Document:

exv4w8

EXHIBIT 4.8

MannKind Corporation,

Issuer

AND

[Trustee],

Trustee

 

INDENTURE

Dated as of [     ], 20

 

Subordinated Debt Securities

 

 

Table of Contents

Page

	 	 	 	 	 

	Article 1 DEFINITIONS
	 	 	1	 
	Section 1.01 Definitions of Terms
	 	 	1	 
	 
	 	 	 	 
	Article 2 ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES
	 	 	4	 
	Section 2.01 Designation and Terms of Securities
	 	 	4	 
	Section 2.02 Form of Securities and Trustee’s Certificate
	 	 	6	 
	Section 2.03 Denominations: Provisions for Payment
	 	 	6	 
	Section 2.04 Execution and Authentications
	 	 	7	 
	Section 2.05 Registration of Transfer and Exchange
	 	 	8	 
	Section 2.06 Temporary Securities
	 	 	8	 
	Section 2.07 Mutilated, Destroyed, Lost or Stolen Securities
	 	 	9	 
	Section 2.08 Cancellation
	 	 	9	 
	Section 2.09 Benefits of Indenture
	 	 	10	 
	Section 2.10 Authenticating Agent
	 	 	10	 
	Section 2.11 Global Securities
	 	 	10	 
	 
	 	 	 	 
	Article 3 REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS
	 	 	11	 
	Section 3.01 Redemption
	 	 	11	 
	Section 3.02 Notice of Redemption
	 	 	11	 
	Section 3.03 Payment Upon Redemption
	 	 	12	 
	Section 3.04 Sinking Fund
	 	 	12	 
	Section 3.05 Satisfaction of Sinking Fund Payments with Securities
	 	 	12	 
	Section 3.06 Redemption of Securities for Sinking Fund
	 	 	13	 
	 
	 	 	 	 
	Article 4 COVENANTS
	 	 	13	 
	Section 4.01 Payment of Principal, Premium and Interest
	 	 	13	 
	Section 4.02 Maintenance of Office or Agency
	 	 	13	 
	Section 4.03 Paying Agents
	 	 	13	 
	Section 4.04 Appointment to Fill Vacancy in Office of Trustee
	 	 	14	 
	Section 4.05 Compliance with Consolidation Provisions
	 	 	14	 
	 
	 	 	 	 
	Article 5 SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
	 	 	14	 
	Section 5.01 Company to Furnish Trustee Names and Addresses of Securityholders
	 	 	14	 
	Section 5.02 Preservation Of Information; Communications With Securityholders
	 	 	15	 
	Section 5.03 Reports by the Company
	 	 	15	 
	Section 5.04 Reports by the Trustee
	 	 	15	 
	 
	 	 	 	 
	Article 6 REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
	 	 	15	 
	Section 6.01 Events of Default
	 	 	15	 
	Section 6.02 Collection of Indebtedness and Suits for Enforcement by Trustee
	 	 	17	 
	Section 6.03 Application of Moneys Collected
	 	 	18	 
	Section 6.04 Limitation on Suits
	 	 	18	 
	Section 6.05 Rights and Remedies Cumulative; Delay or Omission Not Waiver
	 	 	19	 
	Section 6.06 Control by Securityholders
	 	 	19	 
	Section 6.07 Undertaking to Pay Costs
	 	 	19	 
	 
	 	 	 	 
	Article 7 CONCERNING THE TRUSTEE
	 	 	20	 
	Section 7.01 Certain Duties and Responsibilities of Trustee
	 	 	20	 
	Section 7.02 Certain Rights of Trustee
	 	 	21	 
	Section 7.03 Trustee Not Responsible for Recitals or Issuance or Securities
	 	 	22	 
	Section 7.04 May Hold Securities
	 	 	22	 

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Page

	 	 	 	 	 

	Section 7.05 Moneys Held in Trust
	 	 	22	 
	Section 7.06 Compensation and Reimbursement
	 	 	22	 
	Section 7.07 Reliance on Officer’s Certificate
	 	 	23	 
	Section 7.08 Disqualification; Conflicting Interests
	 	 	23	 
	Section 7.09 Corporate Trustee Required; Eligibility
	 	 	23	 
	Section 7.10 Resignation and Removal; Appointment of Successor
	 	 	23	 
	Section 7.11 Acceptance of Appointment By Successor
	 	 	24	 
	Section 7.12 Merger, Conversion, Consolidation or Succession to Business
	 	 	25	 
	Section 7.13 Preferential Collection of Claims Against the Company
	 	 	25	 
	Section 7.14 Notice of Default
	 	 	26	 
	 
	 	 	 	 
	Article 8 CONCERNING THE SECURITYHOLDERS
	 	 	26	 
	Section 8.01 Evidence of Action by Securityholders
	 	 	26	 
	Section 8.02 Proof of Execution by Securityholders
	 	 	26	 
	Section 8.03 Who May be Deemed Owners
	 	 	27	 
	Section 8.04 Certain Securities Owned by Company Disregarded
	 	 	27	 
	Section 8.05 Actions Binding on Future Securityholders
	 	 	27	 
	 
	 	 	 	 
	Article 9 SUPPLEMENTAL INDENTURES
	 	 	27	 
	Section 9.01 Supplemental Indentures Without the Consent of Securityholders
	 	 	27	 
	Section 9.02 Supplemental Indentures With Consent of Securityholders
	 	 	28	 
	Section 9.03 Effect of Supplemental Indentures
	 	 	29	 
	Section 9.04 Securities Affected by Supplemental Indentures
	 	 	29	 
	Section 9.05 Execution of Supplemental Indentures
	 	 	29	 
	 
	 	 	 	 
	Article 10 SUCCESSOR ENTITY
	 	 	29	 
	Section 10.01 Company May Consolidate, Etc
	 	 	29	 
	Section 10.02 Successor Entity Substituted
	 	 	30	 
	 
	 	 	 	 
	Article 11 SATISFACTION AND DISCHARGE
	 	 	30	 
	Section 11.01 Satisfaction and Discharge of Indenture
	 	 	30	 
	Section 11.02 Discharge of Obligations
	 	 	31	 
	Section 11.03 Deposited Moneys to be Held in Trust
	 	 	31	 
	Section 11.04 Payment of Moneys Held by Paying Agents
	 	 	31	 
	Section 11.05 Repayment to Company
	 	 	31	 
	 
	 	 	 	 
	Article 12 IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
	 	 	31	 
	Section 12.01 No Recourse
	 	 	31	 
	 
	 	 	 	 
	Article 13 MISCELLANEOUS PROVISIONS
	 	 	32	 
	Section 13.01 Effect on Successors and Assigns
	 	 	32	 
	Section 13.02 Actions by Successor
	 	 	32	 
	Section 13.03 Surrender of Company Powers
	 	 	32	 
	Section 13.04 Notices
	 	 	32	 
	Section 13.05 Governing Law
	 	 	32	 
	Section 13.06 Treatment of Securities as Debt
	 	 	33	 
	Section 13.07 Section 13.07 Certificates and Opinions as to Conditions Precedent
	 	 	33	 
	Section 13.08 Payments on Business Days
	 	 	33	 
	Section 13.09 Conflict with Trust Indenture Act
	 	 	33	 
	Section 13.10 Counterparts
	 	 	33	 
	Section 13.11 Separability
	 	 	33	 
	Section 13.12 Compliance Certificates
	 	 	34	 

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Page

	 	 	 	 	 

	Article 14 SUBORDINATION OF SECURITIES
	 	 	34	 
	Section 14.01 Subordination Terms
	 	 	34	 

 

			
	(1)	 	The Table of Contents does not constitute part of the Indenture and shall not have any
bearing on the interpretation of any of its terms or provisions.

-iii-

 

INDENTURE

     INDENTURE, dated as of ___, 20 , among MannKind Corporation, a Delaware corporation (the
“Company”), and [TRUSTEE], as trustee (the “Trustee”):

     WHEREAS, for its lawful corporate purposes, the Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance of subordinated debt securities (hereinafter
referred to as the “Securities”), in an unlimited aggregate principal amount to be issued from time
to time in one or more series as in this Indenture provided, as registered Securities without
coupons, to be authenticated by the certificate of the Trustee;

     WHEREAS, to provide the terms and conditions upon which the Securities are to be
authenticated, issued and delivered, the Company has duly authorized the execution of this
Indenture; and

     WHEREAS, all things necessary to make this Indenture a valid agreement of the Company, in
accordance with its terms, have been done.

     NOW, THEREFORE, in consideration of the premises and the purchase of the Securities by the
holders thereof, it is mutually covenanted and agreed as follows for the equal and ratable benefit
of the holders of Securities:

ARTICLE 1

DEFINITIONS

     Section 1.01 Definitions of Terms.

     The terms defined in this Section (except as in this Indenture or any indenture supplemental
hereto otherwise expressly provided or unless the context otherwise requires) for all purposes of
this Indenture and of any indenture supplemental hereto shall have the respective meanings
specified in this Section and shall include the plural as well as the singular. All other terms
used in this Indenture that are defined in the Trust Indenture Act of 1939, as amended, or that are
by reference in such Act defined in the Securities Act of 1933, as amended (except as herein or any
indenture supplemental hereto otherwise expressly provided or unless the context otherwise
requires), shall have the meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of the execution of this instrument.

     “Authenticating Agent” means an authenticating agent with respect to all or any of the series
of Securities appointed by the Trustee pursuant to Section 2.10.

     “Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief
of debtors.

     “Board of Directors” means the Board of Directors of the Company or any duly authorized
committee of such Board.

     “Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of Directors and to be in full
force and effect on the date of such certification.

     “Business Day” means, with respect to any series of Securities, any day other than a day on
which federal or state banking institutions in the Borough of Manhattan, the City of New York, or
in the city of the Corporate Trust Office of the Trustee, are authorized or obligated by law,
executive order or regulation to close.

     “Certificate” means a certificate signed by any Officer. The Certificate need not comply with
the provisions of Section 13.07.

1

 

     “Company” means MannKind Corporation, a corporation duly organized and existing under the laws
of the State of Delaware, and, subject to the provisions of Article Ten, shall also include its
successors and assigns.

     “Corporate Trust Office” means the office of the Trustee at which, at any particular time, its
corporate trust business shall be principally administered, which office at the date hereof is
located at .

     “Custodian” means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.

     “Depositary” means, with respect to Securities of any series for which the Company shall
determine that such Securities will be issued as a Global Security, The Depository Trust Company,
New York, New York, another clearing agency, or any successor registered as a clearing agency under
the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or other applicable
statute or regulation, which, in each case, shall be designated by the Company pursuant to either
Section 2.01 or 2.11.

     “Event of Default” means, with respect to Securities of a particular series, any event
specified in Section 6.01, continued for the period of time, if any, therein designated.

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

     “Global Security” means, with respect to any series of Securities, a Security executed by the
Company and delivered by the Trustee to the Depositary or pursuant to the Depositary’s instruction,
all in accordance with the Indenture, which shall be registered in the name of the Depositary or
its nominee.

     “Governmental Obligations” means securities that are (a) direct obligations of the United
States of America for the payment of which its full faith and credit is pledged or (b) obligations
of a Person controlled or supervised by and acting as an agency or instrumentality of the United
States of America, the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America that, in either case, are not callable or redeemable at
the option of the issuer thereof at any time prior to the stated maturity of the Securities, and
shall also include a depositary receipt issued by a bank or trust company as custodian with respect
to any such Governmental Obligation or a specific payment of principal of or interest on any such
Governmental Obligation held by such custodian for the account of the holder of such depositary
receipt; provided, however, that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary receipt from any amount
received by the custodian in respect of the Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced by such depositary receipt.

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

     “Indenture” means this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered into in accordance
with the terms hereof and shall include the terms of particular series of Securities established as
contemplated by Section 2.01.

     “Interest Payment Date”, when used with respect to any installment of interest on a Security
of a particular series, means the date specified in such Security or in a Board Resolution or in an
indenture supplemental hereto with respect to such series as the fixed date on which an installment
of interest with respect to Securities of that series is due and payable.

     “Officer” means, with respect to the Company, the chairman of the Board of Directors, a chief
executive officer, a president, a chief financial officer, a chief operating officer, any executive
vice president, any senior vice president, any vice president, the treasurer or any assistant
treasurer, the controller or any assistant controller or the secretary or any assistant secretary.

     “Officer’s Certificate” means a certificate signed by any Officer. Each such certificate
shall include the statements provided for in Section 13.07, if and to the extent required by the
provisions thereof.

2.

 

     “Opinion of Counsel” means an opinion in writing subject to customary exceptions of legal
counsel, who may be an employee of or counsel for the Company, that is delivered to the Trustee in
accordance with the terms hereof. Each such opinion shall include the statements provided for in
Section 13.07, if and to the extent required by the provisions thereof.

     “Outstanding”, when used with reference to Securities of any series, means, subject to the
provisions of Section 8.04, as of any particular time, all Securities of that series theretofore
authenticated and delivered by the Trustee under this Indenture, except (a) Securities theretofore
canceled by the Trustee or any paying agent, or delivered to the Trustee or any paying agent for
cancellation or that have previously been canceled; (b) Securities or portions thereof for the
payment or redemption of which moneys or Governmental Obligations in the necessary amount shall
have been deposited in trust with the Trustee or with any paying agent (other than the Company) or
shall have been set aside and segregated in trust by the Company (if the Company shall act as its
own paying agent); provided, however, that if such Securities or portions of such Securities are to
be redeemed prior to the maturity thereof, notice of such redemption shall have been given as
provided in Article Three, or provision satisfactory to the Trustee shall have been made for giving
such notice; and (c) Securities in lieu of or in substitution for which other Securities shall have
been authenticated and delivered pursuant to the terms of Section 2.07.

     “Person” means any individual, corporation, partnership, joint venture, joint-stock company,
limited liability company, association, trust, unincorporated organization, any other entity or
organization, including a government or political subdivision or an agency or instrumentality
thereof.

     “Predecessor Security” of any particular Security means every previous Security evidencing all
or a portion of the same debt as that evidenced by such particular Security; and, for the purposes
of this definition, any Security authenticated and delivered under Section 2.07 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the lost, destroyed or
stolen Security.

     “Responsible Officer” when used with respect to the Trustee means the chairman of its board of
directors, the chief executive officer, the president, any vice president, the secretary, the
treasurer, any trust officer, any corporate trust officer or any other officer or assistant officer
of the Trustee customarily performing functions similar to those performed by the Persons who at
the time shall be such officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.

     “Securities” has the meaning stated in the first recital of this Indenture and more
particularly means any Securities authenticated and delivered under this Indenture.

     “Securityholder”, “holder of Securities”, “registered holder”, or other similar term, means
the Person or Persons in whose name or names a particular Security is registered on the Security
Register kept for that purpose in accordance with the terms of this Indenture.

     “Security Register” and “Security Registrar” shall have the meanings as set forth in Section
2.05.

     “Subsidiary” means, with respect to any Person, (i) any corporation at least a majority of
whose outstanding Voting Stock shall at the time be owned, directly or indirectly, by such Person
or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, (ii)
any general partnership, joint venture or similar entity, at least a majority of whose outstanding
partnership or similar interests shall at the time be owned by such Person, or by one or more of
its Subsidiaries, or by such Person and one or more of its Subsidiaries and (iii) any limited
partnership of which such Person or any of its Subsidiaries is a general partner.

     “Trustee” means, and, subject to the provisions
of Article Seven, shall also include its successors and assigns, and, if at any time there is more
than one Person acting in such capacity hereunder, “Trustee” shall mean each such Person. The term
“Trustee” as used with respect to a particular series of the Securities shall mean the trustee with
respect to that series.

     “Trust Indenture Act” means the Trust Indenture Act of 1939, as amended.

3.

 

     “Voting Stock”, as applied to stock of any Person, means shares, interests, participations or
other equivalents in the equity interest (however designated) in such Person having ordinary voting
power for the election of a majority of the directors (or the equivalent) of such Person, other
than shares, interests, participations or other equivalents having such power only by reason of the
occurrence of a contingency.

ARTICLE 2

ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND

EXCHANGE OF SECURITIES

     Section 2.01 Designation and Terms of Securities.

          (a) The aggregate principal amount of Securities that may be authenticated and delivered under
this Indenture is unlimited. The Securities may be issued in one or more series up to the
aggregate principal amount of Securities of that series from time to time authorized by or pursuant
to a Board Resolution or pursuant to one or more indentures supplemental hereto. Prior to the
initial issuance of Securities of any series, there shall be established in or pursuant to a Board
Resolution, and set forth in an Officer’s Certificate, or established in one or more indentures
supplemental hereto:

               (1) the title of the Securities of the series (which shall distinguish the Securities of
that
series from all other Securities);

               (2) any limit upon the aggregate principal amount of the Securities of that series that
may be
authenticated and delivered under this Indenture (except for Securities authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of, other Securities of that
series);

               (3) the date or dates on which the principal of the Securities of the series is payable,
any
original issue discount that may apply to the Securities of that series upon their issuance, the
principal amount due at maturity, and the place(s) of payment;

               (4) the rate or rates at which the Securities of the series shall bear interest or the
manner
of calculation of such rate or rates, if any;

               (5) the date or dates from which such interest shall accrue, the Interest Payment Dates
on
which such interest will be payable or the manner of determination of such Interest Payment Dates,
the place(s) of payment, and the record date for the determination of holders to whom interest is
payable on any such Interest Payment Dates or the manner of determination of such record dates;

               (6) the right, if any, to extend the interest payment periods and the duration of such
extension;

               (7) the period or periods within which, the price or prices at which and the terms and
conditions upon which Securities of the series may be redeemed, converted or exchanged, in whole or
in part, at the option of the Company;

               (8) the obligation, if any, of the Company to redeem or purchase Securities of the
series
pursuant to any sinking fund, mandatory redemption, or analogous provisions (including payments
made in cash in satisfaction of future sinking fund obligations) or at the option of a holder
thereof and the period or periods within which, the price or prices at which, and the terms and
conditions upon which, Securities of the series shall be redeemed or purchased, in whole or in
part, pursuant to such obligation;

               (9) the form of the Securities of the series including the form of the Certificate of
Authentication for such series;

4.

 

               (10) if other than denominations of one thousand U.S. dollars ($1,000) or any integral
multiple thereof, the denominations in which the Securities of the series shall be issuable;

               (11) any and all other terms (including terms, to the extent applicable, relating to any
auction or remarketing of the Securities of that series and any security for the obligations of the
Company with respect to such Securities) with respect to such series (which terms shall not be
inconsistent with the terms of this Indenture, as amended by any supplemental indenture) including
any terms which may be required by or advisable under United States laws or regulations or
advisable in connection with the marketing of Securities of that series;

               (12) whether the Securities of the series shall be issued in whole or in part in the
form of a
Global Security or Securities; the terms and conditions, if any, upon which such Global Security or
Securities may be exchanged in whole or in part for other individual Securities; and the Depositary
for such Global Security or Securities;

               (13) whether the Securities will be convertible into or exchangeable for shares of
common
stock or other securities of the Company or any other Person and, if so, the terms and conditions
upon which such Securities will be so convertible or exchangeable, including the conversion or
exchange price, as applicable, or how it will be calculated and may be adjusted, any mandatory or
optional (at the Company’s option or the holders’ option) conversion or exchange features, and the
applicable conversion or exchange period;

               (14) if other than the principal amount thereof, the portion of the principal amount of
Securities of the series which shall be payable upon declaration of acceleration of the maturity
thereof pursuant to Section 6.01;

               (15) any additional or different Events of Default or restrictive covenants (which may
include, among other restrictions, restrictions on the Company’s ability or the ability of the
Company’s Subsidiaries to: incur additional indebtedness; issue additional securities; create
liens; pay dividends or make distributions in respect of their capital stock; redeem capital stock;
place restrictions on such Subsidiaries placing restrictions on their ability to pay dividends,
make distributions or transfer assets; make investments or other restricted payments; sell or
otherwise dispose of assets; enter into sale-leaseback transactions; engage in transactions with
stockholders and affiliates; issue or sell stock of their Subsidiaries; or effect a consolidation
or merger) or financial covenants (which may include, among other financial covenants, financial
covenants that require the Company and its Subsidiaries to maintain specified interest coverage,
fixed charge, cash flow-based or asset-based ratios) provided for with respect to the Securities of
the series;

               (16) if other than dollars, the coin or currency in which the Securities of the series
are
denominated (including, but not limited to, foreign currency);

               (17) whether interest will be payable in cash or additional Securities at the
Company’s or the
Securityholders’ option and the terms and conditions upon which the election may be made;

               (18) the terms and conditions, if any, upon which the Company shall pay amounts in
addition to
the stated interest, premium, if any and principal amounts of the Securities of the series to any
Securityholder that is not a “United States person” for federal tax purposes;

               (19) any restrictions on transfer, sale or assignment of the Securities of the series;
and

               (20) the subordination terms of the Securities of the series.

     All Securities of any one series shall be substantially identical except as to denomination
and except as may otherwise be provided in or pursuant to any such Board Resolution or in any
indentures supplemental hereto.

     If any of the terms of the series are established by action taken pursuant to a Board
Resolution of the Company, a copy of an appropriate record of such action shall be certified by the
secretary or an assistant secretary

5.

 

of the Company and delivered to the Trustee at or prior to the delivery of the Officer’s
Certificate of the Company setting forth the terms of the series.

     Securities of any particular series may be issued at various times, with different dates on
which the principal or any installment of principal is payable, with different rates of interest,
if any, or different methods by which rates of interest may be determined, with different dates on
which such interest may be payable and with different redemption dates.

     Section 2.02 Form of Securities and Trustee’s Certificate.

     The Securities of any series and the Trustee’s certificate of authentication to be borne by
such Securities shall be substantially of the tenor and purport as set forth in one or more
indentures supplemental hereto or as provided in a Board Resolution, and set forth in an Officer’s
Certificate, and they may have such letters, numbers or other marks of identification or
designation and such legends or endorsements printed, lithographed or engraved thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of this Indenture, or
as may be required to comply with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any securities exchange on which Securities of that series may be
listed, or to conform to usage.

     Section 2.03 Denominations: Provisions for Payment.

     The Securities shall be issuable as registered Securities and in the denominations of one
thousand U.S. dollars ($1,000) or any integral multiple thereof, subject to Section 2.01(a)(10).
The Securities of a particular series shall bear interest payable on the dates and at the rate
specified with respect to that series. Subject to Section 2.01(a)(16), the principal of and the
interest on the Securities of any series, as well as any premium thereon in case of redemption
thereof prior to maturity, shall be payable in the coin or currency of the United States of America
that at the time is legal tender for public and private debt, at the office or agency of the
Company maintained for that purpose. Each Security shall be dated the date of its authentication.
Interest on the Securities shall be computed on the basis of a 360-day year composed of twelve
30-day months.

     The interest installment on any Security that is payable, and is punctually paid or duly
provided for, on any Interest Payment Date for Securities of that series shall be paid to the
Person in whose name said Security (or one or more Predecessor Securities) is registered at the
close of business on the regular record date for such interest installment. In the event that any
Security of a particular series or portion thereof is called for redemption and the redemption date
is subsequent to a regular record date with respect to any Interest Payment Date and prior to such
Interest Payment Date, interest on such Security will be paid upon presentation and surrender of
such Security as provided in Section 3.03.

     Any interest on any Security that is payable, but is not punctually paid or duly provided for,
on any Interest Payment Date for Securities of the same series (herein called “Defaulted Interest”)
shall forthwith cease to be payable to the registered holder on the relevant regular record date by
virtue of having been such holder; and such Defaulted Interest shall be paid by the Company, at its
election, as provided in clause (1) or clause (2) below:

               (1) The Company may make payment of any Defaulted Interest on Securities to the Persons
in
whose names such Securities (or their respective Predecessor Securities) are registered at the
close of business on a special record date for the payment of such Defaulted Interest, which shall
be fixed in the following manner: the Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each such Security and the date of the proposed payment,
and at the same time the Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon, the Trustee shall fix a special
record date for the payment of such Defaulted Interest which shall not be more than 15 nor less
than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt
by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the
Company of such special record date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the special record date therefor to
be mailed, first class postage prepaid, to each Securityholder at his or her address as it appears
in the Security Register (as

6.

 

hereinafter defined), not less than 10 days prior to such special record date. Notice of the
proposed payment of such Defaulted Interest and the special record date therefor having been mailed
as aforesaid, such Defaulted Interest shall be paid to the Persons in whose names such Securities
(or their respective Predecessor Securities) are registered on such special record date.

               (2) The Company may make payment of any Defaulted Interest on any Securities in any
other
lawful manner not inconsistent with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.

     Unless otherwise set forth in a Board Resolution or one or more indentures supplemental hereto
establishing the terms of any series of Securities pursuant to Section 2.01 hereof, the term
“regular record date” as used in this Section with respect to a series of Securities and any
Interest Payment Date for such series shall mean either the fifteenth day of the month immediately
preceding the month in which an Interest Payment Date established for such series pursuant to
Section 2.01 hereof shall occur, if such Interest Payment Date is the first day of a month, or the
first day of the month in which an Interest Payment Date established for such series pursuant to
Section 2.01 hereof shall occur, if such Interest Payment Date is the fifteenth day of a month,
whether or not such date is a Business Day.

     Subject to the foregoing provisions of this Section, each Security of a series delivered under
this Indenture upon transfer of or in exchange for or in lieu of any other Security of such series
shall carry the rights to interest accrued and unpaid, and to accrue, that were carried by such
other Security.

     Section 2.04 Execution and Authentications.

     The Securities shall be signed on behalf of the Company by one of its Officers. Signatures
may be in the form of a manual or facsimile signature.

     The Company may use the facsimile signature of any Person who shall have been an Officer,
notwithstanding the fact that at the time the Securities shall be authenticated and delivered or
disposed of such Person shall have ceased to be such an officer of the Company. The Securities may
contain such notations, legends or endorsements required by law, stock exchange rule or usage.
Each Security shall be dated the date of its authentication by the Trustee.

     A Security shall not be valid until authenticated manually by an authorized signatory of the
Trustee, or by an Authenticating Agent. Such signature shall be conclusive evidence that the
Security so authenticated has been duly authenticated and delivered hereunder and that the holder
is entitled to the benefits of this Indenture. At any time and from time to time after the
execution and delivery of this Indenture, the Company may deliver Securities of any series executed
by the Company to the Trustee for authentication, together with a written order of the Company for
the authentication and delivery of such Securities, signed by an Officer, and the Trustee in
accordance with such written order shall authenticate and deliver such Securities.

     In authenticating such Securities and accepting the additional responsibilities under this
Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to
Section 7.01) shall be fully protected in relying upon, an Opinion of Counsel stating that the form
and terms thereof have been established in conformity with the provisions of this Indenture.

     The Trustee shall not be required to authenticate such Securities if the issue of such
Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities
under the Securities and this Indenture or otherwise in a manner that is not reasonably acceptable
to the Trustee.

7.

 

     Section 2.05 Registration of Transfer and Exchange.

          (a) Securities of any series may be exchanged upon presentation thereof at the office or
agency of the Company designated for such purpose, for other Securities of such series of
authorized denominations, and for a like aggregate principal amount, upon payment of a sum
sufficient to cover any tax or other governmental charge in relation thereto, all as provided in
this Section. In respect of any Securities so surrendered for exchange, the Company shall execute,
the Trustee shall authenticate and such office or agency shall deliver in exchange therefor the
Security or Securities of the same series that the Securityholder making the exchange shall be
entitled to receive, bearing numbers not contemporaneously outstanding.

          (b) The Company shall keep, or cause to be kept, at its office or agency designated for such
purpose, or such other location designated by the Company, a register or registers (herein referred
to as the “Security Register”) in which, subject to such reasonable regulations as it may
prescribe, the Company shall register the Securities and the transfers of Securities as in this
Article provided and which at all reasonable times shall be open for inspection by the Trustee.
The registrar for the purpose of registering Securities and transfer of Securities as herein
provided shall be appointed as authorized by Board Resolution (the “Security Registrar”).

          Upon surrender for transfer of any Security at the office or agency of the Company designated
for such purpose, the Company shall execute, the Trustee shall authenticate and such office or
agency shall deliver in the name of the transferee or transferees a new Security or Securities of
the same series as the Security presented for a like aggregate principal amount.

