exv10w11



 






Exhibit 10.11




Wells Fargo Foothill, Inc.




(Multicurrency — Cross Border)









MASTER AGREEMENT




dated as of April 20, 2005




	 	 	 	 	 
	 (“Party A”)
	 	 	 	 (“Party B”)
	 WELLS FARGO FOOTHILL, INC.
	 	and
	 	 SMART MODULAR TECHNOLOGIES
	 

	 	 	 	 (WWH), INC., a company incorporated under the laws of the Cayman Islands





have
entered and/or anticipate entering into one or more transactions (each a “Transaction”) that
are or will be governed by this Master Agreement, which includes the schedule (the “Schedule”), and
the documents and other confirming evidence (each a “Confirmation”) exchanged between the parties
confirming those Transactions.




Accordingly, the parties agree as follows:—




1.
Interpretation



(a) Definitions. The terms defined in Section 14 and in the Schedule will have the meanings
therein specified for the purpose of this Master Agreement.



(b) Inconsistency
 . In this event of any inconsistency between the provisions of the Schedule and
the other provisions of this Master Agreement, the Schedule will prevail. In the event of any inconsistency
between the provisions of any Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.



(c) Single
Agreement . All Transactions are entered into in reliance on the fact that this Master
Agreement and all Confirmations form a single agreement between the parties (collectively referred
to as this “Agreement”), and the parties would not
otherwise enter into any Transactions.





	2.	 	Obligations
	 
	(a)	 	General Conditions.





(i) Each
party will make each payment or delivery specified in each Confirmation to
be made by it, subject to the other provisions of this Agreement.



(ii) Payments under this Agreement will be made on the due date for value on that date in
the place of the account specified in the relevant Confirmation or otherwise pursuant to
this Agreement, in freely transferable funds and in the manner customary for payments in
the required currency. Where settlement is by delivery (that is other than by payment),
such delivery will be made for receipt on the due date in the manner customary for the
relevant obligation unless otherwise specified in the relevant Confirmation or elsewhere
in this Agreement.



 


Copyright © 1992 by International Swap Dealers Association, Inc.




 









 








(iii) Each obligation of each party under Section 2(a)(i) is subject to (1) the
condition precedent that no Event of Default or Potential Event of Default with respect
to the other party has occurred and is continuing, (2) the condition precedent that no
Early Termination Date in respect of the relevant Transaction has occurred or been
effectively designated and (3) each other applicable condition precedent specified in this
Agreement.


(b)
Change of Account. Either party may change its account for receiving a payment or delivery by
giving notice to the other party at least five Local Business Days prior to the scheduled
date for the payment or
delivery to which such change applies unless such other party gives timely notice of a reasonable
objection to such change.





	(c)	 	Netting. If on any date amounts would otherwise be
payable:—-






	 	(i)	 	in the same currency; and
	 
	 	(ii)	 	in respect of the same Transaction.




by each party to the other, then, on such date, each party’s obligation to make payment of any
such amount will be automatically satisfied and discharged and, if the aggregate amount that would
otherwise have been payable by one party exceeds the aggregate amount that would otherwise have
been payable by the other party, replaced by an obligation upon the
party by whom the larger
aggregate amount would have been payable to pay to the other party the excess of the larger
aggregate amount over the smaller aggregate amount.



The parties may elect in respect of two or more Transactions that a net amount will be determined
in respect of all amounts payable on the same date in the same currency in respect of such
Transactions, regardless of whether such amounts are payable in
respect of the same Transaction.
The election may be made in the Schedule or a Confirmation by specifying that subparagraph (ii)
above will not apply to the Transactions identified as being subject to the election, together
with the starting date (in which case subparagraph (ii) above will not, or will cease to, apply to
such Transactions from such date). This election may be made separately for different groups of
Transactions and will apply separately to each pairing of Offices through which the parties make
and receive payments or deliveries.




(d)
Deduction or Withholding far Tax.




(i)
Gross-Up. All payments under this Agreement will be made without any deduction
or withholding for or on account of any Tax unless such deduction or withholding is
required by any applicable law, as modified by the practice of any relevant governmental
revenue authority, then in effect. If a party is so required to
deduct or withhold, then
that party (“X”) will :—



(1) promptly notify the other party (“Y”) of such requirement;



(2) pay to the relevant authorities the full amount required to be deducted or
withheld
(including the full amount required to be deducted or withheld from any additional
amount paid
by X to Y under this Section 2(d)) promptly upon the earlier of
determining that such
deduction
or withholding is required or receiving notice that such amount has been assessed
against Y;



(3) promptly
forward to Y an official receipt (or a certified copy), or other
documentation
reasonably acceptable to Y, evidencing such payment to such authorities; and



(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to which
Y is
otherwise entitled under this Agreement, such additional amount as is necessary to
ensure that
the net amount actually received by Y (free and clear of
Indemnifiable Taxes, whether
assessed
against X or Y) will equal the full amount Y would have received had no such deduction
or
withholding been required. However, X will not be required to pay any additional
amount to Y
to the extent that it would not be required to be paid but for:—



(A) the failure by Y to comply with or perform any agreement contained in Section
4(a)(i), 4(a)(iii) or 4(d); or



(B) the failure of a representation made by Y pursuant to Section 3(f) to be
accurate and
true unless such failure would not have occurred but for (I) any action taken by a
taxing



 


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authority, or brought in a court of competent jurisdiction, on or after the date
on which a Transaction is entered into (regardless of whether such action is
taken or brought with respect to a party to this Agreement) or (II) a Change in
Tax Law.



(ii) Liability.
If: —



(1) X is required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, to make any deduction or withholding in respect of
which X would not be required to pay an additional amount to Y under Section
2(d)(i)(4);



(2) X does not so deduct or withhold; and



(3) a
liability resulting from such Tax is assessed directly against X.



then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such liability (including
any related liability for interest, but including any related liability for penalties
only if Y has failed to comply with or perform any agreement contained in Section
4(a)(i), 4(a)(iii) or 4(d)).


(e)
Default Interest; Other Amounts. Prior to the occurrence or effective designation of an
Early Termination Date in respect of the relevant Transaction, a party that defaults in the
performance of any payment obligation will, to the extent permitted by law and subject to
Section 6(c), be required to pay interest (before as well as after judgment) on the overdue
amount to the other party on demand in the same currency as such overdue amount, for the period
from (and including) the original due date for payment to (but excluding) the date of actual
payment, at the Default Rate. Such interest will be calculated on the basis of daily compounding
and the actual number of days elapsed. If, prior to the occurrence or effective designation of
an Early Termination Date in respect of the relevant Transaction, a party defaults in the
performance of any obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation or elsewhere in
this Agreement.





	3.	 	Representations




Each party represents to the other party (which representations will be deemed to be repeated by
each party on each data on which a Transaction is entered into and, in the case of the
representations in Section 3(f), at all times until the termination of this Agreement) that :—





	(a)	 	Basic Representations.





(i)
Status. It is duly organised and validly existing under the laws of the
jurisdiction of its organisation or incorporation and, if relevant under such laws, in
good standing;



(ii)
Powers. It has the power to execute this Agreement and any other documentation
relating to this Agreement to which it is a party, to deliver this Agreement and any
other documentation relating to this Agreement that it is required by this Agreement to
deliver and to perform its obligations under this Agreement and any obligations it has
under any Credit Support Document to which it is a party and has taken all necessary
action to authorise such execution, delivery and performance;



(iii)
No Violation or Conflict. Such execution, delivery and performance do not violate
or conflict with any law applicable to it, any provision of its constitutional
documents, any order or judgment of any court or other agency of government applicable
to it or any of its assets or any contractual restriction binding on or affecting it or
any of its assets;



(iv)
Consents. All governmental and other consents that are required to have been
obtained by it with respect to this Agreement or any Credit Support Document to which
it is a party have been obtained and are in full force and effect and all conditions of
any such consents have been complied with; and



(v)
Obligations Binding. Its obligations under this Agreement and any Credit Support
Document to which it is a party constitute its legal, valid and binding obligations,
enforceable in accordance with



 


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their respective terms (subject to applicable bankruptcy, reorganisation, insolvency,
moratorium or similar laws affecting creditors’ rights generally and subject, as to
enforceability, to equitable principles of general application (regardless of whether
enforcement is sought in a proceeding in equity or at law).


(b) Absence
of Certain Events. No Event of Default or Potential Event of Default or, to its
knowledge, Termination Event with respect to it has occurred and is continuing and no such event or
circumstance would occur as a result of its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.



(c) Absence
of Litigation. There is not pending or, to its knowledge, threatened against it or any
of its Affiliates any action, suit or proceeding at law or in equity or before any court, tribunal,
governmental body, agency or official or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support Document to which it is a party or its ability to perform its
obligations under this Agreement or such Credit Support Document.



(d) Accuracy
of Specified Information. All applicable information that is furnished in writing by
or on behalf of it to the other party and is identified for the purpose of this Section 3(d) in the
Schedule is, as of the date of the information, true, accurate and
complete in every material respect.



(e) Payer
Tax Representation. Each representation specified in the Schedule as being made by
it for the purpose of this Section 3(e) is accurate and true.



(f) Payee
Tax Representations. Each representation specified is the Schedule as being made by
it for the purpose of this Section 3(f) is accurate and true.





