>

                                       76

          SECTION 9.08 CONFIDENTIALITY. Neither any Agent nor any Lender Party
shall disclose any Confidential Information to any Person without the consent of
the Company, other than (a) to such Agent's or such Lender Party's Affiliates
and Approved Funds and their officers, directors, employees, agents and advisors
and to actual or prospective Eligible Assignees and Participants (who shall be
bound by this provision as though a Lender Party), and then only on a
confidential basis, (b) as required by any law, rule or regulation or judicial
process, (c) as requested or required by any state, Federal or foreign authority
or examiner regulating such Lender Party and (d) to any rating agency when
required by it, PROVIDED that, prior to such disclosure, such rating agency
shall undertake to preserve the confidentiality of any Confidential Information
relating to the Loan Parties received by it from such Lender Party.

          SECTION 9.09 EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery by fax of an executed counterpart of a signature page to this Agreement
shall be effective as delivery of an original executed counterpart of this
Agreement.

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

          SECTION 9.11 DESIGNATED SUBSIDIARIES. (a) DESIGNATION. The Company may
at any time, and from time to time, by delivery to the Administrative Agent of a
Designation Letter duly executed by the Company and the respective Subsidiary
and substantially in the form of Exhibit D-1 hereto, designate such Subsidiary
as a "Designated Subsidiary" for purposes of this Agreement and such Subsidiary
shall thereupon become a "Designated Subsidiary" for purposes of this Agreement
and, as such, shall have all of the rights and obligations of a Borrower
hereunder. The Administrative Agent shall promptly notify each Lender of each
such designation by the Company and the identity of the respective Subsidiary.

          (b)  OPINION OF LOCAL COUNSEL TO NON-U.S. GUARANTORS. Following the
designation of a Subsidiary as a "Designated Subsidiary" under Section 9.11(a)
the Company shall use all reasonable efforts to have delivered to the
Administrative Agent opinions of local counsel for the Non-U.S. Guarantors, in
each case as requested by, and in form and substance acceptable to, the
Administrative Agent.
<PAGE>

                                       77

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

          SECTION 9.12 JURISDICTION, ETC. (a) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any California court or federal court of the United
States of America sitting in Los Angeles California, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such California
court or, to the extent permitted by law, in such federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other Loan Documents in the
courts of any jurisdiction.

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

          SECTION 9.13 GOVERNING LAW. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of
California.

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

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

          (c)  The obligation of the Borrowers in respect of any sum due from it
in any currency (the "PRIMARY CURRENCY") to any Lender Party or the
Administrative Agent hereunder shall, notwithstanding any judgment in any other
currency, be discharged only to the extent that on the Business Day following
receipt by such Lender Party or the Administrative Agent (as the case

<PAGE>

                                       78

may be), of any sum adjudged to be so due in such other currency, such Lender
Party or the Administrative Agent (as the case may be) may in accordance with
normal banking procedures purchase the applicable Primary Currency with such
other currency; if the amount of the applicable Primary Currency so purchased is
less than such sum due to such Lender Party or the Administrative Agent (as the
case may be) in the applicable Primary Currency, each Borrower agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Lender Party or the Administrative Agent (as the case may be) against such loss,
and if the amount of the applicable Primary Currency so purchased exceeds such
sum due to any Lender Party or the Administrative Agent (as the case may be) in
the applicable Primary Currency, such Lender Party or the Administrative Agent
(as the case may be) agrees to remit to the applicable Borrower such excess.

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

<PAGE>

                                       79

          SECTION 9.16 WAIVER OF JURY TRIAL. Each of the Loan Parties, each
Agent and the Lender Parties irrevocably waives all right to trial by jury in
any action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to any of the Loan Documents, the
Advances, the Letters of Credit or the actions of any Agent or any Lender Party
in the negotiation, administration, performance or enforcement thereof.

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

                                             COMPANY

                                             INTERNATIONAL RECTIFIER CORPORATION

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

<PAGE>

                           SOLE ARRANGER, SYNDICATION AGENT, ADMINISTRATIVE
                           AGENT AND INITIAL ISSUING BANK

                                BNP PARIBAS
                                as Sole Arranger, Syndication Agent,
                                Administrative Agent and Initial Issuing Bank

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

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

                           INITIAL LENDERS

                                BNP PARIBAS

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

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

<PAGE>

                                ABN AMRO Bank N.V.

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

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

<PAGE>

                                SANWA BANK CALIFORNIA

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

<PAGE>

                                UNION BANK OF CALIFORNIA, N.A.

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

<PAGE>

                                THE FUJI BANK, LIMITED

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

<PAGE>

                                COMERICA BANK - CALIFORNIA

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

<PAGE>

                                MELLON BANK, N.A.

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

<PAGE>

                                WELLS FARGO BANK ,N.A.

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

<PAGE>

                                                                   SCHEDULE I TO
                                                                CREDIT AGREEMENT

                   COMMITMENTS AND APPLICABLE LENDING OFFICES
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
NAME OF LENDER       REVOLVING       LETTER OF       DOMESTIC LENDING OFFICE           EUROCURRENCY LENDING OFFICE
                     CREDIT          CREDIT
                     COMMITMENT      COMMITMENT
-------------------------------------------------------------------------------------------------------------------------
<S>                <C>               <C>           <C>                               <C>
BNP Paribas           $22,500,000      $3,000,000    Los Angeles Branch                Los Angeles Branch
                                                     725 S. Figueroa St, Suite 2090    725 S. Figueroa St, Suite 2090
                                                     Los Angeles, CA  90017            Los Angeles, CA  90017
                                                     Attention:  Tjalling Terpstra /   Attention:  Tjalling Terpstra /
                                                                  Jeffrey King                      Jeffrey King
                                                     Telephone:    (213) 688 6425      Telephone:    (213) 688 6425
                                                     Telecopier:   (213) 488 9602      Telecopier:   (213) 488 9602

-------------------------------------------------------------------------------------------------------------------------
ABN AMRO Bank, N.V.   $21,000,000      $2,800,000    208 South LaSalle, Suite 1500     208 South LaSalle, Suite 1500
                                                     Chicago, IL 60604-1003            Chicago, IL 60604-1003
                                                     Attention: Credit Administration  Attention:  Credit Administration
                                                     Telephone:  (312) 992-5110        Telephone:  (312) 992-5110
                                                     Telecopier: (312) 992-5111        Telecopier: (312) 992-5111
                                                                                       with a copy to:
                                                     with a copy to:
                                                                                       101 California Street, Suite 4550
                                                     101 California Street,            San Francisco CA 94111-5812
                                                     Suite 4550                        Attention: Joseph Endoso
                                                     San Francisco CA 94111-5812       Telephone: (415) 984-3700
                                                     Attention:  Joseph Endoso         Telecopier:(415) 362-3524
                                                     Telephone:  (415) 984-3700
                                                     Telecopier: (415) 362-3524
-------------------------------------------------------------------------------------------------------------------------
Sanwa Bank            $21,000,000      $2,800,000    9000 East Valley Boulevard        9000 East Valley Boulevard
California                                           Rosemead CA 91770                 Rosemead CA 91770
                                                     Attention:   Stephen J Popovich   Attention:   Stephen J Popovich /
                                                                  /Gregg Hessick                    Gregg Hessick
                                                     Telephone:  (626) 312-5741 /      Telephone:  (626) 312-5741 /
                                                                 (626) 312 5738                    (626) 312 5738
                                                     Telecopier: (626) 312-5751        Telecopier: (626) 312-5751

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

<PAGE>

                                      I-2

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
NAME OF LENDER       REVOLVING       LETTER OF       DOMESTIC LENDING OFFICE           EUROCURRENCY LENDING OFFICE
                     CREDIT          CREDIT
                     COMMITMENT      COMMITMENT
-------------------------------------------------------------------------------------------------------------------------
<S>                <C>               <C>           <C>                               <C>
Wells Fargo Bank,     $21,000,000      $2,800,000    Los Angeles Regional Commercial   Los Angeles Regional Commercial
N.A.                                                 Banking Office                    Banking Office
                                                     333 South Grand Avenue, 3rd Fl    333 South Grand Avenue, 3rd Fl
                                                     Los Angeles, CA 90071             Los Angeles, CA 90071
                                                     Attention  Charles C. Warner      Attention  Charles C. Warner
                                                     Telephone:  (213) 253-3658        Telephone:  (213) 253-3658
                                                     Telecopier: (213) 687-3501        Telecopier: (213) 687-3501

                                                     with a copy to:                   with a copy to:

                                                     Commercial Banking Office         Commercial Banking Office
                                                     201 Third Street; 8th floor       201 Third Street; 8th floor
                                                     San Francisco, CA  94103          San Francisco, CA  94103
                                                     Attention  Evelyn Lucas           Attention  Evelyn Lucas
                                                     Telephone:  (415) 477-5426        Telephone:  (415) 477-5426
                                                     Telecopier: (415) 979-0675        Telecopier: (415) 979-0675

-------------------------------------------------------------------------------------------------------------------------
Union Bank of         $21,000,000      $2,800,000    455 S. Figueroa Street, 10th Fl   455 S. Figueroa Street, 10th Fl
California, N.A.                                     Los Angeles, CA 90071             Los Angeles, CA 90071
                                                     Attention: Robert Petersen, RVP   Attention:   Robert Petersen, RVP
                                                     Telephone:   (213) 236-4182       Telephone:   (213) 236-4182
                                                     Facsimile:   (213) 236 4066       Facsimile:   (213) 236 4066

                                                     with a copy to                    with a copy to

                                                     1980 Saturn Street                1980 Saturn Street
                                                     Monterey Park, CA  91755          Monterey Park, CA  91755
                                                     Attention:  Ruby Gonzales         Attention:  Ruby Gonzales
                                                     Telephone:  (323) 720-7055        Telephone:  (323) 720-7055
                                                     Telecopier: (323) 720-6198        Telecopier: (323) 720-6198
-------------------------------------------------------------------------------------------------------------------------
The Fuji Bank,        $14,500,000      $1,933,333    333 South Hope Street, 39th Fl    333 South Hope Street, 39th Fl
Limited                                              Los Angeles, CA 90071             Los Angeles, CA 90071
                                                     Attention:   Richard G. Bushman   Attention:   Richard G. Bushman
                                                     Telephone:   (213) 253-4182       Telephone:   (213) 253-4182
                                                     Telecopier:  (213) 253-4175       Telecopier:  (213) 253-4175

                                                     with a copy to                    with a copy to

                                                     333 South Hope Street, 39th Fl    333 South Hope Street, 39th Fl
                                                     Los Angeles, CA 90071             Los Angeles, CA 90071
                                                     Attention:  Carol Esparza         Attention:  Carol Esparza
                                                     Telephone:   (213) 253-4137       Telephone:   (213) 253-4137
                                                     Telecopier:  (213) 253-4178       Telecopier:  (213) 253-4178

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

</TABLE>

<PAGE>

                                      I-3

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
NAME OF LENDER       REVOLVING       LETTER OF       DOMESTIC LENDING OFFICE           EUROCURRENCY LENDING OFFICE
                     CREDIT          CREDIT
                     COMMITMENT      COMMITMENT
-------------------------------------------------------------------------------------------------------------------------
<S>                <C>               <C>           <C>                               <C>
Comerica Bank -       $14,500,000      $1,933,333    10900 Wilshire Boulevard          10900 Wilshire Boulevard
California                                           Los Angeles, CA 90024             Los Angeles, CA 90024
                                                     Attention:  Scott Lane            Attention:  Scott Lane
                                                     Telephone:  (310) 824-6775        Telephone:  (310) 824-6775
                                                     Telecopier: (310) 824-6833        Telecopier: (310) 824-6833

