-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C6CY/t/zwzzNTkTS0DhzhkKaxCTMJZy4gyyeY1vOFm6dAfamGRcM3Cywum0ouv4m JIfIZZTLU8X2thWgCaeTrA== 0000903423-01-500308.txt : 20020411 0000903423-01-500308.hdr.sgml : 20020411 ACCESSION NUMBER: 0000903423-01-500308 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 15 FILED AS OF DATE: 20011123 GROUP MEMBERS: GEI CAPITAL III, L.L.C. GROUP MEMBERS: GREEN EQUITY INVESTORS III, L.P. GROUP MEMBERS: GREEN EQUITY INVESTORS SIDE III, L.P. GROUP MEMBERS: LEONARD GREEN & PARTNERS, L.P. GROUP MEMBERS: LGP MANAGEMENT, INC. GROUP MEMBERS: T3 ADVISORS II, INC. GROUP MEMBERS: T3 ADVISORS, INC. GROUP MEMBERS: TCW ASSET MANAGEMENT COMPANY GROUP MEMBERS: TCW/CRESCENT MEZZANINE III, LLC GROUP MEMBERS: TCW/CRESCENT MEZZANINE PARTNERS III, L.P. GROUP MEMBERS: TCW/CRESCENT MEZZANINE TRUST III GROUP MEMBERS: THE TCW GROUP, INC. GROUP MEMBERS: TPG ADVISORS III, INC. GROUP MEMBERS: TPG WAFER PARTNERS LLC FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TPG WAFER HOLDINGS LLC CENTRAL INDEX KEY: 0001162601 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 752956882 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 301 COMMERCE STREET STE 3300 CITY: FT WORTH STATE: TX ZIP: 76102 BUSINESS PHONE: 8178714000 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MEMC ELECTRONIC MATERIALS INC CENTRAL INDEX KEY: 0000945436 STANDARD INDUSTRIAL CLASSIFICATION: SEMICONDUCTORS & RELATED DEVICES [3674] IRS NUMBER: 561505767 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-52339 FILM NUMBER: 1798433 BUSINESS ADDRESS: STREET 1: 501 PEARL DR CITY: ST PETERS STATE: MO ZIP: 63376 BUSINESS PHONE: 6364745000 MAIL ADDRESS: STREET 1: 501 PEARL DRIVE STREET 2: P. O. BOX 8 CITY: ST. PETERS STATE: M0 ZIP: 63376 SC 13D 1 tpg13d.txt OMB APPROVAL OMB Number: 3235-0145 Expires: October 31, 2002 Estimated average burden hours per response.....14.90 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. ____)* MEMC Electronic Materials, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $0.01 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 552715-10-4 ---------------------------------------------------------------- (CUSIP Number) Richard A. Ekleberry James R. Gillette Linda D. Barker Texas Pacific Group Leonard Green & Partners, L.P. The TCW Group, Inc. 301 Commerce Street, 11111 Santa Monica Boulevard, 865 S. Figueroa Street, Suite 3300 Suite 2000 Suite 1800 Fort Worth, TX 76102 Los Angeles, CA 90025 Los Angeles, CA 90017 (817)871-4000 (310) 954-0416 (213) 244-0000 With copies to: Paul J. Shim, Esq. Howard A. Sobel, Esq. Charles F. Niemeth Cleary, Gottlieb, Steen Kramer Levin Naftalis O'Melveny & Myers LLP & Hamilton & Frankel LLP 153 East 53rd Street One Liberty Plaza 919 Third Avenue New York, New York 10022 New York, New York 10006 New York, New York 10022 (212) 326-2000 (212) 225-2000 (212) 715-9100 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) November 13, 2001 ---------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. |_| Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See ss. 240.13d-7(b) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. SEC 1746 (3-00) SCHEDULE 13D - --------------------- CUSIP No. 552715-10-4 - --------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON TPG Wafer Holdings LLC 2 ===================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS* 00 - Contributions of Partners of Affiliates 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7 SOLE VOTING POWER NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 182,182,192 (See Items 4 and 5.) EACH REPORTING PERSON 9 SOLE DISPOSITIVE POWER WITH 10 SHARED DISPOSITIVE POWER 182,182,192 (See Items 4 and 5.) 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 182,182,192 (See Items 4 and 5.) 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 90.3% (See Items 4 and 5.) 14 TYPE OF REPORTING PERSON* OO (Limited Liability Company) *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - --------------------- CUSIP No. 552715-10-4 - --------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON TPG Wafer Partners LLC 2 ===================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS* 00 - Contributions of Partners of Affiliates 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7 SOLE VOTING POWER NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 182,182,192 (See Items 4 and 5.) EACH REPORTING PERSON 9 SOLE DISPOSITIVE POWER WITH 10 SHARED DISPOSITIVE POWER 182,182,192 (See Items 4 and 5.) 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 182,182,192 (See Items 4 and 5.) 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 90.3% (See Items 4 and 5.) 14 TYPE OF REPORTING PERSON* OO (Limited Liability Company) *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - --------------------- CUSIP No. 552715-10-4 - --------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON TPG Advisors III, Inc. 2 ===================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS* Not Applicable 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7 SOLE VOTING POWER NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 182,182,192 (See Items 4 and 5.) EACH REPORTING PERSON 9 SOLE DISPOSITIVE POWER WITH 10 SHARED DISPOSITIVE POWER 182,182,192 (See Items 4 and 5.) 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 182,182,192 (See Items 4 and 5.) 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 90.3% (See Items 4 and 5.) 14 TYPE OF REPORTING PERSON* CO *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - --------------------- CUSIP No. 552715-10-4 - --------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON T3 Advisors, Inc. 2 ===================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS* Not Appicable 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7 SOLE VOTING POWER NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 182,182,192 (See Items 4 and 5.) EACH REPORTING PERSON 9 SOLE DISPOSITIVE POWER WITH 10 SHARED DISPOSITIVE POWER 182,182,192 (See Items 4 and 5.) 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 182,182,192 (See Items 4 and 5.) 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 90.3% (See Items 4 and 5.) 14 TYPE OF REPORTING PERSON* CO *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - --------------------- CUSIP No. 552715-10-4 - --------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON T3 Advisors II, Inc. 2 ===================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS* Not Appicable 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7 SOLE VOTING POWER NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 182,182,192 (See Items 4 and 5.) EACH REPORTING PERSON 9 SOLE DISPOSITIVE POWER WITH 10 SHARED DISPOSITIVE POWER 182,182,192 (See Items 4 and 5.) 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 182,182,192 (See Items 4 and 5.) 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 90.3% (See Items 4 and 5.) 14 TYPE OF REPORTING PERSON* CO *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - --------------------- CUSIP No. 552715-10-4 - --------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Green Equity Investors III, L.P. 2 ===================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS* 00-Contribution of Partners 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7 SOLE VOTING POWER NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 182,182,192 (See Items 4 and 5.) EACH REPORTING PERSON 9 SOLE DISPOSITIVE POWER WITH 10 SHARED DISPOSITIVE POWER 182,182,192 (See Items 4 and 5.) 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 182,182,192 (See Items 4 and 5.) 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 90.3% (See Items 4 and 5.) 14 TYPE OF REPORTING PERSON* PN *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - --------------------- CUSIP No. 552715-10-4 - --------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Green Equity Investors Side III, L.P. 2 ===================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS* 00-Contribution of Partners 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7 SOLE VOTING POWER NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 182,182,192 (See Items 4 and 5.) EACH REPORTING PERSON 9 SOLE DISPOSITIVE POWER WITH 10 SHARED DISPOSITIVE POWER 182,182,192 (See Items 4 and 5.) 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 182,182,192 (See Items 4 and 5.) 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 90.3% (See Items 4 and 5.) 14 TYPE OF REPORTING PERSON* PN *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - --------------------- CUSIP No. 552715-10-4 - --------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON GEI Capital III, L.L.C. 2 ===================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS* Not applicable 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7 SOLE VOTING POWER NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 182,182,192 (See Items 4 and 5.) EACH REPORTING PERSON 9 SOLE DISPOSITIVE POWER WITH 10 SHARED DISPOSITIVE POWER 182,182,192 (See Items 4 and 5.) 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 182,182,192 (See Items 4 and 5.) 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 90.3% (See Items 4 and 5.) 14 TYPE OF REPORTING PERSON* OO - Limited Liability Company *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - --------------------- CUSIP No. 552715-10-4 - --------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON LPG Management, Inc. 2 ===================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS* Not applicable 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7 SOLE VOTING POWER NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 182,182,192 (See Items 4 and 5.) EACH REPORTING PERSON 9 SOLE DISPOSITIVE POWER WITH 10 SHARED DISPOSITIVE POWER 182,182,192 (See Items 4 and 5.) 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 182,182,192 (See Items 4 and 5.) 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 90.3% (See Items 4 and 5.) 14 TYPE OF REPORTING PERSON* CO *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - --------------------- CUSIP No. 552715-10-4 - --------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Leonard Green & Partners, L.P. 2 ===================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS* Not applicable 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7 SOLE VOTING POWER NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 182,182,192 (See Items 4 and 5.) EACH REPORTING PERSON 9 SOLE DISPOSITIVE POWER WITH 10 SHARED DISPOSITIVE POWER 182,182,192 (See Items 4 and 5.) 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 182,182,192 (See Items 4 and 5.) 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 90.3% (See Items 4 and 5.) 14 TYPE OF REPORTING PERSON* PN *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - --------------------- CUSIP No. 552715-10-4 - --------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON TCW/Crescent Mezzanine Partners III, L.P. 2 ===================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS* WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7 SOLE VOTING POWER NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 182,182,192 (See Items 4 and 5.) EACH REPORTING PERSON 9 SOLE DISPOSITIVE POWER WITH 10 SHARED DISPOSITIVE POWER 182,182,192 (See Items 4 and 5.) 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 182,182,192 (See Items 4 and 5.) 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 90.3% (See Items 4 and 5.) 14 TYPE OF REPORTING PERSON* PN *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - --------------------- CUSIP No. 552715-10-4 - --------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON TCW/Crescent Mezzanine Trust III 2 ===================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS* WC 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7 SOLE VOTING POWER NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 182,182,192 (See Items 4 and 5.) EACH REPORTING PERSON 9 SOLE DISPOSITIVE POWER WITH 10 SHARED DISPOSITIVE POWER 182,182,192 (See Items 4 and 5.) 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 182,182,192 (See Items 4 and 5.) 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 90.3% (See Items 4 and 5.) 14 TYPE OF REPORTING PERSON* OO (Trust) *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - --------------------- CUSIP No. 552715-10-4 - --------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON The TCW Group, Inc. 2 ===================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS* Not Applicable 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION Nevada 7 SOLE VOTING POWER NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 182,182,192 (See Items 4 and 5.) EACH REPORTING PERSON 9 SOLE DISPOSITIVE POWER WITH 10 SHARED DISPOSITIVE POWER 182,182,192 (See Items 4 and 5.) 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 182,182,192 (See Items 4 and 5.) 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 90.3% (See Items 4 and 5.) 14 TYPE OF REPORTING PERSON* HC, CO *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - --------------------- CUSIP No. 552715-10-4 - --------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON TCW Asset Management Company 2 ===================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS* Not applicable 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION California 7 SOLE VOTING POWER NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 182,182,192 (See Items 4 and 5.) EACH REPORTING PERSON 9 SOLE DISPOSITIVE POWER WITH 10 SHARED DISPOSITIVE POWER 182,182,192 (See Items 4 and 5.) 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 182,182,192 (See Items 4 and 5.) 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 90.3% (See Items 4 and 5.) 14 TYPE OF REPORTING PERSON* HC, CO, IA *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. SCHEDULE 13D - --------------------- CUSIP No. 552715-10-4 - --------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON TCW/Crescent Mezzanine III, LLC 2 ===================================================================== CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |_| (b) |X| 3 SEC USE ONLY 4 SOURCE OF FUNDS* Not Applicable 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware 7 SOLE VOTING POWER NUMBER OF SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 182,182,192 (See Items 4 and 5.) EACH REPORTING PERSON 9 SOLE DISPOSITIVE POWER WITH 10 SHARED DISPOSITIVE POWER 182,182,192 (See Items 4 and 5.) 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 182,182,192 (See Items 4 and 5.) 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 90.3% (See Items 4 and 5.) 14 TYPE OF REPORTING PERSON* OO (Limited Liability Company) *SEE INSTRUCTIONS BEFORE FILLING OUT! INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7 (INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION. Item 1. Security and Issuer. This statement relates to the shares of common stock, par value $0.01 per share ("Common Stock"), of MEMC Electronic Materials, Inc., a Delaware corporation (the "Company"), whose principal executive offices are located at 501 Pearl Drive (City of O'Fallon), St. Peters, Missouri 63376. Item 2. Identity and Background. This statement is filed by TPG Wafer Holdings LLC, a Delaware limited liability company ("Wafer Holdings"), TPG Wafer Partners LLC, a Delaware limited liability company ("Wafer Partners"), TPG Advisors III, Inc., a Delaware corporation ("TPG Advisors"), T3 Advisors, Inc., a Delaware corporation ("T3 Advisors"), and T3 Advisors II, Inc., a Delaware corporation ("T3 Advisors II"), Green Equity Investors III, L.P., a Delaware limited partnership ("GEI"), Green Equity Investors Side III, L.P., a Delaware limited partnership ("GEI Side"), GEI Capital III, L.L.C., a Delaware limited liability company ("GEI Capital"), LGP Management, Inc., a Delaware corporation ("LGPM"), and Leonard Green & Partners, L.P., a Delaware limited partnership ("LGP"), TCW/Crescent Mezzanine Partners III, L.P. , a Delaware limited partnership ("TCW Partners"), TCW/Crescent Mezzanine Trust III, a Delaware business trust ("TCW Trust"), The TCW Group, Inc., a Nevada corporation ("TCW Group"), TCW Asset Management Company, a California corporation ("TAMCO"), and TCW/Crescent Mezzanine III, LLC, a Delaware limited liability company ("TCW Mezzanine III" and together with Wafer Holdings, Wafer Partners, TPG Advisors, T3 Advisors, T3 Advisors II, GEI, GEI Side, GEI Capital, LGPM, LGP, TCW Partners, TCW Trust, TCW Group and TAMCO, the "Reporting Persons"). The Reporting Persons are making this single, joint filing because they may be deemed to constitute a "group" within the meaning of Section 13(d)(3) of the Act, although neither the fact of this filing nor anything contained herein shall be deemed to be an admission by the Reporting Persons that such a group exists. A copy of the Joint Filing Agreement of the Reporting Persons is attached hereto as Exhibit 1. Wafer Holdings and Wafer Partners As to Wafer Holdings and Wafer Partners, information is included herein with respect to TPG Wafer Management LLC ("Wafer Management"), TPG Partners III, L.P. ("TPG Partners"), T3 Partners, L.P. ("T3 Partners"), T3 Partners II, L.P. ("T3 Partners II"), TPG Parallel III, L.P. ("TPG Parallel"), TPG Investors III, L.P. ("TPG Investors"), FOF Partners III, L.P. ("FOF"), FOF Partners III-B, L.P. ("FOF B"), TPG Dutch Parallel III, C.V. ("TPG Dutch"), T3 Parallel, L.P. ("T3 Parallel"), T3 Investors, L.P. ("T3 Investors"), T3 Dutch Parallel, C.V. ("T3 Dutch"), T3 Parallel II, L.P. ("T3 Parallel II"), TPG GenPar III, L.P. ("TPG GenPar"), T3 GenPar, L.P. ("T3 GenPar"), T3 GenPar II, L.P. ("T3 GenPar II"), TPG Advisors, T3 Advisors and T3 Advisors II (collectively, the "TPG Controlling Persons"). The address of the principal business offices of each of the TPG Controlling Persons, Wafer Holdings and Wafer Partners is 301 Commerce Street, Suite 3300, Fort Worth, Texas 76102. Wafer Holdings was formed solely for the purpose of effecting the transactions described under Item 4 below and holding securities of the Company. Wafer Holdings has not engaged in any activities other than those incident to formation and such transactions. As described above, the members of Wafer Holdings are Wafer Partners, GEI, GEI Side, TCW Partners, TCW Trust and Wafer Management. Wafer Partners was formed solely for the purpose of effecting the transactions described under Item 4 below and holding securities of the Company. Wafer Partners has not engaged in any activities other than those incident to formation and such transactions. As described above, the members of Wafer Partners are TPG Partners, T3 Partners, T3 Partners II, TPG Parallel, TPG Investors, FOF, FOF B, TPG Dutch, T3 Parallel, T3 Investors, T3 Dutch and T3 Parallel II. Wafer Partners is also the sole member of Wafer Management. TPG Advisors's principal business is to serve as the general partner of TPG GenPar, a Delaware limited partnership. The principal business of TPG GenPar is to serve as the general partner of each of TPG Partners, TPG Parallel, TPG Investors, FOF, FOF B, each a Delaware limited partnership, and TPG Dutch, a Netherlands limited partnership, and other related entities engaged in making investments in securities of public and private corporations. T3 Advisors's principal business is to serve as the general partner of T3 GenPar, a Delaware limited partnership. The principal business of T3 GenPar is to serve as the general partner of each of T3 Partners, T3 Parallel, T3 Investors, each a Delaware limited partnership, and T3 Dutch, a Netherlands limited partnership, and other related entities engaged in making investments in securities of public and private corporations in the telecommunications and technology industries. T3 Advisors II's principal business is to serve as the general partner of T3 GenPar II, a Delaware limited partnership. The principal business of T3 GenPar II is to serve as the general partner of each of T3 Partners II and T3 Parallel II, each a Delaware limited partnership, and other related entities engaged in making investments in securities of public and private corporations in the telecommunications and technology industries. The executive officers and directors of each of TPG Advisors and T3 Advisors are David Bonderman (director and President), James Coulter (director and Executive Vice President), William Price (director and Executive Vice President), Richard Schifter (Vice President), James O'Brien (Vice President and Treasurer), Richard Ekleberry (Vice President and Secretary), Thomas Reinhart (Vice President), Jeffrey Shaw (Vice President), Jonathan Coslet (Vice President), John Viola (Vice President), Linda Rogenski (Assistant Secretary) and S. Michelle Reese (Assistant Secretary), each of whom is a natural person. The executive officers and directors of T3 Advisors II are David Bonderman (director and President), James Coulter (director and Executive Vice President), William Price (director and Executive Vice President), James O'Brien (Vice President and Treasurer), Richard Ekleberry (Vice President and Secretary), John Viola (Vice President), Linda Rogenski (Assistant Secretary) and S. Michelle Reese (Assistant Secretary), each of whom is a natural person. No other persons control the TPG Controlling Persons. David Bonderman has his business address at 301 Commerce Street, Suite 3300, Fort Worth, Texas 76102. Mr. Bonderman's principal occupation is as a director and President of TPG Advisors, T3 Advisors, T3 Advisors II and affiliated entities. Mr. Bonderman is a citizen of the United States. James Coulter has his business address at 345 California Street, Suite 3300, San Francisco, California 94104. Mr. Coulter's principal occupation is as a director and Executive Vice President of TPG Advisors, T3 Advisors, T3 Advisors II and affiliated entities. Mr. Coulter is a citizen of the United States. William Price has his business address at 345 California Street, Suite 3300, San Francisco, California 94104. Mr. Price's principal occupation is as a director and Executive Vice President of TPG Advisors, T3 Advisors, T3 Advisors II and affiliated entities. Mr. Price is a citizen of the United States. Richard Schifter has his business address at 1133 Connecticut Avenue, Suite 700, N.W., Washington, D.C. 20036. Mr. Schifter's principal occupation is as a Vice President of TPG Advisors, T3 Advisors and affiliated entities. Mr. Schifter is a citizen of the United States. James O'Brien has his business address at 301 Commerce Street, Suite 3300, Fort Worth, Texas 76102. Mr. O'Brien's principal occupation is as a Vice President and Treasurer of TPG Advisors, T3 Advisors, T3 Advisors II and affiliated entities. Mr. O'Brien is a citizen of the United States. Richard Ekleberry has his business address at 301 Commerce Street, Suite 3300, Fort Worth, Texas 76102. Mr. Ekleberry's principal occupation is as a Vice President and Secretary of TPG Advisors, T3 Advisors, T3 Advisors II and affiliated entities. Mr. Ekleberry is a citizen of the United States. Thomas Reinhart has his business address at 345 California Street, Suite 3300, San Francisco, California 94104. Mr. Reinhart's principal occupation is as a Vice President of TPG Advisors, T3 Advisors and affiliated entities. Mr. Reinhart is a citizen of the United States. Jeffrey Shaw has his business address at 345 California Street, Suite 3300, San Francisco, California 94104. Mr. Shaw's principal occupation is as a Vice President of TPG Advisors, T3 Advisors and affiliated entities. Mr. Shaw is a citizen of the United States. Jonathan Coslet has his business address at 345 California Street, Suite 3300, San Francisco, California 94104. Mr. Coslet's principal occupation is as a Vice President of TPG Advisors, T3 Advisors and affiliated entities. Mr. Coslet is a citizen of the United States. John Viola has his business address at 301 Commerce Street, Suite 3300, Fort Worth, Texas 76102. Mr. Viola's principal occupation is as a Vice President of TPG Advisors, T3 Advisors, T3 Advisors II and affiliated entities. Mr. Viola is a citizen of the United States. Linda Rogenski has her business address at 301 Commerce Street, Suite 3300, Fort Worth, Texas 76102. Ms. Rogenski's principal occupation is as an Assistant Secretary of TPG Advisors, T3 Advisors, T3 Advisors II and affiliated entities. Ms. Rogenski is a citizen of the United States. S. Michelle Reese has her business address at 301 Commerce Street, Suite 3300, Fort Worth, Texas 76102. Ms. Reese's principal occupation is as an Assistant Secretary of TPG Advisors, T3 Advisors, T3 Advisors II and affiliated entities. Ms. Reese is a citizen of the United States. GEI and GEI Side As to GEI and GEI Side, information is included herein with respect to GEI Capital, LGPM and LGP (the "LGP Controlling Persons"). The address and principal place of business of each of GEI, GEI Side and the LGP Controlling Persons is 11111 Santa Monica Boulevard, Suite 2000, Los Angeles, California 90025. GEI Capital's principal business is to act as the general partner of GEI and GEI Side, each of whose principal business is to pursue investments. LGPM's principal business is to act as the general partner of LGP, which is an affiliate of GEI Capital and whose principal business is to act as the management company of GEI, GEI Side and other affiliated funds. As a result of the LGP Controlling Persons' relationship with GEI and GEI Side, the LGP Controlling Persons may be deemed to have indirect beneficial ownership of the Common Stock; however, the LGP Controlling Persons disclaim beneficial ownership of the Common Stock. Leonard I. Green, Jonathan D. Sokoloff, John G. Danhakl, Peter J. Nolan, Jonathan A. Seiffer and John M. Baumer, each an individual United States citizen having a principal business address at 11111 Santa Monica Boulevard, Suite 2000, Los Angeles, California 90025, either directly (whether through ownership interest or position) or through one or more intermediaries, may be deemed to control the LGP Controlling Persons. As stated above, the LGP Controlling Persons may be deemed to share beneficial ownership with respect to the Common Stock. As such, Messrs. Green, Sokoloff, Danhakl, Nolan, Seiffer and Baumer may be deemed to share beneficial ownership of the Common Stock. However, such individuals disclaim beneficial ownership of the Common Stock. John G. Danhakl is a director of the Company. TCW Partners and TCW Trust As to TCW Partners and TCW Trust, information is included herein with respect to TCW Group, TAMCO, investment sub-advisor to TCW Partners and TCW Trust, TCW Mezzanine III, general partner of TCW Partners and managing owner of TCW Trust, and TCW Management III, investment advisor to TCW Partners and TCW Trust (TCW Management III together with TCW Group, TAMCO and TCW Mezzanine III, the "TCW Controlling Persons"). Each of the TCW Controlling Persons, TCW Partners and TCW Trust may be deemed to be a part of one or more "groups" for purposes of Regulation 13D-G promulgated under the Securities Exchange Act of 1934, but disclaims that status. The address of the principal business and principal office for TCW Group and TAMCO is 865 South Figueroa Street, Suite 1800, Los Angeles, California 90017. The address of the principal business and principal office for TCW Mezzanine III, TCW Management III, TCW Partners and TCW Trust is 11100 Santa Monica Boulevard, Suite 2000, Los Angeles, California 90025. TCW Group is a holding company of entities involved in the principal business of providing investment advice and management services. The executive officers of TCW Group are listed below. The directors are listed on Schedule I hereto. The principal business address for each executive officer is 865 South Figueroa Street, Suite 1800, Los Angeles, California 90017. Each executive officer is a citizen of the United States of America unless otherwise specified below: Name Title ---- ----- Robert A. Day Chairman of the Board & Chief Executive Officer Ernest O. Ellison Vice Chairman Thomas E. Larkin, Jr. Vice Chairman Marc I. Stern President Alvin R. Albe, Jr. Executive Vice President William C. Sonneborn Chief Operating Officer Patrick R. Pagni* Deputy to the Chairman and Chief Executive Officer Michael E. Cahill Managing Director, General Counsel & Secretary David S. DeVito Managing Director and Chief Financial Officer & Assistant Secretary * citizen of France Schedule I attached hereto and incorporated herein sets forth with respect to each director of TCW Group, his or her name, residence or business address, citizenship, present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is conducted. TAMCO is a wholly-owned subsidiary of TCW Group. TAMCO provides investment advice and management services to institutional and individual investors. TAMCO is the sole member of TCW Mezzanine III, the managing member of TCW Management III and the investment sub-advisor of TCW Partners and TCW Trust. The executive officers of TAMCO are listed below. The directors are listed on Schedule II hereto. The principal business address for each executive officer and director is 865 South Figueroa Street, Suite 1800, Los Angeles, California 90017. Each executive officer is a citizen of the United States of America unless otherwise specified below: Name Title ---- ----- Robert A. Day Chairman of the Board & Chief Executive Officer Thomas E. Larkin, Jr. Vice Chairman Marc I. Stern President & Vice Chairman Ernest O. Ellison Chairman, Investment Policy Committee Alvin R. Albe, Jr. Executive Vice President Mark W. Gibello Executive Vice President William C. Sonneborn Executive Vice President & Assistant Secretary Michael E. Cahill Managing Director, General Counsel & Secretary David S. DeVito Managing Director and Chief Financial Officer & Assistant Secretary Schedule II attached hereto and incorporated herein sets forth with respect to each director of TAMCO, his or her name, residence or business address, citizenship, present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is conducted. Jean-Marc Chapus is a director of the Company. TCW Mezzanine III and TCW Management III are entities that operate in furtherance of investment objectives of TCW Partners and TCW Trust. TCW Mezzanine III is the general partner of TCW Partners and the managing owner of TCW Trust. TCW Management III is the investment advisor of TCW Partners and TCW Trust. TCW Management III has delegated all disposition and voting discretion to TAMCO and disclaims any beneficial ownership in the securities covered by this Schedule 13D. Wilmington Trust Co., a Delaware corporation ("Wilmington Trust"), is the trustee of TCW Trust. The principal business of TCW Partners and TCW Trust is to make investments in securities, including common and preferred stock and other interests in business organizations with the principal objective of appreciation of capital invested. TCW Trust is a Delaware business trust of which Wilmington Trust is the trustee. The TCW Controlling Persons, together with TCW Partners, TCW Trust and TCW Group's other direct and indirect subsidiaries, collectively constitute The TCW Group, Inc. business unit (the "TCW Business Unit"). The TCW Business Unit is primarily engaged in the provision of investment management services. As of July 6, 2001, the ultimate parent company of TCW Group is Societe Generale S.A., a company incorporated under the laws of France ("SG"). The principal business of SG is acting as a holding company for a global financial services group, which includes certain distinct specialized business units that are independently operated, including the TCW Business Unit. SG, for purposes of the federal securities laws, may be deemed ultimately to control TCW Group and the TCW Business Unit. SG, its executive officers and directors, and its direct and indirect subsidiaries (including all of its business units except the TCW Business Unit), may beneficially own shares of Common Stock. In accordance with Exchange Act Release No. 34-39538 (January 12, 1998) and due to the separate management and independent operation of its business units, SG disclaims beneficial ownership of the Common Stock beneficially owned by the Reporting Persons. The TCW Controlling Persons, TCW Partners and TCW Trust each disclaim beneficial ownership of Common Stock beneficially owned by SG and any of SG's other business units. During the last five years, none of the Reporting Persons and, to the best knowledge of the Reporting Persons, none of the executive officers or directors of TPG Advisors, T3 Advisors, T3 Advisors II, the TCW Controlling Persons or the LGP Controlling Persons, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). During the last five years, none of the Reporting Persons and, to the best knowledge of the Reporting Persons, none of such individuals, has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Item 3. Source and Amount of Funds or Other Consideration. As more fully described under Item 4 below, Wafer Holdings, among other parties, entered into the Purchase Agreement (as defined below), pursuant to which Wafer Holdings agreed to purchase the Sellers' Common Stock (as defined below) for $2 in cash and the Sellers' Notes (as defined below) for $4 in cash. The funds required for the purchase of the Sellers' Common Stock and the Sellers' Notes were obtained from general funds available to Wafer Holdings and its affiliates. As more fully described under Item 4 below, the Sellers' Notes were restructured into Warrants (as defined below) to purchase Common Stock, Senior Notes (as defined below) and 260,000 shares of Series A Preferred Stock (as defined below), and will be restructured as more fully described below into the Italian Notes (as defined below). Item 4. Purpose of Transaction. Purchase Agreement. On September 30, 2001, TPG Partners, T3 Partners, T3 Partners II and Wafer Holdings, on the one hand, and E.ON AG, a German corporation, E.ON International Finance B.V., a Dutch corporation, FIDELIA Corporation, a Delaware corporation, VEBA Zweite Verwaltungsgesellschaft mbH, a German corporation and E.ON North America, Inc., a Delaware corporation, on the other hand (collectively, the "Sellers"), entered into a Purchase Agreement, dated as of September 30, 2001 (the "Purchase Agreement"), providing for, among other things, the purchase by Wafer Holdings of (i) 49,959,970 shares of Common Stock (the "Sellers' Common Stock") and (ii) indebtedness of the Company and/or its subsidiaries having an aggregate principal amount of approximately $910 million (the "Sellers' Notes" and together with the Sellers' Common Stock, the "Sellers' Securities"). Pursuant to an Assignment Agreement, dated as of November 13, 2001 (the Assignment Agreement"), by and among Wafer Holdings, on the one hand, and Wafer Partners, MEMC Holdings Corporation, a Delaware corporation, GEI, GEI Side, TCW Partners and TCW Trust, on the other hand (collectively, the "Note Assignees"), Wafer Holdings assigned the rights to purchase the Sellers' Notes to the Note Assignees. The closing of the transactions contemplated by the Purchase Agreement occurred on November 13, 2001 and the aggregate purchase price paid for the Sellers' Securities by Wafer Holdings and the Note Assignees pursuant to the Purchase Agreement was $6 in cash. Restructuring Agreement. On November 13, 2001, Wafer Holdings and the Company entered into a Restructuring Agreement providing for, among other things, (1) the restructuring of the Sellers' Notes into (a) $50 million in initial aggregate principal amount of Senior Subordinated Secured Notes due 2007 of the Company ("Senior Notes"), (b) warrants to purchase 16,666,667 shares of Common Stock ("Warrants") and (c) 260,000 shares of Series A Cumulative Convertible Preferred Stock, par value $0.01 per share, of the Company (the "Series A Preferred Stock") and (2) the restructuring of euro55 million (approximately $50 million) in debt outstanding under an existing term credit facility of the Company's Italian subsidiary. Assuming Shareholder Approval (as defined below) is obtained, the Reporting Persons will collectively own or have the right to acquire, through ownership of the Common Stock, conversion of the Series A Preferred Stock and exercise of the Warrants, approximately 182,182,192 shares of Common Stock, representing approximately 90.3% of the Company's outstanding Common Stock. The Restructuring Agreement also provides that the Company will cause its Board of Directors (the "Board") to consist of between 5 and 11 members, and to cause four individuals designated by Wafer Holdings (the "Board Nominees") to be elected as directors of the Company allocated among the three classes of directors as Wafer Holdings directs. At each annual meeting of the Company's shareholders following November 13, 2001, the Company is required to use its best efforts, subject to the fiduciary duties of the Board, to cause the election of the Board Nominees then up for election. If the Board Nominees are not so elected, Wafer Holdings may elect the Board Nominees in its capacity of the holder of the Series A Preferred Stock pursuant to the Certificate of Designations (as defined below). Wafer Holdings shall not be entitled to designate Board Nominees if (i) less than $130,000,000 in stated value of the Series A Preferred Stock is outstanding or (ii) it and its affiliates beneficially own, in the aggregate, less than 50% of the then outstanding shares of the Series A Preferred Stock. The Restructuring Agreement also contains covenants that restrict the ability of the Company to take certain significant actions without the consent of Wafer Holdings, including entering into agreements restricting the Company's or its subsidiaries' ability to incur liens; making certain dividends or other distributions; entering into transactions with the Company's affiliates; and mergers, consolidations and liquidations. In addition, Wafer Holdings enjoys a right of first offer with respect to any issuance by the Company of equity securities representing more than 10% of its then outstanding voting securities. These restrictive covenants will terminate at such time as Wafer Holdings or its affiliates beneficially own less than 25% of the Original Number of Combined Shares (as defined in the Restructuring Agreement). Also, Wafer Holdings has agreed that it and its affiliates will not effect or cause to be effected a short-form merger pursuant to Delaware General Corporation Law Section 253 without (i) approval by a special committee of the Board that does not include any representative of Wafer Holdings or its affiliates and (ii) an opinion of a nationally recognized investment banking firm to the effect that the consideration to be received by holders of Common Stock other than Wafer Holdings and its affiliates in such merger is fair from a financial point of view. The restructuring was approved by a Special Committee of the Board, comprised of the independent members of the Board, after review and consideration of the restructuring, the restructuring agreements and related documents, alternatives available to the Company and receipt by the Special Committee of an opinion from the financial advisors retained by the Special Committee that the transactions were fair from a financial point of view to the public stockholders of the Company. The transactions contemplated by the Purchase Agreement and the Restructuring Agreement were completed on November 13, 2001, except for the restructuring of the debt of the Company's Italian subsidiary, which is expected to be completed no later than November 29, 2001. Pursuant to an Indenture, dated as of November 13, 2001 (the "Indenture"), the Company issued and delivered to Wafer Partners, GEI, GEI Side, TCW Partners and TCW Trust an aggregate of $50 million in initial aggregate principal amount of Senior Notes. Thereafter, Wafer Partners assigned $750,000 in principal amount of Senior Notes to Wafer Management. The Company also issued and delivered the Warrants to Wafer Partners, GEI, GEI Side, TCW Partners and TCW Trust. Thereafter, Wafer Partners assigned 250,000 Warrants to Wafer Management. As a result of such transactions, Wafer Holdings is the record owner of 49,959,970 shares of Common Stock and 260,000 shares of Series A Preferred Stock; Wafer Partners is the record owner of 9,850,001 Warrants; Wafer Management is the record owner of 250,000 Warrants; GEI is the record owner of 3,258,872 Warrants; GEI Side is the record owner of 24,461 Warrants; TCW Partners is the record owner of 3,065,630 Warrants; and TCW Trust is the record owner of 217,703 Warrants. The terms of the securities acquired or to be acquired pursuant to the Restructuring Agreement by Wafer Holdings and the Note Assignees are summarized below. Series A Preferred Stock. The Series A Preferred Stock has a liquidation preference of $1,000 per share (plus accumulated and unpaid dividends). Prior to Shareholder Approval, the Series A Preferred Stock accumulates dividends at a rate of 10.00% per annum (or, if greater during the relevant quarterly period, in an amount equal to the value of the dividends that would be paid on the common stock then issuable upon conversion of the Series A Preferred Stock) if paid in cash, or 12% per annum if paid in kind. Following Shareholder Approval, the Series A Preferred Stock will accumulate dividends at a rate of 10.00% per annum if paid in cash, or 12% per annum if paid in kind. On or after the eighth anniversary of the date of issuance, the holders of the Series A Preferred Stock may require the Company to redeem shares of the Series A Preferred Stock in cash at a redemption price equal to the stated value plus accrued and unpaid dividends. Upon a Change of Control (as defined in the Certificate of Designations), the holders of the Series A Preferred Stock may require the Company to redeem their shares at a per share price equal to 101% of the stated value of the Series A Preferred Stock plus the aggregate amount of all other accumulated and unpaid dividends in respect of such share. In addition, the Series A Preferred Stock will be convertible into Common Stock at the option of the holders at any time at a conversion price of $2.25 per share of Common Stock, subject to customary anti-dilution adjustments. Until the Company obtains Shareholder Approval relating to the Series A Preferred Stock and the Common Stock issuable upon conversion of the Series A Preferred Stock pursuant to its terms, the Series A Preferred Stock may not be converted into more than 19.9% of the outstanding shares of the Common Stock. Following Shareholder Approval, each share of Series A Preferred Stock will entitle the holder thereof to such number of votes, voting together with holders of Common Stock as a single class, equal to the number of shares of Common Stock into which it is convertible. The Certificate of Designations of the Series A Preferred Stock setting forth the terms of the Series A Preferred Stock (the "Certificate of Designations") also contains covenants which restrict the ability of the Company to take certain significant actions without the consent of a majority of the holders of the Series A Preferred Stock including: altering its certificate of incorporation or by-laws, if such alteration would adversely affect the powers, preferences or special rights of the Series A Preferred Stock; or authorizing, creating, issuing or increasing any class or series of capital stock senior or pari passu to the Series A Preferred Stock or additional Series A Preferred Stock. Senior Notes. The Senior Notes bear interest at a rate of 8% (payment in kind) in the first two years after issuance, 14% (payment in kind) in the third and fourth years after issuance and 14% (payment in kind with optional payment in cash at the request of the holders of the Senior Notes) in the fifth and sixth years after issuance. As collateral securing the Company's payment obligations under the Senior Notes, the Company has pledged substantially all of its domestic assets, including all of the capital stock of most of its domestic subsidiaries and 65% of the capital stock of certain of its foreign subsidiaries, but excluding any assets currently pledged to support third party debt. The Company's domestic subsidiaries have also guaranteed the Company's payment obligations. The Senior Notes, and the security interests related thereto, are subordinated in priority and right of payment to the Revolving Credit Facility described below. Warrants. The Warrants are exercisable for 16,666,667 shares of Common Stock at an exercise price of $3.00 per share, subject to customary anti-dilution adjustments. The Warrants may be exercised, in whole or in part, at any time and from time to time, after the Company obtains Shareholder Approval for the issuance of the Common Stock underlying the Warrants until the tenth anniversary of the date of issuance. Italian Notes. Pursuant to the Restructuring Agreement, the Company has agreed to cause its Italian subsidiary to amend its term credit facility and issue and deliver to Wafer Partners, the lender under such term credit facility, euro55 million (aggregate principal amount) of credit notes due 2031 (the "Italian Notes"). These notes will be secured by the assets of the Italian subsidiary and bear interest at a rate of 6% per annum, which interest shall accrue, compound annually, be added to the principal amount of the Italian Notes and shall only be payable upon redemption, acceleration or maturity of the Italian Notes. Registration Rights Agreement. In connection with the Restructuring Agreement, the Company and Wafer Holdings have entered into a registration rights agreement (the "Registration Rights Agreement") providing for registration rights with respect to the Series A Preferred Stock, the shares of Common Stock issuable upon conversion of the Series A Preferred Stock, the Senior Notes and the related guarantees, the Warrants, the shares of Common Stock issuable upon exercise of the Warrants, and any shares of Common Stock owned or acquired by Wafer Holdings or its affiliates (including the shares acquired by Wafer Holdings from the Sellers pursuant to the Purchase Agreement) (collectively, the "Registrable Securities"). The Company has agreed that, on or before August 10, 2002, the Company will file with the Securities and Exchange Commission a shelf registration statement on Form S-3 covering resales of the Registrable Securities by the holders of those Registrable Securities. Revolving Credit Facility. On November 13, 2001, TPG Wafer Credit Partners LLC, a Delaware limited liability company ("Wafer Credit Partners"), T3 Partners II, T3 Parallel II, TCW Partners, TCW Trust, GEI and GEI Side (collectively, the "Revolving Credit Lenders"), established a five-year revolving credit facility (the "Revolving Credit Facility") pursuant to the Revolving Credit Agreement among the Company, the Revolving Credit Lenders, the administrative agent and the collateral agent, pursuant to which the Revolving Credit Lenders have committed to make available to the Company a line of credit in an aggregate amount of up to $150 million. Loans under the Revolving Credit Facility may not exceed: (i) $50 million at any time prior to January 1, 2002, (ii) $75 million at any time prior to April 1, 2002, (iii) $100 million at any time prior to July 1, 2002, (iv) $125 million at any time prior to October 1, 2002 and (v) $150 million after October 1, 2002. Loans will bear interest at a rate of interest per annum based on LIBOR plus 3.5% or an alternate base rate (based on the greater of the federal funds rate and Citibank, N.A.'s prime rate) plus 2.5%. As collateral securing the Company's payment obligations under the Revolving Credit Agreement, the Company has pledged substantially all of its domestic assets, including all of the capital stock of most of its domestic subsidiaries and 65% of the capital stock of certain of its foreign subsidiaries, but excluding any assets currently pledged to support third party debt. The Company's domestic subsidiaries have also guaranteed the Company's payment obligations. Merger Agreement. Pursuant to a Merger Agreement, dated November 13, 2001, the Company has agreed, subject to Shareholder Approval, to permit the merger of Wafer Holdings with and into the Company at such time as the members of Wafer Holdings shall determine. The Company will continue in existence as the surviving corporation. As a result of the merger, the members of Wafer Holdings generally will convert their interests in Wafer Holdings into the equity securities of the Company held by Wafer Holdings, plus Common Stock having a market value equal to the principal amount of any debt securities of the Company held by Wafer Holdings. Management Advisory Agreement. In connection with the restructuring, the Company has entered into a management advisory agreement with TPG GenPar, pursuant to which TPG GenPar will provide certain management and financial advisory services to the Company in exchange for an annual management advisory fee of $2 million plus additional compensation if TPG GenPar acts as financial advisor to the Company for certain future transactions. Shareholder Approval. Pursuant to the Restructuring Agreement, the Company has agreed to use its best efforts to obtain, as promptly as possible, (i) any necessary approval by the stockholders of the Company relating to the Series A Preferred Stock, the shares issuable upon conversion of the Series A Preferred Stock, the Warrants and the shares issuable upon exercise of the warrants under the rules and regulations of the New York Stock Exchange, (ii) the approval by the stockholders of the Company of the plan of merger contained in the Merger Agreement in accordance with the Delaware General Corporation Law, and (iii) the approval by the stockholders of the Company of a one-for-two reverse split of the Common Stock (collectively, "Shareholder Approval"). The Company has also agreed to use its best efforts to hold a special meeting of its stockholders for such purpose no later than February 28, 2002 and will file with the Commission a proxy statement with respect to such shareholder meeting no later than December 15, 2001. As the Reporting Persons hold a majority of the outstanding shares of Common Stock, receipt of Shareholder Approval is assured. Fees and Expenses. Pursuant to the Restructuring Agreement, the Company is responsible for the payment of all its expenses incurred in connection with the Restructuring Agreement, including all fees and expenses of its legal counsel and all third-party consultants engaged by it to assist in such transactions. The Company will pay to Wafer Holdings and its affiliates a $10 million transaction fee and a $3 million credit facility fee, and reimburse Wafer Holdings and its affiliates for all its fees and disbursements of legal counsel, financial advisors and other third party consultants and other out-of-pocket expenses incurred by it in connection with the restructuring. General. The provisions of the Purchase Agreement, the Assignment Agreement, the Restructuring Agreement, the Certificate of Designations, the Warrants, the Indenture, the Registration Rights Agreement, the Revolving Credit Agreement, the Merger Agreement and the Management Advisory Agreement are set forth as exhibits to this Schedule, and are incorporated herein in their entirety by this reference in response to this Item. The foregoing description of the terms and provisions of these documents is a summary only, and is qualified in its entirety by reference to such documents. Subject to the restrictions described above, the Reporting Persons may, from time to time, subject to developments with respect to the Company and market conditions, consider and determine to effect the purchase or sale of shares of Common Stock, Series A Preferred Stock, Warrants, Senior Notes and/or other securities of the Company. Except as set forth herein, none of the Reporting Persons have any plans or proposals which would relate to or result in any of the actions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer. (a), (b) The Reporting Persons may be deemed beneficially to own up to 182,182,192 shares of Common Stock, representing in the aggregate approximately 90.3% of the outstanding shares of Common Stock, based on the number of shares of Common Stock represented by the Company in the Restructuring Agreement to be outstanding as of November 13, 2001 and assuming the exercise or conversion in full of the Warrants and the Series A Preferred Stock. Each of the TCW Controlling Persons, TCW Partners and TCW Trust may be deemed to be part of one or more "groups" for purposes of Regulation 13D-G promulgated under the Securities Exchange Act of 1934, but disclaims that status. (c) Except as described herein, no transactions in shares of common stock of the Company were effected during the past 60 days by the Reporting Persons and the TPG Controlling Persons or to the best of their knowledge, any of the individuals identified in Item 2. (d) Not applicable. (e) Not applicable. Item 6. Contracts, Arrangements, Understanding or Relationships with Respect to Securities of the Issuer. Amended and Restated LLC Operating Agreement of Wafer Holdings. Wafer Holdings, Wafer Partners, TCW Partners, TCW Trust, GEI, GEI Side and Wafer Management have entered into the Amended and Restated LLC Operating Agreement of Wafer Holdings, dated as of November 13, 2001 (the "LLC Agreement"), which provides that Wafer Partners shall be the managing member of Wafer Holdings and conduct the business and affairs of Wafer Holdings. This includes voting of the equity securities that Wafer Holdings holds except as set forth below. Members' Agreement. Wafer Holdings, Wafer Partners, TCW Partners, TCW Trust, GEI, GEI Side and Wafer Management have entered into a Members' Agreement, dated as of November 13, 2001 (the "Members' Agreement"), providing for, among other things, an agreement by Wafer Partners, the managing member of Wafer Holdings, not to cause Wafer Holdings to vote its shares of Common Stock without the prior written consent of TCW Partners, TCW Trust, GEI and GEI Side on certain matters, including mergers, liquidation, bankruptcy, dissolution, recapitalization, reorganization, and amendments to the certificate of incorporation or bylaws of the Company. The Members' Agreement also provides that TCW Partners and TCW Trust may nominate one individual to the Board, GEI and GEI Side may nominate one individual to the Board, and Wafer Partners, as the managing member of Wafer Holdings, agrees to cause Wafer Holdings to vote its shares of Common Stock in favor of the election of such individuals as directors of the Company. Intercreditor Agreement. Wafer Credit Partners, T3 Partners II, T3 Parallel II, TCW Partners, TCW Trust, GEI and GEI Side, Wafer Partners and Wafer Management (collectively, the "Lenders") have entered into an Intercreditor Agreement, dated as of November 13, 2001, providing for, among other things, the assignment of any participation interests in the Italian Notes, the Senior Notes and Warrants held by any Lender to the other non-defaulting Lenders pro rata in the event of a default of such Lender under the Revolving Credit Agreement; Wafer Partners' right of first offer to any participation interests in the Italian Notes, Senior Notes or Warrants that any Lender wishes to transfer; the Lenders' tag-along rights to any transfer by Wafer Partners or its affiliates of the Italian Notes, Senior Notes or Warrants; and Wafer Partners' rights to cause the holders of participation interests in the Italian Notes, Senior Notes or Warrants to sell such securities if Wafer Partners wishes to sell its securities. The provisions of the LLC Agreement, the Members' Agreement and the Intercreditor Agreement are set forth as exhibits to this Schedule, and are incorporated herein in their entirety by this reference in response to this Item 6. The foregoing description of the terms and provisions of these documents is a summary only, and is qualified in its entirety by reference to such documents. Except as set forth in this statement, to the best knowledge of the Reporting Persons, there are no other contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 and between such persons and any person with respect to any securities of the Company, including but not limited to, transfer or voting of any of the securities of the Company, joint ventures, loan or options arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, or a pledge or contingency the occurrence of which would give another person voting power over the securities of the Company. Item 7. Material to be Filed as Exhibits Schedule I Directors of TCW Group Schedule II Directors of TAMCO Exhibit 1 Joint Filing Agreement Exhibit 2 Purchase Agreement Exhibit 3 Assignment Agreement Exhibit 4 Restructuring Agreement Exhibit 5 Certificate of Designations of Series A Preferred Stock Exhibit 6 Form of Warrant Exhibit 7 Indenture Exhibit 8 Registration Rights Agreement Exhibit 9 Revolving Credit Agreement Exhibit 10 Merger Agreement Exhibit 11 Management Advisory Agreement Exhibit 12 Amended and Restated LLC Operating Agreement of Wafer Holdings Exhibit 13 Members' Agreement Exhibit 14 Intercreditor Agreement SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to TPG Wafer Holdings LLC is true, complete and correct. Dated: November 21, 2001 TPG WAFER HOLDINGS LLC By: /s/ Richard A. Ekleberry ------------------------- Name: Richard A. Ekleberry Title: Vice President After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to TPG Wafer Partners LLC is true, complete and correct. Dated: November 21, 2001 TPG WAFER PARTNERS LLC By: /s/ Richard A. Ekleberry ------------------------- Name: Richard A. Ekleberry Title: Vice President After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to Green Equity Investors III, L.P. is true, complete and correct. Dated: November 21, 2001 GREEN EQUITY INVESTORS III, L.P. By: GEI Capital III, LLC, its General Partner By: /s/ John Danhakl ------------------------ Name: John Danhakl Title: Manager After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to GEI Capital III, L.L.C. is true, complete and correct. Dated: November 21, 2001 GEI CAPITAL III, L.L.C. By: /s/ John Danhakl ------------------------ Name: John Danhakl Title: Manager After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to LGP Management, Inc. is true, complete and correct. Dated: November 21, 2001 LGP MANAGEMENT, INC. By: /s/ John Danhakl ------------------------ Name: John Danhakl Title: Vice President After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to Leonard Green & Partners, L.P., is true, complete and correct. Dated: November 21, 2001 LEONARD GREEN & PARTNERS, L.P. By: LGP Management, Inc., its General Partner By: /s/ John Danhakl ------------------------ Name: John Danhakl Title: Vice President After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to Green Equity Investors Side III, L.P. is true, complete and correct. Dated: November 21, 2001 GREEN EQUITY INVESTORS SIDE III, L.P. By: GEI Capital III, LLC, its General Partner By: /s/ John Danhakl ------------------------ Name: John Danhakl Title: Manager After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to TCW/Crescent Mezzanine Partners III, L.P. is true, complete and correct. Dated: November 21, 2001 TCW/CRESCENT MEZZANINE PARTNERS III, L.P. By: TCW/Crescent Mezzanine III, LLC, its general partner By: TCW Asset Management Company, its sole member By: /s/ Linda D. Barker ------------------------- Name: Linda D. Barker Title: Authorized Signatory After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to TCW/Crescent Mezzanine Trust III is true, complete and correct. Dated: November 21, 2001 TCW/CRESCENT MEZZANINE TRUST III By: TCW/Crescent Mezzanine III, LLC, its managing owner By: TCW Asset Management Company, its sole member By: /s/ Linda D. Barker ------------------------- Name: Linda D. Barker Title: Authorized Signatory After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to The TCW Group, Inc. is true, complete and correct. Dated: November 21, 2001 THE TCW GROUP, INC. By: /s/ Linda D. Barker ------------------------- Name: Linda D. Barker Title: Authorized Signatory After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to TCW Asset Management Company is true, complete and correct. Dated: November 21, 2001 TCW ASSET MANAGEMENT COMPANY By: /s/ Linda D. Barker ------------------------- Name: Linda D. Barker Title: Authorized Signatory After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to TCW/Crescent Mezzanine III, LLC is true, complete and correct. Dated: November 21, 2001 TCW/CRESCENT MEZZANINE III, LLC By: TCW Asset Management Company, its sole member By: /s/ Linda D. Barker ------------------------- Name: Linda D. Barker Title: Authorized Signatory After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to TPG Advisors III, Inc. is true, complete and correct. Dated: November 21, 2001 TPG ADVISORS III, INC. By: /s/ Richard A. Ekleberry ------------------------- Name: Richard A. Ekleberry Title: Vice President After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to T3 Advisors, Inc. is true, complete and correct. Dated: November 21, 2001 T3 ADVISORS, INC. By: /s/ Richard A. Ekleberry ------------------------- Name: Richard A. Ekleberry Title: Vice President After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement with respect to T3 Advisors II, Inc. is true, complete and correct. Dated: November 21, 2001 T3 ADVISORS II, INC. By: /s/ Richard A. Ekleberry ------------------------- Name: Richard A. Ekleberry Title: Vice President SCHEDULE I BOARD OF DIRECTORS OF THE TCW GROUP, INC. All of the following individuals are directors of The TCW Group, Inc. Each director is a citizen of the United States of America unless otherwise indicated below: MARK L. ATTANASIO 11100 Santa Monica Blvd., Suite 2000 Los Angeles, CA 90025 PHILIPPE CITERNE Chief Executive Officer Societe Generale, S.A. Tour Societe Generale 17, cour Valmy 92972 Paris-La Defense Cedex-France (Citizen of France) PHILIPPE COLLAS Chairman and Chief Executive Officer Societe Generale Asset Management, S.A. 2, place de la Coupole 92078 Paris-La Defense Cedex-France (Citizen of France) ROBERT A. DAY Chairman of the Board, Chairman and Chief Executive Officer Trust Company of the West 865 South Figueroa St., Suite 1800 Los Angeles, CA 90017 DAMON P. DE LASZLO, ESQ. Managing Director of Harwin Engineers S.A., Chairman & D.P. Advisers Holdings Limited Byron's Chambers A2 Albany, Piccadilly London W1V 9RD - England (Citizen of United Kingdom) WILLIAM C. EDWARDS Partner Bryan & Edwards 3000 Sand Hill Road, Suite 190 Menlo Park, CA 94025 ERNEST O. ELLISON Vice Chairman Trust Company of the West 865 South Figueroa St., Suite 1800 Los Angeles, California 90017 RICHARD N. FOSTER McKinsey & Company Inc. 55 E. 52nd Street, 21st Floor New York, NY 10022 CARLA A. HILLS 1200 19th Street, N.W., Suite 201 Washington, DC 20036 DR. HENRY A. KISSINGER Chairman Kissinger Associates, Inc. 350 Park Ave., 26th Floor New York, NY 10022 THOMAS E. LARKIN, JR. President Trust Company of the West 865 South Figueroa St., Suite 1800 Los Angeles, CA 90017 KENNETH L. LAY Enron Corp. 1400 Smith Street Houston, TX 77002-7369 MICHAEL T. MASIN, ESQ. Vice Chairman GTE Corporation One Stamford Forum Stamford, CT 06904 EDFRED L. SHANNON, JR. Investor/Rancher 1000 S. Fremont Ave. Alhambra, CA 91804 ROBERT G. SIMS Private Investor 11770 Bernardo Plaza Court, Suite 108 San Diego, CA 92128 MARC I. STERN President The TCW Group, Inc. 865 South Figueroa St., Suite 1800 Los Angeles, CA 90017 YASUYUKI TAYAMA Managing Director The Yusad Fire and Marine Insurance Company, Limited 26-1, Nishi-Shinjuku Shinjuku-Ku, Toyko, 112-0014 Japan (Citizen of Japan) JAMES R. UKROPINA O'Melveny & Myers LLP 400 South Hope Street, 15th Floor Los Angeles, CA 90071 SCHEDULE II BOARD OF DIRECTORS OF TCW ASSET MANAGEMENT COMPANY All of the following individuals are directors of TCW Asset Management Company. Each director is a citizen of the United States of America unless otherwise indicated below: CHRISTOPHER J. AINLEY ALVIN R. ALBE, JR. MARK L. ATTANASIO PHILIP A. BARACH JAVIER W. BAZ ROBERT D. BEYER GLEN E. BICKERSTAFF MICHAEL E. CAHILL ARTHUR R. CARLSON JEAN-MARC CHAPUS ROBERT A. DAY, Chairman PENELOPE D. FOLEY DOUGLAS S. FOREMAN NICOLA F. GALLUCCIO MARK W. GIBELLO JEFFREY E. GUNDLACH RAYMOND F. HENZE, III THOMAS E. LARKIN, JR. STEPHEN MCDONALD NATHAN B. SANDLER WILLIAM C. SONNEBORN KOMAL S. SRI-KUMAR MARC I. STERN EXHIBIT INDEX EXHIBIT DESCRIPTION PAGE - ------- ----------- ---- 1 Joint Filing Agreement, dated as of November 21, 2001, among TPG Wafer Holdings LLC, TPG Wafer Partners LLC, TPG Advisors III, Inc., T3 Advisors, Inc., T3 Advisors II, Inc., TCW/Crescent Mezzanine III, LLC, Green Equity Investors III, L.P., Green Equity Investors Side III, L.P., TCW/Crescent Mezzanine III, L.P., TCW/Crescent Mezzanine Trust III, The TCW Group, Inc. and TCW Asset Management Company. 2 Purchase Agreement, dated as of September 30, 2001, among TPG Partners III, L.P., T(3)Partners, L.P. and T(3)Partners II, L.P., TPG Wafer Holdings LLC, E.ON AG, E.ON International Finance B.V., FIDELIA Corporation, VEBA Zweite Verwaltungsgesellschaft mbH and E.ON North America, Inc. 3 Assignment Agreement, dated as of November 13, 2001, among TPG Partners III, L.P., T3 Partners, L.P., T3 Partners II, L.P., TPG Wafer Holdings LLC, Green Equity Investors III, L.P., Green Equity Investors Side III, L.P., TCW/Crescent Mezzanine Partners III, L.P., TCW/Crescent Mezzanine Trust III, TPG Wafer Partners LLC and MEMC Holdings Corporation. 4 Restructuring Agreement, dated as of November 13, 2001, between TPG Wafer Holdings LLC and MEMC Electronic Materials, Inc. 5 Certificate of Designations of Series A Cumulative Convertible Preferred Stock of MEMC Electronic Materials, Inc. 6 Form of Warrant Certificate evidencing Warrants to purchase Common Stock, par value $0.01 per share of MEMC Electronic Materials, Inc. 7 Indenture, dated as of November 13, 2001, among MEMC Electronic Materials, Inc., Citibank, N.A. and Citicorp USA, Inc. 8 Registration Rights Agreement, dated as of November 13, 2001, among MEMC Electronic Materials, Inc., TPG Wafer Holdings LLC and the Guarantors specified therein. 9 Revolving Credit Agreement, dated as of November 13, 2001, among MEMC Electronic Materials, Inc., the Lenders specified therein and Citicorp USA, Inc. 10 Merger Agreement, dated as of November 13, 2001, between TPG Wafer Holdings LLC and MEMC Electronic Materials, Inc. 11 Management Advisory Agreement, dated as of November 13, 2001, between MEMC Electronic Materials, Inc. and TPG GenPar III, L.P. 12 Amended and Restated Limited Liability Company Operating Agreement of TPG Wafer Holdings LLC, dated as of November 13, 2001 13 Members' Agreement, dated as of November 13, 2001, among TPG Wafer Holdings LLC, TPG Wafer Partners LLC, TCW/Crescent Mezzanine Partners III, L.P., TCW/Crescent Mezzanine Trust III, Green Equity Investors III, L.P., Green Equity Investors Side III, L.P. and TPG Wafer Management LLC. 14 Intercreditor Agreement, dated as of November 13, 2001, among TPG Wafer Credit Partners, LLC, T3 Partners II, L.P., T3 Parallel II, L.P., TCW/Crescent Mezzanine Partners III, L.P., TCW/Crescent Mezzanine Trust III, Green Equity Investors III, L.P., Green Equity Investors Side III, L.P., TPG Wafer Management LLC and TPG Wafer Partners LLC. EX-1 3 tbgex1.txt EXHIBIT 1 JOINT FILING AGREEMENT JOINT FILING AGREEMENT (this "Agreement"), dated as of November 21, 2001, among TPG Wafer Holdings LLC, TPG Wafer Partners LLC and TCW/Crescent Mezzanine III, LLC, each a Delaware limited liability company, Green Equity Investors III, L.P., Green Equity Investors Side III, L.P. and TCW/Crescent Mezzanine III, L.P., each a Delaware limited partnership, TCW/Crescent Mezzanine Trust III, a Delaware trust, The TCW Group, Inc., a Nevada corporation, and TCW Asset Management Company, a California corporation, TPG Advisors III, Inc., T3 Advisors, Inc. and T3 Advisors II, Inc., each a Delaware corporation (collectively, the "Joint Filers"). W I T N E S S E T H WHEREAS, as of the date hereof, each of the Joint Filers is filing a Schedule 13D under the Securities Exchange Act of 1934 (the "Exchange Act") with respect to securities of MEMC Electronic Materials, Inc. (the "Schedule 13D"); WHEREAS, each of the Joint Filers is individually eligible to file the Schedule 13D; WHEREAS, each of the Joint Filers wishes to file the Schedule 13D and any amendments thereto jointly and on behalf of each of the Joint Filers, pursuant to Rule 13d-1(k)(1) under the Exchange Act; NOW, THEREFORE, in consideration of these premises and other good and valuable consideration, the parties hereto agree as follows: 1. The Joint Filers hereby agree that the Schedule 13D is, and any amendments thereto will be, filed on behalf of each of the Joint Filers pursuant to Rule 13d-1(k)(1)(iii) under the Exchange Act. 2. Each of the Joint Filers hereby acknowledges that, pursuant to Rule 13d-1(k)(1)(i) under the Exchange Act, it is responsible for the timely filing of the Schedule 13D and any amendments thereto, and for the completeness and accuracy of the information concerning it contained therein, and is not responsible for the completeness and accuracy of the information concerning any of the other parties contained therein, unless it knows or has reason to know that such information is inaccurate. 3. Each of the Joint Filers hereby agrees that this Agreement shall be filed as an exhibit to the Schedule 13D, pursuant to Rule 13d-1(k)(1)(iii) under the Exchange Act. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed individually or by their respective directors hereunto duly authorized as of the day and year first above written. TPG WAFER HOLDINGS LLC By: /s/ Richard A. Ekleberry ------------------------- Name: Richard A. Ekleberry Title: Vice President TPG WAFER PARTNERS LLC By: /s/ Richard A. Ekleberry ------------------------- Name: Richard A. Ekleberry Title: Vice President GREEN EQUITY INVESTORS III, L.P. By: GEI Capital III, LLC, its General Partner By: /s/ John Danhakl ---------------------------- Name: John Danhakl Title: Manager GREEN EQUITY INVESTORS SIDE III, L.P. By: GEI Capital III, LLC, its General Partner By: /s/ John Danhakl ---------------------------- Name: John Danhakl Title: Manager GEI CAPITAL III, L.L.C. By: /s/ John Danhakl ---------------------------- Name: John Danhakl Title: Manager LGP MANAGEMENT, INC. By: /s/ John Danhakl ---------------------------- Name: John Danhakl Title: Vice President LEONARD GREEN & PARTNERS, L.P. By: LGP Management, Inc., its General Partner By: /s/ John Danhakl ---------------------------- Name: John Danhakl Title: Vice President TCW/CRESCENT MEZZANINE PARTNERS III, L.P. By: TCW/Crescent Mezzanine III, LLC, its general partner By: TCW Asset Management Company, its sole member By: /s/ Linda D. Barker ------------------------- Name: Linda D. Barker Title: Authorized Signatory TCW/CRESCENT MEZZANINE TRUST III By: TCW/Crescent Mezzanine III, LLC, its managing owner By: TCW Asset Management Company, its sole member By: /s/ Linda D. Barker ------------------------- Name: Linda D. Barker Title: Authorized Signatory THE TCW GROUP, INC. By: /s/ Linda D. Barker ------------------------- Name: Linda D. Barker Title: Authorized Signatory TCW ASSET MANAGEMENT COMPANY By: /s/ Linda D. Barker ------------------------- Name: Linda D. Barker Title: Authorized Signatory TCW/CRESCENT MEZZANINE III, LLC By: TCW Asset Management Company, its sole member By: /s/ Linda D. Barker ------------------------- Name: Linda D. Barker Title: Authorized Signatory TPG ADVISORS III, INC. By: /s/ Richard A. Ekleberry ------------------------- Name: Richard A. Ekleberry Title: Vice President T3 ADVISORS, INC. By: /s/ Richard A. Ekleberry ------------------------- Name: Richard A. Ekleberry Title: Vice President T3 ADVISORS II, INC. By: /s/ Richard A. Ekleberry ------------------------- Name: Richard A. Ekleberry Title: Vice President EX-2 4 tpgex2.txt EXHIBIT 2 - -------------------------------------------------------------------------------- PURCHASE AGREEMENT among E.ON AG, E.ON NORTH AMERICA, INC., E.ON INTERNATIONAL FINANCE B.V., FIDELIA CORPORATION, VEBA ZWEITE VERWALTUNGSGESELLSCHAFT MBH, TPG PARTNERS III, L.P., T(3)PARTNERS, L.P., T(3)PARTNERS II, L.P., and TPG WAFER HOLDINGS LLC - -------------------------------------------------------------------------------- Dated as of September 30, 2001 ARTICLE I Definitions.........................................2 1.01. Definitions.........................................2 ARTICLE II Purchase and Sale of Shares and Notes...............9 2.01. Purchase and Sale of Notes..........................9 2.02. Purchase and Sale of Shares.........................9 2.03. The Closing........................................10 2.04. Closing Deliveries of Sellers......................10 2.05. Closing Deliveries of Buyer........................10 2.06. Performance Payment................................10 ARTICLE III Representations, Warranties and Covenants of Sellers...............................12 3.01. Organization and Good Standing.....................12 3.02. Due Authorization; Enforceability..................12 3.03. Non-Contravention..................................13 3.04. Regulatory Approvals...............................13 3.05. Transactions with Affiliates.......................13 3.06. Existing Loan Agreements...........................13 3.07. Broker Fees........................................14 3.08. Litigation; Decrees................................14 3.09. Absence of Payments................................14 ARTICLE IV Representations, Warranties and Covenants of the Shareholders..................15 4.01. Title to Shares....................................15 ARTICLE V Representations, Warranties and Covenants of TPG and Buyer.........................15 5.01. Organization and Good Standing.....................15 5.02. Due Authorization; Enforceability..................15 5.03. Non-Contravention..................................16 5.04. Investment Intent..................................16 5.05. Accredited Investor; Investment Representations....................................16 5.06. Regulatory Approvals...............................17 5.07. Loan Characterization..............................17 5.08. Broker Fees........................................17 5.09. Sufficiency of Capital.............................17 5.10. Litigation; Decrees................................18 ARTICLE VI Further Agreements and Assurances..................18 6.01. Government Filings and Approvals...................18 6.02. Corporate Investigation by Buyer...................18 6.03. Confidentiality....................................18 6.04. Recovery of Avoided Claims, Etc....................19 6.05. Maintenance of Directors' and Officers' Insurance................................19 6.06. Revolving Credit Facility..........................20 6.07. Acknowledgment of Taisil Lender Rights.............20 6.08. No Solicitation....................................20 6.09. Actions Prior to Closing...........................21 6.10. Available E.ON Credit Facilities...................21 6.11. Funding............................................22 6.12. Closing Payments...................................23 6.13. Termination of Funding.............................23 6.14. Bankruptcy Filing, Etc.............................24 6.15. Section 203 Acknowledgement........................25 6.16. Adequacy and Sufficiency of Collateral.............25 6.17. Post-Closing Revolving Credit Facility Loans.......25 6.18. Bankruptcy Filings Not Permitted...................26 6.19. PBGC...............................................26 ARTICLE VII Conditions to Buyer's Obligations..................26 7.01. Accuracy of Representations and Warranties.........26 7.02. Performance of Covenants...........................27 7.03. Governmental Approvals.............................27 7.04. No Injunctions or Restraints.......................27 7.05. Notes, Etc.........................................27 7.06. Share Certificates.................................28 7.07. Registration Rights................................28 7.08. Resignations As Agents.............................28 7.09. Opinions of Counsel................................28 7.10. Resignations.......................................28 7.11. Company Restructuring..............................28 7.12. Taisil.............................................29 7.13. Company Pension Plan...............................29 7.14. Loan Agreement Release.............................29 7.15. General Release....................................29 7.16. Termination Agreement..............................29 7.17. Financial Tests....................................29 7.18. Bankruptcy Authorization...........................29 7.19. Japanese Loans.....................................29 7.20. Minimum Funding....................................30 ARTICLE VIII Conditions to Sellers' Obligations.................30 8.01. Accuracy of Representations and Warranties.....................................30 8.02. Performance of Covenants...........................30 8.03. Governmental Approvals.............................30 8.04. No Injunctions or Restraints.......................30 8.05. Payment of Purchase Price..........................31 8.06. Receipt of Assignment and Acceptances..............31 8.07. Loan Agreement Release.............................31 8.08. General Release....................................31 8.09. Termination Agreement..............................31 8.10. Opinion of Counsel.................................31 8.11. Revolving Credit Facility..........................31 8.12. Company Pension Plan...............................31 8.13. Bankruptcy Authorization...........................32 ARTICLE IX Additional Covenants...............................32 9.01. Notice.............................................32 9.02. Further Assurances.................................32 ARTICLE X Termination of Agreement...........................32 10.01. Termination........................................32 ARTICLE XI Indemnification....................................35 11.01. Indemnification by Sellers.........................35 11.02. Indemnification by TPG and Buyer...................35 11.03. Third-Party Claims.................................35 ARTICLE XII Miscellaneous......................................37 12.01. Survival...........................................37 12.02. Entire Agreement; Amendment........................37 12.03. Successors and Assigns.............................37 12.04. Counterparts.......................................37 12.05. Headings...........................................37 12.06. Certain Tax Matters................................38 12.07. Waiver; Requirement of Writing.....................38 12.08. Expenses...........................................38 12.09. Sellers' Representative............................38 12.10. TPG Representative.................................39 12.11. Notices............................................40 12.12. Governing Law......................................43 12.13. Public Announcements...............................43 12.14. No Third-Party Beneficiaries.......................44 12.15. Construction; Interpretation.......................44 12.16. No Effect on the Company...........................44 Annex I Revolving Credit Facility Term Sheet Annex II Description of Lien and Mortgage Referred to in Section 6.19 Exhibit A Share Ownership Exhibit B Loan Agreements Exhibit C Form of Resignation Exhibit D-1 Form of Opinion of Ulrich Huppe Exhibit D-2 Form of Opinion of Ulrich Huppe Exhibit D-3 Form of Opinion of A. Paul Brandimarte Exhibit D-4 Form of Opinion of Reed Smith Exhibit E Form of Opinion of Lee & Li Exhibit F Form of Opinion of Chadbourne & Parke LLP Exhibit G Form of Loan Agreement Release Exhibit H Form of General Release Exhibit I Form of Termination Agreement Exhibit J Form of Opinion of Morris, Nichols, Arsht & Tunnell Exhibit K Form of Opinion of Cleary, Gottlieb, Steen & Hamilton PURCHASE AGREEMENT This PURCHASE AGREEMENT, dated as of September 30, 2001, is by and among TPG Partners III, L.P., T(3) Partners, L.P. and T(3) Partners II, L.P., each a Delaware limited partnership (collectively, "TPG") and TPG Wafer Holdings LLC, a Delaware limited liability company ("Buyer"), on the one hand, and E.ON AG, a German corporation, E.ON International Finance B.V., a Dutch corporation, FIDELIA Corporation, a Delaware corporation, VEBA Zweite Verwaltungsgesellschaft mbH, a German corporation and E.ON North America, Inc., a Delaware corporation, on the other hand (collectively, the "Sellers"). W I T N E S S E T H : WHEREAS, the Shareholders own in the aggregate 49,959,970 shares of common stock, $.01 par value (the "Shares"), of MEMC Electronic Materials, Inc., a Delaware corporation (the "Company") as set forth on Exhibit A hereto; WHEREAS, the Noteholders hold Notes in respect of the indebtedness of the Company and/or its Subsidiaries in the aggregate principal amount on the date hereof as set forth on Exhibit B hereto; WHEREAS, Buyer has been established by TPG for purposes of engaging in the transactions contemplated hereby; WHEREAS, the Noteholders desire to sell to Buyer and Buyer desires to purchase from the Noteholders, all of the Notes and all of the Noteholders' rights under the related Loan Agreements and the Shareholders desire to sell to Buyer, and Buyer desires to purchase from the Shareholders, all of the Shares, all of the foregoing upon the terms and conditions hereinafter set forth; and WHEREAS, the transactions contemplated hereby have been approved for purposes of Section 203 of the Delaware General Corporation Law by a special committee of the Board of Directors of the Company, pursuant to delegated authority; NOW, THEREFORE, in consideration of the premises and of the mutual agreements hereinafter contained, the parties hereto, intending to be legally bound, do hereby agree as follows: ARTICLE I Definitions 1.01. Definitions. The following terms shall have the respective meanings set forth below throughout this Agreement: "Action" means any legal, administrative, arbitral, mediation or other alternative dispute resolution procedure or other action, proceeding, claim, inquiry or investigation before any court, arbitrator or other Governmental Entity. "Acquisition Proposal" has the meaning set forth in Section 6.08(a). "Added Insurance Expense" has the meaning set forth in Section 6.05. "Affiliate" means (i) any Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified; (ii) any Person that holds a Material Interest (as defined below in this definition) in such specified Person; (iii) each Person that serves as a director, officer, partner, executor, or trustee of such specified Person (or in a similar capacity); (iv) any Person in which such specified Person holds a Material Interest; (v) any Person with respect to which such specified Person serves as a general partner or a trustee (or in a similar capacity); and (vi) any Affiliate of any individual described in clause (ii) or (iii). For purposes of this definition, (a) "control" of a Person will mean the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise; and (b) "Material Interest" means direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of voting securities or other voting interests representing at least 10% of the outstanding voting power of a Person or equity securities or other equity interests representing at least 10% of the outstanding equity securities or equity interests in a Person. Notwithstanding the foregoing, for purposes of this Agreement, the MEMC Affiliate Group shall not be deemed Affiliates of either TPG, Buyer or any of the Sellers, and none of TPG, Buyer or any of the Sellers shall be deemed Affiliates of the MEMC Affiliate Group. "Agreed Upon Firm" has the meaning set forth in Section 2.06(c). "Agreement" means this Purchase Agreement, as the same may be amended, modified or supplemented from time to time in accordance with its terms. "Assignment and Acceptance" has the meaning set forth in Section 7.05. "Available E.ON Credit Facilities" shall mean the Second Amended and Restated Revolving Credit Agreement dated as of September 4, 2001 referred to on item 11 of Schedule 3.05, as amended from time to time (the "Secured Loan Agreement"), the Amended and Restated Overnight Loan Agreement dated as of December 31, 2000 referred to in item 15 of Schedule 3.05 and any new Loan Agreement entered into after the date hereof with the consent of the Buyer and TPG (such consent not to be unreasonably withheld) between the Company or a subsidiary of the Company and a Noteholder. "Average Backlog" for any Backlog Measurement Period shall be (a) the sum of the Backlog for each of the five business days during the Backlog Measurement Period, divided by (b) five (5). "Backlog" means the sum total of wafers (as measured in millions of square inches) which has been shipped in respect of bona fide sales to third party customers from the first calendar day of the month and remaining shipments which are expected to be made in respect of bona fide sales to third party customers from the date backlog is computed to the last calendar day of the month by the Company and its consolidated subsidiaries. Amounts expected to be shipped shall be evidenced by third party customer orders including purchase orders, purchase order releases pursuant to blanket purchase orders and / or customer buy plans communicated by electronic data interchange communications, e-mail messages or via telephone to an MEMC customer service representative or salesperson. In all cases, Backlog will be computed without duplication and on a basis consistent with the computation thereof as agreed by the parties. "Backlog Measurement Period" shall mean each of the following: (a) October 5, 2001 and the four business days immediately preceding October 5, 2001; (b) October 19, 2001 and the four business days immediately preceding October 19, 2001 and (c) November 7, 2001 and the four business days immediately preceding November 7, 2001. "Bankruptcy Code" has the meaning set forth in Section 6.04. "Buyer" has the meaning set forth in the preamble to this Agreement. "Buyer's Affiliates" has the meaning set forth in Section 11.01. "Buyer Pre-Closing Collateral" has the meaning set forth in Section 6.11(b). "Buyer Pre-Closing Funded Amount" has the meaning set forth in Section 6.11(b). "Closing" has the meaning set forth in Section 2.03. "Closing Date" has the meaning set forth in Section 2.03. "Code" means the Internal Revenue Code of 1986, as amended. "Company" has the meaning set forth in the first recital to this Agreement. "Company Pension Plan" means the MEMC Pension Plan. "Company Restructuring" has the meaning set forth in Section 7.11. "Designated Directors" means Dr. Alfred Oberholz, Dr. Wilhelm Simson, Dr. Hans Michael Gaul, Helmut Mamsch and Paul T. O'Brien. "Disagreement Notice" has the meaning set forth in Section 2.06(c). "EBITDA" means for any period, the Company's consolidated net income/(loss) for such period, plus or minus, as applicable, to the extent deducted or added in computing consolidated net income/(loss), without duplication, minority interest, equity in income/(loss) of joint ventures, provision/(benefit) for income taxes, interest expense, interest income, depreciation, amortization of goodwill and other intangibles, gains or losses resulting from the transactions contemplated by this Agreement or the Company Restructuring, gains or losses from foreign currency translation or transactions, extraordinary gains and losses, gains or losses upon sale or disposition of assets or capital stock, and other non-recurring items, determined in accordance with generally accepted accounting principles on a basis consistent with the Company's audited financial statements for the calendar year ended December 31, 2000. For the avoidance of doubt, in computing EBITDA (a) royalty income and non-operating income not otherwise described in this definition which has been included in computing consolidated income/loss shall not be deducted and (b) non-operating expenses not otherwise described in this definition which have been included in computing consolidated income/loss shall not be added. "Entity" has the meaning set forth in Section 6.08(a). "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. "Fiscal 2000" means the period beginning on January 1, 2000 and ending December 31, 2000. "Fiscal 2002" means the period beginning on January 1, 2002 and ending December 31, 2002. "Funding Needs" shall mean those funds that (i) the Company requires imminently during the period on or prior to December 31, 2001 for the Company's operating costs and expenses (including without limitation interest owing under the Loan Agreements) and other cash needs during the period on or prior to December 31, 2001 and which the Company demonstrates are so required to the reasonable satisfaction of E.ON AG (with respect to the Available E.ON Credit Facilities) and the Shareholders (with respect to capital contributions) by reasonable back-up detail furnished to E.ON AG or the Shareholders, as the case may be and (ii) are not available from cash of the Company and/or its Subsidiaries (excluding cash held by its non-U.S. Subsidiaries, which shall be deemed not to be available for this purpose) are not permitted to be borrowed under the Available E.ON Credit Facilities (in the case of capital contributions) and are not available from other financing sources. Funding Needs shall specifically exclude any funds which may be needed or utilized in respect of or related in any way to (a) any payments by the Company and/or any of its Affiliates to the Taisil Lenders, (b) any payments to be made, amounts to be set aside or similar arrangements in connection with the Company's defined benefit pension plan (other than normal contributions that are made in the ordinary course of business and that are in amounts and are otherwise consistent with legal requirements or past practices) or pursuant to arrangements with the PBGC, (c) any obligations for fees, expenses or other amounts which may be owed to TPG, Buyer or any of their Affiliates or in connection with the Company Restructuring and (d) any payments by the Company and/or any of its Affiliates to any lenders other than payments of interest and regularly scheduled principal amounts (but specifically excluding from Funding Needs any other payments of principal amounts, such as principal amounts owing by reason of defaults, acceleration of amounts due or acceleration of required payment or maturity dates). "Funding Termination Event" shall mean any of the following: (i) the filing of a bankruptcy petition by or against the Company; or (ii) the termination of this Agreement; or (iii) the consummation of the Closing under the Purchase Agreement. "Governmental Entity" means any: (i) federal, state, local, foreign or international government; (ii) court, arbitral or other tribunal or governmental or quasi-governmental authority of any nature (including any governmental agency, political subdivisions, instrumentalities, branch, department, official, or entity); or (iii) body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature pertaining to government. "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. "Indemnified Party" has the meaning set forth in Section 11.03. "Indemnifying Party" has the meaning set forth in Section 11.03. "Loan" means any arrangement pursuant to a Loan Agreement in which a Noteholder has loaned money to the Company and/or one or more of its Subsidiaries, and the Company and/or one or more of its Subsidiaries, as the case may be, has agreed to repay such money, along with interest. "Loan Agreement" means each of the agreements identified as such on Exhibit B, and any loan agreement entered into between (a) the Company or a Subsidiary of the Company and (b) any Noteholder during the Pre-Closing Period. "Losses" has the meaning set forth in Section 11.01. "MEMC Affiliate Group" means the Company, the Company's subsidiaries and the Company's Affiliates controlled by the Company. "Noteholder" means each of E.ON AG, E.ON International Finance B.V., E.ON North America, Inc. and FIDELIA Corporation. "Note Closing Payment" has the meaning set forth in Section 2.01. "Note Purchase" has the meaning set forth in Section 2.01. "Note Purchase Price" has the meaning set forth in Section 2.01. "Notes" means the promissory notes evidencing the Loans under the Loan Agreements. "Notification Date" has the meaning set forth in Section 6.13(b). "Order" means any award, decision, stipulation, injunction, judgment, order, ruling, subpoena, writ, decree or verdict entered, issued, made, or rendered by any Governmental Entity. "PBGC" means the Pension Benefit Guaranty Corporation. "Performance Payment Amount" has the meaning set forth in Section 2.06(a). "Performance Payment Date" means the date 10 days after the Performance Payment Amount is determined to be final and binding in accordance with Section 2.06(c). "Performance Statement" has the meaning set forth in Section 2.06(c). "Person" means any individual, corporation, partnership, limited liability company, joint venture, trust, business association or other entity, including any Governmental Entity. "Post-Closing Funding Needs" means those funds that the Company requires for the Company's operating costs and expenses and other cash needs following the Closing Date. "Pre-Closing Period" means the period commencing as of the date of this Agreement and ending on the Closing Date. "Required Period" has the meaning set forth in Section 6.05. "Required Policies" has the meaning set forth in Section 6.05. "Revenues" shall mean monthly consolidated net sales of the Company and its consolidated subsidiaries, calculated on a calendar basis, determined in accordance with U.S. GAAP consistently applied, plus net sales of 300 millimeter product (also referred to as 300 millimeter sales contra) for that same period to the extent not otherwise included, determined in accordance with U.S. GAAP consistently applied. Net sales shall be computed net of any discounts, returns or allowances or other items as may be required by U.S. GAAP, consistently applied. "Revolving Credit Facility" has the meaning set forth in Section 6.06. "Revolving Credit Lender" shall mean TPG Partners III, L.P. or one or more other lenders which shall be reasonably acceptable (with respect to such lender's financial condition and its ability to perform its obligations under the Revolving Credit Facility) to the Sellers' Representative, such acceptance to be confirmed in writing. "Secured Loan Agreement" has the meaning set forth in this Section 1.01 under the definition of Available E.ON Credit Facilities. "Securities Act" has the meaning set forth in Section 5.04. "Sellers" has the meaning set forth in the preamble to this Agreement. "Sellers' Affiliates" means the Affiliates of any Seller and any of Sellers' or any of Sellers' Affiliates' respective directors, officers, employees or agents, but the MEMC Affiliate Group shall not be deemed Sellers' Affiliates. "Sellers' Representative" has the meaning set forth in Section 12.09(a). "Share Purchase" has the meaning set forth in Section 2.02. "Share Purchase Price" has the meaning set forth in Section 2.02. "Shareholder" means each of VEBA Zweite Verwaltungsgesellschaft mbH and E.ON North America, Inc. "Shares" has the meaning set forth in the first recital to this Agreement. "Subsidiary" means (i) any partnership of which the Company is a general partner and (ii) any corporation or other form of entity with respect to which the Company (or a Subsidiary thereof) owns a majority of the shares of common stock or other voting interests, or has the power to vote or direct the voting of sufficient securities to elect a majority of the board of directors or similar governing body of such corporation or entity or otherwise controls (as such term is defined in the definitions of Affiliate) such corporation or entity. "Taisil" means Taisil Electronic Materials Corporation, a corporation organized under the laws of the Republic of China. "Taisil Lenders" means ABN AMRO Bank N.V., Taipei Branch, Taiwan Cooperative Bank and a sufficient number of other lenders of Taisil required to waive or otherwise consent to the sale of the Shares for purposes of the Taisil Lender Rights. "Taisil Lender Rights" has the meaning set forth in Section 6.07. "Taxes" means all federal, state, foreign or other governmental taxes, including all income, profit, franchise, excise, property, use, intangibles, sales, payroll, employment, withholding and other taxes, and including all additions to taxes, fines and penalties imposed with respect to such amounts. "Tax Return" means any federal, state, local or foreign return, report, form, declaration, statement, document or other information required to be filed for any period with any taxing authority with respect to Taxes. "Third-Party Claim" has the meaning set forth in Section 11.03. "TPG" means, collectively, the Delaware limited partnerships identified as such in the preamble to this Agreement and, where appropriate, each of them individually. Any obligation of TPG hereunder shall constitute the joint and several obligation of the limited partnerships comprising TPG. Each representation, warranty, covenant and agreement hereunder shall constitute a representation, warranty, covenant and agreement of each of the limited partnerships comprising TPG with respect to itself and the other limited partnerships. "TPG Representative" has the meaning set forth in Section 12.10. "Transaction" has the meaning set forth in Section 2.03. "Transaction Documents" means any certificate, schedule, agreement, instrument of transfer or other document required to be delivered pursuant to this Agreement or the transactions contemplated hereby. "U.S. GAAP" means generally accepted accounting principles in the United States. ARTICLE II Purchase and Sale of Shares and Notes 2.01. Purchase and Sale of Notes. Subject to all of the terms and conditions of this Agreement, at the Closing each Noteholder shall sell the Notes owned by it, together with all of such Noteholder's rights and interests under the related Loan Agreements, to Buyer and Buyer shall purchase such Notes, rights and interest from such Noteholder (the "Note Purchase") for an amount equal to the sum of (x) one dollar ($1.00) and (y) the Performance Payment Amount (as defined in Section 2.06(a)), if any, such that the aggregate purchase price payable to the Noteholders is equal to the sum of (x) four dollars ($4.00) (the "Note Closing Payment") and (y) the Performance Payment Amount (the "Note Purchase Price"). 2.02. Purchase and Sale of Shares. Subject to all of the terms and conditions of this Agreement, at the Closing each Shareholder shall sell the Shares owned by it to Buyer and Buyer shall purchase such Shares from such Shareholder (the "Share Purchase") for an amount equal to one dollar ($1.00), such that the aggregate purchase price payable to the Shareholders for their Shares is equal to two dollars ($2.00) (the "Share Purchase Price"). 2.03. The Closing. Subject to fulfillment of each of the terms and conditions hereof, the closing (the "Closing") of the transactions contemplated by this Agreement and the Transaction Documents (the "Transaction") will take place at the offices of Chadbourne & Parke LLP, 30 Rockefeller Plaza, New York, NY 10112 at 10:00 a.m. local time on October 29, 2001, or, if the conditions to the Closing have not been satisfied by such date, as soon as practicable after such conditions shall have been satisfied (such time and date of the Closing being herein called the "Closing Date"). If requested by Buyer, the Closing may be structured as comprising two separate steps, with the Note Purchase closing first and the Share Purchase closing sometime thereafter, either on the same day or on successive days. 2.04. Closing Deliveries of Sellers. At the Closing, (i) each Noteholder will deliver or cause to be delivered to Buyer the Notes to be sold by it duly endorsed in blank or with duly executed bond powers attached in proper form for transfer, an Assignment and Acceptance (as defined in Section 7.05) relating to such Notes and the applicable Loan Agreements, and all other documents required to be delivered by it at the Closing pursuant to this Agreement; and (ii) each Shareholder will deliver or cause to be delivered to Buyer certificates for the Shares to be sold by it duly endorsed in blank or with duly executed stock powers attached in proper form for transfer, along with all documents required to be delivered by it at the Closing pursuant to this Agreement. 2.05. Closing Deliveries of Buyer. At the Closing, Buyer will deliver or cause to be delivered (i) to the Noteholders, the Note Closing Payment, (ii) to the Shareholders, the Share Purchase Price and (iii) to the Sellers, all documents required to be delivered by Buyer at the Closing pursuant to this Agreement. 2.06. Performance Payment. (a) As additional consideration to the Noteholders, on the Performance Payment Date, Buyer will pay to the Noteholders an aggregate amount equal to the following (such amounts to be in the alternative and not cumulative) (the "Performance Payment Amount"): (i) $0, if the Company's EBITDA for Fiscal 2002 is less than $100 million; or (ii) $30 million, if the Company's EBITDA for Fiscal 2002 equals or exceeds $100 million, but is less than $150 million; or (iii) $75 million, if the Company's EBITDA for Fiscal 2002 equals or exceeds $150 million, but is less than $300 million; or (iv) $150 million, if the Company's EBITDA for Fiscal 2002 equals or exceeds $300 million. (b) The Performance Payment Amount will be paid by Buyer on the Performance Payment Date and allocated among the Notes as follows: (i) an amount equal to the lesser of (A) the Performance Payment Amount and (B) the aggregate outstanding principal amount and accrued but unpaid interest as of the Closing Date under the Secured Loan Agreement shall be allocated to E.ON AG and payable to an account designated by E.ON AG (by wire transfer of immediately available funds); and (ii) the remaining balance of the Performance Payment Amount, if any, shall be allocated among the Noteholders pro-rata based on the aggregate principal amounts and accrued and unpaid interest as of the Closing Date owing to such Noteholder under the Loan Agreements (other than the Secured Loan Agreement) to such accounts as are designated by such Noteholders (by wire transfer of immediately available funds). (c) On or before March 31, 2003, Buyer will deliver to the Noteholders (i) a copy of the Company's financial statements for Fiscal 2002 as certified by the Company's independent certified public accountants, and (ii) a statement prepared by Buyer setting forth the amount of EBITDA of the Company for Fiscal 2002 and the amount, if any, of the Performance Payment Amount payable pursuant to Section 2.06(a) with appropriate supporting calculations and supporting documentation, including without limitation the amount of each item added to or deducted from consolidated net income (loss) in calculating EBITDA (the "Performance Statement"). Within 30 days after receipt by the Noteholders of such Performance Statement from Buyer, the Noteholders may object to the Performance Statement by so notifying Buyer in a written statement, setting forth in reasonable detail the nature and basis for the dispute (a "Disagreement Notice"). The Noteholders agree that absent manifest error, they will not be entitled to challenge any item as being improperly accounted for under GAAP if such item is derived from the audited Fiscal 2002 Financial Statements and the accounting for such item is consistent with the Company's audited financial statements for Fiscal 2000. If the Noteholders do not send a Disagreement Notice within such 30-day period or if the Noteholders send a written notice that they accept the calculation of the Performance Payment Amount, the Noteholders shall be deemed to have accepted the determination of the EBITDA amounts and the Performance Payment Amount set forth in the Performance Statement as final and binding. If the Noteholders issue a Disagreement Notice, then during the 30-day period following Buyer's receipt of the Disagreement Notice, Buyer and the Noteholders shall attempt in good faith to resolve the disagreement with respect to the Performance Statement, and during such 30-day period an independent auditing firm selected by the Noteholders shall be given full access to the books, records, employees and officers of the Company and its Affiliates relevant, or which such independent auditing firm believes in good faith may be relevant, to the disagreement or such other aspects of the determination of EBITDA as the independent auditing firm reasonably believes necessary to determine the accuracy of the Performance Statement. If the Noteholders and Buyer are unable to resolve any such disagreement within such 30-day period, the subject matter of the disagreement including any other areas of disagreement which arise during such 30-day period shall be submitted to an independent accounting firm of international reputation reasonably acceptable to the Noteholders and Buyer (the "Agreed Upon Firm"). The Noteholders and Buyer shall use reasonable best efforts to cause the Agreed Upon Firm to render its determination on the resolution of the disagreement within 90 days of its submission by the Noteholders and Buyer. Such determination shall be final, conclusive and binding upon Buyer and the Noteholders. Buyer shall pay the Performance Payment Amount reflecting the determination of the Agreed Upon Firm in accordance with Sections 2.06(a) and 2.06(b). The fees and expenses for the Agreed Upon Firm and the Noteholders' independent auditing firm shall be paid by the Noteholders, except that such fees and expenses shall be paid by Buyer, if the Agreed Upon Firm determines that the Performance Payment Amount payable to the Noteholders exceeds the amount so determined by Buyer. ARTICLE III Representations, Warranties and Covenants of Sellers Each Seller hereby represents, warrants and covenants to Buyer, as to itself only, as follows: 3.01. Organization and Good Standing. It is a corporation or, in the case of VEBA Zweite Verwaltungsgesellschaft mbH, a limited liability company, duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation, and has full power and authority, corporate or otherwise, to own the Shares or Notes owned by it. 3.02. Due Authorization; Enforceability. It has all requisite corporate or limited liability company, as the case may be, power and authority to execute, deliver and perform this Agreement and the Transaction Documents to which it is a party and to consummate the Transaction. The execution, delivery and performance of this Agreement and the Transaction Documents to which it is a party and the consummation of the Transaction by it have been duly authorized by all necessary or appropriate corporate or other action and no other proceedings are necessary to authorize this Agreement or the Transaction Documents to which it is a party or to consummate the Transaction. This Agreement and those Transaction Documents executed or delivered by it on or prior to the date of this Agreement constitute, and prior to the Closing the remaining Transaction Documents required to be executed by it after the date of this Agreement will constitute when so executed, the valid and legally binding obligations of such Seller (assuming that this Agreement and the Transaction Documents constitute the valid and binding obligations of Buyer), enforceable against such Seller, in accordance with their terms except as enforceability may be limited by applicable (i) bankruptcy, insolvency, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and (ii) laws relating to the availability of specific performance, injunctive relief or other equitable remedies (regardless of whether such enforceability is sought in equity or at law). 3.03. Non-Contravention. The execution, delivery and performance of this Agreement by it and the consummation of the Transaction do not and will not, with or without the giving of notice or the lapse of time, or both, violate, conflict with, result in the breach of, require a consent under, or accelerate the performance required by any of the terms, conditions or provisions of (i) the charter documents or by-laws or other governing documents of such Seller or (ii) any covenant, agreement or understanding to which such Seller is a party or any Order, ruling, decree, judgment, arbitration award, law, rule, regulation or stipulation to which such Seller is subject or constitute a default thereunder, except to the extent, in the case of the foregoing clause (ii), any of the foregoing would not, individually or in the aggregate, prevent any Seller from materially performing its obligation under this Agreement or the Transaction Documents to which it is a party or consummating the Transaction. 3.04. Regulatory Approvals. Except as set forth in Schedule 3.04 attached hereto, it is not required to file, seek or obtain any governmental notice, filing, authorization, approval, Order or consent, or any bond in satisfaction of any governmental regulation, in connection with the execution, delivery and performance by it of this Agreement or the consummation by it of the Transaction. 3.05. Transactions with Affiliates. Except as set forth in Schedule 3.05 or Schedule 3.06 none of the Sellers or any of their Affiliates is, or at the Closing will be, party to any agreements, contracts or other arrangements with the Company or its Subsidiaries which are not cancelable without liability to the Company or such Subsidiary on less than 30 days' notice by the Company or such Subsidiary, as the case may be, or which involve payments by the Company and such Subsidiary, as the case may be, in excess of two hundred fifty thousand dollars ($250,000) per annum. 3.06. Existing Loan Agreements. Except as represented by the Notes or the related Loan Agreements, or under the arrangements set forth in Schedule 3.05 or as set forth in Schedule 3.06, there is, and at the Closing Date there will be, no material indebtedness of the Company or its Subsidiaries in excess of an aggregate of two hundred fifty thousand dollars ($250,000) owing to any Seller or its Affiliates (other than the Company and its controlled Affiliates). Schedule 3.06 sets forth, as of the close of business on September 28, 2001, the outstanding principal amounts of each Loan made by such Seller, and a description of the scheduled payments of principal and interest (and other amounts) in respect of each Loan through December 31, 2001. Sellers have provided to TPG true and correct copies of each Loan Agreement that has not been filed by the Company with the Securities and Exchange Commission. As of the close of business on September 28, 2001, there was an aggregate maximum amount of approximately $7,800,000 of borrowings available to the Company and its Subsidiaries pursuant to the Available E.ON Credit Facilities. Except as set forth in this Section 3.06, Sellers make no further representations or warranties with respect to the Loan Agreements. 3.07. Broker Fees. There are no claims (or any basis for any claims) for brokerage commissions, finder's fees or like payments in connection with this Agreement or the Transaction resulting from any action taken by it or on its behalf, except Merrill Lynch & Co. has been retained by Sellers. Sellers shall be responsible for any fees and expenses that may be due to Merrill Lynch & Co., and shall jointly and severally indemnify and hold Buyer harmless with respect to the representations and warranties and agreements set forth in this Section 3.07. 3.08. Litigation; Decrees. To such Seller's knowledge, as of the date hereof (i) there is no Order in effect to which it is a party that is related to the Transaction and (ii) except as set forth on Schedule 3.08, it is not a party to, or engaged in, and has not been threatened with, any Action that is related to the Transaction. 3.09. Absence of Payments. From July 1, 2001 until the date of this Agreement, (i) none of the Sellers or any of their respective Affiliates has received payment of any amounts from the Company in respect of the Loan Agreements, other than (x) regularly scheduled interest payments in respect of the Loans, which interest payments received from July 1, 2001 to and including September 12, 2001 did not exceed eleven million dollars ($11,000,000) in the aggregate and (y) amounts paid and reborrowed or available for reborrowing under the Available E.ON Credit Facilities and (z) commitment fees described in Schedule 3.06, and (ii) none of the Sellers or their respective Affiliates has received any other payment of any amounts from the Company in excess of two hundred fifty thousand dollars ($250,000) in the aggregate, except in connection with any currency forward contracts or the other agreements listed on Schedule 3.05. ARTICLE IV Representations, Warranties and Covenants of the Shareholders Each Shareholder hereby represents, warrants and covenants to Buyer, as to itself only, as follows: 4.01. Title to Shares. It is the owner of the number of Shares set forth opposite the name of such Shareholder on Exhibit A hereto, and will sell, transfer, assign and deliver to the Buyer good and valid title to such Shares at the Closing as provided in this Agreement and Buyer will acquire good and valid title to the Shares, free and clear of any liens, pledges, encumbrances, options, restrictions, charges, agreements or claims, except for such encumbrances as may be imposed by applicable securities laws or the Delaware General Corporation Law. The number of Shares set forth opposite the name of such Shareholder on Exhibit A hereto constitute all of the Shares held by such Shareholder and its Affiliates, and neither it nor any of its Affiliates holds any "phantom" stock rights, options, warrants or rights of first refusal, or other rights to purchase, obtain or acquire, or any outstanding securities or obligations convertible into or exchangeable for, or any voting or other agreements with respect to, any securities of the Company. ARTICLE V Representations, Warranties and Covenants of TPG and Buyer Each of TPG and Buyer hereby jointly and severally represent, warrant and covenant to Sellers as follows: 5.01. Organization and Good Standing. Each entity comprising TPG is a limited partnership and Buyer is a limited liability company, each duly organized, validly existing and in good standing under the laws of the State of Delaware, with full power and authority to consummate the Transaction. 5.02. Due Authorization; Enforceability. Each of TPG and Buyer has all requisite power and authority to execute, deliver and perform this Agreement and the Transaction Documents to which it is a party and to consummate the Transaction. The execution, delivery and performance of this Agreement and the Transaction Documents to which each of TPG and/or Buyer, as the case may be, is a party and the consummation of the Transaction by each of TPG and Buyer have been duly authorized by all necessary or appropriate action and no other proceedings are necessary to authorize this Agreement or the Transaction Documents to which either of TPG and Buyer is a party or to consummate the Transaction. This Agreement and those Transaction Documents executed or delivered by each of TPG and/or Buyer on or prior to the date of this Agreement constitute, and prior to the Closing the remaining Transaction Documents required to be executed by each of TPG and/or Buyer after the date of this Agreement will constitute when so executed, the valid and legally binding obligations of each of TPG and/or Buyer (assuming that this Agreement and the Transaction Documents constitute the valid and binding obligations of Sellers), as the case may be, enforceable against each of TPG and/or Buyer, in accordance with their terms except as enforceability may be limited by applicable (i) bankruptcy, insolvency, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and (ii) laws relating to the availability of specific performance, injunctive relief or other equitable remedies (regardless of whether such enforceability is sought in equity or at law). 5.03. Non-Contravention. The execution, delivery and performance of this Agreement and the other Transaction Documents by each of TPG and Buyer and the consummation of the Transaction do not and will not, with or without the giving of notice or the lapse of time, or both, violate, conflict with, result in the breach of, require a consent under, or accelerate the performance required by any of the terms, conditions or provisions of (i) the charter documents or other governing documents of TPG or of Buyer or (ii) any covenant, agreement or understanding to which TPG and/or Buyer, as the case may be, is a party or any Order, ruling, decree, judgment, arbitration award, law, rule, regulation or stipulation to which TPG and/or Buyer is subject or constitute a default thereunder, except to the extent, in the case of the foregoing clause (ii), any of the foregoing would not, individually or the aggregate, prevent either of TPG or Buyer from materially performing its obligation under this Agreement or the Transaction Documents to which either is a party or consummating the Transaction. 5.04. Investment Intent. Buyer is acquiring, and TPG confirms that Buyer is acquiring, the Shares and the Notes for its own account for investment purposes only and not with a view to, or for sale or resale in connection with, any public distribution thereof or with any present intention of selling, distributing or otherwise disposing of the Shares or the Notes in violation of the Securities Act of 1933, as amended (the "Securities Act"). Each of Buyer and TPG understands that neither the Shares nor the Notes have been registered under the Securities Act or any state securities or "blue-sky" laws by reasons that depend upon, among other things, the bona fide nature of Buyer's investment intent as expressed herein and as explicitly acknowledged hereby and that under such laws and applicable regulations such securities may not be resold without registration under the Securities Act unless an applicable exemption from registration is available. 5.05. Accredited Investor; Investment Representations. Each of Buyer and TPG is an "accredited investor" within the meaning of Rule 501 of Regulation D under the Securities Act. By reason of TPG's and/or Buyer's business and financial experience in business, each of TPG and Buyer has such knowledge, sophistication and experience in business and financial matters as to be capable of evaluating the merits and risks of the purchase of the Shares and the Notes, is able to bear the economic risk of such investment in the Company, and is able to afford a complete loss of such investment. 5.06. Regulatory Approvals. Except as set forth in Schedule 5.06, neither TPG nor Buyer is required to file, seek or obtain any governmental notice, filing, authorization, approval, order or consent in connection with the execution, delivery and performance by it of this Agreement or the consummation by it of the Transaction. 5.07. Loan Characterization. Each of TPG and Buyer acknowledges that, notwithstanding anything herein to the contrary, none of the Sellers or any of their Affiliates or representatives is making any representations or warranties relating to whether or not any of the Loans might, under any circumstances or for any purpose, be treated or characterized as equity, as subordinated indebtedness junior to any other indebtedness of the Company or as anything other than indebtedness. Neither TPG nor Buyer shall assert or make any claim against any of the Sellers that any of the Loans should be treated as equity, as subordinated indebtedness or as anything other than indebtedness. In addition, neither TPG nor Buyer shall assert any claim against any Seller or any of their respective Affiliates arising from, or in connection with, (i) the Company Restructuring, (ii) the Revolving Credit Facility or any other arrangement between or among TPG, the Buyer and/or their respective Affiliates, and the Company and/or the Company's Affiliates (other than any claim asserting that E.ON AG has breached its obligations under the guaranty described in Section 6.11(c)) or (iii) the failure of either the Company or any of the Company's Affiliates to perform any obligations in connection with any of the foregoing. 5.08. Broker Fees. There are no claims (or any basis for any claims) for brokerage commissions, finder's fees or like payments in connection with this Agreement or the Transaction resulting from any action taken by either of TPG or Buyer or on either's behalf, except Salomon Smith Barney, Inc. has been retained by TPG. Each of TPG and Buyer shall be responsible for any fees and expenses that may be due to Salomon Smith Barney, Inc., and shall indemnify and hold Sellers harmless with respect to the representations and warranties and agreements set forth in this Section 5.08. 5.09. Sufficiency of Capital. Buyer has sufficient available capital to pay the Note Closing Payment, the Share Purchase Price, and any expenses, fees or other amounts it may be reasonably expected to pay in connection with the consummation of the Transaction and the Revolving Credit Lender will on the Closing Date have sufficient available capital to provide funds under the revolving credit facility described in Section 6.06 hereof and neither TPG nor Buyer requires any limited partner, shareholder, board or other such approval in connection with the consummation of the Transaction. 5.10. Litigation; Decrees. To the knowledge of Buyer or TPG, on the date hereof, there is no Order in effect to which either TPG or Buyer is a party that is related to the Transaction and, except as set forth on Schedule 3.08, neither TPG nor Buyer is a party to, or engaged in or has been threatened with, any Action that is related to the Transaction. ARTICLE VI Further Agreements and Assurances 6.01. Government Filings and Approvals. Sellers, TPG and Buyer agree promptly to file or cause to be filed, respectively, an acquired person's and acquiring person's notification and report form required by the HSR Act and any other applicable regulatory filing with respect to the Transaction. Sellers, TPG and Buyer further agree to use their commercially reasonable efforts to comply promptly with all requests or requirements which applicable federal, state or foreign law or governmental officials may impose on them with respect to the Transaction. The commercially reasonable efforts of Sellers, TPG and Buyer shall include but shall not be limited to good faith response, in cooperation with each other, to all requests for information, documentary or otherwise, by any governmental agency; provided, however, that TPG shall not be required to divest any assets, businesses or properties in connection therewith. 6.02. Corporate Investigation by Buyer. Each of TPG and Buyer hereby acknowledges that each of TPG and Buyer and their advisors and representatives (i) has had full access to make or cause to be made such investigation of the assets, properties and business of the Company and of its financial and legal condition as it deemed necessary or advisable to familiarize itself with such assets, properties, business and other matters and (ii) has had sufficient opportunity to discuss such assets, properties, business and other matters with the Company's officers, attorneys, accountants and other relevant representatives. Each of TPG and Buyer hereby acknowledges that none of Sellers, their representatives or any other person has made any oral representation or warranty, expressed or implied, with respect to the Company, its assets, properties or business or the accuracy or completeness of any information regarding the Company or its properties, assets or business furnished or made available to TPG, Buyer or their representatives. 6.03. Confidentiality. Each of TPG and Buyer on the one hand, and the Sellers on the other hand, shall, and shall cause each of their Affiliates, associates and representatives to (i) maintain in confidence any and all information concerning the other party and (ii) refrain from using any such information for their own benefit or in competition with or otherwise to the detriment of Sellers on the one hand, and TPG and Buyer on the other hand. It is understood that no party to this Agreement shall have any liability hereunder for disclosure or use of any such information which (i) is in or, through no fault of such party, comes into the public domain, (ii) was acquired from other sources after the Closing, provided such sources are not, to the knowledge of such party, bound by any confidentiality agreement with such other party or (iii) such party, in good faith upon advice of legal counsel, believes that it is legally required to disclose. 6.04. Recovery of Avoided Claims, Etc. Each of TPG and Buyer confirms and agrees with Sellers, notwithstanding anything contained herein to the contrary, if and to the extent that either TPG, Buyer, any of their respective Affiliates and/or any lender under the Revolving Credit Facility receives directly any amounts as a result of avoidance recoveries, recharacterization, equitable subordination or similar claims against Sellers arising out of transfers made to Sellers prior to the Closing Date (including, for the avoidance of doubt, any amounts received by TPG, Buyer, any of their respective Affiliates and/or any lender under the Revolving Credit Facility as a result of amounts paid to the Company, the estate of the Company or any bankruptcy receiver or trustee by any such transferee, or any Affiliate of such transferee as a result of such recovery, recharacterization, equitable subordination or claim) any such recoveries shall be held by TPG and/or Buyer, any of their respective Affiliates, and/or any lender under the Revolving Credit Facility, as the case may be, in trust, and TPG and Buyer shall promptly pay or cause to be paid such amounts to Sellers. In the event that any amounts previously paid by the Company or any of its Subsidiaries to a Seller are subsequently avoided or otherwise caused to be disgorged by Sellers to the bankruptcy estate of the Company by a trustee in a proceeding under title 11 of the United States Code (the "Bankruptcy Code"), such Seller shall have the right to assert any resulting claim (net of any amount repaid pursuant to the immediately preceding sentence) against the Company or any of its Subsidiaries, as applicable, and shall be the sole beneficiary of any amounts recovered in respect thereof. 6.05. Maintenance of Directors' and Officers' Insurance. Following the Closing, Buyer will use its reasonable best efforts to cause the Company to maintain its directors' and officers' insurance policies in existence on the date hereof, or generally comparable insurance policies (collectively, the "Required Policies") for a period of not less than three (3) years following the Closing Date (the "Required Period") so as to protect all the Designated Directors. To the extent the Company does not maintain the Required Policies for the Required Period, Buyer agrees to purchase and maintain in effect for the Required Period, at its sole cost and expense, directors' and officers' insurance policies that are no less favorable to the Designated Directors than the Company's directors' and officers' insurance policies in existence on the date hereof, protecting the Designated Directors with respect to claims made, or that may be made, relating to the period on or prior to the Closing Date; provided, however, that in the event that the aggregate cost of insurance called for by this Section 6.05 (i.e., for the Required Period) is more than $440,000 (such excess herein referred to as "Added Insurance Expense"), then Buyer shall notify Sellers of the aggregate amount of the Added Insurance Expense, and Sellers shall have the option of either (i) requiring Buyer to maintain or procure such directors and officers insurance coverage and paying to Buyer the amount of the Added Insurance Expense or (ii) waiving any rights to have Buyer maintain or procure such coverage. Nothing herein shall limit the right of the Company to obtain such insurance on its own, whether prior to or after the Closing. 6.06. Revolving Credit Facility. TPG and Buyer agree that TPG or another lender reasonably acceptable (with respect to such lender's financial condition and its ability to perform its obligations under the Revolving Credit Facility) to Sellers shall offer to the Company a revolving credit facility on terms that are consistent with those set forth on Annex I (the "Revolving Credit Facility"). TPG shall cause the Revolving Credit Lender to comply with the provisions of this Agreement and the Revolving Credit Agreement. 6.07. Acknowledgment of Taisil Lender Rights. Each of TPG and Buyer hereby acknowledges that certain lenders of Taisil may have rights under certain loan agreements and/or guarantees relating to Taisil that may arise as a result of the sale of the Shares hereunder (the "Taisil Lender Rights") and that any funding or other responsibilities that arise out of the exercise of any such Taisil Lender Rights shall remain the sole responsibility of Taisil, the Company and/or its Subsidiaries, as applicable. 6.08. No Solicitation. (a) Until this Agreement is terminated or until the occurrence of the Closing, whichever occurs first, Sellers shall not, and shall use their reasonable best efforts to cause their representatives not to, (i) solicit, initiate or encourage the submission of inquiries, proposals or offers from any individual, corporation, partnership, limited liability company or other entity, other than TPG or any of its Affiliates (an "Entity") relating to the purchase of the Notes, the Shares or any portion thereof or the acquisition of all or a significant portion of the assets or equity or debt interest of the Company, whether by merger, tender offer or otherwise (an "Acquisition Proposal"), (ii) enter into or participate in any discussions regarding an Acquisition Proposal with any Entity or (iii) otherwise cooperate with, or assist or participate in, facilitate or encourage, any effort or attempt by any Entity to make an Acquisition Proposal. For the avoidance of doubt, Acquisition Proposal does not include the entering into or modification of any Loan Agreements, security agreements or pledge agreements by E.ON AG and its Affiliates, on the one hand, and the Company and its Subsidiaries, on the other hand. (b) Until this Agreement is terminated or until the occurrence of the Closing, whichever occurs first, at any meeting of stockholders of the Company or at any adjournment thereof or in any other circumstances upon which a Shareholder's vote, consent or other approval is sought, such Shareholder shall be present (in person or by proxy) and shall vote (or cause to be voted) its Shares against (and shall not execute any written consent in favor of) (i) any merger agreement or merger, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by the Company or any other Acquisition Proposal or (ii) any amendment of the Company's certificate of incorporation or by-laws or other proposal or transaction involving the Company or any of its subsidiaries, which amendment or other proposal or transaction would in any manner impede, frustrate, delay, prevent or nullify the transactions contemplated by this Agreement or the Company Restructuring. The Shareholders further agree not to commit or agree to take any action inconsistent with the foregoing. 6.09. Actions Prior to Closing. Until this Agreement is terminated or until the occurrence of the Closing, whichever occurs first, Sellers shall (i) not take any action which would reasonably be expected to cause any of their representations or warranties to become untrue in a material respect, (ii) not enter into any new loan agreement or other lending instrument with the Company unless consented to by TPG and Buyer (such consent not to be unreasonably withheld), (iii) not materially modify any of the Loan Agreements, except (A) in connection with the amount or type of collateral (provided that in no event shall such collateral include the Buyer Pre-Closing Collateral), (B) increases in amounts permitted to be borrowed, or (C) with the consent of Buyer not to be unreasonably withheld, any other modification of the Loan Agreements and (iv) use its reasonable best efforts to cause the Company not to (A) pay any amount in respect of any Loan, other than regularly scheduled interest substantially as described in Schedule 3.06, regularly scheduled commitment fees described in Schedule 3.06 or amounts which the Company may reborrow or (B) pay any amount in respect of Shares, whether by way of dividend, distribution, repurchase or otherwise. In addition, until this Agreement is terminated or until the occurrence of the Closing, whichever occurs first, the Sellers shall not file a petition against the Company or any of its Subsidiaries under the Bankruptcy Code, and shall not request or otherwise take any action to cause or encourage the Company or any of its Subsidiaries to file a petition under the Bankruptcy Code except in accordance with the by-law described in Section 7.18. Until this Agreement is terminated or until the occurrence of the Closing, whichever occurs first, neither TPG nor Buyer shall take any action which would reasonably be expected to cause any of their representations or warranties to become untrue in a material respect. 6.10. Available E.ON Credit Facilities. On or prior to October 15, 2001, E.ON AG may, but shall have no obligation to amend the Secured Loan Agreement so that the amount permitted to be borrowed under the Available E.ON Credit Facilities shall be increased by an amount to be determined in the sole discretion of E.ON AG. Unless and until a Funding Termination Event shall have occurred, and subject to the terms of this Section 6.10 and the terms of Section 6.13, the Company shall be permitted to borrow pursuant to the Available E.ON Credit Facilities an amount equal to the maximum amount which may be borrowed pursuant to the Available E.ON Credit Facilities. 6.11. Funding. (a) Unless and until a Funding Termination Event shall have occurred and subject to the terms of this Section 6.11 and Section 6.13, and following the date on which the Company shall have borrowed all amounts permitted to be borrowed under the Available E.ON Credit Facilities, the Shareholders shall provide funding in an aggregate amount not to exceed fifty million dollars ($50,000,000) less the amount of the increase in the permitted borrowing amount under the Available E.ON Credit Facilities pursuant to Section 6.10 in the form of capital contributions to the Company (without the issuance of any securities) at such times as determined by the Shareholders in their reasonable judgment for the Funding Needs. The Company shall have no obligation to repay to the Shareholders any such contribution to the capital of the Company. (b) In the event that the amount of Funding Needs prior to the Closing (as reasonably agreed by the Revolving Credit Lender and the Sellers' Representative) exceeds fifty million dollars ($50,000,000), the Revolving Credit Lender shall, subject to the grant by the Company of the security interest described in the immediately following sentence, lend to the Company pursuant to the Revolving Credit Facility an amount (the "Buyer Pre-Closing Funded Amount") equal to the lesser of (i) the amount of such excess and (ii) thirty million dollars ($30,000,000). Subject to agreement with the Company, the loan made by the Revolving Credit Lender shall be collateralized by a first priority, perfected security interest in: the Company's plant, property and equipment (to the extent not currently subject to any security interests); the issued and outstanding shares of capital stock of MEMC Pasadena, Inc.; any debt issued by MEMC Pasadena, Inc. held by the Company (and rights in any collateral securing such debt); and the proceeds thereof (collectively, the "Buyer Pre-Closing Collateral"). (c) Prior to the Closing, the Company's obligations under the Revolving Credit Facility to make payments of the principal amount of the loans made pursuant to Section 6.11(b), together with interest at the rate set forth in the Revolving Credit Facility Agreement shall be unconditionally guaranteed by the Shareholders, which guaranty shall be supported by a letter of credit issued by a bank reasonably acceptable to TPG and Buyer with E.ON AG as the account party and, in accordance with the terms of the Revolving Credit Facility, the Buyer Pre-Closing Funded Amount, together with interest thereon, shall become due and payable immediately upon any termination of this Agreement. The loans to be made by the Revolving Credit Lender hereunder shall be solely for Funding Needs. The Revolving Credit Lender shall not make any advance under Section 6.11(b) unless the Shareholders shall have agreed in writing, such agreement not to be unreasonably withheld, that such loan is for Funding Needs. The guaranty by the Shareholders shall be terminated and have no force or effect whatsoever from and after the date on which the Closing occurs, notwithstanding any failure of the Company to pay amounts due under such loan or any requirement that the Revolving Credit Lender pay back any amounts received from the Company. (d) If the Revolving Credit Lender does not make any of the loans required by Section 6.11(b) in breach thereof, the Shareholders shall in addition to any other rights, have the right to terminate this Agreement in accordance with Section 10.01(a)(vi). 6.12. Closing Payments. At the Closing, the Shareholders shall make a capital contribution to the Company in an aggregate amount equal to (w) five million dollars ($5,000,000) to enable the Company to make the contribution to its defined benefit plan referred to in Sections 7.13 and 8.12 plus (x) the excess, if any, of (A) fifty million dollars ($50,000,000) over (B) the sum of (y) the aggregate capital contributions made by the Shareholders pursuant to Section 6.11(a) following the date of this Agreement, and (z) the aggregate amount borrowed by the Company under the Secured Loan Agreement in excess of fifty million dollars ($50,000,000). For the avoidance of doubt, none of the Shareholders shall have any obligation to make any payments under this Section 6.12 if the Closing does not occur. 6.13. Termination of Funding. (a) Notwithstanding the provisions of Sections 6.10 and 6.11: (i) if on or prior to October 22, 2001 (w) the consent or waiver of the Taisil Lenders set forth in Section 7.12 has not been obtained and (x) Buyer and TPG shall not have irrevocably and unconditionally waived in a writing delivered to the Sellers the condition set forth in Section 7.12, or (ii) if on or prior to October 29, 2001, (y) the agreement described in Section 7.19 has not been obtained and (z) Buyer and TPG shall not have irrevocably and unconditionally waived in a writing delivered to the Sellers the condition set forth in Section 7.19; then the Sellers' Representative may upon written notice after the applicable date to TPG and the Buyer, terminate any further obligation under this Agreement to lend any money or make any capital contributions to the Company. (b) Notwithstanding the provisions of Sections 6.10 and 6.11, if (i)(x) the Company shall have had Revenue for the month of September, 2001 or October, 2001 in an amount less than that specified in Section 7.17, or (y) for any Backlog Measurement Period, the Company shall have Average Backlog in an amount less than the amount set forth in Section 7.17, (ii) the Sellers or the Company shall have provided Buyer and TPG with information, in the form agreed upon by Buyer and TPG, on the one hand, and the Sellers, on the other hand, showing that such Revenue or Average Backlog, as the case may be, failed to meet the levels prescribed by Section 7.17, and (iii) within three (3) business days after the receipt by Buyer and TPG of Backlog information in respect of the relevant Backlog Measurement Period and Revenue information in respect of the preceding calendar month (the last day of each such three (3) business day period being a "Notification Date"), Buyer and TPG shall not have irrevocably and unconditionally waived in a writing delivered to the Sellers the entire condition set forth in Section 7.17 (for the avoidance of doubt, the waiver will be for the entire condition, not only the portion of the condition relating to a particular date or time period) and all other financial conditions precedent to the consummation of the Company Restructuring. The Sellers' Representative may, upon written notice thereafter to TPG and the Buyer terminate any further obligation under this Agreement to lend any money or make any capital contributions to the Company. (c) Notwithstanding the provisions of Sections 6.10 and 6.11 if on any Notification Date Buyer and TPG shall not have either (i) delivered to Sellers an officer's certificate stating that as of such Notification Date nothing has come to their attention which renders the information known to them as of the date of this Agreement untrue, incorrect or incomplete in a material adverse respect or (ii) irrevocably and unconditionally waived in a writing delivered to the Sellers the condition contained in the last sentence of Section 7.11, then the Sellers may, upon written notice to TPG and the Buyer, terminate any further obligation under this Agreement to lend any money or make any capital contributions to the Company. (d) For the avoidance of doubt, the Sellers may deliver a written notice to TPG and Buyer under this Section 6.13 notwithstanding that the Sellers had no further obligation to lend any money or make any capital contributions to the Company, and such notice shall also be a funding termination notice for purposes of Section 10.01(a)(vii) and Section 6.14. 6.14. Bankruptcy Filing, Etc. (a) Subject to Section 6.14(c), if the Company shall be the subject of a petition under the Bankruptcy Code prior to the termination of this Agreement (which in the case of an involuntary proceeding shall not be dismissed within sixty (60) days after the petition is filed), the Sellers shall pay Buyer the sum of five million dollars ($5,000,000). Notwithstanding anything herein to the contrary, the foregoing obligation shall not apply if either (a) the Revolving Credit Lender has not made any of the loans required by Section 6.11(b) in breach thereof or (b) the Sellers or the Sellers' Representative have delivered a funding termination notice in accordance with any of the provisions of Section 6.13. For the avoidance of doubt, if this Agreement is terminated (x) pursuant to the provisions of Section 10.01(a)(iv) or (y) pursuant to the provisions of Section 10.01(a)(viii) or (z) pursuant to the provisions of Section 10.01(a)(ix), the payment obligation set forth in the first sentence of this Section 6.14 shall not apply. (b) Subject to Section 6.14(c), if this Agreement is terminated by either Buyer or Sellers solely pursuant to clause (i) (and for the avoidance of doubt, not clause (ii)) of Section 10.01(a)(x), then Sellers shall pay Buyer the sum of five million dollars ($5,000,000). (c) Notwithstanding anything contained in this Section 6.14 to the contrary, in no event shall Sellers be required to pay to Buyer an amount in excess of five million dollars ($5,000,000) in the aggregate pursuant to this Section 6.14. 6.15. Section 203 Acknowledgement. The parties hereby acknowledge that until the Transaction, including, without limitation, the sale of the Shares, had been approved by the special committee of the Board of Directors of the Company, the parties had no "agreement, arrangement or understanding" within the meaning of Section 203 of the Delaware General Corporation Law with respect to such Transaction. 6.16. Adequacy and Sufficiency of Collateral. The parties hereby acknowledge and agree that the adequacy or sufficiency of the collateral securing the Revolving Credit Facility shall not be a condition precedent to the Closing, to the Company Restructuring or to the funding pursuant to the Revolving Credit Facility of the first thirty million dollars ($30 million) to be borrowed thereunder. 6.17. Post-Closing Revolving Credit Facility Loans. On and/or after the Closing, the Revolving Credit Lender shall unconditionally lend and advance to the Company pursuant to the terms of the Revolving Credit Facility, as and when requested by the Company, an aggregate amount equal to the excess, if any, of (A) thirty million dollars ($30,000,000) over (B) the Buyer Pre-Closing Funded Amount; provided however that so long as the security interest described in Section 6.19 hereof shall have been granted on or before the Closing Date, such unconditional obligation to lend shall terminate if on or after the Closing Date, the PBGC shall have instituted proceedings or threatened in writing to institute proceedings to terminate the Company Pension Plan or has taken other action that could reasonably result in a material liability to the Company under Sections 4062 through 4064 or 4067 through 4070 of ERISA. Such loan shall be advanced subject to no conditions whatsoever other than a written request by the Chief Executive Officer and the Chief Financial Officer of the Company stating that the borrowing is for the Company's Post-Closing Funding Needs. For the avoidance of doubt, except under the conditions described in the proviso of the first sentence of this Section 6.17, such loan shall be advanced notwithstanding (a) there being a breach of any covenant or occurrence of any event of default under the Revolving Credit Agreement or (b) the Company or any subsidiary of the Company having commenced voluntary bankruptcy proceedings or (c) any conditions applicable to other borrowings under the Revolving Credit Facility not being satisfied. TPG and Buyer shall use reasonable efforts to cause the Company to have at least two members of the Board of Directors of the Company who is not affiliated or associated with TPG or Buyer or any of their Affiliates until the aforementioned thirty million dollars ($30 million) is fully borrowed by the Company. Buyer and TPG acknowledge that money damages would not be adequate for a breach of Section 6.17 or Section 6.18. Accordingly, in addition to any other rights and remedies available to Sellers, Sellers shall be entitled to specific performance of the obligations of TPG, Buyer and/or the Revolving Credit Lender under the provisions of this Section 6.17 and Section 6.18. 6.18. Bankruptcy Filings Not Permitted. Unless and until the Revolving Credit Lender has advanced to the Company at least thirty million dollars ($30,000,000) pursuant to the terms of the Revolving Credit Facility, TPG and Buyer shall not, and shall cause each Revolving Credit Lender to not, (i) permit the Company to file a petition under the Bankruptcy Code, (ii) file a petition against the Company or any of its Subsidiaries under the Bankruptcy Code or (iii) permit the Company to amend, modify, revoke or render ineffective the by-law amendment described in Section 8.13. 6.19. PBGC. Promptly following the date of this Agreement, TPG shall propose to enter into an agreement with the PBGC whereby, among other things, in consideration for certain agreements on the part of the PBGC, including its agreement to forebear from taking actions with respect to the Company Pension Plan in connection with the transactions contemplated hereby, the Company will agree to secure the Company's obligations to the Company Pension Plan by a second lien and/or mortgage on the U.S. plant, property and equipment of the Company as of the date hereof in an initial amount of at least thirty million dollars ($30,000,000), on terms substantially as set forth in Annex II. Prior to the Closing, Buyer and TPG will negotiate in good faith with the PBGC with a view to executing such agreement in a form and in substance satisfactory to Buyer and the Company. ARTICLE VII Conditions to Buyer's Obligations The obligations of Buyer hereunder are subject to the satisfaction, or waiver in writing by Buyer, on or prior to the Closing Date, of the following conditions: 7.01. Accuracy of Representations and Warranties. The representations and warranties of each Seller set forth in Article III hereof and the representations and warranties of each Shareholder set forth in Article IV hereof shall be true and correct in all material respects on the date hereof and on the Closing Date with the same effect as though such representations and warranties had been made on and as of such date (except that for purposes of this Section 7.01 the $250,000 amount contained in Sections 3.05, 3.06, and 3.09 shall be deemed to be $1,000,000) and each Seller shall have delivered to TPG and Buyer a certificate to that effect, dated the Closing Date and signed by such Seller. 7.02. Performance of Covenants. Each and all of the covenants and agreements of each Seller to be performed or complied with prior to or on the Closing Date shall have been duly performed or complied with by such Seller, and each Seller shall have delivered to TPG and Buyer a certificate to that effect, dated the Closing Date, and signed by such Seller. 7.03. Governmental Approvals. All provisions under the HSR Act and any other required governmental approvals shall have been complied with, and the respective waiting periods thereunder shall have expired or have been terminated. 7.04. No Injunctions or Restraints. No temporary restraining order, preliminary or permanent injunction or other legal restraint or prohibition preventing the Transaction shall be in effect; provided, however, that each of TPG and Buyer shall have used its commercially reasonable efforts to prevent the entry of any such order, injunction or other restraint or prohibition against it and to appeal as promptly as possible any such order, injunction or other restraint or prohibition that may be entered against it. 7.05. Notes, Etc. Each of the Noteholders shall have delivered to Buyer (a) the Notes held by such Noteholder evidencing the Loans set forth on Exhibit B hereto, opposite the name of such Noteholder and duly endorsed in blank, or accompanied by appropriate bond powers, in proper form for transfer, (b) an Assignment and Acceptance, executed by such Noteholder, for each Loan Agreement to which such Noteholder is a party, which Assignment and Acceptance shall be substantially in the form attached as Exhibit C to such Loan Agreement (an "Assignment and Acceptance"), (c) an assignment of any security agreement relating to the Notes to which such Noteholder is a party and (d) a copy of each Loan Agreement to which such Noteholder is a party. The Company shall have taken all such action as shall be necessary to effect the transfer of the Notes, the Loan Agreements and the related agreements, including without limitation, recording such transfer on its books if and to the extent Buyer shall specifically identify and request such action by the Company by written request to the Company and the Sellers at least ten (10) days prior to the Closing Date. 7.06. Share Certificates. The Shareholders shall have delivered to Buyer certificates representing the Shares, duly endorsed in blank, or accompanied by appropriate stock powers, in proper form for transfer. 7.07. Registration Rights. Each of the Shareholders shall have assigned to Buyer any and all contractual rights that it may have to require the Company to register all or a portion of its Shares with the Securities and Exchange Commission. 7.08. Resignations As Agents. Each of the Noteholders shall have delivered to Buyer a resignation, dated the Closing Date, of such Noteholder under each of the Loan Agreements for which such Noteholder is acting as Agent which resignation shall be substantially in the form of Exhibit C hereto. 7.09. Opinions of Counsel. Buyer shall have received (i) the opinions of Ulrich Huppe with respect to certain matters relating to E.ON AG and VEBA Zweite Verwaltungsgesellschaft mbH to the effect set forth in Exhibit D-1 and Exhibit D-2 attached hereto, (ii) the opinion of A. Paul Brandimarte with respect to certain matters relating to E.ON North America, Inc. to the effect set forth in Exhibit D-3 attached hereto, (iii) the opinion of Reed Smith LLP with respect to certain matters relating to FIDELIA Corporation to the effect set forth in Exhibit D-4 attached hereto, (iv) the opinion of Lee & Li with respect to certain matters relating to Taisil to the effect set forth in Exhibit E attached hereto, and (v) the opinion of Chadbourne & Parke LLP, with respect to certain other matters, to the effect set forth in Exhibit F attached hereto. 7.10. Resignations. Buyer shall have received the resignations of the Designated Directors from the Board of Directors of the Company. 7.11. Company Restructuring. Buyer and the Company shall have reached agreement upon the terms and provisions of, and executed and delivered a definitive agreement, in form and substance satisfactory to Buyer, with respect to an exchange by Buyer of the Loans for newly issued debt and equity securities of the Company with customary or otherwise reasonably appropriate representations and warranties, pre-closing conditions and financial covenants (which, in the case of representations and warranties, pre-closing conditions and financial covenants described in Annex I, shall be not stricter than as so described) (the "Company Restructuring"), and all conditions to the Company Restructuring shall have been materially satisfied or waived. The Revolving Credit Lender and the Company shall have entered into the Revolving Credit Facility and shall have executed and delivered all agreements and instruments related thereto, with terms consistent with those set forth in Annex I and Section 6.17 and those set forth in Section 7.17. Nothing shall have come to the attention of TPG or Buyer which renders the information known to TPG and Buyer as of the date of this Agreement untrue, incorrect or incomplete in a material adverse respect. 7.12. Taisil. The Taisil Lenders shall have furnished their consent or waiver, as applicable, in form and substance reasonably satisfactory to Buyer, with respect to the sale of the Shares pursuant to this Agreement. 7.13. Company Pension Plan. The Company shall have contributed to the Company Pension Plan an amount equal to five million dollars ($5,000,000). 7.14. Loan Agreement Release. The Company and each subsidiary of the Company which is a party to a Loan Agreement shall have executed a release of all unperformed obligations of the lender under each of the Loan Agreements substantially in the form of Exhibit G hereto. Prior to the Closing, the Company and its Subsidiaries shall have borrowed in full all amounts available to them under the Loan Agreements. 7.15. General Release. The Company, the Sellers and the other parties set forth on Exhibit H hereto shall have entered into a General Release substantially in the form of Exhibit H hereto. 7.16. Termination Agreement. The Company and the other parties set forth on Exhibit I hereto shall have entered into a Termination Agreement substantially in the form of Exhibit I hereto. 7.17. Financial Tests. The Company shall have (A) for the month of September, 2001 and October, 2001, Revenue of no less than $36,000,000 for each such month and (B) Average Backlog for each Backlog Measurement Period of no less than 28,000,000 square inches. 7.18. Bankruptcy Authorization. On or prior to October 8, 2001, the Board of Directors of the Company shall have adopted an amendment to the Company's by-laws providing that any authorization for the filing of a petition under the Bankruptcy Code must be authorized by a vote of at least all but one of the members of the Company's Board of Directors then in office, including at least two such directors not affiliated or associated with E.ON AG or its Affiliates, and such amendment shall not have been modified, revoked or otherwise rendered ineffective. 7.19. Japanese Loans. The lenders in respect of the indebtedness owing by the Company's Japanese subsidiary shall have agreed, on terms and otherwise in form and substance reasonably satisfactory to TPG and Buyer, to the deferral of at least $15,000,000 of debt amortization payments scheduled to be made in the period October 2001 through and including December 2002 to a time or times occurring after December 31, 2002. 7.20. Minimum Funding. The Company shall have fulfilled all obligations existing at any time during the Pre-Closing Period under the minimum funding standards of Section 412 of the Code determined without regard to any waiver granted on or after the date of this Agreement, and the Company shall have delivered to TPG and the Buyer an officer's certificate to such effect. ARTICLE VIII Conditions to Sellers' Obligations The obligations of Sellers hereunder are subject to the satisfaction, or waiver in writing by Sellers, on or prior to the Closing Date of the following conditions: 8.01. Accuracy of Representations and Warranties. The representations and warranties of TPG and Buyer set forth in Article V hereof shall be true and correct in all material respects on the date hereof and on the Closing Date with the same effect as though such representations and warranties had been made on and as of such date and each of TPG and Buyer shall have delivered to each Seller a certificate to that effect, dated the Closing Date, and signed by a duly authorized officer of each of TPG and Buyer. 8.02. Performance of Covenants. Each and all of the covenants and agreements of TPG and Buyer to be performed or complied with prior to or on the Closing Date shall have been duly performed or complied with by each of TPG and Buyer, and each of TPG and Buyer shall have delivered to each Seller a certificate to that effect, dated the Closing Date, and signed by a duly authorized officer of each of TPG and Buyer. 8.03. Governmental Approvals. All provisions under the HSR Act and any other required governmental approvals shall have been complied with, and the respective waiting periods thereunder shall have expired or have been terminated. 8.04. No Injunctions or Restraints. No temporary restraining order, preliminary or permanent injunction or other legal restraint or prohibition preventing the Transaction shall be in effect; provided, however, that each Seller shall have used its commercially reasonable efforts to prevent the entry of any such order, injunction or other restraint or prohibition against it and to appeal as promptly as possible any such order, injunction or other restraint or prohibition that may be entered against it. 8.05. Payment of Purchase Price. (a) Buyer shall have delivered to each Noteholder at the Closing pursuant to Section 2.01, and each Noteholder shall have received that portion of the Note Closing Payment payable to such Noteholder. (b) Buyer shall have delivered to each Shareholder at the Closing pursuant to Section 2.02, and each Shareholder shall have received, that portion of the Share Purchase Price payable to such Shareholder. 8.06. Receipt of Assignment and Acceptances. Buyer shall have delivered to each Noteholder a counterpart original, executed by Buyer, of each Assignment and Acceptance delivered by such Noteholder pursuant to Section 7.05 hereof. 8.07. Loan Agreement Release. The Company and each subsidiary of the Company which is a party to a Loan Agreement shall have executed a release, of all unperformed obligations of the lender under each of the Loan Agreements substantially in the form of Exhibit G hereto. 8.08. General Release. The Company, the Sellers and the other parties set forth on Exhibit H hereto shall have entered into a General Release substantially in the form of Exhibit H hereto. 8.09. Termination Agreement. The Company and the other parties set forth on Exhibit I hereto shall have entered into a Termination Agreement substantially in the form of Exhibit I hereto. 8.10. Opinion of Counsel. Sellers shall have received (i) the opinion of Morris, Nichols, Arsht & Tunnell, with respect to certain matters relating to TPG and Buyer to the effect set forth in Exhibit J, and (ii) the opinion of Cleary, Gottlieb, Steen & Hamilton, counsel for TPG and Buyer, to the effect set forth in Exhibit K attached hereto. 8.11. Revolving Credit Facility. The Revolving Credit Lender and the Company shall have entered into the Revolving Credit Facility, with terms consistent with those set forth in Annex I and Section 6.17 and those set forth in Section 7.17. 8.12. Company Pension Plan. (a) Any agreement entered into between Buyer and/or the Company, on the one hand, and the PBGC on the other hand, shall not require any obligation of any Seller beyond the obligation to provide a capital contribution equal to five million dollars ($5,000,000). (b) The Company shall have contributed to the Company Pension Plan an amount equal to five million dollars ($5,000,000). 8.13. Bankruptcy Authorization. On or prior to the Closing Date, the Board of Directors of the Company shall have adopted an amendment to the Company's by-laws providing that any authorization for the filing of a petition under the Bankruptcy Code during the period commencing on the Closing Date through and including the date on which at least thirty million dollars ($30,000,000) has been loaned to the Company pursuant to the terms of the Revolving Credit Facility must be authorized by a vote of at least all but one of the members of the Company's Board of Directors then in office, including at least two such directors not affiliated or associated with Buyer, TPG, any Revolving Credit Lender, or any of their respective Affiliates, and such amendment shall not have been modified, revoked or otherwise rendered ineffective. ARTICLE IX Additional Covenants 9.01. Notice. Each party hereto shall promptly give notice to the other upon becoming aware of the occurrence or impending occurrence of any event which would cause or constitute a breach of any of the representations and warranties of such party contained in this Agreement (and such party shall take all reasonable action necessary to prevent or promptly remedy the same) or a failure to satisfy any of the conditions to such party's obligations to close hereunder. 9.02. Further Assurances. From time to time, as and when requested by either party hereto, the other party shall execute and deliver, or cause to be executed and delivered, all such documents and instruments and shall take, or cause to be taken, all such further or other actions, as such other party may reasonably deem necessary or desirable to consummate the Transaction. In addition, TPG and Buyer agree to provide Sellers with reasonable access to the books and records of the Company and other relevant information, and to make employees available, in each case as may be reasonably necessary or helpful in order to assist any Seller in defending or asserting any claims or rights with respect to the period prior to the Closing. ARTICLE X Termination of Agreement 10.01. Termination. (a) Anything contained herein to the contrary notwithstanding, this Agreement may be terminated and the transactions contemplated hereby abandoned at any time prior to the Closing Date: (i) by mutual written consent of Sellers and Buyer; (ii) by Sellers if any of the conditions set forth in Article VIII shall have become incapable of fulfillment and shall not have been waived by Sellers; (iii) by Buyer if any of the conditions set forth in Article VII shall have become incapable of fulfillment and shall not have been waived by Buyer; (iv) by Buyer or Sellers, if the Closing does not occur on or prior to November 15, 2001 provided that such date shall be extended to November 30, 2001 if (a) the condition set forth in Section 7.03 shall not yet have been satisfied and (b) Buyer and TPG shall have delivered to Sellers on November 15, 2001 an officers' certificate of Buyer and TPG (i) stating in reasonable detail in which respects the condition contained in Section 7.03 has not been satisfied and (ii) confirming that all conditions precedent contained in Article VII (other than the condition contained in Section 7.03) either (x) have been satisfied as of such date (and those conditions shall be set forth in the certificate), (y) have been irrevocably and unconditionally waived (and those conditions shall be set forth in the certificate) or (z) are reasonably capable of being satisfied by November 30, 2001 (and those conditions shall be set forth in the certificate) and (iii) stating that to TPG's and Buyer's knowledge, the condition contained in Section 7.03 is reasonably capable of being satisfied by November 30, 2001; (v) by Buyer or Sellers within thirty (30) days of the date on which a voluntary or involuntary bankruptcy petition under the Bankruptcy Code is filed by or against the Company; or (vi) by Buyer or Sellers if the other party hereto breaches any of its covenants or agreements contained herein and such breach is not cured within 5 days of receipt of written notice of such breach (such notice to be given in accordance with Section 12.10); (vii) by Buyer or Sellers if Sellers or the Sellers' Representative delivers a funding termination notice pursuant to Section 6.13; (viii) by Buyer or Sellers on or prior to the fifth business day after October 29, 2001 if Buyer shall not have delivered to Sellers on or prior to October 29, 2001, an officers' certificate of TPG and Buyer confirming that (i) Buyer and the Company have reached agreement upon the terms and provisions of, and have executed and delivered, a definitive agreement, in form and substance satisfactory to Buyer, with respect to the Company Restructuring, and (ii) to TPG's and Buyer's knowledge, there are no conditions to the Company Restructuring contained in such definitive agreement that are not reasonably capable of being satisfied; (ix) by Buyer or Sellers at any time after October 29, 2001 if Development Bank of Japan or any of the other lenders in respect of the indebtedness owing by the Company's Japanese subsidiary shall at any time (whether before, on or after October 29, 2001) accelerate amounts due or accelerate required payments or maturity dates or take any other action whereby payments of principal are owing on a date prior to the regularly scheduled dates for payment of principal, and such acceleration shall be in effect and not have been withdrawn at the time notice of termination has been sent; or (x) by Buyer or Sellers (i) within five (5) business days of the date of receipt by Buyer or Sellers, as the case may be, of written notification that the PBGC has instituted proceedings to terminate the Company Pension Plan or (ii) within five business days of the date of receipt by Buyer or Sellers, as the case may be, of written notification that PBGC has threatened in writing to institute proceedings to terminate the Company Pension Plan or taken other action that could result in a material liability to the Company under Sections 4062 through 4064 or 4067 through 4070 of ERISA; provided, however, that the party seeking termination (other than in a termination pursuant to clause (i)) is not in breach in any material respect of any of its representations, warranties, covenants or agreements contained in this Agreement. (b) In the event of termination by Sellers or Buyer pursuant to this Section 10.01, written notice thereof shall forthwith be given to the other party and the transactions contemplated by this Agreement shall be terminated, without further action by either party. (c) If this Agreement is terminated and the transactions contemplated hereby are abandoned as described in this Section 10.01, this Agreement shall become void and of no further force or effect, except for the provisions of (i) Sections 3.07 and 5.08, (ii) Section 12.08, (iii) Section 6.03, (iv) Section 6.05, (v) Section 6.14 and (vi) this Section 10.01. Nothing in this Section 10.01 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or to impair the right of any party to compel specific performance by the other party of its obligations under this Agreement. ARTICLE XI Indemnification 11.01. Indemnification by Sellers. The Sellers, jointly and severally, will indemnify, defend, save and hold TPG, Buyer and their Affiliates (other than the MEMC Affiliate Group) and any of their directors, officers, employees or agents ("Buyer's Affiliates") harmless from and against any and all damages, liabilities, losses, penalties, expenses, assessments, judgments or deficiencies of any nature whatsoever (including, without limitation, reasonable attorneys' fees and expenses, consultants' and investigators' fees and expenses, and other costs and expenses incident to any suit, action or proceeding) (together, "Losses") incurred or sustained by TPG, Buyer or any of Buyer's Affiliates which arise out of or result from (a) any breach of any representation and warranty given or made by a Seller herein or in any certificate delivered with respect thereto, or (b) the noncompliance with or nonperformance of any agreement, obligation or covenant of a Seller under this Agreement. Any claim for indemnification hereunder for any breach or inaccuracy of a representation or warranty must be made by notice to the Sellers within the applicable time period specified in Section 12.01. 11.02. Indemnification by TPG and Buyer. TPG and Buyer, jointly and severally, will indemnify, defend, save and hold Sellers and Sellers' Affiliates (including any director, officer, employee or agent of any of the foregoing) harmless from and against any and all Losses incurred or sustained by Sellers or any of Sellers' Affiliates (including any director, officer, employee or agent or other Affiliate of any of the foregoing) which arise out of or result from (a) any breach of any representation and warranty given or made by TPG or Buyer herein or in any certificate delivered with respect thereto or (b) the noncompliance with or nonperformance of any agreement, obligation or covenant of TPG or Buyer under this Agreement. Any claim for indemnification hereunder for any breach of a representation or warranty must be made by notice to Buyer within the applicable time period specified in Section 12.01. 