	4.	 	Agreements




Each party agrees with the other that, so long as either party has or may have any
obligation under this Agreement or under any Credit Support Document
to which it is a party:—



(a) Furnish Specified Information. It will deliver to the other party or, in certain cases under
subparagraph (iii) below, to such government or taxing authority as the other party reasonably
directs:—




(i) any forms, documents or certificates relating to taxation specified in the Schedule
or any Confirmation;



(ii) any other documents specified in the Schedule or any Confirmation; and



(iii) upon
reasonable demand by such other party, any form or document that may be
required or reasonably requested in writing in order to allow such other party or its
Credit Support Provider to make a payment under this Agreement or any applicable Credit
Support Document without any deduction or withholding for or on account of any Tax or
with such deduction or withholding at a reduced rats (so long as the completion,
execution or submission of such form or document would not materially prejudice the legal
or commercial position of the party in receipt of such demand), with any such form or
document to be accurate and completed in a manner reasonably satisfactory to such other
party and to be executed and to be delivered with any reasonably
required certification.


in each case by the date specified in the Schedule or such Confirmation or, if none is
specified, as soon as reasonably practicable.



(b) Maintain
Authorisations. It will use all reasonable efforts to maintain in full force and
effect all consents of any governmental or other authority that are required to be obtained by it with respect
to this Agreement or any Credit Support Document to which it is a party and will use all reasonable efforts
to obtain any that may become necessary in the future.



(c) Comply
with Laws. It will comply in all material respects with all applicable laws and orders
to which it may be subject if failure so to comply would materially impair its ability to perform its
obligations under this Agreement or any Credit Support Document to
which it is a party.



(d) Tax
Agreement. It will give notice of any failure of a representation made by it under Section
3(f) to be accurate and true promptly upon learning of such failure.




 


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(e)
Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax levied or imposed upon
it or in respect of its execution or performance of this Agreement by a jurisdiction in which it
is incorporated,



organised, managed and controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is
located (“Stamp Tax Jurisdiction”)
and will indemnify the other party against any Stamp Tax levied or imposed upon the other party or
in respect of the other party’s execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the other party.





	5.	 	Events of Default and Termination Events




(a) Events of Default. The occurrence at any time with respect to a party or, if applicable, any
Credit Support Provider of such party or any Specified Entity of such party of any of the
following events constitutes an event of default (an “Event of Default”) with respect to such
party:—




(i)
Failure to Pay or Deliver. Failure by the party to make, when due, any payment under
this Agreement or delivery under Section 2(a)(i) or 2(e) required to be made by it if such
failure is not remedied on or before the third Local Business Day after notice of such
failure is given to the party;



(ii) Breach of Agreement. Failure by the party to comply with or perform any agreement or
obligation (other than an obligation to make any payment under this Agreement or delivery
under Section 2(a)(i) or 2(e) or to give notice of a Termination Event or any agreement or
obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by
the party in accordance with this Agreement if such failure is not remedied on or before
the thirtieth day after notice of such failure is given to the party;



(iii)
Credit Support Default.



(1) Failure by the party or any Credit Support Provider of such party to comply
with or perform any agreement or obligation to be complied with or performed by it in
accordance with any Credit Support Document if such failure is continuing after any applicable grace
period has elapsed;



(2) the expiration or termination of such Credit Support Document or the failing or
ceasing of such Credit Support Document to be in full force and effect for the purpose of this
Agreement (in either case other than in accordance with its terms) prior to the satisfaction of
all obligations of such party under each Transaction to which such Credit Support Document relates
without the written consent of the other party; or



(3) the party or such Credit Support Provider disaffirms, disclaims, repudiates or
rejects, in whole or in part, or challenges the validity of, such Credit Support Document;



(iv) Misrepresentation. A representation (other than a representation under Section 3(e)
or (f)) made or repeated or deemed to have been made or repeated by the party or any
Credit Support Provider of such party in this Agreement or any Credit Support Document
proves to have been incorrect or misleading in any material respect when made or repeated
or deemed to have been made or repeated;



(v)
Default under Specified Transaction. The party, any Credit Support Provider of such
party or any applicable Specified Entity of such party (1) defaults under a Specified
Transaction and, after giving effect to any applicable notice requirement or grace period,
there occurs a liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction, (2) defaults, after giving effect to any
applicable notice requirement or grace period, in making any payment or delivery due on the
last payment, delivery or exchange date of, or any payment on early termination of, a
Specified Transaction (or such default continues for at least three Local Business Days if
there is no applicable notice requirement or grace period) or (3) disaffirms, disclaims,
repudiates or rejects, in whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate it or
act on its behalf);



(vi)
Cross Default.  If “Cross Default” is
specified in the Schedule as applying to the
party, the occurrence or existence of (1) a default, event of
default or other similar
condition or event (however described) in respect of such party, any Credit Support Provider
of such party or any applicable



 


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Specified Entity of such party under one or more agreements or instruments relating to
Specified Indebtedness of any of them (individually or collectively) in an aggregate
amount of not less than the applicable Threshold Amount (as specified in the Schedule)
which has resulted in such Specified Indebtedness becoming, or becoming capable at such
time of being declared, due and payable under such agreements or instruments, before it
would otherwise have been due and payable or (2) a default by such party, such Credit
Support Provider or such Specified Entity (individually or collectively) in making one or
more payments on the due date thereof in an aggregate amount of not less than the
applicable Threshold Amount under such agreements or instruments (after giving effect to
any applicable notice requirement or grace period);



(vii)
Bankruptcy. The party, any Credit Support Provider of such party or any applicable
Specified Entity of such party:—



(1) is dissolved (other than pursuant to a consolidation, amalgamation or merger);
(2) becomes insolvent or is unable to pay its debts or fails or admits in writing its
inability generally to pay its debts as they become due; (3) makes a general
assignment, arrangement or composition with or for the benefit of its creditors; (4)
institutes or has instituted against it a proceeding seeking a judgment of insolvency
or bankruptcy or any other relief under any bankruptcy or insolvency law or other
similar law affecting creditors’ rights, or a petition is presented for its
winding-up or liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition (A) results in a
judgment of insolvency or bankruptcy or the entry of an order for relief or the
making of an order for its winding-up or liquidation or (B) is not dismissed,
discharged, stayed or restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its winding-up, official
management or liquidation (other than pursuant to a consolidation, amalgamation or
merger); (6) seeks or becomes subject to the appointment of an administrator,
provisional liquidator, conservator, receiver, trustee, custodian or other similar
official for it or for all or substantially all its assets;
(7) has a secured party take possession of all or substantially all its assets or has a
distress,
execution, attachment, sequestration or other legal process levied, enforced or sued on
or against
all or substantially all its assets and such secured party maintains possession, or any
such
process is not dismissed, discharged, stayed or restrained, in each case within 30 days
thereafter;
(8) causes or is subject to any event with respect to it which, under the applicable
laws of any
jurisdiction, has an analogous effect to any of the events specified in clauses (1) to
(7)
(inclusive); or (9) takes any action in furtherance of, or indicating its consent to,
approval of, or
acquiescence in, any of the foregoing acts; or



(viii) Merger Without Assumption. The party or any Credit Support Provider, of such party
consolidates or amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, another entity and, at the time of such consolidation,
amalgamation, merger or transfer:—



(1) the
resulting, surviving or transferee entity fails to assume all the obligations
of such party or such Credit Support Provider under this Agreement or any Credit Support Document to
which it or its predecessor was a party by operation of law or pursuant to an agreement
reasonably satisfactory to the other party to this Agreement; or



(2) the benefits of any Credit Support Document fail to extend (without the consent of
the other party) to the performance by such resulting, surviving or transferee entity of
its obligations under this Agreement.


(b) Termination Events. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of such party of any
event specified below constitutes an Illegality if the event is specified in (i) below, a Tax Event
if the event is specified in (ii) below or a Tax Event Upon
Merger if the event Is specified in
(iii) below, and, if specified to be applicable, a Credit Event Upon Merger if the event is
specified pursuant to (iv) below or an Additional Termination Event if the event is specified
pursuant to (v) below:—




(i)
Illegality. Due to the adoption of, or any change in, any applicable law after the
date on which a Transaction is entered into, or due to the promulgation of, or any change
in, the interpretation by any court, tribunal or regulatory authority with competent
jurisdiction of any applicable law after such date, it becomes unlawful (other than as a
result of a branch by the party of Section 4(b)) for such party (which will be the
Affected Party):—



 


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(1) to perform any absolute or contingent obligation to make a payment or delivery or
to receive a payment or delivery in respect of such Transaction or to comply with any
other material provision of this Agreement relating to such Transaction; or



(2) to perform, or for any Credit Support Provider of such party to perform, any
contingent or other obligation which the party (or such Credit Support Provider) has under any
Credit Support Document relating to such Transaction;



(ii)
Tax Event. Due to (x) any action taken by a taxing authority, or brought in a court of
competent jurisdiction, on or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with respect to a party to this
Agreement) or (y) a Change in Tax Law, the party (which will be the Affected Party) will,
or there is a substantial likelihood that it will, on the next succeeding Scheduled Payment
Date (1) be required to pay to the other party an additional amount in respect of an
Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section
2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in respect of interest under
Section 2(e), 6(d)(ii) or 6(e) and no additional amount is required to be paid in
respect of such Tax under Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A)
or (B));



(iii) Tax Event Upon Merger. The party (the “Burdened Party”) on the next succeeding
Scheduled Payment Date will either (1) be required to pay an additional amount in respect
of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under
Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment
from which an amount has been
deducted or withheld for or on account of any Indemnifiable Tax in respect of which the
other party is not required to pay an additional amount (other than by reason of Section
2(d)(i)(4)(A) or (B)), in either case as a result of a party consolidating or
amalgamating with, or merging with or into, or transferring all or substantially all its
assets to, another entity (which will be the Affected Party) where such action does not
constitute an event described in Section 5 (a)(viii);



(iv)
Credit Event Upon Merger. If “Credit Event Upon Merger” is specified in the Schedule
as applying to the party, such party (“X”), any Credit Support Provider of X or any
applicable Specified Entity of X consolidates or amalgamates with, or merges with or
into, or transfers all or substantially all its assets to, another entity and such action
does not constitute an event described in Section 5(a)(viii) but the creditworthiness of
the resulting, surviving or transferee entity is materially weaker than that of X, such
Credit Support Provider or such Specified Entity, as the case may be, immediately prior
to such action (and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or



(v)
Additional Termination Event. If any “Additional Termination Event” is
specified in the Schedule or any Confirmation as applying, the occurrence of such
event (and, in such event, the Affected Party or Affected Parties shall be as
specified for such Additional Termination Event in the Schedule or such
Confirmation).