                                                     with a copy to:                   with a copy to:

                                                     611 Anton Boulevard, 2nd Fl       611 Anton Boulevard, 2nd Fl
                                                     Costa Mesa, CA 92626              Costa Mesa, CA 92626
                                                     Telephone:  (714) 435-3973        Telephone:  (714) 435-3973
                                                     Telecopier: (714) 424-3857        Telecopier: (714) 424-3857

-------------------------------------------------------------------------------------------------------------------------
Mellon Bank, N.A.     $14,500,000      $1,933,333    Three Mellon Bank, Room 2300      Three Mellon Bank, Room 2300
                                                     Pittsburgh, PA 15259              Pittsburgh, PA 15259
                                                     Attention:  Emma Borza            Attention:  Emma Borza
                                                     Telephone:  (412) 234-7365        Telephone:  (412) 234-7365
                                                     Telecopier: (412) 209-6122        Telecopier: (412) 209-6122

                                                     with a copy to:                   with a copy to:

                                                     400 S. Hope Street, 5th Fl        400 S. Hope Street, 5th Fl
                                                     Los Angeles, CA 90071             Los Angeles, CA 90071
                                                     Attention:  John N. Cate          Attention:  John N. Cate
                                                     Telephone:  (213) 553-9561        Telephone:  (213) 553-9561
                                                     Telecopier: (213) 629-0492        Telecopier: (213) 629-0492

-------------------------------------------------------------------------------------------------------------------------
TOTAL:               $150,000,000     $20,000,000
----------------------------------------------------
</TABLE>

<PAGE>

                                                                  EXECUTION COPY

                                                                     EXHIBIT A-1
                                                                       TO CREDIT
                                                                       AGREEMENT

                          FORM OF REVOLVING CREDIT NOTE

$_______________                                            Dated: ____ __, ____

                  FOR VALUE RECEIVED, the undersigned, International Rectifier
Corporation, a Delaware corporation (the "BORROWER"), HEREBY PROMISES TO PAY to
the order of __________________ (the "LENDER") for the account of its Applicable
Lending Office (as defined in the Credit Agreement referred to below) the
principal amount of the Revolving Credit Advance (as defined below) owing to the
Lender by the Borrower pursuant to the Credit Agreement dated as of November 2,
2000 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the "CREDIT AGREEMENT"; terms defined therein, unless otherwise
defined herein, being used herein as therein defined) among the Borrower, the
Lender and certain other Lender Parties party thereto and BNP Paribas, as Sole
Arranger, Administrative Agent and Initial Issuing Bank, on the dates and in the
amounts specified in the Credit Agreement.

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

                  Both principal and interest are payable in lawful money of the
United States of America, or in a Committed Currency, as applicable, to BNP
Paribas, as Administrative Agent, at the Administrative Agent?s Account, in same
day funds. Each Revolving Credit Advance owing to the Lender by the Borrower and
the maturity thereof, and all payments made on account of principal thereof,
shall be recorded by the Lender and, prior to any transfer hereof, endorsed on
the grid attached hereto, which is part of this Promissory Note; PROVIDED,
HOWEVER, that the failure of the Lender to make any such recordation or
endorsement shall not affect the Obligations of the Borrower under this
Promissory Note.

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

<PAGE>

                                      A1-2

other Loan Parties under the Loan Documents, are secured by the Collateral as
provided in the Loan Documents.

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

                                       INTERNATIONAL RECTIFIER CORPORATION

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

<PAGE>

                                      A1-3

<TABLE>
<CAPTION>

                       ADVANCES AND PAYMENTS OF PRINCIPAL
----------------------------------------------------------------------------------------------------------------------
          DATE              AMOUNT OF ADVANCE     AMOUNT OF PRINCIPAL      UNPAID PRINCIPAL       NOTATION MADE BY
                                                     PAID OR REPAID             BALANCE
----------------------------------------------------------------------------------------------------------------------
<S>                         <C>                   <C>                      <C>                    <C>
----------------------------------------------------------------------------------------------------------------------

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

                                                                  EXECUTION COPY

                                                                     EXHIBIT A-2
                                                                       TO CREDIT
                                                                       AGREEMENT

                          FORM OF COMPETITIVE BID NOTE

$_______________                                            Dated: ____ __, 200_

                  FOR VALUE RECEIVED, the undersigned, International Rectifier
Corporation, a Delaware corporation (the "BORROWER"), HEREBY PROMISES TO PAY to
the order of __________________ (the "LENDER") for the account of its Applicable
Lending Office (as defined in the Credit Agreement referred to below) the
principal amount of the Competitive Bid Advance (as defined below) owing to the
Lender by the Borrower pursuant to the Credit Agreement dated as of November 2,
2000 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the "CREDIT AGREEMENT"; terms defined therein, unless otherwise
defined herein, being used herein as therein defined) among the Borrower, the
Lender and certain other Lender Parties party thereto and BNP Paribas, as Sole
Arranger, Administrative Agent and Initial Issuing Bank, on the dates and in the
amounts specified in the Credit Agreement.

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

                  Both principal and interest are payable in the Foreign
Currency denomination of the Competitive Bid Advance to which such principal and
interest relate and are payable to BNP Paribas, as Administrative Agent, at the
Administrative Agent?s Account, in same day funds. Each Competitive Bid Advance
owing to the Lender by the Borrower and the maturity thereof, and all payments
made on account of principal thereof, shall be recorded by the Lender and, prior
to any transfer hereof, endorsed on the grid attached hereto, which is part of
this Promissory Note; PROVIDED, HOWEVER, that the failure of the Lender to make
any such recordation or endorsement shall not affect the Obligations of the
Borrower under this Promissory Note.

                  This Promissory Note is one of the Notes referred to in, and
is entitled to the benefits of, the Credit Agreement. The Credit Agreement,
among other things, (i) provides for the making of advances (the "COMPETITIVE
BID ADVANCES") by the Lender to the Borrower in an amount not to exceed the
Equivalent of the U.S. dollar amount first above mentioned, the indebtedness of
the Borrower resulting from each such Competitive Bid Advance being evidenced by
this Promissory Note, and (ii) contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified. The obligations of the Borrower under
this Promissory Note and the other Loan Documents, and the

<PAGE>

                                      A2-2

obligations of the other Loan Parties under the Loan Documents, are secured by
the Collateral as provided in the Loan Documents.

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

                                       INTERNATIONAL RECTIFIER CORPORATION

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

<PAGE>

                                      A2-3

                       ADVANCES AND PAYMENTS OF PRINCIPAL

<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------
          DATE              AMOUNT OF ADVANCE     AMOUNT OF PRINCIPAL      UNPAID PRINCIPAL       NOTATION MADE BY
                                                     PAID OR REPAID             BALANCE
----------------------------------------------------------------------------------------------------------------------
<S>                         <C>                   <C>                      <C>                    <C>
----------------------------------------------------------------------------------------------------------------------

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

                                                                     EXHIBIT B-1
                                                                       TO CREDIT
                                                                       AGREEMENT

                  FORM OF NOTICE OF REVOLVING CREDIT BORROWING

BNP Paribas,
  as Administrative Agent
  under the Credit Agreement
  referred to below

____________________
____________________                                          Dated: _____, ____

Attention:  _______________

Ladies and Gentlemen:

                  The undersigned, [INTERNATIONAL RECTIFIER CORPORATION]/[NAME
OF DESIGNATED SUBSIDIARY], refers to the Credit Agreement dated as of _________,
2000 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the "CREDIT AGREEMENT"; the terms defined therein being used
herein as therein defined), among International Rectifier Corporation, the
Lender Parties party thereto and BNP Paribas, as Sole Arranger, Administrative
Agent and Initial Issuing Bank, and hereby gives you notice, irrevocably,
pursuant to Section 2.02 of the Credit Agreement that the undersigned hereby
requests a Revolving Credit Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Revolving Credit
Borrowing (the "PROPOSED REVOLVING CREDIT BORROWING") as required by Section
2.02(a) of the Credit Agreement:

                  (i) The Business Day of the Proposed Revolving Credit
         Borrowing is _________ __, [200_].

                  (ii) The Type of Advances comprising the Proposed Revolving
         Credit Borrowing is [Base Rate Advances] [Eurocurrency Rate Advances].

                  (iii) The aggregate amount of the Proposed Revolving Credit
         Borrowing is ______________ (1).

-------------------
(1) Proposed Revolving Credit Borrowing must be denominated in Dollars or a
Committed Currency. Revolving Credit Borrowings denominated in Committed
Currencies must be Eurocurrency Rate Advances.

<PAGE>

                                      B1-2

                  [(iv) The initial Interest Period for each Eurocurrency Rate
         Advance made as part of the Proposed Revolving Credit Borrowing is
         __________ month[s].]

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

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

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

                  Delivery of an executed counterpart of this Notice of
Borrowing by telecopier shall be effective as delivery of an original executed
counterpart of this Notice of Borrowing.

                                         Very truly yours,

                                         [INTERNATIONAL RECTIFIER CORPORATION] /
                                         [DESIGNATED SUBSIDIARY]

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

<PAGE>

                                                                     EXHIBIT B-2
                                                                       TO CREDIT
                                                                       AGREEMENT

                   FORM OF NOTICE OF COMPETITIVE BID BORROWING

BNP Paribas,
  as Administrative Agent
  under the Credit Agreement
  referred to below

____________________
____________________                                          Dated: _____, ____

Attention:  _______________

Ladies and Gentlemen:

                  The undersigned, [INTERNATIONAL RECTIFIER CORPORATION]/[NAME
OF DESIGNATED SUBSIDIARY], refers to the Credit Agreement dated as of _________,
2000 (as amended, amended and restated, supplemented or otherwise modified from
time to time, the "CREDIT AGREEMENT"; the terms defined therein being used
herein as therein defined), among International Rectifier Corporation, the
Lender Parties party thereto and BNP Paribas, as Sole Arranger, Administrative
Agent and Initial Issuing Bank, and hereby gives you notice, irrevocably,
pursuant to Section 2.04 of the Credit Agreement that the undersigned hereby
requests a Competitive Bid Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Competitive Bid
Borrowing (the "PROPOSED COMPETITIVE BID BORROWING") as required by Section
2.04(a)(i) of the Credit Agreement:

                  (i) The Business Day of the Proposed Competitive Bid Borrowing
         is _________ __, [200_].

                  (ii) The aggregate amount of the Proposed Competitive Bid
         Borrowing is ______________.

                  (iii) The interest rate basis and day count convention to be
         offered by the Lenders for the Proposed Competitive Bid Borrowing is
         ____________, and _________, respectively.

<PAGE>

                                      B2-2

                  (iv) The currency of the Proposed Competitive Bid Borrowing is
         ___________.(1)

                  (v) [The Interest Period for the Proposed Competitive Bid
         Borrowing is ___________.(2)] / [The maturity date for repayment of
         each Local Rate Advance to be made as part of such Competitive Bid
         Borrowing is ____________.(3)]

                  (vi) The interest payment date or dates relating to the
         Proposed Competitive Bid Borrowing is or are _____________.