          All Securities presented or surrendered for exchange or registration of transfer, as provided
in this Section, shall be accompanied (if so required by the Company or the Security Registrar) by
a written instrument or instruments of transfer, in form satisfactory to the Company or the
Security Registrar, duly executed by the registered holder or by such holder’s duly authorized
attorney in writing.

          (c) Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and set forth
in an Officer’s Certificate, or established in one or more indentures supplemental to this
Indenture, no service charge shall be made for any exchange or registration of transfer of
Securities, or issue of new Securities in case of partial redemption of any series, but the Company
may require payment of a sum sufficient to cover any tax or other governmental charge in relation
thereto, other than exchanges pursuant to Section 2.06, Section 3.03(b) and Section 9.04 not
involving any transfer.

          (d) The Company shall not be required (i) to issue, exchange or register the transfer of any
Securities during a period beginning at the opening of business 15 days before the day of the
mailing of a notice of redemption of less than all the Outstanding Securities of the same series
and ending at the close of business on the day of such mailing, nor (ii) to register the transfer
of or exchange any Securities of any series or portions thereof called for redemption, other than
the unredeemed portion of any such Securities being redeemed in part. The provisions of this
Section 2.05 are, with respect to any Global Security, subject to Section 2.11 hereof.

     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 Security (including any transfers between or among
depositary participants or beneficial owners of interests in any Global Security) 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 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.

     Section 2.06 Temporary Securities.

     Pending the preparation of definitive Securities of any series, the Company may execute, and
the Trustee shall authenticate and deliver, temporary Securities (printed, lithographed or
typewritten) of any authorized denomination. Such temporary Securities shall be substantially in
the form of the definitive Securities in lieu of which they are issued, but with such omissions,
insertions and variations as may be appropriate for temporary Securities, all as may be determined
by the Company. Every temporary Security of any series shall be executed by

8.

 

the Company and be authenticated by the Trustee upon the same conditions and in substantially
the same manner, and with like effect, as the definitive Securities of such series. Without
unnecessary delay, the Company will execute and will furnish definitive Securities of such series
and thereupon any or all temporary Securities of such series may be surrendered in exchange
therefor (without charge to the holders), at the office or agency of the Company designated for the
purpose, and the Trustee shall authenticate and such office or agency shall deliver in exchange for
such temporary Securities an equal aggregate principal amount of definitive Securities of such
series, unless the Company advises the Trustee to the effect that definitive Securities need not be
executed and furnished until further notice from the Company. Until so exchanged, the temporary
Securities of such series shall be entitled to the same benefits under this Indenture as definitive
Securities of such series authenticated and delivered hereunder.

     Section 2.07 Mutilated, Destroyed, Lost or Stolen Securities.

     In case any temporary or definitive Security shall become mutilated or be destroyed, lost or
stolen, the Company (subject to the next succeeding sentence) shall execute, and upon the Company’s
request the Trustee (subject as aforesaid) shall authenticate and deliver, a new Security of the
same series, bearing a number not contemporaneously outstanding, in exchange and substitution for
the mutilated Security, or in lieu of and in substitution for the Security so destroyed, lost or
stolen. In every case the applicant for a substituted Security shall furnish to the Company and
the Trustee such security or indemnity as may be required by them to save each of them harmless,
and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company
and the Trustee evidence to their satisfaction of the destruction, loss or theft of the applicant’s
Security and of the ownership thereof. The Trustee may authenticate any such substituted Security
and deliver the same upon the written request or authorization of any officer of the Company. Upon
the issuance of any substituted Security, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

     In case any Security that has matured or is about to mature shall become mutilated or be
destroyed, lost or stolen, the Company may, instead of issuing a substitute Security, pay or
authorize the payment of the same (without surrender thereof except in the case of a mutilated
Security) if the applicant for such payment shall furnish to the Company and the Trustee such
security or indemnity as they may require to save them harmless, and, in case of destruction, loss
or theft, evidence to the satisfaction of the Company and the Trustee of the destruction, loss or
theft of such Security and of the ownership thereof.

     Every replacement Security issued pursuant to the provisions of this Section shall constitute
an additional contractual obligation of the Company whether or not the mutilated, destroyed, lost
or stolen Security shall be found at any time, or be enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any and all other Securities
of the same series duly issued hereunder. All Securities shall be held and owned upon the express
condition that the foregoing provisions are exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities, and shall preclude (to the extent lawful) any and
all other rights or remedies, notwithstanding any law or statute existing or hereafter enacted to
the contrary with respect to the replacement or payment of negotiable instruments or other
securities without their surrender.

     Section 2.08 Cancellation.

     All Securities surrendered for the purpose of payment, redemption, exchange or registration of
transfer shall, if surrendered to the Company or any paying agent, be delivered to the Trustee for
cancellation, or, if surrendered to the Trustee, shall be cancelled by it, and no Securities shall
be issued in lieu thereof except as expressly required or permitted by any of the provisions of
this Indenture. On request of the Company at the time of such surrender, the Trustee shall deliver
to the Company canceled Securities held by the Trustee. In the absence of such request the Trustee
may dispose of canceled Securities in accordance with its standard procedures and deliver a
certificate of disposition to the Company. If the Company shall otherwise acquire any of the
Securities, however, such acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Securities unless and until the same are delivered to the Trustee
for cancellation.

9.

 

     Section 2.09 Benefits of Indenture.

     Nothing in this Indenture or in the Securities, express or implied, shall give or be construed
to give to any Person, other than the parties hereto and the holders of the Securities (and, with
respect to the provisions of Article Fourteen, the holders of any indebtedness of the Company to
which the Securities of any series are subordinated) any legal or equitable right, remedy or claim
under or in respect of this Indenture, or under any covenant, condition or provision herein
contained; all such covenants, conditions and provisions being for the sole benefit of the parties
hereto and of the holders of the Securities (and, with respect to the provisions of Article
Fourteen, the holders of any indebtedness of the Company to which the Securities of any series are
subordinated).

     Section 2.10 Authenticating Agent.

     So long as any of the Securities of any series remain Outstanding there may be an
Authenticating Agent for any or all such series of Securities which the Trustee shall have the
right to appoint. Said Authenticating Agent shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon exchange, transfer or partial redemption
thereof, and Securities so authenticated shall be entitled to the benefits of this Indenture and
shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. All
references in this Indenture to the authentication of Securities by the Trustee shall be deemed to
include authentication by an Authenticating Agent for such series. Each Authenticating Agent shall
be acceptable to the Company and shall be a corporation that has a combined capital and surplus, as
most recently reported or determined by it, sufficient under the laws of any jurisdiction under
which it is organized or in which it is doing business to conduct a trust business, and that is
otherwise authorized under such laws to conduct such business and is subject to supervision or
examination by federal or state authorities. If at any time any Authenticating Agent shall cease
to be eligible in accordance with these provisions, it shall resign immediately.

     Any Authenticating Agent may at any time resign by giving written notice of resignation to the
Trustee and to the Company. The Trustee may at any time (and upon request by the Company shall)
terminate the agency of any Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or cessation of eligibility
of any Authenticating Agent, the Trustee may appoint an eligible successor Authenticating Agent
acceptable to the Company. Any successor Authenticating Agent, upon acceptance of its appointment
hereunder, shall become vested with all the rights, powers and duties of its predecessor hereunder
as if originally named as an Authenticating Agent pursuant hereto.

     Section 2.11 Global Securities.

          (a) If the Company shall establish pursuant to Section 2.01 that the Securities of a
particular series are to be issued as a Global Security, then the Company shall execute and the
Trustee shall, in accordance with Section 2.04, authenticate and deliver, a Global Security that
(i) shall represent, and shall be denominated in an amount equal to the aggregate principal amount
of, all of the Outstanding Securities of such series, (ii) shall be registered in the name of the
Depositary or its nominee, (iii) shall be delivered by the Trustee to the Depositary or pursuant to
the Depositary’s instruction and (iv) shall bear a legend substantially to the following effect:
“Except as otherwise provided in Section 2.11 of the Indenture, this Security may be transferred,
in whole but not in part, only to another nominee of the Depositary or to a successor Depositary or
to a nominee of such successor Depositary.”

          (b) Notwithstanding the provisions of Section 2.05, the Global Security of a series may be
transferred, in whole but not in part and in the manner provided in Section 2.05, only to another
nominee of the Depositary for such series, or to a successor Depositary for such series selected or
approved by the Company or to a nominee of such successor Depositary.

          (c) If at any time the Depositary for a series of the Securities notifies the Company that it
is unwilling or unable to continue as Depositary for such series or if at any time the Depositary
for such series shall no longer be registered or in good standing under the Exchange Act, or other
applicable statute or regulation, and a successor Depositary for such series is not appointed by
the Company within 90 days after the Company receives such notice or becomes aware of such
condition, as the case may be, or if an Event of Default has occurred and is continuing and the
Company has received a request from the Depositary or from the Trustee, this Section 2.11 shall no
longer be applicable to the Securities of such series and the Company will execute, and subject to
Section 2.04,

10.

 

the Trustee will authenticate and deliver the Securities of such series in definitive
registered form without coupons, in authorized denominations, and in an aggregate principal amount
equal to the principal amount of the Global Security of such series in exchange for such Global
Security. In addition, the Company may at any time determine that the Securities of any series
shall no longer be represented by a Global Security and that the provisions of this Section 2.11
shall no longer apply to the Securities of such series. In such event the Company will execute
and, subject to Section 2.04, the Trustee, upon receipt of an Officer’s Certificate evidencing such
determination by the Company, will authenticate and deliver the Securities of such series in
definitive registered form without coupons, in authorized denominations, and in an aggregate
principal amount equal to the principal amount of the Global Security of such series in exchange
for such Global Security. Upon the exchange of the Global Security for such Securities in
definitive registered form without coupons, in authorized denominations, the Global Security shall
be canceled by the Trustee. Such Securities in definitive registered form issued in exchange for
the Global Security pursuant to this Section 2.11(c) shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities
to the Depositary for delivery to the Persons in whose names such Securities are so registered.

ARTICLE 3

REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS

     Section 3.01 Redemption.

     The Company may redeem the Securities of any series issued hereunder on and after the dates
and in accordance with the terms established for such series pursuant to Section 2.01 hereof.

     Section 3.02 Notice of Redemption.

          (a) In case the Company shall desire to exercise such right to redeem all or, as the case may
be, a portion of the Securities of any series in accordance with any right the Company reserved for
itself to do so pursuant to Section 2.01 hereof, the Company shall, or shall cause the Trustee to,
give notice of such redemption to holders of the Securities of such series to be redeemed by
mailing, first class postage prepaid, a notice of such redemption not less than 30 days and not
more than 90 days before the date fixed for redemption of that series to such holders at their last
addresses as they shall appear upon the Security Register, unless a shorter period is specified in
the Securities to be redeemed. Any notice that is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the registered holder receives the
notice. In any case, failure duly to give such notice to the holder of any Security of any series
designated for redemption in whole or in part, or any defect in the notice, shall not affect the
validity of the proceedings for the redemption of any other Securities of such series or any other
series. In the case of any redemption of Securities prior to the expiration of any restriction on
such redemption provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee with an Officer’s Certificate evidencing compliance with any such
restriction.

     Each such notice of redemption shall specify the date fixed for redemption and the redemption
price at which Securities of that series are to be redeemed, and shall state that payment of the
redemption price of such Securities to be redeemed will be made at the office or agency of the
Company designated for such purpose, upon presentation and surrender of such Securities, that
interest accrued to the date fixed for redemption will be paid as specified in said notice, that
from and after said date interest will cease to accrue and that the redemption is for a sinking
fund, if such is the case. If less than all the Securities of a series are to be redeemed, the
notice to the holders of Securities of that series to be redeemed in part shall specify the
particular Securities to be so redeemed.

     In case any Security is to be redeemed in part only, the notice that relates to such Security
shall state the portion of the principal amount thereof to be redeemed, and shall state that on and
after the redemption date, upon surrender of such Security, a new Security or Securities of such
series in principal amount equal to the unredeemed portion thereof will be issued.

          (b) If less than all the Securities of a series are to be redeemed, the Company shall give the
Trustee at least 45 days’ notice (unless a shorter notice shall be satisfactory to the Trustee) in
advance of the date

11.

 

fixed for redemption as to the aggregate principal amount of Securities of the series to be
redeemed, and thereupon the Trustee shall select, by lot or in such other manner as it shall deem
appropriate and fair in its discretion and that may provide for the selection of a portion or
portions (equal to one thousand U.S. dollars ($1,000) or any integral multiple thereof) of the
principal amount of such Securities of a denomination larger than $1,000, the Securities to be
redeemed and shall thereafter promptly notify the Company in writing of the numbers of the
Securities to be redeemed, in whole or in part. The Company may, if and whenever it shall so
elect, by delivery of instructions signed on its behalf by an Officer, instruct the Trustee or any
paying agent to call all or any part of the Securities of a particular series for redemption and to
give notice of redemption in the manner set forth in this Section, such notice to be in the name of
the Company or its own name as the Trustee or such paying agent may deem advisable. In any case in
which notice of redemption is to be given by the Trustee or any such paying agent, the Company
shall deliver or cause to be delivered to, or permit to remain with, the Trustee or such paying
agent, as the case may be, such Security Register, transfer books or other records, or suitable
copies or extracts therefrom, sufficient to enable the Trustee or such paying agent to give any
notice by mail that may be required under the provisions of this Section.

     Section 3.03 Payment Upon Redemption.

          (a) If the giving of notice of redemption shall have been completed as above provided, the
Securities or portions of Securities of the series to be redeemed specified in such notice shall
become due and payable on the date and at the place stated in such notice at the applicable
redemption price, together with interest accrued to the date fixed for redemption and interest on
such Securities or portions of Securities shall cease to accrue on and after the date fixed for
redemption, unless the Company shall default in the payment of such redemption price and accrued
interest with respect to any such Security or portion thereof. On presentation and surrender of
such Securities on or after the date fixed for redemption at the place of payment specified in the
notice, said Securities shall be paid and redeemed at the applicable redemption price for such
series, together with interest accrued thereon to the date fixed for redemption (but if the date
fixed for redemption is an interest payment date, the interest installment payable on such date
shall be payable to the registered holder at the close of business on the applicable record date
pursuant to Section 2.03).

          (b) Upon presentation of any Security of such series that is to be redeemed in part only, the
Company shall execute and the Trustee shall authenticate and the office or agency where the
Security is presented shall deliver to the holder thereof, at the expense of the Company, a new
Security of the same series of authorized denominations in principal amount equal to the unredeemed
portion of the Security so presented.

     Section 3.04 Sinking Fund.

     The provisions of Sections 3.04, 3.05 and 3.06 shall be applicable to any sinking fund for the
retirement of Securities of a series, except as otherwise specified as contemplated by Section 2.01
for Securities of such series.

     The minimum amount of any sinking fund payment provided for by the terms of Securities of any
series is herein referred to as a “mandatory sinking fund payment,” and any payment in excess of
such minimum amount provided for by the terms of Securities of any series is herein referred to as
an “optional sinking fund payment”. If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided in Section 3.05.
Each sinking fund payment shall be applied to the redemption of Securities of any series as
provided for by the terms of Securities of such series.

     Section 3.05 Satisfaction of Sinking Fund Payments with Securities.

     The Company (i) may deliver Outstanding Securities of a series and (ii) may apply as a credit
Securities of a series that have been redeemed either at the election of the Company pursuant to
the terms of such Securities or through the application of permitted optional sinking fund payments
pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any
sinking fund payment with respect to the Securities of such series required to be made pursuant to
the terms of such Securities as provided for by the terms of such series, provided that such
Securities have not been previously so credited. Such Securities shall be received and credited
for such purpose by the Trustee at the redemption price specified in such Securities for redemption
through operation of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.

12.

 

     Section 3.06 Redemption of Securities for Sinking Fund.

     Not less than 45 days prior to each sinking fund payment date for any series of Securities
(unless a shorter period shall be satisfactory to the Trustee), the Company will deliver to the
Trustee an Officer’s Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of the series, the portion thereof, if any, that is to be
satisfied by delivering and crediting Securities of that series pursuant to Section 3.05 and the
basis for such credit and will, together with such Officer’s Certificate, deliver to the Trustee
any Securities to be so delivered. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in
the manner specified in Section 3.02 and cause notice of the redemption thereof to be given in the
name of and at the expense of the Company in the manner provided in Section 3.02. Such notice
having been duly given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Section 3.03.

ARTICLE 4

COVENANTS

     Section 4.01 Payment of Principal, Premium and Interest.

     The Company will duly and punctually pay or cause to be paid the principal of (and premium, if
any) and interest on the Securities of that series at the time and place and in the manner provided
herein and established with respect to such Securities. Payments of principal on the Securities
may be made at the time provided herein and established with respect to such Securities by U.S.
dollar check drawn on and mailed to the address of the Securityholder entitled thereto as such
address shall appear in the Security Register, or U.S. dollar wire transfer to, a U.S. dollar
account if such Securityholder shall have furnished wire instructions in writing to the Trustee no
later than 15 days prior to the relevant payment date. Payments of interest on the Securities may
be made at the time provided herein and established with respect to such Securities by U.S. dollar
check mailed to the address of the Securityholder entitled thereto as such address shall appear in
the Security Register, or U.S. dollar wire transfer to, a U.S. dollar account if such
Securityholder shall have furnished wire instructions in writing to the Security Registrar and the
Trustee no later than 15 days prior to the relevant payment date.

     Section 4.02 Maintenance of Office or Agency.

     So long as any series of the Securities remain Outstanding, the Company agrees to maintain an
office or agency, with respect to each such series and at such other location or locations as may
be designated as provided in this Section 4.02, where (i) Securities of that series may be
presented for payment, (ii) Securities of that series may be presented as herein above authorized
for registration of transfer and exchange, and (iii) notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be given or served, such
designation to continue with respect to such office or agency until the Company shall, by written
notice signed by any officer authorized to sign an Officer’s Certificate and delivered to the
Trustee, designate some other office or agency for such purposes or any of them. If at any time
the Company shall fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, notices and demands may be made or served at
the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, notices and demands. The Company initially appoints the
Corporate Trust Office of the Trustee as its paying agent with respect to the Securities.

     Section 4.03 Paying Agents.

          (a) If the Company shall appoint one or more paying agents for all or any series of the
Securities, other than the Trustee, the Company will cause each such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to
the provisions of this Section:

               (1) that it will hold all sums held by it as such agent for the payment of the principal
of
(and premium, if any) or interest on the Securities of that series (whether such sums have been
paid to it by the Company or by any other obligor of such Securities) in trust for the benefit of
the Persons entitled thereto;

13.

 

               (2) that it will give the Trustee notice of any failure by the Company (or by any other
obligor of such Securities) to make any payment of the principal of (and premium, if any) or
interest on the Securities of that series when the same shall be due and payable;

               (3) that it will, at any time during the continuance of any failure referred to in the
preceding paragraph (a)(2) above, upon the written request of the Trustee, forthwith pay to the
Trustee all sums so held in trust by such paying agent; and

               (4) that it will perform all other duties of paying agent as set forth in this
Indenture.

          (b) If the Company shall act as its own paying agent with respect to any series of the
Securities, it will on or before each due date of the principal of (and premium, if any) or
interest on Securities of that series, set aside, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay such principal (and premium, if any) or
interest so becoming due on Securities of that series until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and will promptly notify the Trustee of such action, or
any failure (by it or any other obligor on such Securities) to take such action. Whenever the
Company shall have one or more paying agents for any series of Securities, it will, prior to each
due date of the principal of (and premium, if any) or interest on any Securities of that series,
deposit with the paying agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest, and (unless such paying agent is the Trustee) the Company will
promptly notify the Trustee of this action or failure so to act.

          (c) Notwithstanding anything in this Section to the contrary, (i) the agreement to hold sums
in trust as provided in this Section is subject to the provisions of Section 11.05, and (ii) the
Company may at any time, for the purpose of obtaining the satisfaction and discharge of this
Indenture or for any other purpose, pay, or direct any paying agent to pay, to the Trustee all sums
held in trust by the Company or such paying agent, such sums to be held by the Trustee upon the
same terms and conditions as those upon which such sums were held by the Company or such paying
agent; and, upon such payment by the Company or any paying agent to the Trustee, the Company or
such paying agent shall be released from all further liability with respect to such money.

     Section 4.04 Appointment to Fill Vacancy in Office of Trustee.

     The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will
appoint, in the manner provided in Section 7.10, a Trustee, so that there shall at all times be a
Trustee hereunder.

     Section 4.05 Compliance with Consolidation Provisions.

     The Company will not, while any of the Securities remain Outstanding, consolidate with or
merge into any other Person, in either case where the Company is not the survivor of such
transaction, or sell or convey all or substantially all of its property to any other Person unless
the provisions of Article Ten hereof are complied with.

ARTICLE 5

SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

     Section 5.01 Company to Furnish Trustee Names and Addresses of Securityholders.

     The Company will furnish or cause to be furnished to the Trustee (a) within 15 days after each
regular record date (as defined in Section 2.03) a list, in such form as the Trustee may reasonably
require, of the names and addresses of the holders of each series of Securities as of such regular
record date, provided that the Company shall not be obligated to furnish or cause to furnish such
list at any time that the list shall not differ in any respect from the most recent list furnished
to the Trustee by the Company and (b) at such other times as the Trustee may request in writing
within 30 days after the receipt by the Company of any such request, a list of similar form and
content as of a date not more than 15 days prior to the time such list is furnished; provided,
however, that, in either case, no such list need be furnished for any series for which the Trustee
shall be the Security Registrar.

14.

 

     Section 5.02 Preservation Of Information; Communications With Securityholders.

          (a) The Trustee shall preserve, in as current a form as is reasonably practicable, all
information as to the names and addresses of the holders of Securities contained in the most recent
list furnished to it as provided in Section 5.01 and as to the names and addresses of holders of
Securities received by the Trustee in its capacity as Security Registrar (if acting in such
capacity).

          (b) The Trustee may destroy any list furnished to it as provided in Section 5.01 upon receipt
of a new list so furnished.

          (c) Securityholders may communicate as provided in Section 312(b) of the Trust Indenture Act
with other Securityholders with respect to their rights under this Indenture or under the
Securities, and, in connection with any such communications, the Trustee shall satisfy its
obligations under Section 312(b) of the Trust Indenture Act in accordance with the provisions of
Section 312(b) of the Trust Indenture Act.

     Section 5.03 Reports by the Company.

     The Company covenants and agrees to provide a copy to the Trustee, after the Company files the
same with the Securities and Exchange Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of the foregoing as the
Securities and Exchange Commission may from time to time by rules and regulations prescribe) that
the Company files with the Securities and Exchange Commission pursuant to Section 13 or Section
15(d) of the Exchange Act; provided, however, the Company shall not be required to deliver to the
Trustee any materials for which the Company has sought and received confidential treatment by the
Securities and Exchange Commission; and provided further, that so long as such filings by the
Company are available on the Securities and Exchange Commission’s Electronic Data Gathering,
Analysis and Retrieval System (EDGAR), or Interactive Data Electronic Applications (IDEA), or any
successor system, such filings shall be deemed to have been filed with the Trustee for purposes
hereof without any further action required by the Company; provided that an electronic link to such
filing, together with an electronic notice of such filing have been sent to the Trustee. For the
avoidance of doubt, a failure by the Company to file annual reports, information and other reports
with the Securities and Exchange Commission within the time period prescribed thereof by the
Securities and Exchange Commission shall not be deemed a breach of this Section 5.03.

     Section 5.04 Reports by the Trustee.

          (a) If required by Section 313(a) of the Trust Indenture Act, the Trustee, within sixty (60)
days after each May 1, shall transmit by mail, first class postage prepaid, to the Securityholders,
as their names and addresses appear upon the Security Register, a brief report dated as of such May
1, which complies with Section 313(a) of the Trust Indenture Act.

          (b) The Trustee shall comply with Section 313(b) and 313(c) of the Trust Indenture Act.

          (c) A copy of each such report shall, at the time of such transmission to Securityholders, be
filed by the Trustee with the Company, with each securities exchange upon which any Securities are
listed (if so listed) and also with the Securities and Exchange Commission. The Company agrees to
notify the Trustee when any Securities become listed on any securities exchange.

ARTICLE 6

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT

     Section 6.01 Events of Default.

          (a) Whenever used herein with respect to Securities of a particular series, “Event of Default”
means any one or more of the following events that has occurred and is continuing:

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               (1) the Company defaults in the payment of any installment of interest upon any of the
Securities of that series, as and when the same shall become due and payable, and such default
continues for a period of 90 days; provided, however, that a valid extension of an interest payment
period by the Company in accordance with the terms of any indenture supplemental hereto shall not
constitute a default in the payment of interest for this purpose;

               (2) the Company defaults in the payment of the principal of (or premium, if any, on) any
of
the Securities of that series as and when the same shall become due and payable whether at
maturity, upon redemption, by declaration or otherwise, or in any payment required by any sinking
or analogous fund established with respect to that series; provided, however, that a valid
extension of the maturity of such Securities in accordance with the terms of any indenture
supplemental hereto shall not constitute a default in the payment of principal or premium, if any;

               (3) the Company fails to observe or perform any other of its covenants or agreements
with
respect to that series contained in this Indenture or otherwise established with respect to that
series of Securities pursuant to Section 2.01 hereof (other than a covenant or agreement that has
been expressly included in this Indenture solely for the benefit of one or more series of
Securities other than such series) for a period of 90 days after the date on which written notice
of such failure, requiring the same to be remedied and stating that such notice is a “Notice of
Default” hereunder, shall have been given to the Company by the Trustee, by registered or certified
mail, or to the Company and the Trustee by the holders of at least 25% in principal amount of the
Securities of that series at the time Outstanding;

               (4) the Company 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
case, (iii) consents to the appointment of a Custodian of it or for all or substantially all of its
property or (iv) makes a general assignment for the benefit of its creditors; or

               (5) a court of competent jurisdiction enters an order under any Bankruptcy Law that
(i) is for
relief against the Company in an involuntary case, (ii) appoints a Custodian of the Company for all
or substantially all of its property or (iii) orders the liquidation of the Company, and the order
or decree remains unstayed and in effect for 90 days.

          (b) In each and every such case (other than an Event of Default specified in clause (4) or
clause (5) above), unless the principal of all the Securities of that series shall have already
become due and payable, either the Trustee or the holders of not less than 25% in aggregate
principal amount of the Securities of that series then Outstanding hereunder, by notice in writing
to the Company (and to the Trustee if given by such Securityholders), may declare the principal of
(and premium, if any, on) and accrued and unpaid interest on all the Securities of that series to
be due and payable immediately, and upon any such declaration the same shall become and shall be
immediately due and payable. If an Event of Default specified in clause (4) or clause (5) above
occurs, the principal of and accrued and unpaid interest on all the Securities of that series shall
automatically be immediately due and payable without any declaration or other act on the part of
the Trustee or the holders of the Securities.

          (c) At any time after the principal of (and premium, if any, on) and accrued and unpaid
interest on the Securities of that series shall have been so declared due and payable, and before
any judgment or decree for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the holders of a majority in aggregate principal amount of the Securities of
that series then Outstanding hereunder, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if: (i) the Company has paid or deposited
with the Trustee a sum sufficient to pay all matured installments of interest upon all the
Securities of that series and the principal of (and premium, if any, on) any and all Securities of
that series that shall have become due otherwise than by acceleration (with interest upon such
principal and premium, if any, and, to the extent that such payment is enforceable under applicable
law, upon overdue installments of interest, at the rate per annum expressed in the Securities of
that series to the date of such payment or deposit) and the amount payable to the Trustee under
Section 7.06, and (ii) any and all Events of Default under the Indenture with respect to such
series, other than the nonpayment of principal on (and premium, if any, on) and accrued and unpaid
interest on

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Securities of that series that shall not have become due by their terms, shall have been
remedied or waived as provided in Section 6.06.

     No such rescission and annulment shall extend to or shall affect any subsequent default or
impair any right consequent thereon.