(c) Event of Default and Illegality. If an event or circumstance which would otherwise constitute
or give rise to an Event of Default also constitutes an Illegality, it will be treated as an
Illegality and will not constitute an Event of Default.





	6.	 	Early Termination




(a) Right
to Terminate following Event of Default. If at any time an Event of Default with respect
to a party (the “Defaulting Party”) has occurred and is then continuing, the other party (the
“Non-defaulting Party”) may, by not more than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an Early Termination Date in
respect of all outstanding Transactions. If, however, “Automatic
Early Termination” is specified in the Schedule
as applying to a party, then an Early Termination Date in respect of all outstanding Transactions will occur
immediately upon the occurrence with respect to such party of an Event of Default specified in Section
5(a)(vii)(l), (3), (5), (6) or, to the extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant petition upon the occurrence with respect
to such party of an Event of Default specified in
Section 5(a)(vii)(4) or, to the extent analogous thereto, (8),



(b) Right
to Terminate Following Termination Event.




 


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(i)
Notice. If a Termination Event occurs, an Affected Party will, promptly upon becoming
aware of it, notify the other party, specifying the nature of that
Termination Event and each
Affected Transaction and will also give such other information about that Termination Event as
the other party may reasonably require.



(ii)
Transfer to Avoid Termination Event. If either an
Illegality under Section 5(b)(i)(1) or
a Tax Event occurs and there is only one Affected Party, or if a Tax Event Upon Merger occurs
and the Burdened Party is the Affected Party, the Affected Party will, as a condition to its
right to designate an Early Termination Date under Section 6(b)(iv), use all reasonable
efforts (which will not require such party to incur a loss, excluding immaterial, incidental
expenses) to transfer within 20 days after it gives notice under Section 6(b)(i) all its
rights and obligations under this Agreement in respect of the Affected Transactions to
another of its Offices or Affiliates so that such Termination Event
ceases to exist.



If the Affected Party is not able to mate such a transfer it will give notice to the other
party to that effect within such 20 day period, whereupon the other party may effect such a
transfer within 30 days after the notice is given under Section 6(b)(i).



Any such transfer by a party under this Section 6(b)(ii) will be subject to and conditional
upon the prior written consent of the other party, which consent will not be withheld if such
other party’s policies in effect at such time would permit it to enter into transactions with
the transferee on the terms proposed.



(iii)
Two Affected Parties. If an Illegality under Section 5(b)(i)(l) or a Tax Event occurs
and there are two Affected Parties, each party will use all reasonable efforts to reach
agreement within 30 days after notice thereof is given under Section 6(b)(i) on action to
avoid that Termination Event.



(iv)
Right to Terminate. If:—



(1) a transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii), as the
case may be, has not been effected with respect to all Affected Transactions within 30
days after an Affected Party gives notice under Section 6(b)(i); or



(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger or an Additional
Termination Event occurs, or a Tax Event Upon Merger occurs and the Burdened Party is
not the Affected Party,



either party on the case of an Illegality, the Burdened Party in the case of a Tax Event Upon
Merger, any Affected Party in the case of a Tax Event or an Additional Termination Event if
there is more than one Affected Party, or the party which is not the Affected Party in the
case of a Credit Event Upon Merger or an Additional Termination Event if there is only one
Affected Party may, by not more than 20 days notice to the other party and provided that the
relevant Termination Event is then continuing, designate a day not earlier than the day such
notice is effective as an Early Termination Date in respect of all Affected Transactions.




	(c)	 	Effect of Designation.





(i) If notice designating an Early Termination Date is given under Section 6(a) or (b), the
Early Termination Date will occur on the date so designated, whether or not the relevant
Event of Default or Termination Event is then continuing.



(ii) Upon the occurrence or effective designation of an Early Termination Date, no further
payments or deliveries under Section 2(a)(i) or 2(e) in respect or the Terminated
Transactions will be required to be made, but without prejudice to the other provisions of
this Agreement. The amount, if any, payable in respect of an Early
Termination Date shall be
determined pursuant to Section 6(e).




	(d)	 	Calculations.





(i)
Statement. On or as soon as reasonably practicable following the occurrence of an
Early Termination Does, each party will make the calculations on its part, if any,
contemplated by Section 6(e) and will provide to the other party a
statement(1) showing, in
reasonable detail, such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e))



 


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and (2) giving details of the relevant account to which any amount payable to it is to be
paid. In the absence of written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party obtaining such quotation will be
conclusive evidence of the existence and accuracy of such quotation.



(ii)
Payment Date. An amount calculated as being due in respect of any Early Termination
Date under Section 6(e) will be payable on the day that notice of the amount payable is
effective (in the case of an Early Termination Date which is designated or occurs as a
result of an Event of Default) and on the day which is two Local Business Days after the
day on which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination
Event). Such amount
will be paid together with (to the extent permitted under applicable law) interest
thereon (before as well as after judgment) in the Termination Currency, from (and
including) the relevant Early Termination Date to (but excluding) the date such amount is
paid, at the Applicable Rate. Such interest will be calculated on the basis of daily
compounding and the actual number of days elapsed.


(e) 
Payments on Early Termination.   If an Early Termination Date occurs, the following provisions
shall apply based on the parties’ election in the Schedule of a payment measure, either “Market
Quotation” or “Loss”, and a payment method, either the “First Method” or the “Second Method”. If
the parties fail to designate a payment measure or payment method in the Schedule, it will be
deemed that “Market Quotation” or the “Second Method”, as the case may be, shall apply. The
amount, if any, payable in respect of an Early Termination Date and determined pursuant to this
Section will be subject to any Set-off.





	 	(i)	 	Events of Default. If the Early Termination Date results from an Event of
Default:—





(1) First
Method and Market Quotation.    If the First Method and Market Quotation
apply, the Defaulting Party will pay to the Non-defaulting Party the excess, if a positive
number, of (A) the sum of the Settlement Amount (determined by
the Non-defaulting Party) in respect of
the Terminated Transactions and the Termination Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party over (B) the Termination Currency Equivalent of the
Unpaid Amounts owing to the Defaulting Party.



(2) First
Method and Loss.  If the First Method and Loss apply, the Defaulting Party
will pay to the Non-defaulting Party, if a positive number, the Non-defaulting Party’s Loss in
respect of this Agreement.



(3) Second
Method and Market Quotation.  If the Second Method and Market Quotation
apply, an amount will be payable equal to (A) the sum of the Settlement Amount
(determined by the Non-defaulting Party) in respect of the Terminated Transactions and the
Termination Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting Party less (B)
the Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party.
If that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting
Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of that amount
to the Defaulting Party.



(4) Second
Method and Loss. If the Second Method and Loss apply, an amount will be
payable equal to the Non-defaulting Party’s Loss in respect of
this Agreement. If that
amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it
is a negative number, the Non-defaulting Party will pay the absolute value of that amount to the
Defaulting Party.




	 	(ii)	 	Termination Events. If the Early Termination Data results from a Termination Event:—





(1) 
One
Affected Party.  If there is one Affected Party, the amount payable will be
determined in accordance with Section 6(e)(i)(3), if Market Quotation applies, or Section
6(e)(i)(4), if Loss applies, except that, in either case, references to the Defaulting Party and to the
Non-defaulting Party will be deemed to be references to the Affected Party and the party which is not
the Affected Party, respectively, and, if Loss applies and fewer than all the Transactions
are being terminated, Loss shall be calculated in respect of all Terminated Transactions.



(2) Two
Affected Parties.  If there are two Affected Parties:—



 


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(A) if
Market Quotation applies, each party will determine a Settlement
Amount in respect of the Terminated Transactions, and an amount will be payable
equal to (I) the sum of (a) one-half of the difference between the Settlement
Amount of the party with the higher Settlement Amount (“X”) and the Settlement
Amount of the party with the lower Settlement Amount (“Y”) and (b) the
Termination Currency Equivalent of the Unpaid Amounts owing to X less (II) the
Termination Currency Equivalent of the Unpaid Amounts owing to Y; and




(B) if Loss applies, each party will determine its Loss in respect of this
Agreement (or, if fewer than all the Transactions are being terminated, in
respect of all Terminated Transactions) and an amount will be payable equal to
one-half of the difference between the Loss of the party with the higher Loss
(”X”) and the Loss of the party with the lower Loss (“Y”).




If the amount payable is a positive number, Y will pay it to X; if it is a negative
number, X will pay the absolute value of that amount to Y.




(iii)
Adjustment for Bankruptcy. In circumstances where an Early Termination Date occurs
because “Automatic Early Termination” applies in respect of a party, the amount
determined under this Section 6(e) will be subject to such adjustments as are appropriate
and permitted by law to reflect any payments or deliveries made by
one party to the other
under this Agreement (and retained by such other party) during the period from the
relevant Early Termination Date to the date for payment determined under Section
6(d)(ii).




(iv)
Pre-Estimate.  The parties agree that if Market Quotation applies an amount
recoverable under this Section 6(e) is a reasonable pre-estimate of loss and not a
penalty. Such amount is payable for the loss of bargain and the loss of protection
against future risks and except as otherwise provided in this Agreement neither party
will be entitled to recover any additional damages as a consequence of such losses.


7. Transfer



Subject to Section 6(b)(ii), neither this Agreement nor any interest or obligation in or under
this Agreement may be transferred (whether by way of security or otherwise) by either party
without the prior written consent of the other party, except that:—



(a) a party may make such a transfer of this Agreement pursuant to a consolidation or
amalgamation with, or merger with or into, or transfer of all or substantially all its assets to,
another entity (but without prejudice to any other right or remedy under this Agreement); and



(b) a party may make such a transfer of all or any part of its interest in any amount payable
to it from a Defaulting Party under Section 6(e).