11.03. Third-Party Claims. (a) Within 15 business days after service of notice of any claim or of process by any third person in any matter in respect of which indemnity may be sought from the other party pursuant to this Agreement (a "Third-Party Claim"), the party in receipt of the claim (the "Indemnified Party") shall notify the other party (the "Indemnifying Party") of the receipt thereof. Unless the Indemnifying Party shall notify the Indemnified Party that it elects to assume the defense of any such Third-Party Claim or settlement thereof (such notice to be given as promptly as reasonably possible in view of the necessity to arrange for such defense and in no event later than 10 days following the aforesaid notice), the Indemnified Party shall assume the defense of any such Third-Party Claim or settlement thereof. (b) If the Indemnifying Party elects to assume the defense of any Third-Party Claim, the Indemnified Party shall cooperate with the Indemnifying Party in the defense or prosecution thereof. Such cooperation shall include the retention and (upon the Indemnifying Party's reasonable request) the provision to the Indemnifying Party of records and information which are reasonably relevant to such Third-Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. (c) Such defense shall be conducted expeditiously (but with due regard for obtaining the most favorable outcome reasonably likely under the circumstances, taking into account costs and expenditures) and the Indemnifying Party or Indemnified Party, as the case may be, shall be advised promptly of all developments. If the Indemnifying Party assumes the defense of any Third-Party Claim, the Indemnified Party will have the right to participate fully in any such action or proceeding and to retain its own counsel, but the fees and expenses of such counsel will be at its own expense unless (i) the Indemnifying Party shall have agreed to the retention of such counsel for both the indemnifying and indemnified parties or (ii) the named parties to any such suit, action or proceeding (including any impleaded parties) include both the Indemnifying Party and the Indemnified Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. If the Indemnifying Party shall have assumed the defense of a Third-Party Claim, the Indemnified Party shall agree to any settlement, compromise or discharge of a Third-Party Claim which the Indemnifying Party may recommend and which by its terms obligates the Indemnifying Party to pay the full amount of the liability in connection with such Third-Party Claim, which releases the Indemnified Party completely in connection with such Third-Party Claim and which would not otherwise adversely affect the Indemnified Party. The Indemnified Party shall have the right to settle any Third-Party Claim the defense of which shall not have been assumed by the Indemnifying Party provided such settlement is reasonably acceptable to the Indemnifying Party. Buyer and each Seller acknowledge and agree that its sole and exclusive remedy with respect to any and all claims relating to the subject matter of this Agreement shall be pursuant to the indemnification provisions set forth in this Article XI. In furtherance of the foregoing Buyer and each Seller hereby waives to the fullest extent permitted under applicable law, any and all rights, claims and causes of action it may have against the other parties hereto, their Affiliates and their respective officers, directors, employees, stockholders, agents and representatives arising under or based upon any Federal, state, local or foreign statute, law, ordinance, rule or regulation, except pursuant to the indemnification provisions set forth in this Article XI. (d) Notwithstanding the foregoing, the Indemnifying Party shall not be entitled to assume the defense of any Third-Party Claim (and shall be liable for the fees and expenses of counsel incurred by the Indemnified Party in defending such Third Party Claim) if the Third-Party Claim seeks an order, injunction or other equitable relief or relief for other than money damages against the Indemnified Party, and the Indemnified Party shall have the sole and exclusive right to settle any such Third-Party Claim. ARTICLE XII Miscellaneous 12.01. Survival. The representations, warranties and covenants set forth in this Agreement shall survive the Closing Date and shall remain in full force and effect until expiration of the applicable statute of limitations. All covenants, representations, warranties and agreements made by Sellers, on the one hand, and TPG and/or Buyer, on the other hand, shall be unaffected by any investigation made by TPG or Buyer or Sellers, respectively or by any knowledge obtained as a result thereof or otherwise. 12.02. Entire Agreement; Amendment. This Agreement (including the Schedules and Exhibits attached hereto) and the Assignment and Acceptances constitute the entire agreement and understanding of the parties relating to the subject matter hereof and supersede all prior agreements and understandings, whether oral or written, relating to the subject matter hereof. The terms of this Agreement cannot be changed, modified, released or discharged orally. 12.03. Successors and Assigns. This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and permitted assigns. This Agreement may not be assigned by TPG or Buyer without the prior written consent of each Seller or by any Seller without the prior written consent of TPG and Buyer; provided, however, that this Agreement may be assigned by Buyer to one or more Affiliates of Buyer, provided that (i) Buyer shall notify in writing each Seller in advance of any proposed assignment, (ii) after such assignment, TPG and Buyer shall continue to be bound by this Agreement, and Buyer shall continue to be bound by each Assignment and Acceptance executed by Buyer, and (iii) on or prior to the date of such assignment TPG and Buyer and the assignee shall execute all such documents as Sellers shall reasonably request. 12.04. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 12.05. Headings. The headings in this Agreement are included for convenience of reference only and shall not in any way affect the meaning or interpretation of this Agreement. 12.06. Certain Tax Matters. (a) Sellers, TPG and Buyer shall cooperate with each other in connection with any Tax matter, including the preparation and filing of any Tax Return or the handling of any audit, contest or court proceeding, relating to Sellers' ownership or sale of the Shares or the Notes or any of the transactions contemplated hereby. Such cooperation shall include (but not be limited to) providing reasonable access to the books, records and employees of the Company in each case as may be reasonably necessary or helpful in order to reduce or minimize any Tax or to support a reporting position. Sellers, TPG and Buyer further agree for all Tax purposes to abide by and report all transactions contemplated hereunder consistent with this Agreement, including in connection with the filing of any Tax Return, any refund claim or in any litigation. (b) Transfer Taxes. Buyer shall pay all sales, use, transfer, stamp, conveyance, value added or similar taxes, duties, excises or governmental charges imposed by any taxing jurisdiction, including any and all recording fees, notarial fees and other similar costs of closing incurred in connection with the sale, transfer or assignment of the Shares and/or the Notes or otherwise on account of this Agreement or the transactions contemplated hereby. 12.07. Waiver; Requirement of Writing. This Agreement cannot be changed or any performance, term or condition waived in whole or in part except by a writing signed by the party against whom enforcement of the change or waiver is sought. Any term or condition of this Agreement may be waived at any time by the party hereto entitled to the benefit thereof. No delay or failure on the part of any party in exercising any rights hereunder, and no partial or single exercise thereof, will constitute a waiver of such rights or of any other rights hereunder. 12.08. Expenses. Each of the parties hereto shall pay, without right of reimbursement from the other party or, except as provided in other agreements, from the Company, all the costs incurred by it incident to the preparation, execution and delivery of this Agreement and the performance of its obligations hereunder, whether or not the transactions contemplated by this Agreement shall be consummated. 12.09. Sellers' Representative. (a) Each of the Sellers hereby irrevocably makes, constitutes, and appoints E.ON AG its representative, agent and true and lawful attorney in fact of and for each of the Sellers in connection with the Transaction Documents and the Transaction (the "Sellers' Representative"). Each of the Sellers hereby authorizes and empowers the Sellers' Representative to make or give any approval, waiver, request, consent, instruction or other communication on behalf of each of the Sellers as each such Seller could do for himself, herself or itself, including with respect to the amendment of any provision of any Transaction Document (or any schedule thereto). Each of the Sellers authorizes and empowers the Sellers' Representative to receive all demands, notices or other communications directed to such Seller under any Transaction Document. Each of the Sellers authorizes and empowers the Sellers' Representative to (A) take any action (or to determine to refrain from taking any action) with respect thereto as the Sellers' Representative may deem appropriate as effectively as if such Seller could act for itself (including, without limitation, the settlement or compromise of any dispute or controversy), which action will be binding on all the Sellers and (B) execute and deliver all instruments and documents of every kind incident to the foregoing with the same effect as if such Seller had executed and delivered such instruments and documents personally. Accordingly, any demands, notices or other communications directed to any Seller hereunder shall be deemed effective if given to Sellers' Representative. (b) Upon the resignation of the Sellers' Representative, or at any other time or from time to time, a successor may be appointed by the Sellers' Representative or the Sellers but such appointment will not be effective until such successor shall agree in writing to accept such appointment and notice of the selection of such successor Sellers' Representative is provided to Buyer. (c) To the extent requested by the Sellers' Representative, the Sellers shall indemnify the Sellers' Representative against any and all losses, liabilities or expenses incurred by it arising out of or in connection with acting as the Sellers' Representative under this Agreement and the other Transaction Documents, including the costs and expenses of enforcing this Agreement and defending the Sellers against any claim whether asserted by TPG and/or Buyer or any other person or liability in connection with the exercise or performance of any of its powers hereunder, except to the extent any such loss, liability or expense may be attributable to its gross negligence, bad faith or willful misconduct. 12.10. TPG Representative. (a) Each entity comprising TPG hereby irrevocably makes, constitutes, and appoints Buyer its representative, agent and true and lawful attorney in fact of and for each of the entities comprising TPG in connection with the Transaction Documents and the Transaction (the "TPG Representative"). Each of the entities comprising TPG hereby authorizes and empowers the TPG Representative to make or give any approval, waiver, request, consent, instruction or other communication on behalf of each of the entities comprising TPG as each such entity could do for himself, herself or itself, including with respect to the amendment of any provision of any Transaction Document (or any schedule thereto). Each of the entities comprising TPG authorizes and empowers the TPG Representative to receive all demands, notices or other communications directed to such entity under any Transaction Document. Each of the entities comprising TPG authorizes and empowers the TPG Representative to (A) take any action (or to determine to refrain from taking any action) with respect thereto as the TPG Representative may deem appropriate as effectively as if such entity could act for itself (including, without limitation, the settlement or compromise of any dispute or controversy), which action will be binding on all the entities comprising TPG and (B) execute and deliver all instruments and documents of every kind incident to the foregoing with the same effect as if such entity had executed and delivered such instruments and documents personally. Accordingly, any demands, notices or other communications directed to any entity comprising TPG hereunder shall be deemed effective if given to the TPG Representative. (b) Upon the resignation of the TPG Representative, or at any other time or from time to time, a successor may be appointed by the TPG Representative or the entities comprising TPG but such appointment will not be effective until such successor shall agree in writing to accept such appointment and notice of the selection of such successor TPG Representative is provided to the Sellers' Representative. (c) To the extent requested by the TPG Representative, the entities comprising TPG shall indemnify the TPG Representative against any and all losses, liabilities or expenses incurred by it arising out of or in connection with acting as the TPG Representative under this Agreement and the other Transaction Documents, including the costs and expenses of enforcing this Agreement and defending the entities comprising TPG against any claim whether asserted by any of the Sellers or any other person or liability in connection with the exercise or performance of any of its powers hereunder, except to the extent any such loss, liability or expense may be attributable to its gross negligence, bad faith or willful misconduct. 12.11. Notices. Any notice, request, consent, waiver or other communication required or permitted hereunder shall be effective only if it is in writing and personally delivered or sent by certified or registered mail, postage prepaid, addressed as set forth below, or sent by facsimile to the number set forth below with confirmation received and followed by a writing personally delivered or sent by certified or registered mail: (a) If to TPG, the TPG Representative or Buyer: Texas Pacific Group 301 Commerce Street, Suite 3300 Fort Worth, TX 76102 Attention: Mr. James J. O'Brien Telecopy: (817) 871-4010 with a copy to: Cleary, Gottlieb, Steen & Hamilton One Liberty Plaza New York, NY 10006 Attention: Paul J. Shim, Esq. Telecopy: (212) 225-3999 (b) If to the Shareholders: E.ON North America, Inc. 405 Lexington Avenue New York, NY 10174 Attention: Mr. A. Paul Brandimarte, Jr. Telecopy: (212) 557-5189 VEBA Zweite Verwaltungsgesellschaft mbH E.ON - Platz 1 D-40479 Dusseldorf Germany Attention: Dr. Rolf Pohlig Telecopy: 011-49-211-45-79-963 with copies to: E.ON AG E.ON - Platz 1 D-40479 Dusseldorf Germany Attention: Legal Department Telecopy: 011-49-211-45-79-963 and Chadbourne & Parke LLP 30 Rockefeller Plaza New York, NY 10112 Attention: Morton E. Grosz, Esq. Telecopy: (212) 541-5369 (c) If to the Noteholders: E.ON AG E.ON - Platz 1 D-40479 Dusseldorf Germany Attention: Legal Department Telecopy: 011-49-211-45-79-963 FIDELIA Corporation 300 Delaware Avenue, Suite 545 Wilmington, DE 19801 Attention: Mr. Joern A. Stuehmeier Telecopy: (302) 427-5913 E.ON North America, Inc. 405 Lexington Avenue New York, NY 10174 Attention: Mr. A. Paul Brandimarte, Jr. Telecopy: (212) 557-5189 E.ON International Finance B.V. Strawinskylaan 3105, Atrium 7th Floor 1000BL Amsterdam Netherlands Attention: Mr. Peter Pels Telecopy: 011-31-20-4420-319 with a copy to: Chadbourne & Parke LLP 30 Rockefeller Plaza New York, NY 10112 Attention: Morton E. Grosz, Esq. Telecopy: (212) 541-5369 (d) If to the Sellers' Representative: E.ON AG E.ON - Platz 1 D-40479 Dusseldorf Germany Attention: Legal Department Telecopy: 011-49-211-45-79-963 with a copy to: Chadbourne & Parke LLP 30 Rockefeller Plaza New York, NY 10112 Attention: Morton E. Grosz, Esq. Telecopy: (212) 541-5369 or such other person or address or to such other facsimile number as the addressee may have specified in a notice duly given to the sender as provided herein. Such notice or communication shall be deemed to have been given as of the date so personally delivered, sent by facsimile or mailed. 12.12. Governing Law. This Agreement will be construed and interpreted in accordance with and governed by the internal laws of the State of New York applicable to contracts made and to be performed entirely within such State, without regard to the conflicts of law principles of such State. 12.13. Public Announcements. None of the parties shall make any press release or public announcement with respect to the transactions contemplated hereby without (i) in the case of TPG and/or Buyer, obtaining the prior approval of Sellers and (ii) in the case of any Seller, obtaining the prior approval of TPG and Buyer, except as may be required by law or regulations of securities exchanges. Approvals under this Section 12.12 shall not be unreasonably withheld. 12.14. No Third-Party Beneficiaries. Except to the extent specifically set forth in Section 11.01 and Section 11.02, nothing in this Agreement is intended or will be construed as creating or giving the Company or any person, firm, corporation or other entity, other than the parties hereto and their successors and permitted assigns, any right, remedy or claim under or in respect of this Agreement or any provision hereof. 12.15. Construction; Interpretation. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. For the purposes of this Agreement, (i) words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender as the context requires, (ii) the terms "hereof", "herein", and "herewith" and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, (iii) the word "including" and words of similar import when used in this Agreement shall mean "including, without limitation", unless otherwise specified, and (iv) the word "or," when used in expressions of condition or exclusion, shall not be exclusive. 12.16. No Effect on the Company. Nothing contained in this Agreement shall be deemed to affect or restrict in any way any actions of the Company or its directors, and it is understood and agreed that no obligation is created by this Agreement to agree upon or consummate the Company Restructuring. IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or caused this Agreement to be duly executed by their respective officers thereunto duly authorized, as of the date first above written. E.ON AG By: /s/ Paul Brandimarte ----------------------------- Name: Paul Brandimarte Title: Attorney in Fact By: /s/ Joseph Supp ----------------------------- Name: Joseph Supp Title: Attorney in Fact VEBA ZWEITE VERWALTUNGSGESELLSCHAFT MBH By: /s/ Paul Brandimarte ----------------------------- Name: Paul Brandimarte Title: Attorney in Fact E.ON INTERNATIONAL FINANCE B.V. By: /s/ Paul Brandimarte ----------------------------- Name: Paul Brandimarte Title: Attorney in Fact By: /s/ Joseph Supp ----------------------------- Name: Joseph Supp Title: Attorney in Fact FIDELIA CORPORATION By: /s/ Joern A. Stuehmeier ----------------------------- Name: Joern A. Stuehmeier Title: President E.ON NORTH AMERICA, INC. By: /s/ Paul Brandimarte ----------------------------- Name: Paul Brandimarte Title: Vice President TPG PARTNERS III, L.P. By: TPG GenPar III, L.P. By: TPG Advisors III, Inc. By: /s/ Gene J. Frantz ----------------------------- Name: Gene J. Frantz Title: Vice President T(3)PARTNERS, L.P. By: T(3)GenPar, L.P. By: T(3)Advisors, Inc. By: /s/ Gene J. Frantz ----------------------------- Name: Gene J. Frantz Title: Vice President T(3)PARTNERS II, L.P. By: T(3)GenPar II, L.P. By: T(3)Advisors II, Inc. By: /s/ Gene J. Frantz ----------------------------- Name: Gene J. Frantz Title: Vice President TPG WAFER HOLDINGS LLC By: /s/ Gene J. Frantz ----------------------------- Name: Gene J. Frantz Title: Vice President EX-3 5 tpgex3.txt EXHIBIT 3 ASSIGNMENT AGREEMENT ASSIGNMENT AGREEMENT (the "Agreement"), dated as of November 13, 2001, among TPG Partners III, L.P., T3 Partners, L.P. and T3 Partners II, L.P., each a Delaware limited partnership (collectively, "TPG"), TPG Wafer Holdings LLC, a Delaware limited liability company ("Buyer"), Green Equity Investors III, L.P. ("GEI"), Green Equity Investors Side III, L.P. ("GEI Side") and TCW/Crescent Mezzanine Partners III, L.P. ("TCW"), each a Delaware limited partnership, TCW/Crescent Mezzanine Trust III, a Delaware trust ("TCW Trust"), TPG Wafer Partners LLC, a Delaware limited liability company ("Wafer Partners"), and MEMC Holdings Corporation, a Delaware corporation ("Holdings"). GEI, GEI Side, TCW, TCW Trust, Wafer Partners and Holdings are referred to herein collectively as the "New Investors" and each as a "New Investor". W I T N E S S E T H : WHEREAS, pursuant to that certain Purchase Agreement, dated as of September 30, 2001 (the "Purchase Agreement"), by and among TPG and Buyer, on the one hand, and E.ON AG, a German corporation, E.ON International Finance B.V., a Dutch corporation, FIDELIA Corporation, a Delaware corporation, VEBA Zweite Verwaltungsgesellschaft mbH, a German corporation, and E.ON North America, Inc., a Delaware corporation, on the other hand (collectively, "Sellers"), Buyer has the right to purchase the Shares and the Notes in accordance with the terms of the Purchase Agreement; WHEREAS, in accordance with Section 12.03 of the Purchase Agreement, Buyer wishes to assign its right to purchase the Notes to the New Investors, and the New Investors wish to accept such assignment; and WHEREAS, in accordance with Section 12.03 of the Purchase Agreement, Buyer has notified the Sellers in writing of this proposed assignment and the Sellers have given their written consent to such assignment. NOW, THEREFORE, in consideration of the obligations contained herein, and for other good and valuable consideration, the adequacy of which is hereby acknowledged, the parties hereto agree as follows: Section 1. Definitions. Capitalized terms used but not defined herein shall have the meanings set forth in the Purchase Agreement. Section 2. Assignment. (a) Buyer hereby assigns to Holdings its right to purchase pursuant to the Purchase Agreement, and Holdings hereby agrees to purchase from the Sellers pursuant to and in accordance with the terms of the Purchase Agreement, the Notes set forth on Schedule 2(a) of this Agreement. Buyer hereby assigns to Holdings all of its rights under the Purchase Agreement with respect to the purchase of such Notes under the Purchase Agreement, and Holdings accepts such Notes, subject to the terms of, and satisfaction of the conditions to Closing set forth in, the Purchase Agreement, and hereby agrees to assume the obligations of Buyer under the Purchase Agreement to the extent of such assignment; provided, however, the amount of Buyer's obligation under Section 2.06 of the Purchase Agreement assumed by Holdings hereunder shall not exceed Holdings's Pro Rata Share of the aggregate payment obligation, if any, of Buyer under Section 2.06 of the Purchase Agreement. (b) Buyer hereby assigns to GEI and GEI Side its right to purchase pursuant to the Purchase Agreement, and GEI and GEI Side hereby agree to purchase from the Sellers pursuant to and in accordance with the terms of the Purchase Agreement, the Notes set forth on Schedule 2(b) of this Agreement. Buyer hereby assigns to GEI and GEI Side all of its rights under the Purchase Agreement with respect to the purchase of such Notes under the Purchase Agreement, and GEI and GEI Side accept such Notes, subject to the terms of, and satisfaction of the conditions to Closing set forth in, the Purchase Agreement, and hereby agree to assume the obligations of Buyer under the Purchase Agreement to the extent of such assignment; provided, however, the amount of Buyer's obligation under Section 2.06 of the Purchase Agreement assumed by GEI and GEI Side hereunder shall not exceed GEI and GEI Side's respective Pro Rata Shares of the aggregate payment obligation, if any, of Buyer under section 2.06 of the Purchase Agreement. (c) Buyer hereby assigns to TCW and TCW Trust its right to purchase pursuant to the Purchase Agreement, and TCW and TCW Trust hereby agree to purchase from the Sellers pursuant to and in accordance with the terms of the Purchase Agreement, the Notes set forth on Schedule 2(c) of this Agreement. Buyer hereby assigns to TCW and TCW Trust all of its rights under the Purchase Agreement with respect to the purchase of such Notes under the Purchase Agreement, and TCW and TCW Trust accept such Notes, subject to the terms of, and satisfaction of the conditions to Closing set forth in, the Purchase Agreement, and hereby agree to assume the obligations of Buyer under the Purchase Agreement to the extent of such assignment; provided, however, the amount of Buyer's obligation under Section 2.06 of the Purchase Agreement assumed by TCW and TCW Trust hereunder shall not exceed TCW and TCW Trust's respective Pro Rata Share of the aggregate payment obligation, if any, of Buyer under Section 2.06 of the Purchase Agreement. (d) Buyer hereby assigns to Wafer Partners its right to purchase pursuant to the Purchase Agreement, and Wafer Partners hereby agrees to purchase from the Sellers pursuant to and in accordance with the terms of the Purchase Agreement, the Notes set forth on Schedule 2(d) of this Agreement. Buyer hereby assigns to Wafer Partners all of its rights under the Purchase Agreement with respect to the purchase of such Notes under the Purchase Agreement, and Wafer Partners accepts such Notes, subject to the terms of, and satisfaction of the conditions to Closing set forth in, the Purchase Agreement, and hereby agrees to assume the obligations of Buyer under the Purchase Agreement to the extent of such assignment; provided, however, the amount of Buyer's obligation under Section 2.06 of the Purchase Agreement assumed by Wafer Partners hereunder shall not exceed Wafer Partners' Pro Rata Share of the aggregate payment obligation, if any, of Buyer under Section 2.06 of the Purchase Agreement. (e) Notwithstanding the foregoing provisions of Section 2 of this Agreement, nothing in this Agreement shall increase the obligations or liabilities of the Sellers under the Purchase Agreement in any way, or reduce or diminish the obligations or liabilities of Buyer or TPG under the Purchase Agreement in any way. By way of example and without limiting the preceding sentence, any defense available to the Sellers with respect to any action or claim by TPG or Buyer shall also be available to the Sellers with respect to any action or claim by a New Investor, and each New Investor accepts the Notes and the Purchase Agreement subject to any extensions, waivers, confirmations or other actions taken or not taken by TPG and/or the Buyer and/or the TPG Representative. Buyer and TPG acknowledge that they shall continue to be bound by the Purchase Agreement and be liable for all obligations thereunder, including without limitation the obligations under Section 2.06 and Article XI thereof. (f) Each New Investor hereby (i) consents to all the provisions of the Purchase Agreement and agrees to be bound by provisions thereof which limit or have the effect of limiting rights or claims it might otherwise have under the Purchase Agreement or otherwise to the same extent as if such New Investor was the Buyer or TPG, including without limitation the provisions of Sections 5.07 and 6.04 of the Purchase Agreement; and (ii) irrevocably makes, constitutes and appoints the TPG Representative its representative, agent and true and lawful attorney in fact for all matters relating to the Purchase Agreement, and agrees that it shall not take any action with respect to the Purchase Agreement except through the TPG Representative on its behalf. (g) "Pro Rata Share" shall mean the percentage interest as set forth for each New Investor on Schedule 2(e). Section 3. Investment. (a) Each New Investor has independently, and without reliance on Buyer or any of Buyer's Affiliates or any of their respective partners, officers, directors, members, employees, agents or representatives (collectively, the "TPG Parties"), made its own analysis and decision regarding whether to enter this Agreement and purchase the Notes. Each New Investor acknowledges receipt of the Purchase Agreement. Each New Investor acknowledges that no TPG Party has provided any information to any New Investor, nor made any statement, representation or warranty to any New Investor, with respect to the Notes. Each New Investor agrees that it will, independently and without reliance on any TPG Party, continue to make its own decisions regarding the Notes, and each New Investor acknowledges that its exclusive rights and remedies with respect to the Notes shall be those rights and remedies accorded to the Buyer under the Investment Agreement. (b) Each New Investor is acquiring the Notes for its own account solely for the purpose of investment and not with a view to, or for sale in connection with, any distribution thereof in violation of the Securities Act. Each New Investor acknowledges that the Notes have not been registered under the Securities Act and may be sold or disposed of in the absence of such registration only pursuant to an exemption from the registration requirements of the Securities Act. Section 4. Entire Agreement. This Agreement sets forth the entire agreement between the parties hereto with respect to the transactions contemplated by this Agreement. Any provision of this Agreement may be amended, modified or supplemented in whole or in part at any time by an agreement in writing among the parties hereto executed in the same manner as this Agreement. Section 5. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to constitute an original, but all of which together shall constitute one and the same document. SECTION 6. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THAT STATE WITHOUT REFERENCE TO ITS CONFLICT OF LAWS RULES. Section 7. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given, if delivered personally, by telecopier or sent by first class mail, postage prepaid, as follows: (a) If to Buyer, TPG, Wafer Partners or Holdings: Texas Pacific Group 301 Commerce Street, Suite 3300 Fort Worth, TX 76102 Attention: Mr. James J. O'Brien Telecopy: (817) 871-4010 with a copy to: Cleary, Gottlieb, Steen & Hamilton One Liberty Plaza New York, NY 10006 Attention: Paul J. Shim, Esq. Telecopy: (212) 225-3999 (b) If to GEI or GEI Side: Leonard Green & Partners, L.P. 11111 Santa Monica Boulevard Suite 2000 Los Angeles, California 90025 Attention: John Baumer Telecopy: (310) 954-0404 with a copy to: Kramer Levin Naftalis & Frankel LLP 919 Third Avenue New York, NY 10022-3852 Attention: Howard A. Sobel, Esq. Telecopy: (212) 715-8000 (c) If to TCW or TCW Trust: TCW/Crescent Mezzanine Partners III, L.P. 11100 Santa Monica Boulevard Suite 2000 Los Angeles, California 90025 Attention: Jean-Marc Chapus Telecopy: (310) 235-5967 with a copy to: Kramer Levin Naftalis & Frankel LLP 919 Third Avenue New York, NY 10022-3852 Attention: Howard A. Sobel, Esq. Telecopy: (212) 715-8000 Section 8. Termination. This Agreement shall be terminated and shall be of no further force or effect if the Purchase Agreement is validly terminated in accordance with Section 10.01 thereof, except for Section 6 hereof, which shall survive any termination of this Agreement. Section 9. No Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and the Sellers and, with respect to Section 11.02 of the Purchase Agreement, the Sellers' Affiliates (including any director, officer, employee or agent or other Affiliate of any of the foregoing) and their respective successors and permitted assigns and nothing herein, express or implied, is intended or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. Sellers and Sellers' Affiliates are third party beneficiaries of this Agreement. Section 10. Successors and Assigns. This Agreement is not transferable or assignable by the New Investors, except with the prior written consent of the Buyer. Any purported transfer or assignment of this Agreement without such written consent shall be null and void. IN WITNESS WHEREOF, this Assignment Agreement executed on behalf of the parties hereto by their respective duly authorized officers, all as of the date first above written. TPG PARTNERS III, L.P. By: TPG GenPar III, L.P., its general partner By: TPG Advisors III, Inc., its general partner By: /s/ James J. O' Brien --------------------- Name: James J. O'Brien Title: Vice President T3 PARTNERS, L.P. By: T3 GenPar, L.P., its general partner By: T3 Advisors, Inc., its general partner By: /s/ James J. O' Brien --------------------- Name: James J. O'Brien Title: Vice President T3 PARTNERS II, L.P. By: T3 GenPar II, L.P., its general partner By: T3 Advisors II, Inc., its general partner By: /s/ James J. O' Brien --------------------- Name: James J. O'Brien Title: Vice President TPG WAFER HOLDINGS LLC By: /s/ Richard A. Ekleberry ------------------------ Name: Richard A. Ekleberry Title: Vice President TPG WAFER PARTNERS LLC By: /s/ Richard A. Ekleberry ------------------------ Name: Richard A. Ekleberry Title: Vice President MEMC HOLDINGS CORPORATION By: /s/ Richard A. Ekleberry ------------------------ Name: Richard A. Ekleberry Title: Vice President TCW/CRESCENT MEZZANINE PARTNERS III, L.P. and TCW/CRESCENT MEZZANINE TRUST III By: TCW/Crescent Mezzanine Management III, L.L.C. its Investment Manager. By: TCW Asset Management Company, its Sub-Advisor By: /s/ Jean-Marc Chapus -------------------- Name: Jean-Marc Chapus Title: Managing Director By: /s/ James C. Shevlet, Jr. ------------------------- Name: James C. Shevlet, Jr. Title: Senior Vice President GREEN EQUITY INVESTORS III, L.P. By: GEI Capital III, LLC, its General Partner By: /s/ John Danhakl ---------------- Name: John Danhakl Title: Manager GREEN EQUITY INVESTORS SIDE III, L.P. By: GEI Capital III, LLC, its General Partner By: /s/ John Danhakl ------------------- Name: John Danhakl Title: Manager EX-4 6 tpgex4.txt EXHIBIT 4 RESTRUCTURING AGREEMENT dated as of November 13, 2001 between TPG WAFER HOLDINGS LLC and MEMC ELECTRONIC MATERIALS, INC. ARTICLE I DEFINITIONS Section 1.01. Definitions....................................................2 Section 1.02. General Interpretive Principles...............................14 ARTICLE II RESTRUCTURING Section 2.01. Restructuring.................................................15 Section 2.02. Restructuring Closing.........................................15 ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY Section 3.01. Organization; Powers..........................................17 Section 3.02. Authorization; Enforceability.................................17 Section 3.03. Governmental Approvals; No Conflicts..........................18 Section 3.04. Financial Condition; No Material Adverse Change...............18 Section 3.05. Properties....................................................20 Section 3.06. Litigation and Environmental Matters..........................20 Section 3.07. Compliance with Law and Agreements............................21 Section 3.08. Taxes.........................................................21 Section 3.09. ERISA.........................................................21 Section 3.10. Disclosure....................................................22 Section 3.11. Subsidiaries..................................................22 Section 3.12. Insurance.....................................................23 Section 3.13. Labor Matters.................................................23 Section 3.14. Capitalization; Securities....................................23 Section 3.15. Dividends, Stock Repurchases, Etc.............................24 Section 3.16. No Rights Plan................................................24 Section 3.17. Exemption from Registration...................................24 Section 3.18. Financial Advisors and Brokers; Fairness Opinion..............24 Section 3.19. Material Contracts............................................25 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE INVESTOR Section 4.01. Organization..................................................25 Section 4.02. Authorization; Enforceability.................................25 Section 4.03. Governmental Approvals; No Conflicts..........................26 Section 4.04. Financial Advisors and Brokers................................26 Section 4.05. Purpose of Investment.........................................26 Section 4.06. Holdings......................................................26 Section 4.07. Financial Ability to Make Loans...............................27 ARTICLE V GOVERNANCE Section 5.01. Board Size....................................................27 Section 5.02. Board Representation..........................................27 Section 5.03. Meetings......................................................28 ARTICLE VI PRE-CLOSING COVENANTS Section 6.01. Taking of Necessary Action....................................28 Section 6.02. Conduct of Business...........................................29 Section 6.03. Notifications.................................................31 ARTICLE VII DDITIONAL COVENANTS Section 7.01. Financial and Other Information...............................31 Section 7.02. Restricted Payments; Certain Payments of Indebtedness.........32 Section 7.03. Restrictive Agreements........................................32 Section 7.04. Publicity.....................................................32 Section 7.05. Status of Dividends...........................................33 Section 7.06. Director and Officer Indemnification..........................33 Section 7.07. Listing; Reservation..........................................33 Section 7.08. Legend........................................................33 Section 7.09. Approval for Issuance of Shares...............................34 Section 7.10. Transactions with Affiliates..................................35 Section 7.11. Equity Issuances..............................................35 Section 7.12. Fundamental Changes...........................................37 Section 7.13. Short-Form Merger.............................................37 Section 7.14. Tax Sharing Agreement.........................................37 Section 7.15. Holdings Loans................................................37 ARTICLE VIII CONDITIONS Section 8.01. Conditions to the Investor's Obligations with Respect to the Restructuring.................38 Section 8.02. Conditions of the Company's Obligations with Respect to the Restructuring..................................41 ARTICLE IX TERMINATION Section 9.01. Termination of Agreement......................................42 Section 9.02. Effect of Termination.........................................42 ARTICLE X MISCELLANEOUS Section 10.01. Fees and Expenses.............................................43 Section 10.02. Survival of Representations and Warranties....................43 Section 10.03. Specific Performance..........................................43 Section 10.04. Indemnification...............................................43 Section 10.05. Notices.......................................................46 Section 10.06. Entire Agreement..............................................47 Section 10.07. Amendment.....................................................47 Section 10.08. Counterparts..................................................47 Section 10.09. Governing Law.................................................47 Section 10.10. Successors and Assigns........................................48 Section 10.11. No Third-Party Beneficiaries..................................49 Section 10.12. Schedules.....................................................49 SCHEDULE 1 Loans to be Exchanged for Notes and Warrants S-1 SCHEDULE 2 Loans held by Holdings S-2 SCHEDULE 5.02(d) Board Nominees S-5 Company Disclosure Schedule CD-1 EXHIBIT A Form of Series A Certificate of Designations A-1 EXHIBIT B Form of Credit Agreement B-1 EXHIBIT C Form of Indenture C-1 EXHIBIT D Form of Warrant Certificate D-1 EXHIBIT E Form of Registration Rights Agreement E-1 EXHIBIT F Term Sheet for Italian Credit Agreement Amendment F-1 EXHIBIT G Form of Merger Agreement G-1 EXHIBIT H Form of Counsel to Company Opinion H-1 EXHIBIT I Form of Counsel to Investor Opinion I-1 EXHIBIT J Certificate of Incorporation of Holdings J-1 EXHIBIT K Form of Employment Resolutions K-1 EXHIBIT L Form of Tax Sharing Agreement L-1 RESTRUCTURING AGREEMENT THIS RESTRUCTURING AGREEMENT (the "Agreement"), dated as of November 13, 2001, by and between TPG Wafer Holdings LLC, a Delaware limited liability company (the "Investor"), and MEMC Electronic Materials, Inc., a Delaware corporation (the "Company"). W I T N E S S E T H: ------------------- WHEREAS, each of the Company and the Investor has determined to enter into this Agreement pursuant to which (i) the Investor has agreed to exchange all of the then outstanding Holdings Class A Common Stock (as defined herein) of MEMC Holdings Corporation, a Delaware corporation ("Holdings"), held by the Investor in return for the issuance by the Company to the Investor of 260,000 shares of the Company's Series A Cumulative Convertible Preferred Stock, par value $0.01 per share (the "Series A Preferred Stock"), having the rights, preferences, privileges and restrictions set forth in the form of Certificate of Designations substantially in the form attached hereto as Exhibit A (the "Series A Certificate of Designations"), each share of which shall be convertible at the option of the holder at any time following the Closing into shares (the "Conversion Shares") of common stock, par value $0.01 per share (the "Common Stock"), of the Company, (ii) the Credit Agreement Lenders (as defined herein) and the Company have agreed to enter into an agreement setting forth the terms and conditions of a revolving credit facility substantially in the form attached hereto as Exhibit B (the "Credit Agreement"), (iii) the Investor has agreed to cause the Notes Designees (as defined herein) to deliver the Loans (as defined herein) set forth on Schedule 1 in return for the issuance by the Company to such Notes Designees, as specified by the Investor, of (A) $50,000,000 in principal amount of Senior Subordinated Secured Notes Due 2007 of the Company (the "Notes") pursuant to, and having the terms and conditions set forth in, the form of indenture substantially in the form attached hereto as Exhibit C (the "Indenture") and (B) 16,666,667 detachable warrants (the "Warrants") having the terms set forth in the form of warrant certificate substantially in the form attached hereto as Exhibit D (the "Warrant Certificate"), (iv) the Investor has agreed to enter into, and the Company has agreed to enter into, and to cause the Guarantors (as defined herein) to enter into, a registration rights agreement with the terms and conditions set forth in the form of registration rights agreement substantially in the form attached hereto as Exhibit E (the "Registration Rights Agreement"), (v) the Company has agreed to execute and deliver, and to cause MEMC Electronic Materials S.p.A (the "Italian Subsidiary") to execute and deliver, and the Investor has agreed to execute and deliver, and to cause the Italian Credit Agreement Lenders (as defined herein) to execute and deliver, in each case as applicable, an amendment to the Italian Credit Agreement (as defined herein) pursuant to a definitive amendment to the Italian Credit Agreement consistent with the terms and conditions set forth in the term sheet attached hereto as Exhibit F and with such other terms and conditions as the Investor and the Company may reasonably agree (the "Italian Credit Agreement Amendment") and (vi) the Company and the Investor have agreed to enter into an Agreement and Plan of Merger with the terms and conditions set forth in the form of merger agreement substantially in the form attached hereto as Exhibit G (the "Merger Agreement"); WHEREAS, the Company and the Investor desire to make certain representations, warranties, covenants and agreements in connection with the transactions contemplated herein; NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows: ARTICLE I DEFINITIONS Section 1.01. Definitions. As used in this Agreement, the following terms shall have the meanings set forth below: "Affiliate" has the meaning set forth in Rule 12b-2 under the Exchange Act as in effect on the date hereof. The term "Affiliated" has a correlative meaning. Notwithstanding the foregoing, for all purposes hereof, neither the Company nor any of its Subsidiaries shall be deemed an "Affiliate" of any TPG Person. Notwithstanding the foregoing, for all purposes hereof, (a) the Investor and each Person Controlled by, Controlling or under common Control with the Investor (each, a "TPG Person") shall not be deemed an "Affiliate" of any Designated Purchaser Person (as defined below), and no Designated Purchaser, and no Person Controlled by, Controlling or under common Control with such Designated Purchaser (each, a "Designated Purchaser Person"), shall be deemed an "Affiliate" of any TPG Person or any other Designated Purchaser Person, in any such case solely as a consequence of this Agreement or the transactions contemplated hereby and (b) neither the Company nor any of its Subsidiaries shall be deemed a TPG Person or an "Affiliate" of any TPG Person. "Agreement" has the meaning set forth in the preamble hereto. "Beneficially Own" with respect to any securities means having "beneficial ownership" of such securities (as determined pursuant to Rule 13d-3 under the Exchange Act as in effect on the date hereof, except that a Person shall be deemed to Beneficially Own all such securities that such Person has the right to acquire whether such right is exercisable immediately or after the passage of time). The terms "Beneficial Ownership" and "Beneficial Owner" have correlative meanings. Notwithstanding the foregoing, for all purposes hereof, no TPG Person shall be deemed to Beneficially Own any securities that are held by any Designated Purchaser Person, and no Designated Purchaser Person shall be deemed to Beneficially Own any securities that are held by any TPG Person or any other Designated Purchaser Person, in any such case solely as a consequence of this Agreement or the transactions contemplated hereby. "Board Nominees" has the meaning set forth in Section 5.02(a). "Board of Directors" means the board of directors of the Company. "Business Day" means any day, other than a Saturday, Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close. "By-laws" means the By-laws of the Company, as amended from time to time. "Capital Lease Obligations" of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital lease obligations on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP. "Certificate of Incorporation" means the Restated Certificate of Incorporation of the Company, as amended from time to time. "Change in Control" means: (a) the failure by TPG Persons to own (and retain the right to vote), directly or indirectly, beneficially and of record, Equity Interests in the Company representing greater than 15% of each of the aggregate ordinary Voting Power and aggregate value represented by the issued and outstanding Equity Interests in the Company; (b) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or Group, of Equity Interests representing a greater percentage of either the aggregate ordinary Voting Power or the aggregate value represented by the issued and outstanding Equity Interests in the Company then owned, directly or indirectly, beneficially and of record, by TPG Persons; or (c) occupation of a majority of the seats (other than vacant seats) on the Board of Directors by Persons who were neither (i) nominated by the Board of Directors nor (ii) appointed by directors so nominated. "Claim" has the meaning set forth in Section 10.04(c). "Class I" means the class of directors of the Board of Directors whose initial term expired at the annual meeting of stockholders of the Company in 1996 and has expired or will expire at every third annual meeting thereafter. "Class II" means the class of directors of the Board of Directors whose initial term expired at the annual meeting of stockholders of the Company in 1997 and has expired or will expire at every third annual meeting thereafter. "Class III" means the class of directors of the Board of Directors whose initial term expired at the annual meeting of stockholders of the Company in 1998 and has expired or will expire at every third annual meeting thereafter. "Closing" has the meaning set forth in Section 2.02. "Closing Date" has the meaning set forth in Section 2.02. "Code" means the Internal Revenue Code of 1986, as amended from time to time. "Commission" means the U.S. Securities and Exchange Commission. "Common Stock" has the meaning set forth in the recitals hereto. "Company" has the meaning set forth in the preamble hereto. "Company Benefit Plans" means each employee or director benefit or compensation plan, arrangement or agreement, including pension, savings, welfare, medical or life insurance, severance, fringe benefit, executive compensation, deferred compensation, incentive, bonus and long-term performance option and other equity-based compensation plans, arrangements or agreements, including any "employee benefit plans" as defined in Section 3(3) of ERISA, whether or not subject to ERISA, and each employment, retention, consulting, change in control, termination or severance plan, program, arrangement or agreement that was entered into or is maintained by or to which the Company or any of its Subsidiaries contribute or is obligated to contribute or with respect to which the Company or any of its Subsidiaries has any liability, direct or indirect, contingent or otherwise, or otherwise providing benefits to any current or former employee, officer or director of the Company or any of its Subsidiaries. "Company Documents" means each document, instrument or certificate, other than this Agreement, to be executed and delivered by the Company and/or any of its Subsidiaries in connection with the consummation of the transactions contemplated by this Agreement, including the Series A Certificate of Designations, the Indenture, the Indenture Ancillary Documents, the Notes, the Warrant Certificates, the Registration Rights Agreement, the Credit Agreement, the Credit Agreement Ancillary Documents, the Italian Credit Agreement Amendment, the Italian Ancillary Documents and the Merger Agreement. "Consolidated Backlog" for any calendar month means, as of any measurement date, the sum total of wafers (as measured in millions of square inches) which has been shipped in respect of bona fide sales to third party customers during such month to (and including) such measurement date and remaining shipments which are reasonably expected by the Company to be made in respect of bona fide sales to third party customers from (but excluding) such measurement date through the last calendar day of the month by the Company and its consolidated Subsidiaries. Amounts expected to be shipped shall be evidenced by third party customer orders including purchase orders, purchase order releases pursuant to blanket purchase orders and/or customer buy plans communicated by electronic data interchange communications, e-mail messages or via telephone to a customer service representative or salesperson of the Company or a Subsidiary. "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. The terms "Controlling" and "Controlled" have meanings correlative thereto. "Conversion Shares" has the meaning set forth in the recitals hereto. "Covered Securities" has the meaning set forth in Section 7.11(b) hereof. "Credit Agreement" has the meaning set forth in the recitals hereto. "Credit Agreement Ancillary Documents" means the ancillary documents contemplated by the Credit Agreement to be executed and delivered in connection with the execution and delivery of the Credit Agreement. "Credit Agreement Lenders" means the "Lenders" as such term is defined in the Credit Agreement. "Derivative Securities" means any subscriptions, options, conversion rights, warrants, or other agreements, securities or commitments of any kind obligating the Company or any Person to issue, grant, deliver or sell, or cause to be issued, granted, delivered or sold, any Equity Interests of the Company or any of its Subsidiaries. "Designated Purchaser" has the meaning set forth in Section 10.10(b) hereof. "Designated Purchaser Person" has the meaning set forth in the definition of "Affiliate." "DGCL" means the Delaware General Corporation Law. "Disclosure Schedule" means the Disclosure Schedule of the Company that is attached hereto. "Environmental Laws" means any Law relating in any way to the environment; the protection, preservation or restoration of natural resources; the management (including generation, use, handling, transportation, storage, treatment and disposal) of Hazardous Materials; the Release or threatened Release of any Hazardous Materials into the environment or health and safety matters. "Environmental Liability" means any liability, contingent or otherwise (including any costs, obligations, expenses, losses or other liability in connection with personal injury, strict liability, damages, diminution of value, investigation, monitoring, remediation, administrative oversight costs, fines, penalties or indemnities) of the Company or any Subsidiary directly or indirectly arising or resulting from or based upon (a) violation of any Environmental Law, (b) the management, including generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is retained, assumed or imposed with respect to any of the foregoing. "E.ON Purchase Agreement" means the Purchase Agreement dated as of September 30, 2001 among E.ON AG, E.ON North America, Inc., E.ON International Finance B.V., FIDELIA Corporation, VEBA Zweite Verwaltungsgesellchaft mbH, TPG Partners III, L.P., T3 Partners, L.P., T3 Partners II, L.P. and the Investor. "Equity Interests" means, as to any Person, shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other interests of such Person that are denominated, or have substantially the characteristics of, equity interests. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. "ERISA Affiliate" means, at any time, each trade or business (whether or not incorporated) that would, at the time, be treated together with Company or any of its Subsidiaries as a single employer under Title IV or Section 302 of ERISA or Section 412 of the Code. "ERISA Event" means (a) any "reportable event" described in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than a "reportable event" not subject to the provision for 30-day notice to the PBGC); (b) the existence with respect to any Plan of an "accumulated funding deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived or the filing of an application pursuant to Section 412(e) of the Code or Section 304 of ERISA for any extension of an amortization period; (c) the provision or filing of a notice of intent to terminate a Plan other than a standard termination within the meaning of Section 4041 of ERISA or the treatment of a Plan amendment as a distress termination under Section 4041 of ERISA; (d) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (e) the incurrence by the Company or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (f) the receipt by the Company or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan under Section 4042 of ERISA or the occurrence or existence of any other event or condition which might reasonably be expected to constitute grounds for the termination of, the appointment of a trustee to administer, any Plan other than in a standard termination within the meaning of Section 4041 of ERISA or the imposition of any lien on the assets of the Company or any of its Subsidiaries or ERISA Affiliates under ERISA, including as a result of the operation of Section 4069 of ERISA; (g) the incurrence by the Company, any of its Subsidiaries or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan or with respect to the withdrawal from a Multiple Employer Plan during a plan year in which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA or by reason of the provisions of Section 4064 of ERISA upon the termination of a Multiple Employer Plan; or (h) the receipt by the Company or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Company or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA. "Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder from time to time. "Foreign Company Benefit Plans" means each Company Benefit Plan maintained for the benefit of the employees of the Company or any of its Subsidiaries located outside the United States. "GAAP" means generally accepted accounting principles in the United States of America consistently applied. "Governmental Authority" means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body (including the NYSE), court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. "Group" has the same meaning as is used with respect to that term in Rule 13d-5 under the Exchange Act as in effect on the date hereof. "Guarantee" of or by any Person (the "guarantor") means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the "primary obligor") in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation, provided that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. "Guarantor" has the meaning set forth in the Registration Rights Agreement. "Hazardous Materials" means any substance, pollutant, contaminant, chemical or other material (including petroleum or any fraction thereof, asbestos or asbestos-containing-material, polychlorinated biphenyls, urea formaldehyde foam insulation) or waste that is classified or regulated under any Environmental Law. "Hedging Agreement" means any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement. "Holdings" has the meaning set forth in the recitals hereto. "Holdings Class A Common Stock" shall have the meaning set forth in Section 4.06(b). "Holdings Class B Common Stock" shall have the meaning set forth in Section 4.06(b). "Holdings Common Stock" has the meaning set forth in Section 4.06(b). "HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the regulations promulgated thereunder. "Indebtedness" of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (j) all obligations, contingent or otherwise, of such Person in respect of bankers' acceptances. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. Notwithstanding anything to the contrary in this paragraph, the term "Indebtedness" shall not include (a) obligations under Hedging Agreements or (b) agreements providing for indemnification, purchase price adjustments or similar obligations incurred or assumed in connection with the acquisition or disposition of assets or stock. "Indemnified Company Parties" has the meaning set forth in Section 10.04(b). "Indemnified Investor Parties" has the meaning set forth in Section 10.04(a). "Indemnified Party" has the meaning set forth in Section 10.04(c). "Indenture" has the meaning set forth in the recitals hereto. "Indenture Ancillary Documents" means the ancillary documents contemplated by the Indenture to be executed and delivered in connection with the execution and delivery of the Indenture. "Insolvency Event" means (a) the Company or any of its Subsidiaries commences a voluntary case concerning itself under Title 11 of the United States Code as now or hereafter in effect, or under any state insolvency, liquidation, rehabilitation or similar statute or any successor statutes thereto ("Insolvency Statutes"); (b) an involuntary case is commenced against the Company or any of its Subsidiaries under an Insolvency Statute; (c) a custodian is appointed under any applicable Insolvency Statute for, or takes charge of, all or any substantial part of the property of the Company or any of its Subsidiaries; (d) any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution or similar law of any jurisdiction, whether now or hereafter in effect, relating to the Company or any of its Subsidiaries is commenced (i) by the Company or any of its Subsidiaries or (ii) by any other Person; (e) the Company or any of its Subsidiaries is adjudicated insolvent or bankrupt; (f) any order of relief or other order approving any such case or proceeding is entered; (g) the Company or any of its Subsidiaries makes a general assignment for the benefit of creditors; or (h) the Company or any of its Subsidiaries shall state in writing that it is unable to pay, or shall be unable to pay, its debts, generally as they become due. "Insolvency Statutes" has the meaning set forth in the definition of "Insolvency Event." "Investor" has the meaning set forth in the preamble hereto. "Investor Documents" means each document, instrument or certificate, other than this Agreement, to be executed and delivered by the Investor in connection with the consummation of the transactions contemplated by this Agreement, including the Registration Rights Agreement. "Investor Group" means, collectively, the Investor, the Designated Purchasers (if any), the Notes Designees and the respective Affiliates of such Persons. "Investor Information" has the meaning set forth in Section 7.09(b). "Italian Ancillary Documents" means the ancillary documents contemplated by the Italian Credit Agreement Amendment to be executed and delivered in connection with the execution and delivery of the Italian Credit Agreement Amendment, including, without limitation, any amendments to the Company's guarantee of the Italian Credit Agreement. "Italian Closing" has the meaning set forth in Section 2.02. "Italian Closing Date" has the meaning set forth in Section 2.02. "Italian Credit Agreement" means the euro 55,000,000 Amended and Restated Credit Agreement dated as of September 22, 2001 between the Italian Subsidiary and E.ON International Finance B.V., as amended from time to time. "Italian Credit Agreement Amendment" has the meaning set forth in the recitals hereto. "Italian Credit Agreement Lenders" means the "Lenders" as such term is defined in the Italian Credit Agreement Amendment. "Italian Subsidiary" has the meaning set forth in the recitals hereto. "Law" means any law, treaty, statute, ordinance, code, rule, regulation, judgment, decree, order, writ, award, injunction, directives or determination of any Governmental Authority. "Lien" means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities. "Loans" has the meaning set forth in the E.ON Purchase Agreement. "Losses" has the meaning set forth in Section 10.04(a). "Material Adverse Effect" means any event, change, circumstance or effect that is or is reasonably likely to be materially adverse to (a) the business, assets, operations, properties, financial condition or contingent liabilities of the Company and the Subsidiaries, taken as a whole, (b) the ability of the Company or any of its Subsidiaries to perform their obligations under the Company Documents or (c) any rights of or benefits available to the Investor, the Notes Designees, the Credit Agreement Lenders or the Designated Purchasers under the Company Documents. "Merger Agreement" has the meaning set forth in the recitals hereto. "Mortgage" means a mortgage, deed of trust, assignment of leases and rents, leasehold mortgage or other security document granting a Lien on any Mortgaged Property to secure the loans made under the Credit Agreement or the Notes. "Mortgaged Property" means, initially, each parcel of real property and the improvements thereto owned by the Company or a Subsidiary Loan Party (as defined in the Credit Agreement) and identified on Section 1.01(A) of the Disclosure Schedule, and includes each other parcel of real property and improvements thereto with respect to which a Mortgage is granted in connection with the Credit Agreement or the Indenture. "Multiple Employer Plan" means an employee benefit plan described in Section 4063 of ERISA. "Multiemployer Plan" means a multiemployer plan as defined in Section 4001(a)(3) of ERISA. "Notes" has the meaning set forth in the recitals hereto. "Notes Designees" means those Persons designated by the Investor to participate in the Notes Exchange. "Notes Exchange" has the meaning set forth in Section 2.01. "NYSE" has the meaning set forth in Section 3.03(b). "NYSE Rules" has the meaning set forth in Section 3.03(b). "Offer to Purchase" has the meaning set forth in Section 7.11(b). "Option Plan" means the Company's Equity Incentive Plan, as amended from time to time. "Original Number of Combined Shares" means the Original number of Conversion Shares plus the Original Number of Warrant Shares. "Original Number of Conversion Shares" means the number of Conversion Shares as of the Closing (assuming that all conditions precedent to receipt of Conversion Shares in respect of the then-outstanding shares of Series A Preferred Stock have occurred, including conversion of the Series A Preferred Stock and receipt by the Company of the Shareholder Approval), which number shall be adjusted in accordance with any adjustment made to the number of Conversion Shares issuable upon conversion of the Series A Preferred Stock pursuant to the Series A Certificate of Designations. For the purposes of determining the percentage of the Original Number of Conversion Shares that is Beneficially Owned by the Investor, any Designated Purchaser or any of their respective Affiliates, such calculation shall be made assuming all conditions precedent to receipt of Conversion Shares in respect of the then-outstanding shares of Series A Preferred Stock have occurred or been satisfied, including receipt by the Company of the Shareholder Approval and conversion of the Series A Preferred Stock in accordance with the terms thereof. "Original Number of Series A Shares" means the number of shares of Series A Preferred Stock outstanding as of the Closing. "Original Number of Warrant Shares" means the number of Warrant Shares as of the Closing (assuming that all conditions precedent to receipt of Warrant Shares in respect of the then-outstanding Warrants have occurred, including exercise of the Warrants and receipt by the Company of the Shareholder Approval), which number shall be adjusted in accordance with any adjustment made to the number of Warrant Shares issuable upon exercise of the Warrants pursuant to the Warrant Certificate. For the purposes of determining the percentage of the Original Number of Warrant Shares that is Beneficially Owned by Note Designees, TPG Persons or any of their respective Affiliates, such calculation shall be made assuming all conditions precedent to receipt of Warrant Shares in respect of the then-outstanding Warrants have occurred or been satisfied, including receipt by the Company of the Shareholder Approval and exercise of the Warrants in accordance with the terms thereof. "PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions. "Person" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity. "Plan" means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Company, any of its Subsidiaries or any ERISA Affiliate is an "employer" as defined in Section 3(5) of ERISA. "Proceeding" means any claim, suit, action, proceeding, arbitration or investigation by or before any Governmental Authority. "Proxy Statement" means a proxy statement prepared, filed with the Commission and used by the Company in connection with a Shareholder Meeting. "Purchase Agreement" means a legal, valid and binding agreement of a Person or Persons (each, a "Purchaser") pursuant to which such Purchaser or Purchasers agrees to purchased Covered Securities, which agreement is enforceable against such Purchaser or Purchasers in accordance with its terms (subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and to general principles of equity). "Registration Rights Agreement" has the meaning set forth in the recitals hereto. "Regulatory Approvals" means (a) any and all certificates, permits, licenses, franchises, concessions, grants, consents, approvals, orders, registrations, authorizations, waivers, variances or clearances from, or filings or registrations with, Governmental Authority, and (b) any and all waiting periods imposed by applicable laws. "Release" means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration of any Hazardous Material in, on, onto or into the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or within any building, structure, facility or fixture. "Representatives" means, with respect to any Person, any of such Person's officers, directors, employees, agents, attorneys, accountants, consultants, equity financing partners or financial advisors or other Person associated with, or acting on behalf of, such Person. "Required Regulatory Approval" means any of the following Regulatory Approvals: (i) those regulatory approvals necessary under the HSR Act or required under the Securities Act, the Exchange Act or the securities laws of the several states of the United States, for or in connection with the consummation by the parties hereto of the transactions contemplated by this Agreement; (ii) the filing by the Company of the Series A Certificate of Designations with the Secretary of State of the State of Delaware; or (iii) those Regulatory Approvals set forth in Section 1.01(B) of the Disclosure Schedule. "Restricted Payment" means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Company or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Interests in the Company or any Subsidiary or any option, warrant or other right to acquire any such Equity Interests in the Company or any Subsidiary. "Restructuring" has the meaning set forth in Section 2.01. "Restructuring Agreement" has the meaning set forth in the recitals hereto. "SEC Reports" means (i) the Company's Annual Report on Form 10-K for each of the fiscal years ended December 31, 2000, 1999 and 1998; (ii) the Company's Quarterly Report on Form 10-Q for each of the periods ended June 30, 2001 and March 31, 2001; and (iii) each registration statement, report on Form 8-K, proxy statement, information statement or other report or statement filed by the Company with the Commission on or since January 1, 1998 and prior to the date hereof, in each case in the form (including exhibits and any amendments or supplements thereto) filed with the Commission. "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder from time to time. "Series A Certificate of Designations" has the meaning set forth in the recitals hereto. "Series A Preferred Stock" has the meaning set forth in the recitals hereto. "Shareholder Approval" means (i) any necessary approval by the stockholders of the Company relating to the Series A Preferred Stock, the Conversion Shares, the Warrants and the Warrant Shares under the rules and regulations of the NYSE, (ii) the approval by the stockholders of the Company of the plan of merger contained in the Merger Agreement in accordance with the DGCL and (iii) the approval by the stockholders of the Company of a one-for-two reverse split of the Common Stock. "Shareholder Approval Proposal" means a proposal made by the Board of Directors to the stockholders of the Company in accordance with the DGCL to consider and vote on the Shareholder Approval. "Shareholder Meeting" has the meaning set forth in Section 7.09(a). "Solicitation Date" means, with respect to any Covered Securities, the earlier of (i) the eleventh day following the day on which an Offer to Purchase with respect to such Covered Securities is given and (ii) the date on which the Investor shall have, or shall be deemed to have, declined to purchase such Covered Securities, in each case pursuant to Section 7.11(b) hereof. "Special Committee" means a committee of the Board of Directors consisting of directors who are not Representatives of (a) E.ON AG, E.ON North America, Inc., E.ON International Finance B.V., FIDELIA Corporation, VEBA Zweite Verwaltungsgesellchaft mbH or their Affiliates or (b) a TPG Person. "Special Committee Approval" means the approval by the Special Committee of the Restructuring, the Company's issuance of the Series A Preferred Stock, the Company's issuance of the Notes, including the Company's issuance of the Warrants and, in each case, of the terms thereof. "Stated Value" means the stated value of the Series A Preferred Stock, as set forth in the Series A Certificate of Designation. "Subsequent Reports" has the meaning set forth in Section 3.04(e). "subsidiary" means, with respect to any Person (the "parent") at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. "Subsidiary" means any subsidiary of the Company. "Taxes" means any and all current or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority. "Third Party Claim" has the meaning set forth in Section 10.04(c). "TPG Person" has the meaning set forth in the definition of "Affiliate." "U.S. Company Benefit Plans" means each Company Benefit Plan maintained for the benefit of the employees of the Company of any of its Subsidiaries located in the United States. "Voting Power" means, with respect to any Voting Securities, the aggregate number of votes attributable to such Voting Securities that could generally be cast by the holders thereof for the election of directors at the time of determination (assuming such election were then being held). "Voting Securities" means, (a) with respect to the Company, the Equity Interests of the Company entitled to vote generally for the election of directors of the Company, and (b) with respect to any other Person, any securities of or interests in such Person entitled to vote generally for the election of directors or any similar managing person of such Person. "Warrants" has the meaning set forth in the recitals hereto. References to a number of Warrants shall refer to the number of Warrant Shares issuable upon exercise of such Warrants. "Warrant Certificate" has the meaning set forth in the recitals hereto. "Warrant Shares" means the shares of Common Stock issued, or issuable upon, exercise of the Warrants. "Wholly Owned Subsidiary" means, as to any Person, a Subsidiary of such Person of which 100% of the Equity Interests (other than directors' qualifying shares or similar shares) is owned, directly or indirectly, by such Person. "Withdrawal Liability" means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA. Section 1.02. General Interpretive Principles. Whenever used in this Agreement, except as otherwise expressly provided or unless the context otherwise requires, any noun or pronoun shall be deemed to include the plural as well as the singular and to cover all genders. The name assigned this Agreement and the Section captions used herein are for convenience of reference only and shall not be construed to affect the meaning, construction or effect hereof. Unless otherwise specified, the terms "hereof," "herein" and similar terms refer to this Agreement as a whole (including the exhibits and schedules hereto), and references herein to Articles or Sections refer to Articles or Sections of this Agreement. Words of inclusion shall not be construed as terms of limitation herein, so that references to "include", "includes" and "including" shall not be limiting and shall be regarded as references to non-exclusive and non-characterizing illustrations. Any agreement, certificate or other document defined in this Agreement shall also include, in each case, any amendment or restatement thereof or any supplement thereto. ARTICLE II RESTRUCTURING Section 2.01. Restructuring. Upon the terms and subject to the conditions set forth in this Agreement, and in reliance upon the representations and warranties hereinafter set forth, (i) the Investor will exchange the then outstanding Holdings Class A Common Stock held by the Investor, free and clear of all Liens, in return for the issuance by the Company to the Investor of 260,000 shares of Series A Preferred Stock, free and clear of all Liens, (ii) the Investor will cause the Credit Agreement Lenders to execute and deliver, and the Company will execute and deliver or cause its Subsidiaries to execute and deliver, as applicable, the Credit Agreement and the Credit Agreement Ancillary Documents, (iii) the Investor will cause the Notes Designees to deliver the Loans set forth on Schedule 1 in exchange for (A) the issuance by the Company to the Notes Designees, as specified by the Investor, of $50,000,000 in principal amount of the Notes and (B) Warrant Certificates evidencing 16,666,667 Warrants (the "Notes Exchange"), (iv) the Investor will execute and deliver, and the Company will execute and deliver, and cause the Guarantors to execute and deliver, the Registration Rights Agreement, (v) the Company will execute and deliver, and cause the Italian Subsidiary to execute and deliver, and the Investor will execute and deliver, and cause the Italian Credit Agreement Lenders to execute and deliver, in each case as applicable, the Italian Credit Agreement Amendment and the Italian Ancillary Documents, and (vi) each of the Investor and the Company will execute and deliver the Merger Agreement (all such actions, collectively, the "Restructuring"). Section 2.02. Restructuring Closing. (a) The closing of the transactions described in Section 2.01 (other than the Italian Closing, as defined herein) (the "Closing") shall take place at the offices of Cleary, Gottlieb, Steen & Hamilton, Washington, D.C., at 10:00 a.m., Eastern Standard Time, on November 8, 2001, following satisfaction or, if permissible, waiver, of the conditions set forth in Sections 8.01 and 8.02 hereof, or at such other time and place as the parties may agree (the date on which the Closing occurs, the "Closing Date"). The closing of the Italian Credit Agreement Amendment (the "Italian Closing") shall take place at the offices of Cleary, Gottlieb, Steen & Hamilton, Washington, D.C., at 10:00 a.m., Eastern Standard Time, on such date after the Closing as the parties may agree, but in no event later than 10 Business Days after the Closing, or at such other time and place as the parties may agree (the date on which the Italian Closing occurs, the "Italian Closing Date"). (b) At the Closing: (i) The Company shall, as applicable, deliver or cause to be delivered to the Investor (A) certificates representing the shares of Series A Preferred Stock to be issued to the Investor pursuant to Section 2.01 (registered in the names and in the denominations designated by the Investor at least two Business Days prior to the Closing Date), (B) the Credit Agreement and the Credit Agreement Ancillary Documents, executed as applicable by the Company and its Subsidiaries, (C) the Indenture and the Indenture Ancillary Documents, executed as applicable by the Company and its Subsidiaries, (D) certificates representing (1) the Notes to be issued pursuant to Section 2.01 to the Notes Designees, as specified by the Investor, and (2) the Warrants to be issued pursuant to Section 2.01 to the Notes Designees, as specified by the Investor (in each case, registered in the names and in the denominations designated by the Investor at least two Business Days prior to the Closing Date), in each case after executing such Notes and Warrants and causing such Notes to be authenticated by the trustee under the Indenture, (E) the Registration Rights Agreement executed by the Company, and (F) the Merger Agreement executed by the Company, together with the other documents, certificates and opinions to be delivered pursuant to Section 8.01; and (ii) the Investor shall, as applicable, deliver or cause to be delivered (A) in full payment for the shares of Series A Preferred Stock to be acquired by, and issued to, the Investor pursuant to Section 2.01, the then outstanding Holdings Class A Common Stock, (B) the Credit Agreement, executed by the Credit Agreement Lenders, (C) in full payment for the Notes and Warrants to be issued to the Notes Designees pursuant to Section 2.01, the Loans set forth on Schedule 1 duly endorsed in blank, or accompanied by appropriate bond powers, in proper form for transfer, and an instrument assigning all of the holders' right, title and interest in such Loans and any related security agreements to the Company, (D) the Registration Rights Agreement executed by the Investor, and (E) the Merger Agreement executed by the Investor, together with the other documents, certificates and opinions to be delivered pursuant to Section 8.02. Promptly following the Closing, the Company shall cancel the Loans delivered or caused to be delivered by the Investor pursuant to this Section 2.02(b) and take all other necessary action to effect such cancellation. (c) At the Italian Closing: (i) The Company shall, as applicable, deliver or cause to be delivered to the Investor the Italian Credit Agreement Amendment and the Italian Ancillary Documents, executed by the Company and the Italian Subsidiary, as applicable. (ii) The Investor shall, as applicable, deliver or cause to be delivered to the Company the Italian Credit Agreement Amendment and the Italian Ancillary Documents, executed by the Investor and the Italian Credit Agreement Lenders, as applicable. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company hereby represents and warrants to, and agrees with, the Investor as of the date hereof and as of the Closing Date as follows: Section 3.01. Organization; Powers. The Company and each of its Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required. Section 3.02. Authorization; Enforceability . (a) This Agreement and Company Documents entered into or to be entered into by the Company or any of its Subsidiaries are within the corporate power of the Company or its Subsidiaries, as the case may be, and have been duly authorized by all necessary action (except as contemplated by this Agreement with respect to the Shareholder Approval). This Agreement has been duly executed and delivered by the Company and constitutes, and each Company Document, when executed and delivered by the Company or its Subsidiaries, as the case may be, will constitute, a legal, valid and binding obligation of the Company or such Subsidiaries, as the case may be, enforceable against the Company or such Subsidiaries, as the case may be, in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. The Board of Directors, acting through the Special Committee, has approved the execution and delivery of this Agreement by the Company and has approved the consummation of the transactions contemplated by this Agreement and the Company Documents. The Company has delivered to the Investor true and correct copies of (i) resolutions adopted by the Special Committee to the foregoing effects and (ii) resolutions adopted by the Board of Directors delegating authority to the Special Committee with respect to this Agreement and the consummation of the transactions contemplated by this Agreement and the Company Documents. As of the Italian Closing Date, the board of directors of the Italian Subsidiary shall have approved the execution and delivery of the Italian Credit Agreement Amendment and the Italian Ancillary Documents and the Company shall have delivered to the Investor true and correct copies of resolutions of such board of directors to the foregoing effect. (b) The Board of Directors, acting through the Special Committee, has, prior to the date hereof, taken all action necessary to exempt the Investor and its Affiliates from the application of Section 203 of the DGCL in respect of the ownership by the Investor and/or its Affiliates of interests in the Company. (c) The Board of Directors, acting through the Special Committee, has, in accordance with Section 251 of the DGCL, adopted a resolution approving the Merger Agreement, declaring its advisability and recommending that the Merger Agreement be submitted to the Company's stockholders. Section 3.03. Governmental Approvals; No Conflicts. (a) The execution, delivery and performance of this Agreement and the Company Documents and the consummation of the transactions contemplated thereby (i) do not require any consent or approval of, registration or filing with, or any other action by or before, any Governmental Authority, except for the Required Regulatory Approvals and such as have been obtained or made and are in full force and effect and except filings necessary to perfect Liens created in connection with the Indenture or the Credit Agreement, (ii) will not violate any applicable Law, including any applicable business combination, control share and any other similar anti-takeover statutes, or the charter, by-laws or other organizational documents of the Company or any of the Subsidiaries or any order of any Governmental Authority, (iii) except as set forth in Section 3.03(a) of the Disclosure Schedule, will not violate or result in a default under any material indenture, agreement or other instrument binding upon the Company or any of the Subsidiaries or any of their assets, or give rise to a right thereunder to require any payment to be made by the Company or any of the Subsidiaries, (iv) will not result in the creation or imposition of any Lien on any asset of the Company or any of the Subsidiaries, except Liens created in connection with the Indenture and the Credit Agreement, and (v) will not give rise to any preemptive rights, rights of first refusal or other similar rights on behalf of any Person under any applicable Law or any provision of the charter by-laws or other organizational documents or any agreement or instrument applicable to the Company of any of its Subsidiaries. (b) Other than the Shareholder Approval, no consent or approval of the Company's stockholders is required by Law, the Certificate of Incorporation, the By-laws, the rules (the "NYSE Rules") of the New York Stock Exchange, Inc. ("NYSE") relating to the listing or trading of the Conversion Shares or Warrant Shares on the NYSE, or otherwise, for the execution, delivery and performance by the Company or its Subsidiaries of this Agreement and the Company Documents and the consummation of the transactions contemplated thereby. (c) Except as set forth in Section 3.03(c) of the Disclosure Schedule, the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and thereby will not constitute a "Change in Control" or "Change of Control" (or similar concept) as such term (or concept) is defined in any material contract, agreement, indenture, mortgage, note, lease or other instrument to which the Company of any of its Subsidiaries is a party or by which the Company or any such Subsidiary is bound or to which the properties of the Company or any such Subsidiary is subject. Section 3.04. Financial Condition; No Material Adverse Change. (a) As of their respective dates, each of the SEC Reports and each registration statement, report, proxy statement, information statement or other statement filed by the Company with the Commission after the date hereof and before the Closing Date (collectively, the "Subsequent Reports") (i) was, or will be, as the case may be, timely filed with the Commission; (ii) complied, or will comply, as the case may be, in all material respects, with the applicable requirements of the Exchange Act and the Securities Act, as the case may be, and (iii) did not, or will not, as the case may be, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The Company has heretofore furnished to the Investor its unaudited consolidated balance sheet as of September 30, 2001 and the related consolidated statements of income and cash flow for the nine months then ended. Each of (x) the Company's unaudited consolidated balance sheet as of September 30, 2001 and (y) the consolidated balance sheets (including the related notes and schedules) included in or incorporated by reference into the SEC Reports or any Subsequent Reports fairly presents, or will fairly present, as the case may be, in all material respects, the consolidated financial position of the entities to which it applies as of the date thereof, and each of (i) the Company's unaudited consolidated statements of income and cash flow for the nine months ended September 30, 2001 and (ii) the consolidated statements of income (or statements of results of operations), stockholders' equity and cash flows (including the related notes and schedules) included in or incorporated by reference into the SEC Reports or any Subsequent Reports, fairly presents or will fairly present, as the case may be, in all material respects, the results of operations, retained earnings and cash flows, as the case may be, of the entities to which it applies (on a consolidated basis) for the periods or as of the dates, as the case may be, set forth therein, in each case in accordance with GAAP applied on a consistent basis throughout the periods covered (except as stated therein or in the notes thereto) and in compliance with the rules and regulations of the Commission. (b) Except as set forth in Section 3.04(b) of the Disclosure Schedule, none of the Company or its Subsidiaries has any material liabilities or obligations of any nature (whether accrued, absolute, fixed, contingent, liquidated, unliquidated or otherwise and whether due or to become due) required by GAAP to be set forth on the Balance Sheet (as defined below) of the Company except as reflected or reserved against on the unaudited consolidated balance sheet of the Company at June 30, 2001 as set forth in the SEC Reports (the "Balance Sheet") or in the notes thereto. Except as set forth in Section 3.04(b) of the Disclosure Schedule, since June 30, 2001, the Company has not incurred any liabilities or obligations except such as would not, individually or in the aggregate, have a Material Adverse Effect. (c) Since September 30, 2001, there has been no material adverse change in the business, assets, operations, properties, financial condition, contingent liabilities or prospects of the Company or the Company and its Subsidiaries, taken as a whole. (d) Except as heretofore communicated to the Investor, its Affiliates or their respective directors, officers, employees, agents or advisors by the Company in writing or as otherwise reflected in the customer specific revenue and volume information communicated in writing to the Investor, its Affiliates or their respective directors, officers, employees, agents or advisors, since December 31, 2000, none of the 20 largest customers of the Company and its Subsidiaries (as of December 31, 2000 or September 30, 2001) has indicated orally or in writing its intention or desire to materially alter or discontinue, in whole or in material part, its relationship with the Company and its Subsidiaries. (e) Since September 30, 2001, other than the amalgamation of MEMC Partecipazioni S.r.l. with and into the Italian Subsidiary, there has not been any issuance or sale, or any direct or indirect purchase, redemption or other acquisition of any shares of the Company's or any Subsidiary's Equity Interests or any Derivative Securities by the Company or any of its Subsidiaries, other than pursuant to or as contemplated by this Agreement or the Option Plan. (f) The Company has heretofore furnished to the Investor, its Affiliates or their respective directors, officers, employees, agents or advisors daily reports of Consolidated Backlog from October 11, 2001 through the Closing Date. Each such report as of its date was complete and accurate in all material respects. Section 3.05. Properties. (a) Except as set forth on Section 3.05(a) of the Disclosure Schedule, the Company and each of the Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property material to its business, except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes and subject to Liens permitted under Section 6.02 of the Credit Agreement. (b) The Company and each of the Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and to the Company's knowledge after due inquiry the use thereof by the Company and the Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect. (c) Section 3.05(c) of the Disclosure Schedule sets forth the address of each real property that is owned or leased by the Company or any of the Subsidiaries. (d) Neither the Company or any of the Subsidiaries has received notice of, or has knowledge of, any material pending or contemplated condemnation proceeding affecting any Mortgaged Property or any sale or disposition thereof in lieu of condemnation. Except as set forth on Section 3.05(d) of the Disclosure Schedule, none of the Mortgaged Property or any interest therein is subject to any right of first refusal, option or other contractual right to purchase any such Mortgaged Property or interest therein. Section 3.06. Litigation and Environmental Matters. (a) There are no actions, suits or proceedings by or before any arbitration or Governmental Authority pending against or, to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, would, individually or in the aggregate, result in a Material Adverse Effect (other than as set forth in Section 3.06(a) of the Disclosure Schedule) or (ii) that involve this Agreement or the Company Documents, or the transactions contemplated thereby. (b) Except as set forth in Section 3.06(b) of the Disclosure Schedule and except with respect to any matters that, individually or in the aggregate, would not result in a Material Adverse Effect, neither the Company or any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability or has received any request for information from a Governmental Authority under any Environmental Law, (iii) has received notice of any claim with respect to any Environmental Liability, (iv) knows of any past or present facts or circumstances that are reasonably likely to result in Environmental Liability, or (v) knows of any investigation or threatened investigation or judicial or administrative proceeding with respect to any of the foregoing. (c) Except as set forth on Section 3.06(c) of the Disclosure Schedule, none of the property currently owned, leased or operated by the Company or by its Subsidiaries is, or as a result of this transaction and the other transactions contemplated by the E.ON Purchase Agreement would be, subject to (i) any state or local Environmental Laws which would impose restrictions on the use of such property or require notice, disclosure or advance approval prior to such transactions, or (ii) any liens under any Environmental Laws. Section 3.07. Compliance with Law and Agreements. Except as set forth in Sections 3.06(b) and (c) of the Disclosure Schedule, each of the Company and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, would not result in a Material Adverse Effect. No Default (as defined in the Credit Agreement) has occurred and is continuing. Section 3.08. Taxes. The Company and each of its Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) any Taxes that are being contested in good faith by appropriate proceedings and for which the Company or such Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so would not result in a Material Adverse Effect. Section 3.09. ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, would result in a Material Adverse Effect. Neither the Company nor any ERISA Affiliate has engaged in a transaction with respect to any employee benefit plan that would reasonably be expected to result in any material liability to the Company or any ERISA Affiliate pursuant to Section 4069 of ERISA. Section 3.09 of the Disclosure Schedule sets forth a complete list of the U.S. Company Benefit Plans meeting the criteria set forth on Section 3.09 of the Disclosure Schedule. The Company shall provide a complete list of Foreign Company Benefit Plans meeting the criteria set forth on Section 3.09 of the Disclosure Schedule as soon as reasonably practicable following the date hereof. The Company has heretofore made available to the Investor, its Affiliates or their respective directors, officers, employees, agents or advisors, either directly or through its public Commission filings, true and complete copies of each U.S. Company Benefit Plan and any amendments thereto except as otherwise set forth on Section 3.09 of the Disclosure Schedule and the following related documents: (i) the actuarial report and Form 5500 for such U.S. Company Benefit Plan (if applicable) for each of the last two years, (ii) the most recent determination letter from the Internal Revenue Service (if applicable) for such U.S. Company Benefit Plan and (iii) the most recent summary plan description for such U.S. Company Benefit Plan and any material modifications thereto (if any). Except as set forth in Section 3.09 of the Disclosure Schedule, there is no formal arrangement or commitment, whether legally binding or not, to create any additional Company Benefit Plan or to amend, modify or change any existing Company Benefit Plan. Except as set forth in Section 3.09 of the Disclosure Schedule and except as would not, individually or in the aggregate, have a Material Adverse Effect, with respect to the Company Benefit Plans (i) each Company Benefit Plan has been operated and administered substantially in accordance with its terms and applicable laws including, but not limited to ERISA and the Code, (ii) each Company Benefit Plan intended to be "qualified" within the meaning of Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service stating that it is so qualified, and, to the Company's knowledge, there are no existing circumstances or any events that have occurred that would reasonably be expected to adversely affect the qualified status of such Company Benefit Plan, (iii) no liability under Title IV has been incurred by the Company, its Subsidiaries or any ERISA Affiliate that has not been satisfied in full, and no condition exists that presents a risk to the Company, its Subsidiaries or any ERISA Affiliate of incurring a liability thereunder (other than liability for benefits or premiums payable to the PBGC) arising in the ordinary course that are not yet due), (iv) no Company Benefit Plan provides benefits, including, without limitation, death or medical benefits (whether or not insured), with respect to current or former employees or directors of the Company or its Subsidiaries beyond their retirement or other termination of service, other than (A) coverage mandated by applicable law, (B) death benefits or retirement benefits under any "employee pension plan" (as defined in Section 3(2) of ERISA), (C) deferred compensation benefits accrued as liabilities on the books of the Company or its Subsidiaries, (D) benefits the full cost of which are borne by the current or former employee or director (or his or her beneficiary), (E) certain retiree medical benefit plans, (F) benefits under certain disability plans or (G) benefits under certain life insurance plans, each of (E), (F) and (G) designated as such on Section 3.09 of the Disclosure Schedule, (v) no Company Benefit Plan is a "multiemployer pension plan" (as defined in Section 3(37) of ERISA), (vi) all contributions or other amounts payable by the Company or its Subsidiaries as of the date of this Agreement with respect to each Company Benefit Plan in respect of current or prior plan years have been paid or accrued in accordance with GAAP and Section 412 of the Code, (vii) no "prohibited transaction" within the meaning of Section 4975 of the Code or Section 406 of ERISA has occurred with respect to which the Company may incur material liability or may be otherwise materially damaged, and (viii) to the Company's knowledge, there are no pending, threatened or anticipated claims (other than routine claims for benefits) by, on behalf of or against any of the Company Benefit Plan or any trusts related thereto. Section 3.10. Disclosure. The Company has disclosed to the Investor, its Affiliates or their respective directors, officers, employees, agents or advisors all agreements, instruments and corporate or other restrictions to which the Company or any of the Subsidiaries is subject, and all other matters known to any of them (other than matters of a general economic nature), that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. The reports, financial statements, certificates or other information furnished by or on behalf of the Company to the Investor, its Affiliates or their respective directors, officers, employees, agents or advisors in connection with the negotiation of this Agreement (as modified or supplemented by other information so furnished), taken as a whole, do not contain any material misstatement of fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, provided that with respect to projected financial information, the Company represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time. The Investor acknowledges that actual results during any period or periods covered by such projected financial information may differ therefrom and such differences may be material. Section 3.11. Subsidiaries. Section 3.11 of the Disclosure Schedule sets forth the name of, and the ownership interest of the Company in, each Subsidiary. Section 3.12. Insurance. Section 3.12 of the Disclosure Schedule sets forth a description of all insurance maintained by or on behalf of the Company and its Subsidiaries. All premiums in respect of such insurance that are required to have been paid have been paid. The Company believes that the insurance maintained by or on behalf of the Company and its Subsidiaries is adequate in all material respects. Section 3.13. Labor Matters. There are no material strikes, lockouts or slowdowns against the Company or any Subsidiary pending or, to the knowledge of the Company, threatened. Except as would not result in a Material Adverse Effect, (a) the hours worked by and payments made to employees of the Company and the Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters and (b) the consummation of the transactions contemplated by this Agreement and the Company Documents will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which the Company or any Subsidiary is bound. Except as set forth in Section 3.13 of the Disclosure Schedule, (i) no current or former employee, officer, director, or consultant of the Company or any of its Subsidiaries is entitled to any benefit, payment, forgiveness of indebtedness or accelerated vesting of any bonus, retirement, severance, change in control, job security or similar benefit or any other enhanced benefit as a result of this Agreement or the transactions contemplated by the E.ON Purchase Agreement, whether alone or in connection with any other event and (ii) the Company is not a party to any agreement, whether written or oral, (A) that would result in any payments that may be considered to be "parachute payments" under Section 280G of the Code, whether or not such compensation would be deemed to be reasonable compensation for services rendered or (B) that would require the Company or any of its Subsidiaries to make any payments that would fail to be deductible under Section 162(m) or any other provision of the Code. Section 3.14. Capitalization; Securities. (a) As of the date hereof, the authorized capital stock of the Company consists of (i) 200,000,000 shares of Common Stock, of which 69,612,900 shares are outstanding and 3,079,510 shares are reserved for issuance under the Option Plan and an additional 3,600,000 shares have been properly authorized for issuance under the Option Plan but not formally reserved, and (ii) 50,000,000 shares of preferred stock, $0.01 par value, of which no shares are outstanding, no shares have been designated and no shares are reserved for issuance. All of such outstanding shares of Common Stock were duly authorized and validly issued and are fully paid and non-assessable. (b) Except for the options and purchase rights granted pursuant to the Option Plan and except as contemplated by this Agreement, there are no authorized or outstanding (or any obligations to authorize or issue) Derivative Securities. (c) Subject to the filing of the Series A Certificate of Designations with the Secretary of State of the State of Delaware, the shares of Series A Preferred Stock to be issued pursuant to this Agreement have been duly and validly authorized and, when issued as contemplated by this Agreement, will have been validly issued and will be fully paid and non-assessable. The Conversion Shares and the Warrant Shares have been duly and validly authorized and validly reserved for issuance, and when issued upon the conversion of Series A Preferred Stock and the exercise of the Warrants, respectively, will have been validly issued and will be fully paid and non-assessable. Prior to the issuance thereof, the Notes will have been duly and validly authorized by the Company and, upon execution and delivery thereof, will constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to applicable bankruptcy, insolvency reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity regardless of whether considered in a proceeding in equity or at law. Except as set forth in Section 3.14 of the Disclosure Schedule, the registration of the Series A Preferred Stock, the Conversion Shares, the Warrants, the Warrant Shares and the Notes pursuant to the Registration Rights Agreement will not give rise to any registration rights on behalf of any Person under any agreement or instrument applicable to the Company (other than the Registration Rights Agreement). Other than pursuant to the Registration Rights Agreement or as set forth in Section 3.14(c) of the Disclosure Schedule, no Person has any right to require the Company to register securities of the Company under the Securities Act, and there are no shareholder or similar agreements to which the Company is a party. (d) The Company is eligible to register securities for resale on Form S-3 under the Securities Act. Section 3.15. Dividends, Stock Repurchases, Etc. Other than pursuant to this Agreement, the Series A Certificate of Designations, the Indenture or the Credit Agreement, or as restricted or limited by applicable Law, or as set forth in Section 3.15 of the Disclosure Schedule, there are no contractual or other restrictions or limitations on the ability of the Company or any of its Subsidiaries to pay any dividends or make any other distributions on, or to purchase, redeem or otherwise acquire, any of its Equity Interests. Section 3.16. No Rights Plan. The Company has not issued any rights or warrants to holders of Common Stock entitling the holders thereof to subscribe for or purchase Common Stock, which rights or warrants (i) are deemed to be transferred with such shares of Common Stock, (ii) are not exercisable and (iii) are also issued in respect of future issuances of Common Stock, in each case in clauses (i) through (iii) until the occurrence of a specified event or events. Section 3.17. Exemption from Registration. Assuming the representations and warranties of the Investor set forth in Article IV are true and correct in all material respects, the issuance and delivery of the Series A Preferred Stock, the Notes and the Warrants pursuant to this Agreement, the acquisition of the Conversion Shares upon conversion of the Series A Preferred Stock and the acquisition of the Warrant Shares upon the exercise of the Warrants will be in compliance with the Securities Act and any applicable state securities laws and will be exempt from the registration requirements of the Securities Act and such state securities laws. Section 3.18. Financial Advisors and Brokers; Fairness Opinion. (a) Except for Houlihan Lokey Howard & Zukin, no Person has acted, directly or indirectly, as a broker, finder or financial advisor of the Company in connection with this Agreement or the transactions contemplated thereby, and no Person is entitled to receive any broker's, finder's or similar fee or commission in respect thereof based in any way on any agreement, arrangement or understanding made by or on behalf of the Company, any of its Subsidiaries or any of their respective directors, officers or employees. True and correct copies of all agreements between the Company, on the one hand, and Houlihan Lokey Howard & Zukin (or any of its Affiliates), on the other, have been delivered to the Investor. (b) The Special Committee has received an opinion of Houlihan Lokey Howard & Zukin to the effect that the Restructuring and the transactions contemplated thereby are fair, from a financial point of view, to the holders of the Common Stock of the Company other than E.ON North America, Inc., VEBA Zweite Verwaltungsgesellschaft mbH and their Affiliates, and such opinion has not been withdrawn or adversely modified. Section 3.19. Material Contracts. Except for this Agreement and those agreements and other documents filed as exhibits to the SEC Reports and except as set forth in Section 3.19 of the Disclosure Schedule, as of the date of this Agreement: (i) neither the Company nor any of its Subsidiaries is a party to or bound by any "material contract" within the meaning of Item 601(b)(10) of the SEC's Regulation S-K or any non-competition agreement or other agreement or arrangement that materially restricts it or any of its Subsidiaries from competing in any line of business; (ii) neither the Company nor any of its Subsidiaries has entered into any amendment of any such "material contract" or waived any of its material rights under any such "material contract"; and (iii) no such "material contract" has been terminated. Each such "material contract" constitutes a legal, valid and binding obligation of the Company or such Subsidiaries, as the case may be, enforceable in accordance with its terms against the Company or such Subsidiary as the case may be, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. Except as set forth in Section 3.19 of the Disclosure Schedule, neither the Company nor any of its Subsidiaries is in default under any such "material contract", and there has not occurred any event that, with the lapse of time or the giving of notice or both, would constitute such a default, except for such defaults that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Company. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE INVESTOR The Investor represents and warrants to and agrees with, the Company as of the date hereof and as of the Closing Date as follows: Section 4.01. Organization. The Investor is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite power and authority to carry on its business as now conducted. Section 4.02. Authorization; Enforceability. This Agreement and Investor Documents entered into or to be entered into by the Investor are within the Investor's powers and have been duly authorized by all necessary action. This Agreement has been duly executed and delivered by the Investor and constitutes, and each Investor Document, when executed and delivered by the Investor, will constitute, a legal, valid and binding obligation of the Investor, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. Section 4.03. Governmental Approvals; No Conflicts. The execution, delivery and performance of this Agreement and the Investor Documents entered into or to be entered into by the Investor and the consummation of the transactions contemplated thereby (i) do not require any consent or approval of, registration or filing with, or any other action by or before, any Governmental Authority, except for the Required Regulatory Approvals and such as have been obtained or made and are in full force and effect and except where the failure to obtain such consent or approval or make such registration or filing, individually or in the aggregate, would not result in a Material Adverse Effect, (ii) will not violate any applicable Law or the charter, by-laws or other organizational documents of the Investor or any order of any Governmental Authority and (iii) will not violate or result in a default under any material indenture, agreement or other instrument binding upon the Investor or any of its assets, or give rise to a right thereunder to require any payment to be made by the Investor. Section 4.04. Financial Advisors and Brokers. Except for Salomon Smith Barney Inc., no Person has acted directly or indirectly as a broker, finder or financial advisor of the Investor in connection with this Agreement, the Investor Documents or the transactions contemplated thereby, and no Person is entitled to receive any broker's, finder's or similar fee or commission in respect thereof based in any way on any agreement, arrangement or understanding made by or on behalf of the Investor or any of its directors, officers or employees. Section 4.05. Purpose of Investment . Except as permitted pursuant to Section 10.10(b), the Investor is acquiring the Series A Preferred Stock under this Agreement for its own accounts solely for the purpose of investment and not with a view to, or for sale in connection with, any distribution thereof in violation of the Securities Act. The Investor acknowledges that the Series A Preferred Stock, the Conversion Shares, the Notes, the Warrants and the Warrant Shares have not been registered under the Securities Act and may be sold or disposed of in the absence of such registration only pursuant to an exemption from the registration requirements of the Securities Act. Section 4.06. Holdings. (a) Holdings is, or by the Closing Date will be, duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, with all requisite power and authority to carry on its business as it will be conducted and, except where the failure to do so, individually or in the aggregate, would not result in a material adverse effect on its business, assets operations or properties, qualified to do business in, and will be in good standing in, every jurisdiction where such qualification is required. A true and correct copy of the certificate of incorporation of Holdings is attached hereto as Exhibit J. (b) (i) The authorized capital stock of Holdings consists, or as of the Closing Date will consist, of (A) 9,000 shares of Class A Common Stock, par value $0.01 (the "Holdings Class A Common Stock"), of which 9,000 shares will be outstanding immediately preceding the Closing and (B) 1 share of Class B Common Stock, par value $0.01 (the "Holdings Class B Common Stock"), of which 1 share will be outstanding immediately preceding the Closing and, in each case, which will then be owned by the Investor (such shares, collectively, the "Holdings Common Stock"). As of the Closing, the Investor will be the lawful record and beneficial owner of all of the Holdings Common Stock, the Investor will have valid title thereto, free and clear of all Liens, and the Holdings Common Stock will be duly authorized and validly issued, fully paid and non-assessable. (ii) As of the Closing Date there will be no authorized or outstanding (or any obligations to authorize or issue) Derivative Securities of Holdings. (c) As of the Closing Date, Holdings will have all right, title and interest in the Loans set forth on Schedule 2 and will have no other debts or liabilities whatsoever. Holdings was incorporated solely for the purpose of holding such Loans and has not otherwise engaged in any business or operations. Section 4.07. Financial Ability to Make Loans. The Credit Agreement Lenders have adequate funds available to them to make the loans contemplated by the Credit Agreement. ARTICLE V GOVERNANCE Section 5.01. Board Size. For so long as the Investor is entitled to designate any Board Nominee for election to the Board of Directors, the Board of Directors shall consist of no more than 11, nor less than 5, directors. Section 5.02. Board Representation. (a) The Board of Directors shall, prior to the Closing, elect a total of four nominees designated in writing by the Investor (such persons, or replacements designated by the Investor, the "Board Nominees"), to the Board of Directors, to be allocated to Class I, Class II or Class III as specified by the Investor. Commencing with the annual meeting of stockholders of the Company the record date for which next follows the Closing Date, and at each annual meeting of stockholders of the Company thereafter, the Investor shall be entitled to present to the Board of Directors or the nominating committee thereof a number of nominees for election to the class of directors up for election to the Board of Directors at such annual meeting equal to the number of Board Nominees in such class immediately prior to such election and the Company shall use its best efforts to cause the election to the Board of Directors of such Board Nominees. If the Board of Directors shall cease to be a classified board, the Investor shall be entitled to present to the Board of Directors or the nominating committee thereof two nominees for election to the Board of Directors at each annual meeting of stockholders of the Company. In the event of the death, disability, resignation or removal of a Board Nominee, the Investor shall designate a replacement for such director, which replacement the Company shall cause to be elected to the Board of Directors. (b) The Company shall cause each Board Nominee designated for election to the Board of Directors pursuant to Section 5.02(a) to be included in the slate of nominees recommended by the Board of Directors to the stockholders of the Company for election as directors at the relevant annual meeting of the stockholders, and shall use its best efforts to cause the election of each such Board Nominee, including soliciting proxies in favor of the election of such person. (c) Notwithstanding the foregoing provisions of this Section 5.02, the Investor shall not be entitled to designate Board Nominees for election to the Board of Directors in the event that (i) less than $130,000,000 in Stated Value of the Series A Preferred Stock is outstanding or (ii) the Investor and its Affiliates do not Beneficially Own, in the aggregate, more than 50% of the then outstanding shares of Series A Preferred Stock. In the event that the Investor shall not be entitled to designate Board Nominees for election to the Board of Directors, the Board Nominees shall resign from the Board of Directors no later than the thirtieth day after the day on which the Investor becomes aware that the aggregate Beneficial Ownership of it and its Affiliates is reduced below the threshold ownership level of Original Number of Series A Shares specified in this Section 5.02(c). If a Board Nominee does not resign on or prior to such thirtieth day as required pursuant to the immediately preceding sentence, a majority of the Board of Directors (excluding any Board Nominees) shall have the right to remove such Board Nominee from the Board of Directors. (d) If the Board of Directors shall determine in good faith in the exercise of its fiduciary duties, that nomination of any person designated by the Investor for election to the Board of Directors would be contrary to the best interests of the Company, then the Company shall promptly notify the Investor of such determination (either in person, if such determination shall be made at a Board of Directors meeting at which a Board Nominee is present or by telephone (promptly confirmed in writing), if such determination shall be made at a Board of Directors meeting at which a Board Nominee is not present) and thereafter the Investor shall have a period of no less than five Business Days to designate a new person for nomination for election to the Board of Directors as a Board Nominee. The Board of Directors has approved the executives of the Investor set forth on Schedule 5.02(d) as Board Nominees for all purposes hereof as the date hereof. Section 5.03. Meetings. From and after the Closing Date, for so long as a Board Nominee serves as a member of the Board of Directors, each Board Nominee shall be invited to attend all regular and special meetings of the Board of Directors. The Company shall notify each Board Nominee of any such meeting no later than the time at which it notifies any other member of the Board of Directors of such meeting. ARTICLE VI PRE-CLOSING COVENANTS Section 6.01. Taking of Necessary Action. Each of the parties hereto agrees to use its best efforts promptly to take or cause to be taken all actions and promptly to do or cause to be done all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement in accordance with the terms of the Agreement. Without limiting the foregoing, (i) the Company will use its best efforts to file the Series A Certificate of Designations with the Secretary of State of the State of Delaware, (ii) the Company will use its best effort to enter into or cause its Subsidiaries to enter into, as applicable, the Company Documents and (iii) the Investor and the Company will use their best efforts to make all filings with respect to, and to obtain, all Required Regulatory Approvals and other Regulatory Approvals necessary or, in the opinion of the Investor or the Company, advisable, in order to permit the consummation of the transactions contemplated hereby. Section 6.02. Conduct of Business. From the date hereof until the Closing Date, except as set forth on Section 6.02 of the Disclosure Schedule, the Company shall conduct its business and shall cause its Subsidiaries to conduct their respective businesses in, and only in, the ordinary course and shall use, and shall cause its Subsidiaries to use, their best efforts to preserve intact their respective present business organizations, operations, goodwill and relationships with third parties (including customers and vendors) and to keep available the services of the present directors, officers and key employees. Without limiting the generality of the foregoing, from the date hereof until the Closing Date, without the prior written consent of the Investor (except as expressly permitted or required by this Agreement): (a) the Company shall not, and shall cause each of its Subsidiaries not to, other than in the ordinary course of business, sell any of the assets of the Company or its Subsidiaries (or the securities of entities holding the same) to any Person, other than the Company or a Wholly Owned Subsidiary of the Company, in one transaction or a series of related transactions, in which the fair value of the assets being sold, or the total consideration (in the form of cash or property and including any contingent consideration and any Indebtedness or other obligations assumed) to be received by the Company and its Subsidiaries, exceeds $50,000; (b) other than in the ordinary course of business consistent with past practice, the Company shall not, and shall cause each of its Subsidiaries not to, acquire any assets, in one transaction or series of related transactions, in which the total consideration (in the form of cash or property and including any contingent consideration and any Indebtedness or other obligations assumed) to be paid by the Company and its Subsidiaries exceeds $50,000; (c) the Company shall not, and shall cause each of its Subsidiaries, as the case may be, not to take any of the actions or enter into any of the agreements, commitments or transactions described below: (i) any change or amendment to the Certificate of Incorporation or By-laws or the certificate or articles of incorporation, bylaws or other organizational documents of any Subsidiaries of the Company; (ii) any issuance or sale, or any direct or indirect purchase, redemption or other acquisition of any shares of their respective Equity Interests or Derivative Securities, other than pursuant to this Agreement or transactions contemplated hereby or the Option Plan; (iii) any dividend or other distribution declared, set aside, paid or made with respect to Equity Interests by the Company or any of its Subsidiaries, except (x) dividends or other distributions made to the Company or to any Subsidiary of the Company and (y) dividends and distributions declared, set aside, paid or made by any joint venture in which the Company or any Subsidiary owns an equity interest, which dividends and distributions were declared, set aside, paid or made in accordance with the organizational documents or related service agreements of such joint venture as in effect on the date of such payment; (iv) any increase in excess of $50,000 in the Indebtedness of the Company and its Subsidiaries, taken as a whole, other than increases due to borrowings under existing lines of credit; (v) any amendment of any mortgage, Lien, lease, Regulatory Approval, loan agreement, indenture or other agreement, instrument or document, which amendment is material to the Company and its Subsidiaries, taken as a whole; (vi) any default, event of default or breach (or any event which, with notice or the passage of time or both, would constitute a default, event of default or breach) by the Company or any of its Subsidiaries of any credit, financing or other agreement or instrument relating to any Indebtedness, which default, event of default or breach is material to the Company and its Subsidiaries, taken as a whole; (vii) any commitment, agreement or transaction entered into, amended, or terminated (or any waiver of any rights or remedies under any of the foregoing) by the Company or any of its Subsidiaries (including any agreement with respect to any ongoing or threatened litigation) that is material to the Company and its Subsidiaries, taken as a whole, other than in the ordinary course of business; (viii) any entry into or amendment of any material employment, severance, compensation, consulting, retention, change of control or similar agreement with, or any material increase in the compensation or benefits payable or to become payable by the Company or any of its Subsidiaries to, any employee of the Company or any of its Subsidiaries (other than agreements terminable without penalty or similar payment by the Company or such Subsidiary, as the case may be, on not more than 30 days' notice and increases in compensation payable or to become payable to employees (other than directors or officers) in the ordinary course of business consistent with past practice); (ix) any change in the financial accounting methods, principles or practices of the Company and its Subsidiaries for financial accounting purposes, except as required by GAAP or applicable Law; (x) other than the amalgamation of MEMC Partecipazioni S.r.l with and into the Italian Subsidiary, any adoption of any agreement or understanding with respect to any Change in Control, merger, consolidation or other reorganization with respect to the Company or any of its Subsidiaries, or any adoption of any plan, agreement or arrangement with respect to, or resolutions providing for, the liquidation or dissolution of the Company or any of its Subsidiaries; or (xi) any settlement or compromise of any Proceeding other than those in which the amount paid (to the extent not reimbursed with the proceeds of any insurance policy) does not exceed $50,000. (d) the Company shall not, and shall cause each of its Subsidiaries not to, take any action that it knows or has reason to believe would cause a representation or warranty of the Company set forth herein to be untrue in any material respect if made at such time, or a covenant of the Company set forth in Article VII to fail to be satisfied as of the Closing Date; and (e) the Company shall not, and shall cause each of its Subsidiaries not to, commit or agree to do any of the foregoing. Section 6.03. Notifications. At all times prior to the Closing Date, the Investor shall promptly notify the Company and the Company shall promptly notify the Investor in writing of any fact, change, condition, circumstance or occurrence or nonoccurrence of any event which will or is reasonably likely to result in the failure to satisfy the conditions to be complied with or satisfied by it hereunder; provided, however, that the delivery of any notice pursuant to this Section 6.03 shall not limit or otherwise affect the remedies available hereunder to any party receiving such notice. ARTICLE VII ADDITIONAL COVENANTS Section 7.01. Financial and Other Information. (a) So long as TPG Persons Beneficially Own, in the aggregate, at least 25% of the Original Number of Combined Shares, the Company shall (and shall cause each of its Subsidiaries to) afford to the TPG Persons that then Beneficially Own Conversion Shares and their Representatives reasonable access, upon reasonable notice and in such manner as will not unreasonably interfere with the conduct of the Company's (or such Subsidiary's) business, to their respective properties, books, contracts, commitments and records (including information regarding any pending or threatened Proceeding to which the Company or any of its Subsidiaries is, or reasonably expects to be, a party) and to discuss the business, affairs, finances, regulatory status and other matters related to the purchase and Beneficial Ownership of the Series A Preferred Stock, Conversion Shares, Warrants or Warrant Shares with Representatives of the Company; provided, however, that neither the Company nor any Subsidiary shall be required to disclose any such information pursuant to this Section 7.01 to the extent that such disclosure (i) would result in the breach or violation of the confidentiality or non-disclosure provisions of any license or agreement to which the Company or any of its Subsidiaries is a party or (ii) in the opinion of outside legal counsel to the Company, would result in the Company's inability to assert the attorney-client privilege with respect to such information or require premature public disclosure thereof in accordance with applicable rules and regulations of the Commission promulgated under the Exchange Act. (b) Upon the written request of the Company, each TPG Person shall inform the Company of the number of Conversion Shares, Original Number of Conversion Shares, Warrants Shares or Original Number of Warrant Shares, as applicable, then Beneficially Owned by such TPG Person. Such information shall be delivered to the Company within five Business Days of the delivery of such request to such TPG Person. To the extent such information is not available to the public, the Company shall keep such information confidential. Section 7.02. Restricted Payments; Certain Payments of Indebtedness. From and after the Closing, so long as TPG Persons Beneficially Own, in the aggregate, at least 25% of the Original Number of Combined Shares, without the prior written approval of the Investor: (a) The Company will not, and will not permit any Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except that (i) the Company may declare and pay dividends with respect to its capital stock payable solely in additional shares of its capital stock, (ii) the Company or any Subsidiary may pay dividends or other distributions with respect to any shares of their capital stock or the Series A Preferred Stock in accordance with the Series A Certificate of Designations, (iii) Subsidiaries may declare and pay dividends ratably with respect to their capital stock and (iv) the Company may make Restricted Payments, not exceeding $200,000 during any fiscal year, pursuant to and in accordance with stock option plans or other benefit plans for directors, management or employees of the Company and the Subsidiaries, including the redemption or purchase of capital stock of the Company held by former directors, management or employees of the Company or any Subsidiary following termination of their employment. (b) The Company will not, and will not permit any Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness, except (i) payment of Indebtedness permitted under the Credit Agreement, (ii) pursuant to the Restructuring, and (iii) payment of Indebtedness permitted under the Indenture. Section 7.03. Restrictive Agreements. From and after the Closing, so long as TPG Persons Beneficially Own, in the aggregate, at least 25% of the Original Number of Combined Shares, without the prior written approval of the Investor, the Company will not, and will not permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the Company or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions on, or to purchase, redeem or otherwise acquire to any shares of its capital stock or to make or repay loans or advances to the Company or any other Subsidiary or to Guarantee Indebtedness of the Company or any other Subsidiary, provided that (i) the foregoing shall not apply to restrictions and conditions imposed by Law or permitted under Section 6.10 of the Credit Agreement, (ii) the foregoing shall not apply to restrictions and conditions permitted by the Indenture and (iii) the foregoing shall not apply to restrictions and conditions imposed by Section 7.02. Section 7.04. Publicity. Except as required by Law or by obligations pursuant to any listing agreement with or requirement of any national securities exchange or national quotation system on which the Common Stock is listed, admitted to trading or quoted, neither the Company (nor any of its Affiliates) nor the Investor (nor any of its Affiliates) shall, without the prior written consent of each other party hereto, which consent shall not be unreasonably withheld or delayed, make any public announcement or issue any press release with respect to the transactions contemplated by this Agreement. Prior to making any such public disclosure required by applicable Law or pursuant to any listing agreement with or requirement of any relevant national exchange or national quotation system, the disclosing party shall consult with the other parties hereto, to the extent feasible, as to the content and timing of such public announcement or press release. Section 7.05. Status of Dividends. The Company agrees to treat the Series A Preferred Stock as equity for all Tax purposes unless the Company determines that there is no reasonable basis for such position. The Company shall take no action (other than as required by Law) that would jeopardize the availability of the dividends received deduction under Section 243(a)(1) of the Code for the distributions on the Series A Preferred Stock that are paid out of current or accumulated earnings and profits, if any. Section 7.06. Director and Officer Indemnification. (a) So long as any Board Nominee serves as a member of the Board of Directors or as an officer of the Company, the Company shall provide to each such individual indemnification and directors' and officers' insurance having terms and provisions no less favorable to such individuals than the indemnification and directors' and officers' insurance provided to other directors and officers of the Company (including coverage for matters based in whole or in part on, or arising in whole or in part out of, any matter existing or occurring while such Board Nominee was a director, even though such Board Nominee may no longer be a director at the time any claim for indemnification or coverage under insurance is made). (b) So long as any Board Nominee serves as a member of the Board of Directors or as an officer of the Company, the Company shall not amend the Certificate of Incorporation or By-laws so as to adversely affect the rights of any such person with respect to indemnification by the Company for any Losses incurred by such person in such person's capacity as an officer or director of the Company. Section 7.07. Listing; Reservation. (a) So long as any TPG Person Beneficially Owns Conversion Shares or Warrant Shares, the Company shall use its best efforts to ensure that the Common Stock continues to be listed for trading on the NYSE. The Company will use its best efforts so that upon issuance all Conversion Shares and Warrant Shares will be listed for trading on the NYSE. (b) From and after the Closing, the Company shall at all times reserve and keep available, out of its authorized and unissued Common Stock, solely for the purpose of issuing Common Stock upon the conversion of the Series A Preferred Stock and the exercise of the Warrants, such number of shares of Common Stock free of preemptive rights as shall be sufficient to issue Common Stock upon the conversion of all outstanding shares of Series A Preferred Stock and upon the exercise of all outstanding Warrants. Section 7.08. Legend. (a) The Investor agrees to the placement of a legend (the "Private Placement Legend") substantially as set forth below on (i) certificates representing Series A Preferred Stock issued pursuant to the terms of this Agreement, (ii) certificates representing Conversion Shares, (iii) certificates representing the Notes issued pursuant to the terms of this Agreement, (iv) certificates representing Warrants issued pursuant to the terms of this Agreement, (v) certificates representing Warrant Shares and (vi) any certificate issued at any time in exchange or substitution for any certificate bearing such legend. The Private Placement Legend is substantially as follows: THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. (b) The Private Placement Legend shall be removed from a certificate representing Series A Preferred Stock, Conversion Shares, Notes, Warrants or Warrant Shares as applicable, if the securities represented thereby are sold pursuant to an effective registration statement under the Securities Act or there is delivered to the Company such satisfactory evidence, which may include an opinion of independent counsel, as reasonably may be requested by the Company, to confirm that neither such legend nor the restrictions on transfer set forth therein are required to ensure that transfers of such securities will not violate the registration and prospectus delivery requirements of the Securities Act. Section 7.09. Approval for Issuance of Shares. (a) The Company shall use its best efforts to obtain, as promptly as possible, the Shareholder Approval and take all action necessary to present the Shareholder Approval Proposal for a vote at each meeting of stockholders of the Company, annual or otherwise, held after the execution of this Agreement. Each meeting of stockholders at which the Shareholder Approval is considered is referred to herein as a "Shareholder Meeting." The Company shall use its best efforts to obtain the required approval of its stockholders of the Shareholder Approval Proposal at each Shareholder Meeting. The Company shall use its best efforts to hold a Shareholder Meeting no later than February 28, 2002 and shall file with the Commission a Proxy Statement with respect to such Shareholder Meeting no later than December 15, 2001. (b) Each Proxy Statement shall contain the recommendation of the Board of Directors that the stockholders approve the Shareholder Approval Proposal. The Company shall notify the Investor promptly of the receipt by it of any comments from the Commission or its staff and of any request by the Commission for amendments or supplements to such Proxy Statement or for additional information, and will supply the Investor with copies of all correspondence between the Company and its representatives, on the one hand, and the Commission or the members of its staff or of any other Governmental Authority, on the other hand, with respect to such Proxy Statement. The Company shall give the Investor and its counsel a reasonable opportunity to review and comment on those portions of such Proxy Statement describing or referring to the Shareholder Approval Proposal or any member of the Investor Group (the "Investor Information") prior to the filing of the Proxy Statement with the Commission and shall give the Investor and its counsel a reasonable opportunity to review and comment on all amendments and supplements to the Investor Information and all responses to requests for additional information and replies to comments prior to their being filed with, or sent to, the Commission with respect to the Investor Information. The Company shall give reasonable consideration to any comments the Investor or its counsel may provide with respect to the Investor Information or any amendment or supplement thereto. (c) Notwithstanding anything to the contrary contained in this Section 7.09, the Company shall not be required to take any of the actions described in Section 7.09(a) or (b) hereof with respect to the Shareholder Approval Proposal if, in the opinion of outside legal counsel to the Company, the Shareholder Approval is not required under the NYSE Rules to permit the actions described in the definition of "Shareholder Approval". (d) Each Proxy Statement, as of the date it is mailed to stockholders of the Company and as of the date of the relevant Shareholder Meeting, will not include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that this Section 7.09(d) shall not apply to any information provided to the Company in writing by any member of the Investor Group with respect to such member expressly for inclusion in the Proxy Statement. Section 7.10. Transactions with Affiliates. From and after the Closing, so long as TPG Persons Beneficially Own, in the aggregate, at least 25% of the Original Number of Combined Shares, the Company shall not, without the prior written approval of the Investor, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except such transactions that are permitted under the Credit Agreement and the Indenture. Section 7.11. Equity Issuances. (a) From and after the Closing, so long as TPG Persons Beneficially Own, in the aggregate, at least 25% of the Original Number of Combined Shares, the Company and each of its Subsidiaries shall not, without the prior written approval of the Investor, issue or sell any Equity Interests of the Company or any Subsidiary or any Derivative Securities in a transaction or series of related transactions (such transaction or series of related transactions, a "10% Transaction") as a direct or indirect result of which any Person (other than any institutionally managed, public held mutual fund registered with the Commission) or Group would have, or have the right to acquire, Beneficial Ownership of Equity Interests representing 10% or more of the aggregate Voting Power of the then-outstanding Voting Securities of the Company or any such Subsidiary; provided, however, that the Company may issue its Equity Interests in a 10% Transaction without any such approval if (i) the consideration to be received by the Company in such transaction is solely in the form of cash, (ii) the transaction is completed pursuant to a Purchase Agreement, and (iii) the Company has complied with the procedures set forth in Section 7.11(b) hereof with respect to such transaction; and provided further, that, notwithstanding the foregoing any transaction expressly permitted pursuant to Section 6.02 hereof shall not constitute a 10% Transaction. (b) (i) Prior to any offer or sale by the Company of any of its Equity Interests (the "Covered Securities") in a 10% Transaction, the Company shall give written notice (a "Proposed Sale Notice") to the Investor of the Company's desire to sell the Covered Securities, which notice shall identify (A) the number of Covered Securities, (B) the terms of the Covered Securities and (C) any other material terms and conditions of the proposed offer or sale (other than a proposed sale price). The date on which such Proposed Sale Notice is given is referred to herein as the "Notice Date." On and prior to the Solicitation Date with respect to any Covered Securities, and following the Solicitation Date if the Company shall have delivered an Acceptance Notice with respect to such Covered Securities, the Company shall not, shall not permit any of its Subsidiaries or Affiliates to, and shall not authorize or permit any of its or their Representatives to, directly or indirectly, solicit or encourage the submission of any proposal from any Person (other than the Investor and its Affiliates), participate in any discussion or negotiations with any Person (other than the Investor and its Affiliates), or authorize, engage in or enter any agreement or understanding with any Person (other than the Investor and its Affiliates), with respect to the issuance or sale of such Covered Securities. (ii) The Investor shall have forty days following the Notice Date (the "Response Period") to notify the Company in writing (such notification, an "Offer to Purchase") of its offer, or an offer by any of its Affiliates, to purchase in cash all (but not less than all) of the Covered Securities referred to in the relevant Proposed Sale Notice. During the Response Period, if requested by the Investor or any of its Affiliates, the Company shall negotiate in good faith with the Investor or such Affiliate with respect to the terms of a proposed purchase of Covered Securities by the Investor or such Affiliate. Any Offer to Purchase shall set forth a proposed cash purchase price for such Covered Securities (the "Investor Price") and the proposed closing date for the purchase and may include other material terms and conditions of the proposed purchase. The Investor shall not be obligated to deliver an Offer to Purchase, and if an Offer to Purchase is not given prior to the end of the Response Period, the Investor shall be deemed to have declined to purchase such Covered Securities. (iii) The Company shall have ten days following the delivery of an Offer to Purchase to accept the offer made by the Investor or its Affiliates to purchase all (but not less than all) of the Covered Securities on the terms and subject to the conditions set forth in the Offer to Purchase by giving the Investor written notice to that effect (an "Acceptance Notice"). If, in accordance with the terms of the preceding sentence, the Company accepts the offer made by the Investor or its Affiliates to purchase such Covered Securities on the terms and subject to the conditions set forth in the Offer to Purchase, the closing for such transaction shall take place at a time and place reasonably acceptable to the Investor and the Company. If the Company does not give an Acceptance Notice in accordance with the terms of the first sentence of this paragraph, the Company shall be deemed to have rejected the offer set forth in the relevant Offer to Purchase. (iv) If the Company has complied with the foregoing provisions of this Section 7.11(b) and shall not have given an Acceptance Notice with respect to any Covered Securities following the Solicitation Date with respect to such Covered Securities, the Company may enter into a Purchase Agreement with any other Person with respect to all (but not less than all) of such Covered Securities within 40 days following such Solicitation Date (or within 60 days following such Solicitation Date, if such Purchase Agreement constitutes a customary underwriting agreement (an "Underwriting Agreement") that contemplates a bona fide offering of the Covered Securities to the public that is registered under the Securities Act) and sell all (but not less than all) of the Covered Securities pursuant to such Purchase Agreement within 70 days following such Solicitation Date (or within 100 days following such Solicitation Date if such sale is made pursuant to an Underwriting Agreement and constitutes a bona fide offering of the Covered Securities to the public that is registered under the Securities Act); provided that (i) the purchase price for such Covered Securities in such sale is at least 105% of the related Investor Price, if any, and (ii) the terms and conditions of such sale are otherwise not materially worse for the Company than those set forth in the related Offer to Purchase. If the Company has not executed a Purchase Agreement with respect to such Covered Securities within 40 days or 60 days, as the case may be, following the relevant Solicitation Date, or has not completed a sale of all of such Covered Securities within 70 days or 100 days, as the case may be, following the relevant Solicitation Date, the Company shall no longer be permitted to sell such Covered Securities without again fully complying with all the provisions of this Section 7.11, and all the restrictions contained in this Section 7.11 shall again be in effect with respect to such Covered Securities. Section 7.12. Fundamental Changes. From and after the Closing, so long as members of the Investor Group Beneficially Own, in the aggregate, at least 25% of the Original Number of Combined Shares, without the prior written approval of the Investor, the Company will not, and will not permit any Subsidiary to, (a) merge into, consolidate with or enter into any other business combination with any other Person, or permit any other Person to merge into, consolidate with or enter into any other business combination with it, if such merger, consolidation or business combination would result in a Change in Control or sale of substantially all of the Company's assets or (b) enter into or commence any liquidation, bankruptcy, dissolution, recapitalization, reorganization, assignment to creditors or any similar transaction. Section 7.13. Short-Form Merger . So long as TPG Persons Control the Company, the Investor will not, and will cause such other TPG Persons not to, effect, or cause to be effected, a "short-form" merger pursuant to DGCL Section 253 unless (i) such merger shall have been approved by a special committee of the Board of Directors that does not include any Representatives of a TPG Person and (ii) such special committee shall have received an opinion from a nationally recognized investment banking firm to the effect that the consideration to be received by holders of Common Stock (other than TPG Persons) in such merger is fair, from a financial point of view, to such holders of Common Stock. Section 7.14. Tax Sharing Agreement. Upon notice from the Investor that it has elected to be treated as a corporation for U.S. federal income tax purposes, the Company will (i) agree, and cause its eligible U.S. Subsidiaries to agree, to file consolidated income tax returns with the Investor and (ii) execute, and cause its eligible U.S. Subsidiaries to execute, a tax sharing agreement substantially in the form attached hereto as Exhibit L. Section 7.15. Holdings Loans. The Company will take all actions necessary, and cause its Subsidiaries (including Holdings upon the transfer by the Investor to the Company of the Holdings Class A Common Stock pursuant to Section 2.01) to take all actions necessary, to permit the pledges of collateral under the Credit Agreement Ancillary Documents and the Indenture Ancillary Documents. The Company will not enforce, and will cause its Subsidiaries (including Holdings upon the transfer by the Investor to the Company of the Holdings Class A Common Stock pursuant to Section 2.01) not to enforce, any negative pledge clauses under the Loans listed in Schedule 2. ARTICLE VIII CONDITIONS Section 8.01. Conditions to the Investor's Obligations with Respect to the Restructuring. The obligation of the Investor at the Closing, to (i) deliver to the Company the Holdings Class A Common Stock, (ii) cause the Credit Agreement Lenders to enter into the Credit Agreement, (iii) cause the Notes Designees to deliver the Loans to the Company, (iv) enter into the Registration Rights Agreement, and (v) enter into the Merger Agreement, in each case pursuant to Section 2.01, is subject to satisfaction or waiver of each of the following conditions precedent: (a) Representations and Warranties; Covenants. The representations and warranties of the Company set forth in Article III qualified as to materiality shall have been true and correct in all respects, and those not so qualified shall have been true and correct in all material respects, on and as of the date hereof and as of the Closing as if made on the Closing Date (except where such representation and warranty speaks by its terms as of a different date, in which case it shall be true and correct as of such date, or except where such representation and warranty is not true or correct solely as a result of actions expressly permitted by Section 6.02). The Company shall have performed in all material respects all obligations and complied with all agreements, undertakings, covenants and conditions required hereunder to be performed by it at or prior to the Closing. The Company shall have delivered to the Investor at the Closing a certificate in form and substance reasonably satisfactory to the Investor dated the Closing Date and signed by the chief executive officer and the chief financial officer of the Company to the effect that the conditions set forth in this Section 8.01(a) have been satisfied. (b) Secretary's Certificate. The Investor shall have received a certificate from the Company of the Company's Secretary or other duly authorized officer of the Company and in a form reasonably acceptable to the Investor, dated as of the Closing Date, (i) attaching the Certificate of Incorporation and By-laws and making customary certifications with respect thereto, (ii) certifying that the resolutions of the Board of Directors delegating to the Special Committee authority with respect to this Agreement and the consummation of the transactions contemplated by this Agreement and the Company Documents were duly adopted and have not been rescinded or amended as of the Closing Date, (iii) certifying resolutions of the Special Committee approving the execution and delivery of this Agreement by the Company and the consummation of the transactions contemplated by this Agreement and the Company documents were duly adopted and have not been rescinded or amended as of the Closing Date, and (iv) attesting as to the incumbency and signature of each officer of the Company who shall execute this Agreement, any Company Document or any other instrument or document required to be executed pursuant hereto or thereto. (c) Opinions of Counsel. The Investor shall have received at the Closing a written opinion from Bryan Cave LLP, special counsel to the Company, dated the Closing Date, substantially in the form set forth in Exhibit H. (d) Compliance with Laws; No Adverse Action or Decision. Since the date hereof, (i) no Law shall have been promulgated, enacted or entered that restrains, enjoins, prevents, materially delays, prohibits or otherwise makes illegal the performance of this Agreement or any of the Investor Documents or Company Documents; (ii) no preliminary or permanent injunction or other order by any Governmental Authority that restrains, enjoins, prevents, delays, prohibits or otherwise makes illegal the performance of this Agreement or any of the Investor Documents or the Company Documents shall have been issued and remain in effect; and (iii) no Governmental Authority shall have instituted any Proceeding that seeks to restrain, enjoin, prevent, delay, prohibit or otherwise make illegal the performance of this Agreement or any of the Investor Documents or Company Documents. (e) Consents. All Regulatory Approvals (including the Required Regulatory Approvals) from any Governmental Authority and all consents, waivers or approvals from any other Person required for or in connection with the execution and delivery of this Agreement and the Investor Documents and the Company Documents and the consummation of the transactions contemplated thereby shall have been obtained or made on terms reasonably satisfactory to the Investor, and all waiting periods specified under applicable Law, the expiration of which is necessary for such consummation, shall have expired or been terminated. (f) Proceedings. All corporate and other proceedings to be taken by the Company in connection with this Agreement and the Company Documents with respect to the transactions contemplated thereby to be completed at the Closing and documents incident thereto shall have been completed in form and substance reasonably satisfactory to the Investor, and the Investor shall have received all such counterpart originals or certified or other copies of this Agreement and the Company Documents and such other documents as it may reasonably request. (g) No Material Adverse Effect; No Insolvency Event. No event shall have occurred or change, circumstance or effect arisen or been discovered that has had, or is reasonably likely to have, a Material Adverse Effect; and no Insolvency Event shall have occurred. (h) Board Nominees. The Board of Directors shall have elected the Board Nominees pursuant to Section 5.02. (i) E.ON Note Purchase. The Note Purchase (as defined in the E.ON Purchase Agreement) shall have been consummated (j) Establishment of Preferred Stock; Delivery of Securities. The Company shall have filed with the Secretary of State of the State of Delaware the Certificate of Designations containing the resolutions of the Board of Directors of the Company creating the Series A Preferred Stock and setting forth the terms and conditions of the Series A Preferred Stock. A copy of each of the Certificate of Incorporation and the Series A Certificate of Designations, certified by the State of Delaware (or, in the case of the Series A Certificate of Designations, accompanied by evidence of its filing reasonably satisfactory to the Investor), shall have been delivered to the Investor and the Company shall have executed and delivered to the Investor the shares of Series A Preferred Stock pursuant to Section 2.01. (k) Credit Agreement. (i) The Credit Agreement, together with each Credit Agreement Ancillary Document, each substantially in the form of Exhibit B, shall have been executed and delivered by the Company, its Subsidiaries, the Administrative Agent thereunder and the Collateral Agent thereunder, in each case as applicable. (ii) The conditions to the obligations of the Credit Agreement Lenders set forth in Section 4.01 of the Credit Agreement to make loans under the Credit Agreement shall have been satisfied. (l) Indenture and Notes. (i) The Indenture, together with each Indenture Ancillary Document, each substantially in the form of Exhibit C, shall have been executed and delivered by the Company, its Subsidiaries, the Trustee thereunder and the Collateral Agent thereunder, in each case as applicable. (ii) The Investor or, as directed by the Investor, the Trustee and/or the Collateral Agent under the Indenture shall have received such documents and certificates as the Investor or its counsel may reasonably request with respect to legal matters relating to the Indenture and the Indenture Ancillary Documents, including in connection with the security interests to be granted pursuant to the Indenture Ancillary Documents, all in form and substance satisfactory to the Investor and its counsel. (iii) The Company shall have executed and delivered the Notes to the Notes Designees pursuant to Section 2.01 after having caused the Notes to be authenticated by the Trustee under the Indenture. (m) Warrant Certificates. The Warrant Certificates, substantially in the form of Exhibit D, shall have been executed and delivered by the Company to the Notes Designees pursuant to Section 2.01. (n) Registration Rights Agreement. The Registration Rights Agreement, substantially in the form of Exhibit E, shall have been executed and delivered by the Company and the Guarantors. (o) Merger Agreement. The Merger Agreement, substantially in the form of Exhibit G, shall have been executed and delivered by the Company. (p) Resolution of the Board of Directors of the Company Concerning Employee Benefits. The Board of Directors or the appropriate committee thereof that has the authority to approve the following resolution, shall have adopted a resolution concerning employee benefit and compensation matters substantially in the form attached hereto as Exhibit K. (q) Employment Agreements. The Company and each employee who is employed in the position of corporate vice president or above shall have entered into an employment agreement, the form and substance of which are to the reasonable satisfaction of the Investor, and which include a waiver by the employee of any rights or entitlements to any benefits under the MEMC Electronic Materials, Inc. Supplemental Executive Pension Plan. Section 8.02. Conditions of the Company's Obligations with Respect to the Restructuring. The obligation of the Company at the Closing to (i) issue to the Investor the Series A Preferred Stock, (ii) enter and cause its Subsidiaries to enter into the Credit Agreement and the Credit Agreement Ancillary Documents, as applicable, (iii) enter into, and cause its Subsidiaries to enter into, the Indenture and the Indenture Ancillary Documents, as applicable, (iv) issue the Notes and the Warrant Certificates to the Notes Designees, (v) enter into, and cause the Guarantors to enter into, the Registration Rights Agreement, and (vi) enter into the Merger Agreement, in each case pursuant to Section 2.01, is subject to satisfaction or waiver of each of the following conditions precedent: (a) Representations and Warranties; Covenants. The representations and warranties of the Investor set forth in Article IV qualified as to materiality shall have been true and correct in all respects, and those not so qualified shall have been true and correct in all material respects, on and as of the date hereof and as of the Closing as if made on the Closing Date (except where such representation and warranty speaks by its terms as of a different date, in which case it shall be true and correct as of such date). The Investor shall have performed in all material respects all obligations and complied with all agreements, undertakings, covenants and conditions required by it to be performed at or prior to the Closing, and the Investor shall have delivered to the Company at the Closing a certificate in form and substance reasonably satisfactory to the Company dated the Closing Date and signed on behalf of a member of the Investor to the effect that the conditions set forth in this Section 8.02(a) have been satisfied. (b) Opinions of Counsel. The Company shall have received at the Closing (i) a written opinion from Cleary, Gottlieb, Steen & Hamilton, special counsel to the Investor, and (ii) a written opinion from Morris, Nichols, Arsht & Tunnell, special counsel to the Investor, each dated the Closing Date, such opinions to cover in the aggregate the matters substantially as set forth in Exhibit I. (c) Compliance with Laws; No Adverse Action or Decision. Since the date hereof, (i) no Law shall have been promulgated, enacted or entered that restrains, enjoins, prevents, materially delays, prohibits or otherwise makes illegal the performance of any of this Agreement or the Investor Documents or the Company Documents with respect to the transactions contemplated thereby to be completed at the Closing; (ii) no preliminary or permanent injunction or other order by any Governmental Authority that restrains, enjoins, prevents, delays, prohibits or otherwise makes illegal the performance of any of this Agreement or the Investor Documents or the Company Documents with respect to the transactions contemplated thereby to be completed at the Closing shall have been issued and remain in effect; and (iii) no Governmental Authority shall have instituted any action, claim, suit, investigation or other proceeding that seeks to restrain, enjoin, prevent, delay, prohibit or otherwise make illegal the performance of any of this Agreement or the Investor Documents or the Company Documents. (d) Credit Agreement. The Credit Agreement and each Credit Agreement Ancillary Document, substantially in the form of Exhibit B, shall have been executed and delivered by the Credit Agreement Lenders, the Administrative Agent thereunder and the Collateral Agent thereunder, in each case as applicable. ARTICLE IX TERMINATION Section 9.01. Termination of Agreement. Subject to Section 9.02, this Agreement may be terminated by notice in writing at any time prior to the Closing by: (a) the Investor or the Company, if the Closing shall not have occurred on or before November 30, 2001; provided, however, that the right to terminate this Agreement under this Section 9.01(a) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure of the Closing to occur on or before such date; (b) the Investor if there has been a material breach by the Company of a representation, warranty, covenant or agreement set forth in this Agreement which has not been cured within one day after written notice thereof; (c) the Investor or the Company, if any Governmental Authority of competent jurisdiction shall have issued any judgment, injunction, order, ruling or decree or taken any other action restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated by this Agreement and such judgment, injunction, order, ruling, decree or other action becomes final and non-appealable; provided that the party seeking to terminate this Agreement pursuant to this clause (c) shall have used its best efforts to have such judgment, injunction, order, ruling or decree lifted, vacated or denied; (d) the Investor or the Company, if the E.ON Purchase Agreement has been terminated; or (e) mutual written agreement of the Investor and the Company. Section 9.02. Effect of Termination. If this Agreement is terminated in accordance with Section 9.01 and the transactions contemplated hereby are not consummated, this Agreement shall become null and void and of no further force and effect except that (i) the terms and provisions of this Section 9.02, Section 7.04 and Article X shall remain in full force and effect and (ii) any termination of this Agreement shall not relieve any party hereto from any liability for any breach of its obligations hereunder. ARTICLE X MISCELLANEOUS Section 10.01. Fees and Expenses. (a) The Company shall be responsible for the payment of all expenses incurred by it in connection with this Agreement and the transactions contemplated thereby (including any Proxy Statement), including all fees and expenses of its legal counsel and all third-party consultants engaged by it to assist in such transactions. The Company shall be responsible for and reimburse the Investor for all of its fees and disbursements of legal counsel, financial advisors and other third party consultants and other out-of-pocket expenses incurred by the Investor in connection with this Agreement and the transactions contemplated thereby. Such reimbursements shall be due to the Investor within three Business Days after receipt by the Company of an invoice therefor. In addition to such fees and expenses, the Company shall pay the Investor a $10,000,000 fee within three Business Days after receipt by the Company of an invoice therefor. For the avoidance of doubt, no fees or expenses due to the Investor under this Section 10.01 will be payable by the Company if the closing is not consummated. (b) All amounts payable under this Agreement shall be paid in immediately available funds to an account or accounts designated by the recipient of such amounts. Section 10.02. Survival of Representations and Warranties. Notwithstanding any investigation conducted or notice or knowledge obtained by or on behalf of any party hereto, each representation or warranty in this Agreement or in the Disclosure Schedule or certificates delivered pursuant to this Agreement shall survive the Closing for a period of two years; provided, however, that (i) each representation and warranty made in Sections 3.01, 3.02, 3.03, 3.14, 4.01, 4.02 and 4.03 shall survive the Closing without limitation and (ii) each representation and warranty made in Sections 3.06(b), 3.08 and 3.09 or in any section of the Disclosure Schedule or certificate related thereto shall survive the Closing until the sixtieth day following the expiration of the applicable statute of limitations with respect to any action that may be brought relating to the matters described in such representation and warranty. Any claim for indemnification under this Article X arising out of the inaccuracy or breach of any representation or warranty must be made prior to the termination of the applicable survival period. Section 10.03. Specific Performance. The parties hereto specifically acknowledge that monetary damages are not an adequate remedy for violations of this Agreement, and that any party hereto may, in its sole discretion, apply to a court of competent jurisdiction for specific performance or injunctive or such other relief as such court may deem just and proper in order to enforce this Agreement or prevent any violation hereof and, to the extent permitted by applicable law and to the extent the party seeking such relief would be entitled on the merits to obtain such relief, each party waives any objection to the imposition of such relief. Section 10.04. Indemnification. (a) The Company agrees to indemnify and hold harmless the Investor, each Designated Purchaser, each Note Designee, each member, limited partner or general partner, as the case may be, of the Investor, each Designated Purchaser, each Note Designee, each limited or general partner of each such member, limited partner or general partner, each of their Affiliates and each of their Representatives (collectively, the "Indemnified Investor Parties") from and against any and all losses, penalties, judgments, suits, costs, claims, liabilities, damages and expenses (including reasonable attorneys' fees and disbursements but excluding Taxes imposed as a result of being a direct or indirect owner of the Series A Preferred Stock, Conversion Shares, Notes, Warrants or Warrant Shares or realizing income or gain with respect thereto) (collectively, "Losses"), incurred by, imposed upon or asserted against any of the Indemnified Investor Parties as a result of, relating to or arising out of, (i) the breach of any representation or warranty made by the Company in this Agreement or any Company Document or in any certificate delivered by the Company pursuant to this Agreement or any Company Document (each of which shall be deemed to have been made for the benefit of all members of the Investor Group), (ii) the breach of any agreement or covenant made by the Company in this Agreement or any Company Document or in any certificate delivered by the Company pursuant to any this Agreement or any Company Document (each of which shall be deemed to have been made for the benefit of all members of the Investor Group), or (iii) to the fullest extent permitted by law, the transactions contemplated hereby, the negotiation, execution, delivery and performance of this Agreement and the issuance and/or direct or indirect ownership of the Series A Preferred Stock, Conversion Shares, Notes, Warrants or Warrant Shares (including any litigation, suits, actions, investigations, claims or proceedings to which an Indemnified Investor Party is made party as a result thereof), including in connection with an Indemnified Investor Party's status as a shareholder of the Company and any alleged violation of applicable business combination, control share and any other similar anti-takeover statutes; provided, however, that nothing in this clause (iii) shall require the Company to indemnify any Indemnified Investor Party with respect to any Loss resulting solely from (x) a decline in the market value of the Series A Preferred Stock, Conversion Shares, Notes, Warrants or Warrant Shares or (y) a claim by a third party that the Investor's entering into this Agreement and consummating the transactions contemplated thereby breaches any contract or agreement by and between the Investor and such third party. (b) The Investor agrees to indemnify and hold harmless the Company and each of its Representatives (collectively, the "Indemnified Company Parties") from and against any and all Losses incurred by any of the Indemnified Company Parties as a result of, or arising out of, (i) the breach of any representation or warranty made by the Investor in this Agreement or any Investor Document or in any certificate delivered by the Investor pursuant to this Agreement or any Investor Document, or (ii) the breach of any agreement or covenant made by the Investor in this Agreement or any Investor Document or in any certificate delivered by the Investor pursuant to this Agreement or any Investor Document. (c) The following provisions shall apply to any claim for Losses (a "Claim") by an Indemnified Investor Party or Indemnified Company Party (as the case may be, the "Indemnified Party") entitled to any indemnification under this Section 10.04 in respect of, arising out of or involving a claim or demand made by any Person against an Indemnified Party (a "Third Party Claim"): (i) The Indemnified Party shall notify the indemnifying party in writing within 10 Business Days after receipt by such Indemnified Party of written notice of a Third Party Claim if a Claim in respect thereof is to be made against the indemnifying party under this Section 10.04; but the failure to so notify the indemnifying party (x) will not relieve the indemnifying party from liability under this Section 10.04 unless and to the extent it has been actually and materially prejudiced by such failure and (y) will not, in any event, relieve the indemnifying party from any obligations to any Indemnified Party other than the indemnification obligation provided in this Section 10.04. (ii) If a Third Party Claim is made against an Indemnified Party, the indemnifying party shall be entitled to participate in the defense thereof and, if it so chooses and acknowledges its obligations to indemnify the Indemnified Party therefor, to assume the defense thereof with counsel of the indemnifying party's choice to represent the Indemnified Party; provided, however, that such counsel shall be reasonably satisfactory to the Indemnified Party; provided, further, that the Indemnified Party shall have the right to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the indemnifying party (except that the indemnifying party shall be liable for the fees and expenses of counsel employed by the Indemnified Party for any period during which the indemnifying party has failed to assume the defense of any Third Party Claim. Notwithstanding the foregoing, the Indemnified Party shall have the right to employ one firm or separate counsel (plus local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel, if (w) the use of counsel chosen by the indemnifying party to represent the Indemnified Party would present such counsel with a conflict of interest (based upon written advice of counsel to the Indemnified Party), (x) the actual or potential defendants in, or targets of, any such action include both the Indemnified Party and the indemnifying party and the Indemnified Party shall have reasonably concluded that there may be legal defenses available to it or other Indemnified Parties which are different from or additional to those available to the indemnifying party, (y) the indemnifying party shall not have employed counsel satisfactory to the Indemnified Party (in the exercise of the Indemnified Party's reasonable judgment) to represent the Indemnified Party within a reasonable time after notice of the Third Party Claim or (z) the indemnifying party shall authorize in writing the Indemnified Party to employ separate counsel at the expense of the indemnifying party. (iii) Whether or not the indemnifying party shall have assumed the defense of a Third Party Claim, the indemnifying party shall not admit any liability with respect to, or settle, compromise or discharge, any pending or threatened Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld). If the indemnifying party shall have assumed the defense of a Third Party Claim, the Indemnified Party shall agree to any settlement, compromise or discharge of a Third Party Claim which the indemnifying party shall recommend and which releases the Indemnified Party completely and unconditionally from all liability in connection with such Third Party Claim and which would not otherwise adversely affect the Indemnified Party. (iv) Notwithstanding the foregoing, in the event the indemnifying party fails timely, in good faith or diligently to defend, contest or otherwise protect against any Third Party Claim (after having assumed the defense therefor), the Indemnified Party shall have the right, but not the obligation, to assume the defense of such Third Party Claim and take such other action as it may elect to defend, protect against or settle such Third Party Claim as it may determine. (v) The indemnifying party shall be subrogated to the claims or rights of the Indemnified Investor Parties or the Indemnified Company Parties, as the case may be, as against any other Persons with respect to any Loss paid by the indemnifying party under this Section 10.04(c). The Investor shall be subrogated to the claims or rights of the Company as against the Company's insurers, that refused to pay on the Company's applicable directors' and officers' liability insurance policies as contemplated by Section 10.04(b), with respect to any Loss paid by the Investor under this Section 10.04(c). The Company shall use its best efforts to take all necessary steps to implement the subrogation contemplated in the preceding sentence. (d) All payments under this Section 10.04 shall be due promptly following the occurrence of the related Loss; provided, however, that if a final, non-appealable judicial determination is made that an Indemnified Party is not entitled to any such payment it will promptly repay the appropriate amounts to the appropriate indemnifying party. Section 10.05. Notices. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given, if delivered personally, by facsimile or sent by overnight courier or by first class mail, postage prepaid, as follows: (i) If to the Company, to: MEMC Electronic Materials, Inc. 501 Pearl Drive (City of O'Fallon) P.O. Box 8 St. Peters, Missouri 63376 Attention: General Counsel Facsimile: 636-474-5162 With a copy to: Bryan Cave LLP 700 13th Street, N.W. Washington, D.C. 20005 Attention: LaDawn Naegle, Esq. Facsimile: 202-508-6200 (ii) If to the Investor, to: TPG Wafer Holdings LLC 301 Commerce Street Suite 3300 Fort Worth, Texas 76102 Attention: Richard A. Ekleberry, Esq. Facsimile: 817-871-4688 With a copy to: Cleary, Gottlieb, Steen & Hamilton One Liberty Plaza New York, New York 10006 Attention: Michael L. Ryan, Esq. Facsimile: 212-225-3999 If to any other holder of shares of Series A Preferred Stock, Conversion Shares, Notes, Warrants or Warrant Shares addressed to such holder at the address of such holder in the record books of the Company; or to such other address or addresses as shall be designated in writing. All notices shall be effective when received. Section 10.06. Entire Agreement. This Agreement and the documents described herein or attached or delivered pursuant hereto set forth the entire agreement between the parties hereto with respect to the transactions contemplated by this Agreement. Section 10.07. Amendment. Any provision of this Agreement may only be amended, modified or supplemented in whole or in part at any time by an agreement in writing among the parties hereto executed in the same manner as this Agreement; provided, that no amendment, modification or supplement to this Agreement shall be effective unless approved by a majority of the directors then serving on the Board of Directors who have not previously been, are not then and are not anticipated to be Representatives of any TPG Person. No failure on the part of any party to exercise, and no delay in exercising, any right shall operate as waiver thereof, nor shall any single or partial exercise by either party of any right preclude any other or future exercise thereof or the exercise of any other right. No investigation by the Investor of the Company prior to or after the date hereof shall stop or prevent the Investor from exercising any right hereunder or be deemed to be a waiver of any such right. Section 10.08. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to constitute an original, but all of which together shall constitute one and the same document. Section 10.09. Governing Law. This Agreement shall be governed by, and interpreted in accordance with, the laws of the State of New York applicable to contracts made and to be performed in that State without reference to its conflict of laws rules. The parties hereto agree that the appropriate and exclusive forum for any disputes arising out of this Agreement solely between the Company and the Investor shall be the United States District Court for the Southern District of New York located in the Borough of Manhattan, and, if such court will not hear any such suit, the courts of the State of New York, and the parties hereto irrevocably consent to the exclusive jurisdiction of such courts, and agree to comply with all requirements necessary to give such courts jurisdiction. The parties hereto further agree that the parties will not bring suit with respect to any disputes arising out of this Agreement except as expressly set forth below for the execution or enforcement of judgment, in any jurisdiction other than the above specified courts. Each of the parties hereto irrevocably consents to the service of process in any action or proceeding hereunder by the mailing of copies thereof by registered or certified airmail, postage prepaid, to the address specified in Section 10.05. The foregoing shall not limit the rights of any party hereto to serve process in any other manner permitted by the law or to obtain execution of judgment in any other jurisdiction. The parties further agree, to the extent permitted by law, that final and unappealable judgment against any of them in any action or proceeding contemplated above shall be conclusive and may be enforced in any other jurisdiction within or outside the United States by suit on the judgment, a certified or exemplified copy of which shall be conclusive evidence of the fact and the amount of indebtedness. The parties agree to waive any and all rights that they may have to a jury trial with respect to disputes arising out of this Agreement. Section 10.10. Successors and Assigns. (a) Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the Company's successors and assigns. Except as provided in Section 10.10(b) hereof, neither this Agreement nor any rights hereunder may be assigned by any party hereto in whole or in part without the prior written consent of the other party hereto; provided, however, that the Investor may assign all or part of its interest in this Agreement and its rights hereunder to any of its Affiliates and, thereafter, the term "Investor," as applied to the assigning Investor, shall include any such Affiliate to the extent of such assignment and shall mean the assigning Investor and such Affiliates taken collectively. (b) Notwithstanding the foregoing, prior to the Closing the Investor may assign its rights with respect to up to 49% of the Series A Preferred Stock to be acquired by the Investor hereunder to any Person or Persons not Affiliated with the Investor (each such Person, a "Designated Purchaser"). The Investor shall not assign pursuant to this Section 10.10(b) any of its rights under this Agreement other than the right to receive Series A Preferred Stock. Except as expressly provided in this Agreement, no Designated Purchaser shall have any rights under this Agreement or any rights of the Investor, other than rights that by their terms are available to all holders of Series A Preferred Stock and Conversion Shares generally under the Series A Certificate of Designations. As a condition to any assignment pursuant to this Section 10.10(b), each Designated Purchaser shall deliver to the Company a letter, dated as of the Closing Date or, if later, the date of such assignment, in form and substance reasonably satisfactory to the Company, pursuant to which such Designated Purchaser shall (i) make the representation set forth in Section 4.05 hereof and (ii) agree to comply with the provisions set forth in Sections 7.01(b) and 7.04 hereof as if it were the Investor thereunder. Any assignment to such Designated Purchaser that does not comply with the preceding provisions of this Section 10.10(b) shall be null and void, and if such assignment is made at or prior to the Closing, the Investor shall acquire the Series A Preferred Stock that would have been purchased by such Designated Purchaser at the Closing. Section 10.11. No Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement, except that the provisions of Section 7.06 shall inure to the benefit of and be enforceable by the Board Nominees and the provisions of Section 10.04 shall inure to the benefit of and be enforceable by each Indemnified Investor Party and Indemnified Company, as the case may be. Section 10.12. Schedules. When a Schedule or a Section of the Disclosure Schedule is referenced in a provision of this Agreement as setting forth exceptions to or exclusions from a representation, warranty, definition or statement made in such provision, the exceptions or exclusions set forth in such Schedule or such Section of the Disclosure Schedule are exceptions and exclusions only to such representation, warranty, definition or statement and do not qualify or limit any other provision of this Agreement unless specifically so stated in such other provision. IN WITNESS WHEREOF, this Agreement has been executed on behalf of the parties hereto by their respective duly authorized officers, all as of the date first above written. TPG WAFER HOLDINGS LLC By: /s/ Richard A. Ekleberry ---------------------------------------------- Name: Richard A. Ekleberry Title: Vice president MEMC ELECTRONIC MATERIALS, INC. By: /s/ James M. Stolze ----------------------------------------------- Name: James M. Stolze Title: Executive Vice President Chief Financial Officer EXHIBIT A SERIES A CERTIFICATE OF DESIGNATIONS EXHIBIT B FORM OF CREDIT AGREEMENT EXHIBIT C FORM OF INDENTURE EXHIBIT D FORM OF WARRANT CERTIFICATE EXHIBIT E FORM OF REGISTRATION RIGHTS AGREEMENT EXHIBIT F Summary of Terms euro55,000,000 Promissory Notes Due 2031 of MEMC Electronic Materials S.p.A. ---------------------------------------------------------- I. GENERAL ------- Issuer MEMC Electronic Materials S.p.A. (the "Company"). Securities euro55,000,000 Promissory Notes due 2031 (the "Notes") to be issued pursuant to an amendment of the Existing Credit Agreement (as defined below). Investor A TPG limited liability company and/or its designated assignees. Amendment On the closing date (i) the Investor will acquire all rights under the Company's euro55,000,000 Amended and Restated Credit Agreement dated as of September 22, 2001 (the "Existing Credit Agreement") and (ii) pursuant to an amendment of the Existing Credit Agreement, the Company will issue the Notes to the Investor. II. THE NOTES --------- Issue Date [ ], 2001. Maturity Date [ ], 2031. Interest 6% per annum, which shall accrue and be added to the principal amount of the Notes and shall only be payable upon redemption, acceleration or maturity of the Notes (interest will compound once a year). Security The Notes will be secured by all of the assets of the Company, including without limitation (i) the shares of MEMC Holdings B.V., (ii) real estate owned by the Company, (iii) accounts receivable of the Company and (iv) inventory of the Company. Guarantees All obligations of the Company under the Notes will be unconditionally guaranteed by MEMC Electronic Materials, Inc. ("MEMC"). Priority The Notes will constitute senior obligations of the Company, ranking pari passu with all of the Company's senior indebtedness. Mandatory Prepayment Events The Notes shall be redeemed by the Company pro rata to the extent of (a) 100% of the net proceeds of asset sales or other dispositions of property by MEMC or its subsidiaries (including the Company), (b) 75% of the net proceeds of issuances of debt obligations of MEMC and its subsidiaries (including the Company) and (c) 75% of the net proceeds of issuances of equity interests by MEMC; provided, that the Company shall only make such redemptions to the extent that (i) (A) the lenders under MEMC's senior secured revolving credit facility (the "Facility") have waived the requirement of MEMC to make prepayments under the Facility in the event of such assets sales, debt issuances or equity issuances or (B) all outstanding amounts under the Facility have been paid and (ii) (A) the holders of MEMC's senior secured notes due 2007 (the "MEMC Notes") have waived the requirement of MEMC to make prepayments under the MEMC Notes in the event of such assets sales, debt issuances or equity issuances or (B) all outstanding amounts under the MEMC Notes have been paid. Optional Redemption The Notes are redeemable at the Company's option, in whole or in part, upon not less than 30 and no more than 60 days' notice, subject to the following terms and redemption prices, plus accrued and unpaid interest to the date of redemption: o Until the tenth anniversary of the issue date: 108% o After the tenth anniversary of the issue date to the twentieth anniversary of the issue date: 105% o After the twentieth anniversary of the issue date to the scheduled maturity: 102% Change of Control Holders of the Notes shall be entitled to require the Company to repurchase the Notes at a price equal to 101% of the principal amount, plus accrued and unpaid interest, upon a change of control of the Company or MEMC. Representations and Warranties Usual for securities of this type (with appropriate materiality thresholds, as applicable), including, without limitation, accuracy of financial statements, absence of litigation, no violation of agreements or instruments, compliance with laws, payment of taxes, ownership of properties, regulatory approvals and the validity, priority and perfection of security interests in the collateral. Affirmative Covenants Usual for securities of this type (to be applicable to the Company and its subsidiaries), with appropriate materiality thresholds, as applicable, including, without limitation, maintenance of corporate existence and rights, delivery of audited annual consolidated financial statements and unaudited quarterly consolidated financial statements, notices of default and litigation, maintenance of properties in good working order, compliance with laws, further assurances and payment of taxes. Negative Covenants Usual for securities of this type (to be applicable to the Company and its subsidiaries), including, without limitation, a limitation on dividend payments and a prohibition on loans by the Company until the entire principal amount of the Notes is paid in full. Events of Default Usual for securities of this type, including, without limitation, nonpayment of principal or interest, violation of covenants, incorrectness of representations and warranties, cross default and cross acceleration of debt of MEMC or its affiliates, bankruptcy of the Company or MEMC or its affiliates, material judgments and actual or asserted invalidity of security. Right To Transfer The holders of the Notes shall have the absolute and unconditional right to transfer the Notes in compliance with applicable law to any third parties. Conditions to Closing Usual for securities of this type, including, without limitation, the closing will be conditioned upon first-priority perfected security interests in the collateral (free and clear of all other liens, subject to limited exceptions to be agreed upon). EXHIBIT G FORM OF MERGER AGREEMENT EXHIBIT H FORM OF COUNSEL TO COMPANY OPINION November 13, 2001 TPG Wafer Holdings LLC 301 Commerce Street Suite 3300 Fort Worth, Texas 76102 Re: Restructuring Agreement by and between TPG Wafer Holdings LLC and MEMC Electronic Materials, Inc. ---------------------------------------------------------- Ladies and Gentlemen: We have acted as special counsel for MEMC Electronic Materials, Inc., a Delaware corporation (the "Company"), MEMC International, Inc., a Delaware corporation ("MEMC International"), MEMC Pasadena, Inc., a Delaware corporation ("MEMC Pasadena"), MEMC Southwest Inc., a Delaware corporation ("MEMC Southwest"), PlasmaSil, L.L.C., a Delaware limited liability company ("PlasmaSil"), and SiBond, L.L.C., a Delaware limited liability company ("SiBond", and together with MEMC International, MEMC Pasadena, MEMC Southwest and PlasmaSil, the "U.S. Subsidiaries"), in connection with, inter alia, the Restructuring Agreement, by and between TPG Wafer Holdings LLC ("TPG") and the Company dated as of November 13, 2001 (the "Restructuring Agreement"). This letter is furnished by us as special counsel for the Company pursuant to Section 8.01(b) of the Restructuring Agreement. Undefined terms used herein shall have the meanings assigned to them in the Restructuring Agreement. In connection herewith, we have examined and relied without independent investigation as to matters of fact upon such certificates of public officials, such statements and certificates of officers of the Company and the U.S. Subsidiaries and such other corporate records, documents, certificates and instruments as we have deemed necessary or appropriate in order to enable us to render the opinions expressed herein. Without limiting the foregoing, we have examined copies of the following (items (c) through (h) sometimes collectively referred to herein as the "Transaction Agreements"): (a) the organizational documents of the Company and the U.S. Subsidiaries as amended to date; (b) the Certificate of Designations of the Company, as filed with the Delaware Secretary of State on November [ ], 2001 (the "Certificate of Designations"); (c) the Restructuring Agreement; (d) the Registration Rights Agreement, dated as of November 13, 2001, among the Company, the Company guarantors specified therein and TPG; (e) the Indenture, dated as of November 13, 2001, between the Company and Citibank, N.A., as trustee and Citicorp USA, Inc. collateral agent; (f) the Indenture Ancillary Documents (as defined in the Restructuring Agreement); (g) the Company's Senior Subordinated Secured Notes Due 2007 issued under the Indenture (the "Notes"); (h) the Agreement and Plan of Merger, dated as of November 13, 2001, between the Company and TPG (the "Merger Agreement"); and (i) the Warrant Certificates (the "Warrant Certificates"), dated as of November 13, 2001, issued by the Company. We have assumed the genuineness of all signatures on all documents examined by us, the authenticity of all documents submitted to us as originals and the conformity to authentic originals of all documents submitted to us as certified or photostatted copies. We have also assumed the due authorization, execution and delivery of the Transaction Agreements by the respective parties thereto other than the Company. Based upon the foregoing and in reliance thereon and subject to the exceptions, limitations and qualifications stated herein, we are of the opinion that: (i) Each of the Company and the U.S. Subsidiaries is a corporation or limited liability company, as the case may be, validly existing and in good standing under the laws of its jurisdiction of organization and has all requisite organizational power and authority to carry on its business in all material respects as presently conducted and to own and operate or hold under lease its properties. (ii) Each of the Company and its U.S. Subsidiaries is qualified to do business and is in good standing as a foreign corporation under the laws of the jurisdictions set forth in Schedule I hereto. (iii) Each of the Company and the U.S. Subsidiaries, to the extent each is a party thereto, (i) has all requisite organizational power and authority to execute and deliver the Transaction Agreements and to perform its obligations under the Transaction Agreements, the Series A Certificate of Designations and the Warrant Certificates, and (ii) has duly authorized by all necessary organizational action on its part the execution and delivery of the Transaction Agreements and the performance thereby of its obligations under the Transaction Agreements, the Series A Certificate of Designations and the Warrant Certificates. (iv) Each of the Transaction Agreements and the Warrant Certificates has been duly executed and delivered by the Company and the U.S. Subsidiaries, to the extent each is a party thereto, and constitutes a valid and binding obligation of the Company and the U.S. Subsidiaries, as the case may be, enforceable against each of them, as the case may be, in accordance with its terms under the laws of the State of New York. (v) The shares of Series A Preferred Stock issuable to TPG pursuant to the Restructuring Agreement have been duly and validly authorized and, when issued and delivered against payment therefor in accordance with the terms of the Restructuring Agreement, will be validly issued by the Company and fully paid and non-assessable. The shares of Common Stock into which the Series A Preferred Stock is convertible have been duly and validly authorized and validly reserved for issuance and, when issued in accordance with the terms of the Series A Certificate of Designations, will have been validly issued and will be fully paid and non-assessable. (vi) Prior to the issuance thereof, the Company's Senior Subordinated Secured Notes Due 2007 (the "Notes"), will have been duly and validly authorized by the Company and, when issued and delivered against payment therefor in accordance with the terms of the Restructuring Agreement and the Indenture, will constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms. The Warrants have been duly and validly authorized, and when issued and delivered against payment therefor in accordance with the terms of the Restructuring Agreement by the Company, will be fully paid and non-assessable. The Warrant Shares to be issued upon exercise of the Warrants have been duly and validly authorized and reserved for issuance and, when issued in accordance with the terms of the Warrant Certificates, will have been validly issued and will be fully paid and non-assessable. (vii) No consent or approval of the Company's stockholders is required by U.S. federal, state or local Law or the Certificate of Incorporation or By-laws for the execution, delivery or performance by the Company of the Restructuring Agreement, other than as expressly provided in the Restructuring Agreement. (vii) The execution and delivery of each of the Transaction Agreements does not, and the performance by the Company and the U.S. Subsidiaries, to the extent each is a party thereto, of their obligations as set forth in the Transaction Agreements, the Series A Certificate of Designations and the Warrant Certificates, and the consummation of the transactions contemplated by the Restructuring Agreement will not, (a) violate any provision of the Certificate of Incorporation or the By-laws of the Company or the comparable organizational documents of any of the U.S. Subsidiaries, (b) give rise to any pre-emptive rights, rights of first refusal or other similar rights on behalf of any person under Delaware law or any provision of the Certificate of Incorporation or the By-laws of the Company, or any Material Agreements (as hereinafter defined) applicable to the Company, other than as described in the Transaction Agreements or the Schedules thereto, or (c) result in a breach or violation of any of the terms or provisions of, or constitute a default (with or without notice or the passage of time) under, or result in or give rise to a right of termination, cancellation, acceleration or modification of any right or obligation under, or require any consent, waiver or approval under, any Material Agreements, other than such as has been obtained. (viii) The execution, delivery and performance by the Company of the Restructuring Agreement will not violate the Delaware General Corporation Law. As used herein, the term "Material Agreement" shall mean any agreement, indenture, lease or other instrument or agreement that is both (i) an exhibit to (a) the Company's Annual Report on Form 10-K for the period ended December 31, 2000, or (b) the Company's Quarterly Reports on Form 10-Q for the periods ended March 31, 2001 and June 30, 2001, and (ii) an agreement, indenture, lease or other instrument or agreement to which the Company or any of its U.S. Subsidiaries is a party or by which any of their properties or assets are bound, but shall exclude any Agreement between, on the one hand, the Company and/or any U.S. Subsidiary and, on the other hand, E.ON AG or its affiliates, as to which we express no opinion. The opinions in paragraphs (iv) and (vi) above are subject to the effect of applicable bankruptcy, insolvency, fraudulent transfer, reorganization, receivership, moratorium, arrangement and assignment for the benefit of creditors laws, and other similar laws. This opinion is also subject to the effect of general principles of equity, whether applied by a court of law or equity, including, but not limited to, principles (i) governing the availability of specific performance, injunctive relief or other equitable remedies, (ii) affording equitable defenses (e.g., waiver, laches and estoppel) against a party seeking enforcement, (iii) requiring good faith and fair dealing in the performance and enforcement of a contract by the party seeking its enforcement, (iv) requiring reasonableness in the performance and enforcement of an agreement by the party seeking its enforcement, (v) requiring consideration of the materiality of a breach or the consequences of the breach to the party seeking its enforcement, (vi) requiring consideration of the impracticability or impossibility of performance at the time of attempted enforcement, and (vii) affording defenses based upon the unconscionability of the enforcing party's conduct after the parties have entered into the contract. These opinions are also subject to the effect of generally applicable rules of law that (i) may, where less than all of a contract may be unenforceable, limit the enforceability of the balance of the contract to circumstances in which the unenforceable portion is not an essential part of the agreed exchange, and (ii) govern and afford discretion, judicial, arbital or otherwise, regarding the determination of damages and entitlement to attorneys' fees and other costs. These opinions are also subject to the qualification that the enforceability of any indemnification or contribution provisions set forth in any documents or agreements referred to herein may be limited by federal or state securities laws or by public policy. We express no opinion as to: (i) any of the specially regulated business activities of the company or the U.S. Subsidiaries; (ii) any tax effect or consequences relating to the Transaction Agreements or the transactions contemplated thereby; or (iii) the creation or perfection of any security interests relating to the Transaction Agreements or the transactions contemplated thereby. This opinion is not rendered with respect to any laws other than the laws of the State of New York, the Delaware General Corporation Law and the federal laws of the United States. This opinion is provided to you solely for the purpose of permitting the Company to comply, in part, with its obligations under of the Restructuring Agreement. Without our prior written consent, this opinion may not be quoted in whole or in part or otherwise referred to in any report or document or furnished to any person or entity other than to each of you. This opinion is given as of the date hereof, and we expressly disclaim any obligation to revise or update this opinion subsequent to the date hereof or to advise you or any other person of any matter subsequent to the date hereof which would cause us to modify this opinion in whole or in part. Very truly yours, Bryan Cave LLP Schedule I Entity Jurisdiction ------ ------------ MEMC Electronic Materials, Inc. California Massachusetts Missouri New Hampshire New York South Carolina Texas MEMC Pasadena, Inc. Louisiana Texas MEMC Southwest Inc. Texas SiBond, LLC Missouri PlasmaSil, LLC Connecticut Missouri EXHIBIT I FORM OF COUNSEL TO INVESTOR OPINION Opinion substantially to the effect that: 1. Investor is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware. 2. Investor has all requisite power as a limited liability company and authority to execute, deliver and perform its obligations under this Agreement, the Registration Rights Agreement and the Merger Agreement. The execution, delivery and performance of the Agreement and the Registration Rights Agreement have been duly authorized by all other necessary action on the part of Investor. 3. Each of the Agreement, the Registration Rights Agreement and the Merger Agreement has been duly executed and delivered by Investor and, assuming due execution and delivery by each other party thereto, each such agreement constitutes a valid and binding obligation of Investor enforceable against Investor in accordance with its terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors' rights generally and to general principles of equity. EXHIBIT J CERTIFICATE OF INCORPORATION OF HOLDINGS EXHIBIT K FORM OF EMPLOYMENT RESOLUTION WHEREAS, this Committee wishes to exercise its discretion under Section 14 of the MEMC Electronic Materials, Inc. 1995 Equity Incentive Plan, as amended and restated on August 3, 2000 (the "Equity Incentive Plan") and any relevant stock option grant agreements to provide that stock options outstanding on the date of the closing of the transaction contemplated by the Purchase Agreement dated as of September 30, 2001, by and among TPG Partners III, L.P., T(3) Partners, L.P. and T(3) Partners II, L.P., TPG Wafer Holdings LLC, E.ON AG, E.ON International Finance B.V., FIDELIA Corporation, VEBA Zweite Verwaltungsgesellschaft mbH, and E.ON North America, Inc. (the "Purchase Agreement") shall not become immediately vested and exercisable as a result of the occurrence of such transaction. WHEREAS, this Committee wishes to exercise its discretion under the MEMC Electronic Materials, Inc. 2001 Annual Incentive Plan (the "Existing AIP") to terminate the Existing AIP and to replace it with a new annual incentive plan for 2001 (the "New AIP") with substantially similar terms as the Existing AIP except that there shall be no provision accelerating the payment of or providing additional benefits or payments as a result of a corporate transaction, including without limitation the transactions contemplated pursuant to the Purchase Agreement, and the New AIP shall provide that payment of any award, or any portion of any award, may be made in the form of restricted stock, in the sole discretion of the Compensation Committee. NOW THEREFORE IT IS RESOLVED, that, effective as of the date of this resolution, this Committee hereby exercises its discretion under Section 14 of the Equity Incentive Plan and any relevant stock option grant agreements to provide that stock options outstanding on the closing of the transaction contemplated by the Purchase Agreement shall not become immediately vested and exercisable as a result of the occurrence of such transaction. RESOLVED FURTHER, that this Committee hereby exercises its discretion under the Existing AIP to terminate the Existing AIP effective as of the date of this resolution. RESOLVED FURTHER, that this Committee hereby authorizes the Company to replace the Existing AIP with a New AIP, which has substantially similar terms as the Existing AIP, provided that there shall be no provision accelerating the payment of or providing additional benefits or payments as a result of a corporate transaction, including without limitation the transactions contemplated pursuant to the Purchase Agreement, and the New AIP shall provide that payment of any award, or any portion of any award, may be made in the form of restricted stock, in the sole discretion of the Compensation Committee. EXHIBIT L-1 FORM OF TAX SHARING AGREEMENT TAX SHARING AGREEMENT Tax Sharing Agreement ("Agreement") dated as of this [ ] of [ ], [ ], by and among TPG Wafer Holdings LLC ("Wafer Holdings"), MEMC Electronic Materials, Inc. ("MEMC"), and each of the MEMC subsidiaries listed on Schedule I hereto (each, individually, a "Subsidiary," and collectively, the "Subsidiaries"). RECITALS 1. Wafer Holdings has elected, pursuant to Treasury Regulation Section 1.7701-3(c), to be classified as a corporation for U.S. federal tax purposes. Wafer Holdings, MEMC and the Subsidiaries are members ("Members") of an affiliated group (the "Affiliated Group"), as defined in Section 1504(a) of the Internal Revenue Code of 1986 (the "Code"), for the taxable year ending December 31, [ ]. All references in this Agreement to provisions of the Code or the Treasury Regulations promulgated thereunder, including Proposed Treasury Regulations, shall include any corresponding successor provisions. 2. It is the intent and desire of the parties hereto that a method be established for allocating the federal and state consolidated tax liability of the Affiliated Group among its Members in those jurisdictions in which a consolidated or combined return is required or permitted to be filed, for reimbursing Wafer Holdings for payment of such tax liability, for compensating any Member for use of its losses or tax credits, and to provide for the allocation and payment of any refund arising from a carryback of losses or tax credits from subsequent taxable years. AGREEMENT Now, therefore, in consideration of the mutual covenants and promises contained herein, the parties hereto agree as follows: 1. Filing of Returns. A U.S. consolidated income tax return and estimated tax returns shall be prepared and filed by Wafer Holdings for the taxable year ending December 31, [ ], and for each subsequent taxable period in respect of which the Affiliated Group is required or permitted to file a U.S. consolidated income tax return. With respect to such tax return preparation, Wafer Holdings shall act in good faith with regard to all Members included in an applicable return and shall include within such consolidated tax return all Members currently included within the MEMC consolidated group unless a contrary treatment is required by law. Wafer Holdings shall have the right with respect to any consolidated tax returns to determine in good faith (i) the manner in which such returns, documents or statements shall be prepared and filed, including, without limitation, the manner in which any item of income, gain, loss, deduction or credit shall be reported, (ii) whether any extensions should be requested, and (iii) the elections that will be made by any Member of the Affiliated Group. In addition, Wafer Holdings shall have the right, in good faith, to (i) contest, compromise, or settle any adjustments or deficiency proposed, asserted or assessed as a result of any audit of any U.S. consolidated income tax return, (ii) file, prosecute, compromise or settle any claim for refund, and (iii) determine whether any refunds shall be received by way of refund or credited against tax liabilities. Finally, in preparing the U.S. consolidated income tax returns, Wafer Holdings will reasonably request information from Members of the Affiliated Group, specifying deadlines for receiving the requested information. The Members of the Affiliated Group will comply with the information request within the specified deadline, unless an alternative deadline is arranged with Wafer Holdings. 2. Allocation of Tax Liability. Wafer Holdings, MEMC and Subsidiaries agree that, for purposes of this Agreement, the consolidated tax liability for each year beginning with the taxable year ending December 31, [ ], determined in accordance with Treasury Regulations Section 1.1502-2, shall be apportioned among them in accordance with the provisions of Treasury Regulations Sections 1.1552-1(a)(2) (tax liability is allocated in proportion to separate tax liabilities) and 1.1502-33(d)(2) (the "wait-and-see method"). Accordingly, the tax liability shall first be allocated to the several Members on the basis of the percentage of the total tax that the tax of such Member if computed on a separate return would bear to the total amount of taxes for all Members so computed pursuant to Section 1552(a)(2) of the Code and Treasury Regulations Section 1.1552-1(a)(2). Then, under Treasury Regulations Section 1.1502-33(d)(2), if a Member had tax attributes that were absorbed by the Affiliated Group in a prior year and that Member would have been able to use those tax attributes in the current taxable year on a separate return basis, the portion of that Member's tax liability for the current taxable year that would not have arisen if such tax attributes had been available to that Member will be reallocated to other Members as provided for under Treasury Regulations Section 1.1502-33(d)(2). For purposes of this Agreement, the U.S. consolidated income tax liability shall include any liability for alternative minimum tax ("AMT"). Such consolidated AMT shall be apportioned among the Members in accordance with the provisions of Proposed Treasury Regulations Section 1.1552-1(g). Accordingly, the AMT liability shall be allocated to the several Members on the basis of the percentage of the total consolidated AMT that the separate adjusted AMT of such Member, if computed as provided in Proposed Treasury Regulations Section 1.1502-55(h)(6)(iv), would bear to the total amount of such separate adjusted AMTs for all Members so computed. 3. Payment of Tax. MEMC and each Subsidiary shall pay to Wafer Holdings no later than 2 business days before the date on which the Affiliated Group's U.S. consolidated income tax return is required to be filed (taking account of any extensions thereof) its separate return tax liability determined as provided under Section 2 above plus its "Equitable Share" (as defined below) of any interest or penalties shown on the return. To the extent that the interest and penalties shown on a return are directly related to items of income, deduction, credit, etc. of a particular Member, or such Member's delay in providing information to Wafer Holdings as provided in Section 1 above, that Member's Equitable Share of such interest and penalties is 100%. Each Member's Equitable Share of any interest and penalties shown on the return that are not directly related to the items or delay of a particular Member (and so allocated to that particular Member) will be a ratable share of any such interest or penalties, determined by multiplying such interest or penalties by a fraction, the numerator of which equals the portion of the Affiliated Group's tax liability allocated to such Member (before interest or penalties) and the denominator of which equals the Affiliated Group's tax liability (before interest or penalties). 4. Carryforward/Carryback of Losses and Credits. If part or all of an unused loss or tax credit is allocated to a Member pursuant to Treasury Regulations Sections 1.1502-21 or 1.1502-79, and it is carried back or forward to a year in which such Member filed a separate return or a consolidated return with another affiliated group, (i) any refund or reduction in tax liability arising from the carryback or carryover shall be retained by such Member and (ii) if such loss is a SRLY item and was taken into account by such Member in determining its separate return tax liability for any year pursuant to Section 2 of this Agreement, the computation pursuant to Section 2 shall be redetermined by excluding such SRLY item and such Member shall pay the difference between the redetermined amount and the amount previously paid by it pursuant to Section 2 upon the earlier of the realization of any refund or reduction in tax liability arising from the carryback, the Member becoming a Former Member, or the expiration of the SRLY, and such amount shall be credited to the Members to which such amount is attributable pursuant to Section 2. Notwithstanding the foregoing, Wafer Holdings shall determine whether an election shall be made (i) not to carry back any portion of any net operating loss arising in a U.S. consolidated return year (including any portion allocated to a Member under Treasury Regulations Section 1.1502-21) in accordance with Code Section 172(b)(3), and (ii) to reattribute to itself any portion of any net operating loss or capital loss carryover attributable to MEMC or a Subsidiary, to the extent permitted by Treasury Regulations Section 1.1502-20(g). MEMC and each Subsidiary agrees to join with Wafer Holdings in filing any necessary elections under Treasury Regulations Section 1.1502-20(g). 5. Estimated Tax Payments. If the Affiliated Group is required to make estimated federal income tax payments (including payment due at the time any extension of time is sought for the filing of the Affiliated Group's federal income tax return), MEMC and each Subsidiary shall, if requested by Wafer Holdings, pay to Wafer Holdings, no later than 2 business days before the date each estimated tax payment is to be made by Wafer Holdings, that percentage of the estimated tax payment that equals the percentage which the estimated separate return tax liability of such Member bears to the aggregate of the Members' estimated separate return tax liabilities for the taxable year computed as provided under Section 2 above. Wafer Holdings shall determine, or cause MEMC to determine, such estimates. Any estimated tax payments made by MEMC or a Subsidiary under this Section 5 with respect to any taxable year shall be applied to reduce the amount, if any, owed by such Member under Section 3 hereof with respect to such year. Any excess of such estimated payments by MEMC or a Subsidiary over the amount described in Section 3 for such year shall be repaid by Wafer Holdings to such Member no later than 10 business days after the date of filing of the consolidated return for such taxable year or, to the extent such excess represents all or a part of a tax refund to be received by the Affiliated Group, no later than 10 business days after the receipt of the refund. 6. Adjustments to Tax Liability. If the U.S. consolidated income tax liability is adjusted for any taxable period, whether pursuant to an amended return, a claim for refund, a tax audit by the Internal Revenue Service or some other reason, the liability of each Member shall be recomputed to give effect to such adjustments, and in the case of a refund, Wafer Holdings shall make payment to each Member for its share of the refund, determined in the same manner as in Section 2 above, within 10 business days after the refund is received by Wafer Holdings, and in the case of an increase in tax liability, each Member shall pay to Wafer Holdings its allocable share of such increased tax liability (including its Equitable Share of any interest and penalties) within 10 business days after receiving notice of such liability from Wafer Holdings. The parties recognize that a recomputation of the consolidated tax liability for any taxable year under this Section 6 is not necessarily the final liability for such year, and such liability may be recomputed more than once. 7. New Members of Affiliated Group. If during a consolidated return period Wafer Holdings, MEMC or any Subsidiary acquires or organizes another corporation that is required to be included in the Affiliated Group's U.S. consolidated income tax return, then such corporation shall join in and be bound by this Agreement. 8. Termination of Agreement. This Agreement shall apply to all taxable periods as to which a U.S. consolidated income tax return is filed by Wafer Holdings and any other Member unless Wafer Holdings and all the other Members agree in writing to terminate the Agreement, except that this Agreement shall be terminated with respect to MEMC or any Subsidiary that ceases to be included in the Affiliated Group but continues to be a corporation subject to federal income tax ("Former Member"). Notwithstanding any such termination, this Agreement shall continue in effect with respect to all taxable periods prior to termination, including any payments or refunds relating to such periods. 9. Post-Consolidated Return Period. Notwithstanding the termination of this Agreement with respect to one or more Subsidiaries, Wafer Holdings and any Former Member shall furnish each other with all information and assistance as shall reasonably be requested (including, without limitation, returns, supporting schedules, work papers, correspondence and other documents) relating to the tax liability of the Affiliated Group or such Former Member for any taxable year in which the Former Member was included in the Affiliated Group. Moreover, Wafer Holdings and the Former Member shall furnish each other with information and assistance required, and shall take all steps necessary, to apply for and obtain the benefit of any carryback of a net operating or capital loss or any investment, foreign tax or other credit of the Former Member to a taxable year in which the Former Member was included in the Affiliated Group and a U.S. consolidated income tax return was filed. 10. Audits and Refund Claims. Wafer Holdings and a Former Member shall also consult and furnish each other with information concerning the status of any tax audit or tax refund claim relating to a taxable year in which the Former Member was included in the Affiliated Group and a U.S. consolidated income tax return was filed. Wafer Holdings shall have the right to make the final determination as to the response of the Affiliated Group to any audit and shall have the sole right to control any contest of any change proposed and any proposed disallowance of a refund claim by the Internal Revenue Service through the Appeals Office of the Internal Revenue Service and the courts in connection with any taxable year for which this Agreement is in effect. Each Member shall bear an equitable share of the cost of any such contest (including fees and expenses of outside accountants, lawyers or other experts). 11. Settlement of Disputes. A dispute or difference between Wafer Holdings and a Former Member with respect to the operation or interpretation of this Agreement shall be decided by three arbitrators. Wafer Holdings and the Former Member shall each select one arbitrator and the arbitrators selected by the parties shall select a third arbitrator. The decision of such arbitrators shall be final. The fees of such arbitrators shall be borne equally by Wafer Holdings and the Former Member. 12. Elections. Wafer Holdings shall have the sole authority to make any or all elections available under the Code, Treasury Regulations and any applicable state or local income tax code, law or statute. 13. State and Local Income Taxes. The principles underlying the rights and obligations hereunder of the Members in respect of federal income taxes shall be applied in respect of any state or local tax (however denominated) based on or measured by all or any part of the net income or loss of the Affiliated Group or several of its Members (a "Combined Tax"). All of the procedural and timing requirements of this Agreement applicable to federal income taxes shall be equally applicable to any Combined Tax, with appropriate adjustments thereto to reflect the differences, if any, in corresponding provisions of the applicable income tax code, law or statute governing any such Combined Tax and any administrative provisions relating thereto. Notwithstanding the foregoing, nothing contained herein shall require an affirmative election to file a consolidated or combined state or local return, which election shall be made by Wafer Holdings in its sole discretion. 14. Entire Agreement. This Agreement contains the entire understanding of the parties hereto with respect to the subject matter contained herein. No alteration, amendment or modification of any of the terms of this Agreement shall be valid unless made by an instrument signed in writing by an authorized officer of each party. 15. Binding Agreement. This Agreement shall be binding upon and inure to the benefit of each party hereto and its respective successors and assigns. 16. Other Agreements. Notwithstanding the terms of this agreement, the tax sharing agreement between MEMC and MEMC Southwest, Inc. dated as of June 30, 1995 shall remain in effect. 17. Severability. Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained therein. 18. Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York. 19. Counterparts. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. In witness whereof, the parties hereto have caused their names to be subscribed and executed by their respective authorized officers as of the date first written above. TPG WAFER HOLDINGS LLC By: ------------------------------------------ Name: Title: MEMC ELECTRONIC MATERIALS, INC. By: ------------------------------------------ Name: Title: MEMC Pasadena, INC. By: ------------------------------------------ Name: Title: MEMC Southwest Inc. By: ------------------------------------------ Name: Title: MEMC International, Inc. By: ------------------------------------------ Name: Title: [ADD SIGNATURE LINES FOR ANY OTHER ELIGIBLE SUBSIDIARIES] SCHEDULE I Subsidiaries MEMC Pasadena, Inc. MEMC Southwest Inc. MEMC International, Inc. EX-5 7 tpgex5.txt EXHIBIT 5 [EXECUTION COPY] CERTIFICATE OF DESIGNATIONS of SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK of MEMC ELECTRONIC MATERIALS, INC. (Pursuant to Section 151 of the Delaware General Corporation Law) -------------- MEMC Electronic Materials, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the "Corporation"), hereby certifies that the following resolutions were adopted by the Board of Directors of the Corporation (the "Board of Directors") pursuant to authority of the Board of Directors as required by Section 151 of the General Corporation Law of the State of Delaware: RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors in accordance with the provisions of the Restated Certificate of Incorporation of the Corporation (the "Certificate of Incorporation"), the Board of Directors hereby creates a series of the Corporation's previously authorized preferred stock, $0.01 par value (the "Preferred Stock"), and hereby states the designation and number thereof, and fixes the voting powers, preferences and relative, participating, optional and other special rights, and the qualifications, limitations and restrictions thereof, as follows: Series A Cumulative Convertible Preferred Stock: I. Designation and Amount The designation of this series of shares shall be "Series A Cumulative Convertible Preferred Stock" (the "Series A Preferred Stock"); the stated value per share shall be $1,000 (the "Stated Value"); and the number of shares constituting such series shall be 260,000. The number of shares of the Series A Preferred Stock may be decreased from time to time by a resolution or resolutions of the Board of Directors or a duly authorized committee of the Board of Directors and by the filing of a certificate pursuant to the provisions of the General Corporation Law of the State of Delaware stating that such reduction has been so authorized; provided, however, that such number shall not be decreased below the aggregate number of shares of the Series A Preferred Stock then outstanding. II. Rank A. With respect to dividend rights, the Series A Preferred Stock shall rank (i) junior to each other class or series of Preferred Stock which by its terms ranks senior to the Series A Preferred Stock as to payment of dividends, (ii) on a parity with each other class or series of Preferred Stock which by its terms ranks on a parity with the Series A Preferred Stock as to payment of dividends, and (iii) prior to the Corporation's Common Stock, par value $0.01 per share (the "Common Stock"), and, except as specified above, all other classes and series of capital stock of the Corporation hereafter issued by the Corporation. With respect to dividends, all Equity Interests of the Corporation to which the Series A Preferred Stock ranks senior, including the Common Stock, are collectively referred to herein as the "Junior Dividend Securities"; all Equity Interests of the Corporation with which the Series A Preferred Stock ranks on a parity, if any, are collectively referred to herein as the "Parity Dividend Securities"; and all Equity Interests of the Corporation to which the Series A Preferred Stock ranks junior, if any, are collectively referred to herein as the "Senior Dividend Securities." B. With respect to the distribution of assets upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the Series A Preferred Stock shall rank (i) junior to each other class or series of Preferred Stock which by its terms ranks senior to the Series A Preferred Stock as to distribution of assets upon liquidation, dissolution or winding up, (ii) on a parity with each other class or series of Preferred Stock which by its terms ranks on a parity with the Series A Preferred Stock as to distribution of assets upon liquidation, dissolution or winding up of the Corporation, and (iii) prior to the Common Stock, and, except as specified above, all other classes and series of capital stock of the Corporation hereinafter issued by the Corporation. With respect to the distribution of assets upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, all Equity Interests of the Corporation to which the Series A Preferred Stock ranks senior, including the Common Stock, are collectively referred to herein as "Junior Liquidation Securities" (and together with the Junior Dividend Securities are referred to herein as the "Junior Securities"); all Equity Interests of the Corporation to which the Series A Preferred Stock ranks on parity, if any, are collectively referred to herein as "Parity Liquidation Securities" (and together with the Parity Dividend Securities are referred to herein as the "Parity Securities"); and all Equity Interests of the Corporation to which the Series A Preferred Stock ranks junior, if any, are collectively referred to herein as "Senior Liquidation Securities" (and together with the Senior Dividend Securities are referred to herein as the "Senior Securities"). C. The Series A Preferred Stock shall be subject to the creation of Junior Securities, but no Senior Securities, Parity Securities or additional Series A Preferred Stock shall be created except in accordance with the terms hereof, including, without limitation, Article VII, Section E. III. Dividends A. Dividends. In the event the Shareholder Approval is required to be obtained pursuant to applicable rules, interpretations, rulings or determinations of the NYSE, shares of Series A Preferred Stock shall entitle holders of record (the "Registered Holders") to cash dividends, except as otherwise provided in this Article III, at a rate (i) prior to the Shareholder Approval Date of 10.00% per annum or, if greater in any quarterly period, in an amount equal to the value of the dividends that would have been paid with respect to the shares of Common Stock into which such shares of Series A Preferred Stock could have been converted (assuming the Shareholder Approval had been obtained) on the record date for the payment of such dividends with respect to the Common Stock and (ii) on and following the Shareholder Approval Date, 10.00% per annum. In the event the Shareholder Approval is not so required to be obtained, the Series A Preferred Stock shall entitle Registered Holders to cash dividends, except as otherwise provided in this Article III, at a rate of 10.00% per annum from the date of issuance. Dividends are due and shall be paid in four equal quarterly installments on the last day of March, June, September and December of each year (commencing December 31, 2001, it being understood that dividends shall be deemed to have accumulated from the Closing Date through December 31, 2001), or if any such date is not a Business Day, on the Business Day next preceding such day (each such date, regardless of whether any dividends have been paid or declared and set aside for payment on such date, a "Dividend Payment Date"), to the Registered Holders as they appear on the stock record books of the Corporation on the fifteenth day prior to the relevant Dividend Payment Date; provided, however, that the Corporation may elect not to declare or make any dividend payment due hereunder on any Dividend Payment Date (other than as required in connection with any redemption of shares of Series A Preferred Stock or any liquidation, dissolution or winding up of the Corporation), and any such amount then due in respect of dividends shall constitute an Arrearage (as defined below). Dividends shall be paid only when, as and if declared by the Board of Directors out of funds at the time legally available for the payment of dividends. Dividends shall begin to accumulate on outstanding shares of Series A Preferred Stock from the date of issuance and shall be deemed to accumulate from day to day whether or not earned or declared until paid. Dividends shall accumulate on the basis of a 360-day year consisting of twelve 30-day months (four 90-day quarters) and the actual number of days elapsed in the period for which payable. B. Accumulation. Dividends on the Series A Preferred Stock shall be cumulative, and from and after any Dividend Payment Date on which any dividend that has accumulated or been deemed to have accumulated through such date has not been paid in full or any payment date set for a redemption on which such redemption payment has not been paid in full, additional dividends shall accumulate in respect of the amount of such unpaid dividends or unpaid redemption payment (such amount, the "Arrearage") as provided in Section A of this Article III; provided, that, notwithstanding anything to the contrary in Section A of this Article III, (i) if dividends on the Series A Preferred Stock are not paid on any Dividend Payment Date, dividends shall be deemed to have accumulated, and shall accumulate, at a rate of 12.00% per annum (or such lesser rate as may be the maximum rate that is then permitted by applicable law) (the "Arrearage Rate") from the beginning of the quarterly period for which such dividends are payable through the date on which such Arrearage is paid in full and (ii) if a redemption payment with respect to Series A Preferred Stock is not paid in full on the payment date set for such redemption payment, additional dividends shall accumulate on such unpaid redemption payment at the Arrearage Rate from the date set for such redemption through the date on which such Arrearage is paid in full. Such additional dividends in respect of any Arrearage shall be deemed to accumulate from day to day whether or not earned or declared until the Arrearage is paid, shall be calculated as of such successive Dividend Payment Date and shall constitute an additional Arrearage from and after any such successive Dividend Payment Date to the extent not paid on such Dividend Payment Date. If any Arrearage has not been paid in full prior to any payment date set for a redemption of Series A Preferred Stock, for the purposes of calculating accrued and unpaid dividends on the Stated Value of the shares of Series A Preferred Stock to be redeemed, the Arrearage Rate shall apply. References in any Article herein to dividends that have accumulated or that have been deemed to have accumulated with respect to the Series A Preferred Stock shall include the amount, if any, of any Arrearage together with any dividends accumulated or deemed to have accumulated on such Arrearage pursuant to the immediately preceding two sentences. Additional dividends in respect of any Arrearage may be declared and paid at any time, in whole or in part, without reference to any regular Dividend Payment Date, to Registered Holders as they appear on the stock record books of the Corporation on such record date as may be fixed by the Board of Directors (which record date shall be no less than 10 days prior to the corresponding payment date). C. Method of Payment. Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accumulated and payable on all outstanding shares of Series A Preferred Stock shall be allocated pro rata on a share-by-share basis among all such shares then outstanding. Any such partial payment shall be made in cash. Dividends that are declared and paid in an amount less than the full amount of dividends accumulated on the Series A Preferred Stock (and on any Arrearage) shall be applied first to the earliest dividend which has not theretofore been paid. All cash payments of dividends on the shares of Series A Preferred Stock shall be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. IV. Liquidation Preference In the event of a liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the holders of then-outstanding shares of Series A Preferred Stock shall be entitled to receive out of the assets of the Corporation, whether such assets are capital or surplus of any nature, an amount per share equal to (i) in the event the Shareholder Approval is required to be obtained pursuant to the applicable rules, interpretations, rulings or determinations of the NYSE, (A) prior to the Shareholder Approval Date, the greater of (1) the sum of (x) the dividends, if any, accumulated or deemed to have accumulated thereon to the date of final distribution to such holders, whether or not such dividends are declared and (y) the Stated Value thereof, and (2) the amount that would be payable to holders of the Series A Preferred Stock if the shares of Series A Preferred Stock had been converted into shares of Common Stock immediately prior to such liquidation, dissolution or winding up (assuming the Shareholder Approval is not required or had been obtained) and (B) on and following the Shareholder Approval Date, the amount set forth in clause (i)(A)(1) above, and (ii) in the event the Shareholder Approval is not so required to be obtained, on and following the date of issuance of the Series A Preferred Stock, the amount set forth in clause (i)(A)(1) above, and in each case no more, before any payment shall be made or any assets distributed to the holders of any Junior Liquidation Securities. After any such payment in full, the holders of Series A Preferred Stock shall not, as such, be entitled to any further participation in any distribution of assets of the Corporation. All the assets of the Corporation available for distribution to stockholders after the liquidation preferences of any Senior Liquidation Securities, if any, shall be distributed ratably (in proportion to the full distributable amounts to which holders of Series A Preferred Stock and Parity Liquidation Securities, if any, are respectively entitled upon such dissolution, liquidation or winding up) among the holders of the then-outstanding shares of Series A Preferred Stock and Parity Liquidation Securities, if any, when such assets are not sufficient to pay in full the aggregate amounts payable thereon. Neither a consolidation or merger of the Corporation with or into any other Person or Persons, nor a sale, conveyance, lease, exchange or transfer of all or part of the Corporation's assets for cash, securities or other property to a Person or Persons shall be deemed to be a liquidation, dissolution or winding up of the Corporation for purposes of this Article IV entitling the Series A Preferred Stock to a liquidation preference hereunder, but the holders of shares of Series A Preferred Stock shall nevertheless be entitled from and after any such consolidation, merger or sale, conveyance, lease, exchange or transfer of all or part of the Corporation's assets to the rights in respect of a liquidation provided by this Article IV following any such transaction. Notice of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, stating the payment date or dates when, and the place or places where, the amounts distributable to each holder of shares of Series A Preferred Stock in such circumstances shall be payable, shall be given by first-class mail, postage prepaid, mailed not less than 45 days prior to any payment date stated therein, to holders of record as they appear on the stock record books of the Corporation as of the date such notices are first mailed. V. Mandatory Redemption A. Mandatory Redemption. The Series A Preferred Stock shall not be redeemable except as provided in this Article V. At any time on or after the eighth anniversary of the original issuance of the Series A Preferred Stock, the Series A Preferred Stock, shall, to the extent that the Corporation shall have funds legally available therefore, be redeemable in whole or in part at the option of the holders of the Series A Preferred Stock at a redemption price per share in cash (the "Mandatory Redemption Price") equal to the Stated Value plus all unpaid dividends accumulated thereon to the date of actual payment of the Mandatory Redemption Price, whether or not such dividends have been declared. B. Mandatory Redemption Notice and Redemption Procedures. If any holder of Series A Preferred Stock desires to exercise such holder's redemption right pursuant to Section A of this Article V, such holder shall give written notice to the Corporation stating such holder's election and specifying the number of shares to be redeemed pursuant to Section A of this Article V (the "Mandatory Redemption Notice"). Within 10 days after the receipt of such Mandatory Redemption Notice, the Corporation shall give written notice to such holder, by first-class mail, postage prepaid, at such holder's address as it appears on the records of the Corporation (which notice shall be accompanied by a facsimile transmission thereof to those holders who shall so request): (i) notifying such holder of the date fixed for redemption (which shall not be later than 30 days after the receipt by the Corporation of the Mandatory Redemption Notice) (the "Mandatory Redemption Date"); (ii) stating that the Series A Preferred Stock may be converted until the close of business on the Business Day prior to the Mandatory Redemption Date by surrendering to the Corporation or its transfer agent for the Series A Preferred Stock the certificate or certificates for the shares to be converted, accompanied by written notice specifying the number of shares to be converted, and stating the name and address of the transfer agent of the Series A Preferred Stock, if any; and (iii) stating that dividends shall cease to accrue on the Mandatory Redemption Date unless the Corporation defaults in the payment of the Mandatory Redemption Price. The Corporation shall redeem the number of shares of Series A Preferred Stock so specified in the Mandatory Redemption Notice on the Mandatory Redemption Date. C. Change in Control. In the event there occurs a Change in Control, any holder of record of shares of Series A Preferred Stock, in accordance with the procedures set forth in Section D of this Article V, may require the Corporation to redeem any or all of the shares of Series A Preferred Stock held by such holder in an amount per share equal to the sum of (i) the amount, if any, of all unpaid dividends accumulated thereon to the date of actual payment thereof, whether or not such dividends have been declared, and (ii) 101% of Stated Value (the "Change in Control Price"). D. Change in Control Notice and Redemption Procedures. Notice of any Change in Control shall be sent to the holders of record of the outstanding shares of Series A Preferred Stock not more than ten days following a Change in Control, which notice (a "Change in Control Notice") shall describe the transaction or transactions constituting such Change in Control and set forth each holder's right to require the Corporation to redeem any or all shares of Series A Preferred Stock held by him or her out of funds legally available therefor, the redemption date, which date shall be not more than 30 days from the date of such Change in Control Notice (the "Change in Control Redemption Date"), and the procedures to be followed by such holders in exercising his or her right to cause such redemption; provided, however, that if shares of Series A Preferred Stock are owned by more than 50 holders or groups of Affiliated holders and if the Series A Preferred Stock is listed on any national securities exchange or quoted on any national quotation system, the Corporation shall give such Change in Control Notice by publication in a newspaper of general circulation in the Borough of Manhattan, The City of New York, within 30 days following such Change in Control and, in any case, a similar notice shall be mailed concurrently to each holder of shares of Series A Preferred Stock. Failure by the Corporation to give the Change in Control Notice as prescribed by the preceding sentence, or the formal insufficiency of any such Change in Control Notice, shall not prejudice the rights of any holder of shares of Series A Preferred Stock to cause the Corporation to redeem any such shares held by him or her. In the event a holder of shares of Series A Preferred Stock shall elect to require the Corporation to redeem any or all such shares of Series A Preferred Stock pursuant to Section C of this Article V, such holder shall deliver, prior to the Change in Control Redemption Date as set forth in the Change in Control Notice, or, if the Change in Control Notice is not given as required by this Section D, at any time following the last day the Corporation was required to give the Change in Control Notice in accordance with this Section D (in which case the Change in Control Redemption Date shall be the date which is the later of (x) 30 days following the last day the Corporation was required to give the Change in Control Notice in accordance with this Section D and (y) 15 days following the delivery of such election by such holder), a written notice, in the form specified by the Corporation (if the Corporation did in fact give the notice required by this Section D), to the Corporation so stating, and specifying the number of shares to be redeemed pursuant to Section C of this Article V; provided, however, that if all of the shares of the Series A Preferred Stock are owned by 50 or fewer holders or groups of Affiliated holders, such holders or groups may deliver a notice or an election to redeem at any time within 90 days following the occurrence of a Change in Control without awaiting receipt of a Change in Control Notice or the expiration of the time allowed for the delivery of a Change in Control Notice hereunder. The Corporation shall redeem the number of shares so specified on the Change in Control Redemption Date fixed by the Corporation or as provided in the preceding sentence. The Corporation shall comply with the requirements of Rules 13e-4 and 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the shares of Series A Preferred Stock as a result of a Change in Control. From and after the time the Change in Control Redemption Price is paid in accordance with the terms hereof with respect to any share of Series A Preferred Stock, all dividends on such share of Series A Preferred Stock shall cease to accumulate and all rights of the holder thereof as a holder of Series A Preferred Stock shall cease and terminate. E. Deposit of Funds. The Corporation shall, no later than 11:00 a.m., New York City time, on any Mandatory Redemption Date or Change in Control Redemption Date pursuant to this Article V, deposit with its transfer agent or other redemption agent in the Borough of Manhattan, The City of New York having a capital and surplus of at least $500,000,000, as a trust fund for the benefit of the holders of the shares of Series A Preferred Stock to be redeemed, cash that is sufficient in amount to redeem the shares to be redeemed in accordance with the Mandatory Redemption Notice or Change in Control Notice, with irrevocable instructions and authority to such transfer agent or other redemption agent to pay to the respective holders of such shares, as evidenced by a list of such holders certified by an officer of the Corporation, the Mandatory Redemption Price or Change in Control Redemption Price, as the case may be, upon surrender of their respective share certificates. Such deposit shall be deemed to constitute full payment of such shares to the holders, and from and after the date of such deposit, all rights of the holders of the shares of Series A Preferred Stock that are to be redeemed as stockholders of the Corporation with respect to such shares, except the right to receive the Mandatory Redemption Price or Change in Control Price, as applicable, upon the surrender of their respective certificates and all rights under Articles VIII and X, shall cease and terminate. In case holders of any shares of Series A Preferred Stock called for redemption shall not, within two years after such deposit, claim the cash deposited for redemption thereof, such transfer agent or other redemption agent shall, upon demand, pay over to the Corporation the balance so deposited. Thereupon, such transfer agent or other redemption agent shall be relieved of all responsibility to the holders thereof and the sole right of such holders, with respect to shares to be redeemed, shall be to receive the Mandatory Redemption Price or Change in Control Price, as applicable, as general creditors of the Corporation. Any interest accrued on any funds so deposited shall belong to the Corporation, and shall be paid to it from time to time on demand. VI. Restrictions on Dividends So long as any shares of the Series A Preferred Stock are outstanding, the Board of Directors shall not declare, and the Corporation shall not pay or set apart for payment any dividend on any Junior Securities or Parity Securities or make any payment on account of, or set apart for payment money for a sinking or other similar fund for, the repurchase, redemption or other retirement of, any Junior Securities or Parity Securities or any warrants, rights or options exercisable for or convertible into any Junior Securities or Parity Securities (other than the repurchase, redemption or other retirement of debentures or other debt securities that are convertible or exchangeable into any Junior Securities or Parity Securities), or make any distribution in respect of the Junior Securities or Parity Securities, either directly or indirectly, and whether in cash, obligations or shares of the Corporation or other property (other than distributions or dividends in Junior Securities to the holders of Junior Securities), and shall not permit any Person directly or indirectly controlled by the Corporation to purchase or redeem any Junior Securities or Parity Securities or any warrants, rights, calls or options exercisable for or convertible into any Junior Securities or Parity Securities (other than the repurchase, redemption or other retirement of debentures or other debt securities that are convertible or exchangeable into any Junior Securities or Parity Securities) unless prior to or concurrently with such declaration, payment, setting apart for payment, repurchase, redemption or other retirement or distribution, as the case may be, all accumulated and unpaid dividends on shares of the Series A Preferred Stock not paid on the dates provided for in Section A of Article III (including Arrearages and accumulated dividends thereon and regardless of whether the Corporation shall have had the right to elect to defer such payments as provided for in Article III) shall have been paid, except that when dividends are not paid in full as aforesaid upon the shares of Series A Preferred Stock, all dividends declared on the Series A Preferred Stock and any series of Parity Dividend Securities shall be declared and paid pro rata so that the amount of dividends so declared and paid on Series A Preferred Stock and such series of Parity Dividend Securities shall in all cases bear to each other the same ratio that accumulated dividends (including interest accrued on or additional dividends accumulated in respect of such accumulated dividends) on the shares of Series A Preferred Stock and such Parity Dividend Securities bear to each other. Notwithstanding the foregoing, this paragraph shall not prohibit (i) the acquisition, repurchase, exchange, conversion, redemption or other retirement for value of shares of Series A Preferred Stock or any Parity Dividend Security by the Corporation in accordance with the terms of such securities or (ii) the acquisition, repurchase, exchange, conversion, redemption or other retirement for value by the Corporation of any Junior Dividend Securities by the Corporation in accordance with obligations in existence at the time of original issuance of the Series A Preferred Stock. VII. Voting Rights A. The holders of shares of Series A Preferred Stock shall have no voting rights except as set forth below or as otherwise from time to time required by law. B. From and after the Shareholder Approval Date, for so long as any shares of the Series A Preferred Stock are outstanding, each share of Series A Preferred Stock shall entitle the holder thereof to vote on all matters voted on by holders of Common Stock, and the shares of Series A Preferred Stock shall vote together with shares of Common Stock as a single class. With respect to any such vote, each share of Series A Preferred Stock shall entitle its holder to a number of votes equal to the number of shares of Common Stock into which such share of Series A Preferred Stock would be convertible at the time of the record date with respect to such vote (assuming all conditions precedent to such conversion have been satisfied and that such conversion had occurred as of the record date for such vote). C. So long as (i) at least $130,000,000 in Stated Value of the Series A Preferred Stock remains outstanding and (ii) the Investor or any of its Affiliates Beneficially Owns, in the aggregate, greater than 50% of the Series A Preferred Stock, in the event that one or more of the Board Nominees required to be designated for election to the Board of Directors pursuant to the Restructuring Agreement are not so designated or are not elected to the Board of Directors, then the number of directors constituting the Board of Directors shall, without further action, be increased by the number of such Board Nominees not elected to the Board of Directors pursuant to the Restructuring Agreement, or if such requisite increase in the number of directors constituting the Board of Directors would require the approval of the Corporation's stockholders or is prohibited by the Restructuring Agreement, then a number of directors (other than Board Nominees) shall resign from the Board of Directors, so as to enable the Investor and its Affiliates to designate as directors the number of Board Nominees not elected to the Board of Directors pursuant to the Restructuring Agreement, and the Investor and its Affiliates shall have, in addition to the other voting rights set forth herein, the exclusive right, voting separately as a single class, to elect a number of directors to the Board of Directors equal to the number of such Board Nominees not elected to the Board of Directors. Directors elected pursuant to this Section C shall continue as directors and such additional voting right shall continue until such time as the requisite number of Board Nominees are elected to the Board of Directors pursuant to the Restructuring Agreement, at which time the directors elected by the Investor and its Affiliates pursuant to this Section C shall cease to be directors (unless elected as Board Nominees), and such additional voting rights shall terminate subject to revesting in the event of each and every subsequent event of the character indicated above. D. (a) The foregoing rights of holders of shares of Series A Preferred Stock to take any action as provided in this Article VII may be exercised at any annual meeting of stockholders or at a special meeting of stockholders held for such purpose as hereinafter provided or at any adjournment thereof, or, subject to the applicable provisions of the federal securities laws, by the written consent, delivered to the Secretary of the Corporation, of the holders of the minimum number of shares required to take such action. So long as such right to vote continues (and unless such right has been exercised by written consent of the minimum number of shares required to take such action), the Chairman of the Board of Directors may call, and upon the written request of holders of record of 20% of the outstanding shares of Series A Preferred Stock, addressed to the Secretary of the Corporation at the principal office of the Corporation, shall call, a special meeting of the holders of shares entitled to vote as provided herein. Such meeting shall be held as soon as reasonably practicable after delivery of such request to the Secretary, at the place and upon the notice provided by law and in the By-laws for the holding of meetings of stockholders. (b) Each director elected pursuant to Section C of this Article VII shall serve until the next annual meeting or until his or her successor shall be elected and shall qualify, unless the director's term of office shall have terminated pursuant to the provisions of Section C hereof. In case any vacancy shall occur among the directors elected pursuant to Section C hereof, such vacancy shall be filled for the unexpired portion of the term by vote of the remaining director or directors theretofore elected pursuant to Section C of this Article VII (or such director's or directors' successor in office), if any. If any such vacancy is not so filled within 20 days after the creation thereof or if all of the directors so elected shall cease to serve as directors before their term shall expire, the holders of the shares of Series A Preferred Stock then outstanding and entitled to vote for such director pursuant to the provisions of Section C of this Article VII may elect successors to hold office for the unexpired terms of any vacant directorships, by written consent as provided herein, or at a special meeting of such holders called as provided herein. The holders of a majority of the shares entitled to vote for directors pursuant to Section C of this Article VII shall have the right to remove with or without cause at any time and replace any directors such holders have elected pursuant to such section, by written consent as herein provided, or at a special meeting of such holders called as provided herein. E. Without the consent or affirmative vote of the holders of at least a majority of the outstanding shares of Series A Preferred Stock, voting separately as a class, the Corporation shall not: (i) authorize, create (by reclassification or otherwise) or issue, or increase the authorized amount of, (a) any Senior Securities, Parity Securities or additional Series A Preferred Stock or (b) any class or series of capital stock or any security convertible into or exercisable for any class or series of capital stock, that is redeemable mandatorily or redeemable at the option of the holder thereof at any time on or prior to the redemption of the Series A Preferred Stock (whether or not only upon the occurrence of a specified event); (ii) amend, alter or repeal any provision of the Certificate of Incorporation or the By-laws, if the amendment, alteration or repeal alters or changes the powers, preferences or special rights of the Series A Preferred Stock so as to affect them adversely; or (iii) authorize or take any other action if such action would be inconsistent with the provisions of this Certificate of Designations. F. Other Agreements and Securities. Subject to Section G of Article X, the Corporation shall not, from and after the date of the original issuance of the Series A Preferred Stock, enter into any agreement, amend or modify any existing agreement or obligation, or issue any security that prohibits, conflicts or is inconsistent with, or would be breached by, the Corporation's performance of its obligations hereunder. VIII. Conversion A. Conversion. (a) At the option and election of the holder thereof, each share of Series A Preferred Stock, including all unpaid dividends accumulated thereon to the Conversion Date (as defined below), whether or not such dividends have been declared, may be converted in the manner and subject to the limitations provided herein at any time into fully paid and nonassessable shares of Common Stock. As of the Conversion Date with respect to a share of Series A Preferred Stock, subject to subsections (d) and (e) of this Section A, such share shall be converted into that number of shares of Common Stock equal to the quotient of (i) the sum of (A) the Stated Value plus (B) all unpaid dividends accumulated on such share of Series A Preferred Stock to the Conversion Date whether or not such dividends have been declared, divided by (ii) the Conversion Price in effect on the Conversion Date. (b) Conversion of shares of the Series A Preferred Stock may be effected by any holder thereof upon the surrender to the Corporation at the principal office of the Corporation or at the office of any agent or agents of the Corporation, as may be designated by the Board of Directors of the Corporation and identified to the holders in writing upon such designation, of the certificate for such shares of Series A Preferred Stock to be converted accompanied by a written notice stating that such holder elects to convert all or a specified whole number of shares represented by such certificate in accordance with the provisions of this Section A and specifying the name or names in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. In case such notice shall specify a name or names other than that of such holder, such notice shall be accompanied by payment of all transfer taxes payable upon the issuance of shares of Common Stock in such name or names. Other than such taxes, the Corporation will pay any and all issue and other taxes (other than taxes based on income) that may be payable in respect of any issue or delivery of shares of Common Stock on conversion of Series A Preferred Stock pursuant hereto. As promptly as practical, and in any event within three Business Days after the Conversion Date, the Corporation shall deliver or cause to be delivered as directed by the holder of shares of Series A Preferred Stock being converted (i) certificates representing the number of validly issued, fully paid and nonassessable full shares of Common Stock to which such holder shall be entitled, (ii) any cash that is required to be paid pursuant to subsection (d) of this Section A, and (iii) if less than the full number of shares of Series A Preferred Stock evidenced by the surrendered certificate or certificates is being converted, a new certificate or certificates, of like tenor, for the number of shares of Series A Preferred Stock evidenced by such surrendered certificate or certificates less the number of shares of Series A Preferred Stock being converted. Such conversion shall be deemed to have occurred at the close of business on the date (the "Conversion Date") of the giving of such notice by the holder of the Series A Preferred Stock to be converted and of such surrender of the certificate or certificates representing the shares of Series A Preferred Stock to be converted so that as of such time the rights of the holder thereof as to the shares being converted shall cease except for the right to receive shares of Common Stock and/or cash in accordance herewith, and the person entitled to receive the shares of Common Stock issued as a result of such conversion shall be treated for all purposes as having become the holder of such shares of Common Stock at such time. (c) In the event that the Series A Preferred Stock is to be redeemed pursuant to Article V, from and after the Mandatory Redemption Date or Change in Control Redemption Date, as applicable, the right of a holder to convert shares of Series A Preferred Stock pursuant to this Section A shall cease and terminate, except if the Corporation shall default in payment of the Mandatory Redemption Price on the Mandatory Redemption Date or the Change in Control Redemption Price on the Change in Control Redemption Date, in which case all such rights shall continue unless and until such shares are redeemed and such price is paid in full in accordance with the terms hereof. Notwithstanding anything in the foregoing to the contrary, if the Conversion Date shall occur with respect to any shares of Series A Preferred Stock on or prior to any Mandatory Redemption Date or Change in Control Redemption Date, such shares of Series A Preferred Stock shall be converted by the Corporation into Common Stock in the manner provided in this Section A. (d) In connection with the conversion of any shares of Series A Preferred Stock, no fractions of shares of Common Stock shall be issued, but in lieu thereof the Corporation shall pay a cash adjustment in respect of such fractional interest in an amount equal to such fractional interest multiplied by the Closing Price per share of Common Stock on the Conversion Date (or on the Trading Day immediately preceding the Conversion Date, if the Conversion Date is not a Trading Day). If more than one share of Series A Preferred Stock shall be surrendered for conversion by the same holder on the same Conversion Date, the number of full shares of Common Stock issuable on conversion thereof shall be computed on the basis of the total number of shares of Series A Preferred Stock so surrendered. (e) To the extent the Shareholder Approval is required to be obtained pursuant to applicable rules, interpretations, rulings or determinations of the NYSE, then notwithstanding anything to the contrary in this Section A, in the event that a Conversion Date with respect to a share of Series A Preferred Stock occurs on a date before which the Shareholder Approval has been obtained, the number of shares of Common Stock into which such share of Series A Preferred Stock shall be converted shall not exceed the quotient of (i) the number of shares of Common Stock that is equal to 19.9% of the number of shares of Common Stock outstanding on the Closing Date (as adjusted for any stock split, reverse stock split, stock dividend or similar event with respect to the Common Stock) divided by (ii) 260,000 (as adjusted for any stock split, reverse stock split, stock dividend or similar event with respect to the Series A Preferred Stock), and, with respect to any such conversion with a Conversion Date occurring after February 28, 2002, upon delivery of such shares of Common Stock in accordance with the terms hereof, the Corporation shall pay in cash to the holder of such share of Series A Preferred Stock the amount, if any, equal to the Closing Price of the Common Stock on the Conversion Date (or, if the Conversion Date is not a Trading Day, the immediately preceding Trading Day) multiplied by the number of shares of Common Stock that would have been received upon conversion pursuant to this Article VIII that is in excess of the actual number of shares of Common Stock received as a result of the operation of this subsection (e). (f) The Corporation shall at all times reserve and keep available for issuance upon the conversion of the Series A Preferred Stock in accordance with the terms hereof, such number of its authorized but unissued shares of Common Stock as will from time to time be sufficient to permit the conversion of all outstanding shares of Series A Preferred Stock, and shall take all action required to increase the authorized number of shares of Common Stock if necessary to permit the conversion of all outstanding shares of Series A Preferred Stock. B. Adjustment of Conversion Price. Except in connection with an Organic Change, which shall be subject to Section C below, the Conversion Price shall be subject to adjustment from time to time as follows: (a) Stock Dividends. In case the Corporation after the date of the original issuance of the Series A Preferred Stock shall pay a dividend or make a distribution to all holders of shares of Common Stock in shares of Common Stock, then in any such case the Conversion Price in effect at the opening of business on the day following the record date for the determination of stockholders entitled to receive such dividend or distribution shall be reduced to a price obtained by multiplying such Conversion Price by a fraction of which (x) the numerator shall be the number of shares of Common Stock outstanding at the close of business on such record date and (y) the denominator shall be the sum of such number of shares of Common Stock outstanding and the total number of shares of Common Stock constituting such dividend or distribution, such reduction to become effective immediately after the opening of business on the day following such record date. For purposes of this subsection (a), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Corporation but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. The Corporation will not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Corporation. (b) Stock Splits and Reverse Splits. In case after the date of the original issuance of the Series A Preferred Stock outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, the Conversion Price in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately reduced, and, conversely, in case after the original issuance of the Series A Preferred Stock outstanding shares of Common Stock shall be combined into a smaller number of shares of Common Stock, the Conversion Price in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately increased, such reduction or increase, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (c) Issuances Below Conversion Price. (i) If the Corporation after the date of the original issuance of the Series A Preferred Stock issues Common Stock without consideration or at a price per share (such no consideration or price per share, the "New Price Per Share") less than the Conversion Price in effect immediately preceding such issuance of Common Stock, then the Conversion Price shall be adjusted effective immediately following such issuance of Common Stock to the New Price Per Share; provided, however, that no adjustment shall be made if such Common Stock is issued to holders of Common Stock and the Corporation issues or distributes to each holder of Series A Preferred Stock the Common Stock that each such holder would have been entitled to receive had the Series A Preferred Stock held by such holder been converted prior to such issuance of such Common Stock. (ii) If the Corporation after the date of the original issuance of the Series A Preferred Stock issues Derivative Securities entitling Persons to subscribe for or acquire shares of Common Stock, in each case at a New Price Per Share for such Common Stock less than the Conversion Price in effect immediately preceding such issuance of Derivative Securities, then the Conversion Price shall be adjusted effective immediately following such issuance of Derivative Securities to a price equal to the New Price Per Share; provided, however, that no adjustment shall be made if such Derivative Securities are issued to holders of Common Stock and the Corporation issues or distributes to each holder of Series A Preferred Stock the Derivative Securities that each such holder would have been entitled to receive had the Series A Preferred Stock held by such holder been converted prior to such issuance of Derivative Securities. Rights or warrants issued by the Corporation to all holders of Common Stock entitling the holders thereof to subscribe for or purchase Equity Interests, which rights or warrants (A) are deemed to be transferred with such shares of Common Stock, (B) are not exercisable and (C) are also issued in respect of future issuances of Common Stock, including shares of Common Stock issued upon conversion of shares of Series A Preferred Stock, in each case in clauses (A) through (C) until the occurrence of a specified event or events (a "Trigger Event"), shall for purposes of this subsection (c)(ii) not be deemed issued until the occurrence of the earliest Trigger Event. (iii) If (A) the exercise price provided for in any Derivative Securities referred to in subsection (c)(ii) above, (B) the additional consideration, if any, payable upon the conversion or exchange of any Derivative Securities referred to in subsection (c)(ii) above or (C) the rate at which any such Derivative Securities referred to in subsection (c)(ii) above are convertible into or exchangeable for Common Stock shall change at any time (other than under or by reason of provisions designed to protect against dilution upon an event which results in a related adjustment pursuant to this Article VIII), the Conversion Price then in effect shall forthwith be readjusted (effective only with respect to the conversion of Series A Preferred Stock after such readjustment) to the Conversion Price that would then be in effect had the adjustment made upon the issuance, sale, distribution or granting of such Derivative Securities been made based upon such changed purchase price, additional consideration or conversion rate, as the case may be, but only with respect to such Derivative Securities as then remain outstanding. (d) Special Dividends. In case the Corporation after the date of the original issuance of the Series A Preferred Stock shall distribute to all holders of shares of Common Stock evidences of its indebtedness or assets (excluding any regular periodic cash dividend but including any extraordinary cash dividend), Equity Interests (other than Common Stock) or rights to subscribe (excluding those referred to in subsection (c) above) for Equity Interests other than Common Stock, in each such case the Conversion Price in effect immediately prior to the close of business on the record date for the determination of stockholders entitled to receive such distribution shall be adjusted to a price obtained by multiplying such Conversion Price by a fraction of which (x) the numerator shall be the Closing Price per share of Common Stock on such record date, less the then-current fair market value as of such record date (as determined by the Board of Directors in its good faith judgment) of the portion of assets or evidences of indebtedness or Equity Interests or subscription rights so distributed applicable to one share of Common Stock, and (y) the denominator shall be such Closing Price, such adjustment to become effective immediately prior to the opening of business on the day following such record date; provided, however, that no adjustment shall be made (1) if the Corporation issues or distributes to each holder of Series A Preferred Stock the subscription rights referred to above that each such holder would have been entitled to receive had the Series A Preferred Stock held by such holder been converted prior to such record date or (2) if the Corporation grants to each such holder the right to receive, upon the conversion of the Series A Preferred Stock held by such holder at any time after the distribution of the evidences of indebtedness or assets or Equity Interests referred to above, the evidences of indebtedness or assets or Equity Interests that such holder would have been entitled to receive had such Series A Preferred Stock been converted prior to such record date. The Corporation shall provide any holder of Series A Preferred Stock, upon receipt of a written request therefor, with any indenture or other instrument defining the rights of the holders of any indebtedness, assets, subscription rights or Equity Interests referred to in this subsection (d). Rights or warrants issued by the Corporation to all holders of Common Stock entitling the holders thereof to subscribe for or purchase Equity Interests, which rights or warrants (i) are deemed to be transferred with such shares of Common Stock, (ii) are not exercisable and (iii) are also issued in respect of future issuances of Common Stock, including shares of Common Stock issued upon conversion of shares of Series A Preferred Stock, in each case in clauses (i) through (iii) until the occurrence of a Trigger Event, shall for purposes of this subsection (d) not be deemed issued until the occurrence of the earliest Trigger Event. (e) Tender or Exchange Offer. In case a tender or exchange offer made by the Corporation or any Subsidiary for all or any portion of the Common Stock shall be consummated and such tender offer shall involve an aggregate consideration having a fair market value (as determined by the Board of Directors in its good faith judgment) at the last time (the "Offer Time") tenders may be made pursuant to such tender or exchange offer (as it may be amended) that, together with the aggregate of the cash plus the fair market value (as determined by the Board of Directors in its good faith judgment), as of the Offer Time, of consideration payable in respect of any tender or exchange offer by the Corporation or any such Subsidiary for all or any portion of the Common Stock consummated preceding the Offer Time and in respect of which no Conversion Price adjustment pursuant to this subsection (e) has been made, exceeds 5% of the product of the Closing Price of the Common Stock at the Offer Time multiplied by the number of shares of Common Stock outstanding (including any tendered shares) at the Offer Time, the Conversion Price shall be reduced so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the Offer Time by a fraction of which (x) the numerator shall be (i) the product of the Closing Price of the Common Stock at the Offer Time multiplied by the number of shares of Common Stock outstanding (including any tendered shares) at the Offer Time minus (ii) the fair market value (determined as aforesaid) of the aggregate consideration payable to stockholders based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of all shares validly tendered and not withdrawn as of the Offer Time (the shares deemed so accepted, up to any such maximum, being referred to as the "Purchased Shares") and (y) the denominator shall be the product of (i) such Closing Price at the Offer Time multiplied by (ii) such number of outstanding shares at the Offer Time minus the number of Purchased Shares, such reduction to become effective immediately prior to the opening of business on the day following the Offer Time. For purposes of this subsection (e), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Corporation but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. (f) Closing Price Determination. For the purpose of any computation under subsection (d) of this Section B, the Closing Price of Common Stock on any date shall be deemed to be the average of the Closing Prices for the five consecutive Trading Days ending on the day in question (or if such day is not a Trading Day, the next preceding Trading Day), provided, however, that (i) if the "ex" date for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the Conversion Price pursuant to this Section B occurs on or after the 20th Trading Day prior to the day in question and prior to the "ex" date for the issuance or distribution requiring such computation, the Closing Price for each Trading Day prior to the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the same fraction which the Conversion Price is so required to be adjusted as a result of such other event, (ii) if the "ex" date for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the Conversion Price pursuant to this Section B occurs on or after the "ex" date for the issuance or distribution requiring such computation and on or prior to the day in question, the Closing Price for each Trading Day on and after the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the reciprocal of the fraction by which the Conversion Price is so required to be adjusted as a result of such other event, and (iii) if the "ex" date for the issuance or distribution requiring such computation is on or prior to the day in question, after taking into account any adjustment required pursuant to clause (ii) of this proviso, the Closing Price for each Trading Day on or after such "ex" date shall be adjusted by adding thereto the fair market value on the day in question (as determined by the Board of Directors in a manner consistent with any determination of such value for the purposes of subsection (d) of this Section B) of the assets, evidences of indebtedness, Equity Interests or subscription rights being distributed applicable to one share of Common Stock as of the close of business on the day before such "ex" date. For the purposes of any computation under subsection (e) of this Section B, the Closing Price on any date shall be deemed to be the average of the daily Closing Prices for the five consecutive Trading Days ending at the Offer Time; provided, however, that if the "ex" date for any event (other than the tender or exchange offer requiring such computation) that requires an adjustment to the Conversion Price pursuant to this Section B occurs on or after the date of commencement of such tender or exchange offer and prior to the Offer Time for such tender or exchange offer, the Closing Price for each Trading Day prior to the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the same fraction by which the Conversion Price is so required to be adjusted as a result of such other event. For purposes of this subsection (f), the term "ex" date, (i) when used with respect to any issuance or distribution, means the first date on which the Common Stock trades regular way on the NYSE or on the relevant exchange or in the relevant market from which the Closing Price was obtained without the right to receive such issuance or distribution, (ii) when used with respect to any subdivision or combination of shares of Common Stock, means the first date on which the Common Stock trades regular way on the NYSE or such exchange or in such market after the time at which such subdivision or combination becomes effective, and (iii) when used with respect to any tender or exchange offer means the first date on which the Common Stock trades regular way on the NYSE or such exchange or in such market after the Offer Time of such tender or exchange offer. (g) Other Adjustments. The Corporation may, but shall not be required to, make such reductions in the Conversion Price, in addition to those required by clauses (a), (b), (c), (d) and (e) of this Section B, as it considers to be advisable, including without limitation in order to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock resulting from any dividend or distribution of stock, from any event treated as such for income tax purposes, from any subdivision, reclassification or combination of stock, from any issuance of rights or warrants or from any other transaction having an effect similar to any of the above. Whenever the Conversion Price is reduced pursuant to the preceding sentence, the Corporation shall mail to the holders of then-outstanding shares of Series A Preferred Stock a notice of the reduction at least 15 days prior to the date the reduced Conversion Price takes effect, and such notice shall state the reduced Conversion Price and the period it will be in effect. (h) Minimum Adjustment Requirement. No adjustment shall be required unless such adjustment would result in an increase or decrease of at least $0.01 in the Conversion Price then subject to adjustment; provided, however, that any adjustments that are not made by reason of this subsection (h) shall be carried forward and taken into account in any subsequent adjustment. In case the Corporation shall at any time issue shares of Common Stock by way of dividend on any stock of the Corporation or subdivide or combine the outstanding shares of Common Stock, said amount of $0.01 specified in the preceding sentence (as theretofore increased or decreased, if said amount shall have been adjusted in accordance with the provisions of this subsection (h)) shall forthwith be proportionately increased in the case of such a combination or decreased in the case of such a subdivision or stock dividend so as appropriately to reflect the same. (i) Minimum Permissible Conversion Price. Notwithstanding any other provision of this Section B, no adjustment to the Conversion Price shall reduce the Conversion Price below $0.01, and any such purported adjustment shall instead reduce the Conversion Price to $0.01. The Corporation hereby covenants not to take any action that would or does result in any adjustment in the Conversion Price that, if made without giving effect to the previous sentence, would cause the Conversion Price to be less than $0.01. (j) Notice. Whenever the Conversion Price is adjusted as herein provided, a notice stating that the Conversion Price has been adjusted and setting forth the adjusted Conversion Price shall promptly be mailed by the Corporation to the registered holders of the Series A Preferred Stock. (k) No Adjustment. Anything to the contrary herein notwithstanding, no adjustment to the Conversion Price shall be made pursuant to this Section B as a result of, or in connection with, the issuance of Common Stock or Derivative Securities (i) to directors or employees of the Corporation or its Subsidiaries pursuant to an existing or future stock option, stock bonus, stock purchase or other similar plan adopted by the Board of Directors, an employment agreement approved by the Board of Directors, or the modification, renewal or extension of any such plan or agreement if approved by the Board of Directors or (ii) upon exercise, conversion or exchange of any Derivative Securities whether or not the issuance of which caused an adjustment hereunder. C. Organic Change. (a) Corporation Survives. Upon the consummation of an Organic Change (other than a transaction in which the Corporation is not the surviving entity), lawful provision shall be made as part of the terms of such transaction whereby the terms hereof shall be modified, without payment of any additional consideration by any holder, so as to provide that upon the conversion of shares of Series A Preferred Stock following the consummation of such Organic Change, the holder of Series A Preferred Stock shall have the right to acquire and receive (in lieu of or in addition to the shares of Common Stock acquirable and receivable prior to the Organic Change), without payment of additional consideration therefor, such securities, cash and other property as such holder would have received if such holder had converted such shares of Series A Preferred Stock into Common Stock immediately prior to such Organic Change. Lawful provision also shall be made as part of the terms of the Organic Change so that all other terms hereof shall remain in full force and effect following such an Organic Change. The provisions of this subsection (a) shall similarly apply to successive Organic Changes of the character described in this subsection (a). (b) Corporation Does Not Survive. The Corporation shall not enter into an Organic Change that is a transaction in which the Corporation is not the surviving entity unless lawful provision shall be made as part of the terms of such transaction whereby the surviving entity shall issue new securities (the "New Securities") to each holder of Series A Preferred Stock, without payment of any additional consideration by such holder, with terms that provide that upon the conversion of such New Securities, the holder of such New Securities shall have the right to acquire and receive (in lieu of or in addition to the shares of Common Stock acquirable and receivable prior to the Organic Change), without payment of additional consideration therefor, such securities, cash and other property as such holder would have received if such holder had converted such shares of Series A Preferred Stock into Common Stock immediately prior to such Organic Change. The certificate or articles of incorporation or other constituent document of the surviving entity shall provide for such adjustments which, for events subsequent to the effective date of such certificate or articles of incorporation or other constituent document, shall be equivalent to the adjustments provided for in Section B of this Article VIII. All other terms of such New Securities shall be substantially equivalent to the terms provided herein. The provisions of this subsection (b) shall similarly apply to successive Organic Changes of the character described in of this subsection (b). D. Certain Events. If any event similar to or of the type contemplated by the provisions of Section B or Section C of this Article VIII, but not expressly provided for by such provisions, occurs, then the Board of Directors of the Corporation will make an appropriate and equitable adjustment in the Conversion Price so as to protect the rights of the holders of Series A Preferred Stock in a manner determined in the good faith judgment of the Board of Directors to be substantially similar to the mechanisms provided herein; provided, however, that no such adjustment will decrease the number of shares of Common Stock issuable upon conversion of the Series A Preferred Stock. IX. Additional Definitions For the purposes of this Certificate of Designations of Series A Preferred Stock, the following terms shall have the meanings indicated: "Affiliate" has the meaning set forth in Rule 12b-2 under the Exchange Act as in effect on the date of the Restructuring Agreement. The term "Affiliated" has a correlative meaning. Notwithstanding the foregoing, for all purposes hereof, (i) the Investor and each Person Controlled by, Controlling or under common Control with the Investor (each, a "TPG Person") shall not be deemed an "Affiliate" of any Designated Purchaser Person (as defined below), and no Designated Purchaser, and no Person Controlled by, Controlling or under common Control with such Designated Purchaser (each, a "Designated Purchaser Person"), shall be deemed an "Affiliate" of any TPG Person or any other Designated Purchaser Person, in any such case solely as a consequence of the Restructuring Agreement or the transactions contemplated thereby and (ii) neither the Corporation nor any of its Subsidiaries shall be deemed a TPG Person or an "Affiliate" of any TPG Person. "Beneficially Own" with respect to any securities means having "beneficial ownership" of such securities (as determined pursuant to Rule 13d-3 under the Exchange Act as in effect on the date of the Restructuring Agreement, except that a Person shall be deemed to Beneficially Own all such securities that such Person has the right to acquire whether such right is exercisable immediately or after the passage of time). The terms "Beneficial Ownership" and "Beneficial Owner" have correlative meanings. Notwithstanding the foregoing, for all purposes hereof, no TPG Person shall be deemed to Beneficially Own any securities that are held by any Designated Purchaser Person, and no Designated Purchaser Person shall be deemed to Beneficially Own any securities that are held by any TPG Person or any other Designated Purchaser Person, in any such case solely as a consequence of the Restructuring Agreement or the transactions contemplated thereby. "Board Nominee" means a person designated for election to the Board of Directors by the Investor pursuant to the Restructuring Agreement. "Business Day" means any day, other than a Saturday, Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close. "By-laws" means the By-laws of the Corporation, as amended from time to time. "Change in Control" means (a) the failure by TPG Persons to own (and retain the right to vote), directly or indirectly, beneficially and of record, Equity Interests in the Corporation representing greater than 15% of each of the aggregate ordinary voting power and aggregate value represented by the issued and outstanding Equity Interests in the Corporation, (b) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date of the Restructuring Agreement), of Equity Interests representing a greater percentage of either the aggregate ordinary voting power or the aggregate value represented by the issued and outstanding Equity Interests of the Corporation then owned, directly or indirectly, beneficially and of record, by TPG Persons; or (c) occupation of a majority of the seats (other than vacant seats) on the Board of Directors of the Corporation by Persons who were neither (i) nominated by the Board of Directors of the Corporation nor (ii) appointed by directors so nominated. "Closing Date" has the meaning set forth in the Restructuring Agreement. "Closing Price" with respect to a share of Common Stock on any day means, subject to subsection (f) of Section B of Article VIII if applicable, the last reported sale price on that day or, in case no such reported sale takes place on such day, the average of the last reported bid and asked prices, regular way, on that day, in either case, as reported in the consolidated transaction reporting system with respect to securities listed on the NYSE or, if the shares of Common Stock are not listed on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock are not listed on the NYSE and not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices on such other nationally recognized quotation system then in use, or, if on any such day the shares of Common Stock are not quoted on any such quotation system, the average of the closing bid and asked prices as furnished by a professional market maker selected by the Board of Directors in good faith making a market in the shares of Common Stock. If the shares of Common Stock are not publicly held, or so listed, quoted or publicly traded, the "Closing Price" means the fair market value of a share of Common Stock, as determined in good faith by the Board of Directors. "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. The terms "Controlling" and "Controlled" have meanings correlative thereto. "Conversion Price" shall mean $2.25, as adjusted from time to time pursuant to Section B of Article VIII. "Conversion Shares" has the meaning set forth in the Restructuring Agreement. "Credit Agreement" has the meaning set forth in the Restructuring Agreement. "Derivative Securities" means any subscriptions, options, conversion rights, warrants, or other agreements, securities or commitments of any kind obligating the Corporation or any Person to issue, grant, deliver or sell, or cause to be issued, granted, delivered or sold, Common Stock. "Designated Purchaser" has the meaning set forth in the Restructuring Agreement. "Designated Purchaser Person" has the meaning set forth in the definition of "Affiliate." "Equity Interests" means, as to any Person, shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other interests of such Person that are denominated, or have substantially the characteristics of, equity interests. "Exchange Act" means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, from time to time. "GAAP" means generally accepted accounting principles in the United States of America. "Governmental Authority" means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body (including the NYSE), court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. "Group" has the meaning set forth in Rule 13d-5 under the Exchange Act. "Indenture" has the meaning set forth in the Restructuring Agreement. "Investor" has the meaning set forth in the Restructuring Agreement. "Investor Group" means, collectively, the Investor, the Designated Purchasers, if any, and the respective Affiliates of such Persons. "Law" means any law, treaty, statute, ordinance, code, rule, regulation, judgment, decree, order, writ, award, injunction or determination of any Governmental Authority. "Notes" has the meaning set forth in the Restructuring Agreement. "NYSE" means the New York Stock Exchange, Inc. "Organic Change" means, with respect to any Person, any transaction (including without limitation any recapitalization, capital reorganization or reclassification of any class of capital stock, any consolidation or amalgamation of such Person with, or merger of such Person into, any other Person, any merger of another Person into such Person (other than a merger which does not result in a reclassification, conversion, exchange or cancellation of outstanding shares of capital stock of such Person), any sale or transfer or lease of all or substantially all of the assets of such Person or any compulsory share exchange) pursuant to which any class of capital stock of such Person is converted into the right to receive other securities, cash or other property. "Person" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity. "Restructuring Agreement" means the Restructuring Agreement, dated as of November 13, 2001, between the Investor and the Corporation, as amended, supplemented or otherwise modified from time to time. "Securities Act" means the U.S. Securities Act of 1933, as amended. "Shareholder Approval" has the meaning set forth in the Restructuring Agreement. "Shareholder Approval Date" means the date, if any, on which the Corporation obtains the Shareholder Approval. "subsidiary" means, with respect to any Person (the "parent") at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. "Subsidiary" means any subsidiary of the Corporation. "TPG Person" has the meaning set forth in the definition of "Affiliate." "Trading Day" means any day on which the NYSE is open for trading, or if the shares of Common Stock are not listed on the NYSE any day on which the principal national securities exchange or national quotation system on which the shares of Common Stock are listed, admitted to trading or quoted is open for trading, or if the shares of Common Stock are not so listed, admitted to trading or quoted, any Business Day. X. Miscellaneous A. Notices. Any notice referred to herein shall be in writing and shall be deemed to have been duly given (and shall be effective when received), if delivered personally, by facsimile or sent by overnight courier or by first class mail, postage prepaid, as follows: (i) if to the Corporation, to its office at 501 Pearl Drive (City of O'Fallon), St. Peters, Missouri 63376 (Attention: General Counsel); (ii) if to a holder of the Series A Preferred Stock, to such holder at the address of such holder as listed in the stock record books of the Corporation (which may include the records of any transfer agent for the Series A Preferred Stock); or (iii) to such other address as the Corporation or such holder, as the case may be, shall have designated by notice similarly given. B. Reacquired Shares. Any shares of Series A Preferred Stock redeemed, purchased or otherwise acquired by the Corporation, directly or indirectly, in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof (and shall not be deemed to be outstanding for any purpose) and, if necessary to provide for the lawful redemption or purchase of such shares, the capital represented by such shares shall be reduced in accordance with the Delaware General Corporation Law. All such shares of Series A Preferred Stock shall upon their cancellation and upon the filing of an appropriate certificate with the Secretary of State of the State of Delaware, become authorized but unissued shares of Preferred Stock, $0.01 par value, of the Corporation and may be reissued as part of another series of Preferred Stock, $0.01 par value, of the Corporation subject to the conditions or restrictions on issuance set forth herein. C. Enforcement. Any registered holder of shares of Series A Preferred Stock may proceed to protect and enforce its rights and the rights of such holders by any available remedy by proceeding at law or in equity to protect and enforce any such rights, whether for the specific enforcement of any provision in this Certificate of Designations or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. D. Transfer Taxes. Except as otherwise agreed upon pursuant to the terms of this Certificate of Designations, the Corporation shall pay any and all documentary, stamp or similar issue or transfer taxes and other governmental charges that may be imposed under the laws of the United States of America or any political subdivision or taxing authority thereof or therein in respect of any issue or delivery of Common Stock on conversion, or other securities or property issued on account of, shares of Series A Preferred Stock pursuant hereto or certificates representing such shares or securities. The Corporation shall not, however, be required to pay any such tax or other charge that may be imposed in connection with any transfer involved in the issue or transfer and delivery of any certificate for Common Stock or other securities or property in a name other than that in which the shares of Series A Preferred Stock so converted, or on account of which such securities were issued, were registered and no such issue or delivery shall be made unless and until the Person requesting such issue has paid to the Corporation the amount of any such tax or has established to the satisfaction of the Corporation that such tax has been paid or is not payable. E. Transfer Agent. The Corporation may appoint, and from time to time discharge and change, a transfer agent for the Series A Preferred Stock. Upon any such appointment or discharge of a transfer agent, the Corporation shall send notice thereof by first-class mail, postage prepaid, to each holder of record of shares of Series A Preferred Stock. F. Record Dates. In the event that the Series A Preferred Stock shall be registered under either the Securities Act or the Exchange Act, the Corporation shall establish appropriate record dates with respect to payments and other actions to be made with respect to the Series A Preferred Stock. G. Subordination to Credit Agreement and the Notes. Notwithstanding anything to the contrary herein, by accepting a share of Series A Preferred Stock, the holder thereof shall be deemed to have acknowledged and agreed that (a) such holder's right to receive payments in respect of the Series A Preferred Stock is subject and subordinated in right of payment to the payment in full and discharge of all amounts of principal, interest and fees (however denominated) then outstanding under the Credit Agreement and the Notes and (b) until (i) either payment in full of all such amounts (however denominated) under the Credit Agreement and the Notes has been made in cash, or (ii) if earlier than such payment, all necessary waivers and consents have been obtained with respect to the relevant document as contemplated by the proviso to the last sentence of this Section G, no payment, whether directly or indirectly, by exercise of any right of set-off or otherwise in respect of the Series A Preferred Stock shall be made by the Corporation, and no deposit in respect of the Series A Preferred Stock shall be made pursuant to the terms hereof. In the event that any payment by, or distribution of the assets of, the Corporation of any kind or character (whether in cash, property or securities, whether directly or indirectly, by exercise of any right of set-off or otherwise and whether as a result of a bankruptcy proceeding with respect to the Corporation or otherwise) shall be received by a holder of Series A Preferred Stock at any time when such payment is prohibited by this Section G, such payment shall be held in trust for the benefit of, and shall be paid over to, the lenders under the Credit Agreement and the holders of Notes, as the case may be, as their interests may appear. The preceding two sentences address the relative rights of holders of Series A Preferred Stock, on the one hand, and the lenders under the Credit Agreement and the holders of Notes, as the case may be, on the other hand, and nothing in this Certificate of Designations shall impair, as between the Corporation and the holders of Series A Preferred Stock, the obligation of the Corporation, which is absolute and unconditional, to pay amounts due in respect of the Series A Preferred Stock in accordance with their terms. Without limiting the foregoing, upon a Change in Control, the Corporation shall pay all amounts outstanding under the Credit Agreement and the Indenture to the extent necessary, but only if permitted under the relevant document, in order to permit the payment of the Change in Control Price hereunder or, if such payment is not so permitted under any such document, the Corporation shall exercise any right of defeasance it has under such document (provided that all conditions precedent to the exercise of such right of defeasance have been satisfied, which conditions the Corporation shall use its reasonable best efforts to satisfy) to the extent necessary in order to permit the payment of the Change in Control Price hereunder; provided, that the Corporation shall not be required to make such payments or exercise such right of defeasance under the Credit Agreement or the Indenture if the Corporation has received all necessary waivers and consents from the applicable lenders or holders of Notes permitting the Corporation to pay the Change in Control Price hereunder. IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of the Corporation by its Chief Financial Officer and attested by its Secretary, this 13th day of November, 2001. MEMC ELECTRONIC MATERIALS, INC. By: /s/ James M. Stolze --------------------------------- Name: James M. Stolze Title: Executive Vice President Chief Financial Officer [Corporate Seal] ATTEST: - -------------------------------------------- EX-6 8 tbgex6.txt EXHIBIT 6 Form of Warrant Certificate Warrant Certificate NEITHER THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THE SECURITIES REPRESENTED HEREBY HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAW, AND SUCH SECURITIES MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS AS SET FORTH IN THE REGISTRATION RIGHTS AGREEMENT DATED AS OF NOVEMBER 13, 2001, BY AND AMONG TPG WAFER HOLDINGS LLC, MEMC ELECTRONIC MATERIALS, INC. (THE "CORPORATION") AND THE GUARANTORS IDENTIFIED THEREIN, THE TERMS OF WHICH ARE INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICE OF THE CORPORATION AND AT THE PRINCIPAL OFFICE OF THE WARRANT AGENT. No. W-[__] [________] Warrants WARRANTS Exercisable commencing on the Shareholder Approval Date (as defined herein); Void after Expiration Time (as defined herein) MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation (the "Corporation"), hereby certifies that, for value received, [___________], or registered assigns (the "Warrantholder"), is the owner of [__________] Warrants (as defined below), each of which entitles the Warrantholder to purchase from the Corporation, from and after the Shareholder Approval Date (as defined below), one share of common stock, par value $0.01 per share, of the Corporation (the "Common Stock"), at any time from and after the Shareholder Approval Date and continuing up to the Expiration Time at a per share exercise price determined according to the terms and subject to the conditions set forth in this certificate (the "Warrant Certificate"). The number of shares of Common Stock issuable upon exercise of each such Warrant and the exercise price per share of Common Stock are subject to adjustment from time to time pursuant to the provisions of Section 9 of this Warrant Certificate. The Warrants evidenced by this Warrant Certificate are part of a series of warrants to purchase, from and after the Shareholder Approval Date, up to 16,666,667 shares of Common Stock (collectively, the "Warrants"), issued pursuant to a Restructuring Agreement, dated as of November 13, 2001 (as it may be amended, supplemented or otherwise modified from time to time, the "Restructuring Agreement"), by and between TPG Wafer Holdings LLC, a Delaware limited liability company (the "Investor"), and the Corporation and are entitled to certain rights and privileges set forth therein. Section 1. Definitions. As used in this Warrant Certificate, the following terms shall have the meanings set forth below: "Board of Directors" means the board of directors of the Corporation. "Business Day" means any day, other than a Saturday, Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close. "Certificate of Incorporation" means the Restated Certificate of Incorporation of the Corporation, as amended from time to time. "Closing Price" with respect to a share of Common Stock on any day means, subject to Section 9.1(f), the last reported sale price on that day or, in case no such reported sale takes place on such day, the average of the last reported bid and asked prices, regular way, on that day, in either case, as reported in the consolidated transaction reporting system with respect to securities quoted on the NYSE or, if the shares of Common Stock are not quoted on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock are not quoted on the NYSE and not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices on such other nationally recognized quotation system then in use, or, if on any such day the shares of Common Stock are not quoted on any such quotation system, the average of the closing bid and asked prices as furnished by a professional market maker selected by the Board of Directors making a market in the shares of Common Stock. If the shares of Common Stock are not publicly held or so listed, quoted or publicly traded, the "Closing Price" means the fair market value of a share of Common Stock, as determined in good faith by the Board of Directors. "Code" means the Internal Revenue Code of 1986, as amended from time to time. "Common Stock" has the meaning set forth in the preamble hereto. "Corporation" has the meaning set forth in the preamble hereto. "Derivative Securities" means any subscriptions, options, conversion rights, warrants, or other agreements, securities or commitments of any kind obligating the Corporation to issue, grant, deliver or sell, or cause to be issued, granted, delivered or sold, Common Stock. "Equity Interests" means, as to any Person, shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other interests of such Person that are denominated, or have substantially the characteristics of, equity interests. "Exercise Price" has the meaning set forth in Section 8 hereof. "Expiration Date" means the tenth anniversary of the Issue Date. "Expiration Time" means 5:00 P.M., New York City time, on the Expiration Date. "Fractional Warrant Share" means any fraction of a whole share of Common Stock issued, or issuable upon, exercise of the Warrants. "GAAP" means generally accepted accounting principles in the United States of America. "Governmental Authority" means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body (including the NYSE), court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. "Indenture" means the Indenture by and among the Corporation, Citibank, N.A., as Trustee and Citicorp USA, Inc., as Collateral Agent, dated as of November 13, 2001, as amended, supplemented or otherwise modified from time to time. "Investor" has the meaning set forth in the preamble hereto. "Issue Date" means November 13, 2001. "New Price Per Share" has the meaning set forth in Section 9.1(c)(i) hereof. "New Securities" has the meaning set forth in Section 9.3(b) hereof. "NYSE" means the New York Stock Exchange, Inc. "Offer Time" has the meaning set forth in Section 9.1(e) hereof. "Organic Change" means, with respect to any Person, any transaction (including without limitation any recapitalization, capital reorganization or reclassification of any class of capital stock, any consolidation or amalgamation of such Person with, or merger of such Person into, any other Person, any merger of another Person into such Person (other than a merger which does not result in a reclassification, conversion, exchange or cancellation of outstanding shares of capital stock of such Person), any sale or transfer or lease of all or substantially all of the assets of such Person or any compulsory share exchange) pursuant to which any class of capital stock of such Person is converted into the right to receive other securities, cash or other property. "Notes" means the Senior Subordinated Secured Notes Due 2007 of the Corporation issued pursuant to the Indenture. "Person" means any natural person, corporation, limited liability company, trust, joint venture, association company, partnership, Governmental Authority or other entity. "Principal Amount" means, at a given time and with respect to a given Note, the outstanding principal amount of such Note (which such amount includes, for the sake of clarity, any interest that has been added to the principal amount of such Note pursuant to the terms thereof). "Purchased Shares" has the meaning set forth in Section 9.1(e) hereof. "Restructuring Agreement" has the meaning set forth in the preamble hereto. "Securities Act" means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. "Shareholder Approval" has the meaning assigned to such term in the Restructuring Agreement. "Shareholder Approval Date" means the date, if any, on which the Corporation obtains the Shareholder Approval. "subsidiary" means, with respect to any Person (the "parent") at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. "Subsidiary" means any subsidiary of the Corporation. "Trading Day" means any day on which the NYSE is open for trading, or if the shares of Common Stock are not listed on the NYSE any day on which the principal national securities exchange or national quotation system on which the shares of Common Stock are listed, admitted to trading or quoted is open for trading, or if the shares of Common Stock are not so listed, admitted to trading or quoted, any Business Day. "Warrant" has the meaning set forth in the preamble hereto. "Warrant Agent" means the Person named or otherwise appointed as such as set forth in Section 10 hereof. "Warrant Certificate" has the meaning in the preamble hereto. "Warrant Market Price" means the average of the Closing Prices of a share of Common Stock for the five consecutive Trading Days ending on the Trading Day immediately prior to the day on which the Election to Exercise is delivered. "Warrant Register" has the meaning set forth in Section 2.2 hereof. "Warrant Shares" means the shares of Common Stock, in each case, issued, or issuable upon, exercise of the Warrants. "Warrantholder" has the meaning set forth in the preamble hereto. Section 2. Transferability. 2.1. Registration. The Warrants shall be issued only in registered form. 2.2. Transfer. The Warrants evidenced by this Warrant Certificate may be sold or otherwise transferred at any time (except as such sale or transfer may be restricted pursuant to the Securities Act or any applicable state securities laws) and any such sale or transfer shall be effected on the books (the "Warrant Register") maintained by the Warrant Agent, at is corporate trust office, upon surrender of this Warrant Certificate for registration of transfer duly endorsed by the Warrantholder or by its duly authorized attorney or representative, or accompanied by proper evidence of succession, assignment or authority to transfer. Upon any registration of transfer, the Corporation shall execute and deliver, and the Warrant Agent shall countersign, a new Warrant Certificate or Certificates in appropriate denominations to the Person or Persons entitled thereto. 2.3. Legend on Warrant Shares. If and for so long as required by the Restructuring Agreement, this Warrant Certificate shall contain a legend as set forth in Section 7.08 of the Restructuring Agreement. Section 3. Exchange of Warrant Certificate. Any Warrant Certificate may be exchanged for another certificate or certificates of like tenor entitling the Warrantholder to purchase a like aggregate number of Warrant Shares as the certificate or certificates surrendered then entitles such Warrantholder to purchase. Any Warrantholder desiring to exchange a Warrant certificate shall make such request in writing delivered to the Corporation, and shall surrender, properly endorsed, the certificate evidencing the Warrant to be so exchanged. Thereupon, the Corporation shall execute and deliver to the Person entitled thereto a new Warrant certificate or certificates as so requested. Section 4. Term of Warrants; Exercise of Warrants. 4.1. Duration of Warrant. On the terms and subject to the conditions set forth in this Warrant Certificate, the Warrantholder may exercise the Warrants evidenced hereby, in whole or in part, at any time and from time to time after from and after the Shareholder Approval Date and before the Expiration Time. If the Warrants evidenced hereby are not exercised by the Expiration Time, they shall become void, and all rights hereunder shall thereupon cease. 4.2. Exercise of Warrant. (a) On the terms and subject to the conditions set forth in this Warrant Certificate, the Warrantholder may exercise the Warrants evidenced hereby, in whole or in part, by presentation and surrender to the Warrant Agent of this Warrant Certificate together with the attached Election to Exercise duly filled in and signed, and accompanied by payment to the Corporation of the Exercise Price for the number of Warrant Shares specified in such Election to Exercise. Payment of the aggregate Exercise Price shall be made (i) in cash in an amount equal to the aggregate Exercise Price; (ii) by certified or official bank check in an amount equal to the aggregate Exercise Price; (iii) by an exchange (which shall be treated as a recapitalization under section 368(a) of the Code) with the Corporation of Notes having an aggregate Principal Amount equal to the aggregate Exercise Price; (iv) by an exchange (which shall be treated as a recapitalization under section 368(a) of the Code) with the Corporation of outstanding Warrants (other than the Warrants being exercised) having an aggregate Warrant Market Price which, after subtracting the aggregate Exercise Prices thereof, equals the aggregate Exercise Price of the Warrants being exercised; or (v) by any combination of the foregoing. (b) On the terms and subject to the conditions set forth in this Warrant Certificate, upon such presentation and surrender of this Warrant Certificate and payment of such aggregate Exercise Price as set forth in paragraph (a) hereof, the Corporation shall promptly issue and cause to be delivered to the Warrantholder, or to such Persons as the Warrantholder may designate in writing a certificate or certificates (in such name or names as the Warrantholder may designate in writing) for the specified number of duly authorized, fully paid and non-assessable Warrant Shares issuable upon exercise, and shall deliver to the Warrantholder cash, as provided in Section 11 hereof, with respect to any Fractional Warrant Shares otherwise issuable upon such surrender. In the event that the Warrants evidenced by this Warrant Certificate are exercised in part prior to the Expiration Time, the Corporation shall issue and cause to be delivered to the Warrantholder, or to such Persons as the Warrantholder may designate in writing, a certificate or certificates (in such name or names as the Warrantholder may designate in writing) evidencing any remaining unexercised Warrants. (c) Each Person in whose name any certificate for Warrant Shares is issued shall for all purposes be deemed to have become the holder of record of the Warrant Shares represented thereby on the first date on which both the Warrant certificate evidencing the respective Warrants was surrendered and payment of the Exercise Price and any applicable taxes was made, irrespective of date of issue or delivery of such certificate. Section 5. Payment of Taxes. The Corporation shall pay any and all documentary, stamp or similar issue or transfer taxes and other governmental charges that may be imposed under the laws of the United States of America or any political subdivision or taxing authority thereof or therein in respect of any issue or delivery of Warrant Shares or of other securities or property deliverable upon exercise of the Warrants evidenced by this Warrant Certificate or certificates representing such shares or securities (other than income taxes imposed on the Warrantholder); provided that the Corporation shall not be required to pay any such tax or other charge that may be imposed in connection with any transfer involved in the issue of any certificate for Warrant Shares or other securities or property, or payment of cash, to any Person other than the holder of the Warrant certificate surrendered upon exercise, and in case of any such tax or charge, the Warrant Agent and the Corporation shall not be required to issue any security or property or pay any cash until such tax or charge has been paid or it has been established to the Warrant Agent's and the Corporation's satisfaction that no such tax or charge is payable. Section 6. Mutilated or Missing Warrant. If any Warrant certificate is lost, stolen, mutilated or destroyed, the Corporation shall issue and the Warrant Agent shall countersign, in exchange and substitution for and upon cancellation of the mutilated Warrant certificate, or in lieu of and substitution for the Warrant certificate lost, stolen or destroyed, upon receipt of a proper affidavit or other evidence reasonably satisfactory to the Corporation and the Warrant Agent (and surrender of any mutilated Warrant certificate) and bond of indemnity in form and amount and with corporate surety reasonably satisfactory to the Corporation and the Warrant Agent in each instance protecting the Corporation and the Warrant Agent, a new Warrant certificate of like tenor and representing an equivalent number of Warrants as the Warrant certificate so lost, stolen, mutilated or destroyed. Any such new Warrant certificate shall constitute an original contractual obligation of the Corporation, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant certificate shall be at any time enforceable by anyone. An applicant for such substitute Warrant certificate shall also comply with such other reasonable regulations and pay such other reasonable charges as the Corporation or the Warrant Agent may prescribe. All Warrant certificates shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement of lost, stolen, mutilated or destroyed Warrant certificates, and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement of negotiable instruments or other securities without their surrender. Section 7. Reservation of Shares. The Corporation hereby agrees that there shall be reserved for issuance and delivery upon exercise of this Warrant, free from preemptive rights, the number of shares of authorized but unissued shares of Common Stock as may in the future or shall at any time be required for issuance or delivery upon exercise of the Warrants evidenced by this Warrant Certificate. The Corporation further agrees that it will not, by amendment of its Certificate of Incorporation or through reorganization, consolidation, merger, dissolution or sale of assets, or by any other voluntary act, avoid or seek to avoid the observance or performance of any of the covenants, stipulations or conditions to be observed or performed hereunder by the Corporation. Without limiting the generality of the foregoing, the Corporation agrees that before taking any action which would cause an adjustment reducing the Exercise Price below the then-par value of Warrant Shares issuable upon exercise hereof, the Corporation shall from time to time take all such action that may be necessary in order that the Corporation may validly and legally issue fully paid and nonassessable Warrant Shares at the Exercise Price as so adjusted. Section 8. Exercise Price. The price per share (the "Exercise Price") at which Warrant Shares shall be purchasable upon the exercise of the Warrants evidenced by this Warrant Certificate shall be $3.00, subject to adjustment pursuant to Section 9 hereof. Section 9. Adjustment of Exercise Price and Number of Shares. The number and kind of securities purchasable upon the exercise of the Warrants evidenced by this Warrant Certificate and the Exercise Price thereof shall be subject to adjustment from time to time after the date hereof upon the happening of certain events, as follows: 9.1. Adjustments to Exercise Price. The Exercise Price shall be subject to adjustment as follows: (a) Stock Dividends. In case the Corporation after the date hereof shall pay a dividend or make a distribution to all holders of shares of Common Stock in shares of Common Stock, then in any such case the Exercise Price in effect at the opening of business on the day following the record date for the determination of stockholders entitled to receive such dividend or distribution shall be reduced to a price obtained by multiplying such Exercise Price by a fraction of which (x) the numerator shall be the number of shares of Common Stock outstanding at the close of business on such record date and (y) the denominator shall be the sum of such number of shares of Common Stock outstanding and the total number of shares of Common Stock constituting such dividend or distribution, such reduction to become effective immediately after the opening of business on the day following such record date. For purposes of this subsection (a), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Corporation but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. The Corporation will not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Corporation. (b) Stock Splits and Reverse Splits. In case after the date hereof outstanding shares of Common Stock shall be subdivided into a greater number of shares of Common Stock, the Exercise Price in effect at the opening of business on the day following the day upon which such subdivision becomes effective shall be proportionately reduced, and, conversely, in case after the date hereof outstanding shares of Common Stock shall be combined into a smaller number of shares of Common Stock, the Exercise Price in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately increased, such reduction or increase, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision or combination becomes effective. (c) Issuances Below Exercise Price. (i) If the Corporation after the date hereof issues Common Stock without consideration or at a price per share (such no consideration or price per share, the "New Price Per Share") less than the Exercise Price in effect immediately preceding such issuance of Common Stock, then the Exercise Price shall be adjusted effective immediately following such issuance of Common Stock to the New Price Per Share; provided, however, that no adjustment shall be made if such Common Stock is issued to holders of Common Stock and the Corporation issues or distributes to each Warrantholder the Common Stock that each such Warrantholder would have been entitled to receive had the Warrants held by such Warrantholder been converted prior to such issuance of such Common Stock. (ii) If the Corporation after the date hereof issues Derivative Securities entitling Persons to subscribe for or acquire shares of Common Stock, in each case at a New Price Per Share for such Common Stock less than the Exercise Price in effect immediately preceding such issuance of Derivative Securities, then the Exercise Price shall be adjusted effective immediately following such issuance of Derivative Securities to a price equal to the New Price Per Share; provided, however, that no adjustment shall be made if such Derivative Securities are issued to holders of Common Stock and the Corporation issues or distributes to each Warrantholder the Derivative Securities that each such Warrantholder would have been entitled to receive had the Warrants held by such Warrantholder been converted prior to such issuance of Derivative Securities. Rights or warrants issued by the Corporation to all holders of Common Stock entitling the holders thereof to subscribe for or purchase Equity Interests, which rights or warrants (A) are deemed to be transferred with such shares of Common Stock, (B) are not exercisable and (C) are also issued in respect of future issuances of Common Stock, including shares of Common Stock issued upon exercise of the Warrants evidenced by this Warrant Certificate, in each case in clauses (A) through (C) until the occurrence of a specified event or events (a "Trigger Event"), shall for purposes of this subsection (c)(ii) not be deemed issued until the occurrence of the earliest Trigger Event. (iii) If (A) the exercise price provided for in any Derivative Securities referred to in subsection (c)(ii) above, (B) the additional consideration, if any, payable upon the conversion or exchange of any Derivative Securities referred to in subsection (c)(ii) above or (C) the rate at which any such Derivative Securities referred to in subsection (c)(ii) above are convertible into or exchangeable for Common Stock shall change at any time (other than under or by reason of provisions designed to protect against dilution upon an event which results in a related adjustment pursuant to this Article VIII), the Exercise Price then in effect shall forthwith be readjusted (effective only with respect to the exercise of Warrants after such readjustment) to the Exercise Price that would then be in effect had the adjustment made upon the issuance, sale, distribution or granting of such Derivative Securities been made based upon such changed purchase price, additional consideration or conversion rate, as the case may be, but only with respect to such Derivative Securities as then remain outstanding. (d) Special Dividends. In case the Corporation after the date hereof shall distribute to all holders of shares of Common Stock evidences of its indebtedness or assets (excluding any regular periodic cash dividend but including any extraordinary cash dividend), Equity Interests (other than Common Stock) or rights to subscribe (excluding those referred to in subsection (c) above) for Equity Interests other than Common Stock, in each such case the Exercise Price in effect immediately prior to the close of business on the record date for the determination of stockholders entitled to receive such distribution shall be adjusted to a price obtained by multiplying such Exercise Price by a fraction of which (x) the numerator shall be the Closing Price per share of Common Stock on such record date, less the then-current fair market value as of such record date (as determined by the Board of Directors in its good faith judgment) of the portion of assets or evidences of indebtedness or Equity Interests or subscription rights so distributed applicable to one share of Common Stock, and (y) the denominator shall be such Closing Price, such adjustment to become effective immediately prior to the opening of business on the day following such record date; provided, however, that no adjustment shall be made (1) if the Corporation issues or distributes to each Warrantholder the subscription rights referred to above that each Warrantholder would have been entitled to receive had the Warrants held by such Warrantholder been exercised prior to such record date or (2) if the Corporation grants to each Warrantholder the right to receive, upon the exercise of the Warrants held by such Warrantholder at any time after the distribution of the evidences of indebtedness or assets or Equity Interests referred to above, the evidences of indebtedness or assets or Equity Interests that such Warrantholder would have been entitled to receive had such Warrants been exercised prior to such record date. The Corporation shall provide any Warrantholder, upon receipt of a written request therefor, with any indenture or other instrument defining the rights of the holders of any indebtedness, assets, subscription rights or Equity Interests referred to in this subsection (d). Rights or warrants issued by the Corporation to all holders of Common Stock entitling the holders thereof to subscribe for or purchase Equity Interests, which rights or warrants (i) are deemed to be transferred with such shares of Common Stock, (ii) are not exercisable and (iii) are also issued in respect of future issuances of Common Stock, including shares of Common Stock issued upon exercise of the Warrants evidenced by this Warrant Certificate, in each case in clauses (i) through (iii) until the occurrence of a Trigger Event, shall for purposes of this subsection (d) not be deemed issued until the occurrence of the earliest Trigger Event. (e) Tender or Exchange Offer. In case a tender or exchange offer made by the Corporation or any Subsidiary for all or any portion of the Common Stock shall be consummated and such tender offer shall involve an aggregate consideration having a fair market value (as determined by the Board of Directors in its good faith judgment) at the last time (the "Offer Time") tenders may be made pursuant to such tender or exchange offer (as it may be amended) that, together with the aggregate of the cash plus the fair market value (as determined by the Board of Directors in its good faith judgment), as of the Offer Time, of consideration payable in respect of any tender or exchange offer by the Corporation or any such Subsidiary for all or any portion of the Common Stock consummated preceding the Offer Time and in respect of which no Exercise Price adjustment pursuant to this subsection (e) has been made, exceeds 5% of the product of the Closing Price of the Common Stock at the Offer Time multiplied by the number of shares of Common Stock outstanding (including any tendered shares) at the Offer Time, the Exercise Price shall be reduced so that the same shall equal the price determined by multiplying the Exercise Price in effect immediately prior to the Offer Time by a fraction of which (x) the numerator shall be (i) the product of the Closing Price of the Common Stock at the Offer Time multiplied by the number of shares of Common Stock outstanding (including any tendered shares) at the Offer Time minus (ii) the fair market value (determined as aforesaid) of the aggregate consideration payable to stockholders based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of all shares validly tendered and not withdrawn as of the Offer Time (the shares deemed so accepted, up to any such maximum, being referred to as the "Purchased Shares") and (y) the denominator shall be the product of (i) such Closing Price at the Offer Time multiplied by (ii) such number of outstanding shares at the Offer Time minus the number of Purchased Shares, such reduction to become effective immediately prior to the opening of business on the day following the Offer Time. For purposes of this subsection (e), the number of shares of Common Stock at any time outstanding shall not include shares held in the treasury of the Corporation but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. (f) Closing Price Determination. For the purpose of any computation under subsection (d) of this Section 9.1, the Closing Price of Common Stock on any date shall be deemed to be the average of the Closing Prices for the five consecutive Trading Days ending on the day in question (or if such day is not a Trading Day, the next preceding Trading Day), provided, however, that (i) if the "ex" date for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the Exercise Price pursuant to this Section 9 occurs on or after the 20th Trading Day prior to the day in question and prior to the "ex" date for the issuance or distribution requiring such computation, the Closing Price for each Trading Day prior to the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the same fraction which the Exercise Price is so required to be adjusted as a result of such other event, (ii) if the "ex" date for any event (other than the issuance or distribution requiring such computation) that requires an adjustment to the Exercise Price pursuant to this Section 9 occurs on or after the "ex" date for the issuance or distribution requiring such computation and on or prior to the day in question, the Closing Price for each Trading Day on and after the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the reciprocal of the fraction by which the Exercise Price is so required to be adjusted as a result of such other event, and (iii) if the "ex" date for the issuance or distribution requiring such computation is on or prior to the day in question, after taking into account any adjustment required pursuant to clause (ii) of this proviso, the Closing Price for each Trading Day on or after such "ex" date shall be adjusted by adding thereto the fair market value on the day in question (as determined by the Board of Directors in a manner consistent with any determination of such value for the purposes of subsection (d) of this Section 9.1) of the assets, evidences of indebtedness, Equity Interests or subscription rights being distributed applicable to one share of Common Stock as of the close of business on the day before such "ex" date. For the purposes of any computation under subsection (e) of this Section 9.1, the Closing Price on any date shall be deemed to be the average of the daily Closing Prices for the five consecutive Trading Days ending at the Offer Time; provided, however, that if the "ex" date for any event (other than the tender or exchange offer requiring such computation) that requires an adjustment to the Exercise Price pursuant to this Section 9 occurs on or after the date of commencement of such tender or exchange offer and prior to the Offer Time for the tender or exchange offer, the Closing Price for each Trading Day prior to the "ex" date for such other event shall be adjusted by multiplying such Closing Price by the same fraction by which the Exercise Price is so required to be adjusted as a result of such other event. For purposes of this subsection (f), the term "ex" date, (i) when used with respect to any issuance or distribution, means the first date on which the Common Stock trades regular way on the NYSE or on the relevant exchange or in the relevant market from which the Closing Price was obtained without the right to receive such issuance or distribution, (ii) when used with respect to any subdivision or combination of shares of Common Stock, means the first date on which the Common Stock trades regular way on the NYSE or such exchange or in such market after the time at which such subdivision or combination becomes effective, and (iii) when used with respect to any tender or exchange offer means the first date on which the Common Stock trades regular way on the NYSE or such exchange or in such market after the Offer Time of such tender or exchange offer. (g) Other Adjustments. The Corporation may, but shall not be required to, make such reductions in the Exercise Price, in addition to those required by subsections (a), (b), (c), (d) and (e) of this Section 9.1, as it considers to be advisable, including without limitation in order to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock resulting from any dividend or distribution of stock, from any event treated as such for income tax purposes, from any subdivision, reclassification or combination of stock, from any issuance of rights or warrants or from any other transaction having an effect similar to any of the above. Whenever the Exercise Price is reduced pursuant to the preceding sentence, the Corporation shall cause to be filed with the Warrant Agent and shall cause to be mailed to the Warrantholders, at their last addresses as they shall appear upon the Warrant Register, a notice of the reduction at least 15 days prior to the date the reduced Exercise Price takes effect, and such notice shall state the reduced Exercise Price and the period it will be in effect. (h) Minimum Adjustment Requirement. No adjustment shall be required unless such adjustment would result in an increase or decrease of at least $0.01 in the Exercise Price then subject to adjustment; provided, however, that any adjustments that are not made by reason of this subsection (h) shall be carried forward and taken into account in any subsequent adjustment. In case the Corporation shall at any time issue shares of Common Stock by way of dividend on any stock of the Corporation or subdivide or combine the outstanding shares of Common Stock, said amount of $0.01 specified in the preceding sentence (as theretofore increased or decreased, if said amount shall have been adjusted in accordance with the provisions of this subsection (h)) shall forthwith be proportionately increased in the case of such a combination or decreased in the case of such a subdivision or stock dividend so as appropriately to reflect the same. (i) Minimum Permissible Exercise Price. Notwithstanding any other provision of this Section B, no adjustment to the Exercise Price shall reduce the Exercise Price below $0.01, and any such purported adjustment shall instead reduce the Exercise Price to $0.01. The Corporation hereby covenants not to take any action that would or does result in any adjustment in the Exercise Price that, if made without giving effect to the previous sentence, would cause the Exercise Price to be less than $0.01. (j) Certificate. Whenever an adjustment in the Exercise Price is made as required or permitted by the provisions of this Section 9.1, the Corporation shall promptly file with the Warrant Agent a certificate of its chief financial officer setting forth (A) the adjusted Exercise Price as provided in this Section 9.1 and a brief statement of the facts requiring such adjustment and the computation thereof and (B) the number of shares of Common Stock (or portions thereof) purchasable upon exercise of a Warrant after such adjustment in the Exercise Price in accordance with Section 9.2 hereof and the record date therefor, and promptly after such filing shall mail or cause to be mailed a notice of such adjustment to each Warrantholder at his or her last address as the same appears on the Warrant Register. Such certificate, in the absence of manifest error, shall be conclusive and final evidence of the correctness of such adjustment. The Warrant Agent shall be entitled to rely upon such certificate, and shall be under no duty or responsibility with respect to any such certificate except to exhibit the same to any Warrantholder desiring inspection thereof. (k) Notice. In case: (i) the Corporation shall declare any dividend or any distribution of any kind or character (whether in cash, securities or other property) on or in respect of shares of Common Stock or to the stockholders of the Corporation (in their capacity as such), excluding any regular periodic cash dividend paid out of current or retained earnings (as such terms are used in generally accepted accounting principles); or (ii) the Corporation shall authorize the granting to the holders of shares of Common Stock of rights to subscribe for or purchase any shares of capital stock or of any other right; or (iii) of any reclassification of shares of Common Stock (other than a subdivision or combination of outstanding shares of Common Stock), or of any consolidation or merger to which the Corporation is a party and for which approval of any stockholders of the Corporation is required, or of the sale or transfer of all or substantially all of the assets of the Corporation; or (iv) of the voluntary or involuntary dissolution, liquidation or winding up of the Corporation; then the Corporation shall cause to be filed with the Warrant Agent and shall cause to be mailed to the Warrantholders, at their last addresses as they shall appear upon the Warrant Register, at least 30 days prior to the applicable record date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution or rights or, if a record is not to be taken, the date as of which the holders of shares of Common Stock of record to be entitled to such dividend, distribution or rights are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up is expected to become effective, and, if applicable, the date as of which it is expected that holders of shares of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property (including cash) deliverable upon such reclassification, consolidation, merger, sale, transfer, dissolution, liquidation or winding up. Failure to give any such notice, or any defect therein, shall not affect the validity of the proceedings referred to in clauses (i), (ii), (iii) and (iv) above. (l) No Adjustment. Anything to the contrary herein notwithstanding, no adjustment to the Exercise Price or the number of shares of Common Stock purchasable upon exercise of a Warrant shall be made pursuant to this Section 9.1 or Section 9.2 as a result of, or in connection with, the issuance of Common Stock or Derivative Securities (i) issued to directors or employees of the Corporation or its Subsidiaries pursuant to an existing or future stock option, stock bonus, stock purchase or other similar plan adopted by the Board of Directors, an employment agreement approved by the Board of Directors, or the modification, renewal or extension of any such plan or agreement if approved by the Board of Directors or (ii) upon exercise, conversion or exchange of any Derivative Securities whether or not the issuance of which caused an adjustment hereunder. 9.2. Adjustment to Number of Warrant Shares. Upon each adjustment of the Exercise Price pursuant to Section 9.1 hereof the number of Warrant Shares purchasable upon exercise of a Warrant outstanding prior to the effectiveness of such adjustment shall be adjusted to the number, calculated to the nearest one-hundredth of a Warrant Share, obtained by (x) multiplying the number of Warrant Shares purchasable immediately prior to such adjustment upon the exercise of a Warrant by the Exercise Price in effect prior to such adjustment and (y) dividing the product so obtained by the Exercise Price in effect after such adjustment of the Exercise Price. 