          (d) In case the Trustee shall have proceeded to enforce any right with respect to Securities
of that series under this Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have been determined
adversely to the Trustee, then and in every such case, subject to any determination in such
proceedings, the Company and the Trustee shall be restored respectively to their former positions
and rights hereunder, and all rights, remedies and powers of the Company and the Trustee shall
continue as though no such proceedings had been taken.

     Section 6.02 Collection of Indebtedness and Suits for Enforcement by Trustee.

          (a) The Company covenants that (i) in case it shall default in the payment of any installment
of interest on any of the Securities of a series, or in any payment required by any sinking or
analogous fund established with respect to that series as and when the same shall have become due
and payable, and such default shall have continued for a period of 90 Business Days, or (ii) in
case it shall default in the payment of the principal of (or premium, if any, on) any of the
Securities of a series when the same shall have become due and payable, whether upon maturity of
the Securities of a series or upon redemption or upon declaration or otherwise then, upon demand of
the Trustee, the Company will pay to the Trustee, for the benefit of the holders of the Securities
of that series, the whole amount that then shall have been become due and payable on all such
Securities for principal (and premium, if any) or interest, or both, as the case may be, with
interest upon the overdue principal (and premium, if any) and (to the extent that payment of such
interest is enforceable under applicable law) upon overdue installments of interest at the rate per
annum expressed in the Securities of that series; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, and the amount payable to the
Trustee under Section 7.06.

          (b) If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in
its own name and as trustee of an express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon the Securities of that series
and collect the moneys adjudged or decreed to be payable in the manner provided by law or equity
out of the property of the Company or other obligor upon the Securities of that series, wherever
situated.

          (c) In case of any receivership, insolvency, liquidation, bankruptcy, reorganization,
readjustment, arrangement, composition or judicial proceedings affecting the Company, or its
creditors or property, the Trustee shall have power to intervene in such proceedings and take any
action therein that may be permitted by the court and shall (except as may be otherwise provided by
law) be entitled to file such proofs of claim and other papers and documents as may be necessary or
advisable in order to have the claims of the Trustee and of the holders of Securities of such
series allowed for the entire amount due and payable by the Company under the Indenture at the date
of institution of such proceedings and for any additional amount that may become due and payable by
the Company after such date, and to collect and receive any moneys or other property payable or
deliverable on any such claim, and to distribute the same after the deduction of the amount payable
to the Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the holders of Securities of such series to make
such payments to the Trustee, and, in the event that the Trustee shall consent to the making of
such payments directly to such Securityholders, to pay to the Trustee any amount due it under
Section 7.06.

          (d) All rights of action and of asserting claims under this Indenture, or under any of the
terms established with respect to Securities of that series, may be enforced by the Trustee without
the possession of any of such Securities, or the production thereof at any trial or other
proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery

17.

 

of judgment shall, after provision for payment to the Trustee of any amounts due under Section
7.06, be for the ratable benefit of the holders of the Securities of such series.

     In case of an Event of Default hereunder, the Trustee may in its discretion proceed to protect
and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any of such rights, either at law or
in equity or in bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in the Indenture or in aid of the exercise of any power granted in this
Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture
or by law.

     Nothing contained herein shall be deemed to authorize the Trustee to authorize or consent to
or accept or adopt on behalf of any Securityholder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities of that series or the rights of any holder
thereof or to authorize the Trustee to vote in respect of the claim of any Securityholder in any
such proceeding.

     Section 6.03 Application of Moneys Collected.

     Any moneys collected by the Trustee pursuant to this Article with respect to a particular
series of Securities shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such moneys on account of principal (or premium, if
any) or interest, upon presentation of the Securities of that series, and notation thereon of the
payment, if only partially paid, and upon surrender thereof if fully paid:

     FIRST: To the payment of reasonable costs and expenses of collection and of all amounts
payable to the Trustee under Section 7.06;

     SECOND: To the payment of all indebtedness of the Company to which such series of Securities
is subordinated to the extent required by Section 7.06 and Article Fourteen;

     THIRD: To the payment of the amounts then due and unpaid upon Securities of such series for
principal (and premium, if any) and interest, in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal (and premium, if any) and interest,
respectively; and

     FOURTH: To the payment of the remainder, if any, to the Company or any other Person lawfully
entitled thereto.

     Section 6.04 Limitation on Suits.

     No holder of any Security of any series shall have any right by virtue or by availing of any
provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or
under or with respect to this Indenture or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless (i) such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof with respect to the Securities of such
series specifying such Event of Default, as hereinbefore provided; (ii) the holders of not less
than 25% in aggregate principal amount of the Securities of such series then Outstanding shall have
made written request upon the Trustee to institute such action, suit or proceeding in its own name
as Trustee hereunder; (iii) such holder or holders shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and liabilities to be incurred
therein or thereby; (iv) the Trustee for 90 days after its receipt of such notice, request and
offer of indemnity, shall have failed to institute any such action, suit or proceeding; and (v)
during such 90 day period, the holders of a majority in principal amount of the Securities of that
series do not give the Trustee a direction inconsistent with the request.

     Notwithstanding anything contained herein to the contrary or any other provisions of this
Indenture, the right of any holder of any Security to receive payment of the principal of (and
premium, if any) and interest on such Security, as therein provided, on or after the respective due
dates expressed in such Security (or in the case of redemption, on the redemption date), or to
institute suit for the enforcement of any such payment on or after such

18.

 

respective dates or redemption date, shall not be impaired or affected without the consent of
such holder and by accepting a Security hereunder it is expressly understood, intended and
covenanted by the taker and holder of every Security of such series with every other such taker and
holder and the Trustee, that no one or more holders of Securities of such series shall have any
right in any manner whatsoever by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of the holders of any other of such Securities, or to
obtain or seek to obtain priority over or preference to any other such holder, or to enforce any
right under this Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all holders of Securities of such series. For the protection and enforcement of
the provisions of this Section, each and every Securityholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.

     Section 6.05 Rights and Remedies Cumulative; Delay or Omission Not Waiver.

          (a) Except as otherwise provided in Section 2.07, all powers and remedies given by this
Article to the Trustee or to the Securityholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any other powers and remedies available to the Trustee or the
holders of the Securities, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or otherwise established
with respect to such Securities.

          (b) No delay or omission of the Trustee or of any holder of any of the Securities to exercise
any right or power accruing upon any Event of Default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a waiver of any such default or an
acquiescence therein; and, subject to the provisions of Section 6.04, every power and remedy given
by this Article or by law to the Trustee or the Securityholders may be exercised from time to time,
and as often as shall be deemed expedient, by the Trustee or by the Securityholders.

     Section 6.06 Control by Securityholders.

     The holders of a majority in aggregate principal amount of the Securities of any series at the
time Outstanding, determined in accordance with Section 8.04, shall have the right to direct the
time, method and place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee with respect to such series; provided,
however, that such direction shall not be in conflict with any rule of law or with this Indenture.
Subject to the provisions of Section 7.01, the Trustee shall have the right to decline to follow
any such direction if the Trustee in good faith shall, by a Responsible Officer or officers of the
Trustee, determine that the proceeding so directed, subject to the Trustee’s duties under the Trust
Indenture Act, would involve the Trustee in personal liability or might be unduly prejudicial to
the Securityholders not involved in the proceeding. The holders of a majority in aggregate
principal amount of the Securities of any series at the time Outstanding affected thereby,
determined in accordance with Section 8.04, may on behalf of the holders of all of the Securities
of such series waive any past default in the performance of any of the covenants contained herein
or established pursuant to Section 2.01 with respect to such series and its consequences, except a
default in the payment of the principal of, or premium, if any, or interest on, any of the
Securities of that series as and when the same shall become due by the terms of such Securities
otherwise than by acceleration (unless such default has been cured and a sum sufficient to pay all
matured installments of interest and principal and any premium has been deposited with the Trustee
(in accordance with Section 6.01(c)). Upon any such waiver, the default covered thereby shall be
deemed to be cured for all purposes of this Indenture and the Company, the Trustee and the holders
of the Securities of such series shall be restored to their former positions and rights hereunder,
respectively; but no such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.

     Section 6.07 Undertaking to Pay Costs.

     All parties to this Indenture agree, and each holder of any Securities by such holder’s
acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, 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, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys’ fees, against any party
litigant in such suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any

19.

 

Securityholder, or group of Securityholders, holding more than 10% in aggregate principal
amount of the Outstanding Securities of any series, or to any suit instituted by any Securityholder
for the enforcement of the payment of the principal of (or premium, if any) or interest on any
Security of such series, on or after the respective due dates expressed in such Security or
established pursuant to this Indenture.

ARTICLE 7

CONCERNING THE TRUSTEE

     Section 7.01 Certain Duties and Responsibilities of Trustee.

          (a) The Trustee, prior to the occurrence of an Event of Default with respect to the Securities
of a series and after the curing of all Events of Default with respect to the Securities of that
series that may have occurred, shall undertake to perform with respect to the Securities of such
series such duties and only such duties as are specifically set forth in this Indenture, and no
implied covenants shall be read into this Indenture against the Trustee. In case an Event of
Default with respect to the Securities of a series has occurred (that has not been cured or
waived), the Trustee shall exercise with respect to Securities of that series such of 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 man would exercise or use under the circumstances in the conduct of his own
affairs.

          (b) No provision of this Indenture shall be construed to relieve the Trustee from liability
for its own negligent action, its own negligent failure to act, or its own willful misconduct,
except that:

               (i) prior to the occurrence of an Event of Default with respect to the Securities of a
series
and after the curing or waiving of all such Events of Default with respect to that series that may
have occurred:

                    (A) the duties and obligations of the Trustee shall with
respect to the Securities of such
series be determined solely by the express provisions of this Indenture, and the Trustee shall not
be liable with respect to the Securities of such series except for the performance of such duties
and obligations as are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and

                    (B) in the absence of bad faith on the part of the
Trustee, the Trustee may with respect to
the Securities of such series conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case of any such
certificates or opinions that by any provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture;

               (ii) the Trustee shall not be liable for any error of judgment made in good faith by a
Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;

               (iii) the Trustee shall not be liable with respect to any action taken or omitted to be
taken
by it in good faith in accordance with the direction of the holders of not less than a majority in
principal amount of the Securities of any series at the time Outstanding relating to the time,
method and place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this Indenture with respect to the
Securities of that series; and

               (iv) None of the provisions contained in this Indenture shall require the Trustee to
expend or
risk its own funds or otherwise incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers if there is reasonable ground for
believing that the repayment of such funds or liability is not reasonably assured to it under the
terms of this Indenture or adequate indemnity against such risk is not reasonably assured to it.

20.

 

     Section 7.02 Certain Rights of Trustee.

     Except as otherwise provided in Section 7.01:

          (a) The Trustee may rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order,
approval, bond, security or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;

          (b) Any request, direction, order or demand of the Company mentioned herein shall be
sufficiently evidenced by a Board Resolution or an instrument signed in the name of the Company by
any authorized officer of the Company (unless other evidence in respect thereof is specifically
prescribed herein);

          (c) The Trustee may consult with counsel and the written advice of such counsel or any Opinion
of Counsel shall be full and complete authorization and protection in respect of any action taken
or suffered or omitted hereunder in good faith and in reliance thereon;

          (d) The Trustee shall be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request, order or direction of any of the Securityholders pursuant to
the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities that may be incurred
therein or thereby; nothing contained herein shall, however, relieve the Trustee of the obligation,
upon the occurrence of an Event of Default with respect to a series of the Securities (that has not
been cured or waived), to exercise with respect to Securities of that series such of the rights and
powers vested in it by this Indenture, and to use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own
affairs;

          (e) The Trustee shall not be liable for any action taken or omitted to be taken by it in good
faith and believed by it to be authorized or within the discretion or rights or powers conferred
upon it by this Indenture;

          (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, security, or other papers or documents, unless requested in writing so to do
by the holders of not less than a majority in principal amount of the Outstanding Securities of the
particular series affected thereby (determined as provided in Section 8.04); provided, however,
that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee,
not reasonably assured to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee may require reasonable indemnity against such costs, expenses or liabilities
as a condition to so proceeding. The reasonable expense of every such examination shall be paid by
the Company or, if paid by the Trustee, shall be repaid by the Company upon demand;

          (g) The Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder;

          (h) In no event shall the Trustee be responsible or liable for any failure or delay in the
performance of its obligations hereunder arising out of or caused by, directly or indirectly,
forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts
of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of
God, and interruptions, loss or malfunctions of utilities, communications or computer (software and
hardware) services; it being understood that the Trustee shall use reasonable efforts which are
consistent with accepted practices in the banking industry to resume performance as soon as
practicable under the circumstances;

21.

 

          (i) In no event shall the Trustee be responsible or liable for special, indirect, or
consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit)
irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and
regardless of the form of action; and

          (j) The Trustee agrees to accept and act upon instructions or directions pursuant to this
Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic
methods; provided, however, that (a) the party providing such written instructions, subsequent to
such transmission of written instructions, shall provide the originally executed instructions or
directions to the Trustee in a timely manner, and (b) such originally executed instructions or
directions shall be signed by an authorized representative of the party providing such instructions
or directions. If the party elects to give the Trustee e-mail or facsimile instructions (or
instructions by a similar electronic method) and the Trustee in its discretion elects to act upon
such instructions, the Trustee’s understanding of such instructions shall be deemed controlling.
The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly
from the Trustee’s reliance upon and compliance with such instructions notwithstanding such
instructions conflict or are inconsistent with a subsequent written instruction. The party
providing electronic instructions agrees to assume all risks arising out of the use of such
electronic methods to submit instructions and directions to the Trustee, including without
limitation the risk of the Trustee acting on unauthorized instructions, and the risk or
interception and misuse by third parties.

     In addition, the Trustee shall not be deemed to have knowledge of any Event of Default except
(1) any Event of Default occurring pursuant to Sections 6.01(a)(1) and 6.01(a)(2) hereof or (2) any
Event of Default of which the Trustee shall have received written notification in the manner set
forth in this Indenture or a Responsible Officer of the Trustee shall have obtained actual
knowledge.

     Section 7.03 Trustee Not Responsible for Recitals or Issuance or Securities.

          (a) The recitals contained herein and in the Securities shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for the correctness of the same.

          (b) The Trustee makes no representations as to the validity or sufficiency of this Indenture
or of the Securities.

          (c) (c) The Trustee shall not be accountable for the use or application by the Company of any
of the Securities or of the proceeds of such Securities, or for the use or application of any
moneys paid over by the Trustee in accordance with any provision of this Indenture or established
pursuant to Section 2.01, or for the use or application of any moneys received by any paying agent
other than the Trustee.

     Section 7.04 May Hold Securities.

     The Trustee or any paying agent or Security Registrar, in its individual or any other
capacity, may become the owner or pledgee of Securities with the same rights it would have if it
were not Trustee, paying agent or Security Registrar.

     Section 7.05 Moneys Held in Trust.

     Subject to the provisions of Section 11.05, all moneys received by the Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any moneys received by it hereunder except such as it
may agree with the Company to pay thereon.

     Section 7.06 Compensation and Reimbursement.

          (a) The Company covenants and agrees to pay to the Trustee, and the Trustee shall be entitled
to, such reasonable compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) as the Company and the Trustee may from time to
time agree in writing, for all services rendered by it in the execution of the trusts hereby
created and in the exercise and

22.

 

performance of any of the powers and duties hereunder of the Trustee, and, except as otherwise
expressly provided herein, the Company will pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the reasonable compensation and the expenses and
disbursements of its counsel and of all Persons not regularly in its employ), except any such
expense, disbursement or advance as may arise from its negligence or bad faith and except as the
Company and Trustee may from time to time agree in writing. The Company also covenants to
indemnify the Trustee (and its officers, agents, directors and employees) for, and to hold it
harmless against, any loss, liability or expense incurred without negligence or bad faith on the
part of the Trustee and arising out of or in connection with the acceptance or administration of
this trust, including the reasonable costs and expenses of defending itself against any claim of
liability in the premises.

          (b) The obligations of the Company under this Section to compensate and indemnify the Trustee
and to pay or reimburse the Trustee for reasonable expenses, disbursements and advances shall
constitute indebtedness of the Company to which the Securities are subordinated. Such additional
indebtedness shall be secured by a lien prior to that of the Securities upon all property and funds
held or collected by the Trustee as such, except funds held in trust for the benefit of the holders
of particular Securities.

     Section 7.07 Reliance on Officer’s Certificate.

     Except as otherwise provided in Section 7.01, whenever in the administration of the provisions
of this Indenture the Trustee shall deem it reasonably necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting to take any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved
and established by an Officer’s Certificate delivered to the Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee
for any action taken, suffered or omitted to be taken by it under the provisions of this Indenture
upon the faith thereof.

     Section 7.08 Disqualification; Conflicting Interests.

     If the Trustee has or shall acquire any “conflicting interest” within the meaning of Section
310(b) of the Trust Indenture Act, the Trustee and the Company shall in all respects comply with
the provisions of Section 310(b) of the Trust Indenture Act.

     Section 7.09 Corporate Trustee Required; Eligibility.

     There shall at all times be a Trustee with respect to the Securities issued hereunder which
shall at all times be a corporation organized and doing business under the laws of the United
States of America or any state or territory thereof or of the District of Columbia, or a
corporation or other Person permitted to act as trustee by the Securities and Exchange Commission,
authorized under such laws to exercise corporate trust powers, having a combined capital and
surplus of at least fifty million U.S. dollars ($50,000,000), and subject to supervision or
examination by federal, state, territorial, or District of Columbia authority.

     If such corporation or other Person publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation or other Person
shall be deemed to be its combined capital and surplus as set forth in its most recent report of
condition so published. The Company may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Company, serve as Trustee. In case at
any time the Trustee shall cease to be eligible in accordance with the provisions of this Section,
the Trustee shall resign immediately in the manner and with the effect specified in Section 7.10.

     Section 7.10 Resignation and Removal; Appointment of Successor.

          (a) The Trustee or any successor hereafter appointed may at any time resign with respect to
the Securities of one or more series by giving written notice thereof to the Company and by
transmitting notice of

23.

 

resignation by mail, first class postage prepaid, to the Securityholders of such series, as
their names and addresses appear upon the Security Register. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee with respect to Securities of
such series by written instrument, in duplicate, executed by order of the Board of Directors, one
copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed and have accepted appointment within
30 days after the mailing of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee with respect to
Securities of such series, or any Securityholder of that series who has been a bona fide holder of
a Security or Securities for at least six months may on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor trustee. Such court may
thereupon after such notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.

          (b) In case at any time any one of the following shall occur:

               (i) the Trustee shall fail to comply with the provisions of Section 7.08 after
written request
therefor by the Company or by any Securityholder who has been a bona fide holder of a Security or
Securities for at least six months; or

               (ii) the Trustee shall cease to be eligible in accordance with the provisions of
Section 7.09
and shall fail to resign after written request therefor by the Company or by any such
Securityholder; or

               (iii) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or
insolvent, or commence a voluntary bankruptcy proceeding, or a receiver of the Trustee or of its
property shall be appointed or consented to, or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or
liquidation; then, in any such case, the Company may remove the Trustee with respect to all
Securities and appoint a successor trustee by written instrument, in duplicate, executed by order
of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or any Securityholder who has been a bona fide
holder of a Security or Securities for at least six months may, on behalf of that holder and all
others similarly situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor trustee. Such court may thereupon after such notice, if
any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.

          (c) The holders of a majority in aggregate principal amount of the Securities of any series at
the time Outstanding may at any time remove the Trustee with respect to such series by so notifying
the Trustee and the Company and may appoint a successor Trustee for such series with the consent of
the Company.

          (d) Any resignation or removal of the Trustee and appointment of a successor trustee with
respect to the Securities of a series pursuant to any of the provisions of this Section shall
become effective upon acceptance of appointment by the successor trustee as provided in Section
7.11.

          (e) Any successor trustee appointed pursuant to this Section may be appointed with respect to
the Securities of one or more series or all of such series, and at any time there shall be only one
Trustee with respect to the Securities of any particular series.

     Section 7.11 Acceptance of Appointment By Successor.

          (a) In case of the appointment hereunder of a successor trustee with respect to all
Securities, every such successor trustee so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee; but, on the request of the Company or the successor
trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor trustee all the rights, powers, and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor trustee all property
and money held by such retiring Trustee hereunder.

24.

 

          (b) In case of the appointment hereunder of a successor trustee with respect to the Securities
of one or more (but not all) series, the Company, the retiring Trustee and each successor trustee
with respect to the Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor trustee shall accept such appointment and which (i)
shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor trustee all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the appointment of such successor
trustee relates, (ii) shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (iii) shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust, that each such Trustee
shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts
hereunder administered by any other such Trustee and that no Trustee shall be responsible for any
act or failure to act on the part of any other Trustee hereunder; and upon the execution and
delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein, such retiring Trustee shall with respect to the
Securities of that or those series to which the appointment of such successor trustee relates have
no further responsibility for the exercise of rights and powers or for the performance of the
duties and obligations vested in the Trustee under this Indenture, and each such successor trustee,
without any further act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that or those series to
which the appointment of such successor trustee relates; but, on request of the Company or any
successor trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor
trustee, to the extent contemplated by such supplemental indenture, the property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those series to which the
appointment of such successor trustee relates.

          (c) Upon request of any such successor trustee, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such successor trustee all
such rights, powers and trusts referred to in paragraph (a) or (b) of this Section, as the case may
be.

          (d) No successor trustee shall accept its appointment unless at the time of such acceptance
such successor trustee shall be qualified and eligible under this Article.

          (e) Upon acceptance of appointment by a successor trustee as provided in this Section, the
Company shall transmit notice of the succession of such trustee hereunder by mail, first class
postage prepaid, to the Securityholders, as their names and addresses appear upon the Security
Register. If the Company fails to transmit such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such notice to be
transmitted at the expense of the Company.

     Section 7.12 Merger, Conversion, Consolidation or Succession to Business.

     Any corporation into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to the corporate trust business of the
Trustee, including the administration of the trust created by this Indenture, shall be the
successor of the Trustee hereunder, provided that such corporation shall be qualified under the
provisions of Section 7.08 and eligible under the provisions of Section 7.09, without the execution
or filing of any paper or any further act on the part of any of the parties hereto, anything herein
to the contrary notwithstanding. In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Trustee had itself authenticated such
Securities.

     Section 7.13 Preferential Collection of Claims Against the Company.

     The Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding any
creditor relationship described in Section 311(b) of the Trust Indenture Act. A Trustee who has
resigned or been removed shall be subject to Section 311(a) of the Trust Indenture Act to the
extent included therein.

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     Section 7.14 Notice of Default

     If any Event of Default occurs and is continuing and if such Event of Default is known to a
Responsible Officer of the Trustee, the Trustee shall mail to each Securityholder in the manner and
to the extent provided in Section 313(c) of the Trust Indenture Act notice of the Event of Default
within 45 days after it occurs and 30 days after it is known to a Responsible Officer of the
Trustee or written notice of it is received by the Trustee, unless such Event of Default has been
cured; provided, however, that, except in the case of a default in the payment of the principal of
(or premium, if any) or interest on any Security, the Trustee shall be protected in withholding
such notice if and so long as the board of directors, the executive committee or a trust committee
of directors and/or Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interest of the Securityholders.

ARTICLE 8

CONCERNING THE SECURITYHOLDERS

     Section 8.01 Evidence of Action by Securityholders.

     Whenever in this Indenture it is provided that the holders of a majority or specified
percentage in aggregate principal amount of the Securities of a particular series may take any
action (including the making of any demand or request, the giving of any notice, consent or waiver
or the taking of any other action), the fact that at the time of taking any such action the holders
of such majority or specified percentage of that series have joined therein may be evidenced by any
instrument or any number of instruments of similar tenor executed by such holders of Securities of
that series in person or by agent or proxy appointed in writing.

     If the Company shall solicit from the Securityholders of any series any request, demand,
authorization, direction, notice, consent, waiver or other action, the Company may, at its option,
as evidenced by an Officer’s Certificate, fix in advance a record date for such series for the
determination of Securityholders entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other action, but the Company shall have no obligation to do so. If
such a record date is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other action may be given before or after the record date, but only the Securityholders
of record at the close of business on the record date shall be deemed to be Securityholders for the
purposes of determining whether Securityholders of the requisite proportion of Outstanding
Securities of that series have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other action, and for that purpose the
Outstanding Securities of that series shall be computed as of the record date; provided, however,
that no such authorization, agreement or consent by such Securityholders on the record date shall
be deemed effective unless it shall become effective pursuant to the provisions of this Indenture
not later than six months after the record date.

     Section 8.02 Proof of Execution by Securityholders.

     Subject to the provisions of Section 7.01, proof of the execution of any instrument by a
Securityholder (such proof will not require notarization) or his agent or proxy and proof of the
holding by any Person of any of the Securities shall be sufficient if made in the following manner:

          (a) The fact and date of the execution by any such Person of any instrument may be proved in
any reasonable manner acceptable to the Trustee.

          (b) The ownership of Securities shall be proved by the Security Register of such Securities or
by a certificate of the Security Registrar thereof.

     The Trustee may require such additional proof of any matter referred to in this Section as it
shall deem necessary.

26.

 

     Section 8.03 Who May be Deemed Owners.

     Prior to the due presentment for registration of transfer of any Security, the Company, the
Trustee, any paying agent and any Security Registrar may deem and treat the Person in whose name
such Security shall be registered upon the books of the Company as the absolute owner of such
Security (whether or not such Security shall be overdue and notwithstanding any notice of ownership
or writing thereon made by anyone other than the Security Registrar) for the purpose of receiving
payment of or on account of the principal of, premium, if any, and (subject to Section 2.03)
interest on such Security and for all other purposes; and neither the Company nor the Trustee nor
any paying agent nor any Security Registrar shall be affected by any notice to the contrary.

     Section 8.04 Certain Securities Owned by Company Disregarded.

     In determining whether the holders of the requisite aggregate principal amount of Securities
of a particular series have concurred in any direction, consent or waiver under this Indenture, the
Securities of that series that are owned by the Company or any other obligor on the Securities of
that series or by any Person directly or indirectly controlling or controlled by or under common
control with the Company or any other obligor on the Securities of that series shall be disregarded
and deemed not to be Outstanding for the purpose of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in relying on any such direction,
consent or waiver, only Securities of such series that the Trustee actually knows are so owned
shall be so disregarded. The Securities so owned that have been pledged in good faith may be
regarded as Outstanding for the purposes of this Section, if the pledgee shall establish to the
satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that
the pledgee is not a Person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any such other obligor. In case of a dispute as to
such right, any decision by the Trustee taken upon the advice of counsel shall be full protection
to the Trustee.

     Section 8.05 Actions Binding on Future Securityholders.

     At any time prior to (but not after) the evidencing to the Trustee, as provided in Section
8.01, of the taking of any action by the holders of the majority or percentage in aggregate
principal amount of the Securities of a particular series specified in this Indenture in connection
with such action, any holder of a Security of that series that is shown by the evidence to be
included in the Securities the holders of which have consented to such action may, by filing
written notice with the Trustee, and upon proof of holding as provided in Section 8.02, revoke such
action so far as concerns such Security. Except as aforesaid any such action taken by the holder
of any Security shall be conclusive and binding upon such holder and upon all future holders and
owners of such Security, and of any Security issued in exchange therefor, on registration of
transfer thereof or in place thereof, irrespective of whether or not any notation in regard thereto
is made upon such Security. Any action taken by the holders of the majority or percentage in
aggregate principal amount of the Securities of a particular series specified in this Indenture in
connection with such action shall be conclusively binding upon the Company, the Trustee and the
holders of all the Securities of that series.

ARTICLE 9

SUPPLEMENTAL INDENTURES

     Section 9.01 Supplemental Indentures Without the Consent of Securityholders.

     In addition to any supplemental indenture otherwise authorized by this Indenture, the Company
and the Trustee may from time to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as then in
effect), without the consent of the Securityholders, for one or more of the following purposes:

          (a) to cure any ambiguity, defect, or inconsistency herein or in the Securities of any series;

          (b) to comply with Article Ten;

27.

