Document:

exv4w2

 

Exhibit 4.2

EXECUTION COPY

SMART MODULAR TECHNOLOGIES (WWH), INC.

$125,000,000 Senior Secured Floating Rate Notes due 2012

REGISTRATION RIGHTS AGREEMENT

March 28, 2005

Citigroup Global Markets Inc.

Lehman Brothers Inc.

As Representatives of the Initial Purchasers

c/o Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

Ladies and Gentlemen:

          SMART Modular Technologies (WWH), Inc., an exempted company organized under the laws of the
Cayman Islands (the “Company”), proposes to issue and sell to certain purchasers (the “Initial
Purchasers”), for whom you (the “Representatives”) are acting as representatives, its Senior
Secured Floating Rate Notes (the “Notes”), upon the terms set forth in the Purchase Agreement
between the Issuers and the Representatives dated March 22, 2005 (the “Purchase Agreement”)
relating to the initial placement (the “Initial Placement”) of the Notes. The Notes will be
unconditionally guaranteed (the “Guarantees” and, together with the Notes, the “Securities”) by the
guarantors listed on the signature pages hereto (the “Guarantors” and, together with the Company,
the “Issuers”). To induce the Initial Purchasers to enter into the Purchase Agreement and to
satisfy a condition to your obligations thereunder, the Issuers agree with you for your benefit and
the benefit of the holders from time to time of the Securities (including the Initial Purchasers)
(each a “Holder” and, collectively, the “Holders”), as follows:

          1. Definitions. Capitalized terms used herein without definition shall have their respective
meanings set forth in the Purchase Agreement. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:

          “Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder.

          “Additional Interest” shall have the meaning set forth in Section 8 hereof.

          “Affiliate” shall have the meaning specified in Rule 405 under the Act and the terms
“controlling” and “controlled” shall have meanings correlative thereto.

          “Broker-Dealer” shall mean any broker or dealer registered as such under the Exchange Act.

 

 

          “Business Day” shall mean any day other than a Saturday, a Sunday or a legal
holiday or a day on which banking institutions or trust companies are authorized or
obligated by law to close in New York City.

          “Closing Date” shall mean the date of the first issuance of the Securities.

          “Commission” shall mean the Securities and Exchange Commission.

          “Deferral Period” shall have the meaning indicated in Section 4(k)(ii) hereof.

          “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder.

          “Exchange Offer Registration Period” shall mean the one-year period following the consummation
of the Registered Exchange Offer, exclusive of any period during which any stop order shall be in
effect suspending the effectiveness of the Exchange Offer Registration Statement.

          “Exchange Offer Registration Statement” shall mean a registration statement of the Issuers on
an appropriate form under the Act with respect to the Registered Exchange Offer, all amendments and
supplements to such registration statement, including post-effective amendments thereto, in each
case including the Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.

          “Exchanging Dealer” shall mean any Holder (which may include any Initial Purchaser) that is a
Broker-Dealer and elects to exchange for New Securities any Securities that it acquired for its own
account as a result of market-making activities or other trading activities (but not directly from
any Issuer or any Affiliate of any Issuer) for New Securities.

          “Final Memorandum” shall mean the offering memorandum, dated March 22, 2005,
relating to the Securities, including any and all exhibits thereto and any information
incorporated by reference therein as of such date.

          “Guarantees” shall have the meaning set forth in the preamble hereto.

          “Guarantors” shall have the meaning set forth in the preamble hereto.

          “Holder” shall have the meaning set forth in the preamble hereto.

          “indemnified party” and “indemnified parties” shall have the meaning set forth in Section 6(a)
hereof.

          “Indenture” shall mean the Indenture relating to the Securities, dated as of the date hereof, among the Issuers and U.S. Bank National Association, as trustee, as the same
may be amended from time to time in accordance with the terms thereof.

          “Initial Placement” shall have the meaning set forth in the preamble hereto.

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          “Initial Purchaser” shall have the meaning set forth in the preamble hereto.

          “Losses” shall have the meaning set forth in Section 6(d) hereof.

          “Majority Holders” shall mean, on any date, Holders of a majority of the aggregate principal amount of Securities registered under a Registration Statement.

          “Managing Underwriters” shall mean the investment banker or investment bankers and manager or
managers that administer an underwritten offering, if any, under a Registration Statement.

          “NASD Rules” shall mean the Conduct Rules and the By-Laws of the National Association of
Securities Dealers, Inc.

          “New Securities” shall mean debt securities of the Issuers identical in all material respects
to the Securities (except that the transfer restrictions shall be modified or eliminated, as
appropriate) to be issued under the Indenture.

          “Notes” shall have the meaning set forth in the preamble hereto.

          “Prospectus” shall mean the prospectus included in any Registration Statement (including,
without limitation, a prospectus that discloses information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule 430A under the Act), as
amended or supplemented by any prospectus supplement, with respect to the terms of the offering of
any portion of the Securities or the New Securities covered by such Registration Statement, and
all amendments and supplements thereto, including any and all exhibits thereto and any information
incorporated by reference therein.

          “Purchase Agreement” shall have the meaning set forth in the preamble hereto.

          “Registered
Exchange Offer” shall mean the proposed offer of the Issuers to issue and deliver
to the Holders of the Securities that are not prohibited by any law or policy of the Commission
from participating in such offer, in exchange for the Securities, a like aggregate principal amount
of the New Securities.

          “Registrable Securities” shall mean (i) Securities other than those that have been (A)
registered under a Registration Statement and disposed of in accordance therewith or (B)
distributed to the public pursuant to Rule 144 under the Act or any successor rule or regulation
thereto that may be adopted by the Commission and (ii) any New Securities resale of which
by the Holder thereof requires compliance with the prospectus delivery requirements of the Act.

          “Registration Statement” shall mean any Exchange Offer Registration Statement or Shelf
Registration Statement that covers any of the Securities or the New Securities pursuant to the
provisions of this Agreement, any amendments and supplements to such registration statement,
including post-effective amendments (in each case including the Prospectus contained therein), all
exhibits thereto and all material incorporated by reference therein.

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          “Securities” shall have the meaning set forth in the preamble hereto.

          “Shelf Registration” shall mean a registration effected pursuant to Section 3 hereof.

          “Shelf Registration Period” has the meaning set forth in Section 3(b) hereof.

          “Shelf
Registration Statement” shall mean a “shelf” registration statement of the

Issuers pursuant to the provisions of Section 3 hereof which covers some or all of the
Securities or New Securities, as applicable, on an appropriate form under Rule 415 under the
Act, or any similar rule that may be adopted by the Commission, amendments and
supplements to such registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all material incorporated by
reference therein.

          “Trustee” shall mean the trustee with respect to the Securities under the Indenture.

          “Trust Indenture Act” shall mean the Trust Indenture Act of 1939, as amended, and the rules
and regulations of the Commission promulgated thereunder.

          “underwriter” shall mean any underwriter of Securities in connection with an offering
thereof under a Shelf Registration Statement.

          2. Registered Exchange Offer.

          (a) The Issuers shall prepare and, not later than 240 days following the Closing Date, shall file with the Commission the Exchange Offer Registration Statement with respect to
the Registered Exchange Offer. The Issuers shall use their commercially reasonable efforts to have

the Exchange Offer Registration Statement declared effective under the Act within 330 days of the
Closing Date.

          (b) Upon the effectiveness of the Exchange Offer Registration Statement, the Issuers shall
promptly commence the Registered Exchange Offer, it being the objective of such Registered Exchange
Offer to enable each Holder electing to exchange Securities for New Securities (assuming that such
Holder is not an Affiliate of any Issuer, acquires the New Securities in the ordinary course of such
Holder’s business, has no arrangements with any person to participate in the distribution of the
New Securities and is not prohibited by any law or policy of the Commission from participating in
the Registered Exchange Offer) to trade such New Securities from and after their receipt without any limitations or restrictions under the Act and without
material restrictions under the securities laws of a substantial proportion of the several states
of the United States.

          (c) In connection with the Registered Exchange Offer, the Issuers shall:

          (i)
mail to each Holder a copy of the Prospectus forming part of the Exchange
Offer Registration Statement, together with an appropriate letter of transmittal and related
documents;

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          (ii) keep the Registered Exchange Offer open for not less than 20 Business Days and use
their commercially reasonable efforts to keep the Registered Exchange Offer open for not
more than 25 Business Days after the date notice thereof is mailed to the
Holders (or, in each case, longer if required by applicable law);

          (iii) use their commercially reasonable efforts to keep the Exchange Offer Registration
Statement continuously effective under the Act, supplemented and amended as required, under the Act
to ensure that it is available for sales of New Securities by Exchanging Dealers during the
Exchange Offer Registration Period;

          (iv)
utilize the services of a depositary for the Registered Exchange Offer with an address
in the Borough of Manhattan in New York City, which may be the Trustee, the Trustee or an
Affiliate of either of them;

          (v) permit Holders to withdraw tendered Securities at any time prior to the close
of business, New York time, on the last Business Day on which the Registered Exchange Offer is
open;

          (vi) prior to effectiveness of the Exchange Offer Registration Statement, provide a
supplemental letter to the Commission (A) stating that the
Issuers are conducting the Registered Exchange Offer in reliance on
the position of the Commission in Exxon Capital Holdings Corporation
(pub. avail. May 13, 1988), Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991); and (B)
including a representation that the Issuers have not entered into any arrangement or understanding
with any person to distribute the New Securities to be received in the Registered Exchange Offer
and that, to the best of the Issuers’ information and belief, each Holder participating in the
Registered Exchange Offer is acquiring the New Securities in the ordinary course of business and
has no arrangement or understanding with any person to participate in the distribution of the New
Securities; and

          (vii) otherwise use its commercially reasonable efforts to comply in all respects
with all rules and regulations of the Commission.

          (d) As
soon as practicable after the close of the Registered Exchange Offer,
the Issuers shall:

          (i) accept for exchange all Securities tendered and not validly withdrawn pursuant to the Registered Exchange Offer;

          (ii) deliver to the Trustee for cancellation in accordance with Section 4(s) all
Securities so accepted for exchange; and

          (iii) cause the Trustee promptly to authenticate and deliver to each Holder of Securities a
principal amount of New Securities equal to the principal amount of the Securities of such Holder
so accepted for exchange.

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          (e) Each Holder hereby acknowledges and agrees that any Broker-Dealer and any such Holder
using the Registered Exchange Offer to participate in a distribution of the New Securities (x)
could not under Commission policy as in effect on the date of this Agreement rely on the position
of the Commission in Exxon Capital Holdings Corporation (pub.
avail. May 13, 1988) and Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991), as interpreted in the Commission’s letter to
Shearman & Sterling dated July 2, 1993 and similar no-action letters; and (y) must comply with the
registration and prospectus delivery requirements of the Act in connection with any secondary resale
transaction, which must be covered by an effective registration statement containing the selling
security holder information required by Item 507 or 508, as applicable, of Regulation S-K under
the Act if the resales are of New Securities obtained by such Holder in exchange for
Securities acquired by such Holder directly from the Issuers or one of their Affiliates.
Accordingly, each Holder participating in the Registered Exchange Offer shall be required to
represent in writing to the Issuers that, at the time of the
consummation of the Registered Exchange
Offer:

          (i) any New Securities received by such Holder will be acquired in the ordinary course of business;

          (ii) such Holder will have no arrangement or understanding with any person to
participate in the distribution of the Securities or the New Securities within the meaning
of the Act; and

          (iii) such Holder is not an Affiliate of the Issuers.

          (f) If any Initial Purchaser determines that it is not eligible to participate in the
Registered Exchange Offer with respect to the exchange of Securities constituting any portion of an
unsold allotment, at the request of such Initial Purchaser, the Issuers shall issue and deliver to
such Initial Purchaser or the person purchasing New Securities registered under a Shelf
Registration Statement as contemplated by Section 3 hereof from such Initial Purchaser, in
exchange for such Securities, a like principal amount of New Securities. The Issuers shall use
their commercially reasonable efforts to cause the CUSIP Service Bureau to issue the same CUSIP
number for such New Securities as for New Securities issued pursuant to the Registered Exchange
Offer.

          3. Shelf
Registration. (a) If (i) due to any change in law or applicable
interpretations thereof by the Commission’s staff, the Issuers determine upon advice of their
outside counsel that they are not permitted to effect the Registered Exchange Offer as contemplated
by Section 2 hereof; or (ii) for any other reason the Exchange Offer Registration
Statement is not declared effective within 330 days after the Closing Date or the Registered
Exchange Offer is not consummated within 365 days of the Closing Date; (iii) any Initial Purchaser
so requests with respect to Securities that are not eligible to be exchanged for New Securities in
the Registered Exchange Offer and that are held by it following consummation of the Registered
Exchange Offer; (iv) any Holder (other than an Initial Purchaser) is not eligible to participate
in the Registered Exchange Offer; or (v) in the case of any Initial Purchaser that participates in
the Registered Exchange Offer or acquires New Securities pursuant to Section 2(f) hereof, such
Initial Purchaser does not receive freely tradeable New Securities in exchange for Securities
constituting any portion of an unsold allotment (it being understood that (x) the requirement that
an Initial Purchaser

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deliver a Prospectus containing the information required by Item 507 or 508 of Regulation S-K
under the Act in connection with sales of New Securities acquired in exchange for such Securities
shall not result in such New Securities being not “freely tradeable”; and (y) the requirement that
an Exchanging Dealer deliver a Prospectus in connection with sales of New Securities acquired
in the Registered Exchange Offer in exchange for Securities acquired as a result of market-making
activities or other trading activities shall not result in such New Securities being not “freely
tradeable”), the Issuers shall effect a Shelf Registration Statement in accordance with
subsection (b) below.

          (b) (i) The Issuers shall as promptly as practicable (but in no event more than 90 days
after the filing obligation arises pursuant to this Section 3), file with the Commission and shall
use their commercially reasonable efforts to have declared effective under the Act, a Shelf
Registration Statement relating to the offer and sale of the Securities or the New Securities, as
applicable, by the Holders thereof from time to time in accordance with the methods of distribution
elected by such Holders and set forth in such Shelf Registration Statement; provided, however,
that no Holder (other than an Initial Purchaser) shall be entitled to have the Securities held by
it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by
all of the provisions of this Agreement applicable to such Holder and shall furnish in writing,
within 20 days after receipt of a request therefore, the information specified in Items 507 and 508
of Registration S-K, as applicable, of the Act for use in connection
with the Shelf Registration;
and provided, further, that with respect to New Securities received by an Initial Purchaser in
exchange for Securities constituting any portion of an unsold allotment, the Issuers may, if
permitted by current interpretations by the Commission’s staff, file a post-effective amendment to
the Exchange Offer Registration Statement containing the information required by Item 507 or 508
of Regulation S-K, as applicable, in satisfaction of its obligations under this subsection with
respect thereto, and any such Exchange Offer Registration Statement, as so amended, shall be
referred to herein as, and governed by the provisions herein applicable to, a Shelf Registration
Statement; provided, further, the Issuers shall not be under any obligation to file a post-effective
amendment to, a Shelf Registration Statement or the Exchange Registration Statement, as applicable,
or to file a new Shelf Registration Statement pursuant to this Section 2(b), for the six months
after the effective date of the Shelf Registration Statement, or file a post-effective amendment to
a Shelf Registration Statement or the Exchange Registration
Statement, as applicable, more than
once in any six-month period thereafter.

          (ii) The Issuers shall use their commercially reasonable efforts to keep the Shelf Registration
Statement continuously effective, supplemented and amended as
required by the Act, in order to permit the prospectus forming part
thereof to be usable by Holder for a period the “Shelf Registration Period”) from the date the Shelf Registration Statement is declared effective by
the Commission until (A) the expiration of the holding period under Rule 144(k) under the Act or (B)
the date upon which all the Securities or New Securities, as applicable, covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration Statement. The Issuers
shall be deemed not to have used their commercially reasonable efforts to keep the Shelf
Registration Statement effective during the Shelf Registration Period if they voluntarily take any
action that would result in Holders of Securities covered thereby not being able to offer and sell
such Securities at any time during the Shelf Registration Period, unless such action is (x)
required by applicable law or otherwise undertaken by the Issuers in good faith and

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for valid
business reasons (not including avoidance of the Issuers’ obligations hereunder),
including the acquisition or divestiture of assets, and (y) permitted
pursuant to Section 4(k)(ii) hereof.

          (iii) The Issuers shall use their commercially reasonable efforts to cause the Shelf
Registration Statement and the related Prospectus and any amendment
or supplement thereto, as of the
effective date of the Shelf Registration Statement or such amendment or supplement, (A) to comply
in all material respects with the applicable requirements of the Act; and (B) not to contain any
untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein (in the case of the Prospectus, in the light
of the circumstances under which they were made) not misleading.

          4. Additional
Registration Procedures. In connection with any Shelf Registration
Statement and, to the extent applicable, any Exchange Offer Registration Statement, the following
provisions shall apply.

              (a) The Issuers shall:

          (i) furnish to each of the Representatives and to counsel for the Holders,
 prior to the filing thereof with the Commission, a copy of any Exchange Offer
Registration Statement and any Shelf Registration Statement, and each amendment thereof
and each amendment or supplement, if any, to the Prospectus included therein (including
all documents incorporated by reference therein after the initial filing) and shall use
their commercially reasonable efforts to reflect in each such document, when so filed with the Commission, such comments as the Representatives
reasonably propose;

          (ii) include the information substantially as set forth in Annex A hereto on the
facing page of the Exchange Offer Registration Statement, in Annex B hereto in the forepart
of the Exchange Offer Registration Statement in a section setting forth details of the
Exchange Offer, in Annex C hereto in the underwriting or plan of
distribution section of the
Prospectus contained in the Exchange Offer Registration Statement, and in Annex D hereto
in the letter of transmittal delivered pursuant to the Registered Exchange Offer;

          (iii) if requested by an Initial Purchaser, include the information required by
Item 507 or 508 of Regulation S-K, as applicable, in the Prospectus contained in the
Exchange Offer Registration Statement; and

          (iv)
subject to Section 3, in the case of a Shelf Registration Statement,
include the names of the Holders that propose to sell Securities pursuant to the Shelf
Registration Statement as selling security holders.

            (b) The Issuers shall ensure that:

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          (i) any Registration Statement and any amendment thereto and any Prospectus
forming part thereof and any amendment or supplement thereto complies in all material
respects with the Act; and

          (ii) any Registration Statement and any amendment thereto does not, when it
becomes effective, contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the statements therein
not misleading.

          (c) The Issuers shall advise the Representatives, the Holders of Securities covered by any
Shelf Registration Statement and any Exchanging Dealer under any Exchange Offer Registration
Statement that has provided in writing to the Issuers a telephone or facsimile number and address
for notices, and, if requested by any Representative or any such Holder or Exchanging Dealer,
shall confirm such advice in writing (which notice pursuant to clauses (ii)-(v) hereof shall be
accompanied by an instruction to suspend the use of the Prospectus until the Issuers shall have
remedied the basis for such suspension):

          (i) when a Registration Statement and any amendment thereto has been filed with
the Commission and when the Registration Statement or any post-effective
amendment thereto has become effective;

          (ii)
of any request by the Commission for any amendment or supplement to the
Registration Statement or the Prospectus or for additional information after the notice in
clause (i) has been delivered;

          (iii)
of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the institution or threatening of
any proceeding for that purpose;

          (iv) of the receipt by the Issuers of any notification with respect to the suspension
of the qualification of the securities included therein for sale in
any jurisdiction or the
institution or threatening of any proceeding for such purpose; and

          (v)
of the happening of any event that requires any change in the
Registration Statement or the Prospectus so that, as of such date, they (A) do not contain any untrue
statement of a material fact and (B) do not omit to state a material fact required to be
stated therein or necessary to make the statements therein (in the case of the Prospectus,
in the light of the circumstances under which they were made) not misleading.

          (d) The Issuers shall use their commercially reasonable efforts to prevent the
issuance of any order suspending the effectiveness of any Registration Statement or the
qualification of the securities therein for sale in any jurisdiction and, if issued, to
obtain as soon as possible the withdrawal thereof.

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          (e) The Issuers shall make available to each Holder of Securities covered by any
Shelf Registration Statement, without charge, at least one copy of such Shelf Registration
Statement and any post-effective amendment thereto, including all material incorporated therein
by reference, and, if the Holder so requests in writing, all exhibits thereto
(including exhibits incorporated by reference therein).

          (f) The Issuers shall, during the Shelf Registration Period, deliver to each
Holder of Securities covered by any Shelf Registration Statement, without charge, as
many copies of the Prospectus (including the Preliminary Prospectus) included in such
Shelf Registration Statement and any amendment or supplement thereto as such Holder may
reasonably request. The Issuers consent, subject to the provisions of this Agreement, to the use
of the Prospectus or any amendment or supplement thereto by each of the selling Holders of
Securities in connection with the offering and sale of the Securities covered by the Prospectus,
or any amendment or supplement thereto, included in the Shelf Registration Statement.

