-----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, SEOtfXx1BxDR3PvS8zf+HIU4EnYcougPPRnyQWU1QYp4pdO8KNU9yyT/uCBiAMmS X7qimtIvMTEJ4WF1AB9FWA== 0000903423-02-000050.txt : 20020414 0000903423-02-000050.hdr.sgml : 20020414 ACCESSION NUMBER: 0000903423-02-000050 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 13 FILED AS OF DATE: 20020131 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 NETHERLANDS, L.P. 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 IRS NUMBER: 752956882 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A 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/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-49318 FILM NUMBER: 02524072 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/A 1 tpgsc13da1-30.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. 1)* 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 & The TCW Group, Inc. 301 Commerce Street, Partners, L.P. 865 S. Figueroa Street, Suite 3300 11111 Santa Monica Boulevard, Suite 1800 Fort Worth, TX 76102 Suite 2000 Los Angeles, CA 90017 (817) 871-4000 Los Angeles, CA 90025 (213) 244-0000 (310) 954-0416 With copies to: Paul J. Shim, Esq. Howard A. Sobel, Esq. Charles F. Niemeth Cleary, Gottlieb, Kramer Levin Naftalis O'Melveny & Myers LLP Steen & 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) January 25, 2002 ----------------------------------------------------- (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. Seess. 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. 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 Netherlands, 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 BENEFICIALLY OWNED BY 8 SHARED VOTING POWER EACH REPORTING 182,182,192 (See Items 4 and 5.) PERSON WITH 9 SOLE DISPOSITIVE POWER 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. This Amendment No. 1 (this "Amendment") amends and supplements Items 2, 3, 4, 6 and 7 of the Schedule 13D (the "Schedule") filed on November 21, 2001 by the Reporting Persons with respect to the Common Stock of the Company. All capitalized terms used but not defined in this Amendment have the meanings ascribed to such terms in the Schedule. Item 2. Background and Identity. ----------------------- TCW Partners, TCW Trust and Netherlands. The address and principal place of business of TCW/Crescent Mezzanine III Netherlands, L.P., a Delaware limited partnership ("Netherlands") is 11100 Santa Monica Boulevard, Suite 2000, Los Angeles, California 90025. The principal business of Netherlands 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 investment. TAMCO is the investment sub-advisor to Netherlands. TCW Mezzanine III is the general partner of Netherlands. TCW Management III is the investment advisor to Netherlands. TCW Mezzanine III and TCW Management III are entities that operate in furtherance of the business objectives of TCW Partners, Netherlands and TCW Trust. Each of the TCW Controlling Persons, TCW Partners, Netherlands 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. Netherlands, along with the TCW Controlling Persons, TCW Partners, TCW Trust and TCW Group's other direct and indirect subsidiaries, collectively constitute the TCW Business Unit. Item 3. Source and Amount of Funds or Other Consideration. ------------------------------------------------- The source of funds used by Netherlands to acquire its pro rata portion of the Senior Notes and Warrants from TCW Partners and TCW Trust was the working capital of Netherlands. Netherlands' assumption of a portion of the rights and obligations under the TCW Guaranty and Reimbursement Agreement also served as consideration for such securities. Item 4. Purpose of Transaction. ---------------------- Termination of the November 13, 2001 Revolving Credit Facility. On December 21, 2001, Wafer Credit Partners, T3 Partners II, T3 Parallel II, TCW Partners, TCW Trust, GEI and GEI Side (collectively, the "Old Revolving Credit Lenders"), the administrative and collateral agent and the Company entered into a Termination and Funding Agreement pursuant to which the parties thereto terminated their five-year $150 million revolving credit facility dated as of November 13, 2001 upon the effectiveness of a new five-year $150 million revolving credit facility, dated as of December 21, 2001 (the "New Revolving Credit Facility"). The Termination and Funding Agreement provides, among other things, that the Old Revolving Credit Lenders will, subject to the terms and conditions thereto, make new revolving credit loans available to the Company in the event of the termination of the New Revolving Credit Facility under certain circumstances. New Revolving Credit Facility. On December 21, 2001, the Company entered into the New Revolving Credit Facility pursuant to a Revolving Credit Agreement among the Company, the lenders thereto (the "New Revolving Credit Lenders"), the administrative agent and the collateral agent, pursuant to which the New Revolving Credit Lenders have committed to make available to the Company a line of credit in an aggregate amount of up to $150 million. 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. TPG Guaranty. On December 21, 2001, TPG Partners entered into a Guaranty with the administrative agent under the New Revolving Credit Facility (the "TPG Guaranty"), pursuant to which TPG Partners has agreed to guarantee up to 60% of the obligations of the Company under the New Revolving Credit Facility. GEI Guaranty. On December 21, 2001, GEI and GEI Side entered into a Guaranty with the administrative agent under the New Revolving Credit Facility (the "GEI Guaranty"), pursuant to which GEI and GEI Side jointly and severally agreed to guarantee up to 20% of the obligations of the Company under the New Revolving Credit Facility. TCW Guaranty. On December 21, 2001, TCW Partners and TCW Trust entered into a Guaranty with the administrative agent under the New Revolving Credit Facility (the "TCW Guaranty" and together with the TPG Guaranty and the GEI Guaranty, the "Guaranty"), pursuant to which TCW Partners and TCW Trust jointly and severally agreed to guarantee up to 20% of the obligations of the Company under the New Revolving Credit Facility. Reimbursement Agreement. On December 21, 2001, TPG Partners, GEI, GEI Side, TCW Partners and TCW Trust (the "Fund Guarantors"), the Company and the collateral agent entered into a Reimbursement Agreement, which provides, in relevant part, that the Company will reimburse each Fund Guarantor for any amounts paid by such Fund Guarantor pursuant to the Guaranty. As collateral for securing the Company's payment obligations under the Reimbursement 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. Intercreditor Agreement. Also on December 21, 2001, the Fund Guarantors, as secured parties under the Reimbursement Agreement, and the administrative agent acting on behalf of the New Revolving Credit Lenders, as secured parties under the New Revolving Credit Facility, entered into an Intercreditor Agreement setting forth the rights and remedies of the Fund Guarantors and the New Revolving Credit Lenders, as well as the procedures for exercising such remedies, against the collateral of the Company to satisfy the Company's obligations under the New Revolving Credit Facility and the Reimbursement Agreement. Indenture. Also on December 21, 2001, the Indenture dated as of November 13, 2001, pursuant to which the Senior Subordinated Notes Due 2007 were issued was amended and restated to reflect the subordination of the security interests related to the Senior Subordinated Notes to both the security interests related to the Reimbursement Agreement and the New Revolving Credit Facility, to adjust definitions as appropriate to reflect the New Revolving Credit Facility and the Reimbursement Agreement and to adjust and clarify covenants and other provisions, as appropriate, to reflect, among other things, the terms of the New Revolving Credit Facility and the Reimbursement Agreement. Interfund Side Letter. Also as of December 21, 2001, TCW Partners, Netherlands and TCW Trust entered into a interfund side letter, pursuant to which TCW Partners and TCW Trust agreed to assign to Netherlands, at their original cost, a certain percentage of their undivided interest in their Senior Notes, Warrants, and rights and obligations under the TCW Guaranty and Reimbursement Agreement. Omnibus Amendment Agreement. On January 25, 2002, the Company, the administrative and collateral agent and certain of the Reporting Persons entered into an Omnibus Amendment Agreement pursuant to which, among other things (1) Netherlands was added as a "Guarantor" under the TCW Guaranty and (2) Netherlands was added as a party to the Reimbursement Agreement, both Intercreditor Agreements (i.e., the agreements referenced herein in Item 4 and Item 6) and the Termination and Funding Agreement, as if Netherlands had executed each such document on December 21, 2001. General. The provisions of the Termination and Funding Agreement, the Revolving Credit Agreement, the TPG Guaranty, the GEI Guaranty, the TCW Guaranty, the Reimbursement Agreement, the Intercreditor Agreement, the Amended and Restated Indenture and the Omnibus Amendment Agreement are set forth as exhibits hereto, and are incorporated by reference herein in their entirety in response to this Item 4. 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. Item 6. Contracts, Arrangements, Understanding or Relationships with Respect to Securities of the Issuer. ------------------------------------ Intercreditor Agreement. TPG Partners, TCW Partners, TCW Trust, GEI, GEI Side, Wafer Partners and Wafer Management have entered into an Intercreditor Agreement, dated as of December 21, 2001, providing for, among other things, (i) the assignment of any participation interests in the Italian Notes, the Senior Notes and Warrants held by any Fund Guarantor or its affiliates to the other non-defaulting Fund Guarantors pro rata in the event of certain payment defaults of such Fund Guarantor under the Guaranty or other default under the Guaranty which results in the acceleration of loans or termination of commitments under the New Revolving Credit Facility; (ii) Wafer Partners' right of first offer to any rights or obligations under the Guaranty, participation interests in the Italian Notes, Senior Notes or Warrants that any Fund Guarantor wishes to transfer (other than permitted transferees); (iii) the Fund Guarantors' tag-along rights to any transfer by Wafer Partners or its affiliates of its rights or obligations under the Guaranty, Italian Notes, Senior Notes or Warrants; (iv) Wafer Partners' rights to cause the holders of rights or obligations under the Guaranty, participation interests in the Italian Notes, Senior Notes or Warrants to sell such instruments or securities if Wafer Partners wishes to sell substantially all of such instruments or securities held by it and the purchaser desires to acquire all or substantially all of the outstanding instruments or securities of such type; and (v) the restriction on the ability of TCW Partners, TCW Trust, GEI or GEI Side to transfer any of its rights or obligations under its Guaranty, participation interests in the Italian Notes, Senior Notes or Warrants except to a permitted transferee for twelve months from the date of the Intercreditor Agreement without TPG Partners' or Wafer Partners' consent. Side Letter. On January 25, 2002, Wafer Holdings, Wafer Partners, Wafer Management, GEI, GEI Side, TCW Partners, Netherlands and TCW Trust entered into a Side Letter (the "Side Letter") pursuant to which Netherlands (1) was added to the Members' Agreement and (2) became a party to the Amended and Restated LLC Operating Agreement of Wafer Holdings. The provisions of the Intercreditor Agreement and the Side Letter are set forth as an exhibit hereto, and are incorporated by reference herein in their entirety 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. Item 7. Material to be Filed as Exhibits -------------------------------- Exhibit 1 Joint Filing Agreement Exhibit 15 Termination and Funding Agreement Exhibit 16 Revolving Credit Agreement Exhibit 17 TPG Guaranty Exhibit 18 GEI Guaranty Exhibit 19 TCW Guaranty Exhibit 20 Reimbursement Agreement Exhibit 21 Intercreditor Agreement among the Fund Guarantors and the New Revolving Credit Lenders Exhibit 22 Amended and Restated Indenture Exhibit 23 Intercreditor Agreement among the Fund Guarantors, Wafer Partners and Wafer Management Exhibit 24 Omnibus Amendment Agreement Exhibit 25 Side Letter 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: January 31, 2002 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: January 31, 2002 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 TPG Advisors III, Inc. is true, complete and correct. Dated: January 31, 2002 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: January 31, 2002 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: January 31, 2002 T3 ADVISORS II, 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 Green Equity Investors III, L.P. is true, complete and correct. Dated: January 31, 2002 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: January 31, 2002 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: January 31, 2002 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: January 31, 2002 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: January 31, 2002 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: January 31, 2002 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 III Netherlands, L.P. is true, complete and correct. Dated: January 31, 2002 TCW/CRESCENT MEZZANINE III NETHERLANDS, 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: January 31, 2002 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: January 31, 2002 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: January 31, 2002 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: January 31, 2002 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 EXHIBIT INDEX - --------- ----------------------------------------------------------------- ---- EXHIBIT DESCRIPTION PAGE 1 Joint Filing Agreement, dated as of January 31, 2002, 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 Partners III, L.P., TCW/Crescent Mezzanine III Netherlands, L.P., TCW/Crescent Mezzanine Trust III, The TCW Group, Inc. and TCW Asset Management Company. 15 Termination and Funding Agreement, dated as of December 21, 2001, among MEMC Electronic Materials, Inc., 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. and Citicorp USA, Inc. 16 Revolving Credit Agreement, dated as of November 13, 2001, among MEMC Electronic Materials, Inc. and Citicorp USA, Inc. 17 Guaranty, dated as of December 21, 2001, between TPG Partners III, L.P., TPG GenPar III, L.P. and Citicorp USA, Inc. 18 Guaranty, dated as of December 21, 2001, between Green Equity Investors III, L.P., Green Equity Investors Side III, L.P., GEI Capital III, LLC and Citicorp USA, Inc. 19 Guaranty, dated as of December 21, 2001, between TCW/Crescent Mezzanine Partners III, L.P., TCW/Crescent Mezzanine Trust III, TCW/Crescent Mezzanine Partners III, LLC and Citicorp USA, Inc. 20 Reimbursement Agreement, dated as of December 21, 2001, among MEMC Electronic Materials, Inc., TPG Partners III, 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. and Citicorp USA, Inc. 21 Intercreditor Agreement, dated as of December 21, 2001, among TPG Partners III, 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. and Citicorp USA, Inc. 22 Amended and Restated Indenture, dated as of December 21, 2001, among MEMC Electronic Materials, Inc., Citibank, N.A. and Citicorp USA, Inc. 23 Intercreditor Agreement, dated as of December 21, 2001, among TPG Partners III, 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. 24 Omnibus Amendment Agreement, dated as of January 25, 2002, among MEMC Electronic Materials, Inc., TPG Partners III, L.P., TPG GenPar III, L.P., TPG Wafer Credit Partners LLC, T3 Partners II, L.P., T3 Parallel II, L.P., TPG Wafer Management, LLC, TPG Wafer Partners, LLC, TCW/Crescent Mezzanine Partners III, L.P., TCW/Crescent Mezzanine III Netherlands, L.P., TCW/Crescent Mezzanine Trust III, TCW/Crescent Mezzanine III, LLC, Green Equity Investors III, L.P., Green Equity Investors Side III, L.P., GEI Capital III, LLC and Citicorp USA, Inc. 25 Side Letter, dated as of January 25, 2002, among TCW/Crescent Mezzanine Partners III, L.P., TCW/Crescent Mezzanine III Netherlands, L.P., TCW/Crescent Mezzanine Trust III, Green Equity Investors III, L.P., Green Equity Investors Side III, L.P., TPG Wafer Management, LLC, TPG Wafer Partners, LLC and TPG Wafer Holdings LLC. EX-1 3 tpg_ex1.txt EXHIBIT 1 JOINT FILING AGREEMENT JOINT FILING AGREEMENT (this "Agreement"), dated as of January 31, 2002, 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., TCW/Crescent Mezzanine III Netherlands, L.P. ("Netherlands") and TCW/Crescent Mezzanine Partners 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, on November 21, 2001, each of the Joint Filers, except Netherlands, filed a Schedule 13D (the "Schedule 13D") under the Securities Exchange Act of 1934 (the "Exchange Act") with respect to securities of MEMC Electronic Materials, Inc.; WHEREAS, on January 25, 2002, Netherlands entered into certain agreements, pursuant to which it became a Joint Filer; 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 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 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 III NETHERLANDS, 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 EX-15 4 tpg_ex15.txt Exhibit 15 TERMINATION AND FUNDING AGREEMENT TERMINATION AND FUNDING AGREEMENT (this "Agreement") dated as of December 21, 2001, by and among MEMC ELECTRONIC MATERIALS, INC. (the "Borrower"), TPG WAFER CREDIT PARTNERS LLC, T3 PARTNERS II, L.P., T3 PARALLEL II, L.P., TCW/CRESCENT MEZZANINE PARTNERS III, L.P ("TCW") AND TCW/CRESCENT MEZZANINE TRUST III ("TCW Trust"), GREEN EQUITY INVESTORS III, L.P. ("GEI"), GREEN EQUITY INVESTORS SIDE III, L.P. ("GEI Side" and collectively, the "Lenders"), and CITICORP USA, INC. W I T N E S S E T H T H A T: WHEREAS, the Borrower has entered into a Revolving Credit Agreement dated as of November 13, 2001 (as such agreement has been amended, restated, modified or supplemented, the "Revolving Credit Agreement"), with the Lenders and Citicorp USA, Inc., as administrative and collateral agent, pursuant to which the Lenders agreed to provide the Borrower with a revolving credit facility in an initial aggregate amount not to exceed U.S. $150,000,000; WHEREAS, the Borrower will enter into a revolving credit agreement dated as of December 21, 2001, with the lenders party thereto (the "New Lenders") and Citicorp USA, Inc., as administrative agent (in such capacity, the "Administrative Agent") and collateral agent (in such capacity, the "Collateral Agent") (as such agreement may be further amended, restated, modified or supplemented at any time and from time to time hereafter, the "New Revolving Credit Agreement"), pursuant to which the New Lenders will provide the Borrower with a revolving credit facility in an initial aggregate amount not to exceed U.S. $150,000.000; WHEREAS, TPG Partners III, L.P. ("TPG Partners III") will enter into a guaranty (the "TPG Guaranty"), TCW and TCW Trust will enter into a guaranty (the "TCW Guaranty") and GEI and GEI Side will enter into a guaranty (the "LGP Guaranty" and together with the TPG Guaranty and the TCW Guaranty, the "Guaranty"), each dated as of December 21, 2001 with the Administrative Agent to guarantee the Borrower's obligations under the New Revolving Credit Agreement; WHEREAS, the Borrower will enter into a Reimbursement Agreement dated as of December 21, 2001, with TPG Partners III, TCW, TCW Trust, GEI and GEI Side (collectively, the "Fund Guarantors") and the Collateral Agent (as such agreement may be further amended, restated, modified or supplemented at any time and from time to time hereafter, the "Reimbursement Agreement"), pursuant to which the Borrower agrees to reimburse the Fund Guarantors for any and all payments made under the Guaranty; WHEREAS, to induce the Fund Guarantors to enter into the Guaranty, the Borrower has agreed to secure its obligations under the Reimbursement Agreement with the Collateral; WHEREAS, to induce the Borrower to enter into this Agreement, the Lenders have agreed to provide the Replacement Funding (as defined below) to the Borrower in the event the New Revolving Credit Agreement is terminated or if funds thereunder are unavailable to the Borrower as the result of any Guarantor Default (as such term is defined in the Guaranty); WHEREAS, to ensure that the Borrower's obligations under the Reimbursement Agreement will be secured by the Collateral, the Security Agreement, Pledge Agreement, Guarantee Agreement, the Indemnity, Subrogation and Contribution Agreement, and other security documents and instruments executed in connection with the Revolving Credit Agreement will be amended and restated; and WHEREAS, the Borrower, the Lenders and Citicorp USA, Inc. desire to terminate the Revolving Credit Agreement. NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is agreed as follows: SECTION 1. Definitions. Unless the context otherwise requires, all capitalized terms used but not defined herein shall have the meanings set forth in the Revolving Credit Agreement. SECTION 2. Confirmation of Termination. The Revolving Credit Agreement is terminated upon (i) the execution and delivery of this Agreement and (ii) the occurrence of the Effective Date (as defined in the New Revolving Credit Agreement) under the New Revolving Credit Agreement. The parties hereby acknowledge and confirm that, upon the occurrence of the events described in the preceding sentence, all rights, obligations, liabilities, interests and claims under the Revolving Credit Agreement shall be canceled, terminated, released and extinguished, except that the following shall survive the termination of the Revolving Credit Agreement: (a) the Security Agreement, Pledge Agreement, Guarantee Agreement, Indemnity, Subrogation and Contribution Agreement, and other security documents and instruments executed in connection with the Revolving Credit Agreement, and each such agreement amended and restated concurrent with the execution and delivery of the Reimbursement Agreement so as to secure the obligations of the Borrower and certain of its Subsidiaries thereunder. For the avoidance of doubt, the following security documents shall survive the termination of the Revolving Credit Agreement: (i) the Patent Security Agreement dated as of November 13, 2001 (as amended from time to time), among the Borrower, the Subsidiary Loan Parties and the Collateral Agent, (ii) the Trademark Security Agreement dated as of November 13, 2001 (as amended from time to time), among the Borrower, the Subsidiary Loan Parties and the Collateral Agent and (iii) the Copyright Security Agreement dated as of November 13, 2001 (as amended from time to time), among the Borrower, the Subsidiary Loan Parties and the Collateral Agent; (b) the Borrower's obligations under Sections 2.12, 2.13, 2.14, 10.01 and 10.03 of the Revolving Credit Agreement; and (c) any indemnities and other rights under any Loan Document which by their terms shall survive the termination of the Revolving Credit Agreement. SECTION 3. Replacement Funding. In the event: (i) a Guarantor (as defined in the Guaranty) instructs the New Lenders not to make additional loans to the Borrower under the New Revolving Credit Agreement pursuant to Section 5(8) of the Guaranty and no Default (as defined in the New Revolving Credit Agreement) shall have occurred and be continuing at the time of such instruction (it being understood that any such instruction that is given during the occurrence and continuance of a Default shall be deemed withdrawn if such Default is cured during the time periods specified or provided for in the New Revolving Credit Agreement), (ii) a Guarantor Termination (as defined in the Guaranty) shall have occurred, (iii) a Guarantor Default (as defined in the Guaranty) shall have occurred, (iv) a prepayment of any Borrowings (as defined in the New Revolving Credit Agreement) or the termination of the Commitment of any Lender (as defined in the New Revolving Credit Agreement) shall have occurred pursuant to Section 2.08(c) of the New Revolving Credit Agreement, or (v) a failure of the condition to borrowings set forth in Section 4.02(d) of the New Revolving Credit Agreement shall have occurred, and any of (i), (ii), (iii), (iv) or (v) above causes, directly and principally, the termination of the New Revolving Credit Agreement or the acceleration of amounts outstanding thereunder, each of the Lenders severally agrees to make new revolving credit loans available to the Borrower on terms and conditions no less favorable to the Borrower than the terms and conditions set forth in the Revolving Credit Agreement (it being understood that if any of the occurrences specified in clauses (i) through (v) above causes directly and principally the Company to be in default under any Loan Document, Indenture Documentation (as defined in the New Revolving Credit Agreement) or Reimbursement Documentation (as defined in the New Revolving Credit Agreement) such default shall not in and of itself relieve the Lenders from their obligation to make new revolving credit loans available to the Borrower hereunder) as if such Revolving Credit Agreement had not been terminated by this Agreement (the "Replacement Funding"), provided that the aggregate amount of all outstanding loans under the New Revolving Credit Agreement and any new loans to the Borrower under the Replacement Funding shall not exceed $150,000,000. The foregoing commitment shall survive the termination of the Revolving Credit Agreement and the consummation of the transactions contemplated by the New Revolving Credit Agreement. By entering into this Agreement, each of the Lenders and the Borrower acknowledges and agrees that execution and delivery of this Agreement shall in no respect effect a release of the obligations of certain Affiliates of the Lenders in connection with funding commitments made by TPG and the Buyer (as such terms are defined in the Purchase Agreement) to or for the benefit of the Borrower in the Purchase Agreement (notwithstanding the provisions of Section 12.14 of the Purchase Agreement), as manifested in part by Section 8.02(d) of the Restructuring Agreement and the Lenders' execution and delivery of the Revolving Credit Agreement. SECTION 4. Offset of Fees. In connection with the termination of the Revolving Credit Agreement, each of the Lenders and Citicorp USA, Inc. acknowledges and agrees that any and all amounts payable by the Borrower under the two fee letters, dated as of December 21, 2001, executed and delivered by the Borrower and Salomon Smith Barney, Inc., in connection with the New Revolving Credit Agreement shall reduce, on a dollar for dollar basis, any and all amounts ultimately paid or payable by the Borrower under Section 2.09(b) of the Revolving Credit Agreement. To the extent the Borrower shall have previously paid any or all of such amounts under the Revolving Credit Agreement, the Lenders shall promptly refund such amounts to the Borrower. SECTION 5. 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 6. 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 of the date hereof. 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. Rules of Interpretation; Headings. 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 8. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. SECTION 9. Jurisdiction; Consent to Service of Process. (a) Each party 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 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 the Borrower or any of its Subsidiaries or its properties in the courts of any jurisdiction. (b) Each party 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 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 10.01 of the Revolving Credit Agreement. 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 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 RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS. 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, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year 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 CITICORP USA, INC., as administrative and collateral agent By: /s/ Arnold Y. Wong ---------------------------- Name: Arnold Y. Wong Title: vice President SIGNATURE PAGE TO THE TERMINATION AND FUNDING AGREEMENT DATED AS OF DECEMBER 21, 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 A. Ekleberry ---------------------------- Name: Richard A. Ekleberry Title: Vice President Name of Institution: 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 Name of Institution: 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 SIGNATURE PAGE TO THE TERMINATION AND FUNDING AGREEMENT DATED AS OF DECEMBER 21, 2001, among MEMC ELECTRONIC MATERIALS, INC., THE LENDERS, and CITICORP USA, INC., as Administrative Agent and Collateral Agent. Name of Institutions: 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-Marc 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 TERMINATION AND FUNDING AGREEMENT DATED AS OF DECEMBER 21, 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 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 ACKNOWLEDGED AND AGREED: TPG WAFER HOLDINGS LLC, as Buyer and TPG Representative on behalf of TPG Partners III, L.P., T3 Partners, L.P., T3 Partners II, L.P., TPG Wafer Partners LLC, MEMC Holdings Corporation, Green Equity Investors III, L.P., Green Equity Investors Side III, L.P., TCW/Crescent Mezzanine Partners III, L.P. and TCW/Crescent Mezzanine Trust III By: /s/ Richard A. Ekleberry ---------------------------- Name: Richard A. Ekleberry Title: Vice President EX-16 5 tpg_ex16.txt Exhibit 16 REVOLVING CREDIT AGREEMENT dated as of December 21, 2001, among MEMC ELECTRONIC MATERIALS, INC. as Borrower, The Lenders Party Hereto, and CITICORP USA, INC., as Administrative Agent and Collateral Agent SALOMON SMITH BARNEY INC., as Arranger and Sole Bookrunner Page ARTICLE I DEFINITIONS Section 1.01. Defined Terms.................................................1 Section 1.02. Terms Generally..............................................22 Section 1.03. Accounting Terms; GAAP.......................................23 ARTICLE II THE CREDITS Section 2.01. Commitments..................................................23 Section 2.02. Loans and Borrowings.........................................23 Section 2.03. Requests for Borrowings......................................24 Section 2.04. Funding of Borrowings........................................24 Section 2.05. Interest Elections...........................................25 Section 2.06. Termination and Reduction of Commitments.....................26 Section 2.07. Repayment of Loans; Evidence of Debt.........................27 Section 2.08. Prepayment of Loans..........................................27 Section 2.09. Fees.........................................................30 Section 2.10. Interest.....................................................30 Section 2.11. Alternate Rate of Interest...................................31 Section 2.12. Increased Costs..............................................31 Section 2.13. Break Funding Payments.......................................32 Section 2.14. Taxes........................................................33 Section 2.15. Payments Generally; Pro Rata Treatment; Sharing of Set-offs..34 Section 2.16. Mitigation Obligations; Replacement of Lenders...............36 ARTICLE III REPRESENTATIONS AND WARRANTIES Section 3.01. Organization; Powers.........................................36 Section 3.02. Authorization; Enforceability................................37 Section 3.03. Governmental Approvals; No Conflicts.........................37 Section 3.04. Financial Condition; No Material Adverse Change..............37 Section 3.05. Properties...................................................37 Section 3.06. Litigation and Environmental Matters.........................38 Section 3.07. Compliance with Laws and Agreements..........................39 Section 3.08. Investment and Holding Company Status........................39 Section 3.09. Taxes........................................................39 Section 3.10. ERISA........................................................39 Section 3.11. Disclosure...................................................40 Section 3.12. Subsidiaries.................................................40 Section 3.13. Insurance....................................................40 Section 3.14. Labor Matters................................................40 ARTICLE IV CONDITIONS Section 4.01. Effective Date..............................................41 Section 4.02. Each Borrowing..............................................43 Section 4.03. Initial $30,000,000 of Borrowings...........................43 ARTICLE V AFFIRMATIVE COVENANTS Section 5.01. Financial Statements and Other Information..................44 Section 5.02. Notices of Material Events..................................45 Section 5.03. Information Regarding Collateral............................46 Section 5.04. Existence; Conduct of Business..............................46 Section 5.05. Payment of Obligations......................................47 Section 5.06. Maintenance of Properties...................................47 Section 5.07. Insurance...................................................47 Section 5.08. Casualty and Condemnation...................................47 Section 5.09. Books and Records; Inspection and Audit Rights..............47 Section 5.10. Compliance with Laws........................................47 Section 5.11. Use of Proceeds.............................................48 Section 5.12. Additional Subsidiaries.....................................48 Section 5.13. Further Assurances; Transfer of Joint Venture Stock.........48 ARTICLE VI NEGATIVE COVENANTS Section 6.01. Indebtedness; Certain Equity Securities.....................49 Section 6.02. Liens.......................................................50 Section 6.03. Fundamental Changes.........................................51 Section 6.04. Investments, Loans, Advances, Guarantees and Acquisitions...52 Section 6.05. Asset Sales.................................................54 Section 6.06. Sale and Leaseback Transactions.............................55 Section 6.07. Hedging Agreements..........................................55 Section 6.08. Restricted Payments; Certain Payments of Indebtedness.......55 Section 6.09. Transactions with Affiliates................................56 Section 6.10. Restrictive Agreements......................................56 Section 6.11. Amendment of Material Documents.............................57 Section 6.12. Minimum Quarterly Consolidated EBITDA.......................57 Section 6.13. Minimum Monthly Consolidated Backlog........................58 Section 6.14. Minimum Monthly Consolidated Revenue........................59 Section 6.15. Capital Expenditures........................................61 ARTICLE VII EVENTS OF DEFAULT ARTICLE VIII THE AGENTS ARTICLE IX MISCELLANEOUS Section 9.01. Notices.....................................................66 Section 9.02. Waivers; Amendments.........................................67 Section 9.03. Expenses; Indemnity; Damage Waiver..........................68 Section 9.04. Successors and Assigns......................................69 Section 9.05. Survival....................................................71 Section 9.06. Counterparts; Integration; Effectiveness....................71 Section 9.07. Severability................................................72 Section 9.08. Right of Setoff.............................................72 Section 9.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS..........................................72 Section 9.10. WAIVER OF JURY TRIAL........................................73 Section 9.11. Headings....................................................73 Section 9.12. Confidentiality.............................................73 Section 9.13. Interest Rate Limitation....................................73 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 December 21, 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) 0.50% per annum, in the case of an ABR Loan, or (b) 1.50% 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 9.04), 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. "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 Interests in MEMC Southwest Inc., 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 Revolving Credit 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 9.04. 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 9.02). "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. "First TPG Replacement Date" has the meaning assigned to such term in Section 2.08(c). "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. "Fund Guarantors" means, collectively, GEI, GEI Side, TCW, TCW Trust and TPG. "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. "GAAP" means generally accepted accounting principles in the United States of America consistently applied. "GEI" means Green Equity Investors III, L.P., a Delaware limited partnership, together with its successors and assigns. "GEI Guaranty" means the Guaranty dated as of the date hereof by and among GEI, GEI Side and the Administrative Agent, as from time to time amended, or replaced as contemplated by Section 2.08(c)(ii). "GEI Partnership Agreement" means the Amended and Restated Green Equity Investors III, L.P. Agreement of Limited Partnership dated as of September 25, 1998, as amended. "GEI Replacement Date" has the meaning assigned to such term in Section 2.08(c). "GEI Side" means Green Equity Investors Side III, L.P., a Delaware limited partnership, together with its successors and assigns. "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. "Guarantor Default" has the meaning assigned to such term in the Guaranty. "Guaranty" means, collectively, the GEI Guaranty, the TCW Guaranty and the TPG Guaranty. "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, as amended and restated on and as of the date hereof. "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, as amended from time to time. "Indenture Obligations" has the meaning assigned to such term in the Indenture Documentation. "Intercreditor Agreement" means the intercreditor agreement, dated as of December 21, 2001, by and among the Fund Guarantors, the Administrative Agent and the Collateral Agent, as amended from time to time. "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 Credit Agreement" means the euro55 million Amended and Restated Credit Agreement dated as of September 22, 2001 under which the Italian Issuer is the borrower, together with any amendment of, restatement of, substitution for, or replacement of such agreement. "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 euro55 million (aggregate principal amount) Promissory Notes Due 2031 to be issued by the Italian Issuer under the Italian Credit Agreement 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 Citibank, N.A. 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 December 21, 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 Revolving Credit 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. "Multiemployer Plan" means a multiemployer plan as defined in Section 4001(a)(3) of ERISA. "Multiple Employer Plan" means an employee benefit plan described in Section 4063 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., T3 Partners, L.P., T3 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 9.04(c). "Reimbursement Agreement" means the Reimbursement Agreement, dated as of December 21, 2001, by and among the Borrower, the Fund Guarantors and the Collateral Agent, as amended from time to time. "Reimbursement Documentation" means the Reimbursement Agreement together with the related amended and restated guarantee agreement, the security agreement, the pledge agreement and the indemnity, subrogation and contribution agreement and any other security documents executed in connection therewith. "Reimbursement Obligations" has the meaning assigned to such term in the Reimbursement Documentation. "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" means, 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. "Revolving Credit Obligations" has the meaning assigned to such term in the Security Agreement. "S&P" means Standard & Poor's Rating Service. "Second TPG Replacement Date" has the meaning assigned to such term in Section 2.08(c). "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 Revolving Credit 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. "Surviving Representations" has the meaning assigned to such term in the Guaranty. "Taxes" means any and all current or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority. "TCW" means TCW/Crescent Mezzanine Partners III, L.P., a Delaware limited partnership, together with its successors and assigns. "TCW Guaranty" means the Guaranty dated as of the date hereof between TCW, TCW Trust and the Administrative Agent, as from time to time amended, or replaced as contemplated by Section 2.08(c)(iii). "TCW Partnership Agreement" means the Amended and Restated TCW/Crescent Mezzanine Partners III, L.P. Agreement of Limited Partnership dated as of March 7, 2001, as amended. "TCW Replacement Date" has the meaning assigned to such term in Section 2.08(c). "TCW Trust" means TCW/Crescent Mezzanine Trust III, a Delaware statutory business trust, together with its successors and assigns. "TCW Trust Agreement" means the Declaration of Trust and Trust Agreement of TCW/Crescent Mezzanine Partners III, L.P. dated as of March 7, 2001, as amended. "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. "TPG Guaranty" means the Guaranty dated as of the date hereof between TPG and the Administrative Agent, as from time to time amended, or replaced as contemplated by Section 2.08(c)(i). "TPG Partnership Agreement" means the TPG Partners III, L.P. Agreement of Limited Partnership dated as of December 15, 1999, as amended. "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 at any one time outstanding 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 $5,000,000. 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 $5,000,000, 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 (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three (3) Business Days before the date of the proposed Borrowing, or (b) in the case of an ABR Borrowing, not later than 10:00 a.m., New York City time, on 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 9.04) 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) (i) In the event that (x) on or before the date falling 23 months after the Effective Date (the "First TPG Replacement Date") or (y) on or before the date falling 47 months after the Effective Date (the "Second TPG Replacement Date"), the Administrative Agent has not received a guaranty duly executed by TPG or a replacement guarantor satisfactory to the Lenders and having a stated term of at least two years, in the case of the First TPG Replacement Date, or a guaranty duly executed by TPG and terminating at least 30 days after the Maturity Date, in the case of the Second TPG Replacement Date, in each case pursuant to documentation in form and substance similar or identical to the TPG Guaranty (such documentation to include such evidence of authorization and such legal opinions with respect thereto as the Lenders may reasonably request), then the Borrower shall within 10 Business Days of the First TPG Replacement Date or, as the case may be, the Second TPG Replacement Date prepay in full the aggregate outstanding Borrowings and the Commitment of each Lender shall automatically terminate; provided, however, that no such prepayment shall be required (and the Commitment of each Lender shall not terminate) if, and for so long as TPG has validly and effectively pledged to the Administrative Agent a blocked cash collateral account held in New York with Citibank, N.A. in an amount, and pursuant to documentation in form and substance, reasonably satisfactory to the Administrative Agent. (ii) In the event that on or before the date falling one month prior to the stated expiration date of the GEI Guaranty (as in effect from time to time, the "GEI Replacement Date"), the Administrative Agent has not received a guaranty duly executed by GEI or a replacement guarantor satisfactory to the Lenders and having a stated maturity falling at least 364 days after the then current GEI Replacement Date or, if sooner, 30 days after the Maturity Date, pursuant to documentation in form and substance similar or identical to the GEI Guaranty (such documentation to include such evidence of authorization and such legal opinions with respect thereto as the Lenders may reasonably request), then the Borrower shall within 10 Business Days of the GEI Replacement Date prepay in full the aggregate outstanding Borrowings and the Commitment of each Lender shall automatically terminate; provided, however, that no such prepayment shall be required (and the Commitment of each Lender shall not terminate) if, and for so long as GEI has validly and effectively pledged to the Administrative Agent a blocked cash collateral account held in New York with Citibank, N.A. in an amount, and pursuant to documentation in form and substance, reasonably satisfactory to the Administrative Agent. (iii) In the event that on or before the date falling one month prior to the stated expiration date of the TCW Guaranty (as in effect from time to time, the "TCW Replacement Date"), the Administrative Agent has not received a guaranty duly executed by TCW or a replacement guarantor satisfactory to the Lenders and having a stated maturity falling at least 364 days after the then current TCW Replacement Date or, if sooner, 30 days after the Maturity Date, pursuant to documentation in form and substance similar or identical to the TCW Guaranty (such documentation to include such evidence of authorization and such legal opinions with respect thereto as the Lenders may reasonably request), then the Borrower shall within 10 Business Days of the TCW Replacement Date prepay in full the aggregate outstanding Borrowings and the Commitment of each Lender shall automatically terminate; provided, however, that no such prepayment shall be required (and the Commitment of each Lender shall not terminate) if, and for so long as TCW has validly and effectively pledged to the Administrative Agent a blocked cash collateral account held in New York with Citibank, N.A. in an amount, and pursuant to documentation in form and substance, reasonably satisfactory to the Administrative Agent. (d) 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 (x) Receivables in connection with a Permitted Receivables Financing, or (y) 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. (e) 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. (f) 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. (g) In the event that a Guarantor Termination (as such term is defined in the Guaranty) shall occur, the Borrower shall immediately prepay in full all outstanding Borrowings and the Commitment of each Lender shall automatically terminate. 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 0.375% per annum 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, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent. (c) 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% per annum 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% per annum 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 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 Lenders. In the event that the Borrower makes such an election and the 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 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 tAhe 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(f) 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 use all reasonable efforts to 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 9.03 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 9.03(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 9.04), 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's (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 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. 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, trade names, 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 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. 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 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, 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 the Administrative Agent notifies the Borrower that each of the following conditions is satisfied (or waived in accordance with Section 9.02): (a) The Administrative Agent (or any Related Party) 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 (or any Related Party) shall have received from any Fund Guarantor written evidence satisfactory to the Administrative Agent that the Borrower has satisfied each of the conditions set forth in Section 4.01 of the Reimbursement Agreement. (c) Each Guarantor Condition (as defined in the Guaranty) has been satisfied. (d) The Administrative Agent (or any Related Party) shall have received from each Fund Guarantor either (i) a counterpart of the Guaranty to which it is party duly executed by such party or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page of the Guaranty to which it is party) that such party has signed a counterpart of such Guaranty. (e) 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. (f) 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. (g) 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. (h) 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. (i) 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. (j) The Administrative Agent shall have received evidence that the insurance required by Section 5.07 and the Security Documents is in effect. (k) 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. (l) 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. (m) The Administrative Agent shall have received evidence satisfactory to it of the payment in full of the principal of and accrued interest on the loans outstanding under the Revolving Credit Agreement dated as of November 13, 2001 among the Borrower, the lenders party thereto and Citicorp USA, Inc., as administrative agent and collateral agent, together with all other amounts due and payable thereunder, and termination of the commitments of the lenders thereunder to make additional loans. 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 9.02) at or prior to 5:00 p.m., New York City time, on or as of December 21, 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 9.02). (c) The Administrative Agent shall not have received any instructions from the Fund Guarantors to instruct the Lenders not to make any further Loans. (d) The Surviving Representations of each Fund Guarantor set forth in the Guaranty shall be true and correct in all material respects on and as of the date of such Borrowing as if made on and as of such date, except to the extent such Surviving Representations expressly relate to an earlier date (in which case such Surviving Representations shall be true and correct in all materials respects as to such earlier date). For the avoidance of doubt, any Surviving Representation that refers to "the date hereof" or "as of the date hereof" or any other similar reference shall be deemed to refer to the date of the Guaranty. 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, 2.07(e), 4.01(c) and 4.01(m). 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 Revolving Credit 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. Notwithstanding the foregoing, in no event shall the Borrower or any Subsidiary Loan Party be required to grant a lien on any of the Texas Instruments Agreements (as defined in the Security Agreement). (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 of the Equity Interests in MEMC Kulim Electronic Materials, Sdn. Bhd from the Borrower to MEMC International, Inc. no later than fifteen seventy-five (75) Business Days 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, the Reimbursement Documentation 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(d); (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, the Reimbursement Documentation 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. (viii) Liens created in connection with extensions, renewals or replacements of any Liens referred to in clauses (i) through (vii) above, provided that the principal amount of the obligation secured thereby is not increased and that any such extension, renewal or replacement is limited to the property originally encumbered thereby. 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 and the Reimbursement Documentation (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, the Reimbursement Documentation, 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 other than the pledge thereof contemplated by the Security Documents, the Reimbursement Documentation and the Indenture Documentation. 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 or the Reimbursement Documentation; (ii) payment of regularly scheduled interest and principal payments as and when due in respect of any Indebtedness permitted under the Loan Documents or the Reimbursement Documentation; (iii) refinancings of Indebtedness to the extent such Indebtedness is 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, the Reimbursement Documentation, the Italian Credit Agreement or the Indenture Documentation, (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 $25.0 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 - ----------------------------------------------------------- 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 - ----------------------------------------------------------- January 2002 $34.0 million - ----------------------------------------------------------- February 2002 $34.0 million - ----------------------------------------------------------- March 2002 $34.0 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, the Guaranty or the Reimbursement Documentation, (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; (o) the Administrative Agent shall have been notified by the Fund Guarantors that there exists an "Event of Default" (as defined in the Reimbursement Agreement) under the Reimbursement Agreement; (p) a Guarantor Default shall occur; or (q) 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 and the Guaranty, 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 Fund Guarantor or any subsidiary or other Affiliate of either as if it were not an Agent hereunder and may accept fees and other consideration from the Borrower or any Fund Guarantor for services in connection with the Loan Documents or the Guaranty 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 and the Guaranty. 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 and the Guaranty 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 9.02), and (c) except as expressly set forth in the Loan Documents and the Guaranty, neither Agent shall have any duty to disclose, nor be liable for the failure to disclose, any information relating to the Borrower or any Fund Guarantor or any of their 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 9.02) 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 or the Guaranty, (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 or the Guaranty, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or the Guaranty 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 or the Guaranty, 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 or any Fund Guarantor), 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 9.03 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, the Guaranty or related agreement or any document furnished hereunder or thereunder. Except for action expressly required of either of the Agents by the Loan Documents and the Guaranty, each Agent shall in all cases be fully justified in failing or refusing to act under the Loan Documents and the Guaranty unless it shall receive further assurances to its satisfaction from the Lenders of their indemnification obligations under Section 9.03(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. Each Lender hereby acknowledges the Administrative Agent's agreements in Section 5 of the Guaranty and hereby expressly authorizes the Administrative Agent to act in accordance with each said Section 5. Each Lender hereby acknowledges the Administrative Agent's agreements in the Intercreditor Agreement, Section 5 of the Guaranty, Section 6.14 of the TPG Guaranty and each Section 6.15 of the GEI Guaranty and the TCW Guaranty, and hereby expressly authorizes the Administrative Agent to act in accordance with the Intercreditor Agreement and each said Section of the Guaranty. ARTICLE IX Miscellaneous SECTION 9.01. 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 Graber (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 Graber (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 9.02. 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 but subject to the Guaranty, 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 9.03. 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 9.04. 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 9.03). 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 9.02(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 9.08 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 9.05. 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 9.03 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 9.06. 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 9.07. 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 9.08. 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 9.09. 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 9.01. 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 9.10. 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 9.11. 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 9.12. 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 9.13. 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/ Arnold Y. Wong ----------------------------- Name: Arnold Y. Wong Title: Vice President Exhibit C GUARANTEE AGREEMENT dated as of December 21, 2001, among MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation ("Borrower"), each of the subsidiaries listed on Schedule I hereto (each such subsidiary, individually, a "Subsidiary" or a "Guarantor" and, collectively, the "Subsidiaries" or the "Guarantors") and CITICORP USA, INC. as collateral agent (the "Collateral Agent") for the Secured Parties (as defined in the Security Agreement). Reference is made to the Revolving Credit Agreement dated as of December 21, 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"). Capitalized terms used herein and not defined herein shall have the 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. Each of the Subsidiaries is a direct or indirect subsidiary of the Borrower and acknowledges that it will derive substantial benefit from the making of the Loans by the Lenders. The obligations of the Lenders to make Loans are conditioned on, among other things, the execution and delivery by the Guarantors of a Guarantee Agreement in the form hereof. As consideration therefor and in order to induce the Lenders to make Loans, the Guarantors are willing to execute this Agreement. Accordingly, the parties hereto agree as follows: Section 1. Guarantee. Each Guarantor unconditionally guarantees, jointly with the other Guarantors and severally, as a primary obligor and not merely as a surety, (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 collectively called the "Revolving Credit Obligations"). Each Guarantor further agrees that the Revolving Credit Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any Revolving Credit Obligation. Each Guarantor agrees to pay, in addition to the amounts stated above, any and all expenses (including reasonable counsel fees and expenses) incurred by the Secured Parties in enforcing any rights under this Agreement. Section 2. Revolving Credit Obligations Not Waived. To the fullest extent permitted by applicable law, each Guarantor waives presentment to, demand of payment from and protest to the Borrower of any of the Revolving Credit Obligations, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment. To the fullest extent permitted by applicable law, the obligations of each Guarantor hereunder shall not be affected by (a) the failure of the Collateral Agent or any other Secured Party to assert any claim or demand or to enforce or exercise any right or remedy against the Borrower or any Guarantor under the provisions of the Revolving Credit Agreement, any other Loan Document or otherwise; (b) any recision, waiver (except the effect of any waiver obtained pursuant to Section 12(b)), amendment or modification of, or any release from any terms or provisions of any other Loan Document, any other Guarantee or any other agreement, including with respect to any other Guarantor under this Agreement, (c) the failure to perfect any security interest in, or release of, any of the security held by or on behalf of the Collateral Agent or any other Secured Party, or (d) any change in ownership of the Borrower. Section 3. Security. Each of the Guarantors authorizes the Collateral Agent and each of the other Secured Parties to (a) take and hold security for the payment of this Guarantee and the Revolving Credit Obligations as set forth in the Security Agreement, and exchange, enforce, waive and release any such security, (b) apply such security and direct the order or manner of sale thereof as they in their sole discretion may determine and (c) release or substitute any one or more endorsees, other Guarantors or other obligors. Section 4. Guarantee of Payment. Each Guarantor agrees that its guarantee constitutes a guarantee of payment when due and not of collection, and waives any right to require that any resort be had by the Collateral Agent or any other Secured Party to any of the security held for payment of the Revolving Credit Obligations or to any balance of any deposit account or credit on the books of the Collateral Agent or any other Secured Party in favor of the Borrower or any other Person. Section 5. Limitation on Remedies. Notwithstanding anything to the contrary contained in this Agreement, the Collateral Agent shall not, at the instruction of the Administrative Agent or any Lender, commence or otherwise take any action or proceeding to realize upon any or all of the Collateral or exercise any other rights or enforce any other remedies available under this Agreement, any other Loan Document, or as a matter of law unless and until (i) a Guarantor Default has occurred and is continuing and (ii) the Administrative Agent has exhausted all remedies available under the Guaranty. Section 6. No Discharge or Diminishment of Guarantee. The obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than the indefeasible payment in full in cash of the Revolving Credit Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Revolving Credit Obligations, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Revolving Credit Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affected by the failure of the Collateral Agent or any other Secured Party to assert any claim or demand or to enforce any remedy under the Revolving Credit Agreement, any other Loan Document or any other agreement, by any waiver or modification of any provision of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the Revolving Credit Obligations, or the failure to perfect any security interest in, or the release of, any of the security held by or on behalf of the Collateral Agent or any other Secured Party, or by any other act or omission that may or might in any manner or to any extent vary the risk of any Guarantor or that would otherwise operate as a discharge of each Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of all the Revolving Credit Obligations). Section 7. Defenses of Borrower Waived. To the fullest extent permitted by applicable law, each of the Guarantors waives any defense based on or arising out of any defense of the Borrower or the unenforceability of the Revolving Credit Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower, other than the final and indefeasible payment in full in cash of the Revolving Credit Obligations. The Collateral Agent and the other Secured Parties may, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Revolving Credit Obligations, make any other accommodation with the Borrower or any other guarantor or exercise any other right or remedy available to them against the Borrower or any other guarantor, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Revolving Credit Obligations have been fully, finally and indefeasibly paid in cash. Pursuant to applicable law, each of the Guarantors waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against the Borrower or any other Guarantor or guarantor, as the case may be, or any security. Section 8. Agreement to Pay. In furtherance of the foregoing and not in limitation of any other right that the Collateral Agent or any other Secured Party has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Borrower or any other Loan Party to pay any Revolving Credit Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the Collateral Agent or such other Secured Party as designated thereby in cash the amount of such unpaid Revolving Credit Obligations. Upon payment by any Guarantor of any sums to the Collateral Agent or any Secured Party as provided above, all rights of such Guarantor against the Borrower arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subordinate and junior in right of payment to the prior indefeasible payment in full in cash of all the Revolving Credit Obligations. If any amount shall erroneously be paid to any Guarantor on account of such subrogation, contribution, reimbursement, indemnity or similar right, such amount shall be held in trust for the benefit of the Secured Parties and shall forthwith be paid to the Collateral Agent to be credited against the payment of the Revolving Credit Obligations, whether matured or unmatured, in accordance with the terms of the Loan Documents. Section 9. Information. Each of the Guarantors assumes all responsibility for being and keeping itself informed of the Borrower's financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Revolving Credit Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that none of the Collateral Agent or the other Secured Parties will have any duty to advise any of the Guarantors of information known to it or any of them regarding such circumstances or risks. Section 10. Representations and Warranties. Each of the Guarantors represents and warrants as to itself that all representations and warranties relating to it contained in the Revolving Credit Agreement and other Loan Documents are true and correct in all material respects. Section 11. Termination. The Guarantees made hereunder (a) shall terminate when all the Revolving Credit Obligations have been indefeasibly paid in full and the Lenders have no further commitment to lend under the Revolving Credit Agreement, and (b) shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Revolving Credit Obligation is rescinded or must otherwise be restored by any Secured Party or any Guarantor upon the bankruptcy or reorganization of the Borrower, any Guarantor or otherwise. Section 12. Intercreditor Agreement. Notwithstanding anything to the contrary contained in this Agreement, all rights, obligations and remedies of the Collateral Agent set forth in this Agreement and shall be subject to the provisions set forth in the Intercreditor Agreement. Section 13. 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 the Guarantors that are contained in this Agreement shall bind and inure to the benefit of each party hereto and their respective successors and assigns. This Agreement shall become effective as to any Guarantor when a counterpart hereof executed on behalf of such 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 Guarantor and the Collateral Agent and their respective successors and assigns, and shall inure to the benefit of such Guarantor, the Collateral Agent and the other Secured Parties, and their respective successors and assigns, except that no Guarantor shall have the right to assign its rights or obligations hereunder or any interest herein (and any such attempted assignment shall be void). In the event that a Guarantor ceases to be a Subsidiary pursuant to a transaction permitted under the Loan Documents, such 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 Guarantor and may be amended, modified, supplemented, waived or released with respect to any Guarantor without the approval of any other Guarantor and without affecting the obligations of any other Guarantor hereunder. Section 14. 