Document:

exv4w2

 

Exhibit 4.2

SUPPLEMENTAL INDENTURE NO. 2

Dated as of March 11, 2008

Between

KANSAS CITY POWER & LIGHT COMPANY

and

THE BANK OF NEW YORK TRUST COMPANY, N.A.,

As Trustee

Creating 6.375% Notes Due 2018

 

 

     THIS SUPPLEMENTAL INDENTURE NO. 2 (the “Supplemental Indenture”), dated as of March 11, 2008,
between KANSAS CITY POWER & LIGHT COMPANY, a Missouri corporation (“Company”), and THE BANK OF NEW
YORK TRUST COMPANY, N.A., a national banking association, as Trustee (“Trustee”).

WITNESSETH:

     WHEREAS, the Company has heretofore executed and delivered to the Trustee an Indenture, dated
as of May 1, 2007 (the “Original Indenture” and, as supplemented, the “Indenture”), providing for
the issuance from time to time of one or more series of the Company’s Notes.

     WHEREAS, pursuant to the terms of the Indenture, the Company desires to provide for the
establishment of a series of Notes to be designated as the “6.375% Notes due 2018” (the “2018
Notes”), the form and substance of the 2018 Notes and the terms, provisions and conditions thereof
to be set forth as provided in the Original Indenture and this Supplemental Indenture.

     WHEREAS, Section 2.05 of the Original Indenture provides that various matters with respect to
any series of Notes issued under the Indenture may be established in an indenture supplemental to
the Indenture.

     WHEREAS, Section 13.01(a)(3) of the Indenture provides that the Company and the Trustee may
enter into an indenture supplemental to the Indenture to establish the form or terms of Notes of
any series as permitted by Sections 2.01 and 2.05 of the Original Indenture.

     WHEREAS, all acts and things necessary to make this Supplemental Indenture, when duly executed
and delivered, a valid, binding and legal instrument in accordance with its terms and for the
purposes herein expressed, have been done and performed; and the execution and delivery of this
Supplemental Indenture have been in all respects duly authorized.

     NOW, THEREFORE, in consideration of the premises and in further consideration of the sum of
One Dollar in lawful money of the United States of America paid to the Company by the Trustee at or
before the execution and delivery of this Supplemental Indenture, the receipt whereof is hereby
acknowledged, and of other good and valuable consideration, it is agreed by and between the Company
and the Trustee as follows:

ARTICLE ONE

Relation to Indenture; Additional Definitions

     1.01 Relation to Indenture. This Supplemental Indenture No. 2 constitutes an integral part of
the Original Indenture.

     1.02 Additional Definitions. For all purposes of this Supplemental Indenture No. 2,
capitalized terms used herein shall have the respective meanings specified below or in the Original
Indenture, as the case may be.

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     “Comparable Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term of the 2018 Notes to
be redeemed that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the 2018 Notes.

     “Comparable Treasury Price” means, with respect to any redemption date, (1) the average
of four Reference Treasury Dealer Quotations for such redemption date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations, or (2) if the Quotation Agent
obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such
quotations, or (3) if only one such Reference Treasury Dealer Quotation is received, such
quotation.

     “Corporate Trust Office” means the principal office of the Trustee at which at any
particular time its corporate trust business shall be administered, which is presently 2
North LaSalle Street, Suite 1020, Chicago, Illinois 60602, Attention: Corporate Trust
Administration; telecopy: (312) 827-8542.

     “Maturity Date” has the meaning set forth in Section 1.03.

     “Note Registrar” means The Bank of New York Trust Company, N.A., hereby appointed as an
agency of the Company in accordance with Section 6.02 of the Original Indenture.

     “Original Indenture” has the meaning set forth in the first paragraph of the Recitals
hereof.

     “Quotation Agent” means a Reference Treasury Dealer appointed by the Company.

     “Reference Treasury Dealer” means (1) each of Banc of America Securities LLC and J.P.
Morgan Securities Inc., or their affiliates, and their respective successors, provided,
however, that if either of the foregoing shall cease to be a primary U.S. government
securities dealer in the United States of America (“Primary Treasury Dealer”), the Company
will substitute therefor another Primary Treasury Dealer and (2) two other Primary Treasury
Dealers selected by the Company.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Quotation Agent, of the
bid and asked prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Quotation Agent by such
Reference Treasury Dealer at 5:00 p.m., New York City time, on the third business day
preceding such redemption date.

