Document:

exv10w8

 

Exhibit 10.8

CREDIT AGREEMENT

     THIS CREDIT AGREEMENT (this “Agreement”) is entered into as of August 16, 2005, by and
between MELLANOX TECHNOLOGIES, INC., a California corporation (“Borrower”), and WELLS FARGO BANK,
NATIONAL ASSOCIATION (“Bank”).

RECITALS

     Borrower has requested that Bank extend or continue credit to Borrower as described
below, and Bank has agreed to provide such credit to Borrower on the terms and conditions
contained herein.

     NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Bank and Borrower hereby agree as follows:

ARTICLE I

CREDIT TERMS

     SECTION 1.1. LINE OF CREDIT.

     (a) Line of Credit. Subject to the terms and conditions of this Agreement, Bank hereby
agrees to make advances to Borrower from time to time up to and including June 30, 2007, not
to exceed at any time the aggregate principal amount of Five Million Dollars ($5,000,000.00)
(“Line of Credit”), the proceeds of which shall be used to finance Borrower’s working capital
needs. Borrower’s obligation to repay advances under the Line of Credit shall be evidenced by
a promissory note dated as of August 16, 2005 (“Line of Credit Note”), all terms of which are
incorporated herein by this reference.

     (b) Limitation on Borrowings. Outstanding borrowings under the Line of Credit, to a
maximum of the principal amount set forth above, shall not at any time exceed Two Million
Dollars ($2,000,000.00), unless such outstanding borrowings are less than or equal to eighty
percent (80%) of Borrower’s eligible accounts receivable. All of the foregoing shall be
determined by Bank upon receipt and review of all collateral reports required hereunder and
such other documents and collateral information as Bank may from time to time require.
Borrower acknowledges that said borrowing base was established by Bank with the
understanding that, among other items, the aggregate of all returns, rebates, discounts, credits
and allowances for the immediately preceding three (3) months at all times shall be less than
five percent (5%) of Borrower’s gross sales for said period. If such dilution of Borrower’s
accounts for the immediately preceding three (3) months at any time exceeds five percent (5%)
of Borrower’s gross sales for said period, or if there at any time exists any other matters, events,
conditions or contingencies which Bank reasonably believes may affect payment of any portion
of Borrower’s accounts, Bank, in its sole discretion, may reduce the foregoing advance rate
against eligible accounts receivable to a percentage appropriate to reflect such additional
dilution and/or establish additional reserves against Borrower’s eligible accounts receivable.

     As used herein, “eligible accounts receivable” shall consist solely of trade accounts created
in the ordinary course of Borrower’s business, upon which Borrower’s right to receive payment is
absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has
a perfected security interest of first priority, and shall not include:

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     (i) any account which is past due more than twice Borrower’s standard selling terms,
except with respect to any account for which Borrower has provided extended payment terms not
to exceed one hundred eighty (180) days, any such account which is more than thirty (30) days
past due;

     (ii) that portion of any account for which there exists any right of setoff, defense or
discount (except regular discounts allowed in the ordinary course of business to promote prompt
payment) or for which any defense or counterclaim has been asserted;

     (iii) any account which represents an obligation of any state or municipal government or of
the United States government or any political subdivision thereof (except accounts which represent
obligations of the United States government and for which the assignment provisions of the Federal
Assignment of Claims Act, as amended or recodified from time to time, have been complied with to
Bank’s satisfaction);

     (iv) any account which represents an obligation of an account debtor located in a foreign
country other than an account debtor located in a Canadian province or territory, so long as, in
Bank’s determination, such Canadian jurisdiction recognizes Bank’s first priority security interest
in and right to collect such account as a consequence of any security agreements and UCC filings in
favor of Bank;

     (v) any account which arises from the sale or lease to or performance of services for, or
represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of
Borrower;

     (vi) that portion of any account, which represents interim or progress billings or
retention rights on the part of the account debtor;

     (vii) any account which represents an obligation of any account debtor when twenty
percent (20%) or more of Borrower’s accounts from such account debtor are not eligible
pursuant to (i) above;

     (viii) that portion of any account from an account debtor which represents the amount by
which Borrower’s total accounts from said account debtor exceeds fifty percent (50%) of Borrower’s
total accounts;

     (ix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the
creditworthiness or financial condition of the account debtor, or the industry in which the
account debtor is engaged, to be unsatisfactory.