 

          (c) to provide for uncertificated Securities in addition to or in place of certificated
Securities;

          (d) to add to the covenants, restrictions, conditions or provisions relating to the Company
for the benefit of the holders of all or any series of Securities (and if such covenants,
restrictions, conditions or provisions are to be for the benefit of less than all series of
Securities, stating that such covenants, restrictions, conditions or provisions are expressly being
included solely for the benefit of such series), to make the occurrence, or the occurrence and the
continuance, of a default in any such additional covenants, restrictions, conditions or provisions
an Event of Default, or to surrender any right or power herein conferred upon the Company;

          (e) to add to, delete from, or revise the conditions, limitations, and restrictions on the
authorized amount, terms, or purposes of issue, authentication, and delivery of Securities, as
herein set forth;

          (f) to make any change that does not adversely affect the rights of any Securityholder in any
material respect;

          (g) to provide for the issuance of and establish the form and terms and conditions of the
Securities of any series as provided in Section 2.01, to establish the form of any certifications
required to be furnished pursuant to the terms of this Indenture or any series of Securities, or to
add to the rights of the holders of any series of Securities;

          (h) to evidence and provide for the acceptance of appointment hereunder by a successor
trustee; or

          (i) to comply with any requirements of the Securities and Exchange Commission or any successor
in connection with the qualification of this Indenture under the Trust Indenture Act.

     The Trustee is hereby authorized to join with the Company in the execution of any such
supplemental indenture, and to make any further appropriate agreements and stipulations that may be
therein contained, but the Trustee shall not be obligated to enter into any such supplemental
indenture that affects the Trustee’s own rights, duties or immunities under this Indenture or
otherwise.

     Any supplemental indenture authorized by the provisions of this Section may be executed by the
Company and the Trustee without the consent of the holders of any of the Securities at the time
Outstanding, notwithstanding any of the provisions of Section 9.02.

     Section 9.02 Supplemental Indentures With Consent of Securityholders.

     With the consent (evidenced as provided in Section 8.01) of the holders of not less than a
majority in aggregate principal amount of the Securities of each series affected by such
supplemental indenture or indentures at the time Outstanding, the Company, when authorized by a
Board Resolution, and the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as
then in effect) for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner not covered by Section 9.01 the rights of the holders of the Securities of
such series under this Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the holders of each Security then Outstanding and affected thereby, (a)
extend the fixed maturity of any Securities of any series, or reduce the principal amount thereof,
or reduce the rate or extend the time of payment of interest thereon, or reduce any premium payable
upon the redemption thereof or (b) reduce the aforesaid percentage of Securities, the holders of
which are required to consent to any such supplemental indenture.

     It shall not be necessary for the consent of the Securityholders of any series affected
thereby under this Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such consent shall approve the substance thereof.

28.

 

     Section 9.03 Effect of Supplemental Indentures.

     Upon the execution of any supplemental indenture pursuant to the provisions of this Article or
of Section 10.01, this Indenture shall, with respect to such series, be and be deemed to be
modified and amended in accordance therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the Trustee, the Company and the holders
of Securities of the series affected thereby shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and all the terms and
conditions of any such supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.

     Section 9.04 Securities Affected by Supplemental Indentures.

     Securities of any series affected by a supplemental indenture, authenticated and delivered
after the execution of such supplemental indenture pursuant to the provisions of this Article or of
Section 10.01, may bear a notation in form approved by the Company, provided such form meets the
requirements of any securities exchange upon which such series may be listed, as to any matter
provided for in such supplemental indenture. If the Company shall so determine, new Securities of
that series so modified as to conform, in the opinion of the Board of Directors, to any
modification of this Indenture contained in any such supplemental indenture may be prepared by the
Company, authenticated by the Trustee and delivered in exchange for the Securities of that series
then Outstanding.

     Section 9.05 Execution of Supplemental Indentures.

     Upon the request of the Company, accompanied by its Board Resolutions authorizing the
execution of any such supplemental indenture, and upon the filing with the Trustee of evidence of
the consent of Securityholders required to consent thereto as aforesaid, the Trustee shall join
with the Company in the execution of such supplemental indenture unless such supplemental indenture
affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion but shall not be obligated to enter into such supplemental
indenture. The Trustee, subject to the provisions of Section 7.01, shall receive an Officer’s
Certificate or an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article is authorized or permitted by the terms of this Article and that
all conditions precedent to the execution of the supplemental indenture have been complied with;
provided, however, that such Officer’s Certificate or Opinion of Counsel need not be provided in
connection with the execution of a supplemental indenture that establishes the terms of a series of
Securities pursuant to Section 2.01 hereof.

     Promptly after the execution by the Company and the Trustee of any supplemental indenture
pursuant to the provisions of this Section, the Trustee shall transmit by mail, first class postage
prepaid, a notice, setting forth in general terms the substance of such supplemental indenture, to
the Securityholders of all series affected thereby as their names and addresses appear upon the
Security Register. Any failure of the Trustee to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such supplemental indenture.

ARTICLE 10

SUCCESSOR ENTITY

     Section 10.01 Company May Consolidate, Etc.

     Nothing contained in this Indenture shall prevent any consolidation or merger of the Company
with or into any other Person (whether or not affiliated with the Company) or successive
consolidations or mergers in which the Company or its successor or successors shall be a party or
parties, or shall prevent any sale, conveyance, transfer or other disposition of the property of
the Company or its successor or successors as an entirety, or substantially as an entirety, to any
other corporation (whether or not affiliated with the Company or its successor or successors)
authorized to acquire and operate the same; provided, however, (a) the Company hereby covenants and
agrees that, upon any such consolidation or merger (in each case, if the Company is not the
survivor of such transaction), sale, conveyance, transfer or other disposition, the due and
punctual payment of the principal of (premium, if any) and interest on all of the Securities of all
series in accordance with the terms of each series, according to their tenor, and

29.

 

the due and punctual performance and observance of all the covenants and conditions of this
Indenture with respect to each series or established with respect to such series pursuant to
Section 2.01 to be kept or performed by the Company shall be expressly assumed, by supplemental
indenture (which shall conform to the provisions of the Trust Indenture Act, as then in effect)
reasonably satisfactory in form to the Trustee executed and delivered to the Trustee by the entity
formed by such consolidation, or into which the Company shall have been merged, or by the entity
which shall have acquired such property and (b) in the event that the Securities of any series then
Outstanding are convertible into or exchangeable for shares of common stock or other securities of
the Company, such entity shall, by such supplemental indenture, make provision so that the
Securityholders of Securities of that series shall thereafter be entitled to receive upon
conversion or exchange of such Securities the number of securities or property to which a holder of
the number of shares of common stock or other securities of the Company deliverable upon conversion
or exchange of those Securities would have been entitled had such conversion or exchange occurred
immediately prior to such consolidation, merger, sale, conveyance, transfer or other disposition.

     Section 10.02 Successor Entity Substituted.

          (a) In case of any such consolidation, merger, sale, conveyance, transfer or other disposition
and upon the assumption by the successor entity by supplemental indenture, executed and delivered
to the Trustee and satisfactory in form to the Trustee, of the obligations set forth under Section
10.01 on all of the Securities of all series Outstanding, such successor entity shall succeed to
and be substituted for the Company with the same effect as if it had been named as the Company
herein, and thereupon the predecessor corporation shall be relieved of all obligations and
covenants under this Indenture and the Securities.

          (b) In case of any such consolidation, merger, sale, conveyance, transfer or other
disposition, such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.

          (c) Nothing contained in this Article shall require any action by the Company in the case of a
consolidation or merger of any Person into the Company where the Company is the survivor of such
transaction, or the acquisition by the Company, by purchase or otherwise, of all or any part of the
property of any other Person (whether or not affiliated with the Company).

ARTICLE 11

SATISFACTION AND DISCHARGE

     Section 11.01 Satisfaction and Discharge of Indenture.

     If at any time: (a) the Company shall have delivered to the Trustee for cancellation all
Securities of a series theretofore authenticated and not delivered to the Trustee for cancellation
(other than any Securities that shall have been destroyed, lost or stolen and that shall have been
replaced or paid as provided in Section 2.07 and Securities for whose payment money or Governmental
Obligations have theretofore been deposited in trust or segregated and held in trust by the Company
and thereupon repaid to the Company or discharged from such trust, as provided in Section 11.05);
or (b) all such Securities of a particular series not theretofore delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become due and payable
within one year or are to be called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption, and the Company shall deposit or cause to be
deposited with the Trustee as trust funds the entire amount in moneys or Governmental Obligations
or a combination thereof, sufficient in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the Trustee, to pay at
maturity or upon redemption all Securities of that series not theretofore delivered to the Trustee
for cancellation, including principal (and premium, if any) and interest due or to become due to
such date of maturity or date fixed for redemption, as the case may be, and if the Company shall
also pay or cause to be paid all other sums payable hereunder with respect to such series by the
Company then this Indenture shall thereupon cease to be of further effect with respect to such
series except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03 and 7.10, that
shall survive until the date of maturity or redemption date, as the case may be, and Sections 7.06
and 11.05, that shall survive to such date and thereafter, and the Trustee, on demand of the
Company and at the cost

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and expense of the Company shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture with respect to such series.

     Section 11.02 Discharge of Obligations.

     If at any time all such Securities of a particular series not heretofore delivered to the
Trustee for cancellation or that have not become due and payable as described in Section 11.01
shall have been paid by the Company by depositing irrevocably with the Trustee as trust funds
moneys or an amount of Governmental Obligations sufficient to pay at maturity or upon redemption
all such Securities of that series not theretofore delivered to the Trustee for cancellation,
including principal (and premium, if any) and interest due or to become due to such date of
maturity or date fixed for redemption, as the case may be, and if the Company shall also pay or
cause to be paid all other sums payable hereunder by the Company with respect to such series, then
after the date such moneys or Governmental Obligations, as the case may be, are deposited with the
Trustee the obligations of the Company under this Indenture with respect to such series shall cease
to be of further effect except for the provisions of Sections 2.03, 2.05, 2.07, 4,01, 4.02, 4,03,
7.06, 7.10 and 11.05 hereof that shall survive until such Securities shall mature and be paid.

     Thereafter, Sections 7.06 and 11.05 shall survive.

     Section 11.03 Deposited Moneys to be Held in Trust.

     All moneys or Governmental Obligations deposited with the Trustee pursuant to Sections 11.01
or 11.02 shall be held in trust and shall be available for payment as due, either directly or
through any paying agent (including the Company acting as its own paying agent), to the holders of
the particular series of Securities for the payment or redemption of which such moneys or
Governmental Obligations have been deposited with the Trustee.

     Section 11.04 Payment of Moneys Held by Paying Agents.

     In connection with the satisfaction and discharge of this Indenture all moneys or Governmental
Obligations then held by any paying agent under the provisions of this Indenture shall, upon demand
of the Company, be paid to the Trustee and thereupon such paying agent shall be released from all
further liability with respect to such moneys or Governmental Obligations.

     Section 11.05 Repayment to Company.

     Any moneys or Governmental Obligations deposited with any paying agent or the Trustee, or then
held by the Company, in trust for payment of principal of or premium, if any, or interest on the
Securities of a particular series that are not applied but remain unclaimed by the holders of such
Securities for at least two years after the date upon which the principal of (and premium, if any)
or interest on such Securities shall have respectively become due and payable, or such other
shorter period set forth in applicable escheat or abandoned or unclaimed property law, shall be
repaid to the Company on May 31 of each year or upon the Company’s request or (if then held by the
Company) shall be discharged from such trust; and thereupon the paying agent and the Trustee shall
be released from all further liability with respect to such moneys or Governmental Obligations, and
the holder of any of the Securities entitled to receive such payment shall thereafter, as a general
creditor, look only to the Company for the payment thereof.

ARTICLE 12

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

     Section 12.01 No Recourse.

     No recourse under or upon any obligation, covenant or agreement of this Indenture, or of any
Security, or for any claim based thereon or otherwise in respect thereof, shall be had against any
incorporator, stockholder, officer or director, past, present or future as such, of the Company or
of any predecessor or successor corporation,

31.

 

either directly or through the Company or any such predecessor or successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that this Indenture and the
obligations issued hereunder are solely corporate obligations, and that no such personal liability
whatever shall attach to, or is or shall be incurred by, the incorporators, stockholders, officers
or directors as such, of the Company or of any predecessor or successor corporation, or any of
them, because of the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of the Securities or
implied therefrom; and that any and all such personal liability of every name and nature, either at
common law or in equity or by constitution or statute, of, and any and all such rights and claims
against, every such incorporator, stockholder, officer or director as such, because of the creation
of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or
agreements contained in this Indenture or in any of the Securities or implied therefrom, are hereby
expressly waived and released as a condition of, and as a consideration for, the execution of this
Indenture and the issuance of such Securities.

ARTICLE 13

MISCELLANEOUS PROVISIONS

     Section 13.01 Effect on Successors and Assigns.

     All the covenants, stipulations, promises and agreements in this Indenture made by or on
behalf of the Company shall bind its successors and assigns, whether so expressed or not.

     Section 13.02 Actions by Successor.

     Any act or proceeding by any provision of this Indenture authorized or required to be done or
performed by any board, committee or officer of the Company shall and may be done and performed
with like force and effect by the corresponding board, committee or officer of any corporation that
shall at the time be the lawful successor of the Company.

     Section 13.03 Surrender of Company Powers.

     The Company by instrument in writing executed by authority of its Board of Directors and
delivered to the Trustee may surrender any of the powers reserved to the Company, and thereupon
such power so surrendered shall terminate both as to the Company and as to any successor
corporation.

     Section 13.04 Notices.

     Except as otherwise expressly provided herein, any notice, request or demand that by any
provision of this Indenture is required or permitted to be given, made or served by the Trustee or
by the holders of Securities or by any other Person pursuant to this Indenture to or on the Company
may be given or served by being deposited in first class mail, postage prepaid, addressed (until
another address is filed in writing by the Company with the Trustee), as follows: MannKind
Corporation, 28903 North Avenue Paine, Valencia, California 91355, Attention: General Counsel. Any
notice, election, request or demand by the Company or any Securityholder or by any other Person
pursuant to this Indenture to or upon the Trustee shall be deemed to have been sufficiently given
or made, for all purposes, if given or made in writing at the Corporate Trust Office of the
Trustee.

     Section 13.05 Governing Law.

     This Indenture and each Security shall be deemed to be a contract made under the internal laws
of the State of New York, and for all purposes shall be construed in accordance with the laws of
said State, except to the extent that the Trust Indenture Act is applicable.

32.

 

     Section 13.06 Treatment of Securities as Debt.

     It is intended that the Securities will be treated as indebtedness and not as equity for
federal income tax purposes. The provisions of this Indenture shall be interpreted to further this
intention.

     Section 13.07 Section 13.07 Certificates and Opinions as to Conditions Precedent.

          (a) Upon any application or demand by the Company to the Trustee to take any action under any
of the provisions of this Indenture, the Company shall furnish to the Trustee an Officer’s
Certificate stating that all conditions precedent provided for in this Indenture (other than the
certificate to be delivered pursuant to Section 13.12) relating to the proposed action have been
complied with and, if requested, an Opinion of Counsel stating that in the opinion of such counsel
all such conditions precedent have been complied with, except that in the case of any such
application or demand as to which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.

          (b) Each certificate or opinion provided for in this Indenture and delivered to the Trustee
with respect to compliance with a condition or covenant in this Indenture shall include (i) a
statement that the Person making such certificate or opinion has read such covenant or condition;
(ii) 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; (iii) a statement
that, in the opinion of such Person, he has made such examination or investigation as is reasonably
necessary to enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (iv) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been complied with.

     Section 13.08 Payments on Business Days.

     Except as provided pursuant to Section 2.01 pursuant to a Board Resolution, and set forth in
an Officer’s Certificate, or established in one or more indentures supplemental to this Indenture,
in any case where the date of maturity of interest or principal of any Security or the date of
redemption of any Security shall not be a Business Day, then payment of interest or principal (and
premium, if any) may be made on the next succeeding Business Day with the same force and effect as
if made on the nominal date of maturity or redemption, and no interest shall accrue for the period
after such nominal date.

     Section 13.09 Conflict with Trust Indenture Act.

     If and to the extent that any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.

     Section 13.10 Counterparts.

     This Indenture may be executed in any number of counterparts, each of which shall be an
original, but such counterparts shall together constitute but one and the same instrument.

     Section 13.11 Separability.

     In case any one or more of the provisions contained in this Indenture or in the Securities of
any series shall for any reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other provisions of this
Indenture or of such Securities, but this Indenture and such Securities shall be construed as if
such invalid or illegal or unenforceable provision had never been contained herein or therein.

33.

 

     Section 13.12 Compliance Certificates.

     The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year
during which any Securities of any series were outstanding, an officer’s certificate stating
whether or not the signers know of any Event of Default that occurred during such fiscal year.
Such certificate shall contain a certification from the principal executive officer, principal
financial officer or principal accounting officer of the Company that a review has been conducted
of the activities of the Company and the Company’s performance under this Indenture and that the
Company has complied with all conditions and covenants under this Indenture. For purposes of this
Section 13.12, such compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture. If the officer of the Company signing such
certificate has knowledge of such Event of Default, the certificate shall describe any such Event
of Default and its status.

ARTICLE 14

SUBORDINATION OF SECURITIES

     Section 14.01 Subordination Terms.

     The payment by the Company of the principal of, premium, if any, and interest on any series of
securities issued hereunder shall be subordinated to the extent set forth in an indenture
supplemental hereto relating to such Securities.

     IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed all as
of the day and year first above written.

	 	 	 	 	 	 	 

	 	 	MANNKIND CORPORATION
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 
	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	[TRUSTEE], as Trustee
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 
	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 

34.

 

CROSS-REFERENCE TABLE (1)

	 	 	 
	Section of Trust Indenture Act of 1939, as Amended	 	Section of Indenture
	310(a)
	 	7.09
	310(b)
	 	7.08
	 
	 	7.10
	310(c)
	 	Inapplicable
	311(a)
	 	7.13
	311(b)
	 	7.13
	311(c)
	 	Inapplicable
	312(a)
	 	5.01
	 
	 	5.02(a)
	312(b)
	 	5.02(c)
	312(c)
	 	5.02(c)
	313(a)
	 	5.04(a)
	313(b)
	 	5.04(b)
	313(c)
	 	5.04(a)
	 
	 	5.04(b)
	313(d)
	 	5.04(c)
	314(a)
	 	5.03
	 
	 	13.12
	314(b)
	 	Inapplicable
	314(c)
	 	13.07(a)
	314(d)
	 	Inapplicable
	314(e)
	 	13.07(b)
	314(f)
	 	Inapplicable
	315(a)
	 	7.01(a)
	 
	 	7.01(b)
	315(b)
	 	7.14
	315(c)
	 	7.01
	315(d)
	 	7.01(b)
	315(e)
	 	6.07
	316(a)
	 	6.06
	 
	 	8.04
	316(b)
	 	6.04
	316(c)
	 	8.01
	317(a)
	 	6.02
	317(b)
	 	4.03
	318(a)
	 	13.09

 

			
	(1)	 	This Cross-Reference Table does not constitute part of the Indenture and shall not have any
bearing on the interpretation of any of its terms or provisionsexv10w1

Exhibit 10.1

$200,000,000

PENSON WORLDWIDE, INC.

12.5% Senior Second Lien Secured Notes due 2017

Purchase Agreement

April 29, 2010

J.P. Morgan Securities Inc.

  As Representative of the

  several Initial Purchasers listed

  in Schedule 1 hereto

c/o J.P. Morgan Securities Inc.

383 Madison Avenue

New York, New York 10179

Ladies and Gentlemen:

     Penson Worldwide, Inc., a Delaware corporation (the “Company”), proposes to issue and sell to
the several initial purchasers listed in Schedule 1 hereto (the “Initial Purchasers”), for whom you
are acting as representative (the “Representative”), $200,000,000 principal amount of its 12.5%
Senior Second Lien Secured Notes due 2017 (the “Notes”). The Securities will be issued pursuant to
an Indenture to be dated as of May 6, 2010 (the “Indenture”) among the Company, SAI Holdings, Inc.
(“SAI”) and Penson Holdings, Inc. (“Holdings” and together with SAI, the “Guarantors”), and U.S.
Bank National Association, as trustee (the “Trustee”) and collateral agent (the “Collateral Agent”)
and will be guaranteed on a senior second lien secured basis by each of the Guarantors (the
“Guarantees” and, together with the Notes, the “Securities”).

     The Securities will be sold to the Initial Purchasers without being registered under the
Securities Act of 1933, as amended (the “Securities Act”), in reliance upon an exemption therefrom.
The Company and the Guarantors have prepared a preliminary offering memorandum dated April 21,
2010 (the “Preliminary Offering Memorandum”) and will prepare an offering memorandum dated the date
hereof (the “Offering Memorandum”) setting forth information concerning the Company and the
Securities. Copies of the Preliminary Offering Memorandum have been, and copies of the Offering
Memorandum will be, delivered by the Company to the Initial Purchasers pursuant to the terms of
this Agreement. The Company hereby confirms that it has authorized the use of the Preliminary
Offering Memorandum, the other Time of Sale Information (as defined below) and the Offering
Memorandum in connection with the offering and resale of the Securities by the Initial Purchasers
in the manner contemplated by this Agreement. Capitalized terms used but not defined herein shall
have the meanings given to such terms in the Preliminary Offering Memorandum. References herein to

 

 

the Preliminary Offering Memorandum, the Time of Sale Information and the Offering Memorandum
shall be deemed to refer to and include any document incorporated by reference therein.

     At or prior to the time when sales of the Securities were first made (the “Time of Sale”), the
following information shall have been prepared: the Preliminary Offering Memorandum, as
supplemented and amended by the written communications listed on Annex A hereto (collectively, the
“Time of Sale Information”).

     The Securities being issued hereby, the entry into the Transaction Documents (as defined
below), the amendment and restatement of the Company’s senior secured revolving credit facility by
and among the Company, the guarantors party thereto, Regions Bank and the other financial
institutions from time to time party thereto (the “Amended and Restated Credit Facility”), and the
payment of transaction costs are referred to herein collectively as the “Transactions.”

     Holders of the Securities (including the Initial Purchasers and their direct and indirect
transferees) will be entitled to the benefits of (a) an Intercreditor Agreement, to be dated the
Closing Date (the “Intercreditor Agreement”), by and between the Trustee, the Collateral Agent and
Regions Bank, as administrative agent and collateral agent under the Amended and Restated Credit
Facility and acknowledged by the Company and the Guarantors, which will govern the Collateral (as
defined below) and (b) a Pledge Agreement, to be dated the Closing Date between the Company, the
Guarantors, the Trustee and the Collateral Agent (the “Pledge Agreement”), pursuant to which the
Company and the Guarantors pledge the Collateral (as defined below) securing the Securities in
favor of the Collateral Agent for its benefit and the benefit of the holders of the Securities.

     The Securities will be secured on a second-priority basis, subject to Permitted Liens (as
defined in the Indenture), by liens on (i) all of the capital stock of SAI, Penson Financial
Services, Inc. (“PFSI”), Penson Holdings, Inc. and GHP1, Inc., and 65% of the capital stock of
Penson Financial Services Canada, Inc., (ii) the capital stock of any subsidiary of the Company
owned directly by the Company or a Guarantor that on a consolidated basis, accounted for more than
(x) 5% of consolidated total assets of the Company as of the last day of any fiscal quarter of the
Company following the Closing Date (the “Balance Sheet Date”) and (y) 5% of consolidated total
revenues of the Company for the latest four fiscal quarter period ending on any Balance Sheet Date,
(iii) any other assets of the Company or any of its subsidiaries that are affirmatively pledged as
collateral under the Amended and Restated Credit Facility (clauses (i), (ii) and (iii) in this
paragraph are collectively referred to as “Collateral”) as more particularly described in the Time
of Sale Information and the Offering Memorandum and documented by the Pledge Agreement. The Amended
and Restated Credit Facility will be secured on a first-priority basis, subject to liens permitted
under Section 7.01 of the Amended and Restated Credit Facility, by liens on the Collateral.

     On November 2, 2009, the Company entered into an asset purchase agreement to acquire (the
“Ridge Acquisition”) contracts related to the correspondent clearing and execution business of
Ridge Clearing & Outsourcing Solutions, Inc. (“Ridge”), a wholly owned subsidiary of

-2-

 

Broadridge Financial Solutions, Inc. (“Broadridge”). The Company intends to close the
Acquisition after the offering of the Securities.

     The Company hereby confirms its agreement with the several Initial Purchasers concerning the
purchase and resale of the Securities, as follows:

     1. Purchase and Resale of the Securities.

     (a) The Company agrees to issue and sell the Securities to the several Initial
Purchasers as provided in this Agreement, and each Initial Purchaser, on the basis of the
representations, warranties and agreements set forth herein and subject to the conditions
set forth herein, agrees, severally and not jointly, to purchase from the Company the
respective principal amount of Securities set forth opposite such Initial Purchaser’s name
in Schedule 1 hereto at a price equal to 97.25% of the principal amount thereof plus
accrued interest, if any, from May 6, 2010 to the Closing Date. The Company will not be
obligated to deliver any of the Securities except upon payment for all the Securities to be
purchased as provided herein.

     (b) The Company understands that the Initial Purchasers intend to offer the Securities
for resale on the terms set forth in the Time of Sale Information. Each Initial Purchaser,
severally and not jointly, represents, warrants and agrees that:

     (i) it is a qualified institutional buyer within the meaning of Rule 144A under the
Securities Act (a “QIB”) and an accredited investor within the meaning of Rule 501(a) under
the Securities Act;

     (ii) it has not solicited offers for, or offered or sold, and will not solicit offers
for, or offer or sell, the Securities by means of any form of general solicitation or
general advertising within the meaning of Rule 502(c) of Regulation D under the Securities
Act (“Regulation D”) or in any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act; and

     (iii) it has not solicited offers for, or offered or sold, and will not solicit offers
for, or offer or sell, the Securities as part of their initial offering except:

     (A) within the United States to persons whom it reasonably believes to be QIBs
in transactions pursuant to Rule 144A under the Securities Act (“Rule 144A”) and in
connection with each such sale, it has taken or will take reasonable steps to ensure
that the purchaser of the Securities is aware that such sale is being made in
reliance on Rule 144A; or

     (B) in accordance with the restrictions set forth in Annex C hereto.

     (c) Each Initial Purchaser acknowledges and agrees that the Company and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Sections 6(f) and
6(g), Morgan, Lewis & Bockius LLP and Cahill Gordon & Reindel LLP, respectively,
may rely upon the accuracy of the representations and warranties of the Initial Purchasers,
and compliance by the Initial Purchasers with their agreements,

-3-

 

contained in paragraph (b) above (including Annex C hereto), and each Initial
Purchaser hereby consents to such reliance.

     (d) The Company acknowledges and agrees that the Initial Purchasers may offer and sell
Securities to or through any affiliate of an Initial Purchaser and that any such affiliate
may offer and sell Securities purchased by it to or through any Initial Purchaser so long
as (i) such offers and sales are consistent with Section 1(b) and (ii) the Initial
Purchasers remain liable for the actions or omissions of any such authorized affiliate to
the same extent as if such actions or omissions were performed by the Initial Purchaser.

     (e) The Company and the Guarantors acknowledge and agree that the Initial Purchasers
are acting solely in the capacity of an arm’s length contractual counterparty to the
Company and the Guarantors with respect to the offering of Securities contemplated hereby
(including in connection with determining the terms of the offering) and not as financial
advisors or fiduciaries to, or agents of, the Company, the Guarantors or any other person.
Additionally, neither the Representative nor any other Initial Purchaser is advising the
Company, the Guarantors or any other person as to any legal, tax, investment, accounting or
regulatory matters in any jurisdiction. The Company and the Guarantors shall consult with
their own advisors concerning such matters and shall be responsible for making their own
independent investigation and appraisal of the transactions contemplated hereby, and
neither the Representative nor any other Initial Purchaser shall have any responsibility or
liability to the Company or the Guarantors with respect thereto. Any review by the
Representative or any Initial Purchaser of the Company, the Guarantors, and the
transactions contemplated hereby or other matters relating to such transactions will be
performed solely for the benefit of the Representative or such Initial Purchaser, as the
case may be, and shall not be on behalf of the Company, the Guarantors or any other person.