     “Treasury Rate” means, with respect to any redemption date, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a
price for the Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption date.

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     “2018 Notes” has the meaning set forth in the second paragraph of the Recitals hereof.

     All references herein to Articles, Sections or Exhibits, unless otherwise specified, refer to
the corresponding Articles, Sections or Exhibits of this Supplemental Indenture No. 2. The terms
“herein,” “hereof,” “hereunder” and other words of similar import refer to this Supplemental
Indenture No. 2.

ARTICLE ONE

The Series of Notes

     1.01 Title of the Notes. The 2018 Notes shall be designated as the “6.375% Notes due 2018.”

     1.02 Limitation on Aggregate Principal Amount. The Trustee shall authenticate and deliver
2018 Notes for original issue on the Issue Date in the aggregate principal amount of $350,000,000,
upon a Company Order for the authentication and delivery thereof and satisfaction of Sections
2.01(a) and 2.05(c) of the Original Indenture. Such order shall specify the amount of the 2018
Notes to be authenticated, the date on which the original issue of 2018 Notes is to be
authenticated and the name or names of the initial holder or holders. The aggregate principal
amount of 2018 Notes that may initially be outstanding shall not exceed $350,000,000; provided,
however, that the authorized aggregate principal amount of the 2018 Notes may be increased above
such amount without the consent of the holders of any then outstanding 2018 Notes by a Board
Resolution authorizing such increase.

     1.03 Stated Maturity. The Stated Maturity of the 2018 Notes shall be March 1, 2018 (the
“Maturity Date”).

     1.04 Interest and Interest Rate.

     (a) The 2018 Notes shall bear interest at the rate of 6.375% per annum, from and including
their Original Issue Date of March 11, 2008, or from the most recent Interest Payment Date (as
defined below) to which interest has been paid to, but excluding, the Maturity Date. Such interest
shall be payable semiannually in arrears, on the Interest Payment Dates of March 1 and September 1
in each year, commencing September 1, 2008. Interest accrued on the 2018 Notes from the last
Interest Payment Date before the Maturity Date shall be payable on the Maturity Date.

     (b) The interest so payable, and punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Persons in whose names the 2018 Notes (or one or more predecessor
securities) are registered on the Regular Record Date for such Interest Payment Date, being the
close of business on the immediately preceding February 15 and August 15, as the case may be,
whether or not such day is a Business Day.

     1.05 Place of Payment. Principal and interest payments on the 2018 Notes will be made by the
Company to The Depository Trust Company (the “DTC”) while it is the depository

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for the 2018 Notes, or if DTC shall cease to be the depositary for the 2018 Notes, to the
Trustee at its offices, as paying agent.

     1.06 Place of Registration or Exchange; Notices and Demands With Respect to the 2018 Notes.
The place where the holders of the 2018 Notes may present the 2018 Notes for registration of
transfer or exchange and may make notices and demands to or upon the Company in respect of the 2018
Notes shall be the Corporate Trust Office of the Trustee.

     1.07 Global Notes.

     (a) 2018 Notes shall be issuable in whole or in part in the form of one or more permanent
Global Notes in definitive, full registered, book-entry form, without interest coupons. The Global
Note shall be deposited on its issuance date with, or on behalf of, the Depositary.

     (b) The Depository Trust Company shall initially serve as Depositary with respect to the
Global Note. Such Global Note shall bear the legend set forth in the form of Note attached as
Exhibit A.

     1.08 Form of Securities. The Global Note shall be substantially in the form attached as
Exhibit A.

     1.09 Note Registrar. The Trustee shall initially serve as the Note Registrar for the 2018
Notes.

     1.10 Sinking Fund Obligations. The Company shall have no obligation to redeem or purchase any
2018 Notes pursuant to any sinking fund or analogous requirement or upon the happening of a
specified event or at the option of a Holder thereof.

     1.11 Additional 2018 Notes. Notwithstanding anything to the contrary in the Indenture, the
Company shall not issue additional 2018 Notes after March 11, 2008 unless the Company has delivered
an Opinion of Counsel to the Trustee confirming that the Holders of the outstanding 2018 Notes will
be subject to federal income tax in the same amounts, in the same manner and at the same times as
would have been the case if such additional 2018 Notes were not issued.