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 provision of this Agreement or consent to any departure by any 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 Guarantor in any case shall entitle such 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 Guarantors with respect to which such waiver, amendment or modification relates and the Collateral Agent, subject to any consent required in accordance with Section 9.02 of the Revolving Credit Agreement. SECTION 15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. Section 16. Notices. All communications and notices hereunder shall be in writing and given as provided in Section 9.01 of the Revolving Credit Agreement. All communications and notices hereunder to each Guarantor shall be given to it at its address or telecopy number set forth in Schedule I, with a copy to the Borrower. Section 17. Survival of Agreement; Severability. (a) All covenants, agreements, representations and warranties made by the Guarantors 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 by the Lenders of the Loans regardless of any investigation made by the Secured Parties or on their behalf, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any other fee or amount payable under this Agreement or any other Loan Document is outstanding and 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 or in any other Loan Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein 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 18. Counterparts. This Agreement may be executed in 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 13. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually executed counterpart of this Agreement. Section 19. Rules of Interpretation. The rules of interpretation specified in Section 1.02 of the Revolving Credit Agreement shall be applicable to this Agreement. Section 20. Jurisdiction; Consent to Service of Process. (a) Each 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 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 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 Guarantor or its properties in the courts of any jurisdiction. (b) Each 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 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 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 20. 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 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 20. Section 21. Limitation on Guaranteed Amounts. Anything contained in this Agreement to the contrary notwithstanding, the obligation of each Guarantor hereunder shall be limited to a maximum aggregate amount equal to the greatest amount that would not render such Guarantor's 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 22. Additional Guarantors. 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 Guarantor upon becoming a Subsidiary Loan Party. Upon execution and delivery after the date hereof by the Collateral Agent and such a Subsidiary of an instrument in the form of Annex 1, 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. Section 23. Successor Guarantors. Any Person may merge with any Guarantor in a transaction in which the surviving entity is a Subsidiary of the Borrower; provided that if the surviving entity is not the 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 Loan Documents (or counterparts or supplements thereto), executed and delivered to the Collateral Agent (in form reasonably satisfactory to the Collateral Agent, as applicable) all the obligations of such Guarantor under this Guarantee Agreement and the other applicable Loan Documents; and further provided that prior to the consummation of such transaction, the Borrower must provide the Collateral Agent with an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer complies with the Loan Documents. Section 24. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Secured Party is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other Indebtedness at any time owing by such Secured Party to or for the credit or the account of any Guarantor against any or all the obligations of such Guarantor then existing under this Agreement and the other Loan Documents held by such Secured Party, irrespective of whether or not such Secured Party shall have made any demand under this Agreement or any other Loan Document. The rights of each Secured Party under this Section 24 are in addition to other rights and remedies (including any other rights of setoff) which such Secured Party may have. 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 ------------------------------ Name: James M. Stolze Title: Executive Vice President, Chief Financial Officer By ------------------------------ Name: Kenneth L. Young Title: Treasurer EACH OF THE OTHER SUBSIDIARIES LISTED ON SCHEDULE I HERETO, By ------------------------------ 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 ------------------------------ Name: Title: Schedule I to the Guarantee Agreement GUARANTORS - --------------------------------------------------------------------------- - --------------------------------------------------------------------------- - --------------------------------------------------------------------------- - --------------------------------------------------------------------------- - --------------------------------------------------------------------------- - --------------------------------------------------------------------------- - --------------------------------------------------------------------------- Annex 1 to the Guarantee Agreement SUPPLEMENT NO. [ ] dated as of [ ], to the Guarantee Agreement dated as of December 21, 2001, among MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation ("Borrower"), each of the subsidiaries listed on Schedule I thereto (each such subsidiary, individually, a "Subsidiary" or a "Guarantor" and, collectively, the "Subsidiaries" or "Guarantors") and CITICORP USA, INC., as collateral agent (the "Collateral Agent") for the Secured Parties (as defined in the Security Agreement). A. Reference is made to the Revolving Credit Agreement dated as of December 21, 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"). B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Guarantee Agreement and the Revolving Credit Agreement. C. The Guarantors have entered into the Guarantee Agreement in order to induce the Lenders to make Loans. 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 the Guarantee Agreement as a Guarantor upon becoming a Subsidiary Loan Party. Section 22 of the Guarantee Agreement provides that additional Subsidiaries may become Guarantors under the Guarantee 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 Revolving Credit Agreement to become a Guarantor under the Guarantee Agreement in order to induce the Lenders to make additional Loans and as consideration for Loans previously made. Accordingly, the Collateral Agent and the New Guarantor agree as follows: Section 1. In accordance with Section 22 of the Guarantee Agreement, the New Guarantor by its signature below becomes a Guarantor under the Guarantee 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 Guarantee 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 Guarantee Agreement shall be deemed to include the New Guarantor. The Guarantee Agreement is hereby incorporated herein by reference. Section 2. The New Guarantor represents and warrants to the Collateral Agent and the other Secured Parties 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 may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Collateral Agent shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Guarantor and the Collateral Agent. 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 Guarantee 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. Section 6. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Guarantee Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision hereof in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto 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. All communications and notices hereunder shall be in writing and given as provided in Section 16 of the Guarantee Agreement. All communications and notices hereunder to the New Guarantor shall be given to it at the address set forth under its signature below, with a copy to the Borrower. Section 8. The New Guarantor agrees to reimburse the Collateral Agent for its out-of-pocket expenses in connection with this Supplement, including the reasonable fees, disbursements and other charges of counsel for the Collateral Agent. IN WITNESS WHEREOF, the New Guarantor and the Collateral Agent have duly executed this Supplement to the Guarantee Agreement as of the day and year first above written. [NAME OF NEW GUARANTOR], By -------------------------------------- Name: Title: Address: Citicorp USA, Inc., as Collateral Agent, By -------------------------------------- Name: Title: Exhibit D INDEMNITY, SUBROGATION and CONTRIBUTION AGREEMENT dated as of December 21, 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" and or a "Guarantor" and, collectively, the "Guarantors") 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 the Revolving Credit Agreement dated as of December 21, 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"). Capitalized terms used herein and not defined herein shall have the 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 Guarantors have guaranteed the Revolving Credit Obligations (as defined in the Guarantee Agreement) pursuant to the Guarantee Agreement. The Guarantors have granted Liens on and security interests in certain of their assets to secure such guarantees pursuant to (a) the Pledge Agreement and (b) the Security Agreement. The obligations of the Lenders to make Loans are conditioned on, among other things, the execution and delivery by the Borrower and the Guarantors of an agreement in the form hereof. Accordingly, the Borrower, each Guarantor and the Collateral Agent agree as follows: SECTION 1. Indemnity and Subrogation. In addition to all such rights of indemnity and subrogation as the Guarantors may have under applicable law (but subject to Section 3), the Borrower agrees that (a) in the event a payment shall be made by any Guarantor under the Guarantee Agreement, the Borrower shall indemnify such Guarantor for the full amount of such payment and such Guarantor shall be subrogated to the rights of the Person to whom such payment shall have been made to the extent of such payment and (b) in the event any assets of any Guarantor shall be sold pursuant to any Security Document to satisfy a claim of any Secured Party, the Borrower shall indemnify such Guarantor in an amount equal to the greater of the book value or the fair market value of the assets so sold. SECTION 2. Contribution and Subrogation. Each Guarantor (a "Contributing Guarantor") agrees (subject to Section 3) that, in the event a payment shall be made by any other Guarantor under the Guarantee Agreement or assets of any other Guarantor shall be sold pursuant to any Security Document to satisfy a claim of any Secured Party and such other Guarantor (the "Claiming Guarantor") shall not have been fully indemnified by the Borrower as provided in Section 1, the Contributing Guarantor shall indemnify the Claiming Guarantor in an amount equal to the amount of such payment or the greater of the book value or the fair market value of such assets, as the case may be, in each case multiplied by a fraction of which the numerator shall be the net worth of the Contributing Guarantor on the date hereof and the denominator shall be the aggregate net worth of all the Guarantors on the date hereof (or, in the case of any Guarantor becoming a party hereto pursuant to Section 13, the date of the Supplement hereto executed and delivered by such Guarantor). Any Contributing Guarantor making any payment to a Claiming Guarantor pursuant to this Section 2 shall be subrogated to the rights of such Claiming Guarantor under Section 1 to the extent of such payment. SECTION 3. Subordination. Notwithstanding any provision of this Agreement to the contrary, all rights of each of the Guarantors under Sections 1 and 2 and all other rights of each of the Guarantors in respect of indemnity, contribution or subrogation from any other Loan Party under applicable law or otherwise shall be fully subordinated to the indefeasible payment in full in cash of all Revolving Credit Obligations which are then due and payable whether at maturity, by acceleration or otherwise. No failure on the part of the Borrower or any Guarantor to make the payments required by Sections 1 and 2 (or any other payments required under applicable law or otherwise) shall in any respect limit the obligations and liabilities of any Guarantor with respect to its obligations hereunder, and each Guarantor shall remain liable for the full amount of the obligations of such Guarantor hereunder. SECTION 4. Termination. This Agreement shall survive and be in full force and effect so long as any Revolving Credit Obligation is outstanding and has not been indefeasibly paid in full in cash and any of the Commitments under the Revolving Credit Agreement have not been terminated, and shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Revolving Credit Obligation is rescinded or must otherwise be restored by any Secured Party or any Guarantor upon the bankruptcy or reorganization of the Borrower, any Guarantor or otherwise. SECTION 5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 6. No Waiver; Amendment. (a) No failure on the part of the Collateral Agent or any Guarantor to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy by the Collateral Agent or any Guarantor preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All remedies hereunder are cumulative and are not exclusive of any other remedies provided by law. None of the Collateral Agent and the Guarantors shall be deemed to have waived any rights hereunder unless such waiver shall be in writing and signed by such parties. (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to a written agreement entered into between the Borrower, the Guarantors and the Collateral Agent, subject to any consent required in accordance with Section 9.02 of the Revolving Credit Agreement. SECTION 7. Intercreditor Agreement. Notwithstanding anything to the contrary contained in this Security Agreement, all rights, obligations and remedies of the Collateral Agent set forth in this Agreement and any other Security Documents shall be subject to the provisions set forth in the Intercreditor Agreement. SECTION 8. Notices. All communications and notices hereunder shall be in writing and given as provided in the Guarantee Agreement and addressed as specified therein. SECTION 9. Binding 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 the parties that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns. Neither the Borrower nor any Guarantor may assign or transfer any of its rights or obligations hereunder (and any such attempted assignment or transfer shall be void) without the consent required in accordance with Section 9.02 of the Revolving Credit Agreement. Notwithstanding the foregoing, at the time any Guarantor is released from its obligations under the Guarantee Agreement in accordance with such Guarantee Agreement and the Revolving Credit Agreement, such Guarantor will cease to have any rights or obligations under this Agreement. SECTION 10. Survival of Agreement; Severability. (a) All covenants and agreements made by the Borrower and each Guarantor herein and in the certificates or other instruments prepared or delivered in connection with this Agreement or the other Loan Documents shall be considered to have been relied upon by the Collateral Agent, the other Secured Parties and each Guarantor and shall survive the making by the Lenders of the Loans and shall continue in full force and effect as long as the principal of or any accrued interest on any Loans or any other fee or amount payable under the Revolving Credit Agreement or this Agreement or under any of the other Loan Documents is outstanding and unpaid and as long as the Commitments have not been terminated. (b) In case any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, no party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but 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 11. Counterparts. 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 shall be effective with respect to any Guarantor when a counterpart bearing the signature of such Guarantor shall have been delivered to the Collateral Agent. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Agreement. SECTION 12. Rules of Interpretation. The rules of interpretation specified in Section 1.02 and 1.03 of the Revolving Credit Agreement shall be applicable to this Agreement. SECTION 13. Additional Guarantors. 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 the Guarantee Agreement as a Guarantor upon becoming a Subsidiary Loan Party. Upon execution and delivery, after the date hereof, by the Collateral Agent and such a Subsidiary of an instrument in the form of Annex 1 hereto, such Subsidiary shall become a Guarantor hereunder with the same force and effect as if originally named as a Guarantor hereunder. The execution and delivery of any instrument adding an additional Guarantor as a party to this Agreement shall not require the consent of any 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 Agreement to be executed by their duly authorized officers as of the date first appearing above. MEMC ELECTRONIC MATERIALS, INC. By -------------------------------- Name: James M. Stolze Title: Executive Vice President, Chief Financial Officer By -------------------------------- Name: Kenneth L. Young Title: Treasurer EACH OF THE OTHER SUBSIDIARIES LISTED ON SCHEDULE I HERETO, -------------------------------- 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 -------------------------------- Name: Title: Schedule I To The Indemnity, Subrogation And Contribution Agreement GUARANTOR Name Address Annex 1 to the Indemnity, Subrogation and Contribution Agreement SUPPLEMENT NO. [ ] dated as of [ ], to the Indemnity, Subrogation and Contribution Agreement dated as of December 21, 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 "Guarantors") and CITICORP USA, INC., as collateral agent (in such capacity, the "Collateral Agent") for the Secured Parties (as defined in the Security Agreement). A. Reference is made to (a) the Revolving Credit Agreement dated as of December 21, 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. B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Indemnity, Subrogation and Contribution Agreement and the Revolving Credit Agreement. C. The Borrower and the Guarantors have entered into the Indemnity, Subrogation and Contribution Agreement in order to induce the Lenders to make Loans. 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 the Indemnity, Subrogation and Contribution Agreement as a Guarantor upon becoming a Subsidiary Loan Party. Section 13 of the Indemnity, Subrogation and Contribution Agreement provides that additional Subsidiaries may become Guarantors under the Indemnity, Subrogation and Contribution 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 Revolving Credit Agreement to become a Guarantor under the Indemnity, Subrogation and Contribution Agreement in order to induce the Lenders to make additional Loans and as consideration for Loans previously made. Accordingly, the Collateral Agent and the New Guarantor agree as follows: SECTION 1. In accordance with Section 13 of the Indemnity, Subrogation and Contribution Agreement, the New Guarantor by its signature below becomes a Guarantor under the Indemnity, Subrogation and Contribution Agreement with the same force and effect as if originally named therein as a Guarantor and the New Guarantor hereby agrees to all the terms and provisions of the Indemnity, Subrogation and Contribution Agreement applicable to it as a Guarantor thereunder. Each reference to a "Guarantor" in the Indemnity, Subrogation and Contribution Agreement shall be deemed to include the New Guarantor. The Indemnity, Subrogation and Contribution Agreement is hereby incorporated herein by reference. SECTION 2. The New Guarantor represents and warrants to the Collateral Agent and the other Secured Parties 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 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 Supplement shall become effective when the Collateral Agent shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Guarantor and the Collateral Agent. Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement. SECTION 4. Except as expressly supplemented hereby, the Indemnity, Subrogation and Contribution 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. SECTION 6. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, neither party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Indemnity, Subrogation and Contribution Agreement shall not in any way be affected or impaired (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 hereto 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. All communications and notices hereunder shall be in writing and given as provided in Section 8 of the Indemnity, Subrogation and Contribution Agreement. All communications and notices hereunder to the New Guarantor shall be given to it at the address set forth under its signature below, with a copy to the Borrower. SECTION 8. The New Guarantor agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Collateral Agent. IN WITNESS WHEREOF, the New Guarantor and the Collateral Agent have duly executed this Supplement to the Indemnity, Subrogation and Contribution Agreement as of the day and year first above written. [NAME OF NEW GUARANTOR], By --------------------------------- Name: Title: CITICORP USA, INC., as Collateral Agent By --------------------------------- Name: Title: Schedule I to Supplement No. [ ] to the Indemnity, Subrogation and Contribution Agreement GUARANTOR Name Address Exhibit E PLEDGE AGREEMENT dated as of December 21, 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 December 21, 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 December 21, 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 "Revolving Credit 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 Revolving Credit 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 lien and security interest granted under the Reimbursement Documentation as security for the payment or performance, as the case may be, in full of the Reimbursement Obligations ( the "Reimbursement Security Interest") and 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 Liens created by this Agreement or the Reimbursement Documentation), 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 lien upon and security interest in such Pledged Securities as security for the payment and performance of the Revolving Credit Obligations (subject only to the lien and security interest that comprise the Reimbursement 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, 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 8. 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. Limitation on Remedies. Notwithstanding anything to the contrary contained in this Agreement, the Collateral Agent shall not, at the instruction of the Administrative Agent or any Lender, commence or otherwise take any action or proceeding to realize upon any or all of the Collateral or exercise any other rights or enforce any other remedies available under this Agreement, any other Loan Document, or as a matter of law unless and until (i) a Guarantor Default has occurred and is continuing and (ii) the Administrative Agent has exhausted all remedies available under the Guaranty. SECTION 7. Remedies upon Default. Subject to Section 6, 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 7, 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 Revolving Credit 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 Revolving Credit 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 8. Application of Proceeds of Sale. Subject to Section 6, 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 Revolving Credit 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 Revolving Credit Obligations and Reimbursement Obligations in accordance with Section 5.04 of the Intercreditor Agreement (the amounts so applied to be distributed among the secured parties pro rata in accordance with the amounts of the Revolving Credit Obligations and/or Reimbursement 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 9. 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 9.03 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 Revolving Credit Obligations secured hereby and by the other Security Documents. The provisions of this Section 9 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 Revolving Credit 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 9 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 10. 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 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 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 9.02 of the Revolving Credit Agreement. SECTION 12. 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 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. Intercreditor Agreement. Notwithstanding anything to the contrary contained in this Agreement, all rights, obligations and remedies of the Collateral Agent set forth in this Agreement and any other Security Documents shall be subject to the provisions set forth in the Intercreditor Agreement. SECTION 14. 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 14. Each Pledgor acknowledges that there is no adequate remedy at law for failure by it to comply with the provisions of this Section 14 and that such failure would not be adequately compensable in damages, and therefore agrees that its agreements contained in this Section 14 may be specifically enforced. SECTION 15. 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 Revolving Credit 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 Revolving Credit 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 Revolving Credit Obligations or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Pledgor in respect of the Revolving Credit Obligations or in respect of this Agreement (other than the indefeasible payment in full of all the Revolving Credit Obligations). SECTION 16. Termination or Release. (a) This Agreement and the security interests granted hereby shall terminate when all the Revolving Credit 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 9.02 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 19, 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 16 shall be without recourse to or warranty by the Collateral Agent. SECTION 17. Notices. All communications and notices hereunder shall be in writing and given as provided in Section 9.01 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 18. 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 19. 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 20. 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 Revolving Credit 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 21. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 22. 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 19. 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 23. 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 24. 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. (a) 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. (b) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 17. 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 25. 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 26. 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 27. 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 ---------------------------------------- Name: James M. Stolze Title: Executive Vice President, Chief Financial Officer By ---------------------------------------- Name: Kenneth L. Young Title: Treasurer EACH OF THE OTHER SUBSIDIARIES LISTED ON SCHEDULE I HERETO, By ---------------------------------------- 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 --------------------------------------- Name: Title: Schedule I to the Pledge Agreement SUBSIDIARY PLEDGORS Name Address ---- ------- 1. 2. 3. 4. 5. 6. Schedule II to the Pledge Agreement CAPITAL STOCK OR OTHER EQUITY INTERESTS Number and Class of Percentage of Shares Number of Registered or Other Equity Shares or Other Equity Issuer Certificate Owner Interests Interests - ------ ----------- ----- --------- --------- DEBT SECURITIES Principal Issuer Amount Date of Note Maturity Date - ------ ------ ------------ ------------- Annex 1 to the Pledge Agreement SUPPLEMENT NO. [ ] dated as of [ ] to the PLEDGE AGREEMENT dated as of December 21, 2001, among MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation "Borrower"), each subsidiary of Borrower listed on Schedule I thereto (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). A. Reference is made to (a) the Revolving Credit Agreement dated as of December 21, 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 December 21, 2001 (as amended, supplemented or otherwise modified from time to time, the "Guarantee Agreement") among the Subsidiary Pledgors and the Collateral Agent. B. Capitalized terms used herein and not defined herein shall have meanings assigned to such terms in the Revolving Credit Agreement. C. The Pledgors have entered into the Pledge Agreement in order to induce the Lenders to make Loans. 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 the Pledge Agreement as a Subsidiary Pledgor upon becoming a Subsidiary Loan Party. Section 27 of the Pledge Agreement provides that such Subsidiaries may become Subsidiary Pledgors under the Pledge Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned Subsidiary (the "New Pledgor") is executing this Supplement in accordance with the requirements of the Revolving Credit Agreement to become a Subsidiary Pledgor under the Pledge Agreement in order to induce the Lenders to make additional Loans and as consideration for Loans previously made. Accordingly, the Collateral Agent and the New Pledgor agree as follows: SECTION 1. In accordance with Section 27 of the Pledge Agreement, the New Pledgor by its signature below becomes a Pledgor under the Pledge Agreement with the same force and effect as if originally named therein as a Pledgor and the New Pledgor hereby agrees (a) to all the terms and provisions of the Pledge Agreement applicable to it as a Pledgor thereunder and (b) represents and warrants that the representations and warranties made by it as a Pledgor 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. In furtherance of the foregoing, the New Pledgor, as security for the payment and performance in full of the Revolving Credit Obligations (as defined in the Pledge Agreement), does hereby create and grant to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, their successors and assigns, a security interest in and lien on all of the New Pledgor's right, title and interest in and to the Collateral (as defined in the Pledge Agreement) of the New Pledgor. Each reference to a "Subsidiary Pledgor" or a "Pledgor" in the Pledge Agreement shall be deemed to include the New Pledgor. The Pledge Agreement is hereby incorporated herein by reference. SECTION 2. The New Pledgor represents and warrants to the Collateral Agent and the other Secured Parties 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 may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Collateral Agent shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Pledgor and the Collateral Agent. Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement. SECTION 4. The New Pledgor hereby represents and warrants that set forth on Schedule I attached hereto is a true and correct schedule of all its Pledged Securities. SECTION 5. Except as expressly supplemented hereby, the Pledge Agreement shall remain in full force and effect. SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 7. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, neither party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Pledge Agreement shall not in any way be affected or impaired (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 hereto 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 8. All communications and notices hereunder shall be in writing and given as provided in Section 17 of the Pledge Agreement. All communications and notices hereunder to the New Pledgor shall be given to it at the address set forth under its signature hereto, below, with a copy to the Borrower. SECTION 9. The New Pledgor agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Collateral Agent. IN WITNESS WHEREOF, the New Pledgor and the Collateral Agent have duly executed this Supplement to the Pledge Agreement as of the day and year first above written. [NAME OF NEW PLEDGOR], By ---------------------------- Name: Title: Address: CITICORP USA, INC., as Collateral Agent, By ---------------------------- Name: Title: Schedule I to Supplement No. [ ] to the Pledge Agreement Pledged Securities of the New Pledgor CAPITAL STOCK OR OTHER EQUITY INTERESTS Number and Class of Percentage of Shares Number of Registered Shares or Other or Other Equity Issuer Certificate Owner Equity Interests Interests - ------ ----------- ----- --------- --------- DEBT SECURITIES Principal Issuer Amount Date of Note Maturity Date - ------ ------ ------------ ------------- Exhibit F SECURITY AGREEMENT dated as of December 21, 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 December 21, 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 December 21, 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 "Revolving Credit 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. "Revolving Credit Agreement" has the meaning assigned to such term in the preliminary statement of this Agreement. "Revolving Credit Obligations" 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 Revolving Credit 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 Revolving Credit 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 9.12 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, any other Loan Document or the Reimbursement Documentation. 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 Revolving Credit 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. Limitation on Remedies. Notwithstanding anything to the contrary contained in this Agreement, the Collateral Agent shall not, at the instruction of the Administrative Agent or any Lender, commence or otherwise take any action or proceeding to realize upon any or all of the Collateral or exercise any other rights or enforce any other remedies available under this Agreement, any other Loan Document, or as a matter of law unless and until (i) a Guarantor Default has occurred and is continuing and (ii) the Administrative Agent has exhausted all remedies available under the Guaranty. SECTION 6.02. Remedies upon Default. Subject to Section 6.01, 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 Revolving Credit 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 Revolving Credit 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. Subject to Section 6.01, 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 Revolving Credit 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 Revolving Credit Obligations and the Reimbursement Obligations in accordance with Section 5.04 of the Intercreditor Agreement (the amounts so applied to be distributed among the secured parties pro rata in accordance with the amounts of the Revolving Credit Obligations and/or Reimbursement 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 6.04. Grant of License to Use Intellectual Property. Subject to Section 6.01, 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 9.01 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. Intercreditor Agreement. Notwithstanding anything to the contrary contained in this Security Agreement, all rights, obligations and remedies of the Collateral Agent set forth in this Agreement and any other Security Documents shall be subject to the provisions set forth in the Intercreditor Agreement. SECTION 7.03. 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 Revolving Credit 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 Revolving Credit 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 Revolving Credit Obligations, or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the Revolving Credit Obligations or this Agreement. SECTION 7.04. 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 7.05. 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 7.06. 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 7.07. 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 Revolving Credit Obligations secured hereby and by the other Security Documents. The provisions of this Section 7.07 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 7.07 shall be payable on written demand therefor. SECTION 7.08. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. SECTION 7.09. 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 9.02 of the Revolving Credit Agreement. SECTION 7.10. 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 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 7.10. SECTION 7.11. 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 7.12. 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 7.13. 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 7.05), and shall become effective as provided in Section 7.05. Delivery of an executed signature page to this Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. SECTION 7.14. 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 7.15. 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 7.16. Termination. This Agreement and the Security Interest shall terminate when all the Revolving Credit 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 7.16 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 7.17. 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 ----------------------------- Name: James M. Stolze Title: Executive Vice President, Chief Financial Officer By ----------------------------- Name: Kenneth L. Young Title: Treasurer EACH OF THE OTHER GUARANTORS LISTED ON SCHEDULE I HERETO, By ----------------------------- 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 ----------------------------- Name: Title: Schedule I to the Security Agreement GUARANTORS Schedule II to the Security Agreement COPYRIGHTS - -------------------------------------------------------------------------------- DOCKET DESCRIPTION MW# - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Schedule III to the Security Agreement LICENSES TITLE OF AGREEMENT OR ITEM EFFECTIVE DATE Schedule IV to the Security Agreement PATENTS - -------------------------------------------------------------------------------- DOCKET # TITLE FIRST INVENTOR - -------------------------------------------------------------------------------- Schedule V to the Security Agreement TRADEMARKS - -------------------------------------------------------------------------------- TRADEMARK COUNTRIES STATUS - -------------------------------------------------------------------------------- Annex 1 to the Security Agreement [Form of] PERFECTION CERTIFICATE Reference is made to (a) the Revolving Credit Agreement, dated as of December 21, 2001 (as amended, supplemented or otherwise modified from time to time, the "Revolving Credit Agreement"), among MEMC ELECTRONIC MATERIALS, INC. (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 as collateral agent (in such capacity, the "Collateral Agent"), and (b) the Security Agreement, dated as of December 21, 2001 (as amended, supplemented or otherwise modified from time to time, the "Security Agreement") among the Grantors and the Collateral Agent. Capitalized terms used herein but not defined herein having the respective meanings set forth in the Revolving Credit Agreement and the Security Agreement. The undersigned, a Financial Officer of Borrower, hereby certify to the Collateral Agent and each other Secured Party as follows: 1. Names. (a) The exact corporate name and jurisdiction of organization of each Grantor, as such name appears in its respective certificate of incorporation, is as follows: (b) Set forth below is each other corporate name each Grantor has had in the past five years, together with the date of the relevant change: (c) Except as set forth in Schedule 1 hereto, no Grantor has changed its identity or corporate structure in any way within the past five years. Changes in identity or corporate structure would include mergers, consolidations and acquisitions, as well as any change in the form, nature or jurisdiction of corporate organization. If any such change has occurred, include in Schedule 1 the information required by Sections 1 and 2 of this certificate as to each acquiree or constituent party to a merger or consolidation. (d) The following is a list of all other names (including trade names or similar appellations) used by each Grantor or any of its divisions or other business units in connection with the conduct of its business or the ownership of its properties at any time during the past five years: (e) Set forth below is the Federal Taxpayer Identification Number of each Grantor: 2. Current Locations. (a) The chief executive office of each Grantor is located at the address set forth opposite its name below: Grantor Mailing Address County State - ------- --------------- ------ ----- (b) Set forth below opposite the name of each Grantor are all locations where such Grantor maintains any books or records relating to any Accounts Receivable, Instruments and Documents (with each location at which Chattel Paper, if any, is kept being indicated by an "*"): Grantor Mailing Address County State - ------- --------------- ------ ----- (c) Set forth below opposite the name of each Grantor are all the places of business of such Grantor not identified in paragraph (a) or (b) above: Grantor Mailing Address County State - ------- --------------- ------ ----- (d) Set forth below opposite the name of each Grantor are all the locations where such Grantor maintains any Collateral not identified above: Grantor Mailing Address County State - ------- --------------- ------ ----- (e) Set forth below opposite the name of each Grantor are the names and addresses of all Persons other than such Grantor that have possession of any of the Collateral of such Grantor: Grantor Mailing Address County State - ------- --------------- ------ ----- 3. Unusual Transactions. All Accounts Receivable have been originated by the Grantors and all Inventory has been acquired by the Grantors in the ordinary course of business. 4. UCC Filings. Financing statements in substantially the form of Schedule 4 hereto have been prepared for filing in the UCC filing office in each jurisdiction where a Grantor is organized as identified in Section 1 hereof and where any Collateral constituting fixtures is located as identified in Section 2 hereof. 5. Schedule of Filings. Attached hereto as Schedule 5 is a schedule setting forth, with respect to the filings described in Section 4 above, each filing and the filing office in which such filing is to be made. 6. Filing Fees. All filing fees and taxes payable in connection with the filings described in Section 4 above have been paid or provided for. 7. Stock Ownership. Attached hereto as Schedule 7 is a true and correct list of all the duly authorized, issued and outstanding Equity Interests of each Subsidiary (including the Borrower) and the record and beneficial owners of such Equity Interests. Also set forth on Schedule 7 is each Equity Interest of the Borrower and each Subsidiary that represents 50% or less of the equity of the entity in which such investment was made. 8. Notes. Attached hereto as Schedule 8 is a true and correct list of all notes held by the Borrower and each Subsidiary and all intercompany notes between the Borrower and each Subsidiary and between each Subsidiary and each other such Subsidiary. 9. Advances. Attached hereto as Schedule 9 is (a) a true and correct list of all advances made by the Borrower to any Subsidiary or made by any Subsidiary to the Borrower or to any other Subsidiary, which advances will be on and after the date hereof evidenced by one or more intercompany notes pledged to the Collateral Agent under the Pledge Agreement and (b) a true and correct list of all unpaid intercompany transfers of goods sold and delivered by or to the Borrower or any Subsidiary. 10. Mortgage Filings. Attached hereto as Schedule 10 is a schedule setting forth, with respect to each Mortgaged Property, (i) the exact corporate name of the entity that owns such property as such name appears in its certificate of formation, (ii) if different from the name identified pursuant to clause (i), the exact name of the current record owner of such property reflected in the records of the filing office for such property identified pursuant to the following clause and (iii) the filing office in which a Mortgage with respect to such property must be filed or recorded in order for the Collateral Agent to obtain a perfected security interest therein. IN WITNESS WHEREOF, the undersigned have duly executed this certificate on this [ ]th day of December, 2001. MEMC ELECTRONIC MATERIALS, INC. By -------------------------------- Name: James M. Stolze Title: Executive Vice President, Chief Financial Officer Annex 3 to the Security Agreement SUPPLEMENT NO. [ ] dated as of [ ], to the Security Agreement dated as of December 21, 2001, among MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation (the "Borrower"), each subsidiary of Borrower listed on Schedule I thereto (each such subsidiary individually a "Subsidiary" or a "Guarantor" and, collectively, the "Subsidiaries" or "Guarantors"; the Guarantors and the 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). A. Reference is made to (a) the Revolving Credit Agreement dated as of December 21, 2001 (as amended, supplemented or otherwise modified from time to time) among 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") and (b) the Guarantee Agreement dated as of December 21, 2001 (as amended, supplemented or otherwise modified from time to time, the "Guarantee Agreement"), among the Guarantors and the Collateral Agent. B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Security Agreement and the Revolving Credit Agreement. C. The Grantors have entered into the Security Agreement in order to induce the Lenders to make Loans. 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. Section 7.16 of the Security Agreement provides that such Subsidiaries may become Grantors under the Security Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned Subsidiary (the "New Grantor") is executing this Supplement in accordance with the requirements of the Revolving Credit Agreement to become a Grantor under the Security Agreement in order to induce the Lenders to make additional Loans and as consideration for Loans previously made. Accordingly, the Collateral Agent and the New Grantor agree as follows: SECTION 1. In accordance with Section 7.17 of the Security Agreement, the New Grantor by its signature below becomes a Grantor under the Security Agreement with the same force and effect as if originally named therein as a Grantor and the New Grantor hereby (a) agrees to all the terms and provisions of the Security Agreement applicable to it as a Grantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Grantor 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. In furtherance of the foregoing, the New Grantor, as security for the payment and performance in full of the Revolving Credit Obligations (as defined in the Security Agreement), does hereby create and grant to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, their successors and assigns, a security interest in and lien on all of the New Grantor's right, title and interest in and to the Collateral of the New Grantor. Each reference to a "Grantor" in the Security Agreement shall be deemed to include the New Grantor. The Security Agreement is hereby incorporated herein by reference. SECTION 2. The New Grantor represents and warrants to the Collateral Agent and the other Secured Parties 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 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 Supplement shall become effective when the Collateral Agent shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Grantor and the Collateral Agent. Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement. SECTION 4. The New Grantor hereby represents and warrants that (a) set forth on Schedule I attached hereto is a true and correct statement of the exact corporate name and jurisdiction of organization of the New Grantor and a true and correct schedule of the location of any and all Collateral of the New Grantor and (b) set forth under its signature hereto, is the true and correct location of the chief executive office of the New Grantor. SECTION 5. Except as expressly supplemented hereby, the Security Agreement shall remain in full force and effect. SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 7. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Security Agreement 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 hereto 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 8. All communications and notices hereunder shall be in writing and given as provided in Section 7.01 of the Security Agreement. All communications and notices hereunder to the New Grantor shall be given to it at the address set forth under its signature below, with a copy to the Borrower. SECTION 9. The New Grantor agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Collateral Agent. IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly executed this Supplement to the Security Agreement as of the day and year first above written. [NAME OF NEW GUARANTOR], By ------------------------- Name: Title: CITICORP USA, INC., as Collateral Agent By ------------------------- Name: Title: Schedule I to Supplement No. [ ] to the Security Agreement LOCATION OF COLLATERAL Description Location - ----------- -------- TABLE OF CONTENTS Page ARTICLE I DEFINITIONS Section 1.01. Definition of Certain Terms Used Herein.................2 Section 1.02. Rules of Interpretation.................................6 ARTICLE II SECURITY INTEREST Section 2.01. Security Interest............................................6 Section 2.02. No Assumption of Liability...................................7 Section 2.03. Limitation on Grant of Security Interest.....................7 ARTICLE III REPRESENTATIONS AND WARRANTIES Section 3.01. Title and Authority..........................................7 Section 3.02. Filings......................................................7 Section 3.03. Validity of Security Interest................................8 Section 3.04. Absence of Other Liens.......................................8 ARTICLE IV COVENANTS Section 4.01. Changes with respect to Collateral...........................9 Section 4.02. Records......................................................9 Section 4.03. Protection of Security.......................................9 Section 4.04. Further Assurances...........................................9 Section 4.05. Inspection and Verification.................................10 Section 4.06. Taxes; Encumbrances.........................................10 Section 4.07. Assignment of Security Interest.............................10 Section 4.08. Continuing Obligations of the Grantors......................10 Section 4.09. Use and Disposition of Collateral...........................11 Section 4.10. Limitation on Modification of Accounts......................11 Section 4.11. Insurance...................................................11 Section 4.12. Legend......................................................12 Section 4.13. Covenants Regarding Patent, Trademark and Copyright Collateral........................................12 ARTICLE V POWER OF ATTORNEY ARTICLE VI REMEDIES Section 6.01. Limitation on Remedies......................................14 Section 6.02. Remedies upon Default.......................................14 Section 6.03. Application of Proceeds.....................................16 Section 6.04. Grant of License to Use Intellectual Property...............16 ARTICLE VII MISCELLANEOUS Section 7.01. Notices.....................................................17 Section 7.02. Security Interest Absolute..................................17 Section 7.03. Survival of Agreement.......................................17 Section 7.04. Binding Effect; Several Agreement...........................17 Section 7.05. Successors and Assigns......................................18 Section 7.06. Collateral Agent's Fees and Expenses; Indemnification.......18 Section 7.07. GOVERNING LAW...............................................18 Section 7.08. Waivers; Amendment..........................................19 Section 7.09. WAIVER OF JURY TRIAL........................................19 Section 7.10. Limitation on Security Interest.............................19 Section 7.11. Severability................................................20 Section 7.12. Counterparts................................................20 Section 7.13. Headings....................................................20 Section 7.14. Jurisdiction; Consent to Service of Process.................20 Section 7.15. Termination.................................................20 Section 7.16. Additional Grantors.........................................21 EX-17 6 tpg_ex17.txt Exhibit 17 GUARANTY dated as of December 21, 2001 (this "Agreement" or the "TPG Guaranty") between TPG PARTNERS III, L.P., a Delaware limited partnership (the "Guarantor"), TPG GENPAR III, L.P., a Delaware limited partnership (the "General Partner") and CITICORP USA, INC., as Administrative Agent under the Credit Agreement referred to below (the "Administrative Agent"). MEMC Electronic Materials, Inc., a Delaware corporation (the "Borrower"), certain lenders party thereto and the Administrative Agent are parties to a Revolving Credit Agreement dated as of December 21, 2001 (as from time to time modified or amended, the "Credit Agreement") providing, subject to the terms and conditions thereof, for the making of loans by said lenders to the Borrower in an aggregate principal amount at any one time outstanding up to an aggregate principal amount at any one time outstanding of $150,000,000. To induce said lenders to enter into the Credit Agreement and to extend credit thereunder, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Guarantor has agreed, by its execution and delivery hereof, to guarantee the credit so extended to the Borrower to the extent of the TPG Percentage, as hereinafter defined. Accordingly, the parties hereto agree as follows: Section 1. Definitions. Terms defined in the Credit Agreement are used herein as defined therein. In addition, the following terms shall have the following meanings when used herein: "Change in Control" shall mean (a) TPG GENPAR III, L.P. shall cease to be the "General Partner" (as such term is defined in the TPG Partnership Agreement) of TPG; (b) TPG shall cease to be a Fund Guarantor; (c) GEI Capital III, LLC shall cease to be the "General Partner" (as such term is defined in the GEI Partnership Agreement) of GEI or GEI Side; (d) Leonard Green & Partners L.P. shall cease to be the "Management Company" (as such term is defined in the GEI Partnership Agreement and GEI Side Partnership Agreement); (e) TCW/Crescent Mezzanine III, LLC or any Affiliate thereof shall cease to be the "General Partner" (as such term is defined in the TCW Partnership Agreement) of TCW or cease to be the "Managing Owner" (as such term is defined in the TCW Trust Agreement) of TCW Trust; or (g) TCW/Crescent Mezzanine Management III, LLC or an Affiliate thereof shall cease to be the "Investment Manager" (as such term is defined in the TCW Partnership Agreement and the TCW Trust Agreement) of TCW or TCW Trust; provided, however, that with respect to clauses (c) and (d) above, no "Change in Control" shall be deemed to have occurred as a result of any transaction or series of transactions, name change or changes or corporate reorganization of any Person provided that after such event or events, a majority of the voting interests of the "General Partner" of GEI or GEI Side, as the case may be, continue to be held by the "Principals" (as defined in the GEI and GEI Side Partnership Agreements) collectively. "Guarantor Conditions" shall mean that: (a) The Administrative Agent (or its counsel) shall have received from each Guaranty Party either (i) a counterpart of the Guaranty Document to which it is party duly executed by such party or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page of the Guaranty Document to which it is party) that such party has signed a counterpart of such Guaranty Document; (b) The Administrative Agent shall have received favorable written opinions (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of (i) Richards, Layton & Finger, P.A., special Delaware counsel to the Guaranty Parties party to the GEI Guaranty, Gibson, Dunn & Crutcher LLP, counsel to the Guaranty Parties party to the GEI Guaranty, and Kramer Levin Naftalis & Frankel LLP, special counsel to the Guaranty Parties party to the GEI Guaranty, (ii) O'Melveny & Myers LLP, special counsel to the Guaranty Parties party to the TCW Guaranty, and Kramer Levin Naftalis & Frankel LLP, special counsel to the Guaranty Parties party to the TCW Guaranty and (iii) Morris, Nichols, Arsht & Tunnell, special Delaware counsel to the Guaranty Parties party to the TPG Guaranty, and Cleary, Gottlieb, Steen & Hamilton, special counsel to the Guaranty Parties party to the TPG Guaranty, in each case in form and substance reasonable acceptable to the Administrative Agent; and (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 Guaranty Party, the authorization of the Guaranty Documents and any other legal matters relating to the Guaranty Parties, the Guaranty Documents or the transactions contemplated thereby, all in form and substance satisfactory to the Administrative Agent and its counsel. "Guarantor Default" shall mean any of the following events: (a) any representation or warranty made by or on behalf of any Guaranty Party in any Guaranty Document or any amendment or modification thereof or waiver thereunder, or in any certificate or other document furnished pursuant to any Guaranty Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made; (b) any Guaranty Party shall fail to observe or perform any covenant, condition or agreement applicable to such Guaranty Party contained in Section 4(A)(1)(a), 4(A)(5)(iii), 4(A)(7), 4(A)(8), 4(B)(1)(a), 4(B)(2), 4(B)(3), 4(B)(4), 4(B)(5), 4(B)(6) or 4(B)(7) of the Guaranty Documents; (c) any Guaranty Party shall fail to observe or perform any covenant, condition or agreement applicable to such Guaranty Party contained in any Guaranty Document (other than those specified in clause (a) or (b) of this Section), and such failure shall continue unremedied for a period of 30 days after notice thereof from the Administrative Agent to such Guaranty Party (which notice will be given at the request of any Lender); (d) any Guaranty Party 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; (e) 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 (e) 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; (f) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of any Guaranty Party 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 any Guaranty Party 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; (g) any Guaranty Party 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 (f) of this Section, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Guaranty Party 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; (h) any Guaranty Party shall become unable, admit in writing its inability or fail generally to pay its debts as they become due; (i) one or more judgments for the payment of money in an aggregate amount in excess of $5,000,000 (net of amounts covered by insurance as to which the insurer has admitted liability in writing) shall be rendered against any Guaranty Party and the same shall remain undischarged for a period of 60 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 such Guaranty Party to enforce any such judgment; or (j) a Change in Control shall occur. "Guaranty Document" shall mean each of this Agreement and the Other Guaranties. "Guaranty Party" shall mean the Guarantor, each Other Guarantor and each "General Partner" (as defined in each Guaranty). "Material Adverse Effect" means a material adverse effect on (a) the business, assets, operations, properties, financial condition, contingent liabilities or prospects of the Guarantor, (b) the ability of the Guarantor to perform its obligations hereunder or (c) any rights of or benefits available to the Administrative Agent or the Lenders hereunder. "Material Indebtedness" means Indebtedness, or obligations in respect of one or more Hedging Agreements, of any Guaranty Party party hereto in an aggregate principal amount exceeding $5,000,000. For purposes of determining Material Indebtedness, the "principal amount" of the obligations of the Guaranty Parties in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Guaranty Parties would be required to pay if such Hedging Agreement were terminated at such time. "MEMC Acquisition" shall mean the acquisition by the Guarantor and the Other Guarantors of a controlling equity interest in the Borrower. "Other Guaranties" shall mean (i) the Guaranty dated as of the date hereof between Green Equity Investors III, L.P., Green Equity Investors Side III, L.P. and the Administrative Agent relating to the Credit Agreement (the "GEI Guaranty") and (ii) the Guaranty dated as of the date hereof between TCW/Crescent Mezzanine Partners III, L.P., TCW/Crescent Mezzanine Trust III and the Administrative Agent relating to the Credit Agreement (the "TCW Guaranty"). "Other Guarantors" shall mean (i) Green Equity Investors III, L.P., (ii) Green Equity Investors Side III, L.P. , (iii) TCW/Crescent Mezzanine Partners III, L.P. and (iv) TCW/Crescent Mezzanine Trust III. "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 this Agreement or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement. "Partnership Agreement" shall mean the TPG Partners III, L.P. Agreement of Limited Partnership dated as of December 15, 1999, as amended. "Property" shall mean, with respect to any Person, any property or assets, or interest therein, of such Person including aggregate Unused Capital Commitments. "Solvent" shall mean, with respect to any Person at any time, that (a) the fair value of the Property of such Person is greater than the total amount of liabilities (including without limitation contingent liabilities) of such Person, (b) the present fair saleable value of the Property of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature, and (d) such Person is not engaged in a business and is not about to engage in a business for which such Person's property would constitute an unreasonably small capital. "Surviving Representations" shall mean each of the representations and warranties contained in Sections 3.01(1), 3.01(2), 3.01(3), 3.01(4), 3.01(6), 3.01(8), 3.01(9), 3.01(13), 3.02(1), 3.02(2), 3.02(3), 3.02(4), 3.02(5) and 3.02(6) hereof. "TPG Percentage" shall mean 60% as may be modified from time to time pursuant to the terms hereof. The terms "Bridge Financing", "Capital Commitment", "Capital Contribution", "Commitment Period", "Defaulting Partner", "Dissolution Trigger Event", "Investments", "Limited Partner", "Portfolio Company", "Termination Trigger Event" and "Unused Capital Commitment" shall have the respective meanings assigned thereto in the Partnership Agreement. Section 2. The Guaranty. 2.01 The Guaranty. (a) Subject to Section 2.05, the Guarantor hereby guarantees to the Lenders and the Administrative Agent the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of the TPG Percentage of the principal of and interest on the Loans and the TPG Percentage of all other amounts whatsoever now or hereafter payable or becoming payable to the Lenders and the Administrative Agent by the Borrower under the Credit Agreement (such obligations being herein collectively called the "Guaranteed Obligations"). The Guarantor hereby further agrees that if the Borrower shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Guarantor will promptly pay the TPG Percentage of the same in full when due, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the TPG Percentage thereof will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal. (b) This Agreement is a continuing guaranty and is a guaranty of payment and is not merely a guaranty of collection. (c) The obligations of the Guarantor hereunder and of the Other Guarantors under the Other Guaranties shall be several and not joint, and the Guarantor's obligations hereunder shall be limited to the TPG Percentage of the Guaranteed Obligations. (d) In the event that there is a Guarantor Default by any Other Guarantor (any such Guarantor, a "Defaulting Guarantor"), prior to the exercise of any remedies under or in respect of the Other Guaranty of such Other Guarantor by the Administrative Agent, the Guarantor shall have the right to, within 10 Business Days of notice from the Administrative Agent of the occurrence of such Guarantor Default, assume, on the terms and conditions herein, the obligations of the Defaulting Guarantor under its Other Guaranty. If the Guarantor elects to assume such obligations, the Guarantor shall promptly so notify the Administrative Agent in writing. Such assumption shall become effective upon the delivery by the Guarantor to the Administrative Agent of such instruments and documents (including without limitation such legal opinions and amendments hereto and any related documents as may reasonably be requested by the Administrative Agent) in form and substance reasonably satisfactory to the Administrative Agent and the Guarantor as may be required to transfer to the Guarantor the obligations of the Defaulting Guarantor under the GEI Guaranty or the TCW Guaranty, as applicable. Upon the effectiveness of such assumption, no Guarantor Default shall have been deemed to have occurred. Thereafter, the Other Guaranty (or portion thereof so assumed by the Guarantor) given by the Defaulting Guarantor shall no longer have any force or effect with respect to such Defaulting Guarantor and such Defaulting Guarantor shall be relieved of all of its obligations and duties under such Other Guaranty (or portion thereof so assumed by the Guarantor). (e) The Guarantor may elect to assume, at any time, on the terms and conditions herein, any part or all of the obligations of any Other Guarantor under its Other Guaranty. If the Guarantor elects to assume such obligations, the Guarantor shall so notify the Administrative Agent in writing. Such assumption shall become effective upon delivery to the Administrative Agent by such Other Guarantor and the Guarantor of such instruments and documents (including without limitation such legal opinions and amendment hereto and any related documents as may reasonably be requested by the Administrative Agent) in form and substance reasonably satisfactory to the Administrative Agent and the Guarantor as may be required to transfer to the Guarantor such part or all of the obligations of such Other Guarantor under the GEI Guaranty or the TCW Guaranty, as applicable. Thereafter, the Other Guaranty (or portion thereof so assumed by the Guarantor) given by the Other Guarantor shall no longer have any force or effect with respect to such Other Guarantor and such Other Guarantor shall be relieved of all of its obligations and duties under such Other Guaranty (or portion thereof so assumed by the Guarantor). (f) Anything to the contrary in this Agreement notwithstanding, the obligations of the Guarantor hereunder shall terminate on the date two years after the date hereof (without prejudice to any obligations of the Guarantor with respect to any amount claimed hereunder prior to said date). (g) The Administrative Agent agrees that (i) if it makes any demand for payment under this Agreement in respect of any of the Guaranteed Obligations it will contemporaneously make demands for payment in respect thereof under the Other Guaranties, on a pro rata basis, and (ii) the Administrative Agent will treat the Guarantor, to the extent practicable, no less favorably than it treats each Other Guarantor, subject however to the right of the Administrative Agent and the Lenders to take such actions as they may reasonably determine to be necessary from time to time to protect the rights and remedies of the Administrative Agent and the Lenders in the good faith exercise of their respective credit judgments. 