Document:

KMP Exhibit 10.1

Exhibit 10.1

 

EXECUTION COPY

$1,600,000,000

CREDIT AGREEMENT

dated as of

AUGUST 5, 2005

AMONG

KINDER MORGAN ENERGY PARTNERS, L.P.,

as the Company,

KINDER MORGAN OPERATING L.P. “B”,

as the Subsidiary Borrower,

THE LENDERS PARTY HERETO,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as the Administrative Agent,

CITIBANK, N.A.,

and

JPMORGAN CHASE BANK, N.A.

as the Co-Syndication Agents,

and

THE ROYAL BANK OF SCOTLAND plc

and

BARCLAYS BANK PLC,

as the Co-Documentation Agents

_______________________________________________

WACHOVIA CAPITAL MARKETS LLC,

and

CITIGROUP GLOBAL MARKETS, INC.,

as Joint Lead Arrangers

and

WACHOVIA CAPITAL MARKETS LLC,

CITIGROUP GLOBAL MARKETS, INC.,

and

J.P. MORGAN SECURITIES INC.,

as Joint Book Managers

 

TABLE OF CONTENTS

 Page

ARTICLE I. DEFINITIONS

2

SECTION 1.01

Defined Terms

2

SECTION 1.02

Classification of Loans and Borrowings

22

SECTION 1.03

Accounting Terms; Changes in GAAP

22

SECTION 1.04

Interpretation

22

ARTICLE II. THE CREDITS

23

SECTION 2.01

Commitments

23

SECTION 2.02

Loans and Borrowings

24

SECTION 2.03

Requests for Committed Borrowings

24

SECTION 2.04

Competitive Bid Procedure

25

SECTION 2.05

Swingline Loans

27

SECTION 2.06

Letters of Credit

28

SECTION 2.07

Funding of Borrowings

33

SECTION 2.08

Interest Elections

34

SECTION 2.09

Termination and Reduction of Commitments

35

SECTION 2.10

Repayment of Loans; Evidence of Debt

36

SECTION 2.11

Prepayment of Loans

37

SECTION 2.12

Fees

38

SECTION 2.13

Interest

39

SECTION 2.14

Alternate Rate of Interest

40

SECTION 2.15

Increased Costs

41

SECTION 2.16

Break Funding Payments

42

SECTION 2.17

Taxes

42

SECTION 2.18

Payments Generally; Pro Rata Treatment; Sharing of Set-offs

44

SECTION 2.19

Mitigation Obligations; Replacement of Lenders

45

SECTION 2.20

Telephonic Notices

46

ARTICLE III. CONDITIONS PRECEDENT

46

SECTION 3.01

Conditions Precedent to the Initial Credit Event

46

SECTION 3.02

Conditions Precedent to All Credit Events

47

SECTION 3.03

Conditions Precedent to Conversions

48

SECTION 3.04

Delivery of Documents

48

ARTICLE IV. REPRESENTATIONS AND WARRANTIES

48

SECTION 4.01

Organization and Qualification

49

SECTION 4.02

Authorization, Validity, Etc

49

SECTION 4.03

Governmental Consents, Etc

49

SECTION 4.04

No Breach or Violation of Agreements or Restrictions, Etc

49

SECTION 4.05

Properties

50

 

SECTION 4.06

Litigation and Environmental Matters

50

SECTION 4.07

Financial Statements

50

SECTION 4.08

Disclosure

51

SECTION 4.09

Investment Company Act

51

SECTION 4.10

Public Utility Holding Company Act

51

SECTION 4.11

ERISA

51

SECTION 4.12

Tax Returns and Payments

51

SECTION 4.13

Compliance with Laws and Agreements

52

SECTION 4.14

Purpose of Loans

52

SECTION 4.15

Foreign Assets Control Regulations, etc.

52

ARTICLE V. AFFIRMATIVE COVENANTS

53

SECTION 5.01

Financial Statements and Other Information

53

SECTION 5.02

Existence, Conduct of Business

55

SECTION 5.03

Payment of Obligations

55

SECTION 5.04

Maintenance of Properties; Insurance

56

SECTION 5.05

Books and Records; Inspection Rights

56

SECTION 5.06

Compliance with Laws

56

SECTION 5.07

Use of Proceeds

56

ARTICLE VI. NEGATIVE COVENANTS

57

SECTION 6.01

Liens

57

SECTION 6.02

Fundamental Changes

57

SECTION 6.03

Restricted Payments

58

SECTION 6.04

Transactions with Affiliates

58

SECTION 6.05

Restrictive Agreements

58

SECTION 6.06

Financial Covenants

58

ARTICLE VII. EVENTS OF DEFAULT

59

SECTION 7.01

Events of Default and Remedies

59

ARTICLE VIII. THE ADMINISTRATIVE AGENT

62

SECTION 8.01

Appointment, Powers and Immunities

62

SECTION 8.02

Reliance by Administrative Agent

62

SECTION 8.03

Defaults; Events of Default

63

SECTION 8.04

Rights as a Lender

63

SECTION 8.05

INDEMNIFICATION

63

SECTION 8.06

Non-Reliance on Agents and other Lenders

64

SECTION 8.07

Action by Administrative Agent

64

SECTION 8.08

Resignation or Removal of Administrative Agent

65

SECTION 8.09

Duties of Co-Syndication Agents and Co-Documentation Agents

65

ARTICLE IX. GUARANTY

65

 

SECTION 9.01

Guaranty

65

SECTION 9.02

Continuing Guaranty

66

SECTION 9.03

Effect of Debtor Relief Laws

68

SECTION 9.04

Waiver

69

SECTION 9.05

Full Force and Effect

69

ARTICLE X. MISCELLANEOUS

69

SECTION 10.01

Notices, Etc

69

SECTION 10.02

Waivers; Amendments

71

SECTION 10.03

Payment of Expenses, Indemnities, etc

71

SECTION 10.04

Successors and Assigns

74

SECTION 10.05

Assignments and Participations

74

SECTION 10.06

Survival; Reinstatement

76

SECTION 10.07

Counterparts; Integration; Effectiveness

77

SECTION 10.08

Severability

77

SECTION 10.09

Right of Setoff

77

SECTION 10.10

Governing Law; Jurisdiction; Consent to Service of Process

78

SECTION 10.11

WAIVER OF JURY TRIAL

79

SECTION 10.12

Confidentiality

79

SECTION 10.13

Interest Rate Limitation

80

SECTION 10.14

EXCULPATION PROVISIONS

80

SECTION 10.15

U.S. Patriot Act

81

 

SCHEDULES:

Schedule 1.01

Commitments

Schedule 4.01

Existing Subsidiaries

Schedule 6.05

Existing Restrictions

EXHIBITS:

Exhibit 1.01A 

Form of Assignment and Acceptance

Exhibit 1.01B-1 

Subsidiary Borrower Letter of Credit

Exhibit 1.01B-2 

Other Existing Letters of Credit

Exhibit 1.01-C

Form of Committed Note

Exhibit 1.01-D

Form of Competitive Note

Exhibit 1.01-E

Form of Swingline Note

Exhibit 2.03 

Form of Borrowing Request

Exhibit 2.04-A

Form of Competitive Bid Request

Exhibit 2.04-B

Form of Notice to Lenders of Competitive Bid Request

Exhibit 2.04-C

Form of Competitive Bid

Exhibit 2.06  

Form of Letter of Credit Request

Exhibit 2.07 

Form of Notice of Account Designation

Exhibit 2.08 

Form of Interest Election Request

Exhibit 2.11 

Form of Notice of Prepayment

Exhibit 5.01 

Form of Compliance Certificate

 

 

CREDIT AGREEMENT

THIS CREDIT AGREEMENT, dated as of August 5, 2005 (this “Agreement”) is among:

(a)

Kinder Morgan Energy Partners, L.P., a Delaware limited partnership (the “Company”);

(b)

Kinder Morgan Operating L.P. “B”, a Delaware limited partnership (the “Subsidiary Borrower”);

(c)

the banks and other financial institutions listed on the signature pages hereof under the caption “Lenders” (the “Lenders” and together with each other Person that becomes a Lender pursuant to Section 2.01(b) or Section 10.05, collectively, the “Lenders”);

(d)

Wachovia Bank, National Association, a national banking association, individually as a Lender and as the administrative agent for the Lenders (in such latter capacity together with any other Person that becomes Administrative Agent pursuant to Section 8.08, the “Administrative Agent”);

(e)

Citibank, N.A., and JPMorgan Chase Bank, N.A., as Co-Syndication Agents (the “Co-Syndication Agents”); and

(f)

The Royal Bank of Scotland plc, and Barclays Bank PLC, as Co-Documentation Agents (the “Co-Documentation Agents”).

 PRELIMINARY STATEMENTS

The Company and the Subsidiary Borrower have requested that a credit facility be extended to them pursuant to which: (a) the Company may borrow from the Lenders (i) to repay in full the principal and accrued interest on all loans and other amounts outstanding (if any) under that certain Credit Agreement dated as of August 18, 2004 among the Company, the Subsidiary Borrower, the lenders party thereto, Wachovia Bank, National Association, as the administrative agent, the issuing bank and the swingline bank, and the other agents named therein, (as amended to date, the “Existing Credit Agreement”), (ii) to back commercial paper issuance, and (iii) for general working capital and other general partnership purposes; and (b) the Company may obtain the issuance of letters of credit and the letters of credit (including the Subsidiary Borrower Letter of Credit) issued or otherwise outstanding under the Existing Credit Agreement will be deemed to be letters of credit issued hereunder.

NOW, THEREFORE, the parties hereto agree as follows:

 

ARTICLE I.

DEFINITIONS

 

SECTION 1.01

Defined Terms.  As used in this Agreement, the following terms have the meanings specified below:

“ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, bear interest at a rate determined by reference to the Alternate Base Rate.

“Administrative Agent” has the meaning specified in the introduction to this Agreement.

“Administrative Questionnaire” means an Administrative Questionnaire in the form supplied by the Administrative Agent.

“Affiliate” of any Person shall mean (i) any Person directly or indirectly controlled by, controlling or under common control with such first Person, (ii) any director or officer of such first Person or of any Person referred to in clause (i) above and (iii) if any Person in clause (i) above is an individual, any member of the immediate family (including parents, siblings, spouse and children) of such individual and any trust whose principal beneficiary is such individual or one or more members of such immediate family and any Person who is controlled by any such member or trust.  For purposes of this definition, any Person that owns directly or indirectly 25% or more of the securities having ordinary voting power for the election of directors or other governing body of a corporation or 25% or more of the partnership or other ownership interests of any other Person (other than as a limited partner of such other Person) will be deemed to “control” (including, with its correlative meanings, “controlled by” and “under common control with”) such corporation or other Person.

“Agreement” has the meaning specified in the introduction to this Agreement (subject, however, to Section 1.04(v) hereof).

“Alternate Base Rate” means, for any day, a rate per annum equal to the greater of (a) the Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1% and (b) the Prime Rate in effect for such day.  Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective from the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.

“Applicable Margin” means at any time and from time to time, a percentage per annum equal to the applicable percentage set forth below for the corresponding Performance Level set forth below:

	Performance

Level

	LIBOR Borrowings

Margin Percentage

	I

	.21%

	II

	.27%

	III

	.35%

	IV

	.50%

	V

	.575%

 

The Applicable Margin shall be determined by reference to the Performance Level in effect from time to time, and any change in the Applicable Margin shall be effective from the effective date of the change in the applicable Performance Level giving rise thereto.

“Applicable Percentage” means, with respect to any Lender, the percentage of the Total Commitment represented by such Lender’s Commitment.  If the Total Commitment has terminated or expired, the Applicable Percentages shall be determined based upon the Total Commitment most recently in effect, giving effect to any assignments.

“Application” has the meaning specified in Section 2.06(c).

“Assignment and Acceptance” means an assignment and acceptance entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 10.05), and accepted by the Administrative Agent, in the form of Exhibit 1.01A or any other form approved by the Administrative Agent.

“Available Cash” means, with respect to any fiscal quarter of the Company (a “Test Quarter”), an amount equal to the algebraic sum of (a) the aggregate of all cash distributions actually made to and received by the Company from the Subsidiaries in respect of their Capital Stock during such fiscal quarter minus (b) the aggregate amount of all cash disbursements, including disbursements for operating expenses, payments of principal of and interest on Indebtedness and taxes (net of amounts received or to be received by the Company from the Subsidiaries as reimbursement for such amounts), and capital expenditures (net of any borrowings to fund such capital expenditures permitted pursuant to this Agreement), actually paid by the Company during such Test Quarter, plus, in the case of  a decrease, or minus, in the case of an increase (c) the amount by which, as at the end of such Test Quarter, cash reserves necessary in the reasonable discretion of the Company’s management for the proper conduct of the business of the Company and the Subsidiaries subsequent to such Test Quarter, decreased or increased from the amount of such reserves as at the end of the immediately preceding fiscal quarter.

“Availability Period” means the period from the Effective Date, to the earlier of the Maturity Date and the date of termination of the Commitments.

“Bankruptcy Code” has the meaning specified in Section 9.01(a).

“Benefit Arrangement” means at any time an employee benefit plan within the meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and which is maintained or otherwise contributed to by any member of the ERISA Group.

“Board” means the Board of Governors of the Federal Reserve System of the United States of America.

“Board of Directors” means, with respect to any Person, the Board of Directors of such Person or any committee of the Board of Directors of such Person duly authorized to act on behalf of the Board of Directors of such Person.

“Board Resolution” means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Administrative Agent.

“Bonds” means the Port Facility Refunding Revenue Bonds (Enron Transportation Services, L.P. Project) Series 1994 in the aggregate principal amount of $23,700,000, as issued by the Jackson-Union Regional Port District.

“Borrowers” means, collectively, the Company and the Subsidiary Borrower and “Borrower” means either one of them.

“Borrowing” means (a) a Committed Borrowing or (b) a Competitive Borrowing.

“Borrowing Date” means the Business Day upon which any Letter of Credit is to be  issued or any Loan is to be made available to the Company.

“Borrowing Request” has the meaning specified in Section 2.03.

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in Houston, Texas, New York, New York, or Charlotte, North Carolina, are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.

“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“Capital Stock” means, with respect to any Person, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents (however designated) of such Person’s equity, including  all common stock and preferred stock, any limited or general partnership interest and any limited liability company member interest.

“Change in Control” means either (a) the acquisition through beneficial ownership or otherwise after the date hereof by any person (as such term is used in section 13(d) and section 14(d)(2) of the Exchange Act as in effect on the date hereof) or related persons constituting a group (as such term is used in Rule 13d-5 under the Exchange Act as in effect on the date hereof) of 30% of the Voting Stock of the General Partner; or (b) individuals who, at the beginning of any period of 12 consecutive months, constitute the General Partner’s Board of Directors cease for any reason (other than death or disability) to constitute a majority of the General Partner’s Board of Directors then in office.

“Change in Control Event” means the execution of any definitive agreement which, when fully performed by the parties thereto, would result in a Change in Control.

“Change in Law” means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or any Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s or such Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.  If any Lender (or its applicable lending office or its holding company, as the case may be) shall be, or shall determine itself to be, required by any law, rule, regulation, request, guideline or directive (whether or not having the force of law) relating to capital requirements adopted after the date of this Agreement or any change in the interpretation or application of any thereof by any Governmental Authority after the date of this Agreement (each a “Capital Requirement”) to maintain (and in either such case such Lender, lending office or holding company, as the case may be, does in fact maintain) capital against such Lender’s unused Commitment (or any portion thereof), in whole or in part as a result of such unused Commitment (or portion), either alone or in combination with any proposed or agreed extension thereof (whether or not such extension shall be by its terms at the time be effective), extending or being deemed to extend for a period of more than one year from its inception or to have an original maturity of more than one year or otherwise to last for a period of time sufficient to require maintenance of capital against it, a “Change in Law” shall be deemed to have occurred for purposes of Section 2.15(b) with respect to such Capital Requirement.

“Charges” has the meaning specified in Section 10.13.

“Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Committed Loans, Swingline Loans or Competitive Loans.

“Co-Documentation Agents” has the meaning specified in the introduction to this Agreement.

“Co-Syndication Agents” has the meaning specified in the introduction to this Agreement.

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

“Commitment” means, with respect to each Lender, the commitment of such Lender to make Committed Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s Committed Credit Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section 2.09 and (b) increased pursuant to Section 2.01 or reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 10.05.  The initial amount of each Lender’s Commitment is set forth on Schedule 1.01 hereto, or in the Assignment and Acceptance pursuant to which such Lender shall have assumed its Commitment, as applicable.

“Committed Borrowing” means (a) a borrowing comprised of Committed Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect or (b) a Swingline Loan.

“Committed Credit Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Committed Loans and its LC Exposure and Swingline Exposure at such time.

“Committed Loan” means a Loan made pursuant to Section 2.03.

“Committed Note” means a promissory note of the Company payable to the order of each Lender, in substantially the form of Exhibit 1.01-C, together with all modifications, extensions, renewals and rearrangements thereof.

“Communications” has the meaning specified in Section 10.01.

“Company” has the meaning specified in the introduction to this Agreement.

“Company Debt Rating” means, with respect to the Company as of any date of determination, the rating that has been most recently announced by each of S&P or Moody’s for any non-credit enhanced, unsecured long-term senior debt issued or to be issued by the Company.  For purposes of the foregoing:

(a)

if, at any time, neither S&P nor Moody’s shall have in effect a Company Debt Rating, the Applicable Margin or the Facility Fee Rate, as the case may be, shall be set in accordance with Performance Level V under the definition of “Applicable Margin” or “Facility Fee Rate”, as the case may be;

(b)

if the ratings established by S&P and Moody’s shall fall within different Performance Levels, the Applicable Margin or the Facility Fee Rate, as the case may be, shall be based upon the higher rating; provided, however, that, if the lower of such ratings is two or more Performance Levels below the higher of such ratings, the Applicable Margin or the Facility Fee Rate, as the case may be, shall be based upon the rating that is one Performance Level lower than the higher rating;

(c)

if any rating established by S&P or Moody’s shall be changed, such change shall be effective as of the date on which such change is announced publicly by the rating agency making such change; and

(d)

if S&P or Moody’s shall change the basis on which ratings are established by it, each reference to the Company Debt Rating announced by S&P or Moody’s shall refer to the then equivalent rating by S&P or Moody’s, as the case may be.

“Competitive Bid” means an offer by a Lender to make a Competitive Loan substantially in the form of Exhibit 2.04-C.

“Competitive Bid Rate” means, with respect to any Competitive Bid, the Margin or the Fixed Rate, as applicable, offered by the Lender making such Competitive Bid.

“Competitive Bid Request” means a request by the Company for Competitive Bids in accordance with Section 2.04 substantially in the form of Exhibit 2.04-A.

“Competitive Borrowing” means a borrowing consisting of a Competitive Loan or concurrent Competitive Loans of the same Type, as to which a single Interest Period is in effect and made on the same date by the Lender or Lenders whose Competitive Bid(s) as all or as a part of such borrowing, as the case may be, has (or have) been accepted by the Company under the bidding procedure described in Section 2.04.

“Competitive Loan” means a Loan made pursuant to Section 2.04.

“Competitive Note” means a promissory note of the Company payable to the order of a Lender, in substantially the form of Exhibit 1.01-D, together with all modifications, extensions, renewals and rearrangements thereof.

“Consolidated Assets” means, at the date of any determination thereof, the total assets of the Company and the Subsidiaries as set forth on a consolidated balance sheet of the Company and the Subsidiaries for their most recently completed fiscal quarter, prepared in accordance with GAAP.

“Consolidated EBITDA” means, for any period, the EBITDA of the Company and the Subsidiaries for such period determined on a consolidated basis in accordance with GAAP.

“Consolidated Indebtedness” means, at the date of any determination thereof, Indebtedness of the Company and the Subsidiaries determined on a consolidated basis in accordance with GAAP.

“Consolidated Interest Expense” means, for any period, the Interest Expense of the Company and the Subsidiaries for such period determined on a consolidated basis in accordance with GAAP.

“Consolidated Net Tangible Assets” means, at the date of any determination thereof, Consolidated Assets after deducting therefrom: (a) all current liabilities, excluding (i) any current liabilities that by their terms are extendable or renewable at the option of the obligor thereon to a time more than 12 months after the time as of which the amount thereof is being computed; and (ii) current maturities of long-term debt; and (b) the value, net of any applicable reserves, of all goodwill, trade names, trademarks, patents and other like intangible
assets, all as set forth, or on a pro forma basis would be set forth, on a consolidated balance sheet of the Company and the Subsidiaries for their most recently completed fiscal quarter, prepared in accordance with GAAP.

“Credit Event” means the making of any Loan or the issuance or the extension of any Letter of Credit.

“Default” means any event or condition which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.

“Delegate” means Kinder Morgan Management, LLC, a Delaware limited liability company.

“dollars” or “$” refers to lawful money of the United States of America.

“EBITDA” means (without duplication), with respect to any period for any Person, the Net Income of such Person, increased (to the extent deducted in determining Net Income for such period) by the sum of (a) all income taxes (including state franchise taxes based upon income) of such Person paid or accrued according to GAAP for such period; (b) Consolidated Interest Expense of such Person for such period; and (c) depreciation and amortization of such Person for such period determined in accordance with GAAP.

“Effective Date” means the date occurring on or before August 31, 2005 on which the conditions specified in Section 3.01 are satisfied (or waived in accordance with Section 10.02).

“Eligible Assignee” means (a) any Lender; (b) any Affiliate of any Lender; (c) a commercial bank organized or licensed under the laws of the United States, or a state thereof, and having total assets in excess of $1,000,000,000; (d) a commercial bank organized under the laws of any other country which is a member of the OECD, or a political subdivision of any such country, and having total assets in excess of $1,000,000,000, provided that such bank is acting through a branch or agency located in the country in which it is organized or another country which is also a member of the OECD; and (e) a finance company, insurance company or other financial institution or fund (whether a corporation, partnership, trust or other entity) that is engaged in making, purchasing or otherwise investing in commercial loans in the ordinary course of its business and having a combined capital and surplus or total assets of at least $100,000,000.

“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Company or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release of
any Hazardous Materials into the environment, or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ERISA Group” means the Company, any Subsidiary and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Company or any Subsidiary, are treated as a single employer under Section 414 of the Code.

“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, bear interest at a rate determined by reference to the LIBOR Rate.

“Event of Default” has the meaning specified in Section 7.01.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, any Issuing Bank or any other recipient of any payment to be made by or on account of any Obligation, (a) income or franchise taxes imposed on (or measured by) its net income by the United States of America, or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which either Borrower is located and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Company under Section 2.19(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party to this Agreement or is attributable to such Foreign Lender’s failure or inability to comply with Section 2.17(e), except to the extent that such Foreign Lender’s assignor (if any) was entitled, at the time of assignment, to receive additional amounts from a Borrower with respect to such withholding tax pursuant to Section 2.17(a).

“Execution Date” means the earliest date upon which all of the following shall have occurred: counterparts of this Agreement shall have been executed by the Borrowers and each Lender listed on the signature pages hereof and the Administrative Agent shall have received counterparts hereof which taken together, bear the signatures of the Borrowers and each Lender and the Administrative Agent.

“Executive Summary” means the Executive Summary dated July 2005.

“Existing Credit Agreement” has the meaning specified in the Preliminary Statements.

“Existing Letters of Credit” means, collectively, the Subsidiary Borrower Letter of Credit and the letters of credit issued under the Existing Credit Agreement listed on Exhibit 1.01B-2  .

“Facility Fee” has the meaning specified in Section 2.12(a).  

“Facility Fee Rate” means at any time and from time to time, a percentage per annum equal to the applicable percentage set forth below for the corresponding Performance Level set forth below:

	Performance

Level

	

Facility Fee Rate

	I

	.065%

	II

	.080%

	III

	.100%

	IV

	.125%

	V

	.175%

The Facility Fee Rate shall be determined by reference to the Performance Level in effect from time to time and any change in the Facility Fee Rate shall be effective from the effective date of the change in the applicable Performance Level giving rise thereto.

“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“Fee Letter” has the meaning specified in Section 2.12.

“Fixed Rate” means, with respect to any Competitive Loan (or Competitive Borrowing) (other than a Eurodollar Competitive Loan or Competitive Borrowing), the fixed rate of interest per annum specified by the Lender(s) making such Competitive Loan (or the Competitive Loans comprising such Competitive Borrowing) in its (or their) related Competitive Bid(s).

“Fixed Rate Loan” means a Competitive Loan bearing interest at a Fixed Rate.

“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which either Borrower  is located.  For purposes of this definition, the United States of America, each state thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“GAAP” means generally accepted accounting principles in the United States of America from time to time, including as set forth in the opinions, statements and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and the Financing Accounting Standards Board.

“General Partner” means Kinder Morgan G.P., Inc., a Delaware corporation.

“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

“Guaranteed Obligations” has the meaning specified in Section 9.01.

“Guaranty” means the guaranty of the Company contained in Article IX.

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

“Hedging Agreement” means any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement.

“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (d) all obligations of such Person in respect of the deferred purchase price of property or services or any other similar obligation upon which interest charges are customarily paid (excluding trade accounts payable incurred in the ordinary course of business), (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (f) all Guarantees by such Person of Indebtedness of others (provided that in the event that any Indebtedness of the Company or any Subsidiary shall be  the subject of a Guarantee by one or more Subsidiaries or by the Company, as the case may be, the aggregate amount of the outstanding Indebtedness of the Company and the Subsidiaries in respect thereof shall be determined by reference to the primary Indebtedness so guaranteed, and without duplication by reason of the existence of any such Guarantee), (g) all Capital Lease Obligations of such Person, (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty and (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances.  The Indebtedness of any Person shall include the Indebtedness of any other Person (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.

“Indemnified Parties” has the meaning specified in Section 10.03.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Indemnity Matters” means, with respect to any Indemnified Party, all losses, liabilities, claims and damages (including reasonable legal fees and expenses).

“Interest Election Request” has the meaning specified in Section 2.08.

“Interest Expense” means (without duplication), with respect to any period for any Person (a) the aggregate amount of interest, whether expensed or capitalized, paid, accrued or scheduled to be paid during such period in respect of the Indebtedness of such Person including (i) the interest portion of any deferred payment obligation; (ii) the portion of any rental obligation in respect of Capital Lease Obligations allocable to interest expenses; and (iii) any non-cash interest payments or accruals, all determined in accordance with GAAP, less (b) Interest Income of such Person for such period.

“Interest Income” means, with respect to any period for any Person, interest actually received by such Person during such period.

“Interest Payment Date” means (a) with respect to any ABR Loan (including a Swingline Loan), the last Business Day of each March, June, September and December, (b) with respect to any Eurodollar Loan, the last Business Day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period and (c) with respect to any Fixed Rate Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Fixed Rate Borrowing with an Interest Period of more than 90 days’ duration (unless otherwise specified in the applicable Competitive Bid Request), each day prior to the last day of such Interest Period that occurs at intervals of 90 days’ duration after the first day of such Interest Period, and any other dates that are specified in the applicable Competitive Bid Request as Interest Payment Dates with respect to such Borrowing.

“Interest Period” means (a) with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the Company may elect and (b) with respect to any Fixed Rate Borrowing, the period (which shall not be less than 7 days or more than 180 days) commencing on the date of such Borrowing and ending on the date specified in the applicable Competitive Bid Request; provided, that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of any Eurodollar Borrowing, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period and (iii) no Interest Period shall end after the Stated Maturity Date.  For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and, in the case of a Committed Borrowing, thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

“Issuing Banks” means Wachovia Bank, National Association, and each other consenting Lender that is designated to the Administrative Agent in writing by the Company, in each case in its capacity as an issuer of one or more Letters of Credit hereunder.

“Joint Book Managers” means Wachovia Capital Markets LLC, Citigroup Global Markets, Inc., and J.P. Morgan Securities Inc.

“LC Disbursement” means a payment made by an Issuing Bank pursuant to a Letter of Credit.

“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the applicable Borrower at such time.  The LC Exposure of any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.

“Lender” has the meaning specified in the introduction to this Agreement.

“Lenders” has the meaning specified in the introduction to this Agreement.  Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender.

“Letter of Credit” means any Existing Letter of Credit or any letter of credit issued pursuant to this Agreement.

“Letter of Credit Request” has the meaning specified in Section 2.06.

“LIBOR” means for any Interest Period:

(a)

the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate that appears on the page of the Telerate screen (or any successor thereto) that displays an average British Bankers Association Interest Settlement Rate for deposits in dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period; or

(b)

if the rate referenced in the preceding clause (a) does not appear on such page or service or such page or service shall not be available, the rate per annum equal to the rate determined by the Administrative Agent to be the offered rate on such other page or other service that displays an average British Bankers Association Interest Settlement Rate for deposits in dollars (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period, determined as of approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period; or

(c)

if the rates referenced in the preceding clauses (a) and (b) are not available, the rate per annum determined by the Administrative Agent as the rate of interest at which deposits in dollars (for delivery on the first day of such Interest Period in same day funds) in the approximate amount of the Eurodollar Loan as to which such determination is being made (or, if Wachovia is making or converting a simultaneous Eurodollar Loan in the approximate amount of such Eurodollar Loan being made, continued or converted by Wachovia) and with a term equivalent to such Interest Period would be offered by Wachovia’s London branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period.  

“LIBOR Rate” shall mean, with respect to any Eurodollar Loan for any Interest Period for such Loan, a rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by the Administrative Agent to be equal to the quotient of (i) LIBOR for such Loan for such Interest Period divided by (ii) 1 minus the Reserve Requirement for such Loan for such Interest Period.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset and (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset.

“Loan Documents” mean, collectively, this Agreement (including the Guaranty), the Notes, if any, the Applications, the Fee Letter and all other instruments and documents from time to time executed and delivered by either Borrower in connection herewith and therewith.

“Loans” means advances made by the Lenders to the Company pursuant to this Agreement.

“Margin” means, with respect to any Competitive Loan bearing interest at a rate based on the LIBOR Rate, the marginal rate of interest, if any, to be added to or subtracted from the LIBOR Rate to determine the rate of interest applicable to such Loan, as specified by the Lender making such Loan in its related Competitive Bid.

“Material Adverse Effect” means, relative to any occurrence of whatever nature, a material adverse effect on (a) the business assets, liabilities or financial condition of the Company and the Subsidiaries taken as a whole, (b) the ability of the Borrowers to collectively perform the Obligations or (c) the rights of the Administrative Agent, any Issuing Bank or any Lender against the Borrower under any material provision of this Agreement or any other Loan Document.

“Material Subsidiary” means any Subsidiary the value of the assets of which exceeds 5% of Consolidated Assets.

“Maturity Date” means the earlier of (a) the Stated Maturity Date and (b) the acceleration of the Obligations pursuant to Section 7.01.

“Maximum Rate” has the meaning specified in Section 10.13.

“Moody’s” means Moody’s Investors Service, Inc.

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Net Income” means with respect to any Person for any period that net income of such Person for such period determinant in accordance with GAAP; provided that there shall be excluded, without duplication, from such net income (to the extent otherwise included therein):

(a)

net extraordinary gains and losses (other than, in the case of losses, losses resulting from charges against net income to establish or increase reserves for potential environmental liabilities and reserves for exposure of such Person under rate cases);

(b)

net gains or losses in respect of dispositions of assets other than in the ordinary course of business;

(c)

any gains or losses attributable to write-ups or write-downs of assets; and

(d)

proceeds of any key man insurance, or any insurance on property, plant or equipment.

“Net Worth” means, as to the Company at any date, the amount of partners’ capital of the Company determined as of such date in accordance with GAAP; provided, there shall be excluded, without duplication, from such determination (to the extent otherwise included therein) the amount of accumulated other comprehensive gain or loss as of such date.

“Note” means a Committed Note or a Competitive Note.

“Notice of Account Designation” has the meaning specified in Section 2.07.

“Notice of Default” has the meaning specified in Section 7.01.

“Notice of Prepayment” has the meaning specified in Section 2.11.

“Obligations” means collectively:

(a)

the payment of all indebtedness and liabilities by, and performance of all other obligations of, the Company in respect of the Loans;

(b)

all obligations of the Company and the Subsidiary Borrower under, with respect to, and relating to the Letters of Credit whether contingent or matured;

(c)

the payment of all other indebtedness and liabilities by and performance of all other obligations of, the Company and the Subsidiary Borrower to the Administrative Agent, the Issuing Banks and the Lenders under, with respect to, and arising in connection with, the Loan Documents, and the payment of all indebtedness and liabilities of the Company and the Subsidiary Borrower to the Administrative Agent, the Issuing Banks and the Lenders for fees, costs, indemnification and expenses (including reasonable attorneys’ fees and expenses) under the Loan Documents;

(d)

the reimbursement of all sums advanced and costs and expenses incurred by the Administrative Agent under any Loan Document (whether directly or indirectly) in connection with the Obligations or any part thereof or any renewal, extension or change of or substitution for the Obligations or, any part thereof, whether such advances, costs and expenses were made or incurred at the request of either Borrower or the Administrative Agent; and

(e)

all renewals, extensions, amendments and changes of, or substitutions or replacements for, all or any part of the items described under clauses (a) through (d) above.

“OECD” means the Organization for Economic Cooperation and Development (or any successor).

“Other Taxes” means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement.

“Participant” has the meaning specified in Section 10.05(e).

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“Performance Level” means a reference to one of Performance Level I, Performance Level II, Performance Level III, Performance Level IV or Performance Level V.

“Performance Level I” means, at any date of determination, that the Company shall have a Company Debt Rating in effect on such date of at least A- by S&P or at least A3 by Moody’s.

“Performance Level II” means, at any date of determination, (a) that the Performance Level does not meet the requirements of Performance Level I and (b) that the Company shall have a Company Debt Rating in effect on such date of at least BBB+ by S&P or at least Baa1 by Moody’s.

“Performance Level III” means, at any date of determination, (a) that the Performance Level does not meet the requirements of Performance Level I or Performance Level II and (b) that the Company shall have a Company Debt Rating in effect on such date of at least BBB by S&P or at least Baa2 by Moody’s.

“Performance Level IV” means, at any date of determination, (a) that the Performance Level does not meet the requirements of Performance Level I, Performance Level II or Performance Level III and (b) that the Company shall have a Company Debt Rating in effect on such date of at least BBB- by S&P or at least Baa3 by Moody’s.

“Performance Level V” means, at any date of determination, that the Performance Level does not meet the requirements of Performance Level I, Performance Level II, Performance Level III or Performance Level IV.

“Permitted Encumbrances” means:

(a)

Liens imposed by law for taxes that are not yet due or are being contested in compliance with Section 5.03;

(b)

carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in compliance with Section 5.03;

(c)

pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

(d)

deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

(e)

easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Company or any Subsidiary;

(f)

judgment and attachment Liens not giving rise to an Event of Default or Liens created by or existing from any litigation or legal proceeding that are being contested in compliance with Section 5.03;

(g)

any interest or title of a lessor in property subject to any Capital Lease Obligation or operating lease which, in each case, is permitted under this Agreement; and

(h)

Liens in favor of collecting or payor banks having a right of setoff, revocation, refund or chargeback with respect to money or instruments of the Company or any Subsidiary on deposit with or in possession of such bank;

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness, except as provided in clause (g) above.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Company or any member of its ERISA Group is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Plantation Pipe Line” means Plantation Pipe Line Company, a Delaware and Virginia corporation.

“Pledged Bonds” has the meaning specified in Section 2.06.

“Prime Rate” shall mean the rate of interest from time to time announced publicly by the Administrative Agent at the Principal Office as its prime commercial lending rate.  Such rate is set by the Administrative Agent as a general reference rate of interest, taking into account such factors as the Administrative Agent may deem appropriate, it being understood that many of the Administrative Agent’s commercial or other loans are priced in relation to such rate, that it is not necessarily the lowest or best rate actually charged to any customer and that the Administrative Agent may make various commercial or other loans at rates of interest having no relationship to such rate.

“Principal Office” shall mean the principal office of the Administrative Agent, presently located at 301 South College Street, TW-10, Charlotte, North Carolina  28288-0608 or such other location as designated by the Administrative  Agent from time to time.

“Register” has the meaning specified in Section 10.05.

“Regulation A” means Regulation A of the Board, as the same is from time to time in effect, and all official rulings and interpretations thereunder or thereof.

“Regulation D” means Regulation D of the Board, as the same is from time to time in effect, and all official rulings and interpretations thereunder or thereof.

“Regulation T” means Regulation T of the Board, as the same is from time to time in effect, and all official rulings and interpretations thereunder or thereof.

“Regulation U” means Regulation U of the Board, as the same is from time to time in effect, and all official rulings and interpretations thereunder or thereof.

“Regulation X” means Regulation X of the Board, as the same is from time to time in effect, and all official rulings and interpretations thereunder or thereof.

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.

“Required Lenders” means, at any time, Lenders having Committed Credit Exposures and unused Commitments representing more than 50% of the sum of the total Committed Credit Exposures and unused Commitments at such time.

“Requirement of Law” shall mean any law, statute, code, ordinance, order, determination, rule, regulation, judgment, decree, injunction, franchise, permit, certificate, license, authorization or other directive or requirement (whether or not having the force of law), including Environmental Laws, energy regulations and occupational, safety and health standards or controls, of any Governmental Authority.

“Reserve Requirement” means, for any day as applied to a Eurodollar Loan, the aggregate (without duplication) of the rates (expressed as a decimal fraction) of reserve requirements in effect on such day (including basic, supplemental, marginal and emergency reserves under any regulations of the Board or other Governmental Authority having jurisdiction with respect thereto) dealing with reserve requirements prescribed for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D) maintained by a member bank of the Federal Reserve System.  Eurodollar Loans shall be deemed to constitute Eurocurrency Liabilities and to be subject to such reserve requirements without benefit of or credit for proration, exceptions or offsets which may be available from time to time to any Lender under Regulation D.

“Responsible Officer” means, as used with respect to the Company or the Subsidiary Borrower, the Chairman, Vice Chairman, President, any Vice President, Chief Executive Officer, Chief Financial Officer Controller or Treasurer of the Delegate.

“Restricted Payment” means any distribution (whether in cash, securities or other property) with respect to any partnership interest in the Company, or any payment (whether in cash, securities or other property), including any deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such partnership interest or any option or other right to acquire any such partnership interest; provided, however, that (a) distributions with respect to the partnership interests in the Company that do not exceed, with respect to any fiscal quarter of the Company, the amount of Available Cash for such quarter shall not constitute Restricted Payments so long as both before and after the making of such distribution, no Event of Default or Default shall have occurred and be continuing, (b) any partnership interest split, partnership interest reverse split, dividend of Company partnership interests or similar transaction will not constitute a Restricted Payment, (c) the application by the Company after the date of this Agreement to the purchase, redemption, retirement, cancellation, or termination of partnership interests in the Company of an aggregate amount not greater than the excess of (i) $100,000,000, over (ii) the aggregate amount of all amounts applied to such purchases, redemptions, retirements, cancellations or terminations during the period beginning one day after the Effective Date and extending through and including the date of this Agreement shall not constitute Restricted Payments, and (d) acquisitions by officers, directors and employees of the Company of partnership interests in the Company through cashless exercise of options pursuant to the Company’s Common Unit Option Plan shall not constitute Restricted Payments.

“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc.

“SEC” means the Securities and Exchange Commission or any Governmental Authority succeeding to its function.

“Stated Maturity Date” means August 18, 2010.

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.  Unless the context otherwise clearly requires, references in this Agreement to a “Subsidiary” or the “Subsidiaries” refer to a Subsidiary or the Subsidiaries of the Company.  Notwithstanding the foregoing, Plantation Pipe Line shall not be a Subsidiary of the Company until such time as its assets and liabilities, profit or loss and cash flow are required under GAAP to be consolidated with those of the Company.

“Subsidiary Borrower” has the meaning specified in the introduction to this Agreement.

“Subsidiary Borrower Letter of Credit” means irrevocable letter of credit No. 5113181 issued by First Union National Bank (now Wachovia) in the original face amount of $24,128,548 for the account of the Subsidiary Borrower and for the benefit of Trustee in the form of Exhibit 1.01B-1 hereto.

“Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time.  The Swingline Exposure of any Lender at any time shall be its Applicable Percentage of the total Swingline Exposure at such time.

“Swingline Lender” means Wachovia Bank, National Association, in its capacity as lender of Swingline Loans hereunder.

“Swingline Loan” means a Loan made pursuant to Section 2.05.

“Swingline Note” means a promissory note of the Company payable to the order of the Swingline Lender in substantially the form of Exhibit 1.01-E, together with all modifications, extensions, renewals and rearrangements thereof.

“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.

“Total Capitalization” means, as to the Company at any date, the sum of Consolidated Indebtedness (determined at such date) and the Net Worth (determined as at the end of the most recent fiscal quarter of the Company for which financial statements pursuant to Section 5.01(a) or Section 5.01(b), as applicable, have been delivered).

“Total Commitment” means the sum of the Commitments of the Lenders.

“Transactions” means the execution, delivery and performance by the Borrowers of this Agreement and the other Loan Documents, the borrowing of Loans, the use of the proceeds thereof and the Existing Letters of Credit and the issuance of the other Letters of Credit hereunder.

“Trustee” means JPMorgan Chase Bank, N.A., as successor to Bank One, Texas, NA, as the beneficiary of the Subsidiary Borrower Letter of Credit and any successor beneficiary.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the LIBOR Rate or  the Alternate Base Rate.

“United States” and “U.S.” each means United States of America.

“Utilization Fee” has the meaning specified in Section 2.12(d).

“Utilization Fee Rate” means at any time and from time to time, a percentage per annum equal to 0.10%:

“Voting Stock” means, with respect to any Person, securities of any class or classes of Capital Stock in such Person entitling holders thereof (whether at all times or only so long as no senior class of stock has voting power by reason of any contingency) to vote in the election of members of the Board of Directors or other governing body of such Person or its managing member or its general partner (or its managing general partner if there is more than one general partner).

“Wachovia” means Wachovia Bank, National Association, in its individual capacity.

“Wholly-owned Subsidiary” means a Subsidiary of which all issued and outstanding Capital Stock (excluding (a) in the case of a corporation, directors’ qualifying shares, (b) in the case of a limited partnership, a 2% general partner interest and (c) in the case of a limited liability company, a 2% managing member interest) is directly or indirectly owned by the Company.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

SECTION 1.02

Classification of Loans and Borrowings.  For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Committed Loan” or a “Competitive Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar Committed Loan” or a “Fixed Rate Loan”).  Borrowings also may be classified and referred to by Class (e.g., a “Committed Borrowing” or a “Competitive Borrowing”) or by Type (e.g., a “Eurodollar Borrowing” or a “Fixed Rate Borrowing”) or by Class and Type (e.g., a “Eurodollar Committed Borrowing” or a “Fixed Rate Competitive Borrowing”).

SECTION 1.03

Accounting Terms; Changes in GAAP.  All accounting and financial terms used herein and not otherwise defined herein and the compliance with each covenant contained herein which relates to financial matters shall be determined in accordance with GAAP applied by the Company on a consistent basis, except to the extent that a deviation therefrom is expressly stated.  Should there be a change in GAAP from that in effect on the Execution Date, such that any of the defined terms set forth in Section 1.01 and/or compliance with the covenants set forth in Article VI would then be calculated in a different manner or with different components or any of such covenants and/or defined terms used therein would no longer constitute meaningful criteria for evaluating the matters addressed thereby prior to such change in GAAP (a) the Company and the Required Lenders agree, within the 60-day period following any such change, to negotiate in good faith and enter into an amendment to this Agreement in order to modify the defined terms set forth in Section 1.01 or the covenants set forth in Article VI, or both, in such respects as shall reasonably be deemed necessary by the Required Lenders that the criteria for evaluating the matters addressed by such covenants are substantially the same criteria as were effective prior to any such change in GAAP, and (b) the Company shall be deemed to be in compliance with such covenants during the 60-day period following any such change, or until the earlier date of execution of such amendment, if and to the extent that the Company would have been in compliance therewith under GAAP as in effect immediately prior to such change.

SECTION 1.04

Interpretation.  In this Agreement, unless a clear contrary intention appears:

(i)

the singular number includes the plural number and vice versa;

(ii)

reference to any gender includes each other gender;

(iii)

the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision;

(iv)

reference to any Person includes such Person’s successors and assigns but, if applicable, only if such successors and assigns are permitted by this Agreement, and reference to a Person in a particular capacity excludes such Person in any other capacity or individually; provided that nothing in this clause (iv) is intended to authorize any assignment not otherwise permitted by this Agreement;

(v)

except as expressly provided to the contrary herein, reference to any agreement, document or instrument (including this Agreement) means such agreement, document or instrument as amended, supplemented or modified, or extended, renewed, refunded, substituted or replaced, and in effect from time to time in accordance with the terms thereof and, if applicable, the terms hereof, and reference to any Note or other note or Indebtedness or other indebtedness includes any note or indebtedness issued pursuant hereto in extension or renewal or refunding thereof or in substitution or replacement therefor;

(vi)

unless the context indicates otherwise, reference to any Article, Section, Schedule or Exhibit means such Article or Section hereof or such Schedule or Exhibit hereto;

(vii)

the word “including” (and with correlative meaning “include”) means including, without limiting the generality of any description preceding such term;

(viii)

with respect to the determination of any period of time, except as expressly provided to the contrary, the word “from” means “from and including” and the word “to” means “to but excluding”;

(ix)

reference to any law, rule or regulation means such as amended, modified, codified or reenacted, in whole or in part, and in effect from time to time; and

(x)

the words “asset” and “property” shall be construed to have the same meaning and effect and refer to any and all tangible and intangible assets and properties.

 

ARTICLE II.

THE CREDITS

 

SECTION 2.01

Commitments.  (a) Subject to the terms and conditions set forth herein, each Lender agrees to make Committed Loans to the Company from time to time during the Availability Period in an aggregate principal amount that will not result in (i) such Lender’s Committed Credit Exposure exceeding such Lender’s Commitment or (ii) the sum of the total Committed Credit Exposures, plus the aggregate principal amount of outstanding Competitive Loans, exceeding the Total Commitment.  In furtherance of the foregoing, the aggregate amount of the Total Commitment shall be deemed used from time to time to the extent of the aggregate amount of the Competitive Loans then outstanding, and such deemed use of the Total Commitment shall be applied to the Lenders ratably according to their respective Commitments.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Company may borrow, prepay and reborrow Committed Loans.

(b)

The Company shall have the right, without the consent of the Lenders but with the prior approval of the Administrative Agent, not to be unreasonably withheld, to cause from time to time an increase in the total Commitments of the Lenders by adding to this Agreement one or more additional Lenders or by allowing one or more Lenders to increase their respective Commitments; provided however (1) no Default or Event of Default shall have occurred hereunder which is continuing, (2) no such increase shall cause the aggregate Commitments hereunder to exceed $1,850,000,000 and (3) no Lender’s Commitment shall be increased without such Lender’s consent.

SECTION 2.02

Loans and Borrowings.  ii) Each Committed Loan shall be made as part of a Borrowing consisting of Committed Loans made by the Lenders ratably in accordance with their respective Commitments.  The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments and Competitive Bids of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.

(b)

Subject to Section 2.14, (i) each Committed Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Company may request in accordance herewith, and (ii) each Competitive Borrowing shall be comprised entirely of Eurodollar Loans or Fixed Rate Loans as the Company may request in accordance herewith.  Each Swingline Loan shall be an ABR Loan.  Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Company to repay such Loan in accordance with the terms of this Agreement.

(c)

At the commencement of each Interest Period for any Eurodollar Committed Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $3,000,000.  At the time that each ABR Committed Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $1,000,000; provided that an ABR Committed Borrowing may be in an aggregate amount that is equal to the entire unused balance of the Total Commitment or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(f).  Each Swingline Loan shall be in an amount that is an integral multiple of $100,000 and not less than $5,000,000.  Each Competitive Bid Request shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $25,000,000.  Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of twelve Eurodollar Committed Borrowings outstanding.

(d)

Notwithstanding any other provision of this Agreement, the Company shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Stated Maturity Date.

SECTION 2.03

Requests for Committed Borrowings.  To request a Committed Borrowing, the Company shall notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 10:00 a.m., Charlotte, North Carolina, time, three Business Days before the date of the proposed Borrowing and (b) in the case of an ABR Borrowing, not later than 10:00 a.m., Charlotte, North Carolina, time, on the date of the proposed Borrowing.  Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request in a form of Exhibit 2.03 (a “Borrowing Request”) and signed by the Company.  Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02:

(i)

the aggregate amount of the requested Borrowing;

(ii)

the date of such Borrowing, which shall be a Business Day;

(iii)

whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

(iv)

in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of  the term “Interest Period”; and

(v)

the location and number of the Company’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.07.

If no election as to the Type of Committed Borrowing is specified, then the requested Committed Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with respect to any requested Eurodollar Committed Borrowing, then the Company shall be deemed to have selected an Interest Period of one month’s duration.  Promptly following receipt of a Borrowing Request in accordance with this Section 2.03, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.04

Competitive Bid Procedure.  (a)  Subject to the terms and conditions set forth herein, from time to time during the Availability Period the Company may request Competitive Bids and may (but shall not have any obligation to) accept Competitive Bids and borrow Competitive Loans; provided that the sum of the total Committed Credit Exposures plus the aggregate principal amount of outstanding Competitive Loans, at any time shall not exceed the Total Commitment.  To request Competitive Bids, the Company shall notify the Administrative Agent of such request by telephone, in the case of a Eurodollar Borrowing, not later than 10:00 a.m., Charlotte, North Carolina, time, four Business Days before the date of the proposed Borrowing and, in the case of a Fixed Rate Borrowing, not later than 10:00 a.m., Charlotte, North Carolina, time, one Business Day before the date of the proposed Borrowing; provided that the Company may submit up to (but not more than) three Competitive Bid Requests on the same day, but a Competitive Bid Request shall not be made on any of the five Business Days next succeeding the date of any previous Competitive Bid Request, unless any and all such previous Competitive Bid Requests shall have been withdrawn or all Competitive Bids received in response thereto rejected.  Each such telephonic Competitive Bid Request shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Competitive Bid Request signed by the Company.  Each such telephonic and written Competitive Bid Request shall specify the following information in compliance with Section 2.02:

(i)

the aggregate amount of the requested Borrowing;

(ii)

the date of such Borrowing, which shall be a Business Day;

(iii)

whether such Borrowing is to be a Eurodollar Borrowing or a Fixed Rate Borrowing;

(iv)

the Interest Period to be applicable to such Borrowing, which shall be a period contemplated by the definition of the term “Interest Period”; and

(v)

the location and number of the Company’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.07.

Promptly following receipt of a Competitive Bid Request in accordance with this Section, the Administrative Agent shall notify the Lenders of the details thereof by telecopy (in substantially the form set forth in Exhibit 2.04-B), inviting the Lenders to submit Competitive Bids.

(b)

Each Lender may (but shall not have any obligation to) make one or more Competitive Bids to the Company in response to a Competitive Bid Request.  Each Competitive Bid by a Lender must be substantially the form of Exhibit 2.04-C and must be received by the Administrative Agent by telecopy, in the case of a Eurodollar Competitive Borrowing, not later than 10:00 a.m., Charlotte, North Carolina, time, three Business Days before the proposed date of such Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not later than 10:00 a.m., Charlotte, North Carolina, time, on the proposed date of such Competitive Borrowing.  Competitive Bids that do not conform substantially to the form of Exhibit 2.04-C may be rejected by the Administrative Agent, and the Administrative Agent shall notify the applicable Lender as promptly as practicable.  Each Competitive Bid shall specify (i) the principal amount (which shall be a minimum of $5,000,000 and an integral multiple of $1,000,000 and which may equal the entire principal amount of the Competitive Borrowing requested by the Company) of the Competitive Loan or Loans that the Lender is willing to make, (ii) the Competitive Bid Rate or Rates at which the Lender is prepared to make such Loan or Loans (expressed as a percentage rate per annum in the form of a decimal to no more than four decimal places) and (iii) the Interest Period applicable to each such Loan and the last day thereof (which shall conform to that specified in the Company’s related Competitive Bid Request).

(c)

The Administrative Agent shall promptly notify the Company by telecopy of the Competitive Bid Rate and the principal amount specified in each Competitive Bid and the identity of the Lender that shall have made such Competitive Bid.

(d)

Subject only to the provisions of this paragraph, the Company may accept or reject any Competitive Bid in whole or (to the extent herein below provided) in part.  The Company shall notify the Administrative Agent by telephone, confirmed by telecopy in a form approved by the Administrative Agent, whether and to what extent it has decided to accept or reject each Competitive Bid, in the case of a Eurodollar Competitive Borrowing, not later than 11:30 a.m., Charlotte, North Carolina, time, three Business Days before the date of the proposed Competitive Borrowing, and in the case of a Fixed Rate Borrowing, not later than 11:30 a.m., Charlotte, North Carolina, time, on the proposed date of the Competitive Borrowing; provided that (i) the failure of the Company to give such notice shall be deemed to be a rejection of each Competitive Bid, (ii) the Company shall not accept a Competitive Bid made at a particular Competitive Bid Rate if the Company rejects a Competitive Bid made at a lower Competitive Bid Rate, (iii) the aggregate amount of the Competitive Bids accepted by the Company shall not exceed the aggregate amount of the requested Competitive Borrowing specified in the related Competitive Bid Request, (iv) to the extent necessary to comply with clause (iii) above, the Company may accept Competitive Bids at the same Competitive Bid Rate in part, which acceptance, in the case of multiple Competitive Bids at such Competitive Bid Rate, shall be made pro rata in accordance with the amount of each such Competitive Bid, and (v) except pursuant to clause (iv) above, no Competitive Bid shall be accepted for a Competitive Loan unless such Competitive Loan is in a minimum principal amount of $5,000,000  and an integral multiple of $1,000,000; provided further that if a Competitive Loan must be in an amount less than $5,000,000 because of the provisions of clause (iv) above, such Competitive Loan may be for a minimum of $1,000,000 or any integral multiple thereof, and in calculating the pro rata allocation of acceptances of portions of multiple Competitive Bids at a particular Competitive Bid Rate pursuant to clause (iv) the amounts shall be rounded to integral multiples of $1,000,000 in a manner determined by the Company.  A notice given by the Company pursuant to this Section 2.04(d) shall be irrevocable.

(e)

The Administrative Agent shall promptly notify each bidding Lender by telecopy whether or not its Competitive Bid has been accepted (and, if so, the amount and Competitive Bid Rate so accepted), and each successful bidder will thereupon become bound, subject to the terms and conditions hereof, to make the Competitive Loan in respect of which its Competitive Bid has been accepted.  After completing the notifications referred to in the immediately preceding sentence, the Administrative Agent shall notify each Lender of the aggregate principal amount of all Competitive Bids accepted.

(f)

Upon determination by the Administrative Agent of the LIBOR Rate applicable to any Eurodollar Competitive Loan to be made by any Lender pursuant to a Competitive Bid that has been accepted by a Company pursuant to Section 2.04(d), the Administrative Agent shall notify such Lender of (i) the applicable LIBOR Rate and (ii) the sum of the applicable LIBOR Rate plus the Margin bid by such Lender.

(g)

If the Administrative Agent or any of its Affiliates shall at any time have a Commitment hereunder and shall elect to submit a Competitive Bid in its capacity as a Lender, it shall submit such Competitive Bid directly to the Company at least one quarter of an hour earlier than the time by which the other Lenders are required to submit their Competitive Bids to the Administrative Agent pursuant to paragraph (b) of this Section.

SECTION 2.05

Swingline Loans.  iii) Subject to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Company from time to time during the Availability Period, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $25,000,000 or (ii) the sum of the total Committed Credit Exposures, plus the aggregate principal amount of outstanding Competitive Loans, exceeding the Total Commitment; provided that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Company may borrow, prepay and reborrow Swingline Loans.

(b)

To request a Swingline Loan, the Company shall notify the Administrative Agent of such request by telephone (confirmed by telecopy), not later than 12:00 noon, Charlotte, North Carolina, time, on the day of a proposed Swingline Loan.  Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan.  The Administrative Agent (if not the Swingline Lender) will promptly advise the Swingline Lender of any such notice received from the Company.  So long as the Swingline Lender and the Administrative Agent are Wachovia or (if not Wachovia), the same institution is acting both as the Administrative Agent and as the Swingline Lender, the Swingline Lender shall make each Swingline Loan available to the Company by means of a credit to the deposit account of the Company with the Swingline Lender identified in the most recent Notice of Account Designation by 3:00 p.m., Charlotte, North Carolina, time, on the requested date of such Swingline Loan.