9.3. Organic Change. (a) Corporation Survives. Upon the consummation of an Organic Change (other than a transaction in which the Corporation is not the surviving entity), lawful provision shall be made as part of the terms of such transaction whereby the terms of the Warrant Certificates shall be modified, without payment of any additional consideration by the Warrantholders, so as to provide that upon exercise of Warrants following the consummation of such Organic Change, the Warrantholders of such Warrants shall have the right to purchase (in lieu of or in addition to the Warrant Shares purchasable prior to the Organic Change), without payment of additional consideration therefore, such securities, cash and other property receivable upon such Organic Change by a holder of the number of Warrant Shares into which such Warrants might have been exercised immediately prior to such Organic Change. Lawful provision also shall be made as part of the terms of the Organic Change so that all other terms of the Warrant Certificates shall remain in full force and effect following such an Organic Change. The provisions of this subsection (a) shall similarly apply to successive Organic Changes of the character described in this subsection (a). (b) Corporation Does Not Survive. The Corporation shall not enter into an Organic Change that is a transaction in which the Corporation is not the surviving entity unless lawful provision shall be made as part of the terms of such transaction whereby the surviving entity shall issue new securities (the "New Securities") to each Warrantholder, without payment of any additional consideration by the Warrantholders, with terms that provide that upon the exercise of such New Securities, the holder of such New Securities shall have the right to purchase (in lieu of or in addition to the Warrant Shares purchasable prior to the Organic Change), without payment of additional consideration therefore, such securities, cash and other property receivable upon such Organic Change by a holder of the number of Warrant Shares into which such holder's Warrants might have been exercised immediately prior to such Organic Change. The certificate or articles of incorporation or other constituent document of the surviving entity shall provide for such adjustments which, for events subsequent to the effective date of such certificate or articles of incorporation or other constituent document, shall be equivalent to the adjustments provided for in Section 9.1 hereof. All other terms of such New Securities shall be substantially equivalent to the terms provided herein. The provisions of this subsection (b) shall similarly apply to successive Organic Changes of the character described in this subsection (b). 9.4. Statement on Warrants. The form of Warrant Certificate need not be changed because of any adjustment made pursuant to Section 9.1 or Section 9.2 hereof, and Warrants issued after such adjustment may state the same Exercise Price and the same number of Warrant Shares as are stated in this Warrant Certificate. 9.5. Certain Events. If any event similar to or of the type contemplated by the provisions of Section 9.1 or 9.3, but not expressly provided for by such provisions, occurs, then the Board of Directors of the Corporation will make an appropriate and equitable adjustment in the Exercise Price and the number of Warrant Shares purchasable upon exercise of a Warrant so as to protect the rights of the Warrantholders in a manner determined in the good faith judgment of the Board of Directors to be substantially similar to the mechanisms provided herein; provided, however, that no such adjustment will increase the Exercise Price or decrease the number of Warrant Shares purchasable upon exercise of the Warrants. Section 10. Warrant Agent. On the date of issuance of the Warrants, the Corporation shall cause to be appointed in the Borough of Manhattan, The City of New York, a Warrant Agent, having a capital and surplus of at least $50,000,000. Section 11. Fractional Interests. The Corporation shall not be required to issue Fractional Warrant Shares on the exercise of the Warrants evidenced by this Warrant Certificate. If any Fractional Warrant Share would, but for the provisions of this Section 11, be issuable on the exercise of the Warrants evidenced by this Warrant Certificate (or specified portions thereof), the Corporation shall pay an amount in cash equal to the fraction of a Warrant Share represented by such Fractional Warrant Share multiplied by the Closing Price on the day of such exercise. Section 12. Notice of Shareholder Approval Date. When and if the Shareholder Approval Date shall occur, the Corporation shall promptly file with the Warrant Agent a certificate to such effect, and promptly after such filing shall mail or cause to be mailed a notice of such occurrence to each Warrantholder at his or her last address as the same appears on the Warrant Register. Section 13. No Rights as Shareholder. Nothing in this Warrant Certificate shall be construed as conferring upon the Warrantholder or its transferees any rights as a shareholder of the Corporation, including the right to vote, receive dividends, consent or receive notices as a shareholder with respect to any meeting of shareholders for the election of directors of the Corporation or any other matter. Section 14. Successors. All the covenants and provisions of this Warrant Certificate by or for the benefit of the Corporation or the Warrantholder shall bind and inure to the benefit of their respective successors and permitted assigns hereunder. Section 15. Governing Law; Choice of Forum, Etc. The validity, construction and performance of this Warrant Certificate shall be governed by, and interpreted in accordance with, the laws of New York without reference to its conflict of laws rules. The parties hereto agree that the appropriate and exclusive forum for any disputes arising out of this Warrant Certificate solely between or among any or all of the Corporation, on the one hand, and the Investor and/or any Person who has become a Warrantholder, on the other, shall be the United States District Court for the Southern District of New York, and, if such court will not hear any such suit, the courts of the state of the Corporation's incorporation, and the parties hereto irrevocably consent to the exclusive jurisdiction of such courts, and agree to comply with all requirements necessary to give such courts jurisdiction. The parties hereto further agree that the parties will not bring suit with respect to any disputes, except as expressly set forth below, arising out of this Warrant Certificate for the execution or enforcement of judgment, in any jurisdiction other than the above specified courts. Each of the parties hereto irrevocably consents to the service of process in any action or proceeding hereunder by the mailing of copies thereof by registered or certified airmail, postage prepaid, if to (i) the Corporation, at 501 Pearl Drive (City of O'Fallon), St. Peters, Missouri 63376, Attention: General Counsel, or at such other address specified by the Corporation in writing to the Warrant Agent, and (ii) any Warrantholder, at the address of such Warrantholder specified in the Warrant Register. The foregoing shall not limit the rights of any party hereto to serve process in any other manner permitted by the law or to obtain execution of judgment in any other jurisdiction. The parties further agree, to the extent permitted by law, that final and unappealable judgment against any of them in any action or proceeding contemplated above shall be conclusive and may be enforced in any other jurisdiction within or outside the United States by suit on the judgment, a certified or exemplified copy of which shall be conclusive evidence of the fact and the amount of indebtedness. The parties agree to waive any and all rights that they may have to a jury trial with respect to disputes arising out of this Agreement. Section 16. Benefits of this Agreement. Nothing in this Warrant Certificate shall be construed to give to any Person other than the Corporation and the Warrantholder any legal or equitable right, remedy or claim under this Warrant Certificate, and this Warrant Certificate shall be for the sole and exclusive benefit of the Corporation and the Warrantholder. IN WITNESS WHEREOF, the Corporation has caused this Warrant Certificate to be duly executed, as of this ___ day of November, 2001. MEMC ELECTRONIC MATERIALS, INC. By: --------------------------------- Name: Title: Countersigned: Citibank, N.A., as Warrant Agent By: --------------------------------- Name: Title: ELECTION TO EXERCISE (To be executed upon exercise of Warrants) To MEMC ELECTRONIC MATERIALS, INC.: The undersigned hereby irrevocably elects to exercise the right of purchase represented by the within Warrant Certificate for, and to purchase thereunder, Warrant Shares, as provided for therein, and tenders herewith payment of the purchase price in full in the form of [COMPLETE WHERE APPLICABLE]: o cash or a certified or official bank check in the amount of $ __________ ; and/or o $ Principal Amount of Notes, of which $____________ Principal Amount should be applied toward the payment of such Warrant Shares; and/or o number of Warrants, valued at $ each (such value arrived at by subtracting the Exercise Price of $ from the Warrant Market Price of $ , both the Exercise Price and Warrant Market Price determined in accordance with the provisions of the Warrant Certificate); For a total purchase price of $ ______________. If the Principal Amount of the Notes or the value of the Warrants evidenced by the Warrant Certificate delivered herewith exceeds that portion of the payment which is to be paid by the surrender of such shares or Warrants, you are authorized, as agent of the undersigned, to deliver to the Corporation such Notes or Warrant Certificate delivered herewith for exchange into smaller denominations in order that you may deliver to the undersigned new Notes or Warrant Certificates, in Principal Amount or number as the case may be, equal to the difference between the Principal Amount or number as the case may be, of the Notes or Warrants surrendered, less the Principal Amount or number as the case may be, thereof, used to purchase Warrant Shares. Please issue a certificate or certificates for such Warrant Shares in the name of, and pay any cash for any Fractional Warrant Shares to (please print name address and social security or other identifying number)* : Name: ------------------------------------ Address: --------------------------------- Soc. Sec. #: ----------------------------- AND, if said number of Warrant Shares shall not be all the shares purchasable under the within Warrant Certificate, a new Warrant Certificate is to be issued in the name of the undersigned for the balance remaining of the Warrant Shares purchasable thereunder rounded up to the next higher whole number of Warrant Shares. Signature:** ------------------- - ----------- * The Warrant Certificate and the Restructuring Agreement contain restrictions on the sale and other transfer of the Warrants evidenced by such Warrant Certificate. ** The above signature should correspond exactly with the name on the face of this Warrant Certificate or with the name of the assignee appearing in the assignment form below.* ASSIGNMENT FORM (To be signed only upon assignment of Warrant) FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Name and Address of Assignee must be Printed or Typewritten) Warrants to purchase ______ Warrant Shares of the Corporation, evidenced by the within Warrant Certificate hereby irrevocably constituting and appointing _________________ Attorney to transfer said Warrants on the books of the Corporation, with full power of substitution in the premises. The Assignee's social security or tax identification number is _____________________. Dated: _____________, ____ -------------------------------------- Signature of Registered Holder* - ------------ * The above signature should correspond exactly with the name on the face of this Warrant Certificate. EX-7 9 tbgex7.txt EXHIBIT 7 EXECUTION COPY ================================================================================ MEMC ELECTRONIC MATERIALS, INC. Senior Subordinated Secured Notes Due 2007 ------------------------- INDENTURE Dated as of November 13, 2001 ------------------------- CITIBANK, N.A., as Trustee Citicorp USA, Inc. as Collateral Agent ================================================================================ ARTICLE 1 DEFINITION AND INCORPORATIONS BY REFERENCE SECTION 1.01. Definitions................................................1 SECTION 1.02. Incorporation by Reference of Trust Indenture Act.........19 SECTION 1.03. Rules of Construction.....................................20 ARTICLE 2 THE NOTES SECTION 2.01. Notes Generally...........................................20 SECTION 2.02. Execution and Authentication..............................20 SECTION 2.03. Legends...................................................21 SECTION 2.04. Registrar and Paying Agent................................22 SECTION 2.05. Paying Agent to Hold Money in Trust.......................23 SECTION 2.06. Holder Lists..............................................23 SECTION 2.07. Transfer and Exchange.....................................23 SECTION 2.08. Replacement Notes.........................................24 SECTION 2.09. Outstanding Notes.........................................25 SECTION 2.10. Temporary Notes...........................................26 SECTION 2.11. Cancellation..............................................26 SECTION 2.11. Defaulted Interest........................................26 SECTION 2.12. CUSIP and "ISIN" Numbers..................................26 SECTION 2.14. Computation of Interest...................................26 ARTICLE 3 REDEMPTION AT THE OPTION OF THE ISSUER SECTION 3.01. Optional Redemption.......................................27 SECTION 3.02. Notices to Trustee........................................27 SECTION 3.03. Selection of Notes To Be Redeemed.........................27 SECTION 3.04. Notice of Redemption......................................27 SECTION 3.05. Effect of Notice of Redemption............................28 SECTION 3.06. Deposit of Redemption Price...............................28 SECTION 3.07. Notes Redeemed in Part....................................29 SECTION 3.08. Notes Surrendered in Payment of Warrant Exercise Price....29 ARTICLE 4 MANDATORY REDEMPTION SECTION 4.01. Early Redemption Events...................................29 SECTION 4.02. Change of Control.........................................32 ARTICLE 5 AFFIRMATIVE COVENANTS SECTION 5.01. Payment of Notes..........................................33 SECTION 5.02. Commission Reports, Financial Statements and Other Information...............................................34 SECTION 5.03. Compliance Certificate....................................35 SECTION 5.04. Notices of Material Events................................36 SECTION 5.05. Existence; Conduct of Business............................36 SECTION 5.06. Payment of Obligations....................................36 SECTION 5.07. Maintenance of Properties.................................36 SECTION 5.08. Insurance; Casualty and Condemnation......................37 SECTION 5.09. Books and Records; Inspection and Audit Rights............37 SECTION 5.10. Compliance with Laws......................................37 SECTION 5.11. Additional Subsidiaries...................................37 SECTION 5.12. Further Assurances; Transfer of Joint Venture Stock.......37 ARTICLE 6 NEGATIVE COVENANTS SECTION 6.01. Indebtedness; Certain Equity Securities...................38 SECTION 6.02. Liens.....................................................40 SECTION 6.03. Fundamental Changes and Successor Issuers.................41 SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions.42 SECTION 6.05. Asset Sales...............................................44 SECTION 6.06. Sale and Leaseback Transactions...........................45 SECTION 6.07. Hedging Agreements........................................45 SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness.....45 SECTION 6.09. Transactions with Affiliates..............................46 SECTION 6.10. Restrictive Agreements....................................46 SECTION 6.11. Amendment of Material Documents...........................47 SECTION 6.12. Minimum Quarterly Consolidated EBITDA.....................47 SECTION 6.13. Minimum Monthly Consolidated Backlog......................48 SECTION 6.14. Minimum Monthly Consolidated Revenue......................50 SECTION 6.15. Capital Expenditures......................................52 ARTICLE 7 DEFAULTS AND REMEDIES SECTION 7.01. Events of Default.........................................52 SECTION 7.02. Acceleration..............................................54 SECTION 7.03. Other Remedies............................................55 SECTION 7.04. Waiver of Past Defaults...................................55 SECTION 7.05. Control by Majority.......................................55 SECTION 7.06. Limitation on Suits.......................................56 SECTION 7.07. Rights of Holders to Receive Payment......................56 SECTION 7.08. Collection Suit by Trustee................................56 SECTION 7.09 Trustee May File Proofs of Claim..........................56 SECTION 7.10. Priorities................................................57 SECTION 7.11 Undertaking for Costs.....................................57 SECTION 7.12 Waiver of Stay or Extension Laws..........................57 ARTICLE 8 THE TRUSTEE SECTION 8.01. Duties of Trustee.........................................57 SECTION 8.02. Rights of Trustee.........................................59 SECTION 8.03. Individual Rights of Trustee..............................60 SECTION 8.04. Trustee's Disclaimer......................................60 SECTION 8.05. Notice of Defaults........................................60 SECTION 8.06. Reports by Trustee to Holders.............................60 SECTION 8.07. Compensation and Indemnity................................60 SECTION 8.08. Replacement of Trustee....................................61 SECTION 8.09. Successor Trustee by Merger...............................62 SECTION 8.10. Eligibility; Disqualification.............................62 SECTION 8.11. Preferential Collection of Claims Against the Issuer......63 ARTICLE 9 DISCHARGE; DEFEASANCE SECTION 9.01. Discharge of Liability on Notes; Defeasance...............63 SECTION 9.02. Conditions to Defeasance..................................64 SECTION 9.03. Application of Trust Money................................65 SECTION 9.04. Repayment to the Issuer...................................65 SECTION 9.05. Indemnity for Government Obligations......................65 SECTION 9.06. Reinstatement.............................................65 ARTICLE 10 AMENDMENTS SECTION 10.01. Without Consent of Holders................................66 SECTION 10.02. With Consent of Holders...................................66 SECTION 10.03. Compliance with Trust Indenture Act.......................67 SECTION 10.04. Revocation and Effect of Consents and Waivers.............67 SECTION 10.05. Notation on or Exchange of Notes..........................68 SECTION 10.06. Trustee to Sign Amendments................................68 SECTION 10.07. Payment for Consent.......................................68 ARTICLE 11 SECURITY; NOTE GUARANTEES SECTION 11.01. Collateral and Guarantee Requirement......................68 SECTION 11.02. Regarding the Collateral Agent............................68 ARTICLE 12 SUBORDINATION SECTION 12.01. Agreement to Subordinate..................................72 SECTION 12.02. Liquidation, Dissolution, Bankruptcy......................72 SECTION 12.03. Default on Revolver Obligations...........................72 SECTION 12.04. Acceleration of Payment of Notes..........................73 SECTION 12.05. When Distribution Must Be Paid Over.......................73 SECTION 12.06. Subrogation...............................................73 SECTION 12.07. Relative Rights...........................................73 SECTION 12.08. Subordination May Not Be Impaired by Issuer...............74 SECTION 12.09. Rights of Trustee and Paying Agent........................74 SECTION 12.10. Distribution or Notice to Representative..................74 SECTION 12.11. Article 12 Not To Prevent Events of Default or Limit Right To Accelerate.......................................74 SECTION 12.12. Trust Monies Not Subordinated.............................74 SECTION 12.13. Trustee Entitled To Rely..................................75 SECTION 12.14. Trustee To Effectuate Subordination.......................75 SECTION 12.15. Trustee Not Fiduciary for Lenders under Revolver Obligations...............................................75 ARTICLE 13 MISCELLANEOUS SECTION 13.01. Trust Indenture Act Controls..............................76 SECTION 13.02. Notices...................................................76 SECTION 13.03. Communication by Holders with Other Holders...............76 SECTION 13.04. Certificate and Opinion as to Conditions Precedent........77 SECTION 13.05. Statements Required in Certificate or Opinion.............77 SECTION 13.06. When Notes Disregarded....................................77 SECTION 13.07. Rules by Trustee, Paying Agent and Registrar..............78 SECTION 13.08. Legal Holidays............................................78 SECTION 13.09. GOVERNING LAW.............................................78 SECTION 13.10. No Recourse Against Others................................78 SECTION 13.11. Successors................................................78 SECTION 13.12. Multiple Originals........................................78 SECTION 12.13. Table of Contents; Headings...............................78 Schedule 1.01 Mortgaged Properties Schedule 6.01 Existing Indebtedness Schedule 6.02 Existing Liens Schedule 6.04 Existing Investments Schedule 6.10 Existing Restrictions Exhibit A - Form of Note Exhibit B - Guarantee Agreement Exhibit C - Indemnity, Subrogation and Contribution Agreement Exhibit D - Pledge Agreement Exhibit E - Security Agreement INDENTURE dated as of November 13, 2001 among MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation (the "Issuer"), Citibank, N.A., a national banking association, as trustee (the "Trustee") and (the "Issuer"), Citicorp USA, Inc., a Delaware corporation, as collateral agent (the "Collateral Agent"). Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of the Issuer's Senior Subordinated Secured Notes Due 2007 issued on the date hereof (the "Notes"). ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01. Definitions. "Accrual Period" has the meaning provided in Section 1 of the Notes. "Affiliate" means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. Notwithstanding the foregoing, no individual shall be deemed to be an Affiliate of a Person solely by reason of his or her being an officer or director of such Person. "Blockage Notice" has the meaning provided in section 12.03(b). "Business Day" means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed. "Capital Expenditures" means, for any period, without duplication, (a) the additions to property, plant and equipment and other capital expenditures of the Issuer and its consolidated Subsidiaries that are (or would be) set forth in a consolidated statement of cash flows of the Issuer for such period prepared in accordance with GAAP and (b) Capital Lease Obligations incurred by the Issuer and its consolidated Subsidiaries during such period, provided that the term "Capital Expenditures" (i) shall be net of landlord construction allowances, (ii) shall not include expenditures made in connection with the repair or restoration of assets with insurance or condemnation proceeds and (iii) shall not include the purchase price of equipment to the extent consideration therefor consists of used or surplus equipment being traded in at such time or the proceeds of a concurrent sale of such used or surplus equipment, in each case in the ordinary course of business. "Capital Lease Obligations" of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital lease obligations on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP. "Cash Equivalents" means any of the following: (a) any investment in U.S Government Obligations; (b) investments in time deposit accounts, certificates of deposit and money market deposits maturing not more than one year from the date of acquisition thereof, bankers' acceptances with maturities not exceeding one year and overnight bank deposits, in each case with a bank or trust company that is organized under the laws of the United States of America, any state thereof (including any foreign branch of any of the foregoing) or any foreign country recognized by the United States of America having capital, surplus and undivided profits aggregating in excess of $250,000,000 (or the foreign currency equivalent thereof); (c) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clause (a) above or clause (e) below entered into with a bank meeting the qualifications described in clause (b) above; (d) investments in commercial paper, maturing not more than one year after the date of acquisition, issued by a corporation (other than an Affiliate of the Issuer) organized and in existence under the laws of the United States of America or any foreign country recognized by the United States of America having at the time as of which any investment therein is made one of the two highest ratings obtainable from either Moody's or S&P; (e) investments in securities with maturities of six months or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States of America, or by any foreign government or any state, commonwealth or territory or by any political subdivision or taxing authority thereof, and, in each case, having one of the two highest ratings obtainable from either S&P or Moody's; and (f) investments in funds investing exclusively in cash and/or investments of the types described in clauses (a) and (e) above. "Change in Control" means (a) the failure by TPG to own (and retain the right to vote), directly or indirectly, beneficially and of record, Equity Interests in the Issuer representing greater than 30% of each of the aggregate ordinary voting power and aggregate value represented by the issued and outstanding Equity Interests in the Issuer; (b) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Exchange Act and the rules of the Commission thereunder as in effect on the Issue Date), of Equity Interests representing a greater percentage of either the aggregate ordinary voting power or the aggregate value represented by the issued and outstanding Equity Interests of the Issuer then owned, directly or indirectly, beneficially and of record, by TPG; or (c) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Issuer by Persons who were neither (i) nominated by the board of directors of the Issuer nor (ii) appointed by directors so nominated. "Change in Control Offer" has the meaning provided in Section 4.02. "Code" means the Internal Revenue Code of 1986, as amended from time to time. "Collateral" means any and all "Collateral", as defined in any applicable Security Document. "Collateral Agent" means the "Collateral Agent", as defined in any applicable Security Document, in such capacity under the applicable Security Document. "Collateral and Guarantee Requirement" means the requirement that: (a) the Collateral Agent shall have received from the Issuer and each Pledgor and Guarantor either (i) a counterpart of each of the Guarantee Agreement, the Indemnity, Subrogation and Contribution Agreement, the Pledge Agreement and the Security Agreement duly executed and delivered on behalf of the Issuer and such Pledgor and Guarantor or (ii) in the case of any Person that becomes a Domestic Subsidiary after the date hereof, a supplement to each of the Guarantee Agreement, the Indemnity, Subrogation and Contribution Agreement, the Pledge Agreement and the Security Agreement, in each case in the form specified therein, duly executed and delivered on behalf of such Domestic Subsidiary; (b) all outstanding Equity Interests of the Issuer and each Subsidiary owned directly by or directly on behalf of the Issuer or any Pledgor and Guarantor, shall have been pledged pursuant to the Pledge Agreement (except that the Pledgors and Guarantors shall not be required to pledge (i) more than 65% of the outstanding voting stock of any Foreign Subsidiary, (ii) the Equity Interest of MEMC Southwest Inc. owned directly by the Issuer or (iii) Joint Venture Stock) and the Collateral Agent shall have received certificates or other instruments representing all such Equity Interests, together with stock powers or other instruments of transfer with respect thereto endorsed in blank; (c) all Indebtedness of the Issuer and each Subsidiary that is owing to any Pledgor and Guarantor shall be evidenced by a promissory note and shall have been pledged pursuant to the Pledge Agreement and the Collateral Agent shall have received all such promissory notes, together with instruments of transfer with respect thereto endorsed in blank; (d) all documents and instruments, including Uniform Commercial Code financing statements, required by law or reasonably requested by the Collateral Agent to be filed, registered or recorded to create the Liens intended to be created by the Security Agreement and the Pledge Agreement (including any supplements thereto), and perfect such Liens to the extent required by, and with the priority required by, the Security Agreement and the Pledge Agreement, shall have been filed, registered or recorded or delivered to the Collateral Agent for filing, registration or recording; (e) the Collateral Agent shall have received (i) counterparts of a Mortgage with respect to each Mortgaged Property providing that the Indenture Obligations shall be secured by a Lien on such Mortgaged Property, signed on behalf of the record owner of such Mortgaged Property, (ii) a policy or policies of title insurance issued by a nationally recognized title insurance company, insuring the Lien of each such Mortgage as a valid first Lien on the Mortgaged Property, described therein, free of any other Liens except as expressly permitted by Section 6.02, together with such endorsements, coinsurance and reinsurance as the Trustee or the Collateral Agent may reasonably request, and (iii) such surveys, abstracts, appraisals, legal opinions and other documents as the Trustee or the Collateral Agent may reasonably request with respect to any such Mortgage or Mortgaged Property, as the case may be; and (f) the Issuer and each Pledgor and Guarantor shall have obtained all material consents and approvals required to be obtained by it in connection with the execution and delivery of all Security Documents (or supplements thereto) to which it is a party, the performance of its obligations thereunder and the granting by it of the Liens thereunder. "Commission" means the Securities and Exchange Commission. "Consolidated Backlog" for any calendar month means, as of any measurement date, the sum total of wafers (as measured in millions of square inches) which has been shipped in respect of bona fide sales to third party customers during such month to (and including) such measurement date and remaining shipments which are reasonably expected by the Issuer to be made in respect of bona fide sales to third party customers from (but excluding) such measurement date through the last calendar day of the month by the Issuer and its consolidated Subsidiaries. Amounts expected to be shipped shall be evidenced by third party customer orders including purchase orders, purchase order releases pursuant to blanket purchase orders and/or customer buy plans communicated by electronic data interchange communications, e-mail messages or via telephone to an MEMC customer service representative or salesperson. "Consolidated EBITDA" means, for any period, Consolidated Net Income for such period (but excluding any minority interest, equity in income or loss of joint ventures and royalty income) plus, (a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) consolidated interest expense for such period, (ii) consolidated income tax expense for such period, (iii) all amounts attributable to depreciation and amortization for such period, (iv) all extraordinary charges during such period and (v) all other noncash expenses or losses of the Issuer or any of the Subsidiaries for such period (excluding any such charge that constitutes an accrual of or a reserve for cash charges for any future period), and minus (b) without duplication and to the extent included in determining such Consolidated Net Income, (i) any extraordinary gains for such period, (ii) all noncash items increasing Consolidated Net Income for such period (excluding any items that represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period), (iii) foreign currency gains, (iv) interest income, (v) gains from the sale of assets or capital stock, (vi) income tax benefit and (vii) any other income categories disclosed as non-operating (income) expense not otherwise specified, all determined on a consolidated basis in accordance with GAAP. "Consolidated Net Income" means, for any period, the net income or loss of the Issuer and the Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, provided that there shall be excluded from such net income or loss (a) the income of any Person (other than a consolidated Subsidiary) in which any other Person (other than the Issuer or any consolidated Subsidiary or any director holding qualifying shares in compliance with applicable law) owns an Equity Interest, except to the extent of the amount of dividends or other distributions actually paid to the Issuer or any of the consolidated Subsidiaries by such Person during such period, and (b) the income or loss of any Person accrued prior to the date on which it becomes a Subsidiary or is merged into or consolidated with the Issuer or any consolidated Subsidiary or the date on which such Person's assets are acquired by the Issuer or any consolidated Subsidiary. "Consolidated Revenue" means, for any month, net sales of the Issuer and its consolidated Subsidiaries, determined in accordance with GAAP consistently applied, plus net sales of 300 millimeter product (also referred to as 300 millimeter sales contra) for that same period to the extent not otherwise included, determined in accordance with GAAP consistently applied. Net sales shall be computed net of any discounts, returns or allowances. Net sales shall also exclude sales made by the Issuer or by a Subsidiary to any Affiliate of the Issuer that is Controlled by the Issuer (other than Taisil Electronic Materials Corporation) whether or not consolidated with the Issuer under GAAP. "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. The terms "Controlling" and "Controlled" have meanings correlative thereto. "Corporate Trust Office" has the meaning provided in Section 2.04(a). "covenant defeasance option" has the meaning provided in Section 9.01(b). "Conversion Shares" means the common stock of the Issuer acquired upon conversion of the Cumulative Preferred Stock. "Cumulative Preferred Stock" means the Issuer's Series A Cumulative Convertible Preferred Stock, par value $0.01 per share, having the rights, preferences, privileges and restrictions set forth in the Certificate of Designations therefor filed with the Secretary of State of Delaware. "Default" means any event or condition that constitutes an Event of Default or that upon notice, lapse of time or both would, unless cured or waived, become an Event of Default. "Definitive Note" means a certificated Note (bearing the Restricted Notes Legend if the transfer of such Note is restricted by applicable law). "Domestic Subsidiary" means any Subsidiary of the Issuer other than a Foreign Subsidiary or a Receivables Subsidiary. "Early Redemption Event" means: (a) any sale, transfer or other disposition (including pursuant to a Permitted Receivables Financing or a sale and leaseback transaction) of any property or asset of the Issuer or any Subsidiary, including any Equity Interest owned by it, other than (i) dispositions described in parts (a) and (b) of Section 6.05 and (ii) other dispositions resulting in aggregate Net Proceeds not exceeding $250,000 during any fiscal year of the Issuer; or (b) any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of the Issuer or any Subsidiary, but only to the extent that the Net Proceeds therefrom have not been applied to repair, restore or replace such property or asset within 365 days after such event; or (c) the incurrence by the Issuer or any Subsidiary of any Indebtedness, other than Indebtedness permitted by Section 6.01; or (d) the issuance of any Equity Interests by the Issuer other than (i) the Warrant Shares and the Conversion Shares and (ii) pursuant to an employee benefit plan in effect on the Issue Date or adopted after the Effective Date with the consent of the Holders of a majority (by aggregate principal amount) of the Notes; provided that no receipt by MEMC Korea Company of Net Proceeds shall constitute an Early Redemption Event unless and until (and only to the extent that) such Net Proceeds, or a portion thereof, are actually paid or legally payable as a dividend or distribution to the Issuer or any Pledgor and Guarantor. "Early Redemption Offer" has the meaning provided in Section 4.01. "Environmental Laws" means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, directives or binding agreements issued, promulgated or entered into by or with any Governmental Authority, relating in any way to the environment, the protection, preservation or restoration of natural resources, the management (including generation, use, handling, transportation, storage, treatment and disposal) of Hazardous Materials, the Release or threatened Release of any Hazardous Materials into the environment, or health and safety matters. "Environmental Liability" means any liability, contingent or otherwise (including any costs, obligations, expenses, losses or other liability in connection with personal injury, strict liability, damages, diminution of value, investigation, monitoring, remediation, administrative oversight costs, fines, penalties or indemnities) of the Issuer or any Subsidiary directly or indirectly arising or resulting from or based upon (a) violation of any Environmental Law, (b) the management, including generation, use, handling, transportation, storage, treatment or disposal, of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is retained, assumed or imposed with respect to any of the foregoing. "Equity Interests" means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. "ERISA Affiliate" means, at any time, each trade or business (whether or not incorporated) that would, at the time, be treated together with Issuer or any of its Subsidiaries as a single employer under Title IV or Section 302 of ERISA or Section 412 of the Code. "ERISA Event" means (a) any "reportable event" described in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than a "reportable event" not subject to the provision for 30-day notice to the PBGC); (b) the existence with respect to any Plan of an "accumulated funding deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived or the filing of an application pursuant to Section 412(e) of the Code or Section 304 of ERISA for any extension of an amortization period; (c) the provision or filing of a notice of intent to terminate a Plan other than a standard termination within the meaning of Section 4041 of ERISA or the treatment of a Plan amendment as a distress termination under Section 4041 of ERISA; (d) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (e) the incurrence by the Issuer or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (f) the receipt by the Issuer or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan under Section 4042 of ERISA or the occurrence or existence of any other event or condition which might reasonably be expected to constitute grounds for the termination of, the appointment of a trustee to administer, any Plan other than in a standard termination within the meaning of Section 4041 of ERISA or the imposition of any lien on the assets of the Issuer or any of its Subsidiaries or ERISA Affiliates under ERISA, including as a result of the operation of Section 4069 of ERISA; (g) the incurrence by the Issuer, any of its Subsidiaries or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan or with respect to the withdrawal from a Multiple Employer Plan during a plan year in which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA or by reason of the provisions of Section 4064 of ERISA upon the termination of a Multiple Employer Plan; or (h) the receipt by the Issuer or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Issuer or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA. "Event of Default" has the meaning provided in Section 7.01. "Exchange Act" means the Securities Exchange Act of 1934. "Financial Officer" means the chief financial officer, principal accounting officer, treasurer or controller of the Issuer. "Foreign Subsidiary" means any Subsidiary of the Issuer that is not organized under the laws of the United States of America or any State thereof or the District of Columbia. "GAAP" means generally accepted accounting principles in the United States of America consistently applied. "Governmental Authority" means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. "Guarantee" of or by any Person (the "guarantor") means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the "primary obligor") in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation, provided that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. "Guarantee Agreement" means the Guarantee Agreement, attached hereto as Exhibit B, among the Issuer, the Pledgors and Guarantors and the Collateral Agent for the benefit of the Secured Parties. "Hazardous Materials" means any substance, pollutant, contaminant, chemical or other material (including petroleum or any fraction thereof, asbestos or asbestos containing material, polychlorinated biphenyls and urea formaldehyde foam insulation) or waste that is classified or regulated under any Environmental Law. "Hedging Agreement" means any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement. "Holder" means the Person in whose name a Note is registered on the Registrar's books. "incorporated provision" has the meaning provided in Section 13.01. "Indebtedness" of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (j) all obligations, contingent or otherwise, of such Person in respect of bankers' acceptances. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. Notwithstanding anything to the contrary in this paragraph, the term "Indebtedness" shall not include (a) obligations under Hedging Agreements or (b) agreements providing for indemnification, purchase price adjustments or similar obligations incurred or assumed in connection with the acquisition or disposition of assets or stock. "Indemnity, Subrogation and Contribution Agreement" means the Indemnity, Subrogation and Contribution Agreement, attached hereto as Exhibit C, among the Issuer, the Pledgors and Guarantors and the Collateral Agent. "Indenture" means this Indenture as amended or supplemented from time to time. "Indenture Obligations" has the meaning assigned in the Security Agreement. "Issue Date" means the date on which the Notes are originally issued and authenticated. "Issuer" means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained herein and required by the TIA, each other obligor on the indenture securities. "Issuer Benefit Plans" means each employee or director benefit or compensation plan, arrangement or agreement, including pension, savings, welfare, medical or life insurance, severance, fringe benefit, executive compensation, deferred compensation, incentive, bonus and long-term performance option and other equity-based compensation plans, arrangements or agreements, including any "employee benefit plans" as defined in Section 3(3) of ERISA, whether or not subject to ERISA, and each employment, retention, consulting, change in control, termination or severance plan, program, arrangement or agreement that was entered into or is maintained by or to which the Issuer or any of its Subsidiaries contribute or is obligated to contribute or with respect to which the Issuer or any of its Subsidiaries has any liability, direct or indirect, contingent or otherwise, or otherwise providing benefits to any current or former employee, officer or director of the Issuer or any of its Subsidiaries. "Issuer Order" means a written order of the Issuer signed by two Officers specifying the amount of Notes to be authenticated and the date on which they are to be authenticated. "Italian Issuer" means MEMC Electronic Materials S.p.A., a societa per azioni, or joint stock company, organized under the laws of the Republic of Italy. "Italian Notes" means, collectively, the Euro 55 million (aggregate principal amount) Promissory Notes Due 2031 to be issued by the Italian Issuer as contemplated under the Restructuring Agreement. "Joint Venture Stock" has the meaning assigned to such term in Section 6.03(d). "legal defeasance option" has the meaning provided in Section 9.01(b). "lenders under the Revolver Obligations" (and derivations of that phrase) mean the "Lenders" who are parties to the Revolving Credit Agreement named in the definition of "Revolving Loan Documentation." "Lien" means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities. "Material Adverse Effect" means a material adverse effect on (a) the business, assets, operations, properties, financial condition, contingent liabilities or prospects of the Issuer and the Pledgors and Guarantors, taken as a whole, (b) the ability of the Issuer or the Pledgors and Guarantors to perform their obligations under the Transaction Documents or (c) any rights of or benefits available to the Holders under the Transaction Documents. "Material Indebtedness" means (i) any Revolver Obligations and (ii) any Indebtedness, or obligations in respect of one or more Hedging Agreements, of any one or more of the Issuer and the Subsidiaries in an aggregate principal amount exceeding $2,500,000. For purposes of determining Material Indebtedness pursuant to clause (ii) of the foregoing sentence, the "principal amount" of the obligations of the Issuer or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Issuer or such Subsidiary would be required to pay if such Hedging Agreement were terminated at such time. "Moody's" means Moody's Investors Service, Inc. "Mortgage" means a mortgage, deed of trust, assignment of leases and rents, leasehold mortgage or other security document granting a Lien on any Mortgaged Property to secure the Indenture Obligations. Each Mortgage shall be reasonably satisfactory in form and substance to the Collateral Agent. "Mortgaged Property" means, initially, each parcel of real property and the improvements thereto owned by the Issuer or a Pledgor and Guarantor and identified on Schedule 1.01, and includes each other parcel of real property and improvements thereto with respect to which a Mortgage is granted pursuant to Section 5.11 or 5.12. "Multiple Employer Plan" means an employee benefit plan described in Section 4063 of ERISA. "Multiemployer Plan" means a multiemployer plan as defined in Section 4001(a)(3) of ERISA. "Net Proceeds" means, with respect to any event (a) the cash proceeds received in respect of such event, including (i) any cash received in respect of any non-cash proceeds, but only as and when received, (ii) in the case of a casualty or other insured damage, insurance proceeds in excess of $250,000, and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses (including reasonable attorneys fees, underwriting discounts and commissions and collection expenses) paid or payable by the Issuer and the Subsidiaries to third parties in connection with such event, (ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made by the Issuer and the Subsidiaries as a result of such event to repay Indebtedness (other than Revolver Obligations) secured by such asset or otherwise subject to mandatory prepayment as a result of such event, and (iii) the amount of all taxes paid (or reasonably estimated to be payable) by the Issuer and the Subsidiaries, and (iv) the amount of any reserves established by the Issuer and the Subsidiaries to fund contingent liabilities reasonably estimated to be payable, in each case during the year that such event occurred or the next succeeding year and that are directly attributable to such event (as determined reasonably and in good faith by the chief financial officer of the Issuer). Notwithstanding anything to the contrary set forth above, the proceeds of any sale, transfer or other disposition of Receivables or Related Property (or any interest therein) pursuant to any Permitted Receivables Financing shall not be deemed to constitute Net Proceeds except to the extent that such sale, transfer or other disposition (a) is the initial sale, transfer or other disposition of Receivables or Related Property (or any interest therein) in connection with the establishment of such Permitted Receivables Financing or (b) occurs in connection with an increase in the aggregate outstanding amount of such Permitted Receivables Financing over the aggregate outstanding amount of such Permitted Receivables Financing at the time of such initial sale, transfer or other disposition. "Notes" means the Issuer's Senior Subordinated Secured Notes Due 2007 issued under this Indenture. "Notice of Default' has the meaning provided in Section 7.01. "Offer Amount" has the meaning provided in Section 4.01. "Offer Period" has the meaning provided in Section 4.01. "Officer" means the chairman of the board of directors, the chief executive officer, the chief financial officer, the president or the treasurer of the Issuer. "Officer" of a Pledgor and Guarantor has a correlative meaning thereto. "Officers' Certificate" means a certificate signed by two Officers of each Person issuing such certification. "Opinion of Counsel" means a written opinion (subject to customary assumptions and exclusions) from legal counsel. The counsel may be an employee of or counsel to the Issuer. "Payment Blockage Period" has the meaning provided in Section 12.03(b). "Paying Agent" has the meaning provided in Section 2.04(a). "PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions. "Perfection Certificate" means a certificate in the form of Annex 2 to the Security Agreement or any other form approved by the Issuer and the Collateral Agent. "Period End Date" has the meaning provided in Section 1 of the Notes. "Permitted Acquisition" means any acquisition (whether by purchase, merger, consolidation or otherwise) by the Issuer or any consolidated Subsidiary of all or substantially all the assets of, or all the Equity Interests in, a Person or division or line of business of a Person if, at the time of and immediately after giving effect thereto, (a) no Default has occurred and is continuing or would result therefrom, (b) the principal business of such Person shall be reasonably related to a business in which the Issuer and the Subsidiaries were engaged on the Issue Date or into which they have entered thereafter with the consent of the Holders of a majority (by aggregate principal amount) of the Notes, (c) each Subsidiary formed for the purpose of or resulting from such acquisition shall be or contemporaneously become, a Pledgor and Guarantor and all of the Equity Interests of such Domestic Subsidiary shall be owned directly by the Issuer or a consolidated Domestic Subsidiary and all material actions required to be taken with respect to such acquired or newly formed Domestic Subsidiary under Sections 5.11 and 5.12 shall have been taken (or shall be taken contemporaneously with the closing of such acquisition or within the time period set forth in Section 5.11), (d) the Issuer and the Subsidiaries are in compliance, on a pro forma basis after giving effect to such acquisition (without giving effect to any cost savings other than those actually realized as of the date of such acquisition), with the covenants contained in Sections 6.12, 6.13 and 6.14 recomputed as at the last day of the most recently ended fiscal quarter or month, as the case may be, of the Issuer for which financial statements are available, as if such acquisition (and any related incurrence or repayment of Indebtedness, with any new Indebtedness being deemed to be amortized over the applicable testing period in accordance with its terms) had occurred on the first day of each relevant period for testing such compliance and (e) the Issuer has delivered to the Collateral Agent an officers' certificate to the effect set forth in parts (a), (b), (c) and (d) above, together with all relevant financial information for the Person or assets to be acquired and reasonably detailed calculations demonstrating satisfaction of the requirement set forth in part (d) above. "Permitted Encumbrances" means: (a) Liens imposed by law for taxes or other governmental charges that are not yet due or are being contested in compliance with Section 5.06; (b) carriers', warehousemen's, mechanics', materialmen's, repairmen's and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in compliance with Section 5.06; (c) pledges and deposits made in the ordinary course of business in compliance with workers' compensation, unemployment insurance and other social security laws or regulations; (d) Liens (other than Liens on Collateral) to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business; (e) judgment liens in respect of judgments that do not constitute an Event of Default under part (j) of Section 7.01; (f) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business and minor defects or irregularities in title that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Issuer or any Subsidiary; (g) ground leases in respect of real property on which facilities owned or leased by the Issuer or any of the Subsidiaries are located; (h) any interest or title of a lessor under any lease permitted by this Agreement; (i) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; (j) leases or subleases granted to other Persons and not interfering in any material respect with the business of the Issuer and the Subsidiaries, taken as a whole; and (k) licenses of intellectual property, including patents and trademarks held by the Issuer or one of its Subsidiaries. provided that the term "Permitted Encumbrances" shall not include any Lien securing Indebtedness. "Permitted Investments" means: (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America); (b) investments in commercial paper maturing not more than one year after the date of acquisition thereof and having, at such date of acquisition, one of the two highest credit ratings obtainable from S&P or from Moody's; (c) investments in certificates of deposit, banker's acceptances and time deposits maturing not more than one year after the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts and overnight bank deposits issued or offered by, any commercial bank organized under the laws of the United States of America or any State thereof or any foreign country recognized by the United States of America that has a combined capital and surplus and undivided profits of not less than $250,000,000 (or the foreign-currency equivalent thereof); (d) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in part (a) above or part (e) or (f) below and entered into with a financial institution satisfying the criteria described in part (c) above; (e) securities issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof having maturities of not more than six months from the date of acquisition thereof and, at the time of acquisition, having one of the two highest credit ratings obtainable from S&P or from Moody's; (f) securities issued by any foreign government or any political subdivision of any foreign government or any public instrumentality thereof having maturities of not more than six months from the date of acquisition thereof and, at the time of acquisition, having one of the two highest credit ratings obtainable from S&P or from Moody's; and (g) investments in funds that invest solely in one or more types of securities described in parts (a), (e) and (f) above. "Permitted Receivables Financing" means any financing pursuant to which (a) the Issuer or any Subsidiary sells, conveys or otherwise transfers to a Receivables Subsidiary, in "true sale" transactions, and (b) such Receivables Subsidiary sells, conveys or otherwise transfers to any other Person or grants a security interest to any other Person in, any Receivables (whether now existing or hereafter acquired) of the Issuer or any Subsidiary or any undivided interest therein, and any assets related thereto (including all collateral securing such Receivables), all contracts and all Guarantees or other obligations in respect of such Receivables, proceeds of such Receivables and other assets that are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving Receivables, provided that the board of directors of the Issuer shall have determined in good faith that such Permitted Receivables Financing is economically fair and reasonable to the Issuer and the Subsidiaries, taken as a whole. "Person" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity. "Plan" means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Issuer, any of its Subsidiaries or any ERISA Affiliate is an "employer" as defined in Section 3(5) of ERISA. "Plan Asset Regulations" means the Department of Labor regulation Section 2510.3-101, 29 C.F.R.ss.2510.3-101. "Pledge Agreement" means the Pledge Agreement, attached hereto as Exhibit D, among the Issuer, the Pledgors and Guarantors and the Collateral Agent for the benefit of the Secured Parties. "Pledgors and Guarantors" means each Domestic Subsidiary, from time to time. "protected purchaser" has the meaning set forth in Section 2.08(a). "Purchase Agreement" means the purchase agreement, dated as of September 30, 2001, by and among TPG Partners III, L.P., T(3) Partners, L.P., T(3) Partners II, L.P, TPG Wafer Holdings LLC, E.ON AG, E.ON International Finance B.V., FIDELIA Corporation, VEBA Zweite Verwaltungsgesellschaft mbH and E.ON North America, Inc. "Purchase Date" has the meaning provided in Section 4.01. "Receivable" means the Indebtedness and payment obligations of any Person to the Issuer or any of the Subsidiaries or acquired by the Issuer or any of the Subsidiaries (including obligations constituting an account or general intangible or evidenced by a note, instrument, contract, security agreement, chattel paper or other evidence of indebtedness or security but excluding intercompany obligations) arising from a sale of merchandise or the provision of services by the Issuer or any Subsidiary or the Person from which such Indebtedness and payment obligation were acquired by the Issuer or any of the Subsidiaries, including (a) any right to payment for goods sold or for services rendered and (b) the right to payment of any interest, sales taxes, finance charges, returned check or late charges and other obligations of such Person with respect thereto. "Receivables Subsidiary" means a corporation or other entity that is a newly formed, wholly owned, bankruptcy-remote, special purpose subsidiary of the Issuer or any wholly owned Subsidiary (a) that engages in no activities other than in connection with the financing of Receivables, all proceeds thereof and all rights (contractual or other), collateral and other assets relating thereto, and any business or activities incidental or related to such business (including servicing of Receivables), (b) that is designated by the board of directors of the Issuer (as provided below) as a Receivables Subsidiary, (c) of which no portion of its Indebtedness or any other obligations (contingent or otherwise) (i) is Guaranteed by the Issuer or any Subsidiary (other than pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates the Issuer or any Subsidiary in any way other than pursuant to Standard Securitization Undertakings and other than any obligation to sell or transfer Receivables or (iii) subjects any property or asset of the Issuer or any Subsidiary, directly or indirectly, contingently or otherwise, to the satisfaction thereof, (d) with which none of the Issuer or any Subsidiary has any material contract, agreement, arrangement or understanding (except in connection with a Permitted Receivables Financing), other than fees payable in the ordinary course of business in connection with servicing Receivables, and (e) to which none of the Issuer or any Subsidiary has any obligation to maintain or preserve such entity's financial condition or cause such entity to achieve certain levels of operating results. Upon any such designation, a Financial Officer of the Issuer shall deliver a certificate to the Collateral Agent certifying (a) the resolution of the board of directors of the Issuer giving effect to such designation, (b) that, to the best of such officer's knowledge and belief after consulting with counsel, such designation complied with the foregoing conditions, (c) that after giving effect to such designation (including any Indebtedness permitted to exist in connection with such designation), the Issuer shall be in compliance, on a pro forma basis, with the covenants set forth in Sections 6.12, 6.13 and 6.14 and (d) immediately after giving effect to such designation, no Default shall have occurred and be continuing. "Registrar" has the meaning provided in Section 2.04(a). "Registration Rights Agreement" means the Registration Rights Agreement dated as of November 13, 2001 between the Issuer, TPG Wafer Holdings LLC and the parties identified as guarantors thereunder. "Related Parties" means, with respect to any specified Person, such Person's Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person's Affiliates. "Related Property" shall mean, with respect to each Receivable: (a) all the interest of the Issuer or any Subsidiary in the goods, if any, sold and delivered to an obligor relating to the sale that gave rise to such Receivable, (b) all other security interests or Liens, and the interest of the Issuer or any Subsidiary in the property subject thereto, from time to time purporting to secure payment of such Receivable, together with all financing statements signed by an obligor describing any collateral securing such Receivable, and (c) all guarantees, insurance, letters of credit and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable, in the case of parts (b) and (c), whether pursuant to the contract related to such Receivable or otherwise or pursuant to any obligations evidenced by a note, instrument, contract, security agreement, chattel paper or other evidence of Indebtedness or security and the proceeds thereof. "Release" means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration of any Hazardous Material in, on, onto or into the environment (including ambient air, surface water, groundwater, land surface or subsurface strata or within any building, structure, facility or fixture). "Representative" means any trustee, agent or representative (if any) for lenders under the Revolver Obligations as identified to the Trustee pursuant to written notice from the Issuer. "Restricted Notes Legend" means the legend set forth in Section 2.03(a) of this Indenture. "Restricted Payment" means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Issuer or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Interests in the Issuer or any Subsidiary or any option, warrant or other right to acquire any such Equity Interests in the Issuer or any Subsidiary. "Restructuring Agreement" means the Restructuring Agreement dated as of November 13, 2001, between the Issuer and TPG Wafer Holdings LLC. "Revolver Obligations" has the meaning assigned to such term in the Revolving Loan Documentation and, for the avoidance of doubt, shall include any substitution for, or replacement of, such obligations. "Revolving Loan Documentation" means, collectively, (i) the Revolving Credit Agreement dated as of November 13, 2001 among the Issuer, the Lenders party thereto, Citicorp USA, Inc., as Administrative Agent and Collateral Agent, together with any amendment or restatement thereof or any supplement thereto, (ii) the guarantee agreement, the security agreement, the pledge agreement and the indemnity, subrogation and contribution agreement attached as exhibits to such Revolving Credit Agreement and (iii) any other security documents or other ancillary documents executed in connection therewith. "S&P" means Standard & Poor's Rating Service. "Secured Parties" has the meaning assigned to such term in the Security Agreement. "Securities Act" means the Securities Act of 1933, as amended. "Security Agreement" means the Security Agreement, attached hereto as Exhibit E, among the Issuer, the Pledgors and Guarantors and the Collateral Agent for the benefit of the Secured Parties. "Security Documents" means the Guarantee Agreement, the Security Agreement, the Pledge Agreement, the Mortgages and each other security agreement or other instrument or document executed and delivered pursuant to Section 5.11 or 5.12 to secure any of the Indenture Obligations. "Standard Securitization Undertakings" means representations, warranties, covenants and indemnities entered into at any time by the Issuer or any Subsidiary that are reasonably customary in an accounts receivable transaction. "Stated Maturity" means, with respect to the Notes, the date specified in the Notes as the fixed date on which the final payment of principal is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency beyond the control of the issuer unless such contingency has occurred). "subsidiary" means, with respect to any Person (the "parent") at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. "Subsidiary" means any subsidiary of the Issuer. "Successor Issuer" has the meaning provided in Section 6.03. "TIA" means the Trust Indenture Act of 1939 (15 U.S.C.ss.ss.77aaa-77bbbb) as in effect on the date hereof. "TPG" means TPG Partners III, L.P. and its Affiliates, provided that no such Affiliate shall be deemed a member of TPG to the extent it ceases to be Controlled by, or under common Control with, TPG Partners III, L.P. "Transaction Documents" means the Indenture, the Notes, the Security Documents, the Restructuring Agreement and the Registration Rights Agreement. "Transfer Restricted Note" means any Definitive Note and any other Note that bears or is required to bear the Restricted Notes Legend. "Trustee" means the party named as such in this Indenture until a successor replaces it and, thereafter, means the successor. "Trust Officer" means any vice president, assistant vice president or trust officer of the Trustee assigned by the Trustee to administer its corporate trust matters. "Uniform Commercial Code" means the New York Uniform Commercial Code as in effect from time to time. "U.S. Government Obligations" means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the issuer's option. "Warrant" means any of the warrants to acquire common stock of the Issuer issued pursuant to the Restructuring Agreement. "Warrant Exercise Price" means the aggregate exercise price paid or to be paid in connection with the acquisition of common stock of the Issuer upon any exercise of Warrants. "Warrant Shares" means the common stock of the Issuer acquired upon exercise of the Warrants. "Withdrawal Liability" means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA. SECTION 1.02. Incorporation by Reference of Trust Indenture Act. This Indenture is subject to the mandatory provisions of the TIA, which are incorporated by reference in and made a part of this Indenture. The following TIA terms have the following meanings: "Commission" means the Commission. "indenture securities" means the Notes issued hereunder and the Guarantees issued pursuant to the Security Documents. "indenture security holder" means a Holder. "indenture to be qualified" means this Indenture. "indenture trustee" or "institutional trustee" means the Trustee. "obligor" on the indenture securities means the Issuer, the Pledgors and Guarantors and any other obligor on the indenture securities. All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by Commission rule have the meanings assigned to them by such definitions. SECTION 1.03. Rules of Construction. Unless the context otherwise requires: (i) a term has the meaning assigned to it; (ii) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (iii) "or" is not exclusive; (iv) "including" means including without limitation; (v) words in the singular include the plural and words in the plural include the singular; and (vi) the principal amount of any noninterest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with GAAP. ARTICLE 2 THE NOTES SECTION 2.01. Notes Generally. (a) Initial Issuance. The Issuer shall originally issue the Notes under this Indenture, for purchase by the initial Holders in connection with the transactions described in the Restructuring Agreement. The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is limited to $50,000,000 (subject to Sections 2.09 and 2.10 of this Indenture and subject to interest accrued and added to such principal amount on any Period End Date). (b) Form and Dating..The Notes and the Trustee's certificate of authentication shall each be substantially in the form of Exhibit A hereto, which is hereby incorporated in and expressly made a part of this Indenture. Each Note shall be dated the date of its authentication. The Notes shall be issuable only in registered form without interest coupons. Initially, all Notes shall be issued in definitive, fully-certificated form. The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Issuer is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Issuer) and shall have the Legends required pursuant to Section 2.03 of this Indenture. SECTION 2.02. Execution and Authentication. (a) Two Officers, one of whom shall be the chairman of the board of directors, the President, the chief executive officer or the chief financial officer, shall sign the Notes for the Issuer by manual or facsimile signature. If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless. (b) The Trustee shall authenticate and make available for delivery Notes upon an Issuer Order and a Note shall not be valid until so authenticated. The signature of a Trust Officer or an authenticating agent appointed pursuant to part (c) of this Section 2.02 shall be conclusive evidence that the Note has been authenticated under this Indenture. (c) The Trustee may appoint an authenticating agent reasonably acceptable to the Issuer to authenticate the Notes. Any such appointment shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to the Issuer. Unless limited by the terms of such appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands. (d) In case the Issuer shall be consolidated with or merged into any other Person, or shall convey, transfer, lease or otherwise dispose of its properties and assets substantially as an entirety to any Person, and the Successor Issuer resulting from such consolidation, or surviving such merger, or which shall have received a conveyance, transfer, lease or other disposition as aforesaid, shall have executed an indenture supplemental hereto with the Trustee pursuant to Section 6.03, any of the Notes authenticated or delivered prior to such transaction may, from time to time, at the request of the Successor Issuer, be exchanged for other Notes executed in the name of the Successor Issuer with such changes in phraseology and form as may be appropriate, but otherwise identical to the Notes surrendered for such exchange and of like principal amount; and the Trustee, upon Issuer Order of the Successor Issuer, shall authenticate and deliver Notes as specified in such order for the purpose of such exchange. If Notes shall at any time be authenticated and delivered in any new name of a Successor Issuer pursuant to this Section 2.02(d) in exchange or substitution for or upon registration of transfer of any Notes, such Successor Issuer, at the option of the Holders but without expense to them, shall provide for the exchange of all Notes at the time outstanding for Notes authenticated and delivered in such new name. SECTION 2.03. Legends. (a) Restricted Note Legend. Except as permitted by part (c) of this Section 2.03, each certificate evidencing the Notes (and all Notes issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form (each defined term in the legend being defined as such for purposes of the legend only): "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION." (b) Additional Legend for Definitive Notes. Each Definitive Note shall bear the following legend: "IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS." (c) Use and Removal of Legends. The Restricted Notes Legend and the legend described in Section 2.03(b) shall be removed from a certificate representing Notes if the securities represented thereby are sold pursuant to an effective registration statement under the Securities Act or there is delivered to the Issuer and the Registrar such satisfactory evidence, which may include an Opinion of Counsel, as reasonably may be requested by the Issuer and the Registrar, to confirm that neither such legend nor the restrictions on transfer set forth therein are required to ensure that transfers of such securities will not violate the registration and prospectus delivery requirements of the Securities Act. SECTION 2.04. Registrar and Paying Agent. (a) The Issuer shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange (the "Registrar") and an office or agency where Notes may be presented for payment (the "Paying Agent"). The Registrar shall keep a register of the Notes and of their transfer and exchange and shall retain copies of all letters, notices and other written communications received in connection with the transfer and exchange of Notes. The Issuer may have one or more co-registrars and one or more additional paying agents. The term "Paying Agent" includes any additional paying agent, and the term "Registrar" includes any co-registrars. The Issuer initially appoints the Trustee at its principal corporate trust office in the Borough of Manhattan, City of New York (the "Corporate Trust Office") as Registrar, Paying Agent and agent for service of demands and notices in connection with the Notes and this Indenture, until such time as another Person is appointed as such. (b) The Issuer shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture, which shall incorporate the terms of the TIA. The agreement shall implement the provisions of this Indenture that relate to such agent. The Issuer shall notify the Trustee of the name and address of any such agent. If the Issuer fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 8.07. The Issuer or any of its wholly owned Domestic Subsidiaries may act as Paying Agent or Registrar. (c) The Issuer may remove any Registrar or Paying Agent upon written notice to such Registrar or Paying Agent and to the Trustee; provided, however, that no such removal shall become effective until (i) acceptance of an appointment by a successor as evidenced by an appropriate agreement entered into by the Issuer and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (ii) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (i) above. The Registrar or Paying Agent may resign at any time upon written notice to the Issuer and the Trustee. SECTION 2.05. Paying Agent to Hold Money in Trust. Prior to the Stated Maturity, the Issuer shall deposit with the Paying Agent (or if either of the Issuer or a Domestic Subsidiary of the Issuer is acting as Paying Agent, segregate and hold in trust for the benefit of the Persons entitled thereto) a sum sufficient to pay the principal and interest then becoming due. The Issuer shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of such principal and interest and shall notify the Trustee of any default by the Issuer in making any such payment. If the Issuer or a Domestic Subsidiary of the Issuer acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this Section, the Paying Agent (if other than the Issuer or any Affiliate of the Issuer) shall have no further liability for the money delivered to the Trustee. SECTION 2.06. Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders. If the Trustee is not the Registrar, the Issuer shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at least five Business Days before the Stated Maturity and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders. SECTION 2.07. Transfer and Exchange. (a) The parties hereto hereby acknowledge that, as of the date hereof, the Notes have not been registered under the Securities Act or the securities laws of any state or other jurisdiction. Accordingly, any Holders from time to time, by their acceptance of the Notes issued hereunder (either pursuant to the initial issuance or pursuant to a permitted transfer or exchange), covenant and agree that neither the Notes nor any interest or participation in them shall be offered, sold, assigned, transferred, pledged, exchanged, encumbered or otherwise disposed of in the absence of such registration, or unless such transaction is exempt from, or not subject to, such registration. (b) The Notes shall be transferable or exchangeable only upon the surrender of a Note for registration of transfer or exchange and then only in compliance with the provisions of this Section 2.07. When a Note is presented to the Registrar with a request to register a transfer, the Registrar shall register the transfer as requested if its requirements therefor (including, with respect to Definitive Notes, the requirements set forth in the part (c) of this Section 2.07) are met. (c) When Definitive Notes are presented to the Registrar with a request: (i) to register the transfer of such Definitive Notes; or (ii) to exchange such Definitive Notes for an equal principal amount of Definitive Notes of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided, however, that the Definitive Notes surrendered for transfer or exchange: (A) shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Issuer and the Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing; and (B) in the case of Transfer Restricted Notes, shall be accompanied by such additional information and documents as may be reasonably requested by the Registrar to document compliance with the provisions of Section 2.07 of the Indenture. (d) To permit registration of transfers and exchanges, the Issuer shall execute and, upon Issuer Order, the Trustee shall authenticate Notes at the Registrar's request. No service charge shall be imposed for any registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section. (e) Prior to the due presentation for registration of transfer of any Note, the Issuer, the Trustee, the Paying Agent, and the Registrar may deem and treat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and (subject to paragraph 2 of the Notes) interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Issuer, the Trustee, the Paying Agent, or the Registrar shall be affected by notice to the contrary. The Issuer shall not be required to make, and the Registrar shall not be required to register, transfers or exchanges of Notes selected for redemption (except, in the case of Notes to be redeemed in part, the portion thereof not to be redeemed) or any Notes for a period of 15 days before a selection of Notes to be redeemed. (f) All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture will evidence the same debt and will be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange. (g) The Registrar shall retain copies of all letters, notices and other written communications received in connection with the transfer and exchange of Notes pursuant to this Indenture. The Issuer shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable prior written notice to the Registrar. SECTION 2.08. Replacement Notes. (a) If a mutilated Note is surrendered to the Registrar or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Issuer shall issue and, upon Issuer Order, the Trustee shall authenticate a replacement Note if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the Holder (i) satisfies the Issuer or the Trustee within a reasonable time after he has notice of such loss, destruction or wrongful taking and the Registrar does not register a transfer prior to receiving such notification, (ii) makes such request to the Issuer or the Trustee prior to the Note's being presented for registration of Transfer to the Issuer by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a "protected purchaser") and (iii) satisfies any other reasonable requirements of the Issuer or the Trustee. If required by the Trustee or the Issuer, such Holder shall furnish an indemnity bond sufficient in the judgment of the Trustee to protect the Issuer, the Trustee, the Paying Agent and the Registrar from any loss that any of them may suffer if a Note is replaced. In the event any such mutilated, lost, destroyed or wrongfully taken Note has become or is about to become due and payable, the Issuer in its discretion may pay such Note instead of issuing a new Note in replacement thereof. (b) Upon the issuance of any replacement Note under this Section 2.08, the Issuer may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges that may be imposed and any other expenses (including the fees and expenses of the Trustee and the expenses of the Issuer) in connection therewith. (c) Every replacement Note issued pursuant to this Section 2.08 in exchange for any mutilated Note, or in lieu of any destroyed, lost or stolen Note, shall constitute an original additional contractual obligation of the Issuer and any other obligor upon the Notes, whether or not the mutilated, destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder. (d) The provisions of this Section 2.08 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully taken Notes. SECTION 2.09. Outstanding Notes. (a) Notes outstanding at any time are all authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section as not outstanding. Subject to Section 13.06, a Note does not cease to be outstanding because the Issuer or an Affiliate of the Issuer holds the Note. (b) If a Note is replaced pursuant to Section 2.08, it ceases to be outstanding unless the Trustee and the Issuer receive proof satisfactory to them that the replaced Note is held by a protected purchaser. (c) If the Paying Agent segregates and holds in trust, in accordance with this Indenture, on a redemption date or maturity date money sufficient to pay all principal and interest payable on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, and the Paying Agent is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture, then on and after that date such Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue. SECTION 2.10. Temporary Notes. In the event that Definitive Notes are to be issued under the terms of this Indenture, until such Definitive Notes are ready for delivery, the Issuer may prepare and, upon Issuer Order, the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of Definitive Notes but may have variations that the Issuer considers appropriate for temporary Notes. Without unreasonable delay, the Issuer shall prepare and, upon Issuer Order, the Trustee shall authenticate Definitive Notes and deliver them in exchange for temporary Notes upon surrender of such temporary Notes at the office or agency of the Issuer, without charge to the Holder. Until so exchanged, the Holder of temporary Notes shall in all respects be entitled to the same benefits under this Indenture as a Holder of definitive Notes. SECTION 2.11. Cancellation. The Issuer at any time may deliver Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment or cancellation and shall dispose of canceled Notes in accordance with its customary procedures or deliver canceled Notes to the Issuer pursuant to written direction by an Officer. The Issuer may not issue new Notes to replace Notes it has redeemed, paid or delivered to the Trustee for cancellation for any reason other than in connection with a transfer or exchange upon Issuer Order. The Trustee shall not authenticate Notes in place of canceled Notes other than pursuant to the terms of this Indenture. SECTION 2.12. Defaulted Interest. If the Issuer defaults in a payment of interest on the Notes, the Issuer shall pay the defaulted interest (plus interest on such defaulted interest to the extent lawful) in any lawful manner. SECTION 2.13. CUSIP and "ISIN" Numbers. The Issuer in issuing the Notes may use "CUSIP" and "ISIN" numbers (if then generally in use) and, if so, the Trustee shall use "CUSIP" and "ISIN" numbers in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Issuer will promptly notify the Trustee of any change in the "CUSIP" numbers. SECTION 2.14. Computation of Interest. Interest on the Notes shall accrue in the manner and at the Interest Rate provided in Section 1 of the Notes, and shall be computed on the basis of a year of 360 day year comprised of twelve 30-day months. The interest to be accrued as provided in Section 1 of the Notes shall be determined by the Paying Agent in accordance with the terms of this Indenture and the Notes, and such determination shall be prima facie evidence thereof absent manifest error. ARTICLE 3 REDEMPTION AT THE OPTION OF THE ISSUER SECTION 3.01. Optional Redemption. The Notes shall not be redeemable at the option of the Issuer prior to November 13, 2005. On or after such date, the Notes shall be redeemable at any time at the option of the Issuer, in whole and not in part, on not less than 30 nor more than 60 days prior notice, at the following redemption prices (expressed as percentages of principal amount), plus accrued and unpaid interest to the redemption date, if redeemed during the 12-month period commencing on November 13 of the years set forth below. Year Redemption Price ---- ---------------- 2005.......................................................105.0% 2006.......................................................102.5% SECTION 3.02. Notices to Trustee. If the Issuer elects to redeem Notes pursuant to Section 3.01, it shall notify the Trustee in writing of the redemption date and the principal amount of Notes to be redeemed. The Issuer shall give each notice to the Trustee provided for in this Section at least 45 days before the redemption date unless the Trustee consents to a shorter period. Such notice shall be accompanied by an Officers' Certificate from the Issuer to the effect that such redemption will comply with the conditions herein. Any such notice may be canceled at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of no effect. SECTION 3.03. Selection of Notes To Be Redeemed. If fewer than all the Notes are to be redeemed, the Trustee shall select the Notes to be redeemed pro rata or by lot or by a method that the Trustee in its sole discretion shall deem to be appropriate. The Trustee shall make the selection from outstanding Notes not previously called for redemption. The Trustee may select for redemption portions of the principal of Notes that have denominations larger than $1,000. Notes and portions of them the Trustee selects shall be in amounts of $1,000 or a whole multiple of $1,000. Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. The Trustee shall notify the Issuer promptly of the Notes or portions of Notes to be redeemed. SECTION 3.04. Notice of Redemption. (a) At least 30 days but not more than 60 days before a date for redemption of Notes, the Issuer shall mail a notice of redemption by first-class mail to each Holder of Notes to be redeemed at such Holder's registered address. The notice shall identify the Notes to be redeemed and shall state: (i) the redemption date; (ii) the redemption price and the amount of accrued interest to the redemption date; (iii) the name and address of the Paying Agent; (iv) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price; (v) if fewer than all the outstanding Notes are to be redeemed, the certificate numbers and principal amounts of the particular Notes to be redeemed; (vi) that, unless the Issuer defaults in making such redemption payment or the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture, interest on Notes (or portion thereof) called for redemption ceases to accrue on and after the redemption date; (vii) the CUSIP or ISIN number, if any, printed on the Notes being redeemed; and (viii) that no representation is made as to the correctness or accuracy of the CUSIP or ISIN number, if any, listed in such notice or printed on the Notes. (b) At the Issuer's request, the Trustee shall give the notice of redemption in the Issuer's name and at the Issuer's expense. In such event, the Issuer shall provide the Trustee with the information required by this Section. SECTION 3.05. Effect of Notice of Redemption. Once notice of redemption is mailed, Notes called for redemption become due and payable on the redemption date and at the redemption price stated in the notice. Upon surrender to the Paying Agent, such Notes shall be paid at the redemption price stated in the notice, plus accrued interest, to the redemption date; provided, however, that if the redemption date is after a regular record date and on or prior to the related interest payment date, the accrued interest shall be payable to the Holder of the redeemed Notes registered on the relevant record date. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder. SECTION 3.06. Deposit of Redemption Price. Prior to 10:00 a.m. on the redemption date, the Issuer shall deposit with the Paying Agent (or, if either of the Issuer or a Domestic Subsidiary of the Issuer is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the redemption price of and accrued interest on all Notes to be redeemed on that date other than Notes or portions of Notes called for redemption that have been delivered by the Issuer to the Trustee for cancellation. On and after the redemption date, interest will cease to accrue on Notes or portions thereof called for redemption so long as the Issuer has deposited with the Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid interest on, the Notes to be redeemed, unless the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture. The Paying Agent shall promptly return to the Issuer upon written request any money deposited with the Paying Agent by the Issuer that is in excess of the amounts necessary to pay the redemption price of and accrued interest on all Notes to be redeemed. SECTION 3.07. Notes Redeemed in Part. Upon surrender of a Note that is redeemed in part, the Issuer shall execute and, upon Issuer Order, the Trustee shall authenticate for the Holder (at the Issuer's expense) a new Note equal in principal amount to the unredeemed portion of the Note surrendered. SECTION 3.08. Notes Surrendered in Payment of Warrant Exercise Price. Under and pursuant to the terms of the Warrants, Holders shall have the right to surrender one or more Notes and apply all or a portion of their principal amount in payment of the Warrant Exercise Price. In the event that the outstanding principal amount of such Notes shall be greater than the Warrant Exercise Price so to be paid, the Issuer shall execute and, upon Issuer Order, the Trustee shall authenticate for the Holder (at the Issuer's expense) a new Note equal in principal amount to the portion of surrendered Notes not applied in payment of the Warrant Exercise Price. ARTICLE 4 MANDATORY REDEMPTION SECTION 4.01. Early Redemption Events. (a) In the event and on each occasion that any Net Proceeds are received by or on behalf of the Issuer or any Subsidiary in respect of any Early Redemption Event, the Issuer shall (i) in the case of an event described in part (a) or (b) of the definition of Early Redemption Event, apply all such Net Proceeds, or (ii) in the case of an event described in part (c) or (d) of the definition of Early Redemption Event, apply 75% of such Net Proceeds to redeem Notes in an Early Redemption Offer pursuant to and subject to the conditions of this Section 4.01; provided that, in the case of any event described in clause (a) of the definition of the term "Early Redemption Event" occurring on or prior to the six-month anniversary of the Issue Date (other than the sale, transfer or other disposition of (i) Receivables in connection with a Permitted Receivables Financing, or (ii) other assets of the Issuer or any Subsidiary in connection with the incurrence of Indebtedness in respect of an asset-backed financing entered into with the consent of the Holders of a majority (by aggregate principal amount) of the Notes), if the Issuer shall deliver to the Trustee a certificate of a Financial Officer to the effect that no Default has occurred and is continuing, then no redemption shall be required pursuant to this paragraph in respect of the Net Proceeds in respect of such event until the six-month anniversary of the Issue Date; and further provided, that the Issuer shall have no obligation to make such an Early Redemption Offer unless so directed by the Holders of a majority, in aggregate principal amount, of the Notes (in accordance with part (b) of this Section 4.01); and further provided that, for so long as any Revolver Obligations are outstanding, an Early Redemption Offer shall only be made to the extent of Net Proceeds remaining following the repayment in full of such Revolver Obligations or to the extent that the lenders of such Revolver Obligations provide their consent. (b) Within 5 Business Days following the occurrence of an Early Redemption Event that, pursuant to part (a) of this Section 4.01, requires an Early Redemption Offer to be made, the Issuer shall mail a notice to each Holder with a copy to the Trustee, stating that an Early Redemption Event has occurred and requesting that the Holders of Notes provide their instructions as to whether or not the Issuer should make an Early Redemption Offer. If the Holders of a majority (by aggregate principal amount) of the Notes instruct the Issuer to make an Early Redemption Offer within 10 days following the mailing of the notice described in this part 4.01(b), the Issuer shall become obligated on such 10th day to make an Early Redemption Offer, following the steps set forth in parts (c) and (d) of this Section 4.01. (c) In any Early Redemption Offer required pursuant to this Section 4.01, the Issuer shall be required: (i) FIRST, to purchase Notes tendered pursuant to an offer by the Issuer to Holders for the Notes (the "Early Redemption Offer") at a purchase price of 100% of their principal amount (without premium) plus accrued and unpaid interest to the date of purchase in accordance with the procedures (including prorating in the event of oversubscription) set forth in Section 4.01(d); and (ii) THEREAFTER, to the extent of Net Proceeds, if any, remaining after the completion of the Early Redemption Offer in respect of the Notes, provide funds to the Italian Issuer to permit redemption of the Italian Notes in a similar offer made in respect of the Italian Notes (an "Italian Redemption Offer"). If the aggregate redemption price of Notes and Italian Notes tendered, pursuant to the Early Redemption Offer and the Italian Redemption Offer, is less than the Net Proceeds allotted to the purchase of the Notes and the Italian Notes, the Issuer shall apply the remaining Net Proceeds for general corporate purposes. (d) Early Redemption Offer Procedure. (i) Promptly, and in any event within ten (10) Business Days after the Issuer becomes obligated to make an Early Redemption Offer, the Issuer shall be obligated to deliver to the Trustee and send, by first-class mail to each Holder, a written notice stating that the Holder may elect to have his Notes purchased by the Issuer either in whole or in part (subject to prorating as hereinafter described in the event the Early Redemption Offer is oversubscribed) at the applicable purchase price. The notice shall specify a purchase date not less than 30 days nor more than 60 days after the date of such notice (the "Purchase Date") and shall contain such information concerning the business of the Issuer which the Issuer in good faith believes will enable such Holders to make an informed decision (which at a minimum shall include (A) the most recently filed Annual Report on Form 10-K (including audited consolidated financial statements) of the Issuer, the most recent subsequently filed Quarterly Report on Form 10-Q and any Current Report on Form 8-K of the Issuer filed subsequent to such Quarterly Report, other than Current Reports describing Early Redemption Events otherwise described in the offering materials (or corresponding successor reports), (B) a description of material developments in the Issuer's business subsequent to the date of the latest of such reports, and (C) if material, appropriate pro forma financial information) and all instructions and materials necessary to tender Notes pursuant to the Early Redemption Offer, together with the address referred to in clause (iii) of this part 4.02(d). (ii) Not later than the date upon which written notice of an Early Redemption Offer is delivered to the Trustee as provided above, the Issuer shall deliver to the Trustee an Officers' Certificate as to (A) the amount of the Early Redemption Offer (the "Offer Amount"), (B) the allocation of the Net Proceeds from the Early Redemption Events pursuant to which such Early Redemption Offer is being made and (C) the compliance of such allocation with the provisions of Section 4.01(a). Not later than one Business Day before the Purchase Date, the Issuer shall also irrevocably deposit with the Trustee or with a paying agent (or, if the Issuer is acting as its own paying agent, segregate and hold in trust) an amount equal to the Offer Amount with written instructions for investment in cash or Cash Equivalents and to be held for payment in accordance with the provisions of this Section. Upon the expiration of the period for which the Early Redemption Offer remains open (the "Offer Period"), the Issuer shall deliver to the Trustee for cancellation the Notes or portions thereof that have been properly tendered to and are to be accepted by the Issuer. The Trustee (or the Paying Agent, if not the Trustee) shall, on the date of purchase, mail or deliver payment to each tendering Holder in the amount of the purchase price. In the event that the Offer Amount delivered by the Issuer to the Trustee is greater than the purchase price of the Notes tendered, the Trustee shall deliver the excess to the Issuer immediately after the expiration of the Offer Period for application in accordance with this Section 4.01. (iii) Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to the Issuer at the address specified in the notice at least three Business Days prior to the Purchase Date. Holders shall be entitled to withdraw their election if the Trustee or the Issuer receives not later than one Business Day prior to the Purchase Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note or Notes which were delivered by the Holder for purchase and a statement that such Holder is withdrawing his election to have such Note or Notes purchased. If at the expiration of the Offer Period the aggregate principal amount of Notes included in the Early Redemption Offer surrendered by holders thereof exceeds the Early Redemption Offer Amount, the Issuer shall select the Notes to be purchased on a pro rata basis. Holders whose Notes are purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered. (iv) The Issuer shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Section. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section by virtue thereof. SECTION 4.02. Change of Control. (a) Upon a Change of Control each Holder shall have the right to require that the Issuer offer to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of such Holder's Notes at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid interest thereon to the date of purchase, in accordance with the terms set forth in Section 4.02(b) (a "Change of Control Offer"); provided, however, that the Issuer shall have no obligation to make such a Change of Control Offer unless so instructed by the Holders of a majority, in aggregate principal amount, of the Notes (in accordance with part (b) of this Section 4.02), and further provided that notwithstanding the occurrence of a Change of Control, the Issuer shall not be obligated to purchase the Notes pursuant to this Section 4.02 in the event that the Issuer has exercised its right to redeem all the Notes pursuant to Section 3.01 of this Indenture. (b) Within 5 Business Days following a Change of Control, the Issuer shall mail a notice to each Holder with a copy to the Trustee, stating that a Change of Control has occurred and requesting that the Holders of Notes provide their instructions as to whether or not the Issuer should make a Change of Control Offer. If, within 10 days following the mailing of the notice described in this part 4.01(b), the Holders of a majority (by aggregate principal amount) of the Notes instruct the Issuer to make a Change of Control Offer, the Issuer shall become obligated on such 10th day to make a Change of Control Offer, following the steps set forth in parts (c) - (h) of this Section 4.02. (c) Promptly, and in any event within ten (10) Business Days after the Issuer becomes obligated to make a Change of Control Offer, the Issuer shall mail a notice to each Holder with a copy to the Trustee, which shall: (i) state that a Change of Control has occurred and that each Holder has the right to require the Issuer to purchase all or a portion (equal to $1,000 or an integral multiple thereof) of such Holder's Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest thereon, to the date of purchase; (ii) describe the circumstances and relevant facts and financial information regarding such Change of Control; (iii) set forth the repurchase date (which repurchase date shall be no earlier than 30 days (or such shorter time period as may be permitted under applicable laws, rules and regulations) nor later than 60 days from the date such notice is mailed); and (iv) set forth the instructions determined by the Issuer, consistent with this Section, that a Holder must follow in order to have its Notes purchased. (d) Holders electing to have a Note purchased shall be required to surrender the Note, with an appropriate form duly completed, to the Issuer at the address specified in the notice at least three Business Days prior to the purchase date. Holders shall be entitled to withdraw their election if the Trustee or the Issuer receives not later than one Business Day prior to the purchase date a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note which was delivered for purchase by the Holder and a statement that such Holder is withdrawing his election to have such Note purchased. Holders whose Notes are purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered. (e) On the purchase date, all Notes purchased by the Issuer under this Section shall be delivered to the Trustee for cancellation, and the Issuer shall pay the purchase price plus accrued and unpaid interest, if any, to the Holders entitled thereto. (f) Notwithstanding the foregoing provisions of this Section, the Issuer will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.02 applicable to a Change of Control Offer made by the Issuer and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. (g) In connection with any Change of Control Offer, the Issuer shall deliver to the Trustee an Officers' Certificate stating that all conditions precedent contained herein to the right of the Issuer to make such offer have been complied with. (h) The Issuer shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Section. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Indenture relating to Change of Control Offers, the Issuer shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section by virtue thereof. ARTICLE 5 AFFIRMATIVE COVENANTS For so long as any Note is outstanding, the Issuer covenants and agrees to the following provisions for the benefit of the Holders. SECTION 5.01. Payment of Notes. The Issuer shall promptly pay the principal of and interest on the Notes on the dates and in the manner provided in the Notes and in this Indenture. Principal and interest shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds in accordance with this Indenture money sufficient to pay all principal and interest then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture. The Issuer shall pay interest on overdue principal at the Interest Rate specified in the Notes, and it shall pay interest on accrued interest at the same rate to the extent lawful. Notwithstanding anything to the contrary contained in this Indenture, the Issuer may, to the extent they are required to do so by law, deduct or withhold income or other similar taxes imposed by the United States of America from principal or interest payments hereunder. SECTION 5.02. Commission Reports, Financial Statements and Other Information. (a) The Issuer shall furnish to the Trustee and Holders: (i) within 90 days after the end of each fiscal year of the Issuer, its audited consolidated balance sheet and related statements of operations, stockholders' equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by KPMG LLP or other independent public accountants of recognized national standing (without a "going concern" or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly, in all material respects, the consolidated financial condition and results of operations of the Issuer and the Subsidiaries on a consolidated basis in accordance with GAAP consistently applied; (ii) within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Issuer, its unaudited consolidated balance sheet and related statements of operations, stockholders' equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the consolidated financial condition and results of operations of the Issuer and the Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes; (iii) prior to the commencement of each fiscal year of the Issuer, a detailed consolidated budget for such fiscal year (including a projected consolidated balance sheet and related statements of projected operations and cash flow as of the end of and for such fiscal year and setting forth any material assumptions used for purposes of preparing such budget) and, promptly when available, any significant revisions of such budget; and (iv) copies of the Issuer's annual report and the information, documents and other reports that are specified in Section 13 and 15(d) of the Exchange Act (collectively, the "Required Information"), whether or not the Issuer is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, to be provided within 15 days after the Issuer files them with the Commission (or would be required to file with the Commission); provided, however, that if any of the Required Information is filed with the Commission, the Issuer shall only be required to provide the Trustee copies of such Required Information. In addition, the Issuer shall furnish to the Trustee, promptly upon their becoming available, copies of the annual report to shareholders and any other information provided by the Issuer to its public shareholders generally. (b) The Issuer shall also provide such information as may, from time to time, be necessary to comply with any applicable provisions of TIA ss. 314(a). (c) Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). SECTION 5.03. (a) Compliance Certificate. The Issuer shall furnish the Trustee a certificate from the principal executive officer, principal financial officer or principal accounting officer within 120 days after the end of each fiscal year. Such certificate shall report on the Issuer's compliance with the conditions and covenants of this Indenture, in a manner satisfying the requirements of Section 314(a)(4) of the TIA, and shall include a certification as to whether a Default has occurred and, if a Default has occurred, specify the details thereof and any action taken or proposed to be taken with respect thereto. (b) Information Regarding Collateral. (i) The Issuer will furnish to the Trustee and Collateral Agent prompt written notice of any change (A) in the Issuer's or any Pledgor and Guarantor's corporate name or in any trade name used to identify it in the conduct of its business or in the ownership of its properties, (B) in the location of the Issuer's or any Pledgor and Guarantor's chief executive office, its principal place of business, any office in which it maintains books or records relating to Collateral owned by it or any office or facility at which Collateral owned by it is located (including the establishment of any such new office or facility), (C) in the Issuer's or any Pledgor and Guarantor's identity, jurisdiction of incorporation, or corporate structure or (D) in the Issuer's or any Pledgor and Guarantor's Federal Taxpayer Identification Number. The Issuer agrees not to effect or permit any change referred to in the preceding sentence unless all filings have been made, or will have been made within any statutory period, under the Uniform Commercial Code or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral for the benefit of the Secured Parties. The Issuer also agrees promptly to notify the Collateral Agent and the Trustee if any material portion of the Collateral is damaged or destroyed. (ii) Each year, at the time of delivery of an annual compliance certificate with respect to the preceding fiscal year pursuant to part (a) of this Section 5.03, the Issuer shall deliver to the Collateral Agent (with a copy to the Trustee) a certificate of a Financial Officer of the Issuer (A) setting forth the information required pursuant to Section 2 of the Perfection Certificate or confirming that there has been no change in such information since the date of the Perfection Certificate delivered on the Issue Date or the date of the most recent certificate delivered pursuant to this Section and (B) certifying that all Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations, including all refilings, rerecordings and reregistrations, containing a description of the Collateral have been filed of record in each governmental, municipal or other appropriate office in each jurisdiction identified pursuant to clause (A) above to the extent necessary to protect and perfect the security interests under the Security Agreement for a period of not less than 18 months after the date of such certificate (except as noted therein with respect to any continuation statements to be filed within such period). SECTION 5.04. Notices of Material Events. (a) The Issuer will furnish to the Trustee and the Collateral Agent written notice of the following promptly upon any Financial Officer of the Issuer obtaining knowledge thereof: (i) the occurrence of any Default; (ii) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Issuer or any Affiliate thereof that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect; (iii) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Issuer and the Subsidiaries in an aggregate amount exceeding $2,500,000; and (iv) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect. (b) Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Issuer setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto. SECTION 5.05. Existence; Conduct of Business. The Issuer will, and will cause each of the Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, contracts, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names material to the conduct of the business of the Issuer and its Subsidiaries, taken as a whole, provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03 or any sale of assets permitted under Section 6.05; and further provided, that neither the Issuer nor any of its Subsidiaries shall be obligated to maintain any of the foregoing in the event that the board of directors of the Issuer adopts a resolution to the effect that the maintenance of such asset is no longer necessary or desirable in the conduct of the business of the Issuer and its Subsidiaries. SECTION 5.06. Payment of Obligations. The Issuer will, and will cause each of the Subsidiaries to, pay its Indebtedness and other obligations, including Tax liabilities, before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Issuer or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP, (c) such contest effectively suspends collection of the contested obligation and the enforcement of any Lien securing such obligation and (d) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect. SECTION 5.07. Maintenance of Properties. The Issuer will, and will cause each of the Subsidiaries to, keep and maintain all property material to the conduct of the business of the Issuer and the Subsidiaries, taken as a whole, in good working order and condition, ordinary wear and tear excepted. SECTION 5.08. Insurance; Casualty and Condemnation. (a) The Issuer will, and will cause each of the Subsidiaries to, maintain, with financially sound and reputable insurance companies insurance in such amounts (with no greater risk retention) and against such risks as are customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations and all insurance required to be maintained pursuant to the Security Documents. The Issuer will furnish to the Trustee and the Collateral Agent, upon request in writing, information in reasonable detail as to the insurance so maintained. (b) The Issuer (i) will furnish to the Collateral Agent (with a copy to the Trustee) prompt written notice of any casualty or other insured damage to any material portion of any Collateral or the commencement of any action or proceeding for the taking of any Collateral or any part thereof or interest therein under power of eminent domain or by condemnation or similar proceeding and (ii) will cause the Net Proceeds of any such event (whether in the form of insurance proceeds, condemnation awards or otherwise) to be applied in accordance with the applicable provisions of the Security Documents. SECTION 5.09. Books and Records; Inspection and Audit Rights. The Issuer will, and will cause each of the Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all material dealings and transactions in relation to its business and activities. The Issuer will, and will cause each of the Subsidiaries to, permit any representatives designated by the Trustee or the Collateral Agent, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and at such reasonable intervals as may be reasonably requested. SECTION 5.10. Compliance with Laws. The Issuer will, and will cause each of the Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property, except where the failure to do so, individually or in the aggregate, would not result in a Material Adverse Effect. SECTION 5.11. Additional Subsidiaries. If any additional Subsidiary is formed or acquired after the date hereof, the Issuer will, within ten (10) Business Days after such Subsidiary is formed or acquired, (i) notify the Trustee and Collateral Agent thereof, (ii) cause the Collateral and Guarantee Requirement to be satisfied with respect to such Subsidiary (if it is a Domestic Subsidiary) and with respect to any Equity Interest in or Indebtedness of such Subsidiary owned by or on behalf of the Issuer or any Pledgor and Guarantor and (iii) cause such Subsidiary to deliver to the Trustee a supplement to the Registration Rights Agreement, in the form specified therein. SECTION 5.12. Further Assurances; Transfer of Joint Venture Stock. (a) Upon request of the Trustee or as otherwise necessary, the Collateral Agent or the holders of a majority (by aggregate principal amount) of the Notes, the Issuer will, and will cause each Pledgor and Guarantor to, execute any and all further documents, statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements, fixture filings, mortgages, deeds of trust and other documents) that may be required under any applicable law, or which the Trustee or the Collateral Agent may reasonably request or as otherwise necessary, to cause the Collateral and Guarantee Requirement to be and remain satisfied, all at the expense of the Issuer and the Pledgors and Guarantors. The Issuer also agrees to provide to the Trustee and the Collateral Agent, from time to time, upon request evidence reasonably satisfactory to the Trustee and the Collateral Agent as to the perfection and priority of the Liens created or intended to be created by the Security Documents. (b) If any material assets (including any real property or improvements thereto or any interest therein) are acquired by the Issuer or any Pledgor and Guarantor after the date hereof (other than assets constituting Collateral under the Security Agreement or the Pledge Agreement that become subject to the Lien of the Security Agreement or the Pledge Agreement upon acquisition thereof), the Issuer will notify the Trustee, the Collateral Agent and the Holders thereof, and, if requested by the Trustee, the Collateral Agent or the Holders of a majority, by aggregate principal amount, of the outstanding Notes, the Issuer will cause such assets to be subjected to a Lien securing the Indenture Obligations and will take, and cause the Issuer and the Pledgors and Guarantors to take, such actions as shall be necessary or reasonably requested by the Trustee, the Collateral Agent or such Holders to grant and perfect such Liens, including actions described in paragraph (a) of this Section, all at the expense of the Pledgors and Guarantors. (c) The Issuer will, and will cause each applicable Subsidiary to, execute any and all further documents, financing statements, agreements and instruments, and take all such further actions that may be required under any applicable law, or which the Trustee or the Holders of a majority, by aggregate principal amount, of the Notes may reasonably request, to cause the transfer of all the Joint Venture Stock from the Issuer to MEMC International, Inc. no later than fifteen (15) Business Days (seventy-five (75) Business Days in the case of MEMC Kulim Electronic Materials, Sdn. Bhd.) after the Issue Date. ARTICLE 6 NEGATIVE COVENANTS For so long as any Note is outstanding, the Issuer covenants and agrees to the following provisions for the benefit of the Holders. SECTION 6.01. Indebtedness; Certain Equity Securities. (a) The Issuer will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except: (i) Indebtedness created hereunder or under the other Transaction Documents, Revolver Obligations and Indebtedness evidenced by the Italian Notes; (ii) Indebtedness existing on the Issue Date or incurred pursuant to contractual loan commitments existing on the Issue Date and set forth in Schedule 6.01 and extensions, renewals, refinancings and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof or result in an earlier maturity date or decreased weighted average life thereof; (iii) Indebtedness of the Issuer to any Subsidiary and of any Subsidiary to the Issuer or any other Subsidiary; (iv) Guarantees by the Issuer and by any Subsidiary of Indebtedness of the Issuer or any other Subsidiary, provided that Guarantees by the Issuer or any Pledgor and Guarantor of Indebtedness of any Subsidiary that is not a Pledgor and Guarantor shall be subject to Section 6.04; (v) Indebtedness of the Issuer or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations (provided that such Indebtedness is incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement) and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals, refinancings and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof, provided that the aggregate principal amount of Indebtedness permitted by this clause (v) shall not exceed $5,000,000 at any time outstanding; (vi) Indebtedness of the Issuer or any Subsidiary in respect of workers' compensation claims, self-insurance obligations, performance bonds, surety, appeal or similar bonds and completion guarantees provided by the Issuer and the Subsidiaries in the ordinary course of their business, provided that upon the incurrence of Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims, such obligations are reimbursed within 30 days following such drawing or incurrence; (vii) In each case with any consent required under the Revolving Loan Documentation (but only for so long as such Revolving Loan Documentation is in effect), Indebtedness in respect of a Permitted Receivables Financing, provided that the Net Proceeds resulting from the sale, transfer or other disposition of Receivables in connection with such Permitted Receivables Financing are applied in accordance with Section 4.01; (viii) Indebtedness of the Issuer or any Subsidiary that was (A) Indebtedness of any other Person existing at the time such other Person was merged with or became a Subsidiary, including Indebtedness incurred in connection with, or in contemplation of, such other Person's merging with or becoming a Subsidiary, and extensions, renewals, refinancings and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof (or commitments therefor) or result in an earlier maturity date or decreased weighted average life thereof, provided that the aggregate principal amount of Indebtedness permitted under this clause (viii) shall not exceed $5,000,000 at any time outstanding; (ix) non-interest bearing Indebtedness not for borrowed money, in the nature of customer deposits; and (x) other unsecured Indebtedness in an aggregate principal amount not exceeding $5,000,000 at any time outstanding, provided that the aggregate principal amount of Indebtedness of the Subsidiaries that are not Pledgors and Guarantors permitted by this clause (x) shall not exceed $5,000,000 at any time outstanding. (b) The Issuer will not, and will not permit any Subsidiary to, issue any preferred stock or other preferred Equity Interests, except that (i) the Issuer may issue the Cumulative Preferred Stock; (ii) the Issuer may issue preferred stock or other preferred Equity Interests of the Issuer that do not require mandatory cash dividends or redemptions and do not provide for any right on the part of the holder to require redemption, repurchase or repayment thereof, in each case prior to the date that is 180 days after the Stated Maturity and (iii) the Issuer or any Subsidiary may issue directors' qualifying shares or shares required by applicable law to be held by a Person other than the Issuer or any Subsidiary. SECTION 6.02. Liens. The Issuer will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except: (i) Liens created hereunder, under the Security Documents, under the Revolving Loan Documentation or to secure the Italian Notes; (ii) Permitted Encumbrances; (iii) any Lien on any property or asset of the Issuer or any Subsidiary existing on the Issue Date and set forth in Schedule 6.02, provided that (i) such Lien shall not apply to any other property or asset of the Issuer or any Subsidiary and (ii) such Lien shall secure only those obligations that it secures on the Issue Date and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof; any Lien existing on any property or asset prior to the acquisition thereof by the Issuer or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the Issue Date prior to the time such Person becomes a Subsidiary, provided that (A) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (B) such Lien shall not apply to any other property or assets of the Issuer or any Subsidiary and (C) such Lien shall secure only those obligations that it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof; (iv) Liens on fixed or capital assets acquired, constructed or improved by the Issuer or any Subsidiary, provided that (A) such Liens secure Indebtedness permitted by clause (v) of Section 6.01(a) , (B) such security interests and the Indebtedness secured thereby are incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement, (C) the Indebtedness secured thereby does not exceed 100% of the cost of acquiring, constructing or improving such fixed or capital assets and (D) such security interests shall not apply to any other property or assets of the Issuer or any Subsidiary; (v) sales of Receivables and Related Property (or undivided interests therein) permitted under Section 6.05(c) and Liens on Receivables of a Receivables Subsidiary granted in connection with any Permitted Receivables Financing; (vi) Liens arising solely by virtue of any statutory or common law provision relating to banker's liens, rights of setoff or similar rights; and (vii) statutory and common law Liens in favor of a landlord under leases to which the Issuer or any Subsidiary is a party. SECTION 6.03. Fundamental Changes and Successor Issuers. (a) The Issuer will not, and will not permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto, no Default shall have occurred and be continuing, the following transactions are permitted: (i) any Person may merge with the Issuer in a transaction in which the surviving entity is a corporation, partnership, limited liability company or similar entity organized or existing under the laws of the United States of America, any State thereof or the District of Columbia, provided that if such surviving entity is not the Issuer, such Person (the "Successor Issuer") must expressly assume, by a supplemental indenture hereto, executed and delivered to the Trustee all the obligations of the Issuer under the Transaction Documents; and further provided that prior to the consummation of such transaction, the Issuer must provide the Trustee with an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture comply with this Indenture; (ii) any Person may merge with any Subsidiary in a transaction in which the surviving entity is a Subsidiary; provided that if a Pledgor and Guarantor is one of the parties in such a transaction, and the surviving entity is not the Pledgor and Guarantor, the surviving entity must be a corporation, partnership or limited liability company organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, and such surviving entity must expressly assume, by execution of appropriate Transaction Documents (or counterparts or supplements thereto), executed and delivered to the Trustee and the Collateral Agent all the obligations of such Pledgor and Guarantor under the applicable Transaction Documents; and further provided that prior to the consummation of such transaction, the Issuer must provide the Trustee and the Collateral Agent with an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer complies with this Indenture and the other Transaction Documents; and (iii) any Subsidiary (other than a Pledgor and Guarantor) may liquidate or dissolve if the Issuer determines in good faith that such liquidation or dissolution is in the best interests of the Issuer and is not materially disadvantageous to the Holders, provided that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Sections 6.04 and 6.08. (b) The Issuer will not, and will not permit any of the Subsidiaries (other than a Receivables Subsidiary) to, engage to any material extent in any business other than businesses of the type conducted by the Issuer and the Subsidiaries on the Issue Date and businesses reasonably related thereto. (c) No Receivables Subsidiary will engage in any business other than the purchase and sale or other transfer of Receivables (or participation interests therein) in connection with any Permitted Receivables Financing, together with activities directly related thereto. (d) The Issuer will not permit MEMC International, Inc. to engage in any business or activity other than (i) the ownership of all of the outstanding shares of capital stock of MEMC Korea Company, MEMC Kulim Electronic Materials, Sdn. Bhd. and Taisil Electronic Materials Corporation owned by MEMC International, Inc. on or after the Issue Date (the "Joint Venture Stock") and activities incidental thereto, and (ii) miscellaneous payroll and benefits activities relating to certain expatriate employees and certain management employees in foreign locations of the Issuer and its Subsidiaries. MEMC International, Inc. will not own or acquire any assets (other than the Joint Venture Stock) or incur any liabilities (other than liabilities under the Transaction Documents or the Revolving Loan Documentation, obligations under any stock option plans or other benefit plans for management or employees of the Issuer and its Subsidiaries, obligations under the shareholder or joint venture agreements and related ancillary agreements with respect to MEMC Korea Company, MEMC Kulim Electronic Materials, Sdn. Bhd. and/or Taisil Electronic Materials Corporation, liabilities imposed by law, including tax liabilities, and other liabilities incidental to its existence and permitted business and activities). The Issuer will not permit MEMC International, Inc. to sell, transfer, lease or otherwise dispose of any or all of the Joint Venture Stock. SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. The Issuer will not, and will not permit any of the Subsidiaries to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to such merger) any Equity Interests in or evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit, except: (a) Permitted Investments; (b) investments and Guarantees of Indebtedness of Foreign Subsidiaries existing on the Issue Date and set forth on Schedule 6.04; (c) investments by the Issuer and the Pledgors and Guarantors in Equity Interests in their respective Subsidiaries that are Pledgors and Guarantors and investments by Subsidiaries that are not Pledgors and Guarantors in Equity Interests in their respective Subsidiaries; provided that any such Equity Interests held by the Issuer or a Pledgor and Guarantor shall be pledged pursuant to the Pledge Agreement (subject to the limitations applicable to voting stock of a Foreign Subsidiary referred to in the definition of the term "Collateral and Guarantee Requirement"); (d) loans or advances made by the Issuer to any Subsidiary and made by any Subsidiary to the Issuer or any other Subsidiary provided that any such loans and advances made by the Issuer or a Pledgor and Guarantor shall be evidenced by a promissory note pledged pursuant to the Pledge Agreement; (e) Guarantees constituting Indebtedness permitted by Section 6.01 of Indebtedness of the Issuer or any Pledgor and Guarantor; (f) investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business; (g) Permitted Acquisitions, provided that the sum of all consideration paid or otherwise delivered in connection with Permitted Acquisitions (including the principal amount of any Indebtedness issued as deferred purchase price and the fair market value of any other non-cash consideration) plus the aggregate principal amount of all Indebtedness otherwise incurred or assumed in connection with, or resulting from, Permitted Acquisitions (including Indebtedness of any acquired Persons outstanding at the time of the applicable Permitted Acquisition) shall not exceed, on a cumulative basis subsequent to the Issue Date, $5,000,000; (h) any investments in or loans to any other Person received as noncash consideration for sales, transfers, leases and other dispositions permitted by Section 6.05; (i) Guarantees by the Issuer and the Subsidiaries of leases entered into by any Subsidiary as lessee; (j) extensions of credit in the nature of accounts receivable or notes receivable in the ordinary course of business; (k) investments in payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business; (l) loans or advances to employees made in the ordinary course of business consistent with prudent business practice and not exceeding $500,000 in the aggregate outstanding at any one time; (m) investments in or acquisitions of stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to the Issuer or any Subsidiary or in satisfaction of judgments; (n) investments in the form of Hedging Agreements permitted under Section 6.07; (o) investments by the Issuer or any Subsidiary in (i) the capital stock of a Receivables Subsidiary and (ii) other interests in a Receivables Subsidiary, in each case to the extent determined by the Issuer in its judgment to be reasonably necessary in connection with or required by the terms of the Permitted Receivables Financing; (p) investments, loans, advances, guarantees and acquisitions resulting from a foreclosure by the Issuer or any Subsidiary with respect to any secured investment or other transfer of title with respect to any secured investment in default; (q) investments, loans, advances, guarantees and acquisitions the consideration for which consists solely of shares of common stock of the Issuer; (r) investments in prepaid expenses, negotiable instruments held for collection and lease, utility, workers' compensation, performance and other similar deposits in the ordinary course of business; and (s) other investments in an aggregate amount not to exceed $2,500,000 at any time outstanding. SECTION 6.05. Asset Sales. The Issuer will not, and will not permit any of the Subsidiaries to, sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it, nor will the Issuer permit any of the Subsidiaries to issue any additional Equity Interest in such Subsidiary, except: (a) sales of inventory, used or surplus equipment and Permitted Investments in the ordinary course of business and the periodic clearance of aged inventory; (b) sales, transfers and dispositions to the Issuer or a Subsidiary, provided that any such sales, transfers or dispositions involving a Subsidiary that is not a Pledgor and Guarantor shall be made in compliance with Section 6.09; (c) the Issuer and the Subsidiaries may sell, without recourse (other than Standard Securitization Undertakings and retained interests), Receivables to a Receivables Subsidiary, and any Receivables Subsidiary may sell Receivables and Related Property or an undivided interest therein to any other Person, pursuant to any Permitted Receivables Financing, and convert or exchange Receivables and Related Property into or for notes receivable in connection with the compromise or collection thereof; and (d) sales, transfers and other dispositions of assets (other than Equity Interests in a Subsidiary) that are not permitted by any other part of this Section 6.05, provided that the aggregate fair market value of all assets sold, transferred or otherwise disposed of in reliance upon this part (d) shall not exceed $3,000,000 during any fiscal year of the Issuer; provided that all sales, transfers, leases and other dispositions permitted hereby (other than those permitted by part (b) above) shall be made for fair value and for consideration of at least 80% cash or cash equivalents. SECTION 6.06. Sale and Leaseback Transactions. The Issuer will not, and will not permit any of the Subsidiaries to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred, except for any such sale of any fixed or capital assets that is made for cash consideration in an amount not less than the cost of such fixed or capital asset and is consummated within 180 days after the Issuer or such Subsidiary acquires or completes the construction of such fixed or capital asset. SECTION 6.07. Hedging Agreements. The Issuer will not, and will not permit any of the Subsidiaries to, enter into any Hedging Agreement, other than Hedging Agreements entered into in the ordinary course of business to hedge or mitigate risks to which the Issuer or any Subsidiary is exposed in the conduct of its business or the management of its liabilities. SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness. (a) The Issuer will not, and will not permit any Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except that (i) the Issuer may declare and pay dividends with respect to its capital stock payable solely in additional shares of its capital stock, (ii) Subsidiaries may declare and pay dividends ratably with respect to their capital stock and (iii) the Issuer may make Restricted Payments, not exceeding $200,000 during any fiscal year, pursuant to and in accordance with stock option plans or other benefit plans for directors, management or employees of the Issuer and the Subsidiaries, including the redemption or purchase of capital stock of the Issuer held by former directors, management or employees of the Issuer or any Subsidiary following termination of their employment. (b) The Issuer will not, and will not permit any Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness, except: (i) payment of Indebtedness created under the Transaction Documents; (ii) payment of regularly scheduled interest and principal payments as and when due in respect of any Indebtedness permitted under the Transaction Documents; (iii) refinancings of Indebtedness to the extent permitted by Section 6.01; (iv) payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; and (v) payments in respect of any Permitted Receivables Facility. SECTION 6.09. Transactions with Affiliates. The Issuer will not, and will not permit any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) transactions that are at prices and on terms and conditions not less favorable to the Issuer or such Subsidiary than could be obtained on an arm's-length basis from unrelated third parties, (b) transactions between or among the Issuer and the Pledgors and Guarantors not involving any other Affiliate, (c) to pay management, consulting and advisory fees to TPG or its Affiliates pursuant to any financial advisory, financing, underwriting or placement agreement or in respect of other investment banking activities, including in connection with acquisitions or divestitures, (d) payments of fees and expenses to TPG and its Affiliates in connection with the transactions contemplated under the Restructuring Agreement, the Revolving Loan Documentation and the Purchase Agreement, (e) any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock options and stock ownership plans approved by the board of directors of the Issuer, (f) the grant of stock options or similar rights to officers, employees, consultants and directors of the Issuer pursuant to plans approved by the board of directors of the Issuer and the payment of amounts or the issuance of securities pursuant thereto, (g) loans or advances to employees in the ordinary course of business consistent with prudent business practice, but in any event not to exceed $500,000 in the aggregate outstanding at any one time, and (h) any Restricted Payment permitted by Section 6.08. SECTION 6.10. Restrictive Agreements. The Issuer will not, and will not permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the Issuer or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its capital stock or to make or repay loans or advances to the Issuer or any other Subsidiary or to Guarantee Indebtedness of the Issuer or any other Subsidiary, provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by any Revolving Loan Documentation, (ii) the foregoing shall not apply to restrictions and conditions existing on the Issue Date and identified on Schedule 6.10 (but shall apply to any extension or renewal of, or any amendment or modification if it expands the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (iv) part (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Indenture if such restrictions or conditions apply only to the property or assets securing such Indebtedness, (v) part (a) of the foregoing shall not apply to customary provisions in leases, technology licenses, confidentiality agreements and other contracts or agreements restricting the assignment thereof and (vi) the foregoing shall not apply to restrictions or conditions imposed on a Receivables Subsidiary in connection with a Permitted Receivables Financing. SECTION 6.11. Amendment of Material Documents. (a) The Issuer will not, and will not permit any Subsidiary to, amend, modify or waive any of its rights under its certificate of incorporation, by-laws or other organizational documents to the extent that such amendment, modification or waiver would be adverse to the Holders. The Issuer will not, and will not permit any Subsidiary to, amend, modify or waive any of its rights under any Permitted Receivables Financing to the extent that such amendment, modification or waiver would be materially adverse to the Holders. SECTION 6.12. Minimum Quarterly Consolidated EBITDA. The Issuer will not permit Consolidated EBITDA for any fiscal quarter to be less than the amount set forth opposite such fiscal quarter: - -------------------------------------------------------------------------------- QUARTER MINIMUM AMOUNT - -------------------------------------------------------------------------------- Fourth Quarter of 2001 negative $18.0 million - -------------------------------------------------------------------------------- First Quarter of 2002 negative $13.0 million - -------------------------------------------------------------------------------- Second Quarter of 2002 negative $10.0 million - -------------------------------------------------------------------------------- Third Quarter of 2002 Zero - -------------------------------------------------------------------------------- Fourth Quarter of 2002 $8.0 million - -------------------------------------------------------------------------------- First Quarter of 2003 $10 million - -------------------------------------------------------------------------------- Second Quarter of 2003 $16.0 million - -------------------------------------------------------------------------------- Third Quarter of 2003 $19.0 million - -------------------------------------------------------------------------------- Fourth Quarter of 2003 $25.0 million - -------------------------------------------------------------------------------- First Quarter of 2004 $27.0 million - -------------------------------------------------------------------------------- Second Quarter of 2004 $30.0 million - -------------------------------------------------------------------------------- Third Quarter of 2004 $33.0 million - -------------------------------------------------------------------------------- Fourth Quarter of 2004 $35.0 million - -------------------------------------------------------------------------------- First Quarter of 2005 $37.0 million - -------------------------------------------------------------------------------- Second Quarter of 2005 $40.0 million - -------------------------------------------------------------------------------- Third Quarter of 2005 $42.0 million - -------------------------------------------------------------------------------- Fourth Quarter of 2005 $44.0 million - -------------------------------------------------------------------------------- First Quarter of 2006 $46.0 million - -------------------------------------------------------------------------------- Second Quarter of 2006 $48.0 million - -------------------------------------------------------------------------------- Third Quarter of 2006 $50.0 million - -------------------------------------------------------------------------------- Fourth Quarter of 2006 $52.0 million - -------------------------------------------------------------------------------- First Quarter of 2007 $54.0 million - -------------------------------------------------------------------------------- Second Quarter of 2007 $56.0 million - -------------------------------------------------------------------------------- Third Quarter of 2007 $58.0 million - -------------------------------------------------------------------------------- Fourth Quarter of 2007 $60.0 million - -------------------------------------------------------------------------------- SECTION 6.13. Minimum Monthly Consolidated Backlog. The Issuer will not permit Consolidated Backlog for any month to be less than the amount set forth opposite such month. Consolidated Backlog for any month shall, for the purposes of this Section 6.13, equal the arithmetic mean of the Consolidated Backlog for such month measured as of the close of business on each of the first five (5) Business Days in such month: - -------------------------------------------------------------------------------- MONTH MINIMUM AMOUNT - -------------------------------------------------------------------------------- October 2001 28.0 million square inches - -------------------------------------------------------------------------------- November 2001 29.0 million square inches - -------------------------------------------------------------------------------- December 2001 30.0 million square inches - -------------------------------------------------------------------------------- January 2002 30.0 million square inches - -------------------------------------------------------------------------------- February 2002 30.0 million square inches - -------------------------------------------------------------------------------- March 2002 31.0 million square inches - -------------------------------------------------------------------------------- April 2002 32.0 million square inches - -------------------------------------------------------------------------------- May 2002 32.0 million square inches - -------------------------------------------------------------------------------- June 2002 32.0 million square inches - -------------------------------------------------------------------------------- July 2002 36.0 million square inches - -------------------------------------------------------------------------------- August 2002 36.0 million square inches - -------------------------------------------------------------------------------- September 2002 36.0 million square inches - -------------------------------------------------------------------------------- October 2002 38.0 million square inches - -------------------------------------------------------------------------------- November 2002 38.0 million square inches - -------------------------------------------------------------------------------- December 2002 38.0 million square inches - -------------------------------------------------------------------------------- January 2003 49.0 million square inches - -------------------------------------------------------------------------------- February 2003 49.0 million square inches - -------------------------------------------------------------------------------- March 2003 49.0 million square inches - -------------------------------------------------------------------------------- April 2003 51.0 million square inches - -------------------------------------------------------------------------------- May 2003 51.0 million square inches - -------------------------------------------------------------------------------- June 2003 51.0 million square inches - -------------------------------------------------------------------------------- July 2003 51.0 million square inches - -------------------------------------------------------------------------------- August 2003 51.0 million square inches - -------------------------------------------------------------------------------- September 2003 51.0 million square inches - -------------------------------------------------------------------------------- October 2003 53.0 million square inches - -------------------------------------------------------------------------------- November 2003 53.0 million square inches - -------------------------------------------------------------------------------- December 2003 53.0 million square inches - -------------------------------------------------------------------------------- January 2004 58.0 million square inches - -------------------------------------------------------------------------------- February 2004 58.0 million square inches - -------------------------------------------------------------------------------- March 2004 58.0 million square inches - -------------------------------------------------------------------------------- April 2004 60.0 million square inches - -------------------------------------------------------------------------------- May 2004 60.0 million square inches - -------------------------------------------------------------------------------- June 2004 60.0 million square inches - -------------------------------------------------------------------------------- July 2004 60.0 million square inches - -------------------------------------------------------------------------------- August 2004 60.0 million square inches - -------------------------------------------------------------------------------- September 2004 60.0 million square inches - -------------------------------------------------------------------------------- October 2004 63.0 million square inches - -------------------------------------------------------------------------------- November 2004 63.0 million square inches - -------------------------------------------------------------------------------- December 2004 63.0 million square inches - -------------------------------------------------------------------------------- January 2005 68.0 million square inches - -------------------------------------------------------------------------------- February 2005 68.0 million square inches - -------------------------------------------------------------------------------- March 2005 68.0 million square inches - -------------------------------------------------------------------------------- April 2005 71.0 million square inches - -------------------------------------------------------------------------------- May 2005 71.0 million square inches - -------------------------------------------------------------------------------- June 2005 71.0 million square inches - -------------------------------------------------------------------------------- July 2005 71.0 million square inches - -------------------------------------------------------------------------------- August 2005 71.0 million square inches - -------------------------------------------------------------------------------- September 2005 71.0 million square inches - -------------------------------------------------------------------------------- October 2005 74.0 million square inches - -------------------------------------------------------------------------------- November 2005 74.0 million square inches - -------------------------------------------------------------------------------- December 2005 74.0 million square inches - -------------------------------------------------------------------------------- January 2006 74.0 million square inches - -------------------------------------------------------------------------------- February 2006 74.0 million square inches - -------------------------------------------------------------------------------- March 2006 74.0 million square inches - -------------------------------------------------------------------------------- April 2006 77.0 million square inches - -------------------------------------------------------------------------------- May 2006 77.0 million square inches - -------------------------------------------------------------------------------- June 2006 77.0 million square inches - -------------------------------------------------------------------------------- July 2006 77.0 million square inches - -------------------------------------------------------------------------------- August 2006 77.0 million square inches - -------------------------------------------------------------------------------- September 2006 77.0 million square inches - -------------------------------------------------------------------------------- October 2006 81.0 million square inches - -------------------------------------------------------------------------------- November 2006 81.0 million square inches - -------------------------------------------------------------------------------- December 2006 81.0 million square inches - -------------------------------------------------------------------------------- January 2007 83.0 million square inches - -------------------------------------------------------------------------------- February 2007 83.0 million square inches - -------------------------------------------------------------------------------- March 2007 83.0 million square inches - -------------------------------------------------------------------------------- April 2007 86.0 million square inches - -------------------------------------------------------------------------------- May 2007 86.0 million square inches - -------------------------------------------------------------------------------- June 2007 86.0 million square inches - -------------------------------------------------------------------------------- July 2007 89.0 million square inches - -------------------------------------------------------------------------------- August 2007 89.0 million square inches - -------------------------------------------------------------------------------- September 2007 89.0 million square inches - -------------------------------------------------------------------------------- October 2007 92.0 million square inches - -------------------------------------------------------------------------------- November 2007 92.0 million square inches - -------------------------------------------------------------------------------- December 2007 92.0 million square inches - -------------------------------------------------------------------------------- SECTION 6.14. Minimum Monthly Consolidated Revenue. The Issuer will not permit Consolidated Revenue for any month to be less than the amount set forth opposite such month: - -------------------------------------------------------------------------------- MONTH MINIMUM AMOUNT - -------------------------------------------------------------------------------- October 2001 $36.0 million - -------------------------------------------------------------------------------- November 2001 $37.0 million - -------------------------------------------------------------------------------- December 2001 $38.0 million - -------------------------------------------------------------------------------- January 2002 $38.5 million - -------------------------------------------------------------------------------- February 2002 $38.5 million - -------------------------------------------------------------------------------- March 2002 $38.5 million - -------------------------------------------------------------------------------- April 2002 $41.5 million - -------------------------------------------------------------------------------- May 2002 $41.5 million - -------------------------------------------------------------------------------- June 2002 $41.5 million - -------------------------------------------------------------------------------- July 2002 $46.0 million - -------------------------------------------------------------------------------- August 2002 $46.0 million - -------------------------------------------------------------------------------- September 2002 $46.0 million - -------------------------------------------------------------------------------- October 2002 $50.0 million - -------------------------------------------------------------------------------- November 2002 $51.0 million - -------------------------------------------------------------------------------- December 2002 $52.0 million - -------------------------------------------------------------------------------- January 2003 $52.0 million - -------------------------------------------------------------------------------- February 2003 $52.0 million - -------------------------------------------------------------------------------- March 2003 $52.0 million - -------------------------------------------------------------------------------- April 2003 $54.0 million - -------------------------------------------------------------------------------- May 2003 $54.0 million - -------------------------------------------------------------------------------- June 2003 $54.0 million - -------------------------------------------------------------------------------- July 2003 $55.0 million - -------------------------------------------------------------------------------- August 2003 $55.0 million - -------------------------------------------------------------------------------- September 2003 $55.0 million - -------------------------------------------------------------------------------- October 2003 $56.0 million - -------------------------------------------------------------------------------- November 2003 $56.0 million - -------------------------------------------------------------------------------- December 2003 $56.0 million - -------------------------------------------------------------------------------- January 2004 $61.0 million - -------------------------------------------------------------------------------- February 2004 $61.0 million - -------------------------------------------------------------------------------- March 2004 $61.0 million - -------------------------------------------------------------------------------- April 2004 $63.0 million - -------------------------------------------------------------------------------- May 2004 $63.0 million - -------------------------------------------------------------------------------- June 2004 $63.0 million - -------------------------------------------------------------------------------- July 2004 $65.0 million - -------------------------------------------------------------------------------- August 2004 $65.0 million - -------------------------------------------------------------------------------- September 2004 $65.0 million - -------------------------------------------------------------------------------- October 2004 $67.0 million - -------------------------------------------------------------------------------- November 2004 $67.0 million - -------------------------------------------------------------------------------- December 2004 $67.0 million - -------------------------------------------------------------------------------- January 2005 $70.0 million - -------------------------------------------------------------------------------- February 2005 $70.0 million - -------------------------------------------------------------------------------- March 2005 $70.0 million - -------------------------------------------------------------------------------- April 2005 $72.0 million - -------------------------------------------------------------------------------- May 2005 $72.0 million - -------------------------------------------------------------------------------- June 2005 $72.0 million - -------------------------------------------------------------------------------- July 2005 $74.0 million - -------------------------------------------------------------------------------- August 2005 $74.0 million - -------------------------------------------------------------------------------- September 2005 $74.0 million - -------------------------------------------------------------------------------- October 2005 $76.0 million - -------------------------------------------------------------------------------- November 2005 $76.0 million - -------------------------------------------------------------------------------- December 2005 $76.0 million - -------------------------------------------------------------------------------- January 2006 $78.0 million - -------------------------------------------------------------------------------- February 2006 $78.0 million - -------------------------------------------------------------------------------- March 2006 $78.0 million - -------------------------------------------------------------------------------- April 2006 $80.0 million - -------------------------------------------------------------------------------- May 2006 $80.0 million - -------------------------------------------------------------------------------- June 2006 $80.0 million - -------------------------------------------------------------------------------- July 2006 $82.0 million - -------------------------------------------------------------------------------- August 2006 $82.0 million - -------------------------------------------------------------------------------- September 2006 $82.0 million - -------------------------------------------------------------------------------- October 2006 $84.0 million - -------------------------------------------------------------------------------- November 2006 $84.0 million - -------------------------------------------------------------------------------- December 2006 $84.0 million - -------------------------------------------------------------------------------- January 2007 $86.0 million - -------------------------------------------------------------------------------- February 2007 $86.0 million - -------------------------------------------------------------------------------- March 2007 $86.0 million - -------------------------------------------------------------------------------- April 2007 $88.0 million - -------------------------------------------------------------------------------- May 2007 $88.0 million - -------------------------------------------------------------------------------- June 2007 $88.0 million - -------------------------------------------------------------------------------- July 2007 $90.0 million - -------------------------------------------------------------------------------- August 2007 $90.0 million - -------------------------------------------------------------------------------- September 2007 $90.0 million - -------------------------------------------------------------------------------- October 2007 $92.0 million - -------------------------------------------------------------------------------- November 2007 $92.0 million - -------------------------------------------------------------------------------- December 2007 $92.0 million - -------------------------------------------------------------------------------- SECTION 6.15. Capital Expenditures. The Issuer and its Subsidiaries shall not incur or make Capital Expenditures in an amount exceeding $15,000,000 during the fourth fiscal quarter of 2001, $45,000,000 during fiscal year of 2002, $50,000,000 during fiscal year 2003, $55,000,000 during fiscal year 2004, $55,000,000 during fiscal year 2005, $55,000,000 during fiscal year 2006 and $55,000,000 during fiscal year 2007. ARTICLE 7 DEFAULTS AND REMEDIES SECTION 7.01. Events of Default. Each of the following shall constitute an "Event of Default", whether occurring voluntarily, involuntarily, by operation of law, pursuant to any judgment, decree or order of any court or in compliance with any order, rule or regulation of any or Governmental Authority: (a) the Issuer (i) shall fail to pay any principal of, or interest on, any Note when and as the same becomes due and payable at its Stated Maturity, upon required redemption or repurchase, upon declaration or otherwise, or (ii) shall fail to redeem or purchase Notes when required pursuant to this Indenture or the Notes; (b) any representation or warranty made or deemed to be made by or on behalf of the Issuer or any Pledgor or Guarantor in any Transaction Document, or in any certificate or other document furnished pursuant to or in connection with, any Transaction Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made; (c) the Issuer shall fail to observe or perform any covenant, condition or agreement contained in Section 5.04, Section 5.05 (with respect to the existence of the Issuer) or in Article 6; (d) the Issuer or any Pledgor and Guarantor shall fail to observe or perform any covenant, condition or agreement contained in this Indenture, in any Note or in any Security Document, as applicable (other than those covenants, conditions and agreements specified in parts (a), (b) or (c) of this Section 7.01) and such failure shall continue for 30 days after receipt of a Notice of Default; (e) the Issuer or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness when and as the same shall become due and payable after giving effect to any applicable grace period with respect thereto; (f) any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity, provided that this part (i) shall not apply to secured Indebtedness that become due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness and further provided that this part (i) shall not apply to any Revolver Obligations that becomes due, or subject to prepayment, repurchase, redemption or defeasance prior to scheduled maturity, solely as a result of a Change of Control; (g) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Issuer or any Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Issuer or any Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 45 days or an order or decree approving or ordering any of the foregoing shall be entered; (h) the Issuer or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in part (g) of this Section 7.01, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Issuer or any Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing; (i) the Issuer or any Subsidiary shall become unable, admit in writing its inability or fail generally to pay its debts as they become due; (j) one or more judgments for the payment of money in an aggregate amount in excess of $2,500,000 (net of amounts covered by insurance as to which the insurer has admitted liability in writing) shall be rendered against the Issuer, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Issuer or any Subsidiary to enforce any such judgment; (k) an ERISA Event shall have occurred that, in the opinion of the Holders of a majority (by aggregate principal amount) of the Notes, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect; (l) any Lien purported to be created under any Security Document shall cease to be, or shall be asserted by the Issuer or any Pledgor and Guarantor not to be, a valid and perfected Lien on Collateral having, in the aggregate, a value in excess of $500,000, with the priority required by the applicable Security Document, except (i) as a result of the sale or other disposition of the applicable Collateral in a transaction permitted hereunder, (ii) any action taken by the Collateral Agent to release any such Lien in compliance with the provisions of this Indenture or any Security Agreement or (iii) as a result of the Collateral Agent's failure to maintain possession of any stock certificates, promissory notes or other instruments delivered to it under the Pledge Agreement; or (m) any default or other event shall have occurred under any document governing any Permitted Receivables Financing if the effect of such default or other event is to cause the termination of such Permitted Receivables Financing. A Default under part (d) of this Section 7.01 shall not be an Event of Default until (i) the Holders of at least a majority, by aggregate principal amount, of the Notes notify the Issuer, the Collateral Agent and the Trustee, and (ii) the Issuer or the relevant Pledgor and Guarantor, as applicable, fails to cure such Default within the time period specified under part (d). A notice given pursuant to clause (i) of the foregoing sentence must be given in writing and must specify the Default, demand that it be remedied and state that it constitutes a "Notice of Default". SECTION 7.02. Acceleration. (d) If an Event of Default (other than an Event of Default specified in Section 7.01(g) or (h) with respect to the Issuer) occurs and is continuing, the Trustee or the Holders of at least a majority by aggregate principal amount of the Notes, by notice to the Issuer, may declare the principal of and accrued but unpaid interest on all the Notes to be due and payable. Upon such a declaration, such principal and interest shall be due and payable immediately. If an Event of Default specified in Section 7.01(g) or (h) with respect to the Issuer occurs, the principal of and interest on all the Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee, the Collateral Agent or any Holders. The Holders of a majority in principal amount of the Notes by notice to the Trustee may rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of acceleration. No such rescission shall affect any subsequent Default or impair any right consequent thereto. (e) In the event of a declaration of acceleration of the Notes because an Event of Default has occurred and is continuing as a result of the acceleration of any Indebtedness described in Section 7.01(e) or (f), the declaration of acceleration of the Notes shall be automatically annulled if the holders of any such Indebtedness have rescinded the declaration of acceleration in respect of such Indebtedness within 30 days of the date of such acceleration and if (i) the annulment of the acceleration of the Notes would not conflict with any judgment or decree of a court of competent jurisdiction and (ii) all existing Events of Default, except nonpayment of principal or interest on the Notes that became due solely because of the acceleration of the Notes, have been cured or waived. SECTION 7.03. Other Remedies. (a) If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of or interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture. (b) The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative. SECTION 7.04. Waiver of Past Defaults. The Holders of a majority in principal amount of the Notes by notice to the Trustee may waive on behalf of the Holders of all of the Notes an existing Default and its consequences except (a) a Default in the payment of the principal of or interest on a Note, (b) a Default arising from the failure to redeem or purchase any Note when required pursuant to the terms of this Indenture or (c) a Default in respect of a provision that under Section 10.02 cannot be amended without the consent of each Holder affected. When a Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or impair any consequent right. SECTION 7.05. Control by Majority. The Holders of a majority in principal amount of the Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 8.01, that the Trustee determines is prejudicial to the rights of other Holders or would involve the Trustee in personal liability; provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. Prior to taking any action hereunder, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action. SECTION 7.06. Limitation on Suits. (a) Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Holder may pursue any remedy with respect to this Indenture or the Notes unless: (i) the Holder gives to the Trustee written notice stating that an Event of Default is continuing; (ii) the Holders of at least a majority, by aggregate principal amount, of the Notes make a written request to the Trustee to pursue the remedy; (iii) such Holder or Holders offer to the Trustee reasonable security or indemnity satisfactory to it against any loss, liability or expense; (iv) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and (v) the Holders of a majority in principal amount of the Notes do not give the Trustee a direction inconsistent with the request during such 60-day period. (b) A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder. SECTION 7.07. Rights of Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of and interest on the Notes held by such Holder, on or after the respective due dates expressed or provided for in the Notes, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. SECTION 7.08. Collection Suit by Trustee. If an Event of Default specified in Section 7.01(a) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuer or any other obligor on the Notes for the whole amount then due and owing (together with interest on overdue principal and (to the extent lawful) on any unpaid interest at the rate provided for in the Notes) and the amounts provided for in Section 8.07. SECTION 7.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Holders allowed in any judicial proceedings relative to the Issuer, any Subsidiary or any Pledgor and Guarantor, their creditors or their property and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 8.07. SECTION 7.10. Priorities. If the Trustee collects any money or property pursuant to this Article 7, it shall pay out the money or property in the following order: FIRST: to the Collateral Agent for amounts due under Article 11 and to the Trustee for amounts due under Section 8.07; SECOND: to Holders for amounts due and unpaid on the Notes for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal and interest, respectively; and THIRD: to the Issuer. The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section. At least 15 days before such record date, the Trustee shall mail to each Holder and the Issuer a notice that states the record date, the payment date and amount to be paid. SECTION 7.