                  (vii) The location of the Borrower's account to which funds
         are to be advanced relating to the Proposed Competitive Bid Drawing is
         ___________.

                  The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Competitive Bid Borrowing:

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

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

                  Delivery of an executed counterpart of this Notice of
Borrowing by telecopier shall be effective as delivery of an original executed
counterpart of this Notice of Borrowing.

--------------------
(1) Competitive Bid Borrowings must be denominated in a Foreign Currency.

(2) Use this alternative in the case of a Competitive Bid Borrowing
consisting of LIBO Rate Advances

(3) Use this alternative in the case of a Proposed Competitive Bid Borrowing
consisting of Local Rate Advances (which maturity date may not be earlier
than the date occurring seven days after the date of such Proposed
Competitive Bid Borrowing or later than the earlier of (I) 180 days after the
date of such Proposed Competitive Bid Borrowing and (II) the Termination
Date).

<PAGE>

                                      B2-3

                                        Very truly yours,

                                        [INTERNATIONAL RECTIFIER CORPORATION] /
                                        [DESIGNATED SUBSIDIARY]

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

<PAGE>

                                                                       EXHIBIT C
                                                                       TO CREDIT
                                                                       AGREEMENT

                        FORM OF ASSIGNMENT AND ACCEPTANCE

                  Reference is made to the Credit Agreement dated as of
____________, 2000 (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "CREDIT AGREEMENT"; the terms defined therein,
unless otherwise defined herein, being used herein as therein defined) among
International Rectifier Corporation, a Delaware corporation (the "COMPANY",
together with the Designated Subsidiaries each individually, and together, the
"BORROWER"), the Lender Parties party thereto and BNP Paribas, as Sole Arranger,
Administrative Agent and Initial Issuing Bank.

                  Each "Assignor" referred to on Schedule 1 hereto (each, an
"ASSIGNOR") and each "Assignee" referred to on Schedule 1 hereto (each, an
"ASSIGNEE") agrees severally with respect to all information relating to it and
its assignment hereunder and on Schedule 1 hereto as follows:

                  1. Such Assignor hereby sells and assigns, without recourse
except as to the representations and warranties made by it herein, to such
Assignee, and such Assignee hereby purchases and assumes from such Assignor, an
interest in and to such Assignor's rights and obligations under the Credit
Agreement as of the date hereof equal to the percentage interest specified on
Schedule 1 hereto of all outstanding rights and obligations under the Credit
Agreement Facility or Facilities specified on Schedule 1 hereto. After giving
effect to such sale and assignment, such Assignee's Commitments and the amount
of the Advances owing to such Assignee will be as set forth on Schedule 1
hereto.

                  2. Such Assignor (i) represents and warrants that its name set
forth on Schedule 1 hereto is its legal name, that it is the legal and
beneficial owner of the interest or interests being assigned by it hereunder and
that such interest or interests are free and clear of any adverse claim; (ii)
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
any Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any lien
or security interest created or purported to be created under or in connection
with, any Loan Document or any other instrument or document furnished pursuant
thereto; (iii) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of any Loan Party or the performance or
observance by any Loan Party of any of its obligations under any Loan Document
or any other instrument or document furnished pursuant thereto; and (iv)
attaches the Note or Notes held by such Assignor and requests that the
Administrative Agent exchange such Note or Notes for a new Note or Notes payable
to the order of such Assignee in an amount equal to the Commitments assumed by
such Assignee pursuant hereto or new Notes payable to the order of such Assignee
in an amount equal to the Commitments assumed by such Assignee pursuant hereto
and such Assignor in an amount equal to the Commitments retained by such
Assignor under the Credit Agreement, respectively, as specified on Schedule 1
hereto.

<PAGE>

                                      C-2

                  3. Such Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements referred
to in Section 4.01 thereof 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 Acceptance; (ii) agrees that it will, independently and
without reliance upon any Agent, any Assignor or any other Lender Party and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (iii) represents and warrants that its name set
forth on Schedule 1 hereto is its legal name; (iv) confirms that it is an
Eligible Assignee; (v) appoints and authorizes each Agent to take such action as
agent on its behalf and to exercise such powers and discretion under the Loan
Documents as are delegated to such Agent by the terms thereof, together with
such powers and discretion as are reasonably incidental thereto; (vi) agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of the Credit Agreement are required to be performed by it as a
Lender Party; and (vii) attaches any U.S. Internal Revenue Service forms
required under Section 2.13 of the Credit Agreement.

                  4. Following the execution of this Assignment and Acceptance,
it will be delivered to the Administrative Agent for acceptance and recording by
the Administrative Agent. The effective date for this Assignment and Acceptance
(the "EFFECTIVE DATE") shall be the date of acceptance hereof by the
Administrative Agent, unless otherwise specified on Schedule 1 hereto.

                  5. Upon such acceptance and recording by the Administrative
Agent, as of the Effective Date, (i) such Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment and Acceptance,
have the rights and obligations of a Lender Party thereunder and (ii) such
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement (other than its rights and obligations under the Loan Documents that
are specified under the terms of such Loan Documents to survive the payment in
full of the Obligations of the Loan Parties under the Loan Documents to the
extent any claim thereunder relates to an event arising prior to the Effective
Date of this Assignment and Acceptance) and, if this Assignment and Acceptance
covers all of the remaining portion of the rights and obligations of such
Assignor under the Credit Agreement, such Assignor shall cease to be a party
thereto.

                  6. Upon such acceptance and recording by the Administrative
Agent, from and after the Effective Date, the Administrative Agent shall make
all payments under the Credit Agreement and the Notes in respect of the interest
assigned hereby (including, without limitation, all payments of principal,
interest and commitment fees with respect thereto) to such Assignee. Such
Assignor and such Assignee shall make all appropriate adjustments in payments
under the Credit Agreement and the Notes for periods prior to the Effective Date
directly between themselves.

                  7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of California.

<PAGE>

                                      C-3

                  8. This Assignment and Acceptance may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of Schedule 1 to this Assignment and Acceptance by
telecopier shall be effective as delivery of an original executed counterpart of
this Assignment and Acceptance.

                  IN WITNESS WHEREOF, each Assignor and each Assignee have
caused Schedule 1 to this Assignment and Acceptance to be executed by their
officers thereunto duly authorized as of the date specified thereon.

<PAGE>

                                      C-4

                                   SCHEDULE 1
                                       TO
                            ASSIGNMENT AND ACCEPTANCE

<TABLE>
<CAPTION>

====================================================================================================================
<S>                                                        <C>         <C>       <C>         <C>         <C>
ASSIGNORS:
--------------------------------------------------------------------------------------------------------------------
REVOLVING CREDIT FACILITY
--------------------------------------------------------------------------------------------------------------------
     Percentage interest assigned                                   %         %           %           %           %
--------------------------------------------------------------------------------------------------------------------
     Revolving Credit Commitment assigned                  $           $         $           $           $
--------------------------------------------------------------------------------------------------------------------
     Aggregate outstanding principal amount of Revolving
Credit Advances assigned                                   $           $         $           $           $
--------------------------------------------------------------------------------------------------------------------
     Principal amount of Revolving Credit Note payable
to ASSIGNOR                                                $           $         $           $           $
--------------------------------------------------------------------------------------------------------------------
LETTER OF CREDIT FACILITY
--------------------------------------------------------------------------------------------------------------------
     Letter of Credit Commitment assigned                  $           $         $           $           $
--------------------------------------------------------------------------------------------------------------------
     Letter of Credit Commitment retained                  $           $         $           $           $
====================================================================================================================
</TABLE>

<TABLE>
<CAPTION>

====================================================================================================================
<S>                                                        <C>         <C>       <C>         <C>         <C>
ASSIGNEES:
--------------------------------------------------------------------------------------------------------------------
REVOLVING CREDIT FACILITY
--------------------------------------------------------------------------------------------------------------------
     Percentage interest assumed                                    %         %           %           %           %
--------------------------------------------------------------------------------------------------------------------
     Revolving Credit Commitment assumed                   $           $         $           $           $
--------------------------------------------------------------------------------------------------------------------
     Aggregate outstanding principal amount of Revolving
Credit Advances assumed                                    $           $         $           $           $
--------------------------------------------------------------------------------------------------------------------
     Principal amount of Revolving Credit Note payable
to ASSIGNEE                                                $           $         $           $           $
--------------------------------------------------------------------------------------------------------------------
LETTER OF CREDIT FACILITY
--------------------------------------------------------------------------------------------------------------------
     Letter of Credit Commitment assumed                   $           $         $           $           $
====================================================================================================================
</TABLE>

<PAGE>

                                      C-5

Effective Date (if other than date of acceptance by Administrative Agent):
_________ __, ____

                                   ASSIGNORS

                                                                 , as Assignor
                                         ------------------------
                                         By
                                           --------------------------------
                                             Name:
                                             Title:

                                         Dated:         ,
                                                ----- --  ----
                                                                 , as Assignor
                                         ------------------------
                                         By
                                           --------------------------------
                                             Name:
                                             Title:

                                         Dated:         ,
                                                ----- --  ----
                                   ASSIGNEES

                                                                 , as Assignee
                                         ------------------------
                                         By
                                           --------------------------------
                                             Name:
                                             Title:

                                         Dated:         ,
                                                ----- --  ----
                                                                 , as Assignee
                                         ------------------------
                                         By
                                           --------------------------------
                                             Name:
                                             Title:

                                         Dated:         ,
                                                ----- --  ----

<PAGE>

                                      C-6

Accepted and Approved this ____
day of ___________, ____

BANQUE NATIONALE DE PARIS,
     as Administrative Agent

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

Approved this ____ day
of _____________, ____

INTERNATIONAL RECTIFIER CORPORATION

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

                                                                     EXHIBIT D-1
                                                                       TO CREDIT
                                                                       AGREEMENT

                           FORM OF DESIGNATION LETTER

                                                             ___________, 200[ ]

BNP Paribas, as Administrative Agent
under the Credit Agreement referred to below
725 South Figueroa Street, Suite 2090
Los Angeles, California 90017

Ladies and Gentlemen:

                  We refer to the Credit Agreement dated as of _________, 2000
(as amended, amended and restated, supplemented or otherwise modified from time
to time, the "CREDIT AGREEMENT"; the capitalized terms defined therein and not
otherwise defined herein being used herein as therein defined) among
International Rectifier Corporation (the "COMPANY"), the Lender Parties party
thereto, BNP Paribas as Sole Arranger and Initial Issuing Bank and BNP Paribas
as Administrative Agent (the "ADMINISTRATIVE AGENT").

                  The Company hereby designates its undersigned Subsidiary,
____________ ("DESIGNATED SUBSIDIARY"), as a "Designated Subsidiary" under
Section 9.11 of the Credit Agreement and is made for all purposes of the Credit
Agreement.

                  The Designated Subsidiary, in consideration of each Lender's
agreement to extend credit to it under and on the terms and conditions set forth
in the Credit Agreement, does hereby assume each of the obligations imposed upon
a "Designated Subsidiary" and a "Borrower" under the Credit Agreement and agrees
to be bound by the terms and conditions of the Credit Agreement. In furtherance
of the foregoing, the Designated Subsidiary hereby represents and warrants to
each Lenders as follows:

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

<PAGE>

                                      D1-2

         Designated Subsidiary have been validly issued, are fully paid and
         non-assessable and are owned free and clear of all Liens. All of the
         outstanding capital stock of the Company has been validly issued, has
         been fully paid and is non-assessable.