(c)

The Swingline Lender may by written notice given to the Administrative Agent not later than 12:00 noon, Charlotte, North Carolina, time, on any Business Day require the Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding.  Such notice shall specify the aggregate amount of Swingline Loans in which Lenders will participate.  Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Lender, specifying in such notice such Lender’s Applicable Percentage of such Swingline Loan or Loans.  Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Lender’s Applicable Percentage of such Swingline Loan or Loans.  Each Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or Event of Default or reduction or termination of the Total Commitment, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.  Each Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders.  The Administrative Agent shall notify the Company of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender.  Any amounts received by the Swingline Lender from the Company (or other party on behalf of the Company) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear.  The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Company or the Subsidiary Borrower of any default in the payment thereof.

SECTION 2.06

Letters of Credit.  

(a)

Existing Letters of Credit.  The parties hereto acknowledge that on and after the Effective Date the Existing Letters of Credit shall be Letters of Credit issued by each Issuing Bank indicated as such on Exhibit 1.01B-2 for the account of the Subsidiary Borrower in the case of the Subsidiary Borrower Letter of Credit, and the Company with respect to all other Existing Letters of Credit pursuant to this Agreement.  The Subsidiary Borrower hereby pledges, assigns, transfers and delivers to Wachovia, as the Issuing Bank that has issued the Subsidiary Borrower Letter of Credit, all its right, title and interest to all Bonds purchased with funds drawn under the Subsidiary Borrower Letter of Credit (the “Pledged Bonds”), and hereby grants to such Issuing Bank a first lien on, and security interest in, its rights, title and interest in and to the Pledged Bonds, the interest thereon and all proceeds thereof or substitutions therefor, as collateral security for the prompt and complete payment when due of the amounts payable in respect of the Subsidiary Borrower Letter of Credit.  During such time as any Bonds are Pledged Bonds, the Issuing Bank that has issued the Subsidiary Borrower Letter of Credit shall be entitled to exercise all of the rights of a holder of Bonds with respect to voting, consenting and directing the Trustee as if such Issuing Bank were the owner of such Bonds, and the Subsidiary Borrower hereby grants and assigns to such Issuing Bank all such rights.

(b)

General.  Subject to the terms and conditions set forth herein, the Company may request the issuance of Letters of Credit from an Issuing Bank for its own account individually or for its own account and that of any Subsidiary as co-applicants, in a form reasonably acceptable to the Administrative Agent and such Issuing Bank, at any time and from time to time during the Availability Period.  In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any Application (as defined in Section 2.06(c)) or other agreement submitted by the Company to, or entered into by the Company with, the Issuing Bank thereof relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

(c)

Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Company shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the designated Issuing Bank) to the designated Issuing Bank and the Administrative Agent (not less than five Business Days in advance of the requested date of issuance, amendment, renewal or extension) a notice (a “Letter of Credit Request”) requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, the date of issuance, amendment, renewal or extension, the date on which such Letter of Credit is to expire (which shall comply with Section 2.06(d)), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit.  If requested by the Issuing Bank that has been requested to issue such Letter of Credit, the Company also shall submit a letter of credit application on such Issuing Bank’s standard form (an “Application”) in connection with any request for a Letter of Credit.  A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Company shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension, the sum of the total Committed Credit Exposures, plus the aggregate principal amounts of outstanding Competitive Loans, at any time shall not exceed the Total Commitment.  Upon the issuance, amendment, renewal or extension of each Letter of Credit, the Issuing Bank that has issued such Letter of Credit will notify the Administrative Agent, who, in turn, will notify the Lenders, of the amount and type of such Letter of Credit that is issued, amended, renewed or extended pursuant to this Agreement.

(d)

Expiration Date.  Each Letter of Credit (other than the Subsidiary Borrower Letter of Credit) shall expire at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is five Business Days prior to the Stated Maturity Date.  

(e)

Participations.  On the Effective Date with respect to the Existing Letters of Credit and by the issuance of each other Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Banks or the Lenders, the Issuing Bank that has issued such Letter of Credit hereby grants to each Lender, and each Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit.  In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of such Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by such Issuing Bank and not reimbursed by the Company on the date due as provided in Section 2.06(f), or of any reimbursement payment required to be refunded to the Company for any reason.  Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or an Event of Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

(f)

Reimbursement.  If any Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower for whose account such Letter of Credit was issued shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 12:00 noon, Charlotte, North Carolina, time, on the date that such LC Disbursement is made, if such Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m., Charlotte, North Carolina, time, on such date, or, if such notice has not been received by such Borrower prior to such time on such date, then not later than 12:00 noon, Charlotte, North Carolina, time, on (i) the Business Day that such Borrower receives such notice, if such notice is received prior to 10:00 a.m., Charlotte, North Carolina, time, on the day of receipt, or (ii) the Business Day immediately following the day that such Borrower receives such notice, if such notice is not received prior to such time on the day of receipt; provided that if such Borrower fails to make such payment when due, then, upon demand by such Issuing Bank sent to the Administrative Agent and each Lender before 10:00 a.m., Charlotte, North Carolina, time, each Lender shall pursuant to Section 2.07 on the same day make available to the Administrative Agent for delivery to such Issuing Bank, immediately available funds in an amount equal to such Lender’s Applicable Percentage of the amount of such payment by such Issuing Bank, and the funding of such amount shall be treated as the funding of an ABR Loan by such Lender to such Borrower.  Notwithstanding anything herein or in any other Loan Document to the contrary, the funding obligations of the Lenders set forth in this Section 2.06(f) shall be binding regardless of whether or not a Default or an Event of Default shall exist or the other conditions precedent in Article III are satisfied at such time. If and to the extent any Lender fails to effect any payment due from it under this Section 2.06(f) to the Administrative Agent, then interest shall accrue on the obligation of such Lender to make such payment from the date such payment became due to the date such obligation is paid in full at a rate per annum equal to the Federal Funds Effective Rate.  The failure of any Lender to pay its Applicable Percentage of any payment under any Letter of Credit shall not relieve any other Lender of its obligation hereunder to pay to the Administrative Agent its Applicable Percentage of any payment under any Letter of Credit on the date required, as specified above, but no Lender shall be responsible for the failure of any other Lender to pay to the Administrative Agent such other Lender’s Applicable Percentage of any such payment.

(g)

Obligations Absolute.  The Company’s obligation to reimburse (or in the case of the Subsidiary Borrower Letter of Credit, the Subsidiary Borrower’s obligation to reimburse) LC Disbursements as provided in Section 2.06(f) shall, to the extent permitted by law, be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of:

(i)

any lack of validity or enforceability of any Letter of Credit, this Agreement or any other Loan Document, or any term or provision herein or therein;

(ii)

any amendment or waiver of or any consent to departure from all or any of the provisions of any Letter of Credit, this Agreement or any other Loan Document;

(iii)

the existence of any claim, setoff, defense or other right that either Borrower, or any Affiliate thereof or any other Person may at any time have against the beneficiary under any Letter of Credit, any Issuing Bank, the Administrative Agent or any Lender or any other Person, whether in connection with this Agreement or any other related or unrelated agreement or transaction;

(iv)

any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect;

(v)

payment by any Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit; and

(vi)

any other act or omission to act or delay of any kind of the Issuing Banks, the Lenders, the Administrative Agent or any other Person or any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section 2.06, constitute a legal or equitable discharge of either Borrower’s obligations hereunder.

Neither the Administrative Agent, the Lenders nor the Issuing Banks, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder, including any of the circumstances specified in clauses (i) through (vi) above, as well as any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of any Issuing Bank; provided that the foregoing shall not be construed to excuse any Issuing Bank from liability to the Borrower for whose account such Letter of Credit was issued to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by each Borrower to the extent permitted by applicable law) suffered by such Borrower  that are caused by such Issuing Bank’s failure to exercise the agreed standard of care (as set forth below) in determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof.  The parties hereto expressly agree that each Issuing Bank shall have exercised the agreed standard of care in the absence of gross negligence, willful misconduct or unlawful conduct on the part of such Issuing Bank.  Without limiting the generality of the foregoing, it is understood that each Issuing Bank may accept documents that appear on their face to be in substantial compliance with the terms of a Letter of Credit, without responsibility for further investigation, regardless of any notice or information to the contrary, and may make payment upon presentation of documents that appear on their face to be in substantial compliance with the terms of such Letter of Credit; provided that each Issuing Bank shall have the right, in its sole discretion, to decline to accept such documents and to make such payment if such documents are not in strict compliance with the terms of such Letter of Credit.

(h)

Disbursement Procedures.  Each Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit issued by it.  Each Issuing Bank shall promptly notify the Administrative Agent and the Borrower for whose account such Letter of Credit was issued by telephone (confirmed by telecopy) of such demand for payment and whether such Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve either Borrower of its obligation to reimburse such Issuing Bank and the Lenders with respect to any such LC Disbursement.

(i)

Interim Interest.  If any Issuing Bank shall make any LC Disbursement, then, unless the Company (or, in the case of the Subsidiary Borrower Letter of Credit, the Subsidiary Borrower) shall reimburse such LC Disbursement in full on the date specified in Section 2.06(f), the unpaid amount thereof shall bear interest, for each day from the date such LC Disbursement is made to the date that the Company (or, in the case of the Subsidiary Borrower Letter of Credit, the Subsidiary Borrower) reimburses such LC Disbursement (or all Lenders make the payments to the Administrative Agent contemplated by Section 2.06(f) and treated pursuant to said Section as constituting the funding of ABR Loans), at the rate per annum then applicable to ABR Committed Loans.

(j)

Intentionally Omitted.  

(k)

Cash Collateralization.  If (i) any Event of Default shall occur and be continuing, on the Business Day that the Company receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Lenders with LC Exposure representing greater than 51% of the total LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, (ii) a Change in Control shall occur, or (iii) any Letter of Credit remains outstanding on the Stated Maturity Date, the Company shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders, an amount in cash equal to the LC  Exposure as of such date plus any accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or notice of any kind, upon the occurrence of any Event of Default with respect to either Borrower described in clause (g) or (h) of Section 7.01.  Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrowers under this Agreement and the other Loan Documents.  The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account.  Other than any interest earned on the investment of such deposits (which investments shall be made at the option and sole discretion of the Administrative Agent, but only in investments rated at least AA (or equivalent) by at least one nationally recognized rating agency, if such deposit has been made by reason of a Change in Control having occurred, and in any event at the Company’s risk and expense) such deposits shall not bear interest.  Interest or profits, if any, on such investments shall accumulate in such account and may, subject to the immediately preceding sentence be reinvested from time to time.  Moneys in such account shall be applied by the Administrative Agent to reimburse each Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrowers for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Lenders with LC Exposure representing greater than 51% of the total LC Exposure), be applied to satisfy other obligations of the Borrowers under this Agreement and the other Loan Documents.  If the Company is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Company within three Business Days after all Events of Default have been cured or waived.

SECTION 2.07

Funding of Borrowings.  iv) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 2:00 p.m., Charlotte, North Carolina, time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders; provided that Swingline Loans shall be made as provided in Section 2.05.  Not later than 2:00 p.m. (Charlotte, North Carolina, time) on the proposed Borrowing Date, each Lender will make available to the Administrative Agent, for the account of the Company, at the office of the Administrative Agent in funds immediately available to the Administrative Agent, such Lender’s Loans to be made on such Borrowing Date.  The Company hereby irrevocably authorizes the Administrative Agent to disburse the proceeds of each Borrowing requested pursuant to this Section 2.07 in immediately available funds by crediting or wiring such proceeds to the deposit account of the Company identified in the most recent Notice of Account Designation substantially in the form of Exhibit 2.07 hereto (a “Notice of Account Designation”) delivered by the Company to the Administrative Agent or otherwise agreed upon by the Company and the Administrative Agent from time to time; provided that ABR Committed Loans made to finance the reimbursement of an LC Disbursement as provided in Sections 2.06(e) and (f) shall be remitted by the Administrative Agent to the Issuing Bank that has made such LC Disbursement.

(b)

Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing (or prior to 12:00 noon, Charlotte, North Carolina, time, on such date in the case of an ABR Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.07(a) and may, in reliance upon such assumption, make available to the Company a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Company severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from the date such amount is made available to the Company to the date of payment to the Administrative Agent, at (i) in the case of such Lender, the Federal Funds Effective Rate or (ii) in the case of the Company, the interest rate applicable to ABR Loans.  If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing.

SECTION 2.08

Interest Elections.  v) Subject to Section 2.14, each Committed Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Committed Borrowing, shall have an initial Interest Period as specified in such Borrowing Request.  Thereafter, subject to Section 2.14, the Company may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Committed Borrowing, may elect Interest Periods therefor, all as provided in this Section 2.08.  The Company may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.  This Section 2.08 shall not apply to Competitive Borrowings or Swingline Borrowings, which may not be converted or continued.

(b)

To make an election pursuant to this Section 2.08, the Company shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Company were requesting a Committed Borrowing of the Type resulting from such election to be made on the effective date of such election.  Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in the form of Exhibit 2.08 (an “Interest Election Request”).

(c)

Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:

(i)

the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

(ii)

the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;

(iii)

whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and

(iv)

if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.

If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Company shall be deemed to have selected an Interest Period of one month’s duration.

(d)

Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.

(e)

If the Company fails to deliver a timely Interest Election Request with respect to a Eurodollar Committed Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing.  Notwithstanding any contrary provision hereof, if and so long as an Event of Default is continuing (i) no outstanding Committed Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Committed Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.

SECTION 2.09

Termination and Reduction of Commitments.  (a) Unless previously terminated, the Commitments shall terminate on the Maturity Date.

(b)

The Company may at any time terminate, or from time to time reduce, the Total Commitment, in whole or in part; provided that (i) each partial reduction of the Total Commitment shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the Company shall not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.11, the sum of the total Committed Credit Exposures, plus the aggregate principal amount of outstanding Competitive Loans, would exceed the Total Commitment.

(c)

The Company shall notify the Administrative Agent of any election to terminate or reduce the Total Commitment under Section 2.09(b) at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof.  Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof.  Each notice delivered by the Company pursuant to this Section 2.09 shall be irrevocable; provided that a notice of termination of the Total Commitment delivered by the Company may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Company (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.  Any termination or reduction of the Total Commitment shall be permanent.  Each reduction of the Total Commitment shall be made ratably among the Lenders in accordance with their respective Commitments.

(d)

The Total Commitment shall automatically terminate on the date a Change in Control occurs.

SECTION 2.10

Repayment of Loans; Evidence of Debt.  (a) The Company hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Committed Loan on the Maturity Date, (ii) to the Administrative Agent for the account of each Lender having a Competitive Loan outstanding the then unpaid principal amount of each Competitive Loan on the last day of the Interest Period applicable to such Loan, and (iii) to the Swingline Lender the then unpaid principal amount of each Swingline Loan on demand therefor by the Swingline Lender.  In addition, if the sum of the total Committed Credit Exposures, plus the aggregate principal amount of the outstanding Competitive Loans, exceeds the Total Commitment, the Company shall pay to the Administrative Agent for the account of each Lender an aggregate principal amount of Committed Loans sufficient to cause the sum of the total Committed Credit Exposures, plus the aggregate principal amount of the outstanding Competitive Loans, not to exceed the Total Commitment; provided, however, if the repayment of the outstanding Committed Loans does not cause the total Committed Credit Exposures, plus the aggregate principal amount of the outstanding Competitive Loans, to be equal to or less than the Total Commitment, the Company shall deposit in an account with the Administrative Agent in the name of the Administrative Agent and for the benefit of the Lenders, an amount in cash equal to the amount by which the sum of the total Committed Credit Exposures, plus the aggregate principal amount of the outstanding Competitive Loans, exceeds the Total Commitment, which cash deposit shall be held by the Administrative Agent for the payment of the Obligations of the Borrowers under this Agreement and the other Loan Documents.  The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account other than any interest earned on the investment of such deposit (which investments shall be made at the option and sole discretion of the Administrative Agent, but only in investments rated at least AA (or equivalent) by at least one nationally recognized rating agency, unless an Event of Default shall have occurred and be continuing, and in any event at the Company’s risk and expense).  Interest or profits, if any, on such investments shall accumulate in such account.  Moneys in such account shall be applied by the Administrative Agent to reimburse such Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrowers for the LC Exposure at such time, or if the maturity of the Loans has been accelerated (but subject to the consent of the Lenders with LC Exposure representing greater than 51% of the total LC Exposure), be applied to satisfy other obligations of the Borrowers under this Agreement and the other Loan Documents.  At any time when the sum of the total Committed Credit Exposures, plus the aggregate principal amount of outstanding Competitive Loans, does not exceed the Total Commitment and so long as no Default or Event of Default shall then exist, upon the request of the Company the amount of such deposit (to the extent not applied as aforesaid) shall be returned to the Company within three Business Days after receipt of such request.

(b)

On the date that a Change in Control occurs, the Company shall repay the outstanding principal amount of the Loans and all other amounts outstanding hereunder and under the other Loan Documents and shall comply with the provisions of Section 2.06(k).

(c)

Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Company to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(d)

The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Company to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(e)

The entries made in the accounts maintained pursuant to Section 2.10(c) or (d) shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error or conflict therein shall not in any manner affect the obligation of the Company to repay the Loans in accordance with the terms of this Agreement.

(f)

Any Lender may request that Loans made by it be evidenced by a Committed Note or a Competitive Note, as the case may be.  In such event, the Company shall prepare, execute and deliver to such Lender a Committed Note or a Competitive Note, as the case may be.  Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 10.05) be represented by one or more promissory notes in such forms payable to the order of the payee named therein.

SECTION 2.11

Prepayment of Loans.  (a) The Company shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with Section 2.11(b); provided that the Company shall not have the right to prepay any Competitive Loan without the prior consent of the Lender thereof.

(b)

The Company shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy in the form of Exhibit 2.11 (a “Notice of Prepayment”)) of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Committed Borrowing, not later than 11:00 a.m., Charlotte, North Carolina, time, three Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Committed Borrowing, not later than 11:00 a.m., Charlotte, North Carolina, time, on the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 11:00 a.m., Charlotte, North Carolina, time, on the date of prepayment.  Each such notice shall be irrevocable and shall specify the prepayment date, Type and the principal amount of each Borrowing or portion thereof to be prepaid; provided that, if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.09, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.09.  Each partial prepayment shall be in an aggregate amount not less than, and shall be an integral multiple of, the amounts shown below with respect to the applicable Type of Loan or Borrowing:

  
	Type of

Loan/Borrowing

	Integral

Multiple of

	Minimum

Aggregate Amount

	Eurodollar Committed Borrowing

	$

1,000,000

	$

3,000,000

	ABR Committed Borrowing

	1,000,000

	1,000,000

	Swingline Loan

	100,000

	5,000,000

  

Promptly following receipt of any such notice relating to a Committed Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof.  If the Company fails to designate the Type of Borrowings to be prepaid, partial prepayments shall be applied first to the outstanding ABR Borrowings until all such outstanding principal of ABR Borrowings are repaid in full, and then to the outstanding principal amount of Eurodollar Borrowings.  Each partial prepayment of any Committed Borrowing shall be in an amount that would be permitted in the case of an advance of a Committed Borrowing of the same Type as provided in Section 2.02.  Each prepayment of a Committed Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing.  Prepayments shall be accompanied by accrued interest to the extent required by Section 2.13.

SECTION 2.12

Fees.  (a) The Company agrees to pay to the Administrative Agent for the account of each Lender a facility fee (the “Facility Fee”), which shall accrue at the applicable Facility Fee Rate on the daily amount of the Commitment of such Lender, whether used or unused and when the Commitment has terminated, on the outstanding Loans of such Lender, during the period from the date of this Agreement to the later of (i) the date on which such Commitment terminates and (ii) the date on which the Loans are paid in full.  Accrued Facility Fees shall be payable in arrears on the last Business Day of March, June, September and December of each year and on the date on which the Commitments terminate and the date the Loans are paid in full, commencing on the first such date to occur after the date hereof.  All Facility Fees shall be computed on the basis of a year of 365 or 366 days, as the case may be and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(b)

The Company agrees to pay (i) to the Administrative Agent for the account of each Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at a rate per annum equal to the Applicable Margin on the average daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Lender’s Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to each Issuing Bank a fronting fee, which shall accrue at a rate per annum equal to .100% times the daily maximum amount available to be drawn under each Letter of Credit issued, renewed or extended by such Issuing Bank during the Availability Period, but not to exceed  in any event .100% of the original face amount of each Letter of Credit so issued, renewed or extended.   The Company also agrees to pay each Issuing Bank’s standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit issued by it or the processing of drawings thereunder.  Accrued participation fees and fronting fees shall be payable in arrears on the last Business Day of March, June, September and December of each year, commencing on the first such date to occur after the Effective Date; provided that all such fees shall be payable on the date on which the Commitments terminate and any such fees accruing after the date on which the Commitments terminate shall be payable on demand.  Any other fees payable to any Issuing Bank pursuant to this paragraph shall be payable within 10 days after demand.  All participation fees shall be computed on the basis of a year of 365 or 366 days, as applicable, and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(c)

The Company agrees to pay to the Administrative Agent and each Joint Book Manager, for their own accounts, fees payable in the amounts and at the times specified in that letter agreement dated July 20, 2005 among the Company, the Joint Book Managers, Wachovia, Citibank and JPMorgan Chase Bank, N.A. (as from time to time amended, the “Fee Letter”).

(d)

The Company agrees to pay to the Administrative Agent for the account of each Lender a utilization fee (the “Utilization Fee”), which shall accrue at the applicable Utilization Fee Rate on:

(i)

each Lender’s Commitment (whether used or unused) for each day during the period from the Effective Date to the Maturity Date, on which the sum of the total Committed Credit Exposures, plus the aggregate principal amount of outstanding Competitive Loans, exceeds 50% of the Total Commitment, and 

(ii)

each Lender’s Committed Credit Exposure for each day during the period from the Maturity Date to the date on which the Committed Credit Exposures of all Lenders, are paid in full or reduced to zero, on the sum of the total Committed Credit Exposures, plus the aggregate principal amount of outstanding Competitive Loans, exceeds 50% of the Total Commitment, determined as of the day immediately preceding the Maturity Date.  

All Utilization Fees shall be payable in arrears on the last day of March, June, September and December of each year and on the date the Committed Credit Exposures of all Lenders and all Competitive Loans are paid in full or reduced to zero commencing on the first of such dates to occur after the Effective Date.  All Utilization Fees shall be computed on the basis of a year of 365 or 366 days, as the case may be, and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(e)

All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to each Issuing Bank, in the case of fees payable to it) (for distribution, in the case of Facility Fees and Utilization Fees, to the Lenders).  Except as required by law, fees paid shall not be refundable under any circumstances.

SECTION 2.13

Interest.  (a) The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at a rate per annum equal to the Alternate Base Rate.

(b)

The Loans comprising each Eurodollar Borrowing shall bear interest (i) in the case of a Eurodollar Committed Loan, at the LIBOR Rate for the Interest Period in effect for such Borrowing plus the Applicable Margin or (ii) in the case of a Eurodollar Competitive Loan, at the LIBOR Rate for the Interest Period in effect for such Borrowing plus (or minus, as applicable) the Margin applicable to such Loan.

(c)

Each Fixed Rate Loan shall bear interest at the Fixed Rate applicable to such Loan.

(d)

Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Company hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided above or (ii) in the case of any other amount, 2% plus the Alternate Base Rate.

(e)

Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan; provided that (i) interest accrued pursuant to Section 2.13(d) shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Committed Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment, (iii) in the event of any conversion of any Eurodollar Committed Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion and (iv) all accrued interest shall be payable upon termination of the Total Commitment.

(f)

All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day).  The applicable Alternate Base Rate or LIBOR Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

SECTION 2.14

Alternate Rate of Interest.  If prior to the commencement of any Interest Period for a Eurodollar Borrowing:

(a)

the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the LIBOR Rate for such Interest Period; or

(b)

the Administrative Agent is advised by the Required Lenders (or, in the case of a Eurodollar Competitive Loan, by the Lender that is required to make such Loan) that the LIBOR Rate for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Company and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the Company and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Committed Borrowing to, or continuation of any Committed Borrowing as, a Eurodollar Borrowing shall be ineffective, (ii) if any Borrowing Request requests a Eurodollar Committed Borrowing, such Borrowing shall be made as an ABR Borrowing and (iii) any request by the Company for a Eurodollar Competitive Borrowing shall be ineffective; provided that (A) if the circumstances giving rise to such notice do not affect all the Lenders, then requests by the Company for Eurodollar Competitive Borrowings may be made to Lenders that are not affected thereby and (B) if the circumstances giving rise to such notice affect only one Type of Borrowings, then the other Type of Borrowings shall be permitted.

SECTION 2.15

Increased Costs.  (a) If any Change in Law shall:

(i)

impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the LIBOR Rate) or any Issuing Bank; or

(ii)

impose on any Lender or any Issuing Bank or the London interbank market any other condition affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Loan or Fixed Rate Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender or any Issuing Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or any Issuing Bank hereunder (whether of principal, interest or otherwise), then the Company will pay to such Lender or such Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or such Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered.

(b)

If any Lender or any Issuing Bank determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or such Issuing Bank’s capital or on the capital of such Lender’s or such Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to a level below that which such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or such Issuing Bank’s policies and the policies of such Lender’s or such Issuing Bank’s holding company with respect to capital adequacy), then from time to time the Company will pay to such Lender or such Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or such Issuing Bank or such Lender’s or such Issuing Bank’s holding company for any such reduction suffered.

(c)

A certificate of a Lender or any Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or such Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section 2.15 shall be delivered to the Company and shall be conclusive absent manifest error.  The Company shall pay such Lender or such Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10 Business Days after receipt thereof.

(d)

Failure or delay on the part of any Lender or any Issuing Bank to demand compensation pursuant to this Section 2.15 shall not constitute a waiver of such Lender’s or such Issuing Bank’s right to demand such compensation; provided that the Company shall not be required to compensate a Lender or any Issuing Bank pursuant to this Section 2.15 for any increased costs or reductions incurred more than six months prior to the date that such Lender or such Issuing Bank, as the case may be, notifies the Company of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or such Issuing Bank’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six-month period referred to above shall be extended to include the period of retroactive effect thereof.

SECTION 2.16

Break Funding Payments.  In the event of (a) the payment of any principal of any Eurodollar Loan or Fixed Rate Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow (unless such failure was caused by the failure of a Lender to make such Loan), convert, continue or prepay any Eurodollar Loan, or the failure to convert an ABR Loan to a Eurodollar Loan, on the date specified in any notice delivered pursuant hereto (regardless of whether such notice is permitted to be revocable under Section 2.09 and is revoked in accordance herewith), (d) the failure to borrow any Competitive Loan after accepting the Competitive Bid to make such Loan (unless such failure was caused by the failure of a Lender to make such Loan), or (e) the assignment of any Eurodollar Loan or Fixed Rate Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Company pursuant to Section 2.19, then, in any such event, the Company shall compensate each Lender for the loss, cost and expense attributable to such event.  In the case of a Eurodollar Loan, the loss to any Lender attributable to any such event shall be deemed to include an amount determined by such Lender to be equal to the excess, if any, of (i) the amount of interest that such Lender would pay for a deposit equal to the principal amount of such Loan for the period from the date of such payment, conversion, failure or assignment to the last day of the then current Interest Period for such Loan (or, in the case of a failure to borrow, convert or continue, the duration of the Interest Period that would have resulted from such borrowing, conversion or continuation) if the interest rate payable on such deposit were equal to the LIBOR Rate for such Interest Period, over (ii) the amount of interest that such Lender would earn on such principal amount for such period if such Lender were to invest such principal amount for such period at the interest rate that would be bid by such Lender (or an affiliate of such Lender) for dollar deposits from other banks in the Eurodollar market at the commencement of such period.  A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section 2.16 shall be delivered to the Company and shall be conclusive absent manifest error.  The Company shall pay such Lender the amount shown as due on any such certificate within 10 Business Days after receipt thereof.

SECTION 2.17

Taxes.  (a) Any and all payments by or on account of any obligation of either Borrower hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if either Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.17) the Administrative Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower shall make such deductions and (iii) such Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.

(b)

In addition, such Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law.

(c)

The Company shall indemnify the Administrative Agent, each Lender and each Issuing Bank, within 10 Business Days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section 2.17(c)) paid by the Administrative Agent, such Lender or such Issuing Bank, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the Company by a Lender or an Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or an Issuing Bank, shall be conclusive absent manifest error.

(d)

As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Company to a Governmental Authority, the Company shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e)

Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrowers are located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Company (with a copy to the Administrative Agent), at the time or times prescribed by applicable law or reasonably requested by the Company, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate.

(f)

If the Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by either Borrower or with respect to which either Borrower has paid additional amounts pursuant to this Section 2.17, it shall pay over such refund to such Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by such Borrower under this Section 2.17 with respect to the Taxes and Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Borrowers, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to either Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority.  This Section shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrowers or any other Person.

SECTION 2.18

Payments Generally; Pro Rata Treatment; Sharing of Set-offs.  (a) The Company shall make or, in the case of the Subsidiary Borrower Letter of Credit, the Subsidiary Borrower shall make, each payment required to be made by such Borrower hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or under Section 2.15, 2.16 or 2.17,  or otherwise) prior to 12:00 noon, Charlotte, North Carolina, time, on the date when due, in immediately available funds, without set-off or counterclaim.  Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Administrative Agent at its Principal Office, except payments to be made directly to an Issuing Bank or the Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 10.03 shall be made directly to the Persons entitled thereto.  The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof.  If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension.  All payments hereunder shall be made in dollars.

(b)

If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied (i) first, to pay interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, to pay principal and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties.

(c)

If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Committed Loans or participations in LC Disbursements or Swingline Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Committed Loans and participations in LC Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Committed Loans and participations in LC Disbursements and Swingline Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Committed Loans and participations in LC Disbursements and Swingline Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by either Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assignee or participant, other than to a Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply).  Each Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Company or the Subsidiary Borrower, as the case may be, in the amount of such participation.

(d)

Unless the Administrative Agent shall have received notice from the Company prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or any Issuing Bank hereunder that the Company will not make (or in the case of the Subsidiary Borrower Letter of Credit, the Subsidiary Borrower will not make) such payment, the Administrative Agent may assume that the applicable Borrower  has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or such Issuing Bank, as the case may be, the amount due.  In such event, if the applicable Borrower has not in fact made such payment, then each of the Lenders or such Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or such Issuing Bank with interest thereon, for each day from the date such amount is distributed to it to the date of payment to the Administrative Agent, at the Federal Funds Effective Rate.

(e)

If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.05(c), 2.06(e), 2.07(b) or 2.18(d), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.

SECTION 2.19

Mitigation Obligations; Replacement of Lenders.  (a) If any Lender requests compensation under Section 2.15, or if either Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.

(b)

If any Lender requests compensation under Section 2.15, or if either Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, or if any Lender defaults in its obligation to fund Loans hereunder, then the Company may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 10.05), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Company shall have received the prior written consent of the Administrative Agent (and, if a Commitment is being assigned, the Issuing Banks and Swingline Lender), which consent shall not be unreasonably withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Company (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a reduction in such compensation or payments.  A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Company to require such assignment and delegation cease to apply.

SECTION 2.20

Telephonic Notices.  Without in any way limiting the obligation of the Company or the Subsidiary Borrower to confirm in writing any telephonic notice it is entitled to give under this Agreement or any other Loan Document, the Administrative Agent may act without liability upon the basis of a telephonic notice believed in good faith by the Administrative Agent to be from the Company or the Subsidiary Borrower prior to receipt of written confirmation.  In each such case, each of the Company and the Subsidiary Borrower hereby waives the right to dispute the Administrative Agent’s record of the terms of such telephonic notice.

ARTICLE III.

CONDITIONS PRECEDENT

SECTION 3.01

Conditions Precedent to the Initial Credit Event.  The obligations of the Lenders to make Loans hereunder or the obligation of the Issuing Banks to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied or waived in accordance with Section 10.02:

(a)

The Administrative Agent shall have received the following, each dated the Execution Date:

(i)

this Agreement executed by each party hereto;

(ii)

if requested by any Lender, a Committed Note and a Competitive Note executed by the Company and payable to the order of such Lender;

(iii)

a certificate of an officer and of the secretary or an assistant secretary of the Delegate, certifying, inter alia (A) true and complete copies of each of the limited liability company agreement of the Delegate, the certificate of incorporation, as amended and in effect, of the General Partner, the partnership agreements, each as amended and in effect, of the Borrowers, the bylaws, as amended and in effect, of the General Partner and the resolutions adopted by the Board of Directors of the Delegate (1) authorizing the execution, delivery and performance by each Borrower of this Agreement and the other Loan Documents to which it is or will be a party and, in the case of the Company, the Borrowings to be made and the Letters of Credit to be issued hereunder, (2) approving the forms of the Loan Documents to which it is a party and which will be delivered at or prior to the initial Borrowing Date and (3) authorizing officers of the Delegate to execute and deliver the Loan Documents to which such Borrower is or will be a party and any related documents, including any agreement contemplated by this Agreement, (B) the incumbency and specimen signatures of the officers of the Delegate executing any documents on its behalf and (C) (1) that the representations and warranties made by such Borrower in each Loan Document to which such Borrower is a party and which will be delivered at or prior to the initial Borrowing Date are true and correct in all material respects, (2) the absence of any proceedings for the dissolution or liquidation of such Borrower and (3) the absence of the occurrence and continuance of any Default or Event of Default;

(iv)

letters from CT Corporation System, Inc. in form and substance satisfactory to the Administrative Agent evidencing the obligation of CT Corporation System, Inc. to accept service of process in the State of New York on behalf of each Borrower that is not authorized to do business as a foreign corporation in the State of New York;

(v)

a favorable, signed opinion addressed to the Administrative Agent and the Lenders from Bracewell & Giuliani LLP, counsel to the Borrowers, given upon the express instruction of the Borrowers; and

(vi)

certificates of appropriate public officials as to the existence, good standing and qualification to do business as a foreign entity of each Borrower, the General Partner and the Delegate in the States of Texas and Delaware.

(b)

The Administrative Agent shall be reasonably satisfied that all required consents and approvals of any Governmental Authority and any other Person in connection with the transactions contemplated by this Section 3.01 shall have been obtained and remain in effect (except where the failure to obtain such approvals would not have a Material Adverse Effect).

(c)

The Company shall have paid to Wachovia Capital Markets LLC, Citigroup Global Markets, Inc., J.P. Morgan Securities Inc., and the Administrative Agent all fees and expenses pursuant to the Fee Letter agreed upon by such parties to be paid on or prior to the Execution Date.

(d)

The Existing Credit Agreement shall have been terminated and all amounts outstanding thereunder paid in full.

(e)

The Company shall have paid to Andrews Kurth LLP pursuant to Section 10.03 all reasonable fees and disbursements invoiced to the Company on or prior to the Execution Date.

SECTION 3.02

Conditions Precedent to All Credit Events.  Except with respect to Committed Credit Loans made by the Lenders pursuant to Section 2.06(f), the obligation of the Lenders to make any Loans or to issue or extend any Letter of Credit under this Agreement (including any Loan made or Letter of Credit issued (including for the purpose of the Existing Letters of Credit) on the initial Borrowing Date) is subject to the further conditions precedent that on the date of such Credit Event:

(a)

The conditions precedent set forth in Section 3.01 shall have theretofore been satisfied;

(b)

The representations and warranties set forth in Article IV (other than the representation set forth in Section 4.07(c))and in the other Loan Documents shall be true and correct in all material respects as of, and as if such representations and warranties were made on, the Borrowing Date of the proposed Loan or Letter of Credit, as the case may be (unless such representation and warranty expressly relates to an earlier date), and by the Company’s delivery of a Borrowing Request, the Borrowers shall be deemed to have certified to the Administrative Agent and the Lenders that such representations and warranties are true and correct in all material respects;

(c)

The Company shall have complied with the provisions of Section 2.03, Section 2.04 or Section 2.05, as the case may be; and

(d)

No Default or Event of Default shall have occurred and be continuing or would result from such Credit Event.

The acceptance of the benefits of each Credit Event shall constitute a representation and warranty by the Borrowers to each of the Lenders that all of the conditions specified in this Section 3.02 above exist as of that time.

SECTION 3.03

Conditions Precedent to Conversions.  The obligation of the Lenders to convert or continue any existing Borrowing into or as a Eurodollar Borrowing is subject to the condition precedent that on the date of such conversion or continuation no Default or Event of Default shall have occurred and be continuing or would result from the making of such conversion.  The acceptance of the benefits of each such conversion or continuation shall constitute a representation and warranty by the Borrowers to each of the Lenders that no Default or Event of Default shall have occurred and be continuing or would result from the making of such conversion or continuation.

SECTION 3.04

Delivery of Documents.  All of the Loan Documents, certificates, legal opinions and other documents and papers referred to in this Article III, unless otherwise specified, shall be delivered to the Administrative Agent for the account of each of the Lenders and, except for any Notes, in sufficient counterparts or copies for each of the Lenders and shall be satisfactory in form and substance to the Lenders.

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES

Each Borrower makes for itself, and the Company makes for itself and the Subsidiary Borrower, the following representations and warranties to the Administrative Agent and the Lenders:

SECTION 4.01

Organization and Qualification.  The Company and each of the Subsidiaries (a) is a corporation, partnership or limited liability company duly organized or formed, validly existing and in good standing under the laws of the state of its incorporation, organization or formation, (b) has all requisite corporate, partnership, limited liability company or other power and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted and (c) is duly qualified to do business and is in good standing in every jurisdiction in which the failure to be so qualified would, individually or together with all such other failures of the Company and the Subsidiaries, have a Material Adverse Effect.  As of the date of this Agreement, the Persons and other entities shown on Schedule 4.01 are all of the Subsidiaries of the Company, and such Schedule 4.01 (x) accurately reflects the direct owner of the Capital Stock of each such Subsidiary owned by such direct owner, (y) accurately identifies such Subsidiaries and (z) accurately sets forth the jurisdictions of their respective incorporation, organization or formation, as the case may be.  

SECTION 4.02

Authorization, Validity, Etc.  Each Borrower has all requisite partnership and other power and authority to execute and deliver, and to incur and perform its obligations under this Agreement and under the other Loan Documents to which it is a party and to make the Borrowings hereunder, and all such actions have been duly authorized by all necessary proceedings on its behalf.  This Agreement and the other Loan Documents have been duly and validly executed and delivered by or on behalf of each Borrower party thereto and constitute valid and legally binding agreements of such Borrower enforceable against such Borrower in accordance with the respective terms thereof, except (a) as may be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, fraudulent conveyance or other similar laws relating to or affecting the enforcement of creditors’ rights generally, and by general principles of equity (including principles of good faith, reasonableness, materiality and fair dealing) which may, among other things, limit the right to obtain equitable remedies (regardless of whether considered in a proceeding in equity or at law) and (b) as to the enforceability of provisions for indemnification for violation of applicable securities laws, limitations thereon arising as a matter of law or public policy.

SECTION 4.03

Governmental Consents, Etc.  No authorization, consent, approval, license or exemption of or registration, declaration or filing with any Governmental Authority, is necessary for the valid execution and delivery of, or the incurrence and performance by the Company of its obligations under, any Loan Document to which it is a party, except those that have been obtained and such matters relating to performance as would ordinarily be done in the ordinary course of business after the Execution Date.

SECTION 4.04

No Breach or Violation of Agreements or Restrictions, Etc.  Neither the execution and delivery of, nor the incurrence and performance by the Company of its obligations under, the Loan Documents to which it is a party, nor the extensions of credit contemplated by the Loan Documents, will (a) breach or violate any applicable Requirement of Law, (b) result in any breach or violation of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien upon any of its property or assets (other than Liens created or contemplated by this Agreement) pursuant to the terms of, any indenture, mortgage, deed of trust, agreement or other instrument to which it or any of the Subsidiaries is party or by which any of its properties or assets, or those of any of the Subsidiaries is bound or to which it is subject, except for breaches, violations and defaults under clauses (a) and (b) that neither individually nor in the aggregate could reasonably be expected to result in a Material Adverse Effect, or (c) violate any provision of the organic documents of the Company.

SECTION 4.05

Properties.  Each of the Company and the Subsidiaries has good title to, or valid leasehold or other interests in, all its real and personal property material to its business, except for Liens permitted under Section 6.01.

SECTION 4.06

Litigation and Environmental Matters.  (a) Except as disclosed in the most recent Annual Report on Form 10-K delivered by the Company to the Lenders, there is no action, suit or proceeding by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Company, threatened against or affecting the Company or any of the Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect or (ii) that involves this Agreement or the Transactions.

(b)

In the ordinary course of its business, the Company conducts an ongoing review of the effect of Environmental Laws on the business, operations and properties of the Company and the Subsidiaries, in the course of which it identifies and evaluates associated liabilities and costs (including any capital or operating expenditures required for clean-up or closure of properties currently or previously owned, any capital or operating expenditures required to achieve or maintain compliance with environmental protection standards imposed by law or as a condition of any license, permit or contract, any related constraints on operating activities, including any periodic or permanent shutdown of any facility or reduction in the level of or change in the nature of operations conducted thereat, any costs or liabilities in connection with off-site disposal of wastes or Hazardous Materials, and any actual or potential liabilities to third parties, including employees, and any related costs and expenses). On the basis of this review, the Company has reasonably concluded that such associated liabilities and costs, including the costs of compliance with Environmental Laws, are unlikely to result in a Material Adverse Effect.

SECTION 4.07

Financial Statements.  vi) The consolidated balance sheet of the Company and the Subsidiaries as at December 31, 2004 and the related consolidated statements of income, comprehensive income, partners’ capital and cash flows of the Company and the Subsidiaries for the fiscal year ended on said date, with the opinion thereon of PricewaterhouseCoopers LLP and set forth in the Company’s 2004 Annual Report on Form 10-K, as filed with the SEC, fairly present, in conformity with GAAP, the consolidated financial position of the Company and the Subsidiaries as of such date and their consolidated results of operations and cash flows for such fiscal year.  

(b)

The unaudited consolidated balance sheets of the Company and the Subsidiaries as at June 30, 2005 and the related consolidated statements of income and cash flows of the Company and the Subsidiaries for the six-month period ended on such date and set forth in the Company’s Quarterly Report on Form 10-Q for its fiscal quarter then ended, as filed with the SEC, fairly present, in conformity with GAAP applied on a basis consistent with the financial statements referred to in Section 4.07(a), the consolidated financial position of the Company and the Subsidiaries as at said date and their consolidated results of their operations cash flows for the six-month period ended on said date (subject to the absence of footnotes and to normal year-end and audit adjustments).

(c)

Since December 31, 2004, there has been no material adverse change in the business, assets, liabilities or financial condition of the Company and the Subsidiaries, taken as a whole.

SECTION 4.08

Disclosure.  All information heretofore furnished by the Company to the Administrative Agent or any Lender for purposes of or in connection with this Agreement or any transaction contemplated hereby is, and all such information hereafter furnished by the Company to the Administrative Agent or any Lender will be, true and accurate in all material respects on the date as of which such information is stated or certified.  None of the reports, financial statements, certificates or other information furnished by or on behalf of the Company to the Administrative Agent or any Lender in connection with the syndication or negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

SECTION 4.09

Investment Company Act.  Neither the Company nor any of the Subsidiaries is, or is regulated as, an “investment company,” as such term is defined in the Investment Company Act of 1940, as amended.

SECTION 4.10

Public Utility Holding Company Act.  Neither the Company nor any of the Subsidiaries is a non-exempt “holding company”, or subject to regulation as such, or an “affiliate” of a “holding company” or a “subsidiary company” of a “holding company”, within the meaning of the Public Utility Holding Company Act of 1935, as amended.

SECTION 4.11

ERISA.  Each member of the ERISA Group has fulfilled its obligations under the minimum funding standards of ERISA and the Code with respect to each Plan and is in compliance in all material respects with the presently applicable provisions of ERISA and the Code with respect to each Plan. No member of the ERISA Group has (i) sought a waiver of the minimum funding standard under Section 412 of the Code in respect of any Plan, (ii) failed to make any contribution or payment to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement, which has resulted or could result in the imposition of a Lien or the posting of a bond or other security under ERISA or the  Code or (iii) incurred any liability under Title IV of ERISA other than a liability to the PBGC for premiums under Section 4007 of ERISA, which waiver, failure or liability could reasonably be expected to result in a Material Adverse Effect.

SECTION 4.12

Tax Returns and Payments.  The Company and the Subsidiaries have caused to be filed all federal income tax returns and other material tax returns, statements and reports (or obtained extensions with respect thereto) which are required to be filed and have paid or deposited or made adequate provision in accordance with GAAP for the payment of all taxes (including estimated taxes shown on such returns, statements and reports) which are shown to be due pursuant to such returns, except for taxes being contested in good faith by appropriate proceedings for which adequate reserves in accordance with GAAP have been created on the books of the Company and the Subsidiaries and where the failure to pay such taxes (individually or in the aggregate for the Company and the Subsidiaries) would not have a Material Adverse Effect.

SECTION 4.13

Compliance with Laws and Agreements.  Each of the Company and the Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate for the Company and the Subsidiaries, could not reasonably be expected to result in a Material Adverse Effect.  

SECTION 4.14

Purpose of Loans.  vii)  All proceeds of the Loans will be used for the purposes set forth in Section 5.07.

(b)

None of the proceeds of the loans under the Existing Credit Agreement were, and none of the proceeds of the Loans under this Agreement will be, used directly or indirectly for the purpose of buying or carrying any “margin stock” within the meaning of Regulation U (herein called “margin stock”) or for the purpose of reducing or retiring any indebtedness which was originally incurred to buy or carry any margin stock, or for any other purpose which might constitute this transaction a “purpose” credit within the meaning of Regulation T, U or X.  Neither the Company nor any agent acting on its behalf has taken or will take any action which might cause this Agreement or any other Loan Document to violate Regulation T, Regulation U, Regulation X, or any other regulation of the Board or to violate the Exchange Act.  Margin stock does not constitute more than 25% of the assets of the Company or the Subsidiary Borrower, or of the Company and the Subsidiaries on a consolidated basis, and the Company does not intend or foresee that it will ever do so.

SECTION 4.15

Foreign Assets Control Regulations, etc.

(a)

Neither any Letter of Credit nor any part of the proceeds of the Loans will violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto.

(b)

Neither the Company nor any Subsidiary (i) is, or will become, a Person described or designated in the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or (ii) engages or will engage in any dealings or transactions, or is or will be otherwise associated, with any such Person.  The Company and the Subsidiaries are in compliance, in all material respects, with the USA Patriot Act.

(c)

Neither any Letter of Credit nor any part of the proceeds of the Loans will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, assuming in all cases that such Act applies to the Company or one of the Subsidiaries.

ARTICLE V.

AFFIRMATIVE COVENANTS

Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, the Company covenants and agrees with the Lenders that:

SECTION 5.01

Financial Statements and Other Information.  The Company will furnish to the Administrative Agent, in each case with sufficient copies for each Lender:

(a)

within ten days after the date in each fiscal year on which the Company is required to file its Annual Report on Form 10-K with the SEC or, if earlier, 100 days after the end of each fiscal year (i) such Annual Report, and (ii) its audited consolidated balance sheet and the related consolidated statements of income, comprehensive income, operations, partners’ capital and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures as of the end of and for the previous fiscal year, all reported on by, and accompanied by an opinion (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of their audit) of,  PricewaterhouseCoopers LLP, or other independent public accountants of recognized national standing to the effect that such consolidated financial statements present fairly in all material respects the financial position, results of operations and cash flows of the Company and the Subsidiaries on a consolidated basis in accordance with GAAP; provided, however, that (x) the Company shall be deemed to have furnished said Annual Report on Form 10-K for purposes of clause (i) if it shall have timely made the same available on “EDGAR” and/or on its home page on the worldwide web (at the date of this Agreement located at http://www.kindermorgan.com) and complied with the last grammatical paragraph of this Section 5.01 in respect thereof, and (y) if said Annual Report contains such consolidated balance sheet and such consolidated statements of results of income, comprehensive income, partners’ capital and cash flows, and the report thereon of such independent public accountants (without qualification or exception, and to the effect, as specified above), the Company shall not be required to comply with clause (ii);

(b)

within five days after each date in each fiscal year on which the Company is required to file a Quarterly Report on Form 10-Q with the SEC or, if earlier, fifty days after the end of each fiscal quarter (i) such Quarterly Report, and (ii) its consolidated balance sheet and the related consolidated statements of income and cash flows as of the end of and for the fiscal quarter to which said Quarterly Report relates and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures as of the end and for the corresponding period or periods of the previous fiscal year, all certified by a Responsible Officer as presenting fairly in all material respects the financial condition and results of operations of the Company and the Subsidiaries on a consolidated basis in accordance with GAAP, subject to normal year-end audit adjustments and the absence of footnotes; provided, however, that (x) the Company shall be deemed to have furnished said Quarterly Report for purposes of clause (i) if it shall have timely made the same available on “EDGAR” and/or on its home page on the worldwide web (at the date of this Agreement located at http://www.kindermorgan.com) and complied with the last grammatical paragraph of this Section 5.01 in respect thereof, and (y) if said Quarterly Report contains such consolidated balance sheet and consolidated statements of income and cash flows, and such certifications, the Company shall not be required to comply with clause (ii);

(c)

simultaneously with the delivery of each set of financial statements referred to in clauses (a) and (b) above, a certificate in substantially the form of Exhibit 5.01 signed by an authorized financial or accounting officer of the Company (i) setting forth in reasonable detail the calculations required to establish whether the Company was in compliance with the requirements of Section 6.06(a), (b) and (c) on the date of such financial statements, and (ii) stating whether any Default or Event of Default exists on the date of such certificate and, if any Default or Event of Default then exists, setting forth the details thereof and the action which the Company is taking or proposes to take with respect thereto;

(d)

simultaneously with the delivery of each set of financial statements referred to in clause (a) above, a statement of the firm of independent public accountants which reported on such statements (i) as to whether anything has come to their attention to cause them to believe that any Default or Event of Default existed on the date of such statements and (ii) confirming the calculations set forth in the officer’s certificate delivered simultaneously therewith pursuant to clause (c) above; provided, however, that such accountants shall not be liable to anyone by reason of their failure to obtain knowledge of any Default or Event of Default which would not be disclosed in the course of an audit conducted in accordance with generally accepted auditing standards;

(e)

prompt written notice of the following:

(i)

the occurrence of any Default or Event of Default or Change in Control Event and

(ii)

any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect;

(each notice delivered under this Section 5.01(e) to be accompanied by a statement of a Responsible Officer setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto);

(f)

promptly upon receipt thereof, a copy of each other report or letter submitted to the Company by independent accountants in connection with any annual, interim or special audit made by them of the books of the Company, and a copy of any response by the Company, or the Board of Directors of the general partner of the Company, to such letter or report;

(g)

without duplication of any other requirement of this Section 5.01, promptly upon the mailing thereof to the public unitholders of the Company generally, copies of all financial statements, reports and proxy statements so mailed;

(h)

promptly upon the filing thereof with the SEC, copies of all registration statements (other than the exhibits thereto and any registration statements on Form S-8 or its equivalent) and reports on Form 8-K which the Company shall have filed with the SEC;

(i)

if and when any member of the ERISA Group (i) gives or is required to give notice to the PBGC of any “reportable event” (as defined in Section 4043 of ERISA) (other than such event as to which the 30-day notice requirement is waived) with respect to any Plan which might constitute grounds for a termination of such Plan under Title IV of ERISA, or knows that the plan administrator of any Plan has given or is required to give notice of any such reportable event, a copy of the notice of such reportable event given or required to be given to the PBGC; (ii) receives notice of complete or partial withdrawal liability under Title IV of ERISA or notice that any Multiemployer Plan is in reorganization, is insolvent or has been terminated, a copy of such notice; (iii) receives notice from the PBGC under Title IV of ERISA of an intent to terminate, impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or appoint a trustee to administer any Plan, a copy of such notice; (iv) applies for a waiver of the minimum funding standard under Section 412 of the Code, a copy of such application; (v) gives notice of intent to terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and other information filed with the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to make any payment or contribution to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement or makes any amendment to any Plan or Benefit Arrangement which has resulted or could result in the imposition of a Lien or the posting of a bond or other security, a certificate of the chief financial officer or the chief accounting officer of the Company setting forth details as to such occurrence and action, if any, which the Company or applicable member of the ERISA Group is required or proposes to take; and

(j)

from time to time such other information regarding the business, affairs or financial condition of the Company or any Subsidiary as the Required Lenders or the Administrative Agent may reasonably request.

Information required to be delivered pursuant to Section 5.01(a), 5.01(b), 5.01(g) or 5.01(h) above shall be deemed to have been delivered on the date on which the Company provides notice to the Administrative Agent and the Lenders that such information has been posted on “EDGAR” or the Company’s website or another website identified in such notice and accessible by the Administrative Agent and the Lenders without charge (and the Company hereby agrees to provide such notice); provided that such notice may be included in a certificate delivered pursuant to Section 5.01(c).

SECTION 5.02

Existence, Conduct of Business.  The Company will, and will cause each of the Material Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.02.

SECTION 5.03

Payment of Obligations.  The Company will, and will cause each of the Subsidiaries to, pay, before the same shall become delinquent or in default, its obligations, including tax liabilities, that, if not paid, could result in a Material Adverse Effect, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Company or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP, and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.04

Maintenance of Properties; Insurance.   viii) The Company will keep, and will cause each Material Subsidiary to keep, all property useful and necessary in its business in good working order and condition, ordinary wear and tear excepted.

(b)

The Company will maintain or cause to be maintained with, in the good faith judgment of the Company, financially sound and reputable insurers, or through self-insurance, insurance with respect to its properties and business and the properties and businesses of the Subsidiaries against loss or damage of the kinds customarily insured against by business enterprises of established reputation engaged in the same or similar business and similarly situated, of such types and in such amounts as are customarily carried under similar circumstances by such other corporations. Such insurance may include self-insurance or be subject to co-insurance, deductibility or similar clauses which, in effect, result in self-insurance of certain losses, provided that such self-insurance is in accord with the approved practices of business enterprises of established reputation similarly situated and adequate insurance reserves are maintained in connection with such self-insurance, and, notwithstanding the foregoing provisions of this Section 5.04 the Company or any Subsidiary may effect workers’ compensation or similar insurance in respect of operations in any state or other jurisdiction either through an insurance fund operated by such state or other jurisdiction or by causing to be maintained a system or systems of self-insurance in accord with applicable laws.

SECTION 5.05

Books and Records; Inspection Rights.  The Company will, and will cause each of the Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities.  The Company will, and will cause each of the Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice during normal business hours, to visit and inspect its properties, to examine and make extracts from its books and records (subject to compliance with confidentiality agreements and applicable copyright law), and to discuss its affairs, finances and condition with its officers and independent accountants, all at such times, and as often, as reasonably requested.

SECTION 5.06

Compliance with Laws.  The Company will, and will cause each of the Subsidiaries to, comply with all Requirements of Law applicable to it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.07

Use of Proceeds.  The proceeds of the Loans will be used only for (a) refinancing (i) amounts outstanding under the Existing Credit Agreement, (ii) other Indebtedness of the Company and the Subsidiaries, and (iii) commercial paper, and (b) working capital and other general partnership purposes.

ARTICLE VI.

NEGATIVE COVENANTS

Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired or terminated and all LC Disbursements shall have been reimbursed, the Company covenants and agrees with the Lenders that:

SECTION 6.01

Liens.  The Company  will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:

(a)

Permitted Encumbrances; 

(b)

Liens existing on any property or asset prior to the acquisition thereof by the Company or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary and securing Indebtedness whose incurrence, for purposes of this Agreement, by virtue of acquisition of such property or asset, or by virtue of such Person so becoming a Subsidiary, would not result in a violation of Section 6.06(a), (b) or (c); provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Company or any Subsidiary, (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be, and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof.  For purposes of this Section 6.01(c), the Indebtedness so secured shall be deemed to have been incurred on the last day of the fiscal quarter then most recently ended.

(c)

Liens, not otherwise permitted by the foregoing clauses (a) and (b), securing Indebtedness and payment obligations in respect of Hedging Agreements in an aggregate amount not exceeding 10% of Consolidated Net Tangible Assets.

SECTION 6.02

Fundamental Changes.  The Company will not, and will not permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all (or substantially all) of its assets, or all or substantially all of the stock of or other equity interest in any of the Subsidiaries (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, unless: (a) at the time thereof and immediately after giving effect thereto no Event of Default or Default shall have occurred and be continuing; and (b) the Company is the surviving entity or the recipient of any such sale, transfer, lease or other disposition of assets, provided, that no such merger, consolidation, sale, transfer, lease or other disposition shall have the effect of releasing the Company from any of the Obligations.

SECTION 6.03

Restricted Payments.  The Company will not, and will not permit any of the Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment.