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 7.07 or a suit by Holders of more than 10% in principal amount of the Notes. SECTION 7.12. Waiver of Stay or Extension Laws. Neither the Issuer nor any Pledgor and Guarantor (to the extent it may lawfully do so) shall at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and each Issuer and each Pledgor and Guarantor (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE 8 THE TRUSTEE SECTION 8.01. Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. (b) Except during the continuance of an Event of Default: (i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, with respect to certificates and opinions specifically required to be furnished to it hereunder, the Trustee shall examine the certificates and opinions to determine whether or not they substantially conform to the requirements of this Indenture, but need not confirm or investigate the accuracy of any mathematical calculations or other facts stated therein. (c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that: (i) this paragraph does not limit the effect of paragraph (b) of this Section; (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 7.05; and (iv) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 8.01. (e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer. (f) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. (g) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section and to the provisions of the TIA. SECTION 8.02. Rights of Trustee. (a) The Trustee may conclusively rely on any document (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on the Officers' Certificate or Opinion of Counsel. (c) The Trustee may act through agents or attorneys and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers. (e) The Trustee may consult with counsel of its own selection, and the advice or Opinion of Counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel. (f) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other paper or document unless requested in writing to do so by the Holders of not less than a majority in principal amount of the Notes at the time outstanding, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Issuer, personally or by agent or attorney at the expense of the Issuer and shall incur no liability of any kind by reason of such inquiry or investigation. (g) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. (h) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Trust Officer has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture. (i) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder. SECTION 8.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar or co-paying agent may do the same with like rights. However, the Trustee must comply with Sections 8.10 and 8.11. SECTION 8.04. Trustee's Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, any Security Document or the Notes, it shall not be accountable for the Issuer's use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuer or any Pledgor and Guarantor in this Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Trustee's certificate of authentication. The Trustee shall not be charged with knowledge of any Default or Event of Default under Sections 7.01(b), (c), (d), (e), (f), (i), (j), (k), (l) or (m) or of the identity of any Subsidiary unless a Trust Officer of the Trustee shall have actually received notice thereof in accordance with Section 13.02 hereof from the Issuer, any Pledgor and Guarantor or any Holder. SECTION 8.05. Notice of Defaults. If a Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to each Holder notice of the Default within the earlier of 90 days after it occurs or 30 days after it is known to a Trust Officer. Except in the case of a Default in payment of principal of or interest on any Note (including payments pursuant to the mandatory redemption provisions of such Note, if any), the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Holders. SECTION 8.06. Reports by Trustee to Holders. Within 60 days after each August 15th beginning with August 15, 2002, the Trustee shall mail to each Holder a brief report dated as of such August 15th that complies with Section 313(a) of the TIA if and to the extent required thereby. The Trustee shall also comply with Section 313(b) of the TIA. A copy of each report at the time of its mailing to Holders shall be filed with the Commission and each stock exchange (if any) on which the Notes are listed. The Issuer agree to notify promptly the Trustee whenever the Notes become listed on any stock exchange and of any delisting thereof. SECTION 8.07. Compensation and Indemnity. The Issuer shall pay to the Trustee from time to time reasonable compensation for its services hereunder as the Issuer and the Trustee shall from time to time agree in writing. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Trustee upon request for all out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee's agents, counsel, accountants and experts. The Issuer shall fully indemnify the Trustee and any predecessor Trustee against any and all loss, liability, claim, damage or expense (including reasonable attorneys' fees) incurred by or in connection with the administration of this trust and the performance of its duties hereunder. The Trustee shall notify the Issuer of any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof; provided, however, that any failure so to notify the Issuer shall not relieve the Issuer or any Pledgor and Guarantor of its indemnity obligations hereunder. The Issuer shall defend the claim and the Trustee shall provide reasonable cooperation at the Issuer's expense in the defense. The Trustee may have separate counsel and the Issuer shall pay the fees and expenses of such counsel; provided, however, that the Issuer shall not be required to pay such fees and expenses if it assumes the Trustee's defense and, in the reasonable judgment of the Trustee's outside counsel, there is no conflict of interest between the Issuer, on the one hand, and the Trustee, on the other hand, in connection with such defense. The Issuer need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee as determined by a court of competent jurisdiction to have been caused by its own willful misconduct, negligence or bad faith. To secure the Issuer's payment obligations in this Section, the Trustee shall have a lien prior to the Notes on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Notes. The Issuer's payment obligations pursuant to this Section shall survive the satisfaction or discharge of this Indenture, any rejection or termination of this Indenture under any bankruptcy law or the resignation or removal of the Trustee. Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee incurs expenses after the occurrence of a Default specified in Section 7.01(g) or (h) with respect to the Issuer, the expenses are intended to constitute expenses of administration under applicable bankruptcy, insolvency, receivership or similar law. SECTION 8.08. Replacement of Trustee. (a) The Trustee may resign at any time by so notifying the Issuer. The Holders of a majority in principal amount of the Notes may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. The Issuer shall remove the Trustee if: (i) the Trustee fails to comply with Section 8.10; (ii) the Trustee is adjudged bankrupt or insolvent; (iii) a receiver or other public officer takes charge of the Trustee or its property; or (iv) the Trustee otherwise becomes incapable of acting. (b) If the Trustee resigns, is removed by the Issuer or by the Holders of a majority in principal amount of the Notes and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuer shall promptly appoint a successor Trustee. (c) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 8.07. (d) If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in principal amount of the Notes may petition, at the expense of the Issuer, any court of competent jurisdiction for the appointment of a successor Trustee. (e) If the Trustee fails to comply with Section 8.10, unless the Trustee's duty to resign is stayed as provided in TIA ss.310(b), any Holder who has been a bona fide holder of a Note for at least six months may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. (f) Notwithstanding the replacement of the Trustee pursuant to this Section, the Issuer's obligations under Section 8.07 shall continue for the benefit of the retiring Trustee. SECTION 8.09. Successor Trustee by Merger. If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee. In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have. SECTION 8.10. Eligibility; Disqualification. The Trustee shall at all times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition. The Trustee shall comply with TIA ss. 310(b), subject to its right to apply for a stay of its duty to resign under the penultimate paragraph of TIA ss.310(b); provided, however, that there shall be excluded from the operation of TIA ss. 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuer are outstanding if the requirements for such exclusion set forth in TIA ss. 310(b)(1) are met. SECTION 8.11. Preferential Collection of Claims Against the Issuer. The Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be subject to TIA ss. 311(a) to the extent indicated. ARTICLE 9 DISCHARGE; DEFEASANCE SECTION 9.01. Discharge of Liability on Notes; Defeasance. (a) Subject to Section 9.01(c), when (i) all outstanding Notes (other than Notes replaced or paid pursuant to Section 2.09) have been canceled or delivered to the Trustee for cancellation or (ii) all outstanding Notes not previously delivered for cancellation have become due and payable, whether at maturity or as a result of redemption pursuant to Article 3 or 4 hereof, and the Issuer irrevocably deposits with the Trustee funds in an amount sufficient or U.S. Government Obligations, the principal of and interest on which will be sufficient, or a combination thereof sufficient, in the written opinion of a nationally recognized firm of independent public accountants delivered to the Trustee (which delivery shall only be required if U.S. Government Obligations have been so deposited) to pay the principal of and interest on the outstanding Notes when due at maturity or upon redemption, including interest thereon to maturity or such redemption date (other than Notes replaced pursuant to Section 2.08), and if in either case the Issuer pays all other sums payable hereunder by the Issuer, then this Indenture shall, subject to Section 8.01(c), cease to be of further effect. The Trustee shall acknowledge satisfaction and discharge of this Indenture on demand of the Issuer accompanied by an Officers' Certificate and an Opinion of Counsel and at the cost and expense of the Issuer. (b) Subject to Sections 9.01(c) and 9.02, the Issuer at any time may terminate (i) all of its obligations under the Notes and this Indenture ("legal defeasance option") and (ii) its obligations under Section 5.03, Section 5.04, Sections 5.06 through and including Section 5.11, Section 6.01, Section 6.02, and Sections 6.04 through and including Section 6.15 and the operation of part (d), (e), (f), (j), (k) or (m) of Section 7.01 ("covenant defeasance option"). The Issuer may exercise its legal defeasance option notwithstanding its prior exercise of the covenant defeasance option. In the event that the Issuer terminates all of its obligations under the Notes and this Indenture by exercising the legal defeasance option, the obligations under the Security Documents shall each be terminated simultaneously with the termination of such obligations. If the Issuer exercises its legal defeasance option, payment of the Notes may not be accelerated because of an Event of Default. If the Issuer exercises its covenant defeasance option, payment of the Notes may not be accelerated because of an Event of Default specified in part (d), (e), (f), (j), (k) or (m) of Section 7.01. Upon satisfaction of the conditions set forth herein and upon request of the Issuer, the Trustee shall acknowledge in writing the discharge of those obligations that the Issuer terminates. (c) Notwithstanding the provisions of Sections 9.01(a) and 9.01(b), the obligations of the Issuer in Sections 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 8.07, 8.08 and in this Article 9 shall survive until the Notes have been paid in full. Thereafter, the obligations of the Issuer in Sections 8.07, 9.04 and 9.05 shall survive such satisfaction and discharge. SECTION 9.02. Conditions to Defeasance. (a) The Issuer may exercise its legal defeasance option or covenant defeasance option only if: (i) the Issuer irrevocably deposits in trust with the Trustee money in an amount sufficient or U.S. Government Obligations, the principal of and interest on which will be sufficient, or a combination thereof sufficient, to pay the principal, premium (if any) and interest on the Notes when due at maturity or redemption, as the case may be, including interest thereon to maturity or such redemption date; (ii) the Issuer delivers to the Trustee a certificate from a firm of independent accountants expressing their opinion that the payments of principal and interest when due and without reinvestment on the deposited U.S. Government Obligations plus any deposited money without investment will provide cash at such times and in such amounts as will be sufficient to pay principal and interest when due on all the Notes to maturity or redemption, as the case may be; (iii) 91 days pass after the deposit is made and during the 91-day period no Default specified in Section 7.01(g) or (h) with respect to the Issuer occurs which is continuing at the end of the period; (iv) the deposit does not constitute a default under any other agreement binding on the Issuer; (v) the Issuer delivers to the Trustee an Opinion of Counsel to the effect that the trust resulting from the deposit does not constitute, or is qualified as, a regulated investment company under the Investment Company Act of 1940; (vi) in the case of the legal defeasance option, the Issuer shall have delivered to the Trustee an Opinion of Counsel stating that (A) the Issuer has received from, or there has been published by, the Internal Revenue Service a ruling, or (B) since the date of this Indenture there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred; (vii) in the case of the covenant defeasance option, the Issuer shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such covenant defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred; and (viii) the Issuer delivers to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance and discharge of the Notes as set forth in this Article 9 have been complied with. (b) Before or after a deposit, the Issuer may make arrangements satisfactory to the Trustee for the redemption of Notes at a future date in accordance with Article 3. SECTION 9.03. Application of Trust Money. The Trustee shall hold in trust money or U.S. Government Obligations deposited with it pursuant to this Article 9. It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Notes. SECTION 9.04. Repayment to the Issuer. The Trustee and the Paying Agent shall promptly turn over to the Issuer upon request any money or U.S. Government Obligations held by it as provided in this Article which, in the written opinion of a firm of independent public accountants delivered to the Trustee (which delivery shall only be required if U.S. Government Obligations have been so deposited), are in excess of the amount thereof which would then be required to be deposited to effect an equivalent discharge or defeasance in accordance with this Article. The Trustee and the Paying Agent shall pay to the Issuer upon written request any money held by them for the payment of principal or interest that remains unclaimed for two years, and, thereafter, Holders entitled to the money must look to the Issuer for payment as general creditors and the Trustee, and the Paying Agent shall have no further liability with respect to such monies. SECTION 9.05. Indemnity for Government Obligations. The Issuer shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations. SECTION 9.06. Reinstatement. If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article 9 by reason of any legal proceeding or by reason of any order or judgment of any Governmental Authority enjoining, restraining or otherwise prohibiting such application, the Issuer's obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to this Article 9 until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article 9; provided, however, that, if the Issuer has made any payment of interest on or principal of any Notes because of the reinstatement of its obligations, the Issuer shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent. ARTICLE 10 AMENDMENTS SECTION 10.01. Without Consent of Holders. The Issuer and the Trustee may amend this Indenture or the Notes without notice to or consent of any Holder: (i) to cure any ambiguity, omission, defect or inconsistency; (ii) to allow a Successor Issuer to assume obligations hereunder pursuant to, and in compliance with, Section 6.03(a)(i); (iii) to provide for uncertificated Notes in addition to or in place of certificated Notes; provided, however, that the uncertificated Notes are issued in registered form for purposes of Section 163(f) of the Code or in a manner such that the uncertificated Notes are described in Section 163(f)(2)(B) of the Code; (iv) to add additional Guarantees with respect to the Notes; (v) to pledge additional Collateral as security for the Notes; (vi) to add to the covenants of the Issuer for the benefit of the Holders or to surrender any right or power herein conferred upon the Issuer; (vii) to comply with any requirement of the Commission in connection with qualifying, or maintaining the qualification of, this Indenture under the TIA; or (viii) to make any change that does not adversely affect the rights of any Holder. After an amendment under this Section becomes effective, the Issuer shall mail to Holders a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 10.01. SECTION 10.02. With Consent of Holders. (a) The Issuer and the Trustee may amend this Indenture or the Notes (or waive any provision of the covenants contained in this Indenture) without notice to any Holder but with the written consent of the Holders of at least a majority in principal amount of the Notes then outstanding (including consents obtained in connection with a tender offer or exchange for the Notes). However, without the consent of each Holder affected, an amendment or waiver may not: (i) reduce the amount of Notes whose Holders must consent to an amendment; (ii) reduce the rate of or extend the time for payment of interest on any Note; (iii) reduce the principal of or extend the Stated Maturity of any Note; (iv) reduce the premium payable upon the redemption of any Note or change the time at which any Note may be redeemed in accordance with Article 3; (v) make any Note payable in currency other than that stated in the Note; (vi) impair the right of any Holder to receive payment of principal of, and interest on, such Holder's Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder's Notes; (vii) make any change in Section 7.04 or 7.07 or the second sentence of paragraph (a) of this Section 10.02; or (viii) amend the Security Documents or modify the Collateral and Guarantee Requirement, in each case, in any manner materially adverse to the Holders. (b) It shall not be necessary for the consent of the Holders under this Section 10.02 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof. (c) After an amendment under this Section 10.02 becomes effective, the Issuer shall mail to Holders a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 10.02. SECTION 10.03. Compliance with Trust Indenture Act. Every amendment to this Indenture or the Notes shall comply with the TIA as then in effect. SECTION 10.04. Revocation and Effect of Consents and Waivers. (a) A consent to an amendment or a waiver by a Holder of a Note shall bind the Holder and every subsequent Holder of that Note or portion of the Note that evidences the same debt as the consenting Holder's Note, even if notation of the consent or waiver is not made on the Note. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder's Note or portion of the Note if the Trustee receives the notice of revocation before the date on which the Trustee receives an Officers' Certificate from the Issuer certifying that the requisite number of consents have been received. After an amendment or waiver becomes effective, it shall bind every Holder. An amendment or waiver becomes effective upon the (i) receipt by the Issuer or the Trustee of the requisite number of consents, (ii) satisfaction of conditions to effectiveness as set forth in this Indenture and any indenture supplemental hereto containing such amendment or waiver and (iii) execution of such amendment or waiver (or supplemental indenture) by the Issuer and the Trustee. (b) The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date. SECTION 10.05. Notation on or Exchange of Notes. If an amendment changes the terms of a Note, the Trustee may require the Holder of the Note to deliver it to the Trustee. The Trustee may place an appropriate notation on the Note regarding the changed terms and return it to the Holder. Alternatively, if the Issuer or the Trustee so determines, the Issuer in exchange for the Note shall issue and, upon Issuer Order, the Trustee shall authenticate a new Note that reflects the changed terms. Failure to make the appropriate notation or to issue a new Note shall not affect the validity of such amendment. SECTION 10.06. Trustee to Sign Amendments. The Trustee shall sign any amendment authorized pursuant to this Article 10 if the amendment does not affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and to receive, and (subject to Section 8.01) shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that such amendment is authorized or permitted by this Indenture and that such amendment is the legal, valid and binding obligation of the Issuer enforceable against it in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 10.03). SECTION 10.07. Payment for Consent. Neither the Issuer nor any Affiliate of the Issuer shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid to all Holders that so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement. ARTICLE 11 SECURITY; NOTE GUARANTEES SECTION 11.01. Collateral and Guarantee Requirement. Prior to the issuance of the Notes on the Issue Date, and for so long as any Note remains outstanding, the Issuer shall execute, and cause its Domestic Subsidiaries to execute, the Security Documents and shall take any other steps necessary to cause the Collateral and Guarantee Requirement to be satisfied. SECTION 11.02. Regarding the Collateral Agent. (a) The Trustee, on behalf of the Secured Parties, hereby appoints Citicorp USA, Inc. to act as Collateral Agent under this Indenture and the Security Documents, provided however that for so long as any Revolver Obligations are outstanding, the same Person shall act as Collateral Agent under both the Security Documents and the Revolving Loan Documentation. The Trustee on behalf of itself and the Secured Parties hereby irrevocably appoints the Collateral Agent as its agent and authorizes the Collateral Agent to take such actions on its behalf and to exercise such powers as are delegated to the Collateral Agent by the terms hereof and of the Security Documents, together with such actions and powers as are reasonably incidental thereto. (b) The Person serving as Collateral Agent and its Affiliates may accept deposits from, lend money to and generally engage in any kind of banking, trust or other business with the Issuer or any Subsidiary or other Affiliate thereof as if it were not the Collateral Agent hereunder and may accept fees and other consideration from the Issuer for services in connection with this Indenture, the Security Documents or otherwise without having to account for the same to the Trustee or the Holders. (c) The Collateral Agent shall not have any duties or obligations except those expressly set forth in this Indenture and the Security Documents. Without limiting the generality of the foregoing, (i) the Collateral Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (ii) the Collateral Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by this Indenture and the Security Documents that the Collateral Agent is required to exercise in writing by the Trustee or such number or percentage of the Holders as shall be necessary under the circumstances as provided in Article 10, and (iii) except as expressly set forth in this Indenture and the Security Documents, the Collateral Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Issuer or any of the Subsidiaries that is communicated to or obtained by the Person serving as Collateral Agent or any of its Affiliates in any capacity. The Collateral Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Trustee or such number or percentage of the Holders as shall be necessary under the circumstances as provided in Article 10 or otherwise in the absence of its own gross negligence or willful misconduct as determined in a final judgment by a court of competent jurisdiction. The Collateral Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Collateral Agent by the Issuer or the Trustee, and the Collateral Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Indenture or any Security Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in this Indenture or any Security Document, (iv) the validity, enforceability, effectiveness or genuineness of this Indenture or any Security Document or any other agreement, instrument or document, or the validity, perfection, or priority of any Lien created by any of the Security Documents, or (v) the satisfaction of any condition set forth in this Indenture or any Security Document, other than to confirm receipt of items expressly required to be delivered to the Collateral Agent. (d) The Collateral Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Collateral Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Collateral Agent may consult with legal counsel (who may be counsel for the Issuer), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts. (e) The Collateral Agent may perform any and all of its duties and exercise its rights and powers by or through any one or more sub-agents or attorneys-in-fact appointed by the Collateral Agent. The Collateral Agent and any such sub-agent or attorney-in-fact may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent or attorney-in-fact and to the Related Parties of the Collateral Agent and any such sub-agent or attorney-in-fact. (f) Subject to the appointment and acceptance of a successor Collateral Agent as provided in this paragraph, the Collateral Agent may resign at any time by notifying the Trustee and the Issuer and may be removed at any time with or without cause by the Holders of a majority in principal amount of the Notes. Upon any such resignation, the Holders of a majority in principal amount of the Notes shall have the right, in consultation with the Issuer, to appoint a successor. If no successor shall have been so appointed by such Holders and shall have accepted such appointment within 30 days after the retiring Collateral Agent gives notice of its resignation, then the retiring Collateral Agent may, on behalf of the Trustee and the Holders, appoint a successor Collateral Agent that shall have an office in New York, New York. Upon the acceptance of its appointment as Collateral Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Collateral Agent, and the retiring Collateral Agent shall be discharged from its duties and obligations hereunder and under the Security Documents. The fees payable by the Issuer to a successor Collateral Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Issuer and such successor. After the Collateral Agent's resignation hereunder, the provisions of this Article shall continue in effect for the benefit of such retiring Collateral Agent, its sub-agents and attorneys-in-fact and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Collateral Agent. Notwithstanding the foregoing, any successor Collateral Agent must meet the requirements of Section 11.02(a). (g) Except for action expressly required of the Collateral Agent by this Indenture and the Security Documents, the Collateral Agent shall in all cases be fully justified in failing or refusing to act thereunder unless it shall receive further assurances to its satisfaction from the Holders of their indemnification obligations under Section 11.02(i) in respect of such action. Without limiting the foregoing, the Collateral Agent shall not be required to, and shall not, take any action to enforce any of its or the Trustee's or Holders' rights under, nor waive or amend any provision of, this Indenture or any Security Document or any Collateral, nor give any notice or make any request or demand or filing thereunder, except in each instance as and to the extent instructed to do so by the Trustee or such number or percentage of the Holders as shall be necessary under the circumstances as provided in Article 10, and the Collateral Agent shall have no liability for failure to take any action in the absence of such instructions, provided that the Collateral Agent will promptly send to the Trustee a copy of each notice, request or other document delivered to the Collateral Agent pursuant to the terms of this Indenture and the Security Documents and will take such actions contemplated by this Indenture and the Security Documents as the Trustee and such number or percentage of the Holders as shall be necessary under the circumstances as provided in Article 10 may reasonably instruct, except that nothing herein or in any Security Document shall require the Collateral Agent to take any action that in the reasonable opinion of the Collateral Agent would be contrary to the terms of this Indenture or any Security Document or applicable law or subject the Collateral Agent to personal liability. (h) The Issuer shall pay (i) all reasonable out-of-pocket expenses incurred by the Collateral Agent and its Affiliates, including the reasonable fees, charges and disbursements of Milbank, Tweed, Hadley & McCloy LLP, special New York counsel for the Collateral Agent, in connection with the preparation of this Indenture and the Security Documents or any amendments, modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), and (ii) all reasonable out-of-pocket expenses incurred by the Collateral Agent, including the reasonable fees, charges and disbursements of any counsel for the Collateral Agent in connection with the enforcement or protection of its rights in connection with this Indenture and the Security Documents, including its rights under this Article. (i) The Issuer shall indemnify the Collateral Agent and each Related Party of the Collateral Agent (each such Person being called an "Indemnitee") against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of this Indenture, the Notes and any Security Document or any other agreement or instrument contemplated thereby, the performance by the parties to such documents of their respective obligations thereunder or the consummation of the transactions contemplated thereby, (ii) the use of the proceeds from the sale of any Note, (iii) any presence, Release or threatened Release of Hazardous Materials on, at, under or from any Mortgaged Property or any other property currently or formerly owned or operated by the Issuer or any of the Subsidiaries, or any Environmental Liability related in any way to the Issuer or any of the Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses resulted from the gross negligence or willful misconduct of such Indemnitee or any Related Person of such Indemnitee as determined in a final judgment by a court of competent jurisdiction. (j) To the extent permitted by applicable law, the Issuer shall not assert, and each hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Indenture, the Security Documents or any agreement or instrument contemplated hereby or thereby. ARTICLE 12 SUBORDINATION SECTION 12.01. Agreement to Subordinate. The Issuer agrees, and each Holder by accepting a Note agrees, that the Indebtedness evidenced by the Notes is subordinated in right of payment, to the extent and in the manner provided in this Article 12, to the prior payment in full of the Revolver Obligations and that the subordination is for the benefit of and enforceable by the lenders under the Revolver Obligations. The Notes shall in all respects rank senior to all existing and future Indebtedness of the Issuer other than the Revolver Obligations; and only Indebtedness in relation to the Revolver Obligations shall rank senior to the Notes in accordance with the provisions set forth herein. All provisions of this Article 12 shall be subject to Section 12.12. SECTION 12.02. Liquidation, Dissolution, Bankruptcy. Upon any payment or distribution of the assets of the Issuer to its creditors upon a total or partial liquidation or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Issuer or its property: (a) lenders under the Revolver Obligations shall be entitled to receive payment in full of such Revolver Obligations before Holders shall be entitled to receive any payment of principal of or interest on the Notes; and (b) until the Revolver Obligations are paid in full, any payment or distribution to which Holders would be entitled but for this Article 12 shall be made to lenders under such Revolver Obligations as their interests may appear, except that Holders may receive shares of stock and any debt securities that are subordinated to such Revolver Obligations to at least the same extent as the Notes. SECTION 12.03. Default on Revolver Obligations. (a) The Issuer may not pay the principal of, premium (if any) or interest on the Notes, make any deposit pursuant to Section 9.01 or otherwise repurchase, redeem or otherwise retire any Notes (collectively, "pay the Notes") if (i) any amount under the Revolver Obligations is not paid when due or (ii) any other default on such Revolver Obligations occurs and the maturity of such Revolver Obligations is accelerated in accordance with the relevant terms of the Revolving Loan Documentation unless, in either case, (A) the default has been cured or waived and any such acceleration has been rescinded or (B) such Revolver Obligations have been paid in full; provided, however, that the Issuer may pay the Notes without regard to the foregoing if the Issuer and the Trustee receive written notice approving such payment from the Representative of such creditors with respect to which either of the events set forth in clause (i) or (ii) of this sentence has occurred and is continuing. (b) During the continuance of any default (other than a default described in clause (i) or (ii) of part (a) of this Section 12.03) with respect to any Revolver Obligations pursuant to which the maturity thereof may be accelerated immediately without further notice (except such notice as may be required to effect such acceleration) or the expiration of any applicable grace periods, the Issuer may not pay the Notes for a period (a "Payment Blockage Period") commencing upon the receipt by the Trustee (with a copy to the Issuer) of written notice (a "Blockage Notice") of such default from the Representative of such Revolver Obligations specifying an election to effect a Payment Blockage Period and ending 179 days thereafter (or earlier if such Payment Blockage Period is terminated (i) by written notice to the Trustee and the Issuer from such Representative, (ii) by repayment in full of such Revolver Obligations or (iii) because no default with respect to any Revolver Obligations is continuing). Notwithstanding the provisions described in the immediately preceding sentence (but subject to the provisions contained in the first sentence of part (a) of this Section 12.03), the Issuer may resume payments on the Notes after the end of such Payment Blockage Period, unless the lenders under such Revolver Obligations or the Representative of such lenders shall have accelerated the maturity of such Revolver Obligations, and such Revolver Obligations have not been repaid in full. (c) Not more than one Blockage Notice may be given in any period of 360 consecutive days, irrespective of the number of defaults during such period. For purposes of this Section 12.03, no default or event of default that existed or was continuing on the date of the commencement of any Payment Blockage Period shall be, or be made, the basis of the commencement of a subsequent Payment Blockage Period, whether or not within a period of 360 consecutive days, unless such default or event of default shall have been cured or waived for a period of not less than 90 consecutive days. SECTION 12.04. Acceleration of Payment of Notes. If payment of the Notes is accelerated because of an Event of Default, the Trustee (provided, that the Trustee shall have received written notice from the Issuer or a Representative identifying the Revolver Obligations for which such Representative is so designated, on which notice the Trustee shall be entitled to rely conclusively) shall promptly notify the lenders under the relevant Revolver Obligations (or their Representative) of the acceleration. If any such Revolver Obligation is outstanding, the Issuer may not pay the Notes until five Business Days after such creditors or their Representative receive notice of such acceleration and, thereafter, may pay the Notes only if this Article 12 otherwise permits payment at that time. SECTION 12.05. When Distribution Must Be Paid Over. If a payment or distribution is made to Holders that because of this Article 12 should not have been made to them, any Holder who receive such a payment or distribution shall hold it in trust for lenders under the relevant Revolver Obligations and pay it over to such lenders as their interests may appear. SECTION 12.06. Subrogation. After all Revolver Obligations are paid in full and for so long as any Note remains outstanding, Holders shall be subrogated to the rights of lenders under the Revolver Obligations to receive distributions applicable to Revolver Obligations. A distribution made under this Article 12 to holders of such Revolver Obligations which otherwise would have been made to Holders is not, as between the Issuer and Holders, a payment by the Issuer on such Revolver Obligations. SECTION 12.07. Relative Rights. This Article 12 defines the relative rights of Holders and lenders under such Revolver Obligations. Nothing in this Indenture shall: (a) impair, as between the Issuer and Holders, the obligation of the Issuer, which is absolute and unconditional, to pay principal of and interest on the Notes in accordance with their terms; or (b) prevent the Trustee or any Holder from exercising its available remedies upon a Default, subject to the rights of lenders under Revolver Obligations to receive distributions otherwise payable to Holders. SECTION 12.08. Subordination May Not Be Impaired by Issuer. No right of any lender under the Revolver Obligations to enforce the subordination of the Indebtedness evidenced by the Notes shall be impaired by any act or failure to act by the Issuer or by its failure to comply with this Indenture. SECTION 12.09. Rights of Trustee and Paying Agent. Notwithstanding Section 12.03, the Trustee or Paying Agent may continue to make payments on the Notes and shall not be charged with knowledge of the existence of facts that would prohibit the making of any such payments unless, not less than two Business Days prior to the date of such payment, a Trust Officer of the Trustee receives written notice satisfactory to it that payments may not be made under this Article 12. The Issuer, the Registrar, the Paying Agent, a Representative or a lender under Revolver Obligations may give such notice; provided, however, that, if a lender under Revolver Obligations has a Representative, only the Representative may give such notice. The Trustee in its individual or any other capacity may be a lender under Revolver Obligations with the same rights it would have if it were not Trustee. The Registrar, the Paying Agent and the Collateral Agent may do the same with like rights. The Trustee shall be entitled to all the rights set forth in this Article 12 with respect to any lender under Revolver Obligations which may at any time be held by it, to the same extent as any other lender under such Revolver Obligations; and nothing in Article 8 shall deprive the Trustee of any of its rights as such holder. Nothing in this Article 12 shall apply to claims of, or payments to, the Trustee under or pursuant to Section 8.07 or any other Section of this Indenture. SECTION 12.10. Distribution or Notice to Representative. Whenever a distribution is to be made or a notice given to a lender under Revolver Obligations, the distribution may be made and the notice given to their Representative (if any). SECTION 12.11. Article 12 Not To Prevent Events of Default or Limit Right To Accelerate. The failure to make a payment pursuant to the Notes by reason of any provision in this Article 12 shall not be construed as preventing the occurrence of a Default. Nothing in this Article 12 shall have any effect on the right of the Holders or the Trustee to accelerate the maturity of the Notes. SECTION 12.12. Trust Monies Not Subordinated. Notwithstanding anything contained herein to the contrary, payments from money or the proceeds of U.S. Government Obligations held in trust under Article 9 by the Trustee for the payment of principal of and interest on the Notes shall not be subordinated to the prior payment of any Revolver Obligation or subject to the restrictions set forth in this Article 12, and none of the Holders shall be obligated to pay over any such amount to the Issuer or any lender under the Revolver Obligations or any other creditor of the Issuer. SECTION 12.13. Trustee Entitled To Rely. Upon any payment or distribution pursuant to this Article 12, the Trustee and the Holders shall be entitled to rely (a) upon any order or decree of a court of competent jurisdiction in which any proceedings of the nature referred to in Section 12.02 are pending, (b) upon a certificate of the liquidating trustee or agent or other Person making such payment or distribution to the Trustee or to the Holders or (c) upon the Representatives for the lenders under Revolver Obligations for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the lenders under Revolver Obligations and other Indebtedness of the Issuer, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 12. In the event that the Trustee determines, in good faith, that evidence is required with respect to the right of any Person as a lender under Revolver Obligations to participate in any payment or distribution pursuant to this Article 12, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of such Revolver Obligations owed to such Person, the extent to which such Person is entitled to participate in such payment or distribution and other facts pertinent to the rights of such Person under this Article 12, and, if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. The provisions of Sections 8.01 and 8.02 shall be applicable to all actions or omissions of actions by the Trustee pursuant to this Article 12. SECTION 12.14. Trustee To Effectuate Subordination. Each Holder by accepting a Note authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to acknowledge or effectuate the subordination between the Holders and the lenders under Revolver Obligations as provided in this Article 12 and appoints the Trustee as attorney-in-fact for any and all such purposes. SECTION 12.15. Trustee Not Fiduciary for Lenders under Revolver Obligations. The Trustee shall not be deemed to owe any fiduciary duty to the lenders under Revolver Obligations and shall not be liable to any such creditors if it shall mistakenly pay over or distribute to Holders or the Issuer or any other Person, money or assets to which lenders under Revolver Obligations shall be entitled by virtue of this Article 12 or otherwise. SECTION 12.16. Reliance by Holders of Senior Indebtedness on Subordination Provisions. Each Holder by accepting a Note acknowledges and agrees that the foregoing subordination provisions are, and are intended to be, an inducement and a consideration to any lender under Revolver Obligations, whether the Indebtedness under such Revolver Obligation was created or acquired before or after the issuance of the Notes, to extend and continue to extend, or to continue to extend, such Revolver Obligations and such lender under Revolver Obligations shall be deemed conclusively to have relied on such subordination provisions in extending and continuing to extend, or in continuing to extend, such Revolver Obligations. ARTICLE 13 MISCELLANEOUS SECTION 13.01. Trust Indenture Act Controls. If and to the extent that any provision of this Indenture limits, qualifies or conflicts with the duties imposed by, or with another provision (an "incorporated provision") included in this Indenture by operation of, TIA ss.ss. 310 to 318, inclusive, such imposed duties or incorporated provision shall control. SECTION 13.02. Notices. Any notice or communication shall be in writing and delivered in person, sent by facsimile or mailed by first-class mail addressed as follows: if to the Issuer: MEMC Electronic Materials, Inc. 501 Pearl Drive (City of O'Fallon) St. Peters, Missouri 63376 Attention: Treasurer if to the Trustee: Citibank, N.A. 111 Wall Street, 14th Fl. New York, NY 10005 Attention: Citibank Agency & Trust - Nancy Forte if to the Collateral Agent: Citicorp USA, Inc. 2 Penns Way, Suite 200 New Castle, DE 19720 Attention: David Grabar (Telecopy: (302) 894-6120) The Issuer or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. Any notice or communication mailed to a Holder shall be mailed, first class mail, to the Holder at the Holder's address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it. SECTION 13.03. Communication by Holders with Other Holders. Holders may communicate pursuant to TIA ss. 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Issuer, the Trustee, the Registrar and anyone else shall have the protection of TIA ss. 312(c). SECTION 13.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Issuer to the Trustee to take or refrain from taking any action under this Indenture (other than a request to authenticate the Notes in accordance with this Indenture), the Issuer shall furnish to the Trustee: (a) an Officers' Certificate stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and (b) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent have been complied with. SECTION 13.05. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture (other than pursuant to Section 5.03) shall include: (a) a statement that the individual making such certificate or opinion has read such covenant or condition; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with. In giving such Opinion of Counsel, counsel may rely as to factual matters on an Officers' Certificate or on certificates of public officials. SECTION 13.06. When Notes Disregarded. In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Issuer or any Pledgor and Guarantor shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes which a Trust Officer of the Trustee actually knows are so owned shall be so disregarded. Subject to the foregoing, only Notes outstanding at the time shall be considered in any such determination. Notwithstanding the foregoing, Notes that are to be acquired by the Issuer or any Pledgor and Guarantor pursuant to an exchange offer, tender offer or other agreement shall not be deemed to be owned by such entity until legal title to such Notes passes to such entity. SECTION 13.07. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by or a meeting of Holders. The Registrar and the Paying Agent may make reasonable rules for their functions. SECTION 13.08. Legal Holidays. If a payment date is not a Business Day, payment shall be made on the immediately preceding Business Day, and no interest shall accrue for the intervening period. If a regular record date is not a Business Day, the record date shall not be affected. SECTION 13.09. GOVERNING LAW. THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 13.10. No Recourse Against Others. No director, officer, employee, stockholder or member, as such, of the Issuer or any of the Pledgors and Guarantors, shall have any liability for any obligations of the Issuer or any of the Pledgors and Guarantors under the Notes, this Indenture or the Security Documents, as applicable, or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Note, each Holder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Notes. SECTION 13.11. Successors. All agreements of the Issuer and each Pledgor and Guarantor in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. SECTION 13.12. Multiple Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy is enough to prove this Indenture. SECTION 13.13. Table of Contents; Headings. The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof. IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above. MEMC ELECTRONIC MATERIALS, INC. By: /s/ James M. Stolze ------------------------------------ Name: James M. Stolze Title: Executive Vice President, Chief Financial Officer By: /s/ Kenneth L. Young ------------------------------------ Name: Kenneth L. Young Title: Treasurer Citibank, N.A., as Trustee By: /s/ Nancy Forte ------------------------------------ Name: Nancy Forte Title: Assistant Vice President Citicorp USA, Inc., as Collateral Agent. By: /s/ Edward T. Crook ------------------------------------ Name: Edward T. Crook Title: Managing Director and Vice President SCHEDULES Schedule 1.01 Mortgaged Properties Schedule 6.01 Existing Indebtedness Schedule 6.02 Existing Liens Schedule 6.04 Existing Investments Schedule 6.10 Existing Restrictions EXHIBIT A [FORM OF FACE OF NOTE] [Restricted Notes Legend] THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. [Definitive Notes Legend] IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS. No. $__________ Senior Subordinated Secured Note Due 2007 MEMC Electronic Materials, Inc., a Delaware corporation (the "Issuer"), promises to pay to [_______________], or registered assigns, the principal sum of Dollars plus interest accrued thereon and other sums, if any, in relation thereto on November 13, 2007 or upon redemption or prepayment pursuant to the Indenture dated as of November 13, 2001 (the "Indenture"), among the Issuer, Citibank, N.A., as trustee (the "Trustee") and the Collateral Agent named therein (the "Collateral Agent"). Each Holder, by accepting a Note, agrees that the Indebtedness evidenced by the Notes is subordinated in right of payment, to the extent and in the manner provided in Article 12 of the Indenture, to the prior payment in full of the Revolver Obligations and that the subordination is for the benefit of and enforceable by the lenders under such Revolver Obligations. The Notes shall in all respects rank senior to all existing and future Indebtedness of the Issuer other than the Revolver Obligations; and only Indebtedness in relation to the Revolver Obligations shall rank senior to the Notes in accordance with the provisions set forth in the Indenture. Additional provisions of this Note are set forth on the reverse of this Note. IN WITNESS WHEREOF, the parties have caused this instrument to be duly executed. MEMC Electronic Materials, Inc. by ---------------------------------------- Name: Title: by ---------------------------------------- Name: Title: Dated: TRUSTEE'S CERTIFICATE OF AUTHENTICATION Citibank, N.A., as Trustee, certifies that this is one of the Notes referred to in the Indenture. By: ------------------------------ Authorized Signatory [FORM OF REVERSE SIDE OF NOTE] Senior Subordinated Secured Note Due 2007 1. Interest MEMC Electronic Materials, Inc., a Delaware corporation (the "Issuer"), for value received, hereby promises to pay, upon presentation and surrender of this Note on November 13, 2007 or upon redemption or prepayment pursuant to the Indenture referred to below (the "Stated Maturity"), the principal amount of this Note, together with interest on such principal amount calculated at the applicable rates set forth in the chart below (the "Interest Rate"): Dates Interest Rate Per Annum - -------------------------------------------------------------------------------- From and including Issue Date to but excluding November 13, 2003..............8% From and including November 13, 2003 through Stated Maturity.................14% Accumulated interest shall be added to the principal amount of this Note on November 13 of each year (or if any such date is not a Business Day, on the Business Day immediately preceding such day), commencing November 13, 2002 (each such date, a "Period End Date", and each period from, and including one Period End Date to, but excluding, the next Period End Date, an "Accrual Period;" provided that that the initial Accrual Period will commence on, and include, the Issue Date). On each Period End Date, the interest payable in respect of the most recent Accrual Period shall be calculated by the Paying Agent and added to the principal amount of this Note and, during the following Accrual Period, the resulting principal amount shall be used by the Paying Agent in calculating interest due in respect of such Accrual Period. Interest shall accumulate and be calculated on the basis of a year of a 360-day year consisting of twelve 30-day months. Notwithstanding the foregoing paragraph, at any time after November 13, 2005, the Holders of a majority (by aggregate principal amount) of the Notes may direct, by written consent, that interest earned during the then-current Accrual Period shall be due and payable in cash on the Period End Date next following such written direction; provided, however that any such notice must be provided to the Issuer, the Trustee and the Registrar and Paying Agent at least sixty (60) days prior to the relevant Period End Date. Unless such written direction has been given, interest shall continue to accrue and be added to principal in the manner and on the dates set forth in the previous paragraph. All interest calculations shall be determined by the Paying Agent in accordance with the terms of the Indenture and this Notes, and such determination shall be prima facie evidence thereof absent manifest error. 2. Method of Payment Holders must surrender Notes to a Paying Agent to collect principal payments. The Issuer shall pay principal, premium, if any, and interest in money of the United States of America that at the time of payment is legal tender for payment of public and private debts. The Issuer will make all payments in respect of a certificated Note (including principal, premium and interest) by mailing a check to the registered address of each Holder thereof; provided, however, that payments on the Notes may also be made, in the case of a Holder of at least $1,000,000 aggregate principal amount of Notes, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account no later than 30 days immediately preceding the relevant due date for payment (or such other date as the Trustee may accept in its discretion). 3. Paying Agent and Registrar Initially, Citibank, N.A., a national banking association (the "Trustee"), will act as Paying Agent and Registrar. The Issuer may appoint and change any Paying Agent, Registrar or co-registrar without notice. The Issuer or any of its wholly owned Domestic Subsidiaries may act as Paying Agent, Registrar or co-registrar. 4. Indenture The Issue issued the Notes under an Indenture dated as of November 13, 2001 (the "Indenture"), among the Issuer, the Trustee and the Collateral Agent. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss. 77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA"). Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Notes are subject to all terms and provisions of the Indenture, and Holders are referred to the Indenture and the TIA for a statement of such terms and provisions. The Notes are senior subordinated secured obligations of the Issuer limited to $50,000,000 in aggregate principal amount at any one time outstanding (subject to Sections 2.09 and 2.10 of the Indenture and subject to interest accrued and added to such principal amount on any Period End Date). This Note is one of the Notes referred to in the Indenture, which are treated as a single class of securities under the Indenture. Each Holder, by accepting a Note, agrees that the Indebtedness evidenced by the Notes is subordinated in right of payment, to the extent and in the manner provided in Article 12 of the Indenture, to the prior payment in full of the Revolver Obligations and that the subordination is for the benefit of and enforceable by the lenders under such Revolver Obligations. The Notes shall in all respects rank senior to all existing and future Indebtedness of the Issuer other than the Revolver Obligations; and only Indebtedness in relation to the Revolver Obligations shall rank senior to the Notes in accordance with the provisions set forth in the Indenture. The Indenture imposes certain limitations on the ability of the Issuer and its Subsidiaries to, among other things, incur Indebtedness or Liens, issue or sell certain preferred Equity Interests, make certain Investments and other Restricted Payments, make asset dispositions, enter into certain Hedging Arrangements or sale and leaseback transactions and enter into consensual restrictions upon the payment of certain dividends and distributions by the Issuer or its Subsidiaries. The Indenture also imposes limitations on the ability of the Issuer to consolidate or merge with or into any other Person. To guarantee the due and punctual payment of the principal and interest on the Notes and all other amounts payable by the Issuer under the Indenture and the Notes when and as the same shall be due and payable, whether at maturity, by acceleration or otherwise, the Issuer and the Pledgors and Guarantors have, according to the terms of the Guarantee Agreement and the other Security Documents, jointly and severally, unconditionally guaranteed the Indenture Obligations on a senior subordinated basis and have pledged, pursuant to the terms of the Security Documents, certain Collateral as security for the Indenture Obligations. The Notes constitute unconditional obligations of the Issuer, secured as set forth in the Security Documents and entitled to benefit from the Guarantees under the conditions, and subject to the limitations, set forth in the Guarantee Agreement and the other Security Documents. The Indenture Obligations shall be subordinate in right of payment to the Revolver Obligations and senior in right of payment to all other obligations of the Issuer. 5. Optional Redemption The Notes shall not be redeemable at the option of the Issuer prior to November 13, 2005. On or after such date, on one or more occasions, the Notes shall be redeemable at the option of the Issuer, in whole and not in part, on not less than 30 nor more than 60 days prior notice, at the following redemption prices (expressed as percentages of principal amount), plus accrued and unpaid interest to the redemption date, if redeemed during the 12-month period commencing on November 13 of the years set forth below. Year Redemption Price - -------------------------------------------------------------------------------- 2005......................................................................105.0% 2006......................................................................102.5% 6. Sinking Fund The Notes are not subject to any sinking fund. 7. Notice of Redemption Notice of redemption will be mailed by first-class mail at least 30 days but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at his or her registered address. Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and accrued and unpaid interest on all Notes (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions are satisfied, on and after such date interest ceases to accrue on such Notes (or such portions thereof) called for redemption. 8. Redemption at the Option of Holders upon the Occurrence of Certain Events In accordance with, and subject to the limitations set forth in, Section 4.01 of the Indenture, the Issuer will be required to offer to redeem Notes upon the receipt of proceeds from Early Redemption Events, including certain asset sales, certain casualty events, the incurrence of Indebtedness and the issuance of Equity Interests. Upon a Change of Control, any Holder of Notes will have the right, in accordance with, and subject to the limitations set forth in Section 4.02 of the Indenture, to cause the Issuer to repurchase all or any part of the Notes of such Holder at a purchase price equal to 101% of the principal amount of the Notes to be repurchased plus accrued and unpaid interest to the date of repurchase as provided in, and subject to the terms of, the Indenture. 9. Denominations; Transfer; Exchange The Notes are in registered form without coupons. A Holder may transfer or exchange Notes in accordance with the Indenture. Upon any transfer or exchange, the Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture. The Registrar need not register the transfer of or exchange any Notes selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or to transfer or exchange any Notes for a period of 15 days prior to a selection of Notes to be redeemed or 15 days before an interest payment date. 10. Persons Deemed Owners Except as provided in paragraph 2 hereof, the registered Holder of this Note may be treated as the owner of it for all purposes. 11. Unclaimed Money If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Issuer at their written request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Issuer and not to the Trustee for payment. 12. Discharge and Defeasance Subject to certain conditions, the Issuer at any time may terminate some of or all its obligations under the Notes and the Indenture if the Issuer deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Notes to redemption or maturity, as the case may be. 13. Amendment; Waiver Subject to certain exceptions set forth in the Indenture, (a) the Indenture or the Notes may be amended without prior notice to any Holder but with the written consent of the Holders of at least a majority in aggregate principal amount of the outstanding Notes and (b) any default may be waived with the written consent of the Holders of at least a majority in principal amount of the outstanding Notes. Subject to certain exceptions set forth in the Indenture, without the consent of any Holder of Notes, the Issuer and the Trustee may amend the Indenture or the Notes (i) to cure any ambiguity, omission, defect or inconsistency; (ii) to allow a Successor Issuer to assume obligations under the Indenture pursuant to, and in compliance with, Section 6.03(a)(i) thereof; (iii) to provide for uncertificated Notes in addition to or in place of certificated Notes; (iv) to add additional Guarantees with respect to the Notes; (v) to pledge additional Collateral as security for the Notes; (vi) to add to the covenants of the Issuer or to surrender rights and powers conferred on the Issuer; (vii) to comply with the requirements of the Commission in order to effect or maintain the qualification of the Indenture under the TIA; or (viii) to make any change that does not adversely affect the rights of any Holder. 14. Defaults and Remedies If an Event of Default occurs (other than an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Issuer) and is continuing, the Trustee or the Holders of a majority, by aggregate principal amount, of the outstanding Notes may declare the principal of and accrued but unpaid interest on all the Notes to be due and payable. If an Event of Default relating to certain events of bankruptcy, insolvency or reorganization of the Issuer occurs, the principal of and interest on all the Notes shall become immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. Under certain circumstances, the Holders of a majority in principal amount of the outstanding Notes may rescind any such acceleration with respect to the Notes and its consequences. If an Event of Default occurs and is continuing, the Trustee shall be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense and certain other conditions are complied with. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no Holder may pursue any remedy with respect to the Indenture or the Notes unless (i) such Holder has previously given the Trustee notice that an Event of Default is continuing, (ii) Holders of at least a majority, by aggregate principal amount, of the outstanding Notes have requested the Trustee in writing to pursue the remedy, (iii) such Holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense, (iv) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity and (v) the Holders of a majority in principal amount of the outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period. Subject to certain restrictions, the Holders of a majority in principal amount of the outstanding Notes are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal liability. Prior to taking any action under the Indenture, the Trustee shall be entitled to indemnification satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action. 15. Trustee Dealings with the Issuer Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Issuer or its Affiliates and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee. 16. No Recourse Against Others No director, officer, employee, stockholder or member, as such, of the Issuer or any of the Pledgors and Guarantors, shall have any liability for any obligations of the Issuer or any of the Pledgors and Guarantors under the Notes, the Indenture or the Security Documents, as applicable, or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Note, each Holder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the Notes. 17. Authentication This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Note. 18. Abbreviations Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act). 19. Governing Law THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. 20. CUSIP and ISIN Numbers The Issuer may have caused CUSIP and ISIN numbers to be printed on the Notes and directed the Trustee to use such CUSIP and ISIN numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of any such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Issuer will furnish to any Holder of Notes upon written request and without charge to the Holder a copy of the Indenture which has in it the text of this Note. ASSIGNMENT FORM To assign this Note, fill in the form below: I or we assign and transfer this Note to (Print or type assignee's name, address and zip code) and irrevocably appoint agent to transfer this Note on the books of the Issuer. The agent may substitute another to act for him. _________________________________________________________________ Date: ________________ Your Signature: __________________________ _________________________________________________________________ Sign exactly as your name appears on the other side of this Note. OPTION OF HOLDER TO ELECT PURCHASE To elect to have this Note purchased by the Issuer pursuant to Section 4.01 (Early Redemption Event) or 4.02 (Change of Control) of the Indenture, please check the appropriate box: Early Redemption Event [ ] Change of Control [ ] To elect to have only a portion of this Note purchased by the Issuer pursuant to Section 4.01 or 4.02 of the Indenture, please state the amount ($1,000 or an integral multiple thereof): $ Date: __________________ Your Signature: ________________________ (Sign exactly as your name appears on the other side of the Note) Signature Guarantee:_____________________________________________ Signature must be guaranteed by a participant in a recognized signature guaranty medallion program or other signature guarantor acceptable to the Trustee. EXHIBIT B Guarantee Agreement EXHIBIT C Indemnity, Subrogation and Contribution Agreement EXHIBIT D PLEDGE AGREEMENT dated as of November 13, 2001, among MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation (the "Issuer"), and each subsidiary of the Issuer listed on Schedule I hereto (each such subsidiary individually a "Pledgor and Guarantor" and collectively, the "Pledgors and Guarantors") and Citicorp USA, Inc., a Delaware corporation, as collateral agent (in such capacity, the "Collateral Agent") for the Secured Parties (as defined in the Security Agreement). Reference is made to (a) the Indenture dated as of November 13, 2001 (as amended, supplemented or otherwise modified from time to time, the "Indenture"), among the Issuer, Citibank, N.A., as trustee (in such capacity, the "Trustee") and the Collateral Agent, (b) the Restructuring Agreement dated as of November 13, 2001 between the Issuer and TPG Wafer Holdings LLC (the "Restructuring Agreement") and (c) the Guarantee Agreement dated as of November 13, 2001 (as amended, supplemented or otherwise modified from time to time, the "Guarantee Agreement") among the Issuer, each Pledgor and Guarantor party thereto and the Collateral Agent. Capitalized terms used herein and not defined herein shall have meanings assigned to such terms in the Indenture and, if not defined therein, in the Restructuring Agreement. The Holders have agreed to purchase the Notes pursuant to, and upon the terms and subject to the conditions specified in, the Restructuring Agreement and the Indenture. Each of the Pledgors and Guarantors has agreed to guarantee, among other things, all the obligations of the Issuer under the Indenture on a senior subordinated basis as set forth in Article 12 of the Indenture and Article II of the Guarantee Agreement. The obligations of the Holders to purchase the Notes are conditioned upon, among other things, the execution and delivery by the Issuer of a Pledge Agreement in the form hereof to secure (a) the due and punctual payment of (i) the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Notes, when and as due, whether at maturity, by acceleration, upon one or more dates set for redemption, retirement, repurchase or otherwise and (ii) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of the Issuer and the Pledgors and Guarantors to the Secured Parties under the Indenture, the Notes and the Security Documents and (b) the due and punctual performance of all covenants, agreements, obligations and liabilities of the Issuer and the Pledgors and Guarantors under or pursuant to the Indenture, the Notes and the Security Documents (all the monetary and other obligations referred to in the preceding clauses (a) and (b) being collectively called the "Indenture Obligations"). Accordingly, the Pledgors and Guarantors and the Collateral Agent, on behalf of itself and each Secured Party (and each of their respective successors or assigns), hereby agree as follows: SECTION 1. Pledge. As security for the payment and performance, as the case may be, in full of the Obligations, each Pledgor and Guarantor hereby pledges and grants to the Collateral Agent, its successors and assigns, and hereby grants to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, a security interest in all of such Pledgor and Guarantor's right, title and interest in, to and under (a) the Equity Interests owned by it which are listed on Schedule II hereto and any Equity Interests obtained in the future by such Pledgor and Guarantor and the certificates representing all such Equity Interests (the "Pledged Interests"); provided that the Pledged Interests shall not include (i) more than 65% of the issued and outstanding voting stock of any Foreign Subsidiary or (ii) the outstanding voting stock of MEMC Korea Company, MEMC Kulim Electronic Materials, Sdn. Bhd., MEMC Southwest Inc. and Taisil Electronic Materials Corporation or (iii) to the extent that applicable law requires that a Subsidiary of such Pledgor and Guarantor issue directors' qualifying shares, such qualifying shares; (b)(i) the debt securities owned by it which are listed opposite the name of such Pledgor and Guarantor on Schedule II hereto, (ii) any debt securities in the future issued to such Pledgor and Guarantor and (iii) the promissory notes and any other instruments evidencing such debt securities (the "Pledged Debt Securities"); (c) all other property that may be delivered to and held by the Collateral Agent pursuant to the terms hereof; (d) subject to Section 5, all payments of principal or interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed, in respect of, in exchange for or upon the conversion of the securities referred to in clauses (a) and (b) above; (e) subject to Section 5, all rights and privileges of such Pledgor and Guarantor with respect to the securities and other property referred to in clauses (a), (b), (c) and (d) above; and (f) all proceeds of any of the foregoing (the items referred to in clauses (a) through (f) above being collectively referred to as the "Collateral"). Upon delivery to the Collateral Agent, (a) any Pledged Interests, any Pledged Debt Securities or any stock certificates, notes or other securities now or hereafter included in the Collateral (the "Pledged Securities") shall be accompanied by stock powers duly executed in blank or other instruments of transfer satisfactory to the Collateral Agent and by such other instruments and documents as the Collateral Agent may reasonably request and (b) all other property comprising part of the Collateral shall be accompanied by proper instruments of assignment duly executed by the applicable Pledgor and Guarantor and such other instruments or documents as the Collateral Agent may reasonably request. Each delivery of Pledged Securities shall be accompanied by a schedule describing the securities theretofore and then being pledged hereunder, which schedule shall be attached hereto as Schedule II and made a part hereof. Each schedule so delivered shall supersede any prior schedules so delivered. The pledge of the Pledged Securities is subject to the terms and conditions of that certain Option Agreement dated September 21, 1998, as amended on September 22, 2000, September 25, 2001, and October 25, 2001, among Tokuyama Corporation, Marubeni Corporation, Marubeni America Corporation, the Issuer and MEMC Pasadena. TO HAVE AND TO HOLD the Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto, unto the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, forever; subject, however, to the terms, covenants and conditions hereinafter set forth. SECTION 2. Delivery of the Collateral. (a) Each Pledgor and Guarantor agrees promptly to deliver or cause to be delivered to the Collateral Agent any and all Pledged Securities, and any and all certificates or other instruments or documents representing the Collateral. (b) Each Pledgor and Guarantor will cause any Indebtedness for borrowed money owed to the Pledgor and Guarantor by any Person to be evidenced by a duly executed promissory note that is pledged and delivered to the Collateral Agent pursuant to the terms thereof. SECTION 3. Representations, Warranties and Covenants. Each Pledgor and Guarantor hereby represents, warrants and covenants, as to itself and the Collateral pledged by it hereunder, to and with the Collateral Agent that: (a) the Pledged Interests represent that percentage as set forth on Schedule II of the issued and outstanding shares of each class of the Equity Interests of the issuer with respect thereto; (b) except for the prior lien and security interest granted under the Revolving Loan Documentation as security for the payment or performance, as the case may be, in full of the Revolver Obligations ( the "Senior Security Interest") and the security interest granted hereunder, such Pledgor and Guarantor (i) is and will at all times continue to be the direct owner, beneficially and of record, of the Pledged Securities indicated on Schedule II, (ii) holds the same free and clear of all Liens, (iii) will make no assignment, pledge, hypothecation or transfer of, or create or permit to exist any security interest in or other Lien on, the Collateral, other than pursuant hereto, and (iv) subject to Section 5, will cause any and all Collateral, whether for value paid by such Pledgor and Guarantor or otherwise, to be forthwith deposited with the Collateral Agent and pledged or assigned hereunder; (c) such Pledgor and Guarantor (i) has the power and authority to pledge the Collateral in the manner hereby done or contemplated and (ii) will defend its title or interest thereto or therein against any and all Liens (other than the Lien created by this Agreement), however arising, of all Persons whomsoever; (d) no consent of any other Person (including stockholders or creditors of any Pledgor and Guarantor) and no consent or approval of any Governmental Authority or any securities exchange was or is necessary to the validity of the pledge effected hereby; (e) by virtue of the execution and delivery by the Pledgors and Guarantors of this Agreement, when the Pledged Securities, certificates or other documents representing or evidencing the Collateral are delivered to the Collateral Agent in accordance with this Agreement, the Collateral Agent will have a valid and perfected lien upon and security interest in such Pledged Securities as security for the payment and performance of the Indenture Obligations (subject only to the lien and security interest that comprise the Senior Security Interest); (f) the pledge effected hereby is effective to vest in the Collateral Agent, on behalf of the Secured Parties, the rights of the Collateral Agent in the Collateral as set forth herein; (g) all of the Pledged Interests have been duly authorized and validly issued and are fully paid and nonassessable; (h) all information set forth herein relating to the Pledged Interests is accurate and complete in all material respects as of the date hereof; and (i) the pledge of the Pledged Interests pursuant to this Agreement does not violate Regulation T, U or X of the Federal Reserve Board or any successor thereto as of the date hereof. SECTION 4. Registration in Nominee Name; Denominations. The Collateral Agent, on behalf of the Secured Parties, shall have the right (in its sole and absolute discretion) to hold the Pledged Securities in its own name as pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the Pledgors and Guarantors, endorsed or assigned in blank or in favor of the Collateral Agent. Each Pledgor and Guarantor will promptly give to the Collateral Agent copies of any notices or other communications received by it with respect to Pledged Securities registered in the name of such Pledgor and Guarantor. The Collateral Agent shall at all times have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger denominations for any purpose consistent with this Agreement. SECTION 5. Voting Rights; Dividends and Interest, etc. (a) Unless and until an Event of Default shall have occurred and be continuing: (i) Each Pledgor and Guarantor shall be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Securities or any part thereof for any purpose consistent with the terms of this Agreement, the Indenture and the other Transaction Documents; provided, however, that such Pledgor and Guarantor will not be entitled to exercise any such right if the result thereof could materially and adversely affect the rights inuring to a holder of the Pledged Securities or the rights and remedies of any of the Secured Parties under this Agreement or the Indenture or any other Transaction Document or the ability of the Secured Parties to exercise the same. (ii) The Collateral Agent shall execute and deliver to each Pledgor and Guarantor, or cause to be executed and delivered to each Pledgor and Guarantor, all such proxies, powers of attorney and other instruments as such Pledgor and Guarantor may reasonably request for the purpose of enabling such Pledgor and Guarantor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to subparagraph (i) above and to receive the cash dividends it is entitled to receive pursuant to subparagraph (iii) below. (iii) Each Pledgor and Guarantor shall be entitled to receive and retain any and all cash dividends, interest and principal paid on the Pledged Securities to the extent and only to the extent that such cash dividends, interest and principal are permitted by, and otherwise paid in accordance with, the terms and conditions of the Indenture, the Notes, the other Security Documents and applicable laws. All noncash dividends, interest and principal, and all dividends, interest and principal paid or payable in cash or otherwise in connection with a partial or total liquidation or dissolution, return of capital, capital surplus or paid-in surplus, and all other distributions (other than distributions referred to in the preceding sentence) made on or in respect of the Pledged Securities, whether paid or payable in cash or otherwise, whether resulting from a subdivision, combination or reclassification of the outstanding capital stock of the issuer of any Pledged Securities or received in exchange for Pledged Securities or any part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise, shall be and become part of the Collateral, and, if received by any Pledgor and Guarantor, shall not be commingled by such Pledgor and Guarantor with any of its other funds or property but shall be held separate and apart therefrom, shall be held in trust for the benefit of the Collateral Agent and shall be forthwith delivered to the Collateral Agent in the same form as so received (with any necessary endorsement). (iv) With regard to the pledge of the shares of MEMC Electronic Materials S.p.A., the Collateral Agent shall take all reasonable actions required by applicable mandatory provisions of Italian law in order to enable the Pledgors and Guarantors to exercise all the rights to which the Pledgors and Guarantors are entitled under this Section 5. (b) Upon the occurrence and during the continuance of an Event of Default, all rights of any Pledgor and Guarantor to dividends, interest or principal that such Pledgor and Guarantor is authorized to receive pursuant to paragraph (a)(iii) above shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall subject to the provisions of this paragraph (b) have the sole and exclusive right and authority to receive and retain such dividends, interest or principal. All dividends, interest or principal received by the Pledgor and Guarantor contrary to the provisions of this Section 5 shall be held in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Pledgor and Guarantor, and shall be forthwith delivered to the Collateral Agent upon demand in the same form as so received (with any necessary endorsement). Any and all money and other property paid over to or received by the Collateral Agent pursuant to the provisions of this paragraph (b) shall be retained by the Collateral Agent in an account to be established by the Collateral Agent upon receipt of such money or other property and shall be applied in accordance with the provisions of Section 7. After all Events of Default have been cured or waived, the Collateral Agent shall promptly repay to each Pledgor and Guarantor all cash dividends, interest or principal (without interest), that such Pledgor and Guarantor would otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) above and which remain in such account. (c) Upon the occurrence and during the continuance of an Event of Default, all rights of any Pledgor and Guarantor to exercise the voting and consensual rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section 5, and the obligations of the Collateral Agent under paragraph (a)(ii) of this Section 5, shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers, provided that, unless otherwise directed by the Holders of a majority, by aggregate principal amount, of the Notes, the Collateral Agent shall have the right from time to time following and during the continuance of an Event of Default to permit the Pledgors and Guarantors to exercise such rights. After all Events of Default have been cured or waived, each Pledgor and Guarantor will have the right to exercise the voting and consensual rights and powers that it would otherwise be entitled to exercise pursuant to the terms of paragraph (a)(i) above. SECTION 6. Remedies upon Default. Upon the occurrence and during the continuance of an Event of Default, subject to applicable regulatory and legal requirements, the Collateral Agent may sell the Collateral, or any part thereof, at public or private sale or at any broker's board or on any securities exchange, for cash, upon credit or for future delivery as the Collateral Agent shall deem appropriate. The Collateral Agent shall be authorized at any such sale (if it deems it advisable to do so) to restrict the prospective bidders or purchasers to Persons who will represent and agree that they are purchasing the Collateral for their own account for investment and not with a view to the distribution or sale thereof, and upon consummation of any such sale the Collateral Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold. Each such purchaser at any such sale shall hold the property sold absolutely free from any claim or right on the part of any Pledgor and Guarantor, and, to the extent permitted by applicable law, the Pledgors and Guarantors hereby waive all rights of redemption, stay, valuation and appraisal any Pledgor and Guarantor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. The Collateral Agent shall give a Pledgor and Guarantor 10 days' prior written notice (which each Pledgor and Guarantor agrees is a "reasonable authenticated notification of disposition" within the meaning of Section 9-611 of the UCC (as defined in the Security Agreement) of the Collateral Agent's intention to make any sale of such Pledgor and Guarantor's Collateral. Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a broker's board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral, or portion thereof, will first be offered for sale at such board or exchange. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Collateral Agent may fix and state in the notice of such sale. At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent may (in its sole and absolute discretion) determine. The Collateral Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In case any sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale price is paid in full by the purchaser or purchasers thereof, but the Collateral Agent shall not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice. At any public (or, to the extent permitted by applicable law, private) sale made pursuant to this Section 6, any Secured Party may bid for or purchase, free from any right of redemption, stay or appraisal on the part of any Pledgor and Guarantor (all said rights being also hereby waived and released), the Collateral or any part thereof offered for sale and may make payment on account thereof by using any Indenture Obligation then due and payable to it from such Pledgor and Guarantor as a credit against the purchase price, and it may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to such Pledgor and Guarantor therefor. For purposes hereof, (a) a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof, (b) the Collateral Agent shall be free to carry out such sale pursuant to such agreement and (c) such Pledgor and Guarantor shall not be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall have entered into such an agreement all Events of Default shall have been remedied and the Indenture Obligations paid in full. As an alternative to exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at law or in equity to foreclose upon the Collateral and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver. SECTION 7. Subordination. Notwithstanding anything to the contrary contained in this Pledge Agreement, all rights and remedies set forth in this Pledge Agreement shall be subject to the subordination provisions set forth in Article 12 of the Indenture and Article II of the Guarantee Agreement. SECTION 8. Application of Proceeds of Sale. The Collateral Agent shall apply the proceeds of any collection or sale of the Collateral, as well as any Collateral consisting of cash, as follows: FIRST, to the payment of any Revolver Obligations oustanding, to the extent the Revolving Loan Documentation is in force; SECOND, to the payment of all costs and reasonable expenses incurred by the Trustee or the Collateral Agent (in its capacity as such hereunder or under any other Transaction Document) in connection with such collection or sale or otherwise in connection with this Agreement or any of the Indenture Obligations, including all court costs and the reasonable fees and expenses of its agents and legal counsel, the repayment of all advances made by the Collateral Agent hereunder or under any other Transaction Document on behalf of any Pledgor and Guarantor, and any other costs or expenses incurred in connection with the exercise of any right or remedy hereunder or under any other Transaction Document; THIRD, to the payment in full of the Indenture Obligations (the amounts so applied to be distributed among the Secured Parties pro rata in accordance with the amounts of the Indenture Obligations owed to them on the date of any such distribution); and FOURTH, to the Pledgors and Guarantors, their successors or assigns, or as a court of competent jurisdiction may otherwise direct. The Collateral Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement. Upon any sale of the Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the purchase money by the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication thereof. SECTION 9. Reimbursement of Collateral Agent. (a) Each Pledgor and Guarantor agrees to pay upon demand to the Collateral Agent the amount of any and all reasonable expenses, including the reasonable fees, other charges and disbursements of its counsel and of any experts or agents, that the Collateral Agent may incur in connection with (i) the administration of this Agreement, (ii) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Collateral, (iii) the exercise or enforcement of any of the rights of the Collateral Agent hereunder or (iv) the failure by such Pledgor and Guarantor to perform or observe any of the provisions hereof. (b) Without limitation of its indemnification obligations under the other Transaction Documents, each Pledgor and Guarantor agrees to indemnify the Collateral Agent and the Indemnified Parties (as defined in Section 10.04 of the Restructuring Agreement) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable counsel fees, other charges and disbursements, incurred by or asserted against any Indemnitee arising out of, in any way connected with, or as a result of (i) the execution or delivery of this Agreement or any other Transaction Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations thereunder or the consummation of the other transactions contemplated thereby or (ii) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee. (c) Any amounts payable as provided hereunder shall be additional Indenture Obligations secured hereby and by the other Security Documents. The provisions of this Section 8 shall remain operative and in full force and effect regardless of the termination of this Agreement, the consummation of the transactions contemplated hereby, the repayment of any of the Indenture Obligations, the invalidity or unenforceability of any term or provision of this Agreement or any other Transaction Document or any investigation made by or on behalf of the Collateral Agent or any other Secured Party. All amounts due under this Section 9 shall be payable on written demand therefor and shall bear interest at the rate specified in Section 1 of the Notes. SECTION 10. Collateral Agent Appointed Attorney-in-Fact. Each Pledgor and Guarantor hereby appoints the Collateral Agent the attorney-in-fact of such Pledgor and Guarantor for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof, which appointment is irrevocable and coupled with an interest. Without limiting the generality of the foregoing, the Collateral Agent shall have the right, upon the occurrence and during the continuance of an Event of Default, with full power of substitution either in the Collateral Agent's name or in the name of such Pledgor and Guarantor, to ask for, demand, sue for, collect, receive and give acquittance for any and all moneys due or to become due under and by virtue of any Collateral, to endorse checks, drafts, orders and other instruments for the payment of money payable to the Pledgor and Guarantor representing any interest or dividend or other distribution payable in respect of the Collateral or any part thereof or on account thereof and to give full discharge for the same, to settle, compromise, prosecute or defend any action, claim or proceeding with respect thereto, and to sell, assign, endorse, pledge, transfer and to make any agreement respecting, or otherwise deal with, the same; provided, however, that nothing herein contained shall be construed as requiring or obligating the Collateral Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby. The Collateral Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Pledgor and Guarantor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct. SECTION 11. Waivers; Amendment. (a) No failure or delay of the Collateral Agent in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Collateral Agent hereunder and of the other Secured Parties under the other Transaction Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provisions of this Agreement or consent to any departure by any Pledgor and Guarantor therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) below, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on any Pledgor and Guarantor in any case shall entitle such Pledgor and Guarantor to any other or further notice or demand in similar or other circumstances. (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to a written agreement entered into between the Collateral Agent and the Pledgor and Guarantor or Pledgors and Guarantors with respect to which such waiver, amendment or modification is to apply, subject to any consent required in accordance with Article 10 of the Indenture. SECTION 12. Securities Act, etc. In view of the position of the Pledgors and Guarantors in relation to the Pledged Securities, or because of other current or future circumstances, a question may arise under the Securities Act of 1933, as now or hereafter in effect, or any similar statute hereafter enacted analogous in purpose or effect (such Act and any such similar statute as from time to time in effect being called the "Federal Securities Laws") with respect to any disposition of the Pledged Securities permitted hereunder. Each Pledgor and Guarantor understands that compliance with the Federal Securities Laws might very strictly limit the course of conduct of the Collateral Agent if the Collateral Agent were to attempt to dispose of all or any part of the Pledged Securities, and might also limit the extent to which or the manner in which any subsequent transferee of any Pledged Securities could dispose of the same. Similarly, there may be other legal restrictions or limitations affecting the Collateral Agent in any attempt to dispose of all or part of the Pledged Securities under applicable Blue Sky or other state securities laws or similar laws analogous in purpose or effect. Each Pledgor and Guarantor recognizes that in light of such restrictions and limitations the Collateral Agent may, with respect to any sale of the Pledged Securities, limit the purchasers to those who will agree, among other things, to acquire such Pledged Securities for their own account, for investment, and not with a view to the distribution or resale thereof. Each Pledgor and Guarantor acknowledges and agrees that in light of such restrictions and limitations, the Collateral Agent, in its sole and absolute discretion, (a) may proceed to make such a sale whether or not a registration statement for the purpose of registering such Pledged Securities or part thereof shall have been filed under the Federal Securities Laws and (b) may approach and negotiate with a single potential purchaser to effect such sale, in either case in accordance with a valid exemption from registration under the Federal Securities Laws. Each Pledgor and Guarantor acknowledges and agrees that any such sale might result in prices and other terms less favorable to the seller than if such sale were a public sale without such restrictions. In the event of any such sale, the Collateral Agent shall incur no responsibility or liability for selling all or any part of the Pledged Securities at a price that the Collateral Agent, in its sole and absolute discretion, may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might have been realized if the sale were deferred until after registration as aforesaid or if more than a single purchaser were approached. The provisions of this Section 12 will apply notwithstanding the existence of a public or private market upon which the quotations or sales prices may exceed substantially the price at which the Collateral Agent sells. SECTION 13. Registration, etc. Each Pledgor and Guarantor agrees that, upon the occurrence and during the continuance of an Event of Default, if for any reason the Collateral Agent desires to sell any of the Pledged Securities at a public sale, it will, at any time and from time to time, upon the written request of the Collateral Agent, use its reasonable best efforts to take or to cause the issuer of such Pledged Securities to take such action and prepare, distribute and/or file such documents, as are required or advisable in the reasonable opinion of counsel for the Collateral Agent to permit the public sale of such Pledged Securities. Each Pledgor and Guarantor further agrees to indemnify, defend and hold harmless the Collateral Agent, each other Secured Party, any underwriter and their respective officers, directors, affiliates and controlling Persons from and against all loss, liability, expenses, costs of counsel (including, without limitation, reasonable fees and expenses to the Collateral Agent of legal counsel), and claims (including the costs of investigation) that they may incur insofar as such loss, liability, expense or claim arises out of or is based upon any alleged untrue statement of a material fact contained in any prospectus (or any amendment or supplement thereto) or in any notification or offering circular, or arises out of or is based upon any alleged omission to state a material fact required to be stated therein or necessary to make the statements in any thereof not misleading, except insofar as the same may have been caused by any untrue statement or omission based upon information furnished in writing to such Pledgor and Guarantor or the issuer of such Pledged Securities by the Collateral Agent or any other Secured Party expressly for use therein. Each Pledgor and Guarantor further agrees, upon such written request referred to above, to use its reasonable best efforts to qualify, file or register, or cause the issuer of such Pledged Securities to qualify, file or register, any of the Pledged Securities under the Blue Sky or other securities laws of such states as may be requested by the Collateral Agent and keep effective, or cause to be kept effective, all such qualifications, filings or registrations. Each Pledgor and Guarantor will bear all costs and expenses of carrying out its obligations under this Section 13. Each Pledgor and Guarantor acknowledges that there is no adequate remedy at law for failure by it to comply with the provisions of this Section 13 and that such failure would not be adequately compensable in damages, and therefore agrees that its agreements contained in this Section 13 may be specifically enforced. SECTION 14. Security Interest Absolute. All rights of the Collateral Agent hereunder, the grant of a security interest in the Collateral and all obligations of each Pledgor and Guarantor hereunder, shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Indenture, any other Transaction Document, any agreement with respect to any of the Indenture Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Indenture Obligations, or any other amendment or waiver of or any consent to any departure from the Indenture, any other Transaction Document or any other agreement or instrument relating to any of the foregoing, (c) any exchange, release or nonperfection of any other collateral, or any release or amendment or waiver of or consent to or departure from any guaranty, for all or any of the Indenture Obligations or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Pledgor and Guarantor in respect of the Indenture Obligations or in respect of this Agreement (other than the indefeasible payment in full of all the Indenture Obligations). SECTION 15. Termination or Release. (a) This Agreement and the security interests granted hereby shall terminate when all the Indenture Obligations have been indefeasibly paid in full and there are no Notes outstanding. (b) Upon any sale or other transfer by any Pledgor and Guarantor of any Collateral that is permitted under the Indenture to any Person that is not a Pledgor and Guarantor, or, upon the effectiveness of a release of the security interest granted hereby in any Collateral pursuant to Section 18, the security interest in such Collateral shall be automatically released. (c) In connection with any termination or release pursuant to paragraph (a) or (b) or Section 18, the Collateral Agent shall execute and deliver to any Pledgor and Guarantor, at such Pledgor and Guarantor's expense, all documents that such Pledgor and Guarantor shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to this Section 15 shall be without recourse to or warranty by the Collateral Agent. SECTION 16. Notices. All communications and notices hereunder shall be in writing and given as provided in Section 13.02 of the Indenture. All communications and notices hereunder to any Pledgor and Guarantor shall be given to it at the address or telecopy number set forth on Schedule I, with a copy to the Issuer. SECTION 17. Further Assurances. Each Pledgor and Guarantor agrees to do such further acts and things, and to execute and deliver such additional conveyances, assignments, agreements and instruments, as the Collateral Agent may at any time reasonably request in connection with the administration and enforcement of this Agreement or with respect to the Collateral or any part thereof or in order better to assure and confirm unto the Collateral Agent its rights and remedies hereunder. SECTION 18. Binding Effect; Several Agreement; Assignments. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party; and all covenants, promises and agreements by or on behalf of any Pledgor and Guarantor that are contained in this Agreement shall bind and inure to the benefit of its successors and assigns. This Agreement shall become effective as to any Pledgor and Guarantor when a counterpart hereof executed on behalf of such Pledgor and Guarantor shall have been delivered to the Collateral Agent and a counterpart hereof shall have been executed on behalf of the Collateral Agent, and thereafter shall be binding upon such Pledgor and Guarantor, and the Collateral Agent and their respective successors and assigns, and shall inure to the benefit of such Pledgor and Guarantor, the Collateral Agent and the other Secured Parties, and their respective successors and assigns, except that no Pledgor and Guarantor shall have the right to assign its rights hereunder or any interest herein or in the Collateral (and any such attempted assignment shall be void), except as expressly contemplated by this Agreement or the other Transaction Documents. In the event that a Pledgor and Guarantor ceases to be a Subsidiary pursuant to a transaction permitted under the Transaction Documents, such Pledgor and Guarantor shall be released from its obligations under this Agreement without further action. This Agreement shall be construed as a separate agreement with respect to each Pledgor and Guarantor, and may be amended, modified, supplemented, waived or released with respect to any Pledgor and Guarantor without the approval of any other Pledgor and Guarantor, and without affecting the obligations of any other Pledgor and Guarantor hereunder. SECTION 19. Survival of Agreement; Severability. (a) All covenants, agreements, representations and warranties made by each Pledgor and Guarantor herein and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or any other Transaction Document shall be considered to have been relied upon by the Collateral Agent and the other Secured Parties and shall survive the issuance and delivery to the Holders of the Notes, regardless of any investigation made by the Secured Parties or on their behalf, and shall continue in full force and effect as long as any Indenture Obligation remains unpaid and for so long as any Notes are outstanding. (b) In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. SECTION 20. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 21. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute a single contract, and shall become effective as provided in Section 18. Delivery of an executed counterpart of a signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually executed counterpart of this Agreement. SECTION 22. Rules of Interpretation. The rules of construction specified in Section 1.03 of the Indenture shall be applicable to this Agreement. Section headings used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting this Agreement. SECTION 23. Jurisdiction; Consent to Service of Process. (a) Each Pledgor and Guarantor hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the other Transaction Documents, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that, to the extent permitted by applicable law, all claims in respect of any such action or proceeding may be heard and determined in such New York State 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 the Collateral Agent or any other Secured Party may otherwise have to bring any action or proceeding relating to this Agreement or the other Transaction Documents against any Pledgor and Guarantor or its properties in the courts of any jurisdiction. (b) Each Pledgor and Guarantor hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the other Transaction Documents in any New York State or Federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. (c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 16. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law. SECTION 24. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. SECTION 25. Limitation on Security Interest. Anything contained in this Agreement to the contrary notwithstanding, the obligation hereunder secured by each Pledgor and Guarantor shall be limited to a maximum aggregate amount equal to the greatest amount that would not render such Pledgor and Guarantor's secured obligations hereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the United States Code or any provisions of applicable state law (collectively, the "Fraudulent Transfer Laws"), in each case after giving effect to all liabilities of such Pledgor and Guarantor, contingent or otherwise, that would be taken into account in determining whether the incurrence of the obligation would constitute a fraudulent conveyance under the Fraudulent Transfer Laws and after giving effect, both in determining such Pledgor and Guarantor's probable debt hereunder and in determining its assets, to the existence of any rights to subrogation, contribution, reimbursement, indemnity or similar rights of such Pledgor and Guarantor pursuant to (a) applicable law or (b) any agreement, including the Indemnity, Subrogation and Contribution Agreement. SECTION 26. Additional Pledgors and Guarantors. Pursuant to Section 5.11 of the Indenture, each Subsidiary that was not in existence or not a Domestic Subsidiary on the date of the Indenture is required to enter into this Agreement as a Pledgor and Guarantor upon becoming a Domestic Subsidiary. Upon execution and delivery by the Collateral Agent and a Subsidiary of an instrument in the form of Annex 1, such Subsidiary shall become a Pledgor and Guarantor hereunder with the same force and effect as if originally named as a Pledgor and Guarantor herein. The execution and delivery of such instrument shall not require the consent of any Pledgor and Guarantor hereunder. The rights and obligations of each Pledgor and Guarantor hereunder shall remain in full force and effect notwithstanding the addition of any new Pledgor and Guarantor as a party to this Agreement. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. MEMC ELECTRONIC MATERIALS, INC. By: /s/ James M. Stolze ----------------------------------- Name: James M. Stolze Title: Executive Vice President, Chief Financial Officer By: /s/ Kenneth L. Young ----------------------------------- Name: Kenneth L. Young Title: Treasurer EACH OF THE SUBSIDIARIES LISTED ON SCHEDULE I HERETO, as Pledgor and Guarantor By: /s/ Kenneth L. Young ----------------------------------- Name: Kenneth L. Young, in his capacity as Treasurer for each of the Subsidiaries listed on Schedule I hereto Citicorp USA, Inc., as Collateral Agent By: /s/ Edward T. Crook ----------------------------------- Name: Edward T. Crook Title: Managing Director and Vice President EXHIBIT E SECURITY AGREEMENT dated as of November 13, 2001, among MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation (the "Issuer"), each subsidiary of the Issuer listed on Schedule I hereto (each such subsidiary individually a "Pledgor and Guarantor" and, collectively, the Pledgors and Guarantors, and collectively, together with the Issuer, the "Grantors") and CITICORP USA, Inc., a Delaware corporation, as collateral agent (the "Collateral Agent") for the Secured Parties (as defined herein). Reference is made to (a) the Indenture dated as of November 13, 2001 (as amended, supplemented or otherwise modified from time to time, the "Indenture"), among the Issuer, Citibank, N.A., a national banking association, as trustee (in such capacity, the "Trustee") and the Collateral Agent, (b) the Restructuring Agreement dated as of November 13, 2001, among the Issuer and TPG Wafer Holdings LLC (the "Restructuring Agreement") and (c) the Guarantee Agreement dated as of November 13, 2001 (as amended, supplemented or otherwise modified from time to time, the "Guarantee Agreement"), among the Issuer, each Pledgor and Guarantor party thereto and the Collateral Agent. Unless the context otherwise requires, capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in the Indenture and, if not defined in the Indenture, in the Restructuring Agreement. The Holders have agreed to purchase the Notes, upon the terms and subject to the conditions specified in the Restructuring Agreement and the Indenture. The Issuer has agreed to issue such Notes, upon the terms and subject to the conditions specified in the Restructuring Agreement and the Indenture. Each Pledgor and Guarantor has agreed to guarantee, among other things, all the obligations of the Issuer under the Indenture on a senior subordinated basis as set forth in Article 12 of the Indenture and Article II of the Guarantee Agreement. The obligations of the Holders to purchase the notes are conditioned upon, among other things, the execution and delivery by the Grantors of an agreement in the form hereof to secure (a) the due and punctual payment of (i) the principal of and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Notes, when and as due, whether at maturity, by acceleration, upon one or more dates set for redemption, retirement, repurchase or otherwise and (ii) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of the Issuer and the Pledgors and Guarantors to the Secured Parties under the Indenture, the Notes and the Security Documents and (b) the due and punctual performance of all covenants, agreements, obligations and liabilities of the Issuer and the Pledgors and Guarantors under or pursuant to the Indenture, the Notes and the Security Documents (all the monetary and other obligations described in the preceding clauses (a) and (b) being collectively called the "Indenture Obligations"). Accordingly, the Grantors and the Collateral Agent, on behalf of itself and each Secured Party (and each of their respective successors or assigns), hereby agree as follows: ARTICLE I Definitions ----------- SECTION 1.01. Definition of Certain Terms Used Herein. As used herein, the following terms shall have the following meanings: "Account Debtor" means any Person who is or who may become obligated to any Grantor under, with respect to or on account of an Account. "Accounts" means all "accounts" (as defined in UCC) of any Grantor and shall include any and all right, title and interest of any Grantor to payment for goods and services sold or leased, including any such right evidenced by Chattel Paper, whether due or to become due, whether or not it has been earned by performance, and whether now or hereafter acquired or arising in the future, including accounts receivable from Affiliates of the Grantors. "Accounts Receivable" means all Accounts and all right, title and interest in any returned goods, together with all rights, titles, securities and guarantees with respect thereto, including any rights to stoppage in transit, replevin, reclamation and resales, and all related security interests, liens and pledges, whether voluntary or involuntary, in each case whether now existing or owned or hereafter arising or acquired. "Chattel Paper" has the meaning assigned to such term in the UCC. "Collateral" means all (a) Accounts Receivable, (b) Documents, (c) Equipment, (d) General Intangibles, (e) Inventory, (f) cash and cash accounts, (g) Investment Property (h) Chattel Paper, (i) Instruments, (j) Deposit Accounts and (k) Proceeds, in each case whether or now or hereafter existing. "Commodity Account" means an account maintained by a Commodity Intermediary in which a Commodity Contract is carried out for a Commodity Customer. "Commodity Contract" means a commodity futures contract, an option on a commodity futures contract, a commodity option or any other contract that, in each case, is (a) traded on or subject to the rules of a board of trade that has been designated as a contract market for such a contract pursuant to the federal commodities laws or (b) traded on a foreign commodity board of trade, exchange or market, and is carried on the books of a Commodity Intermediary for a Commodity Customer. "Commodity Customer" means a Person for whom a Commodity Intermediary carries a Commodity Contract on its books. "Commodity Intermediary" means (a) a Person who is registered as a futures commission merchant under the federal commodities laws or (b) a Person who in the ordinary course of its business provides clearance or settlement services for a board of trade that has been designated as a contract market pursuant to federal commodities laws. "Copyright License" means any written agreement, now or hereafter in effect, granting any right to any third party under any Copyright now or hereafter owned by any Grantor or which such Grantor otherwise has the right to license, or granting any right to such Grantor under any Copyright now or hereafter owned by any third party, and all rights of such Grantor under any such agreement. "Copyrights" means all of the following: (a) all copyright rights in any work subject to the copyright laws of the United States or any other country, whether as author, assignee, transferee or otherwise, and (b) all registrations and applications for registration of any such copyright in the United States or any other country, including registrations, recordings, supplemental registrations and pending applications for registration in the United States Copyright Office, including those listed on Schedule II. "Deposit Accounts" has the meaning assigned to such term in the UCC. "Documents" means all instruments, promissory notes, files, records, ledger sheets and documents covering or relating to any of the Collateral. "Entitlement Holder" means a Person identified in the records of a Securities Intermediary as the Person having a Security Entitlement against the Securities Intermediary. If a Person acquires a Security Entitlement by virtue of Section 8-501(b)(2) or (3) of the UCC, such Person is the Entitlement Holder. "Equipment" means "equipment" (as defined in the UCC) of any Grantor and shall include all equipment, furniture and furnishings, and all tangible personal property similar to any of the foregoing, including tools, parts and supplies of every kind and description, and all improvements, accessions or appurtenances thereto, that are now or hereafter owned by any Grantor. The term Equipment shall include Fixtures. "Financial Asset" means (a) a Security, (b) an obligation of a Person or a share, participation or other interest in a Person or in property or an enterprise of a Person, which is, or is of a type, dealt with in or traded on financial markets, or which is recognized in any area in which it is issued or dealt in as a medium for investment or (c) any property that is held by a Securities Intermediary for another Person in a Securities Account if the Securities Intermediary has expressly agreed with the other Person that the property is to be treated as a Financial Asset under Article 8 of the UCC. As the context requires, the term Financial Asset means either the interest itself or the means by which a Person's claim to it is evidenced, including a certificated or uncertificated Security, a certificate representing a Security or a Security Entitlement. "Fixtures" means all items of Equipment, whether now owned or hereafter acquired, of any Grantor that become so related to particular real estate that an interest in them arises under any real estate law applicable thereto. "General Intangibles" means all "general intangibles" (as defined in the UCC) of any Grantor and shall include choses in action and causes of action and all other intangible personal property of any Grantor of every kind and nature (other than Accounts Receivable) now owned or hereafter acquired by any Grantor, including corporate or other business records, indemnification claims, contract rights (including rights under leases, whether entered into as lessor or lessee, Hedging Agreements and other agreements), Intellectual Property, goodwill, registrations, franchises, tax refund claims and any letter of credit, guarantee, claim, security interest or other security held by or granted to any Grantor to secure payment by an Account Debtor of any of the Accounts Receivable. "Instrument" has the meaning assigned to such term in the UCC. "Intellectual Property" means all intellectual and similar property of any Grantor of every kind and nature now owned or hereafter acquired by any Grantor, including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets, confidential or proprietary technical and business information, know-how, show-how or other data or information, software and databases and all embodiments or fixations thereof and related documentation, registrations and franchises, and all additions, improvements and accessions to, and books and records describing or used in connection with, any of the foregoing. "Indenture" has the meaning assigned to such term in the preliminary statement of this Agreement. "Indenture Obligations" has the meaning assigned to such term in the preliminary statement of this Agreement. "Inventory" means "inventory" (as defined in the UCC) of any Grantor and shall include all goods of any Grantor, whether now owned or hereafter acquired, held for sale or lease, or furnished or to be furnished by any Grantor under contracts of service, or consumed in any Grantor's business, including raw materials, intermediates, work in process, packaging materials, finished goods, semi-finished inventory, scrap inventory, manufacturing supplies and spare parts, and all such goods that have been returned to or repossessed by or on behalf of any Grantor. "Investment Property" means all Securities (whether certificated or uncertificated), Security Entitlements, Securities Accounts, Commodity Contracts and Commodity Accounts of any Grantor, whether now owned or hereafter acquired by any Grantor. "License" means any Patent License, Trademark License, Copyright License or other license or sublicense to which any Grantor is a party, including those listed on Schedule III (other than those license agreements in existence on the date hereof and listed on Schedule III and those license agreements entered into after the date hereof, which by their terms prohibit assignment or a grant of a security interest by such Grantor as licensee thereunder). "Patent License" means any written agreement, now or hereafter in effect, granting to any third party any right to make, use or sell any invention on which a Patent, now or hereafter owned by any Grantor or which any Grantor otherwise has the right to license, is in existence, or granting to any Grantor any right to make, use or sell any invention on which a Patent, now or hereafter owned by any third party, is in existence, and all rights of any Grantor under any such agreement. "Patents" means all of the following now owned or hereafter acquired by any Grantor: (a) all letters patent of the United States or any other country, all registrations and recordings thereof, and all applications for letters patent of the United States or any other country, including registrations, recordings and pending applications in the United States Patent and Trademark Office or any similar offices in any other country, including those listed on Schedule IV, and (b) all reissues, continuations, divisions, continuations-in-part, renewals or extensions thereof, and the inventions disclosed or claimed therein, including the right to make, use and/or sell the inventions disclosed or claimed therein. "Perfection Certificate" means a certificate substantially in the form of Annex 1 hereto, completed and supplemented with the schedules and attachments contemplated thereby, and duly executed by an executive officer or Financial Officer of the Issuer. "Proceeds" means "proceeds" (as defined in the UCC) of any Grantor and shall include any consideration received from the sale, exchange, license, lease or other disposition of any asset or property that constitutes Collateral, any value received as a consequence of the possession of any Collateral and any payment received from any insurer or other Person or entity as a result of the destruction, loss, theft, damage or other involuntary conversion of whatever nature of any asset or property which constitutes Collateral, any property collected on or distributed on account of the Collateral, any rights arising out of the Collateral, and shall include, (a) any claim of any Grantor against any third party for (and the right to sue and recover for and the rights to damages or profits due or accrued arising out of or in connection with) (i) past, present or future infringement of any Patent now or hereafter owned by any Grantor, or licensed under a Patent License, (ii) past, present or future infringement or dilution of any Trademark now or hereafter owned by any Grantor or licensed under a Trademark License or injury to the goodwill associated with or symbolized by any Trademark now or hereafter owned by any Grantor, (iii) past, present or future breach of any License and (iv) past, present or future infringement of any Copyright now or hereafter owned by any Grantor or licensed under a Copyright License and (b) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral. "Revolver Obligations" has the meaning assigned to such term in the Revolving Loan Documentation. "Revolving Loan Documentation" means the Revolving Credit Agreement dated as of November 13, 2001 among the Issuer, the Lenders party thereto and Citicorp USA, Inc., a Delaware corporation, as Administrative Agent and collateral agent, together with the guarantee agreement, the security agreement, the pledge agreement and the indemnity, subrogation and contribution agreement attached as exhibits to such Revolving Credit Agreement and any other security documents executed in connection therewith. "Secured Parties" means (a) the Holders, (b) the Trustee, (c) the Collateral Agent, (d) the beneficiaries of each indemnification obligation undertaken by any Grantor under any Transaction Document and (e) the successors and assigns of each of the foregoing. "Securities" means any obligations of an issuer or any shares, participations or other interests in an issuer or in property or an enterprise of an issuer which (a) are represented by a certificate representing a security in bearer or registered form, or the transfer of which may be registered upon books maintained for that purpose by or on behalf of the issuer, (b) are one of a class or series or by its terms is divisible into a class or series of shares, participations, interests or obligations and (c)(i) are, or are of a type, dealt with or traded on securities exchanges or securities markets or (ii) are a medium for investment and by their terms expressly provide that they are a security governed by Article 8 of the UCC. "Securities Account" means an account to which a Financial Asset is or may be credited in accordance with an agreement under which the Person maintaining the account undertakes to treat the Person for whom the account is maintained as entitled to exercise rights that comprise the Financial Asset. "Security Documents" means the Guarantee Agreement and the Security Agreement, the Collateral Assignment, the Pledge Agreement, the Mortgages and each other security agreement or other instrument or document executed and delivered pursuant to Section 5.11 or 5.12 of the Indenture to secure any of the Indenture Obligations. "Security Entitlements" means the rights and property interests of an Entitlement Holder with respect to a Financial Asset. "Security Interest" has the meaning assigned to such term in Section 2.01. "Security Intermediary" means (a) a clearing corporation or (b) a Person, including a bank or broker, that in the ordinary course of its business maintains securities accounts for others and is acting in that capacity. "Texas Instruments Agreements" means the Shareholders' Agreement dated as of May 16, 1995, by and between Texas Instruments Incorporated and the Issuer, as amended; Technology Transfer Agreement dated as of June 30, 1995, by and between Texas Instruments Incorporated, the Issuer and MEMC Southwest Inc.; Texas Instruments Incorporated Purchase Agreement dated as of June 30, 1995, by and between Texas Instruments Incorporated, MEMC Southwest Inc. and the Issuer, as amended; Master Services Agreement dated as of June 30, 1995, by and between Texas Instruments Incorporated and MEMC Southwest Inc.; Chemical Services Agreement dated as of June 30, 1995, by and between Texas Instruments Incorporated and MEMC Southwest Inc.; Information Systems and Services Agreement dated as of June 30, 1995, by and between Texas Instruments Incorporated and MEMC Southwest Inc.; Telephone Services Agreement dated as of June 30, 1995, by and between Texas Instruments Incorporated and MEMC Southwest Inc.; Human Resources Agreement dated as of June 30, 1995, by and between Texas Instruments Incorporated and MEMC Southwest Inc.; Medical Services Agreement dated as of June 30, 1995, by and between Texas Instruments Incorporated and MEMC Southwest Inc.; Purchasing and Inventory Services Agreement dated as of June 30, 1995, by and between Texas Instruments Incorporated and MEMC Southwest Inc.; Environmental, Health and Safety Services Agreement dated as of June 30, 1995, by and between Texas Instruments Incorporated and the Issuer; Agreement Regarding Health & Dental Administrative Expenses dated as of June 30, 1995, by and between Texas Instruments Incorporated and the Issuer. "Trademark License" means any written agreement, now or hereafter in effect, granting to any third party any right to use any Trademark now or hereafter owned by any Grantor or which any Grantor otherwise has the right to license, or granting to any Grantor any right to use any Trademark now or hereafter owned by any third party, and all rights of any Grantor under any such agreement. "Trademarks" means all of the following: (a) all trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, trade styles, trade dress, logos, other source or business identifiers, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all registration and recording applications filed in connection therewith, including registrations and registration applications in the United States Patent and Trademark Office, any State of the United States or any similar offices in any other country or any political subdivision thereof, and all extensions or renewals thereof, including those listed on Schedule V, (b) all goodwill associated therewith or symbolized thereby and (c) all other assets, rights and interests that uniquely reflect or embody such goodwill. "Transaction Documents" means the Indenture, the Restructuring Agreement, the Registration Rights Agreement and the Security Documents. "Trustee" has the meaning set forth in the preamble. "UCC" means the Uniform Commercial Code as in effect from time to time in the state of New York. SECTION 1.02. Rules of Interpretation. The rules of construction specified in Section 1.03 of the Indenture shall be applicable to this Agreement. ARTICLE II Security Interest ----------------- SECTION 2.01. Security Interest. As security for the payment or performance, as the case may be, in full of the Indenture Obligations, each Grantor hereby bargains, sells, conveys, assigns, sets over, mortgages, pledges, hypothecates and transfers to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, a security interest in, all of such Grantor's right, title and interest, whether now owned or hereafter acquired, in, to and under the Collateral (the "Security Interest"); provided that the Security Interest shall not include (i) more than 65% of the issued and outstanding voting stock of any Foreign Subsidiary, (ii) the outstanding voting stock of MEMC Korea Company, MEMC Kulim Electronic Materials, Sbn. Bhd., MEMC Southwest Inc. and Taisil Electronic Materials Corporation, (iii) the Texas Instruments Agreements or (iv) any General Intangible that is, by its terms, not assignable, so long as the failure of the Grantors to maintain such General Intangible would not result in a Material Adverse Effect. Such Security Interest shall be subject to the prior lien and security interest granted under the Revolving Loan Documentation as security for the payment or performance, as the case may be, in full of the Revolver Obligations (the "Senior Security Interest"). Without limiting the foregoing, the Collateral Agent is hereby authorized to file one or more financing statements (including fixture filings), continuation statements, filings with the United States Patent and Trademark Office or United States Copyright Office (or any successor office or any similar office in any other country) or other documents for the purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest granted by each Grantor, without the signature of any Grantors, and naming any Grantor or the Grantors as debtors and the Collateral Agent as secured party. SECTION 2.02. No Assumption of Liability. The Security Interest is granted as security only and shall not subject the Collateral Agent, the Trustee or any other Secured Party to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising out of the Collateral. ARTICLE III Representations and Warranties ------------------------------ The Grantors jointly and severally represent and warrant to the Collateral Agent, the Trustee and the Secured Parties that: SECTION 3.01. Title and Authority. Each Grantor has good and valid rights in and title to the Collateral with respect to which it has purported to grant a Security Interest hereunder and has full power and authority to grant to the Collateral Agent the Security Interest in such Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other Person other than any consent or approval which has been obtained. The Security Interest granted hereby is subject to the terms and conditions of that certain Option Agreement dated September 21, 1998, as amended on September 22, 2000, September 25, 2001, and October 25, 2001, among Tokuyama Corporation, Marubeni Corporation, Marubeni America Corporation, the Issuer and MEMC Pasadena. SECTION 3.02. Filings. (a) The Perfection Certificate has been duly prepared, completed and executed and the information set forth therein is correct and complete in all material respects. Appropriately completed UCC financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations containing a description of the Collateral have been delivered to the Collateral Agent for filing in each governmental, municipal or other office specified in Schedule 5 to the Perfection Certificate, which are all the filings, recordings and registrations (other than filings required to be made in the United States Patent and Trademark Office and the United States Copyright Office in order to perfect the Security Interest in Collateral consisting of United States Patents, Trademarks and Copyrights) that are necessary to publish notice of and protect the validity of and to establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the ratable benefit of the Secured Parties) in respect of all Collateral in which the Security Interest may be perfected by filing, recording or registration in the United States (or any political subdivision thereof) and its territories and possessions, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary in any such jurisdiction, except as provided under applicable law with respect to the filing of continuation statements. (b) Each Grantor shall ensure that fully executed security agreements in the form hereof (or short-form supplements to this Agreement in form and substance satisfactory to the Collateral Agent) and containing a description of all Collateral consisting of Intellectual Property shall have been received and recorded within three months after the execution of this Agreement with respect to United States Patents and United States registered Trademarks (and Trademarks for which United States registration applications are pending) and within one month after the execution of this Agreement with respect to United States registered Copyrights have been delivered to the Collateral Agent for recording by the United States Patent and Trademark Office and the United States Copyright Office pursuant to 35 U.S.C. ss. 261, 15 U.S.C. ss. 1060 or 17 U.S.C. ss. 205 and the regulations thereunder, as applicable, and otherwise as may be required pursuant to the laws of any other necessary jurisdiction in the United States (or any political subdivision thereof) and its territories and possessions, to protect the validity of and to establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the ratable benefit of the Secured Parties) in respect of all Collateral consisting of Patents, Trademarks and Copyrights in which a security interest may be perfected by filing, recording or registration in the United States (or any political subdivision thereof) and its territories and possessions, or in any other necessary jurisdiction, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary in any such jurisdiction (other than such actions as are necessary to perfect the Security Interest with respect to any Collateral consisting of Patents, Trademarks and Copyrights (or registration or application for registration thereof) acquired or developed after the date hereof). SECTION 3.03. Validity of Security Interest. The Security Interest constitutes (a) a legal and valid security interest in all the Collateral securing the payment and performance of the Indenture Obligations, (b) subject to the filings described in Section 3.02 above, a perfected security interest in all Collateral in which a security interest may be perfected by filing, recording or registering a financing statement or analogous document in the United States (or any political subdivision thereof) and its territories and possessions pursuant to the UCC or other analogous applicable law in such jurisdictions and (c) a security interest that shall be perfected in all Collateral in which a security interest may be perfected upon the receipt and recording of this Agreement with the United States Patent and Trademark Office and the United States Copyright Office, as applicable, within the three month period (commencing as of the date hereof) pursuant to 35 U.S.C. ss.261 or 15 U.S.C. ss.1060 or the one month period (commencing as of the date hereof) pursuant to 17 U.S.C. ss.205 and otherwise as may be required to pursuant to the laws of any other necessary jurisdiction in the United States (or any political subdivision thereof) and its territories and possessions. The Security Interest is and shall be prior to any other Lien on any of the Collateral, other than Liens expressly permitted pursuant to Section 6.02 of the Indenture. For the avoidance of doubt (and in each place where this agreement makes reference to Liens permitted pursuant to Section 6.02 of the Indenture), the Senior Security Interest shall be considered a Lien expressly permitted pursuant to Section 6.02 of the Indenture. SECTION 3.04. Absence of Other Liens. The Collateral is owned by the Grantors free and clear of any Lien, except for Liens expressly permitted pursuant to Section 6.02 of the Indenture. The Grantor has not filed or consented to the filing of (a) any financing statement or analogous document under the UCC or any other applicable laws covering any Collateral, (b) any assignment in which any Grantor assigns any Collateral or any security agreement or similar instrument covering any Collateral with the United States Patent and Trademark Office or the United States Copyright Office or (c) any assignment in which any Grantor assigns any Collateral or any security agreement or similar instrument covering any Collateral with any foreign governmental, municipal or other office, which financing statement or analogous document, assignment, security agreement or similar instrument is still in effect, except, in each case, for Liens expressly permitted pursuant to Section 6.02 of the Indenture. ARTICLE IV Covenants --------- SECTION 4.01. Issue Date Requirements. As of the Issue Date for the Notes, the Issuer shall: (a) furnish, to the Collateral Agent and the Trustee, a completed Perfection Certificate (in substantially the form of Annex 1 hereto) dated the Issue Date and signed by an executive officer or Financial Officer of the Issuer, together with all attachments contemplated thereby, including the results of a search of the Uniform Commercial Code (or equivalent) filings made with respect to the Issuer and the Pledgors and Guarantors in the jurisdictions contemplated by the Perfection Certificate and copies of the financing statements (or similar documents) disclosed by such search and evidence reasonably satisfactory to the Collateral Agent and the Trustee that the Liens indicated by such financing statements (or similar documents) are permitted by Section 6.02 of the Indenture or have been released; (b) provide, to the Trustee and the Collateral Agent, a certificate stating that the insurance required by Section 5.08 of the Indenture and the Security Documents is in effect. SECTION 4.02. Changes with respect to Collateral. Each of the Grantors shall promptly notify the Trustee and the Collateral Agent in writing of any change (i) in its legal name, (ii) in its jurisdiction of organization or formation, (iii) in the location of its chief executive office or principal place of business, (iv) in its identity or legal or organizational structure or (v) in its organization identification number or its Federal Taxpayer Identification Number. None of the Grantors shall effect or permit any change referred to in the preceding sentence unless all filings have been made under the UCC or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral (subject only to the Liens expressly permitted pursuant to Section 6.02 of the Indenture). Each Grantor shall promptly notify the Collateral Agent if any material portion of the Collateral owned or held by or on behalf of such Grantor is damaged or destroyed. SECTION 4.03. Records. Each Grantor agrees to maintain, at its own cost and expense, such complete and accurate records with respect to the Collateral owned by it as is consistent with its current practices, but in any event to include complete accounting records indicating all payments and proceeds received with respect to any part of the Collateral, and, at such time or times as the Collateral Agent may reasonably request, promptly to prepare and deliver to the Collateral Agent an updated Perfection Certificate, noting all material changes, if any, since the date of the most recent Perfection Certificate. SECTION 4.04. Protection of Security. Each Grantor shall, at its own cost and expense, take any and all actions reasonably necessary to defend title to the Collateral against all Persons and to defend the Security Interest of the Collateral Agent for the ratable benefit of the Secured Parties in the Collateral and the priority thereof against any Lien not expressly permitted pursuant to Section 6.02 of the Indenture. SECTION 4.05. Further Assurances. Each Grantor agrees, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as are necessary or as the Collateral Agent may from time to time request to better assure, preserve, protect and perfect the Security Interest and the rights and remedies created hereby, including the payment of any fees and taxes required in connection with the execution and delivery of this Agreement, the granting of the Security Interest and the filing of any financing statements (including fixture filings) or other documents in connection herewith or therewith. If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any promissory note or other instrument, such note or instrument shall be promptly pledged and delivered to the Collateral Agent, duly endorsed in a manner satisfactory to the Collateral Agent. SECTION 4.06. Inspection and Verification. The Collateral Agent and such Persons as the Collateral Agent may reasonably designate shall have the right to inspect the Collateral, all records related thereto (and to make extracts and copies from such records) and the premises upon which any of the Collateral is located, at reasonable times and intervals during normal business hours upon reasonable advance notice to the respective Grantor, and to verify under reasonable procedures the validity, amount, quality, quantity, value, condition and status of the Collateral. The Collateral Agent shall have the absolute right to share any information it gains from such inspection or verification with any Holder in accordance with and subject to the provisions set forth in Section 5.09 of the Indenture. SECTION 4.07. Taxes; Encumbrances. At its option, the Collateral Agent may, but is under no obligation to, discharge past due taxes, assessments, charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the Collateral and not permitted pursuant to Section 6.02 of the Indenture, and may pay for the maintenance and preservation of the Collateral, in each case to the extent any Grantor fails to do so as required by the Indenture or this Agreement and such failure shall continue beyond any applicable notice and cure period, and each Grantor jointly and severally agrees to reimburse the Collateral Agent on demand for any payment made or any expense incurred by the Collateral Agent pursuant to the foregoing authorization; provided, however, that nothing in this Section 4.07 shall be interpreted as excusing any Grantor from the performance of, or imposing any obligation on the Collateral Agent or any Secured Party to cure or perform, any covenants or other promises of any Grantor with respect to taxes, assessments, charges, fees, liens, security interests or other encumbrances and maintenance as set forth herein or in the other Transaction Documents. SECTION 4.08. Assignment of Security Interest. If at any time any Grantor shall take a security interest in any property of an Account Debtor or any other Person to secure payment and performance of an Account, such Grantor shall promptly assign such security interest to the Collateral Agent to the extent permitted by any contracts or arrangements to which such property is subject. Such assignment need not be filed of public record unless necessary to continue the perfected status of the security interest against creditors of and transferees from the Account Debtor or other Person granting the security interest. SECTION 4.09. Continuing Obligations of the Grantors. Each Grantor shall remain liable to observe and perform all the conditions and obligations to be observed and performed by it under each contract, agreement or instrument relating to the Collateral, all in accordance with the terms and conditions thereof, and each Grantor jointly and severally agrees to indemnify and hold harmless the Collateral Agent, the Trustee and the Secured Parties from and against any and all liability for such performance; provided that such indemnity shall not be available, as to the Collateral Agent and the Secured Parties, to the extent that such liability resulted from the gross negligence or willful misconduct of the Collateral Agent or a Secured Party. SECTION 4.10. Use and Disposition of Collateral. None of the Grantors shall make or permit to be made an assignment, pledge or hypothecation of the Collateral or shall grant any other Lien in respect of the Collateral, except as expressly permitted by Section 6.02 of the Indenture. None of the Grantors shall make or permit to be made any transfer of the Collateral and each Grantor shall remain at all times in possession of the Collateral owned by it, except that (a) Inventory may be sold or consigned in the ordinary course of business and (b) unless and until the Collateral Agent shall notify the Grantors that an Event of Default shall have occurred and be continuing and that during the continuance thereof the Grantors shall not sell, convey, lease, assign, transfer or otherwise dispose of any Collateral (which notice may be given by telephone if promptly confirmed in writing), the Grantors may use and dispose of the Collateral in any lawful manner not inconsistent with the provisions of this Agreement, the Indenture or any other Transaction Document. Without limiting the generality of the foregoing, each Grantor agrees that it shall not permit any material Inventory to be in the possession or control of any warehouseman, bailee, agent or processor at any time unless such warehouseman, bailee, agent or processor shall have been notified of the Security Interest and shall have agreed in writing to hold the Inventory subject to the Security Interest and the instructions of the Collateral Agent and to waive and release any Lien held by it with respect to such Inventory, whether arising by operation of law or otherwise. SECTION 4.11. Limitation on Modification of Accounts. None of the Grantors will, without the Collateral Agent's prior written consent, which consent shall not be unreasonably withheld, grant any extension of the time of payment of any of the Accounts Receivable, compromise, compound or settle the same for less than the full amount thereof, release, wholly or partly, any Person liable for the payment thereof or allow any credit or discount whatsoever thereon, other than extensions, credits, discounts, compromises or settlements granted or made in the ordinary course of business and consistent with its current practices. SECTION 4.12. Insurance. The Grantors, at their own expense, shall maintain or cause to be maintained insurance covering physical loss or damage to the Inventory and Equipment in accordance with Section 5.08 of the Indenture. Each Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such Grantor's true and lawful agent (and attorney-in-fact) for the purpose, during the continuance of an Event of Default, of making, settling and adjusting claims in respect of Collateral under policies of insurance, endorsing the name of such Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect thereto. In the event that any Grantor at any time or times shall fail to obtain or maintain any of the policies of insurance required hereby or to pay any premium in whole or part relating thereto, the Collateral Agent may, but is under no obligation to, without waiving or releasing any obligation or liability of the Grantors hereunder or any Event of Default, in its reasonable discretion, obtain and maintain such policies of insurance and pay such premium and take any other actions with respect thereto as the Collateral Agent deems advisable. All sums disbursed by the Collateral Agent in connection with this Section 4.12, including reasonable attorneys' fees, court costs, expenses and other charges relating thereto, shall be payable, upon demand, by the Grantors to the Collateral Agent and shall be additional Indenture Obligations secured hereby. SECTION 4.13. Legend. If any Accounts Receivable of any Grantor are evidenced by Chattel Paper, such Grantor shall legend, in form and manner reasonably satisfactory to the Collateral Agent, such Accounts Receivable and its books, records and documents evidencing or pertaining thereto with an appropriate reference to the fact that such Accounts Receivable have been assigned to the Collateral Agent for the benefit of the Secured Parties and that the Collateral Agent has a security interest therein. SECTION 4.14. Covenants Regarding Patent, Trademark and Copyright Collateral. (a) Each Grantor agrees that it will not, and will not permit any of its licensees to, do any act, or omit to do any act, whereby any Patent which is material to the conduct of such Grantor's business may become invalidated or dedicated to the public, and agrees that it shall continue to mark, to the extent permitted by existing technology, any products covered by a Patent with the relevant patent number as necessary and sufficient to establish and preserve its maximum rights under applicable patent laws pursuant to which each such Patent is issued. (b) Each Grantor (either itself or through its licensees or its sublicensees) will, for each Trademark material to the conduct of such Grantor's business, (i) maintain such Trademark in full force free from any claim of abandonment or invalidity for non-use, (ii) maintain the quality of products and services offered under such Trademark sufficient to preclude any findings of abandonment, (iii) display such Trademark with notice of Federal or foreign registration to the extent necessary and sufficient to establish and preserve its maximum rights under applicable law pursuant to which each such Trademark is issued and (iv) not knowingly use or knowingly permit the use of such Trademark in violation of any third party rights. (c) Each Grantor (either itself or through licensees) will, for each work covered by a material Copyright, continue to publish, reproduce, display, adopt and distribute the work with appropriate copyright notice as necessary and sufficient to establish and preserve its maximum rights under applicable copyright laws pursuant to which each such Copyright is issued. (d) Each Grantor shall notify the Collateral Agent immediately if it knows or has reason to know that any such Patent, Trademark or Copyright material to the conduct of its business may become abandoned, lost or dedicated to the public, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, United States Copyright Office or any court or similar office of any country) regarding such Grantor's ownership of any such Patent, Trademark or Copyright, its right to register the same, or to keep and maintain the same. (e) In no event shall any Grantor, either itself or through any agent, employee, licensee or designee, file an application for any Patent, Trademark or Copyright (or for the registration of any Trademark or Copyright) with the United States Patent and Trademark Office, United States Copyright Office or any office or agency in any political subdivision of the United States or in any other country or any political subdivision thereof, unless it promptly thereafter informs the Collateral Agent, and, upon request of the Collateral Agent, executes and delivers any and all agreements, instruments, documents and papers as are necessary or as the Collateral Agent may request to evidence and perfect the Collateral Agent's security interest in such Patent, Trademark or Copyright, and each Grantor hereby appoints the Collateral Agent as its attorney-in-fact to execute and file such writings for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed; such power, being coupled with an interest, is irrevocable. (f) Each Grantor will take all necessary steps that are consistent with the practice in any proceeding before the United States Patent and Trademark Office, United States Copyright Office or any office or agency in any political subdivision of the United States or in any other country or any political subdivision thereof, to maintain and pursue each material application relating to the Patents, Trademarks and/or Copyrights (and to obtain the relevant grant or registration) and to maintain each issued Patent and each registration of the Trademarks and Copyrights that is material to the conduct of any Grantor's business, including timely filings of applications for renewal, affidavits of use, affidavits of incontestability and payment of maintenance fees, and, if consistent with good business judgment, to initiate opposition, interference and cancellation proceedings against third parties. (g) In the event that any Grantor has reason to believe that any Collateral consisting of a Patent, Trademark or Copyright material to the conduct of any Grantor's business has been or is about to be infringed, misappropriated or diluted by a third party, such Grantor promptly shall notify the Collateral Agent and shall, if consistent with good business judgment, promptly sue for infringement, misappropriation or dilution and to recover any and all damages for such infringement, misappropriation or dilution, and take such other actions as are appropriate under the circumstances to protect such Collateral. (h) Upon and during the continuance of an Event of Default, each Grantor shall use its best efforts to obtain all requisite consents or approvals from the licensor of each Copyright License, Patent License or Trademark License to effect the assignment of all of such Grantor's right, title and interest thereunder to the Collateral Agent or its designee. ARTICLE V Power of Attorney ----------------- Each Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such Grantor's true and lawful agent and attorney-in-fact, and in such capacity the Collateral Agent shall have the right but not the obligation, with power of substitution for each Grantor and in each Grantor's name or otherwise, for the use and benefit of the Collateral Agent and the Secured Parties, upon the occurrence and during the continuance of an Event of Default (a) to receive, endorse, assign and/or deliver any and all notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Collateral or any part thereof; (b) to demand, collect, receive payment of, give receipt for and give discharges and releases of all or any of the Collateral; (c) to sign the name of any Grantor on any invoice or bill of lading relating to any of the Collateral; (d) to send verifications of Accounts Receivable to any Account Debtor; (e) to commence and prosecute any and all suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any Collateral; (f) to settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any of the Collateral; (g) to notify, or to require any Grantor to notify, Account Debtors to make payment directly to the Collateral Agent; and (h) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement, as fully and completely as though the Collateral Agent were the absolute owner of the Collateral for all purposes; provided, however, that nothing herein contained shall be construed as requiring or obligating the Collateral Agent or any Secured Party to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent or any Secured Party, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby, and no action taken or omitted to be taken by the Collateral Agent or any Secured Party with respect to the Collateral or any part thereof shall give rise to any defense, counterclaim or offset in favor of any Grantor or to any claim or action against the Collateral Agent or any Secured Party. It is understood and agreed that the appointment of the Collateral Agent as the agent and attorney-in-fact of the Grantors for the purposes set forth above is coupled with an interest and is irrevocable. The provisions of this Section shall in no event relieve any Grantor of any of its obligations hereunder or under any other Transaction Document with respect to the Collateral or any part thereof or impose any obligation on the Collateral Agent or any Secured Party to proceed in any particular manner with respect to the Collateral or any part thereof, or in any way limit the exercise by the Collateral Agent or any Secured Party of any other or further right which it may have on the date of this Agreement or hereafter, whether hereunder, under any other Transaction Document, by law or otherwise. ARTICLE VI Remedies -------- SECTION 6.01. Subordination. Notwithstanding anything to the contrary contained in this Security Agreement, all rights and remedies set forth in this Security Agreement shall be subject to the subordination provisions set forth in Article 12 of the Indenture and Article II of the Guarantee Agreement. SECTION 6.02. Remedies upon Default. Upon the occurrence and during the continuance of an Event of Default, each Grantor agrees to deliver each item of Collateral to the Collateral Agent on demand, and it is agreed that the Collateral Agent shall have the right to take any or all of the following actions at the same or different times: (a) with respect to any Collateral consisting of Intellectual Property, on demand, to cause the Security Interest to become an assignment, transfer and conveyance of any of or all such Collateral by the applicable Grantors to the Collateral Agent (except to the extent assignment, transfer or conveyance thereof would result in a loss of said Intellectual Property), or to license or sublicense, whether general, special or otherwise, and whether on an exclusive or non-exclusive basis, any such Collateral throughout the world on such terms and conditions and in such manner as the Collateral Agent shall determine (other than in violation of any then-existing licensing arrangements to the extent that waivers cannot be obtained), and (b) with or without legal process and with or without prior notice or demand for performance, to take possession of the Collateral and without liability for trespass to enter any premises where the Collateral may be located for the purpose of taking possession of or removing the Collateral and, generally, to exercise any and all rights afforded to a secured party under the UCC or other applicable law. Without limiting the generality of the foregoing, each Grantor agrees that the Collateral Agent shall have the right, subject to the mandatory requirements of applicable law, to sell or otherwise dispose of all or any part of the Collateral, at public or private sale or at any broker's board or on any securities exchange, for cash, upon credit or for future delivery as the Collateral Agent shall deem appropriate. The Collateral Agent shall be authorized at any such sale (if it deems it advisable to do so) to restrict the prospective bidders or purchasers to Persons who will represent and agree that they are purchasing the Collateral for their own account for investment and not with a view to the distribution or sale thereof, and upon consummation of any such sale the Collateral Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold. Each such purchaser at any such sale shall hold the property sold absolutely, free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by law) all rights of redemption, stay and appraisal which such Grantor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. The Collateral Agent shall give the Grantors 10 days' written notice (which each Grantor agrees is a "reasonable authenticated notification of disposition" within the meaning of Section 9-611 of the UCC or its equivalent in other jurisdictions) of the Collateral Agent's intention to make any sale of Collateral. Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a broker's board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral, or portion thereof, will first be offered for sale at such board or exchange. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Collateral Agent may fix and state in the notice (if any) of such sale. At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent may (in its sole and absolute discretion) determine. The Collateral Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In case any sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale price is paid by the purchaser or purchasers thereof, but the Collateral Agent shall not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice. At any public (or, to the extent permitted by law, private) sale made pursuant to this Section, any Secured Party may bid for or purchase, free (to the extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of any Grantor (all said rights being also hereby waived and released to the extent permitted by law), the Collateral or any part thereof offered for sale and may make payment on account thereof by using any Indenture Obligation then due and payable to such Secured Party from any Grantor as a credit against the purchase price, and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to any Grantor therefor. For purposes hereof a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the Collateral Agent shall be free to carry out such sale pursuant to such agreement and no Grantor shall be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall have entered into such an agreement all Events of Default shall have been remedied and the Indenture Obligations paid in full. As an alternative to exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver. SECTION 6.03. Application of Proceeds. The Collateral Agent shall apply the proceeds of any collection or sale of the Collateral, as well as any Collateral consisting of cash, as follows: FIRST, to the payment of any Revolver Obligations outstanding, to the extent the Revolving Loan Documentation is in force; SECOND, to the payment of all costs and expenses incurred by the Trustee or the Collateral Agent (in its capacity as such hereunder or under any other Transaction Document) in connection with such collection or sale or otherwise in connection with this Agreement or any of the Obligations, including all court costs and the reasonable fees and expenses of its agents and legal counsel, the repayment of all advances made by the Collateral Agent hereunder or under any other Transaction Document on behalf of any Grantor and any other costs or expenses incurred in connection with the exercise of any right or remedy hereunder or under any other Transaction Document; THIRD, to the payment in full of the Indenture Obligations (the amounts so applied to be distributed among the Secured Parties pro rata in accordance with the amounts of the Indenture Obligations owed to them on the date of any such distribution); and FOURTH, to the Grantors, their successors or assigns, or as a court of competent jurisdiction may otherwise direct. The Collateral Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement. Upon any sale of the Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication thereof. SECTION 6.04. Grant of License to Use Intellectual Property. For the purpose of enabling the Collateral Agent to exercise rights and remedies under this Article at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby grants to the Collateral Agent an irrevocable, non-exclusive license (exercisable without payment of royalty or other compensation to the Grantors) to use, license or sub-license any of the Collateral consisting of Intellectual Property now owned or hereafter acquired by such Grantor, and wherever the same may be located, and including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof. The use of such license by the Collateral Agent shall be exercised, at the option of the Collateral Agent, upon the occurrence and during the continuation of an Event of Default; provided that any license, sub-license or other transaction entered into by the Collateral Agent in accordance herewith shall be binding upon the Grantors notwithstanding any subsequent cure of an Event of Default. ARTICLE VII Miscellaneous ------------- SECTION 7.01. Notices. All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 13.02 of the Indenture. All communications and notices hereunder to any Pledgor and Guarantor shall be given to it at its address or telecopy number set forth on Schedule I, with a copy to the Issuer. SECTION 7.02. Security Interest Absolute. All rights of the Collateral Agent hereunder, the Security Interest and all obligations of the Grantors hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Indenture, any other Transaction Document, any agreement with respect to any of the Indenture Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Indenture Obligations, or any other amendment or waiver of or any consent to any departure from the Indenture, any other Transaction Document or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Indenture Obligations, or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the Indenture Obligations or this Agreement. SECTION 7.03. Survival of Agreement. All covenants, agreements, representations and warranties made by any Grantor herein and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the Secured Parties and shall survive the issuance of the Notes and their purchase by the Holders, regardless of any investigation made by the Holders or on their behalf, and shall continue in full force and effect until this Agreement shall terminate. SECTION 7.04. Binding Effect; Several Agreement. This Agreement shall become effective as to any Grantor when a counterpart hereof executed on behalf of such Grantor shall have been delivered to the Collateral Agent and a counterpart hereof shall have been executed on behalf of the Collateral Agent, and thereafter shall be binding upon such Grantor and the Collateral Agent and their respective successors and assigns, and shall inure to the benefit of such Grantor, the Collateral Agent and the other Secured Parties and their respective successors and assigns, except that no Grantor shall have the right to assign or transfer its rights or obligations hereunder or any interest herein or in the Collateral (and any such assignment or transfer shall be void) except as expressly contemplated by this Agreement or the other Transaction Documents. This Agreement shall be construed as a separate agreement with respect to each Grantor and may be amended, modified, supplemented, waived or released with respect to any Grantor without the approval of any other Grantor and without affecting the obligations of any other Grantor hereunder. SECTION 7.05. Successors and Assigns. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party; and all covenants, promises and agreements by or on behalf of any Grantor or the Collateral Agent that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns. SECTION 7.06. Collateral Agent's Fees and Expenses; Indemnification. (a) Each Grantor jointly and severally agrees to pay upon demand to the Collateral Agent the amount of any and all reasonable expenses, including the reasonable fees, disbursements and other charges of its counsel and of any experts or agents, which the Collateral Agent may incur in connection with (i) the administration of this Agreement, (ii) the custody or preservation of, or the sale of, collection from or other realization upon any of the Collateral, (iii) the exercise, enforcement or protection of any of the rights of the Collateral Agent hereunder or (iv) the failure of any Grantor to perform or observe any of the provisions hereof applicable to it. (b) Without limitation of its indemnification obligations under the other Transaction Documents, each Grantor jointly and severally agrees to indemnify the Collateral Agent and the other Indemnitees against, and hold each of them harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable fees, disbursements and other charges of counsel, incurred by or asserted against any of them arising out of, in any way connected with, or as a result of, the execution, delivery or performance of this Agreement or any claim, litigation, investigation or proceeding relating hereto or to the Collateral, whether or not any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses have resulted from the gross negligence or willful misconduct of such Indemnitee as determined in a final judgment by a court of competent jurisdiction. (c) Any such amounts payable as provided hereunder shall be additional Indenture Obligations secured hereby and by the other Transaction Documents. The provisions of this Section 7.06 shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Transaction Document, the consummation of the transactions contemplated hereby, the repayment of any amounts due under the Indenture or the Notes, the invalidity or unenforceability of any term or provision of this Agreement or any other Transaction Document, or any investigation made by or on behalf of the Collateral Agent or any Holder. All amounts due under this Section 7.06 shall be payable on written demand therefor. SECTION 7.07. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. SECTION 7.08. Waivers; Amendment. (a) No failure or delay of the Collateral Agent in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Collateral Agent hereunder and of the Collateral Agent, the Trustee and the Secured Parties under the other Transaction Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provisions of this Agreement or any other Transaction Document or consent to any departure by any Grantor therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) below, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Grantor in any case shall entitle such Grantor or any other Grantor to any other or further notice or demand in similar or other circumstances. (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Grantor or Grantors with respect to which such waiver, amendment or modification is to apply, subject to any consent required in accordance with Article 10 of the Indenture. SECTION 7.