                  (b) The execution, delivery and performance by the Designated
         Subsidiary of this Designation Letter and each Transaction Document to
         which it is or is to be a party, and the consummation of the
         Transaction, are within the Designated Subsidiary's corporate powers,
         have been duly authorized by all necessary corporate action, and do not
         (i) contravene the Designated Subsidiary 's charter or bylaws, (ii)
         violate any law, rule, regulation (including, without limitation,
         Regulation X of the Board of Governors of the Federal Reserve System),
         order, writ, judgment, injunction, decree, determination or award,
         (iii) conflict with or result in the breach of, or constitute a default
         or require any payment to be made under, any contract, loan agreement,
         indenture, mortgage, deed of trust, lease or other instrument binding
         on or affecting any Loan Party, any of its Subsidiaries or any of their
         properties or (iv) except for the Liens created under the Loan
         Documents, result in or require the creation or imposition of any Lien
         upon or with respect to any of the properties of any Loan Party or any
         of its Subsidiaries. Neither the Designated Subsidiary nor any of its
         Subsidiaries is in violation of any such law, rule, regulation, order,
         writ, judgment, injunction, decree, determination or award or in breach
         of any such contract, loan agreement, indenture, mortgage, deed of
         trust, lease or other instrument, the violation or breach of which
         could be reasonably likely to have a Material Adverse Effect.

                  (c) No authorization or approval or other action by, and no
         notice to or filing with, any governmental authority or regulatory body
         or any other third party is required for (i) the due execution,
         delivery, recordation, filing or performance by the Designated
         Subsidiary or its Subsidiaries of this Designation Letter or any
         Transaction Document to which it is or is to be a party, or for the
         consummation of the Transaction, (ii) the grant by the Designated
         Subsidiary or its Subsidiaries of the Liens granted by it pursuant to
         the Collateral Documents, (iii) the perfection or maintenance of the
         Liens created under the Collateral Documents (including the first
         priority nature thereof) or (iv) the exercise by the Administrative
         Agent or any Lender Party of its rights under the Loan Documents or the
         remedies in respect of the Collateral pursuant to the Collateral
         Documents, except for the authorizations, approvals, actions, notices
         and filings listed on Schedule 4.01(d) to the Credit Agreement.

                  (d) This Designation Letter has been, and each other
         Transaction Document to which the Designated Subsidiary is to be a
         party, when delivered under the Credit Agreement, will have been, duly
         executed and delivered by the Designated Subsidiary. This Agreement is,
         and each other Transaction Document to which the Designated Subsidiary
         is to be a party, when delivered under the Credit Agreement will be,
         the legal, valid and binding obligation of the Designated Party,
         enforceable against the Designated Party in accordance with their
         terms.

                  (e) There is no action, suit, investigation, litigation or
         proceeding affecting the Designated Subsidiary or any of its
         Subsidiaries, including any Environmental Action, pending or, to the
         best knowledge of the Designated Subsidiary, threatened before any

<PAGE>

                                      D1-3

         court, government agency or arbitrator that (i) could be reasonably
         likely to have a Material Adverse Effect or (ii) purports to affect the
         legality, validity or enforceability of this Designation Letter or any
         Transaction Document or the consummation of the transactions
         contemplated hereby.

                  (f) Neither the Designated Subsidiary nor any of its
         Subsidiaries is engaged in the business of extending credit for the
         purpose of purchasing or carrying Margin Stock (other than purchases of
         the shares of common stock of the Designated Subsidiary permitted by
         Section 5.02(g) of the Credit Agreement, all such shares to be retired
         upon purchase), and no proceeds of any Advance or drawings under any
         Letter of Credit will be used to purchase or carry any Margin Stock or
         to extend credit to others for the purpose of purchasing or carrying
         any Margin Stock.

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

                  The Designated Subsidiary hereby agrees that service of
process in any action or proceeding brought in any California State court or in
a federal court may be made upon the Company at its offices at __________,
Attention: __________ (the "PROCESS AGENT") and the Designated Subsidiary hereby
irrevocably appoints the Process Agent to give any notice of any such service of
process, and agrees that the failure of the Process Agent to give any notice of
any such service shall not impair or affect the validity of such service or of
any judgment rendered in any action or proceeding based thereon.

                  The Company hereby accepts such appointment as Process Agent
and agrees with you that (i) the Company will maintain an office in
____________, California through the Termination Date and will give the Agent
prompt notice of any change of address of the Company, (ii) the Company will
perform its duties as Process Agent to receive on behalf of the Designated
Subsidiary and its property service of copies of the summons and complaint and
any other process which may be served in any action or proceeding in any
California State or federal court sitting in [Los Angeles] arising out of or
relating to the Credit Agreement and (iii) the Company will forward forthwith to
the Designated Subsidiary at its address at ___________________ or, if
different, its then current address, copies of any summons, complaint and other
process which the Company received in connection with its appointment as Process
Agent.

<PAGE>

                                      D1-4

                                        Very truly yours,

                                        INTERNATIONAL RECTIFIER CORPORATION

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

                                        [NAME OF DESIGNATED SUBSIDIARY]

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

<PAGE>

                                                                     EXHIBIT F-2
                                                                       TO CREDIT
                                                                       AGREEMENT

                              FORM OF U.S. GUARANTY

                          Dated as of __________, 2000

                                      From

                           THE GUARANTORS NAMED HEREIN

                                       and

                  THE ADDITIONAL GUARANTORS REFERRED TO HEREIN

                                  As Guarantors
                                  -------------
                                   in favor of

                       THE SECURED PARTIES REFERRED TO IN
                     THE CREDIT AGREEMENT REFERRED TO HEREIN

<PAGE>

                                       i

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

SECTION                                                                                                        PAGE
<S>                                                                                                            <C>
Section 1.     Guaranty; Limitation of Liability..................................................................1
Section 2.     Guaranty Absolute..................................................................................2
Section 3.     Waivers and Acknowledgments........................................................................4
Section 4.     Subrogation........................................................................................6
Section 5.     Payments Free and Clear of Taxes, Etc..............................................................6
Section 6.     Representations and Warranties.....................................................................9
Section 7.     Covenants..........................................................................................9
Section 8.     Amendments, Guaranty Supplements, Etc..............................................................9
Section 9.     Notices, Etc......................................................................................10
Section 10.    No Waiver; Remedies...............................................................................10
Section 11.    Right of Set-off..................................................................................10
Section 12.    Indemnification...................................................................................11
Section 13.    Subordination.....................................................................................12
Section 14.    Continuing Guaranty; Assignments under the Credit Agreement.......................................13
Section 15.    Execution in Counterparts.........................................................................13
Section 16.    Governing Law; Jurisdiction; Waiver of Jury Trial, Etc............................................13
</TABLE>

Exhibit A  - Form of Guaranty Supplement

<PAGE>

                                  U.S. GUARANTY

     U.S. GUARANTY dated as of ___________, 2000, (the "GUARANTY") made by the
Persons listed on the signature pages hereof under the caption "Guarantors" and
the Additional Guarantors (as defined in Section 8(b)) (such Persons so listed
and the Additional Guarantors being, collectively, the "GUARANTORS" and,
individually, each a "GUARANTOR") in favor of the Secured Parties (as defined in
the Credit Agreement referred to below).

     PRELIMINARY STATEMENT

     International Rectifier Corporation, a Delaware corporation (the
"COMPANY"), is party to a Credit Agreement dated as of _________, 2000 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"; the capitalized terms defined therein and not
otherwise defined herein being used herein as therein defined) with the Lender
Parties party thereto, BNP Paribas as Sole Arranger and Initial Issuing Bank and
BNP Paribas as Administrative Agent (the "ADMINISTRATIVE AGENT"). Each Guarantor
will derive substantial direct and indirect benefits from the transactions
contemplated by the Credit Agreement. It is a condition precedent to the making
of Advances and the issuance of Letters of Credit by the Lender Parties under
the Credit Agreement from time to time that each Guarantor shall have executed
and delivered this Guaranty.

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

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

<PAGE>

                                       2

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

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

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

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

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

<PAGE>

                                       3

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

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

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

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

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

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

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

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

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

<PAGE>

                                       4

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

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

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

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

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

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

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

     (d) Each Guarantor hereby waives any right to be informed by the
Administrative Agent or any Lender of the financial condition of any other Loan
Party or any

<PAGE>

                                       5

other guarantor of the Guaranteed Obligations or any change therein or any other
circumstances bearing upon the risk of nonpayment or nonperformance of the
Guaranteed Obligations.

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

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

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

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

<PAGE>

                                       6

     SECTION 4. SUBROGATION. Each Guarantor hereby unconditionally and
irrevocably agrees not to exercise any rights that it may now have or hereafter
acquire against a Borrower, any other Loan Party or any other insider guarantor
that arise from the existence, payment, performance or enforcement of such
Guarantor's Obligations under or in respect of this Guaranty or any other Loan
Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of any Secured Party against a Borrower, any
other Loan Party or any other insider guarantor or any Collateral, whether or
not such claim, remedy or right arises in equity or under contract, statute or
common law, including, without limitation, the right to take or receive from a
Borrower, any other Loan Party or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Guaranteed Obligations and all other amounts payable under this
Guaranty shall have been paid in full in cash, all Letters of Credit shall have
expired or been terminated and the Commitments shall have expired or been
terminated. If any amount shall be paid to any Guarantor in violation of the
immediately preceding sentence at any time prior to the latest of (a) the
payment in full in cash of the Guaranteed Obligations and all other amounts
payable under this Guaranty, (b) the Termination Date and (c) the latest date of
expiration or termination of all Letters of Credit, such amount shall be
received and held in trust for the benefit of the Secured Parties, shall be
segregated from other property and funds of such Guarantor and shall forthwith
be paid or delivered to the Administrative Agent in the same form as so received
(with any necessary endorsement or assignment) to be credited and applied to the
Guaranteed Obligations and all other amounts payable under this Guaranty,
whether matured or unmatured, in accordance with the terms of the Loan
Documents, or to be held as Collateral for any Guaranteed Obligations or other
amounts payable under this Guaranty thereafter arising. If (i) any Guarantor
shall make payment to any Secured Party of all or any part of the Guaranteed
Obligations, (ii) all of the Guaranteed Obligations and all other amounts
payable under this Guaranty shall have been paid in full in cash, (iii) the
Termination Date shall have occurred and (iv) all Letters of Credit shall have
expired or been terminated, the Secured Parties will, at such Guarantor's
request and expense, execute and deliver to such Guarantor appropriate
documents, without recourse and without representation or warranty, necessary to
evidence the transfer by subrogation to such Guarantor of an interest in the
Guaranteed Obligations resulting from such payment made by such Guarantor
pursuant to this Guaranty.