     2. Payment and Delivery.

     (a) Payment for and delivery of the Securities will be made at the offices of Cahill
Gordon & Reindel llp, 80 Pine Street, New York, New York 10005 at 10:00 A.M., New
York City time, on May 6, 2010, or at such other time or place on the same or such other
date, not later than the fifth business day thereafter, as the Representative and the
Company may agree upon in writing. The time and date of such payment and delivery is
referred to herein as the “Closing Date”.

     (b) Payment for the Securities shall be made by wire transfer in immediately available
funds to the account(s) specified by the Company to the Representative against delivery to
the nominee of The Depository Trust Company (“DTC”), for the account of the Initial
Purchasers, of one or more global notes representing the Securities (collectively, the
“Global Note”), with any transfer taxes payable in connection with the sale of the
Securities duly paid by the Company. The Global Note will be made available for inspection
by the Representative not later than 1:00 P.M., New York City time, on the business day
prior to the Closing Date.

-4-

 

     3. Representations and Warranties of the Company and the Guarantors. The Company and
the Guarantors jointly and severally represent and warrant to each Initial Purchaser that:

     (a) Preliminary Offering Memorandum, Time of Sale Information and Offering Memorandum.
The Preliminary Offering Memorandum, as of its date, did not, the Time of Sale Information,
at the Time of Sale, did not, and at the Closing Date, will not, and the Offering
Memorandum, in the form first used by the Initial Purchasers to confirm sales of the
Securities and as of the Closing Date, will not, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading; provided
that the Company and the Guarantors make no representation or warranty with respect to any
statements or omissions made in reliance upon and in conformity with information relating to
any Initial Purchaser furnished to the Company in writing by such Initial Purchaser through
the Representative expressly for use in the Preliminary Offering Memorandum, the Time of
Sale Information or the Offering Memorandum.

     (b) Additional Written Communications. The Company (including its agents and
representatives, other than the Initial Purchasers in their capacity as such) has not
prepared, made, used, authorized, approved or referred to and will not prepare, make, use,
authorize, approve or refer to any written communication that constitutes an offer to sell
or solicitation of an offer to buy the Securities (each such communication by the Company or
its agents and representatives (other than a communication referred to in clauses (i), (ii)
and (iii) below) an “Issuer Written Communication”) other than (i) the Preliminary Offering
Memorandum, (ii) the Offering Memorandum, (iii) the documents listed on Annex A hereto,
including a term sheet substantially in the form of Annex B hereto, which constitute part of
the Time of Sale Information, and (iv) any electronic road show or other written
communications, in each case used in accordance with Section 4(c). Each such Issuer Written
Communication, when taken together with the Time of Sale Information, did not, and at the
Closing Date will not, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that the Company
makes no representation and warranty with respect to any statements or omissions made in
each such Issuer Written Communication in reliance upon and in conformity with information
relating to any Initial Purchaser furnished to the Company in writing by such Initial
Purchaser through the Representative expressly for use in any Issuer Written Communication.

     (c) Incorporated Documents. The documents incorporated by reference in each of the
Time of Sale Information and the Offering Memorandum, when filed with the Securities and
Exchange Commission (the “Commission”), conformed or will conform, as the case may be, in
all material respects to the requirements of the Exchange Act and the rules and regulations
of the Commission thereunder.

     (d) Financial Statements. The financial statements, including the related notes
thereto included or incorporated by reference in each of the Time of Sale

-5-

 

Information and the Offering Memorandum present fairly in all material respects the
consolidated financial position of the Company and its subsidiaries as of the dates
indicated and the consolidated results of their operations and the changes in their
consolidated cash flows for the periods specified; such financial statements have been
prepared in conformity with generally accepted accounting principles applied on a consistent
basis throughout the periods covered thereby; the other financial information included or
incorporated by reference in each of the Time of Sale Information and the Offering
Memorandum has been, fairly and accurately presented in all material respects and prepared
on a basis consistent with such financial statements and the books and records of the
Company; and the assumptions underlying the pro forma financial information and the related
notes thereto included in each of the Time of Sale Information and the Offering Memorandum
are reasonable and are set forth in each of the Time of Sale Information and the Offering
Memorandum.

     (e) No Material Adverse Change. Since the date of the most recent financial statements
of the Company included or incorporated by reference in each of the Time of Sale Information
and the Offering Memorandum, except in each case as otherwise disclosed, or incorporated by
reference, in the Time of Sale Information and the Offering Memorandum, (i) there has not
been any material change in the capital stock, increase in long-term debt or any decreases
in consolidated net current assets or stockholders’ equity of the Company or any of its
subsidiaries, or any dividend or distribution of any kind declared, set aside for payment,
paid or made by the Company on any class of capital stock, or any material adverse change,
or any development involving an anticipated prospective material adverse change, in or
affecting the business, properties, management, financial position, results of operations of
the Company and its subsidiaries taken as a whole; (ii) neither the Company nor any of its
subsidiaries has entered into any transaction or agreement that is material to the Company
and its subsidiaries taken as a whole or incurred any liability or obligation, direct or
contingent, that is material to the Company and its subsidiaries taken as a whole; and (iii)
neither the Company nor any of its subsidiaries has sustained any material loss or
interference with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor disturbance or dispute or any action, order or
decree of any court or arbitrator or governmental or regulatory authority.

     (f) Organization and Good Standing. The Company and each of its Significant
Subsidiaries (as defined below) have been duly organized and are validly existing and in
good standing under the laws of their respective jurisdictions of organization, are duly
qualified to do business and are in good standing in each jurisdiction in which their
respective ownership or lease of property or the conduct of their respective businesses
requires such qualification, and have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they are engaged, except where
the failure to be so qualified, in good standing or have such power or authority would not,
individually or in the aggregate, have a material adverse effect on the business,
properties, management, financial position or results of operations of the Company and its
subsidiaries taken as a whole or on the performance by the Company and the Guarantors of
their obligations under the Securities and the Guarantees (a “Material Adverse Effect”).
The Company does not own or control,

-6-

 

directly or indirectly, any corporation, association or other entity other than the
subsidiaries listed on Schedule 2 to this Agreement. The subsidiaries designated as
“significant” in Schedule 2 to this Agreement include any subsidiary that, on a consolidated
basis with its subsidiaries, accounted for more than (x) 10% of the Company’s consolidated
revenues for the twelve months ended December 31, 2009 or (y) 10% of the Company’s
consolidated total assets as of December 31, 2009 (the “Significant Subsidiaries”).

     (g) Capitalization. The Company has an authorized capitalization as set forth in each
of the Time of Sale Information and the Offering Memorandum under the heading
“Capitalization”; and all the outstanding shares of capital stock or other equity interests
of each subsidiary of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and, except for shares of “joint back office” preferred stock
issued in the ordinary course of business and except as set forth in the Time of Sale
Information and the Offering Memorandum, and are owned directly or indirectly by the Company
free and clear of any lien, charge, encumbrance, security interest, restriction on voting or
transfer or any other claim of any third party.

     (h) Due Authorization. The Company and the Guarantors each have the corporate right,
power and authority to execute and deliver this Agreement, the Securities, the Indenture
(including each Guarantee set forth therein), the Pledge Agreement and the Intercreditor
Agreement (collectively, the “Transaction Documents”) and to perform their respective
obligations hereunder and thereunder; and all action required to be taken for the due and
proper authorization, execution and delivery of each of the Transaction Documents and the
consummation of the transactions contemplated thereby has been duly and validly taken.

     (i) The Indenture. The Indenture has been duly authorized by the Company and the
Guarantors and, when duly executed and delivered in accordance with its terms by each of the
parties thereto, will constitute a valid and legally binding agreement of the Company and
the Guarantors enforceable against the Company and the Guarantors in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy, insolvency or
similar laws affecting the enforcement of creditors’ rights generally or by equitable
principles relating to enforceability (collectively, the “Enforceability Exceptions”); and
on the Closing Date, the Indenture will conform in all material respects to the requirements
of the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”), and the rules
and regulations of the Commission applicable to an indenture that is qualified thereunder.

     (j) The Securities and the Guarantees. On the Closing Date, the Securities will have
been duly authorized by the Company and, when duly executed, authenticated, issued and
delivered as provided in the Indenture and paid for as provided herein, will be duly and
validly issued and outstanding and will constitute valid and legally binding obligations of
the Company enforceable against the Company in accordance with their terms, subject to the
Enforceability Exceptions, and will be entitled to the benefits of the Indenture; and the
Guarantees have been duly authorized by the Guarantors and, when the Securities have been
duly executed, authenticated, issued and delivered as provided in

-7-

 

the Indenture and paid for as provided herein, will be valid and legally binding
obligations of the Guarantors, enforceable against the Guarantors in accordance with their
terms, subject to the Enforceability Exceptions, and will be entitled to the benefits of the
Indenture.

     (k) Purchase Agreement. This Agreement has been duly authorized, executed and
delivered by the Company and the Guarantors.

     (l) Other Transaction Documents. Each of the Pledge Agreement and the Intercreditor
Agreement have been duly authorized, executed and delivered by the Company and the
Guarantors and, when duly executed and delivered in accordance with their terms by each of
the parties thereto, will constitute a valid and legally binding agreement of the Company
and the Guarantors, enforceable against the Company and the Guarantors in accordance with
their terms, subject to the Enforceability Exceptions. The Pledge Agreement, when executed
and delivered in connection with the sale of the Securities, will create in favor of the
Collateral Agent for the benefit of itself and the holders of the Securities, valid and
enforceable security interest in and liens on the Collateral and, upon the filing of
appropriate Uniform Commercial Code financing statements in United States jurisdictions as
set forth on Schedule 3 hereto and the taking of the other actions, in each case as further
described in the Pledge Agreements and Schedule 3 hereto, the security interests in and
liens on the rights of the Company or the Guarantors in such Collateral will be perfected
security interests and liens, superior to and prior to the liens of all third-persons other
than Permitted Liens and except as otherwise provided for in the Pledge Agreement or
Intercreditor Agreement.

     (m) Descriptions of the Transaction Documents. Each Transaction Document conforms in
all material respects to the description thereof contained in each of the Time of Sale
Information and the Offering Memorandum.

     (n) No Violation or Default. Neither the Company nor any of its Significant
Subsidiaries is (i) in violation of its charter or by-laws or similar organizational
documents; (ii) in default, and no event has occurred that, with notice or lapse of time or
both, would constitute such a default by the Company or any of its Significant Subsidiaries,
in the due performance or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which
the Company or any of its Significant Subsidiaries is a party or by which the Company or any
of its Significant Subsidiaries is bound or to which any of the property or assets of the
Company or any of its Significant Subsidiaries is subject; or (iii) in violation of any law
or statute or any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of clauses (ii) and (iii) above,
for any such default or violation that would not, individually or in the aggregate, have a
Material Adverse Effect.

     (o) No Conflicts. The execution, delivery and performance by the Company and the
Guarantors of each of the Transaction Documents to which each is a party, the issuance and
sale of the Securities (including the Guarantees) and compliance by the Company and the
Guarantors with the terms thereof and the consummation of the

-8-

 

transactions contemplated by the Transaction Documents will not (i) conflict with or
result in a breach or violation of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its Significant Subsidiaries pursuant
to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument
to which the Company or any of its Significant Subsidiaries is a party or by which the
Company or any of its Significant Subsidiaries is bound or to which any of the property or
assets of the Company or any of its Significant Subsidiaries is subject, (ii) result in any
violation of the provisions of the charter or by-laws or similar organizational documents of
the Company or any of its Significant Subsidiaries or (iii) result in the violation of any
law or statute or any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of clauses (i) and (iii) above,
for any such conflict, breach, violation or default that would not, individually or in the
aggregate, have a Material Adverse Effect.

     (p) No Consents Required. No consent, approval, authorization, order, registration or
qualification of or with any court or arbitrator or governmental or regulatory authority is
required for the execution, delivery and performance by the Company and the Guarantors of
each of the Transaction Documents to which each is a party, the issuance and sale of the
Securities (including the Guarantees) and compliance by the Company and the Guarantors with
the terms thereof and the consummation of the transactions contemplated by the Transaction
Documents, except for such consents, approvals, authorizations, orders and registrations or
qualifications as may be required (i) under applicable state securities laws in connection
with the purchase and resale of the Securities by the Initial Purchasers and (ii) where the
failure to obtain any such consent, approval, authorization, order, registration or
qualification would not reasonably be expected to have a Material Adverse Effect or impair
the issuance and sale of the Securities as contemplated by the Time of Sale Information and
the Offering Memorandum.

     (q) Legal Proceedings. Except as described in each of the Time of Sale Information and
the Offering Memorandum, there are no legal, governmental or regulatory investigations,
actions, suits or proceedings pending to which the Company or any of it subsidiaries is or
may be a party or to which any property of the Company or any of its subsidiaries is or may
be the subject that, individually or in the aggregate, if determined adversely to the
Company or any of its subsidiaries, would reasonably be expected to have a Material Adverse
Effect; and, to the knowledge of the Company, no such investigations, actions, suits or
proceedings are threatened or contemplated by any governmental or regulatory authority or by
others.

     (r) Independent Accountants. BDO Seidman, LLP, who has certified certain financial
statements of the Company and its subsidiaries, is an independent registered public
accounting firm with respect to the Company and its subsidiaries within the applicable rules
and regulations adopted by the Commission and the Public Company Accounting Oversight Board
(United States) and as required by the Securities Act.

-9-

 

     (s) Title to Real and Personal Property. The Company and its Significant Subsidiaries
have good and marketable title in fee simple to, or have valid rights to lease or otherwise
use, all items of real and personal property that are material to the business of the
Company and its Significant Subsidiaries, taken together, in each case free and clear of all
liens, encumbrances, claims and defects and imperfections of title except those that (i) do
not materially interfere with the use made and proposed to be made of such property by the
Company and its Significant Subsidiaries or (ii) would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.

     (t) Title to Intellectual Property. The Company and its Significant Subsidiaries own
or possess adequate rights to use all patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service mark registrations, copyrights,
licenses and know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures) that are material to the
conduct of the business of the Company and its Significant Subsidiaries, taken together; and
the conduct of their respective businesses will not conflict in any material respect with
any such rights of others, and the Company and its Significant Subsidiaries have not
received any notice of any claim of infringement of or conflict with any such rights of
others, except as would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect.

     (u) No Undisclosed Relationships. No relationship, direct or indirect, exists between
or among the Company or any of its subsidiaries, on the one hand, and the directors,
officers, stockholders or other affiliates of the Company or any of its subsidiaries, on the
other, that would be required by the Securities Act to be described in a registration
statement to be filed with the Commission and that is not so described, or incorporated by
reference, in each of the Time of Sale Information and the Offering Memorandum.

     (v) Investment Company Act. Neither the Company nor any of its subsidiaries is, and
after giving effect to the offering and sale of the Securities and the application of the
proceeds thereof as described in each of the Time of Sale Information and the Offering
Memorandum none of them will be, an “investment company” or an entity “controlled” by an
“investment company” within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations of the Commission thereunder (collectively, the “Investment
Company Act”).

     (w) Taxes. Except as otherwise disclosed in the Time of Sale Information and the
Offering Memorandum or except as would not have a Material Adverse Effect (i) the Company
and its subsidiaries have filed all returns with respect to federal, state, local and
foreign taxes required to be filed through the date hereof, (ii) paid all taxes shown by
such returns to be required to be paid through the date hereof, to the extent such taxes
have become due and are not being contested in good faith and for which the Company has
taken appropriate reserves as required by generally accepted accounting principles in the
United States; and (iii) there is no tax deficiency that has been, or would reasonably

-10-

 

be expected to be, asserted against the Company or any of its subsidiaries or any of
their respective properties or assets.

     (x) Licenses and Permits. The Company and its Significant Subsidiaries possess all
licenses, certificates, permits and other authorizations issued by, and have made all
declarations and filings with, the appropriate federal, state, local or foreign governmental
or regulatory authorities that are necessary for the ownership or lease of their respective
properties or the conduct of the business of the Company and its Significant Subsidiaries as
described in each of the Time of Sale Information and the Offering Memorandum, except where
the failure to possess or make the same would not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect; and except as described in each of the
Time of Sale Information and the Offering Memorandum, neither the Company nor any of its
Significant Subsidiaries has received notice of any revocation or adverse modification of
any such license, certificate, permit or authorization or has any reason to believe that any
such license, certificate, permit or authorization will not be renewed in the ordinary
course, except as would not be reasonably expected to have a Material Adverse Effect.

     (y) No Labor Disputes. No labor disturbance by or dispute with employees of the
Company or any of its Significant Subsidiaries exists or, to the knowledge of the Company,
is contemplated or threatened, except as would not be reasonably expected to have a Material
Adverse Effect.

     (z) Compliance with Environmental Laws. The Company and its subsidiaries (i) are in
compliance with any and all applicable federal, state, local and foreign laws, rules,
regulations, decisions and orders relating to the protection of human health or safety, the
environment, hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, “Environmental Laws”), (ii) have received and are in compliance with all
permits, licenses, or other authorizations or approvals required of them under applicable
Environmental Laws to conduct their respective businesses, (iii) have not received notice of
any actual or potential liability under or relating to any Environmental Laws, including for
the investigation or remediation of any disposal or release of hazardous or toxic substances
or wastes, pollutants or contaminants and have no knowledge of any event or condition that
would reasonably be expected to result in any such notice, except in any such case, for any
such failure to comply, or failure to receive required permits, licenses or approvals, or
liability as would not individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect and (iv) except as described in each of the Time of Sale Information
and the Offering Memorandum, none of the Company and its subsidiaries anticipates material
capital expenditures relating to any Environmental Laws.

     (aa) Compliance with ERISA. (i) Each employee benefit plan, within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
for which the Company or any member of its “Controlled Group” (defined as any organization
which is a member of a controlled group of corporations within the meaning of Section 414 of
the Internal Revenue Code of 1986, as amended (the “Code”)) would have any liability (each,
a “Plan”) has been maintained in

-11-

 

compliance with its terms and the requirements of any applicable statutes, orders,
rules and regulations, including but not limited to ERISA and the Code; (ii) no prohibited
transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has
occurred with respect to any Plan excluding transactions effected pursuant to a statutory or
administrative exemption; (iii) for each Plan that is subject to the funding rules of
Section 412 of the Code or Section 302 of ERISA, no “accumulated funding deficiency” as
defined in Section 412 of the Code, whether or not waived, has occurred or is reasonably
expected to occur; (iv) the fair market value of the assets of each Plan exceeds the present
value of all benefits accrued under such Plan (determined based on those assumptions used to
fund such Plan); (v) no “reportable event” (within the meaning of Section 4043(c) of ERISA)
has occurred or is reasonably expected to occur; and (vi) neither the Company nor any member
of the Controlled Group has incurred, nor reasonably expects to incur, any liability under
Title IV of ERISA (other than contributions to the Plan or premiums to the PBGC, in the
ordinary course and without default) in respect of a Plan (including a “multiemployer plan”,
within the meaning of Section 4001(a)(3) of ERISA), except in the case of each of (i)
through (vi) which would not reasonably be expected to have a Material Adverse Effect).

     (bb) Disclosure Controls. The Company maintains an effective system of “disclosure
controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that is designed
to ensure that information required to be disclosed by the Company in reports that it files
or submits under the Exchange Act is recorded, processed, summarized and reported within the
time periods specified in the Commission’s rules and forms, including controls and
procedures designed to ensure that such information is accumulated and communicated to the
Company’s management as reasonably appropriate to allow timely decisions regarding required
disclosure. The Company has carried out evaluations of the effectiveness of its disclosure
controls and procedures as required by Rule 13a-15 of the Exchange Act.

     (cc) Accounting Controls. The Company maintains a system of “internal control over
financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that complies with
the requirements of the Exchange Act and has been designed by, or under the supervision of,
the principal executive and principal financial officers, or persons performing similar
functions, to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. The Company and its subsidiaries maintain
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations; (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. Except as disclosed, or incorporated by
reference, in each of the Time of Sale Information and the Offering Memorandum, there are no
material weaknesses or significant deficiencies in the Company’s internal control over
financial reporting.

-12-

 

     (dd) Insurance. The Company and its Significant Subsidiaries have insurance covering
their respective properties, operations, personnel and businesses, including business
interruption insurance, which insurance is in amounts and insures against such losses and
risks as the Company has determined are adequate in all material respects to protect the
Company and its subsidiaries and their businesses, taken as a whole; and neither the Company
nor any of its Significant Subsidiaries has (i) received notice from any insurer or agent of
such insurer that capital improvements or other expenditures are required or necessary to be
made in order to continue such insurance or (ii) any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires or to obtain
similar coverage at reasonable cost from similar insurers as may be necessary to continue
its business, except as would not reasonably be expected to result in a Material Adverse
Effect.

     (ee) No Unlawful Payments. Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company and the Guarantors, any director, officer, agent, employee or other
person acting on behalf of the Company or any of its subsidiaries has during the last five
years (i) used any corporate funds for any unlawful contribution, gift, entertainment or
other unlawful expense relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from corporate
funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977, as amended; or (iv) made any bribe, rebate, payoff, influence payment, kickback
or other unlawful payment except as would not reasonably be expected to have a Material
Adverse Effect.

     (ff) Compliance with Anti-Money Laundering Laws. The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance in all material respects
with applicable financial recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the anti-money laundering statutes
of all jurisdictions to which the Company and its subsidiaries are subject, the rules and
regulations thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency having authority over the Company and
its subsidiaries (collectively, the “Anti-Money Laundering Laws”) and no action, suit or
proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries with respect to the Anti-Money
Laundering Laws is pending or, to the knowledge of the Company, threatened except as would
not reasonably be expected to have a Material Adverse Effect.

     (gg) Compliance with OFAC. None of the Company, any of its subsidiaries or, to the
knowledge of the Company, any director, officer, agent, employee or affiliate of the Company
or any of its subsidiaries is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”); and the
Company will not directly or indirectly use the proceeds of the offering of the Securities
hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions

-13-

 

administered by OFAC except as would not reasonably be expected to have a Material
Adverse Effect.

     (hh) Solvency. On and immediately after the Closing Date, the Company (after giving
effect to the issuance of the Securities and the other transactions related thereto as
described in each of the Time of Sale Information and the Offering Memorandum) will be
Solvent. As used in this paragraph, the term “Solvent” means, with respect to a particular
date, that on such date (i) the present fair market value (or present fair saleable value)
of the assets of the Company is not less than the total amount required to pay the
liabilities of the Company on its total existing debts and liabilities (including contingent
liabilities) as they become absolute and matured; (ii) the Company is able to realize upon
its assets and pay its debts and other liabilities, contingent obligations and commitments
as they mature and become due in the normal course of business; (iii) assuming consummation
of the issuance of the Securities as contemplated by this Agreement, the Time of Sale
Information and the Offering Memorandum, the Company is not incurring debts or liabilities
beyond its ability to pay as such debts and liabilities mature; (iv) the Company is not
engaged in any business or transaction, and does not propose to engage in any business or
transaction, for which its property would constitute unreasonably small capital after giving
due consideration to the prevailing practice in the industry in which the Company is
engaged; and (v) the Company is not a defendant in any civil action that is reasonably
likely to result in a judgment that the Company is or would become unable to satisfy.

     (ii) No Restrictions on Subsidiaries. Except for restrictions imposed by the
applicable regulatory authorities and applicable law (including restrictions required to be
included in the constituent documents of Penson Financial Services, Inc. by applicable
regulatory authorities) and described in the Time of Sale Information and the Offering
Memorandum, no Significant Subsidiary of the Company is currently prohibited, directly or
indirectly, under any agreement or other instrument to which it is a party or is subject,
from paying any dividends to the Company, from making any other distribution on such
Significant Subsidiary’s capital stock, from repaying to the Company any loans or advances
to such Significant Subsidiary from the Company or from transferring any of such Significant
Subsidiary’s properties or assets to the Company or any other subsidiary of the Company.

     (jj) No Broker’s Fees. Neither the Company nor any of its subsidiaries is a party to
any contract, agreement or understanding with any person (other than this Agreement) that
would give rise to a valid claim against any of them or any Initial Purchaser for a
brokerage commission, finder’s fee or like payment in connection with the offering and sale
of the Securities (other than as provided in this Agreement).

     (kk) Rule 144A Eligibility. On the Closing Date, the Securities will not be of the
same class as securities listed on a national securities exchange registered under Section 6
of the Exchange Act or quoted in an automated inter-dealer quotation system; and each of the
Preliminary Offering Memorandum and the Offering Memorandum, as of its respective date,
contains or will contain all the information that, if requested by a

-14-

 

prospective purchaser of the Securities, would be required to be provided to such
prospective purchaser pursuant to Rule 144A(d)(4) under the Securities Act.

     (ll) No Integration. Neither the Company nor any of its affiliates (as defined in Rule
501(b) of Regulation D) has, directly or through any agent, sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any security (as defined in
the Securities Act), that is or will be integrated with the sale of the Securities in a
manner that would require registration of the Securities under the Securities Act.

     (mm) No General Solicitation or Directed Selling Efforts. None of the Company or any
of its affiliates or any other person acting on its or their behalf (other than the Initial
Purchasers, as to which no representation is made) has (i) solicited offers for, or offered
or sold, the Securities by means of any form of general solicitation or general advertising
within the meaning of Rule 502(c) of Regulation D or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act or (ii) engaged in any
directed selling efforts within the meaning of Regulation S under the Securities Act
(“Regulation S”), and all such persons have complied with the offering restrictions
requirement of Regulation S.

     (nn) Securities Law Exemptions. Assuming the accuracy of the representations and
warranties of the Initial Purchasers contained in Section 1(b) (including Annex C hereto)
and their compliance with their agreements set forth therein, it is not necessary, in
connection with the issuance and sale of the Securities to the Initial Purchasers and the
offer, resale and delivery of the Securities by the Initial Purchasers in the manner
contemplated by this Agreement, the Time of Sale Information and the Offering Memorandum, to
register the Securities under the Securities Act or to qualify the Indenture under the Trust
Indenture Act.

     (oo) No Stabilization. Neither the Company nor the Guarantors have taken, directly or
indirectly, any action designed to or that could reasonably be expected to cause or result
in any stabilization or manipulation of the price of the Securities.

     (pp) Margin Rules. Neither the issuance, sale and delivery of the Securities nor the
application of the proceeds thereof by the Company as described in each of the Time of Sale
Information and the Offering Memorandum will violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System or any other regulation of such Board of Governors.

     (qq) Forward-Looking Statements. No forward-looking statement (within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in any of
the Time of Sale Information or the Offering Memorandum has been made or reaffirmed without
a reasonable basis or has been disclosed other than in good faith.

     (rr) Statistical and Market Data. Nothing has come to the attention of the Company
that has caused the Company to believe that the statistical and market-related data included
or incorporated by reference in each of the Time of Sale Information and

-15-

 

the Offering Memorandum is not based on or derived from sources that are reliable and
accurate in all material respects.

     (ss) Sarbanes-Oxley Act. There is and has been no failure on the part of the Company
or any of the Company’s directors or officers, in their capacities as such, to comply with
any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith (the “Sarbanes-Oxley Act”), except for such noncompliance with the
Sarbanes-Oxley Act which would not reasonably be expected to result in a Material Adverse
Effect.

     (tt) Amended and Restated Credit Facility. The Amended and Restated Credit Facility has
been fully and validly authorized by the Company and the Guarantors and, when duly executed
and delivered by the Company and the Guarantors and assuming the Amended and Restated Credit
Facility is a valid and binding agreement of each of the other parties thereto, will be the
valid and legally binding obligation of the Company and the Guarantor, enforceable against
the Company and the Guarantors in accordance with its terms, subject to the Enforceability
Exception. On the Closing Date, the Company will satisfy all conditions to effectiveness
under the Amended and Restated Credit Facility and there will be no Default or Event of
Default, as defined thereunder.

     4. Further Agreements of the Company and the Guarantors. The Company and the
Guarantors jointly and severally covenant and agree with each Initial Purchaser that:

     (a) Delivery of Copies. The Company will deliver, without charge, to the Initial
Purchasers as many copies of the Preliminary Offering Memorandum, any other Time of Sale
Information, any Issuer Written Communication and the Offering Memorandum (including all
amendments and supplements thereto) as the Representative may reasonably request.