SECTION 6.04

Transactions with Affiliates

.  The Company will not, and will not permit any of the Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) in the ordinary course of business at prices and on terms and conditions not less favorable to the Company or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among the Company and the Wholly-owned Subsidiaries not involving any other Affiliate, (c) any payment which would constitute a Restricted Payment but for the proviso to the definition of said term in Section 1.01 and (d) loans and advances by the Company to the General Partner to enable the General Partner to pay general and administrative costs and expenses pursuant to the partnership agreement of the Company and in accordance with past practices.

SECTION 6.05

Restrictive Agreements.  The Company will not, and will not permit any of the Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon the ability of any Subsidiary to pay dividends or other distributions with respect to any shares of its Capital Stock or to make or repay loans or advances to the Company or any other such Subsidiary, provided that the foregoing shall not apply to (a) restrictions and conditions imposed by law or by this Agreement, (b) customary restrictions and conditions contained in agreements relating to the sale of all or substantially all of the Capital Stock or assets of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder and (c) restrictions and conditions existing on the date hereof identified on Schedule 6.05 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition) 

SECTION 6.06

Financial Covenants.  The Company will observe and cause the Subsidiaries to observe each of the following requirements:

(a)

Ratio of Consolidated Indebtedness to Consolidated EBITDA.  The Company will not at any time permit the ratio of Consolidated Indebtedness to Consolidated EBITDA for the four full fiscal quarters most recently ended in respect of which financial statements shall have been delivered pursuant to Section 5.01(a) or (b), as the case may be, to exceed 5.00 to 1.0.  For purposes of this Section 6.06(a), if during any period the Company acquires any Person (or any interest in any Person) or all or substantially all of the assets of any Person, the EBITDA attributable to such assets or an amount equal to the percentage of ownership of the Company in such Person times the EBITDA of such Person, for such period determined on a pro forma basis (which determination, in each case, shall be subject to approval of the Required Lenders, not to be unreasonably withheld) may be included as Consolidated EBITDA for such period, if on the date of such acquisition no Indebtedness (other than Indebtedness permitted pursuant to Section 6.06(b)) is incurred by reason of and giving effect to such acquisition and such Person, or the entity acquiring such assets, as the case may be, is a Subsidiary.  For purposes of ascertaining whether the Required Lenders have approved a determination of the EBITDA attributable to acquired assets, or the assets of an acquired Person, for inclusion in Consolidated EBITDA for any period pursuant to the foregoing sentence, a Lender which has not, within 10 days after its receipt of the certificate of a Responsible Officer required by the last sentence of Section 5.01, objected to the inclusion in Consolidated EBITDA as set forth  therein of an amount  of  EBITDA attributable to such acquired assets or the assets of such acquired Person, as the case may be, shall be deemed to have approved both the determination of such amount of EBITDA so included, and the inclusion thereof in Consolidated EBITDA pursuant to the foregoing sentence.

(b)

Total Indebtedness (excluding Indebtedness of a consolidated Subsidiary of the Company owed to the Company or to any Wholly-owned Subsidiary) of all consolidated Subsidiaries shall at no time exceed 15% of Consolidated Indebtedness.

(c)

Consolidated Indebtedness shall at no time exceed 65% of Total Capitalization.

ARTICLE VII.

EVENTS OF DEFAULT

SECTION 7.01

Events of Default and Remedies.  If any of the following events (“Events of Default”) shall occur and be continuing:

(a)

the principal of any Loan or any reimbursement obligation in respect of any LC Disbursement shall not be paid when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;

(b)

any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document shall not be paid, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three Business Days;

(c)

any representation or warranty made or, for purposes of Article III, deemed made by or on behalf of either Borrower herein, at the direction of either Borrower or by either Borrower in any other Loan Document or in any document, certificate or financial statement delivered in connection with this Agreement or  any other Loan Document shall prove to have been incorrect in any material respect when made or deemed made or reaffirmed, as the case may be;

(d)

either Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.01(e)(i), 5.02 (with respect to such Borrower’s existence) or 5.07 or in Article VI;

(e)

either Borrower shall fail to perform or observe any other term, covenant or agreement contained in this Agreement (other than those specified in Section 7.01(a), Section 7.01(b) or Section 7.01(d)) or any other Loan Document to which it is a party and, in any event, such failure shall remain unremedied for 30 calendar days after the earlier of (i) written notice of such failure shall have been given to the Company by the Administrative Agent or any Lender or, (ii) a Responsible Officer of either Borrower becomes aware of such failure;

(f)

other than as specified in Section 7.01(a) or (b), (i) the Company or any Subsidiary fails to make (whether as primary obligor or as guarantor or other surety) any payment of principal of, or interest or premium, if any, on any item or items of Indebtedness (other than as specified in Section 7.01(a), Section 7.01(b) or Article IX) or any payment in respect of any Hedging Agreement beyond any period of grace provided with respect thereto (not to exceed 30 days); provided that the aggregate outstanding principal amount of all Indebtedness or payment obligations in respect of all Hedging Agreements as to which such a payment default shall occur and be continuing is equal to or exceeds $75,000,000, or (ii) the Company or any Subsidiary fails to duly observe, perform or comply with any agreement with any Person or any term or condition of any instrument, if such failure, either individually or in the aggregate, shall have resulted in the acceleration of the payment of Indebtedness with an aggregate face amount which is equal to or exceeds $75,000,000; provided that this Section 7.01(f) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness, so long as such Indebtedness is paid in full when due;

(g)

an involuntary case shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the Company or any Material Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company or any Material Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

(h)

the Company, or any Material Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, winding-up, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in Section 7.01(g), (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Company or any Material Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

(i)

the Company or any Material Subsidiary shall become unable, admit in writing or fail generally to pay its debts as they become due;

(j)

(i) the General Partner fails to make (whether as primary obligor or as guarantor or other surety) any payment of principal of, or interest or premium, if any, on any item or items of Indebtedness beyond any period of grace provided with respect thereto (not to exceed 30 days); provided that the aggregate outstanding principal amount of all such Indebtedness as to which such a payment default shall occur and be continuing is equal to or exceeds $75,000,000, or (ii) the General Partner fails to duly observe, perform or comply with any agreement with any Person or any term or condition of any instrument, if such failure, individually or in the aggregate, shall have resulted in the acceleration of the payment of Indebtedness with an aggregate face amount which is equal to or exceeds $75,000,000; provided that this Section 7.01(j) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness so long as such Indebtedness is paid in full when due;

(k)

one or more judgments for the payment of money in an aggregate amount in excess of $75,000,000 shall be rendered against the Company, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of 30 consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Company or any Subsidiary to enforce any such judgment;

(l)

any member of the ERISA Group shall fail to pay when due an amount which it shall have become liable to pay under Title IV of ERISA; or notice of intent to terminate a Plan shall be filed under Title IV of ERISA by any member of the ERISA Group, any plan administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate, to impose liability (other than for premiums under Section 4007 of ERISA) in respect of, or to cause a trustee to be appointed to administer any Plan; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any Plan must be terminated; or there shall occur a complete or partial withdrawal from, or a default, within the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which could cause one or more members of the ERISA Group to incur a current payment obligation; and in each of the foregoing instances such condition could reasonably be expected to result in a Material Adverse Effect;

(m)

either Borrower or any Affiliate of Borrower shall petition or apply for or obtain any order restricting payment by any Issuing Bank under any Letter of Credit or extending such Issuing Bank’s liability under such Letter of Credit beyond the expiration date stated therein or otherwise agreed to by such Issuing Bank;

then, and in any such event, and at any time thereafter, if any Event of Default shall then be continuing, the Administrative Agent, may, and upon the written request of the Required Lenders shall, by written notice (including notice sent by telecopy) to the Company (a “Notice of Default”) take any or all of the following actions, without prejudice to the rights of the Administrative Agent, any Lender or other holder of any of the Obligations to enforce its claims against either Borrower (provided that, if an Event of Default specified in Section 7.01(g) or Section 7.01(h) shall occur with respect to the Company or any Subsidiary, the result of which would occur upon the giving of a Notice of Default as specified in clauses (i), (ii) and (v) below, shall occur automatically without the giving of any Notice of Default):  (i) declare the Total Commitment terminated, whereupon the Commitments of the Lenders shall forthwith terminate immediately and any accrued facility fees shall forthwith become due and payable without any other notice of any kind; (ii) declare the principal of and any accrued interest in respect of all Loans, and all the other Obligations owing hereunder and under the other Loan Documents, to be, whereupon the same shall become, forthwith due and payable without presentment, demand, notice of demand or of dishonor and nonpayment, protest, notice of protest, notice of intent to accelerate, declaration or notice of acceleration or any other notice of any kind, all of which are hereby waived by each Borrower; (iii) exercise any rights or remedies under the Loan Documents; (iv) terminate any Letter of Credit which may be terminated in accordance with its terms (whether by the giving of written notice to the beneficiary or otherwise); and (v) direct the Company to comply, and the Company agrees that upon receipt of such notice (or upon the occurrence of an Event of Default specified in Section 7.01(g) or Section 7.01(h)) it will comply, with the provisions of Section 2.06(k).

 

ARTICLE VIII.

THE ADMINISTRATIVE AGENT

SECTION 8.01

Appointment, Powers and Immunities.  Each Lender hereby irrevocably appoints and authorizes the Administrative Agent to act as its agent hereunder and under the other Loan Documents with such powers as are specifically delegated to the Administrative Agent by the terms of this Agreement and such other Loan Documents, together with such other powers as are reasonably incidental thereto.  The Administrative Agent (which term as used in this sentence and in Section 8.05 and the first sentence of Section 8.06 shall include reference to its Affiliates and its Affiliates’ officers, directors, employees, attorneys, accountants, experts and agents):  (a) shall have no duties or responsibilities except those expressly set forth in the Loan Documents, and shall not by reason of the Loan Documents be a trustee or fiduciary for any Lender; (b) makes no representation or warranty to any Lender and shall not be responsible to the Lenders for any recitals, statements, representations or warranties contained in this Agreement, or in any certificate or other document referred to or provided for in, or received by any of them under, this Agreement, or for the value, validity, effectiveness, genuineness, execution, legality, enforceability or sufficiency of this Agreement, any other Loan Document or any other document referred to or provided for herein or therein or for any failure by either Borrower or any other Person (other than the Administrative Agent) to perform any of its obligations hereunder or thereunder or for the existence or value of, or the perfection or priority of any Lien upon, any collateral security or the financial or other condition of the Company, the Subsidiaries or any other obligor or guarantor; (c) except pursuant to Section 8.07 shall not be required to initiate or conduct any litigation or collection proceedings hereunder; and (d) shall not be responsible for any action taken or omitted to be taken by it hereunder or under any other document or instrument referred to or provided for herein or in connection herewith including its own ordinary negligence, except for its own gross negligence,  willful misconduct or unlawful conduct.  The Administrative Agent may employ agents, accountants, attorneys and experts and shall not be responsible for the negligence or misconduct of any such agents, accountants, attorneys or experts selected by it in good faith or any action taken or omitted to be taken in good faith by it in accordance with the advice of such agents, accountants, attorneys or experts.  The Administrative Agent may deem and treat the payee named in any Note as the holder thereof for all purposes hereof unless and until a written notice of the assignment or transfer thereof permitted hereunder shall have been filed with the Administrative Agent.  The Administrative Agent is authorized to release any cash collateral that is permitted to be released pursuant to the terms of this Agreement.

SECTION 8.02

Reliance by Administrative Agent.  The Administrative Agent shall be entitled to rely upon any certification, notice or other communication (including any thereof by telephone, telex, telecopier, telegram or cable) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by the Administrative Agent in good faith.

SECTION 8.03

Defaults; Events of Default.  The Administrative Agent shall not be deemed to have knowledge of the occurrence of a Default or an Event of Default (other than the non-payment of principal of or interest on Loans or of fees or failure to reimburse LC Disbursements) unless the Administrative Agent has received notice from a Lender or a Borrower specifying such Default or Event of Default and stating that such notice is a “Notice of Default”.  In the event that the Administrative Agent receives such a notice of the occurrence of a Default or Event of Default, the Administrative Agent shall give prompt notice thereof to the Lenders.  In the event of a payment Default or Event of Default, the Administrative Agent shall give each Lender prompt notice of each such payment Default or Event of Default.

SECTION 8.04

Rights as a Lender

.  With respect to its Commitments and the Loans made by it and its issuance, or its participation in the issuance, of each Letter of Credit, Wachovia (and any successor acting as Administrative Agent) in its capacity as a Lender hereunder shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not acting as the Administrative Agent, and the term “Lender” or “Lenders” shall, unless the context otherwise indicates, include the Administrative Agent in its individual capacity.  Wachovia (and any successor acting as Administrative Agent) and its Affiliates may (without having to account therefor to any Lender) accept deposits from, lend money to and generally engage in any kind of banking, trust or other business with either Borrower (and any of its Affiliates) as if it were not acting as the Administrative Agent.  Wachovia and its Affiliates may accept fees and other consideration from the Company or the Subsidiary Borrower for services in connection with this Agreement or otherwise without having to account for the same to the Lenders.

SECTION 8.05

INDEMNIFICATION.  THE LENDERS AGREE TO INDEMNIFY THE ADMINISTRATIVE AGENT, THE CO-SYNDICATION AGENTS AND THE CO-DOCUMENTATION AGENTS RATABLY IN ACCORDANCE WITH THEIR APPLICABLE PERCENTAGES FOR THE INDEMNITY MATTERS AS DESCRIBED IN SECTION 10.03 TO THE EXTENT NOT INDEMNIFIED OR REIMBURSED BY THE COMPANY UNDER SECTION 10.03, BUT WITHOUT LIMITING THE OBLIGATIONS OF THE COMPANY UNDER SAID SECTION 10.03 AND FOR ANY AND ALL OTHER LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE ADMINISTRATIVE AGENT, EITHER CO-SYNDICATION AGENT OR THE CO-DOCUMENTATION AGENT IN ANY WAY RELATING TO OR ARISING OUT OF:  (A) THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT CONTEMPLATED BY OR REFERRED TO HEREIN OR THE TRANSACTIONS CONTEMPLATED HEREBY, BUT EXCLUDING, UNLESS A DEFAULT OR AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING, NORMAL ADMINISTRATIVE COSTS AND EXPENSES INCIDENT TO THE PERFORMANCE OF ITS AGENCY DUTIES, IF ANY, HEREUNDER OR (B) THE ENFORCEMENT OF ANY OF THE TERMS OF THIS AGREEMENT OR OF ANY OTHER LOAN DOCUMENT; WHETHER OR NOT ANY OF THE FOREGOING SPECIFIED IN THIS SECTION 8.05 ARISES FROM THE SOLE OR CONCURRENT NEGLIGENCE OF THE ADMINISTRATIVE AGENT, EITHER CO-SYNDICATION AGENT OR THE CO-DOCUMENTATION AGENT, AS THE CASE MAY BE; PROVIDED THAT NO LENDER SHALL BE LIABLE FOR ANY OF THE FOREGOING TO THE EXTENT THEY ARISE FROM THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR UNLAWFUL CONDUCT OF THE ADMINISTRATIVE AGENT, EITHER CO-SYNDICATION AGENT OR EITHER CO-DOCUMENTATION AGENT.

SECTION 8.06

Non-Reliance on Agents and other Lenders.  Each Lender acknowledges and agrees that it has, independently and without reliance on the Administrative Agent, either Co-Syndication Agent, either Co-Documentation Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own credit analysis of the Company and the Subsidiaries and its decision to enter into this Agreement, and that it will, independently and without reliance upon the Administrative Agent, either Co-Syndication Agent, either Co-Documentation Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement.  Neither the Administrative Agent, either Co-Syndication Agent nor either Co-Documentation Agent shall be required to keep itself informed as to the performance or observance by either Borrower of this Agreement, the other Loan Documents or any other document referred to or provided for herein or to inspect the properties or books of either Borrower.  Except for notices, reports and other documents and information expressly required to be furnished to the Lenders by the Administrative Agent hereunder, neither the Administrative Agent, either Co-Syndication Agent nor either Co-Documentation Agent shall have any duty or responsibility to provide any Lender with any credit or other information concerning the affairs, financial condition or business of either Borrower (or any of its Affiliates) which may come into the possession of the Administrative Agent, either Co-Syndication Agent, either Co-Documentation Agent or any of its respective Affiliates.  In this regard, each Lender acknowledges that Andrews Kurth L.L.P. is acting in this transaction as special counsel to the Administrative Agent only.  Each Lender will consult with its own legal counsel to the extent that it deems necessary in connection with this Agreement and other Loan Documents and the matters contemplated herein and therein.

SECTION 8.07

Action by Administrative Agent.  Except for action or other matters expressly required of the Administrative Agent hereunder, the Administrative Agent shall in all cases be fully justified in failing or refusing to act hereunder unless it shall (a) receive written instructions from the Required Lenders (or all of the Lenders as expressly required by Section 10.02) specifying the action to be taken, and (b) be indemnified to its satisfaction by the Lenders against any and all liability and expenses which may be incurred by it by reason of taking or continuing to take any such action.  The instructions of the Required Lenders (or all of the Lenders as expressly required by Section 10.02) and any action taken or failure to act pursuant thereto by the Administrative Agent shall be binding on all of the Lenders.  If a Default or Event of Default has occurred and is continuing, the Administrative Agent shall take such action with respect to such Default or Event of Default as shall be directed by the Required Lenders (or all of the Lenders as required by Section 10.02) in the written instructions (with indemnities) described in this Section 8.07; provided that, unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders.  In no event, however, shall the Administrative Agent be required to take any action which exposes the Administrative Agent to personal liability or which is contrary to this Agreement or applicable law.

SECTION 8.08

Resignation or Removal of Administrative Agent.  Subject to the appointment and acceptance of a successor Administrative Agent as provided below, the Administrative Agent may resign at any time by giving notice thereof to the Lenders and the Company, and the Administrative Agent may be removed at any time with or without cause by the Required Lenders.  Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Administrative Agent (so long as no Default or Event of Default exists) with the prior written consent of the Company (which consent will not unreasonably be withheld).  If no successor Administrative Agent shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent’s giving of notice of resignation or the Required Lenders’ removal of the retiring Administrative Agent, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent (so long as no Default or Event of Default exists) with the prior written consent of the Company (which consent will not unreasonably be withheld).  Upon the acceptance of such appointment hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder.  After any retiring Administrative Agent’s resignation or removal hereunder as Administrative Agent, the provisions of this Article VIII and Section 10.03 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent.

SECTION 8.09

Duties of Co-Syndication Agents and Co-Documentation Agents. Notwithstanding the indemnity of the Co-Syndication Agents and the Co-Documentation Agents contained in Section 8.05 and in Section 9.03, nothing contained in this Agreement shall be construed to impose any obligation or duty whatsoever on any Person named on the cover of this Agreement or elsewhere in this Agreement as Co-Syndication Agents, Co-Documentation Agents, Joint Lead Arranger or Joint Book Manager, other than those applicable to all Lenders as such.

ARTICLE IX.

GUARANTY

SECTION 9.01

Guaranty.  (a) In consideration of, and in order to induce the Administrative Agent and the Lenders to enter into this Agreement and to induce the Lenders to make the Loans and the Issuing Bank thereof to maintain the Subsidiary Borrower Letter of Credit and the other Existing Letters of Credit and the Issuing Banks to issue new Letters of Credit hereunder, the Company hereby absolutely, unconditionally and irrevocably guarantees the punctual payment and performance when due, whether at stated maturity, by acceleration or otherwise, of the Obligations of the Subsidiary Borrower, and all covenants of the Subsidiary Borrower, now or hereafter existing under this Agreement and the other Loan Documents to which the Subsidiary Borrower is a party, whether for principal, interest (including interest accruing or becoming owing both prior to and subsequent to the commencement of any proceeding against or with respect to the Subsidiary Borrower under any chapter of Title 11 of the United States Code, as now or hereafter in effect, or any successor thereto (the “Bankruptcy Code”)), fees, commissions, expenses (including reasonable attorneys’ fees and expenses) or otherwise (all such obligations being the “Guaranteed Obligations”).  The Company agrees to pay any and all expenses incurred by each Lender and the Administrative Agent in enforcing this Guaranty against the Company.

(b)

This Guaranty is an absolute, unconditional, present and continuing guaranty of payment and not of collectibility and is in no way conditioned upon any attempt to collect from the Subsidiary Borrower or any other action, occurrence or circumstance whatsoever.

SECTION 9.02

Continuing Guaranty.  (a) The Company guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of this Agreement and the other Loan Documents.  The Company agrees that, to the maximum extent permitted by applicable law, the Guaranteed Obligations and Loan Documents to which the Subsidiary Borrower is a party may be extended or renewed, and indebtedness thereunder repaid and reborrowed in whole or in part, without notice to or assent by the Company, and that it will remain bound upon this Guaranty notwithstanding any extension, renewal or other alteration of any Guaranteed Obligations or such Loan Documents, or any repayment and reborrowing of Loans.  To the maximum extent permitted by applicable law, except as otherwise expressly provided in this Agreement or any other Loan Document to which the Company is a party, the obligations of the Company under this Guaranty shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms hereof under any circumstances whatsoever, including:

(i)

any modification, amendment, supplement, renewal, extension for any period, increase, decrease, alteration or rearrangement of all or any part of the Guaranteed Obligations, or of this Agreement or any other Loan Document executed in connection herewith, or any contract or understanding among the Company, the Subsidiary Borrower, the Administrative Agent and/or the Lenders, or any other Person, pertaining to the Guaranteed Obligations;

(ii)

any adjustment, indulgence, forbearance or compromise that might be granted or given by the Lenders to the Company or any other Person liable on the Guaranteed Obligations;

(iii)

the insolvency, bankruptcy, arrangement, adjustment, composition, liquidation, disability, dissolution or lack of power of the Company, the Subsidiary Borrower or any other Person at any time liable for the payment of all or part of the Guaranteed Obligations; or any dissolution of the Company, the Subsidiary Borrower or any sale, lease or transfer of any or all of the assets of the Company or the Subsidiary Borrower, or any changes in the shareholders of the Company, the Subsidiary Borrower, or any reorganization of the Company or the Subsidiary Borrower;

(iv)

the invalidity, illegality or unenforceability of all or any part of the Guaranteed Obligations, or any document or agreement executed in connection with the Guaranteed Obligations, for any reason whatsoever, including the fact that (A) the Guaranteed Obligations, or any part thereof, exceeds the amount permitted by law, (B) the act of creating the Guaranteed Obligations or any part thereof is ultra vires, (C) the officers or representatives executing the documents or otherwise creating the Guaranteed Obligations acted in excess of their authority, (D) the Guaranteed Obligations or any part thereof violate applicable usury laws, (E) the Company or the Subsidiary Borrower has valid defenses, claims and offsets (whether at law or in equity, by agreement or by statute) which render the Guaranteed Obligations wholly or partially uncollectible from the Company or the Subsidiary Borrower, (F) the creation, performance or repayment of the Guaranteed Obligations (or execution, delivery and performance of any document or instrument representing part of the Guaranteed Obligations or executed in connection with the Guaranteed Obligations, or given to secure the repayment of the Guaranteed Obligations) is illegal, uncollectible, legally impossible or unenforceable, or (G) this Agreement, any other Loan Document, or any other document or instrument pertaining to the Guaranteed Obligations has been forged or otherwise is irregular or not genuine or authentic;

(v)

any full or partial release of the liability of the Company or the Subsidiary Borrower on the Guaranteed Obligations or any part thereof, or any other Person now or hereafter liable, whether directly or indirectly, jointly, severally, or jointly and severally, to pay, perform, guarantee or assure the payment of the Guaranteed Obligations or any part thereof; it being recognized, acknowledged and agreed by the Company that the Company may be required to pay the Guaranteed Obligations in full without assistance or support of any other Person, and the Company has not been induced to enter into this Guaranty on the basis of a contemplation, belief, understanding or agreement that any other Person will be liable to perform the Guaranteed Obligations, or that the Administrative Agent or any Lender will look to any other Person to perform the Guaranteed Obligations;

(vi)

the taking or accepting of any other security, collateral or guaranty, or other assurance of payment, for all or any part of the Guaranteed Obligations;

(vii)

any release, surrender, exchange, subordination, deterioration, waste, loss or impairment of any collateral, property or security, at any time existing in connection with, or assuring or securing payment of, all or any part of the Guaranteed Obligations;

(viii)

the failure of the Administrative Agent, the Lenders or any other Person to exercise diligence or reasonable care in the preservation, protection, enforcement, sale or other handling or treatment of all or any part of such collateral, property or security;

(ix)

the fact that any collateral, security or Lien contemplated or intended to be given, created or granted as security for the repayment of the Guaranteed Obligations shall not be properly perfected or created, or shall prove to be unenforceable or subordinate to any other Lien; it being recognized and agreed by the Company that the Company is not entering into this Guaranty in reliance on, or in contemplation of the benefits of, the validity, enforceability, collectibility or value of any of the collateral for the Guaranteed Obligations;

(x)

any payment by the Subsidiary Borrower or the Company to the Administrative Agent or any Lender is held to constitute a preference under bankruptcy laws, or for any other reason either the Administrative Agent or any Lender is required to refund such payment or pay such amount to the Subsidiary Borrower or any other Person; or

(xi)

any other action taken or omitted to be taken with respect to this Agreement, any other Loan Document, the Guaranteed Obligations, or any security and collateral therefor, whether or not such action or omission prejudices the Company or increases the likelihood that the Company will be required to pay the Guaranteed Obligations pursuant to the terms hereof;

it being the unambiguous and unequivocal intention of the Company that the Company shall be obligated to pay the Guaranteed Obligations when due, notwithstanding any occurrence, circumstance, event, action, or omission whatsoever, whether contemplated or uncontemplated, and whether or not otherwise or particularly described herein, except for the full and final payment and satisfaction of the Guaranteed Obligations after the termination of the Commitments of all Lenders and the expiration or termination of the Subsidiary Borrower Letter of Credit.

(b)

The Company further agrees that, to the fullest extent permitted by law, as between the Company, on the one hand, and the Lenders and the Administrative Agent, on the other hand, (i) the maturity of the Guaranteed Obligations may be accelerated as provided in Article VII for the purposes of this Guaranty, notwithstanding any stay, injunction or other prohibition preventing such acceleration of the Guaranteed Obligations, and (ii) in the event of any acceleration of the Guaranteed Obligations as provided in Article VII, the Guaranteed Obligations (whether or not due and payable) shall forthwith become due and payable by the Company for the purpose of this Guaranty.

SECTION 9.03

Effect of Debtor Relief Laws.  If after receipt of any payment of all or any part of the Guaranteed Obligations, the Administrative Agent, any Issuing Bank or any Lender is for any reason compelled to surrender or voluntarily surrenders, such payment to any Person (a) because such payment is or may be avoided, invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, fraudulent conveyance, fraudulent transfer, impermissible set-off or a diversion of trust funds or (b) for any other reason, including (i) any judgment, decree or order of any court or administrative body having jurisdiction over the Administrative Agent, any Issuing Bank, any Lender or any of their respective properties or (ii) any settlement or compromise of any such claim effected by the Administrative Agent, any Issuing Bank or any Lender with any such claimant (including the Subsidiary Borrower), then the Guaranteed Obligations or part thereof intended to be satisfied shall be reinstated and continue, and this Guaranty shall continue in full force as if such payment had not been received, notwithstanding any revocation thereof or the cancellation of any instrument evidencing any of the Guaranteed Obligations or otherwise; and the Company shall be liable to pay the Administrative Agent, the Issuing Banks and the Lenders, and hereby does indemnify the Administrative Agent, the Issuing Banks and the Lenders and holds them harmless for the amount of such payment so surrendered and all reasonable expenses (including reasonable attorneys’ fees, court costs and expenses attributable thereto) incurred by the Administrative Agent, any Issuing Bank or any Lender in the defense of any claim made against it that any payment received by the Administrative Agent, any Issuing Bank or any Lender in respect of all or part of the Guaranteed Obligations must be surrendered.  The provisions of this paragraph shall survive the termination of this Guaranty, and any satisfaction and discharge of the Subsidiary Borrower by virtue of any payment, court order or any Federal or state law.

SECTION 9.04

Waiver.  The Company hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Guaranteed Obligations and this Guaranty and waives presentment, demand for payment, notice of intent to accelerate, notice of dishonor or nonpayment and any requirement that the Administrative Agent or any Lender institute suit, collection proceedings or take any other action to collect the Guaranteed Obligations, including any requirement that the Administrative Agent or any Lender exhaust any right or take any action against the Subsidiary Borrower or any other Person or any collateral (it being the intention of the Administrative Agent, the Lenders and the Company that this Guaranty is to be a guaranty of payment and not of collection).  It shall not be necessary for the Administrative Agent or any Lender, in order to enforce any payment by the Company hereunder, to institute suit or exhaust its rights and remedies against the Subsidiary Borrower or any other Person, including others liable to pay any Guaranteed Obligations, or to enforce its rights against any security ever given to secure payment thereof.  The Company hereby expressly waives to the maximum extent permitted by applicable law each and every right to which it may be entitled by virtue of the suretyship laws of the State of New York or any other state in which it may be located, including any and all rights it may have pursuant to Rule 31, Texas Rules of Civil Procedure, Section 17.001 of the Texas Civil Practice and Remedies Code and Chapter 34 of the Texas Business and Commerce Code.

SECTION 9.05

Full Force and Effect.  This Guaranty  is a continuing guaranty and shall remain in full force and effect until all of the Guaranteed Obligations under this Agreement and the other Loan Documents to which the Subsidiary Borrower is a party and all other amounts payable under this Guaranty have been paid in full (after the termination of the Commitments of the Lenders and the termination or expiration of the Subsidiary Borrower Letter of Credit).  All rights, remedies and powers provided in this Guaranty may be exercised, and all waivers contained in this Guaranty may be enforced, only to the extent that the exercise or enforcement thereof does not violate any provisions of applicable law which may not be waived.

ARTICLE X.

MISCELLANEOUS

SECTION 10.01

Notices, Etc.  ix)  The Administrative Agent, any Issuing Bank, any Lender or the holder of any of the Obligations, giving consent or notice or making any request of either Borrower provided for hereunder, shall notify each Lender (in the case of the Administrative Agent and/or any Issuing Bank) and the Administrative Agent (in the case of a Lender or an Issuing Bank) thereof.  In the event that the holder of any Note or any of the Obligations (including any Lender) shall transfer such Note or Obligations, it shall promptly so advise the Administrative Agent which shall be entitled to assume conclusively that no transfer of any Note or any of the Obligations has been made by any holder (including any Lender) unless and until the Administrative Agent receives written notice to the contrary.  

(b)

Except with respect to notices and other communications expressly permitted to be given by telephone, all notices, consents, requests, approvals, demands and other communications (collectively “Communications”) provided for herein shall be in writing (including facsimile Communications) and mailed, telecopied or delivered:

(i)

if to the Company, to it at:

500 Dallas, Suite 1000

Houston, Texas 77002

Attention:

C. Park Shaper

Telecopy No:(713) 369-9499;

(ii)

if to the Subsidiary Borrower, to it in care of the Company;

(iii)

if to the Administrative Agent, to it at:

c/o Wachovia Capital Markets LLC

1001 Fannin Street, Suite 2255

Houston, Texas 77002

Attention:  Russell Clingman

Telecopy No.:(713)-650-6354;

(iv)

if to the Swingline Lender, to it at:

c/o Wachovia Capital Markets LLC

1001 Fannin Street, Suite 2255

Houston, Texas 77002

Attention:  Russell Clingman

Telecopy No.:(713) 650-6354; and

 

(v)

if to any other Lender or to any Issuing Bank, to it at its address (or telecopy number) set forth in the Administrative Questionnaire delivered by such Person to the Administrative Agent or in the Assignment and Acceptance executed by such Person;

or, in the case of any party hereto, such other address or telecopy number as such party may hereafter specify for such purpose by notice to the other parties.

(c)

Communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Lender.  The Administrative Agent or the Company may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.

(d)

Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto.  All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.

SECTION 10.02

Waivers; Amendments.  (a) No failure or delay by the Administrative Agent, any Issuing Bank or any Lender in exercising, and no course of dealing with respect to, any right or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. No notice to or demand on either Borrower in any case shall entitle such Borrower to any other or further notice or demand in similar or other circumstances.  No waiver of any provision of this Agreement or consent to any departure therefrom shall in any event be effective unless the same shall be permitted by Section 10.02(b), and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default or Event of Default, regardless of whether the Administrative Agent, any Lender or any Issuing Bank may have had notice or knowledge of such Default at the time.

(b)

No provision of this Agreement or any other Loan Document provision may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrowers and the Required Lenders or by the Borrowers and the Administrative Agent with the consent of the Required Lenders; provided that no such agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder or under the Fee Letter, without the written consent of each Lender affected thereby, (iii) postpone the scheduled date of payment of the principal amount of any Loan or LC Disbursement (including any payment required by Section 2.10(b)), or any interest thereon, or any fees payable hereunder or under the Fee Letter, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender affected thereby, (iv) change Section 2.18(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, or (v) release the Company from its guaranty contained in Article IX, change any of the provisions of this Section 10.02(b), Section 10.05 or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender; provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent or any Issuing Bank hereunder without the prior written consent of the Administrative Agent or such Issuing Bank, as the case may be.

SECTION 10.03

Payment of Expenses, Indemnities, etc.  The Company agrees:

(a)

to pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the syndication of the credit facilities provided for herein, the preparation and administration of this Agreement or any amendments, modifications or waivers of the provisions hereof, (ii) all reasonable out-of-pocket expenses incurred by any Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, any Issuing Bank or any Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent, any Issuing Bank or any Lender, in connection with the enforcement or protection of its rights in connection with this Agreement, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during  any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

(b)

TO INDEMNIFY THE ADMINISTRATIVE AGENT, THE CO-SYNDICATION AGENTS, THE CO-DOCUMENTATION AGENTS, EACH ISSUING BANK AND EACH LENDER AND EACH OF THEIR AFFILIATES AND EACH OF THEIR OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, AGENTS, ATTORNEYS, ACCOUNTANTS AND EXPERTS (“INDEMNIFIED PARTIES”) FROM, HOLD EACH OF THEM HARMLESS AGAINST AND PROMPTLY UPON DEMAND PAY OR REIMBURSE EACH OF THEM FOR, THE INDEMNITY MATTERS WHICH MAY BE REASONABLY INCURRED BY OR ASSERTED AGAINST OR INVOLVE ANY OF THEM (WHETHER OR NOT ANY OF THEM IS DESIGNATED A PARTY THERETO) AS A RESULT OF, ARISING OUT OF OR IN ANY WAY RELATED TO (I) ANY ACTUAL OR PROPOSED USE BY EITHER BORROWER OF THE PROCEEDS OF ANY OF THE LOANS OR ANY LETTER OF CREDIT, (II) THE EXECUTION, DELIVERY AND PERFORMANCE OF THE LOAN DOCUMENTS, (III) THE OPERATIONS OF THE BUSINESS OF THE COMPANY AND THE SUBSIDIARIES, (IV) THE FAILURE OF THE COMPANY OR ANY SUBSIDIARY TO COMPLY WITH THE TERMS OF THIS AGREEMENT, OR WITH ANY REQUIREMENT OF LAW, (V) ANY INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY WARRANTY OF EITHER BORROWER SET FORTH IN ANY OF THE LOAN DOCUMENTS, (VI) THE ISSUANCE, EXECUTION AND DELIVERY OR TRANSFER OF OR PAYMENT OR FAILURE TO PAY UNDER ANY LETTER OF CREDIT, (VII) THE PAYMENT OF A DRAWING UNDER ANY LETTER OF CREDIT NOTWITHSTANDING THE NON-COMPLIANCE, NON-DELIVERY OR OTHER IMPROPER PRESENTATION OF THE MANUALLY EXECUTED DRAFT(S) AND CERTIFICATION(S) OR (VIII) ANY OTHER ASPECT OF THE LOAN DOCUMENTS, INCLUDING THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL AND ALL OTHER EXPENSES INCURRED IN CONNECTION WITH INVESTIGATING, DEFENDING OR PREPARING TO DEFEND ANY SUCH ACTION, SUIT, PROCEEDING (INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES) OR CLAIM AND INCLUDING ALL INDEMNITY MATTERS ARISING BY REASON OF THE ORDINARY NEGLIGENCE OF ANY INDEMNIFIED PARTY, BUT EXCLUDING ALL INDEMNITY MATTERS ARISING SOLELY BY REASON OF CLAIMS BETWEEN THE LENDERS OR ANY LENDER AND THE ADMINISTRATIVE AGENT, EITHER CO-SYNDICATION AGENT, OR EITHER CO-DOCUMENTATION AGENT OR A LENDER’S SHAREHOLDERS AGAINST THE ADMINISTRATIVE AGENT OR LENDER OR BY REASON OF THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT  OR UNLAWFUL CONDUCT ON THE PART OF THE INDEMNIFIED PARTY SEEKING INDEMNIFICATION.

(c)

TO INDEMNIFY AND HOLD HARMLESS FROM TIME TO TIME THE INDEMNIFIED PARTIES FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, COST RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES TO WHICH ANY SUCH PERSON MAY BECOME SUBJECT (I) UNDER ANY ENVIRONMENTAL LAW APPLICABLE TO THE COMPANY OR ANY SUBSIDIARY OR ANY OF THEIR PROPERTIES OR ASSETS, INCLUDING THE TREATMENT OR DISPOSAL OF HAZARDOUS MATERIALS ON ANY OF THEIR PROPERTIES OR ASSETS, (II) AS A RESULT OF THE BREACH OR NON-COMPLIANCE BY THE COMPANY OR ANY SUBSIDIARY WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE COMPANY OR ANY SUBSIDIARY, (III) DUE TO PAST OWNERSHIP BY THE COMPANY OR ANY SUBSIDIARY OF ANY OF THEIR PROPERTIES OR ASSETS OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES OR ASSETS WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT LIABILITY, (IV) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT OR DISPOSAL OF HAZARDOUS MATERIALS ON OR AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE BORROWERS OR ANY SUBSIDIARY, OR (V) ANY OTHER ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE LOAN DOCUMENTS.

(d)

No Indemnified Party may settle any claim to be indemnified without the consent of the indemnitor, such consent not to be unreasonably withheld; provided, that the indemnitor may not reasonably withhold consent to any settlement that an Indemnified Party proposes, if the indemnitor does not have the financial ability to pay all its obligations outstanding and asserted against the indemnitor at that time, including the maximum potential claims against the Indemnified Party to be indemnified pursuant to this Section 10.03.

(e)

In the case of any indemnification hereunder, the Administrative Agent or Lender, as appropriate shall give notice to the Company of any such claim or demand being made against the Indemnified Party and the Company shall have the non-exclusive right to join in the defense against any such claim or demand; provided that if the Company provides a defense, the Indemnified Party shall bear its own cost of defense unless there is a conflict between the Company and such Indemnified Party.

(f)

THE FOREGOING INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED PARTIES NOTWITHSTANDING THE SOLE OR CONCURRENT NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING, ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNIFIED PARTIES OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE INDEMNIFIED PARTIES.  TO THE EXTENT THAT AN INDEMNIFIED PARTY IS FOUND TO HAVE COMMITTED AN ACT OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR ENGAGED IN UNLAWFUL CONDUCT, THIS CONTRACTUAL OBLIGATION OF INDEMNIFICATION SHALL CONTINUE BUT SHALL ONLY EXTEND TO THE PORTION OF THE CLAIM THAT IS DEEMED TO HAVE OCCURRED BY REASON OF EVENTS OTHER THAN THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR UNLAWFUL CONDUCT OF THE INDEMNIFIED PARTY.

(g)

The Company’s obligations under this Section 10.03 shall survive any termination of this Agreement, the payment of the Loans and the expiration of the Letters of Credit and shall continue thereafter in full force and effect, for a period of six years.

(h)

To the extent that the Company fails to pay any amount required to be paid by it to the Administrative Agent or any Issuing Bank under this Section 10.03, each Lender severally agrees to pay to the Administrative Agent or such Issuing Bank, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent or such Issuing Bank in its capacity as such.

(i)

The Company shall pay any amounts due under this Section 10.03 within thirty (30) days of the receipt by the Company of notice of the amount due.

SECTION 10.04

Successors and Assigns.  The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Banks and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

SECTION 10.05

Assignments and Participations.

(a)

Neither Borrower may assign its rights or obligations hereunder or under the Notes or any Letter of Credit without the prior consent of all of the Lenders and the Administrative Agent.

(b)

Any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that (i) except in the case of an assignment to a Lender or an Affiliate of a Lender, each of the Company and the Administrative Agent (and, in the case of an assignment of all or a portion of a Commitment or any Lender’s obligations in respect of its LC Exposure or Swingline Exposure, the Issuing Banks and the Swingline Lender) must give their prior written consent to such assignment (which consent shall not be unreasonably withheld), (ii) except in the case of an assignment to a Lender or an Affiliate of a Lender or an assignment of the entire remaining amount of the assigning Lender’s Commitment, the amount of the Commitment of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Company and the Administrative Agent otherwise consent, (iii) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement, (iv) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Acceptance, together with a processing and recordation fee of $3,500 for each such assignment, and (v) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire; provided further that any consent of the Company otherwise required under this Section 10.05(b) shall not be required if an Event of Default has occurred and is continuing.  Upon acceptance and recording pursuant to Section 10.05(d), from and after the effective date specified in each Assignment and Acceptance, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Acceptance, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Acceptance, be released from its obligations under this Agreement (and, in the case of an Assignment and Acceptance covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 10.03).  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 10.05(e).

(c)

The Administrative Agent, acting for this purpose as an agent of the Borrowers, shall maintain at one of its offices in Charlotte, North Carolina a copy of each Assignment and Acceptance delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and each Borrower, the Administrative Agent, the Issuing Banks and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by either Borrower, any Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(d)

Upon its receipt of a duly completed Assignment and Acceptance executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in Section 10.05(b) and any written consent to such assignment required by Section 10.05(b), the Administrative Agent shall accept such Assignment and Acceptance and record the information contained therein in the Register.  No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(e)

Any Lender may, without the consent of either Borrower, the Administrative Agent or any Issuing Bank, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Company, the Administrative Agent, the Issuing Banks and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 10.02(b) that affects such Participant.  Subject to Section 10.05(f), each Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 10.05(b), and be indemnified under Section 10.03 as if it were a Lender.  In addition, each agreement creating any participation must include an agreement by the Participant to be bound by the provisions of Section 10.12.

(f)

A Participant shall not be entitled to receive any greater payment under Section 2.15 or 2.17 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Company’s prior written consent.  A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.17 unless the Company is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Company, to comply with Section 2.17(e) as though it were a Lender.

(g)

The Lenders may furnish any information concerning the Borrowers in the possession of the Lenders from time to time to assignees and Participants (including prospective assignees and participants); provided that, such Persons agree to be bound by the provisions of Section 10.12 hereof.

(h)

Notwithstanding anything in this Section 10.05 to the contrary, any Lender may assign and pledge its Notes to any Federal Reserve Bank or the United States Treasury as collateral security pursuant to Regulation A and any operating circular issued by such Federal Reserve System and/or such Federal Reserve Bank.  No such assignment and/or pledge shall release the assigning and/or pledging Lender from its obligations hereunder.

(i)

Notwithstanding any other provisions of this Section 10.05, no transfer or assignment of the interests or obligations of any Lender or any grant of participations therein shall be permitted if such transfer, assignment or grant would require either Borrower to file a registration statement with the SEC or to qualify the Loans under the “Blue Sky” laws of any state.

SECTION 10.06

Survival; Reinstatement.  (a) All covenants, agreements, representations and warranties made by the Borrowers herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, any Issuing Bank or any Lender may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated.  The provisions of Sections 2.15, 2.16, 2.17 and 10.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.

(b)

To the extent that any payments on the Obligations are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, debtor in possession, receiver or other Person under any bankruptcy law, common law or equitable cause, then to such extent, the Obligations so satisfied shall be revived and continue as if such payment or proceeds had not been received.

SECTION 10.07

Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement, the other Loan Documents and the Fee Letter constitute the entire contract among the parties hereto relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof (including the Executive Summary).  Except as provided in Section 3.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.  Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.

SECTION 10.08

Severability.  Any provision of this Agreement held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 10.09

Right of Setoff.  If an Event of Default shall have occurred and be continuing, each Lender is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other indebtedness at any time owing by such Lender to or for the credit or the account of either Borrower against any of and all the Obligations now or hereafter existing under this Agreement and the other Loan Documents held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and although such Obligations may be unmatured.  The rights of each Lender under this Section 10.09 are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.

SECTION 10.10

Governing Law; Jurisdiction; Consent to Service of Process.

(a)

This Agreement and the other Loan Documents shall be construed in accordance with and governed by the laws of the State of New York.

(b)

ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE BOROUGH OF MANHATTAN OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY AND ASSETS, UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS WITH RESPECT TO ANY SUCH ACTION OR PROCEEDING.  EACH BORROWER HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CT CORPORATION SYSTEM, INC., WITH OFFICES ON THE DATE HEREOF AT 111 8TH AVENUE, NEW YORK, NEW YORK 10011, AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE AND ACCEPT FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING.  IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH SUCH BORROWER AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK, NEW YORK ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE ADMINISTRATIVE AGENT.  EACH BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT ITS ADDRESS PROVIDED IN SECTION 10.01, SUCH SERVICE TO BECOME EFFECTIVE THIRTY DAYS AFTER SUCH MAILING.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE  AGENT OR ANY LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST EITHER BORROWER IN ANY OTHER JURISDICTION.

(c)

EACH OF THE BORROWERS HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (b) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO PLEAD OR CLAIM, AND AGREES NOT TO PLEAD OR CLAIM, THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(d)

EACH PARTY HERETO HEREBY (i) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (ii) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (iii) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 10.10.

SECTION 10.11

WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.11.

SECTION 10.12

Confidentiality.  Each of the Administrative Agent, the Issuing Banks and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates, directors, officers and employees and to its agents, including accountants, legal counsel and other advisors who have been informed of the confidential nature of the information provided, (b) to the extent requested by any regulatory authority, including the National Association of Insurance Commissioners or any similar organization, or any nationally recognized rating agency that requires access to information about a Lender’s investment portfolio, (c) to the extent a Lender reasonably believes it is required by applicable laws or regulations or by any subpoena or similar legal process (and such Lender will provide prompt notice thereof to the Company), (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an understanding with such Person that such Person will comply with this Section 10.12, to any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement, (g) with the consent of the Company or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section 10.12 or (ii) becomes available to the Administrative Agent, any Issuing Bank or any Lender from a source other than a Borrower (unless such source is actually known by the individual providing the information to be bound by a confidentiality agreement or other legal or contractual obligation of confidentiality with respect to such information).  For the purposes of this Section 10.12, “Information” means all information received from either Borrower relating to either Borrower or its business, other than any such information that is known to a Lender, publicly known or otherwise available to the Administrative Agent, any Issuing Bank or any Lender other than through disclosure (a) by a Borrower, or (b) from a source actually known to a Lender to be bound by a confidentiality agreement or other legal or contractual obligation of confidentiality with respect to such information.  Any Person required to maintain the confidentiality of Information as provided in this Section 10.12 shall be considered to have complied with its obligation to do so if such Person maintains the confidentiality of such Information in accordance with procedures adopted in good faith to protect confidential Information of third parties delivered to a lender.

SECTION 10.13

Interest Rate Limitation.  Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section 10.13 shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.

SECTION 10.14

EXCULPATION PROVISIONS.  EACH OF THE PARTIES HERETO SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT, THE NOTES AND (IN THE CASE OF THE COMPANY AND THE ADMINISTRATIVE AGENT) THE FEE LETTER AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY.  EACH PARTY HERETO AGREES AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF THIS AGREEMENT ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT “CONSPICUOUS.”

SECTION 10.15

U.S. Patriot Act

.  Each Lender that is subject to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”) hereby notifies the Borrowers that pursuant to the requirements of the Patriot Act, it is required to obtain, verify, and record information that identifies the Borrowers, which information includes the name and address of each Borrower and other information that will allow such Lender to identify such Borrower in accordance with the Patriot Act.

The parties hereto have caused this Agreement to be duly executed as of the date and year first above written.

KINDER MORGAN ENERGY PARTNERS, L.P.,

as the Company

 

By: Kinder Morgan G.P., Inc.,

     its General Partner

By: Kinder Morgan Management, LLC,

     its Delegate

By: /s/ Joseph Listengart                                         

Name:Joseph Listengart                                         

Title:Vice President, General Counsel and Secretary

 

KINDER MORGAN OPERATING L.P. “B”,

as the Subsidiary Borrower 

By:Kinder Morgan G.P., Inc.,

its General Partner

By: Kinder Morgan Management, LLC,

its Delegate

By: /s/ Joseph Listengart                                         

Name:Joseph Listengart                                          

Title:Vice President, General Counsel and Secretary

 

WACHOVIA BANK, NATIONAL ASSOCIATION,

as the Administrative Agent and as a Lender

By:

/s/ Dan Wolff                         

Name:

Dan Wolff                              

Title:

Vice President                        

 

CITIBANK, N.A.,

as a Co-Syndication Agent and as a Lender

By:

/s/ Shirley E. Burrow           

Name:

Shirley E. Burrow                

Title:

Attorney-in-Fact                  

 

BARCLAYS BANK PLC,

as a Co-Documentation Agent and as a Lender

By:

/s/ Nicholas Bell                 

Name:

Nicholas Bell                      

Title:

Director                              

 

JPMORGAN CHASE BANK, N.A.

as a Co-Syndication Agent and as a Lender

By: 

/s/ Kenneth J. Fatur              

Name:

Kenneth J. Fatur                   

Title:

Vice President                      

 

THE ROYAL BANK OF SCOTLAND plc,

as a Co-Documentation Agent and as a Lender

By:

/s/ Matthew J. Main            

Name:

Matthew J. Main                 

Title:

Senior Vice President          

 

THE BANK OF TOKYO-MITSUBISHI, LTD.,

HOUSTON AGENCY

By:

/s/ K. Glasscock           

Name:

K. Glasscock                

Title:

VP & Manager              

 

SUNTRUST BANK

By:

/s/ David Edge                

Name:

David Edge                     

Title:

Managing Director           

 

HARRIS NESBITT FINANCING, INC.

By:

/s/ Cahal B. Carmody         

Name:

Cahal B. Carmody             

Title:

Vice President                     

 

WILLIAM STREET COMMITMENT CORPORATION

(Recourse only to assets of William Street Commitment Corporation)

By:

/s/ Mark Walton           

Name:

Mark Walton                

Title:

Assistant Vice President

 

SUMITOMO MITSUI BANKING CORPORATION

By:

/s/ William M. Ginn    

Name:

William M. Ginn         

Title:

General Manager        

 

COMMERZBANK AG,

NEW YORK AND GRAND CAYMAN BRANCHES

By:

/s/ Andrew Kjoller      

Name:

Andrew Kjoller           

Title:

Vice President             

By:

/s/ Barbara Stacks             

Name:

Barbara Stacks                  

Title:

Assistant Vice President      

 

LEHMAN BROTHERS BANK, FSB

By:

/s/ Janine M. Shugan         

Name:

Janine M. Shugan              

Title:

Authorized Signatory         

 

CALYON, NEW YORK BRANCH

By:

/s/ Philippe Soustra             

Name:

Philippe Soustra                  

Title:

Executive Vice President     

By:

/s/ J. Busquet                        

Name:

J. Busquet                             

Title:

EVP                                     

 

DEUTSCHE BANK AG NEW YORK BRANCH

By:

/s/ Rainer Meier                       

Name:

Rainer Meier                           

Title:

Assistant Vice President          

By:

/s/ Marcus Tarkington               

Name:

Marcus Tarkington                    

Title:

Director                                    

 

UBS LOAN FINANCE LLC

By:

/s/ Irja R. Otsa                       

Name:

Irja R. Otsa                           

Title:

Associate Director                 

Banking Products                   

Services, US                          

By:

/s/ Winstowe Ogbourne            

Name:

Winstowe Ogbourne                 

Title:

Associate Director                    

Banking Products                      

Services, US                             

 

BANK OF AMERICA, N.A.

By:

/s/ Gregory B. Hanson           

Name:

Gregory B. Hanson                

Title:

Vice President                        

 

MERRILL LYNCH BANK USA

By:

/s/ Louis Alder                        

Name:

Louis Alder                             

Title:

Director                                  

 

CREDIT SUISSE, Cayman Islands Branch

By:

/s/ Vanessa Gomez                  

Name:

Vanessa Gomez                       

Title:

Vice President                          

By:

/s/ Denise Alvarez                      

Name:

Denise Alvarez                           

Title:

Associate                                   

 

WELLS FARGO BANK TEXAS, N.A.

By:

/s/ Marc Cuenod                  

Name:

Marc Cuenod                       

Title:

Vice President                       

SCHEDULE 1.01

 COMMITMENTS

  
	Wachovia Bank, National Association

	$

153,333,333.33

	Citibank, N.A.

	$

153,333,333.33

	JPMorgan Chase Bank

	$

153,333,333.33

	The Royal Bank of Scotland plc

	$

121,333,333.33

	Barclays Bank PLC

	$

121,333,333.33

	The Bank of Tokyo-Mitsubishi, Ltd, --

Houston Agency

	

$

121,333,333.33

	SunTrust Bank

	$

121,333,333.33

	William Street Commitment Corporation

	$

60,666,666.67

	Sumitomo Mitsui Banking Corporation

	$

60,666,666.67

	Commerzbank AG, New York and Grand Cayman

Branches

	$

66,666,666.67

	Lehman Brothers Bank, FSB

	$

66,666,666.67

	Calyon, New York Branch

	$

66,666,666.67

	Deutsche Bank AG New York Branch

	$

66,666,666.67

	UBS Loan Finance LLC

	$

66,666,666.67

	Bank of America, N.A.

	$

66,666,666.67

	Merrill Lynch Bank USA

	$

66,666,666.67

	Credit Suisse First Boston

	$

33,333,333.33

	Wells Fargo Bank Texas, N.A.

	$

33,333,333.33

	TOTAL

	$

1,600,000,000.00

  

EXHIBIT 1.01A

FORM OF ASSIGNMENT AND ACCEPTANCE

Dated: ________________

Reference is made to the Credit Agreement dated as of August 5, 2005 (as restated, amended, modified, supplemented and in effect from time to time, the “Credit Agreement”), among Kinder Morgan Energy Partners, L.P., a Delaware limited partnership (the “Company”), Kinder Morgan Operating L.P. “B”, a Delaware limited partnership (the “Subsidiary Borrower”), the Lenders named therein, Wachovia Bank, National Association, as the Administrative Agent (the “Administrative Agent”) and the other agents named therein.  Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.

This Assignment and Acceptance, between the Assignor (as defined and set forth in Schedule I hereto and made a part hereof) and the Assignee (as defined and set forth on Schedule I hereto and made a part hereof) is dated as of the Effective Date of Assignment (as set forth on Schedule I hereto and made a part hereof).

1.

The Assignor hereby irrevocably sells and assigns to the Assignee without recourse to the Assignor, and the Assignee hereby irrevocably purchases and assumes from the Assignor without recourse to the Assignor, as of the Effective Date of Assignment, an undivided interest (the “Assigned Interest”) in and to all the Assignor’s rights, obligations and claims under the Credit Agreement respecting those, and only those, credit facilities contained in the Credit Agreement as set forth on Schedule I (collectively, the “Assigned Facilities”, individually, an “Assigned Facility”), in a principal amount for each Assigned Facility as set forth on Schedule I.

2.

The Assignor (i) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto, other than that it is the legal and beneficial owner of the Assigned Interest and that the Assigned Interest is free and clear of any adverse claim; (ii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrowers or their respective Subsidiaries or the performance or observance by the Borrowers or their respective Subsidiaries of any of its respective obligations under the Credit Agreement, any other Loan Document or any other instrument or document furnished pursuant thereto; and (iii) attaches the Note if any, held by it evidencing the Assigned Facility or Facilities, as the case may be, and requests that the Administrative Agent exchange such Note(s) for a new Note payable to the Assignor (if the Assignor has retained any interest in the Assigned Facility or Facilities) and a new Note payable to the Assignee in the amount which reflects the assignment being made hereby (and after giving effect to any other assignments which have become effective on the Effective Date of Assignment).

3.

The Assignee (i) represents and warrants that it is legally authorized to enter into this Assignment and Acceptance; (ii) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements referred to in Section 4.07 thereof, or if later, the most recent financial statements delivered pursuant to Section 5.01 thereof, and such other documents and information as it has deemed appropriate to make its own credit analysis; (iii) agrees that it will independently and without reliance upon the Administrative Agent, the Assignor or any other Lender and based on such other documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (iv) appoints and authorizes the Administrative Agent to take such action as such agent on its behalf and to exercise such powers as are reasonably incidental thereto; (v) agrees that it will be bound by the provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender; (vi) confirms that it is an Eligible Assignee; (vii) if the Assignee is organized under the laws of a jurisdiction outside the United States, attaches the forms prescribed by the Internal Revenue Services of the United States certifying as to the Assignee’s exemption from United States withholding taxes with respect to all payments to be made to the Assignee under the Credit Agreement or such other documents as are necessary to indicate that all such payments are subject to such tax at a rate by an applicable tax treaty, and (viii) has supplied the information requested on the administrative questionnaire provided by the Administrative Agent.