Any purported transfer that is not in compliance with this Section will be void.



8. Contractual Currency



(a)
Payment in the Contractual Currency.  Each payment under this Agreement will be made in
the relevant currency specified in this Agreement for that payment (the “Contractual Currency”). To
the extent permitted by applicable law, any obligation to make payments under this Agreement in the
Contractual Currency will not be discharged or satisfied by any tender in any currency other than
the Contractual Currency, except to the extent such tender results in the actual receipt by the
party to which payment is owed, acting in a reasonable manner and in
good faith in converting the
currency so tendered into the Contractual Currency, of the full amount in the Contractual Currency
of all amounts payable in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency payable in respect of
this Agreement, the party required to make the payment will, to the extent permitted by applicable
law, immediately pay such additional amount in the Contractual
Currency as may be necessary to
compensate For the shortfall. If for any reason the amount in the
Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this Agreement, the
party receiving the payment will refund promptly the amount of such excess.



(b)
Judgments.  To the extent permitted by applicable law, if any judgment or order expressed in a




ISDA ® 1992




10









 







currency other than the Contractual Currency is rendered (i) for the payment of any amount
owing in respect of this Agreement, (ii) for the payment of any amount relating to any early
termination in respect of this Agreement or (iii) in respect of
a judgment or order of another
court for the payment of any amount described in (i) or
(ii) above, the party seeking recovery,
after recovery in full of the aggregate amount to which such party is entitled pursuant to the
judgment or order, will be entitled to receive immediately from the other party the amount of any
shortfall of the Contractual Currency received by such party as a consequence of sums paid in such
other currency and will refund promptly to the other party any excess of the Contractual Currency
received by such party as a consequence of sums paid in such other currency if such shortfall or
such excess arises or results from any variation between the rate of exchange at which the
Contractual Currency is converted into the currency of the judgment or order for the purposes of
such judgment or order and the rate of exchange at which such party is able, acting in a
reasonable manner and in good faith in converting the currency received into the Contractual
Currency, 10 purchase the Contractual Currency with the amount of the currency of the judgment or
order actually received by such party. The term “rate of exchange” includes, without limitation,
any premiums and costs of exchange payable in connection with the purchase of or conversion into
the Contractual Currency.



(c) Separate
Indemnities. To the extent permitted by applicable law, these indemnities
constitute separate and independent obligations from the other obligations in this Agreement, will
be enforceable as separate and independent causes of action, will apply notwithstanding any
indulgence granted by the party to which any payment is owed and will not be affected by judgment
being obtained or claim or proof being made for any other sums payable in respect of this
Agreement.



(d) Evidence
of Loss. For the purpose of this Section 8, it will be sufficient for a party to
demonstrate that it would have suffered a loss had an actual exchange or purchase been made.



9. Miscellaneous



(a)
Entire Agreement. This Agreement constitutes the entire agreement and understanding of the
parties with respect to its subject matter and supersedes all oral communication and prior writings
with respect thereto.



(b)
Amendments. No amendment, modification or waiver in respect of this Agreement will be
effective unless in writing (including a writing evidenced by a facsimile transmission) and executed
by each of the parties or confirmed by an exchange of telexes or electronic messages on an
electronic messaging system.



(c)
Survival of Obligations. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations
of the parties under this Agreement will survive the termination of any Transaction.



(d)
Remedies Cumulative. Except as provided in this Agreement, the rights, powers, remedies
and privileges provided in this Agreement are cumulative and not exclusive of any rights, powers,
remedies and privileges provided by law.



(e)
Counterparts and Confirmations.





(i) This Agreement (and each amendment, modification and waiver in respect of it)
may be executed and delivered in counterparts (including by facsimile transmission), each
of which will be deemed an original.




(ii) The parties intend that they are legally bound by the terms of each Transaction
from the moment they agree to those terms (whether orally or otherwise). A Confirmation
shall be entered into as soon as practicable and may be executed and delivered in
counterparts (including by facsimile transmission) or be created by an exchange of
telexes or by an exchange of electronic messages on an electronic messaging system,
which in each case will be sufficient for all purposes to evidence a binding supplement
to this Agreement. The parties will specify therein or through another effective means
that any such counterpart, telex or electronic message constitutes a Confirmation.


(f)
No Waiver of Rights. A failure or delay in exercising any right, power or privilege in
respect of this Agreement will not be presumed to operate as a waiver, and a single or partial
exercise of any right, power or privilege will not be presumed to preclude any subsequent or
further exercise, of that right, power or privilege or the exercise of any other right, power or
privilege.



(g) Headings.
The headings used in this Agreement are for convenience of reference only and
are not to




ISDA ® 1992




11









 







affect the construction
of or to be taken into consideration in interpreting this Agreement.



10. Offices; Multibranch Parties



(a) If Section 10(a) is specified in the Schedule as applying, each party that enters into a
Transaction through an Office other than its head or home office represents to the other party
that, notwithstanding the place of booking office or jurisdiction of incorporation or
organisation of such party, the obligations of such party are the same as if it had entered into
the Transaction through its head or home office. This representation will be deemed to be
repeated by such party on each date on which a Transaction is entered into.



(b) Neither party may change the Office through which it makes and receives payments or
deliveries for the purpose of a Transaction without the prior written consent of the other
party.



(c) If a party is specified as a Multibranch Party in the Schedule, such Multibranch Party may
make and receive payments or deliveries under any Transaction through any Office listed in the
Schedule, and the Office through which it makes and receives payments or deliveries with respect
to a Transaction will be specified in the relevant Confirmation.



11. Expenses



A Defaulting Party will, on demand, indemnify and hold harmless the other party for and against
all reasonable out-of-pocket expenses, including legal fees and Stamp Tax, incurred by such
other party by reason of the enforcement and protection of its rights under this Agreement or
any Credit Support Document to which the Defaulting Party is a party or by reason of the early
termination of any Transaction, including, but not limited to, costs of collection.



12. Notices



(a)
Effectiveness. Any notice or other communication in respect of this Agreement may be given
in any manner set forth below (except that a notice or other communication under Section 5 or 6
may not be given by facsimile transmission or electronic messaging system) to the address or
number or in accordance with the electronic messaging system details provided (see the Schedule)
and will be deemed effective as indicated:—





(i) if in writing and delivered in person or by courier, on the date
it is delivered;




(ii) if sent by telex, on the date the recipient’s
answerback is received;




(iii) if
sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it being agreed
that the burden of proving receipt will be on the sender and will not be met by a
transmission report generated by the sender’s facsimile machine);




(iv) if sent by certified or registered mail (airmail, if overseas) or the equivalent
(return receipt requested), on the date that mail is delivered or its delivery is
attempted; or




(v) if sent by electronic messaging system, on the date that electronic message is
received,


unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not
a Local Business Day or that communication is delivered (or attempted) or received, as
applicable, after the close of business on a Local Business Day, in which case that
communication shall be deemed given and effective on the first following day that is a Local
Business Day.



(b)
Change of Addresses. Either party may by notice to the other change the address,
telex or facsimile number or electronic messaging system details at which notices or other
communications are to be given to
it.



13. Governing Law and Jurisdiction



(a)
Governing Law. This Agreement will be governed by and construed in accordance with the
law specified in the Schedule.



(b) Jurisdiction.
With respect to any suit, action or proceedings relating to this
Agreement (“Proceedings”), each party irrevocably:—




ISDA ® 1992





12









 









(i) submits
to the jurisdiction of the English courts, if this Agreement is
expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts
of the State of New York and the United States District Court located in the Borough of
Manhattan in New York City, if this Agreement is expressed to be governed by the laws of
the State of New York; and




(ii) waives any objection which it may have at any time to the laying of venue of any
Proceedings brought in any such court, waives any claim that such Proceedings have been
brought in an inconvenient forum and further waives the right to object, with respect to
such Proceedings, that such court does not have any jurisdiction over such party.


Nothing in this Agreement precludes either party from bringing Proceedings in any other
jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the
Contracting States, as defined in Section 1(3) of the Civil Jurisdiction and Judgments Act 1982
or any modification, extension or re-enactment thereof for the time being in force) nor will the
bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in
any other jurisdiction.



(c)
Service of Process. Each party irrevocably appoints the Process Agent (if any) specified
opposite its name in the Schedule to receive, for it and on its behalf, service of process in any
Proceedings. If for any reason any party’s Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in the manner provided
for notices in Section 12. Nothing in this Agreement will affect the right of either party to serve
process in any other manner permitted by law.



(d)
Waiver of Immunities. Each party irrevocably waives, to the fullest extent permitted by
applicable law, with respect to itself and its revenues and assets (irrespective of their use or
intended use), all immunity on the grounds of sovereignty or other similar grounds from (i) suit,
(ii) jurisdiction of any court, (iii) relief by way of injunction, order for specific performance or
for recovery of property, (iv) attachment of its assets (whether before or after judgment) and (v)
execution or enforcement of any judgment to which it or its revenues or assets might otherwise be
entitled in any Proceedings in the courts of any jurisdiction and irrevocably agrees, to the extent
permitted by applicable law, that it will not claim any such immunity
in any Proceedings.



14.  Definitions



As used
in this Agreement:—



“Additional
Termination Event” has the meaning specified in Section 5(b).



“Affected
Party” has the meaning specified in Section 5(b).



“Affected
Transactions” means (a) with respect to any Termination Event consisting of an
Illegality, Tax Event or Tax Event Upon Merger, all Transactions affected by the occurrence of such
Termination Event and (b) with respect to any other Termination Event, all Transactions.