     (b) Offering Memorandum, Amendments or Supplements. Before finalizing the Offering
Memorandum or making or distributing any amendment or supplement to any of the Time of Sale
Information or the Offering Memorandum or filing with the Commission any document that will
be incorporated by reference therein, the Company will furnish to the Representative and
counsel for the Initial Purchasers a copy of the proposed Offering Memorandum or such
amendment or supplement or document to be incorporated by reference therein for review, and,
unless advised by counsel that such distribution or filing with the Commission is required
by law, will not distribute any such proposed Offering Memorandum, amendment or supplement
or file any such document with the Commission to which the Representative reasonably
objects.

     (c) Additional Written Communications. Before making, preparing, using, authorizing,
approving or referring to any Issuer Written Communication, the Company will furnish to the
Representative and counsel for the Initial Purchasers a copy of such written communication
for review and will not make, prepare, use, authorize, approve or refer to any such written
communication to which the Representative reasonably objects.

-16-

 

     (d) Notice to the Representative. The Company will advise the Representative promptly
after it becomes aware, and confirm such advice in writing (including, without limitation,
via email or similar means of electronic communication), (i) of the issuance by any
governmental or regulatory authority of any order preventing or suspending the use of any of
the Time of Sale Information, any Issuer Written Communication or the Offering Memorandum or
the initiation or threatening of any proceeding for that purpose; (ii) of the occurrence of
any event at any time prior to the completion of the initial offering of the Securities as a
result of which any of the Time of Sale Information, any Issuer Written Communication or the
Offering Memorandum as then amended or supplemented would include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing when such Time of Sale Information,
Issuer Written Communication or the Offering Memorandum is delivered to a purchaser, not
misleading; and (iii) of the receipt by the Company of any notice with respect to any
suspension of the qualification of the Securities for offer and sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose; and the Company will use
its reasonable efforts to prevent the issuance of any such order preventing or suspending
the use of any of the Time of Sale Information, any Issuer Written Communication or the
Offering Memorandum or suspending any such qualification of the Securities and, if any such
order is issued, will use its reasonable efforts to obtain as soon as possible the
withdrawal thereof.

     (e) Time of Sale Information. If at any time prior to the Closing Date the Company
becomes aware that (i) any event has occurred or condition exists as a result of which any
of the Time of Sale Information as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not
misleading or (ii) it is necessary to amend or supplement any of the Time of Sale
Information to comply with law, the Company will promptly notify the Initial Purchasers
thereof and forthwith prepare and, subject to paragraph (b) above, furnish to the Initial
Purchasers such amendments or supplements to any of the Time of Sale Information (or any
document to be filed with the Commission and incorporated by reference therein) as may be
necessary so that the statements in any of the Time of Sale Information as so amended or
supplemented will not, in light of the circumstances under which they were made, be
misleading or so that any of the Time of Sale Information will comply with law.

     (f) Ongoing Compliance of the Offering Memorandum. If at any time prior to the
completion of the initial offering of the Securities the Company becomes aware that (i) any
event has occurred or condition exists as a result of which the Offering Memorandum as then
amended or supplemented would include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in the light of
the circumstances existing when the Offering Memorandum is delivered to a purchaser, not
misleading or (ii) it is necessary to amend or supplement the Offering Memorandum to comply
with law, the Company will promptly notify the Initial Purchasers thereof and forthwith
prepare and, subject to paragraph (b) above, furnish to the Initial Purchasers such
amendments or supplements to the Offering Memorandum (or

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any document to be filed with the Commission and incorporated by reference therein) as
may be necessary so that the statements in the Offering Memorandum as so amended or
supplemented (including such document to be incorporated by reference therein) will not, in
the light of the circumstances existing when the Offering Memorandum is delivered to a
purchaser, be misleading or so that the Offering Memorandum will comply with law.

     (g) Blue Sky Compliance. The Company will qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the Representative shall
reasonably request and will continue such qualifications in effect so long as required for
the offering and resale of the Securities; provided that neither the Company nor the
Guarantors shall be required to (i) qualify as a foreign corporation or as a dealer in
securities in any such jurisdiction where it would not otherwise be required to so qualify,
(ii) file any general consent to service of process in any such jurisdiction or (iii)
subject itself to taxation in any such jurisdiction if it is not otherwise so subject.

     (h) Clear Market. During the period from the date hereof through and including the
date that is 90 days after the date hereof, the Company and the Guarantors will not, without
the prior written consent of the Representative, offer, sell, contract to sell or otherwise
dispose of any new debt securities issued or guaranteed by the Company or the Guarantors and
having a tenor of more than one year; provided that the foregoing shall not apply to (A) the
promissory note to be issued by the Company to the seller in connection with the Ridge
Acquisition, (B) any borrowings made by the Company under the Amended and Restated Credit
Facility and (C) any borrowings by the Company from any subsidiary of the Company

     (i) Use of Proceeds. The Company will apply the net proceeds from the sale of the
Securities as described in each of the Time of Sale Information and the Offering Memorandum
under the heading “Use of proceeds.”

     (j) Supplying Information. While the Securities remain outstanding and are “restricted
securities” within the meaning of Rule 144(a)(3) under the Securities Act, the Company and
the Guarantors will, during any period in which the Company is not subject to and in
compliance with Section 13 or 15(d) of the Exchange Act, furnish to holders of the
Securities and prospective purchasers of the Securities designated by such holders, upon the
request of such holders or such prospective purchasers, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.

     (k) DTC. The Company will assist the Initial Purchasers in arranging for the
Securities to be eligible for clearance and settlement through DTC.

     (l) No Resales by the Company. During the period from the Closing Date until one year
after the Closing Date, the Company will not, and will not permit any of its affiliates (as
defined in Rule 144 under the Securities Act) to, resell any of the Securities that have
been acquired by any of them, except for Securities purchased by the Company or any of its
affiliates and resold in a transaction registered under the Securities Act.

-18-

 

     (m) No Integration. Neither the Company nor any of its affiliates (as defined in Rule
501(b) of Regulation D) will, directly or through any agent, sell, offer for sale, solicit
offers to buy or otherwise negotiate in respect of, any security (as defined in the
Securities Act), that is or will be integrated with the sale of the Securities in a manner
that would require registration of the Securities under the Securities Act.

     (n) No General Solicitation or Directed Selling Efforts. None of the Company or any of
its affiliates or any other person acting on its or their behalf (other than the Initial
Purchasers, as to which no covenant is given) will (i) solicit offers for, or offer or sell,
the Securities by means of any form of general solicitation or general advertising within
the meaning of Rule 502(c) of Regulation D or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act or (ii) engage in any directed
selling efforts within the meaning of Regulation S, and all such persons will comply with
the offering restrictions requirement of Regulation S.

     (o) No Stabilization. Neither the Company nor the Guarantors will take, directly or
indirectly, any action designed to or that could reasonably be expected to cause or result
in any stabilization or manipulation of the price of the Securities.

     (p) The Liens. The Company and the Guarantors shall cause the Securities to be secured
by perfected second-priority liens on the Collateral (it being understood that the Amended
and Restated Credit Facility shall be secured by perfected first-priority liens on the
Collateral) to the extent and in the manner provided for in the Indenture and the Pledge
Agreement and as described in the Time of Sale Information and the Offering Memorandum in
each case subject to no Liens (as defined in the Indenture) except Permitted Liens.

     5. Certain Agreements of the Initial Purchasers. Each Initial Purchaser hereby
represents and agrees that it has not and will not use, authorize use of, refer to, or participate
in the planning for use of, any written communication that constitutes an offer to sell or the
solicitation of an offer to buy the Securities other than (i) the Preliminary Offering Memorandum
and the Offering Memorandum, (ii) a written communication that contains no “issuer information” (as
defined in Rule 433(h)(2) under the Securities Act) that was not included (including through
incorporation by reference) in the Preliminary Offering Memorandum or the Offering Memorandum,
(iii) any written communication listed on Annex A or prepared pursuant to Section 4(c) above
(including any electronic road show), (iv) any written communication prepared by such Initial
Purchaser and approved by the Company in advance in writing or (v) any written communication
relating to or that contains the terms of the Securities and/or other information that was included
(including through incorporation by reference) in the Preliminary Offering Memorandum or the
Offering Memorandum.

     For the purpose of Section 4(d)(ii) and 4(f), the Initial Purchasers will, upon request by the
Company, advise the Company of the completion of the initial offering of the Securities.

     6. Conditions of Initial Purchasers’ Obligations. The obligation of each Initial
Purchaser to purchase Securities on the Closing Date as provided herein is subject to the

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performance by the Company and the Guarantors of their respective covenants and other
obligations hereunder and to the following additional conditions:

     (a) Representations and Warranties. The representations and warranties of the Company
and the Guarantors contained herein shall be true and correct on the date hereof and on and
as of the Closing Date; and the statements of the Company and the Guarantors and their
respective officers made in any certificates delivered pursuant to this Agreement shall be
true and correct on and as of the Closing Date.

     (b) No Downgrade. Subsequent to the earlier of (A) the Time of Sale and (B) the
execution and delivery of this Agreement, (i) no downgrading shall have occurred in the
rating accorded the Securities or any other debt securities or preferred stock issued or
guaranteed by the Company or any of its subsidiaries by any “nationally recognized
statistical rating organization,” as such term is defined by the Commission for purposes of
Rule 436(g)(2) under the Securities Act; and (ii) no such organization shall have publicly
announced that it has under surveillance or review, or has changed its outlook with respect
to, its rating of the Securities or of any other debt securities or preferred stock issued
or guaranteed by the Company or any of its subsidiaries (other than an announcement with
positive implications of a possible upgrading).

     (c) No Material Adverse Change. No event or condition of a type described in Section
3(e) hereof shall have occurred or shall exist, which event or condition is not described in
each of the Time of Sale Information (excluding any amendment or supplement thereto) and the
Offering Memorandum (excluding any amendment or supplement thereto) the effect of which in
the judgment of the Representative makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Securities on the terms and in the manner contemplated by
this Agreement, the Time of Sale Information and the Offering Memorandum.

     (d) Officer’s Certificate. The Representative shall have received on and as of the
Closing Date a certificate of an executive officer of the Company and the Guarantors who has
specific knowledge of the Company’s or the Guarantors’ financial matters and is satisfactory
to the Representative (i) confirming that such officer has carefully reviewed the Time of
Sale Information and the Offering Memorandum and, to the knowledge of such officer, the
representations set forth in Sections 3(a) and 3(b) hereof are true and correct, (ii)
confirming that the other representations and warranties of the Company and the Guarantors
in this Agreement are true and correct and that the Company and the Guarantors have complied
with all agreements and satisfied all conditions on their part to be performed or satisfied
hereunder at or prior to the Closing Date and (iii) to the effect set forth in paragraphs
(b) and (c) above.

     (e) Comfort Letters. On the date of this Agreement and on the Closing Date, BDO
Seidman, LLP shall have furnished to the Representative, at the request of the Company,
letters, dated the respective dates of delivery thereof and addressed to the Initial
Purchasers, in form and substance reasonably satisfactory to the Representative, containing
statements and information of the type customarily included in accountants’ “comfort
letters” to underwriters with respect to the financial statements and certain

-20-

 

financial information contained or incorporated by reference in each of the Time of
Sale Information and the Offering Memorandum; provided that the letter delivered on
the Closing Date shall use a “cut-off” date no more than three business days prior to the
Closing Date.

     (f) Opinion and 10b-5 Statement of Counsel for the Company. Morgan Lewis & Bockius
LLP, counsel for the Company, shall have furnished to the Representative, at the request of
the Company, their written opinion and 10b-5 statement, dated the Closing Date and addressed
to the Initial Purchasers, in form and substance reasonably satisfactory to the
Representative, to the effect set forth in Annex D-1 hereto and the Company’s in-house
counsel shall have furnished to the Representative, a written opinion, dated the Closing
Date and addressed to the Initial Purchasers, in form and substance reasonably satisfactory
to the Representative, to the effect set forth in Annex D-2 hereto.

     (g) Opinion and 10b-5 Statement of Counsel for the Initial Purchasers. The
Representative shall have received on and as of the Closing Date an opinion and 10b-5
statement of Cahill Gordon & Reindel llp, counsel for the Initial Purchasers, with
respect to such matters as the Representative may reasonably request, and such counsel shall
have received such documents and information as they may reasonably request to enable them
to pass upon such matters.

     (h) No Legal Impediment to Issuance. No action shall have been taken and no statute,
rule, regulation or order shall have been enacted, adopted or issued by any federal, state
or foreign governmental or regulatory authority that would, as of the Closing Date, prevent
the issuance or sale of the Securities or the issuance of the Guarantees; and no injunction
or order of any federal, state or foreign court shall have been issued that would, as of the
Closing Date, prevent the issuance or sale of the Securities or the issuance of the
Guarantees.

     (i) Good Standing. The Representative shall have received on and as of the Closing
Date satisfactory evidence of the good standing of the Company and its Significant
Subsidiaries in their respective jurisdictions of organization and their good standing in
such other jurisdictions as the Representative may reasonably request, in each case in
writing or any standard form of telecommunication, from the appropriate governmental
authorities of such jurisdictions.

     (j) Indenture. The Initial Purchasers shall have received a counterpart of the
Indenture that shall have been executed and delivered by a duly authorized officer of the
Company, the Guarantors, the Trustee and the Collateral Agent.

     (k) Pledge Agreement and Intercreditor Agreement. Except as otherwise provided for in
the Pledge Agreement, the Indenture or the other documents entered into pursuant to the
Transactions, the Initial Purchasers, the Trustee and Collateral Agent shall have received
each of the Pledge Agreement and the Intercreditor Agreement and all other certificates,
agreements or instruments necessary to perfect the Collateral Agent’s security interest in
all of the Collateral, including but not limited to, stock certificates

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accompanied by instruments of transfer and stock powers undated and endorsed in blank,
Uniform Commercial Code financing statements in appropriate form for filing; each such
document executed by the Company and each other party thereto, and each such document shall
be in full force and effect and evidence that all of the liens on the Collateral other than
Permitted Liens have been released. The Initial Purchasers shall also have received (i)
certified copies of Uniform Commercial Code lien searches of a recent date listing all
effective financing statements, lien notices or comparable documents that name the Company
or the Guarantors as debtor and that are filed in those state jurisdictions in which the
Company or the Guarantors are organized and such other searches that the Initial Purchasers
deem necessary or appropriate, none of which encumber the Collateral covered or intended to
be covered by the Pledge Agreement (other than Permitted Liens) and (ii) acceptable evidence
of payment or arrangements for payment by the Company and the Guarantors of all applicable
recording taxes, fees, charges, costs and expenses required for the recording documents
pursuant to the Pledge Agreement.

     (l) DTC. The Securities shall be eligible for clearance and settlement through DTC.

     (m) Ridge Report. On the date of this Agreement, FTI Consulting Inc. shall have
delivered to the Representative, at the request of the Company, a financial due diligence
and accounting report dated as of the date hereof and addressed to the Initial Purchasers,
in form and substance reasonably satisfactory to the Representative, relating to the
correspondent clearing contracts and execution business of Ridge and containing certain
financial information relating to the Ridge Acquisition contained or incorporated by
reference in each of the Time of Sale Information and the Offering Memorandum.

     (n) Amended and Restated Credit Facility. On or concurrently with the closing of the
Securities, the Amended and Restated Credit Facility shall have become effective.

     (o) Additional Documents. On or prior to the Closing Date, the Company and the
Guarantors shall have furnished to the Representative such further certificates and
documents as the Representative may reasonably request.

     All opinions, letters, certificates and evidence mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Initial Purchasers.

     7. Indemnification and Contribution.

     (a) Indemnification of the Initial Purchasers. The Company and the Guarantors jointly
and severally agree to indemnify and hold harmless each Initial Purchaser, its affiliates,
directors and officers and each person, if any, who controls such Initial Purchaser within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any and all losses, claims, damages and liabilities (including, without limitation,
reasonable legal fees and other expenses incurred in

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connection with any suit, action or proceeding or any claim asserted, as such fees and
expenses are incurred), joint or several, that arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in the Preliminary
Offering Memorandum, any of the other Time of Sale Information, any Issuer Written
Communication or the Offering Memorandum (or any amendment or supplement thereto) or any
omission or alleged omission to state therein a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not
misleading, in each case except insofar as such losses, claims, damages or liabilities
arise out of, or are based upon, any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with any information relating
to any Initial Purchaser furnished to the Company in writing by such Initial Purchaser
through the Representative expressly for use therein, it being understood and agreed that
the only such information consists of the following: the information in the fourth
sentence of the eleventh paragraph and the thirteenth paragraph under the heading “Plan of
Distribution” in the Preliminary Offering Memorandum and the Offering Memorandum.

     (b) Indemnification of the Company. Each Initial Purchaser agrees, severally and not
jointly, to indemnify and hold harmless the Company, the Guarantors, each of their
respective directors and officers and each person, if any, who controls the Company or the
Guarantors within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but only
with respect to any losses, claims, damages or liabilities that arise out of, or are based
upon, any untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with any information relating to such Initial Purchaser
furnished to the Company in writing by such Initial Purchaser through the Representative
expressly for use in the Preliminary Offering Memorandum, any of the other Time of Sale
Information, any Issuer Written Communication or the Offering Memorandum (or any amendment
or supplement thereto), it being understood and agreed that the only such information
consists of the following: the information in the fourth sentence of the eleventh
paragraph and the thirteenth paragraph under the heading “Plan of Distribution” in the
Preliminary Offering Memorandum and the Offering Memorandum.

     (c) Notice and Procedures. If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or asserted
against any person in respect of which indemnification may be sought pursuant to either
paragraph (a) or (b) above, such person (the “Indemnified Person”) shall promptly notify
the person against whom such indemnification may be sought (the “Indemnifying Person”) in
writing; provided that the failure to notify the Indemnifying Person shall not
relieve it from any liability that it may have under paragraph (a) or (b) above except to
the extent that it has been materially prejudiced (through the forfeiture of substantive
rights or defenses) by such failure; and provided, further, that the
failure to notify the Indemnifying Person shall not relieve it from any liability that it
may have to an Indemnified Person otherwise than under paragraph (a) or (b) above. If any
such proceeding shall be brought or asserted against an Indemnified Person and it shall
have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel

-23-

 

reasonably satisfactory to the Indemnified Person (who shall not, without the consent
of the Indemnified Person, be counsel to the Indemnifying Person) to represent the
Indemnified Person and any others entitled to indemnification pursuant to this Section 7
that the Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such proceeding and shall pay the fees and expenses of such counsel related to
such proceeding, as incurred. In any such proceeding, any Indemnified Person shall have
the right to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person unless (i) the Indemnifying Person and the
Indemnified Person shall have mutually agreed to the contrary; (ii) the Indemnifying Person
has failed within a reasonable time to retain counsel reasonably satisfactory to the
Indemnified Person; (iii) the Indemnified Person shall have reasonably concluded that there
may be legal defenses available to it that are different from or in addition to those
available to the Indemnifying Person; or (iv) the named parties in any such proceeding
(including any impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be inappropriate due to
actual or potential differing interests between them. It is understood and agreed that the
Indemnifying Person shall not, in connection with any proceeding or related proceeding in
the same jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all such fees and
expenses shall be reimbursed as they are incurred. Any such separate firm for any Initial
Purchaser, its affiliates, directors and officers and any control persons of such Initial
Purchaser shall be designated in writing by the Representative and any such separate firm
for the Company, the Guarantors, their respective directors and officers and any control
persons of the Company and the Guarantors shall be designated in writing by the Company.
The Indemnifying Person shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified
Person from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have
requested that an Indemnifying Person reimburse the Indemnified Person for fees and
expenses of counsel as contemplated by this paragraph, the Indemnifying Person shall be
liable for any settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 30 days after receipt by the Indemnifying Person
of such request and (ii) the Indemnifying Person shall not have reimbursed the Indemnified
Person in accordance with such request prior to the date of such settlement. No
Indemnifying Person shall, without the written consent of the Indemnified Person, effect
any settlement of any pending or threatened proceeding in respect of which any Indemnified
Person is or could have been a party and indemnification could have been sought hereunder
by such Indemnified Person, unless such settlement (x) includes an unconditional release of
such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified
Person, from all liability on claims that are the subject matter of such proceeding and (y)
does not include any statement as to or any admission of fault, culpability or a failure to
act by or on behalf of any Indemnified Person.

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     (d) Contribution. If the indemnification provided for in paragraphs (a) and (b) above
is unavailable to an Indemnified Person or insufficient in respect of any losses, claims,
damages or liabilities referred to therein, then each Indemnifying Person under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to
the amount paid or payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Guarantors on the one hand and the Initial
Purchasers on the other from the offering of the Securities or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i) but also
the relative fault of the Company and the Guarantors on the one hand and the Initial
Purchasers on the other in connection with the statements or omissions that resulted in
such losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Guarantors on the
one hand and the Initial Purchasers on the other shall be deemed to be in the same
respective proportions as the net proceeds (before deducting expenses) received by the
Company from the sale of the Securities and the total discounts and commissions received by
the Initial Purchasers in connection therewith, as provided in this Agreement, bear to the
aggregate offering price of the Securities. The relative fault of the Company and the
Guarantors on the one hand and the Initial Purchasers on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the Guarantors or by the Initial Purchasers and the
parties’ relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

     (e) Limitation on Liability. The Company, the Guarantors and the Initial Purchasers
agree that it would not be just and equitable if contribution pursuant to this Section 7
were determined by pro rata allocation (even if the Initial Purchasers were treated as one
entity for such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount paid or
payable by an Indemnified Person as a result of the losses, claims, damages and liabilities
referred to in paragraph (d) above shall be deemed to include, subject to the limitations
set forth above, any legal or other reasonable expenses incurred by such Indemnified Person
in connection with any such action or claim. Notwithstanding the provisions of this
Section 7, in no event shall an Initial Purchaser be required to contribute any amount in
excess of the amount by which the total discounts and commissions received by such Initial
Purchaser with respect to the offering of the Securities exceeds the amount of any damages
that such Initial Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Initial Purchasers’ obligations to contribute pursuant to this
Section 7 are several in proportion to their respective purchase obligations hereunder and
not joint.

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     (f) Non-Exclusive Remedies. The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies that may otherwise be available to any
Indemnified Person at law or in equity.

     8. Termination. This Agreement may be terminated in the absolute discretion of the
Representative, by notice to the Company, if after the execution and delivery of this Agreement and
on or prior to the Closing Date (i) trading generally shall have been suspended or materially
limited on the New York Stock Exchange (the “NYSE”) or NASDAQ; (ii) trading of any securities
issued or guaranteed by the Company shall have been suspended on the NYSE or NASDAQ; (iii) a
general moratorium on commercial banking activities shall have been declared by federal or New York
State authorities; or (iv) there shall have occurred any outbreak or escalation of hostilities or
any change in financial markets or any calamity or crisis, either within or outside the United
States, that, in the judgment of the Representative, is material and adverse and makes it
impracticable or inadvisable to proceed with the offering, sale or delivery, of the Securities on
the terms and in the manner contemplated by this Agreement, the Time of Sale Information and the
Offering Memorandum.

     9. Defaulting Initial Purchaser.

     (a) If, on the Closing Date, any Initial Purchaser defaults on its obligation to
purchase the Securities that it has agreed to purchase hereunder, the non-defaulting
Initial Purchasers may in their discretion arrange for the purchase of such Securities by
other persons satisfactory to the Company on the terms contained in this Agreement. If,
within 36 hours after any such default by any Initial Purchaser, the non-defaulting Initial
Purchasers do not arrange for the purchase of such Securities, then the Company shall be
entitled to a further period of 36 hours within which to procure other persons satisfactory
to the non-defaulting Initial Purchasers to purchase such Securities on such terms. If
other persons become obligated or agree to purchase the Securities of a defaulting Initial
Purchaser, either the non defaulting Initial Purchasers or the Company may postpone the
Closing Date for up to five full business days in order to effect any changes that in the
opinion of counsel for the Company or counsel for the Initial Purchasers may be necessary
in the Time of Sale Information, the Offering Memorandum or in any other document or
arrangement, and the Company agrees to promptly prepare any amendment or supplement to the
Time of Sale Information or the Offering Memorandum that effects any such changes. As used
in this Agreement, the term “Initial Purchaser” includes, for all purposes of this
Agreement unless the context otherwise requires, any person not listed in Schedule 1 hereto
that, pursuant to this Section 9, purchases Securities that a defaulting Initial Purchaser
agreed but failed to purchase.

     (b) If, after giving effect to any arrangements for the purchase of the Securities of
a defaulting Initial Purchaser or Initial Purchasers by the non-defaulting Initial
Purchasers and the Company as provided in paragraph (a) above, the aggregate principal
amount of such Securities that remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have the right to
require each non-defaulting Initial Purchaser to purchase the principal amount of
Securities that such Initial Purchaser agreed to purchase hereunder plus such

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Initial Purchaser’s pro rata share (based on the principal amount of Securities that
such Initial Purchaser agreed to purchase hereunder) of the Securities of such defaulting
Initial Purchaser or Initial Purchasers for which such arrangements have not been made.

     (c) If, after giving effect to any arrangements for the purchase of the Securities of
a defaulting Initial Purchaser or Initial Purchasers by the non-defaulting Initial
Purchasers and the Company as provided in paragraph (a) above, the aggregate principal
amount of such Securities that remains unpurchased exceeds one-eleventh of the aggregate
principal amount of all the Securities, or if the Company shall not exercise the right
described in paragraph (b) above, then this Agreement shall terminate without liability on
the part of the non-defaulting Initial Purchasers. Any termination of this Agreement
pursuant to this Section 9 shall be without liability on the part of the Company or the
Guarantors, except that the Company and the Guarantors will continue to be liable for the
payment of expenses as set forth in Section 10 hereof and except that the provisions of
Section 7 hereof shall not terminate and shall remain in effect.

     (d) Nothing contained herein shall relieve a defaulting Initial Purchaser of any
liability it may have to the Company, the Guarantors or any non-defaulting Initial
Purchaser for damages caused by its default.

     10. Payment of Expenses.

     (a) Whether or not the transactions contemplated by this Agreement are consummated or
this Agreement is terminated, the Company and the Guarantors jointly and severally agree to
pay or cause to be paid all costs and expenses incident to the performance of their
respective obligations hereunder, including without limitation, (i) the costs incident to
the authorization, issuance, sale, preparation and delivery of the Securities and any taxes
payable in that connection; (ii) the costs incident to the preparation and printing of the
Preliminary Offering Memorandum, any other Time of Sale Information, any Issuer Written
Communication and the Offering Memorandum (including any amendment or supplement thereto)
and the distribution thereof; (iii) the costs of reproducing and distributing each of the
Transaction Documents; (iv) the fees and expenses of the Company’s and the Guarantors’
counsel and independent accountants; (v) the fees and expenses incurred in connection with
the registration or qualification and determination of eligibility for investment of the
Securities under the laws of such jurisdictions as the Representative may designate and the
preparation, printing and distribution of a Blue Sky Memorandum (including the related fees
and expenses of counsel for the Initial Purchasers); (vi) any fees charged by rating
agencies for rating the Securities; (vii) the fees and expenses of the Trustee and
Collateral Agent and any paying agent (including related fees and expenses of any counsel
to such parties); (viii) all expenses and application fees incurred in connection with the
approval of the Securities for book-entry transfer by DTC; (ix) all expenses incurred by
the Company in connection with any “road show” presentation to potential investors; and (x)
(i) all filing costs and expenses relating to the granting and perfection of the security
interests in the Collateral, as set forth in the Pledge Agreement and (ii) the reasonable
fees and expenses of counsel for the Initial Purchasers in connection with all matters
relating to the granting and perfection of security interests in the Collateral for the

-27-

 

Securities (including, without limitation, the Intercreditor Agreement) in an amount
not to exceed $100,000 (provided reasonably detailed invoices are provided).

     (b) If (i) this Agreement is terminated pursuant to Section 8, (ii) the Company for
any reason fails to tender the Securities for delivery to the Initial Purchasers or (iii)
the Initial Purchasers decline to purchase the Securities for any reason permitted under
this Agreement, the Company and the Guarantors jointly and severally agree to reimburse the
Initial Purchasers for all out-of-pocket costs and expenses (including the reasonable fees
and expenses of their counsel) reasonably incurred by the Initial Purchasers in connection
with this Agreement and the offering contemplated hereby.