     SECTION 5. PAYMENTS FREE AND CLEAR OF TAXES, ETC. (a) Any and all payments
made by any Guarantor under or in respect of this Guaranty or any other Loan
Document shall be made, in accordance with Section 2.12 of the Credit Agreement,
free and clear of and without deduction for any and all present or future Taxes.
If any Guarantor shall be required by law to deduct any Taxes from or in respect
of any sum payable under or in respect of this Guaranty or any other Loan
Document to any Secured Party, (i) the sum payable by such Guarantor shall be

<PAGE>

                                       7

increased as may be necessary so that after such Guarantor and the
Administrative Agent have made all required deductions (including deductions
applicable to additional sums payable under this Section 5), such Secured Party
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Guarantor shall make all such deductions and
(iii) such Guarantor shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.

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

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

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

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

<PAGE>

                                       8

Administrative Agent that it is not a "bank" as defined in Section 881(c)(3)(A)
of the Internal Revenue Code) form W-8 (and, if such Secured Party delivers a
form W-8, a certificate representing that such Secured Party is not a "bank" for
purposes of Section 881(c) of the Internal Revenue Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Internal Revenue
Code) of the Company and is not a controlled foreign corporation related to the
Company (within the meaning of Section 864(d)(4) of the Internal Revenue Code)),
as appropriate, or any successor or other form prescribed by the Internal
Revenue Service, certifying that such Secured Party is exempt from or entitled
to a reduced rate of United States withholding tax on payments under the Credit
Agreement or the Notes or, in the case of a Secured Party providing a form W-8,
certifying that such Secured Party is a foreign corporation, partnership, estate
or trust. If the forms provided by a Secured Party at the time such Secured
Party first becomes a party to the Credit Agreement indicate a United States
interest withholding tax rate in excess of zero, withholding tax at such rate
shall be considered excluded from Taxes unless and until such Secured Party
provides the appropriate form certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such forms; PROVIDED, HOWEVER, that if, in the case of a
Secured Party becoming a party to the Credit Agreement, at the date of the
Assignment and Acceptance pursuant to which a Secured Party becomes a party to
the Credit Agreement, the Secured Party assignor was entitled to payments under
subsection (a) of this Section 5 in respect of United States withholding tax
with respect to interest paid at such date, then, to such extent, the term Taxes
shall include (in addition to withholding taxes that may be imposed in the
future or other amounts otherwise includable in Taxes) United States withholding
tax, if any, applicable with respect to the Secured Party assignee on such date.
If any form or document referred to in this subsection (e) and requested by any
Guarantor pursuant to this subsection (e) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form W-8ECI,
W-8BEN or W-8 (or the related certificate described above), that the applicable
Secured Party reasonably considers to be confidential, such Secured Party shall
give notice thereof to the applicable Guarantor and shall not be obligated to
include in such form or document such confidential information.

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

<PAGE>

                                       9

Guarantor shall take such steps as such Secured Party shall reasonably request
to assist such Secured Party to recover such Taxes.

     SECTION 6. REPRESENTATIONS AND WARRANTIES. Each Guarantor hereby makes each
representation and warranty made in the Loan Documents by the Company with
respect to such Guarantor and each Guarantor hereby further represents and
warrants as follows:

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

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

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

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

<PAGE>

                                       10

with the terms of the Loan Documents, such Guarantor shall be automatically
released from this Guaranty.

     (b) Upon the execution and delivery by any Person of a guaranty supplement
in substantially the form of Exhibit A hereto (each, a "GUARANTY SUPPLEMENT"),
(i) such Person shall be referred to as an "ADDITIONAL GUARANTOR" and shall
become and be a Guarantor hereunder, and each reference in this Guaranty to a
"GUARANTOR" shall also mean and be a reference to such Additional Guarantor, and
each reference in any other Loan Document to a "GUARANTOR" or a "U.S. GUARANTOR"
shall also mean and be a reference to such Additional Guarantor, and (ii) each
reference herein to "THIS GUARANTY", "HEREUNDER", "HEREOF" or words of like
import referring to this Guaranty, and each reference in any other Loan Document
to the "GUARANTY", "U.S. GUARANTY", "THEREUNDER", "THEREOF" or words of like
import referring to this Guaranty, shall mean and be a reference to this
Guaranty as supplemented by such Guaranty Supplement.

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

     SECTION 10. NO WAIVER; REMEDIES. No failure on the part of any Secured
Party to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.

     SECTION 11. RIGHT OF SET-OFF. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 of the Credit Agreement to
authorize the Administrative Agent to declare the Notes due and payable pursuant
to the provisions of said Section 6.01, each Agent and each Lender Party and
each of their respective Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness

<PAGE>

                                       11

at any time owing by such Agent, such Lender Party or such Affiliate to or for
the credit or the account of any Guarantor against any and all of the
Obligations of such Guarantor now or hereafter existing under the Loan
Documents, irrespective of whether such Agent or such Lender Party shall have
made any demand under this Guaranty or any other Loan Document and although such
Obligations may be unmatured. Each Agent and each Lender Party agrees promptly
to notify such Guarantor after any such set-off and application; PROVIDED,
HOWEVER, that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Agent and each Lender Party and
their respective Affiliates under this Section are in addition to other rights
and remedies (including, without limitation, other rights of set-off) that such
Agent, such Lender Party and their respective Affiliates may have.

     SECTION 12. INDEMNIFICATION. (a) Without limitation on any other
Obligations of any Guarantor or remedies of the Secured Parties under this
Guaranty, each Guarantor shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless each Secured Party and each of
their Affiliates and their respective officers, directors, employees, agents and
advisors (each, an "INDEMNIFIED PARTY") from and against, and shall pay on
demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party in
connection with or as a result of any failure of any Guaranteed Obligations to
be the legal, valid and binding obligations of any Loan Party enforceable
against such Loan Party in accordance with their terms.

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

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

<PAGE>

                                       12

     SECTION 13. SUBORDINATION. Each Guarantor hereby subordinates any and all
debts, liabilities and other Obligations owed to such Guarantor by each other
Loan Party (the "SUBORDINATED OBLIGATIONS") to the Guaranteed Obligations to the
extent and in the manner hereinafter set forth in this Section 13:

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

     (b) PRIOR PAYMENT OF GUARANTEED OBLIGATIONS. In any proceeding under any
Bankruptcy Law relating to any other Loan Party, each Guarantor agrees that the
Secured Parties shall be entitled to receive payment in full in cash of all
Guaranteed Obligations (including all interest and expenses accruing after the
commencement of a proceeding under any Bankruptcy Law, whether or not
constituting an allowed claim in such proceeding ("POST PETITION INTEREST"))
before such Guarantor receives payment of any Subordinated Obligations.

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

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

<PAGE>

                                       13

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

     SECTION 15. EXECUTION IN COUNTERPARTS. This Guaranty and each amendment,
waiver and consent with respect hereto may be executed in any number of
counterparts and by different parties thereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Guaranty by telecopier shall be
effective as delivery of an original executed counterpart of this Guaranty.

     SECTION 16. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL, ETC. (a)
This Guaranty shall be governed by, and construed in accordance with, the laws
of the State of California.

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

<PAGE>

                                       14

     (c) Each Guarantor irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Guaranty or any of the other Loan Documents to which
it is or is to be a party in any California State or federal court. Each
Guarantor hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such suit, action or
proceeding in any such court.

<PAGE>

     (d) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE ADVANCES
OR THE ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.

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

                                            [GUARANTORS]

                                            By  ________________________________
                                                 Name:
                                                 Title:
                                            Address:

<PAGE>

                                                                     EXHIBIT F-3
                                                                       TO CREDIT
                                                                       AGREEMENT

                            FORM OF NON-U.S. GUARANTY

                          Dated as of ___________, 2000

                                      From

                           THE GUARANTORS NAMED HEREIN

                                       and

                  THE ADDITIONAL GUARANTORS REFERRED TO HEREIN

                                  as Guarantors
                                  -------------
                                   in favor of

                       INTERNATIONAL RECTIFIER CORPORATION

<PAGE>

                                       i

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                                               PAGE
<S>                                                                                                            <C>
Section 1.     Guaranty; Limitation of Liability..................................................................1
Section 2.     Guaranty Absolute..................................................................................2
Section 3.     Waivers and Acknowledgments........................................................................5
Section 4.     Subrogation........................................................................................6
Section 5.     Payments Free and Clear of Taxes, Etc..............................................................7
Section 6.     Representations and Warranties.....................................................................8
Section 7.     Covenants..........................................................................................9
Section 8.     Amendments, Guaranty Supplements, Etc..............................................................9
Section 9.     Notices, Etc.......................................................................................9
Section 10.    No Waiver; Remedies...............................................................................10
Section 11.    Right of Set-Off..................................................................................10
Section 12.    Indemnification...................................................................................10
Section 13.    Subordination.....................................................................................11
Section 14.    Continuing Guaranty; Assignments under the Credit Agreement.......................................13
Section 15.    Execution in Counterparts.........................................................................13
Section 16.    Judgment..........................................................................................13
Section 17.    Governing Law; Jurisdiction; Waiver of Jury Trial, Etc............................................14
</TABLE>

Exhibit A  - Form of Guaranty Supplement

<PAGE>

                                                                       EXHIBIT A
                                                                         TO U.S.
                                                                        GUARANTY

                           FORM OF GUARANTY SUPPLEMENT

                                                            _________ __, 200[ ]

BNP Paribas, as Administrative Agent
725 South Figueroa Street, Suite 2090
Los Angeles, California 90017

Attention:  Tjalling Terpstra

Credit Agreement dated as of _________, 2000 among International Rectifier
Corporation, a Delaware corporation (the "COMPANY"), the Lender Parties party
thereto, BNP Paribas as Sole Arranger and Initial Issuing Bank and BNP Paribas
as Administrative Agent.

Ladies and Gentlemen:

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

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

<PAGE>

                                      A-2

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

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

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

     Section 2. OBLIGATIONS UNDER THE GUARANTY. The undersigned hereby agrees,
as of the date first above written, to be bound as a Guarantor by all of the
terms and conditions of the Guaranty to the same extent as each of the other
Guarantors thereunder. The undersigned further agrees, as of the date first
above written, that each reference in the Guaranty to an "ADDITIONAL GUARANTOR"
or a "GUARANTOR" shall also mean and be a reference to the undersigned, and each
reference in any other Loan Document to a "GUARANTOR", a "U.S. GUARANTOR" or a
"LOAN PARTY" shall also mean and be a reference to the undersigned.

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

<PAGE>

                                      A-3

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

     Section 5. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL, ETC. (a) This
Guaranty Supplement shall be governed by, and construed in accordance with, the
laws of the State of California.

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

     (c) The undersigned irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Guaranty Supplement, the Guaranty or any of the other
Loan Documents to which it is or is to be a party in any California State or
federal court. The undersigned hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such suit, action or proceeding in any such court.

<PAGE>

                                      A-4

     (d) THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE ADVANCES
OR THE ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.

                                      Very truly yours,

                                               [NAME OF ADDITIONAL GUARANTOR]

                                               By  _____________________________
                                                    Name:
                                                    Title:
                                               Address:

<PAGE>

                                NON-U.S. GUARANTY

                  NON-U.S. GUARANTY dated as of __________, 2000, (this
"GUARANTY") made by the Persons listed on the signature pages hereof under the
caption "Guarantors" and the Additional Guarantors (as defined in Section 8(b))
(such Persons so listed and the Additional Guarantors being, collectively, the
"GUARANTORS" and, individually, each a "GUARANTOR") in favor of the Secured
Parties (as defined in the Credit Agreement referred to below).