ARTICLE TWO

Optional Redemption of the 2018 Notes

     2.01 Redemption Price. The Company shall have the right to redeem the 2018 Notes, at its
option, at any time in whole, or from time to time in part, at a redemption price equal to the
greater of:

     (i) 100% of the principal amount of the 2018 Notes to be redeemed or

     (ii) the sum of the present values of the remaining scheduled payments of principal and
interest on the 2018 Notes to be redeemed (not including any portion of such payments of
interest accrued as of the date of redemption), discounted to the date of

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redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate, plus 45 basis points,

plus, in each case, accrued and unpaid interest on the principal amount being redeemed to the
redemption date.

ARTICLE THREE

Miscellaneous Provisions

     3.01 The Indenture, as supplemented by this Supplemental Indenture No. 2, is in all respects
hereby adopted, ratified and confirmed.

     3.02 This Supplemental Indenture No. 2 may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but one and the same
instrument.

     3.03 THIS SUPPLEMENTAL INDENTURE NO. 2 AND EACH 2018 NOTE SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.

     3.04 If any provision in this Supplemental Indenture No. 2 limits, qualifies or conflicts with
another provision hereof that is required to be included herein by any provisions of the Trust
Indenture Act, such required provision shall control.

     3.05 In case any provision in this Supplemental Indenture No. 2 or the 2018 Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

     3.06 The recitals contained herein shall be taken as the statements of the Company, and the
Trustee assumes no responsibility for their correctness. The Trustee makes no representations as
to the proper authorization or due execution hereof or of the 2018 Notes by the Company or as to
the validity or sufficiency of this Supplemental Indenture No. 2 or the 2018 Notes. The Trustee
shall not be accountable for the use or application by the Company of the 2018 Notes or the
proceeds of the 2018 Notes.

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     IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture No. 2 to be
duly executed as of the day and year first above written.

	 	 	 	 	 
	 	KANSAS CITY POWER & LIGHT COMPANY

 	 
	 	By  	/s/ Michael W. Cline
 	 
	 	 	Michael W. Cline 	 
	 	 	Treasurer 	 
	 

[CORPORATE SEAL]

ATTEST:

	 	 	 
	/s/ Mark G. English
	 	 
	 

Mark G. English

	 	 
	Assistant Secretary
	 	 

	 	 	 	 	 
	 	THE BANK OF NEW YORK TRUST COMPANY, N.A.,

Trustee

 	 
	 	By  	/s/ M. Callahan
 	 
	 	 	Name:  	M. Callahan 	 
	 	 	Title:  	Vice President 	 

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	STATE OF MISSOURI

	 	)	 	 
	 

	 	) ss.	 	 
	COUNTY OF JACKSON

	 	)	 	 

     On the 11th day of March, 2008, before me personally came Michael W. Cline, to me
known, who, being by me duly sworn, did depose and say that he is Treasurer of KANSAS CITY POWER &
LIGHT COMPANY, one of the corporations described in and which executed the above instrument; that
he knows the corporate seal of said corporation; that the seal affixed to the said instrument is
such corporate seal; that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.

[NOTORIAL SEAL]

	 	 	 
	 

	 	 
	 
	 	 
	 

	 	Notary Public

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	STATE OF MISSOURI

	 	)	 	 
	 

	 	) ss.	 	 
	COUNTY OF JACKSON

	 	)	 	 

     On the 11th day of March, 2008, before me personally came Mark G. English, to me
known, who, being by me duly sworn, did depose and say that he is Assistant Secretary of KANSAS
CITY POWER & LIGHT COMPANY, one of the corporations described in and which executed the above
instrument; that he knows the corporate seal of said corporation; that the seal affixed to the said
instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of
said corporation; and that he signed his name thereto by like authority.

[NOTORIAL SEAL]

	 	 	 
	 

	 	 
	 
	 	 
	 

	 	Notary Public

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Exhibit A

[FORM OF NOTE]

[Certificated Note]

[For as long as this Global Note is deposited with or on behalf of The Depository Trust Company it
shall bear the following legend.] Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation (“DTC”), to Kansas City
Power & Light Company or its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity
as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof,
Cede & Co., has an interest herein.