     11. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective successors and any
controlling persons referred to herein, and the affiliates, officers and directors of each Initial
Purchaser and the Company and the Guarantors referred to in Section 7 hereof. Nothing in this
Agreement is intended or shall be construed to give any other person any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained herein. No
purchaser of Securities from any Initial Purchaser shall be deemed to be a successor by reason of
such purchase.

     12. Survival. The respective indemnities, rights of contribution, representations,
warranties and agreements of the Company, the Guarantors and the Initial Purchasers contained in
this Agreement or made by or on behalf of the Company, the Guarantors or the Initial Purchasers
pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery
of and payment for the Securities and shall remain in full force and effect, regardless of any
termination of this Agreement or any investigation made by or on behalf of the Company, the
Guarantors or the Initial Purchasers.

     13. Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise
expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities
Act; (b) the term “business day” means any day other than a day on which banks are permitted or
required to be closed in New York City; (c) the term “Exchange Act” means the Securities Exchange
Act of 1934, as amended; (d) the term “subsidiary” has the meaning set forth in Rule 405 under the
Securities Act; and (e) the term “written communication” has the meaning set forth in Rule 405
under the Securities Act.

     14. Miscellaneous.

     (a) Authority of the Representative. Any action by the Initial Purchasers hereunder
may be taken by the Representative on behalf of the Initial Purchasers, and any such action
taken by the Representative shall be binding upon the Initial Purchasers.

     (b) Notices. All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted and confirmed by any
standard form of telecommunication. Notices to the Initial Purchasers shall be given to
the Representative c/o J.P. Morgan Securities Inc., 383 Madison

-28-

 

Avenue, New York, New York 10179 (fax: (212)-270-1063); Attention: Benjamin Ben-Attar.
Notices to the Company and the Guarantors shall be given to them at 1700 Pacific Avenue,
Suite 1400, Dallas, Texas 75201; Attention: Andrew B. Koslow and Kevin McAleer.

     (c) Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.

     (d) Counterparts. This Agreement may be signed in counterparts (which may include
counterparts delivered by any standard form of telecommunication), each of which shall be
an original and all of which together shall constitute one and the same instrument.

     (e) Amendments or Waivers. No amendment or waiver of any provision of this Agreement,
nor any consent or approval to any departure therefrom, shall in any event be effective
unless the same shall be in writing and signed by the parties hereto.

     (f) Headings. The headings herein are included for convenience of reference only and
are not intended to be part of, or to affect the meaning or interpretation of, this
Agreement.

     (g) Termination of Letter Agreement. The Letter Agreement dated July 11, 2008
between the Company and J.P. Morgan Securities Inc. is terminated upon the execution and
delivery hereof.

[Rest of the page was intentionally left blank]

-29-

 

     If the foregoing is in accordance with your understanding, please indicate your acceptance of
this Agreement by signing in the space provided below.

	 	 	 	 	 
	 	Very truly yours,

PENSON WORLDWIDE, INC.

 	 
	 	By:  	/s/ Philip A. Pendergraft
 	 
	 	 	Title:             Chief Executive Officer 	 
	 	 	 	 
	 
	 	PENSON HOLDINGS, INC.

 	 
	 	By:  	/s/ Philip A. Pendergraft
 	 
	 	 	Title:             President 	 
	 	 	 	 
	 
	 	SAI HOLDINGS, INC.

 	 
	 	By:  	/s/ Philip A. Pendergraft
 	 
	 	 	Title:             Executive Vice President 	 
	 	 	 	 

 

 

	 	 	 	 	 

Accepted: April 29, 2010

J.P. MORGAN SECURITIES INC.

     For itself and on behalf of the

     several Initial Purchasers listed

     in Schedule 1 hereto.

	 	 	 	 	 

	By:

	 	/s/ Joseph C. Stephanek
	 	 
	 

	 	 	 	 
	 

	 	Authorized Signatory	 	 

-2-

 

Schedule 1

	 	 	 	 	 
	Initial Purchaser	 	Principal Amount	 
	J.P. Morgan Securities Inc.
	 	$	144,000,000	 
	UBS Securities LLC
	 	$	40,000,000	 
	Morgan Keegan & Company, Inc.
	 	$	8,000,000	 
	JMP Securities LLC
	 	$	8,000,000	 
	 
	 	 	 
	Total
	 	$	200,000,000	 

 

 

Schedule 2

Subsidiaries and Significant Subsidiaries

Penson Financial Services Inc., a North Carolina corporation

Penson GHCO, an Illinois general partnership

Penson Financial Services Canada Inc., a Canadian corporation

Penson Holdings, Inc. a Delaware corporation

SAI Holdings, Inc. a Texas corporation

 

 

Schedule 3

UCC Filings and Jurisdictions

	 	 	 	 	 
	No.	 	Debtor	 	Jurisdiction
	(1)

	 	Penson Holdings, Inc.
	 	Delaware Secretary of State
	 
	(2)

	 	Penson Worldwide, Inc.
	 	Delaware Secretary of State
	 
	(3)

	 	SAI Holdings, Inc.
	 	Texas Secretary of State

-2-

 

ANNEX A

a. Additional Time of Sale Information

     1. Term sheet, dated April 29, 2010 containing the terms of the securities, substantially in
the form of Annex B.

 

 

ANNEX B

Pricing Term Sheet

	 	 	 

	Supplement, dated April 29, 2010

	 	Strictly confidential
	to Preliminary Offering Memorandum
	 	 
	dated April 21, 2010
	 	 

Penson Worldwide, Inc.

12.5% Senior Second Lien Secured Notes due 2017

This Supplement is qualified in its entirety by reference to the Preliminary Offering
Memorandum (as supplemented through and including the date hereof, the “Preliminary Offering
Memorandum”). The information in this Supplement supplements the Preliminary Offering
Memorandum and updates and supersedes the information in the Preliminary Offering Memorandum to the
extent it is inconsistent with the information in the Preliminary Offering Memorandum.

The notes have not been registered under the Securities Act of 1933 and are being offered only to
(1) “qualified institutional buyers” as defined in Rule 144A under the Securities Act and
(2) outside the United States to non-U.S. persons in compliance with Regulation S under the
Securities Act.

	 	 	 

	Issuer:

	 	Penson Worldwide, Inc.
	 
	 	 
	Aggregate Principal Amount:

	 	$200,000,000 
	 
	 	 
	Gross Proceeds:

	 	$200,000,000 
	 
	 	 
	Security Description:

	 	12.5% Senior Second Lien Secured Notes due 2017
	 
	 	 
	Distribution:

	 	144A/Regulation S without registration rights as set forth in the
Preliminary Offering Memorandum
	 
	 	 
	Maturity Date:

	 	May 15, 2017
	 
	 	 
	Issue Price:

	 	100.0% 
	 
	 	 
	Coupon:

	 	12.5% 
	 
	 	 
	Yield to Maturity:

	 	12.5% 
	 
	 	 
	Spread to Benchmark Treasury:

	 	+ 929 bps
	 
	 	 
	Benchmark Treasury:

	 	3.25% due March 31, 2017
	 
	 	 
	Ratings:

	 	B1/BB-
	 
	 	 
	Interest Payment Dates:

	 	May 15 and November 15, commencing on November 15, 2010
	 
	 	 
	Optional Redemption:

	 	Make-whole call at T+50 until May 15, 2014.
From and after May 15, 2014, at the prices set forth below (expressed
as percentages of the principal amount), plus accrued and unpaid
interest:

 

 

	 	 	 	 	 
	Date	 	Price
	May 15, 2014
	 	 	106.250	%
	May 15, 2015
	 	 	103.125	%
	May 15, 2016 and thereafter
	 	 	100.000	%

	 	 	 

	Optional Redemption with Equity 

Proceeds:

	 	In addition, prior to May 15, 2013, up to 35% at a redemption price
equal to 112.5% of the aggregate principal amount thereof, plus accrued
and unpaid interest thereon.
	 
	 	 
	Change of Control:

	 	Putable at 101% of principal, plus accrued and unpaid interest.
	 
	 	 
	CUSIP/ISIN Numbers:

	 	144A CUSIP: 709600 AB6
	 
	 	 
	 

	 	Reg S CUSIP: U7100U AA2
	 
	 	 
	 

	 	Reg S ISIN: USU7100UAA26
	 
	 	 
	Trade Date:

	 	April 29, 2010
	 
	 	 
	Settlement:

	 	T+5 on May 6, 2010
	 
	 	 
	Joint Book-Running Managers:

	 	J.P. Morgan Securities Inc.
	 
	 	 
	 

	 	UBS Securities LLC
	 
	 	 
	Co-Managers:

	 	Morgan Keegan & Company, Inc.
	 
	 	 
	 

	 	JMP Securities
	 
	 	 
	Denominations/Multiple:

	 	$2,000 x $1,000 

Recent Developments:

On April 22, 2010, SAI Holdings, Inc. (“SAI”) and Penson Financial Services, Inc. (“PFSI”), two subsidiaries
of Penson Worldwide, Inc. (the “Company”), entered into a letter agreement (the “Letter Agreement”) with
Schonfeld Group Holdings LLC (“SGH”), Schonfeld Securities, LLC (“Schonfeld”), and Opus Trading Fund LLC
(“Opus”) that amends and clarifies certain terms of the asset purchase agreement dated November 20, 2006
entered into between SAI and Schonfeld as filed with the Securities and Exchange Commission by the Company on
November 21, 2006, as amended (the “Asset Purchase Agreement”). The Letter Agreement, among other things, for
purposes of determining the total payment due to Schonfeld under the earnout provision of the Asset Purchase
Agreement: (i) removes the payment cap; (ii) clarifies that PFSI has no obligation to compress tickets across
subaccounts (unless PFSI does so for other of its correspondents at a later date); and (iii) reduces the
SunGard synergy credit from $2,900,000 to $1,450,000 in 2010 and $1,000,000 in 2011. The Letter Agreement also
assigns all of Schonfeld’s responsibilities under the Asset Purchase Agreement to its parent company, SGH, and
extends the initial term of Opus’s portfolio margining agreement with PFSI from April 30, 2017 to April 30,
2019. The foregoing description of the Letter Agreement is qualified in its entirety by reference to the
Letter Agreement, a copy of which is included as Exhibit 2.1 to the Company’s 8-K filed on April 28, 2010,
which is incorporated by reference herein.

Changes to the Description of Notes in the Preliminary Offering Memorandum:

Set forth below are changes to the “Description of notes” in the Preliminary Offering Memorandum:

-2-

 

Limitation on indebtedness and issuances of preferred stock

	 	•	 	The first paragraph of part (a) under “—Covenants— Limitation on indebtedness and issuances of
preferred stock” shall be replaced in its entirety with the following:

“(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, Incur any Indebtedness,
including Disqualified Stock (other than the Notes, any Subsidiary Guarantees, any exchange notes issued in
exchange therefor and Indebtedness existing on the Issue Date), and the Company will not permit any Restricted
Subsidiary to issue Preferred Stock; provided that the Company or any Subsidiary Guarantor may Incur
Indebtedness and any Restricted Subsidiary may acquire Acquired Indebtedness if, after giving effect to the
Incurrence of such Indebtedness and the receipt and application of the proceeds therefrom, the Consolidated
Fixed Charge Coverage Ratio would be greater than (x) on or prior to May 1, 2011, 2.25:1 and (y) after May 1,
2011, 2.50:1.”

	 	•	 	Clause (1) under the second paragraph of part (a) under “—Covenants— Limitation on indebtedness
and issuances of preferred stock” shall be replaced in its entirety with the following:

“(1) Indebtedness of the Company or any Subsidiary Guarantor under the Credit Agreement in an aggregate
principal amount at any one time outstanding (with letters of credit being deemed to have a principal amount
equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to
exceed $100.0 million; provided that, at any time that the Consolidated EBITDA (with such pro forma and other
adjustments to Consolidated EBITDA as are appropriate and consistent with the pro forma and other adjustment
provisions set forth in the definition of Consolidated Fixed Charge Coverage Ratio) of the Company for the
most recent four full fiscal quarters for which financial statements are available exceeded $100.0 million,
the maximum amount of Indebtedness that may be Incurred pursuant to this clause (1) shall be increased to the
lesser of (x) $125.0 million and (y) the Consolidated EBITDA (with such pro forma and other adjustments to
Consolidated EBITDA as are appropriate and consistent with the pro forma and other adjustment provisions set
forth in the definition of Consolidated Fixed Charge Coverage Ratio) of the Company for such period; provided,
further, that for purposes of the foregoing proviso, Indebtedness under a revolving facility shall be deemed
to have been Incurred on the date commitments thereunder are established in the full amount of such
commitments and shall be deemed to be outstanding at all times such commitments remain in effect and the
Company or applicable Restricted Subsidiary will be allowed to borrow and re-borrow the maximum committed
amount under such commitments for so long as such commitments remains in effect so long as it could have
Incurred such Indebtedness pursuant to this clause (1) on the date the facility was entered into; ”

Limitation on restricted payments

	 	•	 	Part (a) under “—Covenants—Limitation on restricted payments” shall be revised to:

(i) delete the word “or” appearing at the end of the first clause (3) contained therein and to include the
following new clause (4):

“(4) make any principal payment, or redemption, repurchase, defeasance, or other acquisition or retirement for
value, of any Specified Indebtedness; or” and

(ii) replace the existing clause (4) will the following new clause (5):

“(5) make any Investment, other than a Permitted Investment (such payments or any other actions restricted in
clauses (1) through (4) above or this clause (5) being collectively “Restricted Payments”); ”

	 	•	 	Clause (2) under part (b) of “—Covenants—Limitation on restricted payments” shall be replaced in
its entirety with the following:

-3-

 

“(2) the redemption, repurchase, defeasance or other acquisition or retirement for value of Specified
Indebtedness or Indebtedness that is subordinated in right of payment to the Notes, including premium, if any,
and accrued interest, with the proceeds of, or in exchange for, Indebtedness Incurred under clause (3) of the
second paragraph of part (a) of the “Limitation on indebtedness and issuances of preferred stock” covenant;”

	 	•	 	Clause (4) under part (b) of “—Covenants—Limitation on restricted payments” shall be replaced in
its entirety with the following:

“(4) the making of any principal payment or the repurchase, redemption, retirement, defeasance or other
acquisition for value of Specified Indebtedness or Indebtedness which is subordinated in right of payment to
the Notes or any Subsidiary Guarantee in exchange for, or out of the proceeds of a capital contribution or a
substantially concurrent offering of, shares of the Capital Stock (other than Disqualified Stock) of the
Company to a Person that is not a Subsidiary of the Company (or options, warrants or other rights to acquire
such Capital Stock); provided that such options, warrants or other rights are not redeemable at the option of
the holder, or required to be redeemed, in each case other than in connection with a Change of Control of the
Company (provided that prior to any such repurchase, redemption or other acquisition in connection with a
Change of Control, the Company has made an Offer to Purchase and purchased all Notes validly tendered for
payment in accordance with the “Repurchase of notes upon a change of control” covenant);”

	 	•	 	Clause (7) under part (b) of “—Covenants—Limitation on restricted payments” shall be replaced in
its entirety with the following:

“(7) the repurchase, redemption or other acquisition of the Company’s Capital Stock (or options, warrants or
other rights to acquire such Capital Stock); provided that the aggregate amount of all such repurchases
pursuant to this clause (7) shall not exceed $5.0 million;”

	 	•	 	Clauses (9), (10), (11) and (12) under part (b) of “—Covenants—Limitation on restricted
payments” shall be replaced in their entirety with the following:

“(9) payments upon the conversion or exercise of convertible securities, warrants or options (x) in respect of
fractional entitlements or (y) solely to the extent the Company is not permitted to settle the Convertible
Notes in shares of its common stock pursuant to the indenture governing the Convertible Notes (as in effect on
the Issue Date);

(10) other Restricted Payments in an amount not to exceed $5.0 million; and

(11) (x) the redemption, repurchase, defeasance or other acquisition or retirement for value of Specified
Indebtedness, so long as either (1) after giving effect thereto, the Consolidated Leverage Ratio would be less
than 3.00:1.00 or (2) such redemption, repurchase, defeasance or other acquisition or retirement is made other
than from the proceeds of Indebtedness and immediately after giving effect to such transaction, no
Indebtedness is actually outstanding under clause (1) of the second paragraph of part (a) of the covenant
described under “Limitation on indebtedness and issuances of preferred stock” (for the avoidance of doubt,
disregarding the second proviso to such clause (1) for such purpose) or (y) the non-cash reduction of
principal of the Seller Note if effected pursuant to and in accordance with Section 10.2(c) of the Ridge Asset
Purchase Agreement.”

-4-

 

	 	•	 	The proviso at the end of part (b) of “—Covenants—Limitation on restricted payments” shall be
replaced in its entirety with the following:

“provided that, in the case of clause (9), (10) and (11)(x), no Default or Event of Default shall have
occurred and be continuing or occur as a consequence of the actions or payments set forth therein.”

	 	•	 	The references to clauses “(10) and (12)” in part (c) of “—Covenants—Limitation on restricted
payments” shall be replaced with the references to clauses “(9) and (11)”.

Definitions

The following definitions shall be added to the “—Definitions” section:

“Convertible Notes” means the Company’s 8% Senior Convertible Notes due 2014 issued and outstanding on the
Issue Date.

“Specified Indebtedness” means (i) the Seller Note, (ii) the Convertible Notes and (iii) any Indebtedness the
proceeds of which are applied to refinance Indebtedness described in the foregoing clauses (i) and (ii) in
reliance on the exception set forth in clause (b)(2) of the covenant described under “Limitation on restricted
payments.”

 

This material is confidential and is for your information only and is not intended to be used by
anyone other than you. This information does not purport to be a complete description of these
securities or the offering. Please refer to the preliminary offering memorandum for a complete
description.

This communication is being distributed in the United States solely to Qualified Institutional
Buyers, as defined in Rule 144A under the Securities Act of 1933, and outside the United States
solely to non-U.S. persons as defined under Regulation S.

This communication does not constitute an offer to sell or the solicitation of an offer to buy any
securities in any jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction.

-5-

 

ANNEX C

Restrictions on Offers and Sales Outside the United States

     In connection with offers and sales of Securities outside the United States:

     (a) Each Initial Purchaser acknowledges that the Securities have not been registered
under the Securities Act and may not be offered or sold within the United States or to, or
for the account or benefit of, U.S. persons except pursuant to an exemption from, or in
transactions not subject to, the registration requirements of the Securities Act.

     (b) Each Initial Purchaser, severally and not jointly, represents, warrants and agrees
that:

     (i) Such Initial Purchaser has offered and sold the Securities, and will offer
and sell the Securities, (A) as part of their distribution at any time and (B)
otherwise until 40 days after the later of the commencement of the offering of the
Securities and the Closing Date, only in accordance with Regulation S under the
Securities Act (“Regulation S”) or Rule 144A or any other available exemption from
registration under the Securities Act.

     (ii) None of such Initial Purchaser or any of its affiliates or any other
person acting on its or their behalf has engaged or will engage in any directed
selling efforts with respect to the Securities, and all such persons have complied
and will comply with the offering restrictions requirement of Regulation S.

     (iii) At or prior to the confirmation of sale of any Securities sold in
reliance on Regulation S, such Initial Purchaser will have sent to each distributor,
dealer or other person receiving a selling concession, fee or other remuneration
that purchase Securities from it during the distribution compliance period a
confirmation or notice to substantially the following effect:

“The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933, as amended (the “Securities Act”), and may not be
offered or sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time or
(ii) otherwise until 40 days after the later of the commencement of the
offering of the Securities and the date of original issuance of the
Securities, except in accordance with Regulation S or Rule 144A or any other
available exemption from registration under the Securities Act. Terms used
above have the meanings given to them by Regulation S.”

     (iv) Such Initial Purchaser has not and will not enter into any contractual
arrangement with any distributor with respect to the distribution of the Securities,
except with its affiliates or with the prior written consent of the Company.

 

 

     Terms used in paragraph (a) and this paragraph (b) and not otherwise defined in this Agreement
have the meanings given to them by Regulation S.

     (c) Each Initial Purchaser, severally and not jointly, represents, warrants and agrees
that:

     (i) it has only communicated or caused to be communicated and will only
communicate or cause to be communicated any invitation or inducement to engage in
investment activity (within the meaning of Section 21 of the United Kingdom
Financial Services and Markets Act 2000 (the “FSMA”)) received by it in connection
with the issue or sale of any Securities in circumstances in which Section 21(1) of
the FSMA does not apply to the Company or the Guarantors; and

     (ii) it has complied and will comply with all applicable provisions of the FSMA
with respect to anything done by it in relation to the Securities in, from or
otherwise involving the United Kingdom.

     (d) Each Initial Purchaser acknowledges that no action has been or will be taken by the
Company that would permit a public offering of the Securities, or possession or distribution
of any of the Time of Sale Information, the Offering Memorandum, any Issuer Written
Communication or any other offering or publicity material relating to the Securities, in any
country or jurisdiction where action for that purpose is required.

-2-

 

ANNEX D-1

Opinion and 10b-5 of Counsel for the Company and the Guarantors

A. Opinion Counsel for the Company and the Guarantors

May 6, 2010

J.P. Morgan Securities Inc.

UBS Securities LLC

Morgan Keegan & Company, Inc.

JMP Securities LLC

c/o J.P. Morgan Securities Inc.

383 Madison Avenue

New York, New York 10179

Re:       12.5% Senior Second Lien Secured Notes due 2017 of Penson Worldwide, Inc.

Ladies and Gentlemen:

     We have acted as special counsel for Penson Worldwide, Inc., a Delaware corporation (the
“Company”) in connection with the Purchase Agreement, dated April 29, 2010 (the “Purchase
Agreement”), among the Company, SAI Holdings, Inc. (“SAI”), Penson Holdings, Inc. (“Holdings”) and
J.P. Morgan Securities Inc., as representative of the Initial Purchasers (as defined in the
Purchase Agreement). All capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Purchase Agreement. This opinion is being delivered to you pursuant to
Section 6(f) of the Purchase Agreement.

     In connection with the opinions expressed below, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the certificate of incorporation of
the Company and Holdings, (ii) the bylaws of the Company and Holdings, (iii) the Purchase
Agreement, (iv) the Indenture, (v) the Securities issued on the date hereof, (vi) the Intercreditor
Agreement, (vii) the Pledge Agreement (the documents referred to in (iii) through (vii),
collectively, the “Transaction Documents”) (viii) the Time of Sale Information, (ix) the Offering
Memorandum and (x) such other documents and records as we have deemed appropriate for the purposes
of the opinions set forth herein.

     We have assumed the genuineness of all signatures, the legal capacity of natural persons, the
authenticity of the documents submitted to us as originals, the conformity to the original
documents of all documents submitted to us as certified, facsimile or photostatic copies and the
authenticity of the originals of all documents submitted to us as copies. We have also assumed (i)
that the Purchase Agreement, the Indenture, the Intercreditor Agreement and the Pledge Agreement
constitute valid and binding obligations of each party thereto, other than the Company and
Holdings, and (ii) the due authorization, execution and delivery of each of the

 

 

Transaction Documents by each party thereto, other than the Company and Holdings, in accordance
with the laws of its jurisdiction of incorporation or organization.

As to any facts that are material to the opinions hereinafter expressed that we did not
independently establish or verify, we have relied, without investigation, upon the representations
of the Company, SAI and Holdings contained in the Purchase Agreement and upon certificates of
officers of the Company and Holdings.

     In rendering the opinions and making the statements set forth herein, whenever an opinion or
statement herein is qualified by “to our knowledge,” “known to us” or by words of similar import,
it is intended to indicate that, during the course of our representation of the Company in the
subject transaction, no information has come to the attention of those lawyers in our firm who have
rendered legal services in connection with the transactions contemplated by the Offering Memorandum
that gives us actual knowledge of the inaccuracy of such statement or opinion. Except as
specifically set forth herein, we have not undertaken any independent investigation to determine
the accuracy of facts material to any such statement or opinion, and no inference as to such
statement or opinion should be drawn from the fact of our representation of the Company. In making
judgments in respect of matters of materiality, we have, to the extent we deemed appropriate,
relied upon management and other representatives of the Company in assessing the possible impact of
such items upon the Company.

     Based upon and subject to the foregoing and to the limitations and qualifications described
below, we are of the opinion that:

(a) The Company and Holdings have been duly organized and are validly existing and in good
standing under the laws of the State of Delaware, are duly qualified to do business and are
in good standing in each jurisdiction listed on Schedule 2 hereto, and have all
corporate power and authority to own, lease and operate their respective properties and to
conduct the businesses as described in the Time of Sale Memorandum and the Offering
Memorandum.

(b) The Company has an authorized capitalization as set forth in each of the Time of Sale
Information and the Offering Memorandum; and all the outstanding shares of capital stock of
Holdings have been duly and validly authorized and issued, are fully paid and
non-assessable.

(c) The Company and Holdings each have the corporate right, power and authority to execute
and deliver each of the Transaction Documents to which each is a party and to perform their
respective obligations thereunder; and all action required to be taken for the due and
proper authorization, execution and delivery of each of the Transaction Documents and the
consummation of the transactions contemplated thereby has been duly and validly taken.

(d) The Indenture has been duly authorized, executed and delivered by the Company and
Holdings and, assuming due execution and delivery thereof by SAI and the Trustee and
Collateral Agent, constitutes a valid and legally binding agreement of the Company and the
Guarantors enforceable against the Company and the Guarantors in accordance

-2-

 

with its terms; and the Indenture conforms in all material respects with the requirements of
the Trust Indenture Act and the rules and regulations of the Commission applicable to an
indenture that is qualified thereunder.

(e) The Securities have been duly authorized, executed and delivered by the Company and,
when duly authenticated as provided in the Indenture and paid for as provided in the
Purchase Agreement, will be duly and validly issued and outstanding and will constitute
valid and legally binding obligations of the Company enforceable against the Company in
accordance with their terms, subject to the Enforceability Exceptions, and will be entitled
to the benefits of the Indenture; and the Guarantee has been duly authorized by Holdings
and, assuming due authorization by SAI of the Guarantee, when the Guarantees have been duly
executed, authenticated, issued and delivered as provided in the Indenture and paid for as
provided in the Purchase Agreement, will be valid and legally binding obligations of the
Guarantors, enforceable against the Guarantors in accordance with their terms, subject to
the Enforceability Exceptions, and will be entitled to the benefits of the Indenture.

(f) The Purchase Agreement has been duly authorized, executed and delivered by the Company
and Holdings.

(g) The Pledge Agreement has been duly authorized, executed and delivered by the Company and
Holdings and, assuming due authorization, execution and delivery thereof by SAI, and
constitutes a valid and legally binding agreement of the Company and the Guarantors
enforceable against the Company and the Guarantors in accordance with its terms.

(h) The Intercreditor Agreement has been duly authorized, executed and delivered by the
Company and Holdings and, assuming due authorization, execution and delivery thereof by SAI,
constitutes a valid and legally binding agreement of the Company and the Guarantors
enforceable against the Company and the Guarantors in accordance with its terms.

(i) Each Transaction Document conforms in all material respects to the description thereof
contained in each of the Time of Sale Information and the Offering Memorandum.

(j) The execution, delivery and performance by the Company and Holdings of each of the
Transaction Documents to which each is a party, the issuance and sale of the Securities
(including the Holdings Guarantee) and compliance by the Company and Holdings with the terms
thereof and the consummation of the transactions contemplated by the Transaction Documents
will not (i) conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or Holdings pursuant
to, any material contract set forth on Schedule 3 hereto, (ii) result in any
violation of the provisions of the charter or by-laws of the Company or Holdings or (iii)
result in the violation of any law, statute or regulation or, to the

-3-

 

knowledge of such counsel, any judgment of any court or arbitrator or governmental or
regulatory authority.