          (g) The Issuers shall make available to each Exchanging Dealer which so requests,
without charge, at least one copy of the Exchange Offer Registration Statement and any
post-effective amendment thereto, including all material incorporated by reference therein, and,
if the Exchanging Dealer so requests in writing, all exhibits thereto (including exhibits
incorporated by reference therein).

          (h) The Issuers shall promptly deliver to each Initial Purchaser, each Exchanging
Dealer and each other person required to deliver a Prospectus during the Exchange Offer
Registration Period, without charge, as many copies of the Prospectus included in such Exchange
Offer Registration Statement and any amendment or supplement thereto as any such person may
reasonably request. The Issuers consent, subject to the provisions of this Agreement, to the use of
the Prospectus or any amendment or supplement thereto by any Initial Purchaser, any Exchanging Dealer and any such other person that may be required to deliver a
Prospectus following the Registered Exchange Offer in connection with the offering and sale of
the New Securities covered by the Prospectus, or any amendment or supplement thereto, included
in the Exchange Offer Registration Statement.

          (i)
Prior to the Registered Exchange Offer or any other offering of Securities pursuant to any
Registration Statement, the Issuers shall arrange, if necessary, for the qualification of the
Securities or the New Securities for sale under the laws of such jurisdictions as any Holder shall
reasonably request and shall maintain such qualification in effect so long as required; provided
that in no event shall the Issuers be obligated to qualify to do business in any jurisdiction
where they are not then so qualified or to take any action that would subject it to service
of process in suits, other than those arising out of the Initial Placement, the Registered Exchange
Offer or any offering pursuant to a Shelf Registration Statement, in any such jurisdiction where they are not then so subject.

          (j) The Issuers shall use their commercially reasonable efforts to cooperate with the
Holders of Securities to facilitate the timely preparation and delivery of certificates
representing New Securities or Securities to be issued or sold pursuant to any

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Registration Statement free of any restrictive legends and in such denominations and
registered in such names as Holders may request.

          (k)
(i) Upon the occurrence of any event contemplated by subsections (c)(ii) through (v)
above, the Issuers shall promptly (or within the time period provided for by clause (ii) hereof,
if applicable), to the extent requested or required, prepare a post-effective amendment to the
applicable Registration Statement or an amendment or supplement to the related Prospectus or file
any other required document so that, as thereafter delivered to
Initial Purchasers of the
securities included therein, the Prospectus will not include an untrue statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading.
In such circumstances, the period of effectiveness of the Exchange Offer Registration Statement
provided for in Section 2 shall be extended by the number of
days from and including the date of the
giving of a notice of suspension pursuant to Section 4(c) to and including the date when the
Initial Purchasers, the Holders of the Securities and any known Exchanging Dealer shall have
received such amended or supplemented Prospectus pursuant to this Section.

          (ii) Upon the occurrence or existence of any pending corporate development or any other
material event that, in the reasonable judgment of the Issuers, makes it appropriate to suspend
the availability of a Shelf Registration Statement and the related Prospectus, the Issuers shall
give notice (without notice of the nature or details of such events)
to the Holders that the availability of the Shelf Registration is suspended and, upon actual receipt of any such notice,
each Holder agrees not to sell any Registrable Securities pursuant to the Shelf Registration until
such Holder’s receipt of copies of the supplemented or amended Prospectus provided for in Section
3(i) hereof, or until it is advised in writing by the Issuers that the Prospectus may be used, and has received copies of
any additional or supplemental filings that are incorporated or
deemed incorporated by reference in such Prospectus. The period during which the availability of the Shelf Registration and any
Prospectus is suspended (the “Deferral Period”) shall not exceed 45 days in any three-month period
or 90 days in any twelve-month period.

          (1) Not later than the effective date of the applicable Registration Statement, the Issuers
shall provide a CUSIP number for the Securities or the New Securities, as the case may be,
registered under such Registration Statement and provide the Trustee with printed certificates
for such Securities or New Securities, in a form eligible for deposit with The Depository Trust
Company.

          (m) The Issuers shall use their commercially reasonable efforts to comply with all applicable
rules and regulations of the Commission and shall make generally available to its security holders
an earnings statement satisfying the provisions of Section 11(a) of the Act as soon as practicable
after the effective date of the applicable Registration Statement and in any event no later than 45
days after the end of a 12-month period (or 90 days, if such period is a fiscal year) beginning
with the first month of the Company’s first fiscal quarter commencing after the effective date
of the applicable Registration Statement.

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          (n) The Issuers shall cause the Indenture to be qualified under the Trust Indenture Act in a
timely manner.

          (o) The Issuers may require each Holder of securities to be sold pursuant to any Shelf
Registration Statement to furnish to the Issuers such information regarding the Holder and the
distribution of such securities as the Issuers may from time to time reasonably require for
inclusion in such Registration Statement. The Issuers may exclude from such Shelf Registration
Statement the Securities of any Holder that unreasonably fails to furnish all or any material
portion of such information within a reasonable time after receiving such request. The Issuers
shall be under no obligation to compensate any holder that fails to provide the information
required by this Section 4(o) for any lost income, interest or other opportunity, or any liability
incurred, as a result of the Issuers’ decision to exclude such Securities from the Shelf
Registration Statement.

          (p) In the case of any Shelf Registration Statement, the Issuers shall enter into customary
agreements (including, if requested, an underwriting agreement in customary form) and take all
other appropriate actions in order to expedite or facilitate the registration or the disposition
of the Securities, and in connection therewith, if an underwriting agreement is entered into,
cause the same to contain indemnification provisions and procedures no less favorable than those
set forth in Section 6 hereof.

          (q) In the case of any Shelf Registration Statement, the Issuers shall:

          (i) make reasonably available for inspection by the Holders of Securities to be registered thereunder, any underwriter participating in any disposition pursuant
to such Registration Statement, and any attorney, accountant or other agent retained by the
Holders or any such underwriter all relevant financial and other records and pertinent
corporate documents of the Issuers and their subsidiaries;

          (ii) cause each Issuers’ officers, directors, employees, accountants and auditors to
supply all relevant information reasonably requested by the Holders or any such
underwriter, attorney, accountant or agent in connection with any such Registration
Statement as is customary for similar due diligence examinations;

          (iii) make such representations and warranties to the Holders of Securities
registered thereunder and the underwriters, if any, in form, substance and scope as are
customarily made by issuers to underwriters in primary underwritten offerings and covering
matters including, but not limited to, those set forth in the Purchase Agreement;

          (iv) obtain opinions of counsel to the Issuers and updates thereof (which
counsel and opinions (in form, scope and substance) shall cover such matters as are
customarily covered in opinions requested in underwritten offerings and such other matters
as may be reasonably requested by such Holders and underwriters and be substantially in
the form of Exhibits A, B, or C, as applicable, to the Purchase Agreement);

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          (v) obtain “comfort” letters and updates thereof from the independent certified
public accountants of the Company (and, if necessary, any other independent certified
public accountants of any subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or are required to be,
included in the Registration Statement), addressed to each selling Holder of Securities
registered thereunder and the underwriters, if any, in customary form and covering
matters of the type customarily covered in “comfort” letters in connection with primary
underwritten offerings; and

          (vi) deliver such documents and certificates as may be reasonably
requested by the Majority Holders or the Managing Underwriters, if any, including those
to evidence compliance with Section 4(k) and with any customary conditions contained in
the underwriting agreement or other agreement entered into by the Issuers.

The actions set forth in clauses (iii), (iv), (v) and (vi) of this paragraph (q) shall be
performed at (A) the effectiveness of such Registration Statement and each post-effective
amendment thereto; and (B) each closing under any underwriting or similar agreement as and to the
extent required thereunder.

        (r) In the case of any Exchange Offer Registration Statement, the Issuers shall, if
requested by an Initial Purchaser, or by a broker dealer that holds Securities
that were acquired as a result of market making or other trading activities:

          (i) make reasonably available for inspection by the requesting party, and any
attorney, accountant or other agent retained by the requesting party, all relevant
financial and other records, pertinent corporate documents and properties of the Issuers
and their subsidiaries;

          (ii) cause the Issuers’ officers, directors, employees, accountants and auditors to
supply all relevant information reasonably requested by the requesting party or any such
attorney, accountant or agent in connection with any such Registration Statement as is
customary for similar due diligence examinations;

          (iii) make such representations and warranties to the requesting party, in form,
substance and scope as are customarily made by issuers to underwriters in primary
underwritten offerings and covering matters including, but not limited to, those set
forth in the Purchase Agreement;

          (iv) obtain opinions of counsel to the Issuers and updates thereof (which counsel and
opinions (in form, scope and substance) shall cover such matters as are customarily
covered in opinions requested in underwritten offerings and such other matters as may be
reasonably requested by the requesting party or its counsel and be substantially in the
form of Exhibits A, B or C, as applicable, to the Purchase Agreement);

 -13-

 

          (v) obtain “comfort” letters and updates thereof from the independent certified
public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any
business acquired by the Company for which financial statements and financial data are, or
are required to be, included in the Registration Statement), addressed to the requesting
party, in customary form and covering matters of the type customarily covered in
“comfort” letters in connection with primary underwritten offerings, or if requested by
the requesting party or its counsel in lieu of a “comfort” letter, an agreed-upon
procedures letter under Statement on Auditing Standards No. 35, covering matters requested
by the requesting party or its counsel; and

          (vi) deliver such documents and certificates as may be reasonably requested by the
requesting party or its counsel, including those to evidence compliance with Section 4(k)
and with conditions customarily contained in underwriting agreements.

          The foregoing actions set forth in clauses (iii), (iv), (v), and (vi) of this Section shall
be performed at the close of the Registered Exchange Offer and the effective date of any
post-effective amendment to the Exchange Offer Registration Statement.

          (s) If a Registered Exchange Offer is to be consummated, upon delivery of the Securities by
Holders to the Issuers (or to such other person as directed by the
Issuers) in exchange for the New Securities, the Issuers shall mark, or cause to be marked,
on the Securities so exchanged that such Securities are being cancelled in exchange for the New
Securities. In no event shall the Securities be marked as paid or otherwise satisfied.

          (t) The Issuers shall use their commercially reasonable efforts if the Securities have been
rated prior to the initial sale of such Securities, to confirm such ratings will apply to the
Securities or the New Securities, as the case may be, covered by a Registration Statement.

          (u) In the event that any Broker-Dealer shall underwrite any Securities or participate as a
member of an underwriting syndicate or selling group or “assist in the distribution” (within the
meaning of the NASD Rules) thereof, whether as a Holder of such Securities or as an underwriter, a
placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Issuers shall
assist such Broker-Dealer in complying with the NASD Rules.

          (v) The Issuers shall use their commercially reasonable efforts to take all other steps
necessary to effect the registration of the Securities or the New Securities, as the case may be,
covered by a Registration Statement.

          5. Registration Expenses. The Issuers shall bear all expenses incurred in connection with the
performance of its obligations under Sections 2, 3 and 4 hereof and (a) in the case of any
Shelf Registration Statement, will reimburse the Holders who are selling or reselling Securities
pursuant to the “Plan of Distribution” contained in the Shelf Registration Statement for the
reasonable fees and disbursements of one firm or counsel (which shall initially be Cahill

 -14-

 

Gordon & Reindel llp, but which may be another nationally recognized law
firm experienced in securities matters designated by the Majority Holders) to act as counsel for
the Holders in connection therewith, and (b) in the case of any Exchange Offer Registration
Statement, will reimburse the Initial Purchasers for the reasonable fees and disbursements
of counsel acting in connection therewith; provided that the aggregate amount of fees and
disbursements of counsel under this clause (b) shall not exceed $15,000.

          6. Indemnification and Contribution. (a) Each Issuer agrees, jointly and severally, to
indemnify and hold harmless each Holder of Securities or New Securities, as the case may be,
covered by any Registration Statement, each Initial Purchaser and, with respect to any Prospectus
delivery as contemplated in Section 4(h) hereof, each Exchanging Dealer, the directors, officers,
employees, Affiliates and agents of each such Holder, Initial Purchaser or Exchanging Dealer and
each person who controls any such Holder, Initial Purchaser or Exchanging Dealer within the meaning
of either the Act or the Exchange Act (each an “indemnified party” and collectively the “indemnified
parties”) against any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Act, the Exchange
Act or other federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement as originally filed or in any amendment thereof, or in any
preliminary Prospectus or the Prospectus, or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein (in the case of any
preliminary Prospectus or the Prospectus, in the light of the circumstances under which they were
made) not misleading, and agrees to reimburse each such indemnified party, as incurred, for any
legal or other expenses reasonably incurred by it in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that (i) no Issuer will be liable
in any such case to the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written information furnished to the Issuers
by or on behalf of the party claiming indemnification specifically for inclusion therein and (ii)
with respect to any untrue statement or omission or alleged untrue statement or omission made in
any preliminary Prospectus relating to a Registration Statement, the indemnity agreement contained
in this subsection (a) shall not inure to the benefit of any such indemnified party from whom the
person asserting any such losses, claims, damages or liabilities purchased the securities
concerned, if a copy of the Prospectus relating to such Securities or New Securities (as amended or
supplemented at the time of sale) was required to be delivered by such indemnified party and was not
delivered as given by or on behalf of such indemnified party to such person and if such Prospectus
(as so amended or supplemented) would have corrected the defect giving rise to such loss, claim,
damage or liability. This indemnity agreement shall be in addition to any liability that any Issuer
may otherwise have.

          Each Issuer also agrees, jointly and severally, to indemnify as provided in this Section 6(a)
or contribute as provided in Section 6(d) hereof to Losses of each underwriter, if any, of Securities
or New Securities, as the case may be, registered under a Shelf Registration Statement, their
directors, officers, employees, Affiliates or agents and each person who controls

 -15-

 

such underwriter on substantially the same basis as that of the indemnification of the Initial
Purchasers and the selling Holders provided in this Section 6(a) and shall, if requested by any
Holder, enter into an underwriting agreement reflecting such agreement, as provided in Section
4(p) hereof.

          (b) Each Holder of securities covered by a Registration Statement (including each Initial
Purchaser that is a Holder, in such capacity) severally and not jointly agrees to indemnify and
hold harmless the Issuers, each of their directors, each of their officers who signs such
Registration Statement and each person who controls any Issuer within the meaning of either the
Act or the Exchange Act, to the same extent as the foregoing indemnity from the Issuers to each
such Holder, but only with reference to written information relating to such Holder furnished to the Issuers by or on behalf of such
Holder specifically for inclusion in the documents referred to in the foregoing indemnity and shall
reimburse such persons for any legal or other expenses incurred in connection with the
investigation of such loss, claim, damage or liability. This indemnity agreement will be in
addition to any liability that any such Holder may otherwise have.

          (c) Promptly after receipt by an indemnified party under this Section 6 or notice of the
commencement of any action, such indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 6, notify the indemnifying party in writing of
the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve
it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise
learn of such action and such failure results in the forfeiture by the indemnifying party
of substantial rights and defenses; and (ii) will not, in any event, relieve the indemnifying party
from any obligations to any indemnified party other than the indemnification obligation provided
in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel
(including local counsel) of the indemnifying party’s choice at the indemnifying party’s expense to
represent the indemnified party in any action for which indemnification is sought (in which case
the indemnifying party shall not thereafter be responsible for the fees and expenses of any
separate counsel, other than local counsel if not appointed by the indemnifying party, retained by
the indemnified party or parties except as set forth below); provided, however, that such counsel
shall be satisfactory to the indemnified party. Notwithstanding the indemnifying party’s election
to appoint counsel (including local counsel) to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel
if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would
present such counsel with a conflict of interest; (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties that are different from or additional to those available to the
indemnifying party; (iii) the indemnifying party shall not have employed counsel satisfactory to
the indemnified party to represent the indemnified party within a reasonable time after notice of
the institution of such action; or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An indemnifying party
will not, without the prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or
threatened

 -16-

 

 claim, action, suit or proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an unconditional release of
each indemnified party from all liability arising out of such claim, action, suit or proceeding.

          (d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 6 is
unavailable to or insufficient to hold harmless an indemnified party for any reason, then each
applicable indemnifying party shall have a joint and several obligation to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably
incurred in connection with investigating or defending any loss, claim, liability, damage or
action) (collectively “Losses”) to which such indemnified party may be subject in such proportion
as is appropriate to reflect the relative benefits received by such indemnifying party, on the one
hand, and such indemnified party, on the other hand, from the Initial Placement and the
Registration Statement which resulted in such Losses; provided, however, that in no case shall any
Initial Purchaser be responsible, in the aggregate, for any amount in excess of the purchase
discount or commission applicable to such Security, or in the case of a New Security, applicable to
the Security that was exchangeable into such New Security, as set forth in the Final Memorandum,
nor shall any underwriter be responsible for any amount in excess of the underwriting discount or
commission applicable to the securities purchased by such underwriter under the Registration
Statement which resulted in such Losses. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the indemnifying party and the indemnified party shall
contribute in such proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of such indemnifying party, on the one hand, and such indemnified party, on the
other hand, in connection with the statements or omissions which resulted in such Losses as well as
any other relevant equitable considerations. Benefits received by the Issuers shall be deemed to be
equal to the total net proceeds from the Initial Placement (before deducting expenses) as set
forth in the Final Memorandum. Benefits received by the Initial Purchasers shall be deemed to be
equal to the total purchase discounts and commissions as set forth on the cover page of the Final
Memorandum, and benefits received by any other Holders shall be deemed to be equal to the value of
receiving Securities or New Securities, as applicable, registered under the Act. Benefits received
by any underwriter shall be deemed to be equal to the total underwriting discounts and
commissions, as set forth on the cover page of the Prospectus forming a part of the Registration
Statement which resulted in such Losses. Relative fault shall be determined by reference to, among
other things, whether any untrue or any alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information provided by the indemnifying
party, on the one hand, or by the indemnified party, on the other hand, the intent of the parties
and their relative knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The parties agree that it would not be just and equitable if
contribution were determined by pro rata allocation (even if the Holders were treated as one entity
for such purpose) or any other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this paragraph (d), no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 6, each person who controls a Holder within the
meaning of either the Act or the Exchange Act and each director, officer, employee and agent of
such Holder shall have the same rights to contribution as such Holder, and each

 -17-

 

person who controls any Issuer within the meaning of either the Act or the Exchange Act, each officer
of any Issuer who shall have signed the Registration Statement and each director of any Issuer
shall have the same rights to contribution as the Issuers, subject in each case to the applicable
terms and conditions of this paragraph 6(d).

          (e) The provisions of this Section 6 will remain in full force and effect, regardless of any
investigation made by or on behalf of any Holder or the Issuers or any of the indemnified persons
referred to in this Section 6, and will survive the sale by a Holder of securities covered by a
Registration Statement.

          7. Underwritten Registrations. (a) If any of the Securities or New Securities, as the case may
be, covered by any Shelf Registration Statement are to be sold in an underwritten offering, the
Managing Underwriters shall be selected by the Majority Holders.

          (b) No person may participate in any underwritten offering pursuant to any Shelf Registration
Statement, unless such person (i) agrees to sell such person’s Securities or New Securities, as the
case may be, on the basis reasonably provided in any underwriting arrangements approved by the
persons entitled hereunder to approve such arrangements; and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements.

          8. Registration Defaults. If any of the following events (each, a “Registration Default”) shall
occur, then the Issuers shall pay additional interest (the “Additional Interest”) to the Holders of
Securities in respect of the Securities as follows:

          (a) if any Registration Statement required by this Agreement is not filed with the
Commission on or prior to the date specified for such filing in this Agreement, then Additional
Interest shall accrue on the Registrable Securities at a rate of 0.25% per annum for the first
90 days from and including such specified date and such rate shall in-crease by 0.25% per annum
at the end of each subsequent 90-day period, but in no event shall such rate exceed 1.00% per
annum; or

          (b) if any Registration Statement required by this Agreement is not declared effective by the
Commission on or prior to the date by which commercially reasonable efforts are to be used to
cause such effectiveness under this Agreement, then commencing on the day after such specified
date, Additional Interest shall accrue on the Registrable Securities at a rate of 0.25% per annum
for the first 90 days from and including such specified date and such rate shall increase by 0.25%
per annum at the end of each subsequent 90-day period, but in no event shall such rate exceed
1.00% per annum; or

          (c) if any Registration Statement required by this Agreement has been declared effective
but ceases to be effective at any time at which it is required to be effective under this Agreement, then commencing on the day the Registration Statement ceases to
be effective, Additional Interest shall accrue on the Registrable Securities at a rate of 0.25%
per annum for the first 90 days from and including such specified date and

 -18-

 

such rate shall increase by 0.25% per annum at the end of each subsequent 90-day period, but in no
event shall such rate exceed 1.00% per annum;

provided,
however, that (1) upon the filing of the Registration Statement (in the
case of paragraph (a) above), (2) upon the effectiveness of the Registration Statement (in the case
of paragraph (b) above), or (3) upon the effectiveness of the Registration Statement which had
ceased to remain effective (in the case of paragraph (c) above), Additional Interest shall cease to
accrue. A Registration Default referred to in Section 8 hereof shall be deemed not to have occurred
and be continuing in relation to a Shelf Registration Statement or, if required to be kept
effective after consummation of the Exchange Offer, the Exchange Offer Registration Statement or
the related prospectus if (i) such Registration Default has occurred solely as a result of (x) the
filing of a post-effective amendment to such Registration Statement to incorporate annual audited
financial information with respect to the Company where such post-effective amendment is not yet
effective and needs to be declared effective to permit Holders to use the related prospectus or
(y) any other material events with respect to the Issuers that would need to be described in such
Registration Statement or the related prospectus and (ii) in the case of clause (y), the Issuers
are proceeding promptly and in good faith to amend or supplement such Registration Statement and
related prospectus to describe such events or otherwise cause such Registration Statement and
related prospectus to again be usable; provided, however, that if any such Registration Default
occurs for a continuous period in excess of 30 days, Additional Interest shall be payable in
accordance with the above paragraph from the day such Registration Default occurs until such
Registration Default is cured; provided further, however, that no Issuer may avail itself of the
relief provided by this sentence for more than 90 days in any 365-day period.