KANSAS CITY POWER & LIGHT COMPANY

6.375% Notes due 2018

			
	 	 	 
	Interest Rate: 6.375% per annum 

Maturity Date: March 1, 2018

Registered Holder:                                         
	 	Principal Sum $                                        

CUSIP No. 485134 BK5

     KANSAS CITY POWER & LIGHT COMPANY, a Missouri corporation (hereinafter called the “Company”,
which term includes any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to the registered holder named above or registered assigns,
on the maturity date stated above, the principal sum stated above and to pay interest thereon from
March 11, 2008, or from the most recent Interest Payment Date to which interest has been duly paid
or provided for, initially on September 1, 2008, and thereafter semi-annually on March 1 and
September 1 of each year, at the interest rate stated above, until the date on which payment of
such principal sum has been made or duly provided for. The interest so payable on any Interest
Payment Date will be paid to the person in whose name this Note is registered at the close of
business on the February 15 and August 15, as the case may be (whether or not such day is a
Business Day), immediately preceding that Interest Payment Date, except as otherwise provided in
the Indenture.

     The principal and interest payments on this Note will be made by the Company to the registered
holder named above. All such payments shall be made in such coin or currency of the United States
of America as at the time of payment is legally tender for payment of public and private debts.

     This Note is one of a duly authorized issue of notes of the Company (herein called the
“Notes”), issued under an Indenture, dated as of May 1, 2007, as heretofore supplemented and as

A-1

 

further supplemented by Supplemental Indenture No. 2, dated as of March 11, 2008 (herein
called the “Indenture”, which term shall have the meaning assigned to it in such instruments),
between the Company and The Bank of New York Trust Company, N.A., as Trustee (herein called the
“Trustee”, which term includes any successor trustee under the Indenture). Reference is made to
the Indenture and any supplemental indenture thereto for the provisions relating, among other
things, to the respective rights of the Company, the Trustee and the holders of the Notes, and the
terms on which the Notes are authenticated and delivered. This Note is one of the series
designated on the face hereof, initially limited in aggregate principal amount to $350,000,000;
provided, however, that the authorized aggregate principal amount of the Notes may be increased
above such amount by a Board Resolution authorizing such increase.

     The Company shall have the right to redeem the Notes of this series, at its option, at any
time in whole, or from time to time in part, at a redemption price equal to the greater of (i) 100%
of the principal amount to be redeemed or (ii) the sum of the present values of the remaining
scheduled payments of principal and interest on the Notes to be redeemed (not including any portion
of such payments of interest accrued as of the date of redemption), discounted to the date of
redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at
the Treasury Rate plus 45 basis points; plus, in each case, accrued and unpaid interest on the
principal amount of the Notes being redeemed to the redemption date.

     For purposes of determining the redemption price:

     “Comparable Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term of the 2018 Notes to
be redeemed that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of the 2018 Notes.

     “Comparable Treasury Price” means, with respect to any redemption date, (1) the average
of four Reference Treasury Dealer Quotations for such redemption date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations, or (2) if the Quotation Agent
obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such
quotations, or (3) if only one such Reference Treasury Dealer Quotation is received, such
quotation.

     “Quotation Agent” means a Reference Treasury Dealer appointed by the Company.

     “Reference Treasury Dealer” means (1) each of Banc of America Securities LLC and J.P.
Morgan Securities Inc., or their affiliates, and their respective successors, provided,
however, that if either of the foregoing shall cease to be a primary U.S. government
securities dealer in the United States of America (“Primary Treasury Dealer”), the Company
will substitute therefor another Primary Treasury Dealer and (2) two other Primary Treasury
Dealers selected by the Company.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Quotation

A-2

 

Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing to the Quotation Agent by
such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third business day
preceding such redemption date.

     “Treasury Rate” means, with respect to any redemption date, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a
price for the Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption date.

     If an Event of Default shall have occurred and be continuing with respect to the Notes, the
principal hereof may be declared, and upon such declaration shall become, due and payable, in the
manner, with such effect and subject to the conditions provided in the Indenture. Any such
declaration may be rescinded by holders of a majority in principal amount of the outstanding Notes
if all Events of Default with respect to the Notes (other than the non-payment of principal of the
Notes which shall have become due by such declaration) shall have been remedied.