2.02 Acknowledgments, Waivers and Consents. The Guarantor agrees that the obligations of the Guarantor under Section 2.01 hereof shall, to the fullest extent permitted by applicable law, be absolute, irrevocable and unconditional under any and all circumstances. Without limiting the foregoing, the Guarantor agrees that, subject to Section 2.01(g): (a) The occurrence of any one or more of the following shall not affect the enforceability or effectiveness of this Agreement in accordance with its terms or affect, limit, reduce, discharge or terminate the liability of the Guarantor, or the rights, remedies, powers and privileges of the Administrative Agent or any Lender under this Agreement: (i) any modification or amendment (including without limitation by way of amendment, extension, renewal or waiver), or any acceleration or other change in the time for payment or performance of the terms of all or any part of the Guaranteed Obligations or the Credit Agreement, or any other agreement or instrument whatsoever relating thereto, or any modification of the Commitments; (ii) any release, termination, waiver, abandonment, lapse or expiration, subordination or enforcement of the liability of the Guarantor under this Agreement or of either of the Other Guaranties or any other guarantee of all or any part of the Guaranteed Obligations; (iii) any application of the proceeds of any other guarantee to all or any part of the Guaranteed Obligations in any such manner and to such extent as the Administrative Agent may determine; (iv) any release of any Other Guarantor or any other Person (including without limitation any other guarantor with respect to all or any part of the Guaranteed Obligations) in whole or in part from any personal liability with respect to all or any part of the Guaranteed Obligations; (v) any settlement, compromise, release, liquidation or enforcement, upon such terms and in such manner as the Administrative Agent may determine or as applicable law may dictate, of all or any part of the Guaranteed Obligations or either of the Other Guaranties or any other guarantee of all or any part of the Guaranteed Obligations; (vi) the giving of any consent to the merger or consolidation of, the sale of substantial assets by, or other restructuring or termination of the corporate existence of the Borrower or any other Person; (vii) any proceeding against the Borrower or the Guarantor or any Other Guarantor or any other guarantor of all or any part of the Guaranteed Obligations or any collateral provided by any other Person or the exercise of any rights, remedies, powers and privileges of the Administrative Agent and the Lenders under the Credit Agreement or otherwise in such order and such manner as the Administrative Agent may determine, regardless of whether the Administrative Agent or the Lenders shall have proceeded against or exhausted any collateral, right, remedy, power or privilege before proceeding to call upon or otherwise enforce this Agreement or any Other Guaranty; (viii) the entering into such other transactions or business dealings with the Borrower, any subsidiary or Affiliate of the Borrower or any Other Guarantor or any other guarantor of all or any part of the Guaranteed Obligations as the Administrative Agent or any Lender may desire; or (ix) all or any combination of any of the actions set forth in this Section 2.02(a). (b) The enforceability and effectiveness of this Agreement and the liability of the Guarantor, and the rights, remedies, powers and privileges of the Administrative Agent and the Lenders under this Agreement shall not be affected, limited, reduced, discharged or terminated, and the Guarantor hereby expressly waives to the fullest extent permitted by law any defense now or in the future arising, by reason of: (i) the illegality, invalidity or unenforceability of all or any part of the Guaranteed Obligations, the Credit Agreement or any other agreement or instrument whatsoever relating to all or any part of the Guaranteed Obligations; (ii) any disability or other defense with respect to all or any part of the Guaranteed Obligations, including the effect of any statute of limitations that may bar the enforcement of all or any part of the Guaranteed Obligations or the obligations of any such other guarantor; (iii) the illegality, invalidity or unenforceability of any Other Guaranty or any security for or other guarantee of all or any part of the Guaranteed Obligations or the lack of perfection or continuing perfection or failure of the priority of any Lien on any collateral for all or any part of the Guaranteed Obligations; (iv) the cessation, for any cause whatsoever, of the liability of the Borrower or any Other Guaranty or any other guarantor with respect to all or any part of the Guaranteed Obligations (other than, subject to Section 2.03 hereof, by reason of the full payment of all Guaranteed Obligations); (v) any failure of the Administrative Agent or any Lender to marshal assets in favor of the Borrower or any other Person (including any Other Guarantor or any other guarantor of all or any part of the Guaranteed Obligations), to exhaust any collateral for all or any part of the Guaranteed Obligations, to pursue or exhaust any right, remedy, power or privilege it may have against the Borrower or any other guarantor of all or any Other Guarantor or any part of the Guaranteed Obligations or any other Person or to take any action whatsoever to mitigate or reduce such or any other Person's liability under the Credit Agreement, the Administrative Agent and the Lenders being under no obligation to take any such action notwithstanding the fact that all or any part of the Guaranteed Obligations may be due and payable and that the Borrower may be in default of its obligations under the Credit Agreement; (vi) any counterclaim, set-off or other claim which the Borrower or any Other Guarantor or any other guarantor of all or any part of the Guaranteed Obligations has or claims with respect to all or any part of the Guaranteed Obligations; (vii) any failure of the Administrative Agent or any Lender or any other Person to file or enforce a claim in any bankruptcy or other proceeding with respect to any Person; (viii) any bankruptcy, insolvency, reorganization, winding-up or adjustment of debts, or appointment of a custodian, liquidator or the like of it, or similar proceedings commenced by or against any Person, including any discharge of, or bar or stay against collecting, all or any part of the Guaranteed Obligations (or any interest on all or any part of the Guaranteed Obligations) in or as a result of any such proceeding; (ix) any action taken by the Administrative Agent or any Lender that is authorized by this Section 2.02 or otherwise in this Agreement or by any provision of the Credit Agreement or any omission to take any such action; or (x) to the fullest extent permitted by applicable law, any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor. (c) To the fullest extent permitted by law, the Guarantor expressly waives, for the benefit of the Administrative Agent and the Lenders, all set-offs and counterclaims and all diligence, presentment, demand for payment or performance, notices of nonpayment or nonperformance, protest, notices of protest, notices of dishonor and all other notices or demands of any kind or nature whatsoever, and any requirement that the Administrative Agent or any Lender exhaust any right, power or remedy or proceed against the Borrower under the Credit Agreement or any Other Guaranty or any or other agreement or instrument referred to herein or therein, or against any other Person under any other guarantee of, or security for, any of the Guaranteed Obligations, and all notices of acceptance of this Agreement or of the existence, creation, incurrence or assumption of new or additional Guaranteed Obligations. (d) The Guarantor further waives, to the fullest extent permitted by law, any right to which it may be entitled, including, without limitation: (i) that the assets of the Borrower or any Other Guarantor first be used, depleted and/or applied in satisfaction of the Borrower's obligations under the Credit Agreement prior to any amounts being claimed from or paid by the Guarantor; (ii) to require that the Borrower be sued and all claims against the Borrower be completed prior to an action or proceeding being initiated against the Guarantor or any Other Guarantor; and (iii) to have its obligations hereunder be divided among the Guarantor and the Other Guarantors, such that the Guarantor's obligation would be less than the full amount claimed. 2.03 Reinstatement. The obligations of the Guarantor under this Section 2 shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Borrower in respect of the Guaranteed Obligations is rescinded or must otherwise be restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and the Guarantor agrees that it will indemnify the Administrative Agent and the Lenders on demand for all costs and expenses (including, without limitation, reasonable fees and costs of counsel, but without duplication of the obligations of the Borrower under the Credit Agreement) incurred by them in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or the like under any bankruptcy, insolvency or similar law. 2.04 Remedies. The Guarantor agrees that, as between the Guarantor and the Administrative Agent and the Lenders and subject to Section 5 hereof, the obligations of the Borrower under the Credit Agreement may be declared to be forthwith due and payable as provided in Article VII of the Credit Agreement (and shall be deemed to have become automatically due and payable in the circumstances provided in said Article VII) for purposes of Section 2.01 hereof, notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against the Borrower. 2.05 Payments. Each payment by or on account of any obligation of the Guarantor under this Agreement shall be made on or before the date fifteen (15) Business Days after the date the Administrative Agent shall have demanded such payment in writing hereunder, and all such payments shall be made in United States dollars, without deduction, withholding, set-off or counterclaim at the place specified in the Credit Agreement and free and clear of and without deduction for any Indemnified Taxes or Other Taxes. Section 3. Representations and Warranties. 3.01 Guarantor. The Guarantor represents and warrants to the Administrative Agent and the Lenders that: (1) Organization; Power and Authority. The Guarantor (i) is duly organized, validly existing and in good standing as a limited partnership under the laws of the State of Delaware, (ii) has all requisite limited partnership power, and all material governmental licenses, authorizations, consents and approvals, necessary to own its property and carry on its business as now being conducted, (iii) is qualified to do business and is in good standing in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where failure so to qualify could not (either individually or in the aggregate) reasonably be expected to have a Material Adverse Effect, and (iv) has full power, authority and legal right to make and perform this Agreement. (2) Due Authorization, Legality, Etc. The making and performance by the Guarantor of this Agreement are within the purpose of the Guarantor as set forth in Section 2.04 of the Partnership Agreement and have been duly authorized by all necessary partnership action on the part of the Guarantor, and do not and will not contravene (i) the Partnership Agreement, (ii) any applicable law, decree, regulation, judgment, award, injunction or similar legal restriction, as now in effect, or (iii) any agreement, instrument or contractual restriction binding on the Guarantor. (3) No Additional Authorization Required. No license, consent, authorization or approval or other action by, or notice to or registration or filing with, any Governmental Authority, and no other third-party consent or approval, is necessary for the due execution, delivery and performance by the Guarantor of this Agreement, or for the legality, validity or enforceability of this Agreement, except such as have heretofore been given or made. (4) Legal Effect. This Agreement has been duly executed and delivered by the Guarantor and is the legal, valid and binding obligation of the Guarantor, enforceable against the Guarantor in accordance with its terms except (i) as may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally and (ii) as rights may be limited by equitable principles of general applicability. (5) Financial Statements; Material Adverse Effect. The Guarantor has heretofore furnished to the Administrative Agent the following financial statements: (i) the audited financial statements of the Guarantor as at December 31, 2000 for the fiscal year ending on such date; and (ii) the unaudited financial statements of the Guarantor as at September 30, 2001 for the fiscal quarter ending on such date. All such financial statements fairly present the financial condition of the Guarantor as at such dates and the results of their operations for the fiscal year and fiscal quarter ending on such dates (subject, in the case of such financial statements as at September 30, 2001, to normal year-end audit adjustments), all in accordance with GAAP. Since December 31, 2000, no event or circumstance has occurred that has had any of the effects specified in clauses (b) or (c) of the definition of Material Adverse Effect. On the date hereof, the Guarantor is Solvent. (6) Ranking. The payment obligations of the Guarantor hereunder are unconditional and unsubordinated general obligations of the Guarantor, and rank and will at all times rank at least pari passu in priority of payment with all other present and future unsecured unsubordinated Indebtedness of the Guarantor. (7) No Actions or Proceedings. There are no legal or arbitral proceedings, or proceedings by or before any Governmental Authority, now pending or (to the knowledge of the Guarantor) threatened against the Guarantor that (either individually or in the aggregate) (a) could reasonably be expected to have a Material Adverse Effect or (b) purport to affect the legality, validity or enforceability of this Agreement or any of the Loan Documents. (8) Taxes. The Guarantor have filed all tax returns required to be filed and paid all taxes shown to be due thereon except such as are being contested in good faith by appropriate proceedings and for which adequate reserves have been made in accordance with GAAP. (9) Investment Company Act. The Guarantor is not required to register as an "investment company" under the Investment Company Act of 1940, as amended. (10) VCOC. As of the date hereof, the Guarantor is a "venture capital operating company" within the meaning of ERISA. (11) Portfolio Company. The Borrower is a Portfolio Company as defined in the Partnership Agreement. (12) Existing Indebtedness. The aggregate amount of all loans to the Borrower guaranteed by the Guarantor when added to the aggregate outstanding principal amount of any Bridge Financing by the Guarantor to the Borrower and the aggregate amount of all permanent investments by the Guarantor in the Borrower does not as of the date hereof exceed an amount equal to 20% of the aggregate Capital Commitments, and the aggregate amount of all such loans guaranteed by the Guarantor, when added to the aggregate principal amount of all other loans as to which the Guarantor acts as guarantor or surety as of the date hereof, does not exceed an amount equal to 15% of the aggregate Capital Commitments. (13) MEMC Acquisition. As of the date thereof, the MEMC Acquisition complied with the limits set forth in Section 3.03(f) of the Partnership Agreement. (14) Limited Partners. Schedule 1 attached hereto sets forth a complete list of all Limited Partners as of the date hereof. As of the date hereof, (a) no Limited Partner is a Defaulting Partner and (b) no Limited Partner has been excused from making Capital Contributions in respect of the Guarantor's investments in or obligations relating to the Borrower pursuant to Section 3.05 or 5.02 of the Partnership Agreement or otherwise. (15) Termination/Dissolution Trigger Events. No Termination Trigger Event or Dissolution Trigger Event has occurred. 3.02 General Partner. The General Partner represents and warrants to the Administrative Agent and the Lenders that: (1) Organization, Power and Authority. The General Partner (a) is duly organized, validly existing and in good standing as a limited partnership under the laws of the State of Delaware, (b) has all requisite limited partnership power, and all material governmental licenses, authorizations, consents and approvals, necessary to own its property and carry on its business as now being conducted, (c) is qualified to do business in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where failure so to qualify could not (either individually or in the aggregate) reasonably be expected to have a Material Adverse Effect, and (d) has full power, authority and legal right to make and perform this Agreement. (2) Due Authorization, Legality, Etc. The making and performance by the General Partner of this Agreement have been duly authorized by all necessary partnership action on the part of the General Partner and do not and will not contravene (a) the partnership agreement of the General Partner, (b) any applicable law, decree, regulation, judgment, award, injunction or similar legal restriction, as now in effect, or (c) any agreement, instrument or contractual restriction binding on the General Partner. (3) No Additional Authorization Required. No license, consent, authorization or approval or other action by, or notice to or registration or filing with, any Governmental Authority, and no other third-party consent or approval, is necessary for the due execution, delivery and performance by the General Partner of this Agreement, or for the legality, validity or enforceability of this Agreement, except such as have heretofore been given or made. (4) Legal Effect. This Agreement has been duly executed and delivered by the General Partner and is the legal, valid and binding obligation of the General Partner, enforceable against the General Partner in accordance with its terms except (a) as may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally and (b) as rights may be limited by equitable principles of general applicability. (5) Right to give Capital Call Notices, Etc. The General Partner has the right under Section 3.03 of the Partnership Agreement to give notices to the Limited Partners requiring them to make cash contributions to the Guarantor in order to pay the obligations of the Guarantor under this Agreement, and as of the date hereof, the Commitment Period has not expired or been terminated. Without limiting the foregoing, the General Partner will be entitled to make capital calls on the Limited Partners in connection with amounts payable under this Agreement notwithstanding the occurrence of the expiry or termination of the Commitment Period. (6) Investment Company Act. The General Partner is not required to register as an "investment company" under the Investment Company Act of 1940, as amended. (7) Fund Representations. Each of the representations and warranties of the Guarantor in Section 3.01 hereof is, to the best knowledge of the General Partner, true. Section 4. Covenants of Guarantor and General Partner. A. Guarantor. The Guarantor covenants and agrees with the Lenders and the Administrative Agent that, so long as any Commitment or Loan is outstanding and until payment in full of the obligations of the Guarantor hereunder: (1) Existence, Etc. The Guarantor will (a) preserve and maintain its legal existence and (b) preserve and maintain all of its material rights, privileges, licenses and franchises, except, in the case of clause (b) only, to the extent failure to do so could not reasonably be expected to have a Material Adverse Effect. (2) Inspection of Property, Books and Records. The Guarantor will, subject to reasonable confidentiality requirements, (a) maintain appropriate books and records in which full, true and correct entries shall be made of dealings and transactions in relation to its business and activities and (b) permit the Administrative Agent, during normal business hours and as often as may be desired at their own cost and expense (provided, that if a Default has occurred and is continuing the Guarantor shall indemnify the Administrative Agent for such costs and expenses) to examine, copy and make extracts from its books and records, to inspect any of its property, and to discuss its business and affairs with its officers. (3) Compliance with Law. The Guarantor will comply in all respects with the requirements of all applicable laws, rules, regulations and orders of Governmental Authorities (including without limitation ERISA and Environmental Laws) except where failure to comply could not reasonably be expected to have a Material Adverse Effect or where the necessity of compliance therewith is being contested in good faith by appropriate proceedings. (4) Payment of Obligations. The Guarantor will (a) pay and discharge at or before maturity all of its material obligations and liabilities (including, without limitation, claims of materialmen, warehousemen and the like which if unpaid might by law give rise to a Lien) and (b) pay and discharge all taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such obligations, liabilities, tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained in accordance with GAAP and where the failure to pay or discharge such obligation, liability, tax, assessment, charge or levy could not reasonably be expected to have a Material Adverse Effect. (5) Reporting Requirements. The Guarantor will provide to the Administrative Agent: (i) as soon as available and in any event within 45 days after the end of each quarter of each fiscal year of the Guarantor, one copy for each Lender of an unaudited balance sheet of the Guarantor as at the end of each such fiscal quarter and the related statements of income and retained earnings of the Guarantor for such quarter and for the portion of the fiscal year ended at the end of such quarter; (ii) as soon as available and in any event within 120 days after the end of each year of the Guarantor, one copy for each Lender of an audited balance sheet of the Guarantor as at the end of each such fiscal year and the related statements of income and retained earnings of the Guarantor for such fiscal year, accompanied by an unqualified opinion of independent certified public accountants of recognized national standing acceptable to the Lenders, which opinion shall state that the financial statements fairly present the financial condition and results of operations for the Guarantor as at the end of and for such fiscal year in accordance with GAAP; (iii) promptly upon the commencement of, or any material adverse development in, any litigation or proceeding against the Guarantor that could reasonably be expected to have a Material Adverse Effect, notice thereof with a description thereof in reasonable detail; (iv) promptly after it is notified thereof, notice of any change in the list of Limited Partners; and (v) from time to time and, if no Guarantor Default shall have occurred and be continuing, with reasonable prior notice given by the Administrative Agent, such additional information regarding the financial position or business of the Guarantor as the Administrative Agent or any Lender through the Administrative Agent may reasonably request. (6) Ranking. The Guarantor will promptly take all actions as may be reasonably necessary to ensure that the payment obligations of the Guarantor under this Agreement will at all times constitute unconditional and unsubordinated general obligations of the Guarantor ranking at least pari passu in priority of payment with all other present and future unsecured unsubordinated Indebtedness of the Guarantor. (7) Merger, Etc. The Guarantor will not enter into any transaction of merger or consolidation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution). (8) Compliance with the Partnership Agreement. The Guarantor shall comply in all material respects with its obligations under the Partnership Agreement. B. General Partner. The General Partner covenants and agrees with the Lenders and the Administrative Agent that, so long as any Commitment or Loan is outstanding and until payment in full of the obligations of the Guarantor hereunder: (1) Existence, Etc. The General Partner will (a) preserve and maintain its legal existence and (b) preserve and maintain all of its material rights, privileges, licenses and franchises, except, in the case of clause (b) only, to the extent failure to do so could not reasonably be expected to have a Material Adverse Effect. (2) Merger, Etc. The General Partner will not enter into any transaction of merger or consolidation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution). (3) Availability. The General Partner shall assure that there shall at all times be Unused Capital Commitments in an aggregate amount sufficient to assure that the Guarantor can perform its obligations hereunder. (4) Notices Under the Partnership Agreement. The General Partner shall promptly give such notices to the Limited Partners under Section 3.03 of the Partnership Agreement, and under each other provision of the Partnership Agreement, to the extent required to assure it is able to make capital calls on the Limited Partners thereunder in such amounts and at such times as may be required to enable the Guarantor timely to perform its obligations hereunder. (5) VCOC. The General Partner will use its reasonable best efforts to conduct the affairs of the Guarantor so that the Guarantor is at all relevant times a "venture capital operating company" within the meaning of ERISA. (6) Amendments to the Partnership Agreement. The General Partner will not permit the Partnership Agreement to be amended or modified in any manner that has or could reasonably be expected to have a material adverse effect on the rights and remedies of the Administrative Agent or any Lender hereunder. (7) Notice of Material Events. The General Partner will give to the Administrative Agent prompt notice if any Limited Partner becomes a Defaulting Partner, or is excused from making Capital Contributions with respect to this Agreement pursuant to any provision of the Partnership Agreement, of the occurrence of any Termination Trigger Event or Dissolution Trigger Event, and of any event or condition that constitutes a Guarantor Default or that upon notice, lapse or both would, unless cured or waived, become a Guarantor Default. Section 5. Agreements by Administrative Agent. Notwithstanding anything to the contrary in the Credit Agreement or any other Loan Document, the Administrative Agent agrees, on behalf of itself and the Banks, with the Guarantor and the General Partner that, until payment in full of the obligations of the Guarantor hereunder: (1) it will not amend any of the Loan Documents without the prior written consent of the Guarantor; (2) it will not accelerate the maturity of the Loans without the prior written approval of the Guarantor, provided, that this clause (2) shall not apply while a Guarantor Default has occurred and is continuing; (3) if so instructed by the Guarantor while an Event of Default has occurred and is continuing it will accelerate the maturity of the Loans, provided, that nothing in this clause (3) shall require the Administrative Agent to take any action that in good faith it considers to be contrary to the terms of the Loan Documents or applicable law; (4) it will not (i) institute any legal proceedings against the Borrower or any Subsidiary Loan Party or (ii) take any action to enforce any security interest or lien granted to the Administrative Agent pursuant to the Loan Documents, without, in each case, the prior written approval of the Guarantor (and shall in any event have no obligation to institute or prosecute any such proceedings), provided, that this clause (4) shall not apply while a Guarantor Default has occurred and is continuing; (5) it will not grant a waiver of any of its or the Lenders' rights or remedies under the Loan Documents without the prior written approval of the Guarantor; (6) it will promptly forward to the Guarantor a copy of each notice, filing and other document received by it from, or delivered by it to, the Borrower under the Loan Documents, including without limitation each borrowing request thereunder, and will promptly from time to time confirm to the Guarantor, upon its request, the amounts outstanding under the Loan Documents, and the amount paid thereon, and such other matters relating to the Borrower's performance of its obligations under the Loan Documents as the Guarantor may reasonably request or as the Administrative Agent in its sole discretion may consider appropriate to deliver to the Guarantor; (7) upon the instruction of the Guarantor, it will issue the notice referred to in the introduction to Section 4.01 of the Credit Agreement subject to the satisfaction of the Administrative Agent with the sufficiency of the documents furnished pursuant to Section 4.01(c) of the Credit Agreement; (8) if instructed by the Guarantor, it will instruct the Lenders not to make additional Loans to the Borrower; and (9) without limiting the foregoing, if no Guarantor Default has occurred and is continuing and until payment in full of the Guaranteed Obligations, it will take such reasonable actions contemplated by the Loan Documents as the Guarantor may reasonably request (including without limitation the granting of waivers and the release of collateral and the taking of remedial actions in the case of an Event of Default); provided that except with respect to Section 2.08(d) of the Credit Agreement, the Administrative Agent shall have no obligation under this Section 5 to take any action, without the written consent of the Lenders or the Required Lenders as contemplated by the Credit Agreement, which (i) increases the Commitment of any Lender, (ii) reduces the principal amount of any Loan or reduces the rate of interest thereon, or reduces any fees payable under any Loan Document, (iii) postpones the maturity of any Loan, or any date for the payment of any interest or fees payable under any Loan Document, or reduces the amount of, waives or excuses any such scheduled payment, or postpones the scheduled date of expiration of any Commitment, (iv) changes or waives compliance with any of Article II, Section 4.01(c), Section 4.02(d), clause (p) of Article VII, Article VIII or Section 9.03 of the Credit Agreement, or (v) changes or waives any indemnification obligations in favor of the Agents or the Lenders set forth in any of the Loan Documents; provided further that nothing herein or in any other Loan Document shall require the Administrative Agent to take any action that in the reasonable opinion of the Administrative Agent would be contrary to the terms of the Loan Documents or applicable law or subject the Administrative Agent to personal liability; provided further that the Administrative 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 reasonable satisfaction of any applicable indemnification obligations under the Loan Documents in respect of such action. Section 6. Miscellaneous. 6.01 Waiver. No failure on the part of the Administrative Agent or any Lender to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. 6.02 Notices. All notices, requests and other communications provided for herein (including, without limitation, any modifications of, or waivers, requests or consents under, this Agreement) shall be given or made in writing delivered to the intended recipient at (i) in the case of the Administrative Agent, as specified in Section 9.01 of the Credit Agreement and (ii) in the case of the Guarantor and the General Partner, the "Address for Notices" specified below its name on the signature pages hereof or, as to any party, at such other address as shall be designated by such party in a notice to each other party. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when personally delivered or, in the case of a telecopy, emailed or mailed notice, upon receipt, in each case given or addressed as aforesaid. 6.03 Expenses, Etc. The Guarantor agrees to pay or reimburse the Administrative Agent and each of the Lenders for all of their reasonable out-of-pocket costs and expenses (including, without limitation, the reasonable fees and expenses of legal counsel) in connection with any enforcement or collection proceedings resulting from the occurrence of an Event of Default. 6.04 Amendments, Etc. Except as otherwise expressly provided in this Agreement, any provision of this Agreement may be modified or supplemented only by an instrument in writing signed by the Guarantor, the General Partner and the Administrative Agent. Any such amendment or waiver shall be binding upon the Administrative Agent, the Lenders, each holder of any of the Guaranteed Obligations, the Guarantor and the General Partner. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof. Except as otherwise expressly provided herein, the Administrative Agent will not release the Guarantor from its obligations hereunder, or limit its liability hereunder, without the written consent of each Lender. 6.05 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and each holder of any of the Guaranteed Obligations and their respective successors and assigns; provided that neither the Guarantor nor the General Partner may assign any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent. 6.06 Captions. The captions and section headings appearing herein are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement. 6.07 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. 6.08 Governing Law. This Agreement shall be governed by and construed in accordance with the law of the State of New York. 6.09 Jurisdiction, Service of Process and Venue. (a) Each of the Guarantor and the General Partner hereby agrees that any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby or any judgment entered by any court in respect thereof may be brought in the United States District Court for the Southern District of New York or in any New York State Court sitting in the Borough of Manhattan, New York, or, in the case of an action brought against such party, in the courts of its own corporate domicile, and hereby irrevocably submit to the jurisdiction of each such court for the purpose of any such suit, action, proceeding or judgment; provided, that nothing herein shall prevent the Administrative Agent or any Lender from enforcing any judgment obtained in any such court by proceedings in any jurisdiction whatsoever. (b) Each of the Guarantor and the General Partner hereby irrevocably appoints CT Corporation System in New York, New York (the "Process Agent"), with an office on the date hereof at 111 Eighth Avenue, 13th Floor, New York, New York 10011, as its agent and true and lawful attorney-in-fact in its name, place and stead to accept on behalf of the Guarantor and the General Partner and its property, service of copies of the summons and complaint and any other process which may be served in any such suit, action or proceeding brought in the State of New York, and each of the Guarantor and the General Partner agrees that the failure of the Process Agent to give any notice of any such service of process to the Guarantor or the General Partner shall not impair or affect the validity of such service or, to the extent permitted by applicable law, the enforcement of any judgment based thereon. Such appointment shall be irrevocable as long as the Loans are outstanding, except that if for any reason the Process Agent appointed hereby ceases to act as such, the Guarantor and the General Partner will, by an instrument reasonably satisfactory to the Administrative Agent, appoint another Person in the Borough of Manhattan as such Process Agent subject to the approval of the Administrative Agent. Each of the Guarantor and the General Partner hereby further irrevocably consents to the service of process in any suit, action or proceeding in said courts by the mailing thereof by the Administrative Agent or any Lender by registered or certified mail, postage prepaid, at its address set forth beneath its signature hereto. Each of the Guarantor and the General Partner covenants and agrees that it shall take any and all action, including the execution and filing of any and all documents, that may be necessary to continue the designation of a Process Agent pursuant to this Section 6.09 in full force and effect and to cause the Process Agent to act as such. (c) Nothing herein shall in any way be deemed to limit the ability of the Administrative Agent or any Lender to serve any such process or summonses in any other manner permitted by applicable law, or to obtain jurisdiction over the Guarantor and the General Partner in such other jurisdictions, and in such manner, as may be permitted by applicable law. (d) Each of the Guarantor and the General Partner hereby irrevocably waives, to the extent permitted by applicable law, any objection that it may now or hereafter have to the laying of the venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the United States District Court for the Southern District of New York or any New York State Court sitting in the Borough of Manhattan, New York and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum and any right to which it may be entitled on account of place of residence or domicile. A final judgment (in respect of which time for all appeals has elapsed) in any such suit, action or proceeding shall be conclusive and may be enforced in any court to the jurisdiction of which the Guarantor or the General Partner is or may be subject, by suit upon judgment. 6.10 Waiver of Jury Trial. EACH OF THE GUARANTOR, THE GENERAL PARTNER AND THE ADMINISTRATIVE AGENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 6.11 Severability. In case any provision in this Agreement shall be held to be invalid, illegal or unenforceable, such provision shall be severable from the rest of this Agreement, and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 6.12 Set-Off. Without limiting any of the obligations of the Guarantor or the rights of the Administrative Agent or the Lenders hereunder, if the Guarantor shall fail to pay when due (whether at stated maturity, by acceleration or otherwise) any amount payable by it hereunder, each Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by law, without prior notice to the Guarantor (which notice is expressly waived by the Guarantor to the fullest extent permitted by applicable law), to set off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final, in any currency, matured or unmatured) of the Guarantor held by such Lender or any subsidiary, affiliate, branch or agency thereof. Such Lender shall promptly provide notice to the Guarantor of such set-off; provided, that failure by such Lender to provide such notice to the Guarantor shall not give the Guarantor any cause of action or right to damages or affect the validity of such set-off and application. The rights of each Lender under this Section 6.12 are in addition to any other rights and remedies (including, without limitation, any other rights of set-off) that such Lender may have. 6.13 Termination. In addition to Section 2.01(f), the Guarantor may, if no Default or Guarantor Default shall have occurred or be continuing, terminate this Agreement (a "Guarantor Termination") at any time by providing written notice in accordance with Section 6.02 to the Administrative Agent; provided that such termination shall not be effective until (i) the Administrative Agent shall have received an amount equal to the principal of, and interest on, the Loans outstanding under the Credit Agreement, together with all other amounts payable thereunder and under each other Loan Document, (ii) the Commitments of the Lenders under the Credit Agreement shall have been terminated and (iii) any and all obligations hereunder and under the Reimbursement Documentation shall have been satisfied. 6.14 Release. The Administrative Agent agrees that it shall release the Guarantor from its obligations hereunder, if, and for so long as, the Guarantor has validly and effectively pledged to the Administrative Agent a blocked cash collateral account held in New York with Citibank, N.A. in an amount, and pursuant to documentation in form and substance, reasonably satisfactory to the Administrative Agent (provided that no such release shall be effective until the expiry of any applicable preference period under applicable bankruptcy law); provided further that prior to or simultaneously with the release of the Guarantor pursuant to this Section 6.14, the parties hereto agree to make such reasonable amendments to the Reimbursement Documentation and other related documents to ensure that the Guarantor has the same remedies and, in all material respects, the same legal and contractual rights, under and with respect to the Reimbursement Documentation and such other related documents in the event the Administrative Agent exercises its remedies with respect to the cash collateral account as it would in the event the Guarantor were to make a payment pursuant to this Agreement (such amendments to be in writing and in form and substance reasonably acceptable to the parties hereto). IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written. Guarantor --------- TPG PARTNERS III, L.P. By: TPG GENPAR III, L.P., its General Partner By: TPG Advisors III, Inc., its General Partner By /s/ Richard A. Ekleberry ------------------------ Name: Richard A. Ekleberry Title: Vice President Address for Notices: c/o Texas Pacific Group 301 Commerce Street, Suite 3300 Forth Worth, TX 76102 Attention: James J. O'Brien Telecopy: 817-871-4010 General Partner --------------- TPG GENPAR III, L.P. By: TPG Advisors III, Inc., its General Partner By /s/ Richard A. Ekleberry ------------------------ Name: Richard A. Ekleberry Title: Vice President Address for Notices: c/o Texas Pacific Group 301 Commerce Street, Suite 3300 Forth Worth, TX 76102 Attention: James J. O'Brien Telecopy: 817-871-4010 Administrative Agent -------------------- CITICORP USA, INC., as Administrative Agent By /s/ Arnold Y. Wong ------------------------ Name: Arnold Y. Wong Title: Vice President EX-18 7 tpg_ex18.txt Exhibit 18 GUARANTY dated as of December 21, 2001 (this "Agreement" or the "GEI Guaranty") between GREEN EQUITY INVESTORS III, L.P., a Delaware limited partnership ("GEI"), GREEN EQUITY CAPITAL INVESTORS SIDE III, L.P., a Delaware limited partnership ("GEI Side" and, together with GEI, individually, a "Guarantor" and, collectively, the "Guarantors"), GEI CAPITAL III, LLC, a Delaware limited liability company (the "General Partner") and CITICORP USA, INC., as Administrative Agent under the Credit Agreement referred to below (the "Administrative Agent"). MEMC Electronic Materials, Inc., a Delaware corporation (the "Borrower"), certain lenders party thereto and the Administrative Agent are parties to a Revolving Credit Agreement dated as of December 21, 2001 (as from time to time modified or amended, the "Credit Agreement") providing, subject to the terms and conditions thereof, for the making of loans by said lenders to the Borrower in an aggregate principal amount at any one time outstanding up to an aggregate principal amount at any one time outstanding of $150,000,000. To induce said lenders to enter into the Credit Agreement and to extend credit thereunder, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Guarantor has agreed, by its execution and delivery hereof, to jointly and severally guarantee the credit so extended to the Borrower to the extent of the GEI Percentage, as hereinafter defined. Accordingly, the parties hereto agree as follows: Section 1. Definitions. Terms defined in the Credit Agreement are used herein as defined therein. In addition, the following terms shall have the following meanings when used herein: "Change in Control" shall mean (a) TPG GENPAR III, L.P. shall cease to be the "General Partner" (as such term is defined in the TPG Partnership Agreement) of TPG; (b) TPG shall cease to be a Fund Guarantor; (c) GEI Capital III, LLC shall cease to be the "General Partner" (as such term is defined in the GEI Partnership Agreement) of GEI or GEI Side; (d) Leonard Green & Partners L.P. shall cease to be the "Management Company" (as such term is defined in the GEI Partnership Agreement and GEI Side Partnership Agreement); (e) TCW/Crescent Mezzanine III, LLC or any Affiliate thereof shall cease to be the "General Partner" (as such term is defined in the TCW Partnership Agreement) of TCW or cease to be the "Managing Owner" (as such term is defined in the TCW Trust Agreement) of TCW Trust; or (g) TCW/Crescent Mezzanine Management III, LLC or an Affiliate thereof shall cease to be the "Investment Manager" (as such term is defined in the TCW Partnership Agreement and the TCW Trust Agreement) of TCW or TCW Trust; provided, however, that with respect to clauses (c) and (d) above, no "Change in Control" shall be deemed to have occurred as a result of any transaction or series of transactions, name change or changes or corporate reorganization of any Person provided that after such event or events, a majority of the voting interests of the "General Partner" of GEI or GEI Side, as the case may be, continue to be held by the "Principals" (as defined in the GEI and GEI Side Partnership Agreements) collectively. "GEI Percentage" shall mean 20% as modified from time to time pursuant to the terms hereof. "Guarantor Conditions" shall mean that: (a) The Administrative Agent (or its counsel) shall have received from each Guaranty Party either (i) a counterpart of the Guaranty Document to which it is party duly executed by such party or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page of the Guaranty Document to which it is party) that such party has signed a counterpart of such Guaranty Document; (b) The Administrative Agent shall have received favorable written opinions (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of (i) Richards, Layton & Finger, P.A., special Delaware counsel to the Guaranty Parties party to the GEI Guaranty, Gibson, Dunn & Crutcher LLP, counsel to the Guaranty Parties party to the GEI Guaranty, and Kramer Levin Naftalis & Frankel LLP, special counsel to the Guaranty Parties party to the GEI Guaranty, (ii) O'Melveny & Myers LLP special counsel to the Guaranty Parties party to the TCW Guaranty, and Kramer Levin Naftalis & Frankel LLP, special counsel to the Guaranty Parties party to the TCW Guaranty and (iii) Morris, Nichols, Arsht & Tunnell, special Delaware counsel to the Guaranty Parties party to the TPG Guaranty, and Cleary, Gottlieb, Steen & Hamilton, special counsel to the Guaranty Parties party to the TPG Guaranty, in each case, in form and substance reasonable acceptable to the Administrative Agent; and (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 Guaranty Party, the authorization of the Guaranty Documents and any other legal matters relating to the Guaranty Parties, the Guaranty Documents or the transactions contemplated thereby, all in form and substance satisfactory to the Administrative Agent and its counsel. "Guarantor Default" shall mean any of the following events: (a) any representation or warranty made by or on behalf of any Guaranty Party in any Guaranty Document or any amendment or modification thereof or waiver thereunder, or in any certificate or other document furnished pursuant to any Guaranty 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; (b) any Guaranty Party shall fail to observe or perform any covenant, condition or agreement applicable to such Guaranty Party contained in Section 4(A)(1)(a), 4(A)(5)(iii), 4(A)(7), 4(A)(8), 4(B)(1)(a), 4(B)(2), 4(B)(3), 4(B)(4), 4(B)(5), 4(B)(6) or 4(B)(7) of the Guaranty Documents; (c) any Guaranty Party shall fail to observe or perform any covenant, condition or agreement applicable to such Guaranty Party contained in any Guaranty Document (other than those specified in clause (a) or (b) of this Section), and such failure shall continue unremedied for a period of 30 days after notice thereof from the Administrative Agent to such Guaranty Party (which notice will be given at the request of any Lender); (d) any Guaranty Party 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; (e) 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 (e) 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; (f) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of any Guaranty Party 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 any Guaranty Party 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; (g) any Guaranty Party 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 (f) of this Section, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Guaranty Party 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; (h) any Guaranty Party shall become unable, admit in writing its inability or fail generally to pay its debts as they become due; (i) one or more judgments for the payment of money in an aggregate amount in excess of $5,000,000 (net of amounts covered by insurance as to which the insurer has admitted liability in writing) shall be rendered against any Guaranty Party and the same shall remain undischarged for a period of 60 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 such Guaranty Party to enforce any such judgment; or (j) a Change in Control shall occur. "Guaranty Document" shall mean each of this Agreement and the Other Guaranties. "Guaranty Party" shall mean the Guarantors, each Other Guarantor and each "General Partner" (as defined in each Guaranty). "Material Adverse Effect" means a material adverse effect on (a) the business, assets, operations, properties, financial condition, contingent liabilities or prospects of a Guarantor, (b) the ability of a Guarantor to perform its obligations hereunder or (c) any rights of or benefits available to the Administrative Agent or the Lenders hereunder. "Material Indebtedness" means Indebtedness, or obligations in respect of one or more Hedging Agreements, of any Guaranty Party party hereto in an aggregate principal amount exceeding $5,000,000. For purposes of determining Material Indebtedness, the "principal amount" of the obligations of the Guaranty Parties in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Guaranty Parties would be required to pay if such Hedging Agreement were terminated at such time. "Other Guaranties" shall mean (i) the Guaranty dated as of the date hereof between TPG Partners III, L.P. and the Administrative Agent relating to the Credit Agreement (the "TPG Guaranty") and (ii) the Guaranty dated as of the date hereof between TCW/Crescent Mezzanine Partners III, L.P., TCW/Crescent Mezzanine Trust III and the Administrative Agent relating to the Credit Agreement (the "TCW Guaranty"). "Other Guarantors" shall mean (i) TCW/Crescent Mezzanine Partners III, L.P., (ii) TCW/Crescent Mezzanine Trust III and (iii) TPG Partners III, L.P. ("TPG"). "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 this Agreement or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement. "Partnership Agreements" shall mean (i) the Amended and Restated Green Equity Investors III, L.P. Agreement of Limited Partnership dated as of September 25, 1998, as amended and (ii) the Amended and Restated Green Equity Investors Side III, L.P. Agreement of Limited Partnership dated as of October 23, 1998, as amended. "Property" shall mean, with respect to any Person, any property or assets, or interest therein, of such Person including aggregate Unused Capital Contributions. "Solvent" shall mean, with respect to any Person at any time, that (a) the fair value of the Property of such Person is greater than the total amount of liabilities (including without limitation contingent liabilities) of such Person, (b) the present fair saleable value of the Property of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature, and (d) such Person is not engaged in a business and is not about to engage in a business for which such Person's property would constitute an unreasonably small capital. "Surviving Representations" shall mean each of the representations and warranties contained in Sections 3.01(1), 3.01(2), 3.01(3), 3.01(4), 3.01(6), 3.01(8), 3.01(9), 3.01(12), 3.01(13), 3.02(1), 3.02(2), 3.02(3), 3.02(4), 3.02(5) and 3.02(6) hereof. The terms "Capital Contribution", "Commitment Period", "Defaulting Partner", "Limited Partner", "Material Adverse Development", "Ownership Interests", "Partners" and "Unused Capital Contributions" shall have the respective meanings assigned thereto in the Partnership Agreement. Section 2. The Agreement. 2.01 The Agreement. (a) Subject to Section 2.05, the Guarantors hereby jointly and severally guarantee to the Lenders and the Administrative Agent the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of the GEI Percentage of the principal of and interest on the Loans and the GEI Percentage of all other amounts whatsoever now or hereafter payable or becoming payable to the Lenders and the Administrative Agent by the Borrower under the Credit Agreement (such obligations being herein collectively called the "Guaranteed Obligations"). The Guarantors hereby further jointly and severally agree that if the Borrower shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Guarantors will promptly pay the GEI Percentage of the same in full when due, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the GEI Percentage thereof will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal. (b) This Agreement is a continuing guaranty and is a guaranty of payment and is not merely a guaranty of collection. (c) The obligations of the Guarantors hereunder and of the Other Guarantors under the Other Guaranties shall be several and not joint, and the Guarantors' obligations hereunder shall be limited to the GEI Percentage of the Guaranteed Obligations. (d) In the event that there is a Guarantor Default by any Other Guarantor other than TPG (any such Guarantor, a "Defaulting Guarantor"), prior to the exercise of any remedies under or in respect of the Other Guaranty of such Other Guarantor by the Administrative Agent, the Guarantor shall have the right to, within 10 Business Days of notice from the Administrative Agent of the occurrence of such Guarantor Default, assume, on the terms and conditions herein, the obligations of the Defaulting Guarantor under its Other Guaranty. If the Guarantor elects to assume such obligations, the Guarantor shall promptly so notify the Administrative Agent in writing. Such assumption shall become effective upon the delivery by the Guarantor to the Administrative Agent of such instruments and documents (including without limitation such legal opinions and amendments hereto and any related documents as may reasonably be requested by the Administrative Agent) in form and substance reasonably satisfactory to the Administrative Agent and the Guarantor as may be required to transfer to the Guarantor the obligations of the Defaulting Guarantor under the TCW Guaranty. Upon the effectiveness of such assumption no Guarantor Default shall have been deemed to have occurred. Thereafter, the Other Guaranty (or portion thereof so assumed by the Guarantor) given by the Defaulting Guarantor shall no longer have any force or effect with respect to such Defaulting Guarantor and such Defaulting Guarantor shall be relieved of all of its obligations and duties under such Other Guaranty (or portion thereof so assumed by the Guarantor). (e) The Guarantor may elect to assume, at any time, on the terms and conditions herein, any part or all of the obligations of any Other Guarantor other than TPG under its Other Guaranty. If the Guarantor elects to assume such obligations, the Guarantor shall so notify the Administrative Agent in writing. Such assumption shall become effective upon delivery to the Administrative Agent by such Other Guarantor and the Guarantor of such instruments and documents (including without limitation such legal opinions and amendments hereto and any related documents as may reasonably be requested by the Administrative Agent) in form and substance reasonably satisfactory to the Administrative Agent and the Guarantor as may be required to transfer to the Guarantor such part or all of the obligations of such Other Guarantor under such Other Guaranty. Thereafter, the Other Guaranty (or portion thereof so assumed by the Guarantor) given by the Other Guarantor shall no longer have any force or effect with respect to such other Guarantor and such Other Guarantor shall be relieved of all of its obligations and duties under such Other Guaranty (or portion thereof so assumed by the Guarantor). (f) Anything to the contrary in this Agreement notwithstanding, the obligations of the Guarantors hereunder shall terminate on the date 364 days after the date hereof (without prejudice to any obligations of the Guarantors with respect to any amount claimed hereunder prior to said date). (g) The Administrative Agent agrees that (i) if it makes any demand for payment under this Agreement in respect of any of the Guaranteed Obligations it will contemporaneously make demands for payment in respect thereof under the Other Guaranties, on a pro rata basis, and (ii) the Administrative Agent will treat the Guarantors, to the extent practicable, no less favorably than it treats each Other Guarantor, subject however to the right of the Administrative Agent and the Lenders to take such actions as they may reasonably determine to be necessary from time to time to protect the rights and remedies of the Administrative Agent and the Lenders in the good faith exercise of their respective credit judgments. 2.02 Acknowledgments, Waivers and Consents. Each Guarantor agrees that the obligations of such Guarantor under Section 2.01 hereof shall, to the fullest extent permitted by applicable law, be absolute, irrevocable and unconditional under any and all circumstances. Without limiting the foregoing, each Guarantor agrees that, subject to Section 2.01(g): (a) The occurrence of any one or more of the following shall not affect the enforceability or effectiveness of this Agreement in accordance with its terms or affect, limit, reduce, discharge or terminate the liability of such Guarantor, or the rights, remedies, powers and privileges of the Administrative Agent or any Lender under this Agreement: (i) any modification or amendment (including without limitation by way of amendment, extension, renewal or waiver), or any acceleration or other change in the time for payment or performance of the terms of all or any part of the Guaranteed Obligations or the Credit Agreement, or any other agreement or instrument whatsoever relating thereto, or any modification of the Commitments; (ii) any release, termination, waiver, abandonment, lapse or expiration, subordination or enforcement of the liability of any Guarantor under this Agreement or of either of the Other Guaranties or any other guarantee of all or any part of the Guaranteed Obligations; (iii) any application of the proceeds of any other guarantee to all or any part of the Guaranteed Obligations in any such manner and to such extent as the Administrative Agent may determine; (iv) any release of any Other Guarantor or any other Person (including without limitation any other guarantor with respect to all or any part of the Guaranteed Obligations) in whole or in part from any personal liability with respect to all or any part of the Guaranteed Obligations; (v) any settlement, compromise, release, liquidation or enforcement, upon such terms and in such manner as the Administrative Agent may determine or as applicable law may dictate, of all or any part of the Guaranteed Obligations or either of the Other Guaranties or any other guarantee of all or any part of the Guaranteed Obligations; (vi) the giving of any consent to the merger or consolidation of, the sale of substantial assets by, or other restructuring or termination of the corporate existence of the Borrower or any other Person; (vii) any proceeding against the Borrower or any Guarantor or any Other Guarantor or any other guarantor of all or any part of the Guaranteed Obligations or any collateral provided by any other Person or the exercise of any rights, remedies, powers and privileges of the Administrative Agent and the Lenders under the Credit Agreement or otherwise in such order and such manner as the Administrative Agent may determine, regardless of whether the Administrative Agent or the Lenders shall have proceeded against or exhausted any collateral, right, remedy, power or privilege before proceeding to call upon or otherwise enforce this Agreement or any Other Guaranty; (viii) the entering into such other transactions or business dealings with the Borrower, any subsidiary or Affiliate of the Borrower or any Other Guarantor or any other guarantor of all or any part of the Guaranteed Obligations as the Administrative Agent or any Lender may desire; or (ix) all or any combination of any of the actions set forth in this Section 2.02(a). (b) The enforceability and effectiveness of this Agreement and the liability of the Guarantors, and the rights, remedies, powers and privileges of the Administrative Agent and the Lenders under this Agreement shall not be affected, limited, reduced, discharged or terminated, and each Guarantor hereby expressly waives to the fullest extent permitted by law any defense now or in the future arising, by reason of: (i) the illegality, invalidity or unenforceability of all or any part of the Guaranteed Obligations, the Credit Agreement or any other agreement or instrument whatsoever relating to all or any part of the Guaranteed Obligations; (ii) any disability or other defense with respect to all or any part of the Guaranteed Obligations, including the effect of any statute of limitations that may bar the enforcement of all or any part of the Guaranteed Obligations or the obligations of any such other guarantor; (iii) the illegality, invalidity or unenforceability of any Other Guaranty or any security for or other guarantee of all or any part of the Guaranteed Obligations or the lack of perfection or continuing perfection or failure of the priority of any Lien on any collateral for all or any part of the Guaranteed Obligations; (iv) the cessation, for any cause whatsoever, of the liability of the Borrower or any Other Guaranty or any other guarantor with respect to all or any part of the Guaranteed Obligations (other than, subject to Section 2.03 hereof, by reason of the full payment of all Guaranteed Obligations); (v) any failure of the Administrative Agent or any Lender to marshal assets in favor of the Borrower or any other Person (including any Other Guarantor or any other guarantor of all or any part of the Guaranteed Obligations), to exhaust any collateral for all or any part of the Guaranteed Obligations, to pursue or exhaust any right, remedy, power or privilege it may have against the Borrower or any other guarantor of all or any Other Guarantor or any part of the Guaranteed Obligations or any other Person or to take any action whatsoever to mitigate or reduce such or any other Person's liability under the Credit Agreement, the Administrative Agent and the Lenders being under no obligation to take any such action notwithstanding the fact that all or any part of the Guaranteed Obligations may be due and payable and that the Borrower may be in default of its obligations under the Credit Agreement; (vi) any counterclaim, set-off or other claim which the Borrower or any Other Guarantor or any other guarantor of all or any part of the Guaranteed Obligations has or claims with respect to all or any part of the Guaranteed Obligations; (vii) any failure of the Administrative Agent or any Lender or any other Person to file or enforce a claim in any bankruptcy or other proceeding with respect to any Person; (viii) any bankruptcy, insolvency, reorganization, winding-up or adjustment of debts, or appointment of a custodian, liquidator or the like of it, or similar proceedings commenced by or against any Person, including any discharge of, or bar or stay against collecting, all or any part of the Guaranteed Obligations (or any interest on all or any part of the Guaranteed Obligations) in or as a result of any such proceeding; (ix) any action taken by the Administrative Agent or any Lender that is authorized by this Section 2.02 or otherwise in this Agreement or by any provision of the Credit Agreement or any omission to take any such action; or (x) to the fullest extent permitted by applicable law, any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor. (c) To the fullest extent permitted by law, each Guarantor expressly waives, for the benefit of the Administrative Agent and the Lenders, all set-offs and counterclaims and all diligence, presentment, demand for payment or performance, notices of nonpayment or nonperformance, protest, notices of protest, notices of dishonor and all other notices or demands of any kind or nature whatsoever, and any requirement that the Administrative Agent or any Lender exhaust any right, power or remedy or proceed against the Borrower under the Credit Agreement or any Other Guaranty or any or other agreement or instrument referred to herein or therein, or against any other Person under any other guarantee of, or security for, any of the Guaranteed Obligations, and all notices of acceptance of this Agreement or of the existence, creation, incurrence or assumption of new or additional Guaranteed Obligations. (d) Each Guarantor further waives, to the fullest extent permitted by law, any right to which it may be entitled, including, without limitation: (i) that the assets of the Borrower or any Other Guarantor first be used, depleted and/or applied in satisfaction of the Borrower's obligations under the Credit Agreement prior to any amounts being claimed from or paid by any Guarantor; (ii) to require that the Borrower be sued and all claims against the Borrower be completed prior to an action or proceeding being initiated against any Guarantor or any Other Guarantor; and (iii) to have its obligations hereunder be divided among the Guarantors and the Other Guarantors, such that any Guarantor's obligation would be less than the full amount claimed. 2.03 Reinstatement. The obligations of the Guarantors under this Section 2 shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Borrower in respect of the Guaranteed Obligations is rescinded or must otherwise be restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and each Guarantor agrees that it will indemnify the Administrative Agent and the Lenders on demand for all costs and expenses (including, without limitation, reasonable fees and costs of counsel, but without duplication of the obligations of the Borrower under the Credit Agreement) incurred by them in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or the like under any bankruptcy, insolvency or similar law. 2.04 Remedies. Each Guarantor agrees that, as between such Guarantor and the Administrative Agent and the Lenders and subject to Section 5 hereof, the obligations of the Borrower under the Credit Agreement may be declared to be forthwith due and payable as provided in Article VII of the Credit Agreement (and shall be deemed to have become automatically due and payable in the circumstances provided in said Article VII) for purposes of Section 2.01 hereof, notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against the Borrower. 2.05 Payments. Each payment by or on account of any obligation of the Guarantors under this Agreement shall be made on or before the date fifteen (15) Business Days after the date the Administrative Agent shall have demanded such payment in writing hereunder, and all such payments shall be made in United States dollars, without deduction, withholding, set-off or counterclaim at the place specified in the Credit Agreement and free and clear of and without deduction for any Indemnified Taxes or Other Taxes. Section 3. Representations and Warranties. 