4.

Following the execution of this Assignment and Acceptance, it will be delivered to the Administrative Agent for acceptance by it and the Borrowers and recording by the Administrative Agent pursuant to Section 10.05 of the Credit Agreement, effective as of the Effective Date of Assignment (which Effective Date of Assignment shall, unless otherwise agreed to by the Administrative Agent, be at least five Business Days after the execution of this Assignment and Acceptance).

5.

Upon such acceptance and recording, from and after the Effective Date of Assignment, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignee, whether such amounts have accrued prior to the Effective Date of Assignment or accrue subsequent to the Effective Date of Assignment.  The Assignor and Assignee shall make all appropriate adjustments in payments for periods prior to the Effective Date of Assignment by the Administrative Agent or with respect to the making of this assignment directly between themselves.

6.

From and after the Effective Date of Assignment, (i) the Assignee shall be party to the Credit Agreement and, to the extent provided in this Assignment and Acceptance, have the rights and obligations of a Lender thereunder, and (ii) the Assignor shall, to the extent provided in this Assignment and Acceptance or the Credit Agreement, relinquish its claims and rights and be released from its obligations under the Credit Agreement.

7.

THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Acceptance to be executed by their respective duly authorized officers on Schedule I hereto.

                                                            

                                                            

 

Schedule I to Assignment and Acceptance

Legal Name of Assignor:

                                                                                                  

Legal Name of Assignee:

                                                                                                  

Effective Date of Assignment:

                                                                                            

	Assigned Facilities

	 	Principal

Amount of

Assigned Interest

	 	Percentage Assigned of Each

Facility (to at least 8

decimals) (Shown as a

percentage of aggregate

held by all applicable

Lenders)

	 	 	
    	 	 
	Commitment

	 	$                        

	 	
                          %

	Committed Loans

	 	$                        

	 	
                          %

	Competitive Loans

	 	$                        

	 	
                          %

	Total

	 	$                        

	 	

EXHIBIT 1.01B-2

OTHER EXISTING LETTERS OF CREDIT

	Beneficiary

	Purpose

	Global Amount

	Issue Date

	Expiration Date

	Automatic

Renewable

	Morgan Stanley Credit Group

	Crude Hedges

	$

240,000,000.00

	01/15/2004

	12/31/2005

	No

	GE Capital

	Equipment Lease

	$

250,000.00

	12/03/2004

	12/31/2005

	Yes

	National Union Fire Insurance

	Workers’ Comp – SFPP

	$

1,000,000.00

	12/13/2004

	12/03/2005

	Yes

	BNP Paribas

	Crude Hedges

	$

73,000,000.00

	03/30/2005

	12/31/2005

	No

	American Motorists Insurance Co.

	Backup: Surety Bonds

	$

100,000.00

	05/30/2005

	05/30/2006

	Yes

	J Aron & Company

	Crude Hedges

	$

135,000,000.00

	06/27/2005

	12/31/2005

	No

	Travelers Indemnity Insurance

	Workers’ Comp

	$

200,000.00

	06/04/2002

	06/04/2006

	Yes

	JP Morgan Trust Company

	Backup: OHPA Bonds

	$

25,906,588.19

	12/23/2002

	12/23/2005

	No

	JPMorgan Chase Bank, N.A.

	Backup:  Cora Reserve Bonds

	$

24,128,548.00

	03/03/1997

	04/14/2007

	Yes

	

                          TOTAL

	 	

$

499,585,136.19

	 	 	 

EXHIBIT 1.01-C

FORM OF COMMITTED NOTE

_____________, _____

FOR VALUE RECEIVED, the undersigned, KINDER MORGAN ENERGY PARTNERS, L.P., a Delaware limited partnership, (the “Company”), HEREBY PROMISES TO PAY to the order of _______________________________________________________ (the “Lender”), the lesser of (i) such Lender’s Commitment and (ii) the aggregate amount of Committed Loans made by the Lender and outstanding on the Maturity Date.  The principal amount of the Committed Loans made by the Lender to the Company shall be due and payable on the dates and in the amounts as are specified in that certain Credit Agreement dated as of August 5, 2005 (as restated, amended, modified, supplemented and in effect from time to time, the “Credit Agreement”) among the Company, the Subsidiary Borrower, the Lender, certain other lenders that are party thereto, Wachovia Bank, National Association, as Administrative Agent for the Lender and such other lenders, and the other agents named therein.  All capitalized terms used herein and not otherwise defined shall have the meanings as defined in the Credit Agreement.

The Company promises to pay interest on the unpaid principal amount of each Committed Loan outstanding from time to time from the date thereof until such principal amount is paid in full, at such interest rates and payable on such dates as are specified in the Credit Agreement.  Both principal and interest are payable in same day funds in lawful money of the United States of America to the Administrative Agent at its Principal Office, or at such other place as the Administrative Agent shall designate in writing to the Company.

This Note is one of the Committed Notes referred to in, and this Note and all provisions herein are entitled to the benefits of, the Credit Agreement.  The Credit Agreement, among other things (a) provides for the making of Committed Loans by the Lender and the other lenders to the Company from time to time, and (b) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events, for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified, and for limitations on the amount of interest paid such that no provision of the Credit Agreement or this Note shall require the payment or permit the collection of interest in excess of the Maximum Rate.

This Note may be held by the Lender for the account of its applicable lending office and may be transferred from one lending office to another lending office from time to time as the Lender may determine.

The Company and any and all endorsers, guarantors and sureties severally waive grace, demand, presentment for payment, notice of dishonor, default or intent to accelerate, protest and notice of protest and diligence in collecting and bringing of suit against any party hereto, and agree to all renewals, extensions or partial payments hereon and to any release or substitution of security herefor, in whole or in part, with or without notice, before or after maturity.

 

This Note shall be governed by and construed under the laws of the State of New York and  the applicable laws of the United States of America.

KINDER MORGAN ENERGY PARTNERS, L.P.,

as the Company

By: Kinder Morgan G.P., Inc.,

its General Partner

By: Kinder Morgan Management, LLC,

its Delegate

By: 

Name:

Title:

 EXHIBIT 1.01-D

FORM OF COMPETITIVE NOTE

_____________, _____

FOR VALUE RECEIVED, the undersigned, KINDER MORGAN ENERGY PARTNERS, L.P., a Delaware limited partnership, (the “Company”), HEREBY PROMISES TO PAY to the order of ________________________________ (the “Lender”), the lesser of (i) the aggregate amount of Commitments of all Lenders and (ii) the aggregate amount of Competitive Loans made by the Lender and outstanding on the Maturity Date.  The principal amount of the Competitive Loans made by the Lender to the Company shall be due and payable on the dates and in the amounts as are specified in that certain Credit Agreement dated as of August 5, 2005 (as restated, amended, modified, supplemented and in effect from time to time, the “Credit Agreement”) among the Company, the Subsidiary Borrower, the Lender, certain other lenders that are party thereto, Wachovia Bank, National Association, as the Administrative Agent for the Lender and such other lenders, and the other agents named therein.  All capitalized terms used herein and not otherwise defined shall have the meanings as defined in the Credit Agreement.

The Company promises to pay interest on the unpaid principal amount of each Competitive Loan outstanding from time to time from the date thereof until such principal amount is paid in full, at such interest rates and payable on such dates as are specified in the Credit Agreement.  Both principal and interest are payable in same day funds in lawful money of the United States of America to the Administrative Agent at the Principal Office, or at such other place as the Administrative Agent shall designate in writing to the Company.

This Note is one of the Competitive Notes referred to in, and this Note and all provisions herein are entitled to the benefits of, the Credit Agreement.  The Credit Agreement, among other things (a) provides for the making of Competitive Loans by the Lender and the other lenders to the Company from time to time, and (b) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events, for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified, and for limitations on the amount of interest paid such that no provision of the Credit Agreement or this Note shall require the payment or permit the collection of interest in excess of the Maximum Rate.

This Note may be held by the Lender for the account of its applicable lending office and may be transferred from one lending office to another lending office from time to time as the Lender may determine.

The Company and any and all endorsers, guarantors and sureties severally waive grace, demand, presentment for payment, notice of dishonor, default or intent to accelerate, protest and notice of protest and diligence in collecting and bringing of suit against any party hereto, and agree to all renewals, extensions or partial payments hereon and to any release or substitution of security herefor, in whole or in part, with or without notice, before or after maturity.

This Note shall be governed by and construed under the laws of the State of New York and  the applicable laws of the United States of America.

KINDER MORGAN ENERGY PARTNERS, L.P.,

as the Company

By: Kinder Morgan G.P., Inc.,

its General Partner

By: Kinder Morgan Management, LLC,

its Delegate

By:                                                   

Name:

Title:

 

EXHIBIT 1.01-E

FORM OF SWINGLINE NOTE

$25,000,000

______________, _____

FOR VALUE RECEIVED, the undersigned, KINDER MORGAN ENERGY PARTNERS, L.P., a Delaware limited partnership (the “Company”), HEREBY PROMISES TO PAY to the order of __________________________________________________ (the “Swingline Lender”), the lesser of (i) $25,000,000 and (ii) the aggregate amount of Swingline Loans made by the Swingline Lender and outstanding on the Maturity Date.  The principal amount of the Swingline Loans made by the Swingline Lender to the Company shall be due and payable on the dates and in the amounts as are specified in that certain Credit Agreement dated as of August 5, 2005 (as restated, amended, modified, supplemented and in effect from time to time, the “Credit Agreement”) among the Company, the Subsidiary Borrower, the Swingline Lender, certain other lenders that are party thereto, Wachovia Bank, National Association, as Administrative Agent for the Swingline Lender and such other lenders, and the other agents named therein.  All capitalized terms used herein and not otherwise defined shall have the meanings as defined in the Credit Agreement.

The Company promises to pay interest on the unpaid principal amount of each Swingline Loan outstanding from time to time from the date thereof until such principal amount is paid in full, at such interest rates and payable on such dates as are specified in the Credit Agreement.  Both principal and interest are payable in same day funds in lawful money of the United States of America to the Swingline Lender at 301 South College Street, TW-10, Charlotte, North Carolina 28288-0608 or such other place as the Swingline Lender shall designate in writing to the Company.

This Note is the Swingline Note referred to in, and this Note and all provisions herein are entitled to the benefits of, the Credit Agreement.  The Credit Agreement, among other things (a) provides for the making of Swingline Loans by the Swingline Lender to the Company from time to time, and (b) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events, for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified, and for limitations on the amount of interest paid such that no provision of the Credit Agreement or this Note shall require the payment or permit the collection of interest in excess of the Maximum Rate.

The Company and any and all endorsers, guarantors and sureties severally waive grace, demand, presentment for payment, notice of dishonor, default or intent to accelerate, protest and notice of protest and diligence in collecting and bringing of suit against any party hereto, and agree to all renewals, extensions or partial payments hereon and to any release or substitution of security herefor, in whole or in part, with or without notice, before or after maturity.

This Note shall be governed by and construed under the laws of the State of New York and the applicable laws of the United States of America.

KINDER MORGAN ENERGY PARTNERS, L.P.,

as the Company

By: Kinder Morgan G.P., Inc.,

its General Partner

By: Kinder Morgan Management, LLC,

its Delegate

By:                                                       

Name:

Title:

EXHIBIT 2.03

 FORM OF BORROWING REQUEST

Dated __________

Wachovia Bank, National Association,

as Administrative Agent

301 South College Street

Charlotte, North Carolina  28288-0608

Attn:  Syndication Agency Services

Ladies and Gentlemen:

This Borrowing Request is delivered to you by Kinder Morgan Energy Partners, L.P. (the “Company”), a Delaware limited partnership, under Section 2.03 of the Credit Agreement dated as of August 5, 2005, (as restated, amended, modified, supplemented and in effect, the “Credit Agreement”) by and among the Company, the Subsidiary Borrower, the Lenders party thereto, Wachovia Bank, National Association, as Administrative Agent, and the other agents named therein.

1.

The Company hereby requests that the Lenders make a Loan or Loans in the aggregate principal amount of $______________ (the “Committed Loan” or the “Committed Loans”)./1

2.

The Company hereby requests that the Committed Loan or Committed Loans be made on the following Business Day: ________________./2

3.

The Company hereby requests that the Committed Loan or Committed Loans bear interest at the following interest rate, plus the Applicable Margin, as set forth below:

	Type of

Committed Loan

	Principal

Component of

Committed Loan

	Interest

Rate

	Interest Period

(if applicable)

	Maturity Date for

Interest Period 

(if applicable)

	 	 	 	 	 

4.

The Company hereby requests that the funds from the Committed Loan or Committed Loans be disbursed to the following bank account:  ______________________________.

5.

After giving effect to the requested Committed Loan, the sum of the Committed Credit Exposures, plus the aggregate principal amount of Competitive Loans 

_____________________

1     Complete with an
amount in accordance with Section 2.03 of the Credit Agreement.

2     Complete
with a Business Day in accordance with Section 2.03 of the Credit Agreement.

outstanding as of the date hereof (including the requested Loans) does not exceed the maximum amount permitted to be outstanding pursuant to the terms of the Credit Agreement.

6.

All of the conditions applicable to the Committed Loans requested herein as set forth in the Credit Agreement have been satisfied as of the date hereof and will remain satisfied to the date of such Loans.

7.

All capitalized undefined terms used herein have the meanings assigned thereto in the Credit Agreement.

IN WITNESS WHEREOF, the undersigned have executed this Borrowing Request this _____ day of _______________, ______.

KINDER MORGAN ENERGY PARTNERS, L.P.,

as the Company

By: Kinder Morgan G.P., Inc.,

its General Partner

By: Kinder Morgan Management, LLC,

its Delegate

By:                                                     

Name:

Title:

EXHIBIT 2.04-A

FORM OF COMPETITIVE BID REQUEST

Wachovia Bank, National Association,

as Administrative Agent

301 South College Street

Charlotte, North Carolina  28288-0608

Attention:

Syndication Agency Services

Ladies and Gentlemen:

Reference is made to the Credit Agreement dated as of August 5, 2005 (as restated, amended, modified, supplemented and in effect from time to time, the “Credit Agreement”), among the undersigned, the Subsidiary Borrower, the Lenders party thereto, Wachovia Bank, National Association, as Administrative Agent, and the other agents named therein.  Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.  The undersigned hereby gives you notice pursuant to Section 2.04 of the Credit Agreement that it requests a Competitive Borrowing under the Credit Agreement, and in that connection sets forth below the terms on which such Competitive Borrowing is requested to be made:

(A)

Borrowing Date of Competitive

     Borrowing (which is a Business Day)

   

(B)

Aggregate Principal Amount of

            Competitive Borrowing/3

(C)

Interest rate basis/4

(D)

Interest Period and the last

day thereof /5

(E)

Location and number of Company’s account

to which funds are to be deposited

By the delivery of this Competitive Bid Request and the acceptance of any or all of the Competitive Loans offered by the Lenders in response to this Competitive Bid Request, the undersigned shall be deemed to have represented and warranted that the applicable conditions to lending specified in Article III of the Credit Agreement have been satisfied with respect to the Competitive Borrowing requested hereby.

Very truly yours,

KINDER MORGAN ENERGY PARTNERS, L.P.,

as the Company

By: Kinder Morgan G.P., Inc.,

its General Partner

By: Kinder Morgan Management, LLC,

its Delegate

By: 

Name:

Title:

EXHIBIT 2.04-B

FORM OF NOTICE TO LENDERS OF COMPETITIVE BID REQUEST

[Name of Lender]

[Address of Lender]

[Date]

Attention:

Ladies and Gentlemen:

Reference is made to the Credit Agreement dated as of August 5, 2005 (as restated, amended, modified, supplemented and in effect from time to time, the “Credit Agreement”), among Kinder Morgan Energy Partners, L.P. (the “Company”), the Subsidiary Borrower, the Lenders party thereto, Wachovia Bank, National Association, as Administrative Agent, and the other agents named therein.  Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.  The Company delivered a Competitive Bid Request requesting a Competitive Bid on __________,  , pursuant to Section 2.04(a) of the Credit Agreement, and in that connection you are invited to submit a Competitive Bid by  [Date] / [Time]  ./6

  Your Competitive Bid must comply with Section 2.04(b) of the Credit Agreement and the terms set forth below on which the Competitive Bid Request was made:

(A)

Date of Competitive Borrowing

(B)

Principal amount of

Competitive Borrowing

(C)

Interest rate basis

(i.e., Eurodollar or Fixed Rate)

(D)

Interest Period and the last

day thereof/7

Very truly yours,

WACHOVIA BANK, NATIONAL

ASSOCIATION, as Administrative Agent

By:  

Name: 

Title: 

 EXHIBIT 2.04-C

 FORM  OF  COMPETITIVE  BID

Wachovia Bank, National Association,

as Administrative Agent

301 South College Street

Charlotte, North Carolina  28228-0608

[Date]

Attention:  Syndication Agency Services

Ladies and Gentlemen:

The undersigned, [Name of Lender], refers to the Credit Agreement dated as of August 5, 2005 (as restated, amended, modified, supplemented and in effect from time to time, the “Credit Agreement”), among Kinder Morgan Energy Partners, L.P. (the “Company”), the Subsidiary Borrower, the Lenders party thereto, Wachovia Bank, National Association, as Administrative Agent, and the other agents named therein.  Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.  The undersigned hereby makes a Competitive Bid pursuant to Section 2.04(b) of the Credit Agreement, in response to the Competitive Bid Request made by the Company on _________________,  ____, and in that connection sets forth below the terms on which such Competitive Bid is made:

(A)

Principal Amount/8

(B)

Competitive Bid Rate/9

(C)

Interest Period and

the last day thereof/10

The undersigned hereby confirms that it is prepared to extend credit to the Company upon acceptance by the Company of this bid in accordance with Section 2.04(d) of the Credit Agreement.

Very truly yours,

[NAME OF LENDER]

By: 

Name:

Title:

 EXHIBIT 2.06

FORM OF LETTER OF CREDIT REQUEST

Dated __________

Wachovia Bank, National Association,

as Administrative Agent

301 South College Street

Charlotte, North Carolina  28288-0608

Attn:  Syndication Agency Services

and

[Name and address of Issuing Bank,

if the issuing Bank is not Wachovia]

Ladies and Gentlemen:

This Letter of Credit Request is delivered to you by Kinder Morgan Energy Partners L.P. (the “Company”), a Delaware limited partnership, under Section 2.06 of the Credit Agreement dated as of August 5, 2005, (as restated, amended, modified, supplemented, and in effect from time to time, the “Credit Agreement”) by and among the Company, the Subsidiary Borrower, the Lenders party thereto, Wachovia Bank, National Association, as Administrative Agent, and the other agents named therein.

The Company hereby requests the issuance of a Letter of Credit under the Credit Agreement, and in that connection sets forth below the information relating to such Letter of Credit (the “Proposed Letter of Credit”) as required by Section 2.06(c) of the Credit Agreement.  The Proposed Letter of Credit must be issued:

(a)

on or before ____________________, _____/11

(b)

for the benefit of  _____________ whose address is __________________

(c)

in the amount of $_________________

(d)

having an expiry date of ________________, ____/12

(e)

attached hereto is any special language to be incorporated into the Proposed Letter of Credit.

or

The Company hereby refers to Letter of Credit Number  (the “Expiring Letter of Credit”) which has an existing expiry date of _______________.  The Company hereby requests that  [the expiry date of the Expiring Letter of Credit be extended to  _____________./2] [the Issuing Bank that has issued the Expiry Letter of Credit permit the expiry date of the Expiring Letter of Credit be extended to  ________________./2]1.After giving effect to the Proposed Letter of Credit, the sum of the Committed Credit Exposures, plus the aggregate principal amount of Competitive Loans does not exceed the maximum amount permitted to be outstanding pursuant to the terms of the Credit Agreement.

2.

All of the conditions applicable to the Loans requested herein as set forth in the Credit Agreement have been satisfied as of the date hereof and will remain satisfied to the date of the Proposed Letter of Credit.

3.

All capitalized undefined terms used herein have the meanings assigned thereto in the Credit Agreement.

IN WITNESS WHEREOF, the undersigned have executed this Letter of Credit Request this _____ day of _______________, _____.

KINDER MORGAN ENERGY PARTNERS, L.P.,

as the Company

By: Kinder Morgan G.P., Inc.,

its General Partner

By: Kinder Morgan Management, LLC,

its Delegate

By: 

Name:

Title:

 

EXHIBIT 2.07

 FORM OF NOTICE OF ACCOUNT DESIGNATION

Dated ___________

Wachovia Bank, National Association,

as Administrative Agent

301 South College Street

Charlotte, North Carolina  28288-0608

Attn:  Syndication Agency Services

Ladies and Gentlemen:

This Notice of Account Designation is delivered to you by Kinder Morgan Energy Partners, L.P. (the “Company”), a Delaware limited partnership, under Section 2.07 of the Credit Agreement dated as of August 5, 2005 (as restated, amended, modified, supplemented and in effect from time to time, the “Credit Agreement”) by and among the Company, the Subsidiary Borrower, the Lenders party thereto, Wachovia Bank, National Association, as Administrative Agent, and the other agents named therein.

The Administrative Agent is hereby authorized to disburse all Loan proceeds into the following account(s):

[Insert name of bank/

ABA Routing Number/

and Account Number]

IN WITNESS WHEREOF, the undersigned has executed this Notice of Account Designation this _____ day of ___________________, ____.

KINDER MORGAN ENERGY PARTNERS, L.P.,

as the Company

By: Kinder Morgan G.P., Inc.,

its General Partner

By: Kinder Morgan Management, LLC,

its Delegate

By: 

Name:

Title:

 EXHIBIT 2.08

FORM OF INTEREST ELECTION REQUEST

Dated _____________

Wachovia Bank, National Association,

as Administrative Agent

301 South College Street

Charlotte, North Carolina  28288-0608

Attn:  Syndication Agency Services

Ladies and Gentlemen:

This irrevocable Interest Election Request (the “Request”) is delivered to you under Section 2.08 of the Credit Agreement dated as of August 5, 2005 (as restated, amended, modified, supplemented and in effect from time to time, the “Credit Agreement”), by and among Kinder Morgan Energy Partners, L.P., a Delaware limited partnership (the “Company”), the Subsidiary Borrower, the Lenders party thereto (the “Lenders”), Wachovia Bank, National Association as Administrative Agent, and the other agents named therein.

1.

This Interest Election Request is submitted for the purpose of:

(a)

[Converting] [Continuing] a ____________ Committed Loan [into] [as] a ____________ Loan./13

(b)

The aggregate outstanding principal balance of such Committed Loan is $______________.

(c)

The last day of the current Interest Period for such Committed Loan is _____________./14

(d)

The principal amount of such Committed Loan to be [converted] [continued] is $_____________./15

(e)

The requested effective date of the [conversion] [continuation] of such Committed Loan is _______________./16

(f)

The requested Interest Period applicable to the [converted] [continued] Committed Loan is ____________________./17

2.

No Default or Event of Default exists, and none will exist upon the conversion or continuation of the Committed Loan requested herein.

3.

All capitalized undefined terms used herein have the meanings assigned thereto in the Credit Agreement.

IN WITNESS WHEREOF, the undersigned has executed this Interest Election Request this _____ day of ___________________, ____.

KINDER MORGAN ENERGY PARTNERS, L.P.,

as the Company

By: Kinder Morgan G.P., Inc.,

its General Partner

By: Kinder Morgan Management, LLC,

its Delegate

By: 

Name:

Title:

EXHIBIT 2.11

 FORM OF NOTICE OF PREPAYMENT

Wachovia Bank, National Association,

as Administrative Agent

301 South College Street

Charlotte, North Carolina  28228-0608

Attention:  Syndication Agency Services

Ladies and Gentlemen:

This irrevocable Notice of Prepayment is delivered to you by Kinder Morgan Energy Partners, L.P. (the “Company”), a Delaware limited partnership, under Section 2.11 of the Credit Agreement dated as of August 5, 2005 (as restated, amended, modified, supplemented and in effect from time to time, the “Credit Agreement”), by and among the Company, the Subsidiary Borrower, the Lenders party thereto, Wachovia Bank, National Association, as the Administrative Agent, and the other agents named therein. 

1.

The Company hereby provides notice to the Administrative Agent that the Company shall repay the following ABR Loans and/or Eurodollar Loans in the amount of $_____________./18

2.

The Company shall repay the above-referenced Loans on the following Business Day:  ___________________./19

3.

All capitalized undefined terms used herein have the meanings assigned thereto in the Credit Agreement.

IN WITNESS WHEREOF, the undersigned have executed this Borrowing Request this _____ day of _______________, _____.

KINDER MORGAN ENERGY PARTNERS, L.P.,

as the Company

By: Kinder Morgan G.P., Inc.,

its General Partner

By: Kinder Morgan Management, LLC,

its Delegate

By: 

Name:

Title:

 EXHIBIT 5.01

FORM OF COMPLIANCE CERTIFICATE

The undersigned hereby certifies that he is the ____________________________ of KINDER MORGAN MANAGEMENT, LLC, a Delaware limited liability company, the delegate of the KINDER MORGAN G.P., INC., a Delaware corporation, general partner of KINDER MORGAN ENERGY PARTNERS, L.P., a Delaware limited partnership (the “Company”), and that as such he is authorized to execute this certificate on behalf of the Company.  With reference to the Credit Agreement dated as of August 5, 2005 (as restated, amended, modified, supplemented and in effect from time to time, the “Agreement”) among the Company, the Subsidiary Borrower, Wachovia Bank, National Association, as Administrative Agent, for the lenders (the “Lenders”), and the other agents named therein, which are or become a party thereto, and such Lenders, the undersigned represents and warrants as follows (each capitalized term used herein having the same meaning given to it in the Agreement unless otherwise specified);

(a)

Attached hereto are the detailed computations necessary to determine whether the Company is in compliance with Sections 6.06(a), (b) and (c) of the Agreement as of the end of the [fiscal quarter][fiscal year] ending ________________.

(b)

There currently does not exist any Default or Event of Default under the Agreement.

EXECUTED AND DELIVERED this _____ day of ________________, ______.

KINDER MORGAN ENERGY PARTNERS, L.P.,

as the Company

By: Kinder Morgan G.P., Inc.,

its General Partner

By: Kinder Morgan Management, LLC,

its Delegate

By: 

Name:

Title:

Footnotes

 

Complete with an amount in accordance with Section 2.03 of the Credit Agreement.

 

Complete with a Business Day in accordance with Section 2.03 of the Credit Agreement.

 

Not less than $25,000,000 or greater than the unused Total Commitment and in integral multiples of $1,000,000.

 

Eurodollar Competitive Borrowing or Fixed Rate Borrowing.

 

Which shall have a duration (i) in the case of a Eurodollar Loan, of one, two, three or six months and (ii) in the case of Fixed Rate Loan, of not less than seven days nor more than 180 days, and which, in either case, shall end not later than the Termination Date.

 

The Competitive Bid must be received by the Administrative Agent (i) in the case of Eurodollar Loans, not later than 10:00 a.m. Charlotte, North Carolina, time, three Business Days before the Borrowing Date of a proposed Competitive Borrowing, and (ii) in the case of Fixed Rate Loans, not later than 10:00 a.m., Charlotte, North Caroline, time on the Borrowing Date of a proposed Competitive Borrowing.

 

Which may not be a date later than the Termination Date.

 

Not less than $5,000,000 or greater than the requested Competitive Borrowing and in integral multiples of $1,000,000 above said $5,000,000.  Multiple bids will be accepted by the Administrative Agent.

 

i.e. LIBOR Rate + or - _______%, in the case of Eurodollar Loans, or _____%, in the case of Fixed Rate Loan (in each case, expressed in the form of a decimal to no more than four decimal places).

 

The Interest Period must be the Interest Period specified in the Competitive Bid Request.

 

Must be a date not earlier than five Business Days after notice is given to the Issuing Bank.

 

Must comply with Section 2.06(d) of the Credit Agreement.

 

Delete the bracketed language and insert “Alternate Base Rate” or “LIBOR Rate”, as applicable, in each blank.

 

Insert applicable date for any Eurodollar Loan being converted or continued.

 

Complete with an amount in compliance with Section 2.08 of the Credit Agreement.

 

Complete with a Business Day in compliance with Section 2.08 of the Credit Agreement..

 

Complete for each Eurodollar Loan in compliance with the definition of the term “Interest Period” specified in Section 1.01.

 

Complete with an amount in accordance with Section 2.11(b) of the Credit Agreement.

 

Complete with a Business Day in accordance with Section 2.11(b) of the Credit Agreement.

-2-

Three-Year Facilityexv4w1

 

Exhibit 4.1

EXECUTION COPY

 

SMART MODULAR TECHNOLOGIES (WWH), INC.

Senior Secured Floating Rate Notes due 2012

INDENTURE

Dated as of March 28, 2005

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 	 	ARTICLE I
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	DEFINITIONS AND INCORPORATION BY REFERENCE
	 	 	 	 
	 	 	 
	 	 	 	 
	SECTION 1.01	 	Definitions
	 	 	1	 
	SECTION 1.02	 	Other Definitions
	 	 	25	 
	SECTION 1.03	 	Incorporation by Reference of Trust Indenture Act
	 	 	26	 
	SECTION 1.04	 	Rules of Construction
	 	 	27	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE II
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	THE NOTES
	 	 	 	 
	 	 	 
	 	 	 	 
	SECTION 2.01	 	Amount of Notes; Issuable in Series
	 	 	27	 
	SECTION 2.02	 	Form and Dating
	 	 	28	 
	SECTION 2.03	 	Execution and Authentication
	 	 	28	 
	SECTION 2.04	 	Registrar and Paying Agent
	 	 	28	 
	SECTION 2.05	 	Paying Agent To Hold Money in Trust
	 	 	29	 
	SECTION 2.06	 	Holder Lists
	 	 	29	 
	SECTION 2.07	 	Transfer and Exchange
	 	 	29	 
	SECTION 2.08	 	Replacement Notes
	 	 	30	 
	SECTION 2.09	 	Outstanding Notes
	 	 	30	 
	SECTION 2.10	 	Temporary Notes
	 	 	30	 
	SECTION 2.11	 	Cancellation
	 	 	31	 
	SECTION 2.12	 	Defaulted Interest
	 	 	31	 
	SECTION 2.13	 	“CUSIP” and “ISIN” Numbers
	 	 	31	 
	SECTION 2.14	 	Computation of Interest
	 	 	31	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE III
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	REDEMPTION
	 	 	 	 
	 	 	 
	 	 	 	 
	SECTION 3.01	 	Notices to Trustee
	 	 	31	 
	SECTION 3.02	 	Selection of Notes To Be Redeemed
	 	 	31	 
	SECTION 3.03	 	Notice of Redemption
	 	 	32	 
	SECTION 3.04	 	Effect of Notice of Redemption
	 	 	32	 
	SECTION 3.05	 	Deposit of Redemption Price
	 	 	32	 
	SECTION 3.06	 	Notes Redeemed in Part
	 	 	33	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE IV
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	COVENANTS
	 	 	 	 
	 	 	 
	 	 	 	 
	SECTION 4.01	 	Payment of Notes
	 	 	33	 
	SECTION 4.02	 	Commission Reports
	 	 	33	 

-i- 

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	SECTION 4.03	 	Limitation on Incurrence of Additional Indebtedness
	 	 	34	 
	SECTION 4.04	 	Limitation on Restricted Payments
	 	 	36	 
	SECTION 4.05	 	Limitation on Restrictions on Distributions from Restricted
Subsidiaries
	 	 	40	 
	SECTION 4.06	 	Limitation on Sales of Assets and Subsidiary Stock
	 	 	42	 
	SECTION 4.07	 	Limitation on Transactions with Affiliates
	 	 	45	 
	SECTION 4.08	 	Repurchase of Notes at the Option of the Holder Upon a Change
of Control
	 	 	47	 
	SECTION 4.09	 	Compliance Certificate
	 	 	48	 
	SECTION 4.10	 	Further Instruments and Acts
	 	 	48	 
	SECTION 4.11	 	Additional Note Guarantees and Liens
	 	 	48	 
	SECTION 4.12	 	Limitation on Lines of Business
	 	 	49	 
	SECTION 4.13	 	Limitation on the Sale or Issuance of Capital Stock of Restricted
Subsidiaries
	 	 	49	 
	SECTION 4.14	 	Limitation on Liens
	 	 	50	 
	SECTION 4.15	 	Sale/Leaseback Transactions
	 	 	50	 
	SECTION 4.16	 	Additional Amounts
	 	 	50	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE V
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	SUCCESSOR COMPANY
	 	 	 	 
	 	 	 
	 	 	 	 
	SECTION 5.01	 	When Company May Merge or Transfer Assets
	 	 	52	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE VI
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	EVENTS OF DEFAULTS AND REMEDIES
	 	 	 	 
	 	 	 
	 	 	 	 
	SECTION 6.01	 	Events of Default
	 	 	54	 
	SECTION 6.02	 	Acceleration
	 	 	56	 
	SECTION 6.03	 	Other Remedies
	 	 	56	 
	SECTION 6.04	 	Waiver of Past Defaults
	 	 	56	 
	SECTION 6.05	 	Control by Majority
	 	 	56	 
	SECTION 6.06	 	Limitation on Suits
	 	 	57	 
	SECTION 6.07	 	Rights of Holders to Receive Payment
	 	 	57	 
	SECTION 6.08	 	Collection Suit by Trustee
	 	 	57	 
	SECTION 6.09	 	Trustee May File Proofs of Claim
	 	 	57	 
	SECTION 6.10	 	Priorities
	 	 	57	 
	SECTION 6.11	 	Undertaking for Costs
	 	 	58	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE VII
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	TRUSTEE
	 	 	 	 
	 	 	 
	 	 	 	 
	SECTION 7.01	 	Duties of Trustee
	 	 	58	 
	SECTION 7.02	 	Rights of Trustee
	 	 	59	 
	SECTION 7.03	 	Individual Rights of Trustee
	 	 	60	 
	SECTION 7.04	 	Trustee’s Disclaimer
	 	 	60	 
	SECTION 7.05	 	Notice of Defaults
	 	 	60	 
	SECTION 7.06	 	Reports by Trustee to Holders
	 	 	60	 

-ii- 

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	SECTION 7.07	 	Compensation and Indemnity
	 	 	61	 
	SECTION 7.08	 	Replacement of Trustee
	 	 	61	 
	SECTION 7.09	 	Successor Trustee by Merger
	 	 	62	 
	SECTION 7.10	 	Eligibility; Disqualification
	 	 	62	 
	SECTION 7.11	 	Preferential Collection of Claims Against the Company
	 	 	62	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE VIII
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	DISCHARGE OF INDENTURE; DEFEASANCE
	 	 	 	 
	 	 	 
	 	 	 	 
	SECTION 8.01	 	Discharge of Liability on Notes; Defeasance
	 	 	63	 
	SECTION 8.02	 	Conditions to Defeasance
	 	 	63	 
	SECTION 8.03	 	Application of Trust Money
	 	 	64	 
	SECTION 8.04	 	Repayment to the Company
	 	 	65	 
	SECTION 8.05	 	Indemnity for Government Obligations
	 	 	65	 
	SECTION 8.06	 	Reinstatement
	 	 	65	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE IX
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	AMENDMENTS
	 	 	 	 
	 	 	 
	 	 	 	 
	SECTION 9.01	 	Without Consent of Holders
	 	 	65	 
	SECTION 9.02	 	With Consent of Holders
	 	 	66	 
	SECTION 9.03	 	Compliance with Trust Indenture Act
	 	 	67	 
	SECTION 9.04	 	Revocation and Effect of Consents and Waivers
	 	 	67	 
	SECTION 9.05	 	Notation on or Exchange of Notes
	 	 	68	 
	SECTION 9.06	 	Trustee To Sign Amendments
	 	 	68	 
	SECTION 9.07	 	Payment for Consent
	 	 	68	 
	 	 	 
	 	 	 	 
	 	 	ARTICLE X
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	COLLATERAL AND SECURITY
	 	 	 	 
	 	 	 
	 	 	 	 
	SECTION 10.01	 	Security Documents
	 	 	68	 
	SECTION 10.02	 	Recording and Opinions
	 	 	69	 
	SECTION 10.03	 	Release of Collateral
	 	 	69	 
	SECTION 10.04	 	[Reserved]
	 	 	70	 
	SECTION 10.05	 	Certificates of the Trustee
	 	 	70	 
	SECTION 10.06	 	Authorization of Actions To Be Taken by the Trustee Under the
Security Documents
	 	 	71	 
	SECTION 10.07	 	Authorization of Receipt of Funds by the Trustee Under the
Security Documents
	 	 	71	 
	SECTION 10.08	 	Termination of Security Interest
	 	 	71	 
	SECTION 10.09	 	Collateral Agent
	 	 	71	 
	SECTION 10.10	 	Designations
	 	 	72	 
	 	 	 
	 	 	 	 

-iii- 

 

 

	 	 	 	 	 	 	 
	 	 	 	 	Page
	 	 	ARTICLE XI
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	NOTE GUARANTEES
	 	 	 	 
	 	 	 
	 	 	 	 
	SECTION 11.01	 	Note Guarantees
	 	 	72	 
	SECTION 11.02	 	Limitation on Liability
	 	 	74	 
	SECTION 11.03	 	Releases of Note Guarantees
	 	 	74	 
	SECTION 11.04	 	Successors and Assigns
	 	 	74	 
	SECTION 11.05	 	No Waiver
	 	 	74	 
	SECTION 11.06	 	Modification
	 	 	75	 
	SECTION 11.07	 	Execution of Supplemental Indenture for Future Guarantors
	 	 	75	 
	SECTION 11.08	 	Non-Impairment
	 	 	75	 
	SECTION 11.09	 	Waiver of Brazilian Law Benefits
	 	 	75	 
	 	 	 
	 	 	 	 
	ARTICLE XII
	 	 	 	 
	 	 	 
	 	 	 	 
	MISCELLANEOUS
	 	 	 	 
	 	 	 
	 	 	 	 
	SECTION 12.01	 	Trust Indenture Act Controls
	 	 	75	 
	SECTION 12.02	 	Notices
	 	 	75	 
	SECTION 12.03	 	Communication by Holders with Other Holders
	 	 	76	 
	SECTION 12.04	 	Certificate and Opinion as to Conditions Precedent
	 	 	76	 
	SECTION 12.05	 	Statements Required in Certificate or Opinion
	 	 	77	 
	SECTION 12.06	 	When Notes Disregarded
	 	 	77	 
	SECTION 12.07	 	Rules by Trustee, Paying Agent and Registrar
	 	 	77	 
	SECTION 12.08	 	Legal Holidays
	 	 	77	 
	SECTION 12.09	 	GOVERNING LAW
	 	 	77	 
	SECTION 12.10	 	No Recourse Against Others
	 	 	78	 
	SECTION 12.11	 	Successors
	 	 	78	 
	SECTION 12.12	 	Multiple Originals
	 	 	78	 
	SECTION 12.13	 	Table of Contents; Headings
	 	 	78	 

	 	 	 	 	 
	Schedule I
	 	 	 	 
	 
	 	 	 	 
	Appendix A

	 	—
	 	Provisions Relating to Original Notes, Additional Notes,
and Exchange Notes
	 
	 	 	 	 
	Exhibit A

	 	—
	 	Form of Note
	 
	 	 	 	 
	Exhibit B

	 	—
	 	Form of Supplemental Indenture

-iv-  

 

 

          INDENTURE dated as of March 28, 2005, among SMART MODULAR
 TECHNOLOGIES (WWH), INC., an exempted company organized under the laws of the Cayman Islands (the
“Company”), THE GUARANTORS PARTY HERETO (the “Guarantors”) and U.S. BANK NATIONAL
ASSOCIATION, a national banking association, as trustee (the “Trustee”).

          Each party agrees as follows for the benefit of the other parties and for the equal and
ratable benefit of the Holders of (a) the Company’s Senior Secured Floating Rate Notes due 2012
issued on the date hereof (the “Original Notes”), (b) any Additional Notes (as defined
herein) that may be issued on any Issue Date (all such Notes in clauses (a) and (b) being referred
to collectively as the “Initial Notes”) and (c) if and when issued as provided in a
Registration Rights Agreement (as defined in Appendix A hereto (the “Appendix”)), the
Company’s Senior Secured Floating Rate Notes due 2012 (the “Exchange Notes”) issued in an
Exchange Offer in exchange for any Initial Notes (the Initial Notes together with any Exchange
Notes issued hereunder, the “Notes”). On the date hereof, $125,000,000 in aggregate
principal amount of Notes will be issued. Subject to the conditions and in compliance with the
covenants set forth herein, the Company may issue an unlimited aggregate principal amount of
Additional Notes from time to time.

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

          SECTION 1.01 Definitions.

          “Acquired
Debt” means, with respect to any specified Person, (1) Indebtedness of any
other Person existing at the time such other Person is merged with or into or became a Restricted
Subsidiary of such specified Person, including, without limitation, Indebtedness Incurred in
connection with, or in contemplation of, such other Person merging with or into or
becoming a Restricted Subsidiary of such specified Person, and (2) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.

          “Additional Interest” means any additional interest payable under a Registration
Rights Agreement.

          “Additional Notes” means any Senior Secured Floating Rate Notes due 2012, issued
under the terms of this Indenture subsequent to the Closing Date.

          “Affiliate” of any specified Person means any other Person, directly or indirectly,
controlling or controlled by or under direct or indirect common control with such specified Person.
For the purposes of this definition, “control” when used with respect to any Person means the power
to direct the management and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

          “Asset Disposition” means any sale, lease (other than an operating lease), transfer
or other disposition (or series of related sales, leases, transfers or dispositions) by the Company
or any Restricted Subsidiary, including any disposition by means of a merger, consolidation or
similar transaction (each referred to for the purposes of this definition as a “disposition”), of:

     (1) any shares of Capital Stock of a Restricted Subsidiary (other than directors’ qualifying
shares or shares required by applicable law to be held by a Person other than the Company or a
Restricted Subsidiary);

 

 

     (2) all or substantially all the assets of any division or line of business of
the Company or any Restricted Subsidiary;

     (3) any other assets of the Company or any Restricted Subsidiary outside of the
ordinary course of business of the Company or such Restricted Subsidiary;

           Notwithstanding the foregoing, the following items shall not be deemed to be Asset
Dispositions:

     (A) a disposition by the Company to a Restricted Subsidiary or by a Restricted
Subsidiary to the Company or to another Restricted Subsidiary;

     (B) an issuance of Capital Stock by a Subsidiary to the Company or to a Restricted
Subsidiary;

     (C) for purposes of Section 4.06 only, a disposition that constitutes a Restricted
Payment permitted by Section 4.04;

     (D) a disposition of assets with a Fair Market Value of less than $2.0 million;

     (E) a Sale/Leaseback Transaction with respect to any assets within 90 days of the
acquisition of such assets;

     (F) a disposition of Cash Equivalents, the proceeds of which are used within five
business days to make another Permitted Investment;

     (G) a disposition of obsolete, uneconomical, negligible, worn out or surplus property
or equipment in the ordinary course of business and the periodic clearance of aged
inventory;

     (H) any exchange of like-kind property of the type described in Section 1031 of the
Code for use in a Permitted Business;

     (I) the sale or disposition of any assets or property received as a result of a
foreclosure by the Company or any of its Restricted Subsidiaries of any secured Investment
or any other transfer of title with respect to any secured Investment in default;

     (J) the licensing of intellectual property in the ordinary course of business or in
accordance with industry practice; and

     (K) the sale or discount, in each case without recourse, of accounts receivable
arising in the ordinary course of business, but only in connection with the compromise or
collection thereof.

           Notwithstanding the foregoing, the sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Company and its Subsidiaries taken as a whole will be
governed by Section 4.08 and/or 5.01 and not by Section 4.06.

          “Attributable Debt” in respect of a Sale/Leaseback Transaction means, as at the time
of determination, the present value (discounted at the interest rate implicit in such transaction,
determined in accordance with GAAP) of the total obligations of the lessee for net rental payments
during the remaining

2

 

term of the lease included in such Sale/Leaseback Transaction (including any period for which
such lease has been extended or may be, at the option of the lessor, extended).

          “Authorized Agent” means that agent appointed by the Company upon whom process may be
served in any suit, action or proceeding arising out of or based upon this Indenture, the Notes or
the Security Documents 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.

          “Average Life” means, as of the date of determination, with respect to any
Indebtedness or Preferred Stock, the number of years obtained by dividing:

     (1) the sum of the products of the numbers of years from the date of determination to
the dates of each successive scheduled principal payment of such Indebtedness or scheduled
redemption or similar payment with respect to such Preferred Stock multiplied by the amount
of such payment by

     (2) the then outstanding sum of all such payments.

          “Bank Indebtedness” means any and all amounts payable under or in respect of the
Credit Facilities, including principal, premium (if any), interest (including interest accruing on
or after the filing of any petition in bankruptcy or for reorganization relating to the Company or
any Guarantor whether or not a claim for post-filing interest is allowed in such proceedings),
reimbursement obligations, guarantees and all other amounts payable thereunder or in respect
thereof.

          “Board of Directors” means the Board of Directors of the Company or any committee
thereof duly authorized to act on behalf of the Board of Directors of the Company.

          “Brazilian Guarantor” means each Guarantor that is or becomes a party to
this Indenture that is organized under the laws of Brazil or a subdivision thereof.

          “Business Day” means each day which is not a Legal Holiday.

          “Capital Stock” of any Person means any and all shares, partnership, membership or
other interests, participations or other equivalents of or interests in (however designated) equity
of such Person, including any Preferred Stock (but excluding any debt securities convertible into
such equity) and any rights to purchase, warrants, options or similar interests with respect to the
foregoing.

          “Capitalized Lease Obligations” means an obligation that is required to be
classified and accounted for as a capitalized lease for financial reporting purposes in accordance
with GAAP, and the amount of Indebtedness represented by such obligation shall be the capitalized
amount of such obligation determined in accordance with GAAP; and the Stated Maturity thereof shall
be the date of the last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be prepaid by the lessee without payment of a penalty.

          “Cash Equivalents” means any of the following:

     (1) United States dollars;

     (2) Investments in U.S. Government Obligations maturing within
365 days of the date of acquisition thereof;

3

 

     (3) certificates of deposit and eurodollar time deposits with maturities of 12 months
or less from the date of acquisition, bankers’ acceptances with maturities not exceeding 12
months and overnight bank deposits, in each case with any domestic commercial bank having capital
and surplus in excess of $500.0 million;

     (4) repurchase obligations with a term of not more than seven days for underlying securities
of the types described in clauses (2) and (3) of this definition entered into with any financial
institution meeting the qualifications specified in clause (3) of this definition;

     (5) commercial paper maturing not more than 365 days after the date of acquisition
of an issuer (other than an Affiliate of the Company) with a rating, at the time as of which any
investment therein is made, of “A-3” (or higher) according to Standard & Poor’s Rating Group, a
division of McGraw-Hill, Inc. or “P-2” (or higher) according to Moody’s Investor Service, Inc. or
carrying an equivalent rating by a nationally recognized rating agency if both of the two named
rating agencies cease publishing ratings of investments;

     (6) money market funds at least 90% of the assets of which constitute Cash Equivalents of the
kinds described in clauses (1) through (5) of this definition; and

     (7) in the case of any Subsidiary organized or having its principal place of business outside
the United States, investments in the ordinary course of business denominated in the currency of
the jurisdiction in which that Subsidiary is organized or has its principal place of business
which are similar to the items specified in clauses (1) through (6) of this definition
(provided, that with respect to the items specified in clause (3) of this definition,
such commercial bank has a capital and surplus of not less than $250.0 million, including without
limitation any deposit with a bank that is a lender to any Restricted Subsidiary).

          “Cash Management Obligations” means with respect to any Person all obligations of
such Person in respect of overdrafts and other liabilities owed to any other Person that arise from
treasury, depositary, cash management or related services, including processing of electronic funds
through clearing houses, and credit card, credit card processing, debit card and purchase card
services.

          “Change of Control” means the occurrence of any of the following events:

     (1) prior to the first public offering of common stock of the Company, one or more of the
Permitted Holders as a group cease to be the “beneficial
owner” (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that, for the purposes of this clause (1) and clause (2) of
this definition, a Person shall be deemed to have “beneficial ownership” of all shares that any
such Person has the right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than 50% of the total voting power
of the Voting Stock of the Company, whether as a result of an issuance of securities of the
Company, any merger, consolidation, liquidation or dissolution of the Company, or any direct or
indirect transfer of securities by the Company or otherwise (for purposes of this clause (1) and
clause (2) of this definition, the Permitted Holders shall be deemed to beneficially own
any Voting Stock of a Person (the “specified person”) held by any other Person (the “parent
entity”) so long as the Permitted Holders beneficially own (as so defined), directly or indirectly,
in the aggregate a majority of the voting power of the Voting Stock of the parent entity);

     (2) after the first public offering of common stock of the Company, any “person” (as such
term is used in Section 13(d)(3) of the Exchange Act), other than one or more Permitted

4

 

Holders, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of more than 50% of the total voting power of the
Voting Stock of the Company, whether as a result of issuance of securities of the Company, any
merger, consolidation, liquidation or dissolution of the Company, any direct or indirect transfer
of securities by any Permitted Holder or otherwise;

     (3) during any period of two consecutive years, individuals who on the Issue Date
constituted the board of directors of the Company (together with any new directors (A) whose
election by such board of directors of the Company, or whose nomination for election by the
shareholders of the Company was approved by a vote of a majority of the directors of the Company
then still in office who were either directors at the beginning of such period or whose election
or nomination for election was previously so approved or (B) who were elected to the Board of
Directors pursuant to the Modular L.L.C. Shareholder’s Agreement), cease for any reason to
constitute a majority of the board of directors of the Company then in office;

     (4) the adoption of a plan relating to the liquidation or dissolution of the Company; or

     (5) the merger or consolidation of the Company with or into another Person or the
merger of another Person with or into the Company, or the sale of all or substantially all the
assets of the Company and its Restricted Subsidiaries on a consolidated basis to another Person
(other than a Person that is controlled by the Permitted Holders), and, in the case of any such
merger or consolidation, the securities of the Company that are outstanding immediately prior to
such transaction and which represent 100% of the aggregate voting power of the Voting Stock of the
Company are changed into or exchanged for cash, securities or property, unless pursuant to such
transaction such securities are changed into or exchanged for, in addition to any other
consideration, securities of the surviving Person or transferee or a Person controlling such
surviving Person or transferee that represent immediately after such transaction, at least a
majority of the aggregate voting power of the Voting Stock of the surviving Person or transferee or
a Person controlling such surviving Person or transferee.

          “Closing Date” means March 28, 2005.

          “Code” means the Internal Revenue Code of 1986, as amended.

          “Collateral” means all property and assets of the Company or any Guarantor with respect
 to which from time to time a Lien is granted as security for the Notes.

          “Collateral Agent” means the Trustee in its capacity as the “Collateral Agent” under and

 as defined in the Security Documents and any successor thereto in such capacity.

          “Collateral Subsidiaries” means the Domestic Subsidiaries and each Subsidiary of the Company
organized under the laws of the Cayman Islands or the United Kingdom (or any subdivision thereof).

          “Commission” means the Securities and Exchange Commission.

          “Commodity Hedge Obligations” means with respect to any Person any commodity price
protection agreement or other commodity price hedging arrangement or other similar agreement or
arrangement as to which such Person is party.

5

 

          “Company” means the party named as such in the preamble of this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of any provision
contained herein and required by the TIA, each other obligor on the indenture securities.

          “Consolidated Coverage Ratio” as of any date of determination means the ratio of:

     (1) the aggregate amount of EBITDA for the period of the most recent four consecutive fiscal
quarters for which internal financial statements are available prior to the date of such
determination to

     (2) Consolidated Interest Expense for such four fiscal quarters; provided, however,
that:

     (A) if the Company or any Restricted Subsidiary has Incurred any Indebtedness
since the beginning of such period that remains outstanding on such date of
determination or if the transaction giving rise to the need to calculate the Consolidated
Coverage Ratio is an Incurrence of Indebtedness, EBITDA and Consolidated Interest Expense
for such period shall be calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first day of such period (in
each case other than Indebtedness Incurred under any revolving credit facility, in which
case interest expense shall be computed based upon the average daily balance of such
Indebtedness during the applicable period) and the discharge of any other Indebtedness
repaid, repurchased, defeased or otherwise discharged with the proceeds of such new
Indebtedness as if such discharge had occurred on the first day of such period;

     (B) if the Company or any Restricted Subsidiary has repaid, repurchased, defeased or
otherwise discharged any Indebtedness since the beginning of such period or if any
Indebtedness is to be repaid, repurchased, defeased or otherwise discharged (in each case,
if such Indebtedness has been permanently repaid and has not been replaced, other than
Indebtedness Incurred under any revolving credit facility unless such Indebtedness is
permanently reduced, in which case interest expense shall be computed based upon the
average daily balance of such Indebtedness during the applicable period) on the date of
the transaction giving rise to the need to calculate the Consolidated Coverage Ratio,
EBITDA and Consolidated Interest Expense for such period shall be calculated on a pro
forma basis as if such discharge had occurred on the first day of such period and as if
the Company or such Restricted Subsidiary has not earned any interest income actually
earned during such period in respect of cash or Cash Equivalents used to repay,
repurchase, defease or otherwise discharge such Indebtedness;

     (C) if since the beginning of such period the Company or any Restricted Subsidiary
shall have made any Asset Disposition, EBITDA for such period shall be reduced by an amount
equal to EBITDA (if positive) directly attributable to the assets that are the subject of
such Asset Disposition for such period or increased by an amount equal to EBITDA (if
negative) directly attributable thereto for such period and Consolidated Interest Expense
for such period shall be reduced by an amount equal to the Consolidated Interest Expense
directly attributable to any Indebtedness of the Company or any Restricted Subsidiary
repaid, repurchased, defeased or otherwise discharged with respect to the Company and its
continuing Restricted Subsidiaries in connection with such Asset Disposition for such
period (or, if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated
Interest Expense for such period directly attributable to the Indebted-

6

 

ness of such Restricted Subsidiary to the extent the Company and its continuing Restricted
Subsidiaries are no longer liable for such Indebtedness after such sale);

     (D) if since the beginning of such period the Company or any Restricted Subsidiary
(by merger or otherwise) shall have made an Investment in any Restricted Subsidiary (or
any Person that becomes a Restricted Subsidiary) or an acquisition of assets, including
any acquisition of assets occurring in connection with a transaction causing a calculation
to be made hereunder, which constitutes all or substantially all of an operating unit of a
business, EBITDA and Consolidated Interest Expense for such period shall be calculated
after giving pro forma effect thereto (including the Incurrence of any Indebtedness) as if
such Investment or acquisition occurred on the first day of such period; and

     (E) if since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary
since the beginning of such period) shall have made any Asset Disposition or any
Investment or acquisition of assets that would have required an adjustment
pursuant to clause (C) or (D) of this definition if made by the Company or a Restricted
Subsidiary during such period, EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving pro forma effect thereto as if such Asset Disposition,
Investment or acquisition of assets occurred on the first day of such period.

          For purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto and the amount of
Consolidated Interest Expense associated with any Indebtedness Incurred in connection therewith,
the pro forma calculations shall be determined in good faith by a responsible financial or
accounting Officer of the Company. Any such pro forma calculations shall reflect any pro forma
expense and cost reductions attributable to such acquisitions, to the extent such expense and cost
reduction would be permitted by the Commission to be reflected in pro forma financial statements
included in a registration statement filed with the Commission.

          If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the
interest expense on such Indebtedness shall be calculated as if the rate in effect on the date of
determination had been the applicable rate for the entire period
(taking into account any
Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a
remaining term as at the date of determination in excess of 12 months).

          “Consolidated Current Liabilities” means, as of any date of determination, the
aggregate amount of liabilities of the Company and its Restricted Subsidiaries which may properly
be classified as current liabilities (including taxes accrued as estimated), after eliminating;

     (a) all intercompany items between the Company and any Restricted Subsidiary or between
Restricted Subsidiaries; and

     (b) all current maturities of long-term debt.