     The Indenture contains provisions permitting the Company and the Trustee, with the consent of
the holders of not less than a majority in aggregate principal amount of the Notes at the time
outstanding, evidenced as in the Indenture provided, to execute supplemental indentures adding any
provisions to the Indenture or to any supplemental indenture with respect to the Notes, or
modifying in any manner the rights of the holders of the Notes; provided, however, that no such
supplemental indenture shall (i) change the Stated Maturity of any Notes, or reduce the rate
thereon or extend the time of payment of interest thereon, or reduce the principal amount thereof
or any premium thereon, or change the coin or currency in which principal of any Note or any
premium or interest thereon is payable, or change the date on which any Note may be redeemed or
adversely affect the rights of a holder to institute suit for the enforcement of any payment of
principal or any premium or interest on any Note, in each case, without the consent of each holder
of each Note so affected, or (ii) reduce the aforesaid principal amount of the Notes, the holders
of which are required to consent to any such supplemental indenture, or to reduce the percentage of
Notes, the holders of which are required to waive Events of Default, in each case without the
consent of the holders of all Notes affected thereby then outstanding. The Indenture also contains
provisions permitting the holders of not less than a majority in aggregate principal amount of the
Notes of any series at the time outstanding, evidenced as in the Indenture provided, to waive on
behalf of all of the holders of the Notes of such series certain past defaults under the Indenture
and their consequences.

     No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Company, which is absolute and unconditional, to pay the
principal of (and premium, if any) and interest on this Note at the times, place and rate, and in
the coin or currency, herein provided.

     This Note is issuable as a registered Note only, in the denomination of $1,000 and any
integral multiples of $1,000 approved by the Company, such approval to be evidenced by the
execution thereof.

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     As provided in the Indenture, this Note is transferable by the registered holder hereof in
person or by his attorney duly authorized in writing on the books of the Company at the office or
agency to be maintained by the Company for that purpose. Upon any registration of transfer, a new
registered Note or Notes, of authorized denomination or denominations, and in the same aggregate
principal amount, will be issued to the transferee in exchange therefore.

     The Company, the Trustee, any paying agent and any Note Registrar may deem and treat the
registered holder hereof as the absolute owner of this Note (whether or not this Note shall be
overdue and notwithstanding any notations of ownership or other writing hereof made by anyone other
than the Note Registrar) for the purpose of receiving payment of or on account of the principal
hereof and interest due hereon as herein provided and for all other purposes, and neither the
Company nor the Trustee nor any paying agent nor any Note Registrar shall be affected by any notice
to the contrary.

     No recourse shall be had for the payment of the principal of or interest on this Note, or for
any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture
or any indenture supplemental thereto, against any incorporator or against any past, present or
future stockholder, officer or member of the Board of Directors, as such, of the Company, whether
by virtue of any constitution, state or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as party of the
consideration for the issue hereof, expressly waived and released.

     This Note shall be deemed to be a contract made under the laws of the State of New York, and
for all purposes shall be construed in accordance with the laws of the State of New York.

     All terms used in this Note which are defined in the Indenture and not defined herein shall
have the meaning assigned to them in the Indenture.

     This Note shall not be entitled to any benefit under the Indenture or be valid or obligatory
for any purpose until the certificate of authentication on the face hereof is manually signed by
the Trustee.

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     IN WITNESS WHEREOF, the Company has caused this instrument to be signed by the manual or
facsimile signatures of the President and Chief Executive Officer and the Treasurer of the Company,
and a facsimile of its corporate seal to be affixed or reproduced hereon.

	 	 	 	 	 
	 	 	KANSAS CITY POWER & LIGHT COMPANY
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	William H. Downey
	(SEAL)

	 	 	 	President and Chief Executive Officer
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Michael W. Cline
	 

	 	 	 	Treasurer

Dated:                     

Attest:

                                                            

Mark G. English

Assistant Secretary

	 	 	 	 	 
	 	 	TRUSTEE’S CERTIFICATE OF AUTHENTICATION
	 	 	This is one of the Notes of the series designated
	 	 	herein issued under the Indenture described herein.
	 
	 	 	 	 
	 	 	THE BANK OF NEW YORK TRUST COMPANY, N.A.,
	 	 	as Trustee
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 	 	Authorized Signatory

Dated:                     

A-5exv10w1

 

Exhibit 10.1

FOURTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT

     This Fourth Amendment to Credit and Security Agreement (“Fourth Amendment”) is entered into as
of January 31, 2008, by and among Synergetics, Inc., a Missouri corporation), and Synergetics USA,
Inc., a Delaware corporation (individually, a “Borrower” and together, the “Borrowers”), and
Regions Bank (“Lender”).