(k) No consent, approval, authorization, order, registration or qualification of or with any
court or arbitrator or governmental or regulatory authority is required for the execution,
delivery and performance by the Company and the Guarantors of each of the Transaction
Documents to which each is a party, the issuance and sale of the Securities (including the
Guarantees) and compliance by the Company and the Guarantors with the terms thereof and the
consummation of the transactions contemplated by the Transaction Documents, except for such
consents, approvals, authorizations, orders and registrations or qualifications have been
obtained or made by the Company and are in full force and effect and as may be required by
state securities laws in connection with the purchase and resale of the Securities by the
Initial Purchasers.

(l) We have read the statements in the Time of Sale Information and the Offering Memorandum
under the caption “Certain United States federal taxation consequences,” and insofar as such
statements constitute summaries of certain federal tax laws of the United States, are
accurate in all material respects.

IRS Circular 230 Disclosure. To ensure compliance with the requirements imposed by the
Internal Revenue Service, we inform you (i) that any United States federal tax advice
contained in this communication (including any attachment) is not intended or written to be
used, and cannot be used, by any taxpayer for the purpose of avoiding penalties under the
United States Internal Revenue Code; (ii) such advice was written in support of the
promotion, marketing or recommending of the transactions or matters addressed herein and
(iii) taxpayers should seek advice based on their particular circumstances from an
independent tax advisor.

(m) We have read the statements in the Time of Sale Information and the Offering Memorandum
under the caption “Description of notes,” and insofar as such statements constitute a
summary of the terms of the Notes, the Indenture, the Pledge Agreement and the Intercreditor
Agreement, are accurate in all material respects.

(n) Each of the documents incorporated by reference in each of the Time of Sale Information
and the Offering Memorandum (except as to the financial statements, schedules, notes, other
financial and accounting data and statistical data derived therefrom, as to which such
counsel need express no opinion), at the time such document was filed with the Commission,
appeared on its face to be appropriately responsive in all material respects to the
requirements of the Exchange Act.

(o) Neither the Company nor any of its subsidiaries is, and after giving effect to the
offering and sale of the Securities and the application of the proceeds thereof as described
in each of the Time of Sale Information and the Offering Memorandum none of them will be
required to register as, an “investment company” as defined in the Investment Company Act.

-4-

 

(p) Neither the issuance, sale and delivery of the Securities nor the application of the
proceeds thereof by the Company as described in each of the Time of Sale Information and the
Offering Memorandum will violate Regulation T, U or X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board of Governors.

(q) Assuming the accuracy of the representations and warranties, and the compliance with the
agreements, of the Company, the Guarantors and the Initial Purchasers contained in the
Purchase Agreement, it is not necessary, in connection with the issuance and sale of the
Securities to the Initial Purchasers and the initial offer, resale and delivery of the
Securities by the Initial Purchasers in the manner contemplated by the Purchase Agreement,
the Time of Sale Information and the Offering Memorandum, to register the Securities under
the Securities Act or to qualify the Indenture under the Trust Indenture Act.

(r) The Pledge Agreement is effective to create in favor of the Junior Lien Collateral Agent
(as defined in the Pledge Agreement) for the benefit of each holder of the Notes as of the
date hereof and each subsequent holder of the Notes, as security for the Notes Obligations
(as defined in the Pledge Agreement) a valid security interest (the “Article 9 Security
Interest”) in the Collateral (as defined in the Pledge Agreement) of the Company, SAI and
Holdings (collectively, the “Pledgors”) in which a security interest may be created under
Article 9 of the Uniform Commercial Code as currently in effect in the State of New York
(the “Article 9 Collateral”).

(s) Assuming each of the security certificates listed on Schedule 4 hereto (the
“Pledged Shares”) have been delivered to the First Lien Collateral Agent (as defined in the
Intercreditor Agreement) in the State of Texas to be held in accordance with the provisions
of the Intercreditor Agreement, together with duly executed stock powers or other powers in
blank, and assuming that (i) the First Lien Collateral Agent (as defined in the Pledge
Agreement) or any of its agents instructed to hold possession of the certificates for its
benefit in accordance with Section 9-313(h) of the Uniform Commercial Code as currently in
effect in the State of Texas (the “Texas UCC”), at all times retains possession in the State
of Texas of the certificates representing such Pledged Shares, and (ii) the Junior Lien
Collateral Agent is taking the pledge in such Pledged Shares without notice of any adverse
claim, except any such claims that may arise under the First Lien Pledge Agreement (as
defined in the Intercreditor Agreement), then the security interests in such Pledged Shares
created in favor of the Junior Lien Collateral Agent for the benefit of the Secured Parties
under the Pledge Agreement to secure the Notes Obligations (as defined in the Pledge
Agreement) constitute a valid, enforceable and perfected security interest free of adverse
claims under the Texas UCC, except any such claims that may arise under the First Lien
Pledge Agreement (as defined in the Intercreditor Agreement).

(t) Each of the Delaware Financing Statements (as defined on Schedule 5(a) hereto)
is in proper form for filing in the Office of the Secretary of State of the State of
Delaware and upon the proper filing of the Delaware Financing Statements with the Office of
the Secretary of State of the State of Delaware, the Article 9 Security Interest in favor of
the

-5-

 

Junior Lien Collateral Agent for the benefit of the Secured Parties in that portion of the
Article 9 Collateral of the Pledgors in which a security interest may be perfected by the
filing of a financing statement under the of the Uniform Commercial Code as currently in
effect in the State of Delaware (the “Delaware UCC”) will be perfected.

(u) Each of the Texas Financing Statements (as defined on Schedule 5(b) hereto) is
in proper form for filing in the Office of the Secretary of State of the State of Texas and
upon the proper filing of the Texas Financing Statements with the Office of the Secretary of
State of the State of Texas, the Article 9 Security Interest in favor of the Junior Lien
Collateral Agent for the benefit of the Secured Parties in that portion of the Article 9
Collateral of the Pledgors in which a security interest may be perfected by the filing of a
financing statement under the Texas UCC will be perfected.

     Our opinions expressed above are subject to the following limitations, exceptions,
qualifications and assumptions:

1. For purposes of our opinions in paragraph (a) above as to the valid existence and good
standing of the Company and Holdings and the due qualification of the Company and Holdings
to do business as a foreign corporation in each jurisdiction in which their respective
ownership or lease or property or the conduct of their respective businesses requires such
qualification, we have relied solely upon good standing or similar certificates issued by
appropriate authorities in the subject jurisdictions.

2. The enforceability opinions expressed in paragraphs (d), (e), (g), (h) and (s) above are
subject to bankruptcy, insolvency, fraudulent transfer and other similar laws affecting the
rights and remedies of creditors generally and general principles of equity, including
concepts of materiality, reasonableness, good faith and fair dealing.

3. Rights to indemnification and contribution in the Purchase Agreement may be limited by
applicable securities laws and principles of public policy.

4. For purposes of the opinions in paragraphs (j) and (k) above, we have considered only
such laws and regulations that in our experience are typically applicable to a transaction
of the nature contemplated by the Purchase Agreement.

5. For the purposes of the opinions expressed in clause (i) of paragraph (j), certain of the
agreements listed on Schedule 3 state that they are governed by the laws of
jurisdictions other than the laws of the State of New York. We have made no investigation
of any such other laws or consulted with counsel admitted to practice law in such
jurisdictions. We have not examined the question of what law would govern the
interpretation or enforcement of any such agreement and have merely assumed that they would
be interpreted in accordance with their plain meaning. We have not reviewed the covenants
in the any such agreement that contain financial ratios or other financial restrictions and
no opinion is provided with respect thereto.

6. Our opinion regarding tax matters set forth in paragraph (l) hereof is based upon
existing law, regulations, administrative pronouncements and judicial authority, all as in
effect as of today’s date. It represents our best legal judgment as to the matters
addressed

-6-

 

therein, but is not binding on the Internal Revenue Service or the courts. Accordingly, no
assurance can be given that the opinion expressed therein, if contested, would be sustained
by a court. Furthermore, the authorities upon which we rely may be changed at any time with
retroactive effect. No assurances can be given as to the effect of any such change on our
opinion.

7. In connection with the opinions set forth in paragraphs (r), (s), (t), and (u), we have
assumed that each of the Pledgors has, or has power to transfer, rights (to the extent
necessary to grant a security interest) in the Collateral (as defined in the Pledge
Agreement) existing on the date hereof and will have, or will have the power to transfer,
rights (to such extent) in property which becomes the Collateral (as defined in the Pledge
Agreement) after the date hereof.

8. In connection with the opinions set forth in paragraphs (s) and (u), the perfection of a
security interest in any collateral consisting of “proceeds” (as defined in the Texas UCC)
is subject to limitations set forth in Section 9-315 of the Texas UCC.

9. In connection with the opinions set forth in paragraphs (r) and (t), the perfection of a
security interest in any collateral consisting of “proceeds” (as defined in the Delaware
UCC) is subject to limitations set forth in Section 9-315 of the Delaware UCC.

10. Except to the extent expressly set forth in paragraph (s), we express no opinion
regarding the priority of any security interest.

11. Except as expressly provided in paragraph (s), (t) and (u), we express no opinion as to
the perfection of any lien on or security interest in any real or personal property,
tangible or intangible, providing or intended to provide collateral security for the Notes
Obligations (as defined in the Pledge Agreement).

12. The opinions expressed in this opinion letter are limited to the laws of the State of
New York, the General Corporation Law of the State of Delaware, the Delaware UCC, the Texas
UCC and the Federal laws of the United States of America, and we express no opinion with
respect to any other laws of any state or jurisdiction. With respect to our opinions
relating to the Delaware UCC and the Texas UCC, respectively, we have, with your permission,
(i) confined our investigation of the Delaware UCC and the Texas UCC, respectively, to an
examination of the relevant provisions of the UCC as in effect in the State of Delaware and
the State of Texas, respectively, as set forth in the CCH Secured Transactions Guide (as
updated through September 19, 2006) and the O’Connor’s Business and Commerce Code Plus
(2009-10), without regard to any case law decided thereunder or other laws or regulations
relating thereto. We note that the Intercreditor Agreement and the Pledge Agreement provide
that they are to be governed by the laws of the State of New York.

     This opinion letter is effective only as of the date hereof. We do not assume responsibility
for updating this opinion letter as of any date subsequent to its date, and we assume no
responsibility for advising you of any changes with respect to any matters described in this
opinion letter that may occur, or facts that may come to our attention, subsequent to the date
hereof.

-7-

 

     This opinion letter is furnished by us solely for the benefit of the Initial Purchasers in
connection with the transactions contemplated by the Purchase Agreement and may not be relied upon
by the Initial Purchasers for any other purpose, nor may it be furnished to or relied upon by any
other person or entity for any purpose whatsoever; provided, however, that U.S. Bank National
Association, as Trustee under the Indenture, may rely on our opinions in paragraphs (a), (d), (e)
and (q) above, subject to the limitations and qualifications set forth herein. This opinion letter
is not to be quoted in whole or in part or otherwise referred to or used, nor is it to be filed
with any governmental agency or any other person, without our express written consent.

-8-

 

Schedule 1

Initial Purchasers

	 	 	 

	J.P. Morgan Securities Inc.

	 	 
	UBS Securities LLC
	 	 
	Morgan Keegan & Company, Inc.
	 	 
	JMP Securities LLC
	 	 

 

 

Schedule 2

Foreign Qualifications

Penson Worldwide, Inc.:

Penson Holdings, Inc.:

 

 

Schedule 3

Material Contracts

 

 

Schedule 4

Pledged Shares

 

 

Schedule 5

	(a)	 	“Delaware Financing Statements” shall mean, collectively, the following:
	 
	(b)	 	“Texas Financing Statements” shall mean, collectively, the following:

 

 

B. 10b-5 of Counsel for the Company and the Guarantors

May 6, 2010

J.P. Morgan Securities Inc.

UBS Securities LLC

Morgan Keegan & Company, Inc.

JMP Securities LLC

c/o J.P. Morgan Securities Inc.

383 Madison Avenue

New York, New York 10179

Re:       12.5% Senior Second Lien Secured Notes due 2017 of Penson Worldwide, Inc.

Ladies and Gentlemen:

     We have acted as special counsel for Penson Worldwide, Inc., a Delaware corporation (the
“Company”) in connection with the Purchase Agreement, dated April 29, 2010 (the “Purchase
Agreement”), among the Company, SAI Holdings, Inc. (“SAI”), Penson Holdings, Inc. (“Holdings”) and
J.P. Morgan Securities Inc., as representative of the Initial Purchasers (as defined in the
Purchase Agreement). All capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Purchase Agreement. This opinion is being delivered to you pursuant to
Section 6(f) of the Purchase Agreement.

     The purpose of our professional engagement was not to establish or confirm factual matters set
forth in the Time of Sale Information and the Offering Memorandum, and we have not undertaken any
obligation to verify independently any of the factual matters set forth in the Time of Sale
Information and the Offering Memorandum. Moreover, many of the determinations required to be made
in the preparation of the Time of Sale Information and the Offering Memorandum involve matters of a
non-legal nature.

     Subject to the foregoing, we confirm to you that we have participated in conferences with
officers and other representatives of the Company, representatives of the Initial Purchasers and
their counsel, representatives of the independent registered public accounting firm of the Company
and representatives of FTI Consulting, Inc. an advisor to the Company in connection with the Ridge
Acquisition, at which conferences the contents of the Time of Sale Information and the Offering
Memorandum and related matters were discussed and, although we are not passing upon and need not
assume any responsibility for the accuracy, completeness or fairness of the statements contained in
the Time of Sale Information and the Offering Memorandum (except as and to the extent set forth in
paragraphs (i) and (l) of the opinion letter of even date herewith delivered to you by us), on the
basis of the foregoing and the information disclosed to us, but without independent check and
verification, and relying as to materiality on representations and statements of officers and other
representatives of the Company, nothing has come to our attention that has led us to believe that
the Time of Sale Information, at the Time of

 

 

Sale (which we assume to be the date of the Purchase Agreement), contained any untrue statement of
a material fact or omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading, or that the
Offering Memorandum, as of its date and the date hereof, contained or contains any untrue statement
of a material fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading
(it being understood that we do not express any belief with respect to the financial statements,
schedules, notes, other financial and accounting data and statistical data derived therefrom,
included in the Time of Sale Information or the Offering Memorandum).

     This letter is effective only as of the date hereof. We do not assume responsibility for
updating this letter as of any date subsequent to its date, and we assume no responsibility for
advising you of any changes with respect to any matters described in this letter that may occur, or
facts that may come to our attention, subsequent to the date hereof.

     This letter is furnished by us solely for the benefit of the Initial Purchasers in connection
with the transactions contemplated by the Purchase Agreement and may not be relied upon by the
Initial Purchasers for any other purpose, nor may it be furnished to or relied upon by any other
person or entity for any purpose whatsoever. This letter is not to be quoted in whole or in part
or otherwise referred to or used, nor is it to be filed with any governmental agency or any other
person, without our express written consent.

-2-

 

ANNEX D-2

Opinion of In-House Counsel for the Company

May 6, 2010

J.P. Morgan Securities Inc.

UBS Securities LLC

Morgan Keegan & Company, Inc.

JMP Securities LLC

Ladies and Gentlemen:

          I have acted as counsel to Penson Worldwide Inc., a Delaware corporation (the “Company”), in
connection with the issuance of the Company’s ___% Senior Second Lien Secured Notes Due 2017 (the
“Notes”) pursuant to that certain Indenture dated as of May 6, 2010 (the “Indenture”) among the
Company, SAI Holdings, Inc., a Texas corporation (“SAI”), Penson Holdings, Inc., a Delaware
corporation (“PHI”), and U.S. Bank National Association, as trustee (“Trustee”) for the holders of
the Notes (the “Notes Offering”). I have also acted as counsel to Penson Financial Services, Inc.,
a North Carolina corporation (“PFSI”), Penson GHCO, an Illinois general partnership (“Penson
GHCO”), GHP1, Inc., a Texas corporation (“GHP1”) and Penson Financial Services Canada Inc. a
federal corporation incorporated under the laws of Canada (“Penson Canada,” and together with the
Company, PFSI, Penson GHCO, GHP1, SAI, and PHI each a “Penson Entity” and collectively, the “Penson
Entities”) in connection with the Notes Offering. This opinion letter is being delivered to you
pursuant to Section 6(f) the Purchase Agreement dated as of April 29, 2010 (the “Purchase
Agreement”) among J.P. Morgan Securities Inc., as representative (the “Representative”) of the
initial purchasers listed on Schedule1 thereto (collectively the “Initial Purchasers”), the
Company, SAI and PHI. Capitalized terms used herein and defined in the Purchase Agreement are used
as therein defined, unless otherwise defined herein.

          In connection with this opinion, I have examined a copy of: (a) the Indenture executed by the
parties thereto; (b) the global note evidencing the Notes (the “Securities”) issued pursuant to the
Indenture executed by the Company and the Trustee; (c) the Purchase Agreement executed by the
parties thereto, (d) the Pledge Agreement executed by the parties thereto, (e) the Intercreditor
Agreement executed by the parties thereto, (f) the Time of Sale Information; (g) the Offering
Memorandum; (h) a copy of the organizational documents (“Organizational Documents”) and good
standing certificates (the “Good Standing Certificates”) for the Company, SAI, PHI, PFSI, GHP1 and
Penson Canada set forth on the Schedule I hereto, (i) Unanimous Written Consent of the Board of
Directors of SAI, dated as of April 29, 2010 (the “SAI Resolutions”); and (j) such other documents,
records, agreements and certificates as I have deemed appropriate. I have also reviewed such
matters of Texas law, Delaware General Corporation Law and Federal law (collectively, “Applicable
Law”) as I have considered relevant for the purposes of this opinion. The documents referred to in
clauses (a)-(e) are referred to herein at times as the “Transaction Documents.”

 

 

          I have assumed the genuineness of all signatures, the legal capacity of all natural persons,
the authenticity of all documents submitted to me as originals, the conformity to the original
documents of all documents submitted to me as certified, facsimile, pdf, or
photostatic copies, and the authenticity of the originals of all documents submitted to me as
copies. I have also assumed that the Transaction Documents have been duly executed by the Trustee
and the Representative and delivered by the parties thereto. I have also assumed the accuracy and
completeness of representations and warranties of each of the respective Penson Entities set forth
in the Transaction Documents and the due performance by each party of its respective obligations
under such documents, and that each of the Transaction Documents constitutes a valid and binding
obligation of all parties and are enforceable in accordance with their terms against all parties.
As to certain factual matters, I have relied, without any independent verification, upon
certificates provided by public officials and the representations of the respective Penson Entities
set forth in the Transaction Documents together with certificates in support of this opinion dated
the date hereof of the Chief Executive Officer of the Company, a Vice Chairman of PFSI, the
Executive Vice President of SAI, the President of PHI, a Director of Penson Canada and the Chairman
of GHP1 (in its capacity as partner in Penson GHCO). Except as specifically set forth herein, I
have not undertaken any search of any filings of any governmental authority or agency or with any
court or arbitrator, nor have I undertaken any independent investigation to determine the accuracy
of facts material to any such statement or opinion, and no inference as to such statement or
opinion should be drawn from the fact of my representation of the Penson Entities.

          In rendering the opinions set forth herein, whenever a statement or opinion herein is
qualified by “to my knowledge,” or by words of similar import, it is intended to indicate that,
during the course of my representation of the Penson Entities, no information has come to my
attention that gives me actual knowledge of the inaccuracy of such statement or opinion. Except as
specifically set forth herein, I have not undertaken any independent investigation to determine the
accuracy of facts material to any such statement or opinion, and no inference as to such statement
or opinion should be drawn from the fact of my representation of the Penson Entities or employment
with the Company. In making judgments in respect of matters of materiality, I have relied upon
other representatives of the Penson Entities in assessing the possible impact of such items.

          Based upon the foregoing, and subject to the limitations set forth below as well as in the
Transaction Documents (and their respective schedules and exhibits), I am of the opinion that:

	 	1)	 	Each of PFSI, Penson GHCO, Penson Canada, PHI, GHP1 and SAI (each a “Covered
Subsidiary” and, collectively, the “Covered Subsidiaries”) has been duly organized and is
validly existing and in good standing under the laws of its respective jurisdictions of
organization, is duly qualified to do business and is in good standing in each jurisdiction
listed opposite its name on Schedule I attached hereto, and has all corporate or general
partnership power, as applicable, and authority to own, lease and operate its respective
properties and to conduct its businesses as described in the Time of Sale Information and
the Offering Memorandum, except where the failure to have such power or authority would
not, individually or in the aggregate, have a Material Adverse Effect.

-2-

 

	 	2)	 	Each Covered Subsidiary is duly qualified to do business as a foreign corporation in
the jurisdictions listed opposite its name on Schedule I attached hereto, with the
requisite corporate or general partnership power and authority to own, lease and operate
its properties and to conduct its business as described in the Time of Sale Information and
the Offering Memorandum, except where the failure to be so qualified or have such power or
authority would not, individually or in the aggregate, have a Material Adverse Effect.
	 
	 	3)	 	All the outstanding shares of capital stock or other equity interests of each Covered
Subsidiary have been duly and validly authorized and issued, and, to the extent permissible
as a matter of law, are fully paid and non-assessable.
	 
	 	4)	 	SAI has the corporate right, power and authority to execute and deliver each of the
Transaction Documents to which it is a party and to perform its respective obligations
thereunder; and all action required to be taken for the due and proper authorization,
execution and delivery of each of the Transaction Documents and the consummation of the
transactions contemplated thereby has been duly and validly taken.
	 
	 	5)	 	The Indenture has been duly authorized, executed and delivered by SAI.
	 
	 	6)	 	The Purchase Agreement has been duly authorized, executed and delivered by SAI.
	 
	 	7)	 	The Pledge Agreement has been duly authorized, executed and delivered by SAI.
	 
	 	8)	 	The Intercreditor Agreement has been duly authorized, executed and delivered by SAI.
	 
	 	9)	 	The execution, delivery and performance by SAI of each of the Transaction Documents to
which it is a party, the issuance and sale of the Securities and compliance by SAI with the
terms thereof and the consummation of the transactions contemplated by the Transaction
Documents will not (i) conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of any of the Covered
Subsidiaries pursuant to any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Covered Subsidiaries are a party or by which the
Covered Subsidiaries are bound or to which any of the property or assets of the Covered
Subsidiaries is subject, (ii) result in any violation of the provisions of Organizational
Documents of any of the Covered Subsidiaries or (iii) result in the violation of any law,
statute or regulation or, to the knowledge of such counsel, any judgment of any court or
arbitrator or governmental or regulatory authority, except, in the case of clause (i)
above, for any such conflict, breach, violation or default, or imposition of any lien,
charge or encumbrance that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
	 
	 	10)	 	To my knowledge, except as described in the Time of Sale Information and/or the
Offering Memorandum, there are (i) no legal, governmental or regulatory investigations,
actions, suits or proceedings pending to which the Covered Subsidiaries are a party or

-3-

 

	 	 	 	to which any property of the Covered Subsidiaries is subject that, individually or in
the aggregate, if determined adversely to the Covered Subsidiaries, would reasonably be
expected to have a Material Adverse Effect; and (ii) no such investigations, actions,
suits or proceedings are threatened by any governmental or regulatory authority or
threatened by others that, individually or in the aggregate, if determined adversely to
the Covered Subsidiaries, would reasonably be expected to have a Material Adverse Effect

	 	 	 	
My opinions expressed above are subject to the following additional limitations, exceptions,
qualifications and assumptions:

	 
	 	A.	 	The opinions expressed above are limited to Applicable Law and I express no opinion as
to the effect or applicability of the laws of any other State or jurisdiction.
	 
	 	B.	 	The opinions expressed in Sections 1 and 2 above have been rendered on the basis solely
of my review of the Good Standing Certificates and the Organizational Documents of the
Penson Entities and written consent of the Board of Directors of the Company dated as of
April 17, 2010, written consent of the Pricing Committee of the Board of Directors of the
Company dated as of April 29, 2010 and the SAI Resolutions as presented to me, and each of
the Penson Entities has represented to me that such records are accurate and complete in
all respects affecting Transaction Documents and the transactions contemplated thereby.
	 
	 	C.	 	I have relied on the opinion of Morgan Lewis & Bockius LLP rendered of even date to you
as to all matters relevant to this opinion letter.
	 
	 	D.	 	I invite your attention to the fact that certain of the Transaction Documents and/ or
other agreements or instruments state that they are governed by the laws of jurisdictions
other than the Applicable Law. I have made no investigation of any such other laws nor
consulted with counsel admitted to practice law in such jurisdictions. I have not examined
the question of what law would govern the interpretation or enforcement of any such
indentures, agreements or instruments and have merely assumed that they would be
interpreted in accordance with their plain meaning. I have not reviewed the covenants in
the any such indentures, agreements or instruments that contain financial ratios or other
financial restrictions and no opinion is provided with respect thereto.
	 
	 	 	 	

Additionally, I express no opinion as to compliance with:

	 	(i)	 	applicable antifraud statutes, regulations or rules of applicable state
and federal laws concerning the offer, issuance or sale of securities, including,
without limitation, the accuracy and completeness of the information provided by
the Penson Entities in connection with the Transaction Documents;
	 
	 	(ii)	 	any federal or state securities laws, tax laws, environmental laws,
pension and employee benefit laws, antitrust laws, usury laws or any local laws;
	 
	 	(iii)	 	the effect of the law of any jurisdiction which limits the rate of
interest legally chargeable or collectible; and

-4-

 

	 	(iv)	 	the creation, attachment, perfection, priority or enforceability of any
security interest.

          This opinion letter is effective only as of the date hereof. I do not assume responsibility
for updating this letter as of any subsequent date and I assume no responsibility for advising you
of any changes with respect to any matters described in this opinion letter that may occur
subsequent to the date of this opinion letter or from the discovery, subsequent to the date of this
opinion letter, of information not previously known to me pertaining to the events occurring prior
to such date. This opinion letter is solely for the benefit of the Initial Purchasers and Trustee
only in connection with the execution of the Transaction Documents and may not be used or relied
upon by any person or entity for any other purpose whatsoever, without my express prior written
consent. This opinion letter may not be quoted or used, or filed with any agency or person, without
my express prior written consent.

Very truly yours,

Owen Scheurich, Esq.

-5-

 

Schedule I to Legal Opinion

	 	 	 	 	 	 	 	 	 

	Entity

	 	Jurisdiction of
Organization
	 	Organizational

Documents
	 	Additional

Qualification

Jurisdictions
	 	Good Standing
Certificates
	 
	 	 	 	 	 	 	 	 
	Penson Worldwide,
Inc.

	 	Delaware
	 	Amended and
Restated
Certificate of
Incorporation
	 	 	 	Certificate of
Existence dated
                          , 2010
from the Secretary
of State for the
State of Delaware.
	 
	 	 	 	 	 	 	 	 
	SAI Holdings, Inc.

	 	Texas
	 	Articles of
Incorporation
	 	 	 	Certificate of
Existence dated
                          , 2010
from the Secretary
of State for the
State of Texas.
	 
	 	 	 	 	 	 	 	 
	Penson Financial
Services, Inc.

	 	North Carolina
	 	Amended and
Restated Articles
of Incorporation
	 	Texas; Qualified as
a Broker-Dealer via
CRD to transact
business in all
fifty states.
	 	Certificate of
Existence dated
                          , 2010
from the Secretary
of State for the
State of North
Carolina.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Certificate of Fact
dated                           ,
2010 from the
Secretary of State
for the State of
Texas.
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Penson Financial
Services Canada
Inc.

	 	Canada
	 	Certificate of
Incorporation
	 	Quebec, Ontario
	 	Certificate of
Compliance dated
                          , 2010
from the Deputy
Director of
Industry Canada.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Certificat
d’Attestation dated
                          , 2010 from
the Registraire des
Enterprise Quebec.
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Corporation Profile
Report from the
Ministry of
Government Services
of the Province of
Ontario dated                     
     , 2010.
	 
	 	 	 	 	 	 	 	 
	GHP1, Inc.

	 	Texas
	 	Articles of
Incorporation
	 	 	 	Certificate of
Existence dated
                          , 2010
from the Secretary
of State for the
State of Texas.
	 
	 	 	 	 	 	 	 	 
	Penson Holdings,
Inc.

	 	Delaware
	 	Certificate of
Incorporation
	 	 	 	Certificate of
Existence dated
                          , 2010
from the Secretary
of State for the
State of Delaware.

-6-

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