                  PRELIMINARY STATEMENT

                  International Rectifier Corporation, a Delaware corporation
(the "COMPANY"), is party to a Credit Agreement dated as of _________, 2000 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"; the capitalized terms defined therein and not
otherwise defined herein being used herein as therein defined) with the Lender
Parties party thereto, BNP Paribas as Sole Arranger and Initial Issuing Bank and
BNP Paribas as Administrative Agent (the "ADMINISTRATIVE AGENT"). Each Guarantor
will derive substantial direct and indirect benefits from the transactions
contemplated by the Credit Agreement. It is a condition precedent to the making
of Advances and issuance of Letters of Credit by the Lender Parties under the
Credit Agreement from time to time that each Guarantor shall have executed and
delivered this Guaranty.

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

                  SECTION 1. GUARANTY; LIMITATION OF LIABILITY. (a) Each
Guarantor hereby absolutely, unconditionally and irrevocably guarantees the
punctual payment when due, whether at scheduled maturity or on any date of a
required prepayment or by acceleration, demand or otherwise, of all Obligations
of each other Loan Party that is organized under the laws of a jurisdiction
outside of the United States, now or hereafter existing (such Loan Parties being
collectively the "FOREIGN LOAN PARTIES" and individually, each a "FOREIGN LOAN
PARTY") under or in respect of the Loan Documents (including, without
limitation, any extensions, modifications, substitutions, amendments or renewals
of any or all of the foregoing Obligations), whether direct or indirect,
absolute or contingent, and whether for principal, interest, premiums, fees,
indemnities, contract causes of action, costs, expenses or otherwise (such
Obligations being the "GUARANTEED OBLIGATIONS"), and agrees to pay any and all
expenses (including, without limitation, fees and expenses of counsel) incurred
by the Administrative Agent or its assignees in enforcing any rights under this
Guaranty or any other Loan Document. Without limiting the generality of the
foregoing, each Guarantor's liability shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by any other
Foreign Loan Party to any

<PAGE>

                                       2

Secured Party under or in respect of the Loan Documents but for the fact that
they are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other Foreign Loan Party.

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

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

                  (d) Notwithstanding the foregoing, (x) the obligation of any
Guarantor organized under the laws of Germany (each a "GERMAN GUARANTOR") shall
terminate in the event that such Guarantor no longer has any obligation
outstanding under the Loan Documents (other than this Guaranty) or has any other
payment obligation to a Secured Party, and (y) each German Guarantor and by its
acceptance of this Guaranty, each Secured Party, hereby agrees that the
obligations of any German Guarantor hereunder shall be limited to such amount
that would not result in a violation of GMBH-Gesetz Section 30 or any other laws
of Germany that pertain to the protection of capital of such German Guarantor.

                  SECTION 2. GUARANTY ABSOLUTE. Each Guarantor guarantees that
the Guaranteed Obligations will be paid strictly in accordance with the terms of
the Loan Documents, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of any
Secured Party with respect thereto. The Obligations of each Guarantor under or
in respect of this Guaranty are independent of the Guaranteed Obligations or any
other Obligations of any other Loan Party under or in respect of

<PAGE>

                                       3

the Loan Documents, and a separate action or actions may be brought and
prosecuted against each Guarantor to enforce this Guaranty, irrespective of
whether any action is brought against any other Loan Party or whether any other
Loan Party is joined in any such action or actions. The liability of each
Guarantor under this Guaranty shall be irrevocable, absolute and unconditional
irrespective of, and each Guarantor hereby irrevocably waives any defenses it
may now have or hereafter acquire in any way relating to, any or all of the
following:

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

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

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

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

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

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

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

<PAGE>

                                       4

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

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

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

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

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

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

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

<PAGE>

                                       5

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

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

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

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

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

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

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

<PAGE>

                                       6

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

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

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

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

<PAGE>

                                       7

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

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

<PAGE>

                                       8

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

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

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

                  SECTION 6. REPRESENTATIONS AND WARRANTIES. Each Guarantor
hereby makes each representation and warranty made in the Loan Documents by the
Company with respect to such Guarantor and each Guarantor hereby further
represents and warrants as follows:

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

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

<PAGE>

                                       9

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

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

                  (b) Upon the execution and delivery by any Person of a
guaranty supplement in substantially the form of Exhibit A hereto (each a
"GUARANTY SUPPLEMENT"), (i) such Person shall be referred to as an "ADDITIONAL
GUARANTOR" and shall become and be a Guarantor hereunder, and each reference in
this Guaranty to a "GUARANTOR" shall also mean and be a reference to such
Additional Guarantor, and each reference in any other Loan Document to a
"GUARANTOR" or a "NON-U.S. GUARANTOR" shall also mean and be a reference to such
Additional Guarantor, and (ii) each reference herein to "THIS GUARANTY",
"HEREUNDER", "HEREOF" or words of like import referring to this Guaranty, and
each reference in any other Loan Document to the "GUARANTY", "NON-U.S.
GUARANTY", "THEREUNDER", "THEREOF" or words of like import referring to this
Guaranty, shall mean and be a reference to this Guaranty as supplemented by such
Guaranty Supplement.

                  SECTION 9. NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telegraphic, telecopy or
telex communication) and

<PAGE>

                                       10

mailed, telegraphed, telecopied, telexed or delivered to it, if to any
Guarantor, addressed to it in care of the Company at the Company's address
specified in Section 9.02 of the Credit Agreement, if to the Administrative
Agent or any Secured Party, at its address specified in Section 9.02 of the
Credit Agreement or, as to any party, at such other address as shall be
designated by such party in a written notice to each other party. All such
notices and other communications shall, when mailed, telegraphed, telecopied or
telexed, be effective when deposited in the mails, delivered to the telegraph
company, transmitted by telecopier or confirmed by telex answerback,
respectively. Delivery by telecopier of an executed counterpart of a signature
page to any amendment or waiver of any provision of this Guaranty or of any
Guaranty Supplement to be executed and delivered hereunder shall be effective as
delivery of an original executed counterpart thereof.

                  SECTION 10. NO WAIVER; REMEDIES. No failure on the part of any
Secured Party to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

                  SECTION 11. RIGHT OF SET-OFF. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the request
or the granting of the consent specified by Section 6.01 of the Credit Agreement
to authorize the Administrative Agent to declare the Notes due and payable
pursuant to the provisions of said Section 6.01, each Agent and each Lender
Party and each of their respective Affiliates is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Agent,
such Lender Party or such Affiliate to or for the credit or the account of any
Guarantor against any and all of the Obligations of such Guarantor now or
hereafter existing under the Loan Documents, irrespective of whether such Agent
or such Lender Party shall have made any demand under this Guaranty or any other
Loan Document and although such Obligations may be unmatured. Each Agent and
each Lender Party agrees promptly to notify such Guarantor after any such
set-off and application; PROVIDED, HOWEVER, that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Agent and each Lender Party and their respective Affiliates under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Agent, such Lender Party and
their respective Affiliates may have.

                  SECTION 12. INDEMNIFICATION. (a) Without limitation of any
other Obligations of any Guarantor or remedies of the Secured Parties under this
Guaranty, each Guarantor shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless each Secured

<PAGE>

                                       11

Party and each of their Affiliates and their respective officers, directors,
employees, agents and advisors (each, an "INDEMNIFIED PARTY") from and against,
and shall pay on demand, any and all claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable fees and expenses of
counsel) that may be incurred by or asserted or awarded against any Indemnified
Party in connection with or as a result of any failure of any Guaranteed
Obligations to be the legal, valid and binding obligations of any Loan Party
enforceable against such Loan Party in accordance with their terms.

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

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

                  SECTION 13. SUBORDINATION. Each Guarantor hereby subordinates
any and all debts, liabilities and other Obligations owed to such Guarantor by
each other Loan Party (the "SUBORDINATED OBLIGATIONS") to the Guaranteed
Obligations to the extent and in the manner hereinafter set forth in this
Section 13:

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

                  (b) PRIOR PAYMENT OF GUARANTEED OBLIGATIONS. In any proceeding
under any Bankruptcy Law relating to any other Loan Party, each Guarantor agrees
that the Secured Parties shall be entitled to receive payment in full in cash of
all Guaranteed Obligations (including all interest and expenses accruing after
the commencement of a proceeding under any Bankruptcy

<PAGE>

                                       12

Law, whether or not constituting an allowed claim in such proceeding ("POST
PETITION INTEREST")) before such Guarantor receives payment of any Subordinated
Obligations.

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

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

<PAGE>

                                       13

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

                  SECTION 15. EXECUTION IN COUNTERPARTS. This Guaranty and each
amendment, waiver and consent with respect hereto may be executed in any number
of counterparts and by different parties thereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Guaranty by telecopier shall be
effective as delivery of an original executed counterpart of this Guaranty.

                  SECTION 16. JUDGMENT. (a) If for the purposes of obtaining
judgment in any court it is necessary to convert a sum due hereunder in Dollars
into another currency, the parties hereto agree, to the fullest extent that they
may effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase Dollars with such other currency at the Administrative Agent's office
in San Francisco, California 10:00 A.M. (San Francisco time) on the Business Day
preceding that on which final judgment is given.

                  (b) If for the purposes of obtaining judgment in any court it
is necessary to convert a sum due hereunder in a foreign currency into Dollars,
the parties agree to the fullest extent that they may effectively do so, that
the rate of exchange used shall be that at which in accordance with normal
banking procedures the Administrative Agent could purchase such foreign currency
with Dollars at the Administrative Agent's office in San Francisco, California
10:00 A.M. (San Francisco time) on the Business Day preceding that on which
final judgment is given.

<PAGE>

                                       14

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

                  SECTION 17. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL,
ETC.. (a) This Guaranty shall be governed by, and construed in accordance with,
the laws of the State of California.

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

                  (c) Each Guarantor irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Guaranty or any of the other Loan
Documents to which it is or is to be a party in any California State or federal
court. Each Guarantor hereby irrevocably waives, to the fullest extent permitted
by law, the

<PAGE>

                                       15

defense of an inconvenient forum to the maintenance of such suit, action or
proceeding in any such court.

                  (d) Each Guarantor hereby agrees that service of process in
any such action or proceeding brought in the any such California State court or
in such federal court may be made upon International Rectifier Corporation at
its offices at 233 Kansas Street, El Segundo, California 90245 Attention:
Executive Vice President (the "PROCESS AGENT") and each Guarantor hereby
irrevocably appoints the Process Agent its authorized agent to accept such
service of process, and agrees that the failure of the Process Agent to give any
notice of any such service shall not impair or affect the validity of such
service or of any judgment rendered in any action or proceeding based thereon.
Each Guarantor hereby further irrevocably consents to the service of process in
any action or proceeding in such courts by the mailing thereof by any parties
hereto by registered or certified mail, postage prepaid, to the Borrowers at
their addresses specified pursuant to Section 9.02 of the Credit Agreement. Each
Guarantor party hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Guaranty shall affect any right that any party may otherwise have to bring any
action or proceeding relating to this Guaranty or the Loan Documents in the
courts of any jurisdiction. To the extent that each Guarantor has or hereafter
may acquire any immunity from jurisdiction of any court or from any legal
process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, each Guarantor hereby irrevocably waives such immunity in
respect of its obligations under this Guaranty.