          9. No Inconsistent Agreements. The Issuers have not entered into, and agree not to enter into,
any agreement with respect to their securities that is inconsistent with the rights granted to the
Holders herein or that otherwise conflicts with the provisions hereof.

          10. Amendments and Waivers. The provisions of this Agreement may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the provisions hereof may not
be given, unless the Issuers have obtained the written consent of the Holders of a majority of the
aggregate principal amount of the Registrable Securities out-standing; provided that, with respect
to any matter that directly or indirectly affects the rights of any Initial Purchaser hereunder,
the Issuers shall obtain the written consent of each such Initial Purchaser against which such
amendment, qualification, supplement, waiver or consent is to be effective; provided, further, that
no amendment, qualification, supplement, waiver or consent with respect to Section 8 hereof
shall be effective as against any Holder of Registered Securities unless consented to in
writing by such Holder; and provided, further, that the provisions of this Article 10 may not be
amended, qualified, modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Issuers have obtained the written consent of the
Initial Purchasers and each Holder. Notwithstanding the foregoing (except the foregoing provisos),
a waiver or consent to departure from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders whose Securities or New Securities, as the case may be, are
being sold pursuant to a Registration Statement and that does not directly or indirectly affect the
rights of other Holders may be given by the Majority Holders, determined on

 -19-

 

the basis of Securities or New Securities, as the case may be, being sold rather than registered
under such Registration Statement.

          11. Notices. All notices and other communications provided for or permitted hereunder shall be
made in writing by hand-delivery, first-class mail, telex, telecopier or air courier guaranteeing

overnight delivery:

          (a) if to a Holder, at the most current address given by such holder to the Issuers
in accordance with the provisions of this Section 11, which address initially is, with
respect to each Holder, the address of such Holder maintained by the Registrar under the
Indenture;

          (b) if to the Representatives, initially at the address or addresses set forth in the
Purchase Agreement; and

          (c) if to the Issuers, initially at the address set forth in the Purchase Agreement.

          All such notices and communications shall be deemed to have been duly given when received.

          The Initial Purchasers or the Issuers by notice to the other parties may designate additional
or different addresses for subsequent notices or communications.

          12. Remedies. Each Holder, in addition to being entitled to exercise all rights provided to it
herein, in the Indenture or in the Purchase Agreement or granted by law, including recovery
of liquidated or other damages, will be entitled to specific performance of its rights under this
Agreement. Each Issuer agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to
waive in any action for specific performance the defense that a remedy at law would be adequate.

          13. Successors. This Agreement shall inure to the benefit of and be binding upon the parties
hereto, their respective successors and assigns, including, without the need for an express
assignment or any consent by the Issuers thereto,subsequent Holders of Securities and the New Securities, and the indemnified persons referred
to in Section 6 hereof. The Issuers hereby agree to extend the benefits of this Agreement to any
Holder of Securities and the New Securities, and any such Holder may specifically enforce the
provisions of this Agreement as if an original party hereto.

          14. Jurisdiction. Each Issuer agrees that any suit, action or proceeding against such Issuer
brought by any Holder or Initial Purchaser, the directors, officers, employees, Affiliates and
agents of any Holder or Initial Purchaser, or by any person who controls any Holder or Initial
Purchaser, arising out of or based upon this Agreement or the transactions contemplated hereby may
be instituted in any State or U.S. federal court in The City of New York and County of New York,
and waives any objection which it may now or hereafter have to the laying of venue of any such
proceeding, and irrevocably submits to the non-exclusive jurisdiction of such

 -20-

 

courts in any suit, action or proceeding. Each Issuer hereby appoints The Corporation Trust
Company as its authorized agent (the “Authorized Agent”) upon whom process may be served in any
suit, action or proceeding arising out of or based upon this Agreement or the transactions
contemplated herein which may be instituted in any State or U.S. federal court in The City of New
York and County of New York, by any Holder or Initial Purchaser, the directors, officers,
employees, Affiliates and agents of any Holder or Initial Purchaser, or by any person who controls
any Holder or Initial Purchaser, and expressly accepts the non-exclusive jurisdiction of any such
court in respect of any such suit, action or proceeding. Each Issuer hereby represents and
warrants that the Authorized Agent has accepted such appointment and has agreed to act as said
agent for service of process, and such Issuer agrees to take any and all action, including the
filing of any and all documents that may be necessary to continue such appointment in full force
and effect as aforesaid. Proper service of process upon the Authorized Agent shall be deemed, in
every respect, effective service of process upon the applicable Issuer. Each Issuer further agrees
to take any and all action, including the execution and filing of any and all such documents and
instruments, as may be necessary to continue such designation and appointment in full force and
effect so long as any of the Securities shall be outstanding. To the extent that an Issuer
may acquire any immunity from jurisdiction of any court or from any legal process (whether through
service of notice, attachment prior to judgment, attachment in aid of execution, execution or
otherwise) with respect to itself or its property, such Issuer hereby irrevocably waives such
immunity in respect of this Agreement, to the fullest extent permitted by law. Notwithstanding the
foregoing, any action arising out of or based upon this Agreement may be instituted by any
Holder or Initial Purchaser, the directors, officers, employees, Affiliates and agents of any
Holder or Initial Purchaser, or by any person who controls any Holder or Initial Purchaser, in any
court of competent jurisdiction in the Cayman Islands.

          15. Currency. Each reference in this Agreement to U.S. dollars (the “relevant currency”) is
of the essence. To the fullest extent permitted by law, the obligation of the Issuers in respect
of any amount due under this Agreement will, notwithstanding any payment in any other currency
(whether pursuant to a judgment or otherwise), be discharged only to the extent of the amount in
the relevant currency that the party entitled to receive such payment may, in accordance with its normal procedures,
purchase with the sum paid in such other currency (after any premium and costs of exchange) on the
Business Day immediately following the day on which such party receives such payment. If the amount
in the relevant currency that may be so purchased for any reason falls short of the amount
originally due, the Issuers will pay such additional amounts, in the relevant currency, as may be
necessary to compensate for the shortfall. Any obligation of the Issuers not discharged by such
payment will, to the fullest extent permitted by applicable law, be due as a separate and
independent obligation and, until discharged as provided herein, will continue in full force and
effect.

          16. Waiver of Immunity. To the extent that any Issuer has or hereafter may acquire any immunity
(sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction of any court
or from set-off or any legal process (whether service or notice, attachment in aid or otherwise)
with respect to itself or any of its property, such Issuer hereby irrevocably waives and agrees
not to plead or claim such immunity in respect of its obligations under this Agreement.

 -21-

 

          17. Counterparts. This Agreement may be signed in one or more counterparts,
each of which shall constitute an original and all of which together shall constitute one and the
same agreement.

          18. Headings. The section headings used herein are for convenience only and
shall not affect the construction hereof.

          19. Applicable Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be performed in the State of New
York. The parties hereto each hereby waive any right to trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Agreement.

          20. Severability. In the event that any one of more of the provisions contained herein, or
the application thereof in any circumstances, is held invalid, illegal or unenforceable in any
respect for any reason, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.

          21. Securities Held by the Issuers, etc. Whenever the consent or approval of
Holders of a specified percentage of principal amount of Securities or New
Securities is required hereunder, Securities or New Securities, as applicable, held by the
Issuers or their Affiliates (other than subsequent Holders of Securities or New Securities if such
subsequent Holders are deemed to be Affiliates solely by reason of their holdings of such Securities
or New Securities) shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.

 -22-

 

          If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement between the Issuers and the
several Initial Purchasers.

	 	 	 	 	 
	 	Very truly yours,

SMART MODULAR 

TECHNOLOGIES (WWH), 

INC.

 	 
	 	By:  	/s/ Iain MacKenzie
 	 
	 	 	Name:  	Iain MacKenzie  	 
	 	 	Title:  	President
	 
	 	EXECUTED AS A DEED 	 
	 

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

 

 

	 	 	 	 	 
	 	SMART MODULAR

TECHNOLOGIES (GLOBAL), 

INC.

 	 
	 	By:  	/s/ Ann Nguyen 	 
	 	 	Name:  	Ann Nguyen      	 
	 	 	Title:  	Secretary

	 
	 	EXECUTED AS A DEED 	 
	 

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

 

 

	 	 	 	 	 
	 	SMART MODULAR

TECHNOLOGIES (DH), INC. 

 	 
	 	By:  	/s/ Ann Nguyen	 
	 	 	Name:  	Ann Nguyen	 
	 	 	Title:  	Assistant Secretary
	 
	 	EXECUTED AS A DEED 	 
	 

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

 

 

	 	 	 	 	 
	 	SMART MODULAR

TECHNOLOGIES (CI), INC.

 	 
	 	By:  	/s/ Ann Nguyen
 	 
	 	 	Name:  	Ann Nguyen  	 
	 	 	Title:  	Assistant Secretary
	 
	 	EXECUTED AS A DEED 	 
	 

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

 

 

	 	 	 	 	 
	 	SMART MODULAR

TECHNOLOGIES (FOREIGN HOLDINGS), INC.

 	 
	 	By:  	/s/ Iain MacKenzie
 	 
	 	 	Name:  	Iain MacKenzie      	 
	 	 	Title:  	President
	 
	 	EXECUTED AS A DEED 	 
	 

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

 

 

	 	 	 	 	 
	 	SMART MODULAR

TECHNOLOGIES (PUERTO RICO) INC.

 	 
	 	By:  	/s/ Iain MacKenzie
 	 
	 	 	Name:  	Iain MacKenzie      	 
	 	 	Title:  	CEO & President
	 
	 	EXECUTED AS A DEED 	 
	 

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

 

 

	 	 	 	 	 
	 	SMART MODULAR 

TECHNOLOGIES, INC.

 	 
	 	By:  	/s/ Iain MacKenzie
 	 
	 	 	Name:  	Iain MacKenzie      	 
	 	 	Title:  	CEO & President 	 
	 

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

 

 

	 	 	 	 	 
	 	SMART MODULAR

TECHNOLOGIES (DE), INC.

 	 
	 	By:  	/s/ Ann Nguyen
 	 
	 	 	Name:  	Ann Nguyen  	 
	 	 	Title:  	Assistant Secretary 	 
	 

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	SMART MODULAR

TECHNOLOGIES SDN. BHD.

 	 
	 	By:  	/s/ Iain MacKenzie
 	 
	 	 	Name:  	Iain MacKenzie 	 
	 	 	Title:  	Director 	 
	 

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

 

 

	 	 	 	 	 
	 	SMART MODULAR

TECHNOLOGIES (EUROPE) LIMITED

 	 
	 	By:  	/s/ Ann Nguyen
 	 
	 	 	Name:  	Ann Nguyen      	 
	 	 	Title:  	Secretary 	 
	 

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

 

 

	 	 	 	 	 
	 	MODULAR BRASIL 

PARTICIPAÇÕES LTDA.

 	 
	 	By:  	/s/ Noboru Takahashi
 	 
	 	 	Name:  	Noboru Takahashi 	 
	 	 	Title:  	Officer 	 
	 

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

 

 

	 	 	 	 	 
	 	SMART MODULAR

TECHNOLOGIES INDÚSTRIA DE

COMPONENTES ELETRÔNICOS LTDA.

 	 
	 	By:  	/s/ Noboru Takahashi
 	 
	 	 	Name:  	Noboru Takahashi 	 
	 	 	Title:  	Officer 	 
	 

[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]

 

 

The foregoing Agreement is hereby confirmed and
accepted as of the date first above written.

Citigroup Global Markets Inc.
 Lehman Brothers Inc.

By: CITIGROUP GLOBAL MARKETS INC.

	 	 	 	 	 
	By

	 	/s/ Laurence Braham
	 	 
	 

	 	 	 	 
	 

	 	Name: Laurence Braham	 	 
	 

	 	Title: Managing Director	 	 

[Registration Rights]exv4w5

 

Exhibit
4.5

EXECUTION COPY

 

SECURITY AGREEMENT

by and among

SMART MODULAR TECHNOLOGIES (WWH), INC.

THE GUARANTORS PARTY HERETO

and

U.S.
BANK NATIONAL ASSOCIATION,

as Trustee

 

Dated as of March 28, 2005

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	1. DEFINITIONS AND CONSTRUCTION
	 	 	1	 
	1.1 Definitions
	 	 	1	 
	1.2 Code
	 	 	7	 
	1.3 Indenture
	 	 	7	 
	1.4 Construction
	 	 	7	 
	1.5 Schedules and Exhibits
	 	 	7	 
	 
	 	 	 	 
	2. CREATION OF SECURITY INTEREST
	 	 	7	 
	2.1 Grant of Security interest
	 	 	7	 
	2.2 Negotiable Collateral
	 	 	7	 
	2.3 Collection of Accounts, General Intangibles, and Negotiable Collateral
	 	 	8	 
	2.4 Filing
of Financing Statements; Commercial Tort Claims; Delivery of Additional Documentation Required
	 	 	8	 
	2.5 Power of Attorney
	 	 	9	 
	2.6 Right to Inspect
	 	 	9	 
	2.7 Control Agreements
	 	 	9	 
	2.8 Junior Priority Nature of Liens
	 	 	10	 
	 
	 	 	 	 
	3. REPRESENTATIONS, WARRANTIES AND COVENANTS
	 	 	10	 
	3.1 No Encumbrances
	 	 	10	 
	3.2 Location of Inventory and Equipment
	 	 	10	 
	3.3
Jurisdiction of Organization; Location of Chief Executive Office;
FEIN; Organizational ID Number; Commercial Tort Claims
	 	 	10	 
	3.4 DDAs
	 	 	11	 
	3.5 Covenants
	 	 	11	 
	 
	 	 	 	 
	4. TRUSTEE’S RIGHTS AND REMEDIES
	 	 	11	 
	4.1 Rights and Remedies
	 	 	11	 
	4.2 Remedies Cumulative
	 	 	12	 
	 
	 	 	 	 
	5. WAIVERS; INDEMNIFICATION
	 	 	13	 
	5.1 Demand; Protest; etc
	 	 	13	 
	5.2 Trustee’s Liability for Obligor Collateral
	 	 	13	 
	5.3 Indemnification
	 	 	13	 
	 
	 	 	 	 
	6. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER
	 	 	13	 
	 
	 	 	 	 
	7. AMENDMENTS; WAIVERS
	 	 	14	 
	7.1 Amendments and Waivers
	 	 	14	 
	7.2 No Waivers; Cumulative Remedies
	 	 	14	 
	 
	 	 	 	 
	8.TRUSTEE
	 	 	14	 
	8.1 Costs and Expenses
	 	 	14	 
	8.2 Obligor Collateral and Guaranty Matters
	 	 	14	 

-i-

 

	 	 	 	 	 
	9. GENERAL PROVISIONS
	 	 	14	 
	9.1 Effectiveness
	 	 	14	 
	9.2 Section Headings
	 	 	15	 
	9.3 Interpretation
	 	 	15	 
	9.4 Severability of Provisions
	 	 	15	 
	9.5 Counterparts; Telefacsimile Execution
	 	 	15	 
	9.6 Revival and Reinstatement of Obligations
	 	 	15	 
	9.7 Termination; Release
	 	 	15	 
	9.8 Notices
	 	 	15	 

EXHIBITS AND SCHEDULES

	 	 	 
	Exhibit A

	 	Form of Collateral Access Agreement
	Exhibit B

	 	Form of Control Agreement
	Exhibit C

	 	Form of Copyright Security Agreement
	Exhibit D

	 	Form of Patent Security Agreement
	Exhibit E

	 	Form of Trademark Security Agreement
	 
	 	 
	Schedule A

	 	Non-Pledgor Subsidiaries
	Schedule 3.2

	 	Locations of Inventory and Equipment
	Schedule 3.3(a)

	 	Jurisdiction of Organization
	Schedule 3.3(b)

	 	Chief Executive Offices
	Schedule 3.3(c)

	 	FEINS
	Schedule 3.3(d)

	 	Commercial Tort Claims
	Schedule 3.4

	 	Deposit Accounts and Securities Accounts

-ii-

 

SECURITY AGREEMENT

     THIS
SECURITY AGREEMENT (this “Agreement”) is entered into as of March 28, 2005 (as amended,
amended and restated, supplemented or otherwise modified from time to time) among SMART MODULAR
TECHNOLOGIES (WWH), INC., an exempted company organized under the laws of the Cayman Island (the
“Company”). THE GUARANTORS LISTED ON THE
SIGNATURE PAGES HERETO (“Guarantors”, and together with
the Company, the “Obligors”) in favor of U.S.
BANK NATIONAL ASSOCIATION, as trustee (“Trustee”)
pursuant to the Indenture (the “Indenture”) dated as of the date hereof by and among the Company,
the guarantors party thereto and the Trustee, acting for and on behalf of the holders of the Notes
described below (the “Noteholders”).

RECITALS

     WHEREAS, The Company has issued, on the date hereof, Senior Secured Floating Rate Notes due
2012 in the aggregate principal amount of $125,000,000 (collectively,
the “Notes”);

     WHEREAS, the Noteholders have authorized the Trustee to enter into this Agreement; and

     WHEREAS, in order to induce the Noteholders to purchase the Notes, each Obligor has agreed to
secure the payment and performance of the Obligations (as hereinafter defined) and to accomplish
same by (i) executing and delivering to the Trustee this Agreement and (ii) delivering to the
Trustee any and all other documents required hereunder.

     NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

1. DEFINITIONS AND CONSTRUCTION.

     1.1
Definitions. As used in this Agreement, the following terms shall have the
following definitions:

     “Account” means an account (as that term is defined in the Code), and any and all
supporting obligations in respect thereof.

     “Account
Debtor” means any Person who is obligated under, with respect to, or on
account of, an Account, chattel paper, or a General Intangible.

     “Additional
Documents” has the meaning set forth in Section
2.4(c).

     “Agreement” has the meaning set forth in the preamble
hereto.

     “Bank
Indebtedness” has the meaning assigned to such term in the Intercreditor
Agreement.

     “Bankruptcy
Code” means, as applicable, (i) title 11 of the United States Code, (ii)
the Insolvency Act 1986 (and such secondary legislation as refers thereto); or (iii) any
similar legislation in a relevant jurisdiction, in each case, as in effect from time to
time.

 

 

     “Books” means all of each Obligor’s now owned or hereafter acquired books and records
(including all of their Records indicating, summarizing, or evidencing their assets (including the
Obligor Collateral) or liabilities, all of each Obligor’s and the Subsidiaries’ Records relating to
their business operations or financial condition, and all of their goods or General Intangibles
related to such information).

     “Business
Day” means any day that is not (a) a Saturday or a Sunday, or (b) any day on which
banks are authorized or required to close (i) in the case of any Obligor, in the State of
California, (ii) in the case of PR Guarantor, the Commonwealth of Puerto Rico or (iii) in the case
of UK Guarantor, England and Scotland.

     “Code” means the New York Uniform Commercial Code, as in effect from time to time.

     “Collateral” means all personal property and assets and interests in assets and proceeds
thereof now owned or hereafter acquired by any Obligor in or upon which a Lien is granted to the
Trustee under any of the Financing Documents, including without limitation, the Obligor Collateral.

     “Collateral
Access Agreement” means a landlord waiver, bailee letter, or acknowledgement
agreement of any lessor, warehouseman, processor, consignee, or other Person in possession of,
having a Lien upon, or having rights or interests in any Obligor’s Books, Equipment or Inventory,
in each case substantially in the form of Exhibit A or any other form that is in form and substance
reasonably satisfactory to Trustee.

     “Collections” means all cash, checks, notes, instruments, and other items of payment
(including insurance proceeds, proceeds of cash sales, rental proceeds, and tax refunds).

     “Commercial
Tort Claim Assignment” has the meaning assigned to such term in Section 2.4(b).

     “Company” has the meaning set forth in the preamble to this Agreement.

     “Control
Agreement” means a control agreement, substantially in the form of Exhibit B or any
other form that is in form and substance reasonably satisfactory to Trustee, executed and delivered
by an Obligor, Trustee, and the applicable securities intermediary (with respect to a Securities
Account) or a bank (with respect to a Deposit Account).