          “Consolidated Interest Expense” means, for any period, the total interest expense of
the Company and its Consolidated Restricted Subsidiaries, plus, to the extent Incurred by the
Company or its Restricted Subsidiaries in such period but not included in such interest expense,
without duplication:

7

 

     (1) interest expense attributable to Capitalized Lease Obligations
and the imputed interest with respect to Attributable Debt;

     (2) amortization of debt discount;

     (3) capitalized interest;

     (4) commissions, discounts and other fees and charges attributable
to letters of credit and bankers’ acceptance financing;

     (5) interest accruing on any Indebtedness of any other Person to the
extent such Indebtedness is Guaranteed by the Company or any Restricted
Subsidiary;

     (6) net payments associated with Hedging Obligations (including
amortization of fees) (other than any such payments associated with the
Bank Indebtedness, the Notes or the Exchange Notes; provided that in no
event shall any amortization of deferred debt issuance costs be included
in Consolidated Interest Expense);

     (7) dividends in respect of all Disqualified Stock (other than
dividends payable in Capital Stock (other than Disqualified Stock) of the
Company) of the Company and all Preferred Stock of any of the Restricted
Subsidiaries of the Company, to the extent held by Persons other than the
Company or another Restricted Subsidiary;

     (8) interest Incurred in connection with investments in discontinued
operations; and

     (9) the cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Company) in
connection with Indebtedness Incurred by such plan or trust.

          “Consolidated Net Income” means, for any period, the net income of the
Company and its Consolidated Subsidiaries for such period determined in accordance
with GAAP; provided, however, that:

     (1) any net income of any Person (other than the Company), if such Person is not a
Restricted Subsidiary, shall be excluded from such Consolidated Net Income, except that:

     (A) subject to the limitations contained in clause (4) of this definition, the
Company’s equity in the net income of any such Person for such period shall be included
in such Consolidated Net Income up to the aggregate amount of cash actually distributed
by such Person during such period to the Company or a Restricted Subsidiary as a dividend
or other distribution (subject, in the case of a dividend or other distribution made to a
Restricted Subsidiary, to the limitations contained in clause (3) of this definition) and

     (B) the Company’s equity in a net loss of any such Person for such period shall
be included in determining such Consolidated Net Income;

     (2) any net income (or loss) of any Person acquired by the Company or a Subsidiary in a
pooling of interests transaction for any period prior to the date of such acquisition shall be
excluded from such Consolidated Net Income;

8

 

     (3) any net income (or loss) of any Restricted Subsidiary, to the extent that the declaration
of dividends or similar distributions by such Restricted Subsidiary of that income is not at the
date of determination permitted without any prior governmental approval (that has not been
obtained) or is, directly or indirectly, restricted by operation of
the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to such Restricted Subsidiary or its stockholders or other holders of its equity, shall
be excluded from such Consolidated Net Income except that:

     (A) subject to the limitations contained in clause (4) of this definition, the
Company’s equity in the net income of any such Restricted Subsidiary for such period
shall be included in such Consolidated Net Income up to the aggregate amount of cash
actually distributed by such Restricted Subsidiary during such period to the Company or
another Restricted Subsidiary as a dividend or other distribution (subject, in the case
of a dividend or other distribution made to another Restricted Subsidiary, to the
limitation contained in this clause) and

     (B) the Company’s equity in a net loss of any such Restricted Subsidiary for such
period shall be included in determining such Consolidated Net Income;

     (4) any gain (or loss) realized upon the sale or other disposition of any asset of the
Company or its Consolidated Subsidiaries (including pursuant to any Sale/Leaseback Transaction)
that is not sold or otherwise disposed of in the ordinary course of business and any gain (or
loss) realized upon the sale or other disposition of any Capital Stock of any Person shall be
excluded from such Consolidated Net Income (without regard to abandonments or reserves relating
thereto);

     (5) any extraordinary gain or loss shall be excluded from such Consolidated Net Income;

     (6) the cumulative effect of a change in accounting principles shall be excluded from
such Consolidated Net Income;

     (7) gains or losses due solely to fluctuations in currency values and the related tax effects
according to GAAP shall be excluded from such Consolidated Net Income; and

     (8) any non-cash restructuring charges shall be excluded from such Consolidated Net Income.

          “Consolidated Net Tangible Assets” means Total Assets (less accumulated depreciation and
amortization, allowances for doubtful receivables, other applicable reserves and other properly
deductible items) of the Company and its Restricted Subsidiaries, after deducting therefrom
Consolidated Current Liabilities and, to the extent otherwise included, the amounts of (without
duplication):

     (1) the excess of cost over Fair Market Value of assets or businesses acquired;

     (2) any revaluation or other write-up in book value of assets subsequent to the last
day of the fiscal quarter of the Company immediately preceding the issue date of the notes as a
result of a change in the method of valuation in accordance with GAAP;

9

 

     (3) unamortized debt discount and expenses and other unamortized deferred charges, goodwill,
patents, trademarks, service marks, trade names, copyrights, licenses, organization or
developmental expenses and other intangible items;

     (4) minority interests in consolidated Subsidiaries held by Persons other than
the Company or any Restricted Subsidiary;

     (5) treasury stock;

     (6) cash or securities set aside and held in a sinking or other analogous fund established
for the purpose of redemption or other retirement of Capital Stock to the extent such
obligation is not reflected in Consolidated Current Liabilities; and

     (7) Investments in and assets of Unrestricted Subsidiaries.

          “Consolidation” means the consolidation of the amounts of each of the Restricted
Subsidiaries with those of the Company in accordance with GAAP consistently applied; provided,
however, that “Consolidation” shall not include consolidation of the accounts of any
Unrestricted Subsidiary, but the interest of the Company or any Restricted Subsidiary in an
Unrestricted Subsidiary shall be accounted for as an investment. The term “Consolidated” has a
correlative meaning.

          “Credit Agent” means Wells Fargo Foothill, Inc., in its capacity as administrative
and collateral agent for the lenders party to the Credit Agreement or any successor thereto, or any
Person otherwise designated the “Credit Agent” pursuant to the Intercreditor Agreement.

          “Credit Agreement” means the Amended and Restated Loan and Security Agreement dated
the Closing Date among SMART Modular Technologies, Inc., SMART Modular Technologies (Europe)
Limited, SMART Modular Technologies (Puerto Rico) Inc., the other obligors party thereto, the
lenders party thereto and Wells Fargo Foothill, Inc., as the arranger and administrative
agent, and the Loan Documents (as defined therein), including any guarantees, collateral documents,
instruments and agreements executed in connection therewith, and any amendments, supplements,
modifications, extensions, renewals, restatements or refundings thereof (except to the extent that
any such amendment, supplement, modification, extension, renewal, restatement or refunding would be
prohibited by the terms of this Indenture, unless otherwise agreed to by the Holders of at least a
majority in aggregate principal amount of notes at the time outstanding) and any indentures or
credit facilities or commercial paper facilities or other agreements or instruments evidencing or
governing the terms of any indebtedness or other financial accommodation that replace,
refund or refinance any part of the loans, notes, other credit facilities, commitments or other
obligations thereunder (including any such replacement, refunding or refinancing facility or
indenture that increases the amount borrowable thereunder or alters the maturity thereof) unless
such agreement or instrument expressly provides that it is not intended to be and is not the Credit
Agreement hereunder.

          “Credit Agreement Obligations” means (i) all Bank Indebtedness and all other
Indebtedness outstanding under one or more First-Lien Credit Facilities that constitutes Permitted
Debt or is otherwise permitted under Section 4.03 and is secured by a Permitted Lien described in
clause (1) of the definition thereof (ii) all other obligations (not constituting Indebtedness) of
the Company or Guarantor under the Credit Agreement or any such other First-Lien Credit Facility
and (iii) all other obligations of the Company or any Guarantor in respect of Hedging Obligations,
Commodity Hedge Obligations or Cash Management Obligations that are secured by common Collateral
under the same collateral documents

10

 

that secure obligations under the Credit Agreement or are designated by the Company to be
“Credit Agreement Obligations” for purposes of this Indenture.

          “Credit Facilities” means one or more debt facilities (including, without
limitation, the Credit Agreement) or commercial paper facilities, providing for revolving credit
loans, term loans, receivables financing (including through the sale of receivables to lenders or
to special purpose entities formed to borrow from lenders against such receivables) or letters of
credit, or any debt securities or other form of debt financing or financial accommodation
(including convertible or exchangeable debt instruments), in each case, as amended, supplemented,
modified, extended, renewed, restated or refunded in whole or in part from time to time.

          “Currency Agreement” means with respect to any Person any foreign exchange contract,
currency swap agreements or other similar agreement or arrangement to which such Person is a party.

          “Default” means any event which is, or after notice or passage of time or both would
be, an Event of Default.

          “Discharge of Credit Agreement Obligations” means payment in full in cash of the
principal of and interest and premium, if any, on all Indebtedness outstanding under the
First-Lien Credit Facilities or, with respect to Hedging Obligations, Commodity Hedge Obligations
or letters of credit outstanding thereunder, delivery of cash collateral or backstop letters of
credit in respect thereof in compliance with such First-Lien Credit Facility, in each case after or
concurrently with termination of all commitments to extend credit thereunder, and payment in full
in cash of any other Credit Agreement Obligations that are due and payable or otherwise accrued and
owing at or prior to the time such principal, interest and premium, if any, are paid.

          “Disqualified Stock” means, with respect to any Person, any Capital Stock which by
its terms (or by the terms of any security into which it is convertible or for which it is
exchangeable or exercisable) or upon the happening of any event:

     (1) matures or is mandatorily redeemable pursuant to a sinking fund obligation or
otherwise,

     (2) is convertible or exchangeable for Indebtedness or Disqualified Stock or

     (3) is redeemable at the option of the holder thereof, in whole or in part,

in the case of clauses (1), (2) and (3), on or prior to 90 days after the Stated Maturity of the
Notes; provided, however, that only the portion of Capital Stock that so matures or is
mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the
holder thereof prior to the Stated Maturity of the Notes shall be deemed Disqualified Stock;
provided further, however, that any Capital Stock that would not constitute Disqualified
Stock but for provisions thereof giving holders thereof the right to require such Person to
repurchase or redeem such Capital Stock upon the occurrence of an “asset sale” or “change of
control” occurring prior to 90 days after the Stated Maturity of the Notes shall not constitute
Disqualified Stock if the “asset sale” or “change of control” provisions applicable to such Capital
Stock are not more favorable to the holders of such Capital Stock than the provisions of Sections
4.06 and 4.08; and provided further, however, that if Capital Stock is issued to any plan
for the benefit of employees of the Company or its Subsidiaries or by any such plan to those
employees, that Capital Stock shall not constitute Disqualified Stock solely because it may be
required to be repurchased by the Company in order to satisfy applicable statutory or regulatory
obligations.

11

 

          “Domestic Subsidiary” means any Restricted Subsidiary of the Company other than a
Foreign Subsidiary.

          “EBITDA” for any period means the Consolidated Net Income for such period, plus,
without duplication, the following to the extent deducted in calculating such Consolidated Net
Income:

     (1) provision for taxes based on income or profits of the Company and its Consolidated
Restricted Subsidiaries;

     (2) Consolidated Interest Expense;

     (3)
depreciation expense of the Company and its Consolidated Restricted Subsidiaries;

     (4) amortization expense (including amortization of goodwill and other intangibles)
of the Company and its Consolidated Restricted Subsidiaries (excluding amortization expense
attributable to a prepaid cash item that was paid in a prior period);

     (5) all other noncash expenses or losses of the Company and its Consolidated Restricted
Subsidiaries for such period (including, but not limited to, such expenses or losses in
connection with restructuring activities, whether incurred before or after the Issue Date, but
excluding gains or losses due solely to fluctuations in currency values and tax effects
according to GAAP), determined on a consolidated basis in accordance with GAAP;

     (6) any payments pursuant to the Financial Advisory Agreements; and

     (7)
up to a maximum aggregate amount for all periods of $20.0 million of restructuring
charges, payable in cash, taken in connection with any restructuring charges incurred
subsequent to November 30, 2003, provided, such charges are reflected in the
calculations pursuant to this clause (7) only in the period such charges are incurred;

and minus (x) all noncash items increasing Consolidated Net Income of such Person for such Period
(excluding any items which represent the reversal of any accrual of, or cash reserve for,
anticipated cash charges in any prior period) and (y) any noncash outlays which relate to any
noncash charge during any Period.

          Notwithstanding the foregoing, the provision for taxes based on the income or profits of, and
the depreciation and amortization and noncash charges of, a Restricted Subsidiary of the Company
shall be added to Consolidated Net Income to compute EBITDA only to the extent (and in the same
proportion) that the net income of such Restricted Subsidiary was included in calculating
Consolidated Net Income and only if a corresponding amount would be permitted at the date of
determination to be dividended or similarly distributed to the Company by such Restricted
Subsidiary without prior governmental approval (that has not been obtained) or is not, directly or
indirectly, restricted by operation of the terms of its charter and all agreements, instruments,
judgments, decrees, orders, statutes, rules and governmental regulations applicable to such
Restricted Subsidiary or its stockholders or other holders of its equity.

          “Equity Offering” means a primary offering of common stock of the Company, other
than public offerings with respect to the Company’s common stock registered on Form S-8 and Form
S-4.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended.

12

 

          “Excluded Puerto Rico Assets” means, to the extent such property or assets are located in
Puerto Rico and to the extent not permitted under applicable law, interests or claims under
insurance policies, judgments, tort claims, tax refunds, tax refund claims or claims against
governmental entities.

          “Fair Market Value” means, with respect to any asset or property, the price which
could be negotiated in an arm’s-length, free market transaction, for cash, between a willing seller
and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the
transaction. For all purposes of this Indenture, Fair Market Value will be determined in good faith
by the Board of Directors, whose determination will be conclusive and evidenced by a resolution of
the Board of Directors.

          “Financial Advisory Agreements” means collectively, (A) the letter agreement dated
as of April 16, 2004 among SMART Modular Technologies, Inc., TPG Genpar III, L.P., TPG Genpar IV,
L.P. and T3 Genpar II, L.P.; (B) the letter agreement dated as of April 16, 2004 between SMART
Modular Technologies, Inc. and Francisco Partners, L.P.; and (C) the letter agreement dated as of
April 16, 2004 between SMART Modular Technologies, Inc. and SCP Management Company, L.L.C., or, in
each case, any amendment or replacement thereto (including pursuant to any amendment or replacement
thereto) so long as any such amendment or replacement agreement is not more disadvantageous to the
Holders of notes in any material respect than the original agreement as in effect on the Closing
Date.

          “First-Lien Credit Facilities” means (x) the Credit Facilities provided pursuant to
the Credit Agreement and (y) any other Credit Facility that, in the case of both clauses (x) and
(y), is secured by a Permitted Lien described in clause (1) of the definition thereof and, except
for the Credit Facilities provided pursuant to the existing senior bank facilities, is designated
by the Company as a “First-Lien Credit Facility” for the purposes of this Indenture.

          “Foreign Subsidiary” means any Restricted Subsidiary of the Company that is not
organized under the laws of the United States of America, any State thereof, the District of
Columbia or Puerto Rico.

          “GAAP” means generally accepted accounting principles in the United States of
America as in effect on the Closing Date, including those set forth in:

     (1) the opinions and pronouncements of the Public Company Accounting Oversight Board;

     (2) statements and pronouncements of the Financial Accounting Standards Board;

     (3) such other statements by such other entities as approved by a significant segment
of the accounting profession; and

     (4) the rules and regulations of the Commission governing the inclusion of financial
statements (including pro forma financial statements) in periodic reports required to be filed
pursuant to Section 13 of the Exchange Act, including opinions and pronouncements in staff
accounting bulletins and similar written statements from the accounting staff of the Commission.

All ratios and computations based on GAAP contained in this Indenture shall be computed in
conformity with GAAP.

13

 

          “Guarantee” means any obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any Indebtedness of any other Person and any obligation, direct or
indirect, contingent or otherwise, of such Person:

     (1) to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness of such other Person (whether arising by virtue of partnership
arrangements, or by agreement to keep well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or

     (2) entered into for purposes of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof
(in whole or in part);

provided, however, that the term “Guarantee” shall not include endorsements for
collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a
corresponding meaning.

          “Guarantor” means any Subsidiary that has issued a Note Guarantee.

          “Hedging Obligations” of any Person means the obligations of such Person
pursuant to any Interest Rate Agreement or Currency Agreement.

          “Holder” means the Person in whose name a Note is registered on the
Registrar’s books.

          “Incur” means, with respect to any Indebtedness or other obligation of any Person,
to issue, assume, Guarantee, incur or otherwise become liable for; provided, however,
that any Indebtedness or Capital Stock of a Person existing immediately after the time such
Person becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be
deemed to be Incurred by such Person at the time it becomes a Subsidiary. The term “Incurrence”
when used as a noun shall have a correlative meaning. The accretion of principal of a non interest
bearing or other discount security shall not be deemed the Incurrence of Indebtedness.

          “Indebtedness” means, with respect to any Person on any date of determination
(without duplication) the following items if and to the extent that any of them (other than items
specified under clauses (3), (8) and (9) of this definition) would appear as a liability or, in the
case of clause (6) only, Preferred Stock on the balance sheet of such Person, prepared in
accordance with GAAP:

     (1) the principal amount of and premium (if any) in respect of indebtedness of such Person
for borrowed money;

     (2) the principal amount of and premium (if any) in respect of obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments;

     (3) all obligations of such Person in respect of letters of credit or other similar
instruments (including reimbursement obligations with respect thereto but excluding obligations
in respect of letters of credit issued in respect of Trade Payables);

     (4) all obligations of such Person to pay the deferred and unpaid purchase price of property
or services (except Trade Payables), which purchase price is due more than twelve months after
the date of placing such property in service or taking delivery and title thereto or the
completion of such services;

14

 

     (5) all Capitalized Lease Obligations and all Attributable Debt in respect of
Sale/Leaseback Transactions of such Person;

     (6) the amount of all obligations of such Person with respect to the redemption, repayment
or other repurchase of any Disqualified Stock or, with respect to any Subsidiary of such Person,
any Preferred Stock (but excluding, in each case, any accrued
dividends);

     (7) all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether
or not such Indebtedness is assumed by such Person; provided, however, that the amount
of Indebtedness of such Person shall be the lesser of:

     (A) the Fair Market Value of such asset at such date of determination and

     (B) the amount of such Indebtedness of such other Persons;

     (8) any Hedging Obligations of such Person; and

     (9) all obligations of the type referred to in clauses (1) through (8) of other Persons
and all dividends of other Persons for the payment of which, in either case, such Person is
responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including by
means of any Guarantee.

The amount of any Indebtedness outstanding as of any date shall be:

     (1) the accreted value thereof (together with any interest thereon that is more than 30
days past due), in the case of any Indebtedness that does not require current payments of
interest;

     (2) the principal amount thereof, in the case of any other Indebtedness (except as set
forth below) provided that the principal amount of any Indebtedness that is denominated in any
currency other than United States dollars shall be the amount thereof, as determined pursuant to
the foregoing provision, converted into United States dollars at the Spot Rate in effect on the
date that such Indebtedness was incurred or, if such Indebtedness was incurred prior to the
Closing Date, the Spot Rate in effect on the Closing Date;

     (3) the net termination value of any Hedging Obligations as of such date or, in the case of
any Hedging Obligation permitted to be incurred pursuant to clause (7) of Permitted Debt, zero;
and

     (4) in the case of any Indebtedness permitted to be incurred pursuant to clause (6) of
Permitted Debt, zero.

          “Indenture” means this Indenture as amended or supplemented from time to time.

          “Indenture Documents” means (1) this Indenture, the Notes and the Security Documents
and (2) any other related document or instrument executed and delivered pursuant to any Indenture
Document described in clause (1) of this definition evidencing or governing Obligations.

          “Intercreditor Agreement” means that certain intercreditor agreement, dated as of
the Closing Date, between the Credit Agent and the Trustee, as amended (including any amendment and
restatement thereof), supplemented or otherwise modified from time to time.

15

 

          “Interest Rate Agreement” means with respect to any Person any interest rate
protection agreement, interest rate future agreement, interest rate option agreement, interest rate
swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge
agreement or other similar agreement or arrangement as to which such Person is party.

          “Investment” in any Person means any direct or indirect advance, loan (other than
advances to customers in the ordinary course of business that are recorded as accounts receivable
on the balance sheet of the lender) or other extension of credit (including by way of Guarantee or
similar arrangement but excluding commission, travel and similar advances to officers, consultants
and employees made in the ordinary course of business) or capital contribution to (by means of any
transfer of cash or other property to others or any payment for property or services for the
account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person; provided that an Investment by the Company for
consideration consisting of common equity securities of the Company shall not be deemed to be an
Investment other than for purposes of clause (3) of the definition of “Qualified Proceeds”

          For purposes of the definition of “Unrestricted Subsidiary” and Section 4.04;

   (1) “Investment” shall include the portion (proportionate to the Company’s Equity
Interest in such Subsidiary) of the Fair Market Value of the net assets of any
Subsidiary of the Company at the time that such Subsidiary is designated an
Unrestricted Subsidiary; provided, however, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have
a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal
to:

     (A) the Company’s “Investment” in such Subsidiary at the time of such redesignation less

     (B) the portion (proportionate to the Company’s equity interest in such Subsidiary) of
the Fair Market Value of the net assets of such Subsidiary at the time of such
redesignation; and

   (2) any property transferred to or from an Unrestricted Subsidiary shall be valued at
its Fair Market Value at the time of such transfer.

          “Issue Date” means the date on which the notes are originally issued under this
Indenture.

          “Legal Holiday” means a Saturday, Sunday or other day on which banking institutions
are not required by law or regulation to be open in the State of New York.

          “Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of
any kind (including any conditional sale or other title retention agreement or lease in the nature
thereof).

          “Modular L.L.C. Registration Rights Agreement” means the Registration Rights
Agreement dated as of March 8, 2005 between the Company and Modular, L.L.C. or any amendment or
replacement thereto or any transaction contemplated thereby (including pursuant to any amendment or
replacement thereto) so long as any such amendment or replacement agreement is not more
disadvantageous to the Holders of notes in any material respect than the original agreement as in
effect on the Closing Date.

16

 

          “Modular
L.L.C. Shareholders’ Agreement” means the Shareholders’ Agreement dated as
of March 8, 2005 between the Company and Modular, L.L.C. and the other parties named therein or any
amendment or replacement thereto or any transaction contemplated thereby (including pursuant to any
amendment or replacement thereto) so long as any such amendment or replacement agreement is not
more disadvantageous to the Holders of notes in any material respect than the original agreement as
in effect on the Closing Date.

          “Net Available Cash” from an Asset Disposition means cash payments received
(including any cash payments received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise and proceeds from the sale or other disposition of any
securities received as consideration, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of Indebtedness or other
obligations relating to the properties or assets that are the subject of such Asset Disposition or
received in any other noncash form) therefrom, in each case net of:

     (1) all direct costs relating to such Asset Disposition, including all legal, title,
accounting and investment banking fees, and recording tax expenses, sales and other commissions
and other fees and relocation expenses incurred, and all Federal, state, provincial, foreign and
local taxes required to be paid or accrued as a liability under GAAP;

     (2) all payments made on any Indebtedness that (x) is secured by any assets subject to such
Asset Disposition, in accordance with the terms of any Lien upon or other security agreement of
any kind with respect to such assets, or (y) must, by its terms, or in order to obtain a necessary
consent to such Asset Disposition, or by applicable law, be repaid out of the proceeds from such
Asset Disposition;

     (3) all distributions and other payments required to be made to minority interest
holders in Subsidiaries or joint ventures as a result of such Asset Disposition; and

     (4) appropriate amounts to be provided by the seller as a reserve, in accordance with
GAAP against any liabilities associated with the property or other assets disposed
of in such Asset Disposition and retained by the Company or any Restricted Subsidiary after such
Asset Disposition until such time as that reserve is reversed in which case Net Available Cash
shall include the amount of the reserve so reversed.

          “Net Cash Proceeds,” with respect to any issuance or sale of Capital Stock, means
the cash proceeds of such issuance or sale net of attorneys’ fees, accountants’ fees, underwriters’
or placement agents’ fees, discounts or commissions and brokerage, consultant and other fees
actually incurred in connection with such issuance or sale and net of taxes paid or payable as a
result thereof.

          “Non-Recourse Debt” means Indebtedness,

     (1) no default with respect to, which (including any rights that the holders thereof may have
to take enforcement action against an Unrestricted Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness of the Company or any of its Restricted
Subsidiaries to declare a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity; and

     (2) as to which the lenders have been notified in writing that they will not have any
recourse to the stock (other than the stock of an Unrestricted Subsidiary pledged by the Company

17

 

to secure debt of that Unrestricted Subsidiary) or assets of the Company or any of its Restricted
Subsidiaries;

provided that in no event shall Indebtedness of any Unrestricted Subsidiary fail to be
Non-Recourse Debt solely as a result of any default provisions (and any related right of recourse)
contained in a guarantee thereof by the Company or any of its Restricted Subsidiaries if the
Company or that Restricted Subsidiary was otherwise permitted to incur that guarantee
pursuant to this Indenture.

          “Note Guarantee” means each Guarantee of the obligations with respect to the Notes
issued by a Subsidiary of the Company pursuant to the terms of this Indenture.

          “Obligations” means all obligations of the Company and the Guarantors under this
Indenture, the Notes and the other Indenture Documents, including obligations to the Trustee and
the Collateral Agent, whether for payment of principal of, interest, including Additional Interest,
if any, on the Notes and all other monetary obligations of the Company and the Guarantors under
this Indenture, the Notes and the other Indenture Documents, whether for fees, expenses,
indemnification or otherwise.

          “Offering Memorandum” means the offering memorandum relating to the issuance of the
Original Notes dated March 22, 2005.

          “Officer” means the Chairman of the Board, the Chief Executive Officer, the Chief
Financial Officer, the President, any Vice President, the Treasurer or the Secretary of the
Company.

          “Officer’s Certificate” means a certificate signed by an Officer of each Person
issuing such certificate.

          “Opinion of Counsel” means a written opinion from legal counsel who is reasonably
acceptable to the Trustee. The counsel may be an employee of or counsel to the Company, a Guarantor
or the Trustee.

          “Permitted Business” means any business engaged in by the Company or any Restricted
Subsidiary on the Issue Date and any Related Business.

          “Permitted Debt” has the meaning set forth in Section 4.03.

          “Permitted Holders” means the Sponsors and their Affiliates and any
successors thereto.

          “Permitted Investment” means an Investment by the Company or any Restricted
Subsidiary:

     (1) in the Company, a Restricted Subsidiary or a Person that will, upon the making of such
Investment, become a Restricted Subsidiary; provided, however, that the primary business
of such Restricted Subsidiary is a Permitted Business;

     (2) in another Person if as a result of such Investment such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially all its assets to, the
Company or a Restricted Subsidiary;

     (3) in cash or Cash Equivalents;

18

 

     (4) in receivables owing to the Company or any Restricted Subsidiary if created or acquired in
the ordinary course of business and payable or dischargeable in accordance with customary trade
terms; provided, however, that such trade terms may include such concessionary trade
terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances;

     (5) in payroll, travel and similar advances to cover matters that are expected
at the time of such advances ultimately to be treated as expenses for accounting purposes and
that are made in the ordinary course of business;

     (6) in loans or advances to employees made in the ordinary course of business consistent with
prudent business practice and not exceeding $2.0 million in the aggregate outstanding at any one
time;

     (7) in stock, obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Company or any Restricted Subsidiary or in
satisfaction of judgments;

     (8) in any Person to the extent such Investment represents the noncash portion of the
consideration received for an Asset Disposition that was made pursuant to and in compliance with
Section 4.06;

     (9) that constitutes a Hedging Obligation or commodity hedging arrangement entered into for
bona fide hedging purposes of the Company in the ordinary course of business and otherwise in
accordance with this Indenture;

     (10) in securities of any trade creditor or customer received in settlement of obligations
or pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or
insolvency of such trade creditor or customer;

     (11) acquired as a result of a foreclosure by the Company or such Restricted Subsidiary with
respect to any secured Investment or other transfer of title with respect to any secured
Investment in default;

     (12) existing as of the Issue Date or an Investment consisting of any extension, modification
or renewal of any Investment existing as of the Issue Date (excluding any such extension,
modification or renewal involving additional advances, contributions or other investments of cash
or property or other increases thereof unless it is a result of the accrual or accretion of
interest or original issue discount or payment-in-kind pursuant to the terms, as of the Issue
Date, of the original Investment so extended, modified or renewed);

     (13) consisting of purchases and acquisitions of inventory, supplies, materials and
equipment or licenses or leases of intellectual property, in any case, in the ordinary course
of business and otherwise in accordance with this Indenture;

     (14) consisting of Guarantees of Indebtedness or intercompany Indebtedness permitted under
Section 4.03;

     (15) the consideration for which consists solely of Capital Stock other than Disqualified
Stock of the Company; and

19

 

     (16) so long as no Default shall have occurred and be continuing (or result therefrom), in any
Person engaged in a Permitted Business having an aggregate Fair Market Value (measured on the date
made and without giving effect to subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (16) that are at the time outstanding (and measured on the
date made and without giving effect to subsequent changes in value), not to exceed $20.0 million.

          “Permitted Liens” means any of the following Liens:

     (1) Liens upon any property of the Company or any Restricted Subsidiary securing any
Indebtedness permitted to be incurred under Section 4.03(b)(l) and all other obligations of the
Company or any Restricted Subsidiary in respect of such Indebtedness not constituting
Indebtedness;

     (2) Liens securing the Notes and the Note Guarantees;

     (3) Liens in favor of the Company or any Restricted Subsidiary;

     (4) Liens on property of a Person existing at the time such Person is merged with or
into or consolidated with or acquired by the Company or any Restricted Subsidiary; provided
that such Liens were not Incurred in contemplation of such merger or consolidation or
acquisition and do not extend to any assets other than those of the Person merged into or
consolidated with or acquired by the Company or the Restricted Subsidiary;

     (5) Liens on property existing at the time of acquisition of the property by the
Company of any Restricted Subsidiary; provided that such Liens were not Incurred in
contemplation of such acquisition;

     (6) Liens to secure Indebtedness (including Capitalized Lease Obligations) permitted by
Section 4.03(b)(8) covering only the assets acquired with such Indebtedness or additions or
improvements to such assets;

     (7) Liens for taxes, assessments or governmental charges or claims that are not yet
delinquent or that are being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded; provided that any reserve or other appropriate
provision as is required in conformity with GAAP has been made therefor;

     (8) Liens incurred in the ordinary course of business including, without limitation, judgment
and attachment liens of the Company or any Restricted Subsidiary of the Company with respect to
obligations that do not exceed in the aggregate $10.0 million at any one time outstanding and that
are not incurred in connection with the borrowing of money or the obtaining of advances of credit
(other than trade credit in the ordinary course of business, not evidenced by a note and not past
due);

     (9) Liens incurred in connection with Refinancing Indebtedness, but only if such Liens
extend to no more assets than the Liens securing the Indebtedness being refinanced;

     (10) Liens securing Hedging Obligations, Commodity Hedge Obligations or Cash Management
Obligations;

20

 

     (11) statutory Liens of landlords and carriers’, warehousemen’s, mechanics’, suppliers’,
materialmen’s, repairmen’s, or other like Liens (including contractual landlords liens) arising
in the ordinary course of business and with respect to amounts not yet delinquent by more than 180
days or being contested in good faith by appropriate proceedings, if a reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP shall have been made
therefor;

     (12) Liens incurred or deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance and other types of social security;

     (13) easements, zoning restrictions, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not interfering in any
material respect with the business of the Company or any of its Restricted Subsidiaries;

     (14) Liens on specific items of inventory or other goods and proceeds thereof of any Person
securing such Person’s obligations in respect of bankers’ acceptances issued or created for the
account of such Person to facilitate the purchase, shipment or storage of such inventory or other
goods;

     (15) Liens securing reimbursement obligations with respect to commercial letters of credit
which encumber documents and the property relating to such letters of credit and products and
proceeds thereof,

     (16) any interest or title of a lessor in the property subject to any lease or arising from
filing UCC financing statements regarding leases;

     (17) judgment Liens in respect of judgments that do not constitute an Event of Default;

     (18) Liens existing on the Issue Date;

     (19) Liens incurred or deposits made to secure the performance of tenders, bids,
leases, statutory obligations, surety and appeal bonds, government contracts, performance and
return of money bonds and other obligation of a like nature incurred in the ordinary course of
business;

     (20) Liens arising solely by virtue of any statutory or common law provision relating
to banker’s liens, rights of setoff or similar rights;

     (21) Liens on and pledges of the capital stock of any Unrestricted Subsidiary securing
Non-Recourse Debt of that Unrestricted Subsidiary; and

     (22) Liens securing Indebtedness or obligations that is permitted by the terms of this
Indenture to be outstanding having an aggregate principal amount at any one time
outstanding not to exceed $10.0 million.

          “Person” means any individual, corporation, partnership, limited liability company,
joint venture, association, joint-stock company, trust, unincorporated organization, government or
any agency or political subdivision thereof or any other entity.

21

 

          “Preferred Stock,” as applied to the Capital Stock of any Person, means Capital
Stock of any class or classes (however designated) that is preferred as to the payment of
dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of such Person.

          “Purchase Money Indebtedness” means Indebtedness:

     (1) consisting of the deferred purchase price of an asset, conditional sale obligations,
obligations under any title retention agreement and other purchase money obligations, in each case
where the maturity of such Indebtedness does not exceed the anticipated useful life of the asset
being financed; and

     (2) Incurred to finance the acquisition by the Company or a Restricted Subsidiary of all or
a portion of such asset, including additions and improvements;

provided, however, that such Indebtedness is Incurred within 180 days after the
acquisition by the Company or such Restricted Subsidiary of such asset or the relevant addition or
improvement.

          “Qualified Proceeds” means any of the following or any combination of the following:
(1) cash, (2) Cash Equivalents, (3) the Fair Market Value of assets that are used or useful in the
Permitted Business and (4) the Fair Market Value of the Capital Stock of any Person engaged
primarily in a Permitted Business if, in connection with the receipt by the Company or any
Restricted Subsidiary of the Company of such Capital Stock, (a) such Person becomes a Restricted
Subsidiary or (b) such Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, the Company or any Restricted
Subsidiary.

          “Redeemable Preferred Stock” means the Series A Redeemable Preferred Stock, par
value $0.0001 per share, of the Company.

          “Refinance” means, in respect of any Indebtedness, to refinance, extend, renew,
refund, repay, prepay, redeem, defease or retire, or to issue other Indebtedness in exchange or
replacement for, such Indebtedness. “Refinanced” shall have a correlative meaning.

          “Refinancing Indebtedness” means Indebtedness that is Incurred to refund, refinance,
replace, renew, repay or extend (including pursuant to any defeasance or discharge mechanism) any
Indebtedness of the Company or any Restricted Subsidiary (including Indebtedness of the Company
that Refinances Refinancing Indebtedness); provided, however, that:

     (1) the Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of
the Indebtedness being Refinanced,

     (2) the Refinancing Indebtedness has an Average Life at the time such Refinancing
Indebtedness is Incurred that is equal to or greater than the Average Life of the Indebtedness
being refinanced,

     (3) such Refinancing Indebtedness is Incurred in an aggregate principal amount (or if issued
with original issue discount, an aggregate issue price) that is equal to or less than the aggregate
principal amount (or if issued with original issue discount, the aggregate accreted value) then
outstanding of the Indebtedness being Refinanced and

22

 

     (4) if the Indebtedness being Refinanced is subordinated in right of payment to the
Notes, such Refinancing Indebtedness is subordinated in right of payment to the Notes at
least to the same extent as the Indebtedness being Refinanced;

provided further, however, that Refinancing Indebtedness shall not include:

     (A) Indebtedness of a Restricted Subsidiary that is not a Guarantor that Refinances
Indebtedness of the Company or a Guarantor; or

     (B) Indebtedness of the Company or a Restricted Subsidiary that Refinances
Indebtedness of an Unrestricted Subsidiary.

          “Related Business” means any business related, ancillary or complementary to any of
the businesses of the Company and the Restricted Subsidiaries on the Issue Date.

          “Representative” means the trustee, agent or representative (if any) for an issue of
senior Indebtedness.

          “Restricted Subsidiary” means any direct or indirect Subsidiary of the Company other
than an Unrestricted Subsidiary.

          “Sale/Leaseback Transaction” means an arrangement relating to property now owned or
hereafter acquired by the Company or a Restricted Subsidiary whereby the Company or a Restricted
Subsidiary transfers such property to a Person and the Company or such Restricted Subsidiary leases
it from such Person, other than leases between the Company and a Wholly-Owned Subsidiary or between
Wholly-Owned Subsidiaries.

          “Securities Act” means the Securities Act of 1933, as amended.

          “Security Agreements” means the documents set forth on Schedule I and all other
security agreements, pledges, collateral assignments or other instruments evidencing or creating
any Security Interests in favor of the Trustee executed and delivered on or prior to the date of
this Indenture.

          “Security Documents” means, collectively, the Security Agreements, the Intercreditor
Agreement and all other security agreements, pledges, collateral assignments or other instruments
evidencing or creating any Security Interests in favor of the Trustee, for the benefit of the
trustee and the holders of the secured notes, in all or any portion of the Collateral, in each
case, as amended, amended and restated, supplemented, replaced or otherwise modified from time to
time, in accordance with the terms thereof.

          “Security Interests” means the Liens on the Collateral created by the Security
Documents in favor of the Credit Agent for the benefit of, on a first priority basis, the Lender
Group and the Bank Product Providers (as each term is defined in the Credit Agreement) or the
Trustee, as the case may be, on a second priority basis, for the benefit of the Trustee and the
Holders.

          “Significant Subsidiary” means any Restricted Subsidiary that would be a
“Significant Subsidiary” of the Company within the meaning
of either clause (1) or (2) of Article 1
Rule 1-02(w) under Regulation S-X promulgated by the Commission pursuant to the Securities
Act, as such regulation is in effect on the Closing Date.

23

 

          “Sponsors” means TPG Partners III, L.P., Francisco Partners GP, LLC and Shah Capital
Partners, L.P.

          “Spot Rate” means, for any currency, the spot rate at which that currency is offered
for sale against United States dollars as determined by reference to the New York foreign exchange
selling rates, as published in The Wall Street Journal on that date of determination for the
immediately preceding business day or, if that rate is not available, as determined in any publicly
available source of similar market data.

          “Stated Maturity” means, with respect to any Indebtedness, the date specified in
such security as the fixed date on which the final payment of principal of such security
was scheduled to be paid in the original documentation governing such Indebtedness, including
pursuant to any mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has occurred).

          “Subordinated Indebtedness” means any Indebtedness of the Company (whether
outstanding on the Issue Date or thereafter Incurred) that is subordinate or junior in right of
payment to the Notes pursuant to a written agreement. “Subordinated Indebtedness” of a Guarantor
has a correlative meaning.

          “Subsidiary” of any Person means any corporation, association, partnership or other
business entity of which more than 50% of the total Voting Stock is at the time owned or
controlled, directly or indirectly, by:

     (1) such Person;

     (2) such Person and one or more Subsidiaries of such Person; or

     (3) one or more Subsidiaries of such Person.

          “TIA” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in
effect
on the Issue Date.

          “Total Assets” means, with respect to any date of determination, the Company’s total
consolidated assets shown on its consolidated balance sheet in accordance with GAAP on the last
day of the fiscal quarter prior to the date of determination.

          “Trade Payables” means, with respect to any Person, any accounts payable or any
indebtedness or monetary obligation to trade creditors created, assumed or Guaranteed by such
Person arising in the ordinary course of business in connection with the acquisition of goods or
services.

          “Trust Officer” means any vice president, assistant vice president or trust officer
of the Trustee assigned by the Trustee to administer its corporate trust matters.

          “Trustee” means the party named as such in the preamble to this Indenture until a
successor replaces it and, thereafter, means the successor.

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

24

 

          “Unrestricted Subsidiary” means:

     (1) (A) SMART Modular Technologies (Deutschland) GmbH and (B) any Subsidiary of the Company
that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of
Directors in accordance with this Indenture and

     (2) any Subsidiary of an Unrestricted Subsidiary.

          The Board of Directors may designate any Subsidiary of the Company (including any newly
acquired or newly formed Subsidiary of the Company) to be an Unrestricted Subsidiary but only to
the extent that the Subsidiary to be so designated has total Consolidated assets of $1,000 or less
or, if such Subsidiary has Consolidated assets greater than $1,000, then such designation would be
permitted under Section 4.04.

          The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, however, that immediately after giving effect to such designation:

     (x) the Company could Incur $1.00 of additional Indebtedness under Section 4.03(a) and

     (y) no Default shall have occurred and be continuing.

          Any such designation of a Subsidiary as a Restricted Subsidiary or Unrestricted Subsidiary by
the Board of Directors shall be evidenced to the Trustee by promptly filing with the Trustee a copy
of the resolution of the Board of Directors giving effect to such designation and an Officer’s
Certificate certifying that such designation complied with the foregoing provisions.

          “US. Government Obligations” means direct obligations (or certificates representing
an ownership interest in such obligations) of the United States of America (including any agency or
instrumentality thereof) for the payment of which the full faith and credit of the United States of
America is pledged and which are not callable or redeemable at the issuer’s option.

          “Voting Stock” of a Person means all classes of Capital Stock or other interests
(including partnership interests) of such Person then outstanding and normally entitled at the time
to vote in the election of directors, managers or trustees thereof.

          “Wholly-Owned Subsidiary” means a Restricted Subsidiary of the Company all the
Capital Stock of which (other than directors’ qualifying shares) is owned by the Company or another
Wholly-Owned Subsidiary.

          SECTION 1.02 Other Definitions. The following terms have the definitions set forth in the
Sections listed below.

	 	 	 
	Term	 	Defined in Section
	“Additional Amounts”
	 	4.16
	“Affiliate Transaction”
	 	4.07(a)
	“Appendix”
	 	Preamble
	“Bankruptcy Law”
	 	6.01
	“Change
of Control Offer”
	 	4.08(b)
	“covenant defeasance option”
	 	8.01(b)

25

 

	 	 	 
	Term	 	Defined in Section
	“cross acceleration provision”
	 	6.01(6)
	“Custodian”
	 	6.01
	“Definitive Note”
	 	Appendix
	“Event of Default”
	 	6.01
	“Excess Proceeds”
	 	4.06(b)
	“Exchange Offer”
	 	Appendix
	“Exchange Notes”
	 	Preamble
	“Global Notes”
	 	Appendix
	“Guaranteed Obligations”
	 	11.01
	“incorporated provision”
	 	12.01
	“Initial Notes”
	 	Preamble
	“judgment default provision”
	 	6.01(9)
	“legal defeasance option”
	 	8.01(b)
	“Legal Holiday”
	 	12.08
	“Net Available Cash Offer Payment Date”
	 	4.06(a)
	“Notes”
	 	Preamble
	“Notice of Default”
	 	6.01
	“Offer”
	 	4.06(c)(l)
	“Offer Amount”
	 	4.06(c)(2)
	“Offer Period”
	 	4.06(c)(l)
	“Original Notes”
	 	Preamble
	“Notes Custodian”
	 	Appendix
	“Paying Agent”
	 	2.04
	“Permitted Debt”
	 	4.03(b)
	“protected purchaser”
	 	2.08
	“Purchase Date”
	 	4.06(c)(2)
	“Registrar”
	 	2.04
	“Registration Rights Agreement”
	 	Appendix
	“Required Information”
	 	4.02
	“Restricted Payment”
	 	4.04(a)
	“Successor Company”
	 	5.01(a)
	“Taxing Jurisdiction”
	 	4.16

          SECTION 1.03 Incorporation by Reference of Trust Indenture Act. This Indenture is subject to
the mandatory provisions of the TIA, which are incorporated by reference in and made a part of this
Indenture. The following TIA terms have the following meanings:

          “Commission” means the Commission.

          “indenture securities” means the Notes and the Note Guarantees.

          “indenture security holder” means a Holder.

          “indenture to be qualified” means this Indenture.

          “indenture trustee” or “institutional trustee” means the Trustee.

          “obligor” on the indenture securities means the Company, the Guarantors and any
other obligor on the indenture securities.

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          All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by Commission rule have the meanings assigned to them by
such definitions.

          SECTION 1.04 Rules of Construction. Unless the context otherwise requires:

     (a) a term has the meaning assigned to it;

     (b) an accounting term not otherwise defined has the meaning assigned to it in accordance
with GAAP;

     (c) “or” is not exclusive;

     (d) “including” means including without limitation;

     (e) words in the singular include the plural and words in the plural include the singular
and

     (f) references to sections of rules under the Securities Act will be deemed to include
substitute, replacement or successor sections or rules adopted by the Commission from time
to time.

ARTICLE II

THE NOTES

          SECTION 2.01 Amount of Notes; Issuable in Series. The aggregate principal amount of Notes
which may be authenticated and delivered under this Indenture is unlimited. The Notes may be issued
in one or more series. All Notes of any one series shall be substantially identical except as to
denomination. With respect to any Additional Notes issued after the Closing Date (except for Notes
authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Notes pursuant to Section 2.07, 2.08, 2.09, 2.10 or 3.06 or the Appendix), there shall be (a)
established in or pursuant to a resolution of the Board of Directors and (b) (i) set forth or
determined in the manner provided in an Officer’s Certificate or (ii) established in one or more
indentures supplemental hereto, prior to the issuance of such Additional Notes:

     (1) whether such Additional Notes shall be issued as part of a new or existing series of
Notes and the title of such Additional Notes (which shall distinguish the Additional Notes of the
series from Notes of any other series);

     (2) the aggregate principal amount of such Additional Notes which may be authenticated and
delivered under this Indenture, which may be in an unlimited aggregate principal amount;

     (3) the issue price and issuance date of such Additional Notes, including the date from which
interest on such Additional Notes shall accrue; provided, however, that Additional Notes
may be issued only if they are fungible with the other Notes issued under this Indenture for U.S.
federal income tax purposes; and

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     (4) if applicable, that such Additional Notes shall be issuable in whole or in part in
the form of one or more Global Notes and, in such case, the respective depositaries for such Global
Notes, the form of any legend or legends which shall be borne by such Global Notes in addition to
or in lieu of those set forth in Exhibit A hereto and any circumstances in addition to or in lieu
of those set forth in Section 2.3 of the Appendix in which any such Global Note may be exchanged in
whole or in part for Additional Notes registered, or any transfer of such Global Note in whole or
in part may be registered, in the name or names of Persons other than the depositary for such
Global Note or a nominee thereof.

          If any of the terms of any Additional Notes are established by action taken pursuant to a
resolution of the Board of Directors, a copy of an appropriate record of such action shall be
certified by the Secretary or any Assistant Secretary of the Company and delivered to the Trustee
at or prior to the delivery of the Officer’s Certificate or the indenture supplemental hereto
setting forth the terms of the Additional Notes.

          SECTION 2.02 Form and Dating. Provisions relating to the Original Notes, the
Additional Notes and the Exchange Notes are set forth in the Appendix, which is hereby incorporated
in and expressly made a part of this Indenture. The Notes and the Trustee’s certificate of
authentication shall each be substantially in the form of Exhibit A hereto, which is hereby
incorporated in and expressly made a part of this Indenture. The Notes may have notations, legends
or endorsements required by law, stock exchange rule, agreements to which the Company or any
Guarantor are subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Company). Each Note shall be dated the date of its
authentication. The Notes shall be issuable only in registered form without interest coupons and
only in denominations of $1,000 and integral multiples thereof.

          SECTION 2.03 Execution and Authentication. One Officer shall sign the Notes for the
Company by manual or facsimile signature. If an Officer whose signature is on a Note no longer
holds that office at the time the Trustee authenticates the Note, the Note shall be valid
nevertheless. A Note shall not be valid until an authorized signatory of the Trustee manually signs
the certificate of authentication on the Note. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture. The Trustee shall authenticate and make available
for delivery Notes as set forth in the Appendix. The Trustee may appoint an authenticating agent
reasonably acceptable to the Company to authenticate the Notes. Any such appointment shall be
evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to the
Company. Unless limited by the terms of such appointment, an authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the same rights as any
Registrar, Paying Agent or agent for service of notices and demands.

          SECTION 2.04 Registrar and Paying. (a) The Company shall maintain an office or agency
where Notes may be presented for registration of transfer or for exchange (the “Registrar”)
and an office or agency where Notes may be presented for payment (the “Paying Agent”). The Registrar shall keep a register of the Notes and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying agents. The term
“Paying Agent” includes any additional paying agent, and the term “Registrar” includes any
co-registrars. The Company initially appoints the Trustee as (1) Registrar and Paying Agent in
connection with the Notes and (2) the Notes Custodian with respect to the Global Notes.

          (b) The Company shall enter into an appropriate agency agreement with any
Registrar or Paying Agent not a party to this Indenture, which shall incorporate the terms of
the TIA. The

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agreement shall implement the provisions of this Indenture that relate to such agent. The Company
shall notify the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to
appropriate compensation therefor pursuant to Section 7.07. The Company or any of its domestically
organized Wholly-Owned Subsidiaries may act as Paying Agent or Registrar.

          (c) The Company may remove any Registrar or Paying Agent upon written notice to such Registrar
or Paying Agent and to the Trustee; provided, however, that no such removal shall become
effective until (1) acceptance of an appointment by a successor as evidenced by an appropriate
agreement entered into by the Company and such successor Registrar or Paying Agent, as the case may
be, and delivered to the Trustee or (2) notification to the Trustee that the Trustee shall serve as
Registrar or Paying Agent until the appointment of a successor in
accordance with clause (1) of
this Section 2.04(c). The Registrar or Paying Agent may resign at any time upon written notice to
the Company and the Trustee.

          SECTION 2.05 Paying Agent To Hold Money in Trust. Prior to each due date of the
principal of and interest, including Additional Interest, if any, on any Note, the Company shall
deposit with the Paying Agent (or if either of the Company or a Subsidiary of the Company is acting
as Paying Agent, segregate and hold in trust for the benefit of the Persons entitled thereto) a sum
sufficient to pay such principal and interest when so becoming due. The Company shall require each
Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust
for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of
principal of or interest on the Notes, shall notify the Trustee of any default by the Company in
making any such payment. If either of the Company or a Subsidiary of the Company acts as Paying
Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust
fund. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee
and to account for any funds disbursed by the Paying Agent. Upon complying with this Section, the
Paying Agent shall have no further liability for the money delivered to the Trustee.

          SECTION 2.06 Holder Lists. The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and addresses of Holders.
If the Trustee is not the Registrar, the Company shall furnish, or cause the Registrar to furnish,
to the Trustee, in writing at least five Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of Holders.

          SECTION 2.07 Transfer and Exchange. The Notes shall be issued in registered form and
shall be transferable only upon the surrender of a Note for registration of transfer and in
compliance with the Appendix. When a Note is presented to the Registrar with a request to register
a transfer, the Registrar shall register the transfer as requested if its requirements therefor are
met. When Notes are presented to the Registrar with a request to exchange them for an equal
principal amount of Notes of other denominations, the Registrar shall make the exchange as
requested if the same requirements are met. To permit registration of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Notes at the Registrar’s request. The
Company may require payment of a sum sufficient to pay all taxes,
assessments or other governmental charges in connection with any transfer or exchange pursuant
to this Section. The Company shall not be required to make and the Registrar need not register
transfers or exchanges of Notes selected for redemption (except, in the case of Notes to be
redeemed in part, the portion thereof not to be redeemed) or any Notes for a period of 15 days
before a selection of Notes to be redeemed.

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          Prior to the due presentation for registration of transfer of any Note, the Company, the
Guarantors, the Trustee, the Paying Agent, and the Registrar may deem and treat the Person in whose
name a Note is registered as the absolute owner of such Note for the purpose of receiving payment
of principal of and (subject to paragraph 2 of the Notes) interest, if any, on such Note
and for all other purposes whatsoever, whether or not such Note is overdue, and none of the
Company, any Guarantor, the Trustee, the Paying Agent, or the Registrar shall be affected by notice
to the contrary. Any Holder of a Global Note shall, by acceptance of such Global Note, agree that
transfers of beneficial interest in such Global Note may be effected only through a book-entry
system maintained by (a) the Holder of such Global Note (or its agent) or (b) any Holder of a
beneficial interest in such Global Note, and that ownership of a beneficial interest in such Global
Note shall be required to be reflected in a book entry. All Notes issued upon any transfer or
exchange pursuant to the terms of this Indenture will evidence the same debt and will be entitled
to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.

          SECTION 2.08 Replacement Notes. If a mutilated Note is surrendered to the Registrar or
if the Holder of a Note claims that the Note has been lost, destroyed or stolen, the Company shall
issue and the Trustee shall authenticate a replacement Note if the requirements of Section 8-405 of
the Uniform Commercial Code are met, such that the Holder (a) satisfies the Company or the Trustee
within a reasonable time after he has notice of such loss, destruction or wrongful taking and the
Registrar does not register a transfer prior to receiving such notification, (b) makes such request
to the Company or the Trustee prior to the Note being acquired by a protected purchaser as defined
in Section 8-303 of the Uniform Commercial Code (a “protected purchaser”) and (c)
satisfies any other reasonable requirements of the Trustee. If required by the Trustee or the
Company, such Holder shall furnish an indemnity bond sufficient in the judgment of the Trustee to
protect the Company, the Trustee, the Paying Agent and the Registrar from any loss that any of them
may suffer if a Note is replaced. The Company and the Trustee may charge the Holder for their
expenses in replacing a Note. In the event any such mutilated, lost, destroyed or wrongfully taken
Note has become or is about to become due and payable, the Company in their discretion may pay such
Note instead of issuing a new Note in replacement thereof. Every replacement Note is an additional
obligation of the Company. Upon the issuance of any replacement Note under this Section 2.08, the
Company may require payment of a sum sufficient to payable taxes, assessments or other governmental
charges that may be imposed in connection therewith. The provisions of this Section 2.08 are
exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, lost, destroyed or wrongfully taken Notes.

          SECTION 2.09 Outstanding Notes. Notes outstanding at any time are all authenticated by
the Trustee except for those canceled by it, those delivered to it for cancellation and those
described in this Section as not outstanding. Subject to Section 12.06, a Note does not cease to be
outstanding because the Company or an Affiliate of the Company holds the Note. If a Note is
replaced pursuant to Section 2.08, it ceases to be outstanding unless the Trustee and the Company
receive proof satisfactory to them that the replaced Note is held by a protected
purchaser. If the Paying Agent segregates and holds in trust, in accordance with this
Indenture, on a redemption date or maturity date money sufficient to pay all principal and
interest, including Additional Interest, if any, payable on that date with respect to the Notes (or
portions thereof) to be redeemed or maturing, as the case may be, then on and after that date such
Notes (or portions thereof) cease to be outstanding and interest on them ceases to accrue.

          SECTION 2.10 Temporary Notes. In the event that Definitive Notes are to be issued
under the terms of this Indenture, until such Definitive Notes are ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of Definitive Notes but may have variations that the Company
considers appropriate for temporary

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Notes. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate
Definitive Notes and deliver them in exchange for temporary Notes upon surrender of such temporary
Notes at the office or agency of the Company, without charge to the Holder.

          SECTION 2.11 Cancellation. The Company at any time may deliver Notes to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else
shall cancel all Notes surrendered for registration of transfer, exchange, payment or cancellation
and shall dispose of canceled Notes in accordance with its customary procedures or deliver canceled
Notes to the Company pursuant to written direction by an Officer. The Company may not issue new
Notes to replace Notes it has redeemed, paid or delivered to the Trustee for cancellation. The
Trustee shall not authenticate Notes in place of canceled Notes other than pursuant to the terms of
this Indenture.

          SECTION 2.12 Defaulted Interest. If the Company defaults in a payment of interest on
the Notes, the Company shall pay the defaulted interest (plus interest on such defaulted interest
to the extent lawful) in any lawful manner. The Company may pay the defaulted interest to the
Persons who are Holders on a subsequent special record date. The Company shall fix or cause to be
fixed any such special record date and payment date to the reasonable satisfaction of the Trustee
and shall promptly mail or cause to be mailed to each Holder a notice that states the special
record date, the payment date and the amount of defaulted interest to be paid.

          SECTION 2.13 “CUSIP” and “ISIN” Numbers. The Company in issuing the Notes may use
“CUSIP” and “ISIN” numbers (if then generally in use) and, if so, the Trustee shall use “CUSIP”
and “ISIN” numbers in notices of redemption as a convenience to Holders; provided, however,
that any such notice may state that no representation is made as to the correctness of such
numbers either as printed on the Notes or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the Notes, and any such
redemption shall not be affected by any defect in or omission of such numbers.

          SECTION 2.14 Computation of Interest. Interest on the Notes shall be computed on the basis
of a 360-day year comprised of twelve 30-day months.