<PAGE>

                                       16

                  (e) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS, THE ADVANCES OR THE ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

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

                                         [NON-U.S. GUARANTORS]

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

<PAGE>

                                                                       EXHIBIT A
                                                                     TO NON-U.S.
                                                                        GUARANTY

                           FORM OF GUARANTY SUPPLEMENT

                                                         ____________ __, 200[ ]

BNP Paribas, as Administrative Agent
725 South Figueroa Street, Suite 2090
Los Angeles, California90017

Attention:  Tjalling Terpstra

Credit Agreement dated as of _________, 2000 among International Rectifier
Corporation, a Delaware corporation (the "COMPANY"), the Lender Parties party
thereto, BNP Paribas as Sole Arranger and Initial Issuing Bank and BNP Paribas
as Administrative Agent.

Ladies and Gentlemen:

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

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

<PAGE>

                                      A-2

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

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

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

                  Section 2. OBLIGATIONS UNDER THE GUARANTY. The undersigned
hereby agrees, as of the date first above written, to be bound as a Guarantor by
all of the terms and conditions of the Guaranty to the same extent as each of
the other Guarantors thereunder. The undersigned further agrees, as of the date
first above written, that each reference in the Guaranty to an "ADDITIONAL
GUARANTOR" or a "GUARANTOR" shall also mean and be a reference to the
undersigned, and each reference in any other Loan Document to a "GUARANTOR" , a
"NON-U.S. GUARANTOR" or a "LOAN PARTY" shall also mean and be a reference to the
undersigned.

<PAGE>

                                      A-3

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

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

                  Section 5. JUDGMENT. (a) If for the purposes of obtaining
judgment in any court it is necessary to convert a sum due hereunder in Dollars
into another currency, the undersigned agrees, to the fullest extent that it may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase Dollars with such other currency at the Administrative Agent?s office
in San Francisco, California 10:00 A.M. (San Francisco time) on the Business Day
preceding that on which final judgment is given.

                  (b) If for the purposes of obtaining judgment in any court it
is necessary to convert a sum due hereunder in a foreign currency into Dollars,
the undersigned agrees to the fullest extent that it may effectively do so, that
the rate of exchange used shall be that at which in accordance with normal
banking procedures the Administrative Agent could purchase such foreign currency
with Dollars at the Administrative Agent's office in San Francisco, California
10:00 A.M. (San Francisco time) on the Business Day preceding that on which
final judgment is given.

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

<PAGE>

                                      A-4

                  Section 6. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL,
ETC. (a) This Guaranty Supplement shall be governed by, and construed in
accordance with, the laws of the State of California.

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

                  (c) The undersigned irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Guaranty Supplement, the Guaranty
or any of the other Loan Documents to which it is or is to be a party in any
California State or federal court. The undersigned hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such suit, action or proceeding in any such court.

                  (d) The undersigned hereby agrees that service of process in
any such action or proceeding brought in the any such California State court or
in such federal court may be made upon International Rectifier Corporation at
its offices at 233 Kansas Street, El Segundo, California 90245 Attention:
Executive Vice President (the "PROCESS AGENT") and the undersigned hereby
irrevocably appoints the Process Agent its authorized agent to accept such
service of process, and agrees that the failure of the Process Agent to give any
notice of any such service shall not impair or affect the validity of such
service or of any judgment rendered in any action or proceeding based thereon.
The undersigned hereby further irrevocably consents to the service of process in
any action or proceeding in such courts by the mailing thereof by any parties
hereto by registered or certified mail, postage prepaid, to the Borrower at its
address specified pursuant to Section 9.02 of the Credit Agreement. The
undersigned agrees that a final judgment in any such action or proceeding shall
be conclusive and may be enforced in other jurisdictions by suit on the

<PAGE>

                                      A-5

judgment or in any other manner provided by law. Nothing in this Guaranty shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Guaranty or the Loan Documents in the courts of any
jurisdiction. To the extent that the undersigned has or hereafter may acquire
any immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise) with respect to itself or its property, the
undersigned hereby irrevocably waives such immunity in respect of its
obligations under this Guaranty.

                  (e) THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN
DOCUMENTS, THE ADVANCES OR THE ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

                                             Very truly yours,

                                             [NAME OF ADDITIONAL GUARANTOR]

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

<PAGE>

                                                                       EXHIBIT M
                                                                       TO CREDIT
                                                                       AGREEMENT

                          FORM OF DESIGNATION AGREEMENT

                                                     Dated _______________, 200_

Reference is made to the Credit Agreement dated as of _________, 2000 among
International Rectifier Corporation, a Delaware corporation (the "COMPANY"), the
Lender Parties party thereto, BNP Paribas as Sole Arranger and Initial Issuing
Bank and BNP Paribas as Administrative Agent ("AGENT"). Terms defined in the
Credit Agreement are used herein with the same meaning.

_________________________ (the "DESIGNOR") and _________________________ (the
"DESIGNEE") agree as follows:

1. The Designor hereby designates the Designee, and the Designee hereby accepts
such designation, to have a right to make Competitive Bid Advances pursuant to
Section 2.04 of the Credit Agreement.

2. The Designor makes no representation or warranty and assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to
be created under or in connection with, the Credit Agreement or any other
instrument or document furnished pursuant thereto and (ii) the financial
condition of the Company or any Designated Subsidiary or the performance or
observance by the Company or any Designated Subsidiary of any of their
obligations under the Credit Agreement or any other instrument or document
furnished pursuant thereto.

3. The Designee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.01 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Designation Agreement; (ii) agrees that it will, independently and without
reliance upon the Agent, the Designor 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
Agreement; (iii) confirms that it is a Designated Bidder; (iv) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement as are delegated to the
Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental thereto; and (v) agrees that it will perform in accordance
with their terms all of the

<PAGE>

                                      M-2

obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender.

4. Following the execution of this Designation Agreement by the Designor and its
Designee, it will be delivered to the Agent for acceptance and recording by the
Agent. The effective date for this Designation Agreement (the "EFFECTIVE DATE")
shall be the date of acceptance hereof by the Agent, unless otherwise specified
on the signature page hereto.

5. Upon such acceptance and recording by the Agent, as of the Effective Date,
the Designee shall be a party to the Credit Agreement with a right to make
Competitive Bid Advances as a Lender pursuant to Section 2.04 of the Credit
Agreement and the rights and obligations of a Lender related thereto.

6. This Designation Agreement shall be governed by, and construed in accordance
with, the laws of the State of California.

7. This Designation Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Designation Agreement by telecopier shall be effective as
delivery of a manually executed counterpart of this Designation Agreement.

<PAGE>

                                      M-3

IN WITNESS WHEREOF, the Designor and the Designee have caused this Designation
Agreement to be executed by their officers thereunto duly authorized as of the
date first above written.

Effective Date*:  ______________, 200__

                                             [NAME OF DESIGNOR],

                                                as Designor

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

                                             [NAME OF DESIGNEE],

                                                as Designee

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

                                             Applicable Lending Office
                                             (and address for notices):
                                             [ADDRESS]

Accepted this ____ day
of _______________, 2000_

BNP PARIBAS, as Agent

By
  -----------------------
   Name:
   Title:<PAGE>
                                                                  EXECUTION COPY

                                                                     EXHIBIT F-1
                                                                       TO CREDIT
                                                                       AGREEMENT

                           FORM OF SECURITY AGREEMENT

                          Dated as of November 2, 2000

                                      From

                           THE GRANTORS NAMED HEREIN,

                                  AS GRANTORS,

                                       to

                                  BNP PARIBAS,

                                    AS AGENT

<PAGE>

                                       i

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>

                                                                                                               Page
<S>                                                                                                            <C>
Section 1.     Grant of Security..................................................................................2
Section 2.     Security for Obligations...........................................................................3
Section 3.     Grantor Remains Liable.............................................................................3
Section 4.     Delivery and Control of Security Collateral and Account Collateral.................................3
Section 5.     Representations and Warranties.....................................................................4
Section 6.     Further Assurances.................................................................................5
Section 7.     Voting Rights; Dividends; Etc......................................................................6
Section 8.     Transfers and Other Liens; Additional Shares.......................................................8
Section 9.     Agent Appointed Attorney-in-Fact...................................................................8
Section 10.    Agent May Perform..................................................................................9
Section 11.    The Agent's Duties.................................................................................9
Section 12.    Remedies...........................................................................................9
Section 13.    Indemnity and Expenses............................................................................10
Section 14.    Amendments; Waivers; Etc..........................................................................11
Section 15.    Addresses for Notices.............................................................................11
Section 16.    Continuing Security Interest; Assignments Under the Credit Agreement..............................12
Section 17.    Release and Termination...........................................................................12
Section 18.    Annual Collateral Audit...........................................................................13
Section 19.    Governing Law.....................................................................................13
Section 20.    Execution in Counterparts.........................................................................13
</TABLE>

                                    SCHEDULE

Schedule I        -        Pledged Shares

                                     EXHIBIT

Exhibit A         -        Form of Security Agreement Supplement

<PAGE>

                               SECURITY AGREEMENT

                  SECURITY AGREEMENT, dated as of November 2, 2000, made by the
persons whose names appear on the signature pages hereof as Grantors and
Additional Grantors (as defined in Section 14(c)), the "GRANTORS", and each,
individually, a "GRANTOR"), to BNP PARIBAS, ("BNP PARIBAS"), as administrative
agent (together with any successor administrative agent appointed pursuant to
Article VIII of the Credit Agreement, (as defined below) the "AGENT") for the
Secured Parties (as defined in the Credit Agreement).

                  PRELIMINARY STATEMENTS

                  (1) International Rectifier Corporation (the "COMPANY"), is
party to a Credit Agreement dated as of November 2, 2000 (as amended, amended
and restated, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"; the capitalized terms defined therein and not otherwise defined
herein being used herein as therein defined) with the Lender Parties party
thereto and BNP Paribas, as Sole Arranger, Administrative Agent and Initial
Issuing Bank.

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

                  (3) The Company has opened a non-interest bearing cash
collateral account (the "L/C CASH COLLATERAL ACCOUNT") with BNP Paribas at its
office at San Francisco, Account No. 207493-001-44, in the name of the Company
but under the sole control and dominion of the Agent and subject to the terms of
this Agreement.

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

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

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

<PAGE>

                                       2

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

                  (a) all of such Grantor's right, title and interest in and to
all of the following (collectively, the "SECURITY COLLATERAL"):

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

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

                  (b) all of such Grantor's right, title and interest in and to
all of the following (collectively, the "ACCOUNT COLLATERAL"):

                  (i) the L/C Cash Collateral Account;

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

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

<PAGE>

                                       3

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

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

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

                  SECTION 4. DELIVERY AND CONTROL OF SECURITY COLLATERAL AND
ACCOUNT COLLATERAL . (a) Except as provided in Section 4(c) below, all
certificated securities and all instruments representing or evidencing any
Grantor's interest in any Security Collateral or Account Collateral (and, to the
extent requested by the Agent, any other Collateral) shall be delivered to and
held by or on behalf of the Agent pursuant hereto and shall be in suitable form
for transfer by delivery, or shall be accompanied by duly executed instruments
of transfer or assignment in blank, all in form and substance satisfactory to
the Agent. Upon the occurrence and during the continuation of an Event of
Default, Agent shall have the right and without notice to any of the Grantors,
to transfer to or register in the name of the Agent or any of its nominees any
or all of the Security Collateral and the Account Collateral, subject only to
the revocable rights specified in Section 8(a). In addition, the Agent shall
have the right at any time to

<PAGE>

                                       4

exchange certificates or instruments representing or evidencing Security
Collateral or Account Collateral for certificates or instruments of smaller or
larger denominations.