     “Copyright Security Agreement” means a copyright security agreement executed and
delivered by any Obligor in favor of Trustee, with respect to the copyrights owned by such Person,
substantially in the form of Exhibit C or any other form that is in form and substance reasonably
satisfactory to Trustee.

     “Deposit
Account” means any deposit account (as that term is defined in the Code).

     “Equipment” means equipment (as that term is defined in the Code), and includes machinery,
machine tools, motors, furniture, furnishings, trade fixtures, vehicles (including motor vehicles),
computer hardware, tools, parts, and goods (other than consumer goods, farm products, Inventory or
fixtures that are not trade fixtures), wherever located, including all attachments, accessories,
accessions, replacements, substitutions, additions, and improvements
to any of the foregoing.

-2-

 

     “Event
of Default” has the meaning set forth in the Indenture.

     “FEIN” means Federal Employer Identification Number.

     “Financing
Documents” means this Agreement, the Indenture, the Notes, the Security Documents
(as defined in the Indenture) and any other agreement entered into or any notice or certificate
delivered, now or in the future, by any Obligor or any of their respective Affiliates and any
Secured Party in connection with this Agreement or any of the foregoing agreements.

     “Foreign
Obligor” means any Obligor that is not organized under the laws of the United States.

     “General
Intangibles” means general intangibles (as that term is defined in the Code),
including payment intangibles, contract rights, rights to payment,
rights arising under common law statutes, or regulations, choses or things in action, goodwill, patents, trade names, trade
secrets, trademarks, servicemarks, copyrights, blueprints, drawings, purchase orders, customer
lists, monies due or recoverable from pension funds, route lists, rights to payment and other
rights under any royalty or licensing agreements, infringement claims, computer programs,
information contained on computer disks or tapes, software, literature, reports, catalogs,
insurance premium rebates, tax refunds, and tax refund claims, and any and all supporting
obligations in respect thereof, and any other personal property other than Accounts, Deposit
Accounts, goods, Investment Property, and Negotiable Collateral.

     “Guarantor” has the meaning set forth in the preamble hereto.

     “Indemnified
Liabilities” has the meaning set forth in Section
5.3. 

     “Indemnified
Person” has the meaning set forth in Section 5.3.

     “Indenture” has the meaning set forth in the preamble hereto.

     “Insolvency Proceeding” means (a) any proceeding commenced by or against or in respect
of any Person under any provision of the Bankruptcy Code or under any other state, provincial, or
federal bankruptcy or insolvency law, (b) any assignments for the benefit of creditors, formal or
informal moratoria, compositions, arrangements, extensions generally with or for the benefit of
creditors, or any class of them, or (c) any proceedings seeking reorganization, arrangement,
winding-up or other similar relief.

     “Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of the
date hereof, by and among Wells Fargo Foothill, Inc., as Administrative Agent, the Trustee, and the
Company.

     “Inventory” means inventory (as that term is defined in the Code).

     “Investment Property” means investment property (as that term is defined in the Code),
and any and all supporting obligations in respect thereof.

     “IRC” means the Internal Revenue Code of 1986, as in effect from time to time.

-3-

 

     “Lien” means any interest in an asset securing an obligation owed to, or a claim
by, any Person other than the owner of the asset, irrespective of whether (a) such interest is
based on the common law, statute, or contract, (b) such interest is recorded or perfected, and (c)
such interest is contingent upon the occurrence of some future event or events or the existence of
some future circumstance or circumstances. Without limiting the generality of the foregoing, the
term “Lien” includes the lien or security interest arising from a mortgage, deed of trust,
encumbrance, charge, pledge, hypothecation, assignment, security agreement, conditional sale or
trust receipt, or from a lease, consignment, or bailment for security purposes and also includes
reservations, exceptions, encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases, and other title exceptions and encumbrances affecting Real Property.

     “Negotiable Collateral” means letters of credit, letter of credit rights,
instruments, promissory notes, drafts, documents, and chattel paper (including electronic chattel
paper and tangible chattel paper), and any and all supporting obligations in respect thereof.

     “Noteholder-Related Person” means, with respect to any Noteholder, such Noteholder,
together with such Noteholder’s Affiliates, officers, directors, employees, attorneys, and agents.

     “Noteholders” has the meaning set forth in the preamble
hereto.

     “Notes” has the meaning set forth in the recitals
hereto.

     “Obligations” means all principal, interest (including any interest that, but for the
commencement of an Insolvency Proceeding, would have accrued), premiums, liabilities, obligations,
fees, charges, costs, expenses (including any fees or expenses that, but for the commencement of an
Insolvency Proceeding, would have accrued), lease payments, guaranties, covenants, and duties of
any kind and description owing by any Obligor to the Secured Parties or any of them pursuant to or
evidenced by the Notes or any other Financing Documents and irrespective of whether for the payment
of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, and including all interest not paid when due and all expenses that such Obligors
are required to pay or reimburse by the Financing Documents, by law, or otherwise. Any reference in
this Agreement or in the Financing Documents to the Obligations shall include all extensions,
modifications, renewals, or alterations thereof, both prior and subsequent to any Insolvency
Proceeding.

     “Obligor” means each of and “Obligors” means collectively, the Company and
the Guarantors.

     “Obligor Collateral” means all of each Obligor’s now owned or hereafter acquired
right, title, and interest (subject to the specific exceptions contained in any Financing Document)
in and to each of the following:

          (a) all of its Accounts,

          (b) all of its Books,

          (c) all of its commercial tort claims,

          (d) all of its Deposit Accounts,

-4-

 

          (e) all of its Equipment,

          (f) all of its General Intangibles,

          (g) all of its Inventory,

          (h) all of its Investment Property (including all of its securities and
Securities Accounts),

          (i) all of its Negotiable Collateral,

          (j) money or other assets of such Obligor that now or hereafter come into
the possession, custody, or control of any Secured Party,

          (k) the proceeds and products, whether tangible or intangible, of any of the
foregoing, including proceeds of insurance covering any or all of the foregoing, and any
and all Accounts, Books, Deposit Accounts, Equipment, General Intangibles, Inventory,
Investment Property, Negotiable Collateral, money, or other tangible or intangible
property resulting from the sale, exchange, collection, or other disposition of any of
the foregoing, or any portion thereof or interest therein, and the proceeds thereof, and

          (l) only with respect to PR Guarantor, all other business, undertaking,
property, assets, revenues, present and future, and any interest therein.

     Anything contained in any other provision of this Agreement or any other Financing Document to
the contrary notwithstanding, the term “Obligor Collateral” shall not include: (i) the Stock of any
Foreign Subsidiary held by a Domestic Subsidiary, solely to the extent that such Stock represents
more than 66% of the total combined voting power of all classes of Stock of such Foreign Subsidiary
entitled to vote; (ii) any Stock in any of the entities as set forth on Schedule A; (iii) any
rights or interest of any Obligor in any lease covering real property; (iv) any rights or interest
in any contract, lease, permit, license, charter, or license agreement of any Obligor if under the
terms of such contract, lease, permit, license, charter, or license agreement, or applicable law
with respect thereto, the grant of a security interest therein to Trustee is prohibited as a matter
of law or under the terms of such contract, lease, permit, license, charter, or license agreement,
or causes a termination or entitles the other party to terminate, and such prohibition or
termination has not been waived or the consent of the other party to such contract, lease, permit,
license, charter, or license agreement has not been obtained;
provided, however, that the
foregoing exclusion shall in no way be construed (a) to apply if and to the extent any described
prohibition is unenforceable under Section 9-406, 9-407, or 9-408 of the Code or other applicable
law, or (b) so as to limit, impair, or otherwise affect Trustee’s continuing security interests in
any rights or interests of any Obligor in or to monies due or to become due under any described
contract, lease, permit, license, charter or license agreement (including any Accounts), or (c) to
limit, impair, or otherwise affect Trustee’s continuing security interests in any rights or
interests of any Obligor in and to any proceeds from the sale, license, lease, or other
dispositions of any such contract, lease, permit, license, charter, or license agreement, (v) motor
vehicles the perfection of a security interest in which is excluded from the Code in the relevant
jurisdiction, or (vi) only to the extent applicable to the PR Guarantor and not otherwise permitted
under applicable law, the interests or claims under insurance policies (except as to proceeds
payable with respect to other covered collateral), judgments, tort claims, tax refunds or tax
refund claims or claims against a governmental entity, in each case to the extent such property or
assets are located in Puerto Rico.

-5-

 

     “Patent Security Agreement” means a patent security agreement executed and delivered
by any Obligor in favor of Trustee, with respect to the patents owned by such Person, substantially
in the form of Exhibit Dl or any other form that is in form and substance reasonably satisfactory
to Trustee.

     “Permitted Discretion” means a determination made in good faith and in the exercise of
reasonable (from the perspective of a secured asset-based lender) business judgment.

     ‘‘Permitted
Investment” has the meaning specified in the Indenture.

     “PR Guarantor” means SMART Modular Technologies (Puerto Rico) Inc., an exempted
company organized under the laws of the Cayman Islands.

     “Real Property” means any estates or interests in real property now owned or hereafter
acquired by any Obligor or a Subsidiary of any Obligor and the improvements thereto.

     “Record” means information that is inscribed on a tangible medium or which is stored
in an electronic or other medium and is retrievable in perceivable form.

     “SEC” means the United States Securities and Exchange Commission and any successor
thereto.

     “Secured Party” means, individually and collectively, each of the Noteholders and
Trustee, and “Secured Parties” means the Noteholders and Trustee, collectively.

     “Securities Account” means a “securities account” as that term is defined in the
Code.

     “Stock” means all shares, options, warrants, interests, participations, or other
equivalents (regardless of how designated) of or in a Person, whether voting or nonvoting,
including common stock, preferred stock, or any other “equity security” (as such term is defined in
Rule 3(a)l1-1 of the General Rules and Regulations promulgated by the SEC under the Securities
Exchange Act of 1934, as in effect from time to time).

     “Trademark Security Agreement” means a trademark security agreement executed and
delivered by any Obligor in favor of Trustee, with respect to the trademarks owned by such Person,
substantially in the form of Exhibit E or any other form that is in form and substance reasonably
satisfactory to Trustee.

     “Trustee” has the meaning set forth in the preamble to this Agreement.

     “Trustee-Related Persons” means Trustee, together with its Affiliates, officers,
directors, employees, attorneys, and agents.

     “Trustee’s Liens” shall mean the Liens granted by Obligors to Trustee under this
Agreement or the other Financing Documents and any other Liens at any time granted or assigned to
Trustee by any Obligor under any of the Financing Documents.

     “UK Guarantor” shall mean SMART Modular Technologies (Europe) Limited, a company
organized under the laws of England and Wales.

-6-

 

     “United States” or “US” means the United States of America.

     “US Guarantor” shall mean SMART Modular Technologies, Inc., a California
corporation.

     “Voidable Transfer” has the meaning set forth in Section 9.6.

          1.2 Code. Any terms used in this Agreement that are defined in the Code shall be construed
and defined as set forth in the Code unless otherwise defined herein.

          1.3 Indenture. Any terms used in this Agreement that are defined in the Indenture
shall be construed and defined as set forth in the Indenture unless otherwise defined herein.

          1.4 Construction. The rules of construction specified in the Indenture shall be applicable
to this Agreement. In addition, any reference to a Person shall be construed to include
such Person’s successors and assigns and any reference to any agreement, instrument or document shall
include all
amendments, changes, extensions, modifications, renewals or replacements thereto and thereof.

          1.5 Schedules and Exhibits. All of the schedules and exhibits attached to this
Agreement shall be deemed incorporated herein by reference.

2. CREATION OF SECURITY INTEREST.

          2.1 Grant of Security Interest. Each Obligor hereby grants to Trustee, for the benefit
of the Secured Parties, a continuing security interest in all of its right, title, and
interest in all currently
existing and hereafter acquired or arising Obligor Collateral in order to secure prompt
repayment of any
and all of its Obligations in accordance with the terms and conditions of the Financing
Documents and in
order to secure prompt performance by Obligors of each of their covenants and duties under the
Financing
Documents. The Trustee’s Liens in and to the Obligor Collateral shall attach to all Obligor
Collateral
without further act on the part of Trustee or Obligors. Anything contained in this Agreement
or any other
Financing Document to the contrary notwithstanding, except for transactions permitted by the
Indenture
or the Intercreditor Agreement, Obligors and their Subsidiaries have no authority, express or
implied, to
dispose of any item or portion of the Collateral (it being understood, with respect to any
disposition of
Obligor Collateral or an Obligor permitted by the Indenture (in each case to a Person other
than an Obligor), Trustee’s Liens in and to such Obligor Collateral or, in the event of such disposition
permitted under
the Indenture of an Obligor, such Obligor’s Obligations hereunder and under the Financing
Documents,
shall be released automatically upon consummation of such disposition permitted under the
Indenture,
and, if the seller in such permitted disposition was an Obligor, the proceeds and products of
such disposition shall be subject to Trustee’s Liens).

          2.2 Negotiable Collateral. Subject to Section 2.8, in the event that any Obligor Collateral,
including proceeds, is evidenced by or consists of Negotiable Collateral (other than
letter of credit
rights and promissory notes in an aggregate amount of up to
$1,000,000; provided,
however, that if an
Event of Default has occurred and is continuing, and if Trustee so requests, Obligors agree to
deliver
physical possession or control of such items of Collateral), and if and to the extent that
Trustee determines
in its Permitted Discretion that perfection or priority of Trustee’s security interest is
dependent on or enhanced by possession, the applicable Obligor, promptly following the request of Trustee, shall
endorse
and deliver physical possession of such Negotiable Collateral to Trustee.

-7-

 

          2.3 Collection of Accounts, General Intangibles, and Negotiable
Collateral. At any
time after the occurrence and during the continuation of an Event of
Default, Trustee or Trustee’s
designee may notify Account Debtors of the Obligors that the Obligors’ Accounts, chattel paper,
or General Intangibles have been assigned to Trustee or that Trustee has a security interest
therein. After the Discharge of Credit Agreement Obligations, each Obligor agrees that it will
hold in trust for the Secured Party, as the Secured Party’s trustee, any of its Collections that
it receives and immediately will deliver to Trustee in their original form as received by such
Obligor or its Subsidiaries.

          2.4 Filing of Financing Statements; Commercial Tort Claims; Delivery of Additional
Documentation Required. Each Obligor authorizes Trustee to file any financing statement
necessary or desirable to effectuate the transactions contemplated by the Financing Documents, and
any continuation statement or amendment with respect thereto, in any appropriate filing office
without the signature of Obligors where permitted by applicable law. Each Obligor hereby ratifies
the filing of any financing statement previously authorized by it filed without the signature of
such Obligor prior to the date hereof.

          (a) If Obligors or their Subsidiaries acquire any commercial tort claim in excess of
$250.000 after the date hereof, Obligors shall promptly (but in any event within 3
Business Days
after such acquisition) deliver to Trustee a written description of such commercial
tort claim and
shall deliver a written agreement, in form and substance reasonably satisfactory to
Trustee, pursuant to which the applicable Obligor or its Subsidiary shall pledge and collaterally
assign all of
its right, title and interest in and to such commercial tort claim to Trustee, as
security for the Obligations (a “Commercial Tort Claim
Assignment”).

          (b) At any time upon the request of Trustee (except as expressly permitted otherwise
in the Financing Documents), Obligors shall execute or deliver to Trustee any and all
financing
statements, original financing statements in lieu of continuation statements, fixture
filings, security agreements, pledges, assignments, Commercial Tort Claim Assignments,
endorsements of
certificates of title, to the extent applicable, and all other documents
(collectively, the “Additional Documents”) that Trustee may request in its Permitted Discretion, in form and
substance reasonably satisfactory to Trustee in its Permitted Discretion, to create, perfect, and
continue to perfect the Trustee’s Liens in the Collateral (whether now owned or hereafter arising or
acquired,
tangible or intangible, real or personal), to create and perfect Liens in favor of
Trustee in any
owned Real Property having a value in excess of $1,000,000 acquired after the Closing
Date, and
in order to fully consummate all of the transactions contemplated by the Financing
Documents.
To the maximum extent permitted by applicable law, each Obligor authorizes Trustee to
execute
any such Additional Documents in the applicable Obligor’s name and authorizes Trustee
to file
such executed Additional Documents in any appropriate filing office. In addition, on
such periodic basis as Trustee shall reasonably require (in the event an Obligor acquires or
develops a material patent or files a patent application therefor, immediately upon such
acquisition, development and filing), Obligors shall cause to be prepared, executed, and delivered to
Trustee supplemental schedules to the applicable Financing Documents to identify all material
patents, patent
applications, copyright registrations and registered trademarks acquired or generated
by any Obligor as being subject to the security interests created
thereunder; provided,
however, that (i) no
Obligor shall register with the U.S. Copyright Office any unregistered copyrights
(whether in existence on the Closing Date or thereafter acquired, arising or developed) unless (x)
the applicable
Obligor provides Trustee with written notice of its intent to register such
copyrights not less than
30 days prior to the date of the proposed registration, and (y) prior to such
registration, the applicable Obligor executes and delivers to Trustee a Copyright Security Agreement,
supplemental

-8-

 

schedules to an existing Copyright Security Agreement or such other documentation as Trustee
reasonably deems necessary in order to perfect and continue perfected Trustee’s Liens on
such copyrights following such registration and (ii) no Obligors shall be required to make
any filings in any jurisdiction outside the United States in respect of patents, copyrights
and trademarks.

          2.5 Power of Attorney. Subject to the Intercreditor Agreement, each Obligor hereby
irrevocably makes, constitutes, and appoints Trustee (and any of Trustee’s officers,
employees, or agents
designated by Trustee) as such Obligor’s true and lawful attorney, with power, in each case to
the extent
permitted by applicable law, to (a) if such Obligor refuses to, or fails timely to execute and
deliver any of
the documents described in Section 2.4, sign the name of such Obligor on any of the documents
described
in Section 2.4 and (b) after the Discharge of Credit Agreement Obligations, (i) at any time
that an Event
of Default has occurred and is continuing, sign such Obligor’s name on any invoice or bill of
lading relating to the Obligor Collateral, drafts against Account Debtors, or notices to Account Debtors,
(ii) send requests for verification of Obligors’ Accounts to the extent constituting Obligor Collateral,
(iii) endorse
such Obligor’s name on any of its payment items (including all of its Collections) that may
come into the
Secured Party’s possession, (iv) at any time that an Event of Default has occurred and is
continuing,
make, settle, and adjust all claims under such Obligor’s policies of insurance and make all
determinations
and decisions with respect to such policies of insurance, and (v) at any time that an Event of
Default has
occurred and is continuing, settle and adjust disputes and claims respecting Obligors’
Accounts to the extent constituting Collateral, chattel paper, or General Intangibles directly with Account
Debtors, for
amounts and upon terms that Trustee determines to be reasonable, and Trustee may cause to be
executed
and delivered any documents and releases that Trustee determines to be necessary. The
appointment of
Trustee as each Obligor’s attorney, and each and every one of its rights and powers, being
coupled with
an interest, is irrevocable until all of the Obligations have been fully and finally repaid.

          2.6 Right to Inspect. Trustee (through any of its officers, employees, or agents)
shall
have the right, from time to time hereafter upon reasonable notice and at reasonable times to
inspect the
Books and make copies or abstracts thereof and to check, test, and appraise the Collateral, or
any portion
thereof, in order to verify the amount, quality, value, condition of, or any other matter
relating to, the Obligor Collateral.

          2.7
Control Agreements. (a) Obligors agree that they will not transfer assets out of
any of their Deposit Accounts or Securities Accounts; provided,
however, that (i) any
Obligor may make
any such transfer if immediately thereafter, the Obligors are in compliance with Section
2.7(b) and (ii) so
long as no Event of Default has occurred and is continuing or would result therefrom, Obligors
may use
such assets (and the proceeds thereof) to the extent not prohibited by this Agreement or the
other Financing Documents and, if the transfer is to another bank or securities intermediary and made
after the Discharge of Credit Obligations (unless otherwise permitted under Section 2.7(b)), so long as the
applicable
Obligor, Trustee, and the substitute bank or securities intermediary have entered into a
Control Agreement, After the Discharge of Credit Agreement Obligations, Obligors agree that they will,
subject to Sections 2.2, 2.5 and 2.7(b), take any or all reasonable steps that Trustee requests in order for
Trustee to obtain control in accordance with Sections 8-106, 9-104, 9-105, 9-106, and 9-107 of the Code
with respect
to any of its or their Securities Accounts, Deposit Accounts,
electronic chattel paper,
Investment Property,
and letter-of-credit rights. No Control Agreement in respect of any Securities Accounts or
other Investment Property shall be modified by Obligors without the prior written consent of Trustee.
After the Discharge of Credit Agreement Obligations, upon the occurrence and during the continuance of an
Event of
Default, subject to the provisions of any Control Agreement, Trustee may notify any bank or
securities
intermediary to liquidate the applicable Deposit Account or Securities Account or any related
Investment
Property maintained or held thereby and remit the proceeds thereof to an account designated by
the Trustee

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for the
applicable Obligor; provided that, notwithstanding anything in any Financing Document
to the contrary, Trustee agrees that it shall not give any bank or securities intermediary written
notice instructing such bank or securities intermediary to cease honoring the applicable Obligor’s
instructions unless and until an Event of Default has occurred and is continuing.