“Affiliate”
means, subject to the Schedule, in relation to any person, any entiry controlled,
directly or indirectly, by the person, any entity that controls, directly or indirectly, the person
or any entity directly or indirectly under common control with the person. For this purpose,
“control” of any entity or person means ownership of a majority of the voting power of the entity
or person.



“Applicable
Rate” means:—



(a) in respect of obligations payable or deliverable (or which would have been but for
Section 2(a)(iii)) by a Defaulting Party, the Default Rate;



(b) in
respect of an obligation to pay an amount under Section 6(e) of either party from and after
the date (determined in accordance with Section 6(d)(ii)) on which that amount is payable, the
Default Rate;



(c) in respect of all other obligations payable or deliverable (or which would have been but
for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default Rate; and



(d) in
all other cases, the Termination Rate.




ISDA ® 1992





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“Burdened
Party” has the meaning specified in Section 5(b).



“Change in Tax Law” means the enacrment, promulgation, execution or ratification of, or any
change in or amendment to, any law (or in the application or official interpretation of any
law) that occurs on or after the date on which the relevant Transaction is entered into.



“consent” includes a consent, approval, action, authorisation, exemption, notice, filing,
registration or exchange control consent.



“Credit
Event Upon Merger” has the meaning specified in Section 5(b).



“Credit Support Document” means any agreement or instrument that is specified as such in this
Agreement.



“Credit Support Provider” has the meaning specified in the Schedule.



“Default Rate” means a rate per annum equal to the cost (without proof or evidence of any actual
cost) to the relevant payee (as certified by it) if it were to fund or of funding the relevant
amount plus 1% per annum.



“Defaulting
Party” has the meaning specified in Section 6(a).



“Early Termination Date” means the date determined in accordance with Section 6(a) or
6(b)(iv).



“Event
of Default” has the meaning specified in Section 5(a) and, if applicable, in
the Schedule.



“Illegality”
 has the meaning specified in Section 5(b).



“Indemnifiable
Tax” means any Tax other than a Tax that would not be imposed in respect of a
payment under this Agreement but for a present or former connection between the jurisdiction of the
government or taxation authority imposing such Tax and the recipient of such payment or a person
related to such recipient (including, without limitation, a connection arising from such recipient
or related person being or having been a citizen or resident of such jurisdiction, or being or
having been organised, present or engaged in a trade or business in such jurisdiction, or having or
having had a permanent establishment or fixed place of business in such jurisdiction, but excluding
a connection arising solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this Agreement or a Credit
Support Document).



“law”
includes any treaty, law, rule or regulation (as modified, in the case of tax matters, by
the practice of any relevant governmental revenue authority) and
“lawful” and “unlawful” will be
construed accordingly.



“Local
Business Day” means, subject to the Schedule, a day on which commercial banks are open for
business (including dealings in foreign exchange and foreign currency deposits) (a) in relation to
any obligation under Section 2(a)(i), in the place(s) specified in the relevant Confirmation or,
if not so specified, as otherwise agreed by the parties in writing or determined pursuant to
provisions contained, or incorporated by reference, in this Agreement, (b) in relation to any
other payment, in the place where the relevant account is located and, if different, in the
principal financial centre, if any, of the currency of such payment, (c) in relation to any notice
or other communication, including notice contemplated under
Section 5(a)(i), in the city specified
in the address for notice provided by the recipient and, in the case
of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and (d) in relation to
Section 5(a)(v)(2), in the relevant locations for performance with respect to such Specified
Transaction.



“Loss”
means, with respect to this Agreement or one or more Terminated Transactions, as the case
may be, and a party, the Termination Currency Equivalent of an amount that party reasonably
determines in good faith to be its total losses and costs (or gain, in which case expressed as a
negative number) in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost of funding or, at
the election of such party but without duplication, loss or cost incurred as a result of its
terminating, liquidating, obtaining or reestablishing any hedge or related trading position (or
any gain resulting from any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each applicable condition
precedent) on or before the relevant Early Termination Date and not made, except, so as
to avoid duplication, if Section 6(e)(i)(l) or (3) or 6(e)(ii)(2)(A) applies. Loss does not
include a party’s legal fees and out-of-pocket expenses referred to under Section 11, A party will
determine its Loss as of the relevant Early Termination




ISDA ® 1992





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Date, or if that is not reasonably practicable, as of the earliest date thereafter
as is reasonably practicable. A party may (but need not) determine its Loss by reference to
quotations of relevant rates or prices from one or more leading dealers in the relevant markets.



“Market
Quotation” means, with respect to one or more Terminated Transactions and a party
making the determination, an amount determined on the basis of quotations from Reference
Market-makers. Each quotation will be for an amount, if any, that would be paid to such party
(expressed as a negative number) or by such party (expressed as a positive number) in
consideration of an agreement between such party (taking into account any existing Credit Support
Document with respect to the obligations of such party) and the quoting Reference Market-maker to
enter into a transaction (the “Replacement Transaction”) that would have the effect of preserving
for such party the economic equivalent of any payment or delivery (whether the underlying
obligation was, absolute or contingent and assuming the satisfaction of each applicable condition
precedent) by the parties under Section 2(a)(i) in respect of such Terminated Transaction or
group of Terminated Transactions that would, but for the occurrence of the relevant Early
Termination Date, have been required after that date. For this purpose, Unpaid Amounts in respect
of the Terminated Transaction or group of Terminated Transactions are to be excluded but, without
limitation, any payment or delivery that would, but for the relevant Early Termination Date, have
been required (assuming satisfaction of each applicable condition precedent) after that Early
Termination Date is to be included. The Replacement Transaction would be subject to such
documentation as such party and the Reference Market-maker may, in good faith, agree. The party
making the determination (or its agent) will request each Reference Market-maker to provide its
quotation to the extent reasonably practicable as of the same day and time (without regard to
different time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be obtained will be
selected in good faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged, after consultation with the other. If more than three quotations are
provided, the Market Quotation will be the arithmetic mean of the quotations, without regard to
the quotations having the highest and lowest values. If exactly three such quotations are
provided, the Market Quotation will be the quotation remaining after disregarding the highest and
lowest quotations. For this purpose, if more than one quotation has the same highest value or
lowest value, then one of such quotations shall be disregarded. If fewer than three quotations
are provided, it will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.



“Non-default
Rate” means a rate per annum equal to the cost (without proof or evidence of any
actual cost) to the Non-defaulting Party (as certified by it) if it were to fund the relevant
amount.



“Nan-defaulting
Party” has the meaning specified in Section 6(a).



“Office”
means a branch or office of a party, which may be such party’s head or home office.



“Potential
Event of Default” means any event which, with the giving of notice or the lapse of
time or both, would constitute an Event of Default.



“Reference
Market-makers” means four leading dealers in the relevant market selected by the party
determining a Marker Quotation in good faith (a) from among dealers of the highest credit
standing which satisfy all the criteria that such party applies generally at the time in deciding
whether to offer or to make an extension of credit and (b) to the extent practicable, from among
such dealers having an office in the same city.



“Relevant
Jurisdiction” means, with respect to a party, the jurisdictions (a) in which the party
is incorporated, organised, managed and controlled or considered to have its seat, (b) where an
Office through which the party is acting for purposes of this Agreement is located, (c) in which
the party executes this Agreement and (d) in relation to any payment, from or through which such
payment is made.



“Scheduled
Payment Date” means a date on which a payment or delivery is to be made under Section
2(a)(i) with respect to a Transaction.



“Set-off”
 means set-off, offset, combination of accounts, right of retention or withholding or
similar right or requirement to which the payer of an amount under Section 6 is entitled or
subject (whether arising under this Agreement, another contract, applicable law or otherwise)
that is exercised by, or imposed on, such payer.



“Settlement Amount” means, with respect to a party and any Early Termination Date, the sum of:—



(a) the Termination Currency Equivalent of the Market Quotations (whether positive or negative) for
each




ISDA ® 1992




15









 







[ILLEGIBLE] transactions for which a Market Quotation is determined; and



(b) such party’s Loss (whether positive or negative and without reference to any Unpaid Amounts)
for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation
cannot be determined or would not (in the reasonable belief of the party making the determination)
produce a commercially reasonable result.




“Specified Entity” has the meaning specified in the Schedule.



“Specified
Indebtedness” means, subject to the Schedule, any obligation (whether present or
future, contingent or otherwise, as principal or surety or otherwise) in respect of borrowed
money.



“Specified
Transaction” means, subject to the Schedule, (a) any transaction (including an
agreement with respect thereto) now existing or hereafter entered into between one party to this
Agreement (or any Credit Support Provider of such party or any applicable Specified Entity of
such party) and the other party to this Agreement (or any Credit Support Provider of such other
party or any applicable Specified Entity of such other party) which is a rate swap transaction,
basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index
swap, equity or equiry index option, bond option, interest rate option, foreign exchange
transaction, cap transaction, floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of these transactions
and (c) any other transaction identified as a Specified Transaction in this Agreement or the
relevant confirmation.



“Stamp
Tax” means any stamp, registration, documentation or similar tax.



“Tax”
means any present or future tax, levy, impost, duty, charge, assessment or fee of any
nature (including interest, penalties and additions thereto) that is imposed by any government or
other taxing authority in respect of any payment under this Agreement other than a stamp,
registration, documentation or similar tax.



“Tax
Event” has the meaning specified in Suction 5(b).



“Tax
Event Upon Merger” has the meaning specified in Section 5(b).




“Terminated Transactions” means with respect to any Early Termination Date (a) if resulting from a
Termination Event, all Affected Transactions and (b) if resulting from an Event of Default, all
Transactions (in either case) in effect immediately before the effectiveness of the notice
designating that Early Termination Date (or, if “Automatic Early Termination” applies, immediately
before that Early Termination Date).



“Termination
Currency” has the meaning specified in the Schedule.