3.01 Guarantor. Each Guarantor represents and warrants to the Administrative Agent and the Lenders that: (1) Organization; Power and Authority. Such Guarantor (i) is duly organized, validly existing and in good standing as a limited partnership under the laws of the State of Delaware, (ii) has all requisite limited partnership power, and all material governmental licenses, authorizations, consents and approvals, necessary to own its property and carry on its business as now being conducted, (iii) is qualified to do business and is in good standing in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where failure so to qualify could not (either individually or in the aggregate) reasonably be expected to have a Material Adverse Effect, and (iv) has full power, authority and legal right to make and perform this Agreement. (2) Due Authorization, Legality, Etc. The making and performance by such Guarantor of this Agreement are within the purpose of such Guarantor as set forth in such Guarantor's Partnership Agreement and have been duly authorized by all necessary partnership action on the part of such Guarantor, and do not and will not contravene (i) such Guarantor's Partnership Agreement, (ii) any applicable law, decree, regulation, judgment, award, injunction or similar legal restriction, as now in effect, or (iii) any agreement, instrument or contractual restriction binding on such Guarantor. (3) No Additional Authorization Required. No license, consent, authorization or approval or other action by, or notice to or registration or filing with, any Governmental Authority, and no other third-party consent or approval, is necessary for the due execution, delivery and performance by such Guarantor of this Agreement, or for the legality, validity or enforceability of this Agreement, except such as have heretofore been given or made or, in the case of notices required to be given under the Partnership Agreements, will be timely given or made. (4) Legal Effect. This Agreement has been duly executed and delivered by such Guarantor and is the legal, valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms except (i) as may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally and (ii) as rights may be limited by equitable principles of general applicability. (5) Financial Statements; Material Adverse Effect. Such Guarantor has heretofore furnished to the Administrative Agent the following financial statements: (i) the audited financial statements of such Guarantor as at December 31, 2000 for the fiscal year ending on such date; and (ii) the unaudited financial statements of such Guarantor as at September 30, 2001 for the fiscal quarter ending on such date. All such financial statements fairly present the financial condition of such Guarantor as at such dates and the results of their operations for the fiscal year and fiscal quarter ending on such dates (subject, in the case of such financial statements as at September 30, 2001, to normal year-end audit adjustments), all in accordance with GAAP. Since December 31, 2000, no event or circumstance has occurred that has had any of the effects specified in clauses (b) or (c) of the definition of Material Adverse Effect. On the date hereof, such Guarantor is Solvent. (6) Ranking. The payment obligations of such Guarantor hereunder are unconditional and unsubordinated general obligations of such Guarantor, and rank and will at all times rank at least pari passu in priority of payment with all other present and future unsecured unsubordinated Indebtedness of such Guarantor. (7) No Actions or Proceedings. There are no legal or arbitral proceedings, or proceedings by or before any Governmental Authority, now pending or (to the knowledge of such Guarantor) threatened against such Guarantor that (either individually or in the aggregate) (a) could reasonably be expected to have a Material Adverse Effect or (b) purport to affect the legality, validity or enforceability of this Agreement or any of the Loan Documents. (8) Taxes. Such Guarantor has filed all tax returns required to be filed and paid all taxes shown to be due thereon except such as are being contested in good faith by appropriate proceedings and for which adequate reserves have been made in accordance with GAAP. (9) Investment Company Act. Such Guarantor is not required to register as an "investment company" under the Investment Company Act of 1940, as amended. (10) VCOC. As of the date hereof, GEI is a "venture capital operating company" within the meaning of ERISA. (11) Existing Indebtedness. The aggregate amount of all loans to the Borrower guaranteed by such Guarantor when added to the aggregate outstanding amount invested in Ownership Interests of such Guarantor in the Borrower does not exceed an amount equal to 25% of the aggregate Capital Contributions of such Guarantor; and the aggregate amount of indebtedness of such Guarantor outstanding does not and will not at any time exceed an amount equal to 35% of the aggregate Capital Contributions of such Guarantor, unless in either case appropriate waivers are obtained. (12) Limited Partners. Schedule 1 attached hereto sets forth a complete list of all Limited Partners as of the date hereof. As of the date hereof, (a) no Limited Partner is a Defaulting Partner and (b) no Limited Partner has been excused from making Capital Contributions in respect of such Guarantor's investments in or obligations relating to the Borrower pursuant to Section 2.3.7 of such Guarantor's Partnership Agreement or otherwise. (13) Material Adverse Development. As of the date hereof, no Material Adverse Development has occurred and, except as previously disclosed to the Administrative Agent in writing, no event described in clauses (a) through (g) of Section 9.1 of the Partnership Agreements has occurred. 3.02 General Partner. The General Partner represents and warrants to the Administrative Agent and the Lenders that: (1) Organization, Power and Authority. The General Partner (a) is duly organized, validly existing and in good standing as a limited liability company under the laws of the State of Delaware, (b) has all requisite limited liability corporate power, and all material governmental licenses, authorizations, consents and approvals, necessary to own its property and carry on its business as now being conducted, (c) is qualified to do business in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where failure so to qualify could not (either individually or in the aggregate) reasonably be expected to have a Material Adverse Effect, and (d) has full power, authority and legal right to make and perform this Agreement. (2) Due Authorization, Legality, Etc. The making and performance by the General Partner of this Agreement have been duly authorized by all necessary corporate action on the part of the General Partner and do not and will not contravene (a) its organizational documents of the General Partner, (b) any applicable law, decree, regulation, judgment, award, injunction or similar legal restriction, as now in effect, or (c) any agreement, instrument or contractual restriction binding on the General Partner. (3) No Additional Authorization Required. No license, consent, authorization or approval or other action by, or notice to or registration or filing with, any Governmental Authority, and no other third-party consent or approval, is necessary for the due execution, delivery and performance by the General Partner of this Agreement, or for the legality, validity or enforceability of this Agreement, except such as have heretofore been given or made or, in the case of notices required to be given under the Partnership Agreements, will be timely given or made. (4) Legal Effect. This Agreement has been duly executed and delivered by the General Partner and is the legal, valid and binding obligation of the General Partner, enforceable against the General Partner in accordance with its terms except (a) as may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally and (b) as rights may be limited by equitable principles of general applicability. (5) Investment Company Act. The General Partner is not required to register as an "investment company" under the Investment Company Act of 1940, as amended. (6) The General Partner; etc. The General Partner has the right each Partnership Agreement to give notices to Partners requiring them to make cash contributions to the Guarantors in order to pay the obligations of the Guarantors under this Agreement, and as of the date hereof no Commitment Period has expired or been terminated. Without limiting the foregoing, the General Partner will be entitled to make capital calls on the Partners in connection with amounts payable under this Agreement notwithstanding the occurrence of the expiry or termination of the Commitment Period. Section 4. Covenants of Guarantor and General Partner. A. Guarantors. Each Guarantor covenants and agrees with the Lenders and the Administrative Agent that, so long as any Commitment or Loan is outstanding and until payment in full of the obligations of the Guarantors hereunder: (1) Existence, Etc. Such Guarantor will (a) preserve and maintain its legal existence and (b) preserve and maintain all of its material rights, privileges, licenses and franchises, except, in the case of clause (b) only, to the extent failure to do so could not reasonably be expected to have a Material Adverse Effect. (2) Inspection of Property, Books and Records. Such Guarantor will, subject to reasonable confidentiality requirements, (a) maintain appropriate books and records in which full, true and correct entries shall be made of dealings and transactions in relation to its business and activities and (b) permit the Administrative Agent, during normal business hours and as often as may be desired at their own cost and expense (provided, that if a Default has occurred and is continuing such Guarantor shall indemnify the Administrative Agent for such costs and expenses) to examine, copy and make extracts from its books and records, to inspect any of its property, and to discuss its business and affairs with its officers. (3) Compliance with Law. Such Guarantor will comply in all respects with the requirements of all applicable laws, rules, regulations and orders of Governmental Authorities (including without limitation ERISA and Environmental Laws) except where failure to comply could not reasonably be expected to have a Material Adverse Effect or where the necessity of compliance therewith is being contested in good faith by appropriate proceedings. (4) Payment of Obligations. Such Guarantor will (a) pay and discharge at or before maturity all of its material obligations and liabilities (including, without limitation, claims of materialmen, warehousemen and the like which if unpaid might by law give rise to a Lien) and (b) pay and discharge all taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such obligations, liabilities, tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained in accordance with GAAP and where the failure to pay or discharge such obligation, liability, tax, assessment, charge or levy could not reasonably be expected to have a Material Adverse Effect. (5) Reporting Requirements. Such Guarantor will provide to the Administrative Agent: (i) as soon as available and in any event within 45 days after the end of each quarter of each fiscal year of such Guarantor, one copy for each Lender of an unaudited balance sheet of such Guarantor as at the end of each such fiscal quarter and the related statements of operations and partners' capital of such Guarantor for such quarter and for the portion of the fiscal year ended at the end of such quarter; (ii) as soon as available and in any event within 120 days after the end of each year of such Guarantor, one copy for each Lender of an audited balance sheet of such Guarantor as at the end of each such fiscal year and the related statements of operations and partners' capital of such Guarantor for such fiscal year, accompanied by an unqualified opinion of independent certified public accountants of recognized national standing acceptable to the Lenders, which opinion shall state that the financial statements fairly present the financial condition and results of operations for such Guarantor as at the end of and for such fiscal year in accordance with GAAP; (iii) promptly upon the commencement of, or any material adverse development in, any litigation or proceeding against such Guarantor that could reasonably be expected to have a Material Adverse Effect, notice thereof with a description thereof in reasonable detail; (iv) promptly after it is notified thereof, notice of any change in the list of Limited Partners; and (v) from time to time and, if no Guarantor Default shall have occurred and be continuing, with reasonable prior notice given by the Administrative Agent, such additional information regarding the financial position or business of such Guarantor as the Administrative Agent or any Lender through the Administrative Agent may reasonably request. (6) Ranking. Such Guarantor will promptly take all actions as may be reasonably necessary to ensure that the payment obligations of such Guarantor under this Agreement will at all times constitute unconditional and unsubordinated general obligations of such Guarantor ranking at least pari passu in priority of payment with all other present and future unsecured unsubordinated Indebtedness of such Guarantor. (7) Merger, Etc. Such Guarantor will not enter into any transaction of merger or consolidation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution). (8) Compliance with the Partnership Agreement. Such Guarantor shall comply in all material respects with its obligations under its Partnership Agreement. B. General Partner. The General Partner covenants and agrees with the Lenders and the Administrative Agent that, so long as any Commitment or Loan is outstanding and until payment in full of the obligations of the Guarantors hereunder: (1) Existence, Etc. The General Partner will (a) preserve and maintain its legal existence and (b) preserve and maintain all of its material rights, privileges, licenses and franchises, except, in the case of clause (b) only, to the extent failure to do so could not reasonably be expected to have a Material Adverse Effect. (2) Merger, Etc. The General Partner will not enter into any transaction of merger or consolidation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution). (3) Notices Under the Partnership Agreement. The General Partner shall promptly give such notices to the Partners under Sections 2.3.2 and 5.1 of the Partnership Agreements, and under each other provision of the Partnership Agreements, to the extent required to assure it is able to make capital calls on the Partners thereunder in such amounts and at such times as may be required to enable the Guarantors timely to perform their obligations hereunder. (4) Availability. The General Partner shall assure that there shall at all times be Unused Capital Contributions in an aggregate amount sufficient to assure that the Guarantors can perform their obligations hereunder. (5) VCOC. The General Partner will use its reasonable best efforts to conduct the affairs of GEI so that at all relevant times GEI is a "venture capital operating company" within the meaning of ERISA. (6) Amendments to the Partnership Agreement. The General Partner will not permit the Partnership Agreements to be amended or modified in any manner that has or could reasonably be expected to have a material adverse effect on the rights and remedies of the Administrative Agent or any Lender hereunder. (7) Notice of Material Events. The General Partner will give to the Administrative Agent prompt notice if any Partner becomes a Defaulting Partner or is excused from making capital contributions pursuant to any provision of the Partnership Agreements, of the occurrence of any Material Adverse Development, of the occurrence of any event described in clauses (a) through (g) of Section 9.1 of the Partnership Agreements, and of any event that constitutes a Guarantor Default or that upon notice would, unless cured or waived, become a Guarantor Default. Section 5. Agreements by Administrative Agent. Notwithstanding anything to the contrary in the Credit Agreement or any other Loan Document, the Administrative Agent agrees, on behalf of itself and the Banks, with the Guarantors and the General Partner that, until payment in full of the obligations of the Guarantors hereunder: (1) it will not amend any of the Loan Documents without the prior written consent of the Guarantors; (2) it will not accelerate the maturity of the Loans without the prior written approval of the Guarantors, provided, that this clause (2) shall not apply while a Guarantor Default has occurred and is continuing; (3) if so instructed by the Guarantors while an Event of Default has occurred and is continuing it will accelerate the maturity of the Loans, provided, that nothing in this clause (3) shall require the Administrative Agent to take any action that in good faith it considers to be contrary to the terms of the Loan Documents or applicable law; (4) it will not (i) institute any legal proceedings against the Borrower or any Subsidiary Loan Party or (ii) take any action to enforce any security interest or lien granted to the Administrative Agent pursuant to the Loan Documents, without, in each case, the prior written approval of the Guarantors (and shall in any event have no obligation to institute or prosecute any such proceedings), provided, that this clause (4) shall not apply while a Guarantor Default has occurred and is continuing; (5) it will not grant a waiver of any of its or the Lenders' rights or remedies under the Loan Documents without the prior written approval of the Guarantors; (6) it will promptly forward to the Guarantors a copy of each notice, filing and other document received by it from, or delivered by it to, the Borrower under the Loan Documents, including without limitation each borrowing request thereunder, and will promptly from time to time confirm to the Guarantors, upon their request, the amounts outstanding under the Loan Documents, and the amount paid thereon, and such other matters relating to the Borrower's performance of its obligations under the Loan Documents as the Guarantors may reasonably request or as the Administrative Agent in its sole discretion may consider appropriate to deliver to the Guarantors; (7) upon the instruction of the Guarantors, it will issue the notice referred to in the introduction to Section 4.01 of the Credit Agreement subject to the satisfaction of the Administrative Agent with the sufficiency of the documents furnished pursuant to Section 4.01(c) of the Credit Agreement; (8) if instructed by the Guarantors, it will instruct the Lenders not to make additional Loans to the Borrower; and (9) without limiting the foregoing, if no Guarantor Default has occurred and is continuing and until payment in full of the Guaranteed Obligations, it will take such reasonable actions contemplated by the Loan Documents as the Guarantors may reasonably request (including without limitation the granting of waivers and the release of collateral and the taking of remedial actions in the case of an Event of Default); provided that except with respect to Section 2.08(d) of the Credit Agreement, the Administrative Agent shall have no obligation under this Section 5 to take any action, without the written consent of the Lenders or the Required Lenders as contemplated by the Credit Agreement, which (i) increases the Commitment of any Lender, (ii) reduces the principal amount of any Loan or reduces the rate of interest thereon, or reduces any fees payable under any Loan Document, (iii) postpones the maturity of any Loan, or any date for the payment of any interest or fees payable under any Loan Document, or reduces the amount of, waives or excuses any such scheduled payment, or postpones the scheduled date of expiration of any Commitment, (iv) changes or waives compliance with any of Article II, Section 4.01(c), Section 4.02(d), clause (p) of Article VII, Article VIII or Section 9.03 of the Credit Agreement, or (v) changes or waives any indemnification obligations in favor of the Agents or the Lenders set forth in any of the Loan Documents; provided further that nothing herein or in any other Loan Document shall require the Administrative Agent to take any action that in the reasonable opinion of the Administrative Agent would be contrary to the terms of the Loan Documents or applicable law or subject the Administrative Agent to personal liability; provided further that the Administrative 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 reasonable satisfaction of any applicable indemnification obligations under the Loan Documents in respect of such action. Section 6. Miscellaneous. 6.01 Waiver. No failure on the part of the Administrative Agent or any Lender to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. 6.02 Notices. All notices, requests and other communications provided for herein (including, without limitation, any modifications of, or waivers, requests or consents under, this Agreement) shall be given or made in writing delivered to the intended recipient at (i) in the case of the Administrative Agent, as specified in Section 9.01 of the Credit Agreement and (ii) in the case of the Guarantors and the General Partner, the "Address for Notices" specified below its name on the signature pages hereof or, as to any party, at such other address as shall be designated by such party in a notice to each other party. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when personally delivered or, in the case of a telecopy, emailed or mailed notice, upon receipt, in each case given or addressed as aforesaid. 6.03 Expenses, Etc. Each Guarantor agrees to pay or reimburse the Administrative Agent and each of the Lenders for all of their reasonable out-of-pocket costs and expenses (including, without limitation, the reasonable fees and expenses of legal counsel) in connection with any enforcement or collection proceedings resulting from the occurrence of an Event of Default. 6.04 Amendments, Etc. Except as otherwise expressly provided in this Agreement, any provision of this Agreement may be modified or supplemented only by an instrument in writing signed by the Guarantors, the General Partner and the Administrative Agent. Any such amendment or waiver shall be binding upon the Administrative Agent, the Lenders, each holder of any of the Guaranteed Obligations, the Guarantors and the General Partner. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof. Except as expressly provide herein, the Administrative Agent will not release any Guarantor from its obligations hereunder, or limit its liability hereunder, without the written consent of each Lender. 6.05 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and each holder of any of the Guaranteed Obligations and their respective successors and assigns; provided that neither any Guarantor nor the General Partner may assign any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent. 6.06 Captions. The captions and section headings appearing herein are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement. 6.07 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. 6.08 Governing Law. This Agreement shall be governed by and construed in accordance with the law of the State of New York. 6.09 Jurisdiction, Service of Process and Venue. (a) Each of the Guarantors and the General Partner hereby agrees that any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby or any judgment entered by any court in respect thereof may be brought in the United States District Court for the Southern District of New York or in any New York State Court sitting in the Borough of Manhattan, New York, or, in the case of an action brought against such party, in the courts of its own corporate domicile, and hereby irrevocably submit to the jurisdiction of each such court for the purpose of any such suit, action, proceeding or judgment; provided, that nothing herein shall prevent the Administrative Agent or any Lender from enforcing any judgment obtained in any such court by proceedings in any jurisdiction whatsoever. (b) Each of the Guarantors and the General Partner hereby irrevocably appoints CT Corporation System in New York, New York (the "Process Agent"), with an office on the date hereof at 111 Eighth Avenue, 13th Floor, New York, New York 10011, as its agent and true and lawful attorney-in-fact in its name, place and stead to accept on behalf of the Guarantors and the General Partner and its property, service of copies of the summons and complaint and any other process which may be served in any such suit, action or proceeding brought in the State of New York, and each of the Guarantors and the General Partner agrees that the failure of the Process Agent to give any notice of any such service of process to the Guarantors or the General Partner shall not impair or affect the validity of such service or, to the extent permitted by applicable law, the enforcement of any judgment based thereon. Such appointment shall be irrevocable as long as the Loans are outstanding, except that if for any reason the Process Agent appointed hereby ceases to act as such, the Guarantors and the General Partner will, by an instrument reasonably satisfactory to the Administrative Agent, appoint another Person in the Borough of Manhattan as such Process Agent subject to the approval of the Administrative Agent. Each of the Guarantors and the General Partner hereby further irrevocably consents to the service of process in any suit, action or proceeding in said courts by the mailing thereof by the Administrative Agent or any Lender by registered or certified mail, postage prepaid, at its address set forth beneath its signature hereto. Each of the Guarantors and the General Partner covenants and agrees that it shall take any and all action, including the execution and filing of any and all documents, that may be necessary to continue the designation of a Process Agent pursuant to this Section 6.09 in full force and effect and to cause the Process Agent to act as such. (c) Nothing herein shall in any way be deemed to limit the ability of the Administrative Agent or any Lender to serve any such process or summonses in any other manner permitted by applicable law, or to obtain jurisdiction over the Guarantors and the General Partner in such other jurisdictions, and in such manner, as may be permitted by applicable law. (d) Each of the Guarantors and the General Partner hereby irrevocably waives, to the extent permitted by applicable law, any objection that it may now or hereafter have to the laying of the venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the United States District Court for the Southern District of New York or any New York State Court sitting in the Borough of Manhattan, New York and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum and any right to which it may be entitled on account of place of residence or domicile. A final judgment (in respect of which time for all appeals has elapsed) in any such suit, action or proceeding shall be conclusive and may be enforced in any court to the jurisdiction of which the Guarantors or the General Partner is or may be subject, by suit upon judgment. 6.10 Waiver of Jury Trial. EACH OF THE GUARANTORS, THE GENERAL PARTNER AND THE ADMINISTRATIVE AGENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 6.11 Severability. In case any provision in this Agreement shall be held to be invalid, illegal or unenforceable, such provision shall be severable from the rest of this Agreement, and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 6.12 Set-Off. Without limiting any of the obligations of the Guarantors or the rights of the Administrative Agent or the Lenders hereunder, if any Guarantor shall fail to pay when due (whether at stated maturity, by acceleration or otherwise) any amount payable by it hereunder, each Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by law, without prior notice to the Guarantors (which notice is expressly waived by the Guarantors to the fullest extent permitted by applicable law), to set off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final, in any currency, matured or unmatured) of the Guarantors held by such Lender or any subsidiary, affiliate, branch or agency thereof. Such Lender shall promptly provide notice to the Guarantors of such set-off; provided, that failure by such Lender to provide such notice to the Guarantors shall not give the Guarantors any cause of action or right to damages or affect the validity of such set-off and application. The rights of each Lender under this Section 6.12 are in addition to any other rights and remedies (including, without limitation, any other rights of set-off) that such Lender may have. 6.13 Termination. In addition to Section 2.01(f), the Guarantors may, if no Default or Guarantor Default shall have occurred or be continuing, terminate this Agreement (a "Guarantor Termination") at any time by providing written notice in accordance with Section 6.02 to the Administrative Agent; provided that such termination shall not be effective until (i) the Administrative Agent shall have received an amount equal to the principal of, and interest on, the Loans outstanding under the Credit Agreement, together with all other amounts payable thereunder and under each other Loan Document, (ii) the Commitments of the Lenders under the Credit Agreement shall have been terminated and (iii) any and all obligations hereunder and under the Reimbursement Documentation shall have been satisfied. 6.14 Confidentiality. The Administrative Agent 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 or, subject to confidentiality undertakings in the Credit Agreement or substantially the same as those in the Credit Agreement on the date hereof, the Credit Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (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 the Credit Agreement, or to any direct or indirect contractual counterparties in swap agreements or such contractual counterparties' professional advisors, (g) with the consent of the Guarantors 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 the Administrative Agent on a nonconfidential basis from a source other than the Guarantors. For the purposes of this Section, the term "Information" means all information received from the Guarantors relating to the Guarantors or its business (including the information on Schedule 1 hereto). 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. 6.15 Release. The Administrative Agent agrees that it shall release the Guarantors from their obligations hereunder, if, and for so long as, the Guarantors have validly and effectively pledged to the Administrative Agent a blocked cash collateral account held in New York with Citibank, N.A. in an amount, and pursuant to documentation in form and substance, reasonably satisfactory to the Administrative Agent (provided that no such release shall be effective until the expiry of any applicable preference period under applicable bankruptcy law); provided further that prior to or simultaneously with the release of the Guarantors pursuant to this Section 6.15, the parties hereto agree to make such reasonable amendments to the Reimbursement Documentation and other related documents to ensure that the Guarantors have the same remedies and, in all material respects, the same legal and contractual rights, under and with respect to the Reimbursement Documentation and such other related documents in the event the Administrative Agent exercises its remedies with respect to the cash collateral account as it would in the event the Guarantors were to make a payment pursuant to this Agreement (such amendments to be in writing and in form and substance reasonably acceptable to the parties hereto). IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written. Guarantor --------- GREEN EQUITY INVESTORS III, L.P. By: GEI CAPITAL III, LLC, its General Partner By /s/ John Danhakl ------------------------ Name: John Danhakl Title: Manager Address for Notices: c/o Leonard Green & Partners, L.P. 11111 Santa Monica Boulevard, Suite 2000 Los Angeles, CA 90025 Attention: John Baumer Fax: (310) 954-0404 GREEN EQUITY INVESTORS SIDE III, L.P. By: GEI CAPITAL III, LLC, its General Partner By /s/ John Danhakl ------------------------ Name: John Danhakl Title: Manager Address for Notices: Same as Green Equity Investors III, L.P. General Partner GEI CAPITAL III, LLC By /s/ John Danhakl ------------------------ Name: John Danhakl Title: Manager Address for Notices: Same as Green Equity Investors III, L.P. Administrative Agent -------------------- CITICORP USA, INC., as Administrative Agent By /s/ Arnold Y. Wong ------------------------ Name: Arnold Y. Wong Title: Vice President EX-19 8 tpg_ex19.txt Exhibit 19 GUARANTY dated as of December 21, 2001 (this "Agreement" or the "TCW Guaranty") between TCW/CRESCENT MEZZANINE PARTNERS III, L.P., a Delaware limited partnership ("TCW Partners"), TCW/CRESCENT MEZZANINE TRUST III, a Delaware statutory business trust ("TCW Trust" and, together with TCW Partners, individually, a "Guarantor" and, collectively, the "Guarantors), TCW/CRESCENT MEZZANINE III, LLC, a Delaware limited liability company (the "General Partner") and CITICORP USA, INC., as Administrative Agent under the Credit Agreement referred to below (the "Administrative Agent"). MEMC Electronic Materials, Inc., a Delaware corporation (the "Borrower"), certain lenders party thereto and the Administrative Agent are parties to a Revolving Credit Agreement dated as of December 21, 2001 (as from time to time modified or amended, the "Credit Agreement") providing, subject to the terms and conditions thereof, for the making of loans by said lenders to the Borrower in an aggregate principal amount at any one time outstanding up to an aggregate principal amount at any one time outstanding of $150,000,000. To induce said lenders to enter into the Credit Agreement and to extend credit thereunder, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Guarantor has agreed, by its execution and delivery hereof, to jointly and severally guarantee the credit so extended to the Borrower to the extent of the TCW Percentage, as hereinafter defined. Accordingly, the parties hereto agree as follows: Section 1. Definitions. Terms defined in the Credit Agreement are used herein as defined therein. In addition, the following terms shall have the following meanings when used herein: "Change in Control" shall mean (a) TPG GENPAR III, L.P. shall cease to be the "General Partner" (as such term is defined in the TPG Partnership Agreement) of TPG; (b) TPG shall cease to be a Fund Guarantor; (c) GEI Capital III, LLC shall cease to be the "General Partner" (as such term is defined in the GEI Partnership Agreement) of GEI or GEI Side; (d) Leonard Green & Partners L.P. shall cease to be the "Management Company" (as such term is defined in the GEI Partnership Agreement and GEI Side Partnership Agreement); (e) TCW/Crescent Mezzanine III, LLC or any Affiliate thereof shall cease to be the "General Partner" (as such term is defined in the TCW Partnership Agreement) of TCW or cease to be the "Managing Owner" (as such term is defined in the TCW Trust Agreement) of TCW Trust; or (g) TCW/Crescent Mezzanine Management III, LLC or an Affiliate thereof shall cease to be the "Investment Manager" (as such term is defined in the TCW Partnership Agreement and the TCW Trust Agreement) of TCW or TCW Trust; provided, however, that with respect to clauses (c) and (d) above, no "Change in Control" shall be deemed to have occurred as a result of any transaction or series of transactions, name change or changes or corporate reorganization of any Person provided that after such event or events, a majority of the voting interests of the "General Partner" of GEI or GEI Side, as the case may be, continue to be held by the "Principals" (as defined in the GEI and GEI Side Partnership Agreements) collectively. "Guarantor Conditions" shall mean that: (a) The Administrative Agent (or its counsel) shall have received from each Guaranty Party either (i) a counterpart of the Guaranty Document to which it is party duly executed by such party or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page of the Guaranty Document to which it is party) that such party has signed a counterpart of such Guaranty Document; (b) The Administrative Agent shall have received favorable written opinions (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of (i) Richards, Layton & Finger, P.A., special Delaware counsel to the Guaranty Parties party to the GEI Guaranty, Gibson, Dunn & Crutcher LLP, counsel to the Guaranty Parties party to the GEI Guaranty, and Kramer Levin Naftalis & Frankel LLP, special counsel to the Guaranty Parties party to the GEI Guaranty, (ii) O'Melveny & Myers LLP special counsel to the Guaranty Parties party to the TCW Guaranty, and Kramer Levin Naftalis & Frankel LLP, special counsel to the Guaranty Parties party to the TCW Guaranty and (iii) Morris, Nichols, Arsht & Tunnell, special Delaware counsel to the Guaranty Parties party to the TPG Guaranty, and Cleary, Gottlieb, Steen & Hamilton, special counsel to the Guaranty Parties party to the TPG Guaranty, in each case, in form and substance reasonable acceptable to the Administrative Agent; and (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 Guaranty Party, the authorization of the Guaranty Documents and any other legal matters relating to the Guaranty Parties, the Guaranty Documents or the transactions contemplated thereby, all in form and substance satisfactory to the Administrative Agent and its counsel. "Guarantor Default" shall mean any of the following events: (a) any representation or warranty made by or on behalf of any Guaranty Party in any Guaranty Document or any amendment or modification thereof or waiver thereunder, or in any certificate or other document furnished pursuant to any Guaranty 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; (b) any Guaranty Party shall fail to observe or perform any covenant, condition or agreement applicable to such Guaranty Party contained in Section 4(A)(1)(a), 4(A)(5)(iii), 4(A)(7), 4(A)(8), 4(B)(1)(a), 4(B)(2), 4(B)(3), 4(B)(4), 4(B)(5), 4(B)(6) or 4(B)(7) of the Guaranty Documents; (c) any Guaranty Party shall fail to observe or perform any covenant, condition or agreement applicable to such Guaranty Party contained in any Guaranty Document (other than those specified in clause (a) or (b) of this Section), and such failure shall continue unremedied for a period of 30 days after notice thereof from the Administrative Agent to such Guaranty Party (which notice will be given at the request of any Lender); (d) any Guaranty Party 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; (e) 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 (e) 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; (f) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of any Guaranty Party 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 any Guaranty Party 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; (g) any Guaranty Party 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 (f) of this Section, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Guaranty Party 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; (h) any Guaranty Party shall become unable, admit in writing its inability or fail generally to pay its debts as they become due; (i) one or more judgments for the payment of money in an aggregate amount in excess of $5,000,000 (net of amounts covered by insurance as to which the insurer has admitted liability in writing) shall be rendered against any Guaranty Party and the same shall remain undischarged for a period of 60 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 such Guaranty Party to enforce any such judgment; or (j) a Change in Control shall occur. "Guaranty Document" shall mean each of this Agreement and the Other Guaranties. "Guaranty Party" shall mean the Guarantors, each Other Guarantor and each "General Partner" (as defined in each Guaranty). "Material Adverse Effect" means a material adverse effect on (a) the business, assets, operations, properties, financial condition, contingent liabilities or prospects of a Guarantor, (b) the ability of a Guarantor to perform its obligations hereunder or (c) any rights of or benefits available to the Administrative Agent or the Lenders hereunder. "Material Indebtedness" means Indebtedness, or obligations in respect of one or more Hedging Agreements, of any Guaranty Party party hereto in an aggregate principal amount exceeding $5,000,000. For purposes of determining Material Indebtedness, the "principal amount" of the obligations of the Guaranty Parties in respect of any Hedging Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Guaranty Parties would be required to pay if such Hedging Agreement were terminated at such time. "Other Guaranties" shall mean (i) the Guaranty dated as of the date hereof between TPG Partners III, L.P. and the Administrative Agent relating to the Credit Agreement (the "TPG Guaranty") and (ii) the Guaranty dated as of the date hereof between Green Equity Investors III, L.P., Green Equity Investors Side III, L.P. and the Administrative Agent relating to the Credit Agreement (the "GEI Guaranty"). "Other Guarantors" shall mean (i) Green Equity Investors III, L.P., (ii) Green Equity Investors Side III, L.P. and (iii) TPG Partners III, L.P. ("TPG"). "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 this Agreement or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement. "Partnership/Trust Agreement" shall mean (i) the Amended and Restated TCW/Crescent Mezzanine Partners III, L.P. Agreement of Limited Partnership dated as of March 7, 2001, as amended and (ii) the Declaration of Trust and Trust Agreement of TCW/Crescent Mezzanine Partners III, L.P. dated as of March 7, 2001, as amended. "Property" shall mean, with respect to any Person, any property or assets, or interest therein, of such Person including aggregate Unpaid Commitments. "Solvent" shall mean, with respect to any Person at any time, that (a) the fair value of the Property of such Person is greater than the total amount of liabilities (including without limitation contingent liabilities) of such Person, (b) the present fair saleable value of the Property of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature, and (d) such Person is not engaged in a business and is not about to engage in a business for which such Person's property would constitute an unreasonably small capital. "Surviving Representations" shall mean each of the representations and warranties contained in Sections 3.01(1), 3.01(2), 3.01(3), 3.01(4), 3.01(6), 3.01(8), 3.01(9), 3.01(13), 3.02(1), 3.02(2), 3.02(3), 3.02(4), 3.02(5) and 3.02(6) hereof. "TCW Percentage" shall mean 20% as modified from time to time pursuant to the terms hereof. The terms "Aggregate Partnership Commitments", "Aggregate Trust Commitments", "Binding Commitment", "Capital Contribution", "Commitment Period", "Defaulting Owner", "Defaulting Partner", "Event of Withdrawal", "Investment", "Limited Owner", "Limited Partner", "Material Adverse Event", "Mezzanine Securities", "Other Event", "Partners", "Portfolio Company", "Suspension of Commitments" and "Unpaid Commitments" shall have the respective meanings assigned thereto in the Partnership/Trust Agreements. Section 2. The Agreement. 2.01 The Agreement. (a) Subject to Section 2.05, the Guarantors hereby jointly and severally guarantee to the Lenders and the Administrative Agent the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of the TCW Percentage of the principal of and interest on the Loans and the TCW Percentage of all other amounts whatsoever now or hereafter payable or becoming payable to the Lenders and the Administrative Agent by the Borrower under the Credit Agreement (such obligations being herein collectively called the "Guaranteed Obligations"). The Guarantors hereby further jointly and severally agree that if the Borrower shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the Guarantors will promptly pay the TCW Percentage of the same in full when due, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the TCW Percentage thereof will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal. Notwithstanding the foregoing, upon the expiration of the Commitment Period, the TCW Percentage of the Guarananteed Obligations shall be paid within 59 days of such expiration. (b) This Agreement is a continuing guaranty and is a guaranty of payment and is not merely a guaranty of collection. (c) The obligations of the Guarantors hereunder and of the Other Guarantors under the Other Guaranties shall be several and not joint, and the Guarantors' obligations hereunder shall be limited to the TCW Percentage of the Guaranteed Obligations. (d) In the event that there is a Guarantor Default by any Other Guarantor other than TPG (any such Guarantor, a "Defaulting Guarantor"), prior to the exercise of any remedies under or in respect of the Other Guaranty of such Other Guarantor by the Administrative Agent, the Guarantor shall have the right to, within 10 Business Days of notice from the Administrative Agent of the occurrence of such Guarantor Default, assume, on the terms and conditions herein, the obligations of the Defaulting Guarantor under its Other Guaranty. If the Guarantor elects to assume such obligations, the Guarantor shall promptly so notify the Administrative Agent in writing. Such assumption shall become effective upon the delivery by the Guarantor to the Administrative Agent of such instruments and documents (including without limitation such legal opinions and amendments hereto and any related documents as may reasonably be requested by the Administrative Agent) in form and substance reasonably satisfactory to the Administrative Agent and the Guarantor as may be required to transfer to the Guarantor the obligations of the Defaulting Guarantor under the GEI Guaranty. Upon the effectiveness of such assumption no Guarantor Default shall have been deemed to have occurred. Thereafter, the Other Guaranty (or portion thereof so assumed by the Guarantor) given by the Defaulting Guarantor shall no longer have any force or effect with respect to such Defaulting Guarantor and such Defaulting Guarantor shall be relieved of all of its obligations and duties under such Other Guaranty (or portion thereof so assumed by the Guarantor). (e) The Guarantor may elect to assume, at any time, on the terms and conditions herein, any part or all of the obligations of any Other Guarantor other than TPG under its Other Guaranty. If the Guarantor elects to assume such obligations, the Guarantor shall so notify the Administrative Agent in writing. Such assumption shall become effective upon delivery to the Administrative Agent by such Other Guarantor and the Guarantor of such instruments and documents (including without limitation such legal opinions and amendments hereto and any related documents as may reasonably be requested by the Administrative Agent) in form and substance reasonably satisfactory to the Administrative Agent and the Guarantor as may be required to transfer to the Guarantor such part or all of the obligations of such Other Guarantor under such Other Guaranty. Thereafter, the Other Guaranty (or portion thereof so assumed by the Guarantor) given by the Other Guarantor shall no longer have any force or effect with respect to such other Guarantor and such Other Guarantor shall be relieved of all of its obligations and duties under such Other Guaranty (or portion thereof so assumed by the Guarantor). (f) Anything to the contrary in this Agreement notwithstanding, the obligations of the Guarantors hereunder shall terminate on the date 364 days after the date hereof (without prejudice to any obligations of the Guarantors with respect to any amount claimed hereunder prior to said date). (g) The Administrative Agent agrees that (i) if it makes any demand for payment under this Agreement in respect of any of the Guaranteed Obligations it will contemporaneously make demands for payment in respect thereof under the Other Guaranties, on a pro rata basis, and (ii) the Administrative Agent will treat the Guarantors, to the extent practicable, no less favorably than it treats each Other Guarantor, subject however to the right of the Administrative Agent and the Lenders to take such actions as they may reasonably determine to be necessary from time to time to protect the rights and remedies of the Administrative Agent and the Lenders in the good faith exercise of their respective credit judgments. 2.02 Acknowledgments, Waivers and Consents. Each Guarantor agrees that the obligations of such Guarantor under Section 2.01 hereof shall, to the fullest extent permitted by applicable law, be absolute, irrevocable and unconditional under any and all circumstances. Without limiting the foregoing, each Guarantor agrees that, subject to Section 2.01(g): (a) The occurrence of any one or more of the following shall not affect the enforceability or effectiveness of this Agreement in accordance with its terms or affect, limit, reduce, discharge or terminate the liability of such Guarantor, or the rights, remedies, powers and privileges of the Administrative Agent or any Lender under this Agreement: (i) any modification or amendment (including without limitation by way of amendment, extension, renewal or waiver), or any acceleration or other change in the time for payment or performance of the terms of all or any part of the Guaranteed Obligations or the Credit Agreement, or any other agreement or instrument whatsoever relating thereto, or any modification of the Commitments; (ii) any release, termination, waiver, abandonment, lapse or expiration, subordination or enforcement of the liability of any Guarantor under this Agreement or of either of the Other Guaranties or any other guarantee of all or any part of the Guaranteed Obligations; (iii) any application of the proceeds of any other guarantee to all or any part of the Guaranteed Obligations in any such manner and to such extent as the Administrative Agent may determine; (iv) any release of any Other Guarantor or any other Person (including without limitation any other guarantor with respect to all or any part of the Guaranteed Obligations) in whole or in part from any personal liability with respect to all or any part of the Guaranteed Obligations; (v) any settlement, compromise, release, liquidation or enforcement, upon such terms and in such manner as the Administrative Agent may determine or as applicable law may dictate, of all or any part of the Guaranteed Obligations or either of the Other Guaranties or any other guarantee of all or any part of the Guaranteed Obligations; (vi) the giving of any consent to the merger or consolidation of, the sale of substantial assets by, or other restructuring or termination of the corporate existence of the Borrower or any other Person; (vii) any proceeding against the Borrower or any Guarantor or any Other Guarantor or any other guarantor of all or any part of the Guaranteed Obligations or any collateral provided by any other Person or the exercise of any rights, remedies, powers and privileges of the Administrative Agent and the Lenders under the Credit Agreement or otherwise in such order and such manner as the Administrative Agent may determine, regardless of whether the Administrative Agent or the Lenders shall have proceeded against or exhausted any collateral, right, remedy, power or privilege before proceeding to call upon or otherwise enforce this Agreement or any Other Guaranty; (viii) the entering into such other transactions or business dealings with the Borrower, any subsidiary or Affiliate of the Borrower or any Other Guarantor or any other guarantor of all or any part of the Guaranteed Obligations as the Administrative Agent or any Lender may desire; or (ix) all or any combination of any of the actions set forth in this Section 2.02(a). (b) The enforceability and effectiveness of this Agreement and the liability of the Guarantors, and the rights, remedies, powers and privileges of the Administrative Agent and the Lenders under this Agreement shall not be affected, limited, reduced, discharged or terminated, and each Guarantor hereby expressly waives to the fullest extent permitted by law any defense now or in the future arising, by reason of: (i) the illegality, invalidity or unenforceability of all or any part of the Guaranteed Obligations, the Credit Agreement or any other agreement or instrument whatsoever relating to all or any part of the Guaranteed Obligations; (ii) any disability or other defense with respect to all or any part of the Guaranteed Obligations, including the effect of any statute of limitations that may bar the enforcement of all or any part of the Guaranteed Obligations or the obligations of any such other guarantor; (iii) the illegality, invalidity or unenforceability of any Other Guaranty or any security for or other guarantee of all or any part of the Guaranteed Obligations or the lack of perfection or continuing perfection or failure of the priority of any Lien on any collateral for all or any part of the Guaranteed Obligations; (iv) the cessation, for any cause whatsoever, of the liability of the Borrower or any Other Guaranty or any other guarantor with respect to all or any part of the Guaranteed Obligations (other than, subject to Section 2.03 hereof, by reason of the full payment of all Guaranteed Obligations); (v) any failure of the Administrative Agent or any Lender to marshal assets in favor of the Borrower or any other Person (including any Other Guarantor or any other guarantor of all or any part of the Guaranteed Obligations), to exhaust any collateral for all or any part of the Guaranteed Obligations, to pursue or exhaust any right, remedy, power or privilege it may have against the Borrower or any other guarantor of all or any Other Guarantor or any part of the Guaranteed Obligations or any other Person or to take any action whatsoever to mitigate or reduce such or any other Person's liability under the Credit Agreement, the Administrative Agent and the Lenders being under no obligation to take any such action notwithstanding the fact that all or any part of the Guaranteed Obligations may be due and payable and that the Borrower may be in default of its obligations under the Credit Agreement; (vi) any counterclaim, set-off or other claim which the Borrower or any Other Guarantor or any other guarantor of all or any part of the Guaranteed Obligations has or claims with respect to all or any part of the Guaranteed Obligations; (vii) any failure of the Administrative Agent or any Lender or any other Person to file or enforce a claim in any bankruptcy or other proceeding with respect to any Person; (viii) any bankruptcy, insolvency, reorganization, winding-up or adjustment of debts, or appointment of a custodian, liquidator or the like of it, or similar proceedings commenced by or against any Person, including any discharge of, or bar or stay against collecting, all or any part of the Guaranteed Obligations (or any interest on all or any part of the Guaranteed Obligations) in or as a result of any such proceeding; (ix) any action taken by the Administrative Agent or any Lender that is authorized by this Section 2.02 or otherwise in this Agreement or by any provision of the Credit Agreement or any omission to take any such action; or (x) to the fullest extent permitted by applicable law, any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor. (c) To the fullest extent permitted by law, each Guarantor expressly waives, for the benefit of the Administrative Agent and the Lenders, all set-offs and counterclaims and all diligence, presentment, demand for payment or performance, notices of nonpayment or nonperformance, protest, notices of protest, notices of dishonor and all other notices or demands of any kind or nature whatsoever, and any requirement that the Administrative Agent or any Lender exhaust any right, power or remedy or proceed against the Borrower under the Credit Agreement or any Other Guaranty or any or other agreement or instrument referred to herein or therein, or against any other Person under any other guarantee of, or security for, any of the Guaranteed Obligations, and all notices of acceptance of this Agreement or of the existence, creation, incurrence or assumption of new or additional Guaranteed Obligations. (d) Each Guarantor further waives, to the fullest extent permitted by law, any right to which it may be entitled, including, without limitation: (i) that the assets of the Borrower or any Other Guarantor first be used, depleted and/or applied in satisfaction of the Borrower's obligations under the Credit Agreement prior to any amounts being claimed from or paid by any Guarantor; (ii) to require that the Borrower be sued and all claims against the Borrower be completed prior to an action or proceeding being initiated against any Guarantor or any Other Guarantor; and (iii) to have its obligations hereunder be divided among the Guarantors and the Other Guarantors, such that any Guarantor's obligation would be less than the full amount claimed. 2.03 Reinstatement. The obligations of the Guarantors under this Section 2 shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of the Borrower in respect of the Guaranteed Obligations is rescinded or must otherwise be restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise, and each Guarantor agrees that it will indemnify the Administrative Agent and the Lenders on demand for all costs and expenses (including, without limitation, reasonable fees and costs of counsel, but without duplication of the obligations of the Borrower under the Credit Agreement) incurred by them in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or the like under any bankruptcy, insolvency or similar law. 2.04 Remedies. Each Guarantor agrees that, as between such Guarantor and the Administrative Agent and the Lenders and subject to Section 5 hereof, the obligations of the Borrower under the Credit Agreement may be declared to be forthwith due and payable as provided in Article VII of the Credit Agreement (and shall be deemed to have become automatically due and payable in the circumstances provided in said Article VII) for purposes of Section 2.01 hereof, notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable) as against the Borrower. 2.05 Payments. Each payment by or on account of any obligation of the Guarantors under this Agreement shall be made on or before the date fifteen (15) Business Days after the date the Administrative Agent shall have demanded such payment in writing hereunder, and all such payments shall be made in United States dollars, without deduction, withholding, set-off or counterclaim at the place specified in the Credit Agreement and free and clear of and without deduction for any Indemnified Taxes or Other Taxes. Section 3. Representations and Warranties. 3.01 Guarantor. Each Guarantor represents and warrants to the Administrative Agent and the Lenders that: (1) Organization; Power and Authority. Such Guarantor (i) is duly organized, validly existing and in good standing as a limited partnership, in the case of TCW Partners, and a statutory business trust, in the case of TCW Trust, under the laws of the State of Delaware, (ii) has all requisite limited partnership or trust power, as the case may be, and all material governmental licenses, authorizations, consents and approvals, necessary to own its property and carry on its business as now being conducted, (iii) is qualified to do business and is in good standing in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where failure so to qualify could not (either individually or in the aggregate) reasonably be expected to have a Material Adverse Effect, and (iv) has full power, authority and legal right to make and perform this Agreement. (2) Due Authorization, Legality, Etc. The making and performance by such Guarantor of this Agreement are within the purpose of such Guarantor as set forth in such Guarantor's Partnership/Trust Agreement. Without limiting the foregoing, the making and performance by such Guarantor of this Agreement constitutes an "investment" by such Guarantor in Mezzanine Securities. The making and performance by such Guarantor of this Agreement have been duly authorized by all necessary partnership action on the part of such Guarantor, and do not and will not contravene (i) such Guarantor's Partnership/Trust Agreement, (ii) any applicable law, decree, regulation, judgment, award, injunction or similar legal restriction, as now in effect, or (iii) any agreement, instrument or contractual restriction binding on such Guarantor. (3) No Additional Authorization Required. No license, consent, authorization or approval or other action by, or notice to or registration or filing with, any Governmental Authority, and no other third-party consent or approval, is necessary for the due execution, delivery and performance by such Guarantor of this Agreement, or for the legality, validity or enforceability of this Agreement, except such as have heretofore been given or made. (4) Legal Effect. This Agreement has been duly executed and delivered by such Guarantor and is the legal, valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms except (i) as may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally and (ii) as rights may be limited by equitable principles of general applicability. (5) Financial Statements; Material Adverse Effect. Such Guarantor has heretofore furnished to the Administrative Agent the following financial statements: (i) the audited financial statements of such Guarantor as at December 31, 2000 for the fiscal year ending on such date; and (ii) the unaudited financial statements of such Guarantor as at September 30, 2001 for the fiscal quarter ending on such date. All such financial statements fairly present the financial condition of such Guarantor as at such dates and the results of their operations for the fiscal year and fiscal quarter ending on such dates (subject, in the case of such financial statements as at September 30, 2001, to normal year-end audit adjustments), all in accordance with GAAP. Since December 31, 2000, no event or circumstance has occurred that has had any of the effects specified in clauses (b) or (c) of the definition of Material Adverse Effect. On the date hereof, such Guarantor is Solvent. (6) Ranking. The payment obligations of such Guarantor hereunder are unconditional and unsubordinated general obligations of such Guarantor, and rank and will at all times rank at least pari passu in priority of payment with all other present and future unsecured unsubordinated Indebtedness of such Guarantor. (7) No Actions or Proceedings. There are no legal or arbitral proceedings, or proceedings by or before any Governmental Authority, now pending or (to the knowledge of such Guarantor) threatened against such Guarantor that (either individually or in the aggregate) (a) could reasonably be expected to have a Material Adverse Effect or (b) purport to affect the legality, validity or enforceability of this Agreement or any of the Loan Documents. (8) Taxes. Such Guarantor has filed all tax returns required to be filed and paid all taxes shown to be due thereon except such as are being contested in good faith by appropriate proceedings and for which adequate reserves have been made in accordance with GAAP. (9) Investment Company Act. Such Guarantor is not required to register as an "investment company" under the Investment Company Act of 1940, as amended. (10) VCOC. As of the date hereof, such Guarantor is a "venture capital operating company" within the meaning of ERISA. (11) Portfolio Company. The Borrower is a Portfolio Company. (12) Existing Indebtedness. The aggregate amount of all investments by such Guarantor in Mezzanine Securities of the Borrower does not, as of the date hereof, after giving effect to this Agreement, exceed an amount equal to 20% of the Aggregate Partnership Commitments, in the case of TCW Partners, and the Aggregate Trust Commitments, in the case of TCW Trust. (13) Limited Partners/Limited Owners. Schedule 1 attached hereto sets forth a complete list of all Limited Partners and Limited Owners as of December 19, 2001. As of the date hereof, (i) no Limited Partner is a Defaulting Partner and no Limited Owner is a Defaulting Owner and (ii) no Limited Partner is excused from making Capital Contributions pursuant to Section 7.7 of TCW Partners' Partnership/Trust Agreement or otherwise and no Limited Owner is excused from making Capital Contributions pursuant to Section 8.7 of TCW Trust's Partnership/Trust Agreement or otherwise. (14) Event of Withdrawal/Other Events. No Event of Withdrawal, Other Event, or Material dverse Event has occurred. 