          (b) After the Discharge of Credit Agreement Obligations, Obligors shall not have
Permitted Investments (other than Cash Management Accounts) in Deposit Accounts or Securities
Accounts in an aggregate amount in excess of $4,000,000 outstanding at any one time unless the
applicable Obligor and the applicable securities intermediary or bank have entered into Control
Agreements or similar arrangements governing such Permitted Investments in order to perfect (and
further establish) the Trustee’s Liens in such Permitted Investments.

          2.8 Junior Priority Nature of Liens. Notwithstanding anything herein to the
contrary, the lien and security interest granted to the Trustee pursuant to this Agreement and the
exercise of any right or remedy by the Trustee hereunder are subject to the provisions of the
Intercreditor Agreement. In the event of any conflict between the terms of the Intercreditor
Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control.
Notwithstanding anything herein to the contrary, until the Discharge of Credit Agreement
Obligations, the requirements of this Agreement to deliver Obligor Collateral to the Trustee shall
be deemed satisfied by delivery of such Obligor Collateral to the Agent (as such term is defined
in the Intercreditor Agreement).

3. REPRESENTATIONS, WARRANTIES AND COVENANTS.

          In order to induce the Trustee to enter into this Agreement, each Obligor makes the
following representations, warranties and covenants to the Secured Party which shall be true,
correct, and complete, in all material respects, as of the date hereof, and shall be true,
correct, and complete, in all material respects, as of the Closing Date, and such representations
and warranties shall survive the execution and delivery of this Agreement:

          3.1 No Encumbrances. Each Obligor and its Subsidiaries has good and indefeasible
title to, or a valid leasehold interest in, their personal property assets, free and clear of
Liens except for
Permitted Liens and except for assets having de minimis value and not material to their
business.

          3.2 Location of Inventory and Equipment. The Inventory and Equipment of US
Guarantor is not stored with a bailee, warehouseman, or similar party, and is located only
at, or in-transit
between, the locations identified on Schedule 3.2 (as such Schedule may be updated
pursuant to Section
3.5).

          3.3 Jurisdiction of Organization; Location of Chief Executive Office; FEIN; Organizational ID Number; Commercial Tort Claims. The jurisdiction of organization of
each Obligor
and each of its Subsidiaries is set forth on Schedule 3.3(a) (as such Schedule may be
updated from time to time by Obligor on 5 days’ prior written notice to Trustee);

          (a) The chief executive office of each Obligor and each of its Subsidiaries is
located
at the address indicated on Schedule 3.3(b) (as such Schedule may be updated
from lime to time
by notice to the Trustee);

          (b) Each Obligor’s and each of
its Subsidiaries’ FEIN and organizational identification number, if any, are identified on Schedule 3.3(c) (as such Schedule may
be updated from
time to time on 5 days’ prior written notice to Trustee); and

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      (c) Obligors and their Subsidiaries do not hold any commercial tort claims
involving a claim of more than $100,000, except as set forth on Schedule 3.3(d) (as such
Schedule may be updated from time to time on 5 days’ prior written notice to Trustee).

          3.4 DDAs. Set forth on Schedule 3.4 are all of Obligors’ and their
Subsidiaries’ Deposit Accounts and Securities Accounts (as updated from time to time by written notice from
Obligors to
Trustee to reflect Deposit Accounts and Securities Accounts opened in accordance with the
terms hereof),
including, with respect to each bank or securities intermediary (i) the name and address of
such Person,
and (ii) the account numbers of the Deposit Accounts or Securities Accounts maintained with
such Person.

          3.5 Covenants. Each Obligor covenants and agrees that until payment in full of the
Obligations, Obligors shall keep US Guarantor’s Inventory and Equipment only at the locations
identified
on Schedule 3.2; provided, however, that US Guarantor may amend Schedule 3.2 so long
as such
amendment occurs by written notice to Trustee not less than 5 days prior to the date on which
such Inventory or Equipment is moved to such new location, so long as such new location is within the
United States
and, if after the Discharge of Credit Agreement Obligations, so long as, at the time of such
written notification, US Guarantor provides Trustee a Collateral Access Agreement with respect thereto if
such new
location is leased by US Guarantor; and provided
further, that notwithstanding the
foregoing, upon 5 days
prior written notice to Trustee, US Guarantor may move up to $3,000,000 of Inventory and
Equipment to
locations outside the United States in any fiscal year.

4. TRUSTEE’S RIGHTS AND REMEDIES.

          4.1 Rights and Remedies. Subject to Section 2.8 and the provisions of the
Intercreditor Agreement, upon the occurrence, and during the continuation, of an Event of
Default, the Trustee may do any one or more of the following on behalf of the Secured Parties, all
of which are authorized by Obligors:

     (a) Settle or adjust disputes and claims directly with Obligors’ Account Debtors for
amounts and upon terms which Trustee considers advisable, and in such cases, Trustee
will credit
the Secured Parties with only the net amounts received by Trustee in payment of such
disputed
Accounts after deducting all expenses reasonably incurred or expended in connection
therewith;

     (b) Cause Obligors to hold all of their returned Inventory in trust for the Secured
Parties and segregate all such Inventory from all other assets of Obligors or in
Obligors’ possession;

     (c) Without notice to or demand upon any Obligor, make such payments and do such
acts as Trustee considers necessary or reasonable to protect its security interests in
the Obligor
Collateral. Each Obligor agrees to assemble the Obligor Collateral if Trustee so
requires, and to
make the Obligor Collateral available to Trustee at a place that Trustee may designate
which is
reasonably convenient to both parties. Each Obligor authorizes Trustee to enter the
premises
where the Obligor Collateral is located, to lake and maintain possession of the
Obligor Collateral,
or any part of it, and to pay, purchase, contest, or compromise any Lien that in
Trustee’s determination appears to conflict with the Trustee’s Liens in and to the Obligor Collateral
and to pay all
expenses incurred in connection therewith. With respect to any of Obligors’ owned or
leased
premises, each Obligor hereby grants Trustee a license to enter into possession of
such premises
and to occupy the same, without charge, in order to exercise any of the Secured
Party’s rights or
remedies provided herein, at law, in equity, or otherwise;

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     (d) Without notice to any Obligor (such notice being expressly waived), and without
constituting an acceptance of any collateral in full or partial satisfaction of an
obligation (within
the meaning of the Code), to the extent permitted by applicable law, set off and apply
to the Obligations of such Obligor any and all (i) balances and deposits of such Obligor held by
any Secured
Party, or (ii) Indebtedness at any time owing to or for the credit or the account of
such Obligor
held by any Secured Party;

     (e) Hold, as cash collateral, any and all balances and deposits of any Obligor held by
any Secured Party, to secure the full and final repayment of all of the Obligations of
such Obligor;

     (f) Ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise
for sale, and sell (in the manner provided for herein) the Obligor Collateral. Each
Obligor hereby
grants to Trustee a non-exclusive license or other right to use, without charge, such
Obligor’s labels, patents, copyrights, trade secrets, trade names, trademarks, service marks, and
advertising
matter, or any property of a similar nature, as it pertains to the Obligor Collateral,
in completing
production of, advertising for sale, and selling any Obligor Collateral and such
Obligor’s rights
under all licenses and all franchise agreements shall inure to the Secured Parties’
benefit;

     (g) Sell the Obligor Collateral at either a public or private sale, or both, by way of
one or more contracts or transactions, for cash or on terms, in such manner and at such
places (including Obligors’ premises) as Trustee determines in its Permitted Discretion is
commercially
reasonable. It is not necessary that the Obligor Collateral be present at any such sale
but Trustee
shall give the applicable Obligor notice in writing of the time and place of public
sale, or, if the
sale is a private sale or some other disposition other than a public sale is to be made
of the Obligor Collateral, the time on or after which the private sale or other disposition is to
be made; and

               (i) The notice shall be personally delivered or mailed, postage prepaid,
to the applicable Obligor at its address and in the manner provided in the
Indenture, at least 10 days before the earliest time of disposition set forth in the
notice: no notice needs to be given prior to the disposition of any portion of the
Obligor Collateral that is perishable or threatens to decline speedily in value or
that is of a type customarily sold on a recognized market; and

               (ii) Trustee, on behalf of the Secured Parties may credit bid and
purchase at any public sale;

     (h) Trustee may seek the appointment of a receiver or keeper to take possession
of all or any portion of the Obligor Collateral or to operate same and, to the maximum
extent permitted by law, may seek the appointment of such a receiver without the requirement
of prior notice or a hearing; and

     (i) The Trustee and the Secured Parties shall have all other rights and
remedies available to them at law or in equity pursuant to any other Financing
Documents.

          4.2 Remedies Cumulative. The rights and remedies of the Secured Parties under
this Agreement, the other Financing Documents, and all other agreements shall be cumulative. The
Secured Parties shall have all other rights and remedies not inconsistent herewith as provided
under the Code, by law, or in equity. No exercise by the Secured Parties of one right or remedy
shall be deemed an election,

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and no waiver by the Secured Parties of any Event of Default shall be deemed a continuing waiver.
No delay by the Secured Parties shall constitute a waiver, election, or acquiescence by it.

5. WAIVERS; INDEMNIFICATION.

          5.1 Demand; Protest; etc. Each Obligor waives demand, protest, notice of protest,
notice of default or dishonor, notice of payment and nonpayment, nonpayment at maturity,
release, compromise, settlement, extension, or renewal of documents, instruments, chattel paper, and
guarantees at any
time held by any Secured Party on which any such Obligor may in any way be liable.

          5.2 Trustee’s Liability for Obligor Collateral. Each Obligor hereby agrees that: (a)
so long as the Trustee complies with its obligations, if any, under
the Code, Trustee shall
not in any way
or manner be liable or responsible for: (i) the safekeeping of the Obligor Collateral, (ii)
any loss or damage thereto occurring or arising in any manner or fashion from any cause, (iii) any diminution
in the value
thereof, or (iv) any act or default of any carrier, warehouseman, bailee, forwarding agency,
or other Person, except, in each case, to the extent such liability arises from the Trustee’s gross
negligence or willful
misconduct, and (b) except as otherwise provided in clause (a), all risk of loss, damage, or
destruction of
the Obligor Collateral shall be borne by Obligors.

          5.3 Indemnification. The provisions of Section 7.07 of the Indenture shall be deemed
to be incorporated herein.

6. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. (a) THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS
(OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW), AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

          (b) THE PARTIES AGREE THAT TO THE FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW ALL
ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY
IN THE STATE AND FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN, COUNTY OF NEW YORK, STATE OF
NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY OBLIGOR
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT TRUSTEE’S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE TRUSTEE ELECTS TO BRING SUCH ACTION OR WHERE SUCH OBLIGOR COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. OBLIGORS AND THE TRUSTEE WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE
LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE
TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 6(b).

          TO THE EXTENT PERMITTED BY APPLICABLE LAW, OBLIGORS AND THE TRUSTEE HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. OBLIGORS AND THE TRUSTEE
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A

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COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

7. AMENDMENTS; WAIVERS.

          7.1 Amendments and Waivers. No amendment or waiver of any provision of this
Agreement, and no consent with respect to any departure by Obligors therefrom, shall be
effective unless
the same shall be in writing and signed by the Trustee, and any such amendment and waiver
shall be subject to Article IX of the Indenture and the provisions of the Intercreditor Agreement.

          7.2 No Waivers: Cumulative Remedies. No failure by Trustee or any Noteholder to
exercise any right, remedy, or option under this Agreement or delay by Trustee or any
Noteholder in exercising the same, will operate as a waiver thereof. No waiver by Trustee or any Noteholder
will be effective unless it is in writing, and then only to the extent specifically stated. No waiver by
Trustee or any
Noteholder on any occasion shall affect or diminish Trustee’s and each Noteholder’s rights
thereafter to
require strict performance by Obligors of any provision of this Agreement. Trustee’s and each
Noteholder’s rights under this Agreement and the other Financing Documents will be cumulative and
not exclusive of any other right or remedy that Trustee or any Noteholder may have.

8. TRUSTEE.

          8.1 Costs and Expenses. Trustee may incur and pay expenses to the extent Trustee
reasonably deems necessary or appropriate for the performance and fulfillment of its
functions, powers,
and obligations pursuant to the Security Documents, including court costs, attorneys fees and
expenses,
fees and expenses of financial accountants, advisors, consultants, and appraisers, costs of
collection by
outside collection agencies, auctioneer fees and expenses, and costs of security guards or
insurance premiums paid to maintain the Obligor Collateral, whether or not Obligors are obligated to
reimburse Trustee
or Noteholders for such expenses pursuant to the Financing Documents or otherwise. The
undertaking in
this Section shall survive the payment of all Obligations hereunder and the resignation or
replacement of
Trustee.

          8.2  Obligor Collateral and Guaranty Matters. Trustee shall have no obligation
whatsoever to any of the Noteholders to assure that the Obligor Collateral exists or is owned
by Obligors
or is cared for, protected, or insured or has been encumbered, or that the Trustee’s Liens
have been properly or sufficiently or lawfully created, perfected, protected, or enforced or are entitled to
any particular
priority, or to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity,
or to continue exercising, any of the rights, authorities and powers granted or available to
Trustee pursuant to any of the Financing Documents, it being understood and agreed that in respect of the
Obligor Collateral, or any act, omission, or event related thereto, subject to the terms and conditions
contained herein,
Trustee may act in any manner it may deem appropriate, in its sole discretion given Trustee’s
own interest
in the Obligor Collateral in its capacity as one of the Secured Parties and that Trustee shall
have no other
duty or liability whatsoever to any Noteholder as to any of the foregoing, except as otherwise
provided
herein.

9. GENERAL PROVISIONS.

          9.1 Effectiveness. This Agreement shall be binding and deemed effective when
executed by Obligors and the Trustee.

-14-

 

          9.2 Section Headings. Headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each
Section applies
equally to this entire Agreement.

          9.3 Interpretation. Neither this Agreement nor any uncertainty or ambiguity herein
shall be construed or resolved against the Secured Party or Obligors, whether under any rule
of construction or otherwise. On the contrary, this Agreement has been reviewed by all parties and shall
be construed and interpreted according to the ordinary meaning of the words used so as to accomplish
fairly the
purposes and intentions of all parties hereto. In the event two or more agreements made in
favor of the
Trustee in connection with this Agreement grant a Lien in the same Obligor Collateral, the
fact that any
one such agreement may describe such Obligor Collateral in specific terms shall not be
construed to limit
any Lien granted in the same Obligor Collateral which is described in general terms in another
such
agreement.

          9.4
Severability of Provisions. Each provision of this Agreement shall be severable
from every other provision of this Agreement for the purpose of determining the legal
enforceability of
any specific provision.

          9.5 Counterparts; Telefacsimile Execution. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each of which, when
executed
and delivered, shall be deemed to be an original, and all of which, when taken together, shall
constitute
but one and the same Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile
shall be equally as effective as delivery of an original executed counterpart of this
Agreement. Any party
delivering an executed counterpart of this Agreement by telefacsimile also shall deliver an
original executed counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not
affect the validity, enforceability, and binding effect of this Agreement.

          9.6 Revival and Reinstatement of Obligations. If the incurrence or payment of the
Obligations by any Obligor or the transfer to the Secured Parties of any property should for
any reason
subsequently be declared to be void or voidable under any state or federal law relating to
creditors’ rights,
including provisions of the Bankruptcy Code relating to fraudulent conveyances, preferences,
or other
voidable or recoverable payments of money or transfers of property (collectively, a “Voidable
Transfer”),
and if the Secured Party is required to repay or restore, in whole or in part, any such
Voidable Transfer, or
elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable
Transfer, or the
amount thereof that the Secured Parties are required or elect to repay or restore, and as to
all reasonable
costs, expenses, and attorneys fees of the Secured Parties related thereto, the liability of
Obligors automatically shall be revived, reinstated, and restored and shall exist as though such Voidable
Transfer had
never been made.

          9.7 Termination; Release. The security interests granted hereunder in any Obligor
Collateral shall be released in accordance with the provisions of Section 2.1 hereof, the
Indenture and the
Intercreditor Agreement and upon the payment in full of the Obligations. Upon any such
release, Trustee
will, at Obligors’ sole expense, execute and deliver any UCC termination statements, lien
releases, mortgage releases, re-assignments of trademarks, discharges of security interests, and other
similar discharge
or release documents (and, if applicable, in recordable form) as are reasonably necessary to
evidence such
release.

          9.8 Notices. All notices to any party under this Agreement shall be given in the manner and to the addresses set forth in the Indenture.

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[Signature page to follow.]

-16-

 

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and
delivered as of the date first above written.

	 	 	 	 	 
	 	 	SMART MODULAR TECHNOLOGIES 
(WWH), INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ lain Mackenzie
	 

	 	 	 	 
	 

	 	 	 	Name: lain Mackenzie
	 

	 	 	 	Title: President
	 
	 	 	 	 
	 	 	EXECUTED AS A DEED

[SIGNATURE PAGE TO THE SECURITY AGREEMENT]

 

 

	 	 	 	 	 
	 	 	SMART MODULAR TECHNOLOGIES
(GLOBAL), INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Ann Nguyen
	 

	 	 	 	 
	 

	 	 	 	Name: Ann Nguyen
	 

	 	 	 	Title: Secretary
	 
	 	 	 	 
	 	 	EXECUTED AS A DEED

[SIGNATURE PAGE TO THE SECURITY AGREEMENT]

 

 

	 	 	 	 	 
	 	 	SMART MODULAR
TECHNOLOGIES 

(DH), INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Ann Nguyen
	 

	 	 	 	 
	 

	 	 	 	Name: Ann Nguyen
	 

	 	 	 	Title: Assistant Secretary
	 
	 	 	 	 
	 	 	EXECUTED AS A DEED

[SIGNATURE PAGE TO THE SECURITY AGREEMENT]

 

 

	 	 	 	 	 
	 	 	SMART MODULAR TECHNOLOGIES
(CI), INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Ann Nguyen
	 

	 	 	 	 
	 

	 	 	 	Name: Ann Nguyen
	 

	 	 	 	Title: Assistant Secretary
	 
	 	 	 	 
	 	 	EXECUTED AS A DEED

[SIGNATURE PAGE TO THE SECURITY AGREEMENT]

 

 

	 	 	 	 	 
	 	 	SMART MODULAR TECHNOLOGIES 
(FOREIGN HOLDINGS), INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ lain Mackenzie
	 

	 	 	 	 
	 

	 	 	 	Name: lain MacKenzie
	 

	 	 	 	Title: President
	 
	 	 	EXECUTED AS A DEED

[SIGNATURE PAGE TO THE SECURITY AGREEMENT]

 

 

	 	 	 	 	 
	 	 	SMART MODULAR TECHNOLOGIES 
(PUERTO RICO) INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Iain MacKenzie
	 

	 	 	 	 
	 

	 	 	 	Name: Iain MacKenzie
	 

	 	 	 	Title: CEO & President
	 
	 	 	 	 
	 	 	EXECUTED AS A DEED

[SIGNATURE PAGE TO THE SECURITY AGREEMENT]

 

 

	 	 	 	 	 
	 	 	SMART MODULAR TECHNOLOGIES, INC.
	 
	 

	 	By:
	 	/s/ Iain MacKenzie
	 

	 	 	 	 
	 

	 	 	 	Name: IainMacKenzie
	 

	 	 	 	Title: CEO & President

[SIGNATURE PAGE TO THE SECURITY AGREEMENT]

 

 

	 	 	 	 	 
	 	 	SMART MODULAR TECHNOLOGIES 
(DE), INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Ann Nguyen
	 

	 	 	 	 
	 

	 	 	 	Name: Ann Nguyen
	 

	 	 	 	Title: Assistant Secretary

[SIGNATURE PAGE TO THE SECURITY AGREEMENT]

 

 

	 	 	 	 	 
	 	 	SMART MODULAR TECHNOLOGIES
 (EUROPE) LIMITED
	 
	 

	 	By:
	 	/s/ Ann Nguyen
	 

	 	 	 	 
	 

	 	 	 	Name: Ann Nguyen
	 

	 	 	 	Title: Secretary

[SIGNATURE PAGE TO THE SECURITY AGREEMENT]

 

 

	 	 	 	 	 
	 	 	U.S. NATIONAL BANK ASSOCIATION
	 

	 	 	 	as Trustee
	 
	 

	 	By:
	 	/s/ Richard Prokosch
	 

	 	 	 	 
	 

	 	 	 	Name: Richard Prokosch
	 

	 	 	 	Title: Vice President

[SIGNATURE PAGE TO THE SECURITY AGREEMENT]

 

 

EXHIBIT A

Form of Collateral Access Agreement

          U.S. Bank National Association, in its capacity as trustee pursuant to the Security Agreement
(as hereinafter defined) acting for and on behalf of the parties thereto as Secured Parties
(together with its successors and assigns in such capacity, “Trustee”) and the parties from time to
time to the Security Agreement as secured parties (collectively, “Secured Parties”) have entered or
are about to enter into financing arrangements with [Name of Borrower], a [Type of Entity]
(“Debtor”) pursuant to which Trustee has been or may be granted a security interest in any or all
of Debtor’s and certain of its affiliates’ personal property, including, but not limited to,
inventory and equipment (hereinafter “Personal Property”). For purposes of this Agreement,
(i) the term “Personal Property” does not include plumbing and electrical fixtures, heating,
ventilation and air conditioning, wall and floor coverings, walls or ceilings and other fixtures
not constituting trade fixtures. Some of the Personal Property has or may from time to time become
affixed to or be located on, wholly or in part, the real property leased by Debtor or its
affiliates located at [Street Address of Property], the legal description of which is attached as
Exhibit A (the “Premises”). The undersigned is the owner or lessor of the Premises. The term
“Security Agreement” as used herein shall mean the Security Agreement by and among Debtor, certain
of its affiliates, Trustee and Secured Parties, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced.