ARTICLE III

REDEMPTION

          SECTION 3.01 Notices to Trustee. If the Company elects to redeem Notes pursuant
to paragraph 5 of the Notes, it shall notify the Trustee in writing of the redemption date and the
principal amount of Notes to be redeemed. The Company shall give each notice to the Trustee
provided for in this Section at least 45 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officer’s Certificate from the
Company to the effect that such redemption will comply with the conditions herein. Any such notice
may be canceled at any time prior to notice of such redemption being mailed to any Holder and shall
thereby be void and of no effect.

          SECTION 3.02 Selection of Notes To Be Redeemed. If fewer than all the Notes are to be
redeemed, the Trustee shall select the Notes to be redeemed (a) if the Notes are listed on any
national securities exchange, in compliance with the requirements of the principal national
securities exchange on which the Notes are listed or (b) pro rata or by lot or by a method
that the Trustee in its sole discretion shall deem to be fair and appropriate. The Trustee
shall make the selection from outstanding Notes not previously called for redemption. The Trustee
may select for redemption portions of the principal

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of Notes that have denominations larger than $1 ,000. Notes and portions of them the Trustee
selects shall be in amounts of $1,000 or a whole multiple of $1,000. Provisions of this Indenture
that apply to Notes called for redemption also apply to portions of Notes called for redemption.
The Trustee shall notify the Company promptly of the Notes or portions of Notes to be redeemed.

          SECTION 3.03 Notice of Redemption. (a) At least 30 days but not more than 60 days
before a date for redemption of Notes, the Company shall mail a notice of redemption by first-class
mail to each Holder of Notes to be redeemed at such Holder’s registered address. The notice shall
identify the Notes to be redeemed and shall state:

     (i) the redemption date;

     (ii) the redemption price and the amount of accrued interest to the redemption date;

     (iii) the name and address of the Paying Agent;

     (iv) that Notes called for redemption must be surrendered to the Paying Agent to collect
the redemption price;

     (v) if fewer than all the outstanding Notes are to be redeemed, the certificate numbers and
principal amounts of the particular Notes to be redeemed;

     (vi) that, unless the Company defaults in making such redemption payment or the Paying Agent
is prohibited from making such payment pursuant to the terms of this Indenture, interest on Notes
(or portion thereof) called for redemption ceases to accrue on and after the redemption date;

     (vii) the CUSIP or ISIN number, if any, printed on the Notes being redeemed; and

     (viii) that no representation is made as to the correctness or accuracy of the
CUSIP or ISIN number, if any, listed in such notice or printed on the Notes.

          (b) At the Company’s request, the Trustee shall give the notice of redemption in the
Company’s name and at the Company’s expense. In such event, the Company shall provide the Trustee
with the information required by this Section 3.03.

          SECTION 3.04 Effect of Notice of Redemption. Once notice of redemption is mailed,
Notes called for redemption become due and payable on the redemption date and at the redemption
price stated in the notice. Upon surrender to the Paying Agent, such Notes shall be paid at the
redemption price stated in the notice, plus accrued interest, including Additional Interest, if
any, to the redemption date; provided, however, that if the redemption date is after a
regular record date and on or prior to the related interest payment date, the accrued interest and
Additional Interest, if any, shall be payable to the Holder of the redeemed Notes registered on the
relevant record date. Failure to give notice or any defect in the notice to any Holder shall not
affect the validity of the notice to any other Holder.

          SECTION 3.05 Deposit of Redemption Price. Prior to 10:00 a.m. on the redemption date,
the Company shall deposit with the Paying Agent (or, if the Company or a Subsidiary of the Company
is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest, including Additional Interest,
if any, on all Notes to be redeemed on that date other than Notes or portions of Notes called for
redemption that have been delivered by the Company to

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the Trustee for cancellation. On and after the redemption date, interest will cease to accrue on
Notes or portions thereof called for redemption so long as the Company has deposited with the
Paying Agent funds sufficient to pay the principal of, plus accrued and unpaid interest, including
Additional Interest, if any, on the Notes to be redeemed, unless the Paying Agent is
prohibited from making such payment pursuant to the terms of this Indenture. The Paying Agent shall
promptly return to the Company upon written request any money deposited with the Paying Agent by
the Company that is in excess of the amounts necessary to pay the redemption price of and accrued
interest, including Additional Interest, if any, on all Notes to be redeemed.

          SECTION 3.06 Notes Redeemed in Part. Upon surrender of a Note that is redeemed in
part, the Company shall execute and the Trustee shall authenticate for the Holder (at the Company’s
expense) a new Note equal in principal amount to the unredeemed portion of the Note surrendered.

ARTICLE IV

COVENANTS

          SECTION 4.01 Payment of Notes. The Company shall promptly pay the principal of and
interest, including Additional Interest, if any, on the Notes on the dates and in the manner
provided in the Notes and in this Indenture. Principal and interest, including Additional Interest,
if any, shall be considered paid on the date due if on such date the Trustee or the Paying Agent
holds in accordance with this Indenture money sufficient to pay all principal and interest then due
and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money
to the Holders on that date pursuant to the terms of this Indenture. The Company shall pay interest
on overdue principal at the rate specified therefor in the Notes, and it shall pay interest on
overdue installments of interest at the same rate to the extent lawful. Notwithstanding
anything to the contrary contained in this Indenture, the Company may, to the extent they are
required to do so by law, deduct or withhold income or other similar taxes imposed by the United
States of America from principal or interest payments hereunder.

          SECTION 4.02 Commission Reports. (a) The Company shall furnish to the Holders:

     (1) all quarterly and annual financial information that would be required to be contained in
a filing with the Commission on Forms 10-Q and 10-K if the Company were required to file those
Forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and, with respect to the annual information only, a report thereon by the Company’s
certified independent accountants; and

     (2) all current reports that would be required to be filed with the SEC on Form 8-K if the
Company were required to file those reports, in each case, within the time periods specified in
the Commission’s rules and regulations.

          (b) In addition, following the consummation of the exchange offer contemplated by the
Registration Rights Agreement, whether or not required rules and regulations of the Commission, the
Company will file a copy of all that information and reports
referred to in Section 4.02(a)(l) and (2) (the “Required Information”) with the
Commission for public availability within the time periods specified in the Commission’s rules and
regulations (unless the Commission will not accept such a filing) and make that information
available to securities analysts and prospective investors upon request.

          (c) In addition, the Company and the Guarantors have agreed that, for so long as any Notes
remain outstanding, they will furnish to the holders and to
securities analysts and prospective investors,

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upon their request, the information required to be delivered pursuant to Rule l44A(d)(4)
under the Securities Act. The Company also shall comply with the other provisions of TIA Section
314(a).

          SECTION 4.03 Limitation on Incurrence of Additional Indebtedness. (a) The Company
shall not, and shall not permit any Restricted Subsidiary to, Incur, directly or indirectly, any
Indebtedness; provided, however, that the Company or any Guarantor may Incur Indebtedness
if on the date of such Incurrence and after giving effect thereto, the Consolidated Coverage Ratio
would be greater than 2.25:1.

          (b) Notwithstanding the foregoing paragraph (a), the Company and, to the extent
specified, its Restricted Subsidiaries may Incur the following Indebtedness
(collectively, the “Permitted Debt”):

     (1) Bank Indebtedness of the Company or any Guarantor in an aggregate principal
amount outstanding at any time not to exceed $50.0 million less the aggregate amount of
Indebtedness permanently repaid under Section 4.06;

     (2) Indebtedness of the Company owed to and held by any Restricted Subsidiary or Indebtedness
of a Restricted Subsidiary owed to and held by the Company or any other Restricted Subsidiary;
provided, however, that (A) any subsequent issuance or transfer of any Capital Stock or
any other event that results in any such Restricted Subsidiary ceasing to be a Restricted
Subsidiary or any subsequent transfer of any such Indebtedness (except to the Company or
another Restricted Subsidiary) shall be deemed, in each case, to constitute the Incurrence of such
Indebtedness by the issuer thereof, (B) if the Company is the obligor on such Indebtedness, such
Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with
respect to the Notes and (C) if a Guarantor is the obligor, such Indebtedness is subordinated in
right of payment to the Note Guarantee of such Guarantor;

     (3) Indebtedness outstanding on the Issue Date (including the Indebtedness represented by
the Notes and this Indenture and Guarantees thereof by the Restricted Subsidiaries and other than
the Indebtedness described in clause (2) of this Section 4.03(b));

     (4) Indebtedness consisting of Refinancing Indebtedness Incurred in respect of any
Indebtedness described in Section 4.03(a) and in clause (3), (5), (11) or this
clause (4) of this Section 4.03(b);

     (5) Indebtedness consisting of Guarantees of (A) any Indebtedness permitted under Section
4.03(a), so long as the Person providing the Guarantee is a Guarantor or (B) any
Indebtedness permitted under this Section 4.03(b);

     (6) Indebtedness of the Company or any of its Restricted Subsidiaries in respect of worker’s
compensation claims, self insurance obligations, performance bonds, bankers’ acceptances, letters
of credit, surety, bid, appeal or similar bonds and completion guarantees provided by the Company
and the Restricted Subsidiaries in the ordinary course of their business; provided, however,
that upon the drawing of letters of credit for reimbursement obligations, including with
respect to workers’ compensation claims, or the Incurrence of other Indebtedness with respect to
reimbursement type obligations regarding workers’ compensation claims, such obligations are
reimbursed within 60 days following such drawing or Incurrence;

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     (7) Indebtedness under Interest Rate Agreements and Currency Agreements entered into for
bona fide hedging purposes of the Company or any Restricted Subsidiary in the ordinary course of
business;

     (8) Purchase Money Indebtedness, mortgage financings and Capitalized Lease Obligations
Incurred by the Company or any Restricted Subsidiary for the purpose of financing all or any part
of the purchase price, lease or cost of construction or improvement of property (real or
personal), plant or equipment (whether through the direct purchase of assets or the Capital Stock
of any Person owning such assets) (and Refinancing Indebtedness Incurred in respect of such
Indebtedness) in an aggregate principal amount not in excess of the
greater of (x) $15.0 million
and (y) 10% of Consolidated Net Tangible Assets (measured at Incurrence of such Indebtedness), in
each case at any one time outstanding;

     (9) Indebtedness of the Company or any of its Restricted Subsidiaries arising from the
honoring by a bank or other financial institution of a check, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the
ordinary course of business; provided, however, that such Indebtedness is extinguished
within five business days of Incurrence;

     (10) Indebtedness arising from agreements of the Company or a Restricted Subsidiary
providing for indemnification, adjustment of purchase price or similar obligations, in each
case, Incurred or assumed in connection with the disposition of any business, assets or Capital
Stock of the Company or any Restricted Subsidiary; provided that (A) the maximum
aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds
including non-cash proceeds (the Fair Market Value of such non-cash proceeds being measured at the
time received and without giving effect to any subsequent changes in value) actually received by
the Company and its Subsidiaries in connection with such disposition and (B) such Indebtedness is
not reflected in the balance sheet of the Company or any Restricted Subsidiary (contingent
obligations referred to in a footnote to financial statements and not otherwise reflected on the
balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause
(B));

     (11) the Incurrence by the Company or any of its Restricted Subsidiaries of Acquired Debt;
provided, however, that (A) the Company has a Consolidated Coverage Ratio immediately
prior to such Incurrence of at least 1:1 and (B) the Company would have a higher Consolidated
Coverage Ratio immediately after giving effect to such Incurrence than the Consolidated Coverage
Ratio immediately prior to such Incurrence;

     (12) Indebtedness of Foreign Subsidiaries Incurred to finance the working capital
of such Foreign Subsidiaries in an aggregate principal amount that does not exceed $5.0
million at any one time outstanding; and

     (13) Indebtedness of the Company or any Guarantor in an aggregate principal amount (or
accreted value, as applicable) that, when added to all other Indebtedness Incurred pursuant to
this clause (13) and then outstanding, does not exceed $25.0 million.

          (c) Notwithstanding any other provision of this Section 4.03, the maximum amount of
Indebtedness that the Company or any Restricted Subsidiary may Incur pursuant to this covenant
shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rates of
currencies. For purposes of determining compliance with this Section 4.03:

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     (1) Indebtedness Incurred pursuant to the Credit Agreement prior to or on the
Issue Date shall be treated as Incurred pursuant to Section 4.03(b)(l);

     (2) Indebtedness permitted by this Section 4.03 need not be permitted solely by
reference to one provision permitting such Indebtedness but may be permitted in part by one
such provision and in part by one or more other provisions of this covenant permitting such
Indebtedness.

     (3) in the event that Indebtedness meets the criteria of more than one of the types of
Indebtedness described in this Section 4.03, the Company, in its sole discretion, shall
classify such Indebtedness and only be required to include the amount of such Indebtedness
in one of such clauses; and

     (4) the aggregate amount of any Indebtedness Guaranteed pursuant to Section 4.03(b)(5)
will be included in the calculation of Indebtedness but the corresponding amount of the
Guarantee will not be so included.

          (d) Accrual of interest, the accretion of accreted value and the payment of interest in the
form of additional Indebtedness will not be deemed to be an Incurrence of Indebtedness for purposes
of this Section 4.03.

          (e) For purposes of determining compliance with any U.S. dollar-denominated restriction on the
Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated
in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on
the date such Indebtedness was Incurred, in the case of term debt, or first committed, in the case
of revolving credit debt; provided that (1) the U.S. dollar-equivalent principal amount of any such
Indebtedness outstanding or committed on the Issue Date shall be calculated based on the relevant
currency exchange rate in effect on the Issue Date, and (2) if such Indebtedness is Incurred to
Refinance other Indebtedness denominated in a foreign currency, and such Refinancing would cause
the applicable U.S. dollar denominated restriction to be exceeded if calculated at the relevant
currency exchange rate in effect on the date of such Refinancing, such U.S. dollar-denominated
restriction shall be deemed not to have been exceeded so long as the principal amount of such
Refinancing Indebtedness does not exceed the principal amount of such Indebtedness being
Refinanced. The principal amount of any Indebtedness Incurred to Refinance other Indebtedness, if
Incurred in a different currency from the Indebtedness being Refinanced, shall be calculated based
on the currency exchange rate applicable to the currencies in which such respective Indebtedness is
denominated that is in effect on the date of such Refinancing.

          SECTION
4.04 Limitation on Restricted Payments. (a) The Company shall not, and
shall not permit any Restricted Subsidiary, directly or indirectly, to:

     (1) declare or pay any dividend or make any distribution on or in respect of the
Company’s or any Restricted Subsidiary’s Capital Stock (including any payment in connection
with any merger or consolidation) or similar payment to the direct or indirect holders of
its Capital Stock except dividends or distributions payable solely in its Capital Stock
(other than Disqualified Stock) and except dividends or distributions payable to the Company
or another Restricted Subsidiary (and, if such Restricted Subsidiary has shareholders other
than the Company or other Restricted Subsidiaries, to its other
shareholders on a pro rata
basis);

36

 

     (2) purchase, redeem, retire or otherwise acquire for value any Capital Stock of the Company
or any Restricted Subsidiary held by Persons other than the Company or another Restricted
Subsidiary, other than the making of a Permitted Investment;

     (3) purchase, repurchase, redeem, defease or otherwise acquire or retire for value, prior to
scheduled maturity, scheduled repayment or scheduled sinking fund payment any Subordinated
Indebtedness (other than the purchase, repurchase or other acquisition of Subordinated Indebtedness
(A) purchased in anticipation of satisfying a sinking fund obligation, principal installment or
final maturity, in each case due within one year of the date of acquisition or (B) Subordinated
Indebtedness consisting of intercompany Indebtedness permitted under Section 4.03; or

     (4) make any Investment (other than a Permitted Investment) in any Person,
(any such dividend, distribution, purchase, redemption, repurchase, defeasance, other acquisition,
retirement or Investment described in and not excluded from clauses (1) through (4) of Section
4.03(a) being herein referred to as a “Restricted Payment”), if at the time the Company or such
Restricted Subsidiary makes such Restricted Payment:

     (A) a Default shall have occurred and be continuing (or would result therefrom);

     (B) the Company could not Incur at least $1.00 of additional Indebtedness under
Section 4.03(a); or

     (C) the aggregate amount of such Restricted Payment and all other Restricted Payments
(the amount so expended, if other than in cash, to be determined in good faith by the Board
of Directors, whose determination shall be conclusive and evidenced by a resolution of the
Board of Directors) declared or made subsequent to the Issue Date would exceed the sum of
(without duplication):

     (i) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from the beginning of the fiscal quarter
immediately following the fiscal quarter during which the Issue Date occurs to the
end of the most recent fiscal quarter for which internal financial statements are
available ending prior to the date of such Restricted Payment (or, in case such
Consolidated Net Income shall be a deficit, minus 100% of such deficit);

     (ii) 100% of the sum of (A) the aggregate Qualified Proceeds received
by the Company from the issue or sale of its Capital Stock (other than
Disqualified Stock) subsequent to the Issue Date (other than an issuance or sale
to (x) a Subsidiary of the Company or (y) an employee stock ownership plan or
other trust established by the Company or any of its Subsidiaries for the benefit
of its employees to the extent that the purchase by such plan or trust is financed
by Indebtedness of such plan or trust owed to the Company or any of its
Subsidiaries or Indebtedness Guaranteed by the Company or any of its Subsidiaries)
and (B) up to $10.0 million of the Fair Market Value of property (other than cash)
constituting Cash Equivalents or a Permitted Business received by the Company or a
Restricted Subsidiary subsequent to the Issue Date in exchange for Capital Stock
(other than Disqualified Stock) of the Company (other than any such property
received from a Subsidiary of the Company);

37

 

     (iii) 100% of the aggregate Qualified Proceeds received by the Company
from the issuance or sale of debt securities of the Company or Disqualified Stock
of the Company that after the Issue Date have been converted into or exchanged for
Capital Stock (other than Disqualified Stock) of the Company (other than an
issuance or sale to a Subsidiary of the Company or an employee stock ownership plan
or other trust established by the Company or any of its Subsidiaries for the
benefit of its employees to the extent that the purchase by such plan or trust is
financed by Indebtedness of such plan or trust owed to the Company or any of its
Subsidiaries or Indebtedness Guaranteed by the Company or any of its Subsidiaries)
less the amount of any cash or the Fair Market Value of any property distributed by
the Company or any Restricted Subsidiary upon such conversion or exchange;
provided, however, that no amount will be included in this clause (iii) to the
extent it is already included in Consolidated Net Income;

     (iv) in the case of any Investment by the Company or any Restricted
Subsidiary (other than any Permitted Investment) made after the Issue Date, the
disposition of such Investment by, or repayment of such Investment to, the Company
or a Restricted Subsidiary or the receipt by the Company or any Restricted
Subsidiary of any dividends or distributions from such Investment, in an aggregate
amount equal to the lesser of (x) the aggregate amount of such Investment treated
as a Restricted Payment pursuant to clause (4) of Section 4.04(a) and (y) the
aggregate amount in cash received by the Company or any Restricted Subsidiary upon
such disposition, repayment, dividend or distribution; provided, however, that no
amount will be included in this clause (iv) to the extent it is already included in
Consolidated Net Income;

     (v) in the event the Company or any Restricted Subsidiary makes any
Investment in a Person that, as a result of or in connection with such Investment,
becomes a Restricted Subsidiary, an amount equal to the Company’s or any Restricted
Subsidiary’s existing Investment in such Person that was previously treated as a
Restricted Payment pursuant to clause (4) of Section 4.04(a); and

     (vi) the amount equal to the sum of (x) the net reduction in Investments
in Unrestricted Subsidiaries resulting from payments of dividends, repayments of
the principal of loans or advances or other transfers of assets to the Company or
any Restricted Subsidiary from Unrestricted Subsidiaries and (y) the portion
(proportionate to the Company’s equity interest in such Subsidiary) of the Fair
Market Value of the net assets of an Unrestricted Subsidiary at the time such
Unrestricted Subsidiary is redesignated a Restricted Subsidiary; provided, however,
that the foregoing sum shall not exceed, in the case of any Unrestricted
Subsidiary, the amount of Investments previously made by the Company or any
Restricted Subsidiary in such Unrestricted Subsidiary and treated as a Restricted
Payment pursuant to clause (4) of Section 4.04(a).

     (b) The provisions of Section 4.04(a) shall not prohibit:

     (1) any purchase, repurchase, redemption or other acquisition or retirement for value of
Capital Stock of the Company or any Restricted Subsidiary made by
exchange for, or out of

38

 

the proceeds of the substantially concurrent sale of, other Capital Stock of the Company (other
than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of the Company
or an employee stock ownership plan or other trust established by the Company or any of its
Subsidiaries for the benefit of its employees to the extent that the purchase by such plan or trust
is financed by Indebtedness of such plan or trust owed to the Company or any of its Subsidiaries or
Indebtedness Guaranteed by the Company or any of its Subsidiaries); provided, however, that the Net
Cash Proceeds from such sale applied in the manner set forth in this clause (1) will be excluded
from the calculation of amounts under Section 4.03(a)(C)(ii).

     (2) any purchase, repurchase, redemption, defeasance or other acquisition or retirement for
value of Subordinated Indebtedness of the Company or any Restricted Subsidiary made by, exchanged
for, or out of the proceeds of, the substantially concurrent sale of, Indebtedness that is
permitted to be Incurred pursuant to Section 4.03(b)(4): provided, however, that such purchase,
repurchase, redemption, defeasance or other acquisition or retirement for value shall be excluded
from the calculation of the amount of Restricted Payments;

     (3) the repurchase, redemption or other acquisition or retirement for value of Disqualified
Stock of the Company or any Restricted Subsidiary made by exchange for, or out of the proceeds of
the substantially concurrent sale of, Disqualified Stock of the Company or any Restricted
Subsidiary that is permitted to be Incurred pursuant to Section 4.03;

     (4) any purchase or redemption of Subordinated Indebtedness from Net Available Cash to the
extent permitted by Section 4.06;

     (5)
upon the occurrence of a Change of Control and within 60 days after the completion of the
offer to repurchase the Notes pursuant to Section 4.08 (including the purchase of the Notes
tendered), any purchase or redemption of Subordinated Indebtedness required pursuant to the terms
thereof as a result of such Change of Control at a purchase or redemption price not to exceed 101%
of the outstanding principal amount thereof, plus any accrued and unpaid interest; provided,
however, that at the time of such purchase, no Default or Event of Default shall have occurred and
be continuing (or would result therefrom);

     (6) dividends paid within 60 days after the date of declaration thereof if at such date of
declaration such dividend would have complied with this Section 4.04;

     (7) the repurchase, redemption or other acquisition or retirement for value of Capital Stock
of the Company or any of its Subsidiaries from employees, former employees, consultants, former
consultants, directors or former directors of the Company or any of its Subsidiaries (or permitted
transferees of such employees, former employees, consultants, former consultants, directors or
former directors), pursuant to the terms of agreements (including employment agreements) or plans
(or amendments thereto) approved by the Board of Directors under which such individuals purchase or
sell, or are granted the option to purchase or sell, shares of such Capital Stock; provided,
however, that the aggregate amount of such repurchases shall not exceed $2.0 million in any
calendar year;

     (8) the declaration and payment of any dividend (or the making of any similar distribution or
redemption) to the holders of any class or series of Disqualified Stock of the Company or a
Guarantor issued or Incurred after the Issue Date in accordance with the covenant described under
Section 4.03; provided, that no Default or Event of Default shall have occurred and be continuing
immediately after making such declaration or payment; or

39

 

     (9) payments and transactions in connection with

     (A) the Financial Advisory Agreements; provided, however, that a one-time
payment representing the present value of all future payments thereunder shall be
permitted and

     (B) application of the proceeds of this offering and the Credit Agreement
(including the redemption of Redeemable Preferred Stock), and the payment of fees
and expenses with respect thereto;

     (10) the pledge by the Company of the Capital Stock of an Unrestricted Subsidiary of
the Company to secure Non-Recourse Debt of that Unrestricted Subsidiary;

     (11) the purchase, redemption or other acquisition or retirement for value of any
Capital Stock of any Restricted Subsidiary issued after the date of the indenture, provided,
that the aggregate price paid for any such repurchased, redeemed, acquired or retired
Capital Stock shall not exceed the sum of:

     (A) the amount of cash and Cash Equivalents received by that Restricted
Subsidiary from the issue or sale thereof; and

     (B) any accrued dividends thereon the payment of which would be permitted
pursuant to clause (8) of this Section 4.04(b);

     (12) repurchases of Capital Stock deemed to occur upon the exercise of stock options if
such Capital Stock represents a portion of the exercise price thereof;

     (13) any payment, distribution or dividend to pay taxes, franchise taxes and other fees
to maintain the Company’s or any Restricted Subsidiary’s existence;

     (14) payments not to exceed $200,000 in the aggregate solely to enable the Company to
make payments to holders of its Capital Stock in lieu of the issuance of fractional shares
of its Capital Stock; and

     (15) other Restricted Payments in an aggregate amount not to exceed $15.0 million;

provided, however, that each of the foregoing (other than Sections 4.04(b)(6) and 4.04(b)(9)(a))
shall be excluded from calculation of Restricted Payments.

          SECTION
4.05 Limitation on Restrictions on Distributions from Restricted
Subsidiaries. (a) The Company shall not, and shall not permit any Restricted Subsidiary to,
create or otherwise cause or permit to exist or become effective any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary to:

     (1) pay dividends or make any other distributions on its Capital Stock or pay any
Indebtedness or other obligations owed to the Company or any of its Restricted Subsidiaries;

     (2) make any loans or advances to the Company or any of its Restricted Subsidiaries;
or

40

 

     (3)
transfer any of its property or assets to the Company or any of its
Restricted Subsidiaries, except:

     (A) any encumbrance or restriction pursuant to applicable law, regulation, order or an
agreement in effect at or entered into on the Issue Date;

     (B) the Credit Agreement, and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings thereof; provided that the
restrictions contained in any amendment, modification, restatement renewal, increase, supplement,
refunding, replacement or refinancing of the Credit Agreement are, in the good faith judgment of
the Board of Directors, not materially less favorable, taken as a whole, to the Holders than those
contained in the Credit Agreement;

     (C) this Indenture, the Notes, the Guarantees and/or the Security Documents;

     (D) any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to an
agreement relating to any Indebtedness Incurred by such Restricted Subsidiary prior to the date on
which such Restricted Subsidiary was acquired by the Company or a Restricted Subsidiary (other than
Indebtedness Incurred as consideration in, in contemplation of, or to provide all or any portion of
the funds or credit support utilized to consummate the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a Restricted Subsidiary or was
otherwise acquired by the Company or a Restricted Subsidiary) and outstanding on such date;

     (E) any encumbrance or restriction pursuant to an agreement effecting a Refinancing of
Indebtedness Incurred pursuant to an agreement referred to in clause (A) or (B) of this Section
4.05(a)(3) or this clause (E) or contained in any amendment to an agreement referred to in clause
(A) or (B) of this Section 4.05(a)(3) or this clause (E); provided, however, that the encumbrances
and restrictions contained in any agreement or amendment relating to
such Refinancing are not, in
the good faith judgment of the Board of Directors, materially less favorable to the Holders than
the encumbrances and restrictions contained in the agreements relating to the Indebtedness so
Refinanced;

     (F) any encumbrance or restriction

     (i) that restricts in a customary manner the subletting, assignment or transfer
of any property or asset that is subject to a lease, license or similar contract, or

     (ii) that is contained in security agreements securing Indebtedness of a Restricted
Subsidiary to the extent such encumbrance or restriction restricts the transfer of the
property subject to such security agreements;

     (G) with respect to a Restricted Subsidiary, any restriction imposed pursuant to an agreement
entered into for the sale or disposition of all or substantially all the Capital Stock or assets of
such Restricted Subsidiary pending the closing of such sale or disposition;

41

 

     (H) contracts for the sale of assets containing customary restrictions
with respect to a Subsidiary pursuant to an agreement that has been entered into for
the sale or disposition of all or substantially all of the Capital Stock or assets of
such Subsidiary;

     (I) agreements for the sale of assets containing customary restrictions
with respect to such assets;

     (J) restrictions relating to the common stock of Unrestricted
Subsidiaries;

     (K) encumbrances or restrictions existing under or by reason of provisions
with respect to the disposition or distribution of assets or property in joint
venture agreements and other similar agreements entered into in the ordinary course
of business;

     (L) encumbrances or restrictions existing under or by reason of
restrictions on cash or other deposits or net worth imposed by customers under
contracts entered into in the ordinary course of business;

     (M) encumbrances and restrictions applicable only to Foreign
Subsidiaries,

     (N) secured Indebtedness otherwise permitted to be incurred pursuant to
Sections 4.03 and 4.14 that limit the right of the debtor to dispose of the assets
securing that Indebtedness;

     (O) any encumbrance or restriction with respect to a Restricted Subsidiary
pursuant to an agreement evidencing Indebtedness Incurred without violation of
this Indenture; provided, however, that the encumbrances and restrictions with
respect to such Restricted Subsidiary are, in the good faith judgment of the Board
of Directors, no more restrictive in any material respect than the encumbrances
and restrictions with respect to such Restricted Subsidiary contained in
agreements of such Restricted Subsidiary in effect at, or entered into on, the
Issue Date;

and with respect to clause (3) only,

     (A) any encumbrance or restriction consisting of customary nonassignment
provisions in leases governing leasehold interests to the extent such provisions
restrict the transfer of the lease or the property leased thereunder; and

     (B) any encumbrance or restriction contained in security agreements or
mortgages securing Indebtedness of a Restricted Subsidiary to the extent such
encumbrance or restriction restricts the transfer of the property subject to such
security agreements or mortgages.

          SECTION
4.06 Limitation on Sales of Assets and Subsidiary Stock. (a) The Company shall
not, and shall not permit any Restricted Subsidiary to, make any Asset Disposition unless:

     (1) the Company or such Restricted Subsidiary, as the case may be, receives
consideration (including by way of relief from, or by any other Person assuming sole
responsibility for, any liabilities, contingent or otherwise) at the time of such Asset
Disposition at least equal to the Fair Market Value of the shares and assets subject to
such Asset Disposition; and

42

 

     (2) at least 75% of the consideration thereof received by the Company
or such Restricted Subsidiary is in the form of cash or other Qualified Proceeds.

          Within 365 days after the receipt of any Net Available Cash from such Asset Disposition (the
“Net Available Cash Offer Payment Date”), the Company or such Restricted Subsidiary may apply an
amount equal to 100% of the Net Available Cash from such Asset Disposition

     (w) to repay or cash collateralize any Credit Agreement Obligations, to repay
Indebtedness of the Company or any of its Restricted Subsidiaries secured by assets not in
the Collateral, or to repay any Indebtedness of any Restricted Subsidiary that is not a
Guarantor;

     (x) to acquire Capital Stock of another Permitted Business; provided that if the
Company or such Restricted Subsidiary shall have entered into a binding agreement prior to
the Net Available Cash Offer Payment Date to acquire such Capital Stock, the Company or such
Restricted Subsidiary may apply such amounts to such acquisition within an additional
6-month period:

     (A) as a result of the acquisition, such Person becomes a Restricted
Subsidiary; or

     (B) the Investment in such Capital Stock is permitted by clause (16) of the
definition of Permitted Investments;

     (y) to make a capital expenditure; or

     (z) to acquire other long-term assets that are used or useful in the Permitted
Business; provided that if the Company shall have entered into a binding agreement prior to
the Net Available Cash Offer Payment Date to acquire such long-term assets, the Company may
apply such amounts to such acquisition within an additional 6-month
period;

provided, however, that in connection with any prepayment, repayment or purchase of Indebtedness
pursuant to clause (w) of Section 4.06(a), the Company or such Restricted Subsidiary will retire
such Indebtedness and will cause the related loan commitment (if any)
to be permanently reduced in
an amount equal to the principal amount so prepaid, repaid or purchased.

     For
the purposes of Section 4.06(a)(2) only, the following are deemed to be cash:

     (A) the assumption of any liabilities (as shown on the Company’s or a Restricted
Subsidiary’s most recent balance sheet) of the Company or any such Restricted Subsidiary
(other than contingent liabilities and liabilities that are by their terms subordinated to
the Notes or any Note Guarantee) pursuant to a customary novation agreement that releases
the Company or such Restricted Subsidiary from further liability in connection with such
Asset Disposition; and

     (B) any securities or other obligations received by the Company or any Restricted
Subsidiary from the transferee that are converted within 180 days of receipt by the Company
or such Restricted Subsidiary into cash or Cash Equivalents, but only to the extent of the
cash or Cash Equivalents received.

          
The 75% limitation referred to in Section 4.06(a)(2) will not apply to any Asset Disposition
in which the cash or Qualified Proceeds portion of the consideration received therefrom, determined

43

 

in accordance with the two immediately preceding bullet points, is equal to or greater than
what the aftertax proceeds would have been had that Asset Disposition complied with the
aforementioned 75% limitation.

          Pending the final application of any Net Available Cash, the Company or such Restricted
Subsidiary may temporarily reduce revolving credit borrowings or otherwise invest the Net Available
Cash in any manner that is not prohibited by this Indenture.

          (b) Any Net Available Cash from Asset Dispositions that are not applied or invested as
provided in the preceding paragraphs shall constitute “Excess Proceeds,” When the aggregate amount
of Excess Proceeds exceeds $10.0 million, the Company shall make an Asset Disposition Offer to all
Holders of Notes and all holders of other Indebtedness that is pari passu in right of payment with
the Notes containing provisions similar to those set forth in this Indenture with respect to offers
to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount
of Notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds.
The offer price in any Asset Disposition Offer shall be equal to 100% of principal amount plus
accrued and unpaid interest, including Additional Interest, if any, to the date of purchase, and
shall be payable in cash. If any Excess Proceeds remain after consummation of an Asset Disposition
Offer, the Company may use those Excess Proceeds for any purpose not otherwise prohibited by this
Indenture. If the aggregate principal amount of Notes and other pari passu Indebtedness tendered
into such Asset Disposition Offer exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis; provided,
however, that the Company shall not be obligated to purchase Notes in denominations other than
integral multiples of $1,000 principal amount at maturity. Upon completion of each Asset
Disposition Offer, the amount of Excess Proceeds shall be reset at zero.

          (c) (1) Promptly, and in any event within 10 days after the Company becomes obligated to make
an offer (the “Offer”), the Company shall be obligated to deliver to the Trustee and send, by
first-class mail to each Holder, a written notice stating that the Holder may elect to have his
Notes purchased by the Company either in whole or in part (subject to prorating as hereinafter
described in the event the Offer is oversubscribed) in integral multiples of $1,000 of principal
amount, at the applicable purchase price. The Offer shall remain open for a period of at least 20
Business Days following its commencement and not more than 30 Business Days, except to the extent a
longer period is required by applicable laws (the “Offer Period”).

          (2) Not later than the date upon which written notice of an Offer is delivered to the
Trustee as provided in Section 4.06(c)(l), the Company shall deliver to the Trustee an Officer’s
Certificate as to (A) the amount of the Offer (the “Offer Amount”). (B) the allocation of the Net
Available Cash from the Asset Dispositions pursuant to which such Offer is being made and (C) the
compliance of such allocation with the provisions of Sections 4.06(a) and (b). Not later than three
Business Days after the end of the Offer Period (the “Purchase Date”), the Company shall also
irrevocably deposit with the Trustee or with a paying agent (or, if the Company is acting as its
own paying agent, segregate and hold in trust) an amount equal to the Offer Amount with written
instructions for investment in Cash Equivalents and to he held for payment in accordance with the
provisions of this Section 4.06. On the Purchase Date, the Company shall deliver to the Trustee for
cancellation the Notes or portions thereof that have been properly tendered to and are to be
accepted by the Company. The Trustee (or the Paying Agent, if not the Trustee) shall, on the
Purchase Date, mail or deliver payment to each tendering Holder in the amount of the purchase
price. In the event that the Offer Amount delivered by the Company to the Trustee is greater than
the purchase price of the Notes (and such other pari passu Indebtedness) tendered, the Trustee
shall

44

 

deliver the excess to the Company immediately after the expiration of the Offer Period for
application in accordance with this Section 4.06.

          (3) Holders electing to have a Note purchased shall be required to surrender the Note, with an
appropriate form duly completed, to the Company at the address specified in the notice prior to the
expiration of the Offer Period. Holders shall be entitled to withdraw their election if the Trustee
or the Company receives not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the principal amount of the
Note or Notes which were delivered by the Holder for purchase and a statement that such Holder is
withdrawing his election to have such Note or Notes purchased. If at the expiration of the Offer
Period the aggregate principal amount of Notes and any such other pari passu Indebtedness included
in the Offer surrendered by holders thereof exceeds the Offer Amount, the Company shall select the
Notes and such other pan passu Indebtedness to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Company so that only Notes and such other pari
passu Indebtedness in denominations of $1,000, or integral multiples thereof, shall be purchased).
Holders whose Notes are purchased only in part will be issued new Notes equal in principal amount
to the unpurchased portion of the Notes surrendered

          (4) At the time the Company delivers Notes to the Trustee which are to be accepted for
purchase, the Company shall also deliver an Officer’s Certificate stating that such Notes arc to be
accepted by the Company pursuant to and in accordance with the terms of this Section 4.06. A Note
shall be deemed to have been accepted for purchase at the time the Trustee, directly or through an
agent, mails or delivers payment therefor to the surrendering Holder.

          (5) The Company shall comply in all material respects with the requirements of Rule 14e-l
under the Exchange Act and any other securities laws and regulations thereunder to the extent those
laws and regulations are applicable in connection with each repurchase of Notes pursuant to an
Asset Disposition Offer. To the extent that the provisions of any securities laws or regulations
conflict with this Section 4.06, the Company shall comply in all material respects with the
applicable securities laws and regulations and shall not be deemed to have breached their
obligations under this Section 4.06 by virtue of such conflict.

          SECTION
4.07 Limitation on Transactions with Affiliates. (a) The Company shall
not, and shall not permit any Restricted Subsidiary to, directly or indirectly, enter into or
conduct any transaction (including the purchase, sale, lease or exchange of any property or the
rendering of any service) with any Affiliate of the Company (an “Affiliate Transaction”) unless
such transaction is on terms:

    (1) that are no less favorable (other than in immaterial respects) to the Company or
such Restricted Subsidiary, as the case may be, than those that could be obtained at the
time of such transaction in comparable arm’s-length dealings with a Person who is not such
an Affiliate;

    (2) that, in the event such Affiliate Transaction involves an aggregate amount in
excess of $5.0 million;

     (A) are set forth in writing; and

     (B) have been approved by a majority of the members of the Board of Directors
having no personal stake in such Affiliate Transaction and,

45

 

     (3) that, in the event such Affiliate Transaction involves an amount in excess of
$15.0 million, have been determined by a nationally recognized appraisal or investment banking firm
to be fair, from a financial standpoint, to the Company and its
Restricted Subsidiaries.

     (b) The provisions of the foregoing paragraph (a) will not prohibit:

     (1) any Investment (other than a Permitted Investment) or other Restricted Payment permitted
to be paid pursuant to Section 4.04;

     (2) any issuance of securities, or other payments, awards or grants in cash, securities or
otherwise pursuant to, or the funding of, employment arrangements (including change of control
arrangements and severance arrangements), stock options and stock ownership plans approved by the
Board of Directors;

     (3) loans or advances to employees in the ordinary course of business consistent with prudent
business practice, but in any event not to exceed $2.0 million in the aggregate outstanding at any
one time;

     (4) the payment of reasonable fees, compensation or employee benefit arrangements to and any
indemnity provided for the benefit of directors, officers, consultants or employees of the Company
or any Restricted Subsidiary in the ordinary course of business;

     (5) any transaction with a Restricted Subsidiary or joint venture or similar entity which
would constitute an Affiliate Transaction solely because the Company or a Restricted Subsidiary
owns an Equity Interest in or otherwise controls such Restricted Subsidiary, joint venture or
similar entity;

     (6) the payment of management, consulting and advisory fees to the Sponsors or their
Affiliates made pursuant to the Financial Advisory Agreements, and any related out of pocket
expenses; provided, however, that a one-time payment representing the present value of all future
payments thereunder shall be permitted;

     (7) transactions with Unrestricted Subsidiaries customers, suppliers, contractors, joint
venture partners or purchasers or sellers of goods or services, in each ease which are in the
ordinary course of business (including, without limitation, pursuant to joint venture agreements)
and otherwise in compliance with the terms of this Indenture, and which are fair to the Company or
its Restricted Subsidiaries, as applicable, in the reasonable determination of the Board of
Directors or the senior management of the Company or its Restricted Subsidiaries, as applicable or
are on terms at least as favorable as might reasonably have been obtained at such time from an
unaffiliated party;

     (8) any agreement as in effect on the date of this Indenture or any amendment thereto (so long
as that amendment is not disadvantageous to the holders of the notes in any material respect) or
any transaction contemplated thereby;

     (9) any issuance or sale of Capital Stock (other than Disqualified Stock) of the Company;

46

 

     (10) the entrance into by the Company, and performance by the Company under the
Modular L.L.C. Shareholder’s Agreement and the Modular L.L.C. Registration Rights Agreement;
or

     (11) transactions between or among the Company and/or its Restricted Subsidiaries.

          SECTION
4.08 Repurchase of Notes at the Option of the Holder Upon a Change
of Control.
(a) Upon a Change of Control, each Holder shall have the right to require that the Company
repurchase all or any part (equal to 81,000 or an integral multiple thereof) of such Holder’s Notes
at a purchase price in cash equal to 101% of the principal amount thereof plus accrued and unpaid
interest, including Additional Interest, (hereon, if any, to the date of repurchase (subject to the
right of Holders of record on the relevant record date to receive interest due on the relevant
interest payment date) in accordance with the terms contemplated in Section 4.08(b); provided,
however, that notwithstanding the occurrence of a Change of Control, the Company shall not be
obligated to repurchase the Notes pursuant to this Section 4.08 in the event that it has exercised
its right to redeem all the Notes under paragraph 5 of the Notes.

          (b) Within 60 days following any Change of Control, the Company shall mail a notice to each
Holder with a copy to the Trustee (the “Change of Control Offer”) stating:

     (1) that a Change of Control has occurred and that such Holder has the right to require
the Company to purchase all or a portion (equal to $ 1,000 or an integral multiple thereof)
of such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, including Additional Interest, if any, to the
date of repurchase (subject to the right of Holders of record on the relevant record date to
receive interest on the relevant interest payment date);

     (2) the circumstances and relevant facts and financial information regarding such
Change of Control;

     (3) the repurchase date (which shall be no earlier than 30 days (or such shorter time
period as may be permitted under applicable laws, rules and regulations) nor later than 60
days from the date such notice is mailed); and

     (4) the instructions determined by the Company, consistent with this Section 4.08, that
a Holder must follow in order to have its Notes purchased.

          (c) Holders electing to have a Note purchased shall be required to surrender the Note, with an
appropriate form duly completed, to the Company at the address specified in the notice at least
three Business Days prior to the purchase date. Holders shall be entitled to withdraw their
election if the Trustee or the Company receives not later than one Business Day prior to the
purchase date a telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Note which was delivered for purchase by the Holder and a
statement that such Holder is withdrawing his election to have such Note purchased. Holders whose
Notes are purchased only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered.

          (d) On the purchase date, all Notes purchased by the Company under this Section 4.08 shall be
delivered to the Trustee for cancellation, and the Company shall pay the purchase price plus
accrued and unpaid interest, including Additional Interest, if any, to the Holders entitled
thereto.

          
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          (e) Notwithstanding the foregoing provisions of this Section 4.08, the Company shall not be
required to make a Change of Control Offer upon a Change of Control if a third party makes the
Change of Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Section 4.08 and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.

          (f) In connection with any Change of Control Offer, the Company shall deliver to the Trustee
an Officer’s Certificate stating that all conditions precedent contained herein to the right of the
Company to make such offer have been satisfied.

          (g) The Company shall comply, to the extent applicable, with the requirements of Section 14(e)
of the Exchange Act and any other securities laws or regulations in connection with the repurchase
of Notes pursuant to this Section 4.08. To the extent that the provisions of any securities laws or
regulations conflict with this Section 4.08, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its obligations under this
Section by virtue thereof.

          SECTION 4.09 Compliance Certificate. The Company shall deliver to the Trustee
within 120 days after the end of each fiscal year of the Company an Officer’s Certificate stating
that in the course of the performance by the signer of his or her duties as an Officer of the
Company he or she would normally have knowledge of any Default and whether or not the signer knows
of any Default that occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company are taking or propose to take with respect thereto.
The Company also shall comply with Section 314(a)(4) of the TIA.

          SECTION
4.10 Further Instruments and Acts. Upon request of the Trustee, the
Company shall execute and deliver such further instruments and do such further acts as may be
reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

          SECTION
4.11 Additional Note Guarantees and Liens. At the Closing Date, all
Subsidiaries of the Company will be Guarantors other than Estecom Co., Ltd. and SMART Modular
Technologies (Deutschland) GmbH. If any Subsidiary (other than a Foreign Subsidiary from which the
Company cannot, with commercially reasonable efforts, obtain a Guarantee or Lien as a result of the
laws, rules or regulations of the jurisdiction applicable to such Foreign Subsidiary) shall, after
the date hereof, be formed or acquired by the Company or any Restricted Subsidiary, then the
Company shall, at the time, cause such Subsidiary to (1) execute a Guarantee of the obligations of
the Company under the Notes substantially in the form set forth in
Exhibit B hereto, (2) if such
Subsidiary grants any Lien upon any of its assets and property as security for any Credit Agreement
Obligations, execute any and all further Security Documents, financing statements, agreements and
instruments, upon substantially the same terms as the security documents in respect of such Credit
Agreement Obligations, but subject to the Intercreditor Agreement, that grants the Trustee a
second-priority Lien upon such assets and property for the benefit of the Holders and take all such
actions (including the filing and recording of financing statements, fixture filings, mortgages and
other documents) that may be required under any applicable law, or which the Trustee may reasonably
request to create such second-priority Lien, all at the expense of the Company, including all
reasonable fees and expenses of counsel incurred by the Trustee in
connection therewith; provided
that such Subsidiary shall not be required to grant a second-priority Lien upon such property for
the benefit of the Holders if (1) a second-priority security interest in such property cannot be
granted or perfected under applicable law or (2) such grant requires the consent of any third
party, which consent such Subsidiary is unable to obtain using commercially reasonable efforts, and
(3) deliver to the Trustee an Opinion of Counsel, reasonably satisfactory to the Trustee, that such
Guaran-

48

 

an Opinion of Counsel, reasonably satisfactory to the Trustee, that such Guarantee and any such
Security Documents, as the case may be, are valid, binding and enforceable obligations of such
Subsidiary, subject to customary exceptions for bankruptcy, fraudulent conveyance and equitable
principles.

          From and after the Closing Date, if the Company or any Guarantor creates any additional
security interest upon any property to secure any Credit Agreement Obligations or any other
obligations that are secured equally and ratably with the Notes by the second-priority security
interests in the Collateral (other than security interests granted solely to secure Hedging
Obligations, Commodity Hedge Obligations, Cash Management Obligations or for a Guarantor that is a
Foreign Subsidiary for which the Company cannot, with commercially reasonable efforts, obtain such
security interest as a result of the laws, rules or regulations of the jurisdiction applicable to
such Guarantor that is a Foreign Subsidiary), it shall concurrently grant a second-priority
security interest (subject to Permitted Liens) upon such property as security for the Notes and
execute any and all further Security Documents, financing statements, agreements and instruments,
but subject to the Intercreditor Agreement, that grant the Trustee a second-priority Lien upon such
assets and property for the benefit of the Holders and take all such actions (including the filing
and recording of financing statements, fixture filings, mortgages and other documents) that may be
required under any applicable law, or which the Trustee may reasonably request to create such
second-priority Lien, all at the expense of the Company, including all reasonable fees and expenses
of counsel incurred by the Trustee in connection therewith; provided that the Company or Guarantor
shall not be required to grant a second-priority Lien upon such property as security for the Notes
if such grant requires the consent of any third party, which consent the Company or Guarantor is
unable to obtain using commercially reasonable efforts.

          SECTION
4.12 Limitation on Lines of Business. The Company shall not, and shall
not permit any Restricted Subsidiary to, engage in any business, other than a Permitted Business.

          SECTION 4.13 Limitation on the Sale or Issuance of Capital Stock of Restricted
Subsidiaries. (a) The Company will not sell or otherwise dispose of any shares of Capital Stock
of a Restricted Subsidiary, and will not permit any Restricted Subsidiary, directly or indirectly,
to issue or sell or otherwise dispose of any shares of its Capital Stock except:

     (1) to the Company or another Restricted Subsidiary;

     (2) if, immediately after giving effect to such issuance, sale or other disposition,
neither the Company nor any of its Restricted Subsidiaries own any Capital Stock of such
Restricted Subsidiary;

     (3) if, immediately after giving effect to such issuance or sale, such Restricted
Subsidiary would no longer constitute a Restricted Subsidiary and any Investment in such
Person remaining after giving effect thereto would have been permitted to be made under
Section 4.04 if made on the date of such issuance, sale or other disposition;

     (4) directors’ qualifying shares or shares required by applicable law to be held by a
Person other than the Company or a Restricted Subsidiary; or

     (5) in the case of a Restricted Subsidiary other than a wholly-owned Restricted
Subsidiary, the issuance by that Restricted Subsidiary of Capital Stock on a pro rata basis
to the Company and its Restricted Subsidiaries, on the one hand, and minority shareholders
of the Restricted Subsidiary, on the other hand (or on less than a pro rata basis to any
minority shareholder if the minority holder does not acquire its pro rata amount), so long
as the Company or another

49

 

Restricted Subsidiary owns and controls at least the same percentage of the Voting Stock
of, and economic interest in, such Restricted Subsidiary as prior to such issuance.

          (b) The cash proceeds of any sale of Capital Stock permitted under clauses (2) and (3)
will be treated as Net Available Cash from an Asset Disposition and must be applied in accordance
with the terms of the covenant described under Section 4.06.

          SECTION
4.14 Limitation on Liens. The Company shall not, and shall not permit any
Guarantor to, directly or indirectly, create, incur, assume or suffer to exist any Lien of any
kind on any asset now owned or hereafter acquired by the Company or any Guarantor, except
Permitted Liens.

          SECTION
4.15 Sale/Leaseback Transactions. (a) The Company will not, and will not
permit any Guarantor to, enter into any Sale/Leaseback Transaction; provided that the Company
or any Guarantor may enter into a Sale/Leaseback transaction if:

     (1) the Company or that Guarantor, as applicable, could have incurred Indebtedness in
an amount equal to the Attributable Debt relating to such Sale/Leaseback Transaction in
compliance with Section 4.03;

     (2) the gross cash proceeds of the Sale/Leaseback Transaction are at least equal to the
Fair Market Value (in the case of gross cash proceeds in excess of $7.5 million as
determined in good faith by the Board of Directors), of the property that is the subject of
that Sale/Leaseback Transaction; and

     (3) the transfer of assets in that Sale/Leaseback Transaction is permitted by, and the
Company applies the proceeds of such transaction in compliance with Section 4.06.

          SECTION
4.16 Additional Amounts. All payments of principal, premium, interest and
additional interest (if any) in respect of each Note and the Guarantees shall be made free and
clear of, and without withholding or deduction for, any taxes, duties, assessments or governmental
charges of whatever nature imposed, levied, collected, withheld or assessed by or within the Cayman
Islands (and, in the case of a Guarantor, the country of residence or incorporation of the
Guarantor or jurisdiction in which the Guarantor has an office or is doing business) or any
political subdivision or taxing authority thereof or therein or by any other jurisdiction in which
the Company or any Guarantor is organized or resident, has an office or conducts business for tax
purposes or from or through which payment is made (a “Taxing Jurisdiction”), unless such
withholding or deduction is required by law or by regulation or governmental authority having the
force of law. In the event that any such withholding or deduction in respect of principal, premium,
interest or additional interest is so required, the Company or the Guarantors, as the case may be,
shall pay such additional amounts (“Additional Amounts”) as will result in receipt by each Holder
of any Note of such amounts as would have been received by such Holder with respect to such Note or
Guarantee, as applicable, had no such withholding or deduction been required, except that no
Additional Amounts shall be payable:

          (a) for or on account of:

     (1) any tax, duty, assessment or other governmental charge that would not
have been imposed but for

     (A) the existence of any present connection between such Holder or
the beneficial owner of such Note and the Taxing Jurisdiction (other than
merely

50

 

acquiring, holding or disposing of such Note or Guarantee or the receipt of,
or enforcement of rights under, the Guarantees or the Notes, or the receipt
of payments in respect thereof) including, without limitation, such Holder or
the beneficial owner of such Note being a national, domiciliary or resident
thereof or being present or engaged in a trade or business therein or having
a permanent establishment therein; or

     (B) the presentation of such Note (where presentation is
required) more than thirty (30) days after the date on which the payment in
respect of such Note became due and payable or provided for, whichever is
later, except to the extent that such Holder would have been entitled to such
Additional Amounts if it had presented such Note for payment on any day
within such period of thirty (30) days; or

     (2) any estate, inheritance, gift, sale, transfer, personal property or similar
tax, assessment or other governmental charge; or

     (3) any tax, duty, assessment or other governmental charge that would not have
been imposed but for the failure of a Holder or beneficial owner of Notes, following
the Company’s reasonable written request addressed to the Holder, to comply with any
certification, identification, information or other reporting requirements, whether
required by statute, treaty, regulation or administrative practice of a Taxing
Jurisdiction, as a precondition to exemption from, or reduction in the rate of
deduction or withholding of, taxes imposed by the Taxing Jurisdiction (including,
without limitation, a certification that the Holder or beneficial owner is not
resident in the Taxing Jurisdiction); or

     (4) any combination of items (1), (2) and (3); or

     (b) with respect to any payment of the principal of or any premium, interest, or
additional interest, on such Note or Guarantee to such Holder (including a fiduciary or
partnership) to the extent that the beneficial owner of such Note would not have been
entitled to such Additional Amounts had it been the Holder of the Note.

          The Company (or any Guarantor making payments on the Notes) will make any withholding or
deduction required in respect of taxes, and remit the full amount deducted or withheld to the
relevant authority in accordance with applicable law.

          At least 30 days prior to each date on which any payment under or with respect to the Notes is
due and payable (unless such obligation to pay Additional Amounts arises shortly before or after
the 30th day prior to such date, in which case it shall be promptly thereafter), if the Company
will be obligated to pay Additional Amounts with respect to such payment, the Company will deliver
to the Trustee an Officer’s Certificate stating the fact that such Additional Amounts will be
payable and the amounts so payable and will set forth such other information necessary to enable
the Trustee to pay such Additional Amounts to Holders of Notes on the payment date. Each such
Officer’s certificate shall be relied upon until receipt of a further Officer’s certificate
addressing such matters. The Company and the Guarantors will provide to the Trustee a certified
receipt issued by the relevant government authority evidencing payment of withholding taxes within
30 days after payment thereof. Copies of such receipts shall be provided to Holders requesting such
copies.

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          Whenever there is mentioned in any context, the payment of principal, premium, interest or
additional interest, in respect of any Note or the net proceeds received on the sale or exchange of
any Note, such mention shall be deemed to include the payment of
Additional Amounts provided for in
this Indenture to the extent that, in such context, Additional Amounts are, were or would be
payable in respect thereof pursuant to this Indenture.

          The Company and the Guarantors, jointly and severally, will indemnify and hold harmless each
eligible Holder of Notes and, upon written request of any eligible Holder of Notes, reimburse such
Holder for the amount of (i) any taxes levied or imposed on and paid by such Holder as a result of
payments made under or with respect to the Notes held by such Holder; and (ii) any taxes levied or
imposed with respect to any reimbursement under the foregoing clause (i) or this clause (ii), so
that the net amount received by such Holder after such reimbursement will not be less than the net
amount such Holder would have received if the taxes giving rise to the reimbursement described in
clauses (i) and/or (ii) had not been imposed, provided however, that the indemnification obligation
provided for in this paragraph shall not (x) extend to taxes imposed for which the eligible Holder
of Notes would not have been eligible to receive payment of Additional Amounts hereunder and (y)
exceed the amount of Additional Amounts that would otherwise have been payable to such eligible
Holder in respect of the payment giving rise to the indemnification obligation. Holders will
provide such evidence of payment as may be reasonably satisfactory to the Company.

          The Company or the Guarantors, as the case may be, will pay any present or future stamp, court
or documentary taxes, or any other excise or property taxes, charges or similar levies which arise
in any jurisdiction from the execution, delivery, enforcement or registration of the Notes or the
Guarantees, and the Company and the Guarantors, jointly and severally, will agree to indemnify and
hold harmless the Holders for any such taxes (including penalties, interest and related expenses)
paid by such Holders, excluding any such taxes, charges or similar levies imposed by any
jurisdiction outside of the Cayman Islands or any Taxing Jurisdiction, except those resulting from,
or required to be paid in connection with, the enforcement of the Notes or the Guarantees following
the occurrence of any Event of Default with respect to the Notes.