RECITALS

     A. Borrowers and Lender entered into a certain Credit and Security Agreement dated as of March
13, 2006, as heretofore amended from time to time (as so amended, the “Existing Credit Agreement”).

     B. Borrowers and Lenders desire to amend the Existing Credit Agreement as hereinafter
provided.

     C. The Existing Credit Agreement and this Fourth Amendment constitute the “Credit Agreement”
from and after the effectiveness of this Fourth Amendment.

     NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, Borrowers and Lender
agree as follows:

     1. Defined Terms. Each term used herein without definition or a modification to
definition shall have the same meaning as set forth in the Existing Credit Agreement.

     2. Credit Agreement Amendments. The Existing Credit Agreement is hereby amended as
follows, effective upon fulfillment of conditions set forth in Section 4 of this Fourth
Amendment:

     A. Section 1.2, entitled “Primary Definitions,” is hereby amended by modifying
the following definition:

	 	(1)	 	“Borrowing Base” means, at any time and subject
to change from time to time in Lenders’ sole discretion, the lesser of:

	 	(a)	 	the Revolving Loan Commitment, or

	 
	 	(b)	 	the sum of:

	 	(i)	 	up to 85% of Eligible Accounts, plus
	 
	 	(ii)	 	up to the lesser
of (A) 50% of Eligible inventory or (B) $4,750,000,
provided that such monetary limit on Eligible Inventory
shall not apply from the date of the Fourth Amendment
through July 31, 2008.

 

 

	 	 	 	Lender reserves the right to adjust the percentages and maximums
stated above as a result of any field audit or examination of
Collateral by Lender conducted pursuant to Section 2.19
hereof.

	 	(2)	 	“Revolving Note” shall mean the 2008 Amended
and Restated Revolving Note, attached as Exhibit A to the
Fourth Amendment, in maximum principal amount of $9,500,000 (the “2008
Amended and Restated Revolving Note”).

     B. The following Section 2.19 is hereby added to the Credit Agreement:

“Section 2.19 Annual Field Audit. Not more often than once during
any fiscal year of Borrowers, Lender may conduct, at Borrowers’ expense, a
field audit of the facilities, properties, books, records and Collateral of
Borrowers as provided in Section 6.2 hereof; provided that, upon and after
the occurrence of an Event of Default, Lender may conduct, at Borrowers’
expense, such field audits and other examinations of Borrowers’ facilities,
properties, books, records and Collateral, at such time and with such
frequency as Lender may determine in its discretion.”

     C. Subsection (d) to Section 6.1, entitled “Reporting Requirements,” is hereby
amended to read as follows in its entirety:

	 	(d)	 	“As soon as available, and in any event within
15 days after the end of each month (or more frequently if requested by
Lender and in such detail as reasonably required by Lender), a
Borrowing Base certificate in a form acceptable to the Lender
(currently, the form attached to the Fourth Amendment as Exhibit
B), showing the computation of the Borrowing Base as of the close
of business on the last day of the immediately preceding fiscal month
(except that Inventory calculations may be updated not less than every
60 days), prepared by the Borrowers and certified by the Borrowers’
chief financial officer.”

     D. A new Subsection (o) to Section 6.1, entitled “Reporting Requirements,” is
hereby added to read as follows in its entirety:

	 	“(o)	 	As soon as available, and in any event within
30 days after the end of each month (or more frequently if requested by
Lender and in such detail as reasonably required by Lender), an
Accounts aging report, an Inventory report and an accounts payable
report for the preceding month.”

     3. Representations and Warranties. The Borrowers jointly and severally hereby
represent and warrant to the Lender as follows:

2

 

          (a) This Fourth Amendment and the 2008 Amended and Restated Revolving Note have been
duly and validly executed by authorized officers of the Borrowers and constitute the legal,
valid and binding obligation of the Borrowers, enforceable against the Borrowers in
accordance with their terms. The Existing Credit Agreement, as amended by this Fourth
Amendment, remains in full force and effect and remains the valid and binding obligation of
the Borrowers, enforceable against the Borrowers in accordance with its terms. The Borrowers
hereby ratify and confirm the Existing Credit Agreement, as amended by this Fourth
Amendment.

          (b) No Default or Event of Default has occurred or now exists under the Existing Credit
Agreement and no Default or Event of Default will occur as a result of the effectiveness of
this Fourth Amendment.