          In order for Trustee and Secured Parties to consider making loans or providing other financial
accommodations to Debtor or its affiliates in reliance upon the Personal Property as collateral,
the undersigned agrees as follows:

          1. The undersigned waives and relinquishes any landlord’s lien, rights of levy or
distraint, claim, security interest or other interest the undersigned may now or hereafter
have in or with
respect to any of the Personal Property, whether for rent or otherwise.

          2. The Personal Property may be installed in or located on the Premises and is not
and shall not be deemed a fixture or part of the real property but shall at all times be
considered personal
property.

          3. Trustee, for itself and the benefit of Secured Parties, at its option, may, enter and
use the Premises for the purpose of repossessing, removing, selling or otherwise dealing with
any of the
Personal Property, and such license shall be irrevocable and shall continue from the date
Trustee enters
the Premises for a period of up to 90 days after the receipt by Trustee of written notice from
the under
signed directing removal of the Personal Property; provided that (a) for each day that
Trustee uses the
Premises pursuant to the rights granted to it herein, unless the undersigned has otherwise
been paid rent in
respect of any of such period, Trustee shall pay the regularly scheduled rent provided under
the lease relating to the Premises between the undersigned and Debtor (the “Lease”), prorated on a per
diem basis to
be determined on a thirty (30) day month, without Trustee or any Secured Party thereby
assuming the
Lease or incurring any other obligations of Debtor and (b) any damage to the Premises caused
by Trustee
or its representatives will be repaired by Trustee (for the account of Debtor).

 

 

          4. The undersigned agrees to send notice in writing of any default under the Lease to:

   U.S. BANK NATIONAL ASSOCIATION, as Trustee

   Corporate Trust Administration

   60 Livingston Avenue

   St. Paul Minnesota 55107

Upon receipt of such notice, Trustee shall have the right, but not the obligation, to cure such
default within ten (10) days thereafter. Any payment made or act done by Trustee to cure any such
default shall not constitute an assumption by Trustee or any Secured Party of the Lease or any
obligations of Debtor.

          5. This waiver may not be changed or terminated orally or by course of conduct and
is binding upon the undersigned and the heirs, personal representatives, successors and
assigns of the undersigned and inures to the benefit of Trustee, any Secured Party and their respective
successors and as
signs.

          6. THE UNDERSIGNED WAIVES ANY RIGHT TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF THIS LANDLORD AGREEMENT.

Dated this                     day of                                         , 200                     .

	 	 	 
	 

	 	[NAME OF LANDLORD]
	 
	 	 
	 

	 	By:                                        
	 
	 	 
	 

	 	Name:                                        
	 
	 	 
	 

	 	Title:                                        
	 
	 	 
	 

	 	Address for Notices:
	 
	 	 
	 

	 	Attn:                                        

-2-

 

 

EXHIBIT B

Form of Control Agreement

DEPOSIT ACCOUNT CONTROL AGREEMENT

 

          This Agreement is entered into as of [              ], among [          ]
(the “Company”), U.S. BANK NATIONAL ASSOCIATION, in
its capacity as Trustee (“Trustee”), for the noteholders
(the “Noteholders”) and [              ] (“Bank”) with respect to the following:

          A. Bank has agreed to establish and maintain for Company deposit account number
[                  ]
(the “Account”).

          B. Company has assigned to Trustee, on behalf of the Noteholders a security interest
in the Account and in checks and other payment instructions (“Checks”) deposited in the
Account.

          C. Company, Trustee and Bank are entering into this Agreement to evidence Noteholders’
security interest in the Account and such Checks and to provide for the disposition
of net proceeds of Checks deposited in the Account.

Accordingly, Company, Trustee and Bank agree as follows:

          1. (a) This Agreement evidences Trustee’s control over the Account. Notwithstanding
anything to the contrary in the agreement between Bank and Company governing the Account,
Bank will comply with instructions originated by Trustee in accordance with this Agreement
directing the disposition of funds in the Account without further consent of the Company.

   (b) Company represents and warrants to the Trustee and Bank that it has not assigned
or granted a security interest in the Account or any Check deposited in the
Account, except for liens in favor of lenders pursuant to the Loan and Security Agreement, dated
as of March 28, 2005 between the Company, the guarantors party thereto, and Wells Fargo
Foothill, Inc., and any other liens permitted under the Security Agreement between Company and
the Trustee (“Security Agreement”).

   (c) Company will not permit the Account to become subject to any other pledge, assignment,
lien, charge or encumbrance of any kind, other than Trustee’s security
interest referred to herein or other liens permitted under the Security Agreement.

          2. During the Activation Period (as defined below), Bank shall prevent Company
from making any withdrawals from the Account. Prior to the Activation Period, Company may
operate and transact business through the Account in its normal fashion, including making withdrawals
from the Account, but covenants to Trustee it will not close the Account without Trustee’s consent,
which the Trustee agrees to grant promptly following any request by the Company therefor so long as the
Trustee has received a certificate from the Company stating that, immediately after giving effect to
such closure, the Company will be in compliance with Sections 2.7 of the Security Agreement between Company
and Trustee. A reasonable period of time following the commencement of the Activation Period, and
continuing on each Business Day thereafter, Bank shall transfer all collected and available balances
in the

 

 

Account to Trustee at its account specified in the Notice (as defined below). The “Activation Period”
means the period which commences within a reasonable period of time not to exceed two Business Days
after Bank’s receipt of a written notice from Trustee in the form of Exhibit A (the “Notice”). A
“Business Day” is each day except Saturdays, Sundays and Bank holidays. Funds are not available if,
in the reasonable determination of Bank, they are subject to a hold, dispute or legal process
preventing their withdrawal.

          3. Bank agrees it shall not offset, charge, deduct or otherwise withdraw funds from
the Account, except as permitted by Section 4 hereof, until it has been advised in writing by
Trustee that all of Company’s obligations that are secured by the Checks and the Account are paid in full.

Lender shall notify Bank promptly in writing upon payment in full of Company’s obligations.

          4. Bank is permitted to charge the Account:

   (a) for its fees and charges relating to the Account or associated with the Lockbox
Service and this Agreement; and

   (b) in the event any Check deposited into the Account is returned unpaid for any reason
or for any breach of warranty claim.

          5. (a) If the balances in the Account are not sufficient to compensate Bank for any
fees or charges due Bank in connection with the Account or this Agreement, Company agrees to
pay Bank on demand the amount due Bank. Company will have breached this Agreement if it has not
paid Bank, within five days after such demand, the amount due Bank.

   (b) If the balances in the Account are not sufficient to compensate Bank for any returned
Check, Company agrees to pay Bank on demand the amount due Bank. If Company
fails to so pay Bank immediately upon demand, Trustee agrees to pay Bank within five days
after Bank’s demand to Trustee to pay any amount received by Trustee with respect to such
returned Check. The failure to so pay Bank shall constitute a breach of this Agreement.

   (c) Company hereby authorizes Bank, without prior notice, from time to time to
debit any other account Company may have with Bank for the amount or amounts due Bank
under subsection 5(a) or 5(b) hereof.

          6. (a) Bank will send information regarding deposits to the Account to the address
specified below for Company or as otherwise specified in writing by Company to Bank, and will
send a copy of each such deposit advice to the address specified below for Trustee.

   (b) In addition to the original Bank statement provided to Company, Bank will
provide Trustee with a duplicate of such statement.

          7. (a) Bank will not be liable to Company or Trustee for any expense, claim, loss,
damage or cost (“Damages”) arising out of or relating to its performance under this Agreement
other than those Damages which result directly from its acts or omissions constituting negligence or
intentional misconduct.

   (b) In no event will Bank be liable for any special, indirect, exemplary or
consequential damages, including but not limited to lost profits.

-2-

 

     (c) Bank will be excused from failing to act or delay in acting, and no such
failure or delay shall constitute a breach of this Agreement or otherwise give rise to any
liability of Bank, if (i) such failure or delay is caused by circumstances beyond Bank’s reasonable control,
including but not limited to legal constraint, emergency conditions, action or inaction of
governmental, civil or military authority, fire, strike, lockout or other labor dispute, war, riot, theft,
flood, earthquake or other natural disaster, breakdown of public or private or common carrier
communications or transmission facilities, equipment failure, or negligence or default of Company or
Trustee or (ii) such failure or delay resulted from Bank’s reasonable belief that the action would have
violated any guideline, rule or regulation of any governmental authority.

     (d) Bank shall have no duty to inquire or determine whether Company’s obligations
to Trustee are in default or whether Trustee is entitled to provide the Notice to Bank.
Bank may rely on notices and communications it believes in good faith to be genuine and given by
the appropriate party.

     (e) Notwithstanding any of the other provisions in this Agreement, in the event of
the commencement of a case pursuant to Title 11, United States Code, filed by or
against Company, or in the event of the commencement of any similar case under then applicable
federal or state law providing for the relief of debtors or the protection of creditors by or
against Company, Bank may act as Bank deems necessary to comply with all applicable provisions of
governing statutes and shall not be in violation of this Agreement as a result.

     (f) Bank shall be permitted to comply with any writ, levy order or other similar
judicial or regulatory order or process concerning the Account or any Check and shall not
be in violation of this Agreement for so doing.

            8. Company and Trustee shall jointly and severally indemnify Bank against, and
hold it harmless from, any and all liabilities, claims, costs, expenses and damages of any
nature (including but not limited to allocated costs of staff counsel, other reasonable attorney’s fees and any
fees and expenses) in any way arising out of or relating to disputes or legal actions concerning Bank’s
provision of the services described in this Agreement. This section does not apply to any cost or damage
attributable to the gross negligence or intentional misconduct of Bank. Company’s and Trustee’s obligations
under this section shall survive termination of this Agreement.

            9. Company and Trustee shall jointly and severally pay to Bank, upon receipt of
Bank’s invoice, all costs, expenses and attorneys’ fees (including allocated costs for
in-house legal services) incurred by Bank in connection with the enforcement of this Agreement and any
instrument or agreement required hereunder, including but not limited to any such costs, expenses and fees
arising out of the resolution of any conflict, dispute, motion regarding entitlement to rights or rights
of action, or other action to enforce Bank’s rights in a case arising under Title 11, United States Code.
Company agrees to pay Bank, upon receipt of Bank’s invoice, all costs, expenses and attorneys’ fees
(including allocated costs for in-house legal services) incurred by Bank in the preparation and
administration of this Agreement (including any amendments hereto or instruments or agreements required hereunder).

            10. Termination and Assignment of this Agreement shall be as follows:

     (a) Trustee may terminate this Agreement by providing notice to Company and Bank
that all of Company’s obligations which are secured by Checks and the Account are paid in
full. Trustee may also terminate or it may assign this Agreement upon 30 days prior written
notice to Company and Bank. Bank may terminate this Agreement upon 30 days prior written
notice to

-3-

 

Company and Trustee. Company may not terminate this Agreement except with the written
consent of Trustee and upon prior written notice to Bank.

     (b) Notwithstanding subsection 10(a), Bank may terminate this Agreement at any
time by written notice to Company and Trustee if either Company or Trustee breaches any of
the terms of this Agreement, or any other agreement with Bank.

          11. (a) Each party represents and warrants to the other parties that (i) this Agreement
constitutes its duly authorized, legal, valid, binding and enforceable obligation; (ii) the
performance of its obligations under this Agreement and the consummation of the transactions contemplated
hereunder will not (A) constitute or result in a breach of its certificate or articles of incorporation,
by-laws or partnership agreement, as applicable, or the provisions of any material contract to which it is a party or
by which it is bound or (B) result in the violation of any law, regulation, judgment, decree or governmental
order applicable to it; and (iii) all approvals and authorizations required to permit the execution,
delivery, performance and consummation of this Agreement and the transactions contemplated hereunder have been
obtained.

     (b) The parties each agree that it shall be deemed to make and renew each
representation and warranty in subsection 1l(a) on and as of each day on which Company uses
the services set forth in this Agreement.

          12. (a) This Agreement may be amended only by a writing signed by Company,
Trustee and Bank; except that Bank’s charges are subject to change by Bank upon 30 days prior
written notice to Company.

     (b) This Agreement may be executed in counterparts; all such counterparts shall constitute
but one and the same agreement.

     (c) This Agreement controls in the event of any conflict between this Agreement and
any other document or written or oral statement. This Agreement supersedes all prior
understandings, writings, proposals, representations and communications, oral or written, of
any party relating to the subject matter hereof.

     (d)
This Agreement shall be interpreted in accordance with [
              ] law
without reference to that state’s principles of conflicts of law.

          13. Any written notice or other written communication to be given under this
Agreement shall be addressed to each party at its address set forth on the signature page of
this Agreement or to such other address as a party may specify in writing. Except as otherwise expressly
provided herein, any such notice shall be effective upon receipt.

          14. Nothing contained in the Agreement shall create any agency, fiduciary, joint venture or
partnership relationship between Bank and Company or Bank and Trustee.

-4-

 

          In Witness Whereof, the parties hereto have executed this Agreement by their duly
authorized officers as of the day and year first above written.

[                                          ]

(“Company”)

	 	 	 	 	 	 	 
	By:

 

	 	 	 	Address for notices:
	Name:

 

	 	 	 	4211 Starboard Drive
	Title:

 

	 	 	 	Fremont, CA 94538
	 

	 	 	 	 	 	Attn: Jack Pacheco
	 

	 	 	 	 	 	Phone: (510)624-8134
	 

	 	 	 	 	 	Facsimile: (510) 360-8500
	 
	 	 	 	 	 	 
	U.S. BANK NATIONAL ASSOCIATION	 	 	 	 
	(“Trustee”)	 	 	 	 
	 
	 	 	 	 	 	 
	By:

 

	 	 	 	Address for notices:
	 

	 	Name:
	 	 	 	U.S. Bank National Association
	 

	 	Title:
	 	 	 	Corporate Trust Administration
	 

	 	 	 	 	 	60 Livingston Avenue
	 

	 	 	 	 	 	St. Paul, Minnesota 55107
	 
	 	 	 	 	 	 
	BANK OF AMERICA, N.A.	 	 	 	 
	(“Bank”)	 	 	 	 
	 
	 	 	 	 	 	 
	By:

 

	 	 	 	Address for notices:
	Name:

 

	 	 	 	 
	Title:

 

	 	 	 	 

-5-

 

EXHIBIT A

DEPOSIT ACCOUNT CONTROL AGREEMENT

[Letterhead of Trustee]

	 	 	 
	To:

	 	[Bank]
	 

	 	[Address]

	 	 	 	 	 
	 

	 	Re:
	 	[Name of Company]
	 

	 	 	 	Account No.                                        

Ladies and Gentlemen:

          Reference
is made to the Deposit Account Control Agreement dated

_______________________
(the “Agreement”) among [Company Name], us and you regarding the above-
described account (the “Account”). In accordance with Section 2 of the Agreement, we hereby give
you notice of our exercise of control of the Account and we hereby instruct you to transfer funds to
our account as follows:

	 	 	 	 	 
	 

	 	 	 	 
	Bank Name:
	 
	 	 
	ABA No.:
	 
	 	 
	Account Name:
	 
	 	 
	Account No.:

	 
	 	 

	 	 	 	 	 
	 	 	Very truly yours,
	 
	 	 	 	 
	 	 	 
	 	 	      as Trustee
	 
	 	 	 	 
	 

	 	By:

 

	 

	 	Name:

 

	 

	 	Title:

 

	 	 

 

EXHIBIT C

Form of Copyright Security Agreement

          THIS COLLATERAL ASSIGNMENT OF COPYRIGHTS (SECURITY AGREEMENT)
(this “Agreement”), dated
[    ]is made between [NAME OF
PLEDGOR], a [Type of Entity]
with an office at [Address of Chief Executive Office]
(“Pledgor”), and U.S. BANK NATIONAL
ASSOCIATION, a national banking association with an office at 60 Livingston Avenue, St. Paul,
Minnesota 55107 (“Pledgee”), in its capacity as Trustee for the noteholders (the
“Noteholders”).

W I T N E S S E T H:

          WHEREAS, Pledgee, Pledgor, Smart Modular Technologies (WWH), Inc., an exempted company
organized under the laws of the Cayman Islands (the “Company”), and certain other subsidiaries of
the Issuer (the “Guarantors” and together with the Company, the “Issuers”) have entered into that
certain Indenture, dated as of the date hereof (as the same now exists or may hereafter be amended,
the “Indenture”). Initially capitalized terms used herein without definitions shall have the
meanings given to them in the Indenture.

          WHEREAS, Pledgor owns all right, title, and interest in and to, among other things, the
copyrights and rights and interests in copyrights and works protectable by copyright, pending,
registered or otherwise, in the United States and throughout the world, in the works set forth on
Exhibit A hereto (the “Copyrights”).

          WHEREAS,
in order to secure Pledgor’s obligations to the Noteholders under the Indenture,
Pledgor has agreed to grant to Pledgee a security interest in the Copyrights and certain other
assets with respect to the Copyrights, as further set forth herein and in the Security Documents,
and Pledgee has requested Pledgor to enter into this Agreement to evidence further such security
interest.

          NOW THEREFORE, KNOW ALL MEN BY THESE PRESENTS, that for valuable consideration received and to
be received, as security for the full payment and performance of Pledgor’s obligations under the
Indenture, Pledgor hereby grants, transfers and assigns to Pledgee, for the benefit of Pledgee and
the Noteholders (collectively, the “Secured Parties” and each a “Secured Party”), a continuing
security interest in all of Pledgor’s right, title and interest in and to:

     (a) the Copyrights;

     (b) all registrations of the Copyrights in the United States and any foreign countries
and localities;

     (c) all right, title and interest in and to copyrights of all works based on,
incorporated in, derived from, incorporating or relating to all Copyrights (the “Future
Copyrights”);

     (d) all extensions, renewals, and continuations of the Copyrights and Future Copy
rights and the registrations referred to in clause (b) above;

     (e) all rights to sue for past, present and future infringements of the Copyrights and
Future Copyrights;

 

 

     (f) all right, title and interest to make and exploit all derivative works based on or
adapted from all Copyrights and Future Copyrights; and

     (g) all licenses and other agreements under which Pledgor is licensor, and all fees,
rents, royalties, proceeds or monies thereunder, relating to the Copyrights and Future
Copyrights and the use thereof.

     All of the foregoing items set forth in clauses (a) through (g) are hereinafter referred to
collectively as the “Collateral.”

     AND Pledger hereby covenants with Pledgee as follows:

          1. Pledgor’s Obligations. Pledgor agrees that, notwithstanding this Agreement, it
will perform and discharge and remain liable for all its covenants, duties, and obligations
arising in connection with the Collateral and any licenses and agreements related thereto except to the
extent any failure
to so perform, discharge or remain liable would not have a material impact on the overall
value of all the
Collateral or the enforcement, perfection or priority of the security interests therein. No
Secured Party
shall have any obligation or liability in connection with the Collateral or any licenses or
agreements relating thereto by reason of this Agreement or any payment received by any Secured Party relating
to the
Collateral, nor shall any Secured Party be required to perform any covenant, duty or
obligation of Pledgor
arising in connection with the Collateral or any license or agreement related thereto or to
take any other
action regarding the Collateral or any such licenses or agreement.

          2. Representations and Warranties. Pledgor represents and warrants to Pledgee
that:

     (a) Pledgor is the owner of the Collateral, and no adverse claims are currently
outstanding with respect to its title to or the validity of the Collateral except as would
not have a material impact on the overall value of all the Collateral or the enforcement, perfection
or priority of
the security interests therein;

     (b) the copyrights listed on Schedule 12(b) to the Perfection Certificate (as updated
from time to time) are the only material copyrights, copyright registrations and
pending copy
rights in which Pledgor is the owner or is an exclusive licensee;

     (c) none of the Collateral is subject to any mortgage, pledge, lien, security interest,
lease, charge, encumbrance or license (by Pledgor as licensor), except for Pledgee’s
security interest and Permitted Liens; and

     (d) when this Agreement is filed in the United States Copyright Office and Pledgee
has taken the other actions contemplated in this Agreement and by the Security
Documents, this
Agreement will create a legal and valid perfected and continuing lien on and security
interest in
the Collateral, subject to any limitations permitted under the Security Documents, in
favor of
Pledgee, enforceable against Pledgor and all third parties, subject to no other
mortgage, lien,
charge, encumbrance, or security or other interest other than Permitted Liens.