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.09. SECTION 7.10. Limitation on Security Interest. Anything contained in this Agreement to the contrary notwithstanding, the obligation hereunder secured by each Pledgor and Guarantor shall be limited to a maximum aggregate amount equal to the greatest amount that would not render such Pledgor and Guarantor's secured obligations hereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the United States Code or any provisions of applicable state law (collectively, the "Fraudulent Transfer Laws"), in each case after giving effect to all liabilities of such Pledgor and Guarantor, contingent or otherwise, that would be taken into account in determining whether the incurrence of the obligation would constitute a fraudulent conveyance under the Fraudulent Transfer Laws and after giving effect, both in determining such Pledgor and Guarantor's probable debt hereunder and in determining its assets, to the existence of any rights to subrogation, contribution, reimbursement, indemnity or similar rights of such Pledgor and Guarantor pursuant to (a) applicable law or (b) any agreement, including the Indemnity, Subrogation and Contribution Agreement. SECTION 7.11. Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. SECTION 7.12. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one contract (subject to Section 7.04), and shall become effective as provided in Section 7.04. Delivery of an executed signature page to this Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. SECTION 7.13. Headings. Article and Section headings used herein are for the purpose of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement. SECTION 7.14. Jurisdiction; Consent to Service of Process. (a) Each Grantor hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the other Transaction Documents, 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 such New York State or, to the extent permitted by law, in such Federal court. Each Grantor 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 the Collateral Agent, the Trustee or any Holder may otherwise have to bring any action or proceeding relating to this Agreement or the other Transaction Documents against any Grantor or its properties in the courts of any jurisdiction. (b) Each Grantor hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the other Transaction Documents in any New York State or Federal court. Each Grantor 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. (c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 7.01. Nothing in this Agreement will affected the right of any party to this Agreement to serve process in any other manner permitted by law. SECTION 7.15. Termination. This Agreement and the Security Interest shall terminate when all the Indenture Obligations have been indefeasibly paid in full and there are no longer any Notes outstanding, at which time the Collateral Agent shall execute and deliver to the Grantors, at the Grantors' expense, all UCC termination statements and similar documents which the Grantors shall reasonably request to evidence such termination. Any execution and delivery of termination statements or documents pursuant to this Section 7.15 shall be without recourse to or warranty by the Collateral Agent. A Grantor shall automatically be released from its obligations hereunder and the Security Interest in the Collateral of such Grantor shall be automatically released in the event that such Grantor ceases to be a Pledgor and Guarantor pursuant to a transaction permitted under the Transaction Documents, at which time the Collateral Agent shall execute and deliver to any Grantor, at such Grantor's expense, all documents that such Grantor shall reasonably request to evidence such release. SECTION 7.16. Additional Grantors. Pursuant to Section 5.11 of the Indenture, each Subsidiary that was not in existence or not a Domestic Subsidiary on the date of the Indenture is required to enter into this Agreement as a Grantor upon becoming a Domestic Subsidiary. Upon execution and delivery by the Collateral Agent and such Domestic Subsidiary of an instrument in the form of Annex 2 hereto, such Domestic Subsidiary shall become a Grantor hereunder with the same force and effect as if originally named as a Grantor herein. The execution and delivery of any such instrument shall not require the consent of any Grantor hereunder. The rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor as a party to this Agreement. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. MEMC ELECTRONIC MATERIALS, INC. By: /s/ James M. Stolze ------------------------------------- Name: James M. Stolze Title: Executive Vice President, Chief Financial Officer By: /s/ Kenneth L. Young ------------------------------------- Name: Kenneth L. Young Title: Treasurer EACH OF THE SUBSIDIARIES LISTED ON SCHEDULE I HERETO, as a Pledgor and Guarantor By: /s/ Kenneth L. Young ------------------------------------- Name: Kenneth L. Young, in his capacity as Treasurer for each of the Subsidiaries listed on Schedule I hereto Citicorp USA, Inc, as Collateral Agent By: /s/ Edward T. Crook ------------------------------------- Name: Edward T. Crook Title: Managing Director and Vice President EX-8 10 tpgex8.txt EXHIBIT 8 REGISTRATION RIGHTS AGREEMENT dated as of November 13, 2001 among MEMC ELECTRONIC MATERIALS, INC. TPG WAFER HOLDINGS LLC and the Guarantors specified herein REGISTRATION RIGHTS AGREEMENT REGISTRATION RIGHTS AGREEMENT ("Agreement"), dated as of November 13, 2001, by and between MEMC Electronic Materials, Inc., a Delaware corporation (the "Company"), the guarantors included on the signature lines hereto (the "Guarantors" and together with the Company, the "Company Parties") and TPG Wafer Holdings LLC, a Delaware limited liability company (together with its permitted assigns, "TPG" or the "Investor"). W I T N E S S E T H: -------------------- WHEREAS, the Company and the Investor have entered into a Restructuring Agreement, dated as of November 13, 2001 (the "Restructuring Agreement"), pursuant to which (i) the Investor has agreed to exchange shares of common stock of MEMC Holdings Corporation, a Delaware corporation, for shares of the Company's Series A Cumulative Convertible Preferred Stock, $0.01 par value (the "Series A Preferred Stock"), having the rights, preferences, privileges and restrictions set forth in the form of Certificate of Designations attached as Exhibit A to the Restructuring Agreement or in a form as is otherwise agreed upon by the Investor and the Company and (ii) the Investor has agreed to cause the Notes Designees (as defined in the Restructuring Agreement) to deliver such Loans (as defined in the Restructuring Agreement) to be agreed upon by the Company and the Investor, in return for the issuance by the Company to such Notes Designees, as specified by the Investor, of (A) Senior Subordinated Secured Notes Due 2007 of the Company (the "Notes") having the terms and conditions set forth in the form of Indenture attached as Exhibit E to the Restructuring Agreement (the "Indenture") and fully and unconditionally guaranteed (the "Guarantee") by the Guarantors (the Notes, together with the Guarantee, the "Note Securities") and (B) detachable warrants (the "Warrants") having the terms set forth in the form of Warrant Certificate attached as Exhibit G to the Restructuring Agreement or in a form as is otherwise agreed upon by the Company and the Investor; and WHEREAS, as an inducement to the Investor entering into the Restructuring Agreement, the Investor has required that the Company Parties agree, and the Company Parties have agreed, to provide the rights set forth in this Agreement; and WHEREAS, the consummation of the Initial Restructuring is conditioned upon, among other things, the execution and delivery of this Agreement; NOW, THEREFORE, in consideration of the foregoing and the mutual premises, covenants and agreements of the parties hereto, and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: SECTION 1. DEFINITIONS. ----------- 1.1. Capitalized Terms. Capitalized terms used but not defined herein shall have the respective meanings assigned to such terms in the Restructuring Agreement. 1.2. Defined Terms. As used in this Agreement, the following terms shall have the following meanings: "Adverse Disclosure" means public disclosure of material non-public information, disclosure of which, in the Board of Directors' good faith judgment, after consultation with independent outside counsel to the Company, (i) would be required to be made in any Registration Statement filed with the SEC by the Company Parties so that such Registration Statement would not be materially misleading; (ii) would not be required to be made at such time but for the filing of such Registration Statement; and (iii) would materially and adversely affect a proposed financing, reorganization, recapitalization, merger, consolidation, acquisition or similar transaction, or otherwise materially and adversely affect the Company Parties. "Agreement" has the meaning set forth in the preamble hereto. "Board of Directors" means the board of directors of the Company. "Class" has the meaning set forth in the definition of "Registrable Securities." "Common Stock" means the Company's common stock, par value $0.01 per share. "Company" has the meaning set forth in the preamble and shall include the Company's successors by merger, acquisition, reorganization or otherwise. "Company Public Sale" has the meaning set forth in Section 2.3(a). "Demand Notice" has the meaning set forth in Section 2.2(e). "Demand Period" has the meaning set forth in Section 2.2(d). "Demand Registration" has the meaning set forth in Section 2.2(a). "Demand Registration Statement" has the meaning set forth in Section 2.2(a). "Effectiveness Date" means the 330th day following the Initial Closing Date. "Exchange Act" means the United States Securities Exchange Act of 1934, as amended, and any successor thereto, and any rules and regulations promulgated thereunder, all as the same shall be in effect from time to time. "Existing Registration Rights Agreement" means the Registration Rights Agreement, dated as of July 12, 1995, by and between the Company and VEBA Corporation, as successor to Huls Corporation, as amended. "Filing Date" means the 270th day following the Initial Closing Date. "Guarantee" has the meaning set forth in the recitals hereto. "holder" means any holder of Registrable Securities (whether or not acquired pursuant to the Restructuring Agreement) who is a party hereto or who succeeds to rights hereunder pursuant to Section 3.5. "Investor" has the meaning set forth in the preamble hereto. "Material Adverse Change" means (i) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market in the United States of America; (ii) the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States of America or Delaware; (iii) a material outbreak or escalation of armed hostilities or other international or national calamity involving the United States of America or Delaware or the declaration by the United States or Delaware of a national emergency or war or a change in national or international financial, political or economic conditions; and (iv) any event, change, circumstance or effect that is or is reasonably likely to be materially adverse to the business, properties, assets, liabilities, condition (financial or otherwise), operations, results of operations or prospects of the Company and its Subsidiaries taken as a whole. "NASD" means the National Association of Securities Dealers, Inc. "Notes" has the meaning set forth in the preamble hereto. "Note Securities" has the meaning set forth in the recitals hereto. "Person" means any individual, firm, limited liability company or partnership, joint venture, corporation, joint stock company, trust or unincorporated organization, incorporated or unincorporated association, government (or any department, agency or political subdivision thereof) or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity. "Piggyback Registration" has the meaning set forth in Section 2.3(a). "Prospectus" means the prospectus included in any Registration Statement, all amendments and supplements to such prospectus, including post-effective amendments, and all other material incorporated by reference in such prospectus. "Registrable Securities" means (i) any shares of Series A Preferred Stock, any shares of Common Stock or other securities issuable upon the conversion of or as a dividend with respect to the Series A Preferred Stock, (ii) any Warrants, any shares of Common Stock or other securities issuable upon the exercise of the Warrants, (iii) the Note Securities, (iv) any other Common Stock beneficially owned on the date hereof, or hereafter acquired or purchased by the Investor or any of its Affiliates, including without limitation any Common Stock (A) acquired by the Investor or any of its Affiliates as a result of the transactions contemplated by the E.ON Purchase Agreement or upon exercise of any rights to purchase Common Stock and (B) purchased on the open market by the Investor or any of its Affiliates, and (v) in each case, any securities that may be issued or distributed or be issuable in respect of any such Registrable Securities by way of conversion, dividend, stock split or other distribution, merger, consolidation, exchange, recapitalization or reclassification or similar transaction; provided, however, that any such Registrable Securities shall cease to be Registrable Securities to the extent (i) a Registration Statement with respect to the sale of such Registrable Securities has been declared effective under the Securities Act and such Registrable Securities have been disposed of in accordance with the plan of distribution set forth in such Registration Statement, (ii) such Registrable Securities have been sold pursuant to Rule 144 (or any similar provisions then in force) under the Securities Act or (iii) such Registrable Securities shall have been otherwise transferred and new certificates for them not bearing a legend restricting transfer under the Securities Act shall have been delivered by the Company and such securities may be publicly resold without Registration under the Securities Act. For purposes of this Agreement, a "Class" of Registrable Securities means each of (a) the Series A Preferred Stock and any shares of Common Stock or other securities issued upon the conversion of the Series A Preferred Stock, (b) the Warrants and any shares of Common Stock or other securities issued upon the exercise of the Warrants, (c) the Note Securities and (d) the Common Stock referred to in clause (iv) above. Each Class shall also include any securities that may be issued or distributed or be issuable in respect of such Class as contemplated by clause (v) above. A "percentage" (or a "majority") of the Registrable Securities (or, where applicable, of any other securities) shall be determined (x) based on the number of shares of such securities in the cases of (A) the Class consisting of Series A Preferred Stock and Common Stock issued upon conversion of the Series A Preferred Stock collectively, computed on the assumption that all Series A Preferred Stock outstanding on the date of determination had been converted as of such date, (B) the Class consisting of Warrants and Common Stock issued upon the exercise of the Warrants collectively, computed on the assumption that all Warrants outstanding on the date of determination had been exercised as of such date, and (C) the Class consisting of other Common Stock, and (y) based on the principal amount of such securities, in the case of the classes consisting of Note Securities. "Registration" means a registration with the SEC of the Company Parties' securities for offer and sale to the public under a Registration Statement. The term "Register" shall have a correlative meaning. "Registration Expenses" has the meaning set forth in Section 2.8. "Registration Statement" means any registration statement of the Company Parties filed with, or to be filed with, the SEC under the rules and regulations promulgated under the Securities Act, including the related Prospectus, amendments and supplements to such registration statement, including post-effective amendments, and all exhibits and all material incorporated by reference in such registration statement. "Restructuring Agreement" has the meaning set forth in the recitals hereto. "SEC" means the Securities and Exchange Commission. "Securities Act" means the Securities Act of 1933, as amended, and any successor thereto, and any rules and regulations promulgated thereunder, all as the same shall be in effect from time to time. "Series A Preferred Stock" has the meaning set forth in the preamble hereto. "Shelf Period" has the meaning set forth in Section 2.1(b). "Shelf Registration" means a Registration effected pursuant to Section 2.1. "Shelf Registration Statement" means a Registration Statement of the Company Parties filed with the SEC on either (i) Form S-3 (or any successor form or other appropriate form under the Securities Act) or (ii) if the Company Parties are not permitted to file a resale Registration Statement on Form S-3, an evergreen Registration Statement on Form S-1 (or any successor form or other appropriate form under the Securities Act), in each case for an offering to be made on a continuous basis pursuant to Rule 415 under the Securities Act (or any similar rule that may be adopted by the SEC) covering the Registrable Securities, as applicable. "Shelf Suspension" has the meaning set forth in Section 2.1(c). "Underwritten Offering" means a Registration in which securities of the Company Parties are sold to an underwriter or underwriters on a firm commitment basis for reoffering to the public. "Warrants" has the meaning set forth in the recitals hereto. 1.3. General Interpretive Principles. Whenever used in this Agreement, except as otherwise expressly provided or unless the context otherwise requires, any noun or pronoun shall be deemed to include the plural as well as the singular and to cover all genders. The name assigned this Agreement and the section captions used herein are for convenience of reference only and shall not be construed to affect the meaning, construction or effect hereof. Unless otherwise specified, the terms "hereof," "herein" and similar terms refer to this Agreement as a whole (including the exhibits, schedules and disclosure statements hereto), and references herein to Sections refer to Sections of this Agreement. Words of inclusion shall not be construed as terms of limitation herein, so that references to "include", "includes" and "including" shall not be limiting and shall be regarded as references to non-exclusive and non-characterizing illustrations. SECTION 2. REGISTRATION RIGHTS ------------------- 2.1. Shelf Registration. (a) Filing. On or before the Filing Date, the Company Parties shall file with the SEC a Shelf Registration Statement relating to the offer and sale of the Registrable Securities by the holders from time to time in accordance with the methods of distribution elected by such holders and set forth in the Shelf Registration Statement and, thereafter, shall use its best efforts to cause such Shelf Registration Statement to be declared effective under the Securities Act by the Effectiveness Date. If, on the Filing Date, the Company Parties do not qualify to file a Shelf Registration Statement under the Securities Act, then the provisions of Section 2.2 shall apply, but at any time thereafter that the Company Parties do so qualify, it shall, as promptly as practicable, file a Shelf Registration Statement and use its best efforts to cause the Shelf Registration Statement to be declared effective. (b) Continued Effectiveness. The Company Parties shall use their best efforts to keep such Shelf Registration Statement continuously effective under the Securities Act in order to permit the Prospectus forming a part thereof to be usable by holders until such time as (i) the Investor and its Affiliates hold no Series A Preferred Stock and less than 1.0% of the Conversion Shares (assuming conversion of the Series A Preferred Stock), (ii) the Note Designees hold less than 1.0% of the Notes, (iii) the Note Designees hold no Warrants and less than 1.0% of the Warrant Shares (assuming exercise of the Warrants) and (iv) the Investor and its Affiliates hold less than 1.0% of the number of shares of Common Stock acquired by the Investor or any of its Affiliates as a result of the transactions contemplated by the E.ON Purchase Agreement (such period of effectiveness, the "Shelf Period"). Subject to Section 2.1(c), the Company Parties shall not be deemed to have used their best efforts to keep the Shelf Registration Statement effective during the Shelf Period if the Company Parties voluntarily take any action or omit to take any action that would result in holders of the Registrable Securities covered thereby not being able to offer and sell any Registrable Securities pursuant to such Shelf Registration Statement during the Shelf Period, unless such action or omission is required by applicable law. (c) Suspension of Registration. If the continued use of such Shelf Registration Statement at any time would require the Company to make an Adverse Disclosure, the Company may, upon giving prompt written notice of such action to the holders, suspend use of the Shelf Registration Statement (a "Shelf Suspension"); provided, however, that the Company shall not be permitted to exercise a Shelf Suspension (i) more than three times during any 18 month period or (ii) for a period exceeding 40 days on any one occasion. In the case of a Shelf Suspension, the holders agree to suspend use of the applicable Prospectus in connection with any sale or purchase of, or offer to sell or purchase, Registrable Securities, upon receipt of the notice referred to above. The Company shall immediately notify the holders upon the termination of any Shelf Suspension, amend or supplement the Prospectus, if necessary, so it does not contain any untrue statement or omission and furnish to the holders such numbers of copies of the Prospectus as so amended or supplemented as the holders may reasonably request. The Company agrees, if necessary, to supplement or make amendments to the Shelf Registration Statement, if required by the registration form used by the Company Parties for the Shelf Registration or by the instructions applicable to such registration form or by the Securities Act or the rules or regulations promulgated thereunder or as may reasonably be requested by the holders of a majority of any Class of the Registrable Securities then outstanding. Each Company Party represents that, as of the date hereof, it has no knowledge of any circumstance that would reasonably be expected to cause it to exercise its rights under this Section 2.1(c). (d) Underwritten Offering. If the holders of not less than a majority of any Class of Registrable Securities included in any offering pursuant to such Shelf Registration Statement so elect, such offering of Registrable Securities shall be in the form of an Underwritten Offering, and the Company Parties shall amend or supplement the Shelf Registration Statement for such purpose. The holders of a majority of the Class of such Registrable Securities included in such Underwritten Offering shall have the right to select the managing underwriter or underwriters to administer such offering; provided, that such managing underwriter or underwriters shall be reasonably acceptable to the Company Parties. 2.2. Demand Registrations. (a) Demand by Holders. If, on or at any time after the Effectiveness Date, the Shelf Registration Statement is not effective under the Securities Act or is not available for use by the holders, then at any time thereafter the holders of not less than 25% of any Class of Registrable Securities may make a written request to the Company for Registration of Registrable Securities held by such holders and any other holders of Registrable Securities; provided, that the estimated market value or stated value of the Registrable Securities to be so Registered in at least $10 million in the aggregate at the time such request is made. Any such requested Registration shall hereinafter be referred to as a "Demand Registration." Each request for a Demand Registration shall specify the kind and aggregate amount of Registrable Securities to be Registered and the intended methods of disposition thereof. Within 30 days of a request for a Demand Registration, the Company Parties shall file a Registration Statement relating to such Demand Registration (a "Demand Registration Statement"), and shall use their best efforts to cause such Demand Registration Statement to promptly be declared effective under (i) the Securities Act and (ii) the "Blue Sky" laws of such jurisdictions as any holder of Registrable Securities being registered under such Registration or any underwriter, if any, reasonably requests. (b) Limitation on Demand Registrations. Subject to Section 2.2(h), in no event shall the Company Parties be required to effect more than three Demand Registrations per Class of Registrable Securities. (c) Demand Withdrawal. A holder may withdraw its Registrable Securities from a Demand Registration at any time prior to the effectiveness of the applicable Demand Registration Statement. Upon receipt of notices from all holders to such effect, the Company Parties shall cease all efforts to secure effectiveness of the applicable Demand Registration Statement and such Registration nonetheless shall be deemed a Demand Registration for purposes of Section 2.2(b) unless (i) the withdrawing holders shall have paid or reimbursed the Company Parties for all of the reasonable and documented-out-of pocket fees and expenses paid by the Company Parties in connection with the Registration of such withdrawn Registrable Securities or (ii) the withdrawal is made following the occurrence of a Material Adverse Change. (d) Effective Registration. The Company Parties shall be deemed to have effected a Demand Registration if the Demand Registration Statement is declared effective by the SEC and remains effective until the completion of the distribution of Registrable Securities included therein, or if such Registration Statement relates to an Underwritten Offering, such longer period as in the opinion of counsel for the underwriter or underwriters a Prospectus is required by law to be delivered in connection with sales of Registrable Securities by an underwriter or dealer (the applicable period, the "Demand Period"). No Demand Registration shall be deemed to have been effected if (i) during the Demand Period such Registration is interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court or (ii) the conditions to closing specified in the underwriting agreement, if any, entered into in connection with such Registration are not satisfied other than by reason of a wrongful act, misrepresentation or breach of such applicable underwriting agreement by the Investor. (e) Demand Notice. Promptly upon receipt of any request for a Demand Registration pursuant to Section 2.2(a) (but in no event more than 5 Business Days thereafter), the Company Parties shall deliver a written notice (a "Demand Notice") of any such Registration request to all other holders of Registrable Securities of the same Class or classes to be included in such Demand Registration, and the Company Parties shall include in such Demand Registration all such Registrable Securities with respect to which the Company has received written requests for inclusion therein within 10 Business Days after the date that the Demand Notice has been delivered. All requests made pursuant to this Section 2.2(e) shall specify the Class and aggregate amount of Registrable Securities to be registered and the intended method of distribution of such securities. (f) Delay in Filing; Suspension of Registration. If the filing, initial effectiveness or continued use of a Demand Registration Statement at any time would require the Company to make an Adverse Disclosure, the Company may, upon giving prompt written notice of such action to the holders, delay the filing or initial effectiveness of, or suspend use of, the Demand Registration Statement (a "Demand Suspension"); provided, however, that the Company shall not be permitted to exercise a Demand Suspension (i) more than three times during any 18 month period or (ii) for a period exceeding 40 days on any one occasion. In the case of a Demand Suspension, the holders agree to suspend use of the applicable Prospectus in connection with any sale or purchase, or offer to sell or purchase, Registrable Securities, upon receipt of the notice referred to above. The Company shall immediately notify the holders upon the termination of any Demand Suspension, amend or supplement the Prospectus, if necessary, so it does not contain any untrue statement or omission and furnish to the holders such numbers of copies of the Prospectus as so amended or supplemented as the holders may reasonably request. The Company agrees, if necessary, to supplement or make amendments to the Demand Registration Statement, if required by the registration form used by the Company Parties for the Demand Registration or by the instructions applicable to such registration form or by the Securities Act or the rules or regulations promulgated thereunder or as may reasonably be requested by the holders of a majority of the Registrable Securities that are included in such Demand Registration Statement. Each of the Company Parties represents that, as of the date hereof, it has no knowledge of any circumstance that would reasonable be expected to cause it to exercise its rights under this Section 2.2(f). (g) Underwritten Offering. If the holders of not less than a majority of any Class of Registrable Securities requesting a Demand Registration so elect, such offering of Registrable Securities shall be in the form of an Underwritten Offering. The holders of a majority of the Class of such Registrable Securities included in such Underwritten Offering shall have the right to select the managing underwriter or underwriters to administer the offering; provided, that such managing underwriter or underwriters shall be reasonably acceptable to the Company Parties. (h) Priority of Securities Registered Pursuant to Demand Registrations. If the managing underwriter or underwriters of a proposed Underwritten Offering of a Class of Registrable Securities included in a Demand Registration (or, in the case of a Demand Registration not being underwritten, the holders of a majority of a Class of Registrable Securities included therein), advise the Board of Directors in writing that, in its or their opinion, the number of securities of such Class requested to be included in such Demand Registration exceeds the number which can be sold in such offering without being likely to have a significant adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, the number of Registrable Securities of such Class to be included in such Demand Registration shall be allocated pro rata among the holders that have requested to participate in such Demand Registration on the basis of the relative number of Registrable Securities of such Class then held by each such holder, to the extent necessary to reduce the total number of Registrable Securities of such Class to be included in such offering to the number recommended by the managing underwriter or underwriters or such holders, provided, that any securities thereby allocated to a holder that exceed such holder's request shall be reallocated among the remaining requesting holders in like manner. To the extent that Registrable Securities so requested to be registered are excluded from the offering, then the holders of such Registrable Securities shall have the right to one additional Demand Registration under this Section 2.2. (i) Registration Statement Form. Registrations under this Section 2.2 shall be on such appropriate form of the SEC (i) as shall be selected by the Company Parties and as shall be reasonably acceptable to the holders of a majority of each Class of Registrable Securities requesting a Demand Registration and (ii) as shall permit the disposition of such Registrable Securities in accordance with the intended method or methods of disposition specified in such holders' requests for such Registration. 2.3. Piggyback Registrations. (a) Participation. If the Company Parties at any time propose to file a Registration Statement under the Securities Act with respect to any offering of their securities for its own account or for the account of any other Persons (other than (i) a Registration under Section 2.1 or 2.2, (ii) a Registration on Form S-4 or S-8 or any successor form to such Forms or (iii) a Registration of securities solely relating to an offering and sale to employees or directors of the Company Parties pursuant to any employee stock plan or other employee benefit plan arrangement) (a "Company Public Sale"), then, as soon as practicable (but in no event less than 45 days prior to the proposed date of filing such Registration Statement), the Company Parties shall give written notice of such proposed filing to all holders of Registrable Securities that are equity securities in the case of a Company Public Sale of equity securities or Registrable Securities that are debt securities in the case of a Company Public Sale of debt securities, and such notice shall offer the holders of such Registrable Securities the opportunity to Register under such Registration Statement such number of Registrable Securities as each such holder may request in writing (a "Piggyback Registration"). Subject to Section 2.3(b), the Company Parties shall include in such Registration Statement all such Registrable Securities which are requested to be included therein within 15 days after the receipt by such holder of any such notice; provided, however, that if at any time after giving written notice of its intention to Register any securities and prior to the effective date of the Registration Statement filed in connection with such Registration, the Company Parties shall determine for any reason not to Register or to delay Registration of such securities, the Company Parties may, at their election, give written notice of such determination to each holder of Registrable Securities and, thereupon, (i) in the case of a determination not to Register, shall be relieved of their obligation to Register any Registrable Securities in connection with such Registration (but not from its obligation to pay the Registration Expenses in connection therewith), without prejudice, however, to the rights of any holders of Registrable Securities entitled to request that such Registration be effected as a Demand Registration under Section 2.2, and (ii) in the case of a determination to delay Registering, in the absence of a request for a Demand Registration, shall be permitted to delay Registering any Registrable Securities, for the same period as the delay in Registering such other securities. If the offering pursuant to such Registration Statement is to be underwritten, then each holder making a request for a Piggyback Registration pursuant to this Section 2.3(a) must, and the Company Parties shall make such arrangements with the managing underwriter or underwriters so that each such holder may, participate in such Underwritten Offering. If the offering pursuant to such Registration Statement is to be on any other basis, then each holder making a request for a Piggyback Registration pursuant to this Section 2.3(a) must, and the Company Parties will make such arrangements so that each such holder may, participate in such offering on such basis. Each holder of Registrable Securities shall be permitted to withdraw all or part of such holder's Registrable Securities from a Piggyback Registration at any time prior to the effective date thereof. (b) Priority of Piggyback Registration. If the managing underwriter or underwriters of any proposed Underwritten Offering of a Class of Registrable Securities included in a Piggyback Registration informs the Company Parties and the holders of such Class of Registrable Securities in writing that, in its or their opinion, the number of securities of such Class which such holders and any other Persons intend to include in such offering exceeds the number which can be sold in such offering without being likely to have a significant adverse effect on the price, timing or distribution of the securities offered or the market for the securities offered, then the securities to be included in such Registration shall subject to the last sentence of this Section 2.3(b), be (i) first, 100% of the securities of such Class that the Company Parties or (subject to Section 2.7) any Person (other than a holder of Registrable Securities) exercising a contractual right to demand Registration, as the case may be, proposes to sell, and (ii) second, and only if all the securities referred to in clause (i) have been included, the number of Registrable Securities of such Class that, in the opinion of such managing underwriter or underwriters, can be sold without having such adverse effect, with such number to be allocated pro rata among the holders that have requested to participate and (iii) third, and only if all of the Registrable Securities referred to in clause (ii) have been included in such Registration, any other securities eligible for inclusion in such Registration. Notwithstanding anything to the contrary in this Section 2.3(b), the Registrable Securities to be included in a Piggyback Registration shall not be reduced below 25% of the total number of securities included in such Piggyback Registration and, if necessary in order to meet such 25% threshold, Registrable Securities that are the subject of request for participation in such Piggyback Registration shall be included in such Piggyback Registration, in lieu of those to be included pursuant to clause (i) above, allocated pro rata among the holders of Registrable Securities that have requested to participate in such Registration based on the relative number of Registrable Securities of such Class then held by each such holder (provided that any securities thereby allocated to a holder that exceed such holder's request shall be reallocated among the remaining requesting holders in like manner). (c) No Effect on Demand Registrations. No Registration of Registrable Securities effected pursuant to a request under this Section 2.3 shall be deemed to have been effected pursuant to Sections 2.1 and 2.2 or shall relieve the Company of its obligations under Sections 2.1 or 2.2. 2.4. Black-out Periods (a) Black-out Periods for Holders. In the event of a Company Public Sale of the Company's equity securities in an Underwritten Offering, the holders of Registrable Securities agree, if requested by the managing underwriter or underwriters in such Underwritten Offering, not to effect any public sale or distribution of any securities (except, in each case, as part of the applicable Registration, if permitted) that are the same as or similar to those being Registered in connection with such Company Public Sale, or any securities convertible into or exchangeable or exercisable for such securities, during the period beginning seven days before, and ending 90 days (or such lesser period as may be permitted by the Company or such managing underwriter or underwriters) after, the effective date of the Registration Statement filed in connection with such Registration, to the extent timely notified in writing by the Company or the managing underwriter or underwriters. (b) Black-out Period for the Company and Others. In the case of a Registration of Registrable Securities pursuant to Section 2.1 or 2.2 for an Underwritten Offering, the Company Parties agree, if requested by the holders of a majority of a Class of Registrable Securities to be included in such Registration or the managing underwriter or underwriters, not to effect any public sale or distribution of any securities which are the same as or similar to those being Registered, or any securities convertible into or exchangeable or exercisable for such securities, during the period beginning seven days before, and ending 90 days (or such lesser period as may be permitted by such holders or such managing underwriter or underwriters) after, the effective date of the Registration Statement filed in connection with such Registration (or, in the case of an offering under a Shelf Registration Statement, the date of the closing under the underwriting agreement in connection therewith), to the extent timely notified in writing by a holder of Registrable Securities covered by such Registration Statement or the managing underwriter or underwriters. Notwithstanding the foregoing, the Company Parties may effect a public sale or distribution of securities of the type described above and during the periods described above if such sale or distribution is made pursuant to Registrations on Form S-4 or S-8 or any successor form to such Forms or as part of any Registration of securities for offering and sale to employees or directors of the Company Parties pursuant to any employee stock plan or other employee benefit plan arrangement. The Company Parties agree to use their best efforts to obtain from the Company Parties' officers and directors and each other holder of restricted securities of the Company Parties which securities are the same as or similar to the Registrable Securities being Registered, or any restricted securities convertible into or exchangeable or exercisable for any of such securities, an agreement not to effect any public sale or distribution of such securities during any such period referred to in this paragraph, except as part of any such Registration, if permitted. Without limiting the foregoing (but subject to Section 2.7), if after the date hereof the Company Parties grant any Person (other than a holder of Registrable Securities) any rights to demand or participate in a Registration, the Company Parties agree that the agreement with respect thereto shall include such Person's agreement to comply with any blackout period required by this Section as if it were a Company Party hereunder. 2.5. Registration Procedures. (a) In connection with the Company Parties' obligations under Sections 2.1, 2.2 and 2.3, the Company Parties will use their best efforts to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended method or methods of distribution thereof as expeditiously as possible, and in connection therewith the Company Parties will: (i) prepare the required Registration Statement including all exhibits and financial statements required under the Securities Act to be filed therewith, and before filing a Registration Statement or Prospectus, or any amendments or supplements thereto, (x) furnish to the underwriters, if any, and to the holders of the Registrable Securities covered by such Registration Statement, copies of all documents prepared to be filed, which documents will be subject to the review of such underwriters and such holders and their respective counsel and (y) except in the case of a Registration under Section 2.3, not file any Registration Statement or Prospectus or amendments or supplements thereto to which the holders of a majority of any Class of Registrable Securities covered by such Registration Statement or the underwriters, if any, shall reasonably object; (ii) as soon as possible (in the case of a Demand Registration, no later than 30 days after a request for a Demand Registration) file with the SEC a Registration Statement relating to the Registrable Securities including all exhibits and financial statements required by the SEC to be filed therewith, and use its best efforts to cause such Registration Statement to become effective under the Securities Act; (iii) prepare and file with the SEC such amendments and post-effective amendments to such Registration Statement and supplements to the Prospectus as may be (x) reasonably requested by the holders of a majority of any Class of participating Registrable Securities, (y) reasonably requested by any participating holder (to the extent such request relates to information relating to such holder), or (z) necessary to keep such Registration effective for the period of time required by this Agreement, and comply with provisions of the applicable securities laws with respect to the sale or other disposition of all securities covered by such Registration Statement during such period in accordance with the intended method or methods of disposition by the sellers thereof set forth in such Registration Statement; (iv) promptly notify the participating holders of Registrable Securities and the managing underwriter or underwriters, if any, and (if requested) confirm such advice in writing and provide copies of the relevant documents, as soon as reasonably practicable after notice thereof is received by the Company (a) when the applicable Registration Statement or any amendment thereto has been filed or becomes effective, and when the applicable Prospectus or any amendment or supplement to such Prospectus has been filed, (b) of any written comments by the SEC or any request by the SEC or any other federal or state governmental authority for amendments or supplements to such Registration Statement or such Prospectus or for additional information, (c) of the issuance by the SEC of any stop order suspending the effectiveness of such Registration Statement or any order by the SEC or any other regulatory authority preventing or suspending the use of any preliminary or final Prospectus or the initiation or threatening of any proceedings for such purposes, (d) if, at any time, the representations and warranties of the Company Parties in any applicable underwriting agreement cease to be true and correct and in all material respects, and (e) of the receipt by the Company Parties of any notification with respect to the suspension of the qualification of the Registrable Securities for offering or sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; (v) promptly notify each selling holder of Registrable Securities and the managing underwriter or underwriters, if any, when the Company Parties become aware of the happening of any event as a result of which the applicable Registration Statement or the Prospectus included in such Registration Statement (as then in effect) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein (in the case of such Prospectus and any preliminary Prospectus, in light of the circumstances under which they were made) not misleading or, if for any other reason it shall be necessary during such time period to amend or supplement such Registration Statement or Prospectus in order to comply with the Securities Act and, in either case as promptly as reasonably practicable thereafter, prepare and file with the SEC, and furnish without charge to the selling holders and the managing underwriter or underwriters, if any, an amendment or supplement to such Registration Statement or Prospectus so that, as thereafter delivered to the purchaser of such securities, such Prospectus shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of circumstances under which they were made, not misleading; (vi) use its best efforts to prevent or obtain the withdrawal of any stop order or other order suspending the use of any preliminary or final Prospectus; (vii) promptly incorporate in a Prospectus supplement or post-effective amendment such information as the managing underwriter or underwriters and the holders of a majority of any Class of Registrable Securities being sold agree should be included therein relating to the plan of distribution with respect to such Registrable Securities; and make all required filings of such Prospectus supplement or post-effective amendment as soon as reasonably practicable after being notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment; (viii) furnish to each selling holder of Registrable Securities and each underwriter, if any, without charge, as many conformed copies as such holder or underwriter may reasonably request of the applicable Registration Statement and any amendment or post-effective amendment thereto, including financial statements and schedules, all documents incorporated therein by reference and all exhibits (including those incorporated by reference); (ix) deliver to each selling holder of Registrable Securities and each underwriter, if any, without charge, as many copies of the applicable Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such holder or underwriter may reasonably request (it being understood that the Company Parties consent to the use of such Prospectus or any amendment or supplement thereto by each of the selling holders of Registrable Securities and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such Prospectus or any amendment or supplement thereto) and such other documents as such selling holder or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities by such holder or underwriter; (x) on or prior to the date on which the applicable Registration Statement is declared effective, use its best efforts to register or qualify, and cooperate with the selling holders of Registrable Securities, the managing underwriter or underwriters, if any, and their respective counsel, in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or "Blue Sky" laws of each state and other jurisdiction of the United States as any such selling holder or managing underwriter or underwriters, if any, or their respective counsel reasonably request in writing and do any and all other acts or things reasonably necessary or advisable to keep such registration or qualification in effect for so long as such Registration Statement remains in effect and so as to permit the continuance of sales and dealings in such jurisdictions for as long as may be necessary to complete the distribution of the Registrable Securities covered by the Registration Statement, provided that the Company Parties will not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to taxation or general service of process in any such jurisdiction where it is not then so subject; (xi) cooperate with the selling holders of Registrable Securities and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends; and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters may request at least two business days prior to any sale of Registrable Securities to the underwriters; (xii) use its best efforts to cause the Registrable Securities covered by the applicable Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter or underwriters, if any, to consummate the disposition of such Registrable Securities; (xiii) not later than the effective date of the applicable Registration Statement, provide a CUSIP number for all Registrable Securities and provide the applicable transfer agent with printed certificates for the Registrable Securities which are in a form eligible for deposit with The Depository Trust Company; (xiv) make such representations and warranties to the holders of Registrable Securities being registered, and the underwriters or agents, if any, in form, substance and scope as are customarily made by issuers in secondary underwritten public offerings; (xv) enter into such customary agreements (including underwriting and indemnification agreements) and take all such other actions as the holders of at least a majority of any Class of Registrable Securities being sold or the managing underwriter or underwriters, if any, reasonably request in order to expedite or facilitate the registration and disposition of such Registrable Securities; (xvi) obtain for delivery to the holders of Registrable Securities being registered and to the underwriter or underwriters, if any, an opinion or opinions from counsel for the Company Parties dated the effective date of the Registration Statement or, in the event of an Underwritten Offering, the date of the closing under the underwriting agreement, in customary form, scope and substance, which counsel and opinions shall be reasonably satisfactory to such holders or underwriters, as the case may be, and their respective counsel; (xvii) in the case of an Underwritten Offering, obtain for delivery to the Company Parties and the managing underwriter or underwriters, with copies to the holders of Registrable Securities included in such Registration, a cold comfort letter from the Company Parties' independent certified public accountants in customary form and covering such matters of the type customarily covered by cold comfort letters as the managing underwriter or underwriters reasonably request, dated the date of execution of the underwriting agreement and brought down to the closing under the underwriting agreement; (xviii) cooperate with each seller of Registrable Securities and each underwriter, if any, participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the NASD; (xix) use its reasonable best efforts to comply with all applicable securities laws and make available to its security holders, as soon as reasonably practicable an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and the rules and regulations promulgated thereunder; (xx) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by the applicable Registration Statement from and after a date not later than the effective date of such Registration Statement; (xxi) cause all Registrable Securities covered by the applicable Registration Statement to be listed on each securities exchange on which any of the Company Parties' securities are then listed or quoted and on each inter-dealer quotation system on which any of the Company Parties' securities are then quoted; (xxii) make available upon reasonable notice at reasonable times and for reasonable periods for inspection by a representative appointed by the majority of the holders of each Class of Registrable Securities covered by the applicable Registration Statement, by any underwriter participating in any disposition to be effected pursuant to such Registration Statement and by any attorney, accountant or other agent retained by such holders or any such underwriter, all pertinent financial and other records, pertinent corporate documents and properties of the Company Parties, and cause all of the Company Parties' officers, directors and employees and the independent public accountants who have certified their financial statements to make themselves available to discuss the business of the Company Parties and to supply all information reasonably requested by any such Person in connection with such Registration Statement as shall be necessary to enable them to exercise their due diligence responsibility; (xxiii) in the case of an Underwritten Offering, cause the senior executive officers of the Company to participate in the customary "road show" presentations that may be reasonably requested by the managing underwriter or underwriters in any such Underwritten Offering and otherwise to facilitate, cooperate with, and participate in each proposed offering contemplated herein and customary selling efforts related thereto; and (xxiv) promptly, after the issuance of an earnings release or upon the request of a holder, prepare a current report on Form 8-K with respect to such earnings release or a matter of disclosure as requested by such holder and file such Form 8-K with the SEC. (b) The Company Parties may require each seller of Registrable Securities as to which any Registration is being effected to furnish to the Company Parties such information regarding the distribution of such securities and such other information relating to such holder and its ownership of Registrable Securities as the Company Parties may from time to time reasonably request in writing. Each holder of Registrable Securities agrees to furnish such information to the Company Parties and to cooperate with the Company Parties as reasonably necessary to enable the Company Parties to comply with the provisions of this Agreement. (c) Each holder of Registrable Securities agrees by acquisition of such Registrable Securities that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 2.5(a)(v), such holder will forthwith discontinue disposition of Registrable Securities pursuant to such Registration Statement until such holder's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 2.5(a)(v), or until such holder is advised in writing by the Company that the use of the Prospectus may be resumed, and if so directed by the Company, such holder will deliver to the Company (at the Company's expense) all copies, other than permanent file copies then in such holder's possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice. In the event the Company shall give any such notice, the period during which the applicable Registration Statement is required to be maintained effective shall be extended by the number of days during the period from and including the date of the giving of such notice to and including the date when each seller of Registrable Securities covered by such Registration Statement either receives the copies of the supplemented or amended Prospectus contemplated by Section 2.5(a)(v) or is advised in writing by the Company that the use of the Prospectus may be resumed. (d) Holders may seek to register different types of Registrable Securities and different classes simultaneously and the Company Parties shall use their best efforts to effect such Registration and sale in accordance with the intended method or methods of disposition specified by such holders. 2.6. Underwritten Offerings. (a) Shelf and Demand Registrations. If requested by the underwriters for any Underwritten Offering requested by holders of Registrable Securities pursuant to a Registration under Section 2.1 or under Section 2.2, the Company Parties shall enter into an underwriting agreement with such underwriters for such offering, such agreement to be reasonably satisfactory in substance and form to the Company Parties , holders of a majority of each Class of the Registrable Securities to be included in such underwriting, and the underwriters, and to contain such representations and warranties by the Company Parties and such other terms as are generally prevailing in agreements of that type, including indemnities no less favorable to the recipient thereof than those provided in Section 2.9. The holders of the Registrable Securities proposed to be distributed by such underwriters will cooperate with the Company Parties in the negotiation of the underwriting agreement and will give consideration to the reasonable suggestions of the Company Parties regarding the form thereof. Such holders of Registrable Securities to be distributed by such underwriters shall be parties to such underwriting agreement and any or all of the representations and warranties by, and the other agreements on the part of, the Company Parties to and for the benefit of such underwriters shall also be made to and for the benefit of such holders of Registrable Securities and any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement also shall be conditions precedent to the obligations of such holders of Registrable Securities. Any such holder of Registrable Securities shall not be required to make any representations or warranties to or agreements with the Company Parties or the underwriters other than representations, warranties or agreements regarding such holder, such holder's Registrable Securities, such holder's intended method of distribution and any other representations required by law. (b) Piggyback Registrations. If the Company Parties propose to register any of their securities under the Securities Act as contemplated by Section 2.3 and such securities are to be distributed in an Underwritten Offering through one or more underwriters, the Company Parties will, if requested by any holder of Registrable Securities pursuant to Section 2.3 and subject to the provisions of Section 2.3(b), use their best efforts to arrange for such underwriters to include on the same terms and conditions that apply to the other sellers in such Registration all the Registrable Securities to be offered and sold by such holder among the securities of the Company Parties to be distributed by such underwriters in such Registration. The holders of Registrable Securities to be distributed by such underwriters shall be parties to the underwriting agreement between the Company Parties and such underwriters and any or all of the representations and warranties by, and the other agreements on the part of, the Company Parties to and for the benefit of such underwriters shall also be made to and for the benefit of such holders of Registrable Securities and any or all of the conditions precedent to the obligations of such underwriters under such underwriting agreement also shall be conditions precedent to the obligations of such holders of Registrable Securities. Any such holder of Registrable Securities shall not be required to make any representations or warranties to or agreements with the Company Parties or the underwriters other than representations, warranties or agreements regarding such holder, such holder's Registrable Securities and such holder's intended method of distribution or any other representations required by law. (c) Participation in Underwritten Registrations. No Person may participate in any Underwritten Offering hereunder unless such Person (i) agrees to sell such Person's securities on the basis provided in any underwriting arrangements approved by the Persons entitled to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements. 2.7. No Inconsistent Agreements; Additional Rights. Each of the Company Parties represents and warrants that, except for the Existing Registration Rights Agreement, it is not a party to any agreement with respect to its securities that is inconsistent with the rights granted to the holders of Registrable Securities by this Agreement and, other than the registration rights granted as provided herein, has not granted to any party rights with respect to the registration of any Registrable Securities or any other securities issued or to be issued by it. Each of the Company and the Investor agrees that, immediately upon the assignment to and assumption by the Investor of the Existing Registration Rights Agreement pursuant to an agreement among the Investor, VEBA Zweite Verwaltungsgesellschaft mbH and E.ON North America, Inc., the Existing Registration Rights Agreement shall terminate and be of no further force or effect. The Company Parties shall not grant to any other holder of its securities piggyback registration rights that would reduce the number of Registrable Securities in any Registration under this Agreement without the prior written consent of holders of 75% of the Registrable Securities to be included in such Registration. 2.8. Registration Expenses. All expenses incident to the Company Parties' performance of or compliance with this Agreement will be paid by the Company Parties, including (i) all registration and filing fees, and any other fees and expenses associated with filings required to be made with the SEC or the NASD, (ii) all fees and expenses in connection with compliance with state securities or "Blue Sky" laws, (iii) all printing, duplicating, word processing, messenger, telephone, facsimile and delivery expenses (including expenses of printing certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company and of printing prospectuses), (iv) all fees and disbursements of counsel for the Company Parties and of all independent certified public accountants of the Company Parties(including the expenses of any special audit and cold comfort letters required by or incident to such performance), (v) Securities Act liability insurance or similar insurance if the Company Parties so desire or the underwriters so require in accordance with then-customary underwriting practice, (vi) all fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange or quotation of the Registrable Securities on any inter-dealer quotation system, (vii) all applicable rating agency fees with respect to the Registrable Securities, (viii) all reasonable fees and disbursements of counsel selected by the holders of a majority of each Class of the Registrable Securities being registered, (ix) all fees and expenses of accountants selected by the holders of a majority of each Class of the Registrable Securities being registered, (x) any reasonable fees and disbursements of underwriters customarily paid by issuers or sellers of securities, (xi) all fees and expenses of any special experts or other Persons retained by the Company Parties in connection with any Registration, and (xii) all of the Company Parties' internal expenses (including all salaries and expenses of its officers and employees performing legal or accounting duties). All such expenses are referred to herein as "Registration Expenses." The Company Parties shall not be required to pay any fees and disbursements to underwriters not customarily paid by the issuers of securities in a secondary offering, including underwriting discounts and commissions and transfer taxes, if any, attributable to the sale of Registrable Securities. 2.9. Indemnification. (a) Indemnification by the Company Parties Jointly and Severally. Subject to the last sentence of this Section 2.9(a), the Company Parties jointly and severally agree to indemnify and hold harmless, to the full extent permitted by law, each holder of Registrable Securities, each member, limited partner or general partner of each such holder, each of their respective Affiliates, officers, directors, shareholders, members, limited partners, general partners, employees, advisors, and agents and each Person who controls (within the meaning of the Securities Act or the Exchange Act) such Persons and each of their respective Representatives from and against any and all losses, penalties, judgments, suits, costs, claims, damages, liabilities (or actions or proceedings in respect thereof, whether or not such indemnified party is a party thereto) and expenses, joint or several (including reasonable costs of investigation and legal expenses) (each, a "Loss" and collectively "Losses") arising out of or based upon (i) any untrue or alleged untrue statement of a material fact contained in any Registration Statement under which such Registrable Securities were Registered under the Securities Act (including any final, preliminary or summary Prospectus contained therein or any amendment thereof or supplement thereto or any documents incorporated by reference therein), or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus or preliminary Prospectus, in light of the circumstances under which they were made) not misleading; provided, however, that the Company Parties shall not be liable to any particular indemnified party (x) to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any such Registration Statement in reliance upon and in conformity with written information furnished to the Company Parties by such indemnified party expressly for use in the preparation thereof or (y) to the extent that any such Loss arises out of or is based upon an untrue statement or omission in a preliminary Prospectus relating to Registrable Securities, if a Prospectus (as then amended or supplemented) that would have cured the defect was furnished to the indemnified party from whom the Person asserting the claim giving rise to such Loss purchased Registrable Securities at least 5 days prior to the written confirmation of the sale of the Registrable Securities to such Person and a copy of such Prospectus (as amended and supplemented) was not sent or given by or on behalf of such indemnified party to such Person at or prior to the written confirmation of the sale of the Registrable Securities to such Person. This indemnity shall be in addition to any liability the Company Parties may otherwise have. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such holder or any indemnified party and shall survive the transfer of such securities by such holder. The Company Parties will also indemnify underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, their officers and directors and each Person who controls such Persons (within the meaning of the Securities Act and the Exchange Act) to the same extent as provided above with respect to the indemnification of the indemnified parties. Notwithstanding anything to the contrary in this Agreement, the Guarantors shall only be required to provide indemnification pursuant to this Section 2.9 if the Losses for which such indemnification is required arise out of or in connection with the purchase and sale of Note Securities. (b) Indemnification by the Selling Holder of Registrable Securities. Each selling holder of Registrable Securities agrees (severally and not jointly) to indemnify and hold harmless, to the fullest extent permitted by law, the Company Parties, their directors and officers and each Person who controls the Company Parties (within the meaning of the Securities Act or the Exchange Act) from and against any Losses resulting from (i) any untrue statement of a material fact in any Registration Statement under which such Registrable Securities were Registered under the Securities Act (including any final, preliminary or summary Prospectus contained therein or any amendment thereof or supplement thereto or any documents incorporated by reference therein), or (ii) any omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus or preliminary Prospectus, in light of the circumstances under which they were made) not misleading, to the extent, but only to the extent, that such untrue statement or omission is contained in any information furnished in writing by such selling holder to the Company Parties specifically for inclusion in such Registration Statement and has not been corrected in a subsequent writing prior to or concurrently with the sale of the Registrable Securities to the Person asserting the claim. In no event shall the liability of any selling holder of Registrable Securities hereunder be greater in amount than the dollar amount of the proceeds received by such holder under the sale of Registrable Securities giving rise to such indemnification obligation. The Company Parties shall be entitled to receive indemnities from underwriters, selling brokers, dealer managers and similar securities industry professionals participating in the distribution, to the same extent as provided above (with appropriate modification) with respect to information furnished in writing by such Persons specifically for inclusion in any Prospectus or Registration Statement. Each holder also shall indemnify any underwriters of the Registrable Securities, their officers and directors and each person who controls such underwriters (within the meaning of the Securities Act or the Exchange Act) to the same extent as provided above with respect to indemnification of the Company Parties. (c) Conduct of Indemnification Proceedings. Any Person entitled to indemnification hereunder will (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided, that any delay or failure to so notify the indemnifying party shall relieve the indemnifying party of its obligations hereunder only to the extent, if at all, that it is actually and materially prejudiced by reason of such delay or failure) and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided, however, that any Person entitled to indemnification hereunder shall have the right to select and employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless (i) the indemnifying party has agreed in writing to pay such fees or expenses, (ii) the indemnifying party shall have failed to assume the defense of such claim within a reasonable time after receipt of notice of such claim from the Person entitled to indemnification hereunder and employ counsel reasonably satisfactory to such Person, (iii) the indemnified party has reasonably concluded (based upon advice of its counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, or (iv) in the reasonable judgment of any such Person (based upon advice of its counsel) a conflict of interest may exist between such Person and the indemnifying party with respect to such claims (in which case, if the Person notifies the indemnifying party in writing that such Person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such Person). If the indemnifying party assumes the defense, the indemnifying party shall not have the right to settle such action without the consent of the indemnified party. No indemnifying party shall consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of an unconditional release from all liability in respect to such claim or litigation. If such defense is not assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its prior written consent, but such consent may not be unreasonably withheld. (d) Contribution. If for any reason the indemnification provided for in paragraphs (a) and (b) of this Section 2.9 is unavailable to an indemnified party or insufficient in respect of any Losses referred to therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such Loss (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party on the one hand and the indemnified party or parties on the other hand; or (ii) if the allocation provided by clause (i) of this Section 2.9(d) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) of this Section 2.9(d) but also the relative fault of the indemnifying party on the one hand and the indemnified party or parties on the other hand in connection with the acts, statements or omissions that resulted in such losses, as well as any other relevant equitable considerations. In connection with any Registration Statement filed with the SEC by the Company Parties, (x) the relative benefits received by the indemnifying on the one hand and the indemnified party on the other hand shall be deemed to be in the same respective proportions as the net proceeds from the offering of any securities registered thereunder (before deducting expenses) received by the indemnifying party and the net proceeds from the offering of any Registrable Securities (before deducting expenses) received by the indemnified party, bear to the aggregate public offering price of the securities registered thereunder; and (y) the relative fault of the indemnifying party on the one hand and the indemnified party on the other hand shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just or equitable if contribution pursuant to this Section 2.9(d) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The amount paid or payable by an indemnified party as a result of the Losses referred to in Sections 2.9(a) and 2.9(b) shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 2.9(d), in connection with any Registration Statement filed by the Company, a selling holder of Registrable Securities shall not be required to contribute any amount in excess of the dollar amount of the proceeds received by such holder under the sale of Registrable Securities giving rise to such contribution obligation. If indemnification is available under this Section 2.9, the indemnifying parties shall indemnify each indemnified party to the full extent provided in Sections 2.9(a) and 2.9(b) hereof without regard to the relative fault of said indemnifying parties or indemnified party. The remedies provided for in this Section 2.9 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. 2.10. Rules 144 and 144A. The Company Parties covenant that they will file the reports required to be filed by them under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder (or, if the Company Parties are not required to file such reports, they will, upon the request of any holder of Registrable Securities, make publicly available such necessary information for so long as necessary to permit sales pursuant to Rules 144, 144A or Regulation S under the Securities Act), and they will take such further action as any holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holder to sell Registrable Securities without Registration under the Securities Act within the limitation of the exemptions provided by (i) Rules 144, 144A or Regulation S under the Securities Act, as such Rules may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the SEC. Upon the request of any holder of Registrable Securities, the Company Parties will deliver to such holder a written statement as to whether it has complied with such requirements and, if not, the specifics thereof. SECTION 3. MISCELLANEOUS. ------------- 3.1. Term. This Agreement shall terminate upon the expiration of the Shelf Period, except for the provisions of Sections 2.9 and 2.10 and all of this Section 3, which shall survive any such termination. 3.2. Injunctive Relief. It is hereby agreed and acknowledged that it will be impossible to measure in money the damage that would be suffered if the parties fail to comply with any of the obligations herein imposed on them and that in the event of any such failure, an aggrieved Person will be irreparably damaged and will not have an adequate remedy at law. Any such Person shall, therefore, be entitled (in addition to any other remedy to which it may be entitled in law or in equity) to injunctive relief, including specific performance, to enforce such obligations, and if any action should be brought in equity to enforce any of the provisions of this Agreement, none of the parties hereto shall raise the defense that there is an adequate remedy at law. 3.3. Attorneys' Fees. In any action or proceeding brought to enforce any provision of this Agreement or where any provision hereof is validly asserted as a defense, the successful party shall, to the extent permitted by applicable law, be entitled to recover reasonable attorneys' fees in addition to any other available remedy. 3.4. Notices. All notices, other communications or documents provided for or permitted to be given hereunder, shall be made in writing and shall be given either personally by hand-delivery, by facsimile transmission, by mailing the same in a sealed envelope, registered first-Class mail, postage prepaid, return receipt requested, or by air courier guaranteeing overnight delivery: (a) if to the Company Parties: c/o MEMC Electronic Materials, Inc. 501 Pearl Drive (City of O'Fallon) St. Peters, Missouri 63376 Attention: General Counsel Facsimile No.: (636) 474-5162 (b) if to the Investor: TPG Wafer Holdings LLC 301 Commerce Street Suite 3300 Fort Worth, Texas 76102 Attention: Richard A. Ekleberry, Esq. Facsimile No.: 817-871-4088 Each holder, by written notice given to the Company Parties in accordance with this Section 3.4 may change the address to which notices, other communications or documents are to be sent to such holder. All notices, other communications or documents shall be deemed to have been duly given: (i) at the time delivered by hand, if personally delivered; (ii) when receipt is acknowledged in writing by addressee, if by facsimile transmission; (iii) five business days after being deposited in the mail, postage prepaid, if mailed by first Class mail; and (iv) on the first business day with respect to which a reputable air courier guarantees delivery; provided, however, that notices of a change of address shall be effective only upon receipt. 3.5. Successors, Assigns and Transferees; Assumption. (a) The registration rights of any holder under this Agreement with respect to any Registrable Securities may be transferred and assigned without the need for an express assignment, provided that, other than an assignment to the Investor or an Affiliate of the Investor, a Designated Purchaser or an Affiliate of a Designated Purchaser, a Note Designee or an Affiliate of a Note Designee, no such assignment shall be binding upon or obligate the Company Parties to any such assignee unless and until the Company shall have received notice of such assignment as herein provided and a written agreement of the assignee to be bound by the provisions of this Agreement. (b) This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, and their respective successors and permitted assigns. Whether or not any express assignment shall have been made, the provisions of this Agreement which are for the benefit of the parties hereto other than the Company Parties shall also be for the benefit of and enforceable by any subsequent holder of Registrable Securities, subject to the provisions contained herein. (c) The Company Parties shall not change, convert or exchange any Registrable Securities into securities of another Person upon any reorganization, recapitalization, reclassification, merger, consolidation or similar transaction unless (i) such Person shall expressly assume, by a written agreement in a form reasonably acceptable to a majority of holders of each Class of Registrable Securities, all the obligations of the Company Parties under this Agreement with respect to such Registrable Securities; (ii) the Company Parties shall have delivered an executed copy of such agreement to the holders; and (iii) immediately after giving effect to such transaction no default under this Agreement shall have occurred and be continuing. 3.6. Governing Law; Service of Process; Consent to Jurisdiction. (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WITHIN THE STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. (b) To the fullest extent permitted by applicable law, each party hereto (i) agrees that any claim, action or proceeding by such party seeking any relief whatsoever arising out of, or in connection with, this Agreement or the transactions contemplated hereby shall be brought only in the United States District Court for the Southern District of New York and in any New York State court located in the Borough of Manhattan and not in any other State or Federal court in the United States of America or any court in any other country, (ii) agrees to submit to the exclusive jurisdiction of such courts located in the State of New York for purposes of all legal proceedings arising out of, or in connection with, this Agreement or the transactions contemplated hereby, and (iii) irrevocably waives any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. 3.7. Headings. The section and paragraph headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. 3.8. Severability. Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained therein. 3.9. Amendment; Waiver. (a) Except for the addition of new Guarantors as provided in Section 3.12, this Agreement may not be amended or modified and waivers and consents to departures from the provisions hereof may not be given, except by an instrument or instruments in writing making specific reference to this Agreement and signed by the Company Parties, the holders of a majority of each Class of Registrable Securities then outstanding and, so long as it is a holder, the Investor. Each holder of any Registrable Securities at the time or thereafter outstanding shall be bound by any amendment, modification, waiver or consent authorized by this Section 3.9(a), whether or not such Registrable Securities shall have been marked accordingly. (b) The waiver by any party hereto of a breach of any provision of this Agreement shall not operate or be construed as a further or continuing waiver of such breach or as a waiver of any other or subsequent breach. Except as otherwise expressly provided herein, no failure on the part of any party to exercise, and no delay in exercising, any right, power or remedy hereunder, or otherwise available in respect hereof at law or in equity, shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such party preclude any other or further exercise thereof or the exercise of any other right, power or remedy. 3.10. Counterparts. This Agreement may be executed in any number of separate counterparts and by the parties hereto in separate counterparts each of which when so executed shall be deemed to be an original and all of which together shall constitute one and the same agreement. 3.11. Effectiveness. The provisions of this Agreement shall take effect upon the occurrence of the Initial Restructuring (as such term is defined in the Restructuring Agreement) without further action by or on behalf of any party hereto, and other than this Section 3.11 shall have no force or effect prior to the Initial Restructuring. 3.12 Additional Guarantors. Each Domestic Subsidiary (as defined in the Indenture) that was not in existence or not a Subsidiary on the date of this Agreement is required to become a Guarantor upon becoming a Subsidiary. Upon execution and delivery after the date hereof by the Investor and such a Subsidiary of an instrument in the form of Exhibit A, such Subsidiary shall become a Guarantor hereunder with the same force and effect as if originally named as a Guarantor herein. The execution and delivery of any instrument adding an additional Guarantor as a party to this Agreement shall not require the consent of any other Guarantor hereunder. The rights and obligations of each Guarantor hereunder shall remain in full force and effect notwithstanding the addition of any new Guarantor as a party to this Agreement. IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly executed as of the date first written above. MEMC ELECTRONIC MATERIALS, INC. By: /s/ James M. Stolze --------------------------------------------- Name: James M. Stolze Title: Executive Vice President Chief Financial Officer TPG WAFER HOLDINGS LLC By: /s/ Richard A. Ekleberry --------------------------------------------- Name: Richard A. Ekleberry Title: Vice President EACH OF THE SUBSIDIARIES LISTED ON SCHEDULE I HERETO, as Guarantor By: /s/ Kenneth L. Young --------------------------------------------- Name: Kenneth L. Young, in his capacity as Treasurer for each of the subsidiaries listed on Schedule I hereto Schedule I Guarantors: MEMC Pasadena, Inc. MEMC International, Inc. MEMC Southwest Inc. SiBond, L.L.C. PlasmaSil, L.L.C. EXHIBIT A FORM OF SUPPLEMENT SUPPLEMENT NO. [ ] dated as of [ ], to the Registration Rights Agreement dated as of November 13, 2001, among MEMC Electronic Materials, Inc., a Delaware corporation (the "Company"), the guarantors included on the signature lines thereto (the "Guarantors" and together with the Company, the "Company Parties") and TPG Wafer Holdings LLC, a Delaware limited liability company (together with its permitted assigns, "TPG" or the "Investor"). A. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Registration Rights Agreement. B. The Guarantors have entered into the Registration Rights Agreement as an inducement to the Investor entering into the Restructuring Agreement. Pursuant to Section 3.12 of the Registration Rights Agreement, each Domestic Subsidiary (as defined in the Indenture) that was not in existence or not a Subsidiary on the date of the Registration Rights Agreement is required to enter into the Registration Rights Agreement as a Guarantor upon becoming a Subsidiary. Section 3.12 of the Registration Rights Agreement provides that additional Subsidiaries may become Guarantors under the Registration Rights Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned Subsidiary (the "New Guarantor") is executing this Supplement in accordance with the requirements of the Registration Rights Agreement to become a Guarantor under the Registration Rights Agreement. Accordingly, the New Guarantor agrees as follows: SECTION 1. In accordance with Section 3.12 of the Registration Rights Agreement, the New Guarantor by its signature below becomes a Guarantor under the Registration Rights Agreement with the same force and effect as if originally named therein as a Guarantor and the New Guarantor hereby (a) agrees to all the terms and provisions of the Registration Rights Agreement applicable to it as a Guarantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Guarantor thereunder are true and correct on and as of the date hereof except to the extent a representation and warranty expressly relates solely to a specific date in which case such representation and warranty shall be true and correct on such date. Each reference to a "Guarantor" in the Registration Rights Agreement shall be deemed to include the New Guarantor. The Registration Rights Agreement is hereby incorporated herein by reference. SECTION 2. The New Guarantor represents and warrants to the holders of Registrable Securities that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms. SECTION 3. This Supplement shall become effective when the New Guarantor shall have executed this Supplement and delivered it to the Investor. Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually executed counterpart of this Supplement. SECTION 4. Except as expressly supplemented hereby, the Registration Rights Agreement shall remain in full force and effect. SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED WITHIN THE STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. SECTION 6. Whenever possible, each provision or portion of any provision of this Supplement will be interpreted in such manner as to be effective and valid under applicable law but if any provision or portion of any provision of this Supplement is held to be invalid, illegal or unenforceable in any respect under any applicable law in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Supplement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained therein. SECTION 7. All communications and notices under the Registration Rights Agreement to the New Guarantor shall be given to it at the address set forth under its signature below, with a copy to the Company. IN WITNESS WHEREOF, the New Guarantor has duly executed this Supplement to the Registration Rights Agreement as of the day and year first above written. [NAME OF NEW GUARANTOR] By: --------------------------------------------- Name: Title: Address: EX-9 11 tbgex9.txt EXHIBIT 9 EXECUTION COPY REVOLVING CREDIT AGREEMENT dated as of November 13, 2001, among MEMC ELECTRONIC MATERIALS, INC. as Borrower, The Lenders Party Hereto, and CITICORP USA, INC., as Administrative Agent and Collateral Agent TABLE OF CONTENTS Page ARTICLE I DEFINITIONS Section 1.01. Defined Terms................................................1 Section 1.02. Terms Generally.............................................21 Section 1.03. Accounting Terms; GAAP......................................21 ARTICLE II THE CREDITS Section 2.01. Commitments.................................................21 Section 2.02. Loans and Borrowings........................................21 Section 2.03. Requests for Borrowings.....................................22 Section 2.04. Funding of Borrowings.......................................23 Section 2.05. Interest Elections..........................................23 Section 2.06. Termination and Reduction of Commitments....................25 Section 2.07. Repayment of Loans; Evidence of Debt........................25 Section 2.08. Prepayment of Loans.........................................26 Section 2.09. Fees........................................................27 Section 2.10. Interest....................................................27 Section 2.11. Alternate Rate of Interest..................................28 Section 2.12. Increased Costs.............................................29 Section 2.13. Break Funding Payments......................................29 Section 2.14. Taxes.......................................................30 Section 2.15. Payments Generally; Pro Rata Treatment; Sharing of Set-offs....................................................31 Section 2.16. Mitigation Obligations; Replacement of Lenders..............33 ARTICLE III REPRESENTATIONS AND WARRANTIES Section 3.01. Organization; Powers........................................34 Section 3.02. Authorization; Enforceability...............................34 Section 3.03. Governmental Approvals; No Conflicts........................34 Section 3.04. Financial Condition; No Material Adverse Change.............34 Section 3.05. Properties..................................................35 Section 3.06. Litigation and Environmental Matters........................35 Section 3.07. Compliance with Laws and Agreements.........................36 Section 3.08. Investment and Holding Company Status.......................36 Section 3.09. Taxes.......................................................36 Section 3.10. ERISA.......................................................36 Section 3.11. Disclosure..................................................38 Section 3.12. Subsidiaries................................................38 Section 3.13. Insurance...................................................38 Section 3.14. Labor Matters...............................................38 ARTICLE IV CONDITIONS Section 4.01. Effective Date..............................................39 Section 4.02. Each Borrowing..............................................40 Section 4.03. Initial $30,000,000 of Borrowings...........................40 ARTICLE V AFFIRMATIVE COVENANTS Section 5.01. Financial Statements and Other Information..................41 Section 5.02. Notices of Material Events..................................42 Section 5.03. Information Regarding Collateral............................43 Section 5.04. Existence; Conduct of Business..............................43 Section 5.05. Payment of Obligations......................................44 Section 5.06. Maintenance of Properties...................................44 Section 5.07. Insurance...................................................44 Section 5.08. Casualty and Condemnation...................................44 Section 5.09. Books and Records; Inspection and Audit Rights..............44 Section 5.10. Compliance with Laws........................................44 Section 5.11. Use of Proceeds.............................................45 Section 5.12. Additional Subsidiaries.....................................45 Section 5.13. Further Assurances; Transfer of Joint Venture Stock.........45 ARTICLE VI NEGATIVE COVENANTS Section 6.01. Indebtedness; Certain Equity Securities.....................46 Section 6.02. Liens.......................................................47 Section 6.03. Fundamental Changes.........................................48 Section 6.04. Investments, Loans, Advances, Guarantees and Acquisitions...49 Section 6.05. Asset Sales.................................................51 Section 6.06. Sale and Leaseback Transactions.............................51 Section 6.07. Hedging Agreements..........................................52 Section 6.08. Restricted Payments; Certain Payments of Indebtedness.......52 Section 6.09. Transactions with Affiliates................................52 Section 6.10. Restrictive Agreements......................................53 Section 6.11. Amendment of Material Documents.............................53 Section 6.12. Minimum Quarterly Consolidated EBITDA.......................54 Section 6.13. Minimum Monthly Consolidated Backlog........................54 Section 6.14. Minimum Monthly Consolidated Revenue........................56 Section 6.15. Capital Expenditures........................................58 ARTICLE VII EVENTS OF DEFAULT ARTICLE VIII THE AGENTS ARTICLE IX MANAGEMENT RIGHTS FOR FUND LENDERS Section 9.01. Management Rights...........................................63 Section 9.02. Termination; Transfer.......................................64 ARTICLE X MISCELLANEOUS Section 10.01. Notices.....................................................65 Section 10.02. Waivers; Amendments.........................................65 Section 10.03. Expenses; Indemnity; Damage Waiver..........................66 Section 10.04. Successors and Assigns......................................67 Section 10.05. Survival....................................................69 Section 10.06. Counterparts; Integration; Effectiveness....................70 Section 10.07. Severability................................................70 Section 10.08. Right of Setoff.............................................70 Section 10.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS..70 Section 10.10. WAIVER OF JURY TRIAL........................................71 Section 10.11. Headings....................................................71 Section 10.12. Confidentiality.............................................71 Section 10.13. Interest Rate Limitation....................................72 SCHEDULES: Schedule 1.01 -- Mortgaged Properties Schedule 2.01 -- Commitments Schedule 3.03 -- Conflicts Schedule 3.05 -- Real Property Schedule 3.06 -- Disclosed Matters Schedule 3.10(a) -- Borrower Benefit Plans Schedule 3.10(b) -- Borrower Benefit Plan Representations Schedule 3.12 -- Subsidiaries Schedule 3.13 -- Insurance Schedule 3.14 -- Labor Matters Schedule 6.01 -- Existing Indebtedness Schedule 6.02 -- Existing Liens Schedule 6.04 -- Existing Investments Schedule 6.10 -- Existing Restrictions EXHIBITS: Exhibit A -- Form of Assignment and Acceptance Exhibit B-1 -- Form of Opinion of Borrower's Counsel Exhibit B-2 -- Form of Opinion of Local Counsel Exhibit C -- Guarantee Agreement Exhibit D -- Indemnity, Subrogation and Contribution Agreement Exhibit E -- Pledge Agreement Exhibit F -- Security Agreement Exhibit G -- Form of Borrowing Request REVOLVING CREDIT AGREEMENT dated as of November 13, 2001 (this "Agreement"), among MEMC ELECTRONIC MATERIALS, INC., the LENDERS party hereto, and CITICORP USA, INC., as administrative agent and collateral agent hereunder. The parties hereto agree as follows: Article I Definitions Section 1.01. Defined Terms. As used in this Agreement, the following terms have the meanings specified below: "ABR", when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate. "Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate. "Administrative Agent" means Citicorp USA, Inc., in its capacity as administrative agent for the Lenders hereunder. "Administrative Questionnaire" means an Administrative Questionnaire in a form supplied by the Administrative Agent. "Affiliate" means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. Notwithstanding the foregoing, no individual shall be deemed to be an Affiliate of a Person solely by reason of his or her being an officer or director of such Person. "Agents" means the Administrative Agent and the Collateral Agent. "Alternate Base Rate" means, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective from and including the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively. "Applicable Percentage" means, with respect to any Lender, the percentage of the total Commitments represented by such Lender's Commitment. If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments. "Applicable Rate" means, for any day, (a) 2.50% per annum, in the case of an ABR Loan, or (b) 3.50% per annum, in the case of a Eurodollar Loan. "Approved Fund" means, with respect to any Lender that is a fund that invests in bank loans and similar commercial extensions of credit, any other fund that invests in bank loans and similar commercial extensions of credit and is 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 and an assignee (with the consent of any party whose consent is required by Section 10.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent. "Availability Period" means the period from and including the Effective Date to but excluding the earlier of (a) the Maturity Date and (b) the date of termination of the Commitments. "Board" means the Board of Governors of the Federal Reserve System of the United States of America. "Borrower" means MEMC Electronic Materials, Inc., a Delaware corporation. "Borrower Benefit Plans" means each employee or director benefit or compensation plan, arrangement or agreement, including pension, savings, welfare, medical or life insurance, severance, fringe benefit, executive compensation, deferred compensation, incentive, bonus and long-term performance option and other equity-based compensation plans, arrangements or agreements, including any "employee benefit plans" as defined in Section 3(3) of ERISA, whether or not subject to ERISA, and each employment, retention, consulting, change in control, termination or severance plan, program, arrangement or agreement that was entered into or is maintained by or to which the Borrower or any of its Subsidiaries contribute or is obligated to contribute or with respect to which the Borrower or any of its Subsidiaries has any liability, direct or indirect, contingent or otherwise, or otherwise providing benefits to any current or former employee, officer or director of the Borrower or any of its Subsidiaries. "Borrowing" means Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect. "Borrowing Request" means a request by the Borrower for a Borrowing in accordance with Section 2.03. "Business Day" means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed, provided that, when used in connection with a Eurodollar Loan, the term "Business Day" shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market. "Capital Expenditures" means, for any period, without duplication, (a) the additions to property, plant and equipment and other capital expenditures of the Borrower and its consolidated Subsidiaries that are (or would be) set forth in a consolidated statement of cash flows of the Borrower for such period prepared in accordance with GAAP and (b) Capital Lease Obligations incurred by the Borrower and its consolidated Subsidiaries during such period, provided that the term "Capital Expenditures" (i) shall be net of landlord construction allowances, (ii) shall not include expenditures made in connection with the repair or restoration of assets with insurance or condemnation proceeds and (iii) shall not include the purchase price of equipment to the extent consideration therefor consists of used or surplus equipment being traded in at such time or the proceeds of a concurrent sale of such used or surplus equipment, in each case in the ordinary course of business. "Capital Lease Obligations" of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital lease obligations on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP. "Certificate of Designations" means the Certificate of Designations for the Cumulative Preferred Stock, as filed with the Secretary of State of the State of Delaware. "Change in Control" means (a) the failure by TPG to own (and retain the right to vote), directly or indirectly, beneficially and of record, Equity Interests in the Borrower representing greater than 15% of each of the aggregate ordinary voting power and aggregate value represented by the issued and outstanding Equity Interests in the Borrower; (b) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the Effective Date), of Equity Interests representing a greater percentage of either the aggregate ordinary voting power or the aggregate value represented by the issued and outstanding Equity Interests in the Borrower then owned, directly or indirectly, beneficially and of record, by TPG; or (c) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who were neither (i) nominated by the board of directors of the Borrower nor (ii) appointed by directors so nominated. "Change in Law" means (a) the adoption of any law, rule or regulation after the Effective Date, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the Effective Date or (c) compliance by any Lender (or by any lending office of such Lender or by such Lender's holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority first made or issued after the Effective Date. "Closing Date" has the meaning assigned to such term in the Restructuring Agreement. "Code" means the Internal Revenue Code of 1986, as amended from time to time. "Collateral" means any and all "Collateral", as defined in any applicable Security Document. "Collateral Agent" means the "Collateral Agent", as defined in any applicable Security Document. "Collateral and Guarantee Requirement" means the requirement that: (a) the Agents shall have received from each Loan Party either (i) a counterpart of each of the Guarantee Agreement, the Indemnity, Subrogation and Contribution Agreement, the Pledge Agreement and the Security Agreement duly executed and delivered on behalf of such Loan Party or (ii) in the case of any Person that becomes a Loan Party after the Effective Date, a supplement to each of the Guarantee Agreement, the Indemnity, Subrogation and Contribution Agreement, the Pledge Agreement and the Security Agreement, in each case in the form specified therein, duly executed and delivered on behalf of such Loan Party; (b) all outstanding Equity Interests of the Borrower and each Subsidiary owned directly by or directly on behalf of any Loan Party, shall have been pledged pursuant to the Pledge Agreement (except that the Loan Parties shall not be required to pledge (i) more than 65% of the outstanding voting stock of any Foreign Subsidiary, (ii) the Equity Interest of MEMC Southwest Inc. owned directly by the Borrower, or (iii) the Joint Venture Stock) and the Collateral Agent shall have received certificates or other instruments representing all such Equity Interests, together with stock powers or other instruments of transfer with respect thereto endorsed in blank; (c) all Indebtedness of the Borrower and each Subsidiary that is owing to any Loan Party shall be evidenced by a promissory note and shall have been pledged pursuant to the Pledge Agreement and the Collateral Agent shall have received all such promissory notes, together with instruments of transfer with respect thereto endorsed in blank; (d) all documents and instruments, including Uniform Commercial Code financing statements, required by law or reasonably requested by the Collateral Agent to be filed, registered or recorded to create the Liens intended to be created by the Security Agreement and the Pledge Agreement (including any supplements thereto), and perfect such Liens to the extent required by, and with the priority required by, the Security Agreement and the Pledge Agreement, shall have been filed, registered or recorded or delivered to the Collateral Agent for filing, registration or recording; (e) the Collateral Agent shall have received (i) counterparts of a Mortgage with respect to each Mortgaged Property providing that the Loans (in addition to the other Revolver Obligations) shall be secured by a Lien on such Mortgaged Property, signed on behalf of the record owner of such Mortgaged Property, (ii) a policy or policies of title insurance issued by a nationally recognized title insurance company, insuring the Lien of each such Mortgage as a valid first Lien on the Mortgaged Property, described therein, free of any other Liens except as expressly permitted by Section 6.02, together with such endorsements, coinsurance and reinsurance as the Agents or the Required Lenders may reasonably request, and (iii) such surveys, abstracts, appraisals, legal opinions and other documents as the Agents or the Required Lenders may reasonably request with respect to any such Mortgage or Mortgaged Property, as the case may be; and (f) each Loan Party shall have obtained all material consents and approvals required to be obtained by it in connection with the execution and delivery of all Security Documents (or supplements thereto) to which it is a party, the performance of its obligations thereunder and the granting by it of the Liens thereunder. "Commitment" means, with respect to each Lender, the commitment, if any, of such Lender to make Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lender's Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.06 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 10.04. The initial amount of each Lender's Commitment is set forth on Schedule 2.01 (as of the Effective Date), or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, as applicable. The initial aggregate amount of the Lenders' Commitments is $150,000,000; provided, that in no event shall the aggregate amount of the Commitments exceed (i) $50,000,000 at any time prior to January 1, 2002, (ii) $75,000,000 at any time prior to April 1, 2002, (iii) $100,000,000 at any time prior to July 1, 2002 or (iv) $125,000,000 at any time prior to October 1, 2002. "Consolidated Backlog" for any calendar month means, as of any measurement date, the sum total of wafers (as measured in millions of square inches) which has been shipped in respect of bona fide sales to third party customers during such month to (and including) such measurement date and remaining shipments which are reasonably expected by the Borrower to be made in respect of bona fide sales to third party customers from (but excluding) such measurement date through the last calendar day of the month by the Borrower and its consolidated Subsidiaries. Amounts expected to be shipped shall be evidenced by third party customer orders including purchase orders, purchase order releases pursuant to blanket purchase orders and/or customer buy plans communicated by electronic data interchange communications, e-mail messages or via telephone to an MEMC customer service representative or salesperson. "Consolidated EBITDA" means, for any period, Consolidated Net Income for such period (but excluding any minority interest, equity in income or loss of joint ventures and royalty income) plus, (a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) consolidated interest expense for such period, (ii) consolidated income tax expense for such period, (iii) all amounts attributable to depreciation and amortization for such period, (iv) all extraordinary charges during such period and (v) all other noncash expenses or losses of the Borrower or any of the Subsidiaries for such period (excluding any such charge that constitutes an accrual of or a reserve for cash charges for any future period), and minus (b) without duplication and to the extent included in determining such Consolidated Net Income, (i) any extraordinary gains for such period, (ii) all noncash items increasing Consolidated Net Income for such period (excluding any items that represent the reversal of any accrual of, or cash reserve for, anticipated cash charges in any prior period), (iii) foreign currency gains, (iv) interest income, (v) gains from the sale of assets or capital stock, (vi) income tax benefit, and (vii) any other income categories disclosed as nonoperating (income) expense not otherwise specified, all determined on a consolidated basis in accordance with GAAP. "Consolidated Net Income" means, for any period, the net income or loss of the Borrower and the Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, provided that there shall be excluded from such net income or loss (a) the income of any Person (other than a consolidated Subsidiary) in which any other Person (other than the Borrower or any consolidated Subsidiary or any director holding qualifying shares in compliance with applicable law) owns an Equity Interest, except to the extent of the amount of dividends or other distributions actually paid to the Borrower or any of the consolidated Subsidiaries by such Person during such period, and (b) the income or loss of any Person accrued prior to the date on which it becomes a Subsidiary or is merged into or consolidated with the Borrower or any consolidated Subsidiary or the date on which such Person's assets are acquired by the Borrower or any consolidated Subsidiary. "Consolidated Revenue" means, for any month, net sales of the Borrower and its consolidated Subsidiaries, determined in accordance with GAAP consistently applied, plus net sales of 300 millimeter product (also referred to as 300 millimeter sales contra) for that same period to the extent not otherwise included, determined in accordance with GAAP consistently applied. Net sales shall be computed net of any discounts, returns or allowances. Net sales shall also exclude sales made by the Borrower or by a Subsidiary to any Affiliate of the Borrower that is Controlled by the Borrower (other than Taisil Electronic Materials Corporation) whether or not consolidated with the Borrower under GAAP. "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. The terms "Controlling" and "Controlled" have meanings correlative thereto. "Conversion Shares" has the meaning assigned to such term in the Restructuring Agreement. "Cumulative Preferred Stock" means the Borrower's Series A Cumulative Convertible Preferred Stock, par value $0.01 per share, having the rights, preferences, privileges and restrictions set forth in the Certificate of Designations. "Default" means any event or condition that constitutes an Event of Default or that upon notice, lapse of time or both would, unless cured or waived, become an Event of Default. "Disclosed Matters" means the actions, suits and proceedings and the environmental matters disclosed in Schedule 3.06. "dollars" or "$" refers to lawful money of the United States of America. "Effective Date" means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 10.02). "Environmental Laws" means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, directives or binding agreements issued, promulgated or entered into by or with any Governmental Authority, relating in any way to the environment, the protection, preservation or restoration of natural resources, the management (including generation, use, handling, transportation, storage, treatment and disposal) of Hazardous Materials, the Release or threatened Release of any Hazardous Materials into the environment, or health and safety matters. "Environmental Liability" means any liability, contingent or otherwise (including any costs, obligations, expenses, losses or other liability in connection with personal injury, strict liability, damages, diminution of value, investigation, monitoring, remediation, administrative oversight costs, fines, penalties or indemnities) of the Borrower or any Subsidiary directly or indirectly arising or resulting from or based upon (a) violation of any Environmental Law, (b) the management, including generation, use, handling, transportation, storage, treatment or disposal, of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is retained, assumed or imposed with respect to any of the foregoing. "Equity Interests" means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. "ERISA Affiliate" means, at any time, each trade or business (whether or not incorporated) that would, at the time, be treated together with Borrower or any of its Subsidiaries as a single employer under Title IV or Section 302 of ERISA or Section 412 of the Code. "ERISA Event" means (a) any "reportable event" described in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than a "reportable event" not subject to the provision for 30-day notice to the PBGC); (b) the existence with respect to any Plan of an "accumulated funding deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived or the filing of an application pursuant to Section 412(e) of the Code or Section 304 of ERISA for any extension of an amortization period; (c) the provision or filing of a notice of intent to terminate a Plan other than a standard termination within the meaning of Section 4041 of ERISA or the treatment of a Plan amendment as a distress termination under Section 4041 of ERISA; (d) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (e) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (f) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan under Section 4042 of ERISA or the occurrence or existence of any other event or condition which might reasonably be expected to constitute grounds for the termination of, the appointment of a trustee to administer, any Plan other than in a standard termination within the meaning of Section 4041 of ERISA or the imposition of any lien on the assets of the Borrower or any of its Subsidiaries or ERISA Affiliates under ERISA, including as a result of the operation of Section 4069 of ERISA; (g) the incurrence by the Borrower, any of its Subsidiaries or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan or with respect to the withdrawal from a Multiple Employer Plan during a plan year in which it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA or by reason of the provisions of Section 4064 of ERISA upon the termination of a Multiple Employer Plan; or (h) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA. "Eurodollar", when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate. "Event of Default" has the meaning assigned to such term in Article VII. "Excluded Taxes" means, with respect to any Agent, any Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) doing business, income or franchise taxes imposed on (or measured by) its net income, capital or any similar alternate basis by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction described in clause (a) above and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 2.16(b)), any withholding tax that (i) is in effect and would apply to amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect to any withholding tax pursuant to Section 2.14(a), or (ii) is attributable to such Foreign Lender's failure to comply with Section 2.14(e). "Exposure" means, with respect to any Lender at any time, the outstanding principal amount of such Lender's Loans. "Federal Funds Effective Rate" means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding 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 (rounded upwards, if necessary, to the next 1/100 of 1%) 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. "Financial Officer" means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower. "Foreign Company Benefit Plans" means each Borrower Benefit Plan maintained for the benefit of the employees of the Borrower or any of its Subsidiaries located outside the United States. "Foreign Lender" means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is located. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction. "Foreign Subsidiary" means any Subsidiary that is organized under the laws of a jurisdiction other than the United States of America or any State thereof or the District of Columbia. "Funded Indebtedness" means, as of any date, without duplication, (a) the aggregate principal amount of Indebtedness of the Borrower and the Subsidiaries outstanding as of such date (other than any Indebtedness with respect to which the Borrower is not obligated to pay or accrue any cash interest expense as of such date), in the amount that would be reflected on a balance sheet prepared as of such date on a consolidated basis in accordance with GAAP, and (b) the aggregate amount of any Guarantee by the Borrower or any Subsidiary of any such Indebtedness of any other Person. "Fund Lender" means each Lender that intends to be a "venture capital operating company" within the meaning of the Plan Asset Regulations. "GAAP" means generally accepted accounting principles in the United States of America consistently applied. "Governmental Authority" means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government. "Guarantee" of or by any Person (the "guarantor") means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the "primary obligor") in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation, provided that the term "Guarantee" shall not include endorsements for collection or deposit in the ordinary course of business. "Guarantee Agreement" means the Guarantee Agreement, attached hereto as Exhibit C, among the Subsidiary Loan Parties and the Collateral Agent for the benefit of the Secured Parties. "Hazardous Materials" means any substance, pollutant, contaminant, chemical or other material (including petroleum or any fraction thereof, asbestos or asbestos containing material, polychlorinated biphenyls and urea formaldehyde foam insulation) or waste that is classified or regulated under any Environmental Law. "Hedging Agreement" means any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement. "Indebtedness" of any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (j) all obligations, contingent or otherwise, of such Person in respect of bankers' acceptances. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. Notwithstanding anything to the contrary in this paragraph, the term "Indebtedness" shall not include (a) obligations under Hedging Agreements or (b) agreements providing for indemnification, purchase price adjustments or similar obligations incurred or assumed in connection with the acquisition or disposition of assets or stock. "Indemnified Taxes" means Taxes other than Excluded Taxes. "Indemnity, Subrogation and Contribution Agreement" means the Indemnity, Subrogation and Contribution Agreement, attached hereto as Exhibit D, among the Borrower, the Subsidiary Loan Parties and the Collateral Agent. "Indenture" has the meaning assigned to such term in the Restructuring Agreement. "Indenture Documentation" means the Indenture together with the related guarantee agreement, the security agreement, the pledge agreement and the indemnity, subrogation and contribution agreement and any other security documents executed in connection therewith. "Indenture Obligations" has the meaning assigned to such term in the Indenture Documentation. "Interest Election Request" means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.05. "Interest Payment Date" means (a) with respect to any ABR Loan, the last day of each March, June, September and December, and (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months' duration, each day prior to the last day of such Interest Period that occurs at intervals of three months' duration after the first day of such Interest Period. "Interest Period" means, with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the Borrower may elect, provided that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing. "Italian Issuer" means MEMC Electronic Materials S.p.A., a societa per azioni, or joint stock company, organized under the laws of the Republic of Italy. "Italian Notes" means, collectively, the Euro 55 million (aggregate principal amount) Promissory Notes Due 2031 to be issued by the Italian Issuer as contemplated under the Restructuring Agreement. "Joint Venture Stock" has the meaning assigned to such term in Section 6.03(d). "Lenders" means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and Acceptance, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Acceptance. "LIBO Rate" means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Page 3750 of the Telerate Service of Bridge Information Services (or on any successor or substitute page of such Service, or any successor to or substitute for such Service, providing rate quotations comparable to those currently provided on such page of such Service, as determined by the Administrative Agent from time to time in accordance with its normal practice for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market) at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the LIBO Rate with respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period. "Lien" means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities. "Loan Documents" means this Agreement, the Guarantee Agreement, the Indemnity, Subrogation and Contribution Agreement and the Security Documents. "Loan Parties" means the Borrower and the Subsidiary Loan Parties. "Loan Transactions" means the execution, delivery and performance by each Loan Party of the Loan Documents to which it is to be a party, the borrowing of Loans and the use of the proceeds thereof. "Loans" means the loans made and the loans continued by the Lenders to the Borrower pursuant to this Agreement. "Long-Term Indebtedness" means any Indebtedness that, in accordance with GAAP, constitutes (or, when incurred, constituted) a long-term liability. "Material Adverse Effect" means a material adverse effect on (a) the business, assets, operations, properties, financial condition, contingent liabilities or prospects of the Loan Parties taken as a whole, (b) the ability of the Loan Parties to perform their obligations under the Loan Documents or (c) any rights of or benefits available to the Lenders under the Loan Documents. "Material Indebtedness" means Indebtedness (other than the Loans), or obligations in respect of one or more Hedging Agreements, of any one or more of the Borrower and the Subsidiaries in an aggregate principal amount exceeding $2,500,000. For purposes of determining Material Indebtedness, the "principal amount" of the obligations of the Borrower or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to pay if such Hedging Agreement were terminated at such time. "Maturity Date" means November 13, 2006. "Moody's" means Moody's Investors Service, Inc. "Mortgage" means a mortgage, deed of trust, assignment of leases and rents, leasehold mortgage or other security document granting a Lien on any Mortgaged Property to secure the Revolver Obligations. Each Mortgage shall be reasonably satisfactory in form and substance to the Collateral Agent. "Mortgaged Property" means, initially, each parcel of real property and the improvements thereto owned by a Loan Party and identified on Schedule 1.01, and includes each other parcel of real property and improvements thereto with respect to which a Mortgage is granted pursuant to Section 5.12 or 5.13. "Multiple Employer Plan" means an employee benefit plan described in Section 4063 of ERISA. "Multiemployer Plan" means a multiemployer plan as defined in Section 4001(a)(3) of ERISA. "Net Proceeds" means, with respect to any event (a) the cash proceeds received in respect of such event, including (i) any cash received in respect of any non-cash proceeds, but only as and when received, (ii) in the case of a casualty or other insured damage, insurance proceeds in excess of $250,000, and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses (including reasonable attorneys fees, underwriting discounts and commissions and collection expenses) paid or payable by the Borrower and the Subsidiaries to third parties in connection with such event, (ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made by the Borrower and the Subsidiaries as a result of such event to repay Indebtedness (other than Loans) secured by such asset or otherwise subject to mandatory prepayment as a result of such event, (iii) the amount of all taxes paid (or reasonably estimated to be payable) by the Borrower and the Subsidiaries, and (iv) the amount of any reserves established by the Borrower and the Subsidiaries to fund contingent liabilities reasonably estimated to be payable, in each case during the year that such event occurred or the next succeeding year and that are directly attributable to such event (as determined reasonably and in good faith by the chief financial officer of the Borrower). Notwithstanding anything to the contrary set forth above, the proceeds of any sale, transfer or other disposition of Receivables or Related Property (or any interest therein) pursuant to any Permitted Receivables Financing shall not be deemed to constitute Net Proceeds except to the extent that such sale, transfer or other disposition (a) is the initial sale, transfer or other disposition of Receivables or Related Property (or any interest therein) in connection with the establishment of such Permitted Receivables Financing or (b) occurs in connection with an increase in the aggregate outstanding amount of such Permitted Receivables Financing over the aggregate outstanding amount of such Permitted Receivables Financing at the time of such initial sale, transfer or other disposition. "Notes" means the Senior Subordinated Secured Notes Due 2007 issued by the Borrower pursuant to the Indenture. "Other Taxes" means any and all current or future recording, stamp, documentary, excise, transfer, sales, property or similar taxes, charges or levies arising from any payment made under any Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, any Loan Document. "PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions. "Perfection Certificate" means a certificate in the form of Annex 2 to the Security Agreement or any other form approved by the Borrower and the Agents. "Permitted Acquisition" means any acquisition (whether by purchase, merger, consolidation or otherwise) by the Borrower or any consolidated Subsidiary of all or substantially all the assets of, or all the Equity Interests in, a Person or division or line of business of a Person if, at the time of and immediately after giving effect thereto, (a) no Default has occurred and is continuing or would result therefrom, (b) the principal business of such Person shall be reasonably related to a business in which the Borrower and the Subsidiaries were engaged on the Effective Date or have entered thereafter with the consent of the Administrative Agent, (c) each Subsidiary formed for the purpose of or resulting from such acquisition shall be, or contemporaneously become, a Subsidiary Loan Party and all of the Equity Interests of such Subsidiary Loan Party shall be owned directly by the Borrower or a consolidated Subsidiary Loan Party and all material actions required to be taken with respect to such acquired or newly formed Subsidiary Loan Party under Sections 5.12 and 5.13 shall have been taken (or shall be taken contemporaneously with the closing of such acquisition or within the time period set forth in Section 5.12), (d) the Borrower and the Subsidiaries are in compliance, on a pro forma basis after giving effect to such acquisition (without giving effect to any cost savings other than those actually realized as of the date of such acquisition), with the covenants contained in Sections 6.12, 6.13 and 6.14 recomputed as at the last day of the most recently ended fiscal quarter or month, as the case may be, of the Borrower for which financial statements are available, as if such acquisition (and any related incurrence or repayment of Indebtedness, with any new Indebtedness being deemed to be amortized over the applicable testing period in accordance with its terms) had occurred on the first day of each relevant period for testing such compliance and (e) the Borrower has delivered to the Administrative Agent an officers' certificate to the effect set forth in clauses (a), (b), (c) and (d) above, together with all relevant financial information for the Person or assets to be acquired and reasonably detailed calculations demonstrating satisfaction of the requirement set forth in clause (d) above. "Permitted Encumbrances" means: (a) Liens imposed by law for taxes or other governmental charges that are not yet due or are being contested in compliance with Section 5.05; (b) carriers', warehousemen's, mechanics', materialmen's, repairmen's and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in compliance with Section 5.05; (c) pledges and deposits made in the ordinary course of business in compliance with workers' compensation, unemployment insurance and other social security laws or regulations; (d) Liens (other than Liens on Collateral) to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business; (e) judgment liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII; (f) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business and minor defects or irregularities in title that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary; (g) ground leases in respect of real property on which facilities owned or leased by the Borrower or any of the Subsidiaries are located; (h) any interest or title of a lessor under any lease permitted by this Agreement; (i) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; (j) leases or subleases granted to other Persons and not interfering in any material respect with the business of the Borrower and the Subsidiaries, taken as a whole; and (k) licenses of intellectual property, including patents and trademarks held by the Borrower or any of its Subsidiaries, not interfering in any material respect with the business of the Borrower and its Subsidiaries, taken as a whole; provided that the term "Permitted Encumbrances" shall not include any Lien securing Indebtedness. "Permitted Investments" means: (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America); (b) investments in commercial paper maturing not more than one year after the date of acquisition thereof and having, at such date of acquisition, one of the two highest credit ratings obtainable from S&P or from Moody's; (c) investments in certificates of deposit, banker's acceptances and time deposits maturing not more than one year after the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts and overnight bank deposits issued or offered by, any commercial bank organized under the laws of the United States of America or any State thereof or any foreign country recognized by the United States of America that has a combined capital and surplus and undivided profits of not less than $250,000,000 (or the foreign-currency equivalent thereof); (d) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above or clause (e) or (f) below and entered into with a financial institution satisfying the criteria described in clause (c) above; (e) securities issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof having maturities of not more than six months from the date of acquisition thereof and, at the time of acquisition, having one of the two highest credit ratings obtainable from S&P or from Moody's; (f) securities issued by any foreign government or any political subdivision of any foreign government or any public instrumentality thereof having maturities of not more than six months from the date of acquisition thereof and, at the time of acquisition, having one of the two highest credit ratings obtainable from S&P or from Moody's; and (g) investments in funds that invest solely in one or more types of securities described in clauses (a), (e) and (f) above. "Permitted Receivables Financing" means any financing pursuant to which (a) the Borrower or any Subsidiary sells, conveys or otherwise transfers to a Receivables Subsidiary, in "true sale" transactions, and (b) such Receivables Subsidiary sells, conveys or otherwise transfers to any other Person or grants a security interest to any other Person in, any Receivables (whether now existing or hereafter acquired) of the Borrower or any Subsidiary or any undivided interest therein, and any assets related thereto (including all collateral securing such Receivables), all contracts and all Guarantees or other obligations in respect of such Receivables, proceeds of such Receivables and other assets that are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving Receivables, provided that the board of directors of the Borrower shall have determined in good faith that such Permitted Receivables Financing is economically fair and reasonable to the Borrower and the Subsidiaries, taken as a whole. "Person" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity. "Plan" means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower, any of its Subsidiaries or any ERISA Affiliate is an "employer" as defined in Section 3(5) of ERISA. "Plan Asset Regulations" means the Department of Labor regulation Section 2510.3-101, 29 C.F.R.ss.2510.3-101. "Pledge Agreement" means the Pledge Agreement, attached hereto as Exhibit E, among the Loan Parties and the Collateral Agent for the benefit of the Secured Parties. "Prepayment Event" means: (a) any sale, transfer or other disposition (including pursuant to a Permitted Receivables Financing or a sale and leaseback transaction) of any property or asset of the Borrower or any Subsidiary, including any Equity Interest owned by it, other than (i) dispositions described in clauses (a) and (b) of Section 6.05 and (ii) other dispositions resulting in aggregate Net Proceeds not exceeding $250,000 during any fiscal year of the Borrower; or (b) any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of the Borrower or any Subsidiary, but only to the extent that the Net Proceeds therefrom have not been applied to repair, restore or replace such property or asset within 365 days after such event; or (c) the incurrence by the Borrower or any Subsidiary of any Indebtedness, other than Indebtedness permitted by Section 6.01; or (d) the issuance of any Equity Interests by the Borrower other than (i) the Warrant Shares and the Conversion Shares, and (ii) pursuant to an employee benefit plan in effect on the Effective Date or adopted after the Effective Date with the consent of the Required Lenders; provided that no receipt by MEMC Korea Company of Net Proceeds shall constitute a Prepayment Event unless and until (and only to the extent that) such Net Proceeds, or a portion thereof, are actually paid or legally payable as a dividend or distribution to a Loan Party. "Prime Rate" means the rate of interest per annum publicly announced from time to time by Citibank, N.A. as its base rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective. "Purchase Agreement" means the purchase agreement, dated as of September 30, 2001, by and among TPG Partners III, L.P., T(3) Partners, L.P., T(3) Partners II, L.P, TPG Wafer Holdings LLC, E.ON AG, E.ON International Finance B.V., FIDELIA Corporation, VEBA Zweite Verwaltungsgesellschaft mbH and E.ON North America, Inc. "Receivable" means the Indebtedness and payment obligations of any Person to the Borrower or any of the Subsidiaries or acquired by the Borrower or any of the Subsidiaries (including obligations constituting an account or general intangible or evidenced by a note, instrument, contract, security agreement, chattel paper or other evidence of indebtedness or security but excluding intercompany obligations) arising from a sale of merchandise or the provision of services by the Borrower or any Subsidiary or the Person from which such Indebtedness and payment obligation were acquired by the Borrower or any of the Subsidiaries, including (a) any right to payment for goods sold or for services rendered and (b) the right to payment of any interest, sales taxes, finance charges, returned check or late charges and other obligations of such Person with respect thereto. "Receivables Subsidiary" means a corporation or other entity that is a newly formed, wholly owned, bankruptcy-remote, special purpose subsidiary of the Borrower or any wholly owned Subsidiary (a) that engages in no activities other than in connection with the financing of Receivables, all proceeds thereof and all rights (contractual or other), collateral and other assets relating thereto, and any business or activities incidental or related to such business (including servicing of Receivables), (b) that is designated by the board of directors of the Borrower (as provided below) as a Receivables Subsidiary, (c) of which no portion of its Indebtedness or any other obligations (contingent or otherwise) (i) is Guaranteed by the Borrower or any Subsidiary (other than pursuant to Standard Securitization Undertakings), (ii) is recourse to or obligates the Borrower or any Subsidiary in any way other than pursuant to Standard Securitization Undertakings and other than any obligation to sell or transfer Receivables or (iii) subjects any property or asset of the Borrower or any Subsidiary, directly or indirectly, contingently or otherwise, to the satisfaction thereof, (d) with which none of the Borrower or any Subsidiary has any material contract, agreement, arrangement or understanding (except in connection with a Permitted Receivables Financing), other than fees payable in the ordinary course of business in connection with servicing Receivables, and (e) to which none of the Borrower or any Subsidiary has any obligation to maintain or preserve such entity's financial condition or cause such entity to achieve certain levels of operating results. Upon any such designation, a Financial Officer of the Borrower shall deliver a certificate to the Administrative Agent certifying (a) the resolution of the board of directors of the Borrower giving effect to such designation, (b) that, to the best of such officer's knowledge and belief after consulting with counsel, such designation complied with the foregoing conditions, (c) that after giving effect to such designation (including any Indebtedness permitted to exist in connection with such designation), the Borrower shall be in compliance, on a pro forma basis, with the covenants set forth in Section 6.12, 6.13 and 6.14 and (d) immediately after giving effect to such designation, no Default shall have occurred and be continuing. "Register" has the meaning set forth in Section 10.04(c). "Related Parties" means, with respect to any specified Person, such Person's Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person's Affiliates. "Related Property" shall mean, with respect to each Receivable: (a) all the interest of the Borrower or any Subsidiary in the goods, if any, sold and delivered to an obligor relating to the sale that gave rise to such Receivable, (b) all other security interests or Liens, and the interest of the Borrower or any Subsidiary in the property subject thereto, from time to time purporting to secure payment of such Receivable, together with all financing statements signed by an obligor describing any collateral securing such Receivable and (c) all guarantees, insurance, letters of credit and other agreements or arrangements of whatever character from time to time supporting or securing payment of such Receivable, in the case of clauses (b) and (c), whether pursuant to the contract related to such Receivable or otherwise or pursuant to any obligations evidenced by a note, instrument, contract, security agreement, chattel paper or other evidence of Indebtedness or security and the proceeds thereof. "Release" means any release, spill, emission, leaking, dumping, injection, pouring, deposit, disposal, discharge, dispersal, leaching or migration of any Hazardous Material in, on, onto or into the environment (including ambient air, surface water, groundwater, land surface or subsurface strata or within any building, structure, facility or fixture). "Required Lenders" means, at any time, Lenders having Exposures and unused Commitments representing more than 50% of the sum of the total Exposures and unused Commitments at such time. "Restricted Payment" means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Interests in the Borrower or any Subsidiary or any option, warrant or other right to acquire any such Equity Interests in the Borrower or any Subsidiary. "Restructuring Agreement" means that certain Restructuring Agreement, dated as of November 13, 2001, between TPG Wafer Holdings LLC and the Borrower. "Revolver Obligations" has the meaning assigned to such term in the Security Agreement. "S&P" means Standard & Poor's Rating Service. "Secured Parties" has the meaning assigned to such term in the Security Agreement. "Security Agreement" means the Security Agreement, attached hereto as Exhibit F, among the Borrower, the Subsidiary Loan Parties and the Collateral Agent for the benefit of the Secured Parties. "Security Documents" means the Security Agreement, the Pledge Agreement, the Mortgages and each other security agreement or other instrument or document executed and delivered pursuant to Section 5.12 or 5.13 to secure any of the Revolver Obligations. "Standard Securitization Undertakings" means representations, warranties, covenants and indemnities entered into at any time by the Borrower or any Subsidiary that are reasonably customary in an accounts receivable transaction. "Statutory Reserve Rate" means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject, with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage. "subsidiary" means, with respect to any Person (the "parent") at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. "Subsidiary" means any subsidiary of the Borrower. "Subsidiary Loan Party" means any Subsidiary that is not a Foreign Subsidiary or a Receivables Subsidiary. "Taxes" means any and all current or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority. "TPG" means TPG Partners III, L.P. and its Affiliates, provided that no such Affiliate shall be deemed a member of TPG to the extent it ceases to be Controlled by, or under common Control with, TPG Partners III, L.P. "Type", when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate. "U.S. Company Benefit Plans" means each Borrower Benefit Plan maintained for the benefit of the employees of the Borrower or any of its Subsidiaries located in the United States. "Warrant Certificate" has the meaning assigned to such term in the Restructuring Agreement. "Warrant Shares" has the meaning assigned to such term in the Restructuring Agreement. "Warrants" has the meaning assigned to such term in the Restructuring Agreement. "Withdrawal Liability" means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA. Section 1.02. Terms Generally. The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including" shall be deemed to be followed by the phrase "without limitation". The word "will" shall be construed to have the same meaning and effect as the word "shall". Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person's successors and assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words "asset" and "property" shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. Section 1.03. Accounting Terms; GAAP. Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time, provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the Effective Date in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Article II The Credits Section 2.01. Commitments. Subject to the terms and conditions set forth herein, each Lender agrees to make Loans to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not result in such Lender's Exposure exceeding such Lender's Commitment. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Loans. Section 2.02. Loans and Borrowings. (a) Each Loan shall be made as part of a Borrowing consisting of Loans of the same Type made by the Lenders ratably in accordance with their respective Commitments. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder, provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender's failure to make Loans as required. (b) Subject to Section 2.11, each Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith, provided that all Borrowings made on the Effective Date shall be ABR Borrowings. Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan, provided that (i) any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement and (ii) the Borrower shall not be required to make any greater payment under Section 2.14 to the applicable Lender than such Lender would have been entitled to receive if such Lender had not exercised such option. (c) At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $10,000,000. At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less than $10,000,000, provided that an ABR Borrowing may be in an aggregate amount that is equal to the entire unused balance of the total Commitments. Borrowings of more than one Type may be outstanding at the same time, provided that there shall not at any time be more than a total of six Eurodollar Borrowings outstanding. (d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Loan if the Interest Period requested with respect thereto would end after the Maturity Date. Section 2.03. Requests for Borrowings. To request a Borrowing, the Borrower shall notify the Administrative Agent of such request by telephone fifteen (15) Business Days before the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request in the form of Exhibit G or any other form approved by the Administrative Agent and signed by the Borrower. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02: (i) the aggregate amount of such Borrowing; (ii) the date of such Borrowing, which shall be a Business Day; (iii) subject to the proviso to the first sentence of Section 2.02(b), whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; (iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term "Interest Period"; and (v) the location and number of the Borrower's account to which funds are to be disbursed, which shall comply with the requirements of Section 2.04. If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month's duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender's Loan to be made as part of the requested Borrowing. Section 2.04. Funding of Borrowings. (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 1:00 p.m., New York City time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders. The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower maintained with Citibank, N.A. in New York City and designated by the Borrower in the applicable Borrowing Request. (b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender's share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may (but shall not be obligated to), in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender's Loan included in such Borrowing. (c) Nothing in this Section 2.04 shall be deemed to relieve any Lender from its obligation to fulfill its Commitments hereunder or to prejudice any rights that the Borrower may have against any Lender as a result of any default by any such Lender hereunder (it being understood, however, that no Lender shall be responsible for the failure of any other Lender to fulfill its Commitments hereunder). Section 2.05. Interest Elections. (a) Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. (b) To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the Borrower. (c) Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02: (i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing); (ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day; (iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and (iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term "Interest Period". If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month's duration. (d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender's portion of each resulting Borrowing. (e) If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto. Section 2.06. Termination and Reduction of Commitments. (a) Unless previously terminated, the Commitments shall terminate on the Maturity Date. (b) The Borrower may at any time, without premium or penalty, terminate, or from time to time reduce, the Commitments, provided that (i) each reduction of the Commitments shall be in an amount that is an integral multiple of $1,000,000 and not less than $10,000,000 and (ii) the Borrower shall not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.08, the sum of the Exposures would exceed the total Commitments. (c) The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section at least three (3) Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable, provided that a notice of termination delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments shall be permanent. Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments. Section 2.07. Repayment of Loans; Evidence of Debt. (a) The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Loan of such Lender on the Maturity Date. (b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder. (c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender's share thereof, which accounts the Administrative Agent will make available to the Borrower upon its reasonable request. (d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein absent manifest error, provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement. (e) Any Lender may request that Loans made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Borrower and the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 10.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns). Section 2.08. Prepayment of Loans. (a) The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, without premium or penalty (but subject to Section 2.13), subject to the requirements of this Section. (b) In the event and on each occasion that the sum of the Exposures exceeds the total Commitments, the Borrower shall prepay Borrowings in an aggregate amount equal to such excess. (c) In the event and on each occasion that any Net Proceeds are received by or on behalf of the Borrower or any Subsidiary in respect of any Prepayment Event, the Borrower shall, within ten (10) Business Days after such Net Proceeds are received, prepay Borrowings in an aggregate amount equal to (i) in the case of an event described in clause (a) or (b) of the definition of Prepayment Event, such Net Proceeds, or (ii) in the case of an event described in clause (c) or (d) of the definition of Prepayment Event, 75% of such Net Proceeds, provided that, in the case of any event described in clause (a) of the definition of the term "Prepayment Event" occurring on or prior to the six-month anniversary of the Effective Date (other than the sale, transfer or other disposition of (i) Receivables in connection with a Permitted Receivables Financing, or (ii) other assets of the Borrower or any Subsidiary in connection with the incurrence of Indebtedness in respect of an asset-backed financing entered into with the consent of the Required Lenders), if the Borrower shall deliver to the Administrative Agent a certificate of a Financial Officer to the effect that no Default has occurred and is continuing, then no prepayment shall be required pursuant to this paragraph in respect of the Net Proceeds in respect of such event until the six-month anniversary of the Effective Date. (d) Prior to any optional or mandatory prepayment of Borrowings hereunder, the Borrower shall select the Borrowing or Borrowings to be prepaid and shall specify such selection in the notice of such prepayment pursuant to paragraph (e) of this Section. (e) The Borrower shall notify the Administrative Agent by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three (3) Business Days before the date of prepayment, or (ii) in the case of prepayment of an ABR Borrowing, not later than 3:00 p.m., New York City time, on the Business Day prior to the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date, the principal amount of each Borrowing or portion thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably detailed calculation of the amount of such prepayment, provided that, if a notice of optional prepayment of any Loans is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.06, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.06. Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02, except as necessary to apply fully the required amount of a mandatory prepayment or to prepay such Borrowing in full. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.10. Section 2.09. Fees. (a) The Borrower agrees to pay to the Administrative Agent for the account of each Lender a commitment fee, which shall accrue at the rate equal to 0.50% on the average daily unused amount of the Commitments of such Lender (disregarding for the purposes of such calculation the proviso to the last sentence of the definition of "Commitment") during the period from and including the Effective Date to but excluding the date on which such Commitment terminates (it being understood that no commitment fee shall be payable in respect of the portion of any Commitment funded on the Effective Date). Accrued commitment fees shall be payable in arrears on the last day of March, June, September and December of each year and on the dates on which the Commitments terminate, commencing on the first such date to occur after the Effective Date. All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day). For purposes of computing commitment fees, a Commitment of a Lender shall be deemed to be used to the extent of the outstanding Loans of such Lender. (b) The Borrower agrees to pay to the Administrative Agent on the Effective Date, for the account of the Lenders, an underwriting fee in an aggregate amount equal to $3,000,000. (c) The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent. (d) All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent for distribution, in the case of commitment fees, to the Lenders entitled thereto. Fees paid shall not be refundable under any circumstances. Section 2.10. Interest. (a) The Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus the Applicable Rate. (b) The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate. (c) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, to the fullest extent permitted by applicable law, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Loans as provided in paragraph (a) of this Section. (d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the Commitments, provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion. (e) All interest hereunder shall be computed on the basis of a year of 360 days and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent in accordance with the terms of this Agreement, and such determination shall be prima facie evidence thereof absent manifest error. (f) Notwithstanding anything to the contrary herein, the Borrower may elect, in each case with the consent of the Required Lenders to be given or withheld in their absolute discretion, to defer the cash payment of interest on any Loan until a date to be agreed upon by the Borrower and the Required Lenders. In the event that the Borrower makes such an election and the Required Lenders so consent, the rate of interest on such Loan for the period of such deferral shall be increased by an amount to be agreed between the Borrower and the Required Lenders (which amount shall in no event be less than 3%) over the rate otherwise applicable to such Loan. The Lenders shall promptly notify the Administrative Agent of any such consent or agreement. Section 2.11. Alternate Rate of Interest. If prior to the commencement of any Interest Period for a Eurodollar Borrowing: (a) the Administrative Agent determines (which determination shall be prima facie evidence thereof) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or (b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders of making or maintaining their Loans included in such Borrowing for such Interest Period; then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist (it being understood that the Administrative Agent will use commercially reasonable efforts to give such notice as soon as practicable after such circumstances no longer exist), (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing. Section 2.12. Increased Costs. (a) If any Change in Law (except with respect to Taxes, which shall be governed by Section 2.14) shall: (i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate); or (ii) impose on any Lender or the London interbank market any other condition affecting this Agreement or Eurodollar Loans made by such Lender; and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered. (b) If any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on a Lender's capital or on the capital of such Lender's holding company, if any, as a consequence of this Agreement or the Loans made by such Lender to a level below that which such Lender or such Lender's holding company could have achieved but for such Change in Law (taking into consideration such Lender's policies and the policies of such Lender's holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender's holding company for any such reduction suffered. (c) A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be prima facie evidence thereof absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof. (d) Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender's right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender pursuant to this Section for any increased costs or reductions incurred more than 180 days prior to the date that such Lender notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender's intention to claim compensation therefor, and provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof. Section 2.13. Break Funding Payments. In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.08(e) and is revoked in accordance therewith) or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.16, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount reasonably determined by such Lender to be the excess, if any, of (i) the amount of interest that would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest that would accrue on such principal amount for such period at the interest rate that such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be prima facie evidence thereof absent manifest error. The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof. Section 2.14. Taxes. (a) Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes, provided that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Agent or Lender (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law. (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law. (c) The Borrower shall indemnify each Agent and each Lender, within 10 days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by such Agent or such Lender, as the case may be, on or with respect to any payment by or on account of any obligation of the Borrower hereunder or under any other Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the Collateral Agent, or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be prima facie evidence thereof absent manifest error. (d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent. (e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law or reasonably requested by the Borrower as will permit such payments to be made without withholding or at a reduced rate. (f) If an Agent or a Lender has received a refund of any Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.14, which such Agent or such Lender is able to identify as such, it shall pay such refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.14 with respect to the Taxes giving rise to such refund), net of all reasonable out-of-pocket expenses of such Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, however, that the Borrower agrees to pay, upon the request of such Agent or such Lender, the amount paid to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to such Agent or such Lender in the event such Agent or such Lender is required to repay such refund to such Governmental Authority. Upon written request by the Borrower, a Lender shall use reasonable efforts to contest any Taxes for which the Borrower is required to pay additional amounts pursuant to this Section 2.14, or to obtain refunds thereof; provided, however, that such efforts shall not require the Lender to incur additional costs or legal or regulatory burdens that the Lender considers in its good faith judgment to be material, and that nothing in this Section 2.14(f) shall be construed as requiring a Lender to alter the conduct of its business or to arrange or alter in any respect its tax or financial affairs. Nothing contained in this Section 2.14(f) shall require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its Taxes that it deems confidential) to the Borrower or any other Person. Section 2.15. Payments Generally; Pro Rata Treatment; Sharing of Set-offs. (a) The Borrower shall make each payment required to be made by it hereunder or under any other Loan Document (whether of principal, interest, or fees, or of amounts payable under Section 2.12, 2.13 or 2.14, or otherwise) prior to the time expressly required hereunder or under such other Loan Document for such payment (or, if no such time is expressly required, prior to 2:00 p.m., New York City time), on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at Citicorp USA, Inc., 2 Penns Way, Suite 200, New Castle, DE 19720, except that payments pursuant to Sections 2.12, 2.13, 2.14 and 10.03 shall be made directly to the Persons entitled thereto and payments pursuant to other Loan Documents shall be made to the Persons specified therein. The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment under any Loan Document shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments under each Loan Document shall be made in dollars. (b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, interest and fees then due hereunder, such funds shall be applied (i) first, to fees and expenses then due to the Agents hereunder, (ii) second, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (iii) third, towards payment of principal then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal then due to such parties. (c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans, provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation. (d) Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may (but shall not be obligated to), in reliance upon such assumption, distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. (e) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.04(b), 2.15(d) or 10.03(c), then the Administrative Agent may (but shall not be obligated to), in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender's obligations under such Sections until all such unsatisfied obligations are fully paid. Section 2.16. Mitigation Obligations; Replacement of Lenders. (a) If any Lender requests compensation under Section 2.12, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.14, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the reasonable judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.12 or 2.14, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment. (b) If any Lender requests compensation under Section 2.12, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.14, or if any Lender defaults in its obligation to fund Loans hereunder, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 10.04), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that (i) to the extent the assignee is not a Lender or an Affiliate or an Approved Fund of a Lender, the Borrower shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.12 or payments required to be made pursuant to Section 2.14, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply. Nothing in this Section 2.16 shall be deemed to prejudice any rights that the Borrower may have against any Lender as a result of any default by any such Lender in its obligation to fund Loans hereunder. Article III Representations and Warranties The Borrower represents and warrants to the Lenders that: Section 3.01. Organization; Powers. Each of the Borrower and the Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required. Section 3.02. Authorization; Enforceability. The Loan Transactions entered into and to be entered into by each Loan Party are within such Loan Party's powers and have been duly authorized by all necessary action. This Agreement has been duly executed and delivered by the Borrower and constitutes, and each other Loan Document to which any Loan Party is to be a party, when executed and delivered by such Loan Party, will constitute, a legal, valid and binding obligation of the Borrower or such Loan Party (as the case may be), enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law. Section 3.03. Governmental Approvals; No Conflicts. The Loan Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by or before, any Governmental Authority, except such as have been obtained or made and are in full force and effect and except filings necessary to perfect Liens created under the Loan Documents, (b) will not violate any applicable law or regulation or the charter, by-laws or other organizational documents of the Borrower or any of the Subsidiaries or any order of any Governmental Authority, (c) except as set forth on Schedule 3.03, will not violate or result in a default under any material indenture, agreement or other instrument binding upon the Borrower or any of the Subsidiaries or any of their assets, or give rise to a right thereunder to require any payment to be made by the Borrower or any of the Subsidiaries, and (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any of the Subsidiaries, except Liens created under the Loan Documents. Section 3.04. Financial Condition; No Material Adverse Change. (a) The Borrower has heretofore furnished to the Lenders its (i) audited consolidated balance sheet as of December 31, 2000, and the related consolidated statements of income and cash flow for the fiscal year then ended, reported on by KPMG LLP, independent public accountants, and (ii) its unaudited consolidated balance sheet as of September 30, 2001, and the related consolidated statements of income and cash flow for the nine months then ended. Such financial statements present fairly, in all material respects, the consolidated financial position and results of operations of the Borrower and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP. (b) Except as disclosed in the financial statements referred to in paragraph (a) above or the notes thereto, and except for the Disclosed Matters, none of the Borrower or the Subsidiaries has, as of the Effective Date, any material contingent liabilities, unusual long-term commitments or unrealized losses. (c) Since September 30, 2001, there has been no material adverse change in the business, assets, operations, properties, financial condition contingent liabilities or prospects of the Borrower or the Borrower and its Subsidiaries, taken as a whole. (d) The Borrower has heretofore furnished to the Lenders or one or more of their Related Parties daily reports of Consolidated Backlog from October 11, 2001 through the Closing Date. Each such report as of its date was complete and accurate in all material respects. (e) Except as heretofore communicated to the Lenders or one or more of their Related Parties by the Borrower in writing or as otherwise reflected in the customer specific revenue and volume information communicated in writing to the Lenders or one or more of their Related Parties, since December 31, 2000 none of the 20 largest customers of the Borrower and its Subsidiaries (as of December 31, 2000 or September 30, 2001) has indicated orally or in writing its intention or desire to materially alter or discontinue, in whole or in material part, its relationship with the Borrower and its Subsidiaries. Section 3.05. Properties. (a) Except as set forth in Schedule 3.05, the Borrower and each of the Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property material to its business (including its Mortgaged Properties), except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes and subject to Liens permitted by Section 6.02. (b) The Borrower and each of the Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its business, and to Borrower's knowledge after due inquiry the use thereof by the Borrower and the Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, would not result in a Material Adverse Effect. (c) Schedule 3.05 sets forth the address of each real property that is owned or leased by the Borrower or any of the Subsidiaries as of the Effective Date after giving effect to the Loan Transactions. (d) As of the Effective Date, neither the Borrower or any of the Subsidiaries has received notice of, or has knowledge of, any material pending or contemplated condemnation proceeding affecting any Mortgaged Property or any sale or disposition thereof in lieu of condemnation. Except as set forth on Schedule 3.05, none of the Mortgaged Property or any interest therein is subject to any right of first refusal, option or other contractual right to purchase any such Mortgaged Property or interest therein. Section 3.06. Litigation and Environmental Matters. (a) There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower, threatened against or affecting the Borrower or any of the Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, would, individually or in the aggregate, result in a Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve any of the Loan Documents or the Loan Transactions. (b) Except for the Disclosed Matters and except with respect to any other matters that, individually or in the aggregate, would not result in a Material Adverse Effect, neither the Borrower or any of the Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability or has received any request for information from a Governmental Authority under any Environmental Law, (iii) has received notice of any claim with respect to any Environmental Liability, (iv) knows of any past or present facts or circumstances that are reasonably likely to result in Environmental Liability, or (v) knows of investigation or threatened investigation or judicial or administrative proceeding with respect to any of the foregoing. (c) Except for the Disclosed Matters, none of the property currently owned, leased or operated by the Borrower or by its Subsidiaries is, or as a result of the Loan Transactions and other transactions contemplated by the Purchase Agreement would be, subject to (i) any state or local Environmental Laws which would impose restrictions on the use of such property or require notice, disclosure or advance approval prior to such transactions, or (ii) any liens under any Environmental Laws. Section 3.07. Compliance with Laws and Agreements. Except for the Disclosed Matters relating to Section 3.06(b) and (c), each of the Borrower and the Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, would not result in a Material Adverse Effect. No Default has occurred and is continuing. Section 3.08. Investment and Holding Company Status. Neither the Borrower nor any of the Subsidiaries is (a) an "investment company" as defined in, or subject to regulation under, the Investment Company Act of 1940 or (b) a "holding company" as defined in, or subject to regulation under, the Public Utility Holding Company Act of 1935. Section 3.09. Taxes. The Borrower and each of the Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) any Taxes that are being contested in good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so would not result in a Material Adverse Effect. Section 3.10. ERISA. No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, would result in a Material Adverse Effect. Neither the Borrower nor any ERISA Affiliate has engaged in a transaction with respect to any employee benefit plan that would reasonably be expected to result in any material liability to the Borrower or any ERISA Affiliate pursuant to Section 4069 of ERISA. Schedule 3.10(a) sets forth a complete list of the U.S. Company Benefit Plans meeting the criteria set forth therein. The Borrower shall provide a complete list of Foreign Company Benefit Plans meeting the criteria set forth in Schedule 3.10(a) as soon as reasonably practicable following the date hereof. The Borrower has heretofore made available to the Lenders or their Related Parties, either directly or through its public Securities and Exchange Commission filings, true and complete copies of each U.S. Company Benefit Plan and any amendments thereto except as otherwise set forth on Schedule 3.10(a) and the following related documents: (i) the actuarial report and Form 5500 for such U.S. Company Benefit Plan (if applicable) for each of the last two years, (ii) the most recent determination letter from the Internal Revenue Service (if applicable) for such U.S. Company Benefit Plan and (iii) the most recent summary plan description for such U.S. Company Benefit Plan and any material modifications thereto (if any). Except as set forth in Schedule 3.10(a), there is no formal arrangement or commitment, whether legally binding or not, to create any additional Borrower Benefit Plan or to amend, modify or change any existing Borrower Benefit Plan. Except as set forth in Schedule 3.10(b) and except as would not, individually or in the aggregate, have a Material Adverse Effect, with respect to the Borrower Benefit Plans (i) each Borrower Benefit Plan has been operated and administered substantially in accordance with its terms and applicable laws including, but not limited to ERISA and the Code, (ii) each Borrower Benefit Plan intended to be "qualified" within the meaning of Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service stating that it is so qualified, and, to the Borrower's knowledge, there are no existing circumstances or any events that have occurred that would reasonably be expected to adversely affect the qualified status of such Borrower Benefit Plan, (iii) no liability under Title IV has been incurred by the Borrower, its Subsidiaries or any ERISA Affiliate that has not been satisfied in full, and no condition exists that presents a risk to the Borrower, its Subsidiaries or any ERISA Affiliate of incurring a liability thereunder (other than liability for benefits or premiums payable to the PBGC) arising in the ordinary course that are not yet due), (iv) no Borrower Benefit Plan provides benefits, including, without limitation, death or medical benefits (whether or not insured), with respect to current or former employees or directors of the Borrower or its Subsidiaries beyond their retirement or other termination of service, other than (A) coverage mandated by applicable law, (B) death benefits or retirement benefits under any "employee pension plan" (as defined in Section 3(2) of ERISA), (C) deferred compensation benefits accrued as liabilities on the books of the Borrower or its Subsidiaries, (D) benefits the full cost of which are borne by the current or former employee or director (or his or her beneficiary), (E) certain retiree medical benefit plans, (F) benefits under certain disability plans or (G) benefits under certain life insurance plans, each of (E), (F) and (G) designated as such on Schedule 3.10(b), (v) no Borrower Benefit Plan is a "multiemployer pension plan" (as defined in Section 3(37) of ERISA), (vi) all contributions or other amounts payable by the Borrower or its Subsidiaries as of the date of this Agreement with respect to each Borrower Benefit Plan in respect of current or prior plan years have been paid or accrued in accordance with GAAP and Section 412 of the Code, (vii) no "prohibited transaction" within the meaning of Section 4975 of the Code or Section 406 of ERISA has occurred with respect to which the Borrower may incur material liability or may be otherwise materially damaged and (viii) to the Borrower's knowledge, there are no pending, threatened or anticipated claims (other than routine claims for benefits) by, on behalf of or against any of the Borrower Benefit Plan or any trusts related thereto. Section 3.11. Disclosure. The Borrower has disclosed to the Lenders or their Related Parties all agreements, instruments and corporate or other restrictions to which the Borrower or any of the Subsidiaries is subject, and all other matters known to any of them (other than matters of a general economic nature), that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. The reports, financial statements, certificates or other information furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender or any of their Related Parties in connection with the negotiation of this Agreement or any other Loan Document or delivered hereunder or thereunder (as modified or supplemented by other information so furnished), taken as a whole, do not contain any material misstatement of fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, provided that with respect to projected financial information, the Borrower represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time. The Administrative Agent and the Lenders acknowledge that actual results during any period or periods covered by such projected financial information may differ therefrom and such differences may be material. Section 3.12. Subsidiaries. Schedule 3.12 sets forth the name of, and the ownership interest of the Borrower in, each Subsidiary and identifies each Subsidiary that is a Subsidiary Loan Party, in each case as of the Effective Date. Section 3.13. Insurance. Schedule 3.13 sets forth a description of all insurance maintained by or on behalf of the Borrower and the Subsidiaries as of the Effective Date. As of the Effective Date, all premiums in respect of such insurance that are required to have been paid have been paid. The Borrower believes that the insurance maintained by or on behalf of the Borrower and the Subsidiaries is adequate in all material respects. Section 3.14. Labor Matters. As of the Effective Date, there are no material strikes, lockouts or slowdowns against the Borrower or any Subsidiary pending or, to the knowledge of the Borrower, threatened. Except as would not result in a Material Adverse Effect, (a) the hours worked by and payments made to employees of the Borrower and the Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters and (b) the consummation of the Loan Transactions will not give rise to any right of termination or right of renegotiation on the part of any union under any collective bargaining agreement to which the Borrower or any Subsidiary is bound. Except as set forth in Schedule 3.14, (i) no current or former employee, officer, director, or consultant of the Borrower or any of its Subsidiaries is entitled to any benefit, payment, forgiveness of indebtedness or accelerated vesting of any bonus, retirement, severance, change in control, job security or similar benefit or any other enhanced benefit as a result of the Loan Transactions and the transactions contemplated by the Purchase Agreement, whether alone or in connection with any other event and (ii) the Borrower is not a party to any agreement, whether written or oral, (A) that would result in any payments that may be considered to be "parachute payments" under Section 280G of the Code, whether or not such compensation would be deemed to be reasonable compensation for services rendered or (B) that would require the Borrower or any of its Subsidiaries to make any payments that would fail to be deductible under Section 162(m) or any other provision of the Code. Article IV Conditions Section 4.01. Effective Date. The obligations of the Lenders to make Loans hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 10.02): (a) The Administrative Agent (or its counsel) shall have received from the Borrower, the Collateral Agent and each Lender either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement. (b) The Administrative Agent shall have received a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of each of (i) Bryan Cave LLP, counsel for the Borrower, substantially in the form of Exhibit B-1, and (ii) local counsel in each jurisdiction where a Mortgaged Property is located, substantially in the form of Exhibit B-2, and, in the case of each such opinion required by this paragraph, covering such other matters relating to the Loan Parties, the Loan Documents or the Loan Transactions as the Required Lenders shall reasonably request. The Borrower hereby requests such counsel to deliver such opinions. (c) The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of each Loan Party, the authorization of the Loan Transactions and any other legal matters relating to the Loan Parties, the Loan Documents or the Loan Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel. (d) The Administrative Agent shall have received a certificate, dated the Effective Date and signed by the President, a Vice President or a Financial Officer of the Borrower, confirming compliance with the conditions set forth in paragraphs (a) and (b) of Section 4.02. (e) The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel) required to be reimbursed or paid by any Loan Party hereunder or under any other Loan Document. (f) The Collateral and Guarantee Requirement shall have been satisfied and the Administrative Agent shall have received a completed Perfection Certificate dated the Effective Date and signed by an executive officer or Financial Officer of the Borrower, together with all attachments contemplated thereby, including the results of a search of the Uniform Commercial Code (or equivalent) filings made with respect to the Loan Parties (including any Subsidiary Loan Parties formed in connection with or resulting from the Acquisition) in the jurisdictions contemplated by the Perfection Certificate and copies of the financing statements (or similar documents) disclosed by such search and evidence reasonably satisfactory to the Administrative Agent that the Liens indicated by such financing statements (or similar documents) are permitted by Section 6.02 or have been released. (g) The Administrative Agent shall have received evidence that the insurance required by Section 5.07 and the Security Documents is in effect. (h) The Administrative Agent shall have been afforded the timely opportunity to review all other documentation relating to the Loan Transactions and the other transactions contemplated hereby and shall be reasonably satisfied in all respects with such documentation. (i) There shall not have occurred any material adverse change in the business, assets, operations, properties, financial condition, contingent liabilities or prospects of the Borrower or the Borrower and its subsidiaries, taken as a whole, since September 30, 2001. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 10.02) at or prior to 5:00 p.m., New York City time, on November 13, 2001, (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time). Section 4.02. Each Borrowing. Except as provided in Section 4.03, the obligation of each Lender to make a Loan on the occasion of any Borrowing is subject to receipt of the request therefor in accordance herewith and to the satisfaction of the following conditions: (a) The representations and warranties of each Loan Party set forth in the Loan Documents shall be true and correct in all material respects on and as of the date of such Borrowing, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects as to such earlier date). (b) At the time of and immediately after giving effect to such Borrowing, (i) no Default shall have occurred and be continuing and (ii) each of the conditions specified in Section 4.01 shall be satisfied (or waived in accordance with Section 10.02). Each Borrowing shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section. Section 4.03. Initial $30,000,000 of Borrowings. Notwithstanding Section 4.01 and Section 4.02, and notwithstanding any other provision of this Agreement (including any provision of Article VII that would otherwise cause a termination of the Commitments), the obligation of the Lenders to make initial Loans in an aggregate principal amount of $30,000,000 shall be subject to no conditions whatsoever other than compliance by the Borrower with the requirements of Sections 2.02, 2.03, 2.05 and 2.07(e). Article V Affirmative Covenants Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full the Borrower covenants and agrees with the Lenders that: Section 5.01. Financial Statements and Other Information. The Borrower will furnish to the Administrative Agent and each Lender: (a) within 90 days after the end of each fiscal year of the Borrower, its audited consolidated balance sheet and related statements of operations, stockholders' equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by KPMG LLP or other independent public accountants of recognized national standing (without a "going concern" or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly, in all material respects, the consolidated financial condition and results of operations of the Borrower and the Subsidiaries on a consolidated basis in accordance with GAAP consistently applied; (b) within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, its unaudited consolidated balance sheet and related statements of operations, stockholders' equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the consolidated financial condition and results of operations of the Borrower and the Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes; (c) within 10 Business Days after the end of each of the first two months of each fiscal quarter of the Borrower, its unaudited consolidated balance sheet and related statements of operations and cash flows as of the end of and for such month and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly, in all material respects, the consolidated financial condition and results of operations of the Borrower and the Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes; (d) concurrently with any delivery of financial statements under paragraph (a), (b) or (c) above, a certificate of a Financial Officer of the Borrower (i) certifying, to such Financial Officer's knowledge after due inquiry, as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Sections 6.12, 6.13, 6.14 and 6.15 and (iii) stating whether any change in GAAP or in the application thereof has occurred since the date of the Borrower's audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate; (e) concurrently with any delivery of financial statements under paragraph (a) above, a certificate of the accounting firm that reported on such financial statements stating whether they obtained knowledge during the course of their examination of such financial statements of any Default (which certificate may be limited to the extent required by accounting rules or guidelines); (f) prior to the commencement of each fiscal year of the Borrower, a detailed consolidated budget for such fiscal year (including a projected consolidated balance sheet and related statements of projected operations and cash flow as of the end of and for such fiscal year and setting forth any material assumptions used for purposes of preparing such budget) and, promptly when available, any significant revisions of such budget; (g) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Borrower or any Subsidiary with the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, or distributed by the Borrower to its public stockholders generally, as the case may be; (h) on the sixth Business Day of each calendar month, a detailed report of the Consolidated Backlog for such month, measured as of the close of business on the prior Business Day; and (i) promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Borrower or any Subsidiary, or compliance with the terms of any Loan Document, as the Administrative Agent or any Lender may reasonably request. Section 5.02. Notices of Material Events. The Borrower will furnish to the Administrative Agent and each Lender written notice of the following promptly upon a Financial Officer of the Borrower obtaining knowledge thereof: (a) the occurrence of any Default; (b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Borrower or any Affiliate thereof that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect; (c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Borrower and the Subsidiaries in an aggregate amount exceeding $2,500,000; and (d) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect. Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto. Section 5.03. Information Regarding Collateral. (a) The Borrower will furnish to the Administrative Agent prompt written notice of any change (i) in any Loan Party's corporate name or in any trade name used to identify it in the conduct of its business or in the ownership of its properties, (ii) in the location of any Loan Party's chief executive office, its principal place of business, any office in which it maintains books or records relating to Collateral owned by it or any office or facility at which Collateral owned by it is located (including the establishment of any such new office or facility), (iii) in any Loan Party's identity, jurisdiction of organization or corporate structure or (iv) in any Loan Party's Federal Taxpayer Identification Number. The Borrower agrees not to effect or permit any change referred to in the preceding sentence unless all filings have been made, or will have been made within any statutory period, under the Uniform Commercial Code or otherwise that are required in order for the Administrative Agent to continue at all times following such change to have a valid, legal and perfected security interest in all the Collateral for the benefit of the Secured Parties. The Borrower also agrees promptly to notify the Administrative Agent if any material portion of the Collateral is damaged or destroyed. (b) Each year, at the time of delivery of annual financial statements with respect to the preceding fiscal year pursuant to paragraph (a) of Section 5.01, the Borrower shall deliver to the Administrative Agent a certificate of a Financial Officer of the Borrower (i) setting forth the information required pursuant to Section 2 of the Perfection Certificate or confirming that there has been no change in such information since the date of the Perfection Certificate delivered on the Effective Date or the date of the most recent certificate delivered pursuant to this Section and (ii) certifying that all Uniform Commercial Code financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations, including all refilings, rerecordings and reregistrations, containing a description of the Collateral have been filed of record in each governmental, municipal or other appropriate office in each jurisdiction identified pursuant to clause (i) above to the extent necessary to protect and perfect the security interests under the Security Agreement for a period of not less than 18 months after the date of such certificate (except as noted therein with respect to any continuation statements to be filed within such period). Section 5.04. Existence; Conduct of Business. The Borrower will, and will cause each of the Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, contracts, licenses, permits, privileges, franchises, patents, copyrights, trademarks and trade names material to the conduct of the business of the Borrower and its Subsidiaries, taken as a whole, provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03 or any sale of assets permitted under Section 6.05; provided, further, that neither Borrower nor any of its Subsidiaries shall be obligated to maintain any of the foregoing assets in the event that the Board of Directors of Borrower adopts a resolution to the effect that the maintenance of such asset is no longer necessary or desirable in the conduct of the business of the Borrower and its Subsidiaries. Section 5.05. Payment of Obligations. The Borrower will, and will cause each of the Subsidiaries to, pay its Indebtedness and other obligations, including Tax liabilities, before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP, (c) such contest effectively suspends collection of the contested obligation and the enforcement of any Lien securing such obligation and (d) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect. Section 5.06. Maintenance of Properties. The Borrower will, and will cause each of the Subsidiaries to, keep and maintain all property material to the conduct of the business of the Borrower and the Subsidiaries, taken as a whole, in good working order and condition, ordinary wear and tear excepted. Section 5.07. Insurance. The Borrower will, and will cause each of the Subsidiaries to, maintain, with financially sound and reputable insurance companies (a) insurance in such amounts (with no greater risk retention) and against such risks as are customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations and (b) all insurance required to be maintained pursuant to the Security Documents. The Borrower will furnish to the Lenders, upon request in writing of the Administrative Agent, information in reasonable detail as to the insurance so maintained. Section 5.08. Casualty and Condemnation. The Borrower (a) will furnish to the Administrative Agent and the Lenders prompt written notice of any casualty or other insured damage to any material portion of any Collateral or the commencement of any action or proceeding for the taking of any Collateral or any part thereof or interest therein under power of eminent domain or by condemnation or similar proceeding and (b) will cause the Net Proceeds of any such event (whether in the form of insurance proceeds, condemnation awards or otherwise) to be applied in accordance with the applicable provisions of the Security Documents. Section 5.09. Books and Records; Inspection and Audit Rights. The Borrower will, and will cause each of the Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all material dealings and transactions in relation to its business and activities. The Borrower will, and will cause each of the Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and at such reasonable intervals as may be reasonably requested. Section 5.10. Compliance with Laws. The Borrower will, and will cause each of the Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property, except where the failure to do so, individually or in the aggregate, would not result in a Material Adverse Effect. Section 5.11. Use of Proceeds. The proceeds of the Loans will be used only for general corporate purposes, including the payment of fees and expenses of the Administrative Agent and the Lenders and their Affiliates in connection with the transactions. No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X. Section 5.12. Additional Subsidiaries. If any additional Subsidiary is formed or acquired after the Effective Date, the Borrower will, within ten (10) Business Days after such Subsidiary is formed or acquired, notify the Administrative Agent and the Lenders thereof and cause the Collateral and Guarantee Requirement to be satisfied with respect to such Subsidiary (if it is a Subsidiary Loan Party) and with respect to any Equity Interest in or Indebtedness of such Subsidiary owned by or on behalf of any Loan Party. Section 5.13. Further Assurances; Transfer of Joint Venture Stock. (a) The Borrower will, and will cause each Subsidiary Loan Party to, execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements, fixture filings, mortgages, deeds of trust and other documents), that may be required under any applicable law, or which the Administrative Agent or the Required Lenders may reasonably request, to cause the Collateral and Guarantee Requirement to be and remain satisfied, all at the expense of the Loan Parties. The Borrower also agrees to provide to the Administrative Agent, from time to time upon request, evidence reasonably satisfactory to the Administrative Agent as to the perfection and priority of the Liens created or intended to be created by the Security Documents. (b) If any material assets (including any real property or improvements thereto or any interest therein) are acquired by the Borrower or any Subsidiary Loan Party after the Effective Date (other than assets constituting Collateral under the Security Agreement or the Pledge Agreement that become subject to the Lien of the Security Agreement or the Pledge Agreement upon acquisition thereof), the Borrower will notify the Administrative Agent and the Lenders thereof, and, if requested by the Administrative Agent or the Required Lenders, the Borrower will cause such assets to be subjected to a Lien securing the Revolver Obligations and will take, and cause the Subsidiary Loan Parties to take, such actions as shall be necessary or reasonably requested by the Administrative Agent to grant and perfect such Liens, including actions described in paragraph (a) of this Section, all at the expense of the Loan Parties. (c) The Borrower will, and will cause each applicable Subsidiary to, execute any and all further documents, financing statements, agreements and instruments, and take all such further actions that may be required under any applicable law, or which the Administrative Agent or the Required Lenders may reasonably request, to cause the transfer of all the Joint Venture Stock from the Borrower to MEMC International, Inc. no later than fifteen (15) Business Days (seventy-five (75) Business Days in the case of MEMC Kulim Electronic Materials, Sdn. Bhd.) after the Effective Date. Article VI Negative Covenants Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full, the Borrower covenants and agrees with the Lenders that: Section 6.01. Indebtedness; Certain Equity Securities. (a) The Borrower will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except: (i) Indebtedness created under the Loan Documents and the Indenture Documentation and any Indebtedness evidenced by the Italian Notes; (ii) Indebtedness existing (or incurred pursuant to contractual loan commitments existing) on the Effective Date and set forth in Schedule 6.01 and extensions, renewals, refinancings and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof (or commitments therefor) or result in an earlier maturity date or decreased weighted average life thereof; (iii) Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary; (iv) Guarantees by the Borrower and by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary, provided that Guarantees by the Borrower or any Subsidiary Loan Party of Indebtedness of any Subsidiary that is not a Loan Party shall be subject to Section 6.04; (v) Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations (provided that such Indebtedness is incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement) and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals, refinancings and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof, provided that the aggregate principal amount of Indebtedness permitted by this clause (v) shall not exceed $5,000,000 at any time outstanding; (vi) Indebtedness of the Borrower or any Subsidiary in respect of workers' compensation claims, self-insurance obligations, performance bonds, surety, appeal or similar bonds and completion guarantees provided by the Borrower and the Subsidiaries in the ordinary course of their business, provided that upon the incurrence of Indebtedness with respect to reimbursement type obligations regarding workers' compensation claims, such obligations are reimbursed within 30 days following such drawing or incurrence; (vii) in each case with the consent of the Required Lenders to be given or withheld in their absolute discretion, Indebtedness in respect of a Permitted Receivables Financing, provided that the Net Proceeds resulting from the sale, transfer or other disposition of Receivables in connection with such Permitted Receivables Financing are applied in accordance with Section 2.08(c); (viii) Indebtedness of the Borrower or any Subsidiary that was (A) Indebtedness of any other Person existing at the time such other Person was merged with or became a Subsidiary, including Indebtedness incurred in connection with, or in contemplation of, such other Person's merging with or becoming a Subsidiary, and extensions, renewals, refinancings and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof or result in an earlier maturity date or decreased weighted average life thereof, provided that the aggregate principal amount of Indebtedness permitted under this clause (viii) shall not exceed $5,000,000 at any time outstanding; (ix) non-interest bearing Indebtedness not for borrowed money, in the nature of customer deposits; and (x) other unsecured Indebtedness in an aggregate principal amount not exceeding $5,000,000 at any time outstanding, provided that the aggregate principal amount of Indebtedness of the Subsidiaries that are not Subsidiary Loan Parties permitted by this clause (x) shall not exceed $5,000,000 at any time outstanding. (b) The Borrower will not, and will not permit any Subsidiary to, issue any preferred stock or other preferred Equity Interests, except that (i) the Borrower may issue the Cumulative Preferred Stock; (ii) the Borrower may issue preferred stock or other preferred Equity Interests of the Borrower that do not require mandatory cash dividends or redemptions and do not provide for any right on the part of the holder to require redemption, repurchase or repayment thereof, in each case prior to the date that is 180 days after the Maturity Date and (iii) the Borrower or any Subsidiary may issue directors' qualifying shares or shares required by applicable law to be held by a Person other than the Borrower or any Subsidiary. Section 6.02. Liens. The Borrower will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except: (i) Liens created under the Loan Documents and the Indenture Documentation or to secure the Italian Notes; (ii) Permitted Encumbrances; (iii) any Lien on any property or asset of the Borrower or any Subsidiary existing on the Effective Date and set forth in Schedule 6.02, provided that (i) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations that it secures on the Effective Date and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof; any Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the Effective Date prior to the time such Person becomes a Subsidiary, provided that (A) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (B) such Lien shall not apply to any other property or assets of the Borrower or any Subsidiary and (C) such Lien shall secure only those obligations that it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof; (iv) Liens on fixed or capital assets acquired, constructed or improved by the Borrower or any Subsidiary, provided that (A) such Liens secure Indebtedness permitted by clause (v) of Section 6.01(a), (B) such security interests and the Indebtedness secured thereby are incurred prior to or within 180 days after such acquisition or the completion of such construction or improvement, (C) the Indebtedness secured thereby does not exceed 100% of the cost of acquiring, constructing or improving such fixed or capital assets and (D) such security interests shall not apply to any other property or assets of the Borrower or any Subsidiary; (v) sales of Receivables and Related Property (or undivided interests therein) permitted under Section 6.05(c) and Liens on Receivables of a Receivables Subsidiary granted in connection with any Permitted Receivables Financing; (vi) Liens arising solely by virtue of any statutory or common law provision relating to banker's liens, rights of setoff or similar rights; and (vii) statutory and common law Liens in favor of a landlord under leases to which Borrower or any Subsidiary is a party. Section 6.03. Fundamental Changes. (a) The Borrower will not, and will not permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing (i) any Person may merge with the Borrower in a transaction in which the surviving entity is a Person organized or existing under the laws of the United States of America, any State thereof or the District of Columbia and, if such surviving entity is not the Borrower, such Person expressly assumes, in writing, all the obligations of the Borrower, under the Loan Documents (such writing to be in form and substance satisfactory to the Administrative Agent and the Lenders), (ii) any Person may merge with any Subsidiary in a transaction in which the surviving entity is a Subsidiary and, if any party to such merger is a Subsidiary Loan Party, is a Subsidiary Loan Party and (iii) any Subsidiary (other than a Subsidiary Loan Party) may liquidate or dissolve if the Borrower determines in good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders, provided that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Sections 6.04 and 6.08. (b) The Borrower will not, and will not permit any of the Subsidiaries (other than a Receivables Subsidiary) to, engage to any material extent in any business other than businesses of the type conducted by the Borrower and the Subsidiaries on the Effective Date and businesses reasonably related thereto. (c) No Receivables Subsidiary will engage in any business other than the purchase and sale or other transfer of Receivables (or participation interests therein) in connection with any Permitted Receivables Financing, together with activities directly related thereto. (d) The Borrower will not permit MEMC International, Inc. to engage in any business or activity other than (i) the ownership of all of the outstanding shares of capital stock of MEMC Korea Company, MEMC Kulim Electronic Materials, Sdn. Bhd. and Taisil Electronic Materials Corporation owned by MEMC International, Inc. on or after the Effective Date (the "Joint Venture Stock") and activities incidental thereto, and (ii) miscellaneous payroll and benefits activities relating to certain expatriate employees and certain management employees in foreign locations of the Borrower and its Subsidiaries. MEMC International, Inc. will not own or acquire any assets (other than the Joint Venture Stock) or incur any liabilities (other than liabilities under the Loan Documents, obligations under any stock option plans or other benefit plans for management or employees of the Borrower and its Subsidiaries, obligations under the shareholder or joint venture agreements and related ancillary agreements with respect to MEMC Korea Company, MEMC Kulim Electronic Materials, Sdn. Bhd. and/or Taisil Electronic Materials Corporation, liabilities imposed by law, including tax liabilities, and other liabilities incidental to its existence and permitted business and activities). The Borrower will not permit MEMC International, Inc. to sell, transfer, lease or otherwise dispose of any or all of the Joint Venture Stock. Section 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. The Borrower will not, and will not permit any of the Subsidiaries to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to such merger) any Equity Interests in or evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit, except: (a) Permitted Investments; (b) investments and guarantees of Indebtedness of Foreign Subsidiaries existing on the Effective Date hereof and set forth on Schedule 6.04; (c) investments by the Borrower and the Subsidiaries that are Loan Parties in Equity Interests in their respective Subsidiaries that are Loan Parties and investments by Subsidiaries that are not Loan Parties in Equity Interests in their respective Subsidiaries, provided that any such Equity Interests held by a Loan Party shall be pledged pursuant to the Pledge Agreement (subject to the limitations applicable to voting stock of a Foreign Subsidiary referred to in the definition of the term "Collateral and Guarantee Requirement"); (d) loans or advances made by the Borrower to any Subsidiary and made by any Subsidiary to the Borrower or any other Subsidiary, provided that any such loans and advances made by a Loan Party shall be evidenced by a promissory note pledged pursuant to the Pledge Agreement; (e) Guarantees constituting Indebtedness permitted by Section 6.01 of Indebtedness of the Borrower or any Subsidiary Loan Party; (f) investments received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business; (g) Permitted Acquisitions, provided that the sum of all consideration paid or otherwise delivered in connection with Permitted Acquisitions (including the principal amount of any Indebtedness issued as deferred purchase price and the fair market value of any other non-cash consideration) plus the aggregate principal amount of all Indebtedness otherwise incurred or assumed in connection with, or resulting from, Permitted Acquisitions (including Indebtedness of any acquired Persons outstanding at the time of the applicable Permitted Acquisition) shall not exceed, on a cumulative basis subsequent to the Effective Date, $5,000,000; (h) any investments in or loans to any other Person received as noncash consideration for sales, transfers, leases and other dispositions permitted by Section 6.05; (i) Guarantees by the Borrower and the Subsidiaries of leases entered into by any Subsidiary as lessee; (j) extensions of credit in the nature of accounts receivable or notes receivable in the ordinary course of business; (k) investments in payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business; (l) loans or advances to employees made in the ordinary course of business consistent with prudent business practice and not exceeding $500,000 in the aggregate outstanding at any one time; (m) investments in or acquisitions of stock, obligations or securities received in settlement of debts created in the ordinary course of business and owing to the Borrower or any Subsidiary or in satisfaction of judgments; (n) investments in the form of Hedging Agreements permitted under Section 6.07; (o) investments by the Borrower or any Subsidiary in (i) the capital stock of a Receivables Subsidiary and (ii) other interests in a Receivables Subsidiary, in each case to the extent determined by the Borrower in its judgment to be reasonably necessary in connection with or required by the terms of the Permitted Receivables Financing; (p) investments, loans, advances, guarantees and acquisitions resulting from a foreclosure by the Borrower or any Subsidiary with respect to any secured investment or other transfer of title with respect to any secured investment in default; (q) investments, loans, advances, guarantees and acquisitions the consideration for which consists solely of shares of common stock of the Borrower; (r) investments in prepaid expenses, negotiable instruments held for collection and lease, utility, workers' compensation, performance and other similar deposits in the ordinary course of business; and (s) other investments in an aggregate amount not to exceed $2,500,000 at any time outstanding. Section 6.05. Asset Sales. The Borrower will not, and will not permit any of the Subsidiaries to, sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it, nor will the Borrower permit any of the Subsidiaries to issue any additional Equity Interest in such Subsidiary, except: (a) sales of inventory, used or surplus equipment and Permitted Investments in the ordinary course of business and the periodic clearance of aged inventory; (b) sales, transfers and dispositions to the Borrower or a Subsidiary, provided that any such sales, transfers or dispositions involving a Subsidiary that is not a Loan Party shall be made in compliance with Section 6.09; (c) the Borrower and the Subsidiaries may sell, without recourse (other than Standard Securitization Undertakings and retained interests), Receivables to a Receivables Subsidiary, and any Receivables Subsidiary may sell Receivables and Related Property or an undivided interest therein to any other Person, pursuant to any Permitted Receivables Financing, and convert or exchange Receivables and Related Property into or for notes receivable in connection with the compromise or collection thereof; and (d) sales, transfers and other dispositions of assets (other than Equity Interests in a Subsidiary) that are not permitted by any other clause of this Section, provided that the aggregate fair market value of all assets sold, transferred or otherwise disposed of in reliance upon this clause (d) shall not exceed $3,000,000 during any fiscal year of the Borrower; provided that all sales, transfers, leases and other dispositions permitted hereby (other than those permitted by clause (b) above) shall be made for fair value and for consideration of at least 80% cash or cash equivalents. Section 6.06. Sale and Leaseback Transactions. The Borrower will not, and will not permit any of the Subsidiaries to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred, except for any such sale of any fixed or capital assets that is made for cash consideration in an amount not less than the cost of such fixed or capital asset and is consummated within 180 days after the Borrower or such Subsidiary acquires or completes the construction of such fixed or capital asset. Section 6.07. Hedging Agreements. The Borrower will not, and will not permit any of the Subsidiaries to, enter into any Hedging Agreement, other than Hedging Agreements entered into in the ordinary course of business to hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct of its business or the management of its liabilities. Section 6.08. Restricted Payments; Certain Payments of Indebtedness. (a) The Borrower will not, and will not permit any Subsidiary to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except that (i) the Borrower may declare and pay dividends with respect to its capital stock payable solely in additional shares of its capital stock, (ii) Subsidiaries may declare and pay dividends ratably with respect to their capital stock and (iii) the Borrower may make Restricted Payments, not exceeding $200,000 during any fiscal year, pursuant to and in accordance with stock option plans or other benefit plans for directors, management or employees of the Borrower and the Subsidiaries, including the redemption or purchase of capital stock of the Borrower held by former directors, management or employees of the Borrower or any Subsidiary following termination of their employment. (b) The Borrower will not, and will not permit any Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness, except: (i) payment of Indebtedness created under the Loan Documents; (ii) payment of regularly scheduled interest and principal payments as and when due in respect of any Indebtedness permitted under the Loan Documents; (iii) refinancings of Indebtedness to the extent permitted by Section 6.01; (iv) payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; and (v) payments in respect of any Permitted Receivables Facility. Section 6.09. Transactions with Affiliates. The Borrower will not, and will not permit any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) transactions that are at prices and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be obtained on an arm's-length basis from unrelated third parties, (b) transactions between or among the Borrower and the Subsidiary Loan Parties not involving any other Affiliate, (c) to pay management, consulting and advisory fees to TPG or its Affiliates pursuant to any financial advisory, financing, underwriting or placement agreement or in respect of other investment banking activities, including in connection with acquisitions or divestitures, (d) payments of fees and expenses to TPG and its Affiliates in connection with the Loan Transactions and the transactions contemplated under the Purchase Agreement, (e) any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment arrangements, stock options and stock ownership plans approved by the board of directors of the Borrower, (f) the grant of stock options or similar rights to officers, employees, consultants and directors of the Borrower pursuant to plans approved by the board of directors of the Borrower and the payment of amounts or the issuance of securities pursuant thereto, (g) loans or advances to employees in the ordinary course of business consistent with prudent business practice, but in any event not to exceed $500,000 in the aggregate outstanding at any one time, and (h) any Restricted Payment permitted by Section 6.08. Section 6.10. Restrictive Agreements. The Borrower will not, and will not permit any Subsidiary to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its capital stock or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary, provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by any Loan Document, (ii) the foregoing shall not apply to restrictions and conditions existing on the Effective Date identified on Schedule 6.10 (but shall apply to any extension or renewal of, or any amendment or modification if it expands the scope of, any such restriction or condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness, (v) clause (a) of the foregoing shall not apply to customary provisions in leases, technology licenses, confidentiality agreements and other contracts or agreements restricting the assignment thereof and (vi) the foregoing shall not apply to restrictions or conditions imposed on a Receivables Subsidiary in connection with a Permitted Receivables Financing. Section 6.11. Amendment of Material Documents. (a) The Borrower will not, and will not permit any Subsidiary to, amend, modify or waive any of its rights under its certificate of incorporation, by-laws or other organizational documents or the Certificate of Designations, the Notes, the Indenture Documentation, the Warrants or the Warrant Certificate, to the extent that such amendment, modification or waiver would be materially adverse to the Lenders. (b) The Borrower will not, and will not permit any Subsidiary to, amend, modify or waive any of its rights under any Permitted Receivables Financing to the extent that such amendment, modification or waiver would be adverse to the Lenders. Section 6.12. Minimum Quarterly Consolidated EBITDA. The Borrower will not permit Consolidated EBITDA for any fiscal quarter to be less than the amount set forth opposite such fiscal quarter: - -------------------------------------------------------------------------------- QUARTER MINIMUM AMOUNT - -------------------------------------------------------------------------------- Fourth Quarter of 2001 negative $18.0 million - -------------------------------------------------------------------------------- First Quarter of 2002 negative $13.0 million - -------------------------------------------------------------------------------- Second Quarter of 2002 negative $10.0 million - -------------------------------------------------------------------------------- Third Quarter of 2002 zero - -------------------------------------------------------------------------------- Fourth Quarter of 2002 $8.0 million - -------------------------------------------------------------------------------- First Quarter of 2003 $10.0 million - -------------------------------------------------------------------------------- Second Quarter of 2003 $16.0 million - -------------------------------------------------------------------------------- Third Quarter of 2003 $19.0 million - -------------------------------------------------------------------------------- Fourth Quarter of 2003 $25.0 million - -------------------------------------------------------------------------------- First Quarter of 2004 $27.0 million - -------------------------------------------------------------------------------- Second Quarter of 2004 $30.0 million - -------------------------------------------------------------------------------- Third Quarter of 2004 $33.0 million - -------------------------------------------------------------------------------- Fourth Quarter of 2004 $35.0 million - -------------------------------------------------------------------------------- First Quarter of 2005 $37.0 million - -------------------------------------------------------------------------------- Second Quarter of 2005 $40.0 million - -------------------------------------------------------------------------------- Third Quarter of 2005 $42.0 million - -------------------------------------------------------------------------------- Fourth Quarter of 2005 $44.0 million - -------------------------------------------------------------------------------- First Quarter of 2006 $46.0 million - -------------------------------------------------------------------------------- Second Quarter of 2006 $48.0 million - -------------------------------------------------------------------------------- Third Quarter of 2006 $50.0 million - -------------------------------------------------------------------------------- Section 6.13. Minimum Monthly Consolidated Backlog. The Borrower will not permit Consolidated Backlog for any month to be less than the amount set forth opposite such month. Consolidated Backlog for any month shall, for the purposes of this Section 6.13, equal the arithmetic mean of the Consolidated Backlog for such month measured as of the close of business on each of the first five (5) Business Days in such month: - -------------------------------------------------------------------------------- MONTH MINIMUM AMOUNT - -------------------------------------------------------------------------------- October 2001 28.0 million square inches - -------------------------------------------------------------------------------- November 2001 29.0 million square inches - -------------------------------------------------------------------------------- December 2001 30.0 million square inches - -------------------------------------------------------------------------------- January 2002 30.0 million square inches - -------------------------------------------------------------------------------- February 2002 30.0 million square inches - -------------------------------------------------------------------------------- March 2002 31.0 million square inches - -------------------------------------------------------------------------------- April 2002 32.0 million square inches - -------------------------------------------------------------------------------- May 2002 32.0 million square inches - -------------------------------------------------------------------------------- June 2002 32.0 million square inches - -------------------------------------------------------------------------------- July 2002 36.0 million square inches - -------------------------------------------------------------------------------- August 2002 36.0 million square inches - -------------------------------------------------------------------------------- September 2002 36.0 million square inches - -------------------------------------------------------------------------------- October 2002 38.0 million square inches - -------------------------------------------------------------------------------- November 2002 38.0 million square inches - -------------------------------------------------------------------------------- December 2002 38.0 million square inches - -------------------------------------------------------------------------------- January 2003 49.0 million square inches - -------------------------------------------------------------------------------- February 2003 49.0 million square inches - -------------------------------------------------------------------------------- March 2003 49.0 million square inches - -------------------------------------------------------------------------------- April 2003 51.0 million square inches - -------------------------------------------------------------------------------- May 2003 51.0 million square inches - -------------------------------------------------------------------------------- June 2003 51.0 million square inches - -------------------------------------------------------------------------------- July 2003 51.0 million square inches - -------------------------------------------------------------------------------- August 2003 51.0 million square inches - -------------------------------------------------------------------------------- September 2003 51.0 million square inches - -------------------------------------------------------------------------------- October 2003 53.0 million square inches - -------------------------------------------------------------------------------- November 2003 53.0 million square inches - -------------------------------------------------------------------------------- December 2003 53.0 million square inches - -------------------------------------------------------------------------------- January 2004 58.0 million square inches - -------------------------------------------------------------------------------- February 2004 58.0 million square inches - -------------------------------------------------------------------------------- March 2004 58.0 million square inches - -------------------------------------------------------------------------------- April 2004 60.0 million square inches - -------------------------------------------------------------------------------- May 2004 60.0 million square inches - -------------------------------------------------------------------------------- June 2004 60.0 million square inches - -------------------------------------------------------------------------------- July 2004 60.0 million square inches - -------------------------------------------------------------------------------- August 2004 60.0 million square inches - -------------------------------------------------------------------------------- September 2004 60.0 million square inches - -------------------------------------------------------------------------------- October 2004 63.0 million square inches - -------------------------------------------------------------------------------- November 2004 63.0 million square inches - -------------------------------------------------------------------------------- December 2004 63.0 million square inches - -------------------------------------------------------------------------------- January 2005 68.0 million square inches - -------------------------------------------------------------------------------- February 2005 68.0 million square inches - -------------------------------------------------------------------------------- March 2005 68.0 million square inches - -------------------------------------------------------------------------------- April 2005 71.0 million square inches - -------------------------------------------------------------------------------- May 2005 71.0 million square inches - -------------------------------------------------------------------------------- June 2005 71.0 million square inches - -------------------------------------------------------------------------------- July 2005 71.0 million square inches - -------------------------------------------------------------------------------- August 2005 71.0 million square inches - -------------------------------------------------------------------------------- September 2005 71.0 million square inches - -------------------------------------------------------------------------------- October 2005 74.0 million square inches - -------------------------------------------------------------------------------- November 2005 74.0 million square inches - -------------------------------------------------------------------------------- December 2005 74.0 million square inches - -------------------------------------------------------------------------------- January 2006 74.0 million square inches - -------------------------------------------------------------------------------- February 2006 74.0 million square inches - -------------------------------------------------------------------------------- March 2006 74.0 million square inches - -------------------------------------------------------------------------------- April 2006 77.0 million square inches - -------------------------------------------------------------------------------- May 2006 77.0 million square inches - -------------------------------------------------------------------------------- June 2006 77.0 million square inches - -------------------------------------------------------------------------------- July 2006 77.0 million square inches - -------------------------------------------------------------------------------- August 2006 77.0 million square inches - -------------------------------------------------------------------------------- September 2006 77.0 million square inches - -------------------------------------------------------------------------------- October 2006 81.0 million square inches - -------------------------------------------------------------------------------- Section 6.14. Minimum Monthly Consolidated Revenue. The Borrower will not permit Consolidated Revenue for any month to be less than the amount set forth opposite such month: - -------------------------------------------------------------------------------- MONTH MINIMUM AMOUNT - -------------------------------------------------------------------------------- October 2001 $36.0 million - -------------------------------------------------------------------------------- November 2001 $37.0 million - -------------------------------------------------------------------------------- December 2001 $38.0 million - -------------------------------------------------------------------------------- January 2002 $38.5 million - -------------------------------------------------------------------------------- February 2002 $38.5 million - -------------------------------------------------------------------------------- March 2002 $38.5 million - -------------------------------------------------------------------------------- April 2002 $41.5 million - -------------------------------------------------------------------------------- May 2002 $41.5 million - -------------------------------------------------------------------------------- June 2002 $41.5 million - -------------------------------------------------------------------------------- July 2002 $46.0 million - -------------------------------------------------------------------------------- August 2002 $46.0 million - -------------------------------------------------------------------------------- September 2002 $46.0 million - -------------------------------------------------------------------------------- October 2002 $50.0 million - -------------------------------------------------------------------------------- November 2002 $51.0 million - -------------------------------------------------------------------------------- December 2002 $52.0 million - -------------------------------------------------------------------------------- January 2003 $52.0 million - -------------------------------------------------------------------------------- February 2003 $52.0 million - -------------------------------------------------------------------------------- March 2003 $52.0 million - -------------------------------------------------------------------------------- April 2003 $54.0 million - -------------------------------------------------------------------------------- May 2003 $54.0 million - -------------------------------------------------------------------------------- June 2003 $54.0 million - -------------------------------------------------------------------------------- July 2003 $55.0 million - -------------------------------------------------------------------------------- August 2003 $55.0 million - -------------------------------------------------------------------------------- September 2003 $55.0 million - -------------------------------------------------------------------------------- October 2003 $56.0 million - -------------------------------------------------------------------------------- November 2003 $56.0 million - -------------------------------------------------------------------------------- December 2003 $56.0 million - -------------------------------------------------------------------------------- January 2004 $61.0 million - -------------------------------------------------------------------------------- February 2004 $61.0 million - -------------------------------------------------------------------------------- March 2004 $61.0 million - -------------------------------------------------------------------------------- April 2004 $63.0 million - -------------------------------------------------------------------------------- May 2004 $63.0 million - -------------------------------------------------------------------------------- June 2004 $63.0 million - -------------------------------------------------------------------------------- July 2004 $65.0 million - -------------------------------------------------------------------------------- August 2004 $65.0 million - -------------------------------------------------------------------------------- September 2004 $65.0 million - -------------------------------------------------------------------------------- October 2004 $67.0 million - -------------------------------------------------------------------------------- November 2004 $67.0 million - -------------------------------------------------------------------------------- December 2004 $67.0 million - -------------------------------------------------------------------------------- January 2005 $70.0 million - -------------------------------------------------------------------------------- February 2005 $70.0 million - -------------------------------------------------------------------------------- March 2005 $70.0 million - -------------------------------------------------------------------------------- April 2005 $72.0 million - -------------------------------------------------------------------------------- May 2005 $72.0 million - -------------------------------------------------------------------------------- June 2005 $72.0 million - -------------------------------------------------------------------------------- July 2005 $74.0 million - -------------------------------------------------------------------------------- August 2005 $74.0 million - -------------------------------------------------------------------------------- September 2005 $74.0 million - -------------------------------------------------------------------------------- October 2005 $76.0 million - -------------------------------------------------------------------------------- November 2005 $76.0 million - -------------------------------------------------------------------------------- December 2005 $76.0 million - -------------------------------------------------------------------------------- January 2006 $78.0 million - -------------------------------------------------------------------------------- February 2006 $78.0 million - -------------------------------------------------------------------------------- March 2006 $78.0 million - -------------------------------------------------------------------------------- April 2006 $80.0 million - -------------------------------------------------------------------------------- May 2006 $80.0 million - -------------------------------------------------------------------------------- June 2006 $80.0 million - -------------------------------------------------------------------------------- July 2006 $82.0 million - -------------------------------------------------------------------------------- August 2006 $82.0 million - -------------------------------------------------------------------------------- September 2006 $82.0 million - -------------------------------------------------------------------------------- October 2006 $84.0 million - -------------------------------------------------------------------------------- Section 6.15. Capital Expenditures. The Borrower and its Subsidiaries shall not incur or make Capital Expenditures in an amount exceeding $15,000,000 during the fourth fiscal quarter of 2001, $45,000,000 during fiscal year 2002, $50,000,000 during fiscal year 2003, $55,000,000 during fiscal year 2004, $55,000,000 during fiscal year 2005, and $55,000,000 during fiscal year 2006. Article VII Events of Default If any of the following events ("Events of Default") shall occur: (a) the Borrower shall fail to pay any principal of any Loan when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise; (b) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three days; (c) any representation or warranty made or deemed made by or on behalf of the Borrower or any Subsidiary in or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, or in any certificate or other document furnished pursuant to or in connection with any Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made; (d) the Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02, 5.04 (with respect to the existence of the Borrower) or 5.11 or in Article VI; (e) any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in any Loan Document (other than those specified in clause (a), (b) or (d) of this Article), and such failure shall continue unremedied for a period of 30 days after notice thereof from the Administrative Agent to the Borrower (which notice will be given at the request of any Lender); (f) the Borrower or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable after giving effect to any applicable grace period with respect thereto; (g) any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity, provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness; (h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 45 days or an order or decree approving or ordering any of the foregoing shall be entered; (i) the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing; (j) the Borrower or any Subsidiary shall become unable, admit in writing its inability or fail generally to pay its debts as they become due; (k) one or more judgments for the payment of money in an aggregate amount in excess of $2,500,000 (net of amounts covered by insurance as to which the insurer has admitted liability in writing) shall be rendered against the Borrower, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any Subsidiary to enforce any such judgment; (l) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect; (m) any Lien purported to be created under any Security Document shall cease to be, or shall be asserted by any Loan Party not to be, a valid and perfected Lien on Collateral having, in the aggregate, a value in excess of $500,000, with the priority required by the applicable Security Document, except (i) as a result of the sale or other disposition of the applicable Collateral in a transaction permitted under the Loan Documents, (ii) any action taken by the Collateral Agent to release any such Lien in compliance with the provisions of this Agreement or any other Loan Document or (iii) as a result of the Collateral Agent's failure to maintain possession of any stock certificates, promissory notes or other instruments delivered to it under the Pledge Agreement; (n) any default or other event shall have occurred under any document governing any Permitted Receivables Financing if the effect of such default or other event is to cause the termination of such Permitted Receivables Financing; or (o) a Change in Control shall occur; then, and in every such event (other than an event with respect to the Borrower described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to the Borrower described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. Article VIII The Agents Each of the Lenders hereby irrevocably appoints each of the Agents as its agent and authorizes each Agent to take such actions on its behalf and to exercise such powers as are delegated to such Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto. Each bank serving as Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not an Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of banking, trust or other business with the Borrower or any Subsidiary or other Affiliate thereof as if it were not an Agent hereunder and may accept fees and other consideration from the Borrower for services in connection with the Loan Documents or otherwise without having to account for the same to the Lenders. Neither Agent shall have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, (a) neither Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) neither Agent shall have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that such Agent is required to exercise in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.02), and (c) except as expressly set forth in the Loan Documents, neither Agent shall have any duty to disclose, nor be liable for the failure to disclose, any information relating to the Borrower or any of the Subsidiaries that is communicated to or obtained by either of the banks serving as Agent or any of their Affiliates in any capacity. Neither Agent shall be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 10.02) or otherwise in the absence of its own gross negligence or willful misconduct as determined in a final judgement by a court of competent jurisdiction. Neither Agent shall be deemed to have knowledge of any Default unless and until written notice thereof is given to such Agent by the Borrower or a Lender, and neither Agent shall be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, or the validity, perfection, or priority of any Lien created by any of the Security Documents, or (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to such Agent. Each Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. Each Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. Each Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts. Each Agent may perform any of and all its duties and exercise its rights and powers by or through any one or more sub-agents or attorneys-in-fact appointed by such Agent. Each Agent and any such sub-agent or attorney-in-fact may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent or attorney-in-fact and to the Related Parties of each such Agent and any such sub-agent or attorney-in-fact, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as an Agent. Subject to the appointment and acceptance of a successor Agent as provided in this paragraph, either Agent may resign at any time by notifying the Lenders and the Borrower and either Agent may be removed at any time with or without cause by the Required Lenders. Upon any such resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor. If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Agent gives notice of its resignation, then the retiring Agent may, on behalf of the Lenders, appoint a successor Agent that shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as Agent by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a successor Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After an Agent's resignation, the provisions of this Article and Section 10.03 shall continue in effect for the benefit of such retiring Agent, its sub-agents and attorneys-in-fact and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Agent. Each Lender acknowledges that it has, independently and without reliance upon either Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon either Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or related agreement or any document furnished hereunder or thereunder. Except for action expressly required of either of the Agents by the Loan Documents, each Agent shall in all cases be fully justified in failing or refusing to act under the Loan Documents unless it shall receive further assurances to its satisfaction from the Lenders of their indemnification obligations under Section 10.03(c) hereof in respect of such action. Without limiting the foregoing, neither of the Agents shall have any liability or responsibility with respect to the sufficiency of the documents furnished pursuant to Section 4.01 hereof and shall not be required to, and shall not, take any action to enforce any of its or the Lenders' rights under, nor waive or amend any provision of, this Agreement or any of the other Loan Documents or any collateral, nor give any notice or make any request or demand or filing thereunder, except in each instance as and to the extent instructed to do so by the Required Lenders, and neither of the Agents shall have any liability for failure to take any action in the absence of such instructions, provided that each Agent will promptly send to the Lenders and the other Agent a copy of each notice, request or other document delivered to such Agent pursuant to the terms of this Agreement and other Loan Documents and will take such actions contemplated by the Loan Documents as the Required Lenders may reasonably instruct, except that nothing herein or in any other Loan Document shall require any Agent to take any action that in the reasonable opinion of such Agent would be contrary to the terms of this Agreement or applicable law or subject such Agent to personal liability. Article IX Management Rights for Fund Lenders Section 9.01. Management Rights. (a) Borrower hereby agrees to confer upon each Fund Lender certain management rights so that the Loans may qualify as a "venture capital investment" within the meaning of Section 2510.3-101(d)(3)(i) of the Plan Assets Regulations. To the extent necessary, the Borrower shall amend its Certificate of Incorporation and By-laws to conform to the provisions of this Section 9.01. Therefore, each Fund Lender shall have the following rights and entitlements. (i) Each Fund Lender shall be entitled, from time to time, to make proposals, recommendations and suggestions to the Board of Directors of Borrower relating to the business and affairs of Borrower and its Subsidiaries. The Board of Directors shall consider in good faith all proposals, recommendations and suggestions made by each Fund Lender pursuant to the foregoing sentence; provided, however, that nothing in this Section shall obligate, or be deemed to obligate, the Board of Directors to adopt or implement any proposal, recommendation or suggestion made by or on behalf of such Fund Lender. (ii) Borrower shall permit each Fund Lender, at all reasonable times and at each Fund Lender's expense, to discuss the business and affairs of Borrower and its Subsidiaries with the Board of Directors and its officers and independent accountants (or their equivalents); provided, in all cases, that: (A) Such Fund Lender shall give at least two (2) Business Days prior written notice to an officer of Borrower identifying all Person(s) with whom such Fund Lender wishes to have discussions and specifying in reasonable detail the nature of the information sought from such Person(s) and the purpose(s) for which such Fund Lender wishes to obtain such information; (B) during any discussion or at any meeting between such Fund Lender and such Person(s), such Fund Lender shall not inquire into matters not specified in such notice; and (C) Borrower shall have the right to have a representative, in addition to the Person(s) being made available, present during any such discussion or meeting. (iii) Borrower shall permit each Fund Lender, at all reasonable times and at such Fund Lender's expense, to examine such books, records, documents and other written information in the possession of Borrower relating to the affairs of Borrower and its Subsidiaries as such Fund Lender may reasonably request; provided, in all cases, that such Fund Lender shall give at least two (2) Business Days prior written notice to Borrower describing in reasonable detail the books, records, documents and other written information which such Fund Lender wishes to examine and specifying the purpose(s) for which such Fund Lender wishes to make such examination. (iv) Borrower shall permit each Fund Lender, at all reasonable times and at such Fund Lender's expense, to visit and inspect the properties of Borrower and its Subsidiaries; provided, in all cases, that such Fund Lender shall give at least two (2) Business Days prior written notice to Borrower describing in reasonable detail the properties which such Fund Lender wishes to inspect and specifying the purpose(s) for which such Fund Lender wishes to make such inspection. (v) Borrower shall inform each Fund Lender in advance with respect to any significant corporate actions, including, without limitation, extraordinary dividends or distributions, mergers, acquisitions or dispositions of assets, issuances of significant amounts of debt or equity and material amendments to the Certificate of Incorporation or By-laws (or their equivalents) with respect to Borrower or its Subsidiaries, and provide such Fund Lender with the opportunity to consult with Borrower with respect to such actions. (vi) Each Fund Lender shall have the right to have a representative present at all meetings of the Board of Directors of the Borrower. (b) Each Fund Lender hereby agrees that it will not request or otherwise seek to obtain any information pursuant to the foregoing provisions, and will not use (or permit to be used) any information obtained pursuant to the foregoing provisions, except for lawful purposes relating solely to each Fund Lender's interest as a Lender. Without limitation of the foregoing, each Fund Lender hereby agrees that it will not use (or permit to be used) any information obtained in connection with the foregoing provisions in any manner which is unlawful or is adverse or detrimental to Borrower. As a condition to exercising their examination and inspection rights under Section 9.01(a)(iii) and (iv) above, each Fund Lender shall be required to comply with Borrower's normal requirements regarding health, safety, security and operational matters. Section 9.02. Termination; Transfer. (a) Anything in this Agreement or elsewhere to the contrary notwithstanding, all of Borrower's obligations under this Article IX shall automatically terminate with respect to any Fund Lender if (i) such Fund Lender shall fail for any reason to perform or observe in any material respect the agreement on its part to be performed or observed under Section 9.01(b), and (ii) such failure (if capable of being remedied) shall not be remedied within fifteen (15) Business Days after the date on which written notice thereof shall have been given to such Fund Lender by Borrower. (b) In the event a Fund Lender transfers all or any portion of its investment in Borrower to an affiliated entity that is intended to qualify as a venture capital operating company under the Plan Assets Regulations, such transferee shall be afforded the same rights afforded to such Fund Lender hereunder and shall be treated, for such purposes, as a third party beneficiary hereunder. Article X Miscellaneous Section 10.01. Notices. Except in the case of notices and other communications expressly permitted to be given by telephone, all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows: (a) if to the Borrower, to it at 501 Pearl Drive, St. Peter's, Missouri 63376, Attention of Treasurer (Telecopy No. (636) 474-5158); (b) if to the Administrative Agent, to Citicorp USA, Inc., 2 Penns Way, Suite 200, New Castle, DE 19720, Attention of David Grabar (Telecopy No. (302) 894-6120); (c) if to the Collateral Agent, to Citicorp USA, Inc., 2 Penns Way, Suite 200, New Castle, DE 19720, Attention of David Grabar (Telecopy No. (302) 894-6120); and (d) if to any Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire. Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt. Section 10.02. Waivers; Amendments. (a) No failure or delay by any Agent or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Agents and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan shall not be construed as a waiver of any Default, regardless of whether any Agent or any Lender may have had notice or knowledge of such Default at the time. (b) Neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except, in the case of this Agreement, pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or, in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent or the Collateral Agent, as applicable, and the Loan Party or Loan Parties that are parties thereto, in each case with the consent of the Required Lenders, provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender affected thereby, (iii) postpone the maturity of any Loan, or any date for the payment of any interest or fees payable hereunder, or reduce the amount of, waive or excuse any such scheduled payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby, (iv) change Section 2.15(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) change Section 2.10(f), without the written consent of each Lender, (vi) change any of the provisions of this Section or the percentage set forth in the definition of the term "Required Lenders" or any other provision of any Loan Document specifying the number or percentage of Lenders required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender, (vii) release any Subsidiary Loan Party from its Guarantee under the Guarantee Agreement (except as expressly provided in the Guarantee Agreement), or limit its liability in respect of such Guarantee, without the written consent of each Lender, (viii) except in strict accordance with the express provisions of the Security Documents, release all or any substantial part of the Collateral from the Liens of the Security Documents, without the written consent of each Lender, or (ix) change the definition of "Interest Period" to include periods longer than six months; provided that no such agreement shall amend, modify or otherwise affect the rights or duties of any Agent without the prior written consent of such Agent. Notwithstanding the foregoing, any provision of this Agreement may be amended by an agreement in writing entered into by the Borrower, the Required Lenders and the Agents if (i) by the terms of such agreement the Commitment of each Lender not consenting to the amendment provided for therein shall terminate upon the effectiveness of such amendment and (ii) at the time such amendment becomes effective, each Lender not consenting thereto receives payment in full of the principal of and interest accrued on each Loan made by it and all other amounts owing to it or accrued for its account under this Agreement. Section 10.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by each Agent and its Affiliates, including the reasonable fees, charges and disbursements of Milbank, Tweed, Hadley & McCloy LLP, special New York counsel for the Agents in connection with the syndication of the credit facilities provided for herein, the preparation and administration of the Loan Documents or any amendments, modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), and (ii) all reasonable out-of-pocket expenses incurred by such Agent, or any Lender, including the reasonable fees, charges and disbursements of any counsel for such Agent, or any Lender, in connection with the enforcement or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans. (b) The Borrower shall indemnify each Agent, each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an "Indemnitee") against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including the reasonable fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of any Loan Document or any other agreement or instrument contemplated hereby, the performance by the parties to the Loan Documents of their respective obligations thereunder or the consummation of the Loan Transactions, (ii) any Loan or the use of the proceeds therefrom, (iii) any presence, Release or threatened Release of Hazardous Materials on, at, under or from any Mortgaged Property or any other property currently or formerly owned or operated by the Borrower or any of the Subsidiaries, or any Environmental Liability related in any way to the Borrower or any of the Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses resulted from the gross negligence or willful misconduct of such Indemnitee or any Related Person of such Indemnitee as determined in a final judgment by a court of competent jurisdiction. (c) To the extent that the Borrower fails to pay any amount required to be paid by it to any Agent under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to such Agent such Lender's pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against such Agent in its capacity as such. For purposes hereof, a Lender's "pro rata share" shall be determined based upon its share of the sum of the total Exposures and unused Commitments at the time. (d) To the extent permitted by applicable law, the Borrower shall not assert, and each hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Loan Transactions, any Loan or the use of the proceeds thereof. (e) All amounts due under this Section shall be payable promptly after written demand therefor. Section 10.04. Successors and Assigns. (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by the Borrower without such consent shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement. (b) Any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the Loans at the time owing to it), provided that (i) except in the case of an assignment to a Lender or an Affiliate or Approved Fund of a Lender, each of the Borrower and the Administrative Agent must give their prior written consent to such assignment (which consent shall not be unreasonably withheld), (ii) except in the case of an assignment to a Lender or an Affiliate or Approved Fund of a Lender or an assignment of the entire remaining amount of the assigning Lender's Commitments or Loans, the amount of the Commitments or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall not be less than $1,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, (iii) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and obligations under this Agreement, (iv) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee of $3,500, and (v) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire, and provided further that any consent of the Borrower otherwise required under this paragraph shall not be required if an Event of Default has occurred and is continuing. Subject to acceptance and recording thereof pursuant to paragraph (d) of this Section, from and after the effective date specified in each Assignment and Acceptance the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.12, 2.13, 2.14 and 10.03). Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (e) of this Section. (c) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices in The City of New York a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the "Register"). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice. (d) Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, the assignee's completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Acceptance and record the information contained therein in the Register. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph. (e) Any Lender may, without the consent of the Borrower or the Administrative Agent, sell participations to one or more banks or other entities (a "Participant") in all or a portion of such Lender's rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it), provided that (i) such Lender's obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce the Loan Documents and to approve any amendment, modification or waiver of any provision of the Loan Documents, provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 10.02(b) that affects such Participant. Subject to paragraph (f) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.12, 2.13 and 2.14 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.15(c) as though it were a Lender. (f) A Participant shall not be entitled to receive any greater payment under Section 2.12 or 2.14 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.14 unless the Borrower is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.14(e) as though it were a Lender. (g) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest, provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. Section 10.05. Survival. All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans, regardless of any investigation made by any such other party or on its behalf and notwithstanding that any Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid and so long as the Commitments have not expired or terminated. The provisions of Sections 2.12, 2.13, 2.14 and 10.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, and the Commitments or the termination of this Agreement or any provision hereof. Section 10.06. Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Agents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of the other parties hereto required by paragraph (a) of Section 4.01, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement. Section 10.07. Severability. Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. Section 10.08. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against any of and all the obligations of the Borrower then existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement. The rights of each Lender under this Section are in addition to other rights and remedies (including any other rights of setoff) that such Lender may have. Section 10.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. (b) The Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to any Loan Document, 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 such New York State 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 or any other Loan Document shall affect any right that the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or its properties in the courts of any jurisdiction. (c) The Borrower hereby 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 other Loan Document in any court referred to in paragraph (b) of this Section. 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. (d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 10.01. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law. Section 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. Section 10.11. Headings. Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement. Section 10.12. Confidentiality. Each of the Agents and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates' directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement, or to any direct or indirect contractual counterparties in swap agreements or such contractual counterparties' professional advisors, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to any Agent or any Lender on a nonconfidential basis from a source other than the Borrower. For the purposes of this Section, the term "Information" means all information received from the Borrower relating to the Borrower or its business, other than any such information that is available to any Agent or any Lender on a nonconfidential basis prior to disclosure by the Borrower. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. Section 10.13. Interest Rate Limitation. Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts that are treated as interest on such Loan under applicable law (collectively the "Charges"), shall exceed the maximum lawful rate (the "Maximum Rate") that may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. MEMC ELECTRONIC MATERIALS, INC. By /s/ JAMES M. STOLZE ------------------------------- Name: James M. Stolze Title: Executive Vice President, Chief Financial Officer By /s/ KENNETH L. YOUNG ------------------------------- Name: Kenneth L. Young Title: Treasurer CITICORP USA, INC., individually and as Administrative Agent, and Collateral Agent By /s/ EDWARD T. CROOK ------------------------------- Name: Edward T. Crook Title: Managing Director and Vice President SIGNATURE PAGE TO THE REVOLVING CREDIT AGREEMENT DATED AS OF NOVEMBER 13, 2001, among MEMC ELECTRONIC MATERIALS, INC., THE LENDERS, and CITICORP USA, INC., as Administrative Agent and Collateral Agent. Name of Institution: TPG WAFER CREDIT PARTNERS LLC By: /s/ RICHARD EKLEBERRY ------------------------------- Name: Richard Ekleberry Title: Vice President SIGNATURE PAGE TO THE REVOLVING CREDIT AGREEMENT DATED AS OF NOVEMBER 13, 2001, among MEMC ELECTRONIC MATERIALS, INC., THE LENDERS, and CITICORP USA, INC., as Administrative Agent and Collateral Agent. Name of Institution: T3 PARALLEL PARTNERS II, L.P. By: /s/ RICHARD EKLEBERRY ------------------------------- Name: Richard Ekleberry Title: Vice President SIGNATURE PAGE TO THE REVOLVING CREDIT AGREEMENT DATED AS OF NOVEMBER 13, 2001, among MEMC ELECTRONIC MATERIALS, INC., THE LENDERS, and CITICORP USA, INC., as Administrative Agent and Collateral Agent. Name of Institution: T3 PARTNERS II, L.P. By: /s/ RICHARD EKLEBERRY ------------------------------- Name: Richard Ekleberry Title: Vice President SIGNATURE PAGE TO THE REVOLVING CREDIT AGREEMENT DATED AS OF NOVEMBER 13, 2001, among MEMC ELECTRONIC MATERIALS, INC., THE LENDERS, and CITICORP USA, INC., as Administrative Agent and Collateral Agent. Name of Institution: TCW/CRESCENT MEZZANINE PARTNERS III, L.P. AND TCW/CRESCENT MEZZANINE TRUST III By: TCW/Crescent Mezzanine Management III, L.L.C., as its Investment Manager By: TCW Asset Management Company, as Its Sub-Advisor By: /s/ JEAN-MARK CHAPUS ------------------------------- Name: Jean-Marc Chapus Title: Managing Director By: /s/ JAMES C. SHEVLET, JR. ------------------------------- Name: James C. Shevlet, Jr. Title: Senior Vice President SIGNATURE PAGE TO THE REVOLVING CREDIT AGREEMENT DATED AS OF NOVEMBER 13, 2001, among MEMC ELECTRONIC MATERIALS, INC., THE LENDERS, and CITICORP USA, INC., as Administrative Agent and Collateral Agent. Name of Institution: GREEN EQUITY INVESTORS III, L.P. By: GEI Capital III, LLC, as its General Partner By: /s/ JOHN DANHAKL ------------------------------- Name: John Danhakl Title: Manager SIGNATURE PAGE TO THE REVOLVING CREDIT AGREEMENT DATED AS OF NOVEMBER 13, 2001, among MEMC ELECTRONIC MATERIALS, INC., THE LENDERS, and CITICORP USA, INC., as Administrative Agent and Collateral Agent. Name of Institution: GREEN EQUITY INVESTORS SIDE III, L.P. By: GEI Capital III, LLC, as its General Partner By: /s/ JOHN DANHAKL ------------------------------- Name: John Danhakl Title: Manager EXHIBIT A FORM OF ASSIGNMENT AND ACCEPTANCE Reference is made to the Revolving Credit Agreement dated as of November 13, 2001(as amended, supplemented or otherwise modified from time to time, the "Revolving Credit Agreement") among MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation (the "Borrower"), the lenders from time to time party thereto (the "Lenders") and CITICORP USA, INC., as administrative agent (in such capacity, the "Administrative Agent") and collateral agent (in such capacity, the "Collateral Agent") for the lenders. Except as otherwise defined herein, all capitalized terms used herein shall have the meaning assigned to such terms in the Revolving Credit Agreement. The "Assignor" and the "Assignee" referred to on Schedule 1 hereto agree as follows: 1. The Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, an interest in and to the Assignor's rights and obligations under the Revolving 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 Revolving Credit Agreement. After giving effect to such sale and assignment, the Assignee's Commitment and the amount of the Loans owing to the Assignee will be as set forth on Schedule 1 hereto. 2. The Assignor (a) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim; (b) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Revolving Credit Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Revolving Credit Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto; and (c) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrowers or the performance or observance by the Borrowers of any of its obligations under the Revolving Credit Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto. 3. The Assignee (a) confirms that it has received a copy of the Revolving Credit Agreement, together with copies of the financial statements referred to in [Article III] 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; (b) agrees that it will, independently and without reliance upon the Administrative Agent, the Assignor 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 Revolving Credit Agreement; and (c) confirms that it is a Person approved by all of the Lenders and is neither the Borrower nor any Subsidiary of the Borrower (an "Eligible Assignee"); (d) appoints and authorizes the Administrative Agent to take such action as agent on its behalf and to exercise such powers and discretion under the Revolving Credit Agreement and the Security Agreement as are delegated to the Administrative Agent by the terms thereof, together with the such powers and discretion as are reasonably incidental thereto; (e) agrees that it will perform in accordance with their terms all of the obligations that by the terms of the Revolving Credit Agreement are required to be performed by it as a Lender; and (f) attaches any U.S. Internal Revenue Service forms required under Section 2.14 of the Revolving 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, (a) the Assignee shall be a party to the Revolving Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and (b) the Assignor shall, to the extent provided in this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Revolving Credit Agreement. 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 Revolving Credit Agreement (including, without limitation, all payments of principal, interest and facility fees with respect thereto) to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments under the Revolving Credit Agreement 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 New York. 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 a manually executed counterpart of this Assignment and Acceptance. IN WITNESS WHEREOF, the Assignor and the 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. Schedule 1 to the Assignment and Acceptance Percentage interest assigned: % ---------- Assignee's Commitment: $ ---------------- Aggregate outstanding principal amount of Loans assigned: $ ---------------- Effective Date (1): , ---------------- ---- [NAME OF ASSIGNOR], as Assignor By ------------------------------ Title: Date: , --------------- ---- [NAME OF ASSIGNEE], as Assignee By ------------------------------ Title: Eurodollar Lending Office [ADDRESS] Accepted this day of , [ ], as Administrative Agent By ------------------------------ Title: By ------------------------------ Title: - -------- (1) This date should be no earlier than five Business Days after the delivery of this Assignment and Acceptance to the Administrative Agent. EXHIBIT E PLEDGE AGREEMENT dated as of November 13, 2001, among MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation ("Borrower"), each subsidiary of the Borrower listed on Schedule I hereto (each such subsidiary individually a "Subsidiary Pledgor" and collectively, the "Subsidiary Pledgors"; the Borrower and the Subsidiary Pledgors are referred to herein individually as a "Pledgor" and collectively as the "Pledgors") and CITICORP USA, INC., as collateral agent (in such capacity, the "Collateral Agent") for the Secured Parties (as defined in the Security Agreement). Reference is made to (a) the Revolving Credit Agreement dated as of November 13, 2001 (as amended, supplemented or otherwise modified from time to time, the "Revolving Credit Agreement"), among the Borrower, the lenders from time to time party thereto (the "Lenders") and CITICORP USA, INC., as administrative agent for the Lenders (in such capacity, the "Administrative Agent") and (b) the Guarantee Agreement dated as of November 13, 2001 (as amended, supplemented or otherwise modified from time to time, the "Guarantee Agreement") among the Subsidiary Pledgors and the Collateral Agent. Capitalized terms used herein and not defined herein shall have meanings assigned to such terms in the Revolving Credit Agreement. The Lenders have agreed to make Loans to the Borrower pursuant to, and upon the terms and subject to the conditions specified in, the Revolving Credit Agreement. The Pledgors have agreed to guarantee, among other things, all the obligations of the Borrower under the Revolving Credit Agreement. The obligations of the Lenders to make Loans are conditioned upon, among other things, the execution and delivery by the Pledgors of a Pledge Agreement in the form hereof to secure (a) the due and punctual payment of (i) the principal of and premium, if any, and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise and (ii) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of the Loan Parties to the Secured Parties under the Revolving Credit Agreement and the other Loan Documents, (b) the due and punctual performance of all covenants, agreements, obligations and liabilities of the Loan Parties under or pursuant to the Revolving Credit Agreement and the other Loan Documents, (c) unless otherwise agreed to in writing by the applicable Lender party thereto, the due and punctual payment and performance of all obligations of the Borrower or any other Loan Party, monetary or otherwise, under each Hedging Agreement entered into with a counterparty that was a Lender (or an Affiliate of a Lender) at the time such Hedging Agreement was entered into and (d) the due and punctual payment and performance of all obligations in respect of overdrafts and related liabilities owed to the Administrative Agent or any of its Affiliates and arising from treasury, depositary and cash management services in connection with any automated clearing house transfers of funds (all the monetary and other obligations referred to in the preceding clauses (a) through (d) being referred to collectively as the "Revolver Obligations"). Accordingly, the Pledgors and the Collateral Agent, on behalf of itself and each Secured Party (and each of their respective successors or assigns), hereby agree as follows: SECTION 1. Pledge. As security for the payment and performance, as the case may be, in full of the Revolver Obligations, each Pledgor hereby pledges and grants to the Collateral Agent, its successors and assigns, and hereby grants to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, a security interest in all of such Pledgor's right, title and interest in, to and under (a) the Equity Interests owned by it which are listed on Schedule II hereto and any Equity Interests obtained in the future by such Pledgor and the certificates representing all such Equity Interests (the "Pledged Interests"); provided that the Pledged Interests shall not include (i) more than 65% of the issued and outstanding voting stock of any Foreign Subsidiary, (ii) the outstanding voting stock of MEMC Korea Company, MEMC Kulim Electronic Materials, Sdn. Bhd., MEMC Southwest Inc. and Taisil Electronic Materials Corporation or (iii) to the extent that applicable law requires that a Subsidiary of such Pledgor issue directors' qualifying shares, such qualifying shares; (b)(i) the debt securities owned by it which are listed opposite the name of such Pledgor on Schedule II hereto, (ii) any debt securities in the future issued to such Pledgor and (iii) the promissory notes and any other instruments evidencing such debt securities (the "Pledged Debt Securities"); (c) all other property that may be delivered to and held by the Collateral Agent pursuant to the terms hereof; (d) subject to Section 5, all payments of principal or interest, dividends, cash, instruments and other property from time to time received, receivable or otherwise distributed, in respect of, in exchange for or upon the conversion of the securities referred to in clauses (a) and (b) above; (e) subject to Section 5, all rights and privileges of such Pledgor with respect to the securities and other property referred to in clauses (a), (b), (c) and (d) above; and (f) all proceeds of any of the foregoing (the items referred to in clauses (a) through (f) above being collectively referred to as the "Collateral"). Upon delivery to the Collateral Agent, (a) any Pledged Interests, any Pledged Debt Securities or any stock certificates, notes or other securities now or hereafter included in the Collateral (the "Pledged Securities") shall be accompanied by stock powers duly executed in blank or other instruments of transfer satisfactory to the Collateral Agent and by such other instruments and documents as the Collateral Agent may reasonably request and (b) all other property comprising part of the Collateral shall be accompanied by proper instruments of assignment duly executed by the applicable Pledgor and such other instruments or documents as the Collateral Agent may reasonably request. Each delivery of Pledged Securities shall be accompanied by a schedule describing the securities theretofore and then being pledged hereunder, which schedule shall be attached hereto as Schedule II and made a part hereof. Each schedule so delivered shall supersede any prior schedules so delivered. The pledge of the Pledged Securities is subject to the terms and conditions of that certain Option Agreement dated September 21, 1998, as amended on September 22, 2000, September 25, 2001, and October 25, 2001, among Tokuyama Corporation, Marubeni Corporation, Marubeni America Corporation, the Borrower and MEMC Pasadena. TO HAVE AND TO HOLD the Collateral, together with all right, title, interest, powers, privileges and preferences pertaining or incidental thereto, unto the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, forever; subject, however, to the terms, covenants and conditions hereinafter set forth. SECTION 2. Delivery of the Collateral. (a) Each Pledgor agrees promptly to deliver or cause to be delivered to the Collateral Agent any and all Pledged Securities, and any and all certificates or other instruments or documents representing the Collateral. (b) Each Pledgor will cause any Indebtedness for borrowed money owed to the Pledgor by any Person to be evidenced by a duly executed promissory note that is pledged and delivered to the Collateral Agent pursuant to the terms thereof. SECTION 3. Representations, Warranties and Covenants. Each Pledgor hereby represents, warrants and covenants, as to itself and the Collateral pledged by it hereunder, to and with the Collateral Agent that: (a) the Pledged Interests represent that percentage as set forth on Schedule II of the issued and outstanding shares of each class of the Equity Interests of the issuer with respect thereto; (b) except for the security interest granted hereunder, such Pledgor (i) is and will at all times continue to be the direct owner, beneficially and of record, of the Pledged Securities indicated on Schedule II, (ii) holds the same free and clear of all Liens, (iii) will make no assignment, pledge, hypothecation or transfer of, or create or permit to exist any security interest in or other Lien on, the Collateral, other than pursuant hereto, and (iv) subject to Section 5, will cause any and all Collateral, whether for value paid by such Pledgor or otherwise, to be forthwith deposited with the Collateral Agent and pledged or assigned hereunder; (c) such Pledgor (i) has the power and authority to pledge the Collateral in the manner hereby done or contemplated and (ii) will defend its title or interest thereto or therein against any and all Liens (other than the Lien created by this Agreement), however arising, of all Persons whomsoever; (d) no consent of any other Person (including stockholders or creditors of any Pledgor) and no consent or approval of any Governmental Authority or any securities exchange was or is necessary to the validity of the pledge effected hereby; (e) by virtue of the execution and delivery by the Pledgors of this Agreement, when the Pledged Securities, certificates or other documents representing or evidencing the Collateral are delivered to the Collateral Agent in accordance with this Agreement, the Collateral Agent will have a valid and perfected first lien upon and security interest in such Pledged Securities as security for the payment and performance of the Revolver Obligations; (f) the pledge effected hereby is effective to vest in the Collateral Agent, on behalf of the Secured Parties, the rights of the Collateral Agent in the Collateral as set forth herein; (g) all of the Pledged Interests have been duly authorized and validly issued and are fully paid and nonassessable; (h) all information set forth herein relating to the Pledged Interests is accurate and complete in all material respects as of the date hereof; and (i) the pledge of the Pledged Interests pursuant to this Agreement does not violate Regulation T, U or X of the Federal Reserve Board or any successor thereto as of the date hereof. SECTION 4. Registration in Nominee Name; Denominations. The Collateral Agent, on behalf of the Secured Parties, shall have the right (in its sole and absolute discretion) to hold the Pledged Securities in its own name as pledgee, the name of its nominee (as pledgee or as sub-agent) or the name of the Pledgors, endorsed or assigned in blank or in favor of the Collateral Agent. Each Pledgor will promptly give to the Collateral Agent copies of any notices or other communications received by it with respect to Pledged Securities registered in the name of such Pledgor. The Collateral Agent shall at all times have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger denominations for any purpose consistent with this Agreement. SECTION 5. Voting Rights; Dividends and Interest, etc. (a) Unless and until an Event of Default shall have occurred and be continuing: (i) Each Pledgor shall be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Securities or any part thereof for any purpose consistent with the terms of this Agreement, the Revolving Credit Agreement and the other Loan Documents; provided, however, that such Pledgor will not be entitled to exercise any such right if the result thereof could materially and adversely affect the rights inuring to a holder of the Pledged Securities or the rights and remedies of any of the Secured Parties under this Agreement or the Revolving Credit Agreement or any other Loan Document or the ability of the Secured Parties to exercise the same. (ii) The Collateral Agent shall execute and deliver to each Pledgor, or cause to be executed and delivered to each Pledgor, all such proxies, powers of attorney and other instruments as such Pledgor may reasonably request for the purpose of enabling such Pledgor to exercise the voting and/or consensual rights and powers it is entitled to exercise pursuant to subparagraph (i) above and to receive the cash dividends it is entitled to receive pursuant to subparagraph (iii) below. (iii) Each Pledgor shall be entitled to receive and retain any and all cash dividends, interest and principal paid on the Pledged Securities to the extent and only to the extent that such cash dividends, interest and principal are permitted by, and otherwise paid in accordance with, the terms and conditions of the Revolving Credit Agreement, the other Loan Documents and applicable laws. All noncash dividends, interest and principal, and all dividends, interest and principal paid or payable in cash or otherwise in connection with a partial or total liquidation or dissolution, return of capital, capital surplus or paid-in surplus, and all other distributions (other than distributions referred to in the preceding sentence) made on or in respect of the Pledged Securities, whether paid or payable in cash or otherwise, whether resulting from a subdivision, combination or reclassification of the outstanding capital stock of the issuer of any Pledged Securities or received in exchange for Pledged Securities or any part thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such issuer may be a party or otherwise, shall be and become part of the Collateral, and, if received by any Pledgor, shall not be commingled by such Pledgor with any of its other funds or property but shall be held separate and apart therefrom, shall be held in trust for the benefit of the Collateral Agent and shall be forthwith delivered to the Collateral Agent in the same form as so received (with any necessary endorsement). (iv) With regard to the pledge of the shares of MEMC Electronic Materials S.p.A, the Collateral Agent shall take all reasonable actions required by applicable mandatory provisions of Italian law in order to enable the Pledgors to exercise all the rights to which the Pledgors are entitled under this Section 5. (b) Upon the occurrence and during the continuance of an Event of Default, all rights of any Pledgor to dividends, interest or principal that such Pledgor is authorized to receive pursuant to paragraph (a)(iii) above shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall subject to the provisions of this paragraph (b) have the sole and exclusive right and authority to receive and retain such dividends, interest or principal. All dividends, interest or principal received by the Pledgor contrary to the provisions of this Section 5 shall be held in trust for the benefit of the Collateral Agent, shall be segregated from other property or funds of such Pledgor and shall be forthwith delivered to the Collateral Agent upon demand in the same form as so received (with any necessary endorsement). Any and all money and other property paid over to or received by the Collateral Agent pursuant to the provisions of this paragraph (b) shall be retained by the Collateral Agent in an account to be established by the Collateral Agent upon receipt of such money or other property and shall be applied in accordance with the provisions of Section 7. After all Events of Default have been cured or waived, the Collateral Agent shall promptly repay to each Pledgor all cash dividends, interest or principal (without interest), that such Pledgor would otherwise be permitted to retain pursuant to the terms of paragraph (a)(iii) above and which remain in such account. (c) Upon the occurrence and during the continuance of an Event of Default, all rights of any Pledgor to exercise the voting and consensual rights and powers it is entitled to exercise pursuant to paragraph (a)(i) of this Section 5, and the obligations of the Collateral Agent under paragraph (a)(ii) of this Section 5, shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and powers, provided that, unless otherwise directed by the Required Lenders, the Collateral Agent shall have the right from time to time following and during the continuance of an Event of Default to permit the Pledgors to exercise such rights. After all Events of Default have been cured or waived, each Pledgor will have the right to exercise the voting and consensual rights and powers that it would otherwise be entitled to exercise pursuant to the terms of paragraph (a)(i) above. SECTION 6. Remedies upon Default. Upon the occurrence and during the continuance of an Event of Default, subject to applicable regulatory and legal requirements, the Collateral Agent may sell the Collateral, or any part thereof, at public or private sale or at any broker's board or on any securities exchange, for cash, upon credit or for future delivery as the Collateral Agent shall deem appropriate. The Collateral Agent shall be authorized at any such sale (if it deems it advisable to do so) to restrict the prospective bidders or purchasers to Persons who will represent and agree that they are purchasing the Collateral for their own account for investment and not with a view to the distribution or sale thereof, and upon consummation of any such sale the Collateral Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold. Each such purchaser at any such sale shall hold the property sold absolutely free from any claim or right on the part of any Pledgor, and, to the extent permitted by applicable law, the Pledgors hereby waive all rights of redemption, stay, valuation and appraisal any Pledgor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. The Collateral Agent shall give a Pledgor 10 days' prior written notice (which each Pledgor agrees is a "reasonable authenticated notification of disposition" within the meaning of Section 9-611 of the UCC (as defined in the Security Agreement) of the Collateral Agent's intention to make any sale of such Pledgor's Collateral. Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a broker's board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral, or portion thereof, will first be offered for sale at such board or exchange. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Collateral Agent may fix and state in the notice of such sale. At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent may (in its sole and absolute discretion) determine. The Collateral Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In case any sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale price is paid in full by the purchaser or purchasers thereof, but the Collateral Agent shall not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice. At any public (or, to the extent permitted by applicable law, private) sale made pursuant to this Section 6, any Secured Party may bid for or purchase, free from any right of redemption, stay or appraisal on the part of any Pledgor (all said rights being also hereby waived and released), the Collateral or any part thereof offered for sale and may make payment on account thereof by using any Revolver Obligation then due and payable to it from such Pledgor as a credit against the purchase price, and it may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to such Pledgor therefor. For purposes hereof, (a) a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof, (b) the Collateral Agent shall be free to carry out such sale pursuant to such agreement and (c) such Pledgor shall not be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall have entered into such an agreement all Events of Default shall have been remedied and the Revolver Obligations paid in full. As an alternative to exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at law or in equity to foreclose upon the Collateral and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver. SECTION 7. Application of Proceeds of Sale. The Collateral Agent shall apply the proceeds of any collection or sale of the Collateral, as well as any Collateral consisting of cash, as follows: FIRST, to the payment of all costs and reasonable expenses incurred by the Administrative Agent or the Collateral Agent (in its capacity as such hereunder or under any other Loan Document) in connection with such collection or sale or otherwise in connection with this Agreement or any of the Revolver Obligations, including all court costs and the reasonable fees and expenses of its agents and legal counsel, the repayment of all advances made by the Collateral Agent hereunder or under any other Loan Document on behalf of any Pledgor and any other costs or expenses incurred in connection with the exercise of any right or remedy hereunder or under any other Loan Document; SECOND, to the payment in full of the Revolver Obligations (the amounts so applied to be distributed among the Secured Parties pro rata in accordance with the amounts of the Revolver Obligations owed to them on the date of any such distribution); THIRD, to the payment in full of the Indenture Obligations outstanding; and FOURTH, to the Pledgors, their successors or assigns, or as a court of competent jurisdiction may otherwise direct. The Collateral Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement. Upon any sale of the Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the purchase money by the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication thereof. SECTION 8. Reimbursement of Collateral Agent. (a) Each Pledgor agrees to pay upon demand to the Collateral Agent the amount of any and all reasonable expenses, including the reasonable fees, other charges and disbursements of its counsel and of any experts or agents, that the Collateral Agent may incur in connection with (i) the administration of this Agreement, (ii) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Collateral, (iii) the exercise or enforcement of any of the rights of the Collateral Agent hereunder or (iv) the failure by such Pledgor to perform or observe any of the provisions hereof. (b) Without limitation of its indemnification obligations under the other Loan Documents, each Pledgor agrees to indemnify the Collateral Agent and the Indemnitees (as defined in Section 10.03 of the Revolving Credit Agreement) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable counsel fees, other charges and disbursements, incurred by or asserted against any Indemnitee arising out of, in any way connected with, or as a result of (i) the execution or delivery of this Agreement or any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations thereunder or the consummation of the other transactions contemplated thereby or (ii) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether or not any Indemnitee is a party thereto, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee. (c) Any amounts payable as provided hereunder shall be additional Revolver Obligations secured hereby and by the other Security Documents. The provisions of this Section 8 shall remain operative and in full force and effect regardless of the termination of this Agreement, the consummation of the transactions contemplated hereby, the repayment of any of the Revolver Obligations, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document or any investigation made by or on behalf of the Collateral Agent or any other Secured Party. All amounts due under this Section 8 shall be payable on written demand therefor and shall bear interest at the rate specified in Section 2.10(c) of the Revolving Credit Agreement. SECTION 9. Collateral Agent Appointed Attorney-in-Fact. Each Pledgor hereby appoints the Collateral Agent the attorney-in-fact of such Pledgor for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof, which appointment is irrevocable and coupled with an interest. Without limiting the generality of the foregoing, the Collateral Agent shall have the right, upon the occurrence and during the continuance of an Event of Default, with full power of substitution either in the Collateral Agent's name or in the name of such Pledgor, to ask for, demand, sue for, collect, receive and give acquittance for any and all moneys due or to become due under and by virtue of any Collateral, to endorse checks, drafts, orders and other instruments for the payment of money payable to the Pledgor representing any interest or dividend or other distribution payable in respect of the Collateral or any part thereof or on account thereof and to give full discharge for the same, to settle, compromise, prosecute or defend any action, claim or proceeding with respect thereto, and to sell, assign, endorse, pledge, transfer and to make any agreement respecting, or otherwise deal with, the same; provided, however, that nothing herein contained shall be construed as requiring or obligating the Collateral Agent to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby. The Collateral Agent and the other Secured Parties shall be accountable only for amounts actually received as a result of the exercise of the powers granted to them herein, and neither they nor their officers, directors, employees or agents shall be responsible to any Pledgor for any act or failure to act hereunder, except for their own gross negligence or willful misconduct. SECTION 10. Waivers; Amendment. (a) No failure or delay of the Collateral Agent in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Collateral Agent hereunder and of the other Secured Parties under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provisions of this Agreement or consent to any departure by any Pledgor therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) below, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice or demand on any Pledgor in any case shall entitle such Pledgor to any other or further notice or demand in similar or other circumstances. (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to a written agreement entered into between the Collateral Agent and the Pledgor or Pledgors with respect to which such waiver, amendment or modification is to apply, subject to any consent required in accordance with Section 10.02 of the Revolving Credit Agreement. SECTION 11. Securities Act, etc. In view of the position of the Pledgors in relation to the Pledged Securities, or because of other current or future circumstances, a question may arise under the Securities Act of 1933, as now or hereafter in effect, or any similar statute hereafter enacted analogous in purpose or effect (such Act and any such similar statute as from time to time in effect being called the "Federal Securities Laws") with respect to any disposition of the Pledged Securities permitted hereunder. Each Pledgor understands that compliance with the Federal Securities Laws might very strictly limit the course of conduct of the Collateral Agent if the Collateral Agent were to attempt to dispose of all or any part of the Pledged Securities, and might also limit the extent to which or the manner in which any subsequent transferee of any Pledged Securities could dispose of the same. Similarly, there may be other legal restrictions or limitations affecting the Collateral Agent in any attempt to dispose of all or part of the Pledged Securities under applicable Blue Sky or other state securities laws or similar laws analogous in purpose or effect. Each Pledgor recognizes that in light of such restrictions and limitations the Collateral Agent may, with respect to any sale of the Pledged Securities, limit the purchasers to those who will agree, among other things, to acquire such Pledged Securities for their own account, for investment, and not with a view to the distribution or resale thereof. Each Pledgor acknowledges and agrees that in light of such restrictions and limitations, the Collateral Agent, in its sole and absolute discretion, (a) may proceed to make such a sale whether or not a registration statement for the purpose of registering such Pledged Securities or part thereof shall have been filed under the Federal Securities Laws and (b) may approach and negotiate with a single potential purchaser to effect such sale, in either case in accordance with a valid exemption from registration under the Federal Securities Laws. Each Pledgor acknowledges and agrees that any such sale might result in prices and other terms less favorable to the seller than if such sale were a public sale without such restrictions. In the event of any such sale, the Collateral Agent shall incur no responsibility or liability for selling all or any part of the Pledged Securities at a price that the Collateral Agent, in its sole and absolute discretion, may in good faith deem reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might have been realized if the sale were deferred until after registration as aforesaid or if more than a single purchaser were approached. The provisions of this Section 11 will apply notwithstanding the existence of a public or private market upon which the quotations or sales prices may exceed substantially the price at which the Collateral Agent sells. SECTION 12. Registration, etc. Each Pledgor agrees that, upon the occurrence and during the continuance of an Event of Default, if for any reason the Collateral Agent desires to sell any of the Pledged Securities at a public sale, it will, at any time and from time to time, upon the written request of the Collateral Agent, use its reasonable best efforts to take or to cause the issuer of such Pledged Securities to take such action and prepare, distribute and/or file such documents, as are required or advisable in the reasonable opinion of counsel for the Collateral Agent to permit the public sale of such Pledged Securities. Each Pledgor further agrees to indemnify, defend and hold harmless the Collateral Agent, each other Secured Party, any underwriter and their respective officers, directors, affiliates and controlling Persons from and against all loss, liability, expenses, costs of counsel (including, without limitation, reasonable fees and expenses to the Collateral Agent of legal counsel), and claims (including the costs of investigation) that they may incur insofar as such loss, liability, expense or claim arises out of or is based upon any alleged untrue statement of a material fact contained in any prospectus (or any amendment or supplement thereto) or in any notification or offering circular, or arises out of or is based upon any alleged omission to state a material fact required to be stated therein or necessary to make the statements in any thereof not misleading, except insofar as the same may have been caused by any untrue statement or omission based upon information furnished in writing to such Pledgor or the issuer of such Pledged Securities by the Collateral Agent or any other Secured Party expressly for use therein. Each Pledgor further agrees, upon such written request referred to above, to use its reasonable best efforts to qualify, file or register, or cause the issuer of such Pledged Securities to qualify, file or register, any of the Pledged Securities under the Blue Sky or other securities laws of such states as may be requested by the Collateral Agent and keep effective, or cause to be kept effective, all such qualifications, filings or registrations. Each Pledgor will bear all costs and expenses of carrying out its obligations under this Section 12. Each Pledgor acknowledges that there is no adequate remedy at law for failure by it to comply with the provisions of this Section 12 and that such failure would not be adequately compensable in damages, and therefore agrees that its agreements contained in this Section 12 may be specifically enforced. SECTION 13. Security Interest Absolute. All rights of the Collateral Agent hereunder, the grant of a security interest in the Collateral and all obligations of each Pledgor hereunder, shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Revolving Credit Agreement, any other Loan Document, any agreement with respect to any of the Revolver Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Revolver Obligations, or any other amendment or waiver of or any consent to any departure from the Revolving Credit Agreement, any other Loan Document or any other agreement or instrument relating to any of the foregoing, (c) any exchange, release or nonperfection of any other collateral, or any release or amendment or waiver of or consent to or departure from any guaranty, for all or any of the Revolver Obligations or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Pledgor in respect of the Revolver Obligations or in respect of this Agreement (other than the indefeasible payment in full of all the Revolver Obligations). SECTION 14. Termination or Release. (a) This Agreement and the security interests granted hereby shall terminate when all the Revolver Obligations have been indefeasibly paid in full and the Lenders have no further commitment to lend under the Revolving Credit Agreement. (b) Upon any sale or other transfer by any Pledgor of any Collateral that is permitted under the Revolving Credit Agreement to any Person that is not a Pledgor, or, upon the effectiveness of any written consent to the release of the security interest granted hereby in any Collateral pursuant to Section 10.02 of the Revolving Credit Agreement, the security interest in such Collateral shall be automatically released. (c) In connection with any termination or release pursuant to paragraph (a) or (b) or Section 17, the Collateral Agent shall execute and deliver to any Pledgor, at such Pledgor's expense, all documents that such Pledgor shall reasonably request to evidence such termination or release. Any execution and delivery of documents pursuant to this Section 14 shall be without recourse to or warranty by the Collateral Agent. SECTION 15. Notices. All communications and notices hereunder shall be in writing and given as provided in Section 10.01 of the Revolving Credit Agreement. All communications and notices hereunder to any Subsidiary Pledgor shall be given to it at the address or telecopy number set forth on Schedule I, with a copy to the Borrower. SECTION 16. Further Assurances. Each Pledgor agrees to do such further acts and things, and to execute and deliver such additional conveyances, assignments, agreements and instruments, as the Collateral Agent may at any time reasonably request in connection with the administration and enforcement of this Agreement or with respect to the Collateral or any part thereof or in order better to assure and confirm unto the Collateral Agent its rights and remedies hereunder. SECTION 17. Binding Effect; Several Agreement; Assignments. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party; and all covenants, promises and agreements by or on behalf of any Pledgor that are contained in this Agreement shall bind and inure to the benefit of its successors and assigns. This Agreement shall become effective as to any Pledgor when a counterpart hereof executed on behalf of such Pledgor shall have been delivered to the Collateral Agent and a counterpart hereof shall have been executed on behalf of the Collateral Agent, and thereafter shall be binding upon such Pledgor and the Collateral Agent and their respective successors and assigns, and shall inure to the benefit of such Pledgor, the Collateral Agent and the other Secured Parties, and their respective successors and assigns, except that no Pledgor shall have the right to assign its rights hereunder or any interest herein or in the Collateral (and any such attempted assignment shall be void), except as expressly contemplated by this Agreement or the other Loan Documents. In the event that a Pledgor ceases to be a Subsidiary pursuant to a transaction permitted under the Loan Documents, such Pledgor shall be released from its obligations under this Agreement without further action. This Agreement shall be construed as a separate agreement with respect to each Pledgor and may be amended, modified, supplemented, waived or released with respect to any Pledgor without the approval of any other Pledgor and without affecting the obligations of any other Pledgor hereunder. SECTION 18. Survival of Agreement; Severability. (a) All covenants, agreements, representations and warranties made by each Pledgor herein and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the Collateral Agent and the other Secured Parties and shall survive the making of the Loans by the Lenders regardless of any investigation made by the Secured Parties or on their behalf, and shall continue in full force and effect as long as any Revolver Obligation remains unpaid and as long as the Commitments have not been terminated. (b) In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. SECTION 19. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 20. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute a single contract, and shall become effective as provided in Section 17. Delivery of an executed counterpart of a signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually executed counterpart of this Agreement. SECTION 21. Rules of Interpretation. The rules of interpretation specified in Section 1.02 of the Revolving Credit Agreement shall be applicable to this Agreement. Section headings used herein are for convenience of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting this Agreement. SECTION 22. Jurisdiction; Consent to Service of Process. (a) Each Pledgor hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the other Loan Documents, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that, to the extent permitted by applicable law, all claims in respect of any such action or proceeding may be heard and determined in such New York State 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 the Collateral Agent or any other Secured Party may otherwise have to bring any action or proceeding relating to this Agreement or the other Loan Documents against any Pledgor or its properties in the courts of any jurisdiction. (b) Each Pledgor hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the other Loan Documents in any New York State or Federal court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court. (c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 15. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law. SECTION 23. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. SECTION 24. Limitation on Security Interest. Anything contained in this Agreement to the contrary notwithstanding, the obligation hereunder secured by each Subsidiary Pledgor shall be limited to a maximum aggregate amount equal to the greatest amount that would not render such Subsidiary Pledgor's secured obligations hereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the United States Code or any provisions of applicable state law (collectively, the "Fraudulent Transfer Laws"), in each case after giving effect to all liabilities of such Subsidiary Pledgor, contingent or otherwise, that would be taken into account in determining whether the incurrence of the obligation would constitute a fraudulent conveyance under the Fraudulent Transfer Laws and after giving effect, both in determining such Subsidiary Pledgor's probable debt hereunder and in determining its assets, to the existence of any rights to subrogation, contribution, reimbursement, indemnity or similar rights of such Subsidiary Pledgor pursuant to (a) applicable law or (b) any agreement, including the Indemnity, Subrogation and Contribution Agreement. SECTION 25. Additional Pledgors. Pursuant to Section 5.12 of the Revolving Credit Agreement, each Subsidiary Loan Party that was not in existence or not a Subsidiary Loan Party on the date of the Revolving Credit Agreement is required to enter into this Agreement as a Subsidiary Pledgor upon becoming a Subsidiary Loan Party. Upon execution and delivery by the Collateral Agent and a Subsidiary of an instrument in the form of Annex 1, such Subsidiary shall become a Subsidiary Pledgor hereunder with the same force and effect as if originally named as a Subsidiary Pledgor herein. The execution and delivery of such instrument shall not require the consent of any Pledgor hereunder. The rights and obligations of each Pledgor hereunder shall remain in full force and effect notwithstanding the addition of any new Subsidiary Pledgor as a party to this Agreement. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. MEMC ELECTRONIC MATERIALS, INC. By /s/ JAMES M. STOLZE -------------------------------- Name: James M. Stolze Title: Executive Vice President, Chief Financial Officer By /s/ KENNETH L. YOUNG -------------------------------- Name: Kenneth L. Young Title: Treasurer EACH OF THE OTHER SUBSIDIARIES LISTED ON SCHEDULE I HERETO, By /s/ KENNETH L. YOUNG -------------------------------- Name: Kenneth L. Young, in his capacity as Treasurer for each of the other Subsidiaries listed on Schedule I hereto CITICORP USA, INC., as Administrative Agent and Collateral Agent By /s/ EDWARD T. CROOK -------------------------------- Name: Edward T. Crook Title: Managing Director and Vice President EXHIBIT F SECURITY AGREEMENT dated as of November 13, 2001, among MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation (the "Borrower"), each subsidiary of Borrower listed on Schedule I hereto (each such subsidiary individually a "Subsidiary" or a "Guarantor" and, collectively, the "Subsidiaries" or "Guarantors"; and the Guarantors and Borrower are referred to collectively herein as the "Grantors") and CITICORP USA, INC. as collateral agent (in such capacity, the "Collateral Agent") for the Secured Parties (as defined herein). Reference is made to (a) the Revolving Credit Agreement dated as of November 13, 2001 (as amended, supplemented or otherwise modified from time to time, the "Revolving Credit Agreement") among the Borrower, the lenders from time to time party thereto (the "Lenders") and Citicorp USA, Inc., as administrative agent for the Lenders (in such capacity, the "Administrative Agent") and (b) the Guarantee Agreement dated as of November 13, 2001 (as amended, supplemented or otherwise modified from time to time, the "Guarantee Agreement"), among the Guarantors and the Collateral Agent. Unless the context otherwise requires, all capitalized terms used but not defined herein shall have the meanings set forth in the Revolving Credit Agreement. The Lenders have agreed to make Loans to the Borrower upon the terms and subject to the conditions specified in the Revolving Credit Agreement. Each of the Guarantors has agreed to guarantee, among other things, all the obligations of the Borrower under the Revolving Credit Agreement. The obligations of the Lenders to make Loans are conditioned upon, among other things, the execution and delivery by the Grantors of an agreement in the form hereof to secure (a) the due and punctual payment of (i) the principal of and premium, if any, and interest (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set for prepayment or otherwise and (ii) all other monetary obligations, including fees, costs, expenses and indemnities, whether primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), of the Loan Parties to the Secured Parties under the Revolving Credit Agreement and the other Loan Documents, (b) the due and punctual performance of all covenants, agreements, obligations and liabilities of the Loan Parties under or pursuant to the Revolving Credit Agreement and the other Loan Documents, (c) unless otherwise agreed to in writing by the applicable Lender party thereto, the due and punctual payment and performance of all obligations of the Borrower or any other Loan Party, monetary or otherwise, under each Hedging Agreement entered into with a counterparty that was a Lender (or an Affiliate of a Lender) at the time such Hedging Agreement was entered into and (d) the due and punctual payment and performance of all obligations in respect of overdrafts and related liabilities owed to the Administrative Agent or any of its Affiliates and arising from treasury, depositary and cash management services in connection with any automated clearing house transfers of funds (all the monetary and other obligations described in the preceding clauses (a) through (d) being collectively called the "Revolver Obligations"). Accordingly, the Grantors and the Collateral Agent, on behalf of itself and each Secured Party (and each of their respective successors or assigns), hereby agree as follows: ARTICLE I Definitions SECTION 1.01. Definition of Certain Terms Used Herein. As used herein, the following terms shall have the following meanings: "Account Debtor" means any Person who is or who may become obligated to any Grantor under, with respect to or on account of an Account. "Accounts" means all "accounts" (as defined in UCC) of any Grantor and shall include any and all right, title and interest of any Grantor to payment for goods and services sold or leased, including any such right evidenced by Chattel Paper, whether due or to become due, whether or not it has been earned by performance, and whether now or hereafter acquired or arising in the future, including accounts receivable from Affiliates of the Grantors. "Accounts Receivable" means all Accounts and all right, title and interest in any returned goods, together with all rights, titles, securities and guarantees with respect thereto, including any rights to stoppage in transit, replevin, reclamation and resales, and all related security interests, liens and pledges, whether voluntary or involuntary, in each case whether now existing or owned or hereafter arising or acquired. "Chattel Paper" has the meaning assigned to such term in the UCC. "Collateral" means all (a) Accounts Receivable, (b) Documents, (c) Equipment, (d) General Intangibles, (e) Inventory, (f) cash and cash accounts, (g) Investment Property (h) Chattel Paper, (i) Instruments, (j) Deposit Accounts and (k) Proceeds. "Commodity Account" means an account maintained by a Commodity Intermediary in which a Commodity Contract is carried out for a Commodity Customer. "Commodity Contract" means a commodity futures contract, an option on a commodity futures contract, a commodity option or any other contract that, in each case, is (a) traded on or subject to the rules of a board of trade that has been designated as a contract market for such a contract pursuant to the federal commodities laws or (b) traded on a foreign commodity board of trade, exchange or market, and is carried on the books of a Commodity Intermediary for a Commodity Customer. "Commodity Customer" means a Person for whom a Commodity Intermediary carries a Commodity Contract on its books. "Commodity Intermediary" means (a) a Person who is registered as a futures commission merchant under the federal commodities laws or (b) a Person who in the ordinary course of its business provides clearance or settlement services for a board of trade that has been designated as a contract market pursuant to federal commodities laws. "Copyright License" means any written agreement, now or hereafter in effect, granting any right to any third party under any Copyright now or hereafter owned by any Grantor or which such Grantor otherwise has the right to license, or granting any right to such Grantor under any Copyright now or hereafter owned by any third party, and all rights of such Grantor under any such agreement. "Copyrights" means all of the following: (a) all copyright rights in any work subject to the copyright laws of the United States or any other country, whether as author, assignee, transferee or otherwise, and (b) all registrations and applications for registration of any such copyright in the United States or any other country, including registrations, recordings, supplemental registrations and pending applications for registration in the United States Copyright Office, including those listed on Schedule II. "Deposit Accounts" has the meaning assigned to such term in the UCC. "Documents" means all instruments, promissory notes, files, records, ledger sheets and documents covering or relating to any of the Collateral. "Entitlement Holder" means a Person identified in the records of a Securities Intermediary as the Person having a Security Entitlement against the Securities Intermediary. If a Person acquires a Security Entitlement by virtue of Section 8-501(b)(2) or (3) of the UCC, such Person is the Entitlement Holder. "Equipment" means "equipment" (as defined in the UCC) of any Grantor and shall include all equipment, furniture and furnishings, and all tangible personal property similar to any of the foregoing, including tools, parts and supplies of every kind and description, and all improvements, accessions or appurtenances thereto, that are now or hereafter owned by any Grantor. The term Equipment shall include Fixtures. "Financial Asset" means (a) a Security, (b) an obligation of a Person or a share, participation or other interest in a Person or in property or an enterprise of a Person, which is, or is of a type, dealt with in or traded on financial markets, or which is recognized in any area in which it is issued or dealt in as a medium for investment or (c) any property that is held by a Securities Intermediary for another Person in a Securities Account if the Securities Intermediary has expressly agreed with the other Person that the property is to be treated as a Financial Asset under Article 8 of the UCC. As the context requires, the term Financial Asset means either the interest itself or the means by which a Person's claim to it is evidenced, including a certificated or uncertificated Security, a certificate representing a Security or a Security Entitlement. "Fixtures" means all items of Equipment, whether now owned or hereafter acquired, of any Grantor that become so related to particular real estate that an interest in them arises under any real estate law applicable thereto. "General Intangibles" means all "general intangibles" (as defined in the UCC) of any Grantor and shall include choses in action and causes of action and all other intangible personal property of any Grantor of every kind and nature (other than Accounts Receivable) now owned or hereafter acquired by any Grantor, including corporate or other business records, indemnification claims, contract rights (including rights under leases, whether entered into as lessor or lessee, Hedging Agreements and other agreements), Intellectual Property, goodwill, registrations, franchises, tax refund claims and any letter of credit, guarantee, claim, security interest or other security held by or granted to any Grantor to secure payment by an Account Debtor of any of the Accounts Receivable. "Instrument" has the meaning assigned to such term in the UCC. "Intellectual Property" means all intellectual and similar property of any Grantor of every kind and nature now owned or hereafter acquired by any Grantor, including inventions, designs, Patents, Copyrights, Licenses, Trademarks, trade secrets, confidential or proprietary technical and business information, know-how, show-how or other data or information, software and databases and all embodiments or fixations thereof and related documentation, registrations and franchises, and all additions, improvements and accessions to, and books and records describing or used in connection with, any of the foregoing. "Inventory" means "inventory" (as defined in the UCC) of any Grantor and shall include all goods of any Grantor, whether now owned or hereafter acquired, held for sale or lease, or furnished or to be furnished by any Grantor under contracts of service, or consumed in any Grantor's business, including raw materials, intermediates, work in process, packaging materials, finished goods, semi-finished inventory, scrap inventory, manufacturing supplies and spare parts, and all such goods that have been returned to or repossessed by or on behalf of any Grantor. "Investment Property" means all Securities (whether certificated or uncertificated), Security Entitlements, Securities Accounts, Commodity Contracts and Commodity Accounts of any Grantor, whether now owned or hereafter acquired by any Grantor. "License" means any Patent License, Trademark License, Copyright License or other license or sublicense to which any Grantor is a party, including those listed on Schedule III (other than those license agreements in existence on the date hereof and listed on Schedule III and those license agreements entered into after the date hereof, which by their terms prohibit assignment or a grant of a security interest by such Grantor as licensee thereunder). "Patent License" means any written agreement, now or hereafter in effect, granting to any third party any right to make, use or sell any invention on which a Patent, now or hereafter owned by any Grantor or which any Grantor otherwise has the right to license, is in existence, or granting to any Grantor any right to make, use or sell any invention on which a Patent, now or hereafter owned by any third party, is in existence, and all rights of any Grantor under any such agreement. "Patents" means all of the following now owned or hereafter acquired by any Grantor: (a) all letters patent of the United States or any other country, all registrations and recordings thereof, and all applications for letters patent of the United States or any other country, including registrations, recordings and pending applications in the United States Patent and Trademark Office or any similar offices in any other country, including those listed on Schedule IV, and (b) all reissues, continuations, divisions, continuations-in-part, renewals or extensions thereof, and the inventions disclosed or claimed therein, including the right to make, use and/or sell the inventions disclosed or claimed therein. "Perfection Certificate" means a certificate substantially in the form of Annex 2 hereto, completed and supplemented with the schedules and attachments contemplated thereby, and duly executed by an executive officer or Financial Officer of the Borrower. "Proceeds" means "proceeds" (as defined in the UCC) of any Grantor and shall include any consideration received from the sale, exchange, license, lease or other disposition of any asset or property that constitutes Collateral, any value received as a consequence of the possession of any Collateral and any payment received from any insurer or other Person or entity as a result of the destruction, loss, theft, damage or other involuntary conversion of whatever nature of any asset or property which constitutes Collateral, any property collected on or distributed on account of the Collateral, any rights arising out of the Collateral, and shall include , (a) any claim of any Grantor against any third party for (and the right to sue and recover for and the rights to damages or profits due or accrued arising out of or in connection with) (i) past, present or future infringement of any Patent now or hereafter owned by any Grantor, or licensed under a Patent License, (ii) past, present or future infringement or dilution of any Trademark now or hereafter owned by any Grantor or licensed under a Trademark License or injury to the goodwill associated with or symbolized by any Trademark now or hereafter owned by any Grantor, (iii) past, present or future breach of any License and (iv) past, present or future infringement of any Copyright now or hereafter owned by any Grantor or licensed under a Copyright License and (b) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral. "Revolver Obligations" has the meaning assigned to such term in the preliminary statement of this Agreement. "Revolving Credit Agreement" has the meaning assigned to such term in the preliminary statement of this Agreement. "Secured Parties" means (a) the Lenders, (b) the Administrative Agent, (c) the Collateral Agent, (d) each counterparty to a Hedging Agreement entered into with the Borrower or any Loan Party if such counterparty was a Lender (or an Affiliate of a Lender) at the time the Hedging Agreement was entered into, (e) the beneficiaries of each indemnification obligation undertaken by any Grantor under any Loan Document and (f) the successors and assigns of each of the foregoing. "Securities" means any obligations of an issuer or any shares, participations or other interests in an issuer or in property or an enterprise of an issuer which (a) are represented by a certificate representing a security in bearer or registered form, or the transfer of which may be registered upon books maintained for that purpose by or on behalf of the issuer, (b) are one of a class or series or by its terms is divisible into a class or series of shares, participations, interests or obligations and (c)(i) are, or are of a type, dealt with or traded on securities exchanges or securities markets or (ii) are a medium for investment and by their terms expressly provide that they are a security governed by Article 8 of the UCC. "Securities Account" means an account to which a Financial Asset is or may be credited in accordance with an agreement under which the Person maintaining the account undertakes to treat the Person for whom the account is maintained as entitled to exercise rights that comprise the Financial Asset. "Security Entitlements" means the rights and property interests of an Entitlement Holder with respect to a Financial Asset. "Security Interest" has the meaning assigned to such term in Section 2.01. "Security Intermediary" means (a) a clearing corporation or (b) a Person, including a bank or broker, that in the ordinary course of its business maintains securities accounts for others and is acting in that capacity. "Texas Instruments Agreements" means the Shareholders' Agreement dated as of May 16, 1995, by and between Texas Instruments Incorporated and the Borrower, as amended; Technology Transfer Agreement dated as of June 30, 1995, by and between Texas Instruments Incorporated, the Borrower and MEMC Southwest Inc.; Texas Instruments Incorporated Purchase Agreement dated as of June 30, 1995, by and between Texas Instruments Incorporated, MEMC Southwest Inc. and the Borrower, as amended; Master Services Agreement dated as of June 30, 1995, by and between Texas Instruments Incorporated and MEMC Southwest Inc.; Chemical Services Agreement dated as of June 30, 1995, by and between Texas Instruments Incorporated and MEMC Southwest Inc.; Information Systems and Services Agreement dated as of June 30, 1995, by and between Texas Instruments Incorporated and MEMC Southwest Inc.; Telephone Services Agreement dated as of June 30, 1995, by and between Texas Instruments Incorporated and MEMC Southwest Inc.; Medical Services Agreement dated as of June 30, 1995, by and between Texas Instruments Incorporated and MEMC Southwest Inc.; Purchasing and Inventory Services Agreement dated as of June 30, 1995, by and between Texas Instruments Incorporated and MEMC Southwest Inc.; Environmental, Health and Safety Services Agreement dated as of June 30, 1995, by and between Texas Instruments Incorporated and the Borrower; Agreement Regarding Health & Dental Administrative Expenses dated as of June 30, 1995, by and between Texas Instruments Incorporated and the Borrower. "Trademark License" means any written agreement, now or hereafter in effect, granting to any third party any right to use any Trademark now or hereafter owned by any Grantor or which any Grantor otherwise has the right to license, or granting to any Grantor any right to use any Trademark now or hereafter owned by any third party, and all rights of any Grantor under any such agreement. "Trademarks" means all of the following: (a) all trademarks, service marks, trade names, corporate names, company names, business names, fictitious business names, trade styles, trade dress, logos, other source or business identifiers, designs and general intangibles of like nature, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all registration and recording applications filed in connection therewith, including registrations and registration applications in the United States Patent and Trademark Office, any State of the United States or any similar offices in any other country or any political subdivision thereof, and all extensions or renewals thereof, including those listed on Schedule V, (b) all goodwill associated therewith or symbolized thereby and (c) all other assets, rights and interests that uniquely reflect or embody such goodwill. "UCC" means the Uniform Commercial Code as in effect from time to time in the state of New York. SECTION 1.02. Rules of Interpretation. The rules of interpretation specified in Section 1.02 of the Revolving Credit Agreement shall be applicable to this Agreement. ARTICLE II Security Interest SECTION 2.01. Security Interest. As security for the payment or performance, as the case may be, in full of the Revolver Obligations, each Grantor hereby bargains, sells, conveys, assigns, sets over, mortgages, pledges, hypothecates and transfers to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, and hereby grants to the Collateral Agent, its successors and assigns, for the ratable benefit of the Secured Parties, a security interest in, all of such Grantor's right, title and interest in, to and under the Collateral (the "Security Interest"), provided that the Security Interest shall not include (i) more than 65% of the issued and outstanding voting stock of any Foreign Subsidiary, (ii) the outstanding voting stock of MEMC Korea Company, MEMC Kulim Electronic Materials, Sdn. Bhd., MEMC Southwest Inc. and Taisil Electronic Materials Corporation, (iii) the Texas Instruments Agreements, or (iv) any General Intangible that is, by its terms, not assignable, so long as the failure of the Grantors to maintain such General Intangible would not result in a Material Adverse Effect. Without limiting the foregoing, the Collateral Agent is hereby authorized to file one or more financing statements (including fixture filings), continuation statements, filings with the United States Patent and Trademark Office or United States Copyright Office (or any successor office or any similar office in any other country) or other documents for the purpose of perfecting, confirming, continuing, enforcing or protecting the Security Interest granted by each Grantor, without the signature of any Grantors, and naming any Grantor or the Grantors as debtors and the Collateral Agent as secured party. SECTION 2.02. No Assumption of Liability. The Security Interest is granted as security only and shall not subject the Collateral Agent or any other Secured Party to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising out of the Collateral. ARTICLE III Representations and Warranties The Grantors jointly and severally represent and warrant to the Collateral Agent and the Secured Parties that: SECTION 3.01. Title and Authority. Each Grantor has good and valid rights in and title to the Collateral with respect to which it has purported to grant a Security Interest hereunder and has full power and authority to grant to the Collateral Agent the Security Interest in such Collateral pursuant hereto and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any other Person other than any consent or approval which has been obtained. The Security Interest granted hereby is subject to the terms and conditions of that certain Option Agreement dated September 21, 1998, as amended on September 22, 2000, September 25, 2001, and October 25, 2001, among Tokuyama Corporation, Marubeni Corporation, Marubeni America Corporation, the Borrower and MEMC Pasadena. SECTION 3.02. Filings. (a) The Perfection Certificate has been duly prepared, completed and executed and the information set forth therein is correct and complete in all material respects. Appropriately completed UCC financing statements (including fixture filings, as applicable) or other appropriate filings, recordings or registrations containing a description of the Collateral have been delivered to the Collateral Agent for filing in each governmental, municipal or other office specified in Schedule 5 to the Perfection Certificate, which are all the filings, recordings and registrations (other than filings required to be made in the United States Patent and Trademark Office and the United States Copyright Office in order to perfect the Security Interest in Collateral consisting of United States Patents, Trademarks and Copyrights) that are necessary to publish notice of and protect the validity of and to establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the ratable benefit of the Secured Parties) in respect of all Collateral in which the Security Interest may be perfected by filing, recording or registration in the United States (or any political subdivision thereof) and its territories and possessions, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary in any such jurisdiction, except as provided under applicable law with respect to the filing of continuation statements. (b) Each Grantor shall ensure that fully executed security agreements in the form hereof (or short-form supplements to this Agreement in form and substance satisfactory to the Collateral Agent) and containing a description of all Collateral consisting of Intellectual Property shall have been received and recorded within three months after the execution of this Agreement with respect to United States Patents and United States registered Trademarks (and Trademarks for which United States registration applications are pending) and within one month after the execution of this Agreement with respect to United States registered Copyrights have been delivered to the Collateral Agent for recording by the United States Patent and Trademark Office and the United States Copyright Office pursuant to 35 U.S.C. ss. 261, 15 U.S.C. ss. 1060 or 17 U.S.C. ss. 205 and the regulations thereunder, as applicable, and otherwise as may be required pursuant to the laws of any other necessary jurisdiction in the United States (or any political subdivision thereof) and its territories and possessions, to protect the validity of and to establish a legal, valid and perfected security interest in favor of the Collateral Agent (for the ratable benefit of the Secured Parties) in respect of all Collateral consisting of Patents, Trademarks and Copyrights in which a security interest may be perfected by filing, recording or registration in the United States (or any political subdivision thereof) and its territories and possessions, or in any other necessary jurisdiction, and no further or subsequent filing, refiling, recording, rerecording, registration or reregistration is necessary in any such jurisdiction (other than such actions as are necessary to perfect the Security Interest with respect to any Collateral consisting of Patents, Trademarks and Copyrights (or registration or application for registration thereof) acquired or developed after the date hereof). SECTION 3.03. Validity of Security Interest. The Security Interest constitutes (a) a legal and valid security interest in all the Collateral securing the payment and performance of the Revolver Obligations, (b) subject to the filings described in Section 3.02 above, a perfected security interest in all Collateral in which a security interest may be perfected by filing, recording or registering a financing statement or analogous document in the United States (or any political subdivision thereof) and its territories and possessions pursuant to the UCC or other analogous applicable law in such jurisdictions and (c) a security interest that shall be perfected in all Collateral in which a security interest may be perfected upon the receipt and recording of this Agreement with the United States Patent and Trademark Office and the United States Copyright Office, as applicable, within the three month period (commencing as of the date hereof) pursuant to 35 U.S.C. ss.261 or 15 U.S.C. ss.1060 or the one month period (commencing as of the date hereof) pursuant to 17 U.S.C. ss.205 and otherwise as may be required to pursuant to the laws of any other necessary jurisdiction in the United States (or any political subdivision thereof) and its territories and possessions. The Security Interest is and shall be prior to any other Lien on any of the Collateral, other than Liens expressly permitted pursuant to Section 6.02 of the Revolving Credit Agreement. SECTION 3.04. Absence of Other Liens. The Collateral is owned by the Grantors free and clear of any Lien, except for Liens expressly permitted pursuant to Section 6.02 of the Revolving Credit Agreement. The Grantor has not filed or consented to the filing of (a) any financing statement or analogous document under the UCC or any other applicable laws covering any Collateral, (b) any assignment in which any Grantor assigns any Collateral or any security agreement or similar instrument covering any Collateral with the United States Patent and Trademark Office or the United States Copyright Office or (c) any assignment in which any Grantor assigns any Collateral or any security agreement or similar instrument covering any Collateral with any foreign governmental, municipal or other office, which financing statement or analogous document, assignment, security agreement or similar instrument is still in effect, except, in each case, for Liens expressly permitted pursuant to Section 6.02 of the Revolving Credit Agreement. ARTICLE IV Covenants SECTION 4.01. Changes with respect to Collateral. Each of the Grantors shall promptly notify the Collateral Agent in writing of any change (i) in its legal name, (ii) in its jurisdiction of organization or formation, (iii) in the location of its chief executive office or principal place of business, (iv) in its identity or legal or organizational structure or (v) in its organization identification number or its Federal Taxpayer Identification Number. None of the Grantors shall effect or permit any change referred to in the preceding sentence unless all filings have been made under the UCC or otherwise that are required in order for the Collateral Agent to continue at all times following such change to have a valid, legal and perfected first priority security interest in all the Collateral (subject only to Liens expressly permitted pursuant to Section 6.02 of the Revolving Credit Agreement). Each Grantor shall promptly notify the Collateral Agent if any material portion of the Collateral owned or held by or on behalf of such Grantor is damaged or destroyed. SECTION 4.02. Records. Each Grantor agrees to maintain, at its own cost and expense, such complete and accurate records with respect to the Collateral owned by it as is consistent with its current practices, but in any event to include complete accounting records indicating all payments and proceeds received with respect to any part of the Collateral, and, at such time or times as the Collateral Agent may reasonably request, promptly to prepare and deliver to the Collateral Agent an updated Perfection Certificate, noting all material changes, if any, since the date of the most recent Perfection Certificate. SECTION 4.03. Protection of Security. Each Grantor shall, at its own cost and expense, take any and all actions reasonably necessary to defend title to the Collateral against all Persons and to defend the Security Interest of the Collateral Agent for the ratable benefit of the Secured Parties in the Collateral and the priority thereof against any Lien not expressly permitted pursuant to Section 6.02 of the Revolving Credit Agreement. SECTION 4.04. Further Assurances. Each Grantor agrees, at its own expense, to execute, acknowledge, deliver and cause to be duly filed all such further instruments and documents and take all such actions as are necessary or as the Collateral Agent may from time to time request to better assure, preserve, protect and perfect the Security Interest and the rights and remedies created hereby, including the payment of any fees and taxes required in connection with the execution and delivery of this Agreement, the granting of the Security Interest and the filing of any financing statements (including fixture filings) or other documents in connection herewith or therewith. If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any promissory note or other instrument, such note or instrument shall be promptly pledged and delivered to the Collateral Agent, duly endorsed in a manner satisfactory to the Collateral Agent. SECTION 4.05. Inspection and Verification. The Collateral Agent and such Persons as the Collateral Agent may reasonably designate shall have the right to inspect the Collateral, all records related thereto (and to make extracts and copies from such records) and the premises upon which any of the Collateral is located, at reasonable times and intervals during normal business hours upon reasonable advance notice to the respective Grantor and to verify under reasonable procedures the validity, amount, quality, quantity, value, condition and status of the Collateral. The Collateral Agent shall have the absolute right to share any information it gains from such inspection or verification with any Secured Party in accordance with and subject to the provisions set forth in Section 10.12 of the Revolving Credit Agreement. SECTION 4.06. Taxes; Encumbrances. At its option, the Collateral Agent may discharge past due taxes, assessments, charges, fees, Liens, security interests or other encumbrances at any time levied or placed on the Collateral and not permitted pursuant to Section 6.02 of the Revolving Credit Agreement, and may pay for the maintenance and preservation of the Collateral, in each case to the extent any Grantor fails to do so as required by the Revolving Credit Agreement or this Agreement and such failure shall continue beyond any applicable notice and cure period, and each Grantor jointly and severally agrees to reimburse the Collateral Agent on demand for any payment made or any expense incurred by the Collateral Agent pursuant to the foregoing authorization; provided, however, that nothing in this Section 4.06 shall be interpreted as excusing any Grantor from the performance of, or imposing any obligation on the Collateral Agent or any Secured Party to cure or perform, any covenants or other promises of any Grantor with respect to taxes, assessments, charges, fees, liens, security interests or other encumbrances and maintenance as set forth herein or in the other Loan Documents. SECTION 4.07. Assignment of Security Interest. If at any time any Grantor shall take a security interest in any property of an Account Debtor or any other Person to secure payment and performance of an Account, such Grantor shall promptly assign such security interest to the Collateral Agent to the extent permitted by any contracts or arrangements to which such property is subject. Such assignment need not be filed of public record unless necessary to continue the perfected status of the security interest against creditors of and transferees from the Account Debtor or other Person granting the security interest. SECTION 4.08. Continuing Obligations of the Grantors. Each Grantor shall remain liable to observe and perform all the conditions and obligations to be observed and performed by it under each contract, agreement or instrument relating to the Collateral, all in accordance with the terms and conditions thereof, and each Grantor jointly and severally agrees to indemnify and hold harmless the Collateral Agent and the Secured Parties from and against any and all liability for such performance, provided that such indemnity shall not be available, as to the Collateral Agent and the Secured Parties, to the extent that such liability resulted from the gross negligence or willful misconduct of the Collateral Agent or a Secured Party. SECTION 4.09. Use and Disposition of Collateral. None of the Grantors shall make or permit to be made an assignment, pledge or hypothecation of the Collateral or shall grant any other Lien in respect of the Collateral, except as expressly permitted by Section 6.02 of the Revolving Credit Agreement. None of the Grantors shall make or permit to be made any transfer of the Collateral and each Grantor shall remain at all times in possession of the Collateral owned by it, except that (a) Inventory may be sold or consigned in the ordinary course of business and (b) unless and until the Collateral Agent shall notify the Grantors that an Event of Default shall have occurred and be continuing and that during the continuance thereof the Grantors shall not sell, convey, lease, assign, transfer or otherwise dispose of any Collateral (which notice may be given by telephone if promptly confirmed in writing), the Grantors may use and dispose of the Collateral in any lawful manner not inconsistent with the provisions of this Agreement, the Revolving Credit Agreement or any other Loan Document. Without limiting the generality of the foregoing, each Grantor agrees that it shall not permit any material Inventory to be in the possession or control of any warehouseman, bailee, agent or processor at any time unless such warehouseman, bailee, agent or processor shall have been notified of the Security Interest and shall have agreed in writing to hold the Inventory subject to the Security Interest and the instructions of the Collateral Agent and to waive and release any Lien held by it with respect to such Inventory, whether arising by operation of law or otherwise. SECTION 4.10. Limitation on Modification of Accounts. None of the Grantors will, without the Collateral Agent's prior written consent, which consent shall not be unreasonably withheld, grant any extension of the time of payment of any of the Accounts Receivable, compromise, compound or settle the same for less than the full amount thereof, release, wholly or partly, any Person liable for the payment thereof or allow any credit or discount whatsoever thereon, other than extensions, credits, discounts, compromises or settlements granted or made in the ordinary course of business and consistent with its current practices. SECTION 4.11. Insurance. The Grantors, at their own expense, shall maintain or cause to be maintained insurance covering physical loss or damage to the Inventory and Equipment in accordance with Section 5.07 of the Revolving Credit Agreement. Each Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such Grantor's true and lawful agent (and attorney-in-fact) for the purpose, during the continuance of an Event of Default, of making, settling and adjusting claims in respect of Collateral under policies of insurance, endorsing the name of such Grantor on any check, draft, instrument or other item of payment for the proceeds of such policies of insurance and for making all determinations and decisions with respect thereto. In the event that any Grantor at any time or times shall fail to obtain or maintain any of the policies of insurance required hereby or to pay any premium in whole or part relating thereto, the Collateral Agent may, but is under no obligation to, without waiving or releasing any obligation or liability of the Grantors hereunder or any Event of Default, in its reasonable discretion, obtain and maintain such policies of insurance and pay such premium and take any other actions with respect thereto as the Collateral Agent deems advisable. All sums disbursed by the Collateral Agent in connection with this Section 4.11, including reasonable attorneys' fees, court costs, expenses and other charges relating thereto, shall be payable, upon demand, by the Grantors to the Collateral Agent and shall be additional Revolver Obligations secured hereby. SECTION 4.12. Legend. If any Accounts Receivable of any Grantor are evidenced by Chattel Paper, such Grantor shall legend, in form and manner reasonably satisfactory to the Collateral Agent, such Accounts Receivable and its books, records and documents evidencing or pertaining thereto with an appropriate reference to the fact that such Accounts Receivable have been assigned to the Collateral Agent for the benefit of the Secured Parties and that the Collateral Agent has a security interest therein. SECTION 4.13. Covenants Regarding Patent, Trademark and Copyright Collateral. (a) Each Grantor agrees that it will not, and will not permit any of its licensees to, do any act, or omit to do any act, whereby any Patent which is material to the conduct of such Grantor's business may become invalidated or dedicated to the public, and agrees that it shall continue to mark, to the extent permitted by existing technology, any products covered by a Patent with the relevant patent number as necessary and sufficient to establish and preserve its maximum rights under applicable patent laws pursuant to which each such Patent is issued. (b) Each Grantor (either itself or through its licensees or its sublicensees) will, for each Trademark material to the conduct of such Grantor's business, (i) maintain such Trademark in full force free from any claim of abandonment or invalidity for non-use, (ii) maintain the quality of products and services offered under such Trademark sufficient to preclude any findings of abandonment, (iii) display such Trademark with notice of Federal or foreign registration to the extent necessary and sufficient to establish and preserve its maximum rights under applicable law pursuant to which each such Trademark is issued and (iv) not knowingly use or knowingly permit the use of such Trademark in violation of any third party rights. (c) Each Grantor (either itself or through licensees) will, for each work covered by a material Copyright, continue to publish, reproduce, display, adopt and distribute the work with appropriate copyright notice as necessary and sufficient to establish and preserve its maximum rights under applicable copyright laws pursuant to which each such Copyright is issued. (d) Each Grantor shall notify the Collateral Agent immediately if it knows or has reason to know that any such Patent, Trademark or Copyright material to the conduct of its business may become abandoned, lost or dedicated to the public, or of any adverse determination or development (including the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office, United States Copyright Office or any court or similar office of any country) regarding such Grantor's ownership of any such Patent, Trademark or Copyright, its right to register the same, or to keep and maintain the same. (e) In no event shall any Grantor, either itself or through any agent, employee, licensee or designee, file an application for any Patent, Trademark or Copyright (or for the registration of any Trademark or Copyright) with the United States Patent and Trademark Office, United States Copyright Office or any office or agency in any political subdivision of the United States or in any other country or any political subdivision thereof, unless it promptly thereafter informs the Collateral Agent, and, upon request of the Collateral Agent, executes and delivers any and all agreements, instruments, documents and papers as are necessary or as the Collateral Agent may request to evidence and perfect the Collateral Agent's security interest in such Patent, Trademark or Copyright, and each Grantor hereby appoints the Collateral Agent as its attorney-in-fact to execute and file such writings for the foregoing purposes, all acts of such attorney being hereby ratified and confirmed; such power, being coupled with an interest, is irrevocable. (f) Each Grantor will take all necessary steps that are consistent with the practice in any proceeding before the United States Patent and Trademark Office, United States Copyright Office or any office or agency in any political subdivision of the United States or in any other country or any political subdivision thereof, to maintain and pursue each material application relating to the Patents, Trademarks and/or Copyrights (and to obtain the relevant grant or registration) and to maintain each issued Patent and each registration of the Trademarks and Copyrights that is material to the conduct of any Grantor's business, including timely filings of applications for renewal, affidavits of use, affidavits of incontestability and payment of maintenance fees, and, if consistent with good business judgment, to initiate opposition, interference and cancellation proceedings against third parties. (g) In the event that any Grantor has reason to believe that any Collateral consisting of a Patent, Trademark or Copyright material to the conduct of any Grantor's business has been or is about to be infringed, misappropriated or diluted by a third party, such Grantor promptly shall notify the Collateral Agent and shall, if consistent with good business judgment, promptly sue for infringement, misappropriation or dilution and to recover any and all damages for such infringement, misappropriation or dilution, and take such other actions as are appropriate under the circumstances to protect such Collateral. (h) Upon and during the continuance of an Event of Default, each Grantor shall use its best efforts to obtain all requisite consents or approvals from the licensor of each Copyright License, Patent License or Trademark License to effect the assignment of all of such Grantor's right, title and interest thereunder to the Collateral Agent or its designee. ARTICLE V Power of Attorney Each Grantor irrevocably makes, constitutes and appoints the Collateral Agent (and all officers, employees or agents designated by the Collateral Agent) as such Grantor's true and lawful agent and attorney-in-fact, and in such capacity the Collateral Agent shall have the right, with power of substitution for each Grantor and in each Grantor's name or otherwise, for the use and benefit of the Collateral Agent and the Secured Parties, upon the occurrence and during the continuance of an Event of Default (a) to receive, endorse, assign and/or deliver any and all notes, acceptances, checks, drafts, money orders or other evidences of payment relating to the Collateral or any part thereof; (b) to demand, collect, receive payment of, give receipt for and give discharges and releases of all or any of the Collateral; (c) to sign the name of any Grantor on any invoice or bill of lading relating to any of the Collateral; (d) to send verifications of Accounts Receivable to any Account Debtor; (e) to commence and prosecute any and all suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect or otherwise realize on all or any of the Collateral or to enforce any rights in respect of any Collateral; (f) to settle, compromise, compound, adjust or defend any actions, suits or proceedings relating to all or any of the Collateral; (g) to notify, or to require any Grantor to notify, Account Debtors to make payment directly to the Collateral Agent; and (h) to use, sell, assign, transfer, pledge, make any agreement with respect to or otherwise deal with all or any of the Collateral, and to do all other acts and things necessary to carry out the purposes of this Agreement, as fully and completely as though the Collateral Agent were the absolute owner of the Collateral for all purposes; provided, however, that nothing herein contained shall be construed as requiring or obligating the Collateral Agent or any Secured Party to make any commitment or to make any inquiry as to the nature or sufficiency of any payment received by the Collateral Agent or any Secured Party, or to present or file any claim or notice, or to take any action with respect to the Collateral or any part thereof or the moneys due or to become due in respect thereof or any property covered thereby, and no action taken or omitted to be taken by the Collateral Agent or any Secured Party with respect to the Collateral or any part thereof shall give rise to any defense, counterclaim or offset in favor of any Grantor or to any claim or action against the Collateral Agent or any Secured Party. It is understood and agreed that the appointment of the Collateral Agent as the agent and attorney-in-fact of the Grantors for the purposes set forth above is coupled with an interest and is irrevocable. The provisions of this Section shall in no event relieve any Grantor of any of its obligations hereunder or under any other Loan Document with respect to the Collateral or any part thereof or impose any obligation on the Collateral Agent or any Secured Party to proceed in any particular manner with respect to the Collateral or any part thereof, or in any way limit the exercise by the Collateral Agent or any Secured Party of any other or further right which it may have on the date of this Agreement or hereafter, whether hereunder, under any other Loan Document, by law or otherwise. ARTICLE VI Remedies SECTION 6.01. Remedies upon Default. Upon the occurrence and during the continuance of an Event of Default, each Grantor agrees to deliver each item of Collateral to the Collateral Agent on demand, and it is agreed that the Collateral Agent shall have the right to take any of or all the following actions at the same or different times: (a) with respect to any Collateral consisting of Intellectual Property, on demand, to cause the Security Interest to become an assignment, transfer and conveyance of any of or all such Collateral by the applicable Grantors to the Collateral Agent (except to the extent assignment, transfer or conveyance thereof would result in a loss of said Intellectual Property), or to license or sublicense, whether general, special or otherwise, and whether on an exclusive or non-exclusive basis, any such Collateral throughout the world on such terms and conditions and in such manner as the Collateral Agent shall determine (other than in violation of any then-existing licensing arrangements to the extent that waivers cannot be obtained), and (b) with or without legal process and with or without prior notice or demand for performance, to take possession of the Collateral and without liability for trespass to enter any premises where the Collateral may be located for the purpose of taking possession of or removing the Collateral and, generally, to exercise any and all rights afforded to a secured party under the UCC or other applicable law. Without limiting the generality of the foregoing, each Grantor agrees that the Collateral Agent shall have the right, subject to the mandatory requirements of applicable law, to sell or otherwise dispose of all or any part of the Collateral, at public or private sale or at any broker's board or on any securities exchange, for cash, upon credit or for future delivery as the Collateral Agent shall deem appropriate. The Collateral Agent shall be authorized at any such sale (if it deems it advisable to do so) to restrict the prospective bidders or purchasers to Persons who will represent and agree that they are purchasing the Collateral for their own account for investment and not with a view to the distribution or sale thereof, and upon consummation of any such sale the Collateral Agent shall have the right to assign, transfer and deliver to the purchaser or purchasers thereof the Collateral so sold. Each such purchaser at any such sale shall hold the property sold absolutely, free from any claim or right on the part of any Grantor, and each Grantor hereby waives (to the extent permitted by law) all rights of redemption, stay and appraisal which such Grantor now has or may at any time in the future have under any rule of law or statute now existing or hereafter enacted. The Collateral Agent shall give the Grantors 10 days' written notice (which each Grantor agrees is a "reasonable authenticated notification of disposition" within the meaning of Section 9-611 of the UCC or its equivalent in other jurisdictions) of the Collateral Agent's intention to make any sale of Collateral. Such notice, in the case of a public sale, shall state the time and place for such sale and, in the case of a sale at a broker's board or on a securities exchange, shall state the board or exchange at which such sale is to be made and the day on which the Collateral, or portion thereof, will first be offered for sale at such board or exchange. Any such public sale shall be held at such time or times within ordinary business hours and at such place or places as the Collateral Agent may fix and state in the notice (if any) of such sale. At any such sale, the Collateral, or portion thereof, to be sold may be sold in one lot as an entirety or in separate parcels, as the Collateral Agent may (in its sole and absolute discretion) determine. The Collateral Agent shall not be obligated to make any sale of any Collateral if it shall determine not to do so, regardless of the fact that notice of sale of such Collateral shall have been given. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for sale, and such sale may, without further notice, be made at the time and place to which the same was so adjourned. In case any sale of all or any part of the Collateral is made on credit or for future delivery, the Collateral so sold may be retained by the Collateral Agent until the sale price is paid by the purchaser or purchasers thereof, but the Collateral Agent shall not incur any liability in case any such purchaser or purchasers shall fail to take up and pay for the Collateral so sold and, in case of any such failure, such Collateral may be sold again upon like notice. At any public (or, to the extent permitted by law, private) sale made pursuant to this Section, any Secured Party may bid for or purchase, free (to the extent permitted by law) from any right of redemption, stay, valuation or appraisal on the part of any Grantor (all said rights being also hereby waived and released to the extent permitted by law), the Collateral or any part thereof offered for sale and may make payment on account thereof by using any Revolver Obligation then due and payable to such Secured Party from any Grantor as a credit against the purchase price, and such Secured Party may, upon compliance with the terms of sale, hold, retain and dispose of such property without further accountability to any Grantor therefor. For purposes hereof a written agreement to purchase the Collateral or any portion thereof shall be treated as a sale thereof; the Collateral Agent shall be free to carry out such sale pursuant to such agreement and no Grantor shall be entitled to the return of the Collateral or any portion thereof subject thereto, notwithstanding the fact that after the Collateral Agent shall have entered into such an agreement all Events of Default shall have been remedied and the Revolver Obligations paid in full. As an alternative to exercising the power of sale herein conferred upon it, the Collateral Agent may proceed by a suit or suits at law or in equity to foreclose this Agreement and to sell the Collateral or any portion thereof pursuant to a judgment or decree of a court or courts having competent jurisdiction or pursuant to a proceeding by a court-appointed receiver. SECTION 6.02. Application of Proceeds. The Collateral Agent shall apply the proceeds of any collection or sale of the Collateral, as well as any Collateral consisting of cash, as follows: FIRST, to the payment of all costs and reasonable expenses incurred by the Administrative Agent or the Collateral Agent (in its capacity as such hereunder or under any other Loan Document) in connection with such collection or sale or otherwise in connection with this Agreement or any of the Revolver Obligations, including all court costs and the reasonable fees and expenses of its agents and legal counsel, the repayment of all advances made by the Collateral Agent hereunder or under any other Loan Document on behalf of any Grantor and any other costs or expenses incurred in connection with the exercise of any right or remedy hereunder or under any other Loan Document; SECOND, to the payment in full of the Revolver Obligations (the amounts so applied to be distributed among the Secured Parties pro rata in accordance with the amounts of the Revolver Obligations owed to them on the date of any such distribution) THIRD, to the payment in full of the Indenture Obligations outstanding; and FOURTH, to the Grantors, their successors or assigns, or as a court of competent jurisdiction may otherwise direct. The Collateral Agent shall have absolute discretion as to the time of application of any such proceeds, moneys or balances in accordance with this Agreement. Upon any sale of the Collateral by the Collateral Agent (including pursuant to a power of sale granted by statute or under a judicial proceeding), the receipt of the Collateral Agent or of the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Collateral Agent or such officer or be answerable in any way for the misapplication thereof. SECTION 6.03. Grant of License to Use Intellectual Property. For the purpose of enabling the Collateral Agent to exercise rights and remedies under this Article at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, each Grantor hereby grants to the Collateral Agent an irrevocable, non-exclusive license (exercisable without payment of royalty or other compensation to the Grantors) to use, license or sub-license any of the Collateral consisting of Intellectual Property now owned or hereafter acquired by such Grantor, and wherever the same may be located, and including in such license reasonable access to all media in which any of the licensed items may be recorded or stored and to all computer software and programs used for the compilation or printout thereof. The use of such license by the Collateral Agent shall be exercised, at the option of the Collateral Agent, upon the occurrence and during the continuation of an Event of Default; provided that any license, sub-license or other transaction entered into by the Collateral Agent in accordance herewith shall be binding upon the Grantors notwithstanding any subsequent cure of an Event of Default. ARTICLE VII Miscellaneous SECTION 7.01. Notices. All communications and notices hereunder shall (except as otherwise expressly permitted herein) be in writing and given as provided in Section 10.01 of the Revolving Credit Agreement. All communications and notices hereunder to any Guarantor shall be given to it at its address or telecopy number set forth on Schedule I, with a copy to the Borrower. SECTION 7.02. Security Interest Absolute. All rights of the Collateral Agent hereunder, the Security Interest and all obligations of the Grantors hereunder shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Revolving Credit Agreement, any other Loan Document, any agreement with respect to any of the Revolver Obligations or any other agreement or instrument relating to any of the foregoing, (b) any change in the time, manner or place of payment of, or in any other term of, all or any of the Revolver Obligations, or any other amendment or waiver of or any consent to any departure from the Revolving Credit Agreement, any other Loan Document or any other agreement or instrument, (c) any exchange, release or non-perfection of any Lien on other collateral, or any release or amendment or waiver of or consent under or departure from any guarantee, securing or guaranteeing all or any of the Revolver Obligations, or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the Revolver Obligations or this Agreement. SECTION 7.03. Survival of Agreement. All covenants, agreements, representations and warranties made by any Grantor herein and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the Secured Parties and shall survive the making by the Lenders of the Loans, and the execution and delivery to the Lenders of any notes evidencing such Loans, regardless of any investigation made by the Lenders or on their behalf, and shall continue in full force and effect until this Agreement shall terminate. SECTION 7.04. Binding Effect; Several Agreement. This Agreement shall become effective as to any Grantor when a counterpart hereof executed on behalf of such Grantor shall have been delivered to the Collateral Agent and a counterpart hereof shall have been executed on behalf of the Collateral Agent, and thereafter shall be binding upon such Grantor and the Collateral Agent and their respective successors and assigns, and shall inure to the benefit of such Grantor, the Collateral Agent and the other Secured Parties and their respective successors and assigns, except that no Grantor shall have the right to assign or transfer its rights or obligations hereunder or any interest herein or in the Collateral (and any such assignment or transfer shall be void) except as expressly contemplated by this Agreement or the other Loan Documents. This Agreement shall be construed as a separate agreement with respect to each Grantor and may be amended, modified, supplemented, waived or released with respect to any Grantor without the approval of any other Grantor and without affecting the obligations of any other Grantor hereunder. SECTION 7.05. Successors and Assigns. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party; and all covenants, promises and agreements by or on behalf of any Grantor or the Collateral Agent that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns. SECTION 7.06. Collateral Agent's Fees and Expenses; Indemnification. (a) Each Grantor jointly and severally agrees to pay upon demand to the Collateral Agent the amount of any and all reasonable expenses, including the reasonable fees, disbursements and other charges of its counsel and of any experts or agents, which the Collateral Agent may incur in connection with (i) the administration of this Agreement, (ii) the custody or preservation of, or the sale of, collection from or other realization upon any of the Collateral, (iii) the exercise, enforcement or protection of any of the rights of the Collateral Agent hereunder or (iv) the failure of any Grantor to perform or observe any of the provisions hereof applicable to it. (b) Without limitation of its indemnification obligations under the other Loan Documents, each Grantor jointly and severally agrees to indemnify the Collateral Agent and the other Indemnitees against, and hold each of them harmless from, any and all losses, claims, damages, liabilities and related expenses, including reasonable fees, disbursements and other charges of counsel, incurred by or asserted against any of them arising out of, in any way connected with, or as a result of, the execution, delivery or performance of this Agreement or any claim, litigation, investigation or proceeding relating hereto or to the Collateral, whether or not any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses have resulted from the gross negligence or willful misconduct of such Indemnitee as determined in a final judgment by a court of competent jurisdiction. (c) Any such amounts payable as provided hereunder shall be additional Revolver Obligations secured hereby and by the other Security Documents. The provisions of this Section 7.06 shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Loan Document, the consummation of the transactions contemplated hereby, the repayment of any of the Loans, the invalidity or unenforceability of any term or provision of this Agreement or any other Loan Document, or any investigation made by or on behalf of the Collateral Agent or any Lender. All amounts due under this Section 7.06 shall be payable on written demand therefor. SECTION 7.07. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. SECTION 7.08. Waivers; Amendment. (a) No failure or delay of the Collateral Agent in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Collateral Agent hereunder and of the Collateral Agent, the Administrative Agent and the Lenders under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provisions of this Agreement or any other Loan Document or consent to any departure by any Grantor therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) below, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on any Grantor in any case shall entitle such Grantor or any other Grantor to any other or further notice or demand in similar or other circumstances. (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Collateral Agent and the Grantor or Grantors with respect to which such waiver, amendment or modification is to apply, subject to any consent required in accordance with Section 10.02 of the Revolving Credit Agreement. SECTION 7.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.09. SECTION 7.10. Limitation on Security Interest. Anything contained in this Agreement to the contrary notwithstanding, the obligation hereunder secured by each Guarantor shall be limited to a maximum aggregate amount equal to the greatest amount that would not render such Guarantor's secured obligations hereunder subject to avoidance as a fraudulent transfer or conveyance under Section 548 of Title 11 of the United States Code or any provisions of applicable state law (collectively, the "Fraudulent Transfer Laws"), in each case after giving effect to all liabilities of such Guarantor, contingent or otherwise, that would be taken into account in determining whether the incurrence of the obligation would constitute a fraudulent conveyance under the Fraudulent Transfer Laws and after giving effect, both in determining such Guarantor's probable debt hereunder and in determining its assets, to the existence of any rights to subrogation, contribution, reimbursement, indemnity or similar rights of such Guarantor pursuant to (a) applicable law or (b) any agreement, including the Indemnity, Subrogation and Contribution Agreement. SECTION 7.11. Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. SECTION 7.12 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one contract (subject to Section 7.04), and shall become effective as provided in Section 7.04. Delivery of an executed signature page to this Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. SECTION 7.13. Headings. Article and Section headings used herein are for the purpose of reference only, are not part of this Agreement and are not to affect the construction of, or to be taken into consideration in interpreting, this Agreement. SECTION 7.14. Jurisdiction; Consent to Service of Process. (a) Each Grantor hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any New York State court or Federal court of the United States of America sitting in New York City, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or the other Loan Documents, 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 such New York State or, to the extent permitted by law, in such Federal court. Each Grantor 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 the Collateral Agent, the Administrative Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or the other Loan Documents against any Grantor or its properties in the courts of any jurisdiction. (b) Each Grantor hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or the other Loan Documents in any New York State or Federal court. Each Grantor 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. (c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 7.01. Nothing in this Agreement will affected the right of any party to this Agreement to serve process in any other manner permitted by law. SECTION 7.15. Termination. This Agreement and the Security Interest shall terminate when all the Revolver Obligations have been indefeasibly paid in full and the Lenders have no further commitment to lend under the Revolving Credit Agreement, at which time the Collateral Agent shall execute and deliver to the Grantors, at the Grantors' expense, all UCC termination statements and similar documents which the Grantors shall reasonably request to evidence such termination. Any execution and delivery of termination statements or documents pursuant to this Section 7.15 shall be without recourse to or warranty by the Collateral Agent. A Grantor shall automatically be released from its obligations hereunder and the Security Interest in the Collateral of such Grantor shall be automatically released in the event that such Grantor ceases to be a Subsidiary pursuant to a transaction permitted under the Loan Documents, at which time the Collateral Agent shall execute and deliver to any Grantor, at such Grantor's expense, all documents that such Grantor shall reasonably request to evidence such release. SECTION 7.16. Additional Grantors. Pursuant to Section 5.12 of the Revolving Credit Agreement, each Subsidiary Loan Party that was not in existence or not a Subsidiary Loan Party on the date of the Revolving Credit Agreement is required to enter in to this Agreement as a Grantor upon becoming a Subsidiary Loan Party. Upon execution and delivery by the Collateral Agent and a Subsidiary of an instrument in the form of Annex 3 hereto, such Subsidiary shall become a Grantor hereunder with the same force and effect as if originally named as a Grantor herein. The execution and delivery of any such instrument shall not require the consent of any Grantor hereunder. The rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor as a party to this Agreement. IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. MEMC ELECTRONIC MATERIALS, INC. By /s/ JAMES M. STOLZE -------------------------------- Name: James M. Stolze Title: Executive Vice President, Chief Financial Officer By /s/ KENNETH L. YOUNG -------------------------------- Name: Kenneth L. Young Title: Treasurer EACH OF THE OTHER GUARANTORS LISTED ON SCHEDULE I HERETO, By /s/ KENNETH L. YOUNG -------------------------------- Name: Kenneth L. Young, in his capacity as Treasurer for each of the other Guarantors listed on Schedule I hereto CITICORP USA, INC., as Administrative Agent and Collateral Agent By /s/ EDWARD T. CROOK -------------------------------- Name: Edward T. Crook Title: Managing Director and Vice President EXHIBIT G FORM OF NOTICE OF BORROWING Citicorp USA, Inc., as Administrative Agent for the Lenders that are parties to the Revolving Credit Agreement referred to below , 200 ------------ --- Ladies and Gentlemen: The undersigned, MEMC Electronic Materials, Inc., refer to the Revolving Credit Agreement dated as of November 13, 2001 (as amended, supplemented or otherwise modified, the "Revolving Credit Agreement", the terms defined therein being used herein as therein defined), among the undersigned, each of the Lenders parties thereto and Citicorp USA, Inc., as Administrative Agent and Collateral Agent, and hereby gives you notice, irrevocably, pursuant to Section 2.03 of the Revolving Credit Agreement, that the undersigned hereby wishes to borrow under the Revolving Credit Agreement and in that connection sets forth below the information relating to such borrowing (the "Proposed Borrowing"): (i) The Business Day of the Proposed Borrowing is , 200[ ]. (ii) The aggregate amount of the Proposed Borrowing is $ . (iii) The Loans made in connection with the Proposed Borrowing will be [ABR/Eurodollar] Loans. (iv) [The initial Interest Period for each Loan made as part of the Proposed Borrowing is.](1) (v) The proHceeds of the Proposed Borrowing are to be credited to the following account of the Borrower . [The undersigned hereby certifies that the following statements will be true on the date of the Proposed Borrowing, both immediately prior to the making of the related Loans and also after giving effect thereto and the intended use thereof: (a) no Default shall have occurred and be continuing; and - -------- (1) Insert only in the case of Eurodollar Loans. (b) the representations and warranties made by the Borrower in the Loan Documents are true and complete on and as of the date of the Proposed Borrowing with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date).](2) Very truly yours, MEMC ELECTRONIC MATERIALS, INC. By: ---------------------------- Name: Title: - -------- (2) The certification in the bracketed paragraph shall not be required in connection with the initial $30,000,000 of Borrowings. EX-10 12 tbgex10.txt EXHIBIT 10 AGREEMENT AND PLAN OF MERGER This AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of November 13, 2001, is made by and between TPG Wafer Holdings LLC, a Delaware limited liability company ("Holdings") and MEMC Electronic Materials, Inc., a Delaware corporation (the "Company"). WHEREAS, Holdings is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware; WHEREAS, the Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware; WHEREAS, it has been proposed that Holdings be merged with and into the Company (the "Merger") on the terms and subject to the conditions of this Agreement; and WHEREAS, the Board of Directors of the Company and the members of Holdings have determined that it is advisable and in the best interests of each of such companies that Holdings merge into the Company under and pursuant to the laws of Delaware and upon the terms and subject to the conditions provided in this Agreement and have by resolutions duly adopted, approved this Agreement and directed that this Agreement and the transactions contemplated hereby be submitted to a vote of their respective stockholders or members and executed by their respective officers. NOW, THEREFORE, in consideration of the mutual agreements contained herein, the parties hereto hereby agree as follows: I. THE MERGER 1.1. The Merger. (a) Upon the terms and subject to the conditions of this Agreement, Holdings shall be merged with and into the Company in accordance with the laws of the State of Delaware, with the Company continuing in existence as the surviving corporation (the "Surviving Corporation"), and the separate existence of Holdings shall cease. (b) The Merger shall become effective (the "Effective Time") when the following actions shall have been completed: (i) this Agreement and the Merger shall have been adopted and approved by the stockholders of the Company and the members of Holdings in accordance with the relevant provisions of the Delaware General Corporation Law (the "DGCL") and the Delaware Limited Liability Company Act (the "DLLCA"), as applicable; (ii) all of the conditions precedent to the consummation of the Merger specified in this Agreement shall have been satisfied; (iii) the parties hereto shall have filed (the "Filing") with the Secretary of State of Delaware a certificate of merger (the "Certificate of Merger"), in such form as is required by, and executed in accordance with the relevant provisions of, the DGCL and the DLLCA. The parties hereto agree that such Filing shall occur as soon as practicable after all of the conditions precedent to the consummation of the Merger specified in this Agreement shall have been satisfied. 1.2. Effect of the Merger. At the Effective Time, the effect of the Merger shall be as provided in the applicable provisions of the DGCL and the DLLCA. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time all the property, rights, privileges, powers and franchises of the Company and Holdings shall vest in the Surviving Corporation, and all debts, liabilities, obligations, restrictions, disabilities and duties of the Company and Holdings shall become the debts, liabilities, obligations, restrictions, disabilities and duties of the Surviving Corporation. 1.3. Certificate of Incorporation; Bylaws. (a) At the Effective Time, the Certificate of Incorporation of the Company, as in effect immediately prior to the Effective Time, shall be the Certificate of Incorporation of the Surviving Corporation until thereafter amended as provided by law and such Certificate of Incorporation. (b) At the Effective Time, the Bylaws of the Company as in effect immediately prior to the Effective Time, shall be the Bylaws of the Surviving Corporation until thereafter amended as provided by law, the Certificate of Incorporation of the Company and such Bylaws. 1.4. Directors and Officers. The directors of the Company immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation, each to hold office in accordance with the Certificate of Incorporation and Bylaws of the Surviving Corporation, and the officers of the Company immediately prior to the Effective Time shall be the initial officers of the Surviving Corporation in each case until their respective successors are duly elected or appointed and qualified. 1.5. Conversion of Securities. At the Effective Time, by virtue of the Merger and without any action on the part of either the Company, Holdings or the holders of any of the following securities: (a) Each share of common stock, par value $0.01 per share, of the Company ("Company Shares") owned by Holdings immediately prior to the Effective Time ("Held Shares"), shall be cancelled without any conversion thereof and no payment or distribution shall be made with respect thereto. (b) Each share of Series A Cumulative Convertible Preferred Stock, par value $0.01 per share, of the Company ("Company Preferred Stock") owned by Holdings immediately prior to the Effective Time ("Held Preferred Shares"), shall be cancelled without any conversion thereof and no payment or distribution shall be made with respect thereto. (c) Each warrant certificate owned by Holdings immediately prior to the Effective Time evidencing warrants to purchase Company Shares ("Held Warrants") shall be cancelled without any conversion thereof and no payment or distribution shall be made with respect thereto. (d) Any debt or other obligations of the Company or any of its subsidiaries held by Holdings immediately prior to the Effective Time shall be cancelled without any conversion thereof and no payment or distribution shall be made with respect thereto. (e) The limited liability company membership interests of Holdings ("LLC Interests") outstanding immediately prior to the Effective Time shall be converted into and exchanged for, in the aggregate, the following: (i) a number of validly issued, fully paid and nonassessable shares of common stock, par value $0.01 per share, of the Surviving Corporation ("Surviving Corporation Shares") equal to the number of Held Shares then held by Holdings; plus (ii) a number of validly issued, fully paid and nonassessable shares of Series A Cumulative Convertible Preferred Stock, par value $0.01 per share, of the Surviving Corporation, having the same terms and conditions as those set forth in the Certificate of Designations for the Company Preferred Stock immediately prior to the Effective Time, equal to the number of Held Preferred Shares then held by Holdings; plus (iii) a number of validly issued, fully paid and nonassessable warrants to purchase Surviving Corporation Shares of the Surviving Corporation, having the same terms and conditions as those set forth in the warrant certificates evidencing the Held Warrants immediately prior to the Effective Time, equal to the number of Held Warrants then held by Holdings; plus (iv) a number of validly issued, fully paid and nonassessable Surviving Corporation Shares having a Fair Market Value equal to the aggregate principal of and accrued but unpaid interest on any debt or other obligations of the Company or any of its subsidiaries held by Holdings immediately prior to the Effective Time (each of clauses (i)-(iv), the "Merger Consideration"). For purposes of this Agreement, the "Fair Market Value" of a Surviving Corporation Share shall mean the average of the per share Closing Prices for Company Shares (rounded to the nearest ten thousandth and rounded up in the case of five one-hundred thousandths) for the ten Trading Days ending on the Trading Day which is five days prior to the Effective Time. "Closing Price" with respect to a Company Share on any day means the last reported sale price on that day or, in case no such reported sale takes place on such day, the average of the last reported bid and asked prices, regular way, on that day, in either case, as reported in the consolidated transaction reporting system with respect to securities listed on the NYSE or, if the Company Shares are not listed on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Company Shares are listed or admitted to trading or, if the Company Shares are not listed on the NYSE and not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices on such other nationally recognized quotation system then in use, or, if on any such day the Company Shares are not quoted on any such quotation system, the average of the closing bid and asked prices as furnished by a professional market maker selected by the Board of Directors of the Company in good faith making a market in the Company Shares. If the Company Shares are not publicly held, or so listed, quoted or publicly traded, the "Closing Price" means the fair market value of a Company Share, as determined in good faith by the Board of Directors of the Company. "Trading Day" means any day on which the NYSE is open for trading, or if the Company Shares are not listed on the NYSE any day on which the principal national securities exchange or national quotation system on which the Company Shares are listed, admitted to trading or quoted is open for trading, or if the Company Shares are not so listed, admitted to trading or quoted, any Business Day. "Business Day" means any day, other than a Saturday, Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close. (f) The Merger Consideration shall be apportioned to each holder of an LLC Interest in accordance with their respective Membership Interests as set forth in the limited liability company operating agreement of Holdings as in effect immediately prior to the Effective Time. 1.6. Fractional Shares. No certificates or scrip of Surviving Corporation Shares representing fractional Surviving Corporation Shares or book-entry credit of the same shall be issued upon the surrender for exchange of LLC Interests in the Merger and such fractional Surviving Corporation Share interests will not entitle the owner thereof to vote or to have any rights of a holder of Surviving Corporation Shares. Notwithstanding any other provision of this Agreement, each holder of an LLC Interest exchanged pursuant to the Merger who would otherwise have been entitled to receive a fraction of a Surviving Corporation Share (after taking into account all Surviving Corporation Shares of such holder converted in the Merger) shall receive, in lieu thereof, cash (in U.S. dollars), without interest, in an amount equal to the product of (x) such fractional part of a Surviving Corporation Share multiplied by (y) the Fair Market Value. II. REPRESENTATIONS AND WARRANTIES OF HOLDINGS LLC Holdings represents and warrants to the Company that: 2.1. Due Organization. Holdings is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware and has all requisite limited liability company power and authority to own, operate and lease its properties and to carry on its businesses as they are being conducted on the date of this Agreement. 2.2. Execution and Delivery of Agreement; Enforceability. (a) Holdings has all requisite limited liability company power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery by Holdings of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary limited liability company action. (b) This Agreement has been duly executed and delivered by Holdings and, assuming this Agreement constitutes a legal, valid and binding obligation of the Company, constitutes the legal, valid and binding obligation of Holdings, enforceable against Holdings in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors' rights generally and, as to enforceability, to general principles of equity. 2.3. No Conflict. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby do not contravene (a) the certificate of formation or the limited liability company operating agreement of Holdings, (b) any contractual restriction binding on or affecting Holdings or (c) any judgment, order, decree, law, rule or regulation applicable to Holdings. III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company represents and warrants to Holdings that: 3.1. Due Organization. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own, operate and lease its properties and to carry on its businesses as they are being conducted on the date of this Agreement. 3.2. Execution and Delivery of Agreement; Enforceability. (a) The Company has all requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery by the Company of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action. (b) This Agreement has been duly executed and delivered by the Company and, assuming this Agreement constitutes a legal, valid and binding obligation of Holdings, constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors' rights generally and, as to enforceability, to general principles of equity. 3.3. No Conflict. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby do not contravene (a) the charter or Bylaws of the Company, (b) any contractual restriction binding on or affecting the Company or (c) any judgment, order, decree, law, rule or regulation applicable to the Company. 3.4. State Takeover Statutes. The Board of Directors of the Company has taken action under the provisions of Section 203 of the DGCL such that Section 203 of the DGCL does not apply to the Merger. No other state takeover statute is applicable to the Merger. IV. CONDITIONS The obligations of the Company and Holdings to consummate the Merger are subject to the satisfaction of the following conditions: 4.1. Authorization. (a) The Merger shall have been approved by the stockholders of the Company in accordance with the provisions of the DGCL. (b) The Merger shall have been approved by the members of Holdings in accordance with the provisions of the DLLCA, and for the avoidance of doubt, the members of Holdings shall have full discretion as to the timing of such approval. 4.2. Consents and Approvals. All authorizations, consents and approvals (contractual or otherwise) of any federal, state, local or foreign government agency, regulatory body or official or any person (other than the Company or Holdings and their respective stockholders or members) necessary for the valid consummation of the Merger in accordance with the terms and conditions of this Agreement shall have been obtained and shall be in full force and effect. V. MISCELLANEOUS 5.1. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts entered into and to be performed wholly within the State of Delaware. 5.2. Amendment. At any time prior to the Effective Time, the members of Holdings and the Board of Directors of the Company may amend, modify or supplement this Agreement in such manner as they jointly may determine to the fullest extent permitted by applicable law. 5.3. Further Assurances. Prior to the Effective Time, Holdings and the Company shall take all such action (including, without limitation, obtaining the approval of this Agreement and the Merger by the members of Holdings and the stockholders of the Company) as shall be necessary or appropriate in order to effectuate the Merger. However, nothing in this Section shall limit the discretion of the members of Holdings as to the timing of their approval pursuant to Section 4.1(b) above. 5.4. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized, all as of the date first written above. TPG WAFER HOLDINGS LLC, a Delaware limited liability company By: /s/ Richard A. Ekleberry --------------------------------- Name: Richard A. Ekleberry Title: Vice President MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation By: /s/ James M. Stolze --------------------------------- Name: James M. Stolze Title: Executive Vice President Chief Financial Officer EX-11 13 tbgex11.txt EXHIBIT 11 EXECUTION COPY MANAGEMENT ADVISORY AGREEMENT This MANAGEMENT ADVISORY AGREEMENT (the "Agreement") is made and entered into and effective as of November 13, 2001, between MEMC Electronic Materials, Inc., a Delaware corporation (the "Company") and TPG GenPar III, L.P., a Delaware limited partnership (together with its successors and assigns, "TPG"). 1. Retention. The Company hereby acknowledges that it has retained TPG, and TPG acknowledges that TPG will provide management and financial advisory services to the Company as requested by the Board of Directors of the Company during the term of this Agreement. 2. Term. The term of this Agreement shall continue until the earlier to occur of (i) the tenth anniversary of the date hereof, or (ii) the date on which TPG Wafer Holdings LLC, a Delaware limited company and its affiliates, members or successors cease to own beneficially, directly or indirectly, at least fifteen percent (15%) of the voting power of the securities of the Company or its successors. 3. Compensation. (a) As compensation for TPG's services under this Agreement, the Company shall be obligated to pay to TPG an annual fee (the "Management Advisory Fee") of $2 million (the "Base Fee") (subject to adjustment pursuant to paragraph (c) below) and prorated on a daily basis for any partial calendar year during the term of this Agreement. The Management Advisory Fee shall be payable in equal quarterly installments on each January 1, April 1, July 1, and October 1 during the term of this Agreement (each a "Payment Date"), beginning with the first Payment Date following the date hereof. All payments shall be made by wire transfer of immediately available funds to such account as TPG may designate from time to time in writing. (b) In addition to the Base Fee, as compensation for TPG's services as financial advisor to the Company with respect to any future proposals, if any, for a tender offer, acquisition, sale, merger, exchange offer, recapitalization, restructuring or any debt or equity financing directly or indirectly involving the Company or any of its subsidiaries, on the one hand, and any other person or entity, on the other hand, (each such transaction, an "Add-on Transaction"), the Company shall be obligated to pay to TPG, at the closing of each such Add-on Transaction, a cash fee in the amount representing a percentage of the Transaction Value of each such Add-on Transaction (which percentage shall be agreed by TPG and the Company prior to the closing of each such Add-on Transaction). As used herein, the term "Transaction Value" means the total value of the Add-on Transaction, including without limitation, the aggregate amount of the funds required to complete the Add-on Transaction (excluding any fees payable pursuant to this Section 3(b)), including the amount of any indebtedness, preferred stock or similar items assumed (or remaining outstanding). (c) All past due payments in respect of the Management Advisory Fee and any fees received in connection with any Add-on Transactions shall bear interest at the lesser of the highest rate of interest which may be charged under applicable law or the prime commercial lending rate per annum Chase Manhattan Bank or its successors (which rate is a reference rate and is not necessarily its lowest or best rate of interest actually charged to any customer) (the "Prime Rate") as in effect from time to time, plus two percent (2%), from the due date of such payment to and including the date on which payment is made to TPG in full, including such interest accrued thereon. (e) Any or all of the fees provided for in this Section 3 may be waived in full or in part by TPG in its sole and absolute discretion. 4. Reimbursement of Expenses. In addition to the compensation to be paid pursuant to Section 3 hereof, the Company agrees to pay or reimburse TPG for all "Reimbursable Expenses", which shall consist of all reasonable disbursement and out-of-pocket expenses (including without limitation, costs of travel, postage, deliveries and communications and fees and expenses of counsel, accountants and consultants incurred by TPG or its affiliates for the account of the Company or in connection with the performance by TPG of the services contemplated by Section 1 hereof. Promptly (but not more than 10 days) after request by or notice from TPG, the Company shall pay TPG, by wire transfer of immediately available funds to an account designated by TPG, the Reimbursable Expenses for which TPG has provided the Company invoices or reasonably detailed descriptions. All past due payments in respect of the Reimbursable Expenses shall bear interest at the lesser of the highest rate of interest which may be charged under applicable law or the Prime Rate plus 2% from the date which is 10 days following the request or notice from TPG in respect of such Reimbursable Expenses to and including the date on which such Reimbursable Expenses plus accrued interest thereon, are fully paid to TPG. 5. Indemnification. The Company shall indemnify and hold harmless each of TPG, its affiliates and partners, and the respective directors, officers, controlling persons (within the meaning of Section 15 of the Securities Act of 1933 or Section 20(a) of the Securities Exchange Act of 1934), if any, agents and employees of each of TPG, its affiliates and partners (TPG, its affiliates and shareholders, and such other specified persons being collectively referred to as "Indemnified Persons", and individually as an "Indemnified Person") from and against any and all claims, liabilities, losses, damages and expenses incurred by any Indemnified Person (including those arising out of an Indemnified Person's negligence and fees and disbursements of the respective Indemnified Person's counsel) which (A) are related to or arise out of (i) actions taken or omitted to be taken (including any untrue statements made or any statements omitted to be made) by the Company or (ii) actions taken or omitted to be taken by an Indemnified Person with the Company's consent or in conformity with the Company's instructions or the Company's actions or omissions or (B) are otherwise related to or arise out of TPG's engagement, and will reimburse each Indemnified Person for all costs and expenses, including fees and disbursements of any Indemnified Person's counsel, as they are incurred, in connection with investigating, preparing for, defending, or appealing any action, formal or informal claim, investigation, inquiry, or other proceeding, whether or not in connection with pending or threatened litigation, caused by or arising out of or in connection with TPG's acting pursuant to the engagement, whether or not any Indemnified Person is named as a party thereto and whether or not any liability results therefrom. The Company will not, however, be responsible for any claims, liabilities, losses, damages, or expenses pursuant to clause (B) of the preceding sentence that have resulted primarily from TPG's gross negligence or willful misconduct. The Company also agrees that neither TPG nor any other Indemnified Person shall have any liability to the Company for or in connection with such engagement except for any such liability for claims, liabilities, losses, damages, or expenses incurred by the Company that have resulted primarily from TPG's gross negligence or willful misconduct. The Company further agrees that it will not, without the prior written consent of TPG, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit, or proceeding in respect of which indemnifications may be sought hereunder (whether or not any Indemnified Person is an actual or potential party to such claim, action, suit, or proceeding) unless such settlement, compromise or consent includes an unconditional release of TPG and each other Indemnified Person hereunder from all liability arising out of such claim, action, suit or proceeding. THE COMPANY HEREBY ACKNOWLEDGES THAT THE FOREGOING INDEMNITY SHALL BE APPLICABLE TO ANY CLAIMS, LIABILITIES, LOSSES, DAMAGES, OR EXPENSES THAT HAVE RESULTED FROM OR ARE ALLEGED TO HAVE RESULTED FROM THE ACTIVE OR PASSIVE OR THE SOLE, JOINT, OR CONCURRENT ORDINARY NEGLIGENCE OF TPG OR ANY OTHER INDEMNIFIED PERSON. The foregoing right to indemnity shall be in addition to any rights that TPG or any other Indemnified Person may have at common law or otherwise and shall remain in full force and effect following the completion or any termination of the engagement. The Company hereby consents to personal jurisdiction and to service and venue in any court in which any claim, which is subject to this agreement, is brought against TPG or any other Indemnified Person. It is understood that, in connection with TPG's engagement, TPG may also be engaged to act for the Company in one or more additional capacities, and that the terms of this engagement or any such additional engagement(s) may be embodied in one or more separate written agreements. This indemnification shall apply to the engagement specified in the first paragraph hereof as well as to any such additional engagement(s) (whether written or oral) and any modification of said engagement or such additional engagement(s) and shall remain in full force and effect following the completion or termination of said engagement or such additional engagements. 6. Confidential Information. In connection with the performance of the services hereunder, TPG agrees not to divulge any confidential information, secret processes, or trade secrets disclosed by the Company to it solely in its capacity as a financial advisor, unless the Company consents to the divulging thereof or such information, secret processes, or trade secrets are publicly available or otherwise available to TPG without restriction or breach of any confidentiality agreement or unless required by any governmental authority or in response to any valid legal process. 7. Governing Law. This Agreement shall be construed, interpreted, and enforced in accordance with the laws of the State of New York, excluding any choice-of-law provisions thereof. 8. Assignment. This Agreement and all provisions contained herein shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, neither this Agreement nor any of the rights, interests, or obligations hereunder shall be assigned (other than with respect to the rights and obligations of TPG, which may be assigned to any one or more of its partners or affiliates) by any of the parties without the prior written consent of the other party. 9. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument, and the signature of any party to any counterpart shall be deemed a signature to, and may be appended to, any other counterpart. 10. Other Understandings. All discussions, understandings, and agreements theretofore made between any of the parties hereto with respect to the subject matter hereof are merged in this Agreement, which alone fully and completely expresses the agreement of the parties hereto. All calculations of the Management Advisory Fee and Reimbursable Expenses shall be made by TPG and, in the absence of manifest error, shall be final and conclusive. The Company expressly acknowledges that TPG has been retained solely as an advisor to the Company, and not as an advisor to or agent of any other person, and that the Company's engagement of TPG is not intended to confer any rights upon any person not a party hereto, including shareholders, employees or creditors of the Company, as against TPG, TPG's affiliates or partners or any of their respective directors, officers, agents and employees. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date and year first above written. TPG GENPAR III, L.P. By: TPG Advisors III, Inc., its General Partner By: /s/ RICHARD EKLEBERRY ------------------------------- Name: Richard A. Ekleberry Title: Vice President MEMC ELECTRONIC MATERIALS, INC. By: /s/ JAMES M. STOLZE ------------------------------- Name: James M. Stolze Title: Executive Vice President and Chief Financial Officer EX-12 14 tpgex12.txt EXHIBIT 12 AMENDED AND RESTATED LIMITED LIABILITY COMPANY ---------------------------------------------- OPERATING AGREEMENT ------------------- OF -- TPG WAFER HOLDINGS LLC ---------------------- This Amended and Restated Limited Liability Company Operating Agreement made, entered into and effective as of November 13, 2001 (the "Agreement"), by the parties whose names and addresses are set forth on Schedule A hereto as members, and in the event any other parties are admitted to membership, such other parties who shall execute this Agreement by subscribing their names as members to the signature page hereof (each a "Member," and collectively, the "Members"). WITNESSETH: WHEREAS, Richard A. Ekleberry, as an authorized person within the meaning of the Act, has executed and caused to be filed with the Secretary of State of the State of Delaware the Certificate of Formation (the "Certificate") of TPG Wafer Holdings LLC (the "Company") on September 19, 2001 (the "Formation Date") in order to form a limited liability company pursuant to the Delaware Limited Liability Company Act, as amended (the "Act"); and WHEREAS, the Members desire to amend and restate in their entirety the terms of the Limited Liability Company Operating Agreement of the Company dated as of September 19, 2001 (the "Existing Agreement"), in order, among other things, to admit new Members; NOW, THEREFORE, in consideration of the foregoing and of the mutual promises of the parties hereto, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree that the Existing Agreement is hereby amended and restated to read in its entirety as follows: ARTICLE I ORGANIZATION 1.01. Formation of the Company. The Members hereby: (a) approve and ratify the filing of the Certificate with the Secretary of State of the State of Delaware on the Formation Date and all actions taken by or on behalf of the Company on or prior to the execution of this Agreement; and (b) confirm and agree to their status as Members of the Company as set forth herein. 1.02. Office of the Company. The Company shall have its principal office at 301 Commerce Street, Suite 3300, Fort Worth, Texas 76102, and may establish such other offices or places of business for the Company as the Managing Member may deem appropriate. 1.03. Registered Office and Registered Agent. The Company shall have its registered office in the State of Delaware at Corporation Trust Center, 1209 Orange Street, Wilmington, County of New Castle, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company. 1.04. Purposes of the Company. The purposes of the Company shall be to (i) invest in the debt and equity securities of MEMC Electronic Materials, Inc. ("MEMC") and its affiliates and (ii) take any action that is necessary or appropriate in connection therewith. TPG Wafer Partners, LLC and TPG Wafer Management, LLC (collectively, the "TPG Members") hereby represent and warrant to the other parties to this Agreement that, prior to the date of this Agreement, the Company has conducted no business, and has incurred no liabilities or obligations, that would be inconsistent with the purposes of the Company set forth in this Section 1.04. 1.05. Term of the Company. The existence of the Company shall commence as of the date that the Certificate was filed with the Secretary of State of the State of Delaware and shall continue until dissolution thereof in accordance with the provisions of the Certificate or this Agreement. ARTICLE II MANAGEMENT OF COMPANY 2.01. Management Generally. Subject to the terms of this Agreement and of the Members' Agreement (as defined below) and except as may be required by nonwaivable provisions of applicable law, the business and affairs of the Company shall be carried on and managed by the Managing Member (as defined below), and the powers of the Company shall be exercised by or under the authority of, and the business and affairs of the Company shall be managed under the direction of, such Managing Member. The Members (including the managing member) shall not be personally liable for the debts, liabilities, contracts or other obligations of the Company. 2.02. Managing Member. (a) TPG Wafer Partners, LLC ("TPG Wafer Partners") shall be the managing member of the Company (the "Managing Member"). In the event that the Managing Member is unable to serve as the Managing Member or, having commenced to serve, withdraws (the Managing Member being hereinafter referred to as a "Withdrawing Manager"), such Withdrawing Manager's replacement (a "Substitute Manager") shall be selected by the Withdrawing Manager; provided that, in the event that senior principals of Texas Pacific Group no longer control (directly or indirectly) a majority of the Membership Interests, all of the Members (including the TPG Members) shall select a Substitute Manager; and provided, further, that so long as TPG Wafer Partners is the Managing Member of the Company, TPG Wafer Partners will be controlled (directly or indirectly) by senior principals of Texas Pacific Group. (b) Any decision or action by or on behalf of the Company shall require the consent of the Managing Member. The Managing Member may, pursuant to this Section 2.02, appoint one or several persons (each, an "Authorized Representative") to carry out, or act on behalf of the Company as to, any specified actions or decisions to be taken by the Company pursuant to this Agreement or otherwise. The authority of each such Authorized Representative shall be limited to those specific actions or decisions as specified at the time of the appointment of such Authorized Representative, as evidenced in writing by the Managing Member. 2.03 Actions Without a Meeting. Any action required or permitted to be taken by the Managing Member may be evidenced by a consent in writing, setting forth the action so taken, signed by an authorized representative of the Managing Member. Such consent shall have the same force and effect, as of the date stated therein, as a vote of such Managing Member and may be stated as such in any document or instrument filed with the Secretary of State of the State of Delaware or in any certificate or other document delivered to any person or entity. ARTICLE III OFFICERS 3.01 Officers. (a) The Managing Member may, from time to time, designate one or more persons to be officers of the Company. No officer need be a resident of the State of Delaware. Any officers so designated shall have such authority and perform such duties as the Managing Member may, from time to time, delegate to them. The Managing Member may assign titles to particular officers. Unless the Managing Member decides otherwise, if the title is one commonly used for officers of a business corporation formed under the General Corporation Law of the State of Delaware, the assignment of such title shall constitute the delegation to such officer of the authority and duties that are normally associated with that office, subject to any restrictions on such authority imposed by the Managing Member. Any number of offices may be held by the same person. (b) Each officer shall hold office until his or her successor shall be duly designated and qualified or until his or her death or until he or she shall resign or shall have been removed in the manner hereinafter provided. (c) Any officer may resign as such at any time. Such resignation shall be made in writing and shall take effect at the time specified therein, or if no time be specified, at the time of its receipt by the Managing Member. The acceptance of a resignation shall not be necessary to make it effective, unless expressly so provided in the resignation. (d) Any officer may be removed as such, either with or without cause, by the Managing Member at any time. Any vacancy occurring in any office of the Company may be filled by the Managing Member. (e) The following persons are hereby appointed officers of the Company: David Bonderman -- President James G. Coulter -- Vice President William S. Price III -- Vice President James J. O' Brien -- Vice President and Treasurer Richard A. Ekleberry -- Vice President and Secretary Justin T. Chang -- Vice President John W. Marren -- Vice President Carrie A. Wheeler -- Vice President Eugene T. Frantz -- Vice President Linda G. Rogenski -- Assistant Secretary S. Michelle Reese -- Assistant Secretary 3.02. Certain Transactions. The fact that a Member or any affiliate of a Member is directly or indirectly interested in or connected with any person, firm or corporation employed by the Company to render or perform a service, or from which or to whom the Company may buy or sell any property, shall not prohibit the Company from employing or dealing with such person, firm or corporation. ARTICLE IV CAPITAL CONTRIBUTION; MEMBERSHIP INTERESTS; DISTRIBUTIONS 4.01. Initial Capital Contribution; Membership Interests. The Members shall make contributions of capital to the Company (each, a "Capital Contribution") upon ten (10) days' notice provided by the Managing Member, in the amounts shown on Schedule B to this Agreement and the Members shall hold interests in the Company (each, a "Membership Interest") in the amounts shown on such Schedule B. 4.02 Additional Capital Contributions. Except as provided in the following sentence, no Member shall be obligated or permitted to make any additional contribution to the capital of the Company. The Members agree to make additional Capital Contributions from time to time as appropriate in respect of reasonable administrative expenses of the Company (as determined by the Managing Member), including without limitation, outside legal counsel of the Company. Except as a result of the transfer of all or a portion of a Membership Interest that is expressly permitted by this Agreement, no person other than the entities set forth on Schedule B as of the date hereof shall become a Member of the Company. 4.03 Capital Accounts. The Company shall maintain a separate capital account (the "Capital Account") for each Member that shall consist of (a) the sum of (i) such Member's Capital Contributions paid to the Company as of any given time, (ii) the portion of the Company's net income allocated to the Member pursuant to Section 5.02, and (iii) the amount of any Company liabilities assumed by such Member, less (b) the sum of (A) the portion of the Company's net loss allocated to the Member pursuant to Section 5.02, (B) all distributions made by the Company to the Member pursuant to Sections 4.06 and 7.03 and (C) the amount of any Member liabilities assumed or paid by the Company by action of the Members. The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Treasury Regulations under Section 704(b) of the Code, and to the extent not inconsistent with the provisions of this Agreement, shall be interpreted and applied in a manner consistent with such Treasury Regulations. 4.04 Return of Capital. Except upon the dissolution of the Company as provided in Section 7.01 herein, no Member shall have the right to withdraw from the Company or to demand or to receive the return of all or any part of its Capital Account or its Capital Contributions to the Company. 4.05 No Interest on Capital Contribution. No Member shall be paid interest on any of its Capital Contributions or on its Capital Account. 4.06 Distributions. Any distributions to the Members shall be made pro rata in accordance with their respective Membership Interests. Distributions may be made in cash or in-kind. Distributions of cash received by the Company from the disposition of any securities shall be made by the Company within thirty (30) days of the date such cash is received by the Company. The Managing Member may reserve reasonable amounts for anticipated expenses or contingent liabilities of the Company. ARTICLE V Allocations 5.01 Calculation of Profits and Losses. The profits and losses of the Company shall be determined for each fiscal year in accordance with U.S. generally accepted accounting principles. 5.02 Allocation of Profits and Losses. (a) Except as otherwise set forth in this Section 5.02 for Capital Account purposes, all items of income, gain, loss and deduction shall be allocated among the Members pro rata in accordance with their respective Membership Interests. (b) For federal, state and local income tax purposes, items of income, gain, loss, deduction and credit shall be allocated to the Members in accordance with the allocations of the corresponding items for Capital Account purposes under this Section 5.02, except that items with respect to which there is a difference between tax and book basis will be allocated in accordance with Section 704(c) of the Code, the Treasury Regulations thereunder, and Treasury Regulations Section 1.704-1(b)(4)(i). (c) Notwithstanding any provision set forth in this Section, no item of deduction or loss shall be allocated to a Member to the extent the allocation would cause a negative balance in such Member's Capital Account (after taking into account the adjustments, allocations and distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) that exceeds the amount that such Member would be required to reimburse the Company pursuant to this Agreement or under applicable law. (d) In the event any Member unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6), items of the Company's income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate as quickly as possible any deficit balance in its Capital Account in excess of that permitted under Section 5.02(c) created by such adjustments, allocations or distributions. Any special allocations of items of income or gain pursuant to this Section 5.02(d) shall be taken into account in computing subsequent allocations pursuant to this Section 5.02 so that the net amount of any items so allocated and all other items allocated to each Member pursuant to this Section 5.02 shall, to the extent possible, be equal to the net amount that would have been allocated to each such Member pursuant to the provisions of this Section 5.02 if such special allocations had not occurred. (e) Nonrecourse deductions as defined in Treasury Regulations Section 1.704-2(b) shall be allocated among the Members in accordance with their respective Membership Interests. ARTICLE VI SUPERMAJORITY APPROVALS 6.01 Matters Requiring Member Approval. Without the prior written consent of each of (i) TCW/Crescent Mezzanine Trust III and TCW/Crescent Mezzanine Partners III, L.P. (collectively, "TCW") (so long as TCW and those of its Permitted Transferees (as defined in the Members' Agreement) that are controlled by TCW) hold at least fifteen percent (15%) of the Membership Interests and (ii) Green Equity Investors III, L.P. and Green Equity Investors Side III, L.P. (collectively, "LGP") (so long as LGP and those of its Permitted Transferees that are controlled by LGP) hold at least fifteen percent (15%) of the Membership Interests, the Managing Member agrees not to cause the Company to, and the Company shall not: (i) authorize or issue any additional Membership Interests, provided that the Company may authorize and issue additional Membership Interests to the TPG Members without any such consent solely to incentivize the management and directors of MEMC or other persons providing consulting or other services to MEMC (excluding in each case any TPG deal professionals or any TPG affiliate (as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), so long as such additional Membership Interests constitute less than 10% of the aggregate Membership Interests on the date hereof; (ii) engage in a merger (other than any merger with MEMC or any of its subsidiaries), consolidation, statutory share exchange or other business combination or sale of all or substantially all of the assets of the Company or any similar transaction in any one transaction or series of related transactions; provided that TCW and LGP hereby agree to consent to any merger or other transaction in which TPG exercises its "drag-along rights" in accordance with Section 2.04(a) of the Members' Agreement (as defined below); (iii) engage in a liquidation, bankruptcy, dissolution, recapitalization, reorganization, assignment to creditors or any similar transaction; provided that the Company may convert any shares of preferred stock of MEMC to shares of common stock of MEMC without any such consent; (iv) make any amendment to this Agreement that adversely affects the Members' economic interest in the Company; (v) incur any amount of indebtedness for money borrowed in excess of an aggregate amount of $5 million (other than any indebtedness incurred in connection with any restructuring or similar transaction involving the Senior Notes, the Italian Notes or the Revolving Credit Facility (in each case as defined under the Intercreditor Agreement, dated as of the date hereof, by and among TPG Wafer Credit Partners, L.L.C. and certain other parties named therein)); or (vi) enter into an agreement or contract to do any of the foregoing. ARTICLE VII DISSOLUTION AND TERMINATION OF THE COMPANY 7.01 Events Causing Termination. The Company shall be dissolved and its affairs shall be wound up upon the first occurrence of either of the following: (i) termination hereof by the Members holding a majority of the Membership Interests; (ii) the occurrence of any of the events set forth in Section 18-801(a)(4) of the Act that affects the Members and thereby results in the dissolution of the Company (unless the Company is continued as provided in 18-801(a)(4)). 7.02. Winding Up. Upon dissolution of the Company, the Members shall proceed diligently to wind up the affairs of the Company and distribute its assets. 7.03 Liquidation and Termination. Upon dissolution of the Company, as expeditiously as is reasonable, the Company shall pay its liabilities and make distributions in the following manner and order: (i) to creditors, including Members who are creditors, to the extent otherwise permitted by law, in satisfaction of liabilities of the Company (whether by payment or by establishment of reserves); and (ii) to the Members in accordance with their Membership Interests. At such time as the distributions provided for in (i) and (ii) above have been made, the Company shall terminate. 7.04 Accounting on Liquidation. Upon liquidation, a proper accounting shall be made by the Company's accountants of the Company's assets, liabilities and results of operations through the last day of the month in which the Company is terminated. 7.05 Merger with MEMC. In the event of a merger, statutory share exchange or other business combination of the Company with MEMC or any of its subsidiaries, (i) each of the Members shall execute a shareholders' agreement among the Members with terms substantially identical to those included in the Members' Agreement, provided that such shareholders' agreement shall terminate at such time as TPG has sold substantially all of its shares in MEMC (or, if different, the surviving entity of the merger), (ii) the Company shall distribute any securities issued to the Company pursuant to such merger to the Members pro rata in accordance with their respective Membership Interests, and (iii) the Company shall use its best efforts to cause any registration rights held by the Company in respect of any securities of MEMC (or, if different, the surviving entity of the merger) distributed by the Company to be assigned to the Members pro rata in accordance with their respective Membership Interests. ARTICLE VIII COMPANY EXPENSES, BOOKS AND RECORDS 8.01 Operating Expenses. The Company shall pay all current expenses, including administrative expenses and fees, before any distributions may be made to the Members. Appropriate reserves may be determined and charged to the Members (in accordance with U.S. generally accepted accounting principles) for contingent liabilities, if any, as of the date any such contingent liability becomes known to the Members. 8.02 Fiscal Year and Method of Accounting. The fiscal year of the Company shall begin on January 1 of each year (except for the first fiscal year of the Company which shall begin on the date of this Agreement) and end on the following December 31 (except for the last fiscal year of the Company which shall end on the date on which the Company is terminated). The Company shall select the appropriate method of accounting. 8.03 Records. The books and records of the Company shall be maintained at the principal office and place of business of the Company. 8.04 Financial Statements and Reports. The Managing Member shall oversee the accounting, tax and record keeping matters of the Company. 8.05 Tax Matters Member; Tax Election. The Managing Member shall appoint the Tax Matters Member. The Tax Matters Member shall promptly advise the other members of all audits or other actions by the Internal Revenue Service with respect to the Company and shall furnish to the Members a copy of every notice or other communication received by the Tax Matters Member from the Internal Revenue Service with respect to the Company. The Tax Matters Member shall not take any action in connection with a tax audit, or make any tax election, without the consent of the Managing Member. Any direct or indirect cost incurred by the Tax Matters Member, acting in its capacity as such, shall be deemed costs and expenses of the Company, and the Company shall reimburse the Tax Matters Member for such amounts. The Company may elect to be treated as a corporation for U.S. federal income tax purposes (or state or local tax purposes), effective as of any date, and may take any other action as may be necessary or incidental to such election. ARTICLE IX LIABILITY AND INDEMNIFICATION 9.01 Liability. (a) Liability to Company. No Member or officer of the Company, or any employee, agent, limited partner or general partner of a Member, shall in such capacity be liable, responsible or accountable in damages or otherwise to the Company or the other Members by reason of acts, omissions or errors in judgment, except for acts, omissions or errors in judgment that are found by a court of competent jurisdiction to be the result of such person's gross negligence, willful misconduct or bad faith. Notwithstanding any of the foregoing to the contrary, the provisions of this Section 9.01 shall not be construed so as to relieve (or attempt to relieve) a person of any liability, to the extent (but only to the extent) that such liability may not be waived, modified or limited under applicable law, but shall be construed so as to effectuate the provisions of this Section 9.01 to the fullest extent permitted by law. (b) No Personal Liability of Members, Manager, Etc. Members shall have the same limitation of personal liability as is extended to stockholders of a private corporation for profit incorporated under the Delaware General Corporation Law (the "DGCL"). The rights accruing to a Member under this Section 9.01 shall not exclude any other right to which such Member may be lawfully entitled nor shall anything herein contained restrict the right of the Company to indemnify or reimburse a Member in any appropriate situation even though not specifically provided herein. (c) Liability to Third Parties. No Member or officer of the Company, or any employee, agent, limited partner or general partner of the Managing Member in his or her capacity as such shall be liable under a judgment, decree, or order of a court, or in any other manner, for any debt, obligation, or liability of the Company. 9.02 Indemnification. To the fullest extent permitted by law, the Company shall indemnify, defend and hold harmless the Managing Member and officers of the Company, and any employee, director, limited partner, general partner member or agent of such Managing Member (each, an "Indemnified Person") from and against any loss, liability, damages, cost or expense (including legal fees and expenses and any amounts paid in settlement) resulting from a claim, demand, lawsuit, action or proceeding relating to such Indemnified Person's actions or omissions or such Indemnified Person's status or capacity as Managing Member or otherwise concerning business or activities undertaken by or on behalf of the Company; provided, that the acts or omissions of such Indemnified Person are not found by a court of competent jurisdiction upon entry of final judgment to constitute gross negligence, willful misconduct or bad faith. Expenses, including legal fees, incurred by an Indemnified Person and relating to any claim, demand, lawsuit, action or proceeding for which indemnification is sought under this indemnification provision may be paid in advance by the Company; provided, however, that the Indemnified Person shall reimburse the Company for such expenses, with interest, if it is ultimately determined that such Indemnified Person is not entitled to indemnification hereunder. All rights to indemnification provided herein shall survive the dissolution of the Company and the death, withdrawal, retirement, removal, incompetence or insolvency of any Indemnified Person; provided that a claim for indemnification hereunder is made by or on behalf of the Indemnified Person prior to the time distribution in liquidation of the assets of the Company is made pursuant to Section 7.03 hereof. ARTICLE X MEMBER REPRESENTATIONS 10.01 Member Representations. Each Member hereby represents and warrants to the Company that: (i) If the Member is a corporation, partnership, limited liability company, trust, estate or other entity, it is empowered, authorized and qualified to become a Member subject to the terms and conditions of this Agreement, and the person signing this Agreement on behalf of the Member has been duly authorized by the Member to do so. If the Member is an individual, the Member is of legal age to execute this Agreement and is legally competent to do so. (ii) The Member is acquiring Membership Interests for the Member's own account as principal for investment and not with a view to the distribution or sale thereof. (iii) The Member has such knowledge and experience in financial and business matters that the Member is and will be capable of evaluating the merits and risks of the investment in the Company. The Member has been given the opportunity to ask questions of, and receive answers from, the Managing Member and the Company concerning the terms and conditions of, and other matters pertaining to, this investment, and has had access to such financial and other information concerning the Company as it has considered necessary to make a decision to invest in the Company and has availed itself of this opportunity to the full extent desired. (iv) The Member has no need for liquidity in this investment, has the ability to bear the economic risk of this investment, and at the present time and in the foreseeable future can afford a complete loss of this investment. (v) The Member is an "accredited investor" within the meaning of Regulation D promulgated under the Securities Act. (vi) If the Member is a corporation, partnership, limited liability company, trust or other entity, it was not formed or recapitalized for the specific purpose of acquiring the Membership Interests (or, if it was so formed or recapitalized, such Member has informed the Company of, and the Company has agreed to, such fact). (vii) This Agreement has been duly authorized, executed and delivered by the Member and, upon due authorization, execution and delivery by the Managing Member, will constitute the valid and legally binding agreement of the Member enforceable in accordance with its terms against the Member, except as such enforceability may be limited by (i) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other laws of general application relating to or affecting the enforcement of creditors' rights and remedies, as from time to time in effect, (ii) application of equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (iii) considerations of public policy or the effect of applicable law relating to fiduciary duties. (viii) The Member acknowledges that neither the Company, the Managing Member nor any Affiliate thereof has rendered or will render any investment advice or securities valuation advice to the Member, and that the Member is neither subscribing for nor acquiring any interest in the Company in reliance upon, or with the expectation of, any such advice. (ix) No representations or warranties have been made to the Member with respect to the investment in the Membership Interests or the Company other than the representations set forth herein, and the Member has not relied upon any representation or warranty not provided herein or therein in making this subscription. (x) Either (i) none of the funds that the Member is using or will use to fund its purchase are assets of an employee benefit plan as defined in Section 3(3) of ERISA, subject to Title I of ERISA, or a plan described in Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), or an entity whose underlying assets include plan assets for purposes of ERISA by reason of a plan's investment in the entity (any such plan under ERISA or the Code or any such entity collectively referred to as a "Plan") or (ii)(x) some or all of the funds that the Member is using or will use to fund its purchase are assets of one or more Plans and (y) assuming that the Company is not a "party in interest" (within the meaning of Section 3(14) of ERISA) or a "disqualified person" (within the meaning of Section 4975 of the Code) with respect to any Plan other than those Plans previously identified by the Company to the Member in writing, the purchase and holding of the Membership Interests by the Member does not and will not constitute or result in a non-exempt "prohibited transaction" within the meaning of Section 406 of ERISA or Section 4975(c) of the Code. (xi) If the Member is not a United States person, the Member has heretofore notified the Company in writing of its status as such a person. "United States person" means a citizen or resident of the United States, a corporation, partnership or other entity created or organized in or under the laws of the United States or any political subdivision thereof, an estate the income of which is subject to United States federal income taxation regardless of its source, or any trust if (i) a U.S. court is able to exercise primary supervision over the trust's administration and (ii) one or more United States persons have the authority to control all of the trust's substantial decisions. (xii) The execution, delivery and performance of this Agreement by the Member does not and will not result in a breach of any of the terms, conditions or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, credit agreement, note or other evidence of indebtedness, or any lease or other agreement, or any license, permit, franchise or certificate, to which the Member is a party or by which it is bound or to which any of its properties are subject, or require any authorization or approval under or pursuant to any of the foregoing, violate the organizational documents of the Member, or violate in any material respect any statute, regulation, law, order, writ, injunction or decree to which the Member is subject. (xiii) The Member acknowledges that the Company has relied and will rely upon the representations and warranties of the Member set forth in this Agreement and that all such representations and warranties shall survive the date of signing of this Agreement. 10.02 Investor Awareness. The Member acknowledges that it is aware that: (i) No federal or state agency has passed upon the Membership Interests or made any finding or determination as to the fairness of this investment. Neither this Agreement nor any other document relating to the Membership Interests has been filed with the Securities and Exchange Commission or with any securities administrator under state securities laws. (ii) There are substantial risks incident to the purchase of Membership Interests. (iii) There are substantial restrictions on the transferability of the Membership Interests under this Agreement and under applicable law; there is no established market for the Membership Interests and no public market for the Membership Interests is likely to develop; the Membership Interests will not be, and investors in the Company have no rights to require that the Membership Interests be, registered under the 1933 Act or the securities laws of the various states and therefore cannot be resold, pledged, assigned or otherwise disposed of unless subsequently registered or unless an exemption from such registration is available; the Member may have to hold the Membership Interests and bear the economic risk of this investment indefinitely and it may not be possible for the Member to liquidate its investment in the Company. (iv) The Company will not be registered as an investment company under the 1940 Act and none of the Managing Member nor the Company will be registered as an investment advisor under the Investment Advisors Act of 1940, as amended. (v) With respect to the tax and other legal consequences of an investment in the Company, the Member is relying solely upon the advice of its own tax and legal advisors. ARTICLE XI GENERAL PROVISIONS 11.01 Amendments to this Agreement. The terms and provisions of this Agreement may be modified or amended at any time and from time to time by the written consent of Members holding at least 85% of the Membership Interests. 11.02 Entire Agreement. This Agreement supersedes all prior agreements with respect to the subject matter hereof. This instrument, together with the Members' Agreement, dated as of the date hereof by and among the Company, the Managing Member and the Members (the "Members' Agreement"), contain the entire agreement with respect to such subject matter. This instrument may not be amended, supplemented or discharged, and no provision hereof may be modified or waived, except expressly by an instrument in writing signed by the Members. No waiver of any provision hereof shall be deemed a waiver of any other provision nor shall any such waiver by any party be deemed a continuing waiver of any matter. No amendment, modification, supplement, discharge, or waiver hereof or hereunder shall require the consent of any person not a party to this Agreement. 11.03 Notices. Unless otherwise specified herein, all notices, consents, approvals, reports, designations, requests, waivers, elections and other communications (collectively, "Notices") authorized or required to be given pursuant to this Agreement shall be given in writing, shall be either personally delivered to the Member to whom it is given or delivered by an established delivery service by which receipts are given or mailed by first-class mail, postage prepaid, or sent by facsimile, addressed to the Member at the following addresses (or at such other address for a Member as shall be specified by like notice): if to any TPG Entity or TPG Wafer Management, to such Person: c/o Texas Pacific Group 301 Commerce Street, Suite 3300 Fort Worth, Texas 76102 Attention: Richard A. Ekleberry Telephone: 817.871.4080 Fax: 817.871.4088 with a copy (which shall not constitute notice) to: Cleary, Gottlieb, Steen & Hamilton One Liberty Plaza New York, NY 10006 Attention: Michael A. Gerstenzang, Esq. Telephone: 212.225.2000 Fax: 212.225.3999 if to TCW, to: c/o TCW/Crescent Mezzanine Partners III, L.P. 11100 Santa Monica Boulevard, Suite 2000 Los Angeles, California 90025 Attention: Jean-Marc Chapus Telephone: 310.235.5900 Fax: 310.235.5967 with a copy (which shall not constitute notice) to: Kramer Levin Naftalis & Frankel LLP 919 Third Avenue New York, NY 10022-3852 Attention: Howard A. Sobel, Esq. Telephone: 212.715.9326 Fax: 212.715.8000 if to LGP, to: c/o Leonard Green & Partners, L.P. 11111 Santa Monica Boulevard, Suite 2000 Los Angeles, California 90025 Attention: John Baumer Telephone: 310.954.0416 Fax: 310.954.0404 with a copy (which shall not constitute notice) to: Kramer Levin Naftalis & Frankel LLP 919 Third Avenue New York, NY 10022-3852 Attention: Howard A. Sobel, Esq. Telephone: 212.715.9326 Fax: 212.715.8000 All notices, other communications or documents shall be deemed to have been duly given: (i) at the time delivered by hand, if personally delivered; (ii) when receipt is acknowledged in writing by addressee, if by facsimile transmission; (iii) five (5) business days after having been deposited in the mail, postage prepaid, if mailed by first class mail; and (iv) on the first business day with respect to which a reputable air courier guarantees delivery; provided, however, that notices of a change of address shall be effective only upon receipt. 11.04 GOVERNING LAW; VENUE. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES THEREOF. 11.05. Future Actions. The Company and the Members shall execute and deliver all such future instruments and take such other and further action as may be reasonably necessary or appropriate to carry out the provisions of this Agreement. 11.06 Authorization of Officers. Each of the officers of the Company has been authorized to execute, deliver, and thereafter amend, as they deem necessary, on behalf of the Company that certain Purchase Agreement dated as of September 30, 2001 among, inter alia, E.ON AG, E.ON North America, Inc., E.ON International Finance B.V., FIDELIA Corporation, VEBA Zweite Verwaltungsgesellschaft mbH, T3 Partners II, L.P. and TPG Wafer Holdings, LLC, that certain Restructuring Agreement dated as of the date hereof between TPG Wafer Holdings, LLC and MEMC (the "Restructuring Agreement"), that certain Registration Rights Agreement (included as Exhibit E to the Restructuring Agreement and with terms and conditions substantially in the form of Exhibit E) among TPG Wafer Holdings, LLC, MEMC and the Guarantors specified therein, and that certain Agreement and Plan of Merger among TPG Wafer Holdings, LLC and MEMC (included as Exhibit G to the Restructuring Agreement and with terms and conditions substantially in the form of Exhibit G), each in such form and with such changes as such officer shall determine and any and all other agreements and documents contemplated thereby or necessary or desirable in connection therewith in each case as such officer shall determine. 11.07 Limitation on Rights of Others. None of the provisions of this Agreement, including Section 4.02, shall be for the benefit of or enforceable by any creditor of the Company. Furthermore, the Members shall not have any duty or obligation to any creditor of the Company to make any contribution to the Company or to issue any call for capital pursuant to this Agreement. Nothing in this Agreement shall be deemed to create any legal or equitable right, remedy or claim in any person not a party hereto (other than an Indemnified Person). 11.08 Successors and Assigns. No Member may assign or transfer any of its rights or obligations hereunder without the prior written consent of the Managing Member (which may be granted or withheld in the Managing Member' sole discretion), unless (i) such Member is a party to the Members' Agreement and such assignment or transfer complies with the provisions of Article II of the Members' Agreement or (ii) if such Member is not a party to the Members' Agreement, the Managing Member has consented in writing thereto. Any purported assignment or transfer in violation of the foregoing sentence shall be void ab initio. This Agreement shall be binding upon and inure to the benefit of the Members and their respective successors and permitted assigns. 11.09 Confidentiality. Except as required by applicable law or any legal or regulatory process, each Member shall maintain the confidentiality of (i) Non-Public Information and (ii) any information subject to a confidentiality agreement binding upon the Managing Member and made known to the Members; provided that each Member (including the Managing Member) may disclose Non-Public Information to (i) its affiliates, officers, employees, agents and professional consultants upon notification to such affiliate, officer, employee, agent or consultant that such disclosure is made in confidence and shall be kept in confidence, (ii) persons having or purporting to have regulatory authority over such Members or its affiliates, provided that such persons are advised that the Non-Public Information is confidential, or (iii) to a potential transferee of all or part of such Member's Membership Interest, if such potential transferee agrees to be bound by a confidentiality agreement substantially identical to the provisions of this section 11.09; and provided, further, that each Member may disclose Non-Public Information it is required to disclose pursuant to legal process, in which event each Member agrees to provide the Company with prompt notice of such process so that it may seek an appropriate protective order or other appropriate remedy. As used in this section 11.09, "Non-Public Information" means information regarding the Company (including information regarding any person in which the Company holds, or contemplates acquiring, any investment) and the Managing Member received by such Member pursuant to this Agreement, but does not include information that (i) was publicly known at the time such Member receives such information pursuant to this Agreement, (ii) subsequently becomes publicly known through no act or omission by such Member, or (iii) is communicated to such Member by a third party free of any obligation of confidence known to such Member. 11.10 Arbitration. Any controversy, claim or dispute of whatever nature arising between any Managing Member and any non-Managing Member arising out of or relating to this Agreement or the construction, interpretation, performance, breach, termination, enforceability or validity of this Agreement or the arbitration provisions contained in this Agreement, whether such claim existed prior to or arises on or after the date of this Agreement, including the determination of the scope of this Agreement to arbitrate, shall be determined by arbitration in New York City by a panel of three arbitrators in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the "AAA"). In the event the parties cannot agree on the selection of the arbitrators from the one or more lists submitted by the AAA within thirty (30) days after the AAA transmits to the parties its list of potential arbitrators, selection of the arbitrator shall be made by the AAA from the remaining nominees in accordance with the parties' mutual order of preference, or by random selection in the absence of a mutual order of preference. The arbitrators shall base their award on applicable law and judicial precedent, shall include in such award the findings of fact and conclusions of law upon which the award is based and shall not grant any remedy or relief that a court could not grant under applicable law. Judgment on the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. If either party (i) fails to proceed with arbitration as provided herein, (ii) unsuccessfully seeks to stay such arbitration, (iii) fails to comply with any arbitration award, or (iv) is unsuccessful in vacating or modifying the award pursuant to a petition or application for judicial review, each opposing party shall be entitled to be awarded costs, including reasonable attorneys' fees, paid or incurred by each other party in successfully compelling such arbitration or defending against the attempt to stay, vacate or modify such arbitration award and/or successfully defending or enforcing the award. IN WITNESS WHEREOF, the undersigned Members have executed this Limited Liability Company Operating Agreement as of the day and year first above written. TPG WAFER PARTNERS, L.L.C. By: /s/ Richard A. Ekleberry -------------------------------- Name: Richard A. Ekleberry Title: Vice President TCW/CRESCENT MEZZANINE PARTNERS III, L.P. AND TCW/CRESCENT MEZZANINE TRUST III By: TCW/Crescent Mezzanine Management III, L.L.C. Its Investment Manager By: TCW Asset Management Company Its Sub-Advisor By: /s/ Jean-Marc Chapus -------------------------------- Name: Jean-Marc Chapus Title: Managing Director By: /s/ James C. Shevlet, Jr. -------------------------------- Name: James C. Shevlet, Jr. Title: Senior Vice President GREEN EQUITY INVESTORS III, L.P. By: GEI Capital III, LLC Its General Partner By: /s/ John Danhakl -------------------------------- Name: John Danhakl Title: Manager GREEN EQUITY INVESTORS SIDE III, L.P. by: GEI Capital III, LLC Its General Partner By: /s/ John Danhakl -------------------------------- Name: John Danhakl Title: Manager TPG WAFER MANAGEMENT, L.L.C. By: /s/ Richard A. Ekleberry -------------------------------- Name: Richard A. Ekleberry Title: Vice President EX-13 15 tpgex13.txt EXHIBIT 13 MEMBERS' AGREEMENT ------------------ MEMBERS' AGREEMENT (the "Agreement"), dated as of November 13, 2001, by and among TPG Wafer Holdings, LLC, a Delaware limited liability company (the "Company"), TPG Wafer Partners, L.L.C., a Delaware limited liability company (together with its affiliates and successors, "TPG"), TCW/Crescent Mezzanine Partners III, L.P. and TCW/Crescent Mezzanine Trust III (together with their affiliates and successors, "TCW"), Green Equity Investors III, L.P., a Delaware limited partnership (together with its affiliates and successors, "GEI"), Green Equity Investors Side III, L.P., a Delaware limited partnership, (together with its affiliates and successors and GEI, "LGP") and TPG Wafer Management, L.L.C., a Delaware limited liability company (together with its affiliates and successors other than TPG, "TPG Wafer Management") (collectively, the "Members"). WHEREAS, the Members and the Company have heretofore entered into an Amended and Restated Limited Liability Company Operating Agreement, dated as of November 13, 2001, (the "Operating Agreement"); WHEREAS, as of the date hereof, the Members own all of the membership interests ("Membership Interests") of the Company; and WHEREAS, the parties hereto desire to enter into an agreement regarding certain matters described herein, including the imposition of certain restrictions on the transferability of the Membership Interests. NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties mutually agree as follows: ARTICLE I --------- Representations and Warranties ------------------------------ Each of the parties hereby severally represents and warrants to each of the other parties as follows: 1.1 Authority; Enforceability. Such party has the legal capacity or corporate power and authority to enter into this Agreement and to carry out its obligations hereunder. Such party is duly organized and validly existing under the laws of its jurisdiction of organization, and the execution of this Agreement and the consummation of the transactions contemplated herein have been duly authorized by all necessary action. No other act or proceeding, corporate or otherwise, on its part is necessary to authorize the execution of this Agreement or the consummation of any of the transactions contemplated hereby. This Agreement has been duly executed by such party and constitutes its legal, valid and binding obligation, enforceable against it in accordance with the terms of this Agreement, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the rights of creditors generally and to the exercise of judicial discretion in accordance with general principles of equity (whether applied by a court of law or of equity). 1.2 No Breach. Neither the execution of this Agreement nor the performance by such party of its obligations hereunder nor the consummation of the transactions contemplated hereby does or will: (a) conflict with or violate its certificate of incorporation, bylaws or other organizational documents; (b) violate, conflict with or result in the breach or termination of, or otherwise give any other person the right to accelerate, re-negotiate or terminate or receive any payment, or constitute a default or an event of default (or an event which with notice, lapse of time, or both, would constitute a default or event of default) under the terms of, any contract or agreement to which it is a party or by which it or any of its assets or operations are bound or affected; or (c) constitute a violation by such party of any laws, rules or regulations of any governmental, administrative or regulatory authority or any judgments, orders, rulings or awards of any court, arbitrator or other judicial authority or any governmental, administrative or regulatory authority. 1.3 Consents. No consent, waiver, approval, authorization, exemption, registration, license or declaration is required to be made or obtained by such party, other than those which have been made or obtained, in connection with (i) the execution or enforceability of this Agreement or (ii) the consummation of any of the transactions contemplated hereby. ARTICLE II ---------- Transfer of Membership Interests -------------------------------- 2.1 Restrictions on Transfers. (a) No Member may (directly or indirectly) transfer by way of sale, exchange, assignment, pledge, gift or other disposition (all of which acts shall be deemed included in the term "transfer" as used in this Agreement) any or all of the Membership Interests (whether held in its, his or her own right or by a representative of the Member) (each Member, is hereinafter referred to as a "Transferor") unless (i) such transfer of Membership Interests is made in accordance with the provisions of Article II of this Agreement and (ii) the transferee of such Membership Interests (if other than (A) the Company or another Member, (B) a transferee in a sale of Membership Interests made under Rule 144 (or any successor provision) under the Securities Act of 1933, as amended (the "Securities Act"), or (C) a transferee of Membership Interests registered under the Securities Act) agrees to become a party to this Agreement pursuant to Article IV hereof and executes such further documents as may be necessary, in the reasonable opinion of the Company, to make him, her or it a party hereto. (b) Any purported transfer of Membership Interests other than in accordance with this Agreement by any Transferor shall be null and void, and the Company shall refuse to recognize any such transfer for any purpose and shall not reflect in its records any change in record ownership of Membership Interests pursuant to any such transfer. (c) The Company shall not issue any Membership Interests upon original issue or reissue or otherwise dispose of any Membership Interests unless the recipient or transferee of such Membership Interests (if other than a Member) shall agree to become a party to this Agreement pursuant to Article IV hereof and executes such further documents as may be necessary, in the reasonable opinion of the Company, to make him, her or it a party hereto. 2.2 Right of First Offer. (a) In the event that a Member (other than TPG) desires to transfer all or part of its Membership Interest ("Offered Membership Interest") to a third party, other than pursuant to Section 2.3 or 2.4 of this Agreement, the Transferor shall give prompt written notice to the Company and TPG (an "Offer Notice") of its desire to sell the Offered Membership Interest, which notice shall identify (i) the percentage of Offered Membership Interest and (ii) the purchase price (which shall be in cash) and any other material items and conditions of the proposed transfer. The date on which such Transferor's Notice is actually received by the Company and TPG is referred to hereinafter as the "Notice Date." (b) TPG shall have thirty (30) days following the Notice Date to notify the Transferor and the Company in writing of an offer to purchase by TPG in cash (the "Offer to Purchase") all (but not less than all) of the Offered Membership Interest at the purchase price and upon the other terms and conditions specified in the Offer Notice. If the Transferor does not receive a written notice from TPG containing the Offer to Purchase within the thirty (30) day period, TPG shall be deemed to have declined to purchase the Offered Membership Interest and the Transferor may, subject to compliance with the provisions of Section 2.1(a) and Section 2.2(d), thereafter transfer to a purchaser at any time within ninety (90) days following the Notice Date all (but not less than all) of the Offered Membership Interest at a price which is not less than the purchase price specified in the Offer Notice and upon substantially the same terms and conditions set forth in the Offer Notice; provided that if TPG notifies the Transferor in writing, within thirty (30) days following receipt of a notice from the Transferor of the name of a possible purchaser, of an objection to the possible purchaser because the Manager, in its reasonable discretion, determines that the possible purchaser or one or more of its affiliates is engaged in a business that competes in any material respect with MEMC Electronic Materials, Inc. ("MEMC") or any of its subsidiaries, the Transferor shall not have the right to transfer any of the Offered Membership Interest to such possible purchaser; and provided further that if the Offered Membership Interest is not transferred to a purchaser for any reason within ninety (90) days following the Notice Date, then such Offered Membership Interest may be transferred only by again complying with all of the terms and procedures set forth in this Article II. (c) In the event that, pursuant to the Offer to Purchase, TPG agrees to purchase all (but not less than all) of the Offered Membership Interest on the terms and subject to the conditions set forth in the Offer Notice, the closing for such transaction shall take place at a time and place reasonably acceptable to the Transferor and TPG; provided that such closing shall not occur more than thirty (30) days after the date on which the Transferor receives the Offer to Purchase. At such closing, TPG shall deliver to the Transferor the consideration to be exchanged for such Offered Membership Interest, in immediately available funds, and the Transferor shall deliver to TPG all documents required to effect the sale of such Offered Membership Interest, duly endorsed and free of any liens, including appropriate documentation providing indemnities to TPG regarding its title to such Offered Membership Interest. (d) As soon as practicable, but in any event no less than thirty (30) days prior to the consummation of a proposed sale of Offered Membership Interest to a purchaser pursuant to Section 2.2(b), the Transferor shall give written notice to the Company and TPG, which notice shall specify with respect to each such proposed sale, the name or names of one or more possible purchasers, provided that in no event shall such notice specify more than five possible purchasers. The Transferor shall not sell the Offered Membership Interest pursuant to Section 2.2(b) to a purchaser unless the Transferor has given a notice pursuant to the preceding sentence that such purchaser is a possible purchaser. As soon as practicable, but in any event no less than ten (10) days prior to the proposed consummation date of a sale of Offered Membership Interest to a purchaser, the Transferor shall give written notice to the Company and TPG, which notice shall specify with respect to each such proposed sale: (i) the identity of the purchaser, (ii) the cash purchase price to be paid by such purchaser for the Offered Membership Interest, (iii) the date of the proposed transfer and (iv) any other material items and conditions of the proposed sale. 2.3 Transfers to Permitted Transferees. A Member may transfer any or all of the Membership Interest held by such Member to a Permitted Transferee (as hereinafter defined) of such Member without complying with any other provision of this Article II other than Section 2.1(a). For purposes of this Agreement, a "Permitted Transferee" means (a) in the case of any transferor that is not a corporation or individual, any general or limited partner, member, or affiliate (as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of such transferor, (b) in the case of any transferor that is a corporation, any other entity that owns, directly or indirectly, at least 51% of the equity securities of such transferor ("majority ownership") or that is under common majority ownership with such transferor, (c) in the case of any transferor that is an individual, any successor by death or divorce, (d) in the case of any transferor that is a trust whose sole beneficiaries are individuals, such individuals or their spouses or lineal descendants or (e) in the case of TPG or TPG Wafer Management, any officer or director of MEMC or other person providing consulting or other services to MEMC (excluding in each case any TPG deal professionals or any TPG affiliate (as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) solely to incentivize such officers, directors or other persons; provided that such additional Membership Interests constitute less than 10% of the aggregate Membership Interests on the date hereof. 2.4 Certain Rights. (a) Drag Along Rights. In the event that TPG wishes to sell all or substantially all of its Membership Interests by merger, stock sale, asset sale or otherwise to a purchaser (other than pursuant to Section 2.3) that is not an affiliate of TPG or any of its affiliates and said purchaser desires to acquire all or substantially all of the issued and outstanding Membership Interests upon such terms and conditions as agreed to with TPG and its affiliates, each other Member agrees to sell all of its Membership Interests to said purchaser (or to vote such Membership Interests in favor of any merger or other transaction which would effect a sale of such Membership Interest (or all or substantially all of the assets of the Company) and to waive its appraisal or dissenters' rights with respect to such transaction, at a price that reflects the Pro Rata Portion of its Membership Interest (as defined in Section 2.4(b)(iii) below) at the same price and on the same terms and conditions as TPG and its affiliates have agreed to with such purchaser; provided, however, that no Member required to sell pursuant to this Section 2.4(a) shall be required to make any representation, covenant or warranty in connection with such sale, other than as to its ownership and authority to sell, free of liens, claims or encumbrances, the Membership Interests to be sold by such Member. In such case, TPG shall give written notice of such sale to the other Members at least thirty (30) days prior to the consummation of such sale, setting forth (i) the consideration to be received by the Members, (ii) the identity of the purchaser, (iii) the date of the proposed transfer and (iv) any other material items and conditions of the proposed transfer. (b) Tag Along Rights. (i) If TPG or any of its affiliates proposes to transfer any of their Membership Interests to a purchaser other than a Permitted Transferee of TPG, TPG or any of its affiliates (hereinafter referred to as "Selling TPG Members") shall give written notice (a "Transfer Notice") of such proposed transfer to the Members other than the Selling TPG Members (the "Other Members") at least thirty (30) days prior to the consummation of such proposed transfer, setting forth (i) the percentage of its Membership Interest offered, (ii) the consideration to be received by the Members, (iii) the identity of the purchaser, (iv) the date of the proposed transfer, (v) any other material items and conditions of the proposed transfer and (vi) that each such Other Member shall have the right to elect to sell up to the Pro Rata Portion of its Membership Interest. (ii) Upon delivery of a Transfer Notice, each Other Member may elect to sell up to the Pro Rata Portion of its Membership Interest pursuant to the same terms and conditions with respect to payment for the Membership Interest as agreed to by the Selling TPG Members, by sending written notice to the Selling TPG Members within thirty (30) days after receipt of the Transfer Notice, indicating its election to sell up to the Pro Rata Portion of its Membership Interest in the same transaction, in which case the portion of Membership Interests to be sold by the Selling TPG Members shall be reduced by such amount (with the result that each Selling TPG Member and each such electing Other Member shall sell to the purchaser the same percentage of their respective Membership Interests). Following such thirty (30) day period, each such Other Member, concurrently with the Selling TPG Members, shall be permitted to sell to the purchaser, at any time up to ninety (90) days after the delivery of the Transfer Notice, on the terms and conditions set forth in the Transfer Notice the Pro Rata Portion of its Membership Interest; provided, however, that no Selling TPG Member shall be permitted to sell to the purchaser unless, simultaneously with the consummation of such sale, the sale by the Other Members who have elected to sell pursuant to this paragraph (ii) of the Pro Rata Portion of their Membership Interests is also consummated. (iii) For purposes of this Agreement, "Pro Rata Portion" shall mean, with respect to Membership Interests held by a Member, the portion attained by multiplying (A) the aggregate Membership Interests then owned by such Member by (B) a fraction, the numerator of which shall be the aggregate Membership Interests proposed to be sold by the Selling TPG Members to the purchaser as set forth in the Transfer Notice, and the denominator of which shall be the aggregate Membership Interests then outstanding (including such Membership Interests proposed to be sold by the Selling TPG Members). 2.5 Transferee's Rights and Obligations. Any party that acquires a Membership Interest in the Company shall assume the obligations and, unless otherwise agreed by the transferee, acquire the rights of the transferring party with respect to such Membership Interest that it acquires. In connection with such assumption, the transferee will notify the Company and each of the Members that is a party hereto of its address for the purpose of providing notices hereunder. ARTICLE III ----------- Rights with Respect to MEMC --------------------------- 3.1 Approval Rights. TPG, as the Managing Member (the "Manager") of the Company, hereby agrees not to vote the Company's shares in MEMC in support of, and the Company agrees not to permit any of the following actions of MEMC, without the prior written consent of each of (i) TCW (so long as TCW and those of its Permitted Transferees that are controlled by TCW hold at least fifteen percent (15%) of the Membership Interests) and (ii) LGP (so long as LGP and those of its Permitted Transferees that are controlled by LGP hold at least fifteen percent (15%) of the Membership Interests): (a) the authorization of additional shares of capital stock of MEMC (which shall include, without limitation, any shares of common stock, preferred stock, any convertible securities or any warrants or options to acquire common stock), provided that shares of capital stock authorized and issued to any directors, employees, officers, consultants or advisors of the Company or any subsidiary shall not require such approval; (b) any merger (other than any merger with the Company), consolidation, statutory share exchange or other business combination or sale of all or substantially all of the assets of MEMC or any similar transaction in any one transaction or series of related transactions; (c) any liquidation, bankruptcy, dissolution, recapitalization, reorganization, assignment to creditors or any similar transaction by MEMC; provided that TPG, as the Managing Member, may consent to the conversion of any shares of preferred stock of MEMC to shares of common stock of MEMC without any such consent; (d) any material change in the nature of the business in which MEMC is engaged; (e) any material amendment to the certificate of incorporation or by-laws of MEMC; or (f) entering into any contract or agreement to do any of the foregoing. 3.2 Board Seats. For so long as TCW and those of its Permitted Transferees that are controlled by TCW have not sold or otherwise disposed of (other than to Permitted Transferees) more than 25% of the Membership Interests originally acquired by TCW pursuant to the Operating Agreement, TCW shall have the right to nominate one (1) person to the Board of Directors of MEMC. For so long as LGP and those of its Permitted Transferees that are controlled by LGP have not sold or otherwise disposed of (other than to Permitted Transferees) more than 25% of the Membership Interests originally acquired by LGP pursuant to the Operating Agreement, LGP shall have the right to nominate one (1) person to the Board of Directors of MEMC. TPG, agrees to cause the Company to vote, and the Company agrees to vote, its shares in MEMC in support of such TCW and LGP nominees. ARTICLE IV ---------- Additional Parties ------------------ In accordance with Article II of this Agreement, additional Members may be added to and be bound by and receive the benefits afforded by this Agreement (other than benefits specifically afforded to LGP and TCW pursuant to Article III hereunder) upon the signing and delivery of a counterpart of this Agreement by the Company and the acceptance thereof by such additional Members. Promptly after signing and delivering such a counterpart of this Agreement, the Company will deliver a conformed copy thereof to the Members. ARTICLE V --------- Miscellaneous Provisions ------------------------ 5.1 Specific Performance. The parties hereby declare and acknowledge that it is impossible to measure in money the damages that will accrue to any party hereto or to a representative of a Member by reason of a failure to perform any of the obligations under this Agreement. Therefore, if any party hereto or the representative of a Member shall institute any action or proceeding to enforce the provisions hereof, the person against whom such action or proceeding is brought hereby waives the claim or defense that such party or such representative has an adequate remedy at law, and such person shall not urge in any such action or proceeding the claim or defense that such party or such representative has an adequate remedy at law. The parties hereto agree that this Agreement shall be specifically enforceable. 5.2 Confidentiality. Except as required by applicable law or any legal or regulatory process, each Member shall maintain the confidentiality of (i) Non-Public Information and (ii) any information subject to a confidentiality agreement binding upon the Managing Member and made known to the Members; provided that each Member (including the Managing Member) may disclose Non-Public Information to (i) its affiliates, officers, employees, agents and professional consultants upon notification to such affiliate, officer, employee, agent or consultant that such disclosure is made in confidence and shall be kept in confidence, (ii) persons having or purporting to have regulatory authority over such Members or its affiliates, provided that such persons are advised that the Non-Public Information is confidential, or (iii) to a potential transferee of all or part of such Member's Membership Interest, if such potential transferee agrees to be bound by a confidentiality agreement substantially identical to the provisions of this Section 5.2; and provided, further, that each Member may disclose Non-Public Information it is required to disclose pursuant to legal process, in which event each Member agrees to provide the Company with prompt notice of such process so that it may seek an appropriate protective order or other appropriate remedy. As used in this Section 5.2, "Non-Public Information" means information regarding the Company (including information regarding any person in which the Company holds, or contemplates acquiring, any Investment) and the Managing Member received by such Member pursuant to this Agreement, but does not include information that (i) was publicly known at the time such Member receives such information pursuant to this Agreement, (ii) subsequently becomes publicly known through no act or omission by such Member, or (iii) is communicated to such Member by a third party free of any obligation of confidence known to such Member. 5.3 Notices. Any and all notices, designations, offers, acceptances or other communications provided for herein shall be given in writing by registered or certified mail, which shall be addressed, in the case of the Company, to its principal office, and, in the case of any Member, to such Member's address appearing on the stock books of the Company or to such other address as may be designated by such Member in writing to the Company and each other Member. 5.4 Entire Agreement. This Agreement supersedes all prior agreements with respect to the subject matter hereof. This instrument, together with the Amended and Restated Limited Liability Company Operating Agreement of the Company, dated as of the date hereof, by and among the Manager and the Members (the "Operating Agreement"), contains the entire agreement with respect to such subject matter. This instrument may not be amended, supplemented or discharged, and no provision hereof may be modified or waived, except expressly by an instrument in writing signed by the Members as provided. No waiver of any provision hereof shall be deemed a waiver of any other provision nor shall any such waiver by any party be deemed a continuing waiver of any matter. No amendment, modification, supplement, discharge, or waiver hereof or hereunder shall require the consent of any person not a party to this Agreement. 5.5 Governing Law. The validity, construction and performance of this Agreement shall be governed by the laws of the State of Delaware without giving effect to principles of conflicts of laws of the State of Delaware. 5.6 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto, and their successors and assigns. 5.7 Severability. If any portion of this Agreement shall be declared void or unenforceable by any court or administrative body of competent jurisdiction, such portion shall be deemed severable from the remainder of this Agreement, which shall continue in all respects valid and enforceable. 5.8 Amendment and Waiver. Any amendment of this Agreement or any waiver of any provision hereof to be effective shall be in writing and signed by all of the parties hereto. The addition of a Transferee of Membership Interests or a recipient of any Membership Interests as a party hereto shall not constitute an amendment hereto and need be signed only by the Company and such Transferee or recipient. Any failure by any party at any time to enforce any of the provisions of this Agreement shall not be construed a waiver of such provision or any other provisions hereof. 5.9 Arbitration. Any disputes arising from this Agreement shall be resolved by exclusive and final arbitration to be carried out in accordance with the procedures in Section 11.10 of the Operating Agreement. 5.10 Counterparts. This Agreement may be signed by each party hereto upon a separate copy of this Agreement in which event all of said copies shall constitute a single counterpart of this Agreement. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. Each Member in agreement with the foregoing should sign the form of acceptance in the space provided for such Member's signature on this copy of this Agreement delivered to such Member. This Agreement will become a binding agreement among such Members and the Company when signed by the Company and so accepted by such Members. The foregoing Shareholders' Agreement is hereby accepted as of the day and year first above written. TPG WAFER PARTNERS, L.L.C. By: /s/ Richard A. Ekleberry -------------------------------- Name: Richard A. Ekleberry Title: Vice President TCW/CRESCENT MEZZANINE PARTNERS III, L.P. AND TCW/CRESCENT MEZZANINE TRUST III By: TCW/Crescent Mezzanine Management III, L.L.C. Its Investment Manager By: TCW Asset Management Company Its Sub-Advisor By: /s/ Jean-Marc Chapus --------------------------------- Name: Jean-Marc Chapus Title: Managing Director By: /s/ James C. Shevlet, Jr. -------------------------------- Name: James C. Shevlet, Jr. Title: Senior Vice President GREEN EQUITY INVESTORS III, L.P. By: GEI Capital III, LLC Its General Partner By: /s/ John Danhakl -------------------------------- Name: John Danhakl Title: Manager GREEN EQUITY INVESTORS SIDE III, L.P. By: GEI Capital III, LLC Its General Partner By: /s/ John Danhakl -------------------------------- Name: John Danhakl Title: Manager TPG WAFER MANAGEMENT, L.L.C. By: /s/ Richard A. Ekleberry -------------------------------- Name: Richard A. Ekleberry Title: Vice President EX-14 16 tpgex14.txt EXHIBIT 14 EXECUTION VERSION INTERCREDITOR AGREEMENT INTERCREDITOR AGREEMENT, dated as of November 13, 2001, (this "Agreement"), by and among TPG Wafer Credit Partners, LLC, a Delaware limited liability company (together with its affiliates, successors and permitted assigns but excluding each of TPG WP (as defined herein) and T3 Partners II (as defined herein), "TPG WCP"), T3 Partners II, L.P., a Delaware limited partnership ("T3 Partners II"), T3 Parallel II, L.P., a Delaware limited partnership ("T3 Parallel II", and, together with TPG WCP and T3 Partners II, "TPG"), TCW/Crescent Mezzanine Partners III, L.P. and TCW/Crescent Mezzanine Trust III (together with their affiliates, successors and permitted assigns, "TCW"), Green Equity Investors III, L.P., a Delaware limited partnership (together with its affiliates, successors and permitted assigns, "GEI"), Green Equity Investors Side III, L.P., a Delaware limited partnership (together with its affiliates, successors, permitted assigns and GEI, "LGP") and TPG Wafer Management, L.L.C., a Delaware limited liability company ("TPG Wafer Management") (collectively, the "Lenders") and TPG Wafer Partners, LLC, a Delaware limited liability company ("TPG WP"). Except as otherwise defined, capitalized terms used herein have the meaning specified in the Revolving Credit Agreement, dated as of November 13, 2001 (as amended from time to time, the "Revolving Credit Agreement"), by and among MEMC Electronic Materials, Inc. (the "Borrower" or "MEMC"), the Lenders and Citicorp USA, Inc. as Administrative Agent (the "Administrative Agent"); provided, however, that no amendment of a defined term in the Revolving Credit Agreement shall affect the meaning of such terms in this Agreement if all Lenders have not consented in writing to such amendment. RECITALS WHEREAS, the Lenders have contributed to a revolving credit facility (the "Revolving Credit Facility") to be used by the Borrower pursuant to the Revolving Credit Agreement, TPG WP has acquired certain rights under the Italian Credit Agreement (as defined herein) and TPG WP, TPG Wafer Management, TCW and LGP have acquired certain Participation Interests, Senior Notes and Warrants (each as defined herein); WHEREAS, the parties hereto desire to enter into an agreement regarding certain matters described herein, including the division of certain fees, the imposition of certain restrictions on the transferability of their rights and obligations under the Revolving Credit Agreement and with respect to the Italian Credit Agreement, the Participation Interests, the Senior Notes, the Warrants and certain other matters; NOW, THEREFORE, in consideration of the foregoing recitals, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Lenders hereby agree and covenant as follows: 1. Lender Funding Commitments and Certain Other Matters Under the Revolving Credit Agreement. (a) Subject to the provisions of this Agreement, each of the Lenders hereby agrees to comply with the terms of the Revolving Credit Agreement, including the obligations thereunder to make Loans to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not result in such Lender's Exposure exceeding such Lender's Commitment. (b) Notwithstanding the provisions of Section 10.02(b) of the Revolving Credit Agreement, in the event that (i) the aggregate Exposures of all Lenders under the Revolving Credit Facility is (or would, in the event of additional advances under the Revolving Credit Facility as described in the Borrowing Request in clause (iii) below, be) greater than $110,000,000; (ii) the Consolidated EBITDA of MEMC is less than the amounts set forth in Schedule A hereto for the periods and at the times specified in Schedule A, and (iii) MEMC makes a Borrowing Request pursuant to Section 2.03 of the Revolving Credit Agreement (or the equivalent provision of any separate credit agreement referred to in paragraph 1(d) hereof), in each case, each of TCW and LGP (and their Permitted Transferees, if any) may, by written notice to TPG within one Business Day of the receipt of a copy of such Borrowing Request (the "Commitment Notice"), declare that it shall no longer be obligated to make additional loans under the Revolving Credit Agreement or under any separate credit agreement referred to in paragraph 1(d) hereof; provided that, notwithstanding the foregoing, each of TCW and LGP agrees to notify TPG (in advance of the receipt of any Borrowing Request described in clause (iii) above) if TCW or LGP, as the case may be, determines that there is a substantial possibility that it would deliver a Commitment Notice in the event of any such Borrowing Request. Upon delivery of any such Commitment Notice by either or both of TCW and LGP (each such non-committing Lender, a "Non-Committing Lender", and any committing Lender, a "Committing Lender"), TPG may, individually or together with any Committing Lender, elect to assume on a pro rata basis the obligations of any Non-Committing Lender to make additional Loans to the Borrower in accordance with the provisions of the Revolving Credit Agreement (any such election, a "Non-Pro Rata Election"); provided that in the event that (x) TPG has, without the consent of TCW and LGP, consented to any amendment of the provisions of Section 6.12 of the Revolving Credit Agreement or has agreed to waive compliance with such provisions; and (y) the Consolidated EBITDA of MEMC is less than the amounts set forth in Schedule A hereto for the periods and at the times specified in Schedule A but greater than any corresponding amount set forth in Section 6.12 of the Revolving Credit Agreement as a result of such amendment (or TPG has waived compliance with Section 6.12), TPG shall, individually or together with any Committing Lender, assume on a pro rata basis the obligations of any Non-Committing Lender to make additional Loans to the Borrower in accordance with the provisions of the Revolving Credit Agreement. In the event of any Non-Pro Rata Election, each Non-Committing Lender shall execute such agreements and related documents and take such other actions as are reasonably determined by such Non-Committing Lender in pursuance of the assumption of such obligations by TPG and any Committing Lender. (c) In the event of any Non-Pro Rata Election and any actual additional funding of the Borrower by TPG under the Revolving Credit Facility, the Pro Rata Percentage (as defined below) of each Non-Committing Lender's (i) participation interests and any other rights in the loans outstanding and loans to be made in the future, if any, under the Amended and Restated Credit Agreement (the "Italian Credit Agreement") dated as of September 22, 2001 among MEMC Electronic Materials S.p.A. as Borrower and the other parties thereto (or, if such interests have been exchanged for other securities, such Non-Committing Lender's interests in such other securities) (such interests, the "Participation Interests"), (ii) Senior Subordinated Secured Notes issued by the Borrower under Restructuring Agreement (the "Restructuring Agreement") dated as of November 13, 2001 between TPG Wafer Holdings, LLC and MEMC (the "Senior Notes", and (iii) warrants issued by the Borrower under Restructuring Agreement dated as of November 13, 2001 between TPG Wafer Holdings, LLC and MEMC (together with the Warrant Shares (as defined in the Restructuring Agreement), the "Warrants"), shall immediately be assigned at no cost to TPG WP and any Committing Lender on a pro rata basis, in which event such Non-Committing Lender shall execute such agreements and related documents and take such other actions as are reasonably determined by TPG WP in pursuance of such assignment; provided that if any such assignment is prevented by any provision of any other agreement or law, each Non-Committing Lender shall take any other steps that are reasonably requested by TPG WP and any Committing Lender to ensure that TPG WP and such Committing Lenders enjoy the same economic benefits as TPG WP and such Committing Lenders would enjoy from such an assignment . As used herein, the "Pro Rata Percentage" shall mean, with respect to any Non-Committing Lender, the percentage obtained by multiplying (A) one hundred percent (100%), by (B) a fraction, the numerator of which shall be the aggregate amount of such Non-Committing Lender's unfunded Commitment then outstanding (including the additional commitment of such Non-Committing Lender described in paragraph 1(d) below), and the denominator of which shall be the aggregate amount of such Non-Committing Lender's initial Commitment (including the additional commitment of such Non-Committing Lender described in paragraph 1(d) below). (d) In addition, at the election of TPG, TPG, TCW and LGP hereby agree to increase their Commitments under the Revolving Credit Agreement (or make additional capital commitments to MEMC pursuant to a separate credit agreement with terms substantially similar to those of the Revolving Credit Agreement) pro rata in accordance with their initial capital commitments under the Revolving Credit Agreement; provided that TCW shall not be obligated to extend loans to MEMC pursuant to the Revolving Credit Agreement and any separate credit agreement in an aggregate amount exceeding $37 million and LGP shall not be obligated to extend loans to MEMC pursuant to the Revolving Credit Agreement and any separate credit agreement in an aggregate amount exceeding $37 million; and provided, further, that neither TCW nor LGP shall be obligated to increase their Commitments (or make any additional capital commitments pursuant to any separate credit agreement) unless MEMC is in compliance with the Consolidated EBITDA test described in Schedule A. No Lender shall consent to any amendment to or waiver or other action under or in connection with the Revolving Credit Agreement or any separate credit agreement between the Lenders and MEMC which would result in or permit the aggregate amount of all commitments under any credit agreement referred to in this paragraph 1(d) to exceed $185 million. (e) Notwithstanding the provisions of Section 10.02(b) of the Revolving Credit Agreement, TPG hereby agrees not to consent to the release of any part of the Collateral from the Liens of the Security Documents or the placing of additional Liens on any part of the Collateral without the written consent of each of TCW and LGP if such release of Collateral or placing of additional Liens is proposed in connection with additional loans to be made by TPG or any Affiliate of TPG. (f) TPG and TPG WP hereby further agree not to consent to the release of any part of the Italian Collateral (as defined below) from the liens of the Italian Credit Agreement or related agreements in respect of such collateral or the placing of additional liens on any part of the Italian Collateral without the written consent of each of TCW and LGP, if such release of the Italian Collateral or placing of additional liens is proposed in connection with additional loans to be made by TPG or any affiliate of TPG. As used herein, the "Italian Collateral" shall mean the "Collateral" as such term is defined in the Italian Credit Agreement. 2. Lender Default. Notwithstanding any other provision of the Revolving Credit Agreement, in the event that any Lender breaches any of its obligations to provide funding under the Revolving Credit Agreement and such failure is not cured within five (5) days after receipt by such Lender of a written notice thereof from TPG, one hundred percent (100%) of its Participation Interests, Senior Notes and Warrants held by such defaulting Lender shall immediately be assigned at no cost to the non-defaulting Lenders (or, in the case of TPG, to TPG WP) on a pro rata basis, in which event such Non-Committing Lender shall execute such agreements and related documents and take such other actions as reasonably determined by TPG in pursuance of such assignment. 3. Interest Payments. (a) Notwithstanding the provisions of Section 2.10(f) of the Revolving Credit Agreement, until the date that is the third anniversary of the Effective Date, TPG may consent to any proposal of the Borrower not to pay the interest on any Loan in cash unless, on the last day of the immediately preceding calendar month, the Consolidated EBITDA of MEMC for the trailing twelve (12) month period is greater than $100,000,000 (in which case, the relevant interest payment and all subsequent interest payments shall be paid in cash). Following the third anniversary of the Effective Date, TPG shall not, without the consent of each of LGP and TCW, consent to any proposal of the Borrower not to pay the interest on any Loan in cash. 4. Transfer Restriction Period. Notwithstanding anything to the contrary herein, during the period from the Effective Date until the date that is the first anniversary of the Effective Date (the "Transfer Restriction Period"), neither LGP nor TCW may (directly or indirectly) transfer by way of sale, exchange, assignment, pledge, gift or other disposition (all of which acts shall be deemed included in the term "transfer" as used in this Agreement) all or any fraction of its rights or obligations (including all or a portion of its Commitment and the Loans at the time owing to it) under the Revolving Credit Facility (a "Revolver Interest") or any of the Participation Interests, Senior Notes or Warrants held by it to any other Person (other than a Permitted Transferee (as defined below)) unless TPG or TPG WP consents to such transfer. 5. Rights of First Offer. (a) In the event that any Lender or TPG WP (hereinafter, the "Transferor") desires to transfer any of its Revolver Interests, Participation Interests, Senior Notes or Warrants (an "Offered Interest") to a third party, other than pursuant to paragraph 6, 7 or 8 of this Agreement, the Transferor shall give prompt written notice (an "Offer Notice") of its desire to sell the Offered Interest to TPG WP or, in the case of a transfer of Revolver Interests, TPG, which notice shall identify (i) the amount of the Offered Interest and (ii) the purchase price (which shall be in cash) and any other material items and conditions of the proposed transfer. The date on which such Transferor's Notice is actually received by TPG or TPG WP, as the case may be, is referred to hereinafter as the "Notice Date." (b) TPG or TPG WP, as the case may be, shall have thirty (30) days following the Notice Date to notify the Transferor in writing of an offer to purchase in cash (the "Offer to Purchase") all (but not less than all) of the Offered Interest at the purchase price and upon the other terms and conditions specified in the Offer Notice. If the Transferor does not receive a written notice from TPG or TPG WP, as the case may be, containing the Offer to Purchase within the thirty (30) day period, TPG or TPG WP, as the case may be, shall be deemed to have declined to purchase the Offered Interest and the Transferor may, subject to compliance with the provisions of paragraph 5 (d), thereafter transfer to a purchaser at any time within ninety (90) days following the Notice Date all (but not less than all) of the Offered Interest at a price which is not less than the purchase price specified in the Offer Notice and upon substantially the same terms and conditions set forth in the Offer Notice; provided that if TPG or TPG WP, as the case may be, notifies the Transferor in writing, within thirty (30) days following receipt of a notice from the Transferor of the name of a possible purchaser, of an objection to the possible purchaser because TPG or TPG WP, as the case may be, in its reasonable discretion, determines that the purchaser or one or more of its affiliates is engaged in a business that competes with MEMC or any of its subsidiaries, the Transferor shall not have the right to transfer any of the Offered Interest to such possible purchaser; and provided further that if the Offered Interest is not transferred to a purchaser for any reason within ninety (90) days following the Notice Date, then such Offered Interest may be transferred only by again complying with all of the terms and procedures set forth in this paragraph 5. (c) In the event that pursuant to the Offer to Purchase TPG or TPG WP, as the case may be, agrees to purchase all (but not less than all) of the Offered Interest on the terms and subject to the conditions set forth in the Offer Notice, the closing for such transaction shall take place at a time and place reasonably acceptable to the Transferor and TPG or TPG WP, as the case may be; provided that such closing shall not occur more than thirty (30) days after the date on which the Transferor receives the Offer to Purchase. At such closing, TPG or TPG WP, as the case may be, shall deliver to the Transferor the consideration to be exchanged for such Offered Interest, in immediately available funds, and the Transferor shall deliver to TPG or TPG WP, as the case may be, all documents required to effect the sale of such Offered Interest, duly endorsed and free of any liens, including appropriate documentation providing indemnities to TPG to TPG WP, as the case may be, regarding its title to such Offered Interest. (d) As soon as practicable, but in any event no less than thirty (30) days prior to the consummation of a proposed sale of Offered Interest to a purchaser pursuant to paragraph 5(b), the Transferor shall give written notice to the Lenders and TPG, which notice shall specify with respect to each such proposed sale the name or names of one or more possible purchasers, provided that in no event shall such notice specify more than five possible purchasers. The Transferor shall not sell the Offered Interest to a purchaser unless the Transferor has given a notice pursuant to the preceding sentence that such purchaser is a possible purchaser. As soon as practicable, but in any event no less than ten (10) days prior to the consummation of a sale of Offered Interest to a purchaser pursuant to paragraph 5(b), the Transferor shall give written notice to TPG, which notice shall specify with respect to each such proposed sale: (i) the identity of the purchaser, (ii) the cash purchase price to be paid by such purchaser for the Offered Interest, (iii) the date of the proposed transfer and (iv) any other material items and conditions of the proposed sale. 6. Tag-Along Rights. (a) If TPG or TPG WP or any of their affiliates proposes to transfer any Revolver Interests, Participation Interests, interests or rights under or in connection with the Italian Credit Agreement or related agreements in respect of collateral ("Italian Credit Agreement Rights"), Senior Notes, or Warrants to a purchaser other than a Permitted Transferee of TPG or TPG WP, TPG or TPG WP or any of their affiliates (hereinafter referred to as the "Selling TPG Party") shall give written notice (a "Transfer Notice") of such proposed transfer to the Lenders other than the Selling TPG Party (the "Other Lenders") at least thirty (30) days prior to the consummation of such proposed transfer, setting forth (i) the identity of the purchaser, (ii) the consideration to be received by the Other Lenders, (iii) the date of the proposed transfer, (iv) the amount of the Revolver Interests, Participation Interests, Senior Notes or Warrants offered, as the case may be, and, if applicable, the portion of the indebtedness under the Italian Credit Agreement proposed to be transferred, (v) any other material items and conditions of the proposed sale and (vi) that each such Other Lenders shall have the right to elect to sell up to the Pro Rata Portion (as defined below) of its Revolver Interests, Participation Interests, Senior Notes, or Warrants, as the case may be. (b) Upon delivery of a Transfer Notice, each Other Lender may elect to sell up to the Pro Rata Portion of its Revolver Interests, Participation Interests, Senior Notes, or Warrants as the case may be, pursuant to the same terms and conditions with respect to payment for the interest as agreed to by the Selling TPG Party, by sending written notice to the Selling TPG Party within thirty (30) days after receipt of the Transfer Notice, indicating its election to sell up to the Pro Rata Portion of its Revolver Interests, Participation Interests, Senior Notes, or Warrants, as the case may be, in the same transaction, in which case the portion of Revolver Interests, Participation Interests, Senior Notes, or Warrants, as the case may be, to be sold by the Selling TPG Party shall be reduced by such amount (with the result that each Selling TPG Party and each such electing Other Lender shall sell to the purchaser the same percentage of their respective Revolver Interests, Participation Interests, Senior Notes, or Warrants, as the case may be). Following such thirty (30) day period, each Other Lender, concurrently with the Selling TPG Party, shall be permitted to sell to the purchaser, at any time up to ninety (90) days after the delivery of the Transfer Notice, on terms set forth in the Transfer Notice the Pro Rata Portion of its Revolver Interests, Participation Interests, Senior Notes, or Warrants, as the case may be; provided, however, that no Selling TPG Party shall be permitted to sell to the purchaser unless, simultaneously with the consummation of such sale, the sale by the Other Lenders who have elected to sell pursuant to this paragraph (ii) of the Pro Rata Portion of their Revolver Interests, Participation Interests, Senior Notes, or Warrants is also consummated. (c) For purposes of this Agreement, "Pro Rata Portion" shall mean, with respect to Revolver Interests, Participation Interests, Senior Notes, or Warrants, the portion attained by multiplying (A) the aggregate interests then held by such Lender in such Revolver Interests, Participation Interests, Senior Notes or Warrants, as the case may be, by (B) a fraction, the numerator of which shall be the aggregate amount of the Revolver Interests, Participation Interests, Senior Notes, or Warrants proposed to be sold by the Selling TPG Party to the purchaser as set forth in the Transfer Notice, as the case may be, and the denominator of which shall be the aggregate amount of the Revolver Interests, Participation Interests, Senior Notes, or Warrants, as the case may be, then outstanding (including such Revolver Interests, Participation Interests, Senior Notes, or Warrants proposed to be sold by the Selling TPG Party, if any). (d) For the purposes of this paragraph 6 and paragraph 7, the term "Participation Interests" shall include the interests of TPG, TPG WP or any of their affiliates with respect to the Italian Credit Agreement which are held directly by such person or entity, rather than being subject to the participation interests of other entities. 7. Drag-Along Rights. In the event that TPG or TPG WP wishes to sell all or substantially all of (i) its Revolver Interests, (ii) its Participation Interests, (iii) the Senior Notes held by TPG WP, or (iv) the Warrants held by TPG WP, in each case by merger, stock sale, asset sale or otherwise (other than pursuant to paragraph 8 of this Agreement) to a purchaser that is not an affiliate of TPG or TPG WP or any of their affiliates and said purchaser desires to acquire all or substantially all of the outstanding Revolver Interests, Participation Interests, Italian Credit Agreement Rights, Senior Notes or Warrants, as the case may be, upon such terms and conditions as agreed to with TPG or TPG WP, each other Lender agrees to sell all of its Revolver Interests, Participation Interests, Senior Notes, or Warrants as the case may be, to said purchaser and to waive its appraisal or dissenters' rights with respect to such transaction, at a price that reflects the Pro Rata Portion of its Revolver Interests, Participation Interests, Senior Notes, or Warrants, as the case may be, and on the same terms and conditions as TPG or TPG WP have agreed to with such purchaser; provided, however, that no Lender required to sell pursuant to this paragraph 7 shall be required to make any representation, covenant or warranty in connection with such sale, other than as to its ownership and authority to sell, free of liens, claims or encumbrances, the Revolver Interests, Participation Interests, Senior Notes, or Warrants to be sold by such Lender. In such case, TPG or TPG WP, as the case may be, shall give written notice of such sale to the other Lenders at least thirty (30) days prior to the consummation of such sale, setting forth (i) the consideration to be received by such Lenders, (ii) the identity of the purchaser, (iii) the date of the proposed transfer and (iv) any other material items and conditions of the proposed transfer. 8. Permitted Transfers. Notwithstanding anything to the contrary herein, transfers to any Permitted Transferee of a lender shall not be subject to paragraph 5, 6 or 7. For purposes of this Agreement, a "Permitted Transferee" means (a) in the case of any transferor that is not a corporation or individual, any present or former general or limited partner, member, managing director, officer, employee or affiliate (as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of such transferor, (b) in the case of any transferor that is a corporation, any other entity that owns, directly or indirectly, at least 51% of the equity securities of such transferor ("majority ownership") or that is under common majority ownership with such transferor, (c) in the case of any transferor that is an individual, any successor by death or divorce, (d) in the case of any transferor that is a trust whose sole beneficiaries are individuals, such individuals or their spouses or lineal descendants or (e) in the case of TPG or TPG WP, any officers or directors of MEMC or other persons providing consulting or other services to MEMC (excluding in each case any TPG deal professionals or any TPG affiliate (as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), so long as such Revolver Interests, Participation Interests, Senior Notes, or Warrants, as the case may be, constitute less than 10% of the aggregate Revolver Interests, Participation Interests, Senior Notes, or Warrants, as the case may be, on the date hereof. 9. Transferee's Rights and Obligations. Any party that acquires any Revolver Interests, Participation Interests, Senior Notes, or Warrants shall assume the obligations and, unless otherwise agreed by the transferee, acquire the rights of the transferor with respect to such Revolver Interests, Participation Interests, Senior Notes, or Warrants that it acquires; provided that, unless a majority in Interest of the other parties to this Agreement have approved of the transferee in writing, the transferor shall remain liable for all of its obligations under the Revolving Credit Agreement and under this Agreement. In connection with such assumption, the transferee will notify the parties hereto of its address for the purpose of providing notices hereunder. 10. Amendments. Any amendment of this Agreement or any waiver of any provision hereof to be effective shall be in writing and signed by all of the parties hereto. Any failure by any party at any time to enforce any of the provisions of this Agreement shall not be construed a waiver of such provision or any other provisions hereof. 11. Governing Law. The validity, construction and performance of this Agreement shall be governed by the laws of the State of New York without giving effect to principles of conflicts of laws except Section 5-1401 of the General Obligations Law of the State of New York. 12. Arbitration. Any disputes arising from this Agreement shall be resolved by exclusive and final arbitration to be carried out in accordance with the procedures described in Section 11.10 of the Amended and Restated Operating Agreement of TPG Wafer Holdings LLC ("Wafer Holdings"), dated as of November 13, 2001. 13. Counterparts. This Agreement may be signed by each party hereto upon a separate copy of this Agreement in which event all of said copies shall constitute a single counterpart of this Agreement. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. 14. Notices. Unless otherwise specified herein, any and all notices, offers, acceptances and other communications (collectively, "Notices") authorized or required to be given pursuant to this Agreement shall be given in writing, by registered or certified mail, which shall be addressed to the Member at the following addresses (or at such other address for a Member as shall be specified by like notice): if to TPG, TPG WP or TPG Wafer Management, to: c/o Texas Pacific Group 301 Commerce Street, Suite 3300 Fort Worth, Texas 76102 Attention: Richard A. Ekleberry Telephone: 817.871.4080 Fax: 817.871.4088 with a copy (which shall not constitute notice) to: Cleary, Gottlieb, Steen & Hamilton One Liberty Plaza New York, NY 10006 Attention: Michael A. Gerstenzang, Esq. Telephone: 212.225.2000 Fax: 212.225.3999 if to TCW, to: c/o TCW/Crescent Mezzanine Partners III, L.P. 11100 Santa Monica Boulevard, Suite 2000 Los Angeles, California 90025 Attention: Jean-Marc Chapus Telephone: 310.235.5900 Fax: 310.235.5967 with a copy (which shall not constitute notice) to: Kramer Levin Naftalis & Frankel LLP 919 Third Avenue New York, NY 10022-3852 Attention: Howard A. Sobel, Esq. Telephone: 212.715.9326 Fax: 212.715.8000 if to LGP, to: c/o Leonard Green & Partners, L.P. 11111 Santa Monica Boulevard, Suite 2000 Los Angeles, California 90025 Attention: John Baumer Telephone: 310.954.0416 Fax: 310.954.0404 with a copy (which shall not constitute notice) to: Kramer Levin Naftalis & Frankel LLP 919 Third Avenue New York, NY 10022-3852 Attention: Howard A. Sobel, Esq. Telephone: 212.715.9326 Fax: 212.715.8000 All notices, other communications or documents shall be deemed to have been duly given five (5) business days after having been deposited in the mail, postage prepaid, if mailed by first class mail; provided, however, that notices of a change of address shall be effective only upon receipt. 15. Entire Agreement. This Agreement supersedes all prior agreements with respect to the subject matter hereof. This instrument, together with the Revolving Credit Agreement, the Restructuring Agreement, the Italian Credit Agreement and all related agreements contains the entire agreement with respect to such subject matter. This instrument may not be amended, supplemented or discharged, and no provision hereof may be modified or waived, except expressly by an instrument in writing signed by the parties hereto. No waiver of any provision hereof shall be deemed a waiver of any other provision nor shall any such waiver by any party be deemed a continuing waiver of any matter. No amendment, modification, supplement, discharge, or waiver hereof or hereunder shall require the consent of any person not a party to this Agreement. 16. Severability. If any portion of this Agreement shall be declared void or unenforceable by any court or administrative body of competent jurisdiction, such portion shall be deemed severable from the remainder of this Agreement, which shall continue in all respects valid and enforceable. IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement as of the date first above written. TPG WAFER CREDIT PARTNERS, L.L.C. By: /s/ Richard A. Ekleberry ------------------------- Name: Richard A. Ekleberry Title: Vice President T3 PARTNERS II, L.P. By: T3 GenPar II, L.P. Its General Partner By: T3 Advisors II, Inc. Its General Partner By: /s/ Richard A. Ekleberry ------------------------- Name: Richard A. Ekleberry Title: Vice President T3 PARALLEL II, L.P. By: T3 GenPar II, L.P. Its General Partner By: T3 Advisors II, Inc. Its General Partner By: /s/ Richard A. Ekleberry ------------------------- Name: Richard A. Ekleberry Title: Vice President TCW/CRESCENT MEZZANINE PARTNERS III, L.P. and TCW/CRESCENT MEZZANINE TRUST III By: TCW/Crescent Mezzanine Management III, L.L.C. its Investment Manager. By: TCW Asset Management Company, its Sub-Advisor By: /s/ Jean-Marc Chapus ---------------------------- Name: Jean-Marc Chapus Title: Managing Director By: /s/ James C. Shevlet, Jr. ---------------------------- Name: James C. Shevlet, Jr. Title: Senior Vice President GREEN EQUITY INVESTORS III, L.P. By: GEI Capital III, LLC, its General Partner By: /s/ John Danhakl ---------------------------- Name: John Danhakl Title: Manager GREEN EQUITY INVESTORS SIDE III, L.P. By: GEI Capital III, LLC, its General Partner By: /s/ John Danhakl ---------------------------- Name: John Danhakl Title: Manager TPG WAFER MANAGEMENT, L.L.C. By: /s/ Richard A. Ekleberry ------------------------- Name: Richard A. Ekleberry Title: Vice President TPG WAFER PARTNERS, L.L.C. By: /s/ Richard A. Ekleberry ------------------------- Name: Richard A. Ekleberry Title: Vice President -----END PRIVACY-ENHANCED MESSAGE-----