     (c) Letter of Credit Subfeature. As a subfeature under the Line of Credit, Bank
agrees from time to time during the term thereof to issue or cause an affiliate to issue standby
letters of credit for the account of Borrower (each, a “Letter of Credit” and collectively,
“Letters of Credit”); provided however, that the aggregate undrawn amount of all outstanding
Letters of Credit shall not at any time exceed Two Million Dollars ($2,000,000.00). The form and
substance of each Letter of Credit shall be subject to approval by Bank, in its sole discretion.
Each Letter of Credit shall be issued for a term not to exceed twelve (12) months, as designated by
Borrower, provided that no Letter of Credit shall have an expiration date more than twelve (12)
months beyond the maturity date of the Line of Credit. The undrawn amount of all Letters of Credit
shall be reserved under the Line of Credit and shall not be available for borrowings thereunder.
Each Letter of Credit shall be subject to the additional terms and conditions of the Letter of
Credit

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agreements, applications and any related documents required by Bank in connection with the issuance
thereof. Each drawing paid under a Letter of Credit shall be deemed an advance under the Line of
Credit and shall be repaid by Borrower in accordance with the terms and conditions of this
Agreement applicable to such advances; provided however, that if advances under the Line of Credit
are not available, for any reason, at the time any drawing is paid, then Borrower shall immediately
pay to Bank the full amount drawn, together with interest thereon from the date such drawing is
paid to the date such amount is fully repaid by Borrower, at the rate of interest applicable to
advances under the Line of Credit. In such event Borrower agrees that Bank, in its sole discretion,
may debit any account maintained by Borrower with Bank for the amount of any such drawing. In the
event that the Line of Credit is not renewed or extended and any Letter of Credit will have an
expiration date subsequent to the stated maturity of the Line of Credit, Borrower covenants to take
all steps necessary prior to such maturity date to grant Bank a perfected, first priority security
interest in (i) securities acceptable to Bank and/or (ii) cash in an amount equal to the aggregate
amount of Letters of Credit that will be outstanding subsequent to such maturity date, which
collateral may be in addition to or in lieu of the collateral described in Section 1.5.

     (d) Borrowing and Repayment. Borrower may from time to time during the term of the
Line of Credit borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject
to all of the limitations, terms and conditions contained herein or in the Line of Credit Note;
provided however, that the total outstanding borrowings under the Line of Credit shall not at any
time exceed the maximum principal amount available thereunder, as set forth above.

     SECTION 1.2. INTEREST/FEES.

     (a) Interest. The outstanding principal balance of each credit subject hereto, and the
amount of each drawing paid under any Letter of Credit shall bear interest from the date such
drawing is paid to the date such amount is fully repaid by Borrower, at the rate of interest
set
forth in each promissory note or other instrument or document executed in connection
therewith.

     (b) Computation and Payment. Interest shall be computed on the basis of a 360-day
year, actual days elapsed. Interest shall be payable at the times and place set forth in each
promissory note or other instrument or document required hereby.

     (c) Letter of Credit Fees. Borrower shall pay to Bank (i) fees upon the issuance of
each
Letter of Credit equal to three quarters of one percent (0.75%) per annum (computed on the
basis of a 360-day year, actual days elapsed) of the face amount thereof, and (ii) fees upon
the
payment or negotiation of each drawing under any Letter of Credit and fees upon the
occurrence of any other activity with respect to any Letter of Credit (including without
limitation,
the transfer, amendment or cancellation of any Letter of Credit) determined in accordance with
Bank’s standard fees and charges then in effect for such activity.

     SECTION 1.3. COLLECTION OF PAYMENTS. Borrower authorizes Bank to collect all interest and
fees due under the Line of Credit by charging Borrower’s deposit account number 4761-058213 with
Bank, or any other deposit account maintained by Borrower with Bank, for the full amount thereof.
Should there be insufficient funds in any such deposit account to pay all such sums when due, the
full amount of such deficiency shall be immediately due and payable by Borrower.

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     SECTION 1.5. COLLATERAL.