          3. Covenants. Except as would not have a material impact on the overall value of
all the Collateral or the enforcement, perfection or priority of the security interests
therein, Pledgor will
maintain the Collateral, defend the Collateral against the claims of all persons, and will
maintain and re
new all registrations of the Collateral; provided,
however, that Pledgor will not be
required to maintain
any Collateral which no longer has any significant economic value and which is no longer used
or useful

-2-

 

in the
business of Pledgor. Without limiting the generality of the foregoing, and so long as any
Copyright or Future Copyright has any significant economic value or is used by or useful to the
business of Pledgor, Pledgor shall not permit the expiration, termination or abandonment of such
Copyright or Future Copyright without the prior written consent of Pledgee. If, before the
Pledgor’s obligations under the Security Documents have been satisfied in full (other than
unmatured contingent obligations) and the Security Documents have been terminated, Pledgor shall
obtain rights to or be licensed to use any new copyright, or become entitled to the benefit of any
copyright application or copyright registration, the provisions of Section 1 hereof shall
automatically apply thereto and Pledgor shall comply with Section 2.4 of the Security Agreement, if
applicable.

          4. Use Prior to Default. Effective until Pledgee’s exercise of its rights and remedies
upon the occurrence and during the continuance of an Event of Default under and as defined in
the Security Documents (an “Event of Default”), Pledgor shall be entitled to use the Collateral,
subject to the
terms and covenants of the Security Documents and this Agreement.

          5. Remedies Upon Default. Whenever any Event of Default shall have occurred
and be continuing, Pledgee shall have all the rights and remedies granted to it in such event
by the Security Documents, which rights and remedies are specifically incorporated herein by reference
and made a
part hereof, and, subject to any limitations set forth in the Security Agreement or any other
Security
Document, any and all rights and remedies of law available to Pledgee. Pledgee in such event
may collect
directly any payments due to Pledgor in respect of the Collateral and may sell, license,
lease, assign, or
otherwise dispose of the Collateral in the manner set forth in the Security Documents. Pledgor
agrees
that, in the event of any disposition of the Collateral upon and during the continuance of any
such Event
of Default, it will duly execute, acknowledge, and deliver all documents necessary or
advisable (as determined by Trustee in its Permitted Discretion) to record title to the Collateral in any
transferee or transferees thereof, including, without limitation, valid, recordable assignments of the Copyrights or
Future
Copyrights. In the event Pledgor fails or refuses to execute and deliver such documents,
Pledgor hereby
irrevocably appoints Pledgee as its attorney-in-fact, with power of substitution, to execute,
deliver, and
record any such documents on Pledger’s behalf. Notwithstanding any provision hereof to the
contrary,
during the continuance of an Event of Default, Pledgor may sell any merchandise incorporating,
utilizing
or bearing the Copyrights and Future Copyrights to the extent permitted by the Security
Agreement, until
it receives written notice from Pledgee to the contrary. The preceding sentence shall not
limit any right or
remedy granted to Pledgee with respect to Pledger’s inventory under any Security Documents now
or
hereinafter in effect.

          6. Cumulative Remedies. The rights and remedies provided herein are cumulative
and not exclusive of any other rights or remedies provided by law. The rights and remedies
provided
herein are intended to be in addition to and not in substitution of the rights and remedies
provided by the
Security Documents.

          7. Waiver of Rights. No course of dealing between the parties to this Agreement or
any failure or delay on the part of any such party in exercising any rights or remedies
hereunder shall operate as a waiver of any rights or remedies of such party or any other party, and no single or
partial exercise of any rights or remedies by one party hereunder shall operate as a waiver or preclude
the exercise of
any other rights or remedies of such party or any other party. No waiver by Pledgee or any
Secured Party
of any breach or default by Pledgor shall be deemed a waiver of any other previous breach or
default or of
any breach or default occurring thereafter.

          8. Further Acts. Until all of the Obligations shall have been terminated, except as
would not have a material impact on the overall value of all the Collateral or the
enforcement, perfection

-3-

 

or
priority of the security interests therein, Pledgor shall have the duty to make applications on
material unregistered but registrable by copyright in any location where Pledgor does business, to
prosecute such applications diligently, and to preserve and maintain all rights in the Copyrights
and the other Collateral. Any expenses incurred in connection with such applications or other
actions shall be borne by Pledgor. Pledgor shall not abandon any right to file a copyright
application or registration for any copyright, or abandon any such pending copyright application or
registration, without the consent of Pledgee, except to the extent such abandonment would not have
a material impact on the overall value of all the Collateral or the enforcement, perfection or
priority of the security interests therein.

          9. Enforcement. Upon Pledgor’s failure to do so after Pledgee’s demand, or upon
the occurrence and during the continuance of an Event of Default, Pledgee shall have the right
but shall in
no way be obligated to bring suit in its own name (as agent for the Secured Parties) to
enforce the Copyrights and Future Copyrights and any license thereunder, in which event Pledgor shall at the
request of
Pledgee do any and all lawful acts and execute any and all proper documents required by
Pledgee in aid
of such enforcement and Pledgor shall promptly, upon demand, reimburse and indemnify Pledgee,
each
Secured Party and its respective agents for all costs and expenses incurred by each such
person in the exercise of its rights under this Section 9.

          10. Release. Upon (i) the consummation of a Permitted Disposition of the Pledgor or
all (or any portion) of the Collateral or (ii) such time as or at any time after all of the
Obligations (other
than unmatured contingent Obligations) shall have been paid in full in cash and satisfied,
other than upon
enforcement of Pledgee’s remedies under the Security Documents upon the occurrence and during
the
continuance of an Event of Default, the obligations of Pledgor hereunder and the Liens created
hereby
shall automatically terminate (provided that, in the case of any disposition of a portion of
the Collateral,
such termination and release shall only apply to the Collateral disposed of), and Pledgee, as
agent for the
Secured Parties, will execute and deliver to Pledgor all releases or other instruments or take
any such
other actions as may he necessary or evidence such releases.

          11. Notices. All notices, requests and demands to or upon Pledgor or Pledgee under
this Agreement shall be given in the manner prescribed by the Security Agreement.

          12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

          (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO
ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

          (b) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF
PLEDGOR AND PLEDGEE HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OTHER
SECURITY DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. EACH OF PLEDGOR AND PLEDGEE
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS CR SECURITY AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

-4-

 

          13. Successors. This Agreement shall bind and inure to the benefit of the respective
successors and assigns of each of the parties hereto; provided, however, that, except
in connection with
any transaction permitted under the Security Agreement. Pledgor may not assign this Agreement
or any
rights or duties hereunder, or any interest in or to the Collateral, without Pledgee’s prior
written consent
and any prohibited assignment shall be absolutely void ab initio. Except as permitted under
the Security
Agreement, no consent to assignment by Pledgee or any Secured Party shall release Pledgor from
its obligations hereunder. Pledgee and Secured Parties may assign this Agreement and their respective
rights
and duties hereunder pursuant to and to the extent permitted by the terms of the Security
Agreement and,
except as expressly required pursuant to the terms thereof, no consent or approval by Pledgor
is required
in connection with any such assignment.

          14. Amendments and Waivers. No amendment or waiver of any provision of this
Agreement, and no consent with respect to any departure by Pledgor therefrom, shall be
effective unless
the same shall be in writing and signed by Pledgee and Pledgor and made in compliance with the
terms of
the Security Agreement, and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. Pledgor hereby authorizes Pledgee to
modify this
Agreement by amending Exhibit A hereto to include any Future Copyrights.

          15. Effectiveness. This Agreement shall be binding and deemed effective when
executed and delivered by Pledgor and Pledgee and the Closing Date under the Security Agreement
shall
have occurred.

          16.
Section Headings. Headings and numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything contained in each
Section applies
equally to this entire Agreement.

          17. Severability of Provisions. Each provision of this Agreement shall be severable
from every other provision of this Agreement for the purpose of determining the legal
enforceability of
any specific provision.

          18. Counterparts; Telefacsimile Execution. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each of which, when
executed
and delivered, shall be deemed to be an original, and all of which, when taken together, shall
constitute
but one and the same agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile
shall be equally as effective as delivery of an original executed counterpart of this
Agreement. Any party
delivering an executed counterpart of this Agreement by telefacsimile also shall deliver an
original executed counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not
affect the validity, enforceability, and binding effect of this Agreement.

          19. Jurisdiction. Service of Process and Venue.

     (a)
Each party hereto irrevocably and unconditionally submits, to the extent
permitted by applicable law, to any suit, action or proceeding with respect to this
Agreement or any other Security Document or any judgment entered by any court in respect
thereof to the jurisdiction of (i) the United States District Court for the Southern
District of New York or the Supreme Court of the State of New York, County of New York, and
any appellate court from any thereof, and (ii) to the courts of its own corporate domicile,
at the election of the plaintiff, in respect of actions brought against it as a defendant,
and irrevocably submits, to the extent permitted by applicable law, to the non-exclusive
jurisdiction of each such court for the purpose of any such suit, action, proceeding or
judgment.

-5-

 

     (b) Nothing herein shall in any way be deemed to limit the ability of Pledgee or
any Lender to serve any such process or summons in any other manner permitted by applicable
law.

          20. Entire Agreement. This Agreement, in conjunction with the other Security
Documents, represents the entire agreement and understanding of the parties concerning the
subject matter hereof, and supersedes all other prior agreements, understandings, negotiations and
discussions, representations, warranties, commitments, proposals, offers and contracts concerning the subject
matter hereof,
whether oral or written.

          21. Supplement. This Agreement is one of the Security Documents referred to in the
Security Agreement.

-6-

 

          IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date first
above written.

	 	 	 	 	 	 	 
	 	 	PLEDGOR	 	 
	 
	 	 	 	 	 	 
	 	 	[NAME OF ENTITY],	 	 
	 	 	a [Type of
Entity]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	PLEDGEE	 	 
	 
	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION., a Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

-7-

 

EXHIBIT A

List of Copyrights

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Registration
	 	 	 	 	 	 	(Publication)
	#	 	Works/Copyrights	 	Registered No.	 	Date
	 

 

 

EXHIBIT D

Form of Patent Security Agreement

COLLATERAL ASSIGNMENT OF PATENTS

(SECURITY AGREEMENT)

          THIS COLLATERAL ASSIGNMENT OF PATENTS (SECURITY AGREEMENT)
(this “Agreement”) dated [                     ], is made between [                     ], a [                     ]with an office
at [                     ] (“Pledgor”), and U.S. BANK NATIONAL ASSOCIATION, a national banking
association with an office at 60 Livingston Avenue, St. Paul, Minnesota 55107 (“Pledgee”), in its capacity
as Trustee for the noteholders (the “Noteholders”).

W I T N E S S E T H:

          WHEREAS, Pledgee, Pledgor, Smart Modular Technologies (WWH), Inc., an exempted company
organized under the laws of the Cayman Islands (the “Issuer”) and certain other subsidiaries of the
Issuer (the “Guarantors”) have entered into that certain Indenture, dated as of the date hereof (as
the same now exists or may hereafter be amended, the “Indenture”). Initially capitalized terms used
herein without definitions shall have the meanings given in the Indenture.

          WHEREAS,
Pledgor owns all right, title, and interest in and to, among other things, all the
United States and foreign patents, registrations and applications for the protection of inventions
or designs set forth on Exhibit A hereto (the “Patents”).

          WHEREAS, in order to secure Pledgor’s obligations to the Noteholders under the Indenture,
Pledgor has agreed to grant to Pledgee a security interest in the Patents and certain other
patents, inventions and assets with respect to the Patents as further set forth herein and in the
Security Documents, and Pledgee has requested Pledger to enter into this Agreement to evidence
further such security interest.

          NOW THEREFORE, KNOW ALL MEN BY THESE PRESENTS, that for valuable consideration received and to
be received, as security for the full payment and performance of
Pledgor’s obligations under the
Indenture, Pledgor hereby grants, transfers and assigns to Pledgee, for the benefit of Pledgee and
the Noteholders (collectively, the “Secured Parties” and each a “Secured Party”), a continuing
security interest in all of Pledgor’s right, title and interest in and to:

     (a) the Patents;

     (b) all patents, registrations and applications for the protection of inventions and
designs hereafter acquired by, granted to, or filed by Pledgor, whether based upon,
derived from or
variations of any invention or designs disclosed in the Patents or otherwise (the
“Future Patents”);

     (c) all extensions, renewals, and continuations, re-issues, divisions, and
continuations-in-part of the Patents and Future Patents;

     (d) all rights to sue for past, present and future infringements of the Patents and
Future Patents;

     (e) all proceeds, including without limitation, license royalties and proceeds of
infringement suits, based on the Patents and Future Patents;

 

 

     (f) all licenses and other agreements and all fees, rents, royalties, proceeds or
monies
thereunder, relating to the Patents and Future Patents and the use thereof; and

     (g) all trademarks, trademark registrations, trademark registration applications,
formulae, processes, compounds, methods, know-how, and trade secrets relating to the
manufacture
of Pledgor’s products under, utilizing, or in connection with the Patents and Future
Patents and all
goodwill connected with, symbolized by or related to the foregoing.

All of the foregoing items set forth in clauses (a) through (g) are hereinafter referred to
collectively as the “Collateral.”

     AND Pledgor hereby covenants with Pledgee as follows:

          1. Pledgor’s Obligations. Pledgor agrees that, notwithstanding this Agreement, it
will perform and discharge and remain liable for all its covenants, duties, and obligations
arising in connection with the Collateral and any licenses and agreements related thereto except to the
extent any failure
to so perform, discharge or remain liable would not have a material impact on the overall
value of all the
Collateral or the enforcement, perfection or priority of the security interests therein. No
Secured Party
shall have any obligation or liability in connection with the Collateral or any licenses or
agreements relating thereto by reason of this Agreement or any payment received by any Secured Party relating
to the
Collateral, nor shall any Secured Party be required to perform any covenant, duty or
obligation of Pledgor
arising in connection with the Collateral or any license or agreement related thereto or to
take any other
action regarding the Collateral or any such licenses or agreement.

          2.
Representations and Warranties. Pledgor represents and warrants to Pledgee
that:

     (a) Pledgor is the registered owner of, and no adverse claims are currently
outstanding with respect to its title to or the validity of the Collateral except as would
not have a material impact on the overall value of all the Collateral or the enforcement, perfection
or priority of
the security interests therein;

     (b) except as would not have a material impact on the overall value of all the
Collateral or the enforcement, perfection or priority of the security interests therein, such
title is indefeasible for the duration of each such Patent; the Patents are subsisting and no part
thereof has
been adjudicated invalid or unenforceable, in whole or in part; each Patent is, to its
best knowledge, valid and, if granted and registered, enforceable;

     (c) the patents listed on Exhibit A (as updated from time to time) are the only
material patents as to which Pledgor is the owner or is an exclusive licensee; none of the
Collateral is
subject to any mortgage, pledge, lien, security interest, lease, charge, encumbrance or
license (by
Pledgor as licensor), except Pledgee’s security interest and Permitted Liens; and

     (d)
when this Agreement is filed in the United States Patent and Trademark Office
and Pledgee has taken the other actions contemplated in this Agreement and by the other
Security
Documents, this Agreement will create a legal and valid perfected and continuing lien
on and security interest in the Collateral, subject to any limitation permitted under the
Indenture, in favor
of Pledgee, enforceable against Pledgor and all third parties, subject to no other
mortgage, lien,
charge, encumbrance, or security or other interest other than Permitted Liens.

-2-

 

          3. Covenants. Except as would not have a material impact on the overall value of all
the Collateral or the enforcement, perfection or priority of the security interests therein,
Pledgor will maintain and renew all items of Collateral, and will defend the Collateral against the
claims of all persons; provided, however, that Pledgor will not be required to maintain any
Collateral which no longer has any significant economic value and which is no longer used or useful
in the business of Pledgor. Without limiting the generality of the foregoing, so long as any Patent
or Future Patent has any significant economic value or is used by or useful to the business of
Pledgor, Pledgor shall not permit the expiration of any registration of or termination of any
application for any such Patent and Future Patent without the prior
written consent of Pledgee. If,
before the Pledgor’s obligations under the Indenture have been satisfied in full (other than
unmatured contingent obligations) and the Security Documents have been terminated, Pledgor shall
obtain rights to or be licensed to use any new patentable inventions, or become entitled to the
benefit of any patent application or patent for any reissue, division, continuation, renewal,
extension, or continuation-in-part of any Patent, or any improvement on any Patent, the provisions
of Section 1 hereof shall automatically apply thereto.

          4. Use Prior to Default. Effective until Pledgee’s exercise of its rights and remedies
upon the occurrence and during the continuance of an Event of Default under and as defined in
the Indenture (an “Event of Default”), Pledgor shall be entitled to use the Collateral, subject to the
terms and covenants of the Security Documents and this Agreement.

          5. Remedies Upon Default. Whenever any Event of Default shall have occurred
and be continuing, Pledgee shall have all the rights and remedies granted to it in such event
by the Indenture and the Security Documents, which rights and remedies are specifically incorporated
herein by reference and made a part hereof, and, subject to any limitations set forth in the Indenture or any
other Security Document, any and all rights and remedies of law available to Pledgee. Pledgee in such
event may
collect directly any payments due to Pledgor in respect of the Collateral and may sell,
license, lease, as
sign, or otherwise dispose of the Collateral in the manner set forth in the Indenture and the
Security
Documents. Pledgor agrees that, in the event of any disposition of the Collateral upon and
during the
continuance of any such Event of Default, it will duly execute, acknowledge and deliver all
documents
necessary or advisable (as determined by Agent in its Permitted Discretion) to record title to
the Collateral
in any transferee or transferees thereof, including, without limitation, valid, recordable
assignments of the
Patents and Future Patents. In the event Pledgor fails or refuses to execute and deliver such
documents,
Pledgor hereby irrevocably appoints Pledgee as its attorney-in-fact, with power of
substitution, to execute,
deliver, and record any such documents on Pledgor’s behalf. Notwithstanding any provision
hereof to the
contrary, during the continuance of an Event of Default, Pledgor may sell any merchandise
incorporating
or utilizing the Patents and Future Patents to the extent permitted by the Indenture until it
receives written
notice from Pledgee to the contrary. The preceding sentence shall not limit any right or
remedy granted
to Pledgee with respect to Pledgor’s inventory under the Indenture or any Security Documents
now or
hereinafter in effect. Notwithstanding anything herein to the contrary, the lien and security
interest
granted to the Pledgee pursuant to this Agreement and the exercise of any right or remedy by
the Pledgee
hereunder are subject to the provisions of the Intercreditor Agreement, dated as of March
[24], 2005 (as
amended, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”),
among
Pledgor, Pledgee, Wells Fargo Foothill, Inc., as Credit Agent, and the other parties thereto.
In the event
of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms
of the
Intercreditor Agreement shall govern.

          6. Cumulative Remedies. The rights and remedies provided herein are cumulative
and not exclusive of any other rights or remedies provided by law. The rights and remedies
provided
herein are intended to be in addition to and not in substitution of the rights and remedies
provided by the
Indenture or the Security Documents.

-3-

 

          7. Waiver of Rights. No course of dealing between the parties to this Agreement or
any failure or delay on the part of any such party in exercising any rights or remedies hereunder
shall operate as a waiver of any rights or remedies of such party or any other party, and no
single or partial exercise of any rights or remedies by one party hereunder shall operate as a
waiver or preclude the exercise of any other rights or remedies of such party or any other party.
No waiver by Pledgee of any breach or default by Pledgor shall be deemed a waiver of any other
previous breach or default or of any breach or default occurring thereafter.

          8. Further Acts. Until all of the Obligations shall have been paid in full
in cash, except as would not have a material impact on the overall value of all the Collateral or the
enforcement, perfection or priority of the security interests therein, Pledgor shall have the duty
to prosecute diligently any applications for the material Patents and Future Patents pending as of
the date of this Agreement or thereafter, to make applications on material unpatented or
unregistered but patentable or registrable inventions, in any location where Pledgor does business,
and to preserve and maintain all rights in the Patents. Any expenses incurred in connection with
such applications or actions shall be borne by Pledgor. Pledgor shall not abandon any right to file
a patent application or registration for any invention, nor abandon any such pending patent
application or registration, without the consent of Pledgee, except to the extent that such
abandonment would not have a material impact on the overall value of all the Collateral or the
enforcement, perfection or priority of the security interests therein.

          9.
Enforcement. Upon Pledgor’s failure to do so after Pledgee’s demand, or upon
the occurrence and during the continuance of an Event of Default, Pledgee shall have the right
but shall in
no way be obligated to bring suit in its own name (as agent for the Secured Parties) to
enforce the Patents
and Future Patents and any license thereunder, in which event Pledgor shall at the request of
Pledgee do
any and all lawful acts and execute any and all proper documents required by Pledgee in aid of
such enforcement and Pledgor shall promptly, upon demand, reimburse and indemnify Pledgee and its
agents for
all costs and expenses incurred by such person in the exercise of their rights under this
Section 9.