“Termination
Currency Equivalent” means, in respect of any amount denominated in the Termination
Currency, such Termination Currency amount and, in respect of any amount denominated in a
currency other than the Termination Currency (the “Other Currency”), the amount in the
Termination Currency determined by the party making the relevant determination as being required
to purchase such amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of a later date,
that later date, with the Termination Currency at the rate equal to the spot exchange rate of the
foreign exchange agent (selected as provided below) for the purchase of such Other Currency with
the Termination Currency at or about 11:00 a.m. (in the city in which such foreign exchange agent
is located) on such date as would be customary for the determination of such a rate for the
purchase of such Other Currency for value on the relevant Early Termination Date or that later
date. The foreign exchange agent will, if only one party is obliged to make a determination under
Section 6(e), be selected in good faith by that party and otherwise will be agreed by the
parties.



“Termination
Event” means an Illegality, a Tax Event or a Tax Event Upon Merger or, if specified
to be applicable, a Credit Event Upon Merger or an Additional Termination Event.



“Termination
Rate” means a rate per annum equal to the arithmetic mean of the cost (without
proof or evidence of any actual cost) to each party (as certified by
such party) if it were to
fund or of funding such amounts.



“Unpaid
Amounts” owing to any party means, with respect to an Early Termination Date, the
aggregate of (a) in respect of all Terminated Transactions, the amounts that became payable (or
that would have become




ISDA ® 1992




16









 







payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and (b) in respect of
each Terminated Transaction, for each obligation under Section 2(a)(i) which was (or would have
been but for Section 2(a)(iii) required to be settled by delivery to such party on or prior to
such Early Termination Date and which has not been so settled as at such Early Termination Date, an
amount equal to the fair market value of that which was (or would have been) required to be
delivered as of the originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such amounts, from (and
including) the date such amounts or obligations were or would have been required to have been paid
or performed to (but excluding) such Early Termination Date, at the Applicable Rate. Such amounts
of interest will be calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above shall be
reasonably determined by the parry obliged to make the determination under Section 6(e) or, if each
party is so obliged, it shall be the average of the Termination Currency Equivalents of the fair
market values reasonably determined by both parties.



IN WITNESS WHEREOF the parties have executed this document on the respective dates specified below
with effect from the date specified on the first page of this document.




	 	 	 	 	 	 	 
	Party A	 	Party B
	 
	 	 	 	 	 	 
	WELLS FARGO FOOTHILL, INC.	 	SMART MODULAR TECHNOLOGIES (WWH),
INC., a company incorporated under
the laws of the Cayman Islands
	 
	 	 	 	 	 	 
	By:

	 	/s/ Paz Hernandez
	 	By:
	 	/s/ Jack Pacheco
	 

	 	 
	 	 	 	 
	Name: Paz Hernandez	 	Name: Jack Pacheco
	Its: Senior Vice President	 	Its: VP/CFO
	Date: APRIL 25, 2005	 	Date: APRIL 25, 2005






ISDA ® 1992




17









 








Wells Fargo Foothill, Inc.




SCHEDULE



to the




ISDA MASTER AGREEMENT




     This is the Schedule to that certain ISDA Master Agreement dated as of April 20, 2005
between WELLS FARGO FOOTHILL, INC. (“Party A”) and
SMART MODULAR TECHNOLOGIES (WWH), INC., a
company incorporated under the laws of the Cayman Islands (“Party B”).



PART I




Termination Provisions



In this Agreement:




     (A) “Specified
Entity” does not apply in relation to Party A and means
“Guarantors”, as hereinafter defined, in relation to Party B.




	 	(B)	 	“Specified Transaction” will have the meaning specified in Section 14 of this
Agreement.
	 
	 	(C)	 	The “Cross-Default” provisions of Section 5(a)(vi) of this Agreement will
apply to Party A and Party B.





          “Specified Indebtedness” will have the meaning specified in Section 14 and shall include (i)
any amount due and payable in respect of any Specified Transaction (except that, for this purpose
only, the words “and any other entity” shall be substituted for the words “and the other party to
this Agreement (or any Credit Support Provider of such other party or any applicable Specified
Entity of such other party)” where they appear in the definition of Specified Transaction) and
(ii) other indebtedness and other obligations, fixed or contingent, for the payment of money,
owing by Party B to Party A (in its individual or other capacity), including, without limitation,
any indebtedness and other obligations owed by Party B to Party A under that Loan and Security
Agreement dated April 16, 2004 as amended by that Amended and Restated Loan and Security
Agreement dated on March 28, 2005 and as further amended from time to time among Party B as a
borrower, the Lenders that are signatories thereto, as the Lenders and Party A as the Arranger
and Administrative Agent (as amended, supplemented, modified, renewed, replaced, extended,
consolidated or substituted from time to time, the “Loan Agreement”).



          “Threshold Amount” means with respect to Party A 3% of Shareholders’ Equity and with
respect to Party B $5,000,000.



          “Shareholders’
Equity” means, with respect to an entity, at any time, the sum (as shown in
its most recent annual audited financial statements) of (i) its capital stock (including
preferred stock outstanding, taken at par value, (ii) its capital surplus and (iii) its retained
earnings, minus (iv) treasury stock, each to be determined in accordance with generally accepted
accounting principles.



     (D) The
“Credit Event Upon Merger” provisions of Section 5(b)(iv) of this Agreement will apply
to Party A and Party B.



     (E) The
“Automatic Early Termination” provision of Section 6(a) of this Agreement will not
apply to Party A or to Party B.



     (F) Payments
on Early Termination. For the purpose of Section 6(e) of this Agreement:
(i) Market Quotation will apply, and (ii) Second Method
will apply.



     (G) “Termination
Currency” means United States Dollars.



20









 





Wells Fargo Foothill, Inc.




     (H) Additional
Termination Ryent will apply. The following shall constitute an
Additional Termination Event:




     (i) All “Obligations” under and as defined in the Loan Agreement (other than
“Bank Product Obligations”, as so defined) shall be paid and satisfied awl all
commitments by the “Lenders” (as so defined) to extend farther credit shall be
terminated, or there shall exist any “Event of Default” under and as defined in such
Loan Agreement.




     (ii) Party A is no longer a Lender and the Arranger and Administrative Agent under
that Loan Agreement.




     (iii) Upon failure of Party B to comply with Part 3 of this
Agreement.


Party B shall be the sole Affected Party for purposes of Part
l(H)(i) and (ii).




PART 2




Tax Representations




     (A) Payer
Representations. For the purpose of Section 3(e) of this Agreement, each
party makes the following representation:




It is not required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, of any Relevant Jurisdiction to make any deduction or
withholding for or on account of any Tax from any payment (other than interest under
Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to be made by
it to the other party
under this Agreement. In making this representation, it may rely on (i) the accuracy of
any representations made by the other party pursuant to
Section 3(f) of this Agreement,
(ii) the satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of
this Agreement and the accuracy and effectiveness of any document provided by the other
party pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii) the
satisfaction of the agreement of the other party contained in Section 4(d) of this
Agreement, provided that it shall not be a breach of this representation where reliance
is placed on clause




(ii) and the other party does not deliver a form or document under Section 4(a)(iii)
by reason of material prejudice to its legal or commercial position.



     (B) Payee
Representations. For the purpose of Section 3(f) of this Agreement,
Party A represents that it is a corporation organized under the laws of the State of California
and its Taxpayer identification number is 95 – 2689288.




Party
B represents that: Party B is a company incorporated under the laws of Cayman
Islands.



PART 3




Agreement
to Deliver Documents




     For the purposes of Section 4(a)(i)
and (ii) of this Agreement, the parties agree that
the following documents will be delivered:



	 	 	 	 	 	 	 
	 
	Party Required	 	 	 	 	 	Covered by
	to Deliver	 	 	 	Date by which	 	Section 3(d)
	Document	 	Form/Document/Certificate	 	to be delivered	 	Representation
	 
	Party B and Party
A

	 	Resolution adopted by the Board of
Directors,
certified by the Secretary
or an Assistant Secretary,
authorizing the execution,
delivery and performance of
this Agreement and each
Conformation
	 	Within 30 days from the
date of this Agreement
	 	Yes







21









 








Wells Fargo Foothill, Inc.




	 	 	 	 	 	 	 
	Party Required	 	 	 	 	 	Covered by
	to Deliver	 	 	 	Date by which to be	 	Section 3(d)
	Document	 	Form/Document/Certificate	 	delivered	 	Representation
	Party B and Party
A

	 	Specimen signature
certificate of the
Secretary or an Assistant
Secretary, setting out
names and specimen
signatures of each person
or persons authorized on
behalf of the party to
execute and deliver this
Agreement and each
Confirmation
	 	Within 30 days from
the date of this
Agreement
	 	Yes
	 
	 	 	 	 	 	 
	Party B

	 	The Credit Support
document(s), if any, listed
in Part 4, Section (F)
	 	Concurrent with the
execution of this
Agreement
	 	Yes
	 
	 	 	 	 	 	 
	Party B

	 	IRS Form W-8BEN, or any
successor form thereto
	 	Concurrent with the
execution of this
Agreement, promptly
upon reasonable
demand by Party A
and promptly upon
learning that any
such form previously
provided by Party B
has become obsolete
or incorrect.
	 	Yes
	 
	 	 	 	 	 	 
	Party B

	 	Additional information
with respect to Party B as
Party A may reasonably
request from time to time
	 	Promptly upon request
	 	Yes






PART 4




Miscellaneous





	 	(A)	 	Addresses for Notices. For the purpose of Section 12(a)
of this Agreement:





     Address for notices or communications to Party B:



	 	 	 	 	 
	 

	 	Address:
	 	SMART Modular Technologies (WWH),
Inc.
	 

	 	 	 	c/o SMART Modular Technologies, Inc.
	 