ARTICLE V

SUCCESSOR COMPANY

          SECTION
5.01 When Company May Merge or Transfer Assets. (a) The Company shall not
consolidate with or merge with or into, or convey, transfer or lease all or substantially all its
assets to, any Person, unless:

     (1) the resulting, surviving or transferee Person (the “Successor Company”) shall be a
corporation, a partnership or limited liability company, in each case organized and existing
under the laws of the United States of America, any State thereof, the District of Columbia,
or the Cayman Islands and the Successor Company (if not the Company) shall expressly assume,
by a supplemental indenture, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, all the obligations of the Company under the Notes and this
Indenture;

     (2) immediately after giving effect to such transaction (and treating any Indebtedness
which becomes an obligation of the Successor Company or any Restricted Subsidiary as a
result of such transaction as having been Incurred by the Successor Company or such
Restricted Subsidiary at the time of such transaction), no Default shall have occurred and
be continuing;

52

 

     (3) immediately after giving effect to such transaction, the Successor Company (x)
would, at the time of such transaction and after giving effect thereto as if such
transaction had occurred at the beginning of the applicable four quarter period, be able to
Incur at least $1.00 of additional Indebtedness under Section 4,03(a) or (y) would, together
with its Restricted Subsidiaries, have a Consolidated Coverage Ratio immediately after the
transaction (after giving effect thereto as if that transaction had occurred at the
beginning of the applicable four quarter period) than the Consolidated Coverage Ratio of the
Company and its Restricted Subsidiaries immediately prior to such transaction; and

     (4) the Company shall have delivered to the Trustee an Officer’s Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer and such
supplemental indenture (if any) comply with this Indenture.

          The Successor Company shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture.

          (b) In addition, the Company shall not permit any Guarantor to consolidate with or merge with
or into, or convey, transfer or lease all or substantially all of its assets to any Person unless:

     (1) in the case of any Guarantor that is a Domestic Subsidiary, the resulting,
surviving or transferee Person will be a corporation, partnership or limited liability
company organized and existing under the laws of the United States of America, any State
thereof, the District of Columbia or Puerto Rico, and such Person (if not such Guarantor)
shall expressly assume, by a supplemental indenture, executed and delivered to the Trustee,
in form satisfactory to the Trustee, all the obligations of such Guarantor under its Note
Guarantee;

     (2) immediately after giving effect to such transaction (and treating any Indebtedness
which becomes an obligation of the resulting, surviving or transferee Person as a result of
such transaction as having been Incurred by such Person at the time of such transaction), no
Default shall have occurred and be continuing; and

     (3) the Company will have delivered to the Trustee an Officer’s Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer and such
supplemental indenture (if any) comply with this Indenture;

provided, however, that the foregoing shall not apply to any such consolidation or merger with or
into, or conveyance, transfer or lease to, any Person if the resulting, surviving or transferee
Person will not be a Subsidiary of the Company and the other terms of this Indenture, including
Section 4.06, are complied with.

     (c) Notwithstanding the foregoing:

     (1) any Restricted Subsidiary may consolidate with, merge into or transfer all or part
of its properties and assets to the Company or a Wholly Owned Subsidiary;

     (2) the Company may merge with an Affiliate incorporated or organized solely for the
purpose of reincorporating or reorganizing the Company in another jurisdiction to realize
tax or other benefits;

53

 

     (3) nothing herein shall limit any conveyance, transfer or lease of assets between or
among any of the Company and the Guarantors; and

     (4) Section 5.03(a)(3) will not prohibit a merger between the Company and a Person that owns
all of the Capital Stock of the Company created solely for the purpose of holding the Capital Stock
of the Company; provided, however, that the other terms of Section 5.03(a)(3) are complied with.

ARTICLE VI

EVENTS OF DEFAULTS AND REMEDIES

          SECTION
6.01 Events of Default. Each of the following is an Event of Default:

     (1) a default in any payment of interest on any Note or in any payment of Additional Interest
with respect thereto, continued for 30 days;

     (2) a default in the payment of principal of any Note when due and payable at its Stated
Maturity, upon required redemption or repurchase, upon declaration or otherwise;

     (3) the failure by the Company or any Guarantor to comply with its obligations under Section
5.01;

     (4) the failure by the Company or any Guarantor to comply for 30 days after notice with any of
their obligations under Section 4.03, 4.04, 4.06 or 4.08 (in each case, other than a failure to
purchase Notes);

     (5) the failure by the Company or any Guarantor to comply for 60 days after notice with its
other agreements contained in the Notes, this Indenture, the Note Guarantees or the Security
Documents (other than those referred to in clauses (1), (2), (3) and (4) of this Section 6.01);

     (6) the failure by the Company or any Restricted Subsidiary to pay any Indebtedness within any
applicable grace period after final maturity or the acceleration of any such Indebtedness by the
holders thereof because of a default if the total amount of such Indebtedness unpaid or accelerated
exceeds $10.0 million or its foreign currency equivalent (the
“cross acceleration provision”) and
such failure continues for 10 days after receipt of the notice specified in this Indenture;

     (7) the Company or any other Significant Subsidiary pursuant to or within the meaning of any
Bankruptcy Law:

     (i) commences a voluntary case;

     (ii) consents to the entry of an order
for relief against it in an involuntary

     (iii) consents to the appointment of a Custodian of it or for any
substantial part of its property; or

     (iv) makes a general assignment for the benefit of its creditors;

54

 

     (v) or takes any comparable action under any foreign laws relating
to insolvency;

     (8) a court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that:

     (i) is for relief against the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary in an involuntary case;

     (ii) appoints a Custodian of the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary or for all or substantially all of the
property of the Company or any of its Restricted Subsidiaries that is a Significant
Subsidiary; or

     (iii) orders the winding up or liquidation of the Company or any of its
Restricted Subsidiaries that is a Significant Subsidiary; or any similar relief is
granted under any foreign laws

and the order or decree remains unstayed and in effect for 60 days;

     (9) with respect to any judgment or decree for the payment of money in excess of $10.0
million or its foreign currency equivalent against the Company or any Restricted Subsidiary
that is a Restricted Subsidiary, the failure by the Company or such Restricted Subsidiary,
as applicable, to pay such judgment or decree, which judgment or decree has remained
outstanding for a period of 60 days following such judgment or decree without being paid,
discharged, waived or stayed (the “judgment default provision”); and

     (10) (A) except as permitted by this Indenture, any Note Guarantee of any
Significant Subsidiary or any Security Document or any security interest granted thereby
shall be held in any judicial proceeding to be, unenforceable or invalid, or shall cease for
any reason to be in full force and effect and such default continues for 10 days after
written notice, or (B) the Company or Guarantor that is a Significant Subsidiary, or any
Person acting on behalf of such Significant Subsidiary, shall deny or disaffirm its
obligations under any Note Guarantee or Security Document.

          The foregoing shall constitute Events of Default whatever the reason for any such Event of
Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body.

          The term “Bankruptcy Law” means Title 11, United States Code, or any similar Federal or state
law for the relief of debtors. The term “Custodian” means any receiver, trustee, assignee,
liquidator, custodian or similar official under any Bankruptcy Law.

          A Default under clause (4), (5), (6) or (10) of this Section 6.01 will not constitute an Event
of Default until the Trustee notifies the Company, or the Holders of at least 25% in principal
amount of the outstanding Notes notify the Company and the Trustee, of the Default, and the Company
or the relevant Guarantor, as applicable, do not cure such Default within the time specified after
receipt of such notice. Such notice must specify the Default, demand that it be remedied and state
that such notice is a “Notice of Default”.

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     The Company shall deliver to the Trustee, within 30 days after the occurrence
thereof, written notice in the form of an Officer’s Certificate of any event which
with the giving of notice or the lapse of time would become an Event of Default under
clause (3), (4), (5), (6), (9) or (10), its status and what action the Company are
taking or propose to take with respect thereto.

     SECTION
6.02 Acceleration. (a) If an Event of Default (other than an Event
of Default specified in Section 6.01(7) or (8)) occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the outstanding Notes by notice
to the Company may declare the principal of and accrued but unpaid interest on all
the Notes to be due and payable. Upon such a declaration, such principal and interest
will be due and payable immediately. If an Event of Default specified in Section
6.01(7) or (8) occurs, the principal of and interest on all the Notes will become
immediately due and payable without any declaration or other act on the part of the
Trustee or any Holders. Under certain circumstances, the Holders of a majority in
principal amount of the outstanding Notes may rescind any such acceleration with
respect to the Notes and its consequences.

     (b) In the event of a declaration of acceleration of the Notes because an
Event of Default has occurred and is continuing as a result of the acceleration of
any Indebtedness described in Section 6.01(6), the declaration of acceleration of the
Notes shall be automatically annulled if the holders of any such Indebtedness have
rescinded the declaration of acceleration in respect of such Indebtedness within 30
days of the date of such acceleration and if (1) the annulment of the acceleration of
the Notes would not conflict with any judgment or decree of a court of competent
jurisdiction and (2) all existing Events of Default, except nonpayment of principal
or interest on the Notes that became due solely because of the acceleration of the
Notes, have been cured or waived.

     SECTION 6.03 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment of
principal of or interest on the Notes or to enforce the performance of any provision
of the Notes, this Indenture or the Security Documents. The Trustee may maintain a
proceeding even if it does not possess any of the Notes or docs not produce any of
them in the proceeding. A delay or omission by the Trustee or any Holder in
exercising any right or remedy accruing upon an Event of Default shall not impair the
right or remedy or constitute a waiver of or acquiescence in the Event of Default. No
remedy is exclusive of any other remedy. All available remedies are cumulative.

     SECTION 6.04 Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount of the Notes then outstanding by notice to the Trustee may
on behalf of the Holders of all of the Notes waive any existing Default or Event of
Default and its consequences under this Indenture except (1) a continuing Default or Event of Default in the payment of the principal of or interest on a Note, or (2) a
Default in respect of a provision that under Section 9.02 cannot be amended without
the consent of each Holder affected. When a Default is waived, it is deemed cured,
but no such waiver shall extend to any subsequent or other Default or impair any
consequent right.

     SECTION 6.05 Control by Majority. The Holders of a majority in
principal amount of the Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of exercising any trust or
power conferred on the Trustee. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or, subject to Section 7.01, that
the Trustee determines is unduly prejudicial to the rights of other Holders or would
involve the Trustee in personal liability; provided, however, that the Trustee may
take any other action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall

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be entitled to indemnification satisfactory to it in its sole discretion
against all losses and expenses caused by taking or not taking such action.

          SECTION 6.06 Limitation on Suits. (a) Except to enforce the right to
receive payment of principal, premium (if any) or interest when due, no Holder
may pursue any remedy with respect to this Indenture or the Notes unless:

     (1) such Holder has previously given the Trustee notice that an Event of
Default is continuing;

     (2) Holders of at least 25% in principal amount of the outstanding Notes
have requested the Trustee in writing to pursue the remedy;

     (3) such Holders have offered the Trustee reasonable security or
indemnity against any loss, liability or expense;

     (4) the Trustee has not complied with such request within 60 days after
the receipt of the request and the offer of security or indemnity, and

     (5) the Holders of a majority in principal amount of the outstanding
Notes have not given the Trustee a direction inconsistent with such request
within such 60-day period.

     (b) A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over another Holder.

          SECTION 6.07 Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive payment of
principal of and interest, including Additional Interest, if any, on the Notes held
by such Holder, on or after the respective due dates expressed or provided for in
the Notes, or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.

          SECTION
6.08 Collection Suit by Trustee. If an Event of Default specified
in Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover judgment
in its own name and as trustee of an express trust against the Company or any other
obligor on the Notes for the whole amount then due and owing (together with interest
on overdue principal and (to the extent lawful) on any unpaid interest at the rate
provided for in the Notes) and the amounts provided for in Section 7.07.

          SECTION 6.09 Trustee May File Proofs of Claim. The Trustee may
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Holders allowed in any
judicial proceedings relative to the Company, any Subsidiary or Guarantor, their
creditors or their property and, unless prohibited by law or applicable regulations,
may vote on behalf of the Holders in any election of a trustee in bankruptcy or
other Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee and,
in the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and
its counsel, and any other amounts due the Trustee under Section 7.07.

          SECTION 6.10 Priorities. If the Trustee collects any money or property
pursuant to this Article 6, it shall pay out the money or property in the following
order:

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    FIRST: to the Trustee for amounts due under Section 7.07;

    SECOND: to Holders for amounts due and unpaid on the Notes for principal and
interest, ratably, and Additional Interest, if any, without preference or priority of any
kind, according to the amounts due and payable on the Notes for principal and interest,
including Additional Interest, if any, respectively; and

    THIRD: to the Company.

          The Trustee may fix a record date and payment date for any payment to Holders pursuant to this
Section 6.10.

          At least 15 days before such record date, the Trustee shall mail to each Holder and the
Company a notice that states the record date, the payment date and amount to be paid.

          SECTION 6.11 Undertaking for Costs. In any suit for the enforcement of any right
or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted
by it as Trustee, a court in its discretion may require the filing by any party litigant in the
suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess
reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to
Section 6.07 or a suit by Holders of more than 10% in principal amount of the Notes.

ARTICLE VII

TRUSTEE

          SECTION 7.01 Duties of Trustee. (a) If an Event of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use
the same degree of care and skill in their exercise as a prudent person would exercise or use under
the circumstances in the conduct of such person’s own affairs.

     (b) Except during the continuance of an Event of Default:

     (i) the Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and

     (ii) in the absence of bad faith on its part, the Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this Indenture.

     (c) The Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:

     (i) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;

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     (ii) the Trustee shall not be liable for any error of judgment made in good
faith by a Trust Officer unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and

     (in) the Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to Section
6.05.

     (iv) No provision of this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers, if it shall have reasonable
grounds to believe that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.

          (d) Every provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section 7.01.

          (e) The Trustee shall not be liable for interest on any money received by it except as the
Trustee may agree in writing with the Company.

          (f) Money held in trust by the Trustee need not be segregated from other funds except to the
extent required by law.

          (g) Every provision of this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this Section and to the
provisions of the TIA.

          SECTION 7.02 Rights of Trustee. (a) The Trustee may rely on any document believed
by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.

          (b) Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate
or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on the Officer’s Certificate or Opinion of Counsel.

          (c) The Trustee may act through agents and shall not be responsible for the misconduct or
negligence of any agent appointed with due care.

          (d) The Trustee shall not be liable for any action it takes or omits to take in good faith
which it believes to be authorized or within its rights or powers; provided, however, that the
Trustee’s conduct does not constitute willful misconduct or negligence.

          (e) The Trustee may consult with counsel, and the written advice or opinion of counsel with
respect to legal matters relating to this Indenture and the Notes shall be full and complete
authorization and protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such counsel.

          (f) The Trustee shall not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, debenture, note or other paper or document unless requested in writing to do
so by the Holders of not less than a majority in principal amount of the Notes at the time
outstanding, but the Trustee,

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 in its discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney.

          (g) Except with respect to Section 4.01, the Trustee shall have no duty to inquire as
to the performance of the Company with respect to the covenants contained in Article 4. In
addition, the Trustee shall not be deemed to have knowledge of an Event of Default except (t) any
Default or Event of Default occurring pursuant to Sections 4.01, 6.01 (1) or 6.01 (2) or (ii) any
Default or Event of Default of which the Trustee shall have received written notification or
obtained actual knowledge.

          (h) Delivery of reports, information and documents to the Trustee under Section 4.02 is
for informational purposes only and the Trustee’s receipt of the foregoing shall not constitute
constructive notice of any information contained therein or determinable from information contained
therein, including the Company’s compliance with any of their covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officer’s Certificates).

          SECTION 7.03 Individual Rights of Trustee. The Trustee in its individual or any
other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or
their respective Affiliates with the same rights it would have if it were not Trustee. However, if
the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days or
apply to the Commission for permission to continue as Trustee (if this Indenture has been qualified
under the TIA) or resign. Any Paying Agent, Registrar or co-paying agent may do the same with like
rights. However, the Trustee must comply with Sections 7.10 and 7.11.

          SECTION
7.04 Trustee’s Disclaimer. The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture, any Note Guarantee or the Notes,
it shall not be accountable for the Company’s use of the proceeds from the Notes, and it shall not
be responsible for any statement of the Company or any Guarantor in this Indenture or in any
document issued in connection with the sale of the Notes or in the Notes other than the Trustee’s
certificate of authentication. The Trustee shall not be charged with knowledge of any Default or
Event of Default under Section 6.01(3), (4), (5), (6), (9) or (10) or of the identity of any
Significant Subsidiary unless either (a) a Trust Officer shall have actual knowledge thereof or (b)
the Trustee shall have received notice thereof in accordance with Section 12.02 hereof from the
Company, any Guarantor or any Holder.

          SECTION
7.05 Notice of Defaults. If a Default occurs and is continuing and is known to
the Trustee, the Trustee shall mail to each Holder notice of the Default within the earlier of 90
days after it occurs or 30 days after it is known to a Trust Officer or written notice of it is
received by the Trustee. Except in the case of a Default in the payment of principal of. premium
(if any) or interest on any Note (including payments pursuant to the redemption provisions of such
Note), the Trustee may withhold notice if and so long as a committee of its Trust Officers in good
faith determines that withholding notice is in the interests of the Holders.

          SECTION 7.06 Reports by Trustee to Holders. As promptly as practicable after each
May 15 beginning with May 15, 2006, the Trustee shall mail to each Holder a brief report dated as
of such May 15 that complies with Section 313(a) of the TIA if and to the extent required thereby.
The Trustee shall also comply with Section 313(b) of the TIA. The Trustee also will comply with TIA
§ 313(c). A copy of each report at the time of its mailing to Holders shall be filed with the
Commission and each stock exchange (if any) on which the Notes are listed. The Company agree to
notify promptly the Trustee whenever the Notes become listed on any
stock exchange and of any
delisting thereof.

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          SECTION
7.07 Compensation and Indemnity. The Company shall pay to the Trustee from
time to time reasonable compensation for its services hereunder as the Company and the Trustee
shall from time to time agree in writing. The Trustee’s compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services. Such expenses shall include the
reasonable compensation and expenses, disbursements and advances of the Trustee’s agents, counsel,
accountants and experts. Each of the Company and each Guarantor, jointly and severally shall
indemnify the Trustee against any and all loss, liability or expense (including reasonable
attorneys’ fees) incurred by or in connection with the administration of this trust and the
performance of its duties hereunder. The Trustee shall notify the Company of any claim for which it
may seek indemnity promptly upon obtaining actual knowledge thereof; provided, however, that any
failure so to notify the Company shall not relieve the Company or any Guarantor of its indemnity
obligations hereunder. The Company shall defend the claim and the Trustee shall provide reasonable
cooperation at the Company’s expense in the defense. The Trustee may have separate counsel and the
Company and the Guarantors, as applicable, shall pay the fees and expenses of such counsel;
provided, however, that the Company and the Guarantors shall not be required to pay such fees and
expenses if it assumes the Trustee’s defense and, in the reasonable judgment of the Trustee’s
outside counsel, there is no conflict of interest between the Company and the Guarantors, on the
one hand, and the Trustee, on the other hand, in connection with such defense. The Company need not
reimburse any expense or indemnify against any loss, liability or expense incurred by the Trustee
through its own willful misconduct, negligence or bad faith. To secure the Company’s payment
obligations in this Section 7.07, the Trustee shall have a lien prior to the Notes on all money or
property held or collected by the Trustee other than money or property held in trust to pay
principal of and interest and Additional Interest, if any, on particular Notes; provided, however,
that the foregoing exception shall in no way alter the priorities set forth in Section 6.10. The
Company’s payment obligations pursuant to this Section 7.07 shall survive the satisfaction or
discharge of this Indenture, any rejection or termination of this Indenture under any bankruptcy
law or the resignation or removal of the Trustee. Without prejudice to any other rights available
to the Trustee under applicable law, when the Trustee incurs expenses after the occurrence of a
Default specified in Section 6.01(7) or (8), the expenses arc intended to constitute expenses of
administration under the Bankruptcy Law.

          SECTION 7.08 Replacement of Trustee. (a) The Trustee may resign at any time by so
notifying the Company. The Holders of a majority in principal amount of the Notes may remove the
Trustee by so notifying the Trustee and may appoint a successor Trustee. The Company shall remove
the Trustee if:

     (1) the Trustee fails to comply with Section 7.10;

     (2) the Trustee is adjudged bankrupt or insolvent;

     (3) a receiver or other public officer takes charge of the Trustee or its property;
or

     (4) the Trustee otherwise becomes incapable of acting.

           (b) If the Trustee resigns, is removed by the Company or by the Holders of a majority
in principal amount of the Notes and such Holders do not reasonably promptly appoint a successor
Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event
being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.

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          (c) A successor Trustee shall deliver a written acceptance of its appointment to the
retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee
shall become effective, and the successor Trustee shall have all the rights, powers and duties of
the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to
Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided for in Section 7.07.

          (d) If a successor Trustee does not take office within 60 days after the retiring Trustee
resigns or is removed, the retiring Trustee or the Holders of 10% in principal amount of the Notes
may petition any court of competent jurisdiction for the appointment of a successor Trustee.

          (e) If the Trustee fails to comply with Section 7.10, unless the Trustee’s duty to resign is
stayed as provided in TIA Section 310(b), any Holder who has been a bona fide holder of a Note for
at least six months may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.

          (f) Notwithstanding the replacement of the Trustee pursuant to this Section, the
Company’s obligations under Section 7.07 shall continue for the benefit of the retiring
Trustee.

          SECTION 7.09 Successor Trustee by Merger. If the Trustee consolidates with,
merges or converts into, or transfers all or substantially all its corporate trust business or
assets to, another corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Trustee. In case at the time such
successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the
trusts created by this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of any predecessor
trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall
not have been authenticated, any successor to the Trustee may authenticate such Notes either in the
name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such
cases such certificates shall have the full force which it is anywhere in the Notes or in this
Indenture provided that the certificate of the Trustee shall have.

          SECTION 7.10 Eligibility; Disqualification. The Trustee shall at all times
satisfy the requirements of TIA Section 310(a). The Trustee shall have a combined capital and
surplus of at least $100,000,000 as set forth in its most recent published annual report of
condition. The Trustee shall comply with TIA Section 310(b), subject to its right to apply for a
stay of its duty to resign under the penultimate paragraph of TIA Section 310(b); provided,
however, that there shall be excluded from the operation of TIA
Section 310(b)(1) any indenture or
indentures under which other securities or certificates of interest or participation in other
securities of the Company are outstanding if the requirements for such exclusion set forth in TIA
Section 310(b)(1) are met.

          SECTION 7.11 Preferential Collection of Claims Against the Company. The Trustee
shall comply with TIA Section 31l(a), excluding any creditor relationship listed in TIA Section
311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 31l(a) to the
extent indicated.

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ARTICLE VIII

DISCHARGE OF INDENTURE; DEFEASANCE

     SECTION
8.01 Discharge of Liability on Notes; Defeasance. (a) Subject to
Section 8.01(c), when (1) all outstanding Notes (other than Notes replaced or paid
pursuant to Section 2.08) have been canceled or delivered to the Trustee for
cancellation or (2) all outstanding Notes not previously delivered for cancellation
have become due and payable, whether at maturity or as a result of the mailing of a
notice of redemption pursuant to Article 3 hereof, and the Company irrevocably
deposit with the Trustee funds in an amount sufficient or U.S. Government Obligations,
the principal of and interest on which will be sufficient, or a combination thereof
sufficient, in the written opinion of a nationally recognized firm of independent
public accountants delivered to the Trustee (which delivery shall only be required if
U.S. Government Obligations have been so deposited) to pay the principal of and
interest on the outstanding Notes when due at maturity or upon redemption of,
including interest thereon to maturity or such redemption date (other than Notes
replaced or paid pursuant to Section 2.08) and Additional Interest, if any, and if in
either case the Company pays all other sums payable hereunder by the Company, then
this Indenture shall, subject to Section 8.01 (c), cease to be of further effect. The
Trustee shall acknowledge satisfaction and discharge of this Indenture on demand of
the Company accompanied by an Officer’s Certificate and an Opinion of Counsel and at
the cost and expense of the Company.

     (b) Subject to Sections 8.01(c) and 8.02, the Company at any time may terminate
(1) all of its and the Guarantors’ obligations under the Notes and this Indenture
(“legal defeasance option”) and (2) their obligations under Sections 4.02 through
4.16 and the operation of Section 5.01(a)(2) or (3), 6.01(4), 6.01(5), 6.01(6),
6.01(7) (with respect to Restricted Subsidiaries that are Significant Subsidiaries of
the Company only), 6.01(8) (with respect to Restricted Subsidiaries that are
Significant Subsidiaries of the Company only), 6.01(9) (“covenant defeasance option”)
and the Security Documents with respect to the Notes. The Company may exercise its
legal defeasance option notwithstanding their prior exercise of their covenant
defeasance option. In the event that the Company terminates all of its obligations
under the Notes and this Indenture by exercising its legal defeasance option, the
obligations under the Note Guarantees shall each be terminated simultaneously with
the termination of such obligations.

     If the Company exercises its legal defeasance option, payment of the Notes may
not be accelerated because of an Event of Default. If the Company exercise their
covenant defeasance option, payment of the Notes may not be accelerated because of
an Event of Default specified in Section 6.01(4), 6.01(5), 6.01(6), 6.01(7) (with
respect to Restricted Subsidiaries that are Significant Subsidiaries of the Company
only), 6.01(8) (with respect to Restricted Subsidiaries that are Significant
Subsidiaries of the Company only) or 6.01 (9) or because of the failure of the
Company to comply with Section 5.01(a)(2) or (3).

     Upon
satisfaction of the conditions set forth herein and upon request of the
Company, the Trustee shall acknowledge in writing the discharge of those obligations
that the Company terminate.

     (c) Notwithstanding the provisions of Sections 8.01 (a) and 8.01(b), the
Company’s obligations in Sections 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 7.07, 7.08 and
in this Article 8 shall survive until the Notes have been paid in full. Thereafter,
the Company’s obligations in Sections 7.07, 8.04 and 8.05 shall survive.

     SECTION
8.02 Conditions to Defeasance. (a) The Company may
exercise its legal defeasance option or their covenant defeasance option only if:

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     (1) the Company irrevocably deposits in trust with the Trustee money in an amount
sufficient or U.S. Government Obligations, the principal of and interest on which will be
sufficient, or a combination thereof sufficient, to pay the principal, premium (if any) and
interest on the Notes when due at maturity or redemption, as the case may be, including
interest thereon to maturity or such redemption date and Additional Interest, if any;

     (2) nationally recognized investment bank, appraisal firm or firm of independent accountants expressing their opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus any deposited money
without investment will provide cash at such times and in such amounts as will be sufficient
to pay principal and interest when due on all the Notes to maturity or redemption, as the
case may be;

     (3) 91 days pass after the deposit is made and during the 91-day period no Default
specified in Section 6.01(7) or (8) occurs which is continuing at the end of the period;

     (4) the deposit does not constitute a default under any other agreement binding on the
Company;

     (5) the Company delivers to the Trustee an Opinion of Counsel to the effect that the
trust resulting from the deposit does not constitute, or is qualified as, a regulated
investment company under the Investment Company Act of 1940;

     (6) in the case of the legal defeasance option, the Company shall have delivered to the
Trustee an Opinion of Counsel, subject to customary assumptions and exclusions, stating that
(1) the Company has received from, or there has been published by, the Internal Revenue
Service a ruling, or (2) since the date of this Indenture there has been a change in the
applicable Federal income tax law, in either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders will not recognize income, gain or loss
for Federal income tax purposes as a result of such defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same times as would
have been the case if such defeasance had not occurred;

     (7) in the case of the covenant defeasance option, the Company shall have delivered to
the Trustee an Opinion of Counsel, subject to customary assumptions and exclusions, to the
effect that the Holders will not recognize income, gain or loss for Federal income tax
purposes as a result of such covenant defeasance and will be subject to Federal income tax
on the same amounts, in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred; and

     (8) the Company delivers to the Trustee an Officer’s Certificate and an Opinion of
Counsel, each stating that all conditions precedent to the defeasance and discharge of the
Notes as contemplated by this Article 8 have been satisfied.

     (b) Before or after a deposit, the Company may make arrangements satisfactory to the
Trustee for the redemption of Notes at a future date in the Company deliver to the Trustee a
certificate from a accordance with Article 3.

          SECTION 8.03 Application of Trust Money. The Trustee shall hold in trust money or
U.S. Government Obligations deposited with it pursuant to this Article 8. It shall apply the
deposited

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money and the money from U.S. Government Obligations through the Paying Agent and in accordance
with this Indenture to the payment of principal of and interest on the Notes.

          SECTION 8.04 Repayment to the Company. The Trustee and the Paying Agent shall promptly
turn over to the Company upon request any money or U.S. Government Obligations held by it as
provided in this Article 8 which, in the written opinion of nationally recognized firm of
independent public accountants delivered to the Trustee (which delivery shall only be required if
U.S. Government Obligations have been so deposited), are in excess of the amount thereof which
would then be required to be deposited to effect an equivalent discharge or defeasance in
accordance with this Article 8. Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Company upon written request any money held by them for the
payment of principal or interest that remains unclaimed for two years, and, thereafter, Holders
entitled to the money must look to the Company for payment as general creditors and the Trustee,
and the Paying Agent shall have no further liability with respect to such monies.

          SECTION 8.05 Indemnity for Government Obligations. The Company shall pay and
shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against
deposited U.S. Government Obligations or the principal and interest received on such U.S.
Government Obligations.

          SECTION 8.06 Reinstatement. If the Trustee or Paying Agent is unable to apply any
money or U.S. Government Obligations in accordance with Section 8.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company’s and the Guarantors’
obligations under this Indenture and the Notes and the Note Guarantees shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.01 until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in
accordance with Section 8.01; , provided, however, that, if the Company have made any payment of
interest on or principal of any Notes because of the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Notes to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.

ARTICLE IX

AMENDMENTS

          SECTION 9.01 Without Consent of Holders. (a) The Company, the Guarantors and the
Trustee may amend or supplement this Indenture, the Notes, the Note Guarantees or the Security
Documents without notice to or consent of any Holder:

     (1) to cure any ambiguity, omission, defect or inconsistency;

     (2) to comply with Article 5;

     (3) to provide for uncertificated Notes in addition to or in place of certificated
Notes; provided, however, that the uncertificated Notes are issued in registered form for
purposes of Section 163(1) of the Code or in a manner such that the uncertificated Notes are
described in Section 163(f)(2)(B) of the Code;

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     (4) to add Guarantees with respect to the Notes, including any Note Guarantees,
or provide for additional security;

     (5) to add to the covenants of the Company for the benefit of the Holders or to
surrender any right or power herein conferred upon the Company;

     (6) to make any change that does not adversely affect the rights of any Holder;

     (7) to provide for the issuance of the Exchange Notes or Additional Notes, which shall
have terms substantially identical in all material respects to the Original Notes (except
that the transfer restrictions contained in the Original Notes shall be modified or
eliminated, as appropriate), and which shall be treated, together with any outstanding
Original Notes, as a single issue of securities;

     (8) to comply with any requirement of the Commission in connection with qualifying, or
maintaining the qualification of, this Indenture under the TIA; or

     (9) if necessary, in connection with any addition or release of Obligor Collateral
permitted under the terms of this Indenture or Security Documents.

          In addition, without the consent of any Holder, any amendment, waiver or consent agreed to by
the Credit Agent or the holders of Credit Agreement Obligations under any provision of any of the
security documents granting the first-priority lien on any Collateral to secure the Credit
Agreement Obligations shall automatically apply to the comparable provision of this Indenture and
the comparable Security Document entered into in connection with the Notes; provided that (A) no
such amendment, waiver or consent shall have the effect of removing assets subject to the lien of
the Security Documents, except to the extent that a release of such lien is permitted by the terms
of the Intercreditor Agreement and (B) no such amendment, waiver or consent shall materially and
adversely affect the Holders of the Notes without the consent of the Trustee (acting at the
direction of the Holders of a majority of the aggregate principal amount of the Notes). The Company
shall also be entitled to other releases of the Collateral or the Note Guarantees as described in
Sections 10.03 and 11.03 hereof. If the Company wishes under other circumstances to obtain an
amendment or waiver or seek a consent under any Security Document or Note Guarantee, the Company
may mail written notice of their request to the Trustee and the Holders, specifying the amendment,
waiver or consent, the reason it is being sought and any other information requested for the
Holders to reasonably consider such matter. If the Company does not receive written objections from
Holders of at least 25% in aggregate principal amount of the Notes within 20 Business Days after
such mailing, such amendment, waiver or consent shall be deemed granted. If the Company receives
such objections, then they shall not be entitled to effect such amendment or waiver, and such
consent shall not be effective, unless the Company obtains the consent of the Holders of a majority
in outstanding principal amount of the Notes (including any Additional Notes) then outstanding
voting as a single class (including consents obtained in connection with a tender offer or exchange
offer for, or purchase of, the Notes).

          (b) After an amendment under this Section becomes effective, the Company shall mail to
Holders a notice briefly describing such amendment. The failure to give such notice to all Holders,
or any defect therein, shall not impair or affect the validity of an amendment under this Section
9.01.

          SECTION
9.02 With Consent of Holders. (a) The Company, the Guarantors and the
Trustee may amend this Indenture, the Notes, the Note Guarantees or the Security Documents without
notice to any Holder but with the written consent of the Holders of at least a majority in
principal amount

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of the Notes then outstanding (including consents obtained in connection with a tender offer
or exchange for the Notes). However, without the consent of each Holder affected, an amendment may
not:

     (1) reduce the amount of Notes whose Holders must consent to an amendment;

     (2) reduce the rate of or extend the time for payment of interest or any Additional
Interest on any Note;

     (3) reduce the principal of or extend the Stated Maturity of any Note;

     (4) reduce the premium payable upon the redemption of any Note or change the time at
which any Note may be redeemed in accordance with Article 3;

     (5) make any Note payable in money other than that stated in the Note;

     (6)
impair the right of any Holder to receive payment or principal of, and interest,
including Additional Interest, on, such Holder’s Notes on or after the due dates therefor or
to institute suit for the enforcement of any payment on or with respect to such Holder’s
Notes;

     (7) make any change in Section 6.04 or 6.07 or the second sentence of this Section
9.02; or

     (8) modify the Note Guarantees in any manner adverse to the Holders.

          (b) In addition, without the consent of the Holders of at least 80% in principal amount of the
Notes then outstanding, (x) no amendment may release from the Lien of this Indenture or the Notes
and the Security Documents all or substantially all of the Collateral otherwise than in accordance
with the terms of such Security Documents and (y) no amendment to, or waiver of, the provisions of
this Indenture or the Security Documents may alter the priority of the Lien securing the Collateral
in any manner that adversely affects the rights of Holders of the Notes.

          (c) It shall not be necessary for the consent of the Holders under this Section 9.02 to
approve the particular form of any proposed amendment, but it shall be sufficient if such consent
approves the substance thereof. After an amendment under this Section 9.02 becomes effective, the
Company shall mail to Holders a notice briefly describing such amendment. The failure to give such
notice to all Holders, or any defect therein, shall not impair or affect the validity of an
amendment under this Section 9.02.

          SECTION
9.03 Compliance with Trust Indenture Act. Every amendment to this
Indenture or the Notes shall comply with the TIA as then in effect.

          SECTION
9.04 Revocation and Effect of Consents and Waivers. (a) A consent to an
amendment or a waiver by a Holder of a Note shall bind the Holder and every subsequent Holder of
that Note or portion of the Note that evidences the same debt as the consenting Holder’s Note, even
if notation of the consent or waiver is not made on the Note. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder’s Note or portion of the Note
if the Trustee receives the notice of revocation before the date on which the Trustee receives an
Officer’s Certificate from the Company certifying that the requisite number of consents have been
received. After an amendment or waiver becomes effective, it shall bind every Holder. An amendment
or waiver becomes effective upon the (1) receipt by the Company or the Trustee of the requisite
number of consents, (2) satisfaction of conditions

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 to effectiveness as set forth in this Indenture and any indenture supplemental hereto
containing such amendment or waiver and (3) execution of such amendment or waiver (or
supplemental indenture) by the Company and the Trustee.

          (b) The Company may, but shall not be obligated to, fix a record date for the purpose
of determining the Holders entitled to give their consent or take any other action described above
or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be entitled to give such
consent or to revoke any consent previously given or to take any such action, whether or not such
Persons continue to be Holders after such record date. No such consent shall be valid or effective
for more than 120 days after such record date.

          SECTION
9.05 Notation on or Exchange of Notes. If an amendment changes the terms
of a Note, the Trustee may require the Holder of the Note to deliver it to the Trustee. The Trustee
may place an appropriate notation on the Note regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the
Note shall issue and the Trustee shall authenticate a new Note that reflects the changed terms.
Failure to make the appropriate notation or to issue a new Note shall not affect the validity of
such amendment.

          SECTION
9.06 Trustee To Sign Amendments. The Trustee shall sign any amendment authorized pursuant to this Article 9 if the amendment does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not
sign it and in signing such amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 7.01) shall be fully protected in
relying upon, an Officer’s Certificate and an Opinion of Counsel stating that such amendment is
authorized or permitted by this Indenture and that such amendment is the legal, valid and binding
obligation of the Company and the Guarantors enforceable against them in accordance with its terms,
subject to customary exceptions, and complies with the provisions hereof (including Section 9.03).

          SECTION
9.07 Payment for Consent. Neither the Company nor any Affiliate of the Company
shall, directly or indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder for or as an inducement to any consent, waiver or
amendment of any of the terms or provisions of this Indenture or the Notes unless such
consideration is offered to be paid to all Holders that so consent, waive or agree to amend in the
time frame set forth in solicitation documents relating to such consent, waiver or agreement.

ARTICLE X

COLLATERAL AND SECURITY

          SECTION
10.01 Security Documents. The due and punctual payment of the principal of
and interest and Additional Interest, if any, on the Notes when and as the same shall be due and
payable, whether on an interest payment date, at maturity, by acceleration, repurchase, redemption
or otherwise, and interest on the overdue principal of and interest and Additional Interest, if
any, on the Notes and performance of all other obligations of the Company to the Holders or the
Trustee under this Indenture and the Notes, according to the terms hereunder or thereunder, are
secured as provided in the Security Documents which the Company and the applicable Guarantors have
entered into simultaneously with the execution of this Indenture, subject to the terms of the
Intercreditor Agreement. Each Holder, by its acceptance thereof, consents and agrees to the terms
of the Security Documents (including the provisions

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providing for foreclosure and release of Collateral) as the same may be in effect or
may be amended from time to time in accordance with its terms and authorizes and
directs the Collateral Agent to enter into the Security Documents and to perform its
obligations and exercise its rights thereunder in accordance therewith. The Company
shall deliver to the Trustee (if it is not itself then the Collateral Agent) copies
of all documents delivered to the Collateral Agent pursuant to the Security
Documents, and will do or cause to be done all such acts and things as may be
required by the next sentence of this Section 10.01, to assure and confirm to the
Trustee and the Collateral Agent the security interest in the Collateral contemplated
hereby, by the Security Documents or any part thereof, as from time to time
constituted, so as to render the same available for the security and benefit of this
Indenture and of the Notes secured hereby, according to the intent and purposes
herein expressed. Subject to Section 4.11, the Company shall take, and shall cause
their Restricted Subsidiaries to take, any and all actions reasonably required to
cause the Security Documents to create and maintain, as security for the Obligations
of the Company and the Guarantors hereunder, a valid and enforceable perfected
second-priority Lien and security interest in and on all the Collateral, in favor of
the Collateral Agent for the benefit of the Holders, second in priority (subject to
Permitted Liens) to any and all security interests at any time granted in the
Collateral to secure Credit Agreement Obligations.

     SECTION
10.02 Recording and Opinions. (a) The Company will comply with the
provisions of TIA §§ 314(b) and 314(d), in each case following qualification of this
Indenture pursuant to the TIA and except to the extent not required as set forth in
any Commission regulation or interpretation (including any no-action letter issued by
the Staff of the Commission, whether issued to the Company or any other Person).
Following such qualification, to the extent the Company is required to furnish to the
Trustee an Opinion of Counsel pursuant to TIA § 314(b)(2), the Company will furnish
such opinion not more than 60 but not less than 30 days prior to
each April 1,
beginning April 1, 2006. Any release of Collateral permitted by Section 10.03 hereof,
the Security Documents or the Intercreditor Agreement will be deemed not to impair
the Liens under the Indenture and the Security Documents in contravention thereof and
any Person that is required to deliver an Officer’s Certificate or Opinion of Counsel
pursuant to Section 314(d) of the TIA, shall be entitled to rely upon the foregoing
as a basis for delivery of such certificate or opinion. The Trustee may, to the
extent permitted by Sections 7.01 and 7.02 hereof, accept as conclusive evidence of
compliance with the foregoing provisions the appropriate statements contained in such
documents and Opinion of Counsel.

     (b) If any Collateral is released in accordance with this Indenture or
any Security Document at a time when the Trustee is not itself also the Collateral
Agent and if the Company has delivered the certificates and documents required by
the Security Documents and Section 10.03, the Trustee will determine whether it has
received all documentation required by TIA § 314(d) in connection with such release
and, based on such determination and the Opinion of Counsel delivered pursuant to
this Section 10.02, will, upon request, deliver a certificate to the Collateral
Agent setting forth such determination.

     SECTION
10.03 Release of Collateral. (a) Subject to subsections (b), (c)
and (d) of this Section 10.03, Collateral may be released from the Lien and security
interest created by the Security Documents at any time or from time to time in
accordance with the provisions of the Security Documents, the Intercreditor
Agreement, or as provided hereby. Whether prior to or after the Discharge of Credit
Agreement Obligations, upon the request of the Company pursuant to an Officer’s
Certificate certifying that all conditions precedent hereunder have been met and
without the consent of any Holder, the Company and the Guarantors will be entitled
to releases of assets included in the Collateral from the Liens securing the Notes
under any one or more of the following circumstances:

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     (1) [Reserved];

     (2) to enable the Company or any Restricted Subsidiary to consummate any Asset
Disposition permitted or not prohibited under Section 4.06 hereof other than pursuant to an
Asset Disposition to the Company or any Restricted Subsidiary;

     (3) if the Company provides substitute collateral with at least an equivalent fair
value, as determined in good faith by the Board of Directors;

     (4) if all of the stock of any Subsidiary of the Company that is pledged to the
Collateral Agent is released or if any Subsidiary that is a Note Guarantor is released from
its Note Guarantee, such Subsidiary’s assets will also be released;

     (5) in respect of assets included in the Collateral with a fair value, as determined in
good faith by the Board of Directors, of up to $2.0 million in any calendar year, subject to
a cumulative carryover for any amount not used in any prior calendar
year; or

     (6) pursuant to an amendment, waiver or supplement in accordance with Article 9 hereof.

          Upon receipt of such Officer’s Certificate, the Collateral Agent shall execute, deliver
or acknowledge any necessary or proper instruments of termination, satisfaction or release to
evidence the release of any Collateral permitted to be released pursuant to this Indenture or
the Security Documents.

          (b) Except as otherwise provided in the Intercreditor Agreement or the Security Documents, no
Collateral may be released from the Lien and security interest created by the Security Documents
pursuant to the provisions of the Security Documents unless the Officer’s Certificate required by
this Section 10.03 has been delivered to the Collateral Agent.

          (c) At any time when a Default or Event of Default has occurred and is continuing and the
maturity of the Notes has been accelerated (whether by declaration or otherwise) and the Trustee
has delivered a notice of acceleration to the Collateral Agent, no release of Collateral pursuant
to the provisions of the Security Documents will be effective as against the Holders, except as
otherwise provided in the Intercreditor Agreement.

          (d) The release of any Collateral from the terms of this Indenture and the Security Documents
shall not be deemed to impair the security under this Indenture in contravention of the provisions
hereof if and to the extent the Collateral is released pursuant to the terms of the Security
Documents and this Indenture. Any certificate or opinion required by TIA Section 314(d) may be made
by an Officer of the Company except in cases where TIA Section 314(d) requires that such
certificate or opinion be made by an independent Person, which Person will be an independent
engineer, appraiser or other expert selected or approved by the Trustee and the Collateral Agent in
the exercise of reasonable care.

          SECTION
10.04 [Reserved].

          SECTION
10.05 Certificates of the Trustee. In the event that the Company wishes to release
Collateral in accordance with the Security Documents at a time when the Trustee is not itself also
the Collateral Agent and has delivered the certificates and documents required by the Security
Documents and Sections 10.02 and 10.03 hereof, the Trustee will determine whether it has received
all documentation required by TIA Section 314(d) in connection with such release and, based on such
determination and the

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Opinion of Counsel delivered pursuant to Section 10.02, will deliver a
certificate to the Collateral Agent setting forth such determination.

          SECTION 10.06 Authorization of Actions To Be Taken by the Trustee Under
the Security Documents. Subject to the provisions of Sections 7.01 and 7.02
hereof and the Intercreditor Agreement, the Trustee may, in its sole discretion and
without the consent of the Holders, direct, on behalf of the Holders, the Collateral
Agent to, take all actions it deems necessary or appropriate in order to:

     (a) enforce any of the terms of the Security Documents; and

     (b) collect and receive any and all amounts payable in respect of the
Obligations of the Company hereunder. Subject to the Intercreditor Agreement,
the Trustee will have power to institute and maintain such suits and
proceedings as it may deem expedient to prevent any impairment of the
Collateral by any acts that may be unlawful or in violation of the Security
Documents or this Indenture, and such suits and proceedings as the Trustee may
deem expedient to preserve or protect its interests and the interests of the
Holders in the Collateral (including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative
or other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the security interest hereunder or be prejudicial
to the interests of the Holders or of the Trustee).

          SECTION 10.07 Authorization of Receipt of Funds by the Trustee Under the
Security Documents. The Trustee is authorized to receive any funds for the
benefit of the Holders distributed under the Security Documents, and to make further
distributions of such funds to the Holders according to the provisions of this
Indenture.

          SECTION
10.08 Termination of Security Interest. The Trustee will, at
the request of the Company, deliver a certificate to the Collateral Agent stating
that such Obligations have been paid in full, and instruct the Collateral Agent to
release the Liens pursuant to this Indenture and the Security Documents upon (1)
payment in full of the principal of, accrued and unpaid interest and Additional
Interest, if any, on the Notes and all other Obligations under this Indenture, the
Note Guarantees and the Security Documents that are due and payable at or prior to
the time such principal, accrued and unpaid interest and Additional Interest, if
any, are paid, (2) a satisfaction and discharge of this Indenture as described in
Article 8 or (3) a legal defeasance or covenant defeasance as described in Article
8. Upon receipt of such instruction, the Collateral Agent shall execute, deliver or
acknowledge any necessary or proper instruments of termination, satisfaction or
release to evidence the release of all such Liens.

          SECTION
10.09 Collateral Agent. (a) The Trustee shall act as Collateral
Agent and shall be authorized to appoint co-Collateral Agents as necessary in its
sole discretion. Except as otherwise explicitly provided herein or in the Security
Documents, neither the Collateral Agent nor any of its respective officers,
directors, employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall be under
any obligation to sell or otherwise dispose of any Collateral upon the request of
any other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The Collateral Agent shall be accountable only for
amounts that it actually receives as a result of the exercise of such powers, and
neither the Collateral Agent nor any of its officers, directors, employees or agents
shall be responsible for any act or failure to act hereunder, except for its own
willful misconduct, negligence or bad faith.

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          (b) The Trustee, as Collateral Agent, is authorized and directed to (1) enter into the
Security Documents, (2) enter into the Intercreditor Agreement, (3) bind the Holders on the terms
as set forth in the Security Documents and the Intercreditor Agreement and (4) perform and observe
its obligations under the Security Documents and the Intercreditor Agreement.

          (c) If the Company (1) incurs Indebtedness constituting Credit Agreement Obligations at any
time when no Intercreditor Agreement is in effect or at any time when Indebtedness constituting
Credit Agreement Obligations entitled to the benefit of an existing Intercreditor Agreement is
concurrently retired, and (2) delivers to the Collateral Agent an Officer’s Certificate so stating
and requesting the Collateral Agent to enter into an Intercreditor Agreement in favor of a
designated agent or representative for the holders of the Indebtedness so incurred, the Collateral
Agent shall (and is hereby authorized and directed to) enter into such Intel-creditor Agreement,
bind the Holders on the terms set forth therein, and perform and observe its obligations
thereunder.

          SECTION 10.10 Designations. For purposes of the provisions hereof and the Intercreditor
Agreement requiring the Company to designate Indebtedness for the purposes of the term “Credit
Agreement Obligations”, “First-Lien Credit Facilities” or any other such designations hereunder or
under the Intercreditor Agreement, any such designation shall be sufficient if the relevant
designation is set forth in writing, signed on behalf of the Company by an Officer and delivered to
the Trustee, the Collateral Agent and the Credit Agent. For all purposes hereof and the
Intercreditor Agreement, the Company hereby designates the Credit Facilities provided pursuant to
the Credit Agreement as the “First-Lien Credit Agreement” and any Obligations in respect of the
Credit Agreement as “Credit Agreement Obligations”.

ARTICLE XI

NOTE GUARANTEES

          SECTION
11.01 Note Guarantees. (a) Each Guarantor hereby jointly and severally
irrevocably and unconditionally Guarantees, as a primary obligor and not merely as a surety, to
each Holder and to the Trustee and its successors and assigns the full and punctual payment when
due, whether at Stated Maturity, by acceleration, by redemption or otherwise, of all obligations of
the Company under this Indenture (including obligations to the Trustee) and the Notes, whether for
payment of principal of, interest on or Additional Interest, if any, in respect of the Notes and
all other monetary obligations of the Company under this Indenture and the Notes, whether for fees,
expenses, indemnification or otherwise (all the foregoing being hereinafter collectively called the
“Guaranteed Obligations”). Each Guarantor further agrees that the Guaranteed Obligations may be
extended or renewed, in whole or in part, without notice or further assent from each such
Guarantor, and that each such Guarantor shall remain bound under this Article 11 notwithstanding
any extension or renewal of any Guaranteed Obligation.

          (b) Each Guarantor waives presentation to, demand of payment from and protest to the
Company of any of the Guaranteed Obligations and also waives notice of protest for nonpayment. Each
Guarantor waives notice of any default under the Notes or the Guaranteed Obligations. The
obligations of each Guarantor hereunder shall not be affected by (1) the failure of any Holder or
the Trustee to assert any claim or demand or to enforce any right or remedy against the Company or
any other Person under this Indenture, the Notes or any other agreement or otherwise; (2) any
extension or renewal of any thereof; (3) any rescission, waiver, amendment or modification of any
of the terms or provisions of this Indenture, the Notes or any other agreement; (4) the release of
any security held by any Holder or the Trustee for the Guaranteed Obligations or any of them; (5)
the failure of any Holder or Trustee to exercise

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any right or remedy against any other Guarantor; or (6) any change in the
ownership of such Guarantor, except as provided in Section 11.03.

          (c) Each Guarantor hereby waives any right to which it may be entitled to have
its obligations hereunder divided among the Guarantors, such that such Guarantor’s
obligations would be less than the full amount claimed. Each Guarantor hereby waives
any right to which it may be entitled to have the assets of the Company first be used
and depleted as payment of the Company’s or such Guarantor’s obligations hereunder
prior to any amounts being claimed from or paid by such Guarantor hereunder. Each
Guarantor hereby waives any right to which it may be entitled to require that the
Company be sued prior to an action being initiated against such Guarantor.

          (d) Each Guarantor further agrees that its Note Guarantee herein constitutes a
guarantee of payment when due (and not a guarantee of collection) and waives any
right to require that any resort be had by any Holder or the Trustee to any security
held for payment of the Guaranteed Obligations.

          (e) Except
as expressly set forth in Sections 8.01(b), 11.02, 11.03 and 11.07,
the obligations of each Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than payment of the
Guaranteed Obligations in full), including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense of setoff,
counterclaim, recoupment or termination whatsoever or by reason of the invalidity,
illegality or unenforceability of the Guaranteed Obligations or otherwise. Without
limiting the generality of the foregoing, the obligations of each Guarantor herein
shall not be discharged or impaired or otherwise affected by the failure of any
Holder or the Trustee to assert any claim or demand or to enforce any remedy under
this Indenture, the Notes or any other agreement, by any waiver or modification of
any thereof, by any default, failure or delay, willful or otherwise, in the
performance of the Guaranteed Obligations, or by any other act or thing or omission
or delay to do any other act or thing which may or might in any manner or to any
extent vary the risk of any Guarantor or would otherwise operate as a discharge of
any Guarantor as a matter of law or equity.

          (f) Each Guarantor agrees that its Note Guarantee shall remain in full force and
effect until payment in full of all the Guaranteed Obligations. Each Guarantor
further agrees that its Note Guarantee herein shall continue to be effective or be
reinstated, as the case may be, if at any time payment, or any part thereof, of
principal of or interest on any Guaranteed Obligation is rescinded or must otherwise
be restored by any Holder or the Trustee upon the bankruptcy or reorganization of the
Company or otherwise.

          (g) In furtherance of the foregoing and not in limitation of any other right
which any Holder or the Trustee has at law or in equity against any Guarantor by
virtue hereof, upon the failure of the Company to pay the Guaranteed Obligation when
and as the same shall become due. whether at maturity, by acceleration, by redemption
or otherwise, each Guarantor hereby promises to and shall, upon receipt of written
demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or
the Trustee an amount equal to the sum of (1) the unpaid amount of such Guaranteed
Obligations and (2) accrued and unpaid interest on such Guaranteed Obligations then
due and owing (but only to the extent not prohibited by law).

          (h) Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any Guaranteed Obligations
guaranteed hereby until payment in full of all Guaranteed Obligations. Each
Guarantor further agrees that, as between it, on the one hand, and the Holders and
the Trustee, on the other hand, (1) the maturity of the Guaranteed Obligations
guaranteed

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hereby may be accelerated as provided in Article 6 for the purposes of any Note Guarantee
herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in
respect of the Guaranteed Obligations guaranteed hereby, and (2) in the event of any declaration of
acceleration of such Guaranteed Obligations as provided in Article 6, such Guaranteed Obligations
(whether or not due and payable) shall forthwith become due and payable by such Guarantor for the
purposes of this Section 11.01.

          (i) Each Guarantor also agrees to pay any and all costs and expenses (including reasonable
attorneys’ fees and expenses) incurred by the Trustee or any Holder in enforcing any rights under
this Section 11.01.

          (j) Upon request of the Trustee, each Guarantor shall execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.

          SECTION
11.02 Limitation on Liability. Any term or provision of this Indenture to
the contrary notwithstanding, the maximum aggregate amount of the Guaranteed Obligations guaranteed
hereunder by any Guarantor shall not exceed the maximum amount that can be hereby guaranteed
without rendering this Indenture, as it relates to such Guarantor, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally.

          SECTION
11.03 Releases of Note Guarantees. A Note Guarantee shall be released without any
action required on the part of the Trustee, any Holder and except as set forth in the second
sentence of this Section 11.03, (a) if (1) all of the Capital Stock of, or other equity interests
in, or all or substantially all of the assets of such Guarantor is sold or otherwise disposed of
(including by way of merger or consolidation) to a Person other than the Company or any of its
Subsidiaries or (2) such Guarantor ceases to be a Restricted Subsidiary, and the Company otherwise
complies, to the extent applicable, with Sections 4.06 and 5.01 hereof; (b) if the Company
designates such Guarantor as an Unrestricted Subsidiary or (c) if the Company exercises its legal
defeasance option or its covenant defeasance option pursuant to the terms of Article VIII. In the
case of a release pursuant to Section 1 l.03(a), upon delivery by the Company to the Trustee of an
Officer’s Certificate and an Opinion of Counsel to the effect that such release was made by the
Company in accordance with the provisions of this Indenture, the Trustee will execute any documents
reasonably required in order to evidence the release of any Guarantor from its obligations under
its Subsidiary Guarantee. Any Guarantor not released from its obligations under its Subsidiary
Guarantee will remain liable for the full amount of principal of and interest on the Notes and for
the other obligations of any Guarantor under this Indenture as provided in this Article 11.

          SECTION
11.04 Successors and Assigns. Subject to the provisions of Section 11.03,
this Article 11 shall be binding upon each Guarantor and its successors arid assigns and shall
inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event
of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges
conferred upon that party in this Indenture and in the Notes shall automatically extend to and be
vested in such transferee or assignee, all subject to the terms and conditions of this Indenture.