3.02 General Partner. The General Partner represents and warrants to the Administrative Agent and the Lenders that: (1) Organization, Power and Authority. The General Partner (a) is duly organized, validly existing and in good standing as a limited liability company under the laws of the State of Delaware, (b) has all requisite limited liability corporate power, and all material governmental licenses, authorizations, consents and approvals, necessary to own its property and carry on its business as now being conducted, (c) is qualified to do business in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where failure so to qualify could not (either individually or in the aggregate) reasonably be expected to have a Material Adverse Effect, and (d) has full power, authority and legal right to make and perform this Agreement. (2) Due Authorization, Legality, Etc. The making and performance by the General Partner of this Agreement have been duly authorized by all necessary corporate action on the part of the General Partner and do not and will not contravene (a) its organizational documents of the General Partner, (b) any applicable law, decree, regulation, judgment, award, injunction or similar legal restriction, as now in effect, or (c) any agreement, instrument or contractual restriction binding on the General Partner. (3) No Additional Authorization Required. No license, consent, authorization or approval or other action by, or notice to or registration or filing with, any Governmental Authority, and no other third-party consent or approval, is necessary for the due execution, delivery and performance by the General Partner of this Agreement, or for the legality, validity or enforceability of this Agreement, except such as have heretofore been given or made. (4) Legal Effect. This Agreement has been duly executed and delivered by the General Partner and is the legal, valid and binding obligation of the General Partner, enforceable against the General Partner in accordance with its terms except (a) as may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors' rights generally and (b) as rights may be limited by equitable principles of general applicability. (5) Investment Company Act. The General Partner is not required to register as an "investment company" under the Investment Company Act of 1940, as amended. (6) The General Partner; etc. The General Partner has the right under Sections 3.1(a) of the Partnership/Trust Agreements to give notices to the Partners and the Limited Owners requiring them to make cash contributions to the Guarantors in order to pay the obligations of the Guarantors under this Agreement. As of the date hereof, no Commitment Period has expired or been terminated and as of the date hereof no Suspension of Commitments has occurred. This Agreement constitutes a Binding Commitment and the General Partner will be entitled to make capital calls on the Partners and the Limited Owners in connection with amounts payable under this Agreement notwithstanding the occurrence of the expiry, suspension or termination of the Commitment Period (and the making of a payment hereunder will not be a "new Investment" for purposes of Sections 3.2(c) of the Partnership/Trust Agreements). Section 4. Covenants of Guarantor and General Partner. A. Guarantors. Each Guarantor covenants and agrees with the Lenders and the Administrative Agent that, so long as any Commitment or Loan is outstanding and until payment in full of the obligations of the Guarantors hereunder: (1) Existence, Etc. Such Guarantor will (a) preserve and maintain its legal existence and (b) preserve and maintain all of its material rights, privileges, licenses and franchises, except, in the case of clause (b) only, to the extent failure to do so could not reasonably be expected to have a Material Adverse Effect. (2) Inspection of Property, Books and Records. Such Guarantor will, subject to reasonable confidentiality requirements, (a) maintain appropriate books and records in which full, true and correct entries shall be made of dealings and transactions in relation to its business and activities and (b) permit the Administrative Agent, during normal business hours and as often as may be desired at their own cost and expense (provided, that if a Default has occurred and is continuing such Guarantor shall indemnify the Administrative Agent for such costs and expenses) to examine, copy and make extracts from its books and records, to inspect any of its property, and to discuss its business and affairs with its officers. (3) Compliance with Law. Such Guarantor will comply in all respects with the requirements of all applicable laws, rules, regulations and orders of Governmental Authorities (including without limitation ERISA and Environmental Laws) except where failure to comply could not reasonably be expected to have a Material Adverse Effect or where the necessity of compliance therewith is being contested in good faith by appropriate proceedings. (4) Payment of Obligations. Such Guarantor will (a) pay and discharge at or before maturity all of its material obligations and liabilities (including, without limitation, claims of materialmen, warehousemen and the like which if unpaid might by law give rise to a Lien) and (b) pay and discharge all taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its property prior to the date on which penalties attach thereto, except for any such obligations, liabilities, tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained in accordance with GAAP and where the failure to pay or discharge such obligation, liability, tax, assessment, charge or levy could not reasonably be expected to have a Material Adverse Effect. (5) Reporting Requirements. Such Guarantor will provide to the Administrative Agent: (i) as soon as available and in any event within 45 days after the end of each quarter of each fiscal year of such Guarantor, one copy for each Lender of an unaudited balance sheet of such Guarantor as at the end of each such fiscal quarter and the related statements of income and retained earnings of such Guarantor for such quarter and for the portion of the fiscal year ended at the end of such quarter; (ii) as soon as available and in any event within 120 days after the end of each year of such Guarantor, one copy for each Lender of an audited balance sheet of such Guarantor as at the end of each such fiscal year and the related statements of income and retained earnings of such Guarantor for such fiscal year, accompanied by an unqualified opinion of independent certified public accountants of recognized national standing acceptable to the Lenders, which opinion shall state that the financial statements fairly present the financial condition and results of operations for such Guarantor as at the end of and for such fiscal year in accordance with GAAP; (iii) promptly upon the commencement of, or any material adverse development in, any litigation or proceeding against such Guarantor that could reasonably be expected to have a Material Adverse Effect, notice thereof with a description thereof in reasonable detail; (iv) promptly after it is notified thereof, notice of any change in the list of Limited Partners; and (v) from time to time and, if no Guarantor Default shall have occurred and be continuing, with reasonable prior notice given by the Administrative Agent, such additional information regarding the financial position or business of such Guarantor as the Administrative Agent or any Lender through the Administrative Agent may reasonably request. (6) Ranking. Such Guarantor will promptly take all actions as may be reasonably necessary to ensure that the payment obligations of such Guarantor under this Agreement will at all times constitute unconditional and unsubordinated general obligations of such Guarantor ranking at least pari passu in priority of payment with all other present and future unsecured unsubordinated Indebtedness of such Guarantor. (7) Merger, Etc. Such Guarantor will not enter into any transaction of merger or consolidation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution). (8) Compliance with the Partnership Agreement. Such Guarantor shall comply in all material respects with its obligations under its Partnership/Trust Agreement. B. General Partner. The General Partner covenants and agrees with the Lenders and the Administrative Agent that, so long as any Commitment or Loan is outstanding and until payment in full of the obligations of the Guarantors hereunder: (1) Existence, Etc. The General Partner will (a) preserve and maintain its legal existence and (b) preserve and maintain all of its material rights, privileges, licenses and franchises, except, in the case of clause (b) only, to the extent failure to do so could not reasonably be expected to have a Material Adverse Effect. (2) Merger, Etc. The General Partner will not enter into any transaction of merger or consolidation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution). (3) Notices Under the Partnership/Trust Agreements. The General Partner shall promptly give such notices to the Limited Partners and Limited Owners under Sections 3.1 of the Partnership/Trust Agreements, and under each other provision of the Partnership/Trust Agreements, as may be required to assure it is able to make capital calls on the Limited Partners and Limited Owners thereunder in such amounts and at such times as may be required to enable the Guarantors timely to perform their obligations hereunder. (4) Availability. The General Partner shall assure that there shall at all times be Unpaid Commitments in an aggregate amount sufficient to assure that the Guarantors can perform their obligations hereunder. (5) VCOC. The General Partner will use its reasonable best efforts to conduct the affairs of the Guarantor so that each Guarantor is at all relevant times a "venture capital operating company" within the meaning of ERISA. (6) Amendments to the Partnership Agreement. The General Partner will not permit the Partnership/Trust Agreements to be amended or modified in any manner that has or could reasonably be expected to have a material adverse effect on the rights and remedies of the Administrative Agent or any Lender hereunder. (7) Notice of Material Events. The General Partner will give to the Administrative Agent prompt notice if any Limited Partner becomes a Defaulting Partner, any Limited Owner becomes a Defaulting Owner or any Limited Partner or Limited Owner is excused from making Capital Contributions pursuant to any provision of the Partnership/Trust Agreements, of the occurrence of any Event of Withdrawal, Other Event or Material Adverse Event, of any breach by a Guarantor or the General Partner of any provision hereof, and of any event or condition that constitutes a Guarantor Default or that upon notice, lapse or both would, unless cured or waived, become a Guarantor Default. Section 5. Agreements by Administrative Agent. Notwithstanding anything to the contrary in the Credit Agreement or any other Loan Document, the Administrative Agent agrees, on behalf of itself and the Banks, with the Guarantors and the General Partner that, until payment in full of the obligations of the Guarantors hereunder: (1) it will not amend any of the Loan Documents without the prior written consent of the Guarantors; (2) it will not accelerate the maturity of the Loans without the prior written approval of the Guarantors, provided, that this clause (2) shall not apply while a Guarantor Default has occurred and is continuing; (3) if so instructed by the Guarantors while an Event of Default has occurred and is continuing it will accelerate the maturity of the Loans, provided, that nothing in this clause (3) shall require the Administrative Agent to take any action that in good faith it considers to be contrary to the terms of the Loan Documents or applicable law; (4) it will not (i) institute any legal proceedings against the Borrower or any Subsidiary Loan Party or (ii) take any action to enforce any security interest or lien granted to the Administrative Agent pursuant to the Loan Documents, without, in each case, the prior written approval of the Guarantors (and shall in any event have no obligation to institute or prosecute any such proceedings), provided, that this clause (4) shall not apply while a Guarantor Default has occurred and is continuing; (5) it will not grant a waiver of any of its or the Lenders' rights or remedies under the Loan Documents without the prior written approval of the Guarantors; (6) it will promptly forward to the Guarantors a copy of each notice, filing and other document received by it from, or delivered by it to, the Borrower under the Loan Documents, including without limitation each borrowing request thereunder, and will promptly from time to time confirm to the Guarantors, upon their request, the amounts outstanding under the Loan Documents, and the amount paid thereon, and such other matters relating to the Borrower's performance of its obligations under the Loan Documents as the Guarantors may reasonably request or as the Administrative Agent in its sole discretion may consider appropriate to deliver to the Guarantors; (7) upon the instruction of the Guarantors, it will issue the notice referred to in the introduction to Section 4.01 of the Credit Agreement subject to the satisfaction of the Administrative Agent with the sufficiency of the documents furnished pursuant to Section 4.01(c) of the Credit Agreement; (8) if instructed by the Guarantors, it will instruct the Lenders not to make additional Loans to the Borrower; and (9) without limiting the foregoing, if no Guarantor Default has occurred and is continuing and until payment in full of the Guaranteed Obligations, it will take such reasonable actions contemplated by the Loan Documents as the Guarantors may reasonably request (including without limitation the granting of waivers and the release of collateral and the taking of remedial actions in the case of an Event of Default); provided that except with respect to Section 2.08(d) of the Credit Agreement, the Administrative Agent shall have no obligation under this Section 5 to take any action, without the written consent of the Lenders or the Required Lenders as contemplated by the Credit Agreement, which (i) increases the Commitment of any Lender, (ii) reduces the principal amount of any Loan or reduces the rate of interest thereon, or reduces any fees payable under any Loan Document, (iii) postpones the maturity of any Loan, or any date for the payment of any interest or fees payable under any Loan Document, or reduces the amount of, waives or excuses any such scheduled payment, or postpones the scheduled date of expiration of any Commitment, (iv) changes or waives compliance with any of Article II, Section 4.01(c), Section 4.02(d), clause (p) of Article VII, Article VIII or Section 9.03 of the Credit Agreement, or (v) changes or waives any indemnification obligations in favor of the Agents or the Lenders set forth in any of the Loan Documents; provided further that nothing herein or in any other Loan Document shall require the Administrative Agent to take any action that in the reasonable opinion of the Administrative Agent would be contrary to the terms of the Loan Documents or applicable law or subject the Administrative Agent to personal liability; provided further that the Administrative 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 reasonable satisfaction of any applicable indemnification obligations under the Loan Documents in respect of such action. Section 6. Miscellaneous. 6.01 Waiver. No failure on the part of the Administrative Agent or any Lender to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under this Agreement preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. 6.02 Notices. All notices, requests and other communications provided for herein (including, without limitation, any modifications of, or waivers, requests or consents under, this Agreement) shall be given or made in writing delivered to the intended recipient at (i) in the case of the Administrative Agent, as specified in Section 9.01 of the Credit Agreement and (ii) in the case of the Guarantors and the General Partner, the "Address for Notices" specified below its name on the signature pages hereof or, as to any party, at such other address as shall be designated by such party in a notice to each other party. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when personally delivered or, in the case of a telecopy, emailed or mailed notice, upon receipt, in each case given or addressed as aforesaid. 6.03 Expenses, Etc. Each Guarantor agrees to pay or reimburse the Administrative Agent and each of the Lenders for all of their reasonable out-of-pocket costs and expenses (including, without limitation, the reasonable fees and expenses of legal counsel) in connection with any enforcement or collection proceedings resulting from the occurrence of an Event of Default. 6.04 Amendments, Etc. Except as otherwise expressly provided in this Agreement, any provision of this Agreement may be modified or supplemented only by an instrument in writing signed by the Guarantors, the General Partner and the Administrative Agent. Any such amendment or waiver shall be binding upon the Administrative Agent, the Lenders, each holder of any of the Guaranteed Obligations, the Guarantors and the General Partner. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof. Except as expressly provided herein, the Administrative Agent will not release any Guarantor from its obligations hereunder, or limit its liability hereunder, without the written consent of each Lender. 6.05 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and each holder of any of the Guaranteed Obligations and their respective successors and assigns; provided that neither any Guarantor nor the General Partner may assign any of its rights or obligations under this Agreement without the prior written consent of the Administrative Agent; provided further that nothing in this Section 6.05 shall be deemed to prohibit TCW/Crescent Mezzanine III Netherlands, L.P., a Delaware limited partnership, from being added to this Agreement as a joint and several "Guarantor" with the Guarantors. 6.06 Captions. The captions and section headings appearing herein are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement. 6.07 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart. 6.08 Governing Law. This Agreement shall be governed by and construed in accordance with the law of the State of New York. 6.09 Jurisdiction, Service of Process and Venue. (a) Each of the Guarantors and the General Partner hereby agrees that any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby or any judgment entered by any court in respect thereof may be brought in the United States District Court for the Southern District of New York or in any New York State Court sitting in the Borough of Manhattan, New York, or, in the case of an action brought against such party, in the courts of its own corporate domicile, and hereby irrevocably submit to the jurisdiction of each such court for the purpose of any such suit, action, proceeding or judgment; provided, that nothing herein shall prevent the Administrative Agent or any Lender from enforcing any judgment obtained in any such court by proceedings in any jurisdiction whatsoever. (b) Each of the Guarantors and the General Partner hereby irrevocably appoints CT Corporation System in New York, New York (the "Process Agent"), with an office on the date hereof at 111 Eighth Avenue, 13th Floor, New York, New York 10011, as its agent and true and lawful attorney-in-fact in its name, place and stead to accept on behalf of the Guarantors and the General Partner and its property, service of copies of the summons and complaint and any other process which may be served in any such suit, action or proceeding brought in the State of New York, and each of the Guarantors and the General Partner agrees that the failure of the Process Agent to give any notice of any such service of process to the Guarantors or the General Partner shall not impair or affect the validity of such service or, to the extent permitted by applicable law, the enforcement of any judgment based thereon. Such appointment shall be irrevocable as long as the Loans are outstanding, except that if for any reason the Process Agent appointed hereby ceases to act as such, the Guarantors and the General Partner will, by an instrument reasonably satisfactory to the Administrative Agent, appoint another Person in the Borough of Manhattan as such Process Agent subject to the approval of the Administrative Agent. Each of the Guarantors and the General Partner hereby further irrevocably consents to the service of process in any suit, action or proceeding in said courts by the mailing thereof by the Administrative Agent or any Lender by registered or certified mail, postage prepaid, at its address set forth beneath its signature hereto. Each of the Guarantors and the General Partner covenants and agrees that it shall take any and all action, including the execution and filing of any and all documents, that may be necessary to continue the designation of a Process Agent pursuant to this Section 6.09 in full force and effect and to cause the Process Agent to act as such. (c) Nothing herein shall in any way be deemed to limit the ability of the Administrative Agent or any Lender to serve any such process or summonses in any other manner permitted by applicable law, or to obtain jurisdiction over the Guarantors and the General Partner in such other jurisdictions, and in such manner, as may be permitted by applicable law. (d) Each of the Guarantors and the General Partner hereby irrevocably waives, to the extent permitted by applicable law, any objection that it may now or hereafter have to the laying of the venue of any suit, action or proceeding arising out of or relating to this Agreement brought in the United States District Court for the Southern District of New York or any New York State Court sitting in the Borough of Manhattan, New York and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum and any right to which it may be entitled on account of place of residence or domicile. A final judgment (in respect of which time for all appeals has elapsed) in any such suit, action or proceeding shall be conclusive and may be enforced in any court to the jurisdiction of which the Guarantors or the General Partner is or may be subject, by suit upon judgment. 6.10 Waiver of Jury Trial. EACH OF THE GUARANTORS, THE GENERAL PARTNER AND THE ADMINISTRATIVE AGENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. 6.11 Severability. In case any provision in this Agreement shall be held to be invalid, illegal or unenforceable, such provision shall be severable from the rest of this Agreement, and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 6.12 Set-Off. Without limiting any of the obligations of the Guarantors or the rights of the Administrative Agent or the Lenders hereunder, if any Guarantor shall fail to pay when due (whether at stated maturity, by acceleration or otherwise) any amount payable by it hereunder, each Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by law, without prior notice to the Guarantors (which notice is expressly waived by the Guarantors to the fullest extent permitted by applicable law), to set off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final, in any currency, matured or unmatured) of the Guarantors held by such Lender or any subsidiary, affiliate, branch or agency thereof. Such Lender shall promptly provide notice to the Guarantors of such set-off; provided, that failure by such Lender to provide such notice to the Guarantors shall not give the Guarantors any cause of action or right to damages or affect the validity of such set-off and application. The rights of each Lender under this Section 6.12 are in addition to any other rights and remedies (including, without limitation, any other rights of set-off) that such Lender may have. 6.13 Termination. In addition to Section 2.01(f), the Guarantors may, if no Default or Guarantor Default shall have occurred or be continuing, terminate this Agreement (a "Guarantor Termination") at any time by providing written notice in accordance with Section 6.02 to the Administrative Agent; provided that such termination shall not be effective until (i) the Administrative Agent shall have received an amount equal to the principal of, and interest on, the Loans outstanding under the Credit Agreement, together with all other amounts payable thereunder and under each other Loan Document, (ii) the Commitments of the Lenders under the Credit Agreement shall have been terminated and (iii) any and all obligations hereunder and under the Reimbursement Documentation shall have been satisfied. 6.14 Confidentiality. The Administrative Agent 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 or, subject to confidentiality undertakings in the Credit Agreement or substantially the same as those in the Credit Agreement on the date hereof, the Credit Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder, (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 the Credit Agreement, or to any direct or indirect contractual counterparties in swap agreements or such contractual counterparties' professional advisors, (g) with the consent of the Guarantors 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 the Administrative Agent on a nonconfidential basis from a source other than the Guarantors. For the purposes of this Section, the term "Information" means all information received from the Guarantors relating to the Guarantors or its business (including the information on Schedule 1 hereto). 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. 6.15 Release. The Administrative Agent agrees that it shall release the Guarantors from their obligations hereunder, if, and for so long as, the Guarantors have validly and effectively pledged to the Administrative Agent a blocked cash collateral account held in New York with Citibank, N.A. in an amount, and pursuant to documentation in form and substance, reasonably satisfactory to the Administrative Agent (provided that no such release shall be effective until the expiry of any applicable preference period under applicable bankruptcy law); provided further that prior to or simultaneously with the release of the Guarantors pursuant to this Section 6.15, the parties hereto agree to make such reasonable amendments to the Reimbursement Documentation and other related documents to ensure that the Guarantors have the same remedies and, in all material respects, the same legal and contractual rights, under and with respect to the Reimbursement Documentation and such other related documents in the event the Administrative Agent exercises its remedies with respect to the cash collateral account as it would in the event the Guarantors were to make a payment pursuant to this Agreement (such amendments to be in writing and in form and substance reasonably acceptable to the parties hereto). IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written. Guarantor --------- TCW/CRESCENT MEZZANINE PARTNERS III, L.P. and TCW/CRESCENT MEZZANINE TRUST III By: TCW/Crescent Mezzanine Management III, LLC, its Investment Manager By: TCW Asset Management Company, its Sub-Advisor By /s/ James C. Shevlet, Jr. ------------------------------- Name: James C. Shevlet, Jr. Title: Senior Vice President By /s/ C. Shawn Boskin ------------------------------- Name: C. Shawn Boskin Title: Senior Vice President Address for Notices: c/o TCW Crescent Mezzanine, L.L.C. 11100 Santa Monica Blvd. Suite 2000 Los Angeles, CA 90025 Attn: Jim Shevlet Fax: (310) 235-5967 General Partner --------------- TCW/CRESCENT MEZZANINE III, LLC By: TCW Asset Management Company, its Sub-Advisor By /s/ James C. Shevlet, Jr. ------------------------------- Name: James C. Shevlet, Jr. Title: Senior Vice President By /s/ C. Shawn Boskin ------------------------------- Name: C. Shawn Boskin Title: Senior Vice President Address for Notices: c/o TCW Crescent Mezzanine, L.L.C. 11100 Santa Monica Blvd. Suite 2000 Los Angeles, CA 90025 Attn: Jim Shevlet Fax: (310) 235-5967 Administrative Agent -------------------- CITICORP USA, INC., as Administrative Agent By /s/ Arnold Y. Wong ------------------------ Name: Arnold Y. Wong Title: Vice President EX-20 9 tpg_ex20.txt Exhibit 20 - -------------------------------------------------------------------------------- REIMBURSEMENT AGREEMENT by and among MEMC ELECTRONIC MATERIALS, INC. as Borrower, TPG PARTNERS III, L.P., TCW/CRESCENT MEZZANINE PARTNERS III, L.P., TCW/CRESCENT MEZZANINE TRUST III, GREEN EQUITY INVESTORS III, L.P. and GREEN EQUITY INVESTORS SIDE III, L.P. as Fund Guarantors and CITICORP USA, INC. as Collateral Agent dated as of December 21, 2001 - -------------------------------------------------------------------------------- TABLE OF CONTENTS Page ARTICLE I DEFINITIONS Section 1.01. Definitions...........................................1 Section 1.02. General Interpretive Principles.......................7 ARTICLE II REIMBURSEMENT Section 2.01. Obligation to Reimburse...............................8 Section 2.02. Interest..............................................8 Section 2.03. Computations..........................................8 Section 2.04. Payments Due and Currency.............................8 Section 2.05. Bankruptcy and Similar Procedures of Borrower...........................................9 Section 2.06. Obligations Absolute..................................9 Section 2.07. Waiver by Borrower....................................9 Section 2.08. Taxes.................................................9 ARTICLE III REPRESENTATIONS AND WARRANTIES Section 3.01. Authority; Enforceability............................10 Section 3.02. Governmental Approvals; No Conflicts.................11 Section 3.03. Proceedings..........................................11 Section 3.04. Default..............................................11 Section 3.05. Subsidiaries.........................................11 Section 3.06. Properties...........................................11 Section 3.07. Consolidated Backlog; Principal Customers............12 ARTICLE IV CONDITIONS Section 4.01. Effective Date.......................................12 ARTICLE V COVENANTS Section 5.01. Maintenance of Corporate Existence...................13 Section 5.02. Compliance with Laws.................................14 Section 5.03. Books and Records; Inspection and Audit Rights.......14 Section 5.04. Maintenance of Security Interest.....................14 Section 5.05. Notice of Default....................................14 Section 5.06. Information Regarding Collateral.....................14 Section 5.07. Maintenance of Properties............................15 Section 5.08. Insurance............................................15 Section 5.09. Casualty and Condemnation............................15 Section 5.10. Additional Subsidiaries..............................15 Section 5.11. Further Assurances; Transfer of Joint Venture Stock........................................15 ARTICLE VI EVENTS OF DEFAULT Section 6.01. Events of Default....................................16 Section 6.02. Consequences of Default..............................18 Section 6.03. Right of Setoff and Disposition by the Fund Guarantors......................................18 ARTICLE VII COLLATERAL AGENT ARTICLE VIII MISCELLANEOUS Section 8.01. Acknowledgment of Security Interest..................21 Section 8.02. Termination..........................................22 Section 8.03. Notices..............................................22 Section 8.04. Counterparts.........................................23 Section 8.05. Entire Agreement.....................................23 Section 8.06. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS........................24 Section 8.07. Severability.........................................24 Section 8.08. No Third Party Rights; Assignment....................24 Section 8.09. Waivers and Amendments...............................25 Section 8.10. Rights Not Exclusive.................................25 Section 8.11. Expenses; Indemnity; Damage Waiver...................25 Section 8.12. Confidentiality......................................26 TABLE OF CONTENTS ANNEXES: Annex 1 -- Accounts SCHEDULES: Schedule I Fund Guarantor Percentages Schedule 1.01 -- Mortgaged Properties Schedule 3.02 -- Conflicts Schedule 3.05 -- Subsidiaries Schedule 3.06 -- Real Property EXHIBITS: Exhibit A -- Guarantee Agreement Exhibit B -- Indemnity, Subrogation and Contribution Agreement Exhibit C -- Pledge Agreement Exhibit D -- Security Agreement Exhibit E-1 -- Form of Opinion of Borrower's Counsel Exhibit E-2 -- Form of Opinion of Local Counsel REIMBURSEMENT AGREEMENT REIMBURSEMENT AGREEMENT (the "Agreement"), dated as of December 21, 2001, by and among MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation (the "Borrower"), TPG PARTNERS III, L.P. (together with its successors and assigns, the "TPG Guarantor"), TCW/CRESCENT MEZZANINE PARTNERS III, L.P. (together with its successors and assigns, "TCW"), TCW/CRESCENT MEZZANINE TRUST III (together with its successors and assigns, "TCW Trust" and together with TCW, the "TCW Guarantors"), GREEN EQUITY INVESTORS SIDE III, L.P. (together with its successors and assigns, "GEI Side") and GREEN EQUITY INVESTORS III, L.P. (together with its successors and assigns, "GEI" and together with GEI Side, the "GEI Guarantors") (collectively, the "Fund Guarantors"), and CITICORP USA, INC. as collateral agent (in such capacity, the "Collateral Agent"). WHEREAS, the Borrower, contemporaneously herewith, is entering into a Revolving Credit Agreement, dated as of December 21, 2001 with the lenders party thereto (the "Lenders") and Citicorp USA, Inc. as administrative agent (in such capacity, the "Administrative Agent") (as such agreement may be further amended, restated, modified or supplemented at any time and from time to time hereafter, the "Revolving Credit Agreement"), pursuant to which the Lenders will provide the Borrower with a revolving credit facility in an initial aggregate amount not to exceed U.S. $150,000,000; WHEREAS, contemporaneously herewith, the TPG Guarantor is entering into a Guaranty (the "TPG Guaranty"), the TCW Guarantors are entering into a Guaranty (the "TCW Guaranty") and the GEI Guarantors are entering into a Guaranty (the "GEI Guaranty" and together with the TPG Guaranty and the TCW Guaranty, the "Guaranty") each dated as of December 21, 2001 with Citicorp USA, Inc., as Administrative Agent, pursuant to which the Fund Guarantors will guarantee the obligations of the Borrower under the Revolving Credit Agreement; WHEREAS, the Borrower has agreed to reimburse the Fund Guarantors for any and all payments made by the Fund Guarantors under the Guaranty; and WHEREAS, the Security Documents (as hereinafter defined) shall have been executed and delivered and shall secure the obligations of the Borrower under this Agreement; NOW, THEREFORE, in consideration of the mutual covenants and undertakings contained herein, the Fund Guarantors, the Borrower and the Collateral Agent hereby agree as follows: ARTICLE I DEFINITIONS Section 1.01. Definitions. 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 following terms, as used in this Agreement, shall have the following meanings: "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. "Agreement" has the meaning set forth in the preamble hereof. "Borrower" has the meaning set forth in the preamble hereof. "Collateral" means any and all "Collateral", as defined in any applicable Security Document. "Collateral Agent" has the meaning set forth in the preamble hereof. "Collateral and Guarantee Requirement" means the requirement that: (a) the Collateral Agent shall have received from each Reimbursement 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 Reimbursement Party or (ii) in the case of any Person that becomes a Reimbursement 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 Reimbursement Party; (b) all outstanding Equity Interests of the Borrower and each Subsidiary owned directly by or directly on behalf of any Reimbursement Party, shall have been pledged pursuant to the Pledge Agreement (except that the Reimbursement Parties shall not be required to pledge (i) more than 65% of the outstanding voting stock of any Foreign Subsidiary, (ii) the Equity Interests in MEMC Southwest Inc., 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 Reimbursement 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 Reimbursement 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 of the Revolving Credit Agreement, together with such endorsements, coinsurance and reinsurance as the Collateral Agent or the Fund Guarantors may reasonably request, and (iii) such surveys, abstracts, appraisals, legal opinions and other documents as the Collateral Agent or the Fund Guarantors may reasonably request with respect to any such Mortgage or Mortgaged Property, as the case may be; and (f) each Reimbursement 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. "Contracts" means any and all agreements, commitments or other binding undertakings (whether written or oral). "Default" means any condition, event or act which constitutes an Event of Default or which, with the giving of notice or the lapse of time or both, would, unless cured or waived, become an Event of Default. "Dollars" or "U.S.$" means the lawful currency 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 8.09). "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. "Event of Default" has the meaning set forth in Section 6.01 hereof. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Financial Officer" means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower. "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. "Fund Guarantor Percentages" means the TPG Percentage, the TCW Percentage and the Green Percentage. "Fund Guarantors" has the meaning set forth in the preamble hereof. "GEI" has the meaning set forth in the preamble hereof. "GEI Guarantors" has the meaning set forth in the preamble hereof. "GEI Guaranty" has the meaning set forth in the recitals hereof. "GEI Side" has the meaning set forth in the preamble hereof. "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. "Green Percentage" means the percentage assigned to such term on Schedule I hereto, as such schedule may be amended from time to time. "Guarantee Agreement" means the Amended and Restated Guarantee Agreement, attached hereto as Exhibit A, among the Subsidiary Reimbursement Parties and the Collateral Agent for the benefit of the Secured Parties. "Guarantee Amounts" has the meaning set forth in Section 2.01 hereof. "Guaranty" has the meaning set forth in the recitals hereof. "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. "Indemnity, Subrogation and Contribution Agreement" means the Amended and Restated Indemnity, Subrogation and Contribution Agreement, attached hereto as Exhibit B, among the Borrower, the Subsidiary Reimbursement Parties and the Collateral Agent. "Indenture Obligations" has the meaning assigned to such term in the Indenture Documentation. "Intercreditor Agreement" means the Intercreditor Agreement, dated as of December 21, 2001, by and among the Fund Guarantors, the Administrative Agent and the Collateral Agent, as amended from time to time. "Law" means any law, treaty, statute, ordinance, code, rule or regulation of a Governmental Authority or judgment, decree, order, writ, award, injunction or determination of an arbitrator or court or other 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. "Material Adverse Effect" means a material adverse effect on (a) the business, assets, operations, properties, financial condition, contingent liabilities or prospects of the Reimbursement Parties taken as a whole, (b) the ability of the Reimbursement Parties to perform their obligations under the Related Agreements or (c) any rights of or benefits available to the Fund Guarantors under the Related Agreements. "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 Reimbursement Obligation. 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 Reimbursement 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 5.10 or 5.11. "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 Collateral Agent. "Permits" means all permits, authorizations, approvals, registrations or licenses granted by or obtained from any Governmental Authority. "Person" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity. "Pledge Agreement" means the Amended and Restated Pledge Agreement, attached hereto as Exhibit C, among the Reimbursement Parties and the Collateral Agent for the benefit of the Secured Parties. "Proceedings" means any actions, claims, suits, arbitrations, proceedings, or investigations. "Reimbursement Documents" means this Agreement, the Guarantee Agreement, the Indemnity, Subrogation and Contribution Agreement and the Security Documents. "Reimbursement Obligations" has the meaning assigned to such term in the Security Agreement. "Reimbursement Parties" means the Borrower and the Subsidiary Reimbursement Parties. "Reimbursement Transaction" means the execution, delivery and performance by each Reimbursement Party of the Reimbursement Documents to which it is to be a party. "Related Agreements" means the Guaranty, the Revolving Credit Loan Documentation, the Reimbursement Documents and any other agreement or instrument relating thereto. "Revolving Credit Agreement" has the meaning set forth in the recitals hereof. "Revolving Credit Loan Documentation" means, collectively, (i) the Revolving Credit Agreement, 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. "Secured Parties" has the meaning assigned to such term in the Security Agreement. "Security Agreement" means the Amended and Restated Security Agreement, attached hereto as Exhibit D, among the Borrower, the Subsidiary Reimbursement 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 5.10 or 5.11 to secure any of the Reimbursement Obligations. "Subsidiary" means any subsidiary of the Borrower. "Subsidiary Reimbursement Party" means any Subsidiary that is not a Foreign Subsidiary or a Receivable Subsidiary. "TCW" has the meaning set forth in the preamble hereof. "TCW Guarantors" has the meaning set forth in the preamble hereof. "TCW Guaranty" has the meaning set forth in the recitals hereof. "TCW Trust" has the meaning set forth in the preamble hereof. "TCW Percentage" means the percentage assigned to such term on Schedule I hereto, as such schedule may be amended from time to time. "TPG Guarantor" has the meaning set forth in the preamble hereof. "TPG Guaranty" has the meaning set forth in the recitals hereof. "TPG Percentage" means the percentage assigned to such term on Schedule I hereto, as such schedule may be amended from time to time. "Uniform Commercial Code" has the meaning assigned to such term in the Security Agreement. "U.S." means the United States of America. Section 1.02. General Interpretive Principles. 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. ARTICLE II REIMBURSEMENT Section 2.01. Obligation to Reimburse. The Borrower agrees to reimburse each Fund Guarantor for any and all amounts paid by such Fund Guarantors under or pursuant to the Guaranty (including without limitation any amounts paid from a cash collateral account established by such Fund Guarantor pursuant to the Guaranty) (the "Guarantee Amounts"), on demand, which demand may be made prior to, on or after the date of any such payments, to the account of each such Fund Guarantor set forth on Annex 1 hereto or such account as each such Fund Guarantor may designate in writing from time to time. If such demand is made after 11:00 a.m. (Central time), such payment shall be due on the next succeeding Business Day. If any Fund Guarantor makes a demand prior to the date of any such payment, reimbursement from the Borrower will be due on the date of any such payment. Section 2.02. Interest. The Borrower agrees to pay interest on any and all amounts remaining unpaid by the Borrower hereunder for each day unpaid, from the date such amounts are owed until payment in full (after as well as before judgment or arbitral award), payable on demand, at the rate of interest for overdue principal set forth in the Revolving Credit Agreement, provided that if such interest exceeds the maximum amount permitted to be paid under applicable Law, then such interest shall be reduced to such maximum permitted amount. Section 2.03. Computations. All interest shall be computed on the basis of a year of 360 days and actual days elapsed (including the first day but excluding the last day) occurring in the period for which such interest is payable. Section 2.04. Payments Due and Currency. If any payment hereunder becomes due and payable on a day other than a Business Day, the same shall be payable on the next succeeding Business Day, and interest shall continue to accrue during such extension. All amounts under this Agreement shall be denominated, made available and payable in Dollars in immediately available funds. The Borrower shall make each payment required to be made by it hereunder (whether pursuant to Section 2.01, 2.02 or 2.08 or otherwise) directly to the Fund Guarantor entitled to receive such payment. If at any time insufficient funds are received by the Fund Guarantors to pay fully all amounts due hereunder, such funds shall be applied (a) first, to pay those amounts due under Sections 2.01 and 2.02 then due hereunder, ratably among the Fund Guarantors entitled thereto in accordance with such amounts then due to such Fund Guarantors and (b) second, to pay any other remaining amounts then due hereunder, ratably among the Fund Guarantors entitled thereto in accordance with such amounts then due to such Fund Guarantors. If any Fund Guarantor shall obtain payment for any amounts due under Sections 2.01 and 2.02 in a greater proportion than as set forth in the preceding sentence, such Fund Guarantor agrees to ratably share such payment with the other Fund Guarantors. Section 2.05. Bankruptcy and Similar Procedures of Borrower. The Borrower's obligations hereunder shall not be affected by the fact that any obligations of the Borrower are unenforceable or not allowable due to the existence of bankruptcy, insolvency, liquidation, reorganization or other similar procedure involving the Borrower. The obligation to reimburse hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of such obligation is rescinded or reduced in amount or must otherwise be restored or returned by any Person receiving such payment upon the bankruptcy, insolvency, liquidation or reorganization of the Borrower, all as though such payment or part thereof had not been made. Section 2.06. Obligations Absolute. The obligations of the Borrower under this Agreement shall be absolute, indivisible, unconditional and irrevocable, and shall be discharged strictly in accordance with the terms of this Agreement, under all circumstances whatsoever, including the following circumstances: (a) any lack of validity or enforceability of any Related Agreement; (b) any amendment or waiver of or any consent to departure from any Related Agreement; (c) the existence of any claim, counterclaim, setoff, deduction, recoupment, defense or other rights which the Borrower may have at any time against the Fund Guarantors or any other Person for any reason whatsoever, whether in connection with this Agreement or any Related Agreement or otherwise; (d) any statement or any other document presented under any Related Agreement proving to be forged, fraudulent, invalid or insufficient in any respect whatsoever or any statement therein being untrue or inaccurate in any respect whatsoever; and (e) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing. Section 2.07. Waiver by Borrower. The Borrower hereby waives, with respect to its obligations under this Agreement, any presentment, demand, protest, notice of the occurrence of a default under any Related Agreement, and any other notice of any kind whatsoever and promptness in making any claim or demand hereunder. The Borrower's obligations hereunder shall not be discharged or impaired or otherwise affected by (i) the failure of the Fund Guarantors to assert any claim or demand or to enforce any right or remedy under the provisions of any Related Agreement, (ii) any extension or renewal of the Guaranty, or (iii) any other act or thing or omission or delay to do any other act or thing which may in any manner or to any extent vary the risk of the Fund Guarantors or would otherwise operate as a discharge of the Borrower as a matter of Law, unless and until the obligations hereunder are performed in full. Section 2.08. Taxes. (a) All amounts payable to the Fund Guarantors hereunder shall be paid in full and free and clear of any Taxes. If any Tax is required to be withheld or deducted from, or is otherwise payable by the Borrower in connection with, any payment to the Fund Guarantors hereunder, the Borrower (i) shall, if required, withhold or deduct the amount of such Tax from such payment and shall, in any case, pay such Tax to the appropriate taxing authority in accordance with applicable Law, and (ii) shall pay to the Fund Guarantors such additional amounts as may be necessary so that the net amount received by the Fund Guarantors with respect to such payment, after withholding or deducting all Taxes required to be withheld or deducted (including any Taxes required to be withheld or deducted as a result of payments made by the Borrower (whether made to a taxing authority or to the Fund Guarantors) pursuant to this Section 2.08(a)) is equal to the full amount payable hereunder. If any Tax is withheld or deducted from, or is otherwise payable by the Borrower in connection with, any payment payable to the Fund Guarantors hereunder, the Borrower shall, as soon as reasonably possible after the date of such payment, furnish to the Fund Guarantors the original or a certified copy of a receipt for such Tax from the applicable taxing authority. If any payment due to the Fund Guarantors hereunder is or is expected to be made without withholding or deducting therefrom, or otherwise paying in connection therewith, any Tax payable to any taxing authority, the Borrower shall, within thirty (30) days after any request from the Fund Guarantors, furnish to the Fund Guarantors a certificate from such taxing authority, or an opinion of counsel acceptable to the Fund Guarantors, in either case stating that no Tax payable to such taxing authority was or is, as the case may be, required to be withheld or deducted from, or otherwise paid by the Borrower in connection with, such payment. (b) The Borrower shall, promptly upon request by the Fund Guarantors for the payment thereof, pay to the Fund Guarantors (i) all Taxes payable by the Fund Guarantors with respect to any payment due to the Fund Guarantors hereunder, (ii) all Taxes payable by the Fund Guarantors as a result of payments made by the Borrower (whether made to a taxing authority or to the Fund Guarantor) pursuant to this Section 2.08 and (iii) all Taxes on or in respect of this Agreement, any Related Agreement or any other document or instrument relating hereto or thereto, or the recording, registration, notarization or other formalization of any of the foregoing, the enforcement of any of the foregoing, or the introduction of any of the foregoing in any judicial proceedings, or otherwise in respect thereof, other than, in any event, any Excluded Taxes. ARTICLE III REPRESENTATIONS AND WARRANTIES The representations made by the Borrower pursuant to the Security Documents are hereby incorporated by reference herein, and the Borrower shall be deemed to have made such representations hereby to the Fund Guarantors as of the date of such agreements. The Borrower hereby represents and warrants to the Fund Guarantors on the date hereof as follows: Section 3.01. Authority; Enforceability. Each of the Reimbursement Parties 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. The Reimbursement Transactions entered into and to be entered into by each Reimbursement Party are within such Reimbursement 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 Reimbursement Document to which any Reimbursement Party is to be a party, when executed and delivered by such Reimbursement Party, will constitute, a legal, valid and binding obligation of the Borrower or such Reimbursement 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 3.02. Governmental Approvals; No Conflicts. The Reimbursement 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 Reimbursement 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 3.02, 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 and the Reimbursement Documents. Section 3.03. Proceedings. 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 Reimbursement Documents or the Reimbursement Transactions. Section 3.04. Default. No default or event of default under the Revolving Credit Agreement has occurred and is continuing, and the representations and warranties made by the Borrower pursuant to the Revolving Credit Loan Documentation are true and correct as of the date hereof. Section 3.05. Subsidiaries. Schedule 3.05 sets forth the name of, and the ownership interest of the Borrower in, each Subsidiary and identifies each Subsidiary that is a Subsidiary Reimbursement Party, in each case as of the Effective Date. Section 3.06. Properties. 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 3.06, 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 3.07. Consolidated Backlog; Principal Customers. (a) The Borrower has heretofore furnished to the Fund Guarantors or one or more of their Related Parties daily reports of Consolidated Backlog from October 11, 2001 through November 12, 2001. Each such report as of its date was complete and accurate in all material respects. (b) Except as heretofore communicated to the Fund Guarantors 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 Fund Guarantors 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. ARTICLE IV CONDITIONS Section 4.01. Effective Date. The Fund Guarantors shall not be obligated to issue the Guaranty until the date on which each of the following conditions is satisfied (or waived in accordance with Section 8.09): (a) The Fund Guarantors (or their counsel) shall have received from the Borrower either (i) a counterpart of this Agreement signed on behalf of such party or (ii) written evidence satisfactory to the Fund Guarantors (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 Fund Guarantors shall have received a favorable written opinion (addressed to each Fund Guarantor and dated the Effective Date) of each of (i) Bryan Cave LLP, counsel for the Borrower, substantially in the form of Exhibit E-1, and (ii) local counsel in each jurisdiction where a Mortgaged Property is located, substantially in the form of Exhibit E-2, and, in the case of each such opinion required by this paragraph, covering such other matters relating to the Reimbursement Parties, the Reimbursement Documents or the Reimbursement Transactions as the Fund Guarantors shall reasonably request. The Borrower hereby requests such counsel to deliver such opinions. (c) The Fund Guarantors shall have received such documents and certificates as the Fund Guarantors or their counsel may reasonably request relating to the organization, existence and good standing of each Reimbursement Party, the authorization of the Reimbursement Transactions and any other legal matters relating to the Reimbursement Parties, the Reimbursement Documents or the Reimbursement Transactions, all in form and substance satisfactory to the Fund Guarantors and their counsel. (d) The Fund Guarantors 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 Reimbursement Party hereunder or under any other Reimbursement Document. (e) The Collateral and Guarantee Requirement shall have been satisfied and the Fund Guarantors 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 Reimbursement Parties (including any Subsidiary Reimbursement 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 Fund Guarantors that the Liens indicated by such financing statements (or similar documents) are permitted by Section 6.02 of the Revolving Credit Agreement or have been released. (f) The Fund Guarantors shall have received evidence that the insurance required by Section 5.08 and the Security Documents is in effect. (g) The Fund Guarantors shall have been afforded the timely opportunity to review all other documentation relating to the Reimbursement Transactions and the other transactions contemplated hereby and shall be reasonably satisfied in all respects with such documentation. (h) 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. ARTICLE V COVENANTS Section 5.01. Maintenance of Corporate Existence. 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 of the Revolving Credit Agreement or any sale of assets permitted under Section 6.05 of the Revolving Credit Agreement; 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 5.02. 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 5.03. 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 Collateral Agent or any Fund Guarantor, 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 5.04. Maintenance of Security Interest. The Borrower covenants and agrees with the Fund Guarantors that its obligations under this Agreement shall be secured under the Security Documents for so long as the Guaranty is in force. Section 5.05. Notice of Default. The Borrower shall promptly give notice to the Fund Guarantors of any default or event of default under the Revolving Credit Loan Documentation upon a Financial Officer of Borrower obtaining knowledge thereof. Section 5.06. Information Regarding Collateral. (a) The Borrower will furnish to the Fund Guarantors prompt written notice of any change (i) in any Reimbursement 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 Reimbursement 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 Reimbursement Party's identity, jurisdiction of organization or corporate structure or (iv) in any Reimbursement 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 Fund Guarantors 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 Fund Guarantors 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 of the Revolving Credit Agreement, the Borrower shall deliver to the Fund Guarantors 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 5.07. 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 5.08. 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 Fund Guarantors, upon request in writing of the Fund Guarantors, information in reasonable detail as to the insurance so maintained. Section 5.09. Casualty and Condemnation. The Borrower (a) will furnish to the Fund Guarantors 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 5.10. 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 Fund Guarantors and cause the Collateral and Guarantee Requirement to be satisfied with respect to such Subsidiary (if it is a Subsidiary Reimbursement Party) and with respect to any Equity Interest in or Indebtedness of such Subsidiary owned by or on behalf of any Reimbursement Party. Section 5.11. Further Assurances; Transfer of Joint Venture Stock. (a) The Borrower will, and will cause each Subsidiary Reimbursement Party to, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such further instruments as may reasonably be required for carrying out the intention, or facilitating the performance, of this Agreement and the Related Agreements. (b) The Borrower will, and will cause each Subsidiary Reimbursement 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 Fund Guarantors may reasonably request, to cause the Collateral and Guarantee Requirement to be and remain satisfied, all at the expense of the Reimbursement Parties. The Borrower also agrees to provide to the Fund Guarantors, from time to time upon request, evidence reasonably satisfactory to the Fund Guarantors as to the perfection and priority of the Liens created or intended to be created by the Security Documents. (c) If any material assets (including any real property or improvements thereto or any interest therein) are acquired by the Borrower or any Subsidiary Reimbursement 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 Fund Guarantors, and, if requested by the Fund Guarantors, the Borrower will cause such assets to be subjected to a Lien securing the Reimbursement Obligations and will take, and cause the Subsidiary Reimbursement Parties to take, such actions as shall be necessary or reasonably requested by the Fund Guarantors to grant and perfect such Liens, including actions described in paragraph (a) of this Section, all at the expense of the Reimbursement Parties. Notwithstanding the foregoing, in no event shall the Borrower or any Subsidiary Reimbursement Party be required to grant a lien on any of the Texas Instruments Agreements (as defined in the Security Agreement). (d) 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 Fund Guarantors may reasonably request, to cause the transfer of all the Equity Interests in MEMC Kulim Electronic Materials, Sdn. Bhd. from the Borrower to MEMC International, Inc. no later than seventy-five (75) Business Days after the Effective Date. ARTICLE VI EVENTS OF DEFAULT Section 6.01. Events of Default. "Event of Default," wherever used herein, means any one of the following events (whatever the reason for such event and whether it shall be voluntary or involuntary or be effected by operation of Law, pursuant to any judgment, decree or order of any court or pursuant to any order, rule or regulation of any Governmental Authority): (a) the Borrower fails to pay when due any amount hereunder in accordance with the terms hereof; (b) there shall have occurred and be continuing any "Event of Default" (as defined in the Revolving Credit Agreement); (c) any Fund Guarantor is required to make any payment under the Guaranty; (d) the Borrower or any of the Subsidiary Reimbursement Parties fails to observe or perform any of the covenants, terms or agreements contained in any Related Agreement and such breach, default or failure is continuing for a period of 30 days after notice thereof from any Fund Guarantor or the Collateral Agent to the Borrower; (e) any Lien purported to be created under any Security Document shall cease to be, or shall be asserted by any Reimbursement 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 Reimbursement Documents or the Revolving Credit Loan Documentation, (ii) any action taken by the Collateral Agent to release any such Lien in compliance with the provisions of any Reimbursement Document or the Revolving Credit Loan Documentation, 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; (f) 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 (f) 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; (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 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 forty-five (45) days or an order or decree approving or ordering any of the foregoing shall be entered; (h) 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 thirty (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; (i) any decree, order, consent, Permit, license, approval, exemption or authorization or notarization of, or any registration, filing or declaration with, any Governmental Authority or any other act of such Governmental Authority necessary to enable the Borrower to comply with its payment obligations under this Agreement or any Related Agreement shall be revoked, rescinded, restricted, overruled, withdrawn or shall otherwise cease to be in full force and effect, or it otherwise becomes unlawful for the Borrower to perform all or any of its obligations under this Agreement or any Related Agreement; (j) any representation or warranty made or deemed made by or on behalf of the Borrower or any Subsidiary in or in connection with any Related Agreement or any amendment or modification thereof or waiver thereunder, or in any certificate or other document furnished pursuant to or in connection with any Related Agreement or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made; or (k) a Change in Control shall occur. Section 6.02. Consequences of Default. If an Event of Default occurs and is continuing, any Fund Guarantor may (i) declare by notice to the Borrower the Guarantee Amounts, together with any accrued interest thereon, to be immediately due and payable, in which case, all such amounts will be immediately due and payable, (ii) demand by notice to the Borrower the deposit of cash collateral pursuant to this Section 6.02, in which case, the Borrower shall deposit cash collateral in an amount equal to the principal of and accrued interest on the loans and all other amounts due under the Revolving Credit Agreement and (iii) enforce all rights and remedies to which it is entitled under the Reimbursement Documents. Notwithstanding the foregoing, upon the occurrence of an Event of Default described in Section 6.01(f) or (g), the Guaranteed Amounts together with any accrued interest thereon shall automatically be immediately due and payable without any notice or demand and the Borrower shall automatically be obligated to immediately deposit cash collateral in the amount described in clause (ii) of the preceding sentence without any notice or demand. Any cash collateral deposited may be deposited with any Fund Guarantor and such deposit shall be held by such Fund Guarantor or transferred in part or in whole to any other Fund Guarantor. The Fund Guarantors shall hold any such cash collateral for, and may apply such cash collateral to, the payment and performance of the obligations of the Borrower under this Agreement. The provisions of Section 2.04 hereof shall apply to any cash collateral held by any Fund Guarantor and to any cash collateral applied by any Fund Guarantor to the payment of obligations owing to such Fund Guarantor. Section 6.03. Right of Setoff and Disposition by the Fund Guarantors. If any amount payable by the Borrower hereunder (including any amount due under Section 8.11 of this Agreement) is not paid as and when due, the Borrower authorizes the Fund Guarantors to proceed, at any time and from time to time, to the fullest extent permitted by applicable Law, without prior notice, to set off against any indebtedness or other obligation owing by the Fund Guarantors to the Borrower or to dispose of or otherwise realize upon any assets of the Borrower that may at any time be in the possession of or pledged to the Fund Guarantors to the full extent of all amounts payable to the Fund Guarantors hereunder, irrespective of whether or not the Fund Guarantors shall have made any demand hereunder and whether or not such indebtedness or obligation is matured, and apply the proceeds thereof, if any, to such amounts as are due and payable. ARTICLE VII COLLATERAL AGENT Each of the Fund Guarantors 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 of the Reimbursement Documents and the Intercreditor Agreement, together with such actions and powers as are reasonably incidental thereto. Each bank serving as Collateral Agent hereunder 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 the Collateral Agent hereunder and may accept fees and other consideration from the Borrower for services in connection with the Reimbursement Documents or otherwise without having to account for the same to the Fund Guarantors. The Collateral Agent shall not have any duties or obligations except those expressly set forth in the Reimbursement Documents and the Intercreditor Agreement. Without limiting the generality of the foregoing, (a) the Collateral Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) 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 the Reimbursement Documents and the Intercreditor Agreement that the Collateral Agent is required to exercise in writing by the Fund Guarantors, and (c) except as expressly set forth in the Reimbursement Documents and the Intercreditor Agreement, the Collateral Agent shall not 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 the bank serving as Collateral Agent or any of their 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 Fund Guarantors 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 not be deemed to have knowledge of any Default unless and until written notice thereof is given to the Collateral Agent by the Borrower or a Fund Guarantor, 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 the Reimbursement Documents, (ii) the contents of any certificate, report or other document delivered hereunder or in connection with the Reimbursement Documents, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in the Reimbursement Documents, (iv) the validity, enforceability, effectiveness or genuineness of the Reimbursement Documents or any other agreement, instrument or document, or the validity, perfection, or priority of any Lien created by any of the Reimbursement Documents, or (v) the satisfaction of any condition set forth in Section 4.01 or elsewhere in the Reimbursement Documents, other than to confirm receipt of items expressly required to be delivered to the Collateral Agent. 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 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. The Collateral 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 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, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Collateral Agent. 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 Fund Guarantors and the Borrower and the Collateral Agent may be removed at any time with or without cause by the Fund Guarantors. Upon any such resignation, the Fund Guarantors shall have the right, in consultation with the Borrower, to appoint a successor. If no successor shall have been so appointed by the Fund Guarantors 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 Fund Guarantors, appoint a successor Collateral 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 Collateral Agent 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 under the Reimbursement Documents. The fees payable by the Borrower and/or the Fund Guarantors to a successor Collateral Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and/or the Fund Guarantors, as the case may be, and such successor. After a Collateral Agent's resignation, 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. Each Fund Guarantor acknowledges that it has, independently and without reliance upon the Collateral Agent or any other Fund Guarantor 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 Fund Guarantor also acknowledges that it will, independently and without reliance upon the Collateral Agent or any other Fund Guarantor 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 the Reimbursement Documents or related agreement or any document furnished hereunder or thereunder. Except for action expressly required of the Collateral Agent by the Reimbursement Documents, the Collateral Agent shall in all cases be fully justified in failing or refusing to act under the Reimbursement Documents unless it shall receive further assurances to its satisfaction from the Borrower of its indemnification obligations under Section 8.11 in respect of such action. Without limiting the foregoing, the Collateral Agent shall not have any liability or responsibility with respect to the sufficiency of the documents furnished pursuant to Section 4.01 and shall not be required to, and shall not, take any action to enforce any of its or the Fund Guarantors' rights under, nor waive or amend any provision of, the Reimbursement 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 Fund Guarantors, and the Collateral Agent shall not have any liability for failure to take any action in the absence of such instructions, provided that the Collateral Agent will promptly send to the Fund Guarantors a copy of each notice, request or other document delivered to the Collateral Agent pursuant to the terms of the Reimbursement Documents and will take such actions contemplated by the Reimbursement Documents as the Fund Guarantors may reasonably instruct, except that nothing in the Reimbursement Documents 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 the Reimbursement Documents or applicable law or subject the Collateral Agent to personal liability for which it would have no claim for indemnification hereunder. ARTICLE VIII MISCELLANEOUS Section 8.01. Acknowledgment of Security Interest. The Borrower and the Fund Guarantors acknowledge that the Borrower has secured its obligations under this Agreement pursuant to the Security Documents. Section 8.02. Termination. This Agreement may be terminated if the Fund Guarantors and the Borrower so mutually agree in writing. This Agreement shall terminate and the liens and security interests created by the Security Documents shall be released upon the termination of the Revolving Credit Agreement and the Borrower's indefeasible payment in full of its obligations hereunder and under the Revolving Credit Agreement. Section 8.03. Notices. All notices or other communications required or permitted by this Agreement shall be effective upon receipt and shall be in writing and delivered personally or by overnight courier, or sent by facsimile (with confirmation copies delivered personally or by courier within three (3) Business Days), as follows: (a) If to the Borrower, to: MEMC Electronic Materials, Inc. 501 Pearl Drive St. Peters, MO 63376 Attention: Treasurer Telecopy: (636) 474-5158 (b) If to the Fund Guarantors, to: Texas Pacific Group 301 Commerce Street, Suite 3300 Fort Worth, TX 76102 Attention: James J. O'Brien Telecopy: (817) 871-4010 and Leonard Green & Partners, L.P. 11111 Santa Monica Boulevard Suite 2000 Los Angeles, CA 90025 Attention: John Baumer Telecopy: (310) 954-0404 and TCW/Crescent Mezzanine Partners III, L.P. 11100 Santa Monica Boulevard Suite 2000 Los Angeles, CA 90025 Attention: Jean-Marc Chapus Telecopy: (310) 235-5967 with a copy to: Cleary, Gottlieb, Steen & Hamilton One Liberty Plaza New York, NY 10006 Attention: Michael Gerstenzang, Esq. Telecopy: (212) 225-3999 and Kramer Levin Naftalis & Frankel LLP 919 Third Avenue New York, NY 10022 Attention: Howard A. Sobel, Esq. Telecopy: (212) 715-8000 (c) If to the Collateral Agent, to: Citicorp USA, Inc. 2 Penns Way, Suite 200 New Castle, DE 19720 Attention: David Graber Telecopy: (302) 894-6120 or to such other address as hereafter shall be furnished as provided in this Section 8.03 by any of the parties hereto to the other parties hereto. Section 8.04. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute a single instrument. Section 8.05. Entire Agreement. This Agreement and the Related Agreements set forth the entire understanding and agreement between the parties as to the matters covered herein and therein and supersede and replace any prior understanding, agreement or statement of intent (written or oral) with respect thereto. Section 8.06. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. (a) 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 Reimbursement 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 Reimbursement Document shall affect any right that the Collateral Agent or any Fund Guarantor may otherwise have to bring any action or proceeding relating to this Agreement or any other Reimbursement Document against the Borrower or its properties in the courts of any jurisdiction. (b) 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 Related Agreement in any court referred to in paragraph (a) 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. (c) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 8.03. Nothing in this Agreement or any other Related Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law. Section 8.07. 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 8.08. No Third Party Rights; Assignment. This Agreement is intended to be solely for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any Person other than the parties hereto. All rights and obligations hereunder shall not be assignable without the prior written consent of the other parties. Any attempted assignment of rights or obligations in violation of this Section 8.08 shall be null and void. Section 8.09. Waivers and Amendments. No modification of or amendment to this Agreement shall be valid unless in a writing signed by the parties hereto referring specifically to this Agreement and stating the parties' intention to modify or amend the same. Any waiver of any term or condition of this Agreement must be in a writing signed by the party sought to be charged with such waiver referring specifically to the term or condition to be waived, and no such waiver shall be deemed to constitute the waiver of any other breach of the same or of any other term or condition of this Agreement. Section 8.10. Rights Not Exclusive. The rights provided for herein, including under Section 6.03, are cumulative and are not exclusive of any other rights, powers, privileges or remedies provided by Law. Section 8.11. Expenses; Indemnity; Damage Waiver. (a) The Borrower agrees to pay or reimburse the Fund Guarantors and the Collateral Agent for any reasonable costs and expenses (including any expenses paid by Fund Guarantors pursuant to Section 6.03 of the Guaranty) incurred by the Fund Guarantors and the Collateral Agent in connection with the transactions contemplated hereby including for (i) all reasonable out-of-pocket costs and expenses in connection with negotiating and entering into this Agreement and the Related Agreements (including the Guaranty) and any modification, supplement or waiver (whether or not the same shall become effective) of any of the terms of this Agreement or the Related Agreements (including attorney's fees and expenses); (ii) all reasonable and documented out-of-pocket costs and expenses of the Fund Guarantors (including attorney's fees and expenses) in connection with (A) any enforcement or collection proceedings in connection with the negotiation of any restructuring or "work-out" (whether or not consummated) of the obligations of the Borrower hereunder and under the Related Agreements and (B) the enforcement of this Agreement and the Related Agreements; and (iii) all transfer, stamp, documentary or other similar Taxes, assessments or charges levied by any Governmental Authority in respect of this Agreement and the Related Agreements or any other document referred to herein or therein. (b) Any claim under this Section 8.11 shall be asserted by written notice to the Borrower. If the Borrower does not respond within sixty (60) days after receipt of such notice, it shall have no further right to contest the validity of such claim. Any uncontested claim or portion thereof shall be paid by the Borrower within sixty (60) days of receipt of notice of such claim. (c) The Borrower shall indemnify the Collateral Agent and each Fund Guarantor, 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 Reimbursement Document or any other agreement or instrument contemplated hereby, the performance by the parties to the Reimbursement Documents of their respective obligations thereunder or the consummation of the Reimbursement Transactions, (ii) any loan received under the Revolving Credit Agreement or 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. (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 Reimbursement Transactions, any loan received under the Revolving Credit Agreement or the use of the proceeds thereof. (e) All amounts due under this Section shall be payable promptly after written demand therefor. Section 8.12. Confidentiality. Each of the Collateral Agent and the Fund Guarantors 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 Reimbursement 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 any prospective assignee of, 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 the Collateral Agent or any Fund Guarantor 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 the Collateral Agent or any Fund Guarantor 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. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year 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 CITICORP USA, INC., as administrative and collateral agent By: /s/ Arnold Y. Wong ---------------------------- Name: /s/ Arnold Y. Wong Title: vice President SIGNATURE PAGE TO THE REIMBURSEMENT AGREEMENT DATED AS OF DECEMBER 21, 2001, among MEMC ELECTRONIC MATERIALS, INC., THE FUND GUARANTORS, and CITICORP USA, INC., as Administrative Agent and Collateral Agent. Name of Institution: TPG PARTNERS III, L.P. By: TPG GenPar III, L.P. Its General Partner By: TPG Advisors III, Inc. Its General Partner By: /s/ Richard A. Ekleberry ---------------------------- Name: Richard A. Ekleberry Title: Vice President SIGNATURE PAGE TO THE REIMBURSEMENT AGREEMENT DATED AS OF DECEMBER 21, 2001, among MEMC ELECTRONIC MATERIALS, INC., THE FUND GUARANTORS, and CITICORP USA, INC., as Administrative Agent and Collateral Agent. Name of Institutions: 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-Marc Chapus ---------------------------- Name: /s/ 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 REIMBURSEMENT AGREEMENT DATED AS OF DECEMBER 21, 2001, among MEMC ELECTRONIC MATERIALS, INC., THE FUND GUARANTORS, 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 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 AMENDED AND RESTATED GUARANTEE AGREEMENT THIS AMENDED AND RESTATED GUARANTEE AGREEMENT (this "Agreement"), dated as of December 21, 2001, is made among MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation ("Borrower"), each of the subsidiaries listed on Schedule I hereto (each such subsidiary, individually, a "Subsidiary" or a "Guarantor" and, collectively, the "Subsidiaries" or the "Guarantors") and CITICORP USA, INC. as collateral agent (the "Collateral Agent") for the Secured Parties (as defined in the Amended and Restated Security Agreement). Unless the context otherwise requires, all capitalized terms used but not defined herein shall have the meanings set forth in the Reimbursement Agreement. W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Guarantors and the Collateral Agent are parties to that certain guarantee agreement, dated as of November 13, 2001, pursuant to which the Guarantors agreed to guarantee the Borrower's obligations under a revolving credit agreement, dated as of November 13, 2001, among the Borrower, the lenders party thereto, and Citicorp USA, Inc., as administrative agent and collateral agent. WHEREAS, the Borrower, contemporaneously herewith, is entering into the Revolving Credit Agreement, dated as of December 21, 2001(as such agreement may be further amended, restated, modified or supplemented at any time and from time to time hereafter, the "Revolving Credit Agreement"), with the lenders party thereto (the "Lenders") and Citicorp USA, Inc. as administrative agent (in such capacity, the "Administrative Agent"), pursuant to which the Lenders will provide the Borrower with a revolving credit facility in an initial aggregate amount not to exceed U.S. $150,000,000; WHEREAS, contemporaneously herewith, the TPG Guarantor is entering into the TPG Guaranty, the TCW Guarantors are entering into the TCW Guaranty and the GEI Guarantors are entering into the GEI Guaranty (together with the TPG Guaranty and the TCW Guaranty, the "Guaranty") each dated as of December 21, 2001 with the Administrative Agent, pursuant to which the Fund Guarantors will guarantee the obligations of the Borrower under the Revolving Credit Agreement; WHEREAS, the Borrower is, contemporaneously herewith, entering into a Reimbursement Agreement, dated as of December 21, 2001 (as such agreement may be further amended, restated, modified or supplemented at any time and from time to time hereafter, the "Reimbursement Agreement"), with the Fund Guarantors and the Collateral Agent, pursuant to which the Borrower agrees to reimburse the Fund Guarantors for any and all payments made by the Fund Guarantors under the Guaranty; WHEREAS, to induce the Fund Guarantors to enter into the Guaranty, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, (a) each of the Guarantors agrees to grant to the Collateral Agent, for the ratable benefit of the Secured Parties, the Security Interests (as defined in the Amended and Restated Security Agreement) in the Collateral to secure the obligations of the Borrower under the Reimbursement Agreement, and (b) each of the Guarantors agrees to guarantee the obligations of the Borrower under the Reimbursement Agreement; WHEREAS, each of the Subsidiaries is a direct or indirect subsidiary of the Borrower and acknowledges that it will derive substantial benefit from the making of the Guaranty by the Fund Guarantors; and WHEREAS, the obligations of the Fund Guarantors under the Guaranty are conditioned on, among other things, the execution and delivery by the Guarantors of an Amended and Restated Guarantee Agreement in the form hereof; NOW, THEREFORE, in consideration of the benefits accruing to the Borrower and the Guarantors, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: SECTION 1. Guarantee. Each Guarantor unconditionally guarantees, jointly with the other Guarantors and severally, as a primary obligor and not merely as a surety, (a) the due and punctual payment of (i) all Guarantee Amounts (as defined in the Reimbursement Agreement) 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) thereon, 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 Reimbursement Parties to the Secured Parties under the Reimbursement Agreement and the other Reimbursement Documents, (b) the due and punctual performance of all covenants, agreements, obligations and liabilities of the Reimbursement Parties under or pursuant to the Reimbursement Agreement and the other Reimbursement Documents, (c) unless otherwise agreed to in writing by the applicable Fund Guarantor thereto, the due and punctual payment and performance of all obligations of the Borrower or any other Reimbursement Party, monetary or otherwise, under each Hedging Agreement entered into with a counterparty that was a Fund Guarantor (or an Affiliate of a Fund Guarantor) 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 collectively called the "Reimbursement Obligations"). Each Guarantor further agrees that the Reimbursement Obligations may be extended or renewed, in whole or in part, without notice to or further assent from it, and that it will remain bound upon its guarantee notwithstanding any extension or renewal of any Reimbursement Obligation. Each Guarantor agrees to pay, in addition to the amounts stated above, any and all expenses (including reasonable counsel fees and expenses) incurred by the Secured Parties in enforcing any rights under this Agreement. SECTION 2. Reimbursement Obligations Not Waived. To the fullest extent permitted by applicable law, each Guarantor waives presentment to, demand of payment from and protest to the Borrower of any of the Reimbursement Obligations, and also waives notice of acceptance of its guarantee and notice of protest for nonpayment. To the fullest extent permitted by applicable law, the obligations of each Guarantor hereunder shall not be affected by (a) the failure of the Collateral Agent or any other Secured Party to assert any claim or demand or to enforce or exercise any right or remedy against the Borrower or any Guarantor under the provisions of the Reimbursement Agreement, any other Reimbursement Document or otherwise; (b) any recision, waiver (except the effect of any waiver obtained pursuant to Section 12(b)), amendment or modification of, or any release from any terms or provisions of any other Reimbursement Document, any other Guarantee or any other agreement, including with respect to any other Guarantor under this Agreement, (c) the failure to perfect any security interest in, or release of, any of the security held by or on behalf of the Collateral Agent or any other Secured Party, or (d) any change in ownership of the Borrower. SECTION 3. Security. Each of the Guarantors authorizes the Collateral Agent and each of the other Secured Parties to (a) take and hold security for the payment of this Guarantee and the Reimbursement Obligations as set forth in the Amended and Restated Security Agreement, and exchange, enforce, waive and release any such security, (b) apply such security and direct the order or manner of sale thereof as they in their sole discretion may determine and (c) release or substitute any one or more endorsees, other Guarantors or other obligors. SECTION 4. Guarantee of Payment. Each Guarantor further agrees that its guarantee constitutes a guarantee of payment when due and not of collection, and waives any right to require that any resort be had by the Collateral Agent or any other Secured Party to any of the security held for payment of the Reimbursement Obligations or to any balance of any deposit account or credit on the books of the Collateral Agent or any other Secured Party in favor of the Borrower or any other Person. SECTION 5. No Discharge or Diminishment of Guarantee. The obligations of each Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than the indefeasible payment in full in cash of the Reimbursement Obligations), including any claim of waiver, release, surrender, alteration or compromise of any of the Reimbursement Obligations, and shall not be subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of the Reimbursement Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affected by the failure of the Collateral Agent or any other Secured Party to assert any claim or demand or to enforce any remedy under the Reimbursement Agreement, any other Reimbursement Document or any other agreement, by any waiver or modification of any provision of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the Reimbursement Obligations, or the failure to perfect any security interest in, or the release of, any of the security held by or on behalf of the Collateral Agent or any other Secured Party, or by any other act or omission that may or might in any manner or to any extent vary the risk of any Guarantor or that would otherwise operate as a discharge of each Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of all the Reimbursement Obligations). SECTION 6. Defenses of Borrower Waived. To the fullest extent permitted by applicable law, each of the Guarantors waives any defense based on or arising out of any defense of the Borrower or the unenforceability of the Reimbursement Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower, other than the final and indefeasible payment in full in cash of the Reimbursement Obligations. The Collateral Agent and the other Secured Parties may, at their election, foreclose on any security held by one or more of them by one or more judicial or nonjudicial sales, accept an assignment of any such security in lieu of foreclosure, compromise or adjust any part of the Reimbursement Obligations, make any other accommodation with the Borrower or any other guarantor or exercise any other right or remedy available to them against the Borrower or any other guarantor, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Reimbursement Obligations have been fully, finally and indefeasibly paid in cash. Pursuant to applicable law, each of the Guarantors waives any defense arising out of any such election even though such election operates, pursuant to applicable law, to impair or to extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against the Borrower or any other Guarantor or guarantor, as the case may be, or any security. SECTION 7. Agreement to Pay. In furtherance of the foregoing and not in limitation of any other right that the Collateral Agent or any other Secured Party has at law or in equity against any Guarantor by virtue hereof, upon the failure of the Borrower or any other Reimbursement Party to pay any Reimbursement Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, each Guarantor hereby promises to and will forthwith pay, or cause to be paid, to the Collateral Agent or such other Secured Party as designated thereby in cash the amount of such unpaid Reimbursement Obligations. Upon payment by any Guarantor of any sums to the Collateral Agent or any Secured Party as provided above, all rights of such Guarantor against the Borrower arising as a result thereof by way of right of subrogation, contribution, reimbursement, indemnity or otherwise shall in all respects be subordinate and junior in right of payment to the prior indefeasible payment in full in cash of all the Reimbursement Obligations. If any amount shall erroneously be paid to any Guarantor on account of such subrogation, contribution, reimbursement, indemnity or similar right, such amount shall be held in trust for the benefit of the Secured Parties and shall forthwith be paid to the Collateral Agent to be credited against the payment of the Reimbursement Obligations, whether matured or unmatured, in accordance with the terms of the Reimbursement Documents. SECTION 8. Information. Each of the Guarantors assumes all responsibility for being and keeping itself informed of the Borrower's financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Reimbursement Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder, and agrees that none of the Collateral Agent or the other Secured Parties will have any duty to advise any of the Guarantors of information known to it or any of them regarding such circumstances or risks. SECTION 9. Representations and Warranties. Each of the Guarantors represents and warrants as to itself that all representations and warranties relating to it contained in the Reimbursement Agreement and other Reimbursement Documents are true and correct in all material respects. SECTION 10. Termination. The Guarantees made hereunder (a) shall terminate when all the Reimbursement Obligations have been indefeasibly paid in full and the Fund Guarantors have no further obligation under the Guaranty, and (b) shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Reimbursement Obligation is rescinded or must otherwise be restored by any Secured Party or any Guarantor upon the bankruptcy or reorganization of the Borrower, any Guarantor or otherwise. SECTION 11. 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 the Guarantors that are contained in this Agreement shall bind and inure to the benefit of each party hereto and their respective successors and assigns. This Agreement shall become effective as to any Guarantor when a counterpart hereof executed on behalf of such 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 Guarantor and the Collateral Agent and their respective successors and assigns, and shall inure to the benefit of such Guarantor, the Collateral Agent and the other Secured Parties, and their respective successors and assigns, except that no Guarantor shall have the right to assign its rights or obligations hereunder or any interest herein (and any such attempted assignment shall be void). In the event that a Guarantor ceases to be a Subsidiary pursuant to a transaction permitted under the Reimbursement Documents, such 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 Guarantor and may be amended, modified, supplemented, waived or released with respect to any Guarantor without the approval of any other Guarantor and without affecting the obligations of any other Guarantor hereunder. SECTION 12. Intercreditor Agreement. Notwithstanding anything to the contrary contained in this Agreement, all rights, obligations and remedies of the Collateral Agent set forth in this Agreement and shall be subject to the provisions set forth in the Intercreditor Agreement. SECTION 13. 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 Reimbursement Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by any 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 Guarantor in any case shall entitle such 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 Guarantors with respect to which such waiver, amendment or modification relates and the Collateral Agent, subject to any consent required in accordance with Section 8.09 of the Reimbursement Agreement. SECTION 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 15. Notices. All communications and notices hereunder shall be in writing and given as provided in Section 8.03 of the Reimbursement Agreement. All communications and notices hereunder to each Guarantor shall be given to it at its address or telecopy number set forth in Schedule I, with a copy to the Borrower. SECTION 16. Survival of Agreement; Severability. (a) All covenants, agreements, representations and warranties made by the Guarantors herein and in the certificates or other instruments prepared or delivered in connection with or pursuant to this Agreement or any other Reimbursement 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 Guaranty by the Fund Guarantors regardless of any investigation made by the Secured Parties or on their behalf, and shall continue in full force and effect as long as the principal of or any accrued interest on any Reimbursement or any other fee or amount payable under this Agreement or any other Reimbursement Document is outstanding and unpaid and as long as the Guaranty has not been terminated. (b) In the event any one or more of the provisions contained in this Agreement or in any other Reimbursement Document should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and therein 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 17. Counterparts. This Agreement may be executed in 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 11. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually executed counterpart of this Agreement. SECTION 18. Rules of Interpretation. The rules of interpretation specified in Section 1.02 of the Reimbursement Agreement shall be applicable to this Agreement. SECTION 19. Jurisdiction; Consent to Service of Process. (a) Each 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 Reimbursement 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 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 Reimbursement Documents against any Guarantor or its properties in the courts of any jurisdiction. (b) Each 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 Reimbursement 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 20. 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 THE OTHER REIMBURSEMENT 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 REIMBURSEMENT DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 20. SECTION 21. Limitation on Guaranteed Amounts. Anything contained in this Agreement to the contrary notwithstanding, the obligation of each Guarantor hereunder shall be limited to a maximum aggregate amount equal to the greatest amount that would not render such Guarantor's 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 22. Additional Guarantors. Pursuant to Section 5.10 of the Reimbursement Agreement, each Subsidiary Reimbursement Party that was not in existence or not a Subsidiary Reimbursement Party on the date of the Reimbursement Agreement is required to enter into this Agreement as a Guarantor upon becoming a Subsidiary Reimbursement Party. Upon execution and delivery after the date hereof by the Collateral Agent and such a Subsidiary of an instrument in the form of Annex 1, 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. SECTION 23. Successor Guarantors. Any Person may merge with any Guarantor in a transaction in which the surviving entity is a Subsidiary of the Borrower; provided that if the surviving entity is not the 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 Reimbursement Documents (or counterparts or supplements thereto), executed and delivered to the Collateral Agent (in form reasonably satisfactory to the Collateral Agent, as applicable) all the obligations of such Guarantor under this Amended and Restated Guarantee Agreement and the other applicable Reimbursement Documents; and further provided that prior to the consummation of such transaction, the Borrower must provide the Collateral Agent with an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer complies with the Reimbursement Documents. SECTION 24. Right of Setoff. If an Event of Default shall have occurred and be continuing, each Secured Party is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other Indebtedness at any time owing by such Secured Party to or for the credit or the account of any Guarantor against any or all the obligations of such Guarantor then existing under this Agreement and the other Reimbursement Documents held by such Secured Party, irrespective of whether or not such Secured Party shall have made any demand under this Agreement or any other Reimbursement Document. The rights of each Secured Party under this Section 24 are in addition to other rights and remedies (including any other rights of setoff) which such Secured Party may have. 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 -------------------------------- Name: James M. Stolze Title: Executive Vice President, Chief Financial Officer By -------------------------------- Name: Kenneth L. Young Title: Treasurer EACH OF THE OTHER SUBSIDIARIES LISTED ON SCHEDULE I HERETO, By -------------------------------- Name: Kenneth L. Young, in his capacity as Treasurer for each of the other Subsidiaries listed on Schedule I hereto CITICORP USA, INC., as Collateral Agent By -------------------------------- Name: Edward T. Crook Title: Managing Director and Vice President Schedule I to the Amended and Restated Guarantee Agreement GUARANTORS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Annex 1 to the Amended and Restated Guarantee Agreement SUPPLEMENT NO. [ ] dated as of [ ], to the Amended and Restated Guarantee Agreement dated as of December 21, 2001, among MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation ("Borrower"), each of the subsidiaries listed on Schedule I thereto (each such subsidiary, individually, a "Subsidiary" or a "Guarantor" and, collectively, the "Subsidiaries" or "Guarantors") and CITICORP USA, INC., as collateral agent (the "Collateral Agent") for the Secured Parties (as defined in the Amended and Restated Security Agreement). A. Reference is made to the Reimbursement Agreement dated as of December 21, 2001 (as amended, supplemented or otherwise modified from time to time, the "Reimbursement Agreement"), among the Borrower, the Fund Guarantors and CITICORP USA, INC. as collateral agent (in such capacity, the "Collateral Agent"). B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Amended and Restated Guarantee Agreement and the Reimbursement Agreement. C. The Guarantors have entered into the Amended and Restated Guarantee Agreement in order to induce the Fund Guarantors to guarantee the obligation of the Borrower under the Revolving Credit Agreement. Pursuant to Section 5.10 of the Reimbursement Agreement, each Subsidiary Reimbursement Party that was not in existence or not a Subsidiary Reimbursement Party on the date of the Reimbursement Agreement is required to enter into the Amended and Restated Guarantee Agreement as a Guarantor upon becoming a Subsidiary Reimbursement Party. Section 22 of the Amended and Restated Guarantee Agreement provides that additional Subsidiaries may become Guarantors under the Amended and Restated Guarantee 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 Reimbursement Agreement to become a Guarantor under the Guarantee Agreement in order to induce the Fund Guarantors to make additional guarantees and as consideration for guarantees previously made. Accordingly, the Collateral Agent and the New Guarantor agree as follows: SECTION 1. In accordance with Section 22 of the Amended and Restated Guarantee Agreement, the New Guarantor by its signature below becomes a Guarantor under the Amended and Restated Guarantee 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 Amended and Restated Guarantee 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 Amended and Restated Guarantee Agreement shall be deemed to include the New Guarantor. The Amended and Restated Guarantee Agreement is hereby incorporated herein by reference. SECTION 2. The New Guarantor represents and warrants to the Collateral Agent and the other Secured Parties 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 may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Collateral Agent shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Guarantor and the Collateral Agent. 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 Amended and Restated Guarantee 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. SECTION 6. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Amended and Restated Guarantee Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision hereof in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties hereto 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. All communications and notices hereunder shall be in writing and given as provided in Section 14 of the Amended and Restated Guarantee Agreement. All communications and notices hereunder to the New Guarantor shall be given to it at the address set forth under its signature below, with a copy to the Borrower. SECTION 8. The New Guarantor agrees to reimburse the Collateral Agent for its out-of-pocket expenses in connection with this Supplement, including the reasonable fees, disbursements and other charges of counsel for the Collateral Agent. IN WITNESS WHEREOF, the New Guarantor and the Collateral Agent have duly executed this Supplement to the Amended and Restated Guarantee Agreement as of the day and year first above written. [NAME OF NEW GUARANTOR], By ------------------------------- Name: Title: Address: CITICORP USA, INC., as Collateral Agent, By ------------------------------- Name: Title: Exhibit B AMENDED AND RESTATED INDEMNITY, SUBROGATION AND CONTRIBUTION AGREEMENT THIS AMENDED AND RESTATED INDEMNITY, SUBROGATION and CONTRIBUTION AGREEMENT (this "Agreement"), dated as of December 21, 2001, is made 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" and or a "Guarantor" and, collectively, the "Guarantors") and CITICORP USA, INC. as collateral agent (in such capacity, the "Collateral Agent") for the Secured Parties (as defined in the Amended and Restated Security Agreement). Unless the context otherwise requires, all capitalized terms used but not defined herein shall have the meanings set forth in the Reimbursement Agreement. W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Guarantors and the Collateral Agent are parties to that certain indemnity, subrogation and contribution agreement, dated as of November 13, 2001, which set forth the rights of indemnity, subrogation and contribution of the Borrower and the Guarantors in connection with the guarantee of the Borrower's obligations under a revolving credit agreement, dated as of November 13, 2001, among the Borrower, the lenders party thereto, and Citicorp USA, Inc., as administrative agent and collateral agent. WHEREAS, the Borrower, contemporaneously herewith, is entering into the Revolving Credit Agreement, dated as of December 21, 2001(as such agreement may be further amended, restated, modified or supplemented at any time and from time to time hereafter, the "Revolving Credit Agreement"), with the lenders party thereto (the "Lenders") and Citicorp USA, Inc. as administrative agent (in such capacity, the "Administrative Agent"), pursuant to which the Lenders will provide the Borrower with a revolving credit facility in an initial aggregate amount not to exceed U.S. $150,000,000; WHEREAS, contemporaneously herewith, the TPG Guarantor is entering into the TPG Guaranty, the TCW Guarantors are entering into the TCW Guaranty and the GEI Guarantors are entering into the GEI Guaranty (together with the TPG Guaranty and the TCW Guaranty, the "Guaranty") each dated as of December 21, 2001 with the Administrative Agent, pursuant to which the Fund Guarantors will guarantee the obligations of the Borrower under the Revolving Credit Agreement; WHEREAS, the Borrower is, contemporaneously herewith, entering into a Reimbursement Agreement, dated as of December 21, 2001 (as such agreement may be further amended, restated, modified or supplemented at any time and from time to time hereafter, the "Reimbursement Agreement"), with the Fund Guarantors and the Collateral Agent, pursuant to which the Borrower agrees to reimburse the Fund Guarantors for any and all payments made by the Fund Guarantors under the Guaranty; WHEREAS, to induce the Fund Guarantors to enter into the Guaranty, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, (a) each of the Guarantors agrees to grant to the Collateral Agent, for the ratable benefit of the Secured Parties, the Security Interests (as defined herein) in the Collateral to secure the obligations of the Borrower under the Reimbursement Agreement, and (b) each of the Guarantors agrees to guarantee the obligations of the Borrower under the Reimbursement Agreement; WHEREAS, the Guarantors have guaranteed the Reimbursement Obligations (as defined in the Amended and Restated Guarantee Agreement) pursuant to the Amended and Restated Guarantee Agreement, and the Guarantors have granted Liens on and security interests in certain of their assets to secure such guarantees pursuant to (a) the Amended and Restated Pledge Agreement and (b) the Amended and Restated Security Agreement; and WHEREAS, the obligations of the Fund Guarantors under the Guaranty are conditioned on, among other things, the execution and delivery by the Borrower and the Guarantors of an agreement in the form hereof; NOW, THEREFORE, in consideration of the benefits accruing to the Guarantors, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: SECTION 1. Indemnity and Subrogation. In addition to all such rights of indemnity and subrogation as the Guarantors may have under applicable law (but subject to Section 3), the Borrower agrees that (a) in the event a payment shall be made by any Guarantor under the Amended and Restated Guarantee Agreement, the Borrower shall indemnify such Guarantor for the full amount of such payment and such Guarantor shall be subrogated to the rights of the Person to whom such payment shall have been made to the extent of such payment and (b) in the event any assets of any Guarantor shall be sold pursuant to any Security Document to satisfy a claim of any Secured Party, the Borrower shall indemnify such Guarantor in an amount equal to the greater of the book value or the fair market value of the assets so sold. SECTION 2. Contribution and Subrogation. Each Guarantor (a "Contributing Guarantor") agrees (subject to Section 3) that, in the event a payment shall be made by any other Guarantor under the Amended and Restated Guarantee Agreement or assets of any other Guarantor shall be sold pursuant to any Security Document to satisfy a claim of any Secured Party and such other Guarantor (the "Claiming Guarantor") shall not have been fully indemnified by the Borrower as provided in Section 1, the Contributing Guarantor shall indemnify the Claiming Guarantor in an amount equal to the amount of such payment or the greater of the book value or the fair market value of such assets, as the case may be, in each case multiplied by a fraction of which the numerator shall be the net worth of the Contributing Guarantor on the date hereof and the denominator shall be the aggregate net worth of all the Guarantors on the date hereof (or, in the case of any Guarantor becoming a party hereto pursuant to Section 12, the date of the Supplement hereto executed and delivered by such Guarantor). Any Contributing Guarantor making any payment to a Claiming Guarantor pursuant to this Section 2 shall be subrogated to the rights of such Claiming Guarantor under Section 1 to the extent of such payment. SECTION 3. Subordination. Notwithstanding any provision of this Agreement to the contrary, all rights of each of the Guarantors under Sections 1 and 2 and all other rights of each of the Guarantors in respect of indemnity, contribution or subrogation from any other Reimbursement Party under applicable law or otherwise shall be fully subordinated to the indefeasible payment in full in cash of all Reimbursement Obligations which are then due and payable whether at maturity, by acceleration or otherwise. No failure on the part of the Borrower or any Guarantor to make the payments required by Sections 1 and 2 (or any other payments required under applicable law or otherwise) shall in any respect limit the obligations and liabilities of any Guarantor with respect to its obligations hereunder, and each Guarantor shall remain liable for the full amount of the obligations of such Guarantor hereunder. SECTION 4. Termination. This Agreement shall survive and be in full force and effect so long as any Reimbursement Obligation is outstanding and has not been indefeasibly paid in full in cash and the Guaranty and the Reimbursement Agreement have not been terminated, and shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Reimbursement Obligation is rescinded or must otherwise be restored by any Secured Party or any Guarantor upon the bankruptcy or reorganization of the Borrower, any Guarantor or otherwise. SECTION 5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 6. No Waiver; Amendment. (a) No failure on the part of the Collateral Agent or any Guarantor to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy by the Collateral Agent or any Guarantor preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All remedies hereunder are cumulative and are not exclusive of any other remedies provided by law. None of the Collateral Agent and the Guarantors shall be deemed to have waived any rights hereunder unless such waiver shall be in writing and signed by such parties. (b) Neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to a written agreement entered into between the Borrower, the Guarantors and the Collateral Agent, subject to any consent required in accordance with Section 8.09 of the Reimbursement Agreement. SECTION 7. Intercreditor Agreement. Notwithstanding anything to the contrary contained in this Agreement, all rights, obligations and remedies of the Collateral Agent set forth in this Agreement and any other Security Document shall be subject to the provisions set forth in the Intercreditor Agreement. SECTION 8. Notices. All communications and notices hereunder shall be in writing and given as provided in the Amended and Restated Guarantee Agreement and addressed as specified therein. SECTION 9. Binding 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 the parties that are contained in this Agreement shall bind and inure to the benefit of their respective successors and assigns. Neither the Borrower nor any Guarantor may assign or transfer any of its rights or obligations hereunder (and any such attempted assignment or transfer shall be void) without the consent required in accordance with Section 8.09 of the Reimbursement Agreement. Notwithstanding the foregoing, at the time any Guarantor is released from its obligations under the Amended and Restated Guarantee Agreement in accordance with such Amended and Restated Guarantee Agreement and the Reimbursement Agreement, such Guarantor will cease to have any rights or obligations under this Agreement. SECTION 10. Survival of Agreement; Severability. (a) All covenants and agreements made by the Borrower and each Guarantor herein and in the certificates or other instruments prepared or delivered in connection with this Agreement or the other Reimbursement Documents shall be considered to have been relied upon by the Collateral Agent, the other Secured Parties and each Guarantor and shall survive the making of Guaranty by the Fund Guarantors and shall continue in full force and effect as long as the principal of or any accrued interest on any Guarantee Amounts or any other fee or amount payable under the Reimbursement Agreement or this Agreement or under any of the other Reimbursement Documents is outstanding and unpaid and as long as the Guaranty has not been terminated. (b) In case any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, no party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but 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 11. Counterparts. 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 shall be effective with respect to any Guarantor when a counterpart bearing the signature of such Guarantor shall have been delivered to the Collateral Agent. Delivery of an executed signature page to this Agreement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Agreement. SECTION 12. Rules of Interpretation. The rules of interpretation specified in Section 1.02 of the Reimbursement Agreement shall be applicable to this Agreement. SECTION 13. Additional Guarantors. Pursuant to Section 5.10 of the Reimbursement Agreement, each Subsidiary Reimbursement Party that was not in existence or not a Subsidiary Reimbursement Party on the date of the Reimbursement Agreement is required to enter into the Amended and Restated Guarantee Agreement as a Guarantor upon becoming a Subsidiary Reimbursement Party. Upon execution and delivery, after the date hereof, by the Collateral Agent and such a Subsidiary of an instrument in the form of Annex 1 hereto, such Subsidiary shall become a Guarantor hereunder with the same force and effect as if originally named as a Guarantor hereunder. The execution and delivery of any instrument adding an additional Guarantor as a party to this Agreement shall not require the consent of any 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 Agreement to be executed by their duly authorized officers as of the date first appearing above. MEMC ELECTRONIC MATERIALS, INC. By -------------------------------- Name: James M. Stolze Title: Executive Vice President, Chief Financial Officer By -------------------------------- Name: Kenneth L. Young Title Treasurer EACH OF THE OTHER SUBSIDIARIES LISTED ON SCHEDULE I HERETO, By -------------------------------- Name: Kenneth L. Young, in his capacity as Treasurer for each of the other Subsidiaries listed on Schedule I hereto CITICORP USA, INC., as Collateral Agent By -------------------------------- Name: Edward T. Crook Title: Managing Director and Vice President Schedule I to the Amended and Restated Indemnity, Subrogation and Contribution Agreement GUARANTOR Name Address ---- ------- Annex 1 to the Amended and Restated Indemnity, Subrogation and Contribution Agreement SUPPLEMENT NO. [ ] dated as of [ ], to the Amended and Restated Indemnity, Subrogation and Contribution Agreement dated as of December 21, 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 "Guarantors") and CITICORP USA, INC., as collateral agent (in such capacity, the "Collateral Agent") for the Secured Parties (as defined in the Amended and Restated Security Agreement). A. Reference is made to (a) the Reimbursement Agreement dated as of December 21, 2001 (as amended, supplemented or otherwise modified from time to time, the "Reimbursement Agreement"), among the Borrower, the Fund Guarantors and CITICORP USA, INC. as collateral agent (in such capacity, the "Collateral Agent") and (b) the Amended and Restated Guarantee Agreement. B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Amended and Restated Indemnity, Subrogation and Contribution Agreement and the Reimbursement Agreement. C. The Borrower and the Guarantors have entered into the Amended and Restated Indemnity, Subrogation and Contribution Agreement in order to induce the Fund Guarantors to enter into the Guaranty. Pursuant to Section 5.10 of the Reimbursement Agreement, each Subsidiary Reimbursement Party that was not in existence or not a Subsidiary Reimbursement Party on the date of the Revolving Credit Agreement is required to enter into the Indemnity, Subrogation and Contribution Agreement as a Guarantor upon becoming a Subsidiary Reimbursement Party. Section 13 of the Amended and Restated Indemnity, Subrogation and Contribution Agreement provides that additional Subsidiaries may become Guarantors under the Amended and Restated Indemnity, Subrogation and Contribution 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 Reimbursement Agreement to become a Guarantor under the Amended and Restated Indemnity, Subrogation and Contribution Agreement in order to induce the Fund Guarantors to make additional guarantees and as consideration for guarantees previously made. Accordingly, the Collateral Agent and the New Guarantor agree as follows: SECTION 1. In accordance with Section 13 of the Amended and Restated Indemnity, Subrogation and Contribution Agreement, the New Guarantor by its signature below becomes a Guarantor under the Amended and Restated Indemnity, Subrogation and Contribution Agreement with the same force and effect as if originally named therein as a Guarantor and the New Guarantor hereby agrees to all the terms and provisions of the Amended and Restated Indemnity, Subrogation and Contribution Agreement applicable to it as a Guarantor thereunder. Each reference to a "Guarantor" in the Amended and Restated Indemnity, Subrogation and Contribution Agreement shall be deemed to include the New Guarantor. The Amended and Restated Indemnity, Subrogation and Contribution Agreement is hereby incorporated herein by reference. SECTION 2. The New Guarantor represents and warrants to the Collateral Agent and the other Secured Parties 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 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 Supplement shall become effective when the Collateral Agent shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Guarantor and the Collateral Agent. Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement. SECTION 4. Except as expressly supplemented hereby, the Amended and Restated Indemnity, Subrogation and Contribution 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. SECTION 6. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, neither party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Amended and Restated Indemnity, Subrogation and Contribution Agreement shall not in any way be affected or impaired (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 hereto 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. All communications and notices hereunder shall be in writing and given as provided in Section 7 of the Amended and Restated Indemnity, Subrogation and Contribution Agreement. All communications and notices hereunder to the New Guarantor shall be given to it at the address set forth under its signature below, with a copy to the Borrower. SECTION 8. The New Guarantor agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Collateral Agent. IN WITNESS WHEREOF, the New Guarantor and the Collateral Agent have duly executed this Supplement to the Amended and Restated Indemnity, Subrogation and Contribution Agreement as of the day and year first above written. [NAME OF NEW GUARANTOR], By -------------------------------- Name: Title: CITICORP USA, INC., as Collateral Agent By -------------------------------- Name: Title: Schedule I to Supplement No. [ ] to the Amended and Restated Indemnity, Subrogation and Contribution Agreement GUARANTOR Name Address ---- ------- Exhibit C AMENDED AND RESTATED PLEDGE AGREEMENT THIS AMENDED AND RESTATED PLEDGE AGREEMENT, dated as of December 21, 2001, is made 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 Amended and Restated Security Agreement). Unless the context otherwise requires, all capitalized terms used but not defined herein shall have the meanings set forth in the Reimbursement Agreement. W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Pledgors and the Collateral Agent are parties to that certain pledge agreement, dated as of November 13, 2001, pursuant to which the pledgors agreed to pledge and grant to the Collateral Agent a security interest in the Collateral to secure the Borrower's obligations under a revolving credit agreement, dated as of November 13, 2001, among the Borrower, the lenders party thereto, and Citicorp USA, Inc., as administrative agent and collateral agent. WHEREAS, the Borrower, contemporaneously herewith, is entering into the Revolving Credit Agreement, dated as of December 21, 2001(as such agreement may be further amended, restated, modified or supplemented at any time and from time to time hereafter, the "Revolving Credit Agreement"), with the lenders party thereto (the "Lenders") and Citicorp USA, Inc. as administrative agent (in such capacity, the "Administrative Agent"), pursuant to which the Lenders will provide the Borrower with a revolving credit facility in an initial aggregate amount not to exceed U.S. $150,000,000; WHEREAS, contemporaneously herewith, the TPG Guarantor is entering into the TPG Guaranty, the TCW Guarantors are entering into the TCW Guaranty and the GEI Guarantors are entering into the GEI Guaranty (together with the TPG Guaranty and the TCW Guaranty, the "Guaranty") each dated as of December 21, 2001 with the Administrative Agent, pursuant to which the Fund Guarantors will guarantee the obligations of the Borrower under the Revolving Credit Agreement; WHEREAS, the Borrower is, contemporaneously herewith, entering into a Reimbursement Agreement, dated as of December 21, 2001, with the Fund Guarantors and the Collateral Agent, pursuant to which the Borrower agrees to reimburse the Fund Guarantors for any and all payments made by the Fund Guarantors under the Guaranty; and WHEREAS, to induce the Fund Guarantors to enter into the Guaranty, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the Pledgors desires to pledge and grant to the Collateral Agent, for the ratable benefit of the Secured Parties, the Pledged Interests (as defined herein) in the Collateral to secure the obligations of the Borrower under the Reimbursement Agreement; NOW, THEREFORE, in consideration of the benefits accruing to the Grantors, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: Grant of Security Interest The Borrower has agreed, upon the terms specified in the Reimbursement Agreement, to reimburse the Fund Guarantors for any and all amounts paid by the Fund Guarantors under the Guaranty. The Pledgors have agreed to guarantee, among other things, all the obligations of the Borrower under the Reimbursement Agreement. The willingness of the Fund Guarantors to deliver the Guaranty is conditioned upon, among other things, the execution and delivery by the Pledgors of an Amended and Restated Pledge Agreement in the form hereof to secure (a) the due and punctual payment of (i) all Guarantee Amounts (as defined in the Reimbursement Agreement) 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) thereon, 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 Reimbursement Parties to the Secured Parties under the Reimbursement Agreement and the other Reimbursement Documents, (b) the due and punctual performance of all covenants, agreements, obligations and liabilities of the Reimbursement Parties under or pursuant to the Reimbursement Agreement and the other Reimbursement Documents, (c) unless otherwise agreed to in writing by the applicable Fund Guarantor thereto, the due and punctual payment and performance of all obligations of the Borrower or any other Reimbursement Party, monetary or otherwise, under each Hedging Agreement entered into with a counterparty that was a Fund Guarantor (or an Affiliate of a Fund Guarantor) 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 "Reimbursement 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 further agree as follows: SECTION 1. Pledge. As security for the payment and performance, as the case may be, in full of the Reimbursement 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 Reimbursement 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 Reimbursement Agreement and the other Reimbursement 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 Reimbursement Agreement or any other Reimbursement 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 Reimbursement Agreement, the other Reimbursement 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 Fund Guarantors, 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 Reimbursement 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 Reimbursement 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 Collateral Agent (in its capacity as such hereunder or under any other Reimbursement Document) in connection with such collection or sale or otherwise in connection with this Agreement or any of the Reimbursement 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 Reimbursement 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 Reimbursement Document; SECOND, to the payment in full of the Reimbursement Obligations and the Revolving Credit Obligations in accordance with Section 5.04 of the Intercreditor Agreement (the amounts so applied to be distributed among the secured parties pro rata in accordance with the amounts of the Reimbursement Obligations and/or Revolving Credit 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 Reimbursement Documents, each Pledgor agrees to indemnify the Collateral Agent and the Indemnitees (as defined in Section 8.11 of the Reimbursement 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 Reimbursement 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 Reimbursement 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 Reimbursement Obligations, the invalidity or unenforceability of any term or provision of this Agreement or any other Reimbursement 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 Reimbursement 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 8.09 of the Reimbursement 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. Intercreditor Agreement. Notwithstanding anything to the contrary contained in this Agreement, all rights, obligations and remedies of the Collateral Agent set forth in this Agreement and any other Security Documents shall be subject to the provisions set forth in the Intercreditor Agreement. 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 hereunder, shall be absolute and unconditional irrespective of (a) any lack of validity or enforceability of the Reimbursement Agreement, any other Reimbursement Document, any agreement with respect to any of the Reimbursement 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 Reimbursement Obligations, or any other amendment or waiver of or any consent to any departure from the Reimbursement Agreement, any other Reimbursement 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 Reimbursement Obligations or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Pledgor in respect of the Reimbursement Obligations or in respect of this Agreement (other than the indefeasible payment in full of all the Reimbursement Obligations). SECTION 15. Termination or Release. (a) This Agreement and the security interests granted hereby shall terminate when all the Reimbursement Obligations have been indefeasibly paid in full and the Fund Guarantors have no further obligations under the Guaranty. (b) Upon any sale or other transfer by any Pledgor of any Collateral that is permitted under the Reimbursement 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 8.09 of the Reimbursement 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 18, 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 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 8.03 of the Reimbursement 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 17. 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 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 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 Reimbursement Documents. In the event that a Pledgor ceases to be a Subsidiary pursuant to a transaction permitted under the Reimbursement 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 19. 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 Reimbursement 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 Guaranty by the Fund Guarantors 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 Reimbursement 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 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 interpretation specified in Section 1.02 of the Reimbursement 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 23. 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 Reimbursement 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 Reimbursement 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 Reimbursement 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 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 26. Additional Pledgors. Pursuant to Section 5.10 of the Reimbursement Agreement, each Subsidiary Reimbursement Party that was not in existence or not a Subsidiary Reimbursement Party on the date of the Reimbursement Agreement is required to enter into this Agreement as a Subsidiary Pledgor upon becoming a Subsidiary Reimbursement 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 ----------------------------- Name: James M. Stolze Title: Executive Vice President, Chief Financial Officer By ----------------------------- Name: Kenneth L. Young Title: Treasurer EACH OF THE OTHER SUBSIDIARIES LISTED ON SCHEDULE I HERETO, By ----------------------------- Name: Kenneth L. Young, in his capacity as Treasurer for each of the other Subsidiaries listed on Schedule I hereto CITICORP USA, INC., as Collateral Agent By ----------------------------- Name: Edward T. Crook Title: Managing Director and Vice President Schedule I to the Amended and Restated Pledge Agreement SUBSIDIARY PLEDGORS Name Address ---- ------- 1. 2. 3. 4. 5. 6. Schedule II to the Amended and Restated Pledge Agreement CAPITAL STOCK OR OTHER EQUITY INTERESTS Number and Percentage Class of Of Shares Shares or Other or Other Number of Registered Equity Equity Issuer Certificate Owner Interests Interests - ------ ----------- ----- --------- --------- DEBT SECURITIES Principal Issuer Amount Date of Note Maturity Date - ------ ------ ------------ ------------- Annex 1 to the Amended and Restated Pledge Agreement SUPPLEMENT NO. [ ] dated as of [ ] to The Amended and Restated Pledge Agreement dated as of December 21, 2001, among MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation "Borrower"), each subsidiary of Borrower listed on Schedule I thereto (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 Amended and Restated Security Agreement). A. Reference is made to (a) the Reimbursement Agreement dated as of December 21, 2001 (as amended, supplemented or otherwise modified from time to time, the "Reimbursement Agreement"), among the Borrower, the Fund Guarantors and CITICORP USA, INC. as collateral agent (in such capacity, the "Collateral Agent") and (b) the Amended and Restated Guarantee Agreement dated as of December 21, 2001 (as amended, supplemented or otherwise modified from time to time, the "Amended and Restated Guarantee Agreement") among the Subsidiary Pledgors and the Collateral Agent. B. Capitalized terms used herein and not defined herein shall have meanings assigned to such terms in the Reimbursement Agreement. C. The Pledgors have entered into the Amended and Restated Pledge Agreement in order to induce the Fund Guarantors to guarantee the Borrower's obligations under the Revolving Credit Agreement. Pursuant to Section 5.10 of the Reimbursement Agreement, each Subsidiary Reimbursement Party that was not in existence or not a Subsidiary Reimbursement Party on the date of the Reimbursement Agreement is required to enter into the Amended and Restated Pledge Agreement as a Subsidiary Pledgor upon becoming a Subsidiary Reimbursement Party. Section 26 of the Amended and Restated Pledge Agreement provides that such Subsidiaries may become Subsidiary Pledgors under the Amended and Restated Pledge Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned Subsidiary (the "New Pledgor") is executing this Supplement in accordance with the requirements of the Reimbursement Agreement to become a Subsidiary Pledgor under the Amended and Restated Pledge Agreement in order to induce the Fund Guarantors to make additional guarantees and as consideration for the guarantees previously made. Accordingly, the Collateral Agent and the New Pledgor agree as follows: SECTION 1. In accordance with Section 26 of the Amended and Restated Pledge Agreement, the New Pledgor by its signature below becomes a Pledgor under the Amended and Restated Pledge Agreement with the same force and effect as if originally named therein as a Pledgor and the New Pledgor hereby agrees (a) to all the terms and provisions of the Amended and Restated Pledge Agreement applicable to it as a Pledgor thereunder and (b) represents and warrants that the representations and warranties made by it as a Pledgor 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. In furtherance of the foregoing, the New Pledgor, as security for the payment and performance in full of the Reimbursement Obligations (as defined in the Pledge Agreement), does hereby create and grant to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, their successors and assigns, a security interest in and lien on all of the New Pledgor's right, title and interest in and to the Collateral (as defined in the Pledge Agreement) of the New Pledgor. Each reference to a "Subsidiary Pledgor" or a "Pledgor" in the Pledge Agreement shall be deemed to include the New Pledgor. The Pledge Agreement is hereby incorporated herein by reference. SECTION 2. The New Pledgor represents and warrants to the Collateral Agent and the other Secured Parties 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 may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Collateral Agent shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Pledgor and the Collateral Agent. Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement. SECTION 4. The New Pledgor hereby represents and warrants that set forth on Schedule I attached hereto is a true and correct schedule of all its Pledged Securities. SECTION 5. Except as expressly supplemented hereby, the Amended and Restated Pledge Agreement shall remain in full force and effect. SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 7. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, neither party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Amended and Restated Pledge Agreement shall not in any way be affected or impaired (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 hereto 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 8. All communications and notices hereunder shall be in writing and given as provided in Section 15 of the Amended and Restated Pledge Agreement. All communications and notices hereunder to the New Pledgor shall be given to it at the address set forth under its signature hereto, below, with a copy to the Borrower. SECTION 9. The New Pledgor agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Collateral Agent. IN WITNESS WHEREOF, the New Pledgor and the Collateral Agent have duly executed this Supplement to the Amended and Restated Pledge Agreement as of the day and year first above written. [NAME OF NEW PLEDGOR], By ---------------------------------- Name: Title: Address: CITICORP USA, INC., as Collateral Agent, By ---------------------------------- Name: Title: Schedule I to Supplement No. [ ] to the Amended and Restated Pledge Agreement Pledged Securities of the New Pledgor CAPITAL STOCK OR OTHER EQUITY INTERESTS Number and Percentage Class of of Shares Shares or Other or Other Number of Registered Equity Equity Issuer Certificate Owner Interests Interests - ------ ----------- ----- --------- --------- DEBT SECURITIES Principal Issuer Amount Date of Note Maturity Date - ------ ------ ------------ ------------- Exhibit D AMENDED AND RESTATED SECURITY AGREEMENT THIS AMENDED AND RESTATED SECURITY AGREEMENT (this "Agreement"), dated as of December 21, 2001, is made among MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation (the "Borrower"), each subsidiary of the Borrower listed on Schedule I hereto (each such subsidiary individually a "Subsidiary" or "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). Unless the context otherwise requires, all capitalized terms used but not defined herein shall have the meanings set forth in the Reimbursement Agreement. W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Grantors and the Collateral Agent are parties to that certain security agreement, dated as of November 13, 2001, pursuant to which the Grantors agreed to grant to the Collateral Agent a security interest in the Collateral to secure the Borrower's obligations under a revolving credit agreement, dated as of November 13, 2001, among the Borrower, the lenders party thereto, and Citicorp USA, Inc., as administrative agent and collateral agent. WHEREAS, the Borrower, contemporaneously herewith, is entering into the Revolving Credit Agreement, dated as of December 21, 2001(as such agreement may be further amended, restated, modified or supplemented at any time and from time to time hereafter, the "Revolving Credit Agreement"), with the lenders party thereto (the "Lenders") and Citicorp USA, Inc. as administrative agent (in such capacity, the "Administrative Agent"), pursuant to which the Lenders will provide the Borrower with a revolving credit facility in an initial aggregate amount not to exceed U.S. $150,000,000; WHEREAS, contemporaneously herewith, the TPG Guarantor is entering into the TPG Guaranty, the TCW Guarantors are entering into the TCW Guaranty and the GEI Guarantors are entering into the GEI Guaranty (together with the TPG Guaranty and the TCW Guaranty, the "Guaranty") each dated as of December 21, 2001 with the Administrative Agent, pursuant to which the Fund Guarantors will guarantee the obligations of the Borrower under the Revolving Credit Agreement; WHEREAS, the Borrower is, contemporaneously herewith, entering into a Reimbursement Agreement, dated as of December 21, 2001 (as such agreement may be further amended, restated, modified or supplemented at any time and from time to time hereafter, the "Reimbursement Agreement"), with the Fund Guarantors and the Collateral Agent, pursuant to which the Borrower agrees to reimburse the Fund Guarantors for any and all payments made by the Fund Guarantors under the Guaranty; and WHEREAS, to induce the Fund Guarantors to enter into the Guaranty, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, (a) each of the Grantors agrees to grant to the Collateral Agent, for the ratable benefit of the Secured Parties, the Security Interests (as defined herein) in the Collateral to secure the obligations of the Borrower under the Reimbursement Agreement, and (b) each of the Guarantors agrees to guarantee, pursuant to the Amended and Restated Guarantee Agreement, dated as of December 21, 2001, among the Guarantors and the Collateral Agent, the obligations of the Borrower under the Reimbursement Agreement; NOW, THEREFORE, in consideration of the benefits accruing to the Grantors, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: GRANT OF SECURITY INTEREST The Borrower has agreed, on the terms specified in the Reimbursement Agreement, to reimburse the Fund Guarantors for any and all amounts paid by the Fund Guarantors under the Guaranty. Each of the Guarantors has agreed to guarantee, among other things, all the obligations of the Borrower under the Reimbursement Agreement. The willingness of the Fund Guarantors to deliver the Guaranty is 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) all Guarantee Amounts (as defined in the Reimbursement Agreement) 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) thereon, 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 Reimbursement Parties to the Secured Parties under the Reimbursement Agreement and the other Reimbursement Documents, (b) the due and punctual performance of all covenants, agreements, obligations and liabilities of the Reimbursement Parties under or pursuant to the Reimbursement Agreement and the other Reimbursement Documents, (c) unless otherwise agreed to in writing by the applicable Fund Guarantor thereto, the due and punctual payment and performance of all obligations of the Borrower or any other Reimbursement Party, monetary or otherwise, under each Hedging Agreement entered into with a counterparty that was a Fund Guarantor (or an Affiliate of a Fund Guarantor) 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 Collateral 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 "Reimbursement 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 further 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. "Reimbursement Agreement" has the meaning set forth in the recitals hereof. "Reimbursement Obligations" has the meaning assigned to such term in the preliminary statement of this Agreement. "Revolving Credit Agreement" has the meaning set forth in the recitals hereof. "Secured Parties" means (a) the Fund Guarantors, (b) the Collateral Agent, (c) each counterparty to a Hedging Agreement entered into with the Borrower or any Reimbursement Party if such counterparty was a Fund Guarantor (or an Affiliate of a Fund Guarantor) at the time the Hedging Agreement was entered into, (d) the beneficiaries of each indemnification obligation undertaken by any Grantor under any Reimbursement 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 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. "Securities 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 1.01 of the Reimbursement 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 Reimbursement 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 Reimbursement 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 8.12 of the Reimbursement 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 Reimbursement 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 Reimbursement 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 Reimbursement Agreement or any other Reimbursement 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 5.08 of the Reimbursement 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 Reimbursement 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 Reimbursement 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 Reimbursement 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 Reimbursement 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 Reimbursement 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 Collateral Agent (in its capacity as such hereunder or under any other Reimbursement Document) in connection with such collection or sale or otherwise in connection with this Agreement or any of the Reimbursement 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 Reimbursement 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 Reimbursement Document; SECOND, to the payment in full of the Reimbursement Obligations and the Revolving Credit Obligations in accordance with Section 5.04 of the Intercreditor Agreement (the amounts so applied to be distributed among the secured parties pro rata in accordance with the amounts of the Reimbursement Obligations and/or Revolving Credit 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 8.03 of the Reimbursement 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. Intercreditor Agreement. Notwithstanding anything to the contrary contained in this Security Agreement, all rights, obligations and remedies of the Collateral Agent set forth in this Agreement and any other Security Documents shall be subject to the provisions set forth in the Intercreditor Agreement SECTION 7.03. 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 Reimbursement Agreement, any other Reimbursement Document, any agreement with respect to any of the Reimbursement 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 Reimbursement Obligations, or any other amendment or waiver of or any consent to any departure from the Reimbursement Agreement, any other Reimbursement 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 Reimbursement Obligations, or (d) any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Grantor in respect of the Reimbursement Obligations or this Agreement. SECTION 7.04. 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 of the Guaranty by the Fund Guarantors, and the execution and delivery to the Fund Guarantors of any agreements, notes, instruments or documents evidencing such Guaranty, regardless of any investigation made by the Fund Guarantors or on their behalf, and shall continue in full force and effect until this Agreement shall terminate. SECTION 7.05. 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 Reimbursement 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 7.06. 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 7.07. 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 Reimbursement 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 Reimbursement Obligations secured hereby and by the other Security Documents. The provisions of this Section 7.07 shall remain operative and in full force and effect regardless of the termination of this Agreement or any other Reimbursement Document, the consummation of the transactions contemplated hereby, the repayment of any of the Guarantee Amounts, the invalidity or unenforceability of any term or provision of this Agreement or any other Reimbursement Document, or any investigation made by or on behalf of the Collateral Agent or any Fund Guarantors. All amounts due under this Section 7.07 shall be payable on written demand therefor. SECTION 7.08. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. SECTION 7.09. 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 and the Fund Guarantors under the other Reimbursement 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 Reimbursement 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 8.09 of the Reimbursement Agreement. SECTION 7.10. 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 RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER REIMBURSEMENT 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 REIMBURSEMENT DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.10. SECTION 7.11. 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 7.12. 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 7.13 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 7.05), and shall become effective as provided in Section 7.05. Delivery of an executed signature page to this Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. SECTION 7.14. 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 7.15. 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 Reimbursement 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 or any Fund Guarantor may otherwise have to bring any action or proceeding relating to this Agreement or the other Reimbursement 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 Reimbursement 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 7.16. Termination. This Agreement and the Security Interest shall terminate when all the Reimbursement Obligations have been indefeasibly paid in full and the Fund Guarantors have no further obligations under the Guaranty, 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 7.16 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 Reimbursement 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 7.17. Additional Grantors. Pursuant to Section 5.10 of the Reimbursement Agreement, each Subsidiary Reimbursement Party that was not in existence or not a Subsidiary Reimbursement Party on the date of the Reimbursement Agreement is required to enter into this Agreement as a Grantor upon becoming a Subsidiary Reimbursement 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 ------------------------------ Name: James M. Stolze Title: Executive Vice President, Chief Financial Officer By ------------------------------ Name: Kenneth L. Young Title: Treasurer EACH OF THE OTHER GUARANTORS LISTED ON SCHEDULE I HERETO, By ------------------------------ Name: Kenneth L. Young, in his capacity as Treasurer for each of the other Guarantors listed on Schedule I hereto CITICORP USA, INC., as Collateral Agent By ------------------------------ Name: Title: Schedule I to the Amended and Restated Security Agreement GUARANTORS Schedule II to the Amended and Restated Security Agreement COPYRIGHTS - -------------------------------------------------------------------------------- DOCKET DESCRIPTION MW# - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Schedule III to the Amended and Restated Security Agreement LICENSES TITLE OF AGREEMENT OR ITEM EFFECTIVE DATE -------------------------- -------------- Schedule IV to the Amended and Restated Security Agreement PATENTS - -------------------------------------------------------------------------------- DOCKET # TITLE FIRST INVENTOR - -------------------------------------------------------------------------------- Schedule V to the Amended and Restated Security Agreement TRADEMARKS - -------------------------------------------------------------------------------- TRADEMARK COUNTRIES STATUS - -------------------------------------------------------------------------------- Annex 1 to the Amended and Restated Security Agreement [Form of] PERFECTION CERTIFICATE Reference is made to (a) the Reimbursement Agreement, dated as of December 21, 2001 (as amended, supplemented or otherwise modified from time to time, the "Reimbursement Agreement"), among MEMC ELECTRONIC MATERIALS, INC. (the "Borrower"), the Fund Guarantors and CITICORP USA, INC., as collateral agent (in such capacity, the "Collateral Agent"), and (b) the Amended and Restated Security Agreement, dated as of December 21, 2001 (as amended, supplemented or otherwise modified from time to time, the "Amended and Restated Security Agreement") among the Grantors and the Collateral Agent. Capitalized terms used herein but not defined herein having the respective meanings set forth in the Reimbursement Agreement and the Amended and Restated Security Agreement. The undersigned, a Financial Officer of Borrower, hereby certify to the Collateral Agent and each other Secured Party as follows: 1. Names. (a) The exact corporate name and jurisdiction of organization of each Grantor, as such name appears in its respective certificate of incorporation, is as follows: (b) Set forth below is each other corporate name each Grantor has had in the past five years, together with the date of the relevant change: (c) Except as set forth in Schedule 1 hereto, no Grantor has changed its identity or corporate structure in any way within the past five years. Changes in identity or corporate structure would include mergers, consolidations and acquisitions, as well as any change in the form, nature or jurisdiction of corporate organization. If any such change has occurred, include in Schedule 1 the information required by Sections 1 and 2 of this certificate as to each acquiree or constituent party to a merger or consolidation. (d) The following is a list of all other names (including trade names or similar appellations) used by each Grantor or any of its divisions or other business units in connection with the conduct of its business or the ownership of its properties at any time during the past five years: (e) Set forth below is the Federal Taxpayer Identification Number of each Grantor: 2. Current Locations. (a) The chief executive office of each Grantor is located at the address set forth opposite its name below: Grantor Mailing Address County State - ------- --------------- ------ ----- (b) Set forth below opposite the name of each Grantor are all locations where such Grantor maintains any books or records relating to any Accounts Receivable, Instruments and Documents (with each location at which Chattel Paper, if any, is kept being indicated by an "*"): Grantor Mailing Address County State - ------- --------------- ------ ----- (c) Set forth below opposite the name of each Grantor are all the places of business of such Grantor not identified in paragraph (a) or (b) above: Grantor Mailing Address County State - ------- --------------- ------ ----- (d) Set forth below opposite the name of each Grantor are all the locations where such Grantor maintains any Collateral not identified above: Grantor Mailing Address County State - ------- --------------- ------ ----- (e) Set forth below opposite the name of each Grantor are the names and addresses of all Persons other than such Grantor that have possession of any of the Collateral of such Grantor: Grantor Mailing Address County State - ------- --------------- ------ ----- 3. Unusual Transactions. All Accounts Receivable have been originated by the Grantors and all Inventory has been acquired by the Grantors in the ordinary course of business. 4. UCC Filings. Financing statements in substantially the form of Schedule 4 hereto have been prepared for filing in the UCC filing office in each jurisdiction where a Grantor is organized as identified in Section 1 hereof and where any Collateral constituting fixtures is located as identified in Section 2 hereof. 5. Schedule of Filings. Attached hereto as Schedule 5 is a schedule setting forth, with respect to the ilings described in Section 4 above, each filing and the filing office in which such filing is to be made. 6. Filing Fees. All filing fees and taxes payable in connection with the filings described in Section 4 above have been paid or provided for. 7. Stock Ownership. Attached hereto as Schedule 7 is a true and correct list of all the duly authorized, issued and outstanding Equity Interests of each Subsidiary (including the Borrower) and the record and beneficial owners of such Equity Interests. Also set forth on Schedule 7 is each Equity Interest of the Borrower and each Subsidiary that represents 50% or less of the equity of the entity in which such investment was made. 8. Notes. Attached hereto as Schedule 8 is a true and correct list of all notes held by the Borrower and each Subsidiary and all intercompany notes between the Borrower and each Subsidiary and between each Subsidiary and each other such Subsidiary. 9. Advances. Attached hereto as Schedule 9 is (a) a true and correct list of all advances made by the Borrower to any Subsidiary or made by any Subsidiary to the Borrower or to any other Subsidiary, which advances will be on and after the date hereof evidenced by one or more intercompany notes pledged to the Collateral Agent under the Pledge Agreement and (b) a true and correct list of all unpaid intercompany transfers of goods sold and delivered by or to the Borrower or any Subsidiary. 10. Mortgage Filings. Attached hereto as Schedule 10 is a schedule setting forth, with respect to each Mortgaged Property, (i) the exact corporate name of the entity that owns such property as such name appears in its certificate of formation, (ii) if different from the name identified pursuant to clause (i), the exact name of the current record owner of such property reflected in the records of the filing office for such property identified pursuant to the following clause and (iii) the filing office in which a Mortgage with respect to such property must be filed or recorded in order for the Collateral Agent to obtain a perfected security interest therein. IN WITNESS WHEREOF, the undersigned have duly executed this certificate on this [ ]th day of December, 2001. MEMC ELECTRONIC MATERIALS, INC. By ------------------------------ Name: James M. Stolze Title: Executive Vice President, Chief Financial Officer Annex 3 to the Amended and Restated Security Agreement SUPPLEMENT NO. [ ] dated as of [ ], to the Amended and Restated Security Agreement dated as of December 21, 2001, among MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation (the "Borrower"), each subsidiary of Borrower listed on Schedule I thereto (each such subsidiary individually a "Subsidiary" or a "Guarantor" and, collectively, the "Subsidiaries" or "Guarantors"; the Guarantors and the 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). A. Reference is made to (a) the Reimbursement Agreement dated as of December 21, 2001 (as amended, supplemented or otherwise modified from time to time) among the Borrower, the Fund Guarantors and CITICORP USA, INC., as collateral agent (in such capacity, the "Collateral Agent") and (b) the Amended and Restated Guarantee Agreement dated as of December 21, 2001 (as amended, supplemented or otherwise modified from time to time, the "Amended and Restated Guarantee Agreement"), among the Guarantors and the Collateral Agent. B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Amended and Restated Security Agreement and the Reimbursement Agreement. C. The Grantors have entered into the Amended and Restated Security Agreement in order to induce the Fund Guarantors to guarantee the Borrower's obligations under the Revolving Credit Agreement. Pursuant to Section 5.10 of the Reimbursement Agreement, each Subsidiary Reimbursement Party that was not in existence or not a Subsidiary Reimbursement Party on the date of the Reimbursement Agreement is required to enter into this Agreement as a Grantor upon becoming a Subsidiary Reimbursement Party. Section 7.17 of the Amended and Restated Security Agreement provides that such Subsidiaries may become Grantors under the Amended and Restated Security Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned Subsidiary (the "New Grantor") is executing this Supplement in accordance with the requirements of the Reimbursement Agreement to become a Grantor under the Amended and Restated Security Agreement in order to induce the Fund Guarantors to make additional guarantees and as consideration for guarantees previously made. Accordingly, the Collateral Agent and the New Grantor agree as follows: SECTION 1. In accordance with Section 7.17 of the Amended and Restated Security Agreement, the New Grantor by its signature below becomes a Grantor under the Amended and Restated Security Agreement with the same force and effect as if originally named therein as a Grantor and the New Grantor hereby (a) agrees to all the terms and provisions of the Amended and Restated Security Agreement applicable to it as a Grantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Grantor 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. In furtherance of the foregoing, the New Grantor, as security for the payment and performance in full of the Reimbursement Obligations (as defined in the Amended and Restated Security Agreement), does hereby create and grant to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, their successors and assigns, a security interest in and lien on all of the New Grantor's right, title and interest in and to the Collateral of the New Grantor. Each reference to a "Grantor" in the Amended and Restated Security Agreement shall be deemed to include the New Grantor. The Amended and Restated Security Agreement is hereby incorporated herein by reference. SECTION 2. The New Grantor represents and warrants to the Collateral Agent and the other Secured Parties 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 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 Supplement shall become effective when the Collateral Agent shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Grantor and the Collateral Agent. Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement. SECTION 4. The New Grantor hereby represents and warrants that (a) set forth on Schedule I attached hereto is a true and correct statement of the exact corporate name and jurisdiction of organization of the New Grantor and a true and correct schedule of the location of any and all Collateral of the New Grantor and (b) set forth under its signature hereto, is the true and correct location of the chief executive office of the New Grantor. SECTION 5. Except as expressly supplemented hereby, the Amended and Restated Security Agreement shall remain in full force and effect. SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 7. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Amended and Restated Security Agreement 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 hereto 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 8. All communications and notices hereunder shall be in writing and given as provided in Section 7.01 of the Amended and Restated Security Agreement. All communications and notices hereunder to the New Grantor shall be given to it at the address set forth under its signature below, with a copy to the Borrower. SECTION 9. The New Grantor agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Collateral Agent. IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly executed this Supplement to the Amended and Restated Security Agreement as of the day and year first above written. [NAME OF NEW GUARANTOR], By ------------------------------- Name: Title: CITICORP USA, INC., as Collateral Agent By ------------------------------- Name: Title: Schedule I to Supplement No. [ ] to the Amended and Restated Security Agreement LOCATION OF COLLATERAL Description Location ----------- -------- EX-21 10 tpg_ex21.txt Exhibit 21 INTERCREDITOR AGREEMENT INTERCREDITOR AGREEMENT, dated as of December 21, 2001 (as amended, supplemented, amended and restated or otherwise modified from time to time, this "Agreement"), by and among (i) TPG PARTNERS III, L.P., TCW/CRESCENT MEZZANINE PARTNERS III, L.P., TCW/CRESCENT MEZZANINE TRUST III, GREEN EQUITY INVESTORS III, L.P. and GREEN EQUITY INVESTORS SIDE III, L.P., as fund guarantors under the Guaranty defined below (collectively, the "Fund Guarantors"), (ii) CITICORP USA, INC., as administrative agent (in such capacity, the "Administrative Agent"), acting on behalf of itself and for the other financial institutions (the "Lenders") that are or may from time to time become parties to the Revolving Credit Agreement, dated as of December 21, 2001 (as amended, supplemented, amended and restated or otherwise modified from time to time, the "Revolving Credit Agreement") by and among MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation (the "Borrower"), the Lenders and the Administrative Agent, and (iii) CITICORP USA, INC., as collateral agent under the Revolving Credit Security Documents and the Reimbursement Security Documents (each as defined below) (in such capacity, the "Collateral Agent"). W I T N E S S E T H WHEREAS, the Borrower, the Lenders and the Administrative Agent are parties to the Revolving Credit Agreement pursuant to which the Lenders will provide the Borrower with a revolving credit facility in an initial aggregate amount not to exceed U.S. $150,000,000; WHEREAS, the Collateral Agent, for the benefit of the secured parties under the Revolving Credit Security Documents (the "Revolving Credit Secured Parties"), holds certain liens and other security interests granted by the Borrower and the Subsidiary Loan Parties pursuant to the Loan Documents, as security for the obligations of the Borrower under the Revolving Credit Agreement and certain other documents entered into in connection therewith; WHEREAS, each of the Fund Guarantors has entered into a Guaranty (collectively, the "Guaranty") dated as of December 21, 2001 with the Administrative Agent, pursuant to which the Fund Guarantors have agreed to guarantee the obligations of the Borrower under the Revolving Credit Agreement on the terms set forth therein; WHEREAS, the Borrower has entered into a Reimbursement Agreement dated as of December 21, 2001, with the Fund Guarantors and the Collateral Agent (as amended, supplemented, amended and restated or otherwise modified from time to time, the "Reimbursement Agreement"), pursuant to which the Borrower agrees to reimburse the Fund Guarantors for any and all payments made under the Guaranty; WHEREAS, the Collateral Agent, for the benefit of the Fund Guarantors (the "Reimbursement Secured Parties"), holds certain liens and other security interests granted by the Borrower and the Subsidiary Reimbursement Parties pursuant to the Reimbursement Documentation, as security for the obligations of the Borrower under the Reimbursement Agreement and certain other documents entered into in connection therewith; WHEREAS, the obligations of the Borrower under the Revolving Credit Agreement and the Reimbursement Agreement rank senior to the Borrower's Senior Subordinated Secured Notes Due 2007, issued pursuant to the Indenture dated as of November 13, 2001 (as amended, restated, supplemented, otherwise modified or replaced from time to time, the "Indenture") by and among the Borrower, Citibank, N.A., as trustee (in such capacity, the "Trustee") and the Citicorp USA, Inc., as collateral agent for the secured parties under the Indenture; WHEREAS, in order to provide for the orderly administration of the Revolving Credit Agreement, the Reimbursement Agreement, the Guaranty and the obligations of the Borrower to the Secured Parties, to coordinate in giving notices, if any, to the Trustee under the Indenture and to coordinate the enforcement of the respective rights of the Secured Parties in the Collateral, the parties hereto wish to enter into this Agreement; NOW, THEREFORE, in consideration of the premises and mutual agreements hereinafter contained, the parties hereto agree as follows: ARTICLE I DEFINITIONS Section 1.01. Definitions. 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 following terms, as used in this Agreement, shall have the following meanings: "Agreement" means this Intercreditor Agreement. "Blockage Notice" has the meaning assigned to such term in the Indenture. "Collateral Proceeds" has the meaning assigned to such term in Section 5.04. "Decision Period" means, with respect to any decision to be made hereunder, the period designated in a notice delivered by the Collateral Agent pursuant to Section 4.01(a) or 5.02 subject to the following: (i) if the decision relates to a Default and there is no applicable cure period with respect to such Default or if the applicable cure period with respect to such Default has expired, or if the number of days remaining in the applicable cure period with respect to such Default is 29 or fewer, the Decision Period shall end not earlier than 5 days nor later than 10 days after the date of such notice, and (ii) if the decision relates to a Default and the number of days remaining in the applicable cure period with respect to such Default is 30 or more, the Decision Period shall end not earlier than 10 days after the date of such notice nor later than the end of such cure period; provided, that if in the judgment of the Collateral Agent the interests of the Secured Parties or any of them would likely be prejudiced by the observance of clause (i) or (ii) above, the Decision Period shall be such shorter period (but in any event no less than two (2) Business Days, unless otherwise agreed by the party instructing the Collateral Agent) as the Collateral Agent may designate. "Default" means any Reimbursement Default and/or any Revolving Credit Default. "Defaulting Guarantor" has the meaning assigned to such term in the Guaranty. "Event of Default" means any Reimbursement Event of Default and/or any Revolving Credit Event of Default. "Fund Guarantor Percentages" means the TPG Percentage, the TCW Percentage and the Green Percentage listed on Schedule I hereto, as such schedule may be amended from time to time. "Guarantor Default" has the meaning assigned to such term in the Guaranty. "Guaranteed Obligations" has the meaning assigned to such term in the Guaranty. "Indenture" has the meaning set forth in the recitals hereof. "Notice of Default" has the meaning assigned to such term in Section 5.01. "Non-Defaulting Guarantors" means, in the event of a Partial Guarantor Default, those Fund Guarantors, if any, that have satisfied their respective obligations under the Guaranty. "Non-Defaulting Payment" has the meaning assigned to such term in Section 5.04(b). "Partial Guarantor Default" means the occurrence of a Guarantor Default that is not a Total Guarantor Default. "Reimbursement Default" means any Default (as defined in the Reimbursement Agreement) under the Reimbursement Agreement. "Reimbursement Event of Default" means any Event of Default (as defined in the Reimbursement Agreement) under the Reimbursement Agreement. "Reimbursement Security Documents" means the Amended and Restated Security Agreement and the Amended and Restated Pledge Agreement in substantially the form attached as Exhibit D and Exhibit E, respectively, to the Reimbursement Agreement, and each other security agreement or other instrument or document executed and delivered to secure any of the Reimbursement Obligations. "Reimbursement Secured Parties" has the meaning set forth in the recitals hereof. "Revolving Credit Default" means any Default (as defined in the Revolving Credit Agreement) under the Revolving Credit Agreement. "Revolving Credit Event of Default" means any Event of Default (as defined in the Revolving Credit Agreement) under the Revolving Credit Agreement. "Revolving Credit Secured Parties" has the meaning set forth in the recitals hereof. "Revolving Credit Security Documents" means the Security Agreement, Pledge Agreement and each other security agreement or other instrument or document executed and delivered to secure any of the Revolving Credit Obligations. "Secured Parties" means, collectively, the Reimbursement Secured Parties and the Revolving Credit Secured Parties. "Security Documents" means, collectively, the Revolving Credit Security Documents and the Reimbursement Security Documents. "Total Guarantor Default" means the occurrence of a Guarantor Default by all Fund Guarantors under the Guaranty contemporaneously. "TPG Guarantor" has the meaning assigned to such term in the Reimbursement Agreement. "Transaction Documents" means the Reimbursement Documentation, the Loan Documents and the Guaranty. "Trustee" has the meaning assigned to such term in the recitals hereof. ARTICLE II COMMUNICATION Section 2.01. Sharing of Information. Each of the parties hereto shall use reasonable efforts to make available promptly to the other parties hereto any material information it receives pursuant to any Loan Document or any Reimbursement Documentation, as applicable, regarding (i) the operation and financial condition or business of the Borrower or any Related Party, (ii) the ability of the Borrower or any Subsidiary Loan Party or Subsidiary Reimbursement Party, as the case may be, to pay or perform under the Revolving Credit Obligations or the Reimbursement Obligations when due, (iii) the security interests granted by or pursuant to the Security Documents or the Reimbursement Documentation, (iv) the occurrence of a Guarantor Default or a Reimbursement Event of Default or a Revolving Credit Event of Default, or (v) any other matter regarding the Borrower or any Related Parties, the Revolving Credit Obligations or the Reimbursement Obligations which such party considers to be of common interest to the Fund Guarantors, the Administrative Agent, the Collateral Agent and the Lenders; provided, that (i) this Section 2.01 shall not require any Fund Guarantor or Lender to make available information which, in such party's reasonable judgment, is not of common interest to Fund Guarantors and the Lenders or is subject to confidentiality restrictions which prohibit such disclosure and (ii) no party hereto shall have any liability for any failure to make available to the other parties hereto such information or for any inaccuracy or incompleteness of any such information made available by it in good faith. Section 2.02. Enforcement and Other Notices. In the event (and at the time) that any party hereto issues any notice to the Collateral Agent, it shall send a copy of such notice to each other party hereto. Each Secured Party agrees that, if and when requested by another Secured Party, it will provide such information to such other Secured Party as may be necessary to enable such other Secured Party to make any calculation required under the Reimbursement Documentation or the Loan Documents (as the case may be); provided, that (i) this Section 2.02 shall not require any Fund Guarantor to make available information which, in such party's reasonable judgment, is not of common interest to the Fund Guarantors and the Lenders or is subject to confidentiality restrictions which prohibit such disclosure and (ii) neither the Fund Guarantors nor the Administrative Agent shall have any liability for any failure to make available to the other parties hereto such information or for any inaccuracy or incompleteness of any such information made available by it in good faith. Section 2.03. Notices to the Trustee under the Indenture. (a) The Fund Guarantors and the Lenders hereby appoint the Collateral Agent as their representative for the purpose of giving Blockage Notices or other notices, if any, to the Trustee under the Indenture. The parties hereto hereby agree that, in giving such notices, the Collateral Agent shall abide by instructions given pursuant to Section 5.03 of this Agreement. In the event (and at the time) that the Collateral Agent, acting in its capacity as a representative of the other parties hereunder, issues any notice to the Trustee under the Indenture, it shall send a copy of such notice to each other party hereto. (b) Notwithstanding the foregoing, the Fund Guarantors, acting by the written instruction of Fund Guarantors holding 50% or more of the Fund Guarantor Percentages, may appoint a person other than the Collateral Agent to act as their representative for the purpose of giving Blockage Notices or other notices, if any, to the Trustee under the Indenture. The parties hereto hereby agree that, in giving such notices, such representative shall abide by instructions given pursuant to Section 5.03 of this Agreement. In the event (and at the time) that such representative, acting in its capacity as a representative of the Fund Guarantors, issues any notice to the Trustee under the Indenture, it shall send a copy of such notice to each other party hereto. ARTICLE III NOTICE FOR CERTAIN ACTIONS The Administrative Agent (on behalf of itself and each of the Lenders) shall inform the Fund Guarantors promptly following its determination to take any of the following actions (it being understood that the provisions in this Article III shall not affect any of the provisions under Section 5 of the Guaranty): (a) the termination of all or any portion of the Commitments; (b) the occurrence of a Revolving Credit Event of Default; (c) the acceleration of the maturity of any Loan; (d) the commencement of proceedings to collect or enforce any or all of the Revolving Credit Obligations; (e) the giving of any waiver or consent by the Administrative Agent on behalf of the Lenders or the Required Lenders under any Loan Document; (f) any material amendment or modification of any Loan Document; and (g) the taking of any other action by the Administrative Agent or any Lender which the Administrative Agent in its good faith judgment believes would be of interest to the Fund Guarantors; and (h) the issuance of instructions to the Collateral Agent regarding the issuance of a Blockage Notice under the Indenture; provided that such instructions shall be issued by the Administrative Agent only when it is within the authority of the Administrative Agent to do so under Section 5.03. ARTICLE IV DECISIONMAKING Section 4.01. Decisionmaking in Respect of the Collateral Agent. (a) With respect to the matters covered by this Agreement, and notwithstanding any provision of any Loan Document or Reimbursement Documentation, (1) no Secured Party may exercise any right or power, enforce any remedy, give any direction, consent or waiver or make any determination, under or in respect of any provision of any Reimbursement Documentation or Loan Document (including the issuance of a Blockage Notice under the Indenture), except in accordance with this Agreement, and (2) the Collateral Agent shall not exercise any discretion conferred on it under any Reimbursement Documentation or Loan Document with respect to the exercise of any right or power, the enforcement of any remedy, the giving of any direction, consent or waiver or the making of any determination, under or in respect of any provision of any Reimbursement Documentation or Loan Document, except in accordance with this Agreement; provided, that: (i) subject to Section 4.01(b), if, at any time, the Collateral Agent proposes to exercise any discretion conferred on it under any Reimbursement Documentation or Loan Document, then the Collateral Agent shall promptly notify the Fund Guarantors of the matter in question, specifying: (A) the manner in which the Collateral Agent proposes to exercise its discretion, or the manner in which it is proposed that the Collateral Agent exercise its discretion, with respect to the matter in question; and (B) the Decision Period determined by the Collateral Agent within which the Fund Guarantors must provide the Collateral Agent with instructions with respect to the matter in question, and (ii) the Fund Guarantors shall provide a certificate to the Collateral Agent setting forth instructions for responding to each matter for which instructions are sought by the Collateral Agent under Section 4.01(a)(i) within the Decision Period therefor specified pursuant to Section 4.01(a)(i), which instructions shall be binding upon the Collateral Agent; provided, that if the Fund Guarantors fail to provide a certificate setting forth instructions for responding to any matter, the Collateral Agent shall not take any action in respect of such matter; provided further that for so long as the TPG Guarantor is a Non-Defaulting Guarantor, the TPG Guarantor shall act on behalf of the Fund Guarantors, and if the TPG Guarantor is a defaulting party, then the Non-Defaulting Guarantors (acting together, if there is more than one) shall act on behalf of the Fund Guarantors. (b) Notwithstanding anything to the contrary in this Agreement: (i) the Administrative Agent shall not, without the consent of the Fund Guarantors, have the right to consent or agree to amend, modify, terminate, change or waive any provision of any Loan Document; and (ii) the Fund Guarantors shall have the right in their sole discretion to consent or agree to amend, modify, terminate, change or waive any provision of the Reimbursement Documentation (including without limitation actions resulting in the release, sale or pledging of the Collateral). (c) Each decision made and each action taken by the Collateral Agent in accordance with the provisions of this Agreement shall be binding upon each of the Secured Parties. (d) Nothing herein shall be deemed to prohibit the Administrative Agent from accelerating the maturity of the Loans in the event of a Guarantor Default. ARTICLE V DEFAULTS AND REMEDIES Section 5.01. Notice of Default. Promptly after any party hereto (whether independently or upon notice from a Lender pursuant to the Revolving Credit Agreement) obtains actual knowledge of the occurrence of any Default or Event of Default, as the case may be, such party shall promptly notify the Collateral Agent and the other parties hereto thereof in a writing entitled "Notice of Default" (a "Notice of Default"). Each such Notice of Default shall describe such Default or Event of Default in reasonable detail (including, if known by the party giving such notice, the date such Default or Event of Default occurred). Upon receipt of any Notice of Default, the Collateral Agent shall promptly deliver a copy thereof to the other parties hereto. Neither the Administrative Agent nor the Collateral Agent shall be deemed to have knowledge of any Default or Event of Default unless and until written notice thereof is given to the Administrative Agent or the Collateral Agent, as applicable, by the Borrower, a Lender, the other Agent or any other party hereto. Section 5.02. Procedures Following Event of Default. After the Collateral Agent shall have received a Notice of Default: (a) At any time after the occurrence and during the continuance of a Total Guarantor Default, the Administrative Agent may serve a notice on the Collateral Agent which (i) describes the Event of Default with respect to which the Administrative Agent is seeking to pursue remedies and (ii) instructs the Collateral Agent to seek instructions from the Lenders as to whether or not such Event of Default should be waived or any amendment should be made to one or more of the Loan Documents in order to cure such Event of Default. The Administrative Agent may and shall, if instructed to do so by the Lenders, give any notice referred to in this Section 5.02 in accordance with the Revolving Credit Agreement. If the Collateral Agent receives any such notice from the Administrative Agent pursuant to this Section 5.02(a), the Collateral Agent shall promptly notify the other parties hereto and shall request instructions from the Administrative Agent within the specified Decision Period as to whether or not the Event of Default specified in such notice should be waived or any amendment should be made to one or more of the Loan Documents in order to cure such Event of Default. (b) At any time after the occurrence and during the continuance of a Partial Guarantor Default in which the TPG Guarantor is a not a defaulting party, any Fund Guarantor or the Administrative Agent may serve a notice on the Collateral Agent which (i) describes the Event of Default with respect to which the Fund Guarantor or the Administrative Agent is seeking to pursue remedies and (ii) instructs the Collateral Agent to seek instructions from the TPG Guarantor as to whether or not such Event of Default should be waived or any amendment should be made to the Reimbursement Documentation and/or one or more of the Loan Documents in order to cure such Event of Default. If the Collateral Agent receives any notice from the TPG Guarantor pursuant to this Section 5.02(b), the Collateral Agent shall promptly notify the other parties hereto and shall request instructions from the TPG Guarantor within the specified Decision Period as to whether or not the Event of Default specified in such notice should be waived or any amendment should be made to the Reimbursement Documentation and/or one or more of the Loan Documents in order to cure such Event of Default. (c) At any time after the occurrence and during the continuance of a Partial Guarantor Default in which the TPG Guarantor is a defaulting party, the Administrative Agent may serve a notice on the Collateral Agent which (i) describes the Event of Default with respect to which the Administrative Agent is seeking to pursue remedies and (ii) instructs the Collateral Agent to seek instructions from the Non-Defaulting Guarantors as to whether or not such Event of Default should be waived or any amendment should be made to one or more of the Loan Documents in order to cure such Event of Default. The Administrative Agent may and shall, if instructed to do so by the Lenders, give any notice referred to in this Section 5.02 in accordance with the Revolving Credit Agreement. If the Collateral Agent receives any such notice from the Non-Defaulting Guarantors pursuant to this Section 5.02(a), the Collateral Agent shall promptly notify the other parties hereto and shall request instructions from the Non-Defaulting Guarantors within the specified Decision Period as to whether or not the Event of Default specified in such notice should be waived or any amendment should be made to one or more of the Loan Documents in order to cure such Event of Default. Nothing in this Section 5.02 shall be deemed to require the Administrative Agent to waive a Guarantor Default. Section 5.03. Exercise of Remedies. If the Collateral Agent has received a Notice of Default pursuant to Section 5.01, and such Default or Event of Default has not been waived and no amendment to the Loan Documents or Reimbursement Documentation has been made to cure such Event of Default pursuant to Section 5.02: (a) At the instruction of the Non-Defaulting Guarantors, if any, or in the case of a Total Guarantor Default, the Administrative Agent, the Collateral Agent shall exercise the remedies specified in such instruction, including (to the extent specified therein) (i) seeking to enforce the Revolving Credit Security Documents or the Reimbursement Security Documents, as the case may be, (ii) issuing a Blockage Notice or other notices to the Trustee under the Indenture, (iii) seeking to realize upon the Collateral or (iv) in the case of a proceeding against the Borrower or any other Person under any applicable law relating to bankruptcy, insolvency, liquidation, reorganization, moratorium, winding up or composition or readjustment of debts or similar circumstances, seeking to enforce the claims of the Secured Parties thereunder. (b) Notwithstanding anything to the contrary contained in this Agreement, the Collateral Agent shall not, at the instruction of the Administrative Agent or any Lender, commence or otherwise take any action or proceeding to realize upon any or all of the Collateral or exercise any other rights or enforce any other remedies available under the Loan Documents or as a matter of law unless and until (i) a Guarantor Default has occurred and is continuing, and (ii) the Administrative Agent has exhausted all reasonably practical remedies available under the Guaranty. Section 5.04. Application of Collateral Proceeds. Subject to Section 5.03, the proceeds of any collection, recovery, receipt, appropriation, realization or sale of any or all of the Collateral (the "Collateral Proceeds") shall be applied as follows: (a) in the case of a Total Guarantor Default: FIRST, to the payment of all costs and reasonable expenses incurred by the Collateral Agent (in its capacity as such hereunder or under any other Reimbursement Documentation) in connection with such collection or sale or otherwise in connection with this Agreement or any of the Revolving Credit 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 (as defined in Revolving Credit Security Documents) and any other costs or expenses incurred in connection with the exercise of any right or remedy hereunder or under any other Revolving Credit Documentation; SECOND, to the payment in full of the Revolving Credit Obligations outstanding (the amounts so applied to be distributed among the Revolving Credit Secured Parties pro rata in accordance with the amounts of the Revolving Credit Obligations owed to them on the date of any such distribution); THIRD, to the payment in full of the Reimbursement Obligations outstanding pro rata in accordance with the amounts, if any, of such Reimbursement Obligations; FOURTH, to the payment in full of the Indenture Obligations outstanding; and FIFTH, to the Grantors (as defined in Revolving Credit Security Documents), their successors or assigns, or as a court of competent jurisdiction may otherwise direct. (b) in the case of a Partial Guarantor Default: FIRST, to the payment of all costs and reasonable expenses incurred by the Collateral Agent (in its capacity as such hereunder or under any other Reimbursement Documentation) in connection with such collection or sale or otherwise in connection with this Agreement, any of the Revolving Credit Obligations and the Reimbursement 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 or Reimbursement Documentation on behalf of any Grantor (as defined in Security Documents) and any other costs or expenses incurred in connection with the exercise of any right or remedy hereunder or under any other Loan Document and Reimbursement Documentation; SECOND, (i) payment in full among such Non-Defaulting Guarantors in accordance with the amounts paid under the Guaranty by such Non-Defaulting Guarantors, in an aggregate amount equal to the product of (x) the Collateral Proceeds and (y) a fraction the numerator of which shall be the amount paid by all Non-Defaulting Guarantors under, pursuant to or in connection with the Guaranty (the "Non-Defaulting Payment"), reduced by the amount paid, if any, by the Borrower under, pursuant to and in connection with the Reimbursement Agreement to reimburse any Non-Defaulting Guarantor, and the denominator of which shall be the amount of the Guaranteed Obligations (as defined in the Guaranty) then due and payable under the Guaranty; and (ii) payment in full to the Administrative Agent for the benefit of the Revolving Credit Secured Parties an amount equal to the product of (x) the Collateral Proceeds and (y) a fraction the numerator of which shall be the amount of all payments due and owing from the Borrower under the Revolving Credit Agreement, reduced by the Non-Defaulting Payment, and the denominator of which shall be the amount of the Guaranteed Obligations (as defined in the Guaranty) then due and payable under the Guaranty. THIRD, to the payment in full of the Indenture Obligations outstanding; and FOURTH, to the Grantors (as defined in Revolving Credit Security Documents), their successors or assigns, or as a court of competent jurisdiction may otherwise direct. (c) in the case of no Guarantor Default: FIRST, to the payment of all costs and reasonable expenses incurred by the Collateral Agent (in its capacity as such hereunder or under any other Reimbursement Documentation) in connection with such collection or sale or otherwise in connection with this Agreement or any of the Reimbursement 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 Reimbursement Documentation on behalf of any Grantor (as defined in Reimbursement Security Documents) and any other costs or expenses incurred in connection with the exercise of any right or remedy hereunder or under any other Reimbursement Documentation; SECOND, to the payment in full of the Reimbursement Obligations outstanding pro rata in accordance with the amounts, if any, of such Reimbursement Obligations; THIRD, to the payment in full of the Revolving Credit Obligations outstanding (the amounts so applied to be distributed among the Revolving Credit Secured Parties pro rata in accordance with the amounts of the Revolving Credit Obligations owed to them on the date of any such distribution); FOURTH, to the payment in full of the Indenture Obligations outstanding; and FIFTH, to the Grantors (as defined in Reimbursement Security Documents), their successors or assigns, or as a court of competent jurisdiction may otherwise direct. ARTICLE VI AMENDMENTS, TRANSFERS Section 6.01. Amendments to this Agreement. No provision of this Agreement may be amended, supplemented or otherwise modified except with the prior written consent of the Fund Guarantors, the Administrative Agent (acting at the direction of the Lenders pursuant to the Revolving Credit Agreement), and the Collateral Agent; provided, that the Borrower shall be given notice of any amendment to Section 5.04 hereof. Section 6.02. Transfers of Obligations. In the event that any Fund Guarantor, the Administrative Agent or any Lender proposes to sell or transfer to one or more third parties all or part of its interest in the Reimbursement Obligations or the Revolving Obligations (other than by the granting of a participating interest therein), as the case may be, it (or, in the case of any Lender, the Administrative Agent on its behalf) shall provide to such third parties a copy of this Agreement, and no such sale or transfer shall be undertaken if the effect thereof would be to cause any portion of such Reimbursement Obligations or Revolving Credit Obligations to be held by any person or entity which has not agreed to be bound by the terms of this Agreement. ARTICLE VII MISCELLANEOUS Section 7.01. Notices. Any notice, request or other communication to be given or made under this Agreement shall be in writing (it being understood that telephone numbers are provided below for the purpose of confirmation only). The notice, request or other communication may be delivered by hand, airmail, facsimile or established courier service to the party's address specified below or at such other address as such party notifies to the other parties from time to time and will be effective upon receipt or, in the case of delivery by hand or established courier service, upon refusal of the intended recipient to accept delivery: (a) If to the Fund Guarantors, to: Texas Pacific Group 301 Commerce Street, Suite 3300 Fort Worth, TX 76102 Attention: James J. O'Brien Telecopy: (817) 871-4010 Leonard Green & Partners, L.P. 11111 Santa Monica Boulevard, Suite 2000 Los Angeles, CA 90025 Attention: John Baumer Telecopy: (310) 954-0404 TCW/Crescent Mezzanine Partners III, L.P. 11100 Santa Monica Boulevard, Suite 2000 Los Angeles, CA 90025 Attention: Jean-Marc Chapus with a copy to: Cleary, Gottlieb, Steen & Hamilton One Liberty Plaza New York, NY 10006 Attention: Michael Gerstenzang, Esq. Telecopy: (212) 225-3999 Kramer Levin Naftalis & Frankel LLP 919 Third Avenue New York, NY 10022 Attention: Howard A. Sobel, Esq. Telecopy: (212) 715-8000 (b) If to the Administrative Agent, to: Citicorp USA, Inc. 2 Penns Way, Suite 200 New Castle, DE 19720 Attention: David Graber Telecopy: (302) 894-6120 (c) If to the Collateral Agent, to: Citicorp USA, Inc. 2 Penns Way, Suite 200 New Castle, DE 19720 Attention: David Graber Telecopy: (302) 894-6120 (d) If to the Borrower, to: MEMC Electronic Materials, Inc. 501 Pearl Drive St. Peter's, MO 63376 Attention: Treasurer Telecopy: (636) 474-5158 Section 7.02. Severability. If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 7.03. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. Section 7.04. Benefits of Agreement. Nothing in this Agreement, express or implied, shall give to the Borrower, any other Related Party or any other person or entity other than the parties hereto and their successors and permitted assigns, any benefit or any legal or equitable right or remedy under this Agreement. This Agreement shall be binding upon the parties hereto and their respective successors, assigns or transferees who become Secured Parties entitled to the benefits of the Collateral. Section 7.05. Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all the counterparts shall together constitute one and the same instrument. Section 7.06. No Partnership. Nothing contained in this Agreement and no action by any Secured Party or the Collateral Agent is intended to constitute or shall be deemed to constitute among such Secured Parties and the Collateral Agent (or any of them) a partnership, association, joint venture or other entity. Section 7.07. No Impairments. Nothing in this Agreement is intended or shall be construed to impair, diminish or otherwise adversely affect any other rights the Secured Parties may have or may obtain against the Borrowers or any other Related Party. Section 7.08. Waivers. No waiver of any provision of this Agreement shall be effective unless the same shall be in writing and signed by the Fund Guarantors and the Administrative Agent (and, if such waiver increases the obligations of the Collateral Agent, the Collateral Agent), and any such waiver shall be effective only in the specific instance and for the specific purpose for which given. No delay on the part of any Secured Party in the exercise of any right, power or remedy shall operate as a waiver thereof, nor shall any single or partial waiver by such Secured Party of any right, power or remedy preclude any further exercise thereof, or the exercise of any other right, power or remedy. Section 7.09. Conflicts With Other Security Documents. In the event of any conflict between the terms of this Agreement and any Reimbursement Documentation or Loan Document, the provisions of this Agreement shall control. For the avoidance of doubt, nothing in Section 5.02 shall be construed to restrict the right of the Fund Guarantors, at any time, to elect to waive any Event of Default other than a Guarantor Default or agree to any amendment of the Reimbursement Documentation in order to cure such Event of Default, and nothing in this Agreement shall be construed to restrict the unilateral exercise by any Fund Guarantor of its rights under the Reimbursement Documentation. Nothing in this Agreement shall be construed to restrict the exercise by the Administrative Agent and the Lenders of their rights under the Guaranty. Section 7.10. Integration. This Agreement represents the agreement of the Secured Parties with respect to the subject matter hereof, and there are no promises, undertakings, representations or warranties by any Secured Party relative to subject matter hereof not expressly set forth or referred to herein or in the Transaction Documents. Section 7.11. Representations. Each of the parties hereto represents and warrants, as to itself, that it has duly authorized, executed and delivered this Agreement and that this Agreement is the legal, valid and binding obligation of such party, enforceable against such party in accordance with its terms. Section 7.12. Termination. Upon the indefeasible payment in full of the Guaranteed Obligations and the termination of the Commitments, this Agreement shall terminate and shall be of no further force and effect. Section 7.13. No Reliance. No Secured Party has relied on any representation or warranty of any other Secured Party with respect to this Agreement and the transactions contemplated hereunder unless such representation or warranty has been set forth expressly in this Agreement. Section 7.14. Certain Agreements. Nothing herein shall require the Administrative Agent or the Collateral Agent to take any action that in the reasonable opinion of the Administrative Agent or the Collateral Agent would be contrary to the terms of this Agreement or applicable law or subject the Administrative Agent or the Collateral Agent to personal liability. The Administrative Agent or the Collateral Agent shall in all cases be fully justified in failing or refusing to take such action unless it shall receive further assurances to its reasonable satisfaction of any applicable indemnification obligations in respect of such action. IN WITNESS WHEREOF, the parties hereto have duly executed this Intercreditor Agreement as of the date first above written. TPG PARTNERS III, L.P. By: TPG GenPar III, L.P. Its General Partner By: TPG GenPar III, 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., as Its Investment Manager By: TCW Asset Management Company, as 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, as its General Partner By: /s/ John Danhakl --------------------------------- Name: John Danhakl Title: Manager 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 CITICORP USA, INC., as Administrative Agent By: /s/ Edward T. Crook --------------------------------- Name: Edward T. Crook Title: Managing Director and Vice President CITICORP USA, INC., as Collateral Agent By: /s/ Edward T. Crook --------------------------------- Name: Edward T. Crook Title: Managing Director and Vice President The undersigned hereby acknowledges and agrees to the foregoing terms and provisions. By acknowledging and agreeing to this Agreement, the undersigned acknowledges and agrees to the provisions hereof as they relate to the relative rights of the Fund Guarantors, the Administrative Agent and the Lenders. ACKNOWLEDGED AND AGREED: MEMC ELECTRONIC MATERIALS, INC. By: /s/ Kenneth L. Young --------------------------------- Name: Kenneth L. Young Title: Treasurer SCHEDULE I - -------------------------------------------------------------------------------- PARTY PERCENTAGE ================================================================================ Green Percentage 20% - -------------------------------------------------------------------------------- TPG Percentage 60% - -------------------------------------------------------------------------------- TCW Percentage 20% - -------------------------------------------------------------------------------- EX-22 11 tpg_ex22.txt Exhibit 22 ================================================================================ MEMC ELECTRONIC MATERIALS, INC. Senior Subordinated Secured Notes Due 2007 ---------------------------------------------------------- AMENDED AND RESTATED INDENTURE Dated as of December 21, 2001 ---------------------------------------------------------- CITIBANK, N.A., as Trustee Citicorp USA, Inc. as Collateral Agent ================================================================================ ARTICLE 1 DEFINITION AND INCORPORATIONS BY REFERENCE SECTION 1.01. Definitions.................................................2 SECTION 1.02. Incorporation by Reference of Trust Indenture Act..........20 SECTION 1.03. Rules of Construction......................................21 ARTICLE 2 THE NOTES SECTION 2.01. Notes Generally............................................21 SECTION 2.02. Execution and Authentication...............................22 SECTION 2.03. Legends....................................................23 SECTION 2.04. Registrar and Paying Agent.................................23 SECTION 2.05. Paying Agent to Hold Money in Trust........................24 SECTION 2.06. Holder Lists...............................................24 SECTION 2.07. Transfer and Exchange......................................25 SECTION 2.08. Replacement Notes..........................................26 SECTION 2.09. Outstanding Notes..........................................27 SECTION 2.10. Temporary Notes............................................27 SECTION 2.11. Cancellation...............................................27 SECTION 2.11. Defaulted Interest.........................................28 SECTION 2.12. CUSIP and "ISIN" Numbers...................................28 SECTION 2.14. Computation of Interest....................................28 ARTICLE 3 REDEMPTION AT THE OPTION OF THE ISSUER SECTION 3.01. Optional Redemption........................................28 SECTION 3.02. Notices to Trustee.........................................28 SECTION 3.03. Selection of Notes To Be Redeemed..........................29 SECTION 3.04. Notice of Redemption.......................................29 SECTION 3.05. Effect of Notice of Redemption.............................30 SECTION 3.06. Deposit of Redemption Price................................30 SECTION 3.07. Notes Redeemed in Part.....................................30 SECTION 3.08. Notes Surrendered in Payment of Warrant Exercise Price.....30 ARTICLE 4 MANDATORY REDEMPTION SECTION 4.01. Early Redemption Events....................................31 SECTION 4.02. Change of Control..........................................33 ARTICLE 5 AFFIRMATIVE COVENANTS SECTION 5.01. Payment of Notes...........................................35 SECTION 5.02. Commission Reports, Financial Statements and Other Information................................................35 SECTION 5.03. Compliance Certificate.....................................36 SECTION 5.04. Notices of Material Events.................................37 SECTION 5.05. Existence; Conduct of Business.............................38 SECTION 5.06. Payment of Obligations.....................................38 SECTION 5.07. Maintenance of Properties..................................38 SECTION 5.08. Insurance; Casualty and Condemnation.......................38 SECTION 5.09. Books and Records; Inspection and Audit Rights.............39 SECTION 5.10. Compliance with Laws.......................................39 SECTION 5.11. Additional Subsidiaries....................................39 SECTION 5.12. Further Assurances; Transfer of Joint Venture Stock........39 ARTICLE 6 NEGATIVE COVENANTS SECTION 6.01. Indebtedness; Certain Equity Securities....................40 SECTION 6.02. Liens......................................................42 SECTION 6.03. Fundamental Changes and Successor Issuers..................43 SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions..45 SECTION 6.05. Asset Sales................................................46 SECTION 6.06. Sale and Leaseback Transactions............................47 SECTION 6.07. Hedging Agreements.........................................47 SECTION 6.08. Restricted Payments; Certain Payments of Indebtedness......47 SECTION 6.09. Transactions with Affiliates...............................48 SECTION 6.10. Restrictive Agreements.....................................49 SECTION 6.11. Amendment of Material Documents............................49 SECTION 6.12. Minimum Quarterly Consolidated EBITDA......................49 SECTION 6.13. Minimum Monthly Consolidated Backlog.......................50 SECTION 6.14. Minimum Monthly Consolidated Revenue.......................52 SECTION 6.15. Capital Expenditures.......................................54 ARTICLE 7 DEFAULTS AND REMEDIES SECTION 7.01. Events of Default..........................................55 SECTION 7.02. Acceleration...............................................57 SECTION 7.03. Other Remedies.............................................57 SECTION 7.04. Waiver of Past Defaults or Covenants.......................58 SECTION 7.05. Control by Majority........................................58 SECTION 7.06. Limitation on Suits........................................58 SECTION 7.07. Rights of Holders to Receive Payment.......................59 SECTION 7.08. Collection Suit by Trustee.................................59 SECTION 7.09 Trustee May File Proofs of Claim...........................59 SECTION 7.10. Priorities.................................................59 SECTION 7.11 Undertaking for Costs......................................60 SECTION 7.12 Waiver of Stay or Extension Laws...........................60 ARTICLE 8 THE TRUSTEE SECTION 8.01. Duties of Trustee..........................................60 SECTION 8.02. Rights of Trustee..........................................61 SECTION 8.03. Individual Rights of Trustee...............................62 SECTION 8.04. Trustee's Disclaimer.......................................63 SECTION 8.05. Notice of Defaults.........................................63 SECTION 8.06. Reports by Trustee to Holders..............................63 SECTION 8.07. Compensation and Indemnity.................................63 SECTION 8.08. Replacement of Trustee.....................................64 SECTION 8.09. Successor Trustee by Merger................................65 SECTION 8.10. Eligibility; Disqualification..............................65 SECTION 8.11. Preferential Collection of Claims Against the Issuer.......65 ARTICLE 9 DISCHARGE; DEFEASANCE SECTION 9.01. Discharge of Liability on Notes; Defeasance................66 SECTION 9.02. Conditions to Defeasance...................................67 SECTION 9.03. Application of Trust Money.................................68 SECTION 9.04. Repayment to the Issuer....................................68 SECTION 9.05. Indemnity for Government Obligations.......................68 SECTION 9.06. Reinstatement..............................................68 ARTICLE 10 AMENDMENTS SECTION 10.01. Without Consent of Holders.................................69 SECTION 10.02. With Consent of Holders....................................69 SECTION 10.03. Compliance with Trust Indenture Act........................70 SECTION 10.04. Revocation and Effect of Consents and Waivers..............70 SECTION 10.05. Notation on or Exchange of Notes...........................71 SECTION 10.06. Trustee to Sign Amendments.................................71 SECTION 10.07. Payment for Consent........................................71 ARTICLE 11 SECURITY; NOTE GUARANTEES SECTION 11.01. Collateral and Guarantee Requirement.......................72 SECTION 11.02. Regarding the Collateral Agent.............................72 ARTICLE 12 SUBORDINATION SECTION 12.01. Agreement to Subordinate...................................75 SECTION 12.02. Liquidation, Dissolution, Bankruptcy.......................75 SECTION 12.03. Default on Revolver Obligations............................76 SECTION 12.04. Acceleration of Payment of Notes...........................77 SECTION 12.05. When Distribution Must Be Paid Over........................77 SECTION 12.06. Subrogation................................................77 SECTION 12.07. Relative Rights............................................77 SECTION 12.08. Subordination May Not Be Impaired by Issuer................77 SECTION 12.09. Rights of Trustee and Paying Agent.........................77 SECTION 12.10. Distribution or Notice to Representative...................78 SECTION 12.11. Article 12 Not To Prevent Events of Default or Limit Right To Accelerate..................................78 SECTION 12.12. Trust Monies Not Subordinated..............................78 SECTION 12.13. Trustee Entitled To Rely...................................78 SECTION 12.14. Trustee To Effectuate Subordination........................79 SECTION 12.15. Trustee Not Fiduciary for Lenders under Revolver Obligations.......................................79 ARTICLE 13 MISCELLANEOUS SECTION 13.01. Trust Indenture Act Controls...............................79 SECTION 13.02. Notices....................................................80 SECTION 13.03. Communication by Holders with Other Holders................80 SECTION 13.04. Certificate and Opinion as to Conditions Precedent.........81 SECTION 13.05. Statements Required in Certificate or Opinion..............81 SECTION 13.06. When Notes Disregarded.....................................81 SECTION 13.07. Rules by Trustee, Paying Agent and Registrar...............82 SECTION 13.08. Legal Holidays.............................................82 SECTION 13.09. GOVERNING LAW..............................................82 SECTION 13.10. No Recourse Against Others.................................82 SECTION 13.11. Successors.................................................82 SECTION 13.12. Multiple Originals.........................................82 SECTION 13.13. Table of Contents; Headings................................82 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 AMENDED AND RESTATED INDENTURE dated as of December 21, 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"). W I T N E S S E T H: WHEREAS, the Issuer, the Trustee and the Collateral Agent are parties to the Indenture dated as of November 13, 2001 (the "Original Indenture"), pursuant to which Notes have been issued to the Holders; WHEREAS, 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 Original Indenture, to the prior payment in full of certain obligations which have been created pursuant to the Revolving Credit Agreement dated as of November 13, 2001 (the "Original Revolving Credit Agreement"), among the Issuer, the Lenders party thereto and Citicorp USA, Inc., as Administrative Agent and Collateral Agent, together with certain security documents and other ancillary documents executed in connection therewith (the Original Revolving Credit Agreement, together with such security and ancillary documents, the "Original Revolving Loan Documentation"). WHEREAS, as of the date hereof, the parties to the Original Revolving Loan Documentation desire to terminate the Original Revolving Credit Agreement, and replace the Original Revolving Loan Documentation with: (i) the Revolving Credit Agreement (as defined herein); (ii) a guarantee agreement, a security agreement, a pledge agreement and an indemnity, subrogation and contribution agreement attached as exhibits to such Revolving Credit Agreement; (iii) the Reimbursement Agreement (as defined herein); (iv) a guarantee agreement, a security agreement, a pledge agreement and an indemnity, subrogation and contribution agreement attached as exhibits to such Reimbursement Agreement; and (v) other security documents and other ancillary documents executed in connection therewith (the documents named in clauses (i)-(v), collectively, together with any document executed as an amendment to, restatement of, substitution for, or replacement of, any such document, the "Revolving Loan Documentation"). WHEREAS, it is desirable to amend the Indenture in certain respects to account for the execution of the Revolving Loan Documentation; NOW THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree to amend and restate the Original Indenture in its entirety 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 (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 Interests in MEMC Southwest Inc. 