THIS SECURITY AGREEMENT, dated as of July 1, 1994, (the "Security Agreement") is by and between
INTERNATIONAL RECTIFIER CORPORATION, a Delaware corporation with its principal place of
business located in El Segundo, California (the "Debtor"); and
NATIONSBANC LEASING CORPORATION OF NORTH CAROLINA, a North Carolina corporation
with its principal place of business located in Charlotte, North Carolina (the "Secured Party").
A. The Debtor desires Secured Party to make revolving loans to Debtor to enable Debtor to make progress
payments relating to certain equipment (the "Contract Equipment" as hereinafter defined) from time to time as
more specifically set forth hereinafter.
B. The Debtor desires Secured Party to make term loans to Debtor secured by, and to fund the purchase of,
certain equipment (the "Equipment" as hereinafter defined) from time to time as more specifically set forth
C. So long as the terms and conditions set forth in this Security Agreement are complied with by the Debtor, the
Secured Party is willing to enter into this Security Agreement for the purposes stated herein.
NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
PROGRESS PAYMENT LOANS; TERM LOANS
1.1. PROGRESS PAYMENT LOANS. Subject to the terms and conditions hereof, Secured Party and Debtor
hereby agree that Secured Party may, from time to time, make progress payment loans ("Progress Payment
Loans") to Debtor with respect to the personal property ("Contract Equipment") that will become Equipment
subject to this Security Agreement. The Progress Payment Loans shall be evidenced by a Progress Payment
Note substantially in the form of EXHIBIT C hereto. Advances of Progress Payment Loans may be made by
Secured Party on behalf of Debtor directly to the vendor of the Contract Equipment or may be advanced by
Secured Party to Debtor in reimbursement for funds advanced by Debtor to the vendor. Progress Payment
Loans shall be advanced at the end of each month, p