          (c) The representations and warranties of the Borrower contained in the Existing Credit
Agreement, are true and correct in all material respects on and as of the date of this
Fourth Amendment.

     4. Conditions to Effectiveness of Fourth Amendment. The effectiveness of this Fourth
Amendment and the agreements set forth herein are subject to fulfillment, as determined in the sole
judgment of Lender, of the following conditions:

          (a) Borrowers shall have executed and delivered to Lender this Fourth Amendment and
the 2008 Amended and Restated Revolving Note;

          (b) Each Borrower shall have delivered to Lender a Certificate of the Secretary or an
Assistant Secretary of such Borrower certifying that appropriate corporate actions
authorizing the execution and delivery of this Fourth Amendment have been taken and
covering such other matters as Lender may reasonably request;

          (c) Lender shall have determined that no Default or Event of Default exists; and

          (d) Borrowers shall have delivered such other documents and shall have taken such
other actions as Lender in its reasonable discretion may require.

     5. Release. In consideration of the agreement of Lender to modify the terms of the
Existing Credit Agreement as set forth in this Fourth Amendment, Borrowers hereby release,
discharge and acquit forever Lender and any of its officers, directors, servants, agents, employees
and attorneys, past and present, from any and all claims, demands and causes of action, of whatever
nature, whether in contract or tort, accrued or to accrue, contingent or vested, known or unknown,
arising out of or relating to the loans evidenced by the Existing Credit Agreement, as hereby
amended, or Lender’s administration of the same or any other actions taken pursuant to the Existing
Credit Agreement or under any other documents or instruments evidencing loans made by Lender to
Borrowers or the administration of same; provided, however, that the foregoing release and the
following indemnity relate only to actions or inactions of Lender through the date hereof.

3

 

     6. Payment of Costs/Expenses. Without limiting the generality of provisions in the
Existing Credit Agreement (as amended by this Fourth Amendment) relating to payment of Lender’s
costs and expenses, the Borrower will pay all reasonable out-of-pocket expenses, costs and charges
of Lender’s attorneys incurred in connection with the preparation and implementation of this Fourth
Amendment.

     7. Other Documents/Provisions to Remain in Force. Except as expressly amended hereby,
the Existing Credit Agreement and all documents and instruments executed in connection therewith or
contemplated thereby and all indebtedness incurred pursuant thereto shall remain in full force and
effect and are in all respects hereby ratified and affirmed.

     8. Successors and Assigns. Subject to any restriction on assignment set forth in the
Existing Credit Agreement, this Fourth Amendment shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns.

     9. Counterparts. This Fourth Amendment may be executed in any number of counterparts,
each of which shall constitute one and the same Amendment.

     10. Incorporation by Reference. The Existing Credit Agreement and all exhibits
thereto, and the exhibits to this Fourth Amendment are incorporated herein by this reference,
except to the extent replaced by Exhibits attached to this Fourth Amendment.

     11. No Oral Loan Agreements. Pursuant to Mo. Rev. Stat. § 432.045 and § 432.047, the
parties agree to the quoted language below (all references to “you” are references to Borrower and
all references to “us” are references to Lender):

ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FOREBEAR FROM
ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT
ENFORCEABLE, REGARDLESS OF THE LEGAL THEORY UPON WHICH IT IS BASED, THAT IS IN ANY WAY
RELATED TO THE CREDIT AGREEMENT. TO PROTECT YOU (BORROWER) AND US (LENDER) FROM
MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH MATTERS ARE
CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENT OF THE
AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.

4

 

     IN WITNESS WHEREOF, Lender and Borrowers have caused this Fourth Amendment to be executed
effective as of the date first written above.

	 	 	 	 	 
	 	BORROWERS:

SYNERGETICS, INC.

 	 
	 	By:  	/s/ Pamela G. Boone
 	 
	 	 	Name:  	Pamela G. Boone 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	and

SYNERGETICS USA, INC.