	 	 	 	4211 Starboard Drive
	 

	 	 	 	Fremont, CA 94538
	 
	 	 	 	 
	 

	 	 	 	ATTENTION: Jack Pacheco, Chief Financial Officer
	 
	 	 	 	 
	 

	 	 	 	Fax: 510 360-8500
	 

	 	 	 	Telephone: (510) 624-8134
	 

	 	 	 	E-mail Address: jack.pacheco@smartm.com






     Address for notices or communications to Party A:



	 	 	 	 	 
	 	 	For payment notices:
	 
	 	 	 	 
	 

	 	Address:
	 	Wells Fargo Foothill, Inc.
	 

	 	 	 	2450 Colorado Avenue,
Suite 3000 West
	 

	 	 	 	Santa Monica, CA 90404
	 
	 	 	 	 
	 

	 	 	 	ATTENTION: Kevin Gary







22









 








Wells Fargo Foothill, Inc.




	 	 	 	 	 
	 

	 	 	 	Fax: (310) 453-7423
	 

	 	 	 	Telephone: (310) 453-7272
	 

	 	 	 	E-mail: kgary@wffoothill.com
	 
	 	 	 	 
	 

	 	Address:
	 	Wells Fargo Foothill, Inc.
	 

	 	 	 	2450 Colorado Avenue,
Suite 3000 West
	 

	 	 	 	Santa Monica, CA 90404
	 
	 	 	 	 
	 

	 	 	 	ATTENTION: Deborah James
	 
	 	 	 	 
	 

	 	 	 	Fax:(310) 453-7422
	 

	 	 	 	Telephone: (310) 453-7277
	 

	 	 	 	E-mail: djames@wffoothill.com
	 
	 	 	 	 
	 

	 	Address:
	 	Wells Fargo Foothill, Inc.
	 

	 	 	 	2450 Colorado Avenue, Suite 3000 West
	 

	 	 	 	Santa Monica, ca 90404
	 
	 	 	 	 
	 

	 	 	 	ATTENTION: Krista Wade
	 

	 	 	 	Fax:(310) 453-7422
	 

	 	 	 	Telephone: (310) 453-7274
	 

	 	 	 	E-mail:KWade@wffoothill.com
	 
	 	 	 	 
	 	 	For all other
notices:
	 
	 	 	 	 
	 

	 	Address:
	 	Wells Fargo Foothill, Inc.
	 

	 	 	 	2450 Colorado Avenue, Suite 3000
	 

	 	 	 	West Santa Monica, CA 90404
	 
	 	 	 	 
	 

	 	 	 	ATTENTION: PAZ HERNANDEZ
	 
	 

	 	 	 	Fax: (310) 453-7442
	 

	 	 	 	Telephone: (310) 453-7260






     (B) Process Agent. For the purpose of Section 13(c) of the Agreement, neither Party A
nor Party B will appoint a Process Agent.



     (C) Offices.
The provisions of Section 10(a) will apply to this Agreement.



     (D) Multibranch
Party. For the purpose of Section
10(c) of this Agreement:


            Party A is a Multibranch Party and may
act through any of its U.S. offices. 

            Party B is not a Multibranch
Party.



     (B) Calculation Agent. The Calculation Agent is Party A. No failure by Party A to
perform any duties of the Calculation Agent under this Agreement shall be construed as an Event of
Default under this Agreement.



     (F) Credit Support Document. Any agreement and instrument, now or hereafter existing,
of any kind or nature which secures, guarantees or otherwise provides direct or indirect assurance
of payment or performance of any existing or future obligation of Party B under this Agreement,
made by or on behalf of any person or entity (including, without limiting the generality of the
foregoing, any credit or loan agreement, note, reimbursement agreement, security agreement,
mortgage, pledge agreement, assignment of rents or any other agreement or instrument granting any
lien, security interest, assignment, charge or encumbrance to secure any such obligation, any
guaranty, suretyship, letter of credit or subordination agreement relating to any such obligation
and any “keep well” or other financial support agreement relating to Party B or any Credit Support Provider), in favor
of Party A or any of its Affiliates and including the following:




23










 





Wells Fargo Foothill, Inc.




     (i) the Guaranty of each Guarantor, as defined in the Loan Agreement, in favor of
Party A as Agent for the Lenders, dated as of April 16, 2004, as modified by that certain
Amended and Restated Loan and Security Agreement dated March 28, 2005, as further modified
by that certain First Amendment to Guaranty dated as of April 20, 2005 and as further
modified from time to time; and




     (ii) the Loan Agreement as defined herein, as the same may be amended, supplemented,
modified, renewed, replaced, consolidated, substituted or extended from time to time.



          Party B agrees that the collateral securing the obligations of Party B to Lenders described
in the Credit Support Document(s) shall also secure the obligations of Party B to Party A under
this Agreement.




          The Credit Support Document(s) (as amended from time to time) are incorporated herein and
form a part of this Agreement to the extent that such Credit Support Document(s) relate to the
Transactions governed by this Agreement.




     (G) Credit Support Provider.



          Credit
Support Provider means in relation to Party A: None.




          Credit Support Provider means in relation to Party B: SMART Modular Technologies, Inc.,
SMART Modular Technologies (Puerto Rico) Inc., SMART Modular Technologies (Europe) Limited, SMART
Modular Technologies (Global), Inc., SMART Modular Technologies (DH), Inc., SMART Modular
Technologies (DE), Inc., SMART Modular Technologies (CI), Inc., SMART Modular Technologies
(Foreign Holdings), Inc., SMART Modular Technologies Industria de Componentes Eletronicos Ltda.,
SMART Modular Technologies SDN. BHD., and Modular Brasil
Participações Ltda.,




     (H) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York without reference to choice of law doctrine.



     (I) Netting of Payments. Subparagraph (ii) of Section 2(c) of this Agreement
will apply to the Transactions.



     (J) “Affiliate” will have the meaning specified in Section 14 of this Agreement and
shall exclude any broker/dealer affiliates with respect to Party A.



PART 5




Other Provisions




     (A) Confirmations. Notwithstanding anything to the contrary in this Agreement:




     (i) The parties hereto agree that with respect to each Transaction hereunder a
legally binding agreement shall exist from the moment that the parties hereto agree on the
essential terms of such Transaction, which the parties anticipate will occur by telephone.




     (ii)
For each Transaction Party A and Party B agree to enter into hereunder, Party A
shall promptly send to Party B a Confirmation, substantially in the form of Exhibit I
selling forth the terms of such Transaction. Party B shall execute and return the
Confirmation to Party A or request correction of any error within three Business Days of
receipt. Failure of Parry B to respond within such period shall nor affect the validity or
enforceability of such Transaction and shall be deemed to be an
affirmation of such terms.



     (B) Definitions. For each Transaction (unless otherwise specified in the relevant
Confirmation for that Transaction) all provisions of the 2000 ISDA Definitions (as published by the
International Swaps & Derivatives Association, Inc.), including the Annex to the 2000 ISDA
Definitions, are  hereby incorporated by this reference into this Agreement and shall form
a part hereof as if set forth in full herein.



24









 





Wells Fargo Foothill, Inc.




     (C) Notice of Event of Default. Party B agrees, upon learning of the occurrence of any
event or commencement of any condition that constitutes (or that with the giving of notice or
passage of time or both would constitute) an Event of Default with respect to Party B, promptly to
give Party A notice of such event or condition.



     (D) Additional
Representations. Section 3 of this Agreement is hereby amended by
adding at the end thereof the following subsections (g) through (j) and pursuant to subsections
(i) and (ii) below:




“(g)
Eligible Contract Participant. It is an “eligible contract participant” as that term
is defined in Section 1(a)(12) of the Commodity Exchange Act (7 U.S.C. l(a)(12)) and was
not formed solely for the purposes of constituting and ''eligible contract participant.”




“(h)
Line of Business. It has entered into this Agreement (including each Transaction
evidenced hereby) in conjunction with its line of business (including financial
intermediation services) or the financing of its business.”




“(i)
No Agency. It is entering into this Agreement, any Credit Support Document to which it
is a party, each Transaction and any other documentation relating to this Agreement or any
Transaction as principal (and not as agent or in any other capacity, fiduciary or
otherwise).”




“(j)
Creditworthiness. The economic terms of this Agreement, and Credit Support Document to
which it is a party, and each Transaction have been individually tailored and negotiated by
it, and the creditworthiness of the other party was a material consideration in its entering
into or determining the terms of this Agreement, such Credit Support document, and such
Transaction.”




(i) Section 3(a)(iii) of this Agreement is amended by inserting the word “material”
immediately prior to  the word “contractual” in the third line thereof.




(ii) Section 3(d) of this Agreement is amended to read in its entirety as follows:




“(d)
Accuracy of Specified Information. All applicable information that is furnished
in writing by or on behalf of it to the other party and is identified for purposes of
this Section 3(d) in this Agreement does not contain, when taken as a whole and as of
its date, a misstatement of material fact or omits to state a material fact required
to be stated in order to make the statements therein contained not misleading in the
light of circumstances under which made.”



     (E) Right of Setoff. Section 6 of this Agreement is amended by adding the
following new Section 6(f):




	 	 	 	“(f) Set-off. Any amount (the “Early Termination Amount”) payable under Section 6(e)
by one party (“Party X”) to the other party that is either the Defaulting Party or the
one Affected Party (‘“Party Y”), will, at the option of Party X (and without prior
notice to Party Y), be reduced by its set-off against any amount(s) (the “Other
Agreement Amount”) payable (whether at such time or in the future, or upon the
occurrence of a contingency) by Party Y to Party X (irrespective of the currency,
place of payment or booking office of the obligation) under any other
agreement(s)
between Party X and Party Y or instrument(s) or undertaking(s) issued or executed by
one party to, or in favor of, the other party (and the Other Agreement Amount will be
discharged promptly and in all respects to the extent it is so set-off). Party X will
give notice to the other party of any set-off effected under this Section 6(f).
	 