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 November 13, 2001. "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 Credit Agreement" means the euro55,000,000 Amended and Restated Credit Agreement dated as of September 22, 2001 under which the Italian Issuer is the borrower, together with any amendment of, restatement of, substitution for, or replacement of such agreement. "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 euro55 million (aggregate principal amount) Promissory Notes Due 2031 to be issued by the Italian Issuer under the Italian Credit Agreement 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, including "lenders under such Revolver Obligations") mean collectively (i) the "Lenders" who are parties to the Revolving Credit Agreement and (ii) the "Fund Guarantors" who are parties to the Reimbursement Agreement. "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. "Original Indenture" has the meaning provided in the preamble. "Original Revolving Credit Agreement" has the meaning provided in the preamble. "Original Revolving Loan Documentation" has the meaning provided in the preamble. "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. s.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. "Reimbursement Agreement" means the Reimbursement Agreement dated as of December 21, 2001 among the Issuer, TPG Partners III, L.P., TCW/Crescent Mezzanine Partners, III, L.P. and Green Equity Investors III, L.P., as Fund Guarantors, and Citicorp USA, Inc., as Collateral Agent, together with any amendment of, restatement of, substitution for, or replacement of, such agreement. "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" means, 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 any of the lenders under the Revolver Obligations as identified to the Trustee pursuant to written notice. "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" means, collectively (i) the "Revolving Credit Obligations" as such term is defined in the security agreement attached as an Exhibit to the Revolving Credit Agreement and (ii) the "Reimbursement Obligations" as such term is defined in the security agreement attached as an Exhibit to the Reimbursement Agreement. For the avoidance of doubt, the term "Revolver Obligations" shall include any substitution for, or replacement of, the obligations identified in numbered clauses (i) and (ii) of this definition. "Revolving Credit Agreement" means the Revolving Credit Agreement dated as of December 21, 2001 among the Issuer, the Lenders party thereto and Citicorp USA, Inc., as Administrative Agent and Collateral Agent, together with any amendment of, restatement of, substitution for, or replacement of, such agreement. "Revolving Loan Documentation" has the meaning provided in the preamble. "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 originally issued the Notes under the Original Indenture on November 13, 2001, 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. Notwithstanding the foregoing, in no event shall the Issuer or any Pledgor or Guarantor be required to grant a lien on any of the Texas Instruments Agreements (as defined in the Security Agreement). (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 Equity Interest in MEMC Kulim Electronic Materials, Sdn. Bhd. no later than seventy-five (75) Business Days after the date hereof. 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, under the other Transaction Documents or under the Revolving Loan Documentation 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; and (viii) Liens created in connection with extensions, renewals, or replacements of any Liens referred to in clauses (i) through (vii) above, provided that the principal amount of the obligation secured thereby is not increased and that any such extension, renewal or replacement is limited to the property originally encumbered thereby. 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 other than the pledge thereof contemplated by the Security Documents and the Revolving Loan Documentation. 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 such Indebtedness is 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, by any Transaction Document, by the Revolving Loan Documentation or by the Italian Credit Agreement, (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 $25.0 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 - --------------------------------------------------------------- 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 - -------------------------------------------------------------------------------- January 2002 $34.0 million - -------------------------------------------------------------------------------- February 2002 $34.0 million - -------------------------------------------------------------------------------- March 2002 $34.0 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 or under the Security Documents, (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 or Covenants. 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, any provision of any covenant contained in this Indenture or any existing Default (or Event of 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. A waiver shall become effective upon receipt by the Trustee of such a notice signed by the Holders of a majority in principal amount of the Notes. 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 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 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 (pursuant to Section 10.02) or a waiver (pursuant to Section 7.04) 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 relevant amendment or waiver becomes effective. After an amendment or waiver becomes effective, it shall bind every Holder. An amendment 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 and (iii) execution of such amendment or waiver (or supplemental indenture) by the Issuer and the Trustee. A waiver becomes effective upon receipt by the Trustee of the notice described in Section 7.04. (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. (a) 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. (b) The Issuer and the Trustee acknowledge that the amendment and restatement accomplished by this Amended and Restated Indenture includes amendments to the Notes initially issued on November 13, 2001. Accordingly, the Issuer agrees to execute new Notes in the Form of Exhibit A, which reflect the amendments accomplished hereby, and the Trustee agrees to countersign and deliver such Notes to the Holders upon surrender of the initially-issued Notes. 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 the 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 a 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 any 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 a 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 the Revolver Obligations or a 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 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 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 the 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 the 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 or Representatives (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 the Revolver Obligations for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the lenders under the 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 the 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 the 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 the 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 Amended and Restated 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 EXHIBIT D TO THE INDENTURE EXECUTION COPY 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 SCHEDULE I TO THE PLEDGE AGREEMENT PLEDGORS AND GUARANTORS Name Address County MEMC International, Inc. 501 Pearl Drive St. Charles P. O. Box 8 St. Peters, MO 63376 MEMC Pasadena, Inc. 3000 North South Street Harris Pasadena, TX 77503 MEMC Southwest Inc. 6800 Highway 75 South Grayson Sherman, TX 75090 PlasmaSil, LLC 501 Pearl Drive St. Charles P. O. Box 8 St. Peters, MO 63376 SiBond, LLC 501 Pearl Drive St. Charles P. O. Box 8 St. Peters, MO 63376 Schedule II to the Pledge Agreement CAPITAL STOCK OR OTHER EQUITY INTERESTS Number and Percentage Class of of Shares Shares or Other or Other Number of Registered Equity Equity Issuer Certificate Owner Interests Interests - ------ ----------- ----- --------- --------- [See Separate Document] DEBT SECURITIES Principal Issuer Amount Date of Note Maturity Date - ------ ------ ------------ ------------- [See Separate Document] SUPPLEMENT NO. 1 dated as of December 21, 2001 to the PLEDGE AGREEMENT dated as of November 13, 2001, among MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation ("Issuer"), and each subsidiary of the Issuer listed on Schedule I thereto (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). A. 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 and 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. B. 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. C. The Pledgors and Guarantors have entered into the Pledge Agreement in order to induce the Holders to purchase Notes. 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 the Pledge Agreement as a Pledgor and Guarantor upon becoming a Domestic Subsidiary. Section 26 of the Pledge Agreement provides that such Subsidiaries may become Pledgors and Guarantors under the Pledge Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned Subsidiary (the "New Pledgor and Guarantor") is executing this Supplement in accordance with the requirements of the Indenture to become a Subsidiary Pledgor and Guarantor under the Pledge Agreement as consideration for Notes previously purchased. Accordingly, the Collateral Agent and the New Pledgor and Guarantor agree as follows: SECTION 1. In accordance with Section 26 of the Pledge Agreement, the New Pledgor and Guarantor by its signature below becomes a Pledgor and Guarantor under the Pledge Agreement with the same force and effect as if originally named therein as a Pledgor and Guarantor, and the New Pledgor and Guarantor hereby agrees (a) to all the terms and provisions of the Pledge Agreement applicable to it as a Pledgor and Guarantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Pledgor and 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. In furtherance of the foregoing, the New Pledgor and Guarantor, as security for the payment and performance in full of the Indenture Obligations (as defined in the Pledge Agreement), does hereby create and grant to the Collateral Agent, its successors and assigns, for the benefit of the Holders, their successors and assigns, a security interest in and lien on all of the New Pledgor and Guarantor's right, title and interest in and to the Collateral (as defined in the Pledge Agreement) of the New Pledgor and Guarantor. Each reference to a "Pledgor and Guarantor" in the Pledge Agreement shall be deemed to include the New Pledgor and Guarantor. The Pledge Agreement is hereby incorporated herein by reference. SECTION 2. The New Pledgor and Guarantor represents and warrants to the Collateral Agent and the other Secured Parties 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 may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Collateral Agent shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Pledgor and Guarantor and the Collateral Agent. Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement. SECTION 4. The New Pledgor and Guarantor hereby represents and warrants that set forth on Schedule I attached hereto is a true and correct schedule of all its Pledged Securities. SECTION 5. Except as expressly supplemented hereby, the Pledge Agreement shall remain in full force and effect. SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 7. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, neither party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Pledge Agreement shall not in any way be affected or impaired (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 hereto 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 8. All communications and notices hereunder shall be in writing and given as provided in Section 16 of the Pledge Agreement. All communications and notices hereunder to the New Pledgor and Guarantor shall be given to it at the address set forth under its signature hereto, below, with a copy to the Issuer. SECTION 9. The New Pledgor and Guarantor agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Collateral Agent. IN WITNESS WHEREOF, the New Pledgor and Guarantor, and the Collateral Agent have duly executed this Supplement to the Pledge Agreement as of the day and year first above written. MEMC HOLDINGS CORPORATION By --------------------------------- Name: Title: Address: 501 Pearl Drive P.O. Box 8 St. Peters, MO 63376 Citicorp USA, Inc., as Collateral Agent By --------------------------------- Name: Title: SUPPLEMENT NO. [ ] dated as of [ ] to the PLEDGE AGREEMENT dated as of November 13, 2001, among MEMC ELECTRONIC MATERIALS, INC., a Delaware corporation ("Issuer"), and each subsidiary of the Issuer listed on Schedule I thereto (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). A. 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 and 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. B. 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. C. The Pledgors and Guarantors have entered into the Pledge Agreement in order to induce the Holders to purchase Notes. 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 the Pledge Agreement as a Pledgor and Guarantor upon becoming a Domestic Subsidiary. Section 26 of the Pledge Agreement provides that such Subsidiaries may become Pledgors and Guarantors under the Pledge Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned Subsidiary (the "New Pledgor and Guarantor") is executing this Supplement in accordance with the requirements of the Indenture to become a Subsidiary Pledgor and Guarantor under the Pledge Agreement as consideration for Notes previously purchased. Accordingly, the Collateral Agent and the New Pledgor and Guarantor agree as follows: SECTION 1. In accordance with Section 26 of the Pledge Agreement, the New Pledgor and Guarantor by its signature below becomes a Pledgor and Guarantor under the Pledge Agreement with the same force and effect as if originally named therein as a Pledgor and Guarantor, and the New Pledgor and Guarantor hereby agrees (a) to all the terms and provisions of the Pledge Agreement applicable to it as a Pledgor and Guarantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Pledgor and 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. In furtherance of the foregoing, the New Pledgor and Guarantor, as security for the payment and performance in full of the Indenture Obligations (as defined in the Pledge Agreement), does hereby create and grant to the Collateral Agent, its successors and assigns, for the benefit of the Holders, their successors and assigns, a security interest in and lien on all of the New Pledgor and Guarantor's right, title and interest in and to the Collateral (as defined in the Pledge Agreement) of the New Pledgor and Guarantor. Each reference to a "Pledgor and Guarantor" in the Pledge Agreement shall be deemed to include the New Pledgor and Guarantor. The Pledge Agreement is hereby incorporated herein by reference. SECTION 2. The New Pledgor and Guarantor represents and warrants to the Collateral Agent and the other Secured Parties 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 may be executed in counterparts, each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Supplement shall become effective when the Collateral Agent shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Pledgor and Guarantor and the Collateral Agent. Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement. SECTION 4. The New Pledgor and Guarantor hereby represents and warrants that set forth on Schedule I attached hereto is a true and correct schedule of all its Pledged Securities. SECTION 5. Except as expressly supplemented hereby, the Pledge Agreement shall remain in full force and effect. SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 7. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, neither party hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the Pledge Agreement shall not in any way be affected or impaired (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 hereto 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 8. All communications and notices hereunder shall be in writing and given as provided in Section 16 of the Pledge Agreement. All communications and notices hereunder to the New Pledgor and Guarantor shall be given to it at the address set forth under its signature hereto, below, with a copy to the Issuer. SECTION 9. The New Pledgor and Guarantor agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Collateral Agent. IN WITNESS WHEREOF, the New Pledgor and Guarantor, and the Collateral Agent have duly executed this Supplement to the Pledge Agreement as of the day and year first above written. [NAME OF NEW PLEDGOR AND GUARANTOR] By ------------------------------------ Name: Title: Address: Citicorp USA, Inc., as Collateral Agent By ------------------------------------ Name: Title: Schedule I to Supplement No. [ ] to the Pledge Agreement Pledged Securities of the New Pledgor and Guarantor CAPITAL STOCK OR OTHER EQUITY INTERESTS Number and Percentage Class of of Shares Shares or Other or Other Number of Registered Equity Equity Issuer Certificate Owner Interests Interests - ------ ----------- ----- --------- --------- DEBT SECURITIES Principal Issuer Amount Date of Note Maturity Date - ------ ------ ------------ ------------- EXHIBIT E TO THE INDENTURE EXECUTION COPY 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 Indenture. "Revolving Loan Documentation" has the meaning assigned to such term in the Indenture. "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 SUPPLEMENT NO. 1 dated as of December 21, 2001, to the 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 thereto (each such subsidiary individually a "Pledgor and Guarantor" and, collectively, the "Pledgors and Guarantors," and the Pledgors and Guarantors, 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 in the Security Agreement). A. 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, 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, the Pledgors and Guarantors and the Collateral Agent. B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Security Agreement and the Indenture. C. The Grantors have entered into the Security Agreement in order to induce the Holders to purchase the Notes. 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 in to this Agreement as a Grantor upon becoming a Domestic Subsidiary. Section 7.16 of the Security Agreement provides that such Domestic Subsidiaries may become Grantors under the Security Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned (the "New Grantor") is executing this Supplement in accordance with the requirements of the Indenture to become a Grantor under the Security Agreement, as consideration for the Holders' previous purchase of the Notes. Accordingly, the Collateral Agent and the New Grantor agree as follows: SECTION 1. In accordance with Section 7.16 of the Security Agreement, the New Grantor by its signature below becomes a Grantor under the Security Agreement with the same force and effect as if originally named therein as a Grantor and the New Grantor hereby (a) agrees to all the terms and provisions of the Security Agreement applicable to it as a Grantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Grantor 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. In furtherance of the foregoing, the New Grantor, as security for the payment and performance in full of the Indenture Obligations (as defined in the Security Agreement), does hereby create and grant to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, their successors and assigns, a security interest in and lien on all of the New Grantor's right, title and interest in and to the Collateral of the New Grantor. Each reference to a "Grantor" in the Security Agreement shall be deemed to include the New Grantor. The Security Agreement is hereby incorporated herein by reference. SECTION 2. The New Grantor represents and warrants to the Collateral Agent and the other Secured Parties 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 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 Supplement shall become effective when the Collateral Agent shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Grantor and the Collateral Agent. Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement. SECTION 4. The New Grantor hereby represents and warrants that (a) set forth on Schedule I attached hereto is a true and correct statement of the exact corporate name and jurisdiction of organization of the New Grantor and a true and correct schedule of the location of any and all Collateral of the New Grantor and (b) set forth on Schedule I attached hereto, is the true and correct location of the chief executive office of the New Grantor. SECTION 5. Except as expressly supplemented hereby, the Security Agreement shall remain in full force and effect. SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 7. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Security Agreement 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 hereto 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 8. All communications and notices hereunder shall be in writing and given as provided in Section 7.01 of the Security Agreement. All communications and notices hereunder to the New Grantor shall be given to it at the address set forth under its signature below, with a copy to the Issuer. SECTION 9. The New Grantor agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Collateral Agent. IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly executed this Supplement to the Security Agreement as of the day and year first above written. MEMC HOLDINGS CORPORATION By ------------------------- Name: Title: Address: 501 Pearl Drive P.O. Box 8 St. Peters, MO 63376 Citicorp USA, Inc., as Collateral Agent By ------------------------- Name: Title: Annex 2 to the Security Agreement SUPPLEMENT NO. [ ] dated as of [ ], to the 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 thereto (each such subsidiary individually a "Pledgor and Guarantor" and, collectively, the "Pledgors and Guarantors," and the Pledgors and Guarantors, 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 in the Security Agreement). A. 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, 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, the Pledgors and Guarantors and the Collateral Agent. B. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Security Agreement and the Indenture. C. The Grantors have entered into the Security Agreement in order to induce the Holders to purchase the Notes. 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 in to this Agreement as a Grantor upon becoming a Domestic Subsidiary. Section 7.16 of the Security Agreement provides that such Domestic Subsidiaries may become Grantors under the Security Agreement by execution and delivery of an instrument in the form of this Supplement. The undersigned (the "New Grantor") is executing this Supplement in accordance with the requirements of the Indenture to become a Grantor under the Security Agreement, as consideration for the Holders' previous purchase of the Notes. Accordingly, the Collateral Agent and the New Grantor agree as follows: SECTION 1. In accordance with Section 7.16 of the Security Agreement, the New Grantor by its signature below becomes a Grantor under the Security Agreement with the same force and effect as if originally named therein as a Grantor and the New Grantor hereby (a) agrees to all the terms and provisions of the Security Agreement applicable to it as a Grantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Grantor 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. In furtherance of the foregoing, the New Grantor, as security for the payment and performance in full of the Indenture Obligations (as defined in the Security Agreement), does hereby create and grant to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, their successors and assigns, a security interest in and lien on all of the New Grantor's right, title and interest in and to the Collateral of the New Grantor. Each reference to a "Grantor" in the Security Agreement shall be deemed to include the New Grantor. The Security Agreement is hereby incorporated herein by reference. SECTION 2. The New Grantor represents and warrants to the Collateral Agent and the other Secured Parties 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 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 Supplement shall become effective when the Collateral Agent shall have received counterparts of this Supplement that, when taken together, bear the signatures of the New Grantor and the Collateral Agent. Delivery of an executed signature page to this Supplement by facsimile transmission shall be as effective as delivery of a manually signed counterpart of this Supplement. SECTION 4. The New Grantor hereby represents and warrants that (a) set forth on Schedule I attached hereto is a true and correct statement of the exact corporate name and jurisdiction of organization of the New Grantor and a true and correct schedule of the location of any and all Collateral of the New Grantor and (b) set forth on Schedule I attached hereto, is the true and correct location of the chief executive office of the New Grantor. SECTION 5. Except as expressly supplemented hereby, the Security Agreement shall remain in full force and effect. SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 7. In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Security Agreement 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 hereto 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 8. All communications and notices hereunder shall be in writing and given as provided in Section 7.01 of the Security Agreement. All communications and notices hereunder to the New Grantor shall be given to it at the address set forth under its signature below, with a copy to the Issuer. SECTION 9. The New Grantor agrees to reimburse the Collateral Agent for its reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Collateral Agent. IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly executed this Supplement to the Security Agreement as of the day and year first above written. [NAME OF NEW GRANTOR] By ------------------------- Name: Title: Address: Citicorp USA, Inc., as Collateral Agent By ------------------------- Name: Title: Schedule I to Supplement No. [ ] to the Security Agreement LOCATION OF COLLATERAL Description Location - ----------- -------- EX-23 12 tpg_ex23.txt Exhibit 23 INTERCREDITOR AGREEMENT INTERCREDITOR AGREEMENT, dated as of December 21, 2001, (this "Agreement"), by and among TPG Partners III, L.P., a Delaware limited partnership (together with its Affiliates, successors and permitted assigns, "TPG"), TCW/Crescent Mezzanine Partners III, L.P. and TCW/Crescent Mezzanine Trust III (together with their Affiliates, successors and permitted assigns, "TCW") and 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"), TPG Wafer Management, LLC, a Delaware limited liability company ("TPG Wafer Management") and TPG Wafer Partners, LLC, a Delaware limited liability company ("TPG WP"). RECITALS WHEREAS, MEMC Electronic Materials, Inc. ("MEMC" or the "Borrower") has entered into that certain Revolving Credit Agreement, dated as of December 21, 2001, with the lenders party thereto (the "Lenders") and Citicorp USA, Inc. as administrative agent (in such capacity, the "Administrative Agent") (as such agreement may be further amended, restated, modified or supplemented at any time and from time to time hereafter, the "Revolving Credit Agreement"), pursuant to which the Lenders will provide the Borrower with a revolving credit facility in an initial aggregate amount not to exceed U.S. $150,000,000; WHEREAS, each of the Fund Guarantors (as defined herein) has entered into a Guaranty (collectively, together with any renewal of such Guaranty as described under Section 2.08 of the Revolving Credit Agreement, the "Guaranty") dated as of December 21, 2001 with Citicorp USA, Inc., as Administrative Agent, pursuant to which the Fund Guarantors have agreed to guarantee the obligations of the Borrower under the Revolving Credit Agreement; WHEREAS, the Borrower has, pursuant to the Reimbursement Agreement, agreed to reimburse the Fund Guarantors for any and all payments made by the Fund Guarantors under the Guaranty; WHEREAS, TPG WP, TPG Wafer Management, TCW and LGP have acquired certain Participation Interests, Italian Credit Agreement Rights, Senior Notes and Warrants (each as defined herein); 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 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 parties hereto hereby agree and covenant as follows: 1. Definitions. Unless the context otherwise requires, all capitalized terms used but not defined herein shall have the meanings set forth in the Revolving Credit Agreement; provided, however, that no amendment of a defined term in the Revolving Credit Agreement shall affect the meaning of such terms in this Agreement unless each Fund Guarantor consented in writing to such amendment. The following terms, as used in this Agreement, shall have the following meanings: "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. "Effective Date" means December 21, 2001. "Fund Guarantor Percentages" has the meaning assigned to such term in the Reimbursement Agreement. "Fund Guarantors" means, collectively, the TPG Guarantor, the LGP Guarantor and the TCW Guarantor. "Guaranteed Obligations" has the meaning assigned to such term in the Guaranty. "LGP Guarantor" means, collectively, Green Equity Investors III, L.P. and Green Equity Investors Side III, L.P. "LGP Guaranty" means the Guaranty entered into by the LGP Guarantor. "Reimbursement Agreement" means the Reimbursement Agreement, dated as of December 21, 2001, by and among the Borrower, the Fund Guarantors and Citicorp USA, Inc. as collateral agent. "Reimbursement Documents" has the meaning assigned to such term in the Reimbursement Agreement. "TCW Guarantor" means, collectively, TCW/Crescent Mezzanine Partners, III, L.P. and TCW/Crescent Mezzanine Trust III. "TCW Guaranty" means the Guaranty entered into by the TCW Guarantor. "TPG Guarantor" means TPG Partners III, L.P. "TPG Guaranty" means the Guaranty entered into by the TPG Guarantor. 2. Guarantor Commitments and Certain Other Matters In Connection with the Guaranty. (a) Subject to the provisions of this Agreement, each of the Fund Guarantors hereby agrees to comply with the terms of the Guaranty; provided that each of LGP and TCW hereby agrees to terminate the Guaranty in accordance with Section 6.12 of the Guaranty if and when TPG so directs (so long as TPG has provided at least five (5) Business Days' notice of such required termination), in which case the Fund Guarantors shall make commitments to MEMC pursuant to a separate credit agreement (with terms substantially similar to those of that certain Revolving Credit Agreement, dated as of November 13, 2001, by and among MEMC, the Lenders named therein and Citicorp USA, Inc. as Administrative Agent (the "Terminated Revolver"); and provided, further, that each of LGP and TCW hereby agrees not to terminate the Guaranty in accordance with Section 6.12 of the Guaranty unless TPG so directs. In the event that TPG, LGP and TCW make commitments to MEMC, in any of the circumstances described in this paragraph 2(a) or paragraphs 2(e) or 2(g), each of TPG, LGP and TCW hereby agrees that they shall enter into a separate intercreditor agreement with terms substantially similar to those of that certain Intercreditor Agreement, dated as of November 13, 2001, by and among TPG Wafer Credit Partners, LLC, T3 Partners II, L.P., T3 Parallel II, L.P., TCW/Crescent Mezzanine Partners III, L.P. and TCW/Crescent Mezzanine Trust III, Green Equity Investors III, L.P., Green Equity Investors Side III, L.P., TPG Wafer Management, L.L.C., and TPG Wafer Partners, LLC. (b) Notwithstanding the provisions of Section 5 of each of the LGP Guaranty and the TCW Guaranty, except as otherwise contemplated by this paragraph 2(b) and paragraphs 2(c) and 2(f) hereof, each of LGP and TCW hereby agrees that it (x) shall immediately take any and all such actions under such Section 5 as TPG shall direct (including, without limitation, providing written consents, approvals or other instructions to the Administrative Agent) and (y) shall refrain from any action under such Section 5 unless TPG does so direct, in each case so long as TPG (i) holds a majority of the aggregate Guarantor Interests (as defined herein); (ii) has not failed to make any payment due under Article II of the Guaranty; (iii) has not itself committed a Guarantor Default (as defined in the Guaranty) which has directly resulted in the Administrative Agent (x) declaring the Loans outstanding due and payable in whole or in part or (y) terminating the Commitments, in each case pursuant to Article VII of the Revolving Credit Agreement; and (iv) has not consented to any material amendment to that clause of Section 5 of the TPG Guaranty pursuant to which TPG is directing LGP and TCW to take action or pursuant to which LGP or TCW desire to take action, which amendment both (A) diminished the authority of TPG under such clause and (B) was made without the written consent of each of LGP and TCW; provided that, until the date that is the third anniversary of the Effective Date, LGP and TCW shall not be required by TPG to consent to any proposal of the Borrower not to pay the interest on any Loan in cash if, 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, LGP and TCW shall not be required by TPG to consent to any proposal of the Borrower that any subsequent interest payments shall not be paid in cash); and provided, further, that following the third anniversary of the Effective Date, LGP and TCW shall not be required by TPG to consent to any proposal of the Borrower not to pay the interest on any Loan in cash; and provided, further, that LGP and TCW shall not be required by TPG to consent to any of the matters that are listed in clauses (i) through (ix) of the proviso in Section 9.02(b) of the Revolving Credit Agreement and which require the consent of each of the Lenders. For the avoidance of doubt, the parties hereby agree that the foregoing provisions are not intended in any way to restrict the rights which TPG might enjoy, in the event that the Fund Guarantors were to make commitments to MEMC pursuant to a separate credit agreement (with terms substantially similar to those of the Terminated Revolver), if TPG were to constitute Required Lenders (as defined in the Terminated Revolver) under such separate credit agreement. (c) Notwithstanding anything to the contrary contained in the Revolving Credit Agreement, in the event that (i) the aggregate Exposures of all Lenders under the Revolving Credit Agreement (together with any amounts actually advanced to MEMC by the Fund Guarantors pursuant to any separate credit agreement as contemplated by paragraphs 2(e) and 2(g)) is (or would, in the event of additional advances under the Revolving Credit Agreement 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 paragraphs 2(e) and 2(g) hereof), TPG agrees that it will, as soon as practicable, instruct the Administrative Agent pursuant to Section 5 of the Guaranty not to make additional loans under the Revolving Credit Agreement (or, in the event that the Fund Guarantors have become direct lenders to MEMC under any separate credit agreement as described in paragraphs 2(e) and 2(g) hereof, TPG agrees that it will not consent to any borrowing request under any such separate credit agreement except as otherwise provided in this paragraph 2(c)), unless each of TPG, TCW and LGP shall consent to such Borrowing Request. In the case of any Borrowing Request in the circumstances described in clauses (i) and (ii) above, each of TCW and LGP (and their Permitted Transferees, if any) may, by written notice to TPG (the "Commitment Notice") within one Business Day of being notified by TPG or the Borrower of such Borrowing Request, declare that it shall not consent (pursuant to Section 5 of the Guaranty or otherwise) to such Borrowing Request under the Revolving Credit Agreement or under any separate credit agreement referred to in paragraphs 2(e) and 2(g) 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 Fund Guarantor, a "Non-Committing Guarantor", and any committing Fund Guarantor, a "Committing Guarantor"), TPG may, individually or together with any Committing Guarantor, elect to assume on a pro rata basis (in accordance with the TPG Guarantor's and such Committing Guarantor's respective Fund Guarantor Percentages) the obligations of any Non-Committing Guarantor to guarantee additional Loans to the Borrower in accordance with the provisions of the Guaranty (but not, for the avoidance of doubt, the obligations of such Non-Committing Guarantor in respect of any Loans then outstanding) and receive on the same pro rata basis the benefits of the right to reimbursement and all related rights under the Reimbursement Documents (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 Guarantor, assume on a pro rata basis (in accordance with the TPG Guarantor's and such Committing Guarantor's respective Fund Guarantor Percentages) the obligations of any Non-Committing Guarantor to guarantee additional Loans to the Borrower in accordance with the provisions of the Guaranty (but not, for the avoidance of doubt, the obligations of such Non-Committing Guarantor in respect of any Loans then outstanding) and receive on the same pro rata basis the benefits of the right to reimbursement and all related rights under the Reimbursement Documents. In the event of any Non-Pro Rata Election, TPG and any Committing Guarantor shall execute such agreements and related documents and take such other actions as are reasonably determined by such Non-Committing Guarantor in pursuance of the assumption of such obligations by TPG and such Committing Guarantor, and such Non-Committing Guarantor shall execute such agreements and related documents and take such other actions as are reasonably determined by TPG in pursuance of the assignment of such rights to TPG and such Committing Guarantor. (d) In the event of any Non-Pro Rata Election and any actual additional funding by the Lenders under the Revolving Credit Agreement, the Pro Rata Percentage (as defined below) of each Non-Committing Guarantor and their Affiliates in their (i) 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 the Restructuring Agreement (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 Guarantor on a pro rata basis (in accordance with the TPG Guarantor's and such Committing Guarantor's respective Fund Guarantor Percentages), in which event such Non-Committing Guarantor 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 Guarantor shall take any other steps that are reasonably requested by TPG WP and any Committing Guarantor to ensure that TPG WP and such Committing Guarantors enjoy the same economic benefits as TPG WP and such Committing Guarantors would have enjoyed from such an assignment. As used herein, the "Pro Rata Percentage" shall mean, with respect to any Non-Committing Guarantor, the percentage obtained by multiplying (A) one hundred percent (100%), by (B) one (1) minus a fraction, the numerator of which shall be the sum of (A) the product of (x) such Non-Committing Guarantor's Fund Guarantor Percentage (excluding, for the avoidance of doubt, any adjustment to such Fund Guarantor Percentage as a result of any Non-Pro Rata Election) multiplied by (y) the aggregate amount of the principal and interest of the Loans under the Revolving Credit Agreement, plus (B) the aggregate amount borrowed by MEMC from such Non-Commiting Guarantor under any separate credit agreement, and the denominator of which shall be U.S. $37 million. (e) Notwithstanding anything to the contrary contained in the Revolving Credit Agreement or this Agreement, at the election of TPG, each of TPG, TCW and LGP hereby agrees, as directed by TPG, to increase the amount of its Guaranty and/or to make a commitment to MEMC pursuant to a separate credit agreement (with terms substantially similar to those of the Terminated Revolver), in each case on a pro rata basis in accordance with their Fund Guarantor Percentages; provided that TCW shall not be obligated to guarantee or extend loans to MEMC in an aggregate amount exceeding $37 million and LGP shall not be obligated to guarantee or extend loans to MEMC in an aggregate amount exceeding $37 million, in each case whether in respect of the Guaranty, the Revolving Credit Agreement or any separate credit agreement as contemplated by paragraphs 2(e) and 2(g); and provided, further, that neither TCW nor LGP shall be obligated to increase the amount of its Guaranty or make any commitment to MEMC pursuant to any separate credit agreement unless MEMC is in compliance with the Consolidated EBITDA test described in Schedule A; and provided, further, that neither TCW nor LGP shall be obligated to increase the amount of its Guaranty or make any commitment to MEMC pursuant to any separate credit agreement if such Person had previously delivered a Commitment Notice to TPG. No Fund Guarantor 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 with MEMC which would result in or permit the aggregate amount of all commitments under any credit agreement referred to in this paragraph 2(e) (including the Revolving Credit Agreement) to exceed $185 million. (f) Notwithstanding the provisions of Section 5 of the Guaranty, TPG hereby agrees not to consent to the release of any part of the Collateral from the Liens of the Security Documents (as defined in the Revolving Credit Agreement) or the Security Documents (as defined in the Reimbursement Agreement) 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 or guaranteed by TPG or any Affiliate of TPG. (g) In the event that the Administrative Agent has not received from TPG, LGP or TCW any guaranty described in Section 2.08 of the Revolving Credit Agreement on or before the dates and for the stated maturities therein stipulated (except in the case where such Fund Guarantor has validly and effectively pledged to the Administrative Agent a blocked cash collateral account with Citibank, N.A. in an amount meeting the requirements of Section 5 of the Guaranty), such Guarantor hereby agrees to make a commitment to MEMC pursuant to a separate credit agreement (with terms substantially similar to those of the Terminated Revolver), in an aggregate amount equal to the amount of the Guaranteed Obligations then guaranteed by such Guarantor; provided that such Guarantor shall not be obligated to make any Loans (as defined in the Terminated Revolver) to MEMC unless the other Guarantors are similarly obligated to make Loans pursuant to such separate credit agreement. In the event that the Fund Guarantors become direct lenders to the Company pursuant to any such credit agreement, notwithstanding any provisions allowing the payment of interest by the Borrower on any Loan other than in cash, until the date that is the third anniversary of the Effective Date, TPG may not consent, without the consent of each of LGP and TCW, to any proposal of the Borrower not to pay the interest on any Loan in cash if, 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. 3. Certain Matters in Connection with the Italian Credit Agreement. 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 or guaranteed 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. 4. Guarantor Non-Renewal; Guarantor Default. (a) Notwithstanding any other provision of the Guaranty or the Revolving Credit Agreement or any other agreement to which any of the parties is a party, in the event that the Administrative Agent has not received from LGP or TCW any guaranty described in Section 2.08 of the Revolving Credit Agreement on or before the dates and for the stated maturities therein stipulated (except in the case where such Fund Guarantor has validly and effectively pledged to the Administrative Agent a blocked cash collateral account with Citibank, N.A. in an amount meeting the requirements of Section 5 of the Guaranty) (any Fund Guarantor who fails to provide any such guaranty, a "Non-Renewing Guarantor"), such Non-Renewing Guarantor shall pay to the other Fund Guarantors an aggregate amount equal to the product of (i) the aggregate commitment fees and other fees which were paid to the Lenders and/or the Administrative Agent pursuant to Section 2.09 of the Revolving Credit Agreement and the related arrangement and structuring fee letters dated as of the date hereof and (ii) one (1) minus a fraction, the numerator of which shall be the number of days elapsed from the Effective Date until the date upon which such Guarantor became a Non-Renewing Guarantor and the denominator of which shall be the number of days from the Effective Date through December 21, 2006 , which aggregate amount shall be divided among such other Fund Guarantors pro rata in accordance with their respective Fund Guarantor Percentages. (b) Notwithstanding any other provision of the Guaranty or the Revolving Credit Agreement or any other agreement to which any of the parties is a party, in the event that any Fund Guarantor (i) fails to make any payment due under Article II of the Guaranty; or (ii) commits a Guarantor Default (as defined in the Guaranty) which has directly resulted in the Administrative Agent (x) declaring the Loans outstanding to become due and payable in whole or in part or (y) terminating the Commitments, in each case pursuant to Article VII of the Revolving Credit Agreement (such Fund Guarantor, a "Defaulting Guarantor") and the Administrative Agent has not rescinded such declaration or reinstated such Commitments within five (5) days, one hundred percent (100%) of the Participation Interests, Senior Notes and Warrants held by such Defaulting Guarantor and its Affiliates shall immediately be assigned at no cost to the other Fund Guarantors (or their designated Affiliates) on a pro rata basis (in accordance with their respective Fund Guarantor Percentages), in which event such Defaulting Guarantor shall execute such agreements and related documents and take such other actions as reasonably determined by TPG in pursuance of such assignment; provided that if any such assignment is prevented by any provision of any other agreement or law, such Defaulting Guarantor shall take any other steps that are reasonably requested by TPG to ensure that TPG and such other Fund Guarantors enjoy the same economic benefits as TPG and such other Fund Guarantors would have enjoyed from such an assignment. 5. 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 under the Guaranty (a "Guarantor Interest"), all or a portion of its rights or obligations in respect of any commitment or any loans at the time owing to it under any credit agreement with MEMC (a "Revolver Interest") or any of the Participation Interests, Italian Credit Agreement Rights (as defined below), 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. 6. Rights of First Offer. (a) In the event that any of TCW or LGP (hereinafter, the "Transferor") desires to transfer any of its Guarantor Interests, Revolver Interests, Participation Interests, Italian Credit Agreement Rights, Senior Notes or Warrants (an "Offered Interest") to a third party, other than pursuant to paragraph 7, 8 or 9 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 any 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 6(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 or 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 6(b), the Transferor shall give written notice to 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 6(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. 7. Tag-Along Rights. (a) If TPG or TPG WP or any of their respective Affiliates proposes to transfer any Guarantor Interests, 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 respective Affiliates (hereinafter referred to as the "Selling TPG Party") shall give written notice (a "Transfer Notice") of such proposed transfer to the holders of Guarantor Interests, Revolver Interests, Participation Interests, Senior Notes or Warrants, as the case may be, other than the Selling TPG Party (the "Other Holders") 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 Holders, (iii) the date of the proposed transfer, (iv) the amount of the Guarantor Interests, 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 Holders shall have the right to elect to sell up to the Pro Rata Portion (as defined below) of its Guarantor Interests, Revolver Interests, Participation Interests, Senior Notes, or Warrants, as the case may be. (b) Upon delivery of a Transfer Notice, each Other Holder may elect to sell up to the Pro Rata Portion of its Guarantor Interests, 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 Guarantor Interests, Revolver Interests, Participation Interests, Senior Notes, or Warrants, as the case may be, in the same transaction, in which case the portion of Guarantor Interests, 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 Holder shall sell to the purchaser the same percentage of their respective Guarantor Interests, Revolver Interests, Participation Interests, Senior Notes, or Warrants, as the case may be). Following such thirty (30) day period, each Other Holder, 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 Guarantor Interests, 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 Holders who have elected to sell pursuant to this paragraph (ii) of the Pro Rata Portion of their Guarantor Interests, 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 Guarantor Interests, Revolver Interests, Participation Interests, Senior Notes, or Warrants, the portion attained by multiplying (A) the aggregate interests then held by such Other Holder in such Guarantor Interests, 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 Guarantor Interests, 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 Guarantor Interests, Revolver Interests, Participation Interests, Senior Notes, or Warrants, as the case may be, then outstanding (including such Guarantor Interests, 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 7 and paragraphs 8 and 9, 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. 8. Drag-Along Rights. In the event that TPG or TPG WP wishes to sell all or substantially all of its Guarantor Interests, Revolver Interests, Participation Interests, Italian Credit Agreement Rights, Senior Notes or Warrants, in each case by merger, stock sale, asset sale or otherwise (other than pursuant to paragraph 9 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 Guarantor Interests, Revolver Interests, Participation Interests, Senior Notes or Warrants, as the case may be, upon such terms and conditions as agreed to with TPG or TPG WP, each Other Holder, agrees to sell all of its Guarantor Interests, 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 Guarantor Interests, 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 has agreed to with such purchaser; provided, however, that no party required to sell pursuant to this paragraph 8 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 Guarantor Interests, 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 Holders, at least thirty (30) days prior to the consummation of such sale, setting forth (i) the consideration to be received by such relevant parties, (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. 9. Permitted Transfers. Notwithstanding anything to the contrary herein, transfers to any Permitted Transferee of a party to this agreement shall not be subject to paragraph 6, 7 or 8. 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 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 Affiliate of TPG), so long as such Guarantor Interests, Revolver Interests, Participation Interests, Senior Notes, or Warrants, as the case may be, constitute less than 10% of the aggregate Guarantor Interests, Revolver Interests, Participation Interests, Senior Notes, or Warrants, as the case may be, on the date hereof. 10. Transferee's Rights and Obligations. Any party that acquires any Guarantor Interests, 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 Guarantor Interests, 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 Guaranty (and all related documents) 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. 11. 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. 12. 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. 13. 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. 14. 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. 15. 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 relevant party at the following addresses (or at such other address for a party 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. 16. Entire Agreement. This Agreement supersedes that certain Intercreditor Agreement, dated as of November 13, 2001, by and among TPG Wafer Credit Partners, LLC, T3 Partners II, L.P., T3 Parallel II, L.P., TCW/Crescent Mezzanine Partners III, L.P. and TCW/Crescent Mezzanine Trust III, Green Equity Investors III, L.P., Green Equity Investors Side III, L.P., TPG Wafer Management, L.L.C., and TPG Wafer Partners, LLC. This instrument, together with the Revolving Credit Agreement, the Guaranty, 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. 17. 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 PARTNERS III, L.P. By: TPG GenPar III, Inc. Its General Partner By: TPG Advisors III, 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 EX-24 13 tpg_ex24.txt Exhibit 24 OMNIBUS AMENDMENT AGREEMENT Omnibus Amendment Agreement, dated January 25 2002, among the entities set forth on the signatures pages hereof (this "Agreement"). W I T N E S S E T H T H A T: WHEREAS, as contemplated by Section 6.05 of that certain Guaranty (the "TCW Guaranty") dated as of December 21, 2001 among TCW/Crescent Mezzanine Partners III, L.P. and TCW/Crescent Mezzanine Trust III (collectively, the "Other TCW Entities") and Citicorp, USA Inc., as Administrative Agent (the "Administrative Agent"), TCW/Crescent Mezzanine III Netherlands, L.P. ("Netherlands") may be added to the TCW Guaranty as a joint and several "Guarantor" thereunder; WHEREAS, Netherlands is willing to be so added to the TCW Guaranty provided that it also becomes a party to the Reimbursement Agreement by and among Green Equity Investors III, L.P., Green Equity Investors Side III, L.P. (collectively "LGP"), Citicorp USA, Inc., as Collateral Agent (the "Collateral Agent"), MEMC Electronic Materials, Inc. ("MEMC"), TPG Partners III, L.P. ("TPG") and the Other TCW Entities (the "Reimbursement Agreement"), the Intercreditor Agreement by and among the Administrative Agent, the Collateral Agent, TPG, the Other TCW Entities and LGP (the "Pari Passu Intercreditor Agreement"), the Intercreditor Agreement by and among TPG, the Other TCW Entities, TPG Wafer Management, L.L.C. and TPG Wafer Partners, L.L.C. (the "Intercreditor Agreement") and the Termination and Funding Agreement by and among MEMC, TPG Wafer Credit Partners LLC, T3 Partners II, L.P., T3 Parallel II, L.P., the Other TCW Entities, LGP, the Administrative Agent and the Collateral Agent (the "Termination Agreement"), each dated as of December 21, 2001 (collectively, the "MEMC Documents"); and WHEREAS, the parties to the MEMC Documents wish to effect the amendments provided in this Agreement. NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending legally to be bound, the parties hereto hereby agree as follows: 1. Netherlands is hereby added to the TCW Guaranty as a joint and several "Guarantor" with the Other TCW Entities. Without limiting the foregoing, Netherlands hereby, jointly and severally with the other TCW Entities, guarantees to the Lenders and the Administrative Agent the prompt payment in full when due (whether at stated maturity, by acceleration or otherwise) of the TCW Percentage of the Guaranteed Obligations (as defined in Section 2.01 of the TCW Guaranty) in the same manner and to the same extent as is provided in the TCW Guaranty. In addition, Netherlands hereby (i) makes the representations and warranties set forth in Section 3.01 of the TCW Guaranty with respect to itself and its obligations under this Agreement, as if each reference in such Section to the TCW Guaranty included reference to this Agreement and (ii) submits to the jurisdiction of the courts, appoints and designates the Process Agent (as defined in the TCW Guaranty) its agent for service of process, and waives jury trial, in each case as provided in Sections 6.09 and 6.10 of the TCW Guaranty. Netherlands hereby agrees to deliver within 10 days of the date hereof to the Administrative Agent (i) such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of Netherlands, the authorization of this Agreement and any other legal matters relating to Netherlands or this Agreement or the transactions contemplated thereby, all in form and substance reasonably satisfactory to the Administrative Agent and its counsel, (ii) a favorable written opinion (addressed to the Administrative Agent and the Lenders) of O'Melveny & Meyers LLP special counsel to Netherlands, and Kramer Levin Naftalis & Frankel, LLC, special counsel to Netherlands, each in form and substance reasonably acceptable to the Administrative Agent and (iii) a complete list, as of the date hereof, of all "Limited Partners" (as such term is defined in the Agreement of Limited Partnership dated as of December 21, 2001 between TCW/Crescent Mezzanine III, LLC as General Partner and the Limited Partners listed on Schedule I thereto). The Administrative Agent hereby agrees that such information constitutes "Information" (as defined in Section 6.14 of the TCW Guaranty) and agrees to comply with the requirements of said Section 6.14 as to such Information. 2. The Reimbursement Agreement is hereby amended pursuant to Section 8.09 thereto to include Netherlands within the definitions of "TCW," "Fund Guarantors" and "TCW Guarantors." 3. The Pari Passu Intercreditor Agreement is hereby amended pursuant to Article VI thereto to include Netherlands within the definitions of "Fund Guarantors" and "TCW Percentage" in Schedule I thereto. 4. The Intercreditor Agreement is hereby amended pursuant to Section 11 thereto to include Netherlands within the definitions of "TCW" and "TCW Guarantor." 5. The Termination Agreement is hereby amended to include Netherlands within the definition of "Fund Guarantor" and as one of the "Lenders" referred to therein (except in Section 4 thereof). 6. Each of the MEMC Documents is hereby amended to include Netherlands as a party thereto, as if Netherlands had executed and delivered such documents on December 21, 2001. 7. The LGP Guaranty and the TPG Guaranty (as such terms are defined in the Termination Agreement) are hereby amended pursuant to Sections 6.04 thereto to include Netherlands within the definition of "Other Guarantors." 8. For the avoidance of doubt, and by reason of Section 2 hereof, MEMC and the Collateral Agent hereby confirm that Netherlands is included within the terms "TCW Guarantor," "Fund Guarantors" and "Secured Parties" in the Amended and Restated Security Agreement, dated as of December 21, 2001, among MEMC, certain subsidiaries of MEMC and the Collateral Agent. 9. Except as specifically amended hereby, the MEMC Documents, the LGP Guaranty, the TCW Guaranty and the TPG Guaranty shall remain in full force and effect and nothing herein shall alter, reduce or otherwise modify the obligations of any party under the TCW Guaranty, the LPG Guaranty, the TPG Guaranty and the MEMC Documents. 10. 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 be effective as of December 21, 2001. Delivery of an executed signature page to this Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 11. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. 12. 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 hereto 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. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the day and year 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 CITICORP USA, INC., as Administrative and Collateral Agent By: ------------------------------- Name: Title: TPG PARTNERS III, L.P. By: TPG GenPar III, L.P. Its General Partner By: TPG Advisors III, Inc. Its General Partner By: /s/ Richard A. Ekleberry ------------------------------- Name: Richard A. Ekleberry Title: Vice President With respect to Section 7 only: TPG GENPAR III, L.P. By: TPG Advisor III, Inc. Its General Partner By: /s/ Richard A. Ekleberry ------------------------------- Name: Richard A. Ekleberry Title: Vice President TCW/CRESCENT MEZZANINE PARTNERS III, L.P., TCW/CRESCENT MEZZANINE TRUST III and TCW/CRESCENT MEZZANINE III NETHERLANDS, L.P. 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-Marc Chapus ------------------------------- Name: Jean-Marc Chapus Title: Managing Director By: /s/ James C. Shevlet, Jr. ------------------------------- Name: James C. Shevlet, Jr. Title: Senior Vice President With respect to Section 1 only: TCW/CRESCENT MEZZANINE III, LLC 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, as its General Partner By: /s/ John Danhakl ---------------------------- Name: John Danhakl Title: Manager 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 With respect to Section 7 only: GEI CAPITAL III, LLC 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 TPG WAFER CREDIT PARTNERS LLC 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 EX-25 14 tpg_ex25.txt Exhibit 25 Reference is hereby made to the 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"). Pursuant to Article IV of the Agreement, TCW/Crescent Mezzanine III Netherlands, L.P. ("Netherlands"), the Company and the Members hereby execute and deliver this counterpart of the Agreement, and Netherlands hereby becomes added to, and bound by, and entitled to receive the benefits afforded by, the Agreement, effective as of December 21, 2001. Reference is also made to the Amended and Restated Limited Liability Company Operating Agreement, dated as of November 13, 2001, among the Members. Pursuant to Sections 11.01 and 11.08 thereof, Schedule A thereto is hereby amended to add Netherlands at the same address as TCW and Schedule B thereto is hereby amended to read in its entirety as set forth on Annex 1 hereto. DATED: January 25, 2002. TPG WAFER HOLDINGS, LLC 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 TCW/CRESCENT MEZZANINE PARTNERS III, L.P., TCW/CRESCENT MEZZANINE TRUST III and TCW/CRESCENT MEZZANINE III NETHERLANDS, L.P. By: TCW/Crescent Mezzanine Management III, L.L.C., as its Investment Manager By: TCW Asset Management Company, as Its Sub-Advisor By: TCW Asset Management Company, as 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 -----END PRIVACY-ENHANCED MESSAGE-----