 	 
	 	By:  	/s/ Pamela G. Boone
 	 
	 	 	Name:  	Pamela G. Boone 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	LENDER:

REGIONS BANK

 	 
	 	By:  	/s/ Anne D. Silvestri
 	 
	 	 	Name:  	Anne D. Silvestri 	 
	 	 	Title:  	Senior Vice President 	 

5

 

	 	 	 	 	 

Exhibit A to Fourth Amendment to

Credit and Security Agreement     

2008 AMENDED AND RESTATED

REVOLVING NOTE

$9,500,000.00

St. Louis, Missouri

January 31, 2008

     FOR VALUE RECEIVED, the undersigned, SYNERGETICS, INC., a Missouri corporation, and
SYNERGETICS USA, INC., a Delaware corporation (individually, a “Borrower” and together, the
“Borrowers”), hereby jointly and severally promise to pay on the Termination Date to the order of
Regions Bank (the “Lender”), at its main office in St. Louis, Missouri, or at any other place
designated at any time by the holder hereof, in lawful money of the United States of America and in
immediately available funds, the principal sum of Nine Million Five Hundred Thousand and
00/100 ($9,500,000.00) or, if less, the aggregate unpaid principal amount of all
Advances and Swing Line Loans made by the Lender to the Borrowers under the Credit Agreement
(defined below), together with interest on the principal amount hereunder remaining unpaid from
time to time, computed on the basis of the actual number of days elapsed and a 360-day year, from
the date hereof until this Note is fully paid at the rate from time to time in effect under the
Credit and Security Agreement dated as of March 13, 2006, as heretofore amended by First Amendment
dated as of September 26, 2006, by Second Amendment dated as of December 8, 2006, by Third
Amendment dated as of June 7, 2007, and by Fourth Amendment (“Fourth Amendment”) of even date
herewith (as so amended, the “Credit Agreement”) by and among the Lender and the Borrowers. The
principal hereof and interest accruing thereon shall be due and payable as provided in the Credit
Agreement. This Note may be prepaid only in accordance with the Credit Agreement.

     This Note is issued pursuant, and is subject, to the Credit Agreement, which provides, among
other things, for acceleration hereof. This Note is the 2008 Amended and Restated Revolving Note
referred to in the Fourth Amendment. This Note evidences not only all Advances of Lender under the
Revolving Credit Facility but also all Swing Line Loans made by Lender pursuant to Section 2.1A of
the Credit Agreement.

     This Note, among other things, is secured pursuant to the Credit Agreement and the Security
Documents as therein defined, and may now or hereafter be secured by one or more other security
agreements, mortgages, deeds of trust, assignments or other instruments or agreements.

     The Borrowers hereby agree to pay all costs of collection, including attorneys’ fees and legal
expenses in the event this Note is not paid when due, whether or not legal proceedings are
commenced.

     Presentment or other demand for payment, notice of dishonor and protest are expressly waived.

     This Note shall be governed by the internal substantive laws of the State of Missouri, without
regard for its conflicts-of-law principles.

     This Note is a replacement for, but not a novation or refinancing of: (A) the Revolving Note
dated as of September 26, 2006, as amended by Amended and Restated Revolving Note dated as of
December 8, 2006, by Borrowers payable to the order of Lender; and (B) the Revolving Note dated as
of September 26, 2006, as amended by Amended and Restated Revolving Note dated as of December 8,
2006 and by Amended and Restated Revolving Note dated as of June 7, 2007, by Borrowers payable to
the order of

 

 

Wachovia Bank National Association, which Note was purchased by Lender. This Note does not
evidence or effect a release, or relinquishment of the priority, of the security interests in any
Collateral (as defined in the Credit Agreement).

     ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING
REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE, REGARDLESS
OF THE LEGAL THEORY UPON WHICH IT IS BASED, THAT IS IN ANY WAY RELATED TO THE CREDIT AGREEMENT. TO
PROTECT YOU (BORROWERS) AND US (LENDER) FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE
REACH COVERING SUCH MATTERS ARE CONTAINED IN THIS WRITING (THIS NOTE, THE CREDIT AGREEMENT AND THE
LOAN DOCUMENTS REFERRED TO THEREIN), WHICH IS THE COMPLETE AND EXCLUSIVE STATEMENTS OF THE
AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER AGREE IN WRITING TO MODIFY IT.

	 	 	 	 	 
	 	BORROWERS:

SYNERGETICS, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Pamela G. Boone 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	and

SYNERGETICS USA INC.

 	 
	 	By:  	 	 
	 	 	Name:  	Pamela G. Boone 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

7

 

Exhibit B to Fourth Amendment to Credit
and

Security Agreement

[Borrowing Base Certificate]

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