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

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

                  SECTION 5. REPRESENTATIONS AND WARRANTIES. Each of the
Grantors represents and warrants as follows:

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

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

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

                  (d) Except as otherwise permitted by the Credit Agreement or
the other Loan Documents, this Agreement, the pledge of the Security Collateral
pursuant hereto and the pledge

<PAGE>

                                       5

and assignment of the certificates representing the Account Collateral pursuant
hereto create a valid and perfected first priority security interest in the
Collateral of such Grantor that can be perfected by the filings and deliveries
required hereby securing the payment of the Secured Obligations of such Grantor,
and all filings and other actions necessary or desirable to perfect and protect
such security interest have been duly taken. Such Grantor is the legal and
beneficial owner of the Collateral of such Grantor, free and clear of any Lien,
except for the liens and security interests created or permitted under this
Agreement and the other Loan Documents and subject to any limitation in title
acquired by such Grantor.

                  (e) No consent of any other Person and no authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or any other Person except for the consents,
authorizations, approvals, actions, notices and filings listed on Schedule
4.01(d) to the Credit Agreement, all of which have been duly obtained, taken,
given or made and are in full force and effect, or for is required (i) for the
grant by such Grantor of the assignment and security interest granted hereby,
for the pledge by such Grantor of the Security Collateral pursuant hereto or for
the execution, delivery or performance of this Agreement by such Grantor, (ii)
for the perfection or maintenance of the pledge, assignment and security
interest created hereunder (including the first priority nature of such pledge,
assignment and security interest), except for the filing of financing and
continuation statements under the Uniform Commercial Code, which financing and
continuation statements have been duly filed or will have been duly filed within
the time period specified therefor in Section 5.01(j) of the Credit Agreement,
and except to the extent that the pledge, assignment and security interest
hereunder concerns Pledged Shares issued by any Non-U.S. Subsidiary, in respect
of which steps for the perfection of the pledge, assignment and security
interest hereunder shall be taken as required by Section 5.01(j) and 5.01(l) of
the Credit Agreement, or (iii) for the exercise by the Agent of its voting or
other rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement, except as may be required in connection
with the disposition of any portion of the Security Collateral by laws affecting
the offering and sale of securities generally and except to the extent that the
pledge, assignment and security interest hereunder concerns Pledged Shares
issued by any Non-U.S. Subsidiary, in respect of which action shall be taken as
required by Section 5.01(j) and 5.01(l) of the Credit Agreement.

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

                  SECTION 6. FURTHER ASSURANCES. (a) Each of the Grantors agrees
that from time to time, at the expense of such Grantor, such Grantor shall
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or

<PAGE>

                                       6

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

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

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

                  SECTION 7. VOTING RIGHTS; DIVIDENDS; ETC.. (a) So long as no
Event of Default shall have occurred and be continuing:

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

                  (ii) Each of the Grantors shall be entitled to receive and
         retain, and to utilize free and clear of the lien of this Agreement,
         any and all dividends, interest and other distributions paid in respect
         of the Security Collateral of such Grantor if and to the extent that
         the payment thereof is not otherwise prohibited by the terms of the
         Loan Documents; PROVIDED, HOWEVER, that any and all:

<PAGE>

                                       7

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

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

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

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

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

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

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

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

                  (ii) All dividends, interest and other distributions that are
         received by any of the Grantors contrary to the provisions of clause
         (i) of this Section 7(b) shall be received

<PAGE>
                                       8

         in trust for the benefit of the Agent, shall be segregated from other
         funds of such Grantor and shall be forthwith paid over to the Agent as
         Security Collateral in the same form as so received (with any necessary
         indorsement).

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

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

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

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

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

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

<PAGE>
                                       9

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

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

                  SECTION 12. REMEDIES. If any Event of Default shall have
occurred and be continuing:

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

<PAGE>
                                       10

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

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

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

                  SECTION 13. INDEMNITY AND EXPENSES. (a) Each of the Grantors
agrees to defend, protect, indemnify and hold harmless the Agent, each of the
Secured Parties and each of their respective officers, directors, employees,
agents and advisors (each an "INDEMNIFIED PARTY") from and against any and all
claims, damages, losses, liabilities and expenses (including, without
limitation, reasonable fees and reasonable expenses of counsel) arising out of
or resulting from this Agreement (including, without limitation, enforcement of
this Agreement), except to the extent that such claims, losses or liabilities
are found in a final judgment of a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful misconduct.

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

<PAGE>
                                       11

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

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

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

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

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

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

<PAGE>
                                       12

                  SECTION 16. CONTINUING SECURITY INTEREST; ASSIGNMENTS UNDER
THE CREDIT AGREEMENT. This Agreement shall create a continuing security interest
in the Collateral and shall (a) remain in full force and effect until the latest
of the payment in full in cash of the Secured Obligations (other than contingent
obligations expressed to survive the termination of the Credit Agreement or any
other Loan Document) and the Termination Date, (b) be binding upon each of the
Grantors and each of their respective successors and assigns and (c) inure,
together with the rights and remedies of the Agent hereunder, to the benefit of
the Secured Parties and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), any Lender Party
may assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Agreement (including, without limitation, all or
any portion of its Commitment, the Advances owing to it and any Note or Notes
held by it) to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to such Lender Party
herein or otherwise, in each case as provided in Section 9.07 of the Credit
Agreement.

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

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

<PAGE>
                                       13

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

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

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

                  SECTION 20. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Agreement.

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

<PAGE>

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

                                      INTERNATIONAL RECTIFIER CORPORATION

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

                                      Address:  233 Kansas Street,
                                      El Segundo, California  90245
                                      Attention:  Treasury Department
                                      Telecopier:  (310) 726-8439

                                      ZING TECHNOLOGIES, INC.

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

                                      Address:  233 Kansas Street,
                                      El Segundo, California  90245
                                      Attention:  Treasury Department
                                      Telecopier:  (310) 726-8439

<PAGE>

                                                                      SCHEDULE I
                                                                     TO SECURITY
                                                                       AGREEMENT

                                 PLEDGED SHARES

<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------
GRANTOR                   ISSUER                  CLASS OF     PAR       STOCK         NUMBER OF      PERCENTAGE OF
                                                  STOCK        VALUE     CERTIFICATE   SHARES         ISSUED AND
                                                                         NUMBER(S)                    OUTSTANDING
                                                                                                      SHARES OF
                                                                                                      ISSUER
----------------------------------------------------------------------------------------------------------------------
<S>                       <C>                     <C>          <C>       <C>           <C>                 <C>
International Rectifier   Zing Technologies,      common       $0.01     NY 2220       1,000               100%
Corporation               Inc.
----------------------------------------------------------------------------------------------------------------------
International Rectifier   International           ordinary     L1.00     3             65,000               65%
Corporation               Rectifier Electronic
                          Motion Systems Ltd.     preference   L1.00     5             7,473,079            65%
----------------------------------------------------------------------------------------------------------------------
International Rectifier   International                        1,000     17            6,499,627            65%
Corporation               Rectifier Corporation                lira
                          Italiana Sp.A.
----------------------------------------------------------------------------------------------------------------------
International Rectifier   Rectificadores          Series A     1 peso    1, 2          250*                100%*
Corporation               Internationales S.A.
----------------------------------------------------------------------------------------------------------------------
International Rectifier   Rectificadores          Series B     1 peso    1             3,857,912*          100%*
Corporation               Internationales S.A.
----------------------------------------------------------------------------------------------------------------------
International Rectifier   Rectificadores          Series C     1 peso    1             4,067,000*          100%*
Corporation               Internationales S.A.
----------------------------------------------------------------------------------------------------------------------
International Rectifier   Rectificadores          Series D     1 peso    1             23,828,169*         100%*
Corporation               Internationales S.A.
----------------------------------------------------------------------------------------------------------------------
International Rectifier   Rectificadores          Series E     1 peso    1             36,327,866*         100%*
Corporation               Internationales S.A.
----------------------------------------------------------------------------------------------------------------------
International Rectifier   International                        S$1.00    7             172,250              65%
Corporation               Rectifier Southeast
                          Asia Pte. Ltd
----------------------------------------------------------------------------------------------------------------------
International Rectifier   International           ordinary     L1.00     16            975,000              65%
----------------------------------------------------------------------------------------------------------------------

<PAGE>

<CAPTION>

----------------------------------------------------------------------------------------------------------------------
GRANTOR                   ISSUER                  CLASS OF     PAR       STOCK         NUMBER OF      PERCENTAGE OF
                                                  STOCK        VALUE     CERTIFICATE   SHARES         ISSUED AND
                                                                         NUMBER(S)                    OUTSTANDING
                                                                                                      SHARES OF
                                                                                                      ISSUER
----------------------------------------------------------------------------------------------------------------------
<S>                       <C>                     <C>          <C>       <C>           <C>                 <C>
Corporation               Rectifier Company
                          (Great Britain) Ltd.
----------------------------------------------------------------------------------------------------------------------
International Rectifier   International                        $1.00     4, 5          99,999*           99.999%*
Corporation               Rectifier Hong Kong                  (HKD)
                          Limited
----------------------------------------------------------------------------------------------------------------------
International Rectifier   International                        no par    N/A           350,000*            100%*
Corporation               Rectifier GmbH                       value
----------------------------------------------------------------------------------------------------------------------
International Rectifier   International                        Y50,000   1, 2, 3, 4,   800*                100%*
Corporation               Rectifier Japan Co.                            5, 6, 7, 8
----------------------------------------------------------------------------------------------------------------------
Zing Technologies, Inc.   Omnirel, LLC.           N/A**        N/A**     N/A**         N/A**               100%
----------------------------------------------------------------------------------------------------------------------
</TABLE>

* Notwithstanding the number of shares represented by the certificates, only 65%
of the total shares represented by the certificates are being pledged under this
Security Agreement.
** Zing Technologies, Inc. is pledging its ownership interest in a limited
liability company, Omnirel, L.L.C., a Delaware limited liability company, which
interest is not represented by shares of capital stock.

<PAGE>

                                                                       EXHIBIT A
                                                                     TO SECURITY
                                                                       AGREEMENT

                      FORM OF SECURITY AGREEMENT SUPPLEMENT

                                                            ____________, 200[ ]

BNP Paribas, as Agent
180 Montgomery Street, California 94104,
Attention:  Thomas Kunz and Paggie Wong,
  Telecopier number (415) 956-4230
With a copy to:  Tjalling Terpstra,
  Telecopier number (213) 488-9602)

                 Security Agreement dated as of November 2, 2000
         made by International Rectifier Corporation and the Collateral
                 Grantors named therein to BNP Paribas, as Agent

Ladies and Gentlemen:

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

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

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

<PAGE>

                                      A-2

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

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

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

                                           Very truly yours,

                                           [GRANTORS]

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00017-of-00352.parquet"}]]