	 	 	 	For this purpose, either the Early Termination Amount or the Other Agreement Amount
(or the relevant portion of such amounts) may be converted by Party X into the
Currency in which the other is denominated at the rate of exchange at which such
party would be able, acting in a reasonable manner and in good faith, to purchase
the relevant amount of such currency, The term “rate of exchange” includes, without
limitation, any premiums and costs of exchange payable in connection with the
purchase of or conversion into the relevant currency.
	 
	 	 	 	If an obligation is unascertained, Party X may in good faith estimate that
obligation and set-off in respect of the estimate, subject to the relevant party
accounting to the other when the obligation is ascertained.




25









 











Wells Fargo Foothill, Inc.





Nothing in this Section 6(f) shall be effective to create a charge or other
security interest. This Section shall be without prejudice and in addition to any
right of set-off, combination of accounts, lien or other right to which any party
is at any time otherwise entitled (whether by operation of law, contract or
otherwise).”



     (F) Inconsistency Among Definitions or Provisions. In the event of any inconsistency
between the definitions or provisions in any of the following
documents, the relevant document first
listed below shall govern: (i) a Confirmation (with respect only to definitions in such
Confirmation; provided, however, that other provisions in a Confirmation will govern over
inconsistent provisions in the following documents to the extent that such Confirmation
explicitly states its intent to modify the following document); (ii) the Schedule to the ISDA
Master Agreement; (iii) the ISDA Master Agreement; and
(iv) the 2000 Definitions.



     (G) Incorporation
by Reference of Terms of the Loan Agreement. The covenants, terms and
provisions of, including all representations and warranties of Party B contained in the Loan
Agreement, as in effect from time to time are hereby incorporated by reference in, and made part
of, this Agreement to the same extent as if such covenants, terms, and provisions were set forth
in full herein. In the event of any inconsistency between the covenants, terms and provisions of
the Loan Agreement and this Agreement, the covenants, terms, and provisions of this Agreement
shall govern. Party B hereby agrees that, during the period commencing with the date of this
Agreement through and including such date on which all of Party B’s obligations under this
Agreement are fully performed, Party B will (a) observe, perform, and fulfill each and every such
covenant, term, and provision applicable to Party B, as such covenants, terms, and provisions, may
be amended from time to time after the date of this Agreement with
the consent of Party A provided
that such consent of Party A shall be deemed to be given automatically under this Agreement,
without any further action hereunder by either of Party A or Party B, if Party A or any of its
Affiliates (in its capacity as Lender or as Administrative Agent (as applicable) under the Loan
Agreement) has consented to the amendment of such covenant, term or provision contained in the
Loan Agreement. Subject to Part 1(H)(i) of this Agreement, in the event the Loan Agreement
terminates or becomes no longer binding on Party B prior to the termination of this Agreement and
any Transactions outstanding hereunder, such covenants, terms, and provisions (other then those
requiring payments in respect of amounts owned under the Loan Agreement) as they existed
immediately prior to such termination or such non-binding event, will remain in force and effect
for purposes of this Agreement as though set forth in full herein until the date on which all of
Party B’s obligations under this Agreement are fully performed and this Agreement is terminated.



     (H) Assignability. Section 7 of this Agreement will not apply. Subject to Section
6(b)(ii) of this Agreement, Party B shall not, without Party A’s prior written consent which
shall not be unreasonably withheld, assign Party B’s rights or obligations under this Agreement,
and any purported assignment by Parry B without such consent shall be void. Party A may (1)
transfer its obligations under this Agreement at any time (upon giving Notice to Party
B) to (a) its parent company, Wells Fargo & Company, and its successors and assigns or (b) any
100% owned subsidiary of Wells Fargo & Company, and its successors and assigns.


Party A may also (with the prior written consent of Party B which shall not be unreasonably
withheld) assign its rights and obligations under this Agreement, Any such assignment may be to
one or more financial institutions, private investors, trusts, and or other entities reasonably
acceptable to Party B.




     (I) Expenses. Section 11 of this Agreement will apply.



     (J) Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions of the
Agreement or affecting the validity or enforceability of such provision in any other
jurisdiction. The parties hereto shall endeavor in good faith negotiations to replace the
prohibited or unenforceable provision with a valid provision, the economic effect of which comes
as close as possible to that of the prohibited or unenforceable provision.



     (K) WAIVER OP JURY TRIAL. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY TRIAL OR LITIGATION ARISING OUT OF OR IN CONNECTION WITH ANY TRANSACTION OR
THIS AGREEMENT.



26









 





Wells Fargo Foothill, Inc.




     (L) No Reliance. Each party represents and warrants that, in connection with the negotiation
of and entering into this Agreement, any Credit Support Document and each Transaction (i) the
other party hereto is not acting as a fiduciary or a financial or
investment advisor for it; (ii)
it is not relying upon any advice, counsel or representations (whether written or oral) of the
other party hereto other than the representations expressly set forth in this Agreement, in such
Credit Support Document and in any Confirmation; (iii) the other
party hereto has not given to it
any advice or counsel as to the expected or projected success, return, performance, result,
consequence or benefit (either legal, regulatory, tax, financial, accounting, or otherwise) of
this Agreement, such Credit Support Document or such Transaction; (iv) it has consulted with its
own legal, regulatory, tax, business, investment financial and accounting advisors to the extent
it has deemed necessary and has made its own investment, hedging, and trading decisions (including
decisions regarding the suitability of such Transaction pursuant to this Agreement) based upon its
own judgment and upon any advice from such advisors as it has deemed necessary and not upon any
view expressed by the other party hereto; (v) all trading decisions have been the result of arms
length negotiations between the parties; and (vi) it is entering into this Agreement, such Credit
Support Document and such Transaction with a full understanding of all of the terms, conditions
and risks thereof (economic and otherwise), and it is capable of assuming and willing to assume
(financially and otherwise) those risks.



     (M) Events of Default. Section 5 of this Agreement is hereby amended as
follows:




     (i)
Breach of Agreement. Section 5(a)(ii) of this Agreement is hereby amended by
substituting “tenth Business Day (as defined in the Loan Agreement)” for “thirtieth day”
in the fifth line thereof.



     (N) Condition Precedent. The terms of Section 2 of the Agreement are hereby amended
by the addition of the following subclause (iv):




     “(iv) In addition to the conditions precedent set out in Section 2(a)(iii), if
applicable, each obligation of each party under section 2(a)(i) is subject to the
condition precedent that no Additional Termination Event has occurred and is continuing
with respect to which the other party is an Affected Party and with respect to which all
outstanding Transactions are Affected Transactions.




(O) Bankruptcy. Section 5(a)(vii) of the Agreement is hereby amended by
substituting the number “60” for the number “30” wherever it appears therein.”



     IT WITNESS WHEREOF the parties have executed this document on the respective dates specified
below with effect from the date specified on the first page of this document.



	 	 	 
	“Party A”

	 	“Party B”
	 
	WELLS FARGO FOOTHILL, INC.

	 	SMART MODULAR TECHNOLOGIES (WWH), INC.,
	 

	 	a company incorporated under the laws of the Cayman Islands






	 	 	 	 	 	 	 
	By:

	 	/s/ Paz Hernandez
	 	By:
	 	/s/ Jack Pacheco
	 

	 	 
	 	 	 	 
	Name:

	 	Paz Hernandez
	 	Name:
	 	Jack Pacheco
	Its:

	 	Senior Vice President
	 	Its:
	 	VP/CFO
	Date:

	 	April 25, 2005
	 	Date:
	 	April 25, 2005






27









 






Generic
Risk Disclosure




For
Financial Risk Management Products and Related Transactions




SMART MODULAR TECHNOLOGIES (WWH), INC.,

a company incorporated under the laws of the Cayman Islands




April
20, 2005



As is common with many other financial instruments and transactions, financial risk management
products, in addition to providing significant benefits, may in certain cases involve a variety of
significant risks.



Before entering into any financial risk management transaction, you should carefully consider
whether the transaction is appropriate for you in light of your objectives, experience, financial
and operational resources, and other relevant circumstances. You should also ensure that you fully
understand the nature and extent of your exposure to risk of loss, if any, which in some
circumstances may significantly exceed the amount of any initial payment made by or to you.



Financial risk management products permit precise customization to accomplish particular financial
and risk management objectives that might otherwise be unachievable. The specific risks presented
by a particular transaction necessarily depend upon the terms of that transaction and your
circumstances. Common to all, however, is their nature as legally binding contractual commitments,
which, once agreed to, cannot be altered other than by termination or modification. You should
understand that such termination and/or modification may, in certain circumstances, result in
significant losses.



As in any financial transaction, you should ensure that you understand the requirements, if any,
applicable to you that are established by your regulators or by your board of directors or other
governing body. You should also consider the legal, tax, accounting, and economic implications of
entering into any financial risk management transaction, independently and if necessary, through
consultation with such advisors as may be appropriate to assist you in understanding the risks
involved.



In entering into any financial risk management transaction with, or arranged by, us, Wells Fargo
Foothill, Inc. (the “Lender”), you should also understand that Lender is acting solely in the
capacity of an arm’s length contractual counter party and not in the capacity of your financial
advisor or fiduciary unless Lender has so agreed in writing and then only to the extent so
provided.



This brief statement does not purport to disclose all of the risks or other relevant
considerations of entering into financial risk management transactions.



I have read and fully understand the above disclosure.



SMART
MODULAR TECHNOLOGIES (WWH), INC.,



a company incorporated under the laws of the Cayman Islands




	 	 	 	 	 
	By:

	 	/s/ Jack Pacheco
	 	 
	 

	 	 	 	 
	Name:

	 	Jack Pacheco	 	 
	Title:

	 	VP/CFO	 	 
	Date:

	 	April 25, 2005	 	 







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