          SECTION
11.05 No Waiver. Neither a failure nor a delay on the part of either the Trustee or
the Holders in exercising any right, power or privilege under this Article 11 shall operate as a
waiver thereof, nor shall a single or partial exercise thereof preclude any other or further
exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee and the
Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies
or benefits which either may have under this Article 11 at law, in equity, by statute or otherwise.

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          SECTION 11.06 Modification. No modification, amendment or waiver of any
provision of this Article 11, nor the consent to any departure by any Guarantor
there from, shall in any event be effective unless the same shall be in writing
and signed by the Trustee, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. No notice to
or demand on any Guarantor in any case shall entitle such Guarantor to any other
or further notice or demand in the same, similar or other circumstances.

          SECTION 11.07 Execution of Supplemental Indenture for Future Guarantors.
Each Subsidiary which is required to become a Guarantor pursuant to Section 4.11
shall promptly execute and deliver to the Trustee a supplemental indenture in
the form of Exhibit B hereto pursuant to which such Subsidiary shall become a
Guarantor under this Article 11 and shall guarantee the Guaranteed Obligations.
Concurrently with the execution and delivery of such supplemental indenture, the
Company shall deliver to the Trustee an Opinion of Counsel and an Officer’s
Certificate to the effect that such supplemental indenture has been duly
authorized, executed and delivered by such Subsidiary and that, subject to the
application of bankruptcy, insolvency, moratorium, fraudulent conveyance or
transfer and other similar laws relating to creditors’ rights generally and to
the principles of equity, whether considered in a proceeding at law or in
equity, the Note Guarantee of such Guarantor is a legal, valid and binding
obligation of such Guarantor, enforceable against such Guarantor in accordance
with its terms and or to such other matters as the Trustee may reasonably
request.

          SECTION 11.08 Non-Impairment. The failure to endorse a Note Guarantee on
any Note shall not affect or impair the validity thereof.

          SECTION 11.09 Waiver of Brazilian Law Benefits. Each of the Brazilian
Guarantors hereby irrevocably and unconditionally waives, to the fullest extent
permitted by applicable law, all the benefit under articles 366, 827, 834, 835,
837, 838 and 839 of the Brazilian Civil Code and article 595 of the Brazilian
Civil Procedure Code.

ARTICLE XII

MISCELLANEOUS

          SECTION 12.01 Trust Indenture Act Controls. If and to the extent that any
provision of this Indenture limits, qualifies or conflicts with the duties
imposed by, or with another provision (an “incorporated
provision”) included in
this Indenture by operation of, TIA Sections 310 to 318, inclusive, such imposed
duties or incorporated provision shall control.

          SECTION 12.02 Notices. Any notice or communication shall be in writing and
delivered in person or mailed by first-class mail, facsimile transmission or
overnight air courier guaranteeing next-day delivery addressed as follows:

          if to the Company or any Guarantor:

          SMART Modular Technologies

          4211 Starboard Drive

          Fremont, CA 94538

          Facsimile No.: 510-360-8500

          Attention: Jack Pacheco

75

 

	 	 	 
	 

	 	with a copy to:
	 

	 	 
	 

	 	Davis Polk &Wardwell
	 

	 	1600 El Camino Road
	 

	 	Menlo Park, CA 94025
	 

	 	Facsimile No.: 650-752-3604
	 

	 	Attention: Alan Denenberg
	 

	 	 
	 

	 	if to the Trustee:
	 

	 	 
	 

	 	U. S. Bank National Association
	 

	 	60 Livingstone Avenue
	 

	 	St. Paul, MN 55107

	 

	 	Attention: Richard Prokosch

          The Company or the Trustee by notice to the other may designate additional or different
addresses for subsequent notices or communications. All notices and communications (other than
those sent to Holders) will be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail, postage prepaid, if
mailed; when receipt acknowledged, if transmitted by facsimile; and the next Business Day after
timely delivery to the courier, if sent by overnight air courier guaranteeing next-day delivery.
Any notice or communication mailed to a Holder shall be mailed, first class mail or by overnight
air courier guaranteeing next day delivery, to the Holder at the Holder’s address as it appears on
the registration books of the Registrar and shall be sufficiently
given if so mailed within the time
prescribed. Failure to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the
manner provided in this Section 12.02, it is duly given, whether or not the addressee receives it.

          The Company and each Guarantor hereby appoints The Corporation Trust Company as Authorized
Agent and 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 Company or any
Guarantor, as the case may be.

          SECTION 12.03 Communication by Holders with Other Holders. Holders may communicate pursuant to
TIA Section 312(b) with other Holders with respect to their rights under this Indenture or the
Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA
Section 312(c).

          SECTION 12.04 Certificate and Opinion as to Conditions Precedent. Upon any request or
application by the Company to the Trustee to take or refrain from taking any action under this
Indenture (other than a request to authenticate the Initial Notes in accordance with this
Indenture), the Company shall furnish to the Trustee:

   (a) an Officer’s Certificate in form reasonably satisfactory to the Trustee stating
that, in the opinion of the signer, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and

76

 

   (b) an Opinion of Counsel in form reasonably satisfactory to the Trustee
stating that, in the opinion of such counsel, all such conditions precedent have been
complied with.

          SECTION 12.05 Statements Required in Certificate or Opinion. Each certificate or opinion with
respect to compliance with a covenant or condition provided for in this Indenture (other than
pursuant to Section 4.09) shall include:

   (a) a statement that the individual making such certificate or opinion has read such
covenant or condition;

   (b) a brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion are based;

   (c) a statement that, in the opinion of such individual, he has made such examination
or investigation as is necessary to enable him to express an informed opinion as to whether
or not such covenant or condition has been satisfied; and

   (d) a statement as to whether or not, in the opinion of such individual, such covenant
or condition has been satisfied.

          In giving such Opinion of Counsel, counsel may rely as to factual matters on an Officer’s
Certificate or on certificates of public officials.

          SECTION 12.06 When Notes Disregarded. In determining whether the Holders of the required
principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, any Guarantor or by any Person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company or any Guarantor shall be disregarded and
deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall
be protected in relying on any such direction, waiver or consent, only Notes which the Trustee
knows are so owned shall be so disregarded. Subject to the foregoing, only Notes outstanding at the
time shall be considered in any such determination. Notwithstanding the foregoing, Notes that are
to be acquired by the Company, any Guarantor or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any Guarantor pursuant
to an exchange offer, tender offer or other agreement shall not be deemed to be owned by such
entity until legal title to such Notes passes to such entity.

          SECTION
12.07 Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable
rules for action by or a meeting of Holders. The Registrar and the Paying Agent may make reasonable
rules for their functions.

          SECTION 12.08 Legal Holidays. A “Legal Holiday” is a Saturday, a Sunday or other day
on which banking institutions are not required by law or regulation to be open in the State of New
York. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that
is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular
record date is a Legal Holiday, the record date shall not be affected.

          SECTION 12.09 GOVERNING LAW. THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF

77

 

CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD
BE REQUIRED THEREBY.

          SECTION
12.10 No Recourse Against Others. A director, officer, employee, stockholder or member,
as such, of the Company or any of the Guarantors, shall not have any liability for any obligations
of the Company or any of the Guarantors under the Notes or this Indenture or the Security Documents
or for any claim based on, in respect of or by reason of such obligations or their creation. By
accepting a Note, each Holder shall waive and release all such liability. The waiver and release
shall be part of the consideration for the issue of the Notes.

          SECTION 12.11 Successors. All agreements of each of the Company and each Guarantor in this
Indenture and the Notes shall bind its successors, except, in the case of each Guarantor, as
otherwise provided in Section 11.03. All agreements of the Trustee in this Indenture shall bind its
successors.

          SECTION 12.12 Multiple Originals. The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture.

          SECTION 12.13 Table of Contents; Headings. The table of contents, cross-reference sheet and
headings of the Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not intended to be considered a part hereof and shall not modify or restrict
any of the terms or provisions hereof.

[Signature pages to follow.]

78

 

          IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date
first written above.

	 	 	 	 	 
	 	 	SMART MODULAR TECHNOLOGIES (WWH), INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Iain Mackenzie
	 

	 	 	 	 
	 

	 	 	 	Name: Iain MacKenzie

Title: President
	 
	 	 	 	 
	 	 	EXECUTED AS A DEED

[SIGNATURE PAGE TO THE INDENTURE]

 

 

	 	 	 	 	 
	 	 	SMART MODULAR TECHNOLOGIES (GLOBAL), INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Ann Nguyen
	 

	 	 	 	 
	 

	 	 	 	Name: Ann Nguyen
	 

	 	 	 	Title: Secretary
	 
	 	 	 	 
	 	 	EXECUTED AS A DEED

[SIGNATURE PAGE TO THE INDENTURE]

 

 

	 	 	 	 	 
	 	 	SMART MODULAR TECHNOLOGIES (DH), INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Ann Nguyen
	 

	 	 	 	 
	 

	 	 	 	Name: Ann Nguyen
	 

	 	 	 	Title: Assistant Secretary
	 
	 	 	 	 
	 	 	EXECUTED AS A DEED

[SIGNATURE PAGE TO THE INDENTURE]

 

 

	 	 	 	 	 
	 	 	SMART MODULAR TECHNOLOGIES (CI), INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Ann Nguyen
	 

	 	 	 	 
	 

	 	 	 	Name: Ann Nguyen
	 

	 	 	 	Title: Assistant Secretary
	 
	 	 	 	 
	 	 	EXECUTED AS A DEED

[SIGNATURE PAGE TO THE INDENTURE]

 

 

	 	 	 	 	 
	 	 	SMART MODULAR TECHNOLOGIES 
	 	 	(FOREIGN HOLDINGS), INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Iain MacKenzie
	 

	 	 	 	 
	 

	 	 	 	Name: Iain MacKenzie
	 

	 	 	 	Title: President
	 
	 	 	 	 
	 	 	EXECUTED AS A DEED

[SIGNATURE PAGE TO THE INDENTURE]

 

 

	 	 	 	 	 
	 	 	SMART MODULAR TECHNOLOGIES 
	 	 	(PUERTO RICO) INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Iain MacKenzie
	 

	 	 	 	 
	 

	 	 	 	Name: Iain MacKenzie
	 

	 	 	 	Title: CEO & President
	 
	 	 	 	 
	 	 	EXECUTED AS A DEED

[SIGNATURE PAGE TO THE INDENTURE]

 

 

	 	 	 	 	 
	 	 	SMART MODULAR TECHNOLOGIES, INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Iain MacKenzie
	 

	 	 	 	 
	 

	 	 	 	Name: Iain MacKenzie
	 

	 	 	 	Title: CEO & President

[SIGNATURE PAGE TO THE INDENTURE]

 

 

	 	 	 	 	 
	 	 	SMART MODULAR TECHNOLOGIES (DE), INC.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Ann Nguyen
	 

	 	 	 	 
	 

	 	 	 	Name: Ann Nguyen
	 

	 	 	 	Title: Assistant Secretary

[SIGNATURE PAGE TO THE INDENTURE]

 

 

	 	 	 	 	 
	 	 	SMART MODULAR TECHNOLOGIES SDN. BHD.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Iain MacKenzie
	 

	 	 	 	 
	 

	 	 	 	Name: Iain MacKenzie
	 

	 	 	 	Title: Director

[SIGNATURE PAGE TO THE INDENTURE]

 

 

	 	 	 	 	 
	 	 	SMART MODULAR TECHNOLOGIES (EUROPE) LIMITED
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Ann Nguyen
	 

	 	 	 	 
	 

	 	 	 	Name: Ann Nguyen
	 

	 	 	 	Title: Secretary

[SIGNATURE PAGE TO THE INDENTURE]

 

 

	 	 	 	 	 
	 	 	SMART MODULAR TECHNOLOGIES
	 	 	INDÚSTRIA DE COMPONENTES ELETRÔNICOS LTDA.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Noboru Takahashi
	 

	 	 	 	 
	 

	 	 	 	Name: Noboru Takahashi
	 

	 	 	 	Title: Officer

[SIGNATURE PAGE TO THE INDENTURE]

 

 

	 	 	 	 	 
	 	 	MODULAR BRASIL
PARTICIPAÇÕES LTDA.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Noboru Takahashi
	 

	 	 	 	 
	 

	 	 	 	Name: Noboru Takahashi
	 

	 	 	 	Title: Officer

[SIGNATURE PAGE TO THE INDENTURE]

 

 

	 	 	 	 	 
	 	 	U. S. NATIONAL BANK ASSOCIATION
	 

	 	 	 	as Trustee
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Richard Prokosch
	 

	 	 	 	 
	 

	 	 	 	Name: Richard Prokosch
	 

	 	 	 	Title: Vice President

[SIGNATURE PAGE TO THE INDENTURE]

 

 

APPENDIX A

PROVISIONS RELATING TO ORIGINAL NOTES,

ADDITIONAL NOTES, AND EXCHANGE NOTES

          1. Definitions.

          1.1 Definitions. For the purposes of this Appendix A the following terms shall have
the meanings indicated below:

          “Applicable Procedures” means, with respect to any transfer or transaction involving
a Regulation S Global Note or beneficial interest therein, the rules and procedures of the
Depositary for such Global Note, Euroclear and Clearstream, in each case to the extent applicable
to such transaction and as in effect from time to time.

          “Clearstream” means Clearstream Banking, S.A., or any successor securities clearing
agency.

          “Definitive Note” means a certificated Initial Note or Exchange Note (bearing the
Restricted Notes Legend if the transfer of such Note is restricted by applicable law) that does not
include the Global Notes Legend.

          “Depositary” means The Depository Trust Company, its nominees and their respective
successors.

          “Euroclear” means the Euroclear Clearance System or any successor securities
clearing agency.

          “Exchange Offer” means an offer by the Company, pursuant to a Registration Rights
Agreement, to certain Holders of Initial Notes, to issue and deliver to such Holders, in exchange
for their Initial Notes, a like aggregate principal amount of Exchange Notes registered under the
Securities Act.

          “Global Notes Legend” means the legend set forth under that caption in Exhibit A to
this Indenture.

          “Initial Purchasers” means Citigroup Global Markets Inc. and Lehman
Brothers Inc.

          “Notes Custodian” means the custodian with respect to a Global Note (as appointed by
the Depositary) or any successor person thereto, who shall initially be the Trustee.

          “Purchase Agreement” means (a) the Purchase Agreement dated March 22, 2005, among
the Company, the Guarantors and the Initial Purchasers and (b) any other similar Purchase Agreement
relating to Additional Notes.

          “QIB” means a “qualified institutional buyer” as defined in Rule 144A.

          “Registration Rights Agreement” means (a) the Registration Rights Agreement dated
March 28, 2005, among the Company, the Guarantors and the Initial Purchasers and (b) any other
similar Registration Rights Agreement relating to Additional Notes.

 

 

          “Regulation S” means Regulation S under the Securities Act.

          “Regulation S Notes” means all Initial Notes offered and sold outside the United
States in reliance on Regulation S.

          “Restricted Notes Legend” means the legend set forth under that caption in Exhibit A
to this Indenture.

          “Restricted Period”, with respect to any Notes, means the period of 40 consecutive
days beginning on and including the later of (a) the day on which such Notes are first offered to
persons other than distributors (as defined in Regulation S under the Securities Act) in
reliance on Regulation S and (b) the Issue Date with respect to such Notes, which commencement date
shall be notified by the Company to the Trustee.

          “Rule 144A” means Rule 144A under the Securities Act.

          “Rule 144A Notes” means all Initial Notes offered and sold to QIBs in
reliance on Rule 144A.

          “Securities Act” means the Securities Act of 1933.

          “Shelf Registration Statement” means a registration statement filed by the Company
in connection with the offer and sale of Initial Notes pursuant to a Registration Rights Agreement.

          “Transfer Restricted Notes” means Definitive Notes and any other Notes
that bear or are required to bear the Restricted Notes Legend.

          1.2 Other Definitions.

	 	 	 	 	 
	Term:	 	Defined in Section:
	“Agent Members”
	 	 	2.1	(c)
	“Global
Note”
	 	 	2.1	(b)
	“Regulation S Global Note
”
	 	 	2.1	(b)
	“Rule 144A Global Note”
	 	 	2.1	(b)

          2. The Notes.

          2.1 Form and Dating. (a) The Original Notes issued on the date hereof are being (i)
offered and sold by the Company pursuant to a Purchase Agreement and (ii) resold, initially only to
(1) QIBs in reliance on Rule 144A and (2) Persons
other than U.S. Persons (as defined in Regulation S) in reliance on
Regulation S. Such Original Notes may thereafter be transferred to, among others,
QIBs and purchasers in reliance on Regulation S. Additional Notes offered after the date hereof may
be offered and sold by the Company from time to time pursuant to one or more Purchase Agreements in
accordance with applicable law.

          (b) Global Notes. Rule 144A Notes shall be issued initially in the form of one or
more permanent global notes in definitive, fully registered form (collectively, the “Rule ]44A
Global Note”) and Regulation S Notes shall be issued initially in the form of one or more
global notes (collectively, the “Regulation S Global Note”), in each case without
interest coupons and bearing the Global

-2-

 

Notes Legend and Restricted Notes Legend, which shall be deposited on behalf of the purchasers
of the Notes represented thereby with the Notes Custodian, and registered in the name of the
Depositary or a nominee of the Depositary, duly executed by the Company and authenticated by the
Trustee as provided in this Indenture. Beneficial ownership interests in the Regulation S Global
Note shall not be exchangeable for interests in the Rule 144A Global Note or any other Note without
a Restricted Notes Legend until the expiration of the Restricted Period. The Rule 144A Global Note and the Regulation S Global Note are each referred to herein as a “Global
Note” and are collectively referred to herein as “Global Notes”; provided that the
term “Global Note” when used in Sections 2.1(b), 2.1(c), 2.3(g)(i), 2.3(h)(i) and 2.4 of this
Appendix shall also include any Note in global form issued in connection with an Exchange Offer.
The aggregate principal amount of the Global Notes may from time to time be increased or decreased
by adjustments made on the records of the Trustee and the Depositary or its nominee and on the
schedules thereto as hereinafter provided.

          (c) Book-Entry Provisions. This Section 2.1(c) shall apply only to a Global Note
deposited with or on behalf of the Depositary.

          The Company shall execute and the Trustee shall, in accordance with this Section 2.1(c) and
Section 2.2 of this Appendix and pursuant to an order of the Company signed by two Officers of the
Company, authenticate and deliver initially one or more Global Notes that (i) shall be registered
in the name of the Depositary for such Global Note or Global Notes or the nominee of such
Depositary and (ii) shall be delivered by the Trustee to such
Depositary or pursuant to such
Depositary’s instructions or held by the Trustee as Notes Custodian.

          Members of, or participants in, the Depositary (“Agent Members”) shall have no
rights under this Indenture with respect to any Global Note held on their behalf by the Depositary
or by the Trustee as Notes Custodian or under such Global Note, and the Depositary may be treated
by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to
any written certification, proxy or other authorization furnished by the Depositary or impair, as
between the Depositary and its Agent Members, the operation of customary practices of such
Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global
Note.

          (d) Definitive Notes. Except as provided in Section 2.3 or 2.4 of this Appendix,
owners of beneficial interests in Global Notes will not be entitled to receive physical delivery of
certificated Notes.

          2.2 Authentication. The Trustee shall authenticate and make available for delivery
upon a written order of the Company signed by an Officer of the Company (a) Original Notes for
original issue on the date hereof in an aggregate principal amount of $125,000,000, (b) subject to
the terms of this Indenture, Additional Notes in an unlimited aggregate principal amount and (c)
the Exchange Notes for issue only in an Exchange Offer pursuant to a Registration Rights Agreement
and for a like principal amount of Initial Notes exchanged pursuant thereto. Such order shall
specify the amount of the Notes to be authenticated, the date on which the original issue of Notes
is to be authenticated and whether the Notes are to be Original Notes, Additional Notes or Exchange
Notes. The aggregate principal amount of Notes outstanding at any time is unlimited.

          2.3 Transfer and Exchange. (a) Transfer and Exchange of Definitive Notes. When
Definitive Notes are presented to the Registrar with a request:

-3-

 

          (i) to register the transfer of such Definitive Notes; or

          (ii) to exchange such Definitive Notes for an equal principal amount of Definitive Notes of
other authorized denominations, the Registrar shall register the transfer or
make the exchange as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Notes surrendered for transfer or exchange:

   (1) shall be duly endorsed or accompanied by a written instrument of transfer in form
reasonably satisfactory to the Company and the Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing; and

   (2) in the case of Transfer Restricted Notes, are accompanied by the following
additional information and documents, as applicable:

         (A) if such Definitive Notes are being delivered to the Registrar by a Holder
for registration in the name of such Holder, without transfer, a certification from
such Holder to that effect (in the form set forth on the reverse side of the
Initial Note); or

         (B) if such Definitive Notes are being transferred to the Company, a
certification to that effect (in the form set forth on the reverse side of the
Initial Note); or

         (C) if such Definitive Notes are being transferred pursuant to an exemption
from registration in accordance with Rule 144 under the Securities Act or in
reliance upon another exemption from the registration requirements of the
Securities Act, (x) a certification to that effect (in the form set forth on the
reverse side of the Initial Note) and (y) if the Company so requests, an opinion of
counsel or other evidence reasonably satisfactory to it as to the compliance with
the restrictions set forth in the Restricted Notes Legend.

          (b) Restrictions
on Transfer of a Definitive Note for a Beneficial Interest in a
Global Note. A Definitive Note may not be exchanged for a beneficial interest in a Global Note
except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a
Definitive Note, duly endorsed or accompanied by a written instrument of transfer in form
reasonably satisfactory to the Company and the Registrar, together with:

   (i) certification (in the form set forth on the reverse side of the Initial Note)
that such Definitive Note is being transferred (1) to a QIB in accordance with Rule 144A
or (2) outside the United States in an offshore transaction within the meaning of
Regulation S and in compliance with Rule 904 under the Securities Act; and

   (ii) written instructions directing the Trustee to make, or to direct the Notes
Custodian to make, an adjustment on its books and records with respect to such Global Note
to reflect an increase in the aggregate principal amount of the Notes represented by the
Global Note, such instructions to contain information regarding the Depositary account to
be credited with such increase, then the Trustee shall cancel such Definitive Note and
cause, or direct the Notes Custodian to cause, in accordance with the standing
instructions and procedures existing between the Depositary and the Notes Custodian, the
aggregate principal amount of Notes represented by the Global Note to be increased by the
aggregate principal amount of the Definitive Note to be exchanged and shall credit or
cause to be credited to the account of the Person specified in such instructions a
beneficial interest in the Global Note equal to the principal amount of the Definitive

-4-

 

Note so canceled. If no Global Notes are then outstanding and the Global Note has not been
previously exchanged for certificated securities pursuant to Section 2.4 of this
Appendix, the Company shall issue and the Trustee shall authenticate, upon written order
of the Company in the form of an Officer’s Certificate, a new Global Note in the
appropriate principal amount.

          (c) Transfer
and Exchange of Global Notes. (i) The transfer and exchange of Global
Notes or beneficial interests therein shall be effected through the Depositary, in accordance with
this Indenture (including applicable restrictions on transfer set forth herein, if any) and the
procedures of the Depositary therefor. A transferor of a beneficial interest in a Global Note shall
deliver a written order given in accordance with the Depositary’s procedures containing information
regarding the participant account of the Depositary to be credited with a beneficial interest in
such Global Note or another Global Note and such account shall be credited in accordance with such
order with a beneficial interest in the applicable Global Note and the account of the Person making
the transfer shall be debited by an amount equal to the beneficial interest in the Global Note
being transferred. Transfers by an owner of a beneficial interest in the Rule 144A Global Note to a
transferee who takes delivery of such interest through the Regulation S Global Note, whether before
or after the expiration of the Restricted Period, shall be made only upon receipt by the Trustee of
a certification in the form provided on the reverse of the Initial Notes from the transferor to the
effect that such transfer is being made in accordance with Regulation S or (if available) Rule 144
under the Securities Act and that, if such transfer is being made prior to the expiration of the
Restricted Period, the interest transferred shall be held immediately thereafter through Euroclear
or Clearstream.

          (ii) If the proposed transfer is a transfer of a beneficial interest in one Global Note to a
beneficial interest in another Global Note, the Registrar shall reflect on its books and records
the date and an increase in the principal amount of the Global Note to which such interest is being
transferred in an amount equal to the principal amount of the interest to be so transferred, and
the Registrar shall reflect on its books and records the date and a corresponding decrease in the
principal amount of Global Note from which such interest is being transferred.

          (iii) Notwithstanding any other provisions of this Appendix (other than the provisions set
forth in Section 2.4 of this Appendix), a Global Note may not be transferred as a whole except by
the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary.

          (iv) In the event that a Global Note is exchanged for Definitive Notes pursuant to Section 2.4
of this Appendix prior to the consummation of an Exchange Offer or the effectiveness of a Shelf
Registration Statement with respect to such Notes, such Notes may be exchanged only in accordance
with such procedures as are substantially consistent with the provisions of this Section 2.3
(including the certification requirements set forth on the reverse of the Initial Notes intended to
ensure that such transfers comply with Rule 144A, Regulation S or such other applicable exemption
from registration under the Securities Act, as the case may be) and such other procedures as may
from time to time be adopted by the Company.

          (d) Restrictions on Transfer of Regulation S Global Note. (i) Prior to the
expiration of the Restricted Period, interests in the Regulation S Global Note may only be held
through Euroclear or Clearstream. During the Restricted Period, beneficial ownership interests in
the Regulation S Global Note may only be sold, pledged or transferred through Euroclear or
Clearstream in accordance with the Applicable Procedures and only (1) so long as such security is
eligible for resale pursuant to Rule 144A, to a person whom the selling holder reasonably believes
is a QIB that purchases for its own account or for

-5-

 

the account of a QIB to whom notice is given that the resale, pledge or transfer is being made in
reliance on Rule l44A, (2) in an offshore transaction in
accordance with Regulation S, (3) pursuant
to an exemption from registration under the Securities Act provided by Rule 144 (if applicable)
under the Securities Act or (4) pursuant to an effective registration statement under the
Securities Act, in each case in accordance with any applicable securities laws of any state of the
United States. Prior to the expiration of the Restricted Period, transfers by an owner of a
beneficial interest in the Regulation S Global Note to a transferee who takes delivery of such
interest through the Rule 144A Global Note shall be made only in accordance with Applicable
Procedures and upon receipt by the Trustee of a written certification from the transferor of the
beneficial interest in the form provided on the reverse of the Initial Note to the effect that such
transfer is being made to a QIB within the meaning of Rule 144A in a transaction meeting the
requirements of Rule 144A. Such written certification shall no longer be required after the
expiration of the Restricted Period.

          (ii) Upon the expiration of the Restricted Period, beneficial ownership interests in the
Regulation S Global Note shall be transferable in accordance with applicable law and the other
terms of this Indenture.

          (e) Legend. (i) Except as permitted by the following paragraphs (ii), (iii) or (iv),
each Note certificate evidencing the Global Notes and the Definitive Notes (and all Notes issued in
exchange therefor or in substitution thereof) shall bear a Restricted Notes Legend.

          (ii) Upon any sale or transfer of a Transfer Restricted Note that is a Definitive Note, the
Registrar shall permit the Holder thereof to exchange such Transfer Restricted Note for a
Definitive Note that does not bear the legends set forth above and rescind any restriction on the
transfer of such Transfer Restricted Note if the Holder certifies in writing to the Registrar that
its request for such exchange was made in reliance on Rule 144 (such certification to be in the
form set forth on the reverse of the Initial Note).

          (iii) After a transfer of any Original or Additional Notes during the period of the
effectiveness of a Shelf Registration Statement with respect to such Original or Additional Notes,
as the case may be, all requirements pertaining to the Restricted Notes Legend on such Original or
Additional Notes shall cease to apply and the requirements that any such Original or Additional
Notes be issued in global form shall continue to apply.

          (iv) Upon the consummation of an Exchange Offer with respect to the Original or Additional
Notes pursuant to which Holders of such Original or Additional Notes are offered Exchange Notes in
exchange for their Original or Additional Notes, all requirements pertaining to Original or
Additional Notes that Original or Additional Notes be issued in
global form shall continue to apply,
and Exchange Notes in global form without the Restricted Notes Legend shall be available to Holders
that exchange such Original or Additional Notes in such Exchange Offer.

          (v) [Reserved].

          (vi) Upon a sale or transfer after the expiration of the Restricted Period of any Initial Note
acquired pursuant to Regulation S, all requirements that such
Initial Note bear the Restricted Notes
Legend shall cease to apply and the requirement requiring any such Initial Note be issued in global
form shall continue to apply.

          (vii) Any Additional Notes sold in a registered offering shall not be required to
bear the Restricted Notes Legend.

-6-

 

          (f) 
Cancellation or Adjustment of Global Note. At such time as all
beneficial interests in a Global Note have either been exchanged for Definitive Notes, transferred,
redeemed, repurchased or canceled, such Global Note shall be returned by the Depositary to the
Trustee for cancellation or retained and canceled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Note is exchanged for Definitive Notes,
transferred in exchange for an interest in another Global Note, redeemed, repurchased or canceled,
the principal amount of Notes represented by such Global Note shall be reduced and an adjustment
shall be made on the books and records of the Trustee (if it is then the Notes Custodian for such
Global Note) with respect to such Global Note, by the Trustee or the Notes Custodian, to reflect
such reduction.

          (g) Obligations with Respect to Transfers and Exchanges of Notes. (i) To permit
registrations of transfers and exchanges, the Company shall execute and the Trustee shall
authenticate, Definitive Notes and Global Notes at the Registrar’s request.

          (ii) No service charge shall be made for any registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any such transfer taxes,
assessments or similar governmental charge payable upon exchanges pursuant to Sections 2.07, 3.06,
4.06, 4.08 and 9.05 of this Indenture).

          (iii) Prior
to the due presentation for registration of transfer of any Note, the Company, the
Trustee, the Paying Agent or the Registrar may deem and treat the person in whose name a Note is
registered as the absolute owner of such Note for the purpose of receiving payment of principal of
and interest on such Note and for all other purposes whatsoever, whether or not such Note is
overdue, and none of the Company, the Trustee, the Paying Agent or the Registrar shall be affected
by notice to the contrary.

          (iv) All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture
shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the
Notes surrendered upon such transfer or exchange.

          (h) No Obligation of the Trustee. (i) The Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Note, a member of, or a participant in the
Depositary or any other Person with respect to the accuracy of the records of the Depositary or its
nominee or of any participant or member thereof, with respect to any ownership interest in the
Notes or with respect to the delivery to any participant, member, beneficial owner or other Person
(other than the Depositary) of any notice (including any notice of redemption or repurchase) or the
payment of any amount, under or with respect to such Notes. All notices and communications to be
given to the Holders and all payments to be made to Holders under the Notes shall be given or made
only to the registered Holders (which shall be the Depositary or its nominee in the case of a
Global Note). The rights of beneficial owners in any Global Note shall be exercised only through
the Depositary subject to the applicable rules and procedures of the Depositary. The Trustee may
rely and shall be fully protected in relying upon information furnished by the Depositary with
respect to its members, participants and any beneficial owners.

          (ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this Indenture or under applicable law
with respect to any transfer of any interest in any Note (including any transfers
between or among Depositary participants, members or beneficial owners in any Global Note)
other than to require delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when

-7-

 

expressly required by, the terms of this Indenture, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.

          2.4 Definitive Notes. (a) A Global Note deposited with the Depositary or with the
Trustee as Notes Custodian pursuant to Section 2.1 or issued in connection with an Exchange Offer
shall be transferred to the beneficial owners thereof in the form of Definitive Notes in an
aggregate principal amount equal to the principal amount of such Global Note, in exchange for such
Global Note, only if such transfer complies with Section 2.3 and (i) the Depositary notifies the
Company that it is unwilling or unable to continue as a Depositary for such Global Note or if at
any time the Depositary ceases to be a “clearing agency” registered under the Exchange Act, and a
successor depositary is not appointed by the Company within 90 days of such notice or after the
Company becomes aware of such cessation, or (ii) an Event of Default has occurred and is continuing
or (iii) the Company, in its sole discretion, notifies the Trustee in writing that it elects to
cause the issuance of certificated Notes under this Indenture.

          (b) Any
Global Note that is transferable to the beneficial owners thereof pursuant
to this Section 2.4 shall be surrendered by the Depositary to the Trustee, to be so transferred, in
whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver,
upon such transfer of each portion of such Global Note, an equal aggregate principal amount of
Definitive Notes of authorized denominations. Any portion of a Global Note transferred
pursuant to this Section shall be executed, authenticated and delivered only in denominations of
$1,000 and any integral multiple thereof and registered in such names as the Depositary shall
direct. Any certificated Initial Note in the form of a Definitive Note delivered in
exchange for an interest in the Global Note shall, except as otherwise provided by Section 2.3(e),
bear the Restricted Notes Legend.

          (c) Subject to the provisions of Section 2.4(b), the registered Holder of a Global Note may
grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Notes.

          (d) In the event of the occurrence of any of the events specified in Section 2.4(a)(i), (ii)
or (iii), the Company shall promptly make available to the Trustee a reasonable supply of
Definitive Notes in fully registered form without interest coupons.

-8-

 

EXHIBIT A

[FORM
OF FACE OF NOTE]

[Global Notes Legend]

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK,
NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR 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.

          TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC,
TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED
TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE
REVERSE HEREOF.

[Restricted Notes Legend]

          THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH IN THE NEXT SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL
INTEREST HEREIN, THE HOLDER:

(1) REPRESENTS THAT (A) IT IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE l44A UNDER THE
SECURITIES ACT) (A “QIB”), OR (B) IT IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT;

(2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE ISSUER OR
ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (C) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF REGULATION S
UNDER THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (E)TO AN INSTITUTIONAL “ACCREDITED INVESTOR” (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY (THE
FORM OF

 

 

WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE
PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER, IF THE ISSUER SO REQUESTS, THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER),
OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE,
IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION; AND

(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.

          AS USED HEREIN, THE TERMS “OFFSHORE TRANSACTION” AND “UNITED STATES” HAVE THE MEANINGS GIVEN
TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE GOVERNING THIS SECURITY
CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY IN
VIOLATION OF THE FOREGOING.

2

 

          No.                     $                    

          Senior Secured Floating Rate Note due 2012

	 	 	 	 	 
	 

	 	CUSIP No.                    
	 	 
	 
	 

	 	ISIN No.                    
	 	 

          SMART Modular Technologies (WWH), Inc., an exempted company organized under the laws of the
Cayman Islands, promises to pay to [Cede & Co.], or registered assigns, the principal sum [of      
Dollars] [listed on the Schedule of Increases or Decreases
in Global Note attached hereto](1) on      
        , 2012.

          Interest Payment Dates: January 1, April 1, July 1 and October 1.

          Record Dates: December 15, March 15, June 15 and September 15.

 

			
	(1)	 	Use the Schedule of Increases and Decreases language if Note is in Global Form.

3

 

          Additional provisions of this Note are set forth on the other side of this Note.

          IN WITNESS WHEREOF, the undersigned has caused this instrument to be duly executed.

	 	 	 	 	 
	 	 	SMART MODULAR TECHNOLOGIES (WWH), INC.,
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:

	 	 	 	 	 
	Dated:
	 	 	 	 
	 

	 	 

	 	 

4

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

	 	 	 
	U.S.

	 	BANK NATIONAL ASSOCIATION,
	 

	 	as Trustee, certifies that this is one of the Notes referred
	 

	 	to in the Indenture.

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Authorized Signatory
	 	 

 

			
	*/	 	If the Note is to be issued in global form, add the Global Notes Legend and the
attachment from Exhibit A captioned “TO BE ATTACHED TO
GLOBAL NOTES — SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE”.

5

 

[FORM
OF REVERSE SIDE OF NOTE]

Senior Secured Floating Rate Note due 2012

          1. Interest. (a) SMART Modular Technologies (WWH), Inc., an exempted company organized under
the laws of the Cayman Islands (the “Company”), promises to pay interest on the principal
amount of this Note at the rate per annum reset quarterly, equal to LIBOR plus 5.50% as determined
by the calculation agent (the “Calculation Agent”), which shall initially be the Trustee.
Interest will be payable quarterly in arrears on each January 1, April 1, July 1 and October 1,
commencing on July 1, 2005. The Company will pay interest to those Persons who were holders of
record on the December 15, March 15, June 15 or September 15 immediately preceding the applicable
interest payment date. The Notes will bear interest from the initial issue date or, if interest has
already been paid, from the date it was most recently paid.

          “LIBOR”, with respect to an Interest Period, will be the rate (expressed as a
percentage per annum) for deposits in United States dollars for three-month periods beginning on
the first day of such Interest Period that appears on Telerate Page 3750 as of 11:00 a.m., London
time, on the Determination Date. If Telerate Page 3750 does not include such a rate or is
unavailable on a Determination Date, the Calculation Agent will request the principal London office
of each of four major banks in the London interbank market, as selected by the Calculation Agent,
to provide such bank’s offered quotation (expressed as a percentage per annum), as of approximately
11:00 a.m., London time, on such Determination Date, to prime banks in the London interbank market
for deposits in a Representative Amount in United States dollars for a three-month period beginning
on the first day of such Interest Period. If at least two such offered quotations are so provided,
LIBOR for the Interest Period will be the arithmetic mean of such quotations. If fewer than two
such quotations are so provided, the Calculation Agent will request each of three major banks in
New York City, as selected by the Calculation Agent, to provide such bank’s rate (expressed as a
percentage per annum), as of approximately 11:00 a.m., New York City time, on such Determination
Date, for loans in a Representative Amount in United States dollars to leading European banks for a
three-month period beginning on the first day of such Interest Period. If at least two such rates
are so provided, LIBOR for the Interest Period will be the arithmetic mean of such rates. If fewer
than two such rates are so provided, then LIBOR for the Interest Period will be LIBOR in effect
with respect to the immediately preceding Interest Period.

          “Interest Period” means the period commencing on and including an interest payment
date and ending on and including the day immediately preceding the next succeeding interest payment
date, with the exception that the first Interest Period shall
commence on and include March 28, 2005 and end on and include June 30, 2005.

          “Determination Date”, with respect to an Interest Period, will be the second London
Banking Day preceding the first day of the Interest Period.

          “London Banking Day”, is any day in which dealings in United States dollars are
transacted or, with respect to any future date, are expected to be transacted in the London
interbank market.

          “Representative Amount” means a principal amount of not less than U.S. $1.0 million
for a single transaction in the relevant market at the relevant time.

          “Telerate Page 3750”, means the display designed as “Page 3750” on the Moneyline
Telerate service (or such other page as may replace Page 3750 on that service).

6

 

          The amount of interest for each day that the Notes are outstanding (the “Daily Interest
Amount”) will be calculated by dividing the interest rate in effect for such day by 360 and
multiplying the result by the principal amount of the Notes. The amount of interest to be paid on
the Notes for each Interest Period will be calculated by adding the Daily Interest Amounts for each
day in the Interest Period.

          All percentages resulting from any of the above calculations will be rounded, if necessary, to
the nearest one hundred-thousandth of a percentage point, with five one-millionths of a percentage
point being rounded upwards (e.g., 9.876545% (or .09876545) being rounded to 9.87655% (or
..0987655)) and all dollar amounts used in resulting from such calculations will be rounded to the
nearest cent (with one-half cent being rounded upwards).

          The interest rate on the Notes will in no event be higher than the maximum rate permitted by
New York law as the same may be modified by United States law of general application.

          The Calculation Agent will, upon the request of the Holder of any Note, provide the
interest rate then in effect with respect to the Notes. All calculations made by the Calculation
Agent in the absence of manifest error will be conclusive for all purposes and binding on the
Company, the Guarantors and the Holders of the Notes.

          Interest on the Notes will be computed on the basis of a 360-day year comprised of twelve
30-day months.

          [(b) Additional Interest. The Holder of this Note is entitled to the benefits of a
Registration Rights Agreement, dated as of March 28, 2005, among the Company, the guarantors named
therein (collectively, the “Guarantors”) and the Initial Purchasers named therein (the
“Registration Rights Agreement”). Capitalized terms used in this paragraph (b) but not
defined herein have the meanings assigned to them in the Registration Rights Agreement. Upon the
occurrence of a Registration Default, the Company and the Guarantors will be obligated to pay to
each Holder of Transfer Restricted Securities affected thereby additional interest
(“Additional Interest”) at a rate of 0.25% per annum (the “Additional Interest
Rate”) for the first 90-day period immediately following the occurrence of such Registration
Default. The Additional Interest Rate shall increase by an additional 0.25% per annum with respect
to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum
Additional Interest Rate of 1.0% per annum. Any amounts of Additional Interest due will be payable
in cash on the regular interest payment dates with respect to the notes. Each obligation to pay
Additional Interest rate shall be deemed to commence accruing on the date of the applicable Registration Default and to
cease accruing when all Registration Defaults have been cured.

          The
Trustee shall have no responsibility with respect to the determination of the amount of any
such Additional Interest. For purposes of the foregoing, “Transfer Restricted Notes”
means (i) each Initial Note until the date on which such Initial Note has been exchanged for a
freely transferable Exchange Note in the Exchange Offer, (ii) each Initial Note until the date on
which such Initial Note has been effectively registered under the Securities Act and is eligible to
be disposed of in accordance with a Shelf Registration Statement or (iii) each Initial Note until
the date on which such Initial Note is distributed to the public pursuant to Rule 144 under the
Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act.]3

 

			
	3	 	To be included in Original Note only.

7

 

          2. Method of Payment. The Company shall pay interest on the Notes (except defaulted interest)
to the Persons who are registered Holders of Notes at the close of business on the December 15,
March 15, June 15 and September 15 next preceding the interest payment date even if Notes are
canceled after the record date and on or before the interest payment date. Holders must surrender
Notes to a Paying Agent to collect principal payments. The Company shall pay principal, premium,
Additional Interest, if any, and interest in money of the United States of America that at the time
of payment is legal tender for payment of public and private debts. Payments in respect of the
Notes represented by a Global Note (including principal, premium, interest, including Additional
Interest, if any) shall be made by wire transfer of immediately available funds to the accounts
specified by The Depository Trust Company. The Company will make all payments in respect of a
certificated Note (including principal, premium and interest) by mailing a check to the registered
address of each Holder thereof; provided, however, that payments on the Notes may also be
made, in the case of a Holder of at least $1,000,000 aggregate principal amount of Notes, by wire
transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent
to such effect designating such account no later than 30 days immediately preceding the relevant
due date for payment (or such other date as the Trustee may accept in its discretion).

          3. Paying Agent and Registrar. Initially, U.S. BANK NATIONAL ASSOCIATION, a national banking association (the “Trustee”), will act as Paying
Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice. The Company or any of their domestically incorporated Wholly-Owned Subsidiaries may
act as Paying Agent, Registrar or co-registrar.

          4. Indenture. The Company issued the Notes under an Indenture dated as of March 28, 2005 (the
“Indenture”), among the Company, the Guarantors and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the
Indenture (the “TIA”). Terms defined in the Indenture and not defined herein have the
meanings ascribed thereto in the Indenture. The Notes are subject to all terms and provisions of
the Indenture, and Holders are referred to the Indenture and the TIA for a statement of such terms
and provisions. The Notes are senior secured obligations of the Company. This Note is one of the
[Original] [Exchange] [Additional] Notes referred to in the Indenture. The Notes include the
Original Notes, the Additional Notes and any Exchange Notes issued in exchange for Initial Notes
pursuant to the Indenture. The Original Notes, the Additional Notes and any Exchange Notes are treated as a single class of securities under the Indenture. The Indenture imposes
certain limitations on the ability of the Company and its Restricted Subsidiaries to, among other
things, make certain Investments and other Restricted Payments, pay dividends and other
distributions, incur Indebtedness, enter into consensual restrictions upon the payment of certain
dividends and distributions by such Restricted Subsidiaries, issue or sell shares of capital stock
of such Restricted Subsidiaries, enter into or permit certain transactions with Affiliates and make
asset dispositions. The Indenture also imposes limitations on the
ability of the Company and each
Guarantor to consolidate or merge with or into any other Person or convey, transfer or lease all or
substantially all of the property of the Company.

          To guarantee the due and punctual payment of the principal and interest, if any, on the Notes
and all other amounts payable by the Company under the Indenture and the Notes when and as the same
shall be due and payable, whether at maturity, by acceleration or otherwise, according to the terms
of the Notes and the Indenture, the Guarantors have, jointly and severally, unconditionally
guaranteed the Guaranteed Obligations on a senior basis pursuant to the terms of the Indenture.

8

 

          The Notes are secured on a second-priority basis by the Lien created by the Security Documents
pursuant to, and subject to the terms of, the Indenture and the Intercreditor Agreement.

          5. Optional Redemption. Except as stated below, the Company may not redeem the Notes prior to
April 1, 2008. On and after such date, the Company may redeem the Notes, in whole or in part, on
one or more occasions, on not less than 30 nor more than 60 days’ prior notice, at the following
redemption prices (expressed as percentages of the principal amount), plus accrued and unpaid
interest, including Additional Interest, thereon, if any, to the applicable redemption date
(subject to the right of Holders of record on the relevant record date to receive interest due on
the relevant interest payment date), if redeemed during the 12-month period commencing on April l
of the years set forth below:

	 	 	 	 	 
	 	 	Redemption
	Year	 	Price
	2008
	 	 	103	%
	2009
	 	 	102	%
	2010
	 	 	101	%
	2011 and thereafter
	 	 	100	%

          At
any time on or prior to April 1, 2008, the Notes may be redeemed, in whole or in part at the
option of the Company, upon not less than 30 nor more than 60 days’ prior notice mailed by
first-class mail to each Holder’s registered address, at a redemption price equal to 100% of the
principal amount of the Notes to be redeemed plus the Applicable Premium as of, and accrued and
unpaid interest, including additional interest, if any, to the date of the redemption (the
“Make-Whole Redemption Date”), except that installments of interest which are due
and payable on dates falling on or prior to the applicable redemption date will be payable to the
persons who were the Holders of record at the close of business on the relevant record dates.

          “Applicable Premium” means, with respect to the Notes at any Make-Whole Redemption
Date, the greater of:

          (a) 1.0% of the principal amount of such Notes; and

          (b) the excess of

         (i) the present value at such redemption date of (i) the redemption price of
the note at April 1, 2008 (such redemption price being set forth in the table
appearing above under the caption “— Optional Redemption”) plus (ii) all
required interest payments due on the note through April 1, 2008, assuming that LIBOR in effect on the
date of the redemption notice would be LIBOR in effect through April 1, 2008
(excluding accrued but unpaid interest to the redemption date), computed using a
discount rate equal to LIBOR as of such redemption date plus 0.5% per annum; over

         (ii) the principal amount of such Notes, if greater.

          Optional Redemption upon Equity Offerings. Prior to April 1, 2008, the Company also
may (but shall not have the obligation to), on one or more occasions, redeem up to a maximum of 35%
of the aggregate principal amount of the Notes (calculated giving effect to any issuance of
additional Notes) at a redemption price equal to 5.50% of the principal amount thereof plus a
premium equal to the interest rate per annum applicable on the date of the Notice of Redemption
plus accrued and unpaid interest, including additional interest, thereon, if any, to the redemption
date (subject to the right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date), with the Net

9

 

Cash Proceeds of one or more Equity Offerings by the Company; provided, however, that
after giving effect to any such redemption:

   (i) at least 65% of the aggregate principal amount of the Notes (calculated giving
effect to any issuance of additional Notes) issued remains outstanding; and

   (ii) any such redemption by the Company must be made within 90 days of the date of the
closing of the applicable Equity Offering and must be made in accordance with certain
procedures set forth in the Indenture.

          Optional Tax Redemption. If, as a result of any change in or amendment to the laws,
regulations or published tax rulings of general applicability of a Taxing Jurisdiction), which is
proposed and becomes effective on or after the date of this offering memorandum, in making any
payment due or to become due under the Notes or the Indenture, (a)(i) the Company is or would be
required on the next succeeding interest payment date to pay Additional Amounts or (ii) a Guarantor
is, or on the next succeeding interest payment date would be, unable, for reasons outside its
control, to cause the Company to pay amounts due under the Notes, and with respect to any amount
due under its Guarantee or the Indenture, a Guarantor is, or would be required on the next
succeeding interest payment date, to pay Additional Amounts and (b) the payment of such Additional
Amounts cannot be avoided by the use of any reasonable measures available to the Company or such
Guarantor, as the case may be, the Notes may be redeemed at the option of the Company in whole but
not in part, upon not less than 30 nor more than 60 days’ notice in accordance with the procedures
set forth in the Indenture, at any time at a redemption price equal to 100% of the principal amount
thereof, plus accrued and unpaid interest to the date of redemption. The Company or such Guarantor
will also pay to Holders on the date of redemption any Additional Amounts which are payable.

          Prior to the publication of any notice of redemption in accordance with the foregoing, the
Company shall deliver to the Trustee (i) an Officer’s Certificate stating that such amendment or
change has occurred (irrespective of whether such amendment or change is then effective),
describing the facts leading thereto and stating that the requirement to pay Additional Amounts
cannot be avoided by the Company or the Guarantors, as the case may be, taking reasonable measures
available to it and (ii) an opinion of independent legal counsel,
which counsel shall be reasonably
acceptable to the Trustee, to the effect that the Company has or will become obligated to pay
Additional Amounts on the next succeeding interest payment date as a result of such change or
amendment. Such notice, once delivered by the Company to the Trustee, will be irrevocable.

          No such notice of redemption may be given more than 90 days before the Company first becomes
liable to pay any Additional Amounts or indemnification payments as a result of a change or
amendment described above.

          6. Sinking Fund. The Notes are not subject to any sinking fund.

          7. Notice of Redemption. Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at
his or her registered address. Notes in denominations larger than $1,000 may be redeemed in part
but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and
accrued and unpaid interest, including Additional Interest, if any, on all Notes (or portions
thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the
redemption date and certain other conditions are satisfied, on and after such date interest ceases
to accrue on such Notes (or such portions thereof) called for redemption.

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          8. Repurchase
of Notes at the Option of Holders upon Change of Control; Asset Sale Offer. Upon a
Change of Control, any Holder of Notes will have the right, subject to certain conditions specified
in the Indenture, to cause the Company to repurchase all or any part of the Notes of such Holder at
a purchase price equal to 101% of the principal amount of the Notes to be repurchased plus accrued
and unpaid interest, including Additional Interest, if any, to the date of repurchase (subject to
the right of Holders of record on the relevant record date to receive interest due on the relevant
interest payment date that is on or prior to the date of purchase) as provided in, and subject to
the terms of, the Indenture.

          In addition, in accordance with Section 4.06 of the Indenture, the Company will be required to
offer to purchase Notes with the proceeds from certain asset sales.

          9. Denominations; Transfer; Exchange. The Notes are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange Notes in
accordance with the Indenture. Upon any transfer or exchange, the Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate endorsements or transfer documents and
to pay any taxes required by law or permitted by the Indenture. The Registrar need not register the
transfer of or exchange any Notes selected for redemption (except, in the case of a Note to be
redeemed in part, the portion of the Note not to be redeemed) or to transfer or exchange any Notes
for a period of 15 days prior to a selection of Notes to be redeemed or 15 days before an interest
payment date.

          10. Persons Deemed Owners. Except as provided in paragraph 2 hereof, the registered Holder of
this Note may be treated as the owner of it for all purposes.

          11. Unclaimed Money. If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to the Company at their written
request unless an abandoned property law designates another Person. After any such payment, Holders
entitled to the money must look only to the Company and not to the Trustee for payment.

          12. Discharge and Defeasance. Subject to certain conditions, the Company at any time may
terminate some of or all its and the Guarantors’ obligations under the Notes and the Indenture if
the Company deposits with the Trustee money or U.S. Government Obligations for the payment of
principal and interest on the Notes to redemption or maturity, as the case may be.

          13. Amendment,
Supplement and Waiver. Subject to certain exceptions set forth in the Indenture,
(a) the Indenture, the Notes, the Note Guarantees or the Security Documents may be amended without
prior notice to any Holder but with the written consent of the Holders of at least a majority in
aggregate principal amount of the outstanding Notes and (b) any
Default may be waived with the
written consent of the Holders of at least a majority in principal amount of the outstanding Notes.
Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the
Company and the Trustee may amend or supplement the Indenture, the Notes, the Note Guarantees or
the Security Documents (i) to cure any ambiguity, omission, defect or inconsistency; (ii) to comply
with Article 5; (iii) to provide for uncertificated Notes in addition to or in place of
certificated Notes; provided, however, that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code or in a manner such that the
uncertificated Notes are described in Section l63(f)(2)(B) of the Code; (iv) to add additional Note
Guarantees with respect to the Notes; (v) to add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred upon the Company; (vi) to make any
change that does not adversely affect the rights of any Holder; (vii) to provide for the issuance
of the Exchange Notes or Additional Notes, which shall have terms substantially identical in all
material respects to the Original Notes (except that the transfer restrictions contained in the
Original Notes shall be modified or eliminated, as appropriate), and which shall be treated,
together with any outstanding

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Original Notes, as a single issue of securities; (viii) to comply with any requirement of the Commission
in connection with qualifying, or maintaining the qualification of, the Indenture under the TIA; or
(ix) if necessary, in connection with any addition or release of Collateral permitted under the
terms of the Indenture or Security Documents.

          14. Defaults and Remedies. If an Event of Default occurs (other than an Event of Default
specified in Section 6.01(7) or (8) of the Indenture) and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the outstanding Notes may declare the principal of
and accrued but unpaid interest on all the Notes to be due and payable. If an Event of Default
specified in Section 6.01(7) or (8) of the Indenture occurs, the principal of and interest on all
the Notes shall become immediately due and payable without any declaration or other act on the part
of the Trustee or any Holders. Under certain circumstances, the Holders of a majority in principal
amount of the outstanding Notes may rescind any such acceleration with respect to the Notes and its
consequences.

          If an Event of Default occurs and is continuing, the Trustee shall be under no obligation to

exercise any of the rights or powers under the Indenture at the request or direction
of any of the Holders unless such Holders have offered to the Trustee reasonable indemnity or
security against any loss, liability or expense and certain other conditions are complied with.
Except to enforce the right to receive payment of principal, premium (if any) or interest when due,
no Holder may pursue any remedy with respect to the Indenture or the Notes unless (i) such Holder
has previously given the Trustee notice that an Event of Default is continuing, (ii) Holders of at
least 25% in principal amount of the outstanding Notes have requested the Trustee in writing to
pursue the remedy, (iii) such Holders have offered the Trustee reasonable security or indemnity
against any loss, liability or expense, (iv) the Trustee has not complied with such request within
60 days after the receipt of the request and the offer of security or indemnity and (v) the Holders
of a majority in principal amount of the outstanding Notes have not given the Trustee a direction
inconsistent with such request within such 60-day period. Subject to certain restrictions, the
Holders of a majority in principal amount of the outstanding Notes are given the right to direct
the time, method and place of conducting any proceeding for any remedy available to the Trustee or
of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to
follow any direction that conflicts with law or the Indenture or that the Trustee determines is
unduly prejudicial to the rights of any other Holder or that would involve the Trustee in personal
liability. Prior to taking any action under the Indenture, the Trustee shall be entitled to
indemnification satisfactory to it in its sole discretion against all losses and expenses caused by
taking or not taking such action.

          15. Trustee Dealings with the Company. Subject to certain limitations imposed by the TIA, the
Trustee under the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Company or
its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it
would have if it were not Trustee.

          16. No Recourse Against Others. A director, officer, employee, stockholder or member, as such,
of the Company or any of the Guarantors, shall not have any liability for any obligations of the
Company or any of the Guarantors under the Notes, the Indenture, the Note Guaranties or the
Security Documents or for any claim based on, in respect of or by reason of such obligations or
their creation. By accepting a Note, each Holder shall waive and release all such liability. The
waiver and release shall be part of the consideration for the issue of the Notes.

          17. Authentication. This Note shall not be valid until an authorized signatory of the Trustee
(or an authenticating agent) manually signs the certificate of authentication on the other side of
this Note.

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          18. Abbreviations. Customary abbreviations may be used in the name of a Holder or an assignee,
such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants
with rights of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A
(=Uniform Gift to Minors Act).

          19. Governing Law. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

          20. CUSIP and ISIN Numbers. The Company may have caused CUSIP and ISIN numbers to be printed
on the Notes and directed the Trustee to use such CUSIP and ISIN numbers in notices of redemption
as a convenience to Holders. No representation is made as to the accuracy of any such numbers either as printed on the Notes or as contained in any notice
of redemption and reliance may be placed only on the other identification numbers placed thereon.

          THE COMPANY WILL FURNISH TO ANY HOLDER OF NOTES UPON WRITTEN REQUEST AND WITHOUT CHARGE TO THE
HOLDER A COPY OF THE INDENTURE WHICH HAS IN IT THE TEXT OF THIS NOTE.

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