          10. Release. Upon a release of the Collateral pursuant to Section 10.03 of the
Indenture, the obligations of Pledgor hereunder and the Liens created hereby shall automatically
terminate
(provided that, in the case of any disposition of a portion of the Collateral, such
termination and release
shall only apply to the Collateral disposed of), and Pledgee, as agent for the Secured
Parlies, will execute
and deliver to Pledgor all releases or other instruments or take any such other actions as may
be necessary
or evidence such releases.

          11. Notices. All notices, requests and demands to or upon Pledgor or Pledgee under
this Agreement shall be given in the manner prescribed by the Indenture.

          12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

          (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO
ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

          (b) TO
THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF
PLEDGOR AND PLEDGEE HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OTHER
SECURITY DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN,

-4-

 

INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY
CLAIMS. EACH OF PLEDGOR AND PLEDGEE REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH
LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

          13. Successors. This Agreement shall bind and inure to the benefit of the respective
successors and assigns of each of the parties hereto; provided, however, that, except in
connection with
any transaction permitted under the Indenture, Pledgor may not assign this Agreement or any
rights or
duties hereunder, or any interest in or to the Collateral, without Pledgee’s prior written
consent and any
prohibited assignment shall be absolutely void ab initio. No consent to assignment by Pledgee,
except as
permitted under the Indenture shall release Pledgor from its obligations hereunder. Pledgee
may assign
this Agreement and its rights and duties hereunder pursuant to and to the extent permitted by
the terms of
the Indenture and, except as expressly required pursuant to the terms thereof, no consent or
approval by
Pledgor is required in connection with any such assignment.

          14. Amendments and Waivers. No amendment or waiver of any provision of this
Agreement, and no consent with respect to any departure by Pledgor therefrom, shall be
effective unless
the same shall be in writing and signed by Pledgee and Pledgor and made in compliance with the
terms of
the Indenture, and then any such waiver or consent shall be effective only in the specific
instance and for
the specific purpose for which given. Pledgor hereby authorizes Pledgee to modify this
Agreement by
amending Exhibit A hereto to include any Future Patents or additional licenses.

          15. Effectiveness. This Agreement shall be binding and deemed effective when
executed and delivered by Pledgor and Pledgee and the Closing Date under the Indenture shall have
occurred.

          16.
Section Headings. Headings and numbers have been set
forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each
Section applies
equally to this entire Agreement.

          17.
Severability of Provisions. Each provision of this Agreement shall be severable
from every other provision of this Agreement for the purpose of determining the legal
enforceability of
any specific provision.

          18. Counterparts; Telefacsimile Execution. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each of which, when
executed
and delivered, shall be deemed to be an original, and all of which, when taken together, shall
constitute
but one and the same agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile
shall be equally as effective as delivery of an original executed counterpart of this
Agreement. Any party
delivering an executed counterpart of this Agreement by telefacsimile also shall deliver an
original executed counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not
affect the validity, enforceability, and binding effect of this Agreement.

          19.
Jurisdiction, Service of Process and Venue.

     (a) Each party hereto irrevocably and unconditionally submits, to the extent
permitted by applicable law, to any suit, action or proceeding with respect to this
Agreement or any judgment entered by any court in respect thereof to the jurisdiction of
(i) the United States

-5-

 

District Court for the Southern District of New York or the Supreme Court of the State of New
York, County of New York, and any appellate court from any thereof, and (ii) to
the courts of its own corporate domicile, at the election of the plaintiff, in respect of
actions brought against it as a defendant, and irrevocably submits, to the extent permitted
by applicable law, to the non-exclusive jurisdiction of each such court for the purpose of
any such suit, action, proceeding or judgment.

     (b) Nothing herein shall in any way be deemed to limit the ability of Pledgee to
serve any such process or summons in any other manner permitted by applicable law.

          20. Entire Agreement. This Agreement, in conjunction with the other Security
Documents, represents the entire agreement and understanding of the parties concerning the
subject matter hereof, and supersedes all other prior agreements, understandings, negotiations and
discussions, representations, warranties, commitments, proposals, offers and contracts concerning the subject
matter hereof,
whether oral or written.

          21. Supplement. This Agreement is one of the Security Documents referred to in the
Indenture.

-6-

 

          IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date first above
written.

	 	 	 	 	 	 	 
	 	 	PLEDGOR	 	 
	 
	 	 	 	 	 	 
	 	 	[                      ]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	PLEDGEE	 	 
	 
	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION,	 	 
	 	 	a national banking association, as Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 
	 	 
	 

	 	 	 	Title:	 	 

-7-

 

EXHIBIT A

List of Patents

	 	 	 	 	 	 	 
	 	 	Patent	 	Patent No.	 	Issued Date
	 
	 
	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 
	 

 

 

EXHIBIT E

Form of Trademark Security Agreement

COLLATERAL
ASSIGNMENT OF TRADEMARKS 
(SECURITY AGREEMENT)

          THIS
COLLATERAL ASSIGNMENT OF TRADEMARKS (SECURITY AGREEMENT) dated
[       ]
(this “Agreement”), is made between
[       ], a
[       ]  with an office
at [       ]
(“Pledgor”), and U.S. BANK NATIONAL ASSOCIATION a national banking
corporation (“Pledgee”), in its capacity as Trustee for the Noteholders (as defined below).

W I T N E S S E T H:

          WHEREAS, Pledgee, Pledgor, Smart Modular Technologies (WWH) Inc., an exempted company
organized under the laws of the Cayman Islands (“Parent”), and certain other subsidiaries of Parent
have entered into that certain Indenture, dated as of the date hereof (as the same now exists or
may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, the
“Indenture”), governing Parent’s $125,000,000 Senior Secured Floating Rate Notes due 2012.
Initially capitalized terms used herein without definitions shall have the meanings given in the
Indenture.

          WHEREAS, Pledgor owns all right, title, and interest in and to, among other things, all the
trademarks, United States trademarks and trademark registrations, and the trademark applications
and trade names, set forth on Exhibit A hereto (the “Trademarks”).

          WHEREAS, in order to secure pledgor’s obligations to the Noteholders (as defined in the
Indenture) under the Indenture, Pledgor has agreed to grant to Pledgee a security interest in the
Trademarks and the goodwill and certain other assets with respect to the Trademarks, as further set
forth herein, and Pledgee has requested Pledgor to enter into this Agreement to further evidence
such security interest.

          NOW THEREFORE, KNOW ALL MEN BY THESE PRESENTS, that for valuable consideration received and to
be received, as security for the full payment and performance of pledgor’s obligations under the
Indenture, Pledgor hereby grants, transfers and assigns to Pledgee, for the benefit of Pledgee and
the Noteholders (collectively, the “Secured Parties” and each a “Secured Party”), a continuing
security interest in all of pledgor’s right, title and interest in and to:

     (a) the Trademarks;

     (b) all registrations of the Trademarks in any State of the United States and any foreign countries and localities;

     (c) all trade names, trademarks and trademark registrations hereafter adopted or
acquired and used, including, but not limited to, those which are based upon or derived
from the
Trademarks or any variations thereof (the “Future
Trademarks”);

     (d)
all extensions, renewals, and continuations of the Trademarks and Future Trademarks and the registrations referred to in clause (b) above;

     (e) all rights to sue for past, present and future infringements of the Trademarks and
Future Trademarks;

 

 

     (f) all packaging, labeling, trade names, service marks, logos, and trade dress including or containing the Trademarks and Future Trademarks, or a representation thereof, or
any
variation thereof;

     (g)
all licenses and other agreements under which Pledgor is licensor, and all fees,
rents, royalties, proceeds or monies thereunder, relating to the Trademarks and Future
Trademarks and the use thereof; and

     (h) all goodwill of Pledgor’s business connected with, symbolized by or in any
way related to the items set forth in clauses (a) through (g) above.

All of the foregoing items set forth in clauses (a) through (h) are hereinafter referred to
collectively as the “Collateral.”

          AND
Pledgor hereby covenants with Pledgee as follows:

          1. Pledgor’s Obligations. Pledgor agrees that, notwithstanding this Agreement, it
will perform and discharge and remain liable for all its covenants, duties, and obligations
arising in connection with the Collateral and any licenses and agreements related thereto except to the
extent any failure
to so perform, discharge or remain liable would not have a material impact on the overall
value of all the
Collateral or the enforcement, perfection or priority of the security interests therein. No
Secured Party
shall have any obligation or liability in connection with the Collateral or any licenses or
agreements relating thereto by reason of this Agreement or any payment received any Secured Party relating to
the Collateral, nor shall any Secured Party be required to perform any covenant, duty or obligation of
Pledgor arising in connection with the Collateral or any license or agreement related thereto or to take
any other action regarding the Collateral or any such licenses or agreement.

          2. Representations and Warranties. Pledgor represents and warrants to Pledgee
that:

     (a) Pledgor is the owner of the Collateral, and no adverse claims are currently
outstanding with respect to its title to or the validity of the Collateral except as would
not have a material impact on the overall value of all the Collateral or the enforcement, perfection
or priority of
the security interests therein;

     (b) the trademarks listed on Exhibit A are the only material trademarks,
trademark
registrations, trademark applications and trade names in which Pledgor has any or all
ownership
right, title and interest;

     (c) none of the Collateral is subject to any mortgage, pledge, lien, security interest,
lease, charge, encumbrance or license (by Pledgor as licensor), except for Pledgee’s
interests
granted hereunder and Permitted Liens; and

     (d) when this Agreement is filed in the United States Patent and Trademark Office
(the “Trademark Office”) and Pledgee has taken the other actions contemplated in this
Agreement
and by the Security Documents, this Agreement will create a legal and valid perfected
and continuing lien on and security interest in the Collateral, subject to any limitations
permitted under
the Indenture, in favor of Pledgee, enforceable against Pledgor and all third parties,
subject to no
other mortgage, lien, charge, encumbrance, or security or other interest other than
Permitted
Liens.

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          3.
Covenants. Except as would not have a material impact on the overall value of
all the Collateral or the enforcement, perfection or priority of the security interests
therein, Pledgor will
maintain the Collateral, defend the Collateral against the claims of all persons, and will
maintain and renew all registrations of the Collateral; provided, however, that Pledgor will not be required
to maintain
any Collateral which no longer has any significant economic value and which is no longer used
or useful
in the business of Pledgor. Pledgor will maintain the same standard of quality (which Pledgee
has reviewed) for the goods and services in connection with which the Trademarks are used as Pledgor
maintained for such goods and services prior to entering into this Agreement except as would not
have a material impact on the overall value of all the Collateral or the enforcement, perfection or
priority of the security interests therein. To the extent permitted by, and subject to Pledgee’s compliance with
the Indenture,
Pledgee shall have the right to enter upon Pledgor’s premises at all reasonable times to
monitor such quality standards. Without limiting the generality of the foregoing, and so long as any Trademark
or Future
Trademark has any significant economic value or is used by or useful to the business of
Pledgor, Pledgor
shall not permit the expiration, termination or abandonment of such Trademark or Future
Trademark
without the prior written consent of Pledgee. If, before the Pledgor’s obligations under the
Security
Documents have been satisfied in full and the Security Documents have been terminated, Pledgor
shall
obtain rights to or be licensed to use any new trademark, or become entitled to the benefit of
any trademark application or trademark registration, the provisions of Section 1 hereof shall
automatically apply
thereto.

          4. Use Prior to Default. Effective until Pledgee’s exercise of its rights and remedies
upon the occurrence and during the continuance of an Event of Default under and as defined in
the Security Documents (an “Event of Default”), Pledgor shall be entitled to use the Collateral,
subject to the
terms and covenants of the Security Documents and this Agreement.

          5. Remedies Upon Default. Whenever any Event of Default shall have occurred
and be continuing, Pledgee shall have all the rights and remedies granted to it in such event
by the Indenture and the Security Documents, which rights and remedies are specifically incorporated
herein by reference and made a part hereof, and, subject to any limitations set forth in the Indenture or any
Security
Document, any and all rights and remedies of law available to Pledgee or any Noteholder.
Pledgee in
such event may collect directly any payments due to Pledgor in respect of the Collateral and
may sell,
license, lease, assign, or otherwise dispose of the Collateral in the manner set forth in the
Indenture and
the Security Documents. Pledgor hereby agrees that Pledgee shall at all times have such
royalty-free licenses, to the extent permitted by law and the Indenture and the Security Documents, to use
any Collateral that is reasonably necessary to permit the exercise of any of Pledgee’s rights or
remedies upon or after the occurrence and during the continuance of an Event of Default with respect to (among
other things)
any Collateral (as defined in the Indenture), including Pledgee’s rights to sell inventory,
tooling or packaging which is acquired by Pledgor or any of its Affiliates (or is successor, assignee or
trustee in bankruptcy). Pledgor agrees that, in the event of any disposition of the Collateral upon and
during the continuance of any such Event of Default, it will duly execute, acknowledge, and deliver all
documents necessary or advisable (as determined by Agent in its Permitted Discretion) to record title to
the Collateral in
any transferee or transferees thereof, including, without limitation, valid, recordable
assignments of the
Trademarks or Future Trademarks. In the event Pledgor fails or refuses to execute and deliver
such
documents, Pledgor hereby irrevocably appoints Pledgee as its attorney-in-fact, with power of
substitution, to execute, deliver, and record any such documents on Pledgor’s behalf. Notwithstanding
any provision hereof to the contrary, during the continuance of an Event of Default, Pledgor may sell
any merchandise or services bearing the Trademarks and Future Trademarks to the extent permitted by the
Indenture
until it receives written notice from Pledgee to the contrary. The preceding sentence shall
not limit any
right or remedy granted to Pledgee with respect to Pledgor’s inventory under any Indenture now
or hereinafter in effect. Notwithstanding anything herein to the contrary, the lien and security
interest granted to

-3-

 

the Pledgee pursuant to this Agreement and the exercise of any right or remedy by the Pledgee
hereunder are subject to the provisions of the Intercreditor Agreement, dated as of March [24],
2005 (as amended, supplemented or otherwise modified from time to time, the “Intercreditor
Agreement”), among Pledgor, Pledgee, Wells Fargo Foothill Inc., as credit agent and the other
parties thereto. In the event of any conflict between the terms of the Intercreditor Agreement and
this Agreement, the terms of the Intercreditor Agreement shall govern.

          6. Cumulative Remedies. The rights and remedies provided herein are cumulative
and not exclusive of any other rights or remedies provided by law. The rights and remedies
provided
herein are intended to be in addition to and not in substitution of the rights and remedies
provided by the
Security Documents.

          7. Waiver of Rights. No course of dealing between the parties to this Agreement or
any failure or delay on the part of any such party in exercising any rights or remedies
hereunder shall operate as a waiver of any rights or remedies of such party or any other party, and no single or
partial exercise of any rights or remedies by one party hereunder shall operate as a waiver or preclude
the exercise of
any other rights or remedies of such party or any other party. No waiver by Pledgee or the
Noteholders of
any breach or default by Pledgor shall be deemed a waiver of any other previous breach or
default or of
any breach or default occurring thereafter.

          8. Future Acts. Until all of the Obligations shall have been paid in full in cash, except as would not have a material impact on the overall value of all the Collateral or the
enforcement, perfection or priority of the security interests therein, Pledgor shall have the duty to make
applications on
material unregistered but registrable as trademarks in any location where Pledgor does
business, to prosecute such applications diligently, and to preserve and maintain all rights in the Trademarks
and the other
Collateral. Any expenses incurred in connection with such applications and other actions shall
be borne
by Pledgor. Pledgor shall not abandon any right to file a trademark application or
registration for any
trademark, or abandon any such pending trademark application or registration, without the
consent of
Pledgee, except to the extent that such abandonment would not have a material impact on the
overall
value of all the Collateral or the enforcement, perfection or priority of the security
interests therein.

          9.
Enforcement. Upon Pledgor’s failure to do so after Pledgee’s demand, or upon
the continuance and during the continuance of an Event of Default, Pledgee shall have the
right but shall
in no way be obligated to bring suit in its own name (as trustee for the Secured Parties) to
enforce the
Trademarks and Future Trademarks and any license thereunder, in which event Pledgor shall at
the request of Pledgee do any and all lawful acts and execute any and all proper documents required
by Pledgee
in aid of such enforcement and Pledgor shall promptly, upon demand, reimburse and indemnify
Pledgee,
each Lender and their respective agents for all costs and expenses incurred by each such
Person in the
exercise of its rights under this Section 9.

          10. Release. Upon a release of the Collateral pursuant to Section 10.03 of the
Indenture, the obligations of Pledgor hereunder and the Liens created hereby shall automatically
terminate
(provided that, in the case of any disposition of a portion of the Collateral, such
termination and release
shall only apply to the Collateral disposed of), and Pledgee, as agent for the Secured
Parties, will execute
and deliver to Pledgor all releases or other instruments or take any such other actions as may
be necessary
or evidence such releases.

          11. Notices. All notices, requests and demands to or upon Pledgor or Pledgee under
this Agreement shall be given in the manner prescribed by the Indenture.

-4-

 

          12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.

          (a) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO
ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

          (b) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF
PLEDGOR AND PLEDGEE HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. EACH OF PLEDGOR AND PLEDGEE
REPRESENTS THAT IT HAS REVIEWED THIS WAIVER AND KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.

          13.
Successors. This Agreement shall bind and inure to the benefit of the respective
successors and assigns of each of the parties hereto; provided, however, that, except
in connection with
any transaction permitted under the Indenture, Pledgor may not assign this Agreement or any
rights or
duties hereunder, or any interest in or to the Collateral, without Pledgee’s prior written
consent and any
prohibited assignment shall be absolutely void ab initio. Except as permitted under the
Indenture, no consent to assignment by Pledgee or any Lender shall release Pledgor from its obligations
hereunder.
Pledgee may assign this Agreement and its rights and duties hereunder pursuant to and to the
extent permitted by the terms of the Indenture and, except as expressly required pursuant to the terms
thereof, no
consent or approval by Pledgor is required in connection with any such assignment.

          14. Amendments and Waivers. No amendment or waiver of any provision of this
Agreement, and no consent with respect to any departure by Pledgor therefrom, shall be
effective unless
the same shall be in writing and signed by Pledgee and Pledgor and made in compliance with the
terms of
the Indenture, and then any such waiver or consent shall be effective only in the specific
instance and for
the specific purpose for which given. Pledgor hereby authorizes Pledgee to modify this
Agreement by
amending Exhibit A hereto to include any Future Trademarks.

          15. Effectiveness. This Agreement shall be binding and deemed effective when
executed and delivered by Pledgor and Pledgee and the Closing Date under the Indenture shall have
occurred.

          16. Section Headings. Headings and numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything contained in each
Section applies
equally to this entire Agreement.

          17. Severability of Provisions. Each provision of this Agreement shall be severable
from every other provision of this Agreement for the purpose of determining the legal
enforceability of
any specific provision.

          18.
Counterparts; Telefacsimile Execution. This Agreement may be executed in any
number of counterparts and by different parties on separate counterparts, each of which, when
executed

-5-

 

and delivered, shall be deemed to be an original, and all of which, when taken together, shall
constitute but one and the same agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed counterpart of this
Agreement. Any party delivering an executed counterpart of this Agreement by telefacsimile also
shall deliver an original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement.

          19.
Jurisdiction, Service of Process and Venue.

          (a) Each party hereto irrevocably and unconditionally submits, to the extent
permitted by applicable law, to any suit, action or proceeding with respect to this Agreement or any
judgment
entered by any court in respect thereof to the jurisdiction of (i) the United States District
Court for the
Southern District of New York or the Supreme Court of the State of New York, County of New
York, and
any appellate court from any thereof, and (ii) to the courts of its own corporate domicile, at
the election of
the plaintiff, in respect of actions brought against it as a defendant, and irrevocably
submits, to the extent
permitted by applicable law, to the non-exclusive jurisdiction of each such court for the
purpose of any
such suit, action, proceeding or judgment.

          (b) Nothing herein shall in any way be deemed to limit the ability of Pledgee or any
Lender to serve any such process or summons in any other manner permitted by applicable law.

          20. Entire Agreement. This Agreement, in conjunction with the other Security
Documents, represents the entire agreement and understanding of the parties concerning the
subject matter hereof, and supersedes all other prior agreements, understandings, negotiations and
discussions, representations, warranties, commitments, proposals, offers and contracts concerning the subject
matter hereof,
whether oral or written.

          21. Supplement. This Agreement is one of the Security Documents referred to in the
Indenture.

-6-

 

          IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date first above
written.

	 	 	 	 	 	 	 
	 	 	PLEDGOR	 	 
	 
	 	 	 	 	 	 
	 	 	[                      ]	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 
	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	PLEDGEE	 	 
	 
	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION,	 	 
	 	 	      a national banking association, as Trustee	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 
	 	 
	 

	 	 	 	Title:	 	 

-7-

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