     As security for all indebtedness of Borrower to Bank, Borrower hereby grants to Bank security
interests of first priority in all Borrower’s accounts receivable and other rights to payment,
general intangibles, and inventory.

     Notwithstanding the inclusion of “general intangibles” in the definitions of Collateral in the
security agreements executed by Borrower, Bank hereby disclaims a security interest in Borrower’s
patents, copyrights, trademarks and other forms of intellectual property (collectively, “IP”),
provided that nothing in such disclaimer is intended to or shall be construed so as to deprive Bank
of such rights as it may require to foreclose upon Borrower’s personal property collateral (other
than IP) in accordance with the terms of the applicable security agreement and relevant law.

     All of the foregoing shall be evidenced by and subject to the terms of such security
agreements, financing statements, and other documents as Bank shall reasonably require, all in form
and substance satisfactory to Bank. Borrower shall reimburse Bank immediately upon demand for all
costs and expenses incurred by Bank in connection with any of the foregoing security, including
without limitation, filing and recording fees and costs of audits.

     SECTION 1.6. GUARANTIES. All indebtedness of Borrower to Bank under the Line of Credit shall
be guaranteed by Mellanox Technologies, Ltd. (“MTL”) in the principal amount of Five Million
Dollars ($5,000,000.00), as evidenced by and subject to the terms of A guaranty in form and
substance satisfactory to Bank.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

     Borrower makes the following representations and warranties to Bank, which representations and
warranties shall survive the execution of this Agreement and shall continue in full force and
effect until the full and final payment, and satisfaction and discharge, of all obligations of
Borrower to Bank subject to this Agreement.

     SECTION 2.1. LEGAL STATUS. Borrower is a borrower, duly organized and existing and in good
standing under the laws of California, and is qualified or licensed to do business (and is in good
standing as a foreign corporation, if applicable) in all jurisdictions in which such qualification
or licensing is required or in which the failure to so qualify or to be so licensed could
reasonably be expected to have a material adverse effect on Borrower.

     SECTION 2.2. AUTHORIZATION AND VALIDITY. This Agreement and each promissory note,
contract, instrument and other document required hereby or at any time hereafter delivered to Bank
in connection herewith (collectively, the “Loan Documents”) have been duly authorized, and upon
their execution and delivery in accordance with the provisions hereof will constitute legal, valid
and binding agreements and obligations of Borrower or the party which executes the same,
enforceable in accordance with their respective terms.

     SECTION 2.3. NO VIOLATION. The execution, delivery and performance by Borrower of each of
the Loan Documents do not violate any provision of any law or regulation, or contravene any
provision of the Articles of Incorporation or By-Laws of Borrower, or result in any breach of or
default under any contract, obligation, indenture or other instrument to which Borrower is a party
or by which Borrower may be bound.

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     SECTION 2.4. LITIGATION. There are no pending, or to the best of Borrower’s knowledge
threatened, actions, claims, investigations, suits or proceedings by or before any governmental
authority, arbitrator, court or administrative agency which could reasonably be expected to have a
material adverse effect on the financial condition or operation of Borrower other than those
disclosed by Borrower to Bank in writing prior to the date hereof.

     SECTION 2.5. CORRECTNESS OF FINANCIAL STATEMENT. The financial statement of Borrower dated
March 31, 2005, a true copy of which has been delivered by Borrower to Bank prior to the date
hereof, (a) is complete and correct and presents fairly the financial condition of Borrower as of
March 31, 2005, (b) discloses all liabilities of Borrower that are required to be reflected or
reserved against as of March 31, 2005 under generally accepted accounting principles, whether
liquidated or unliquidated, fixed or contingent, and (c) has been prepared in accordance with
generally accepted accounting principles in effect as of March 31, 2005, consistently applied.
Since the date of such financial statement there has been no material adverse change in the
financial condition of Borrower, nor has Borrower mortgaged, pledged, granted a security interest
in or otherwise encumbered any of its assets or properties except in favor of Bank or as otherwise
permitted by Bank in writing.

     SECTION 2.6. INCOME TAX RETURNS. Borrower has no knowledge of any pending assessments or
adjustments of its income tax payable with respect to any year.

     SECTION 2.7. NO SUBORDINATION. There is no agreement, indenture, contract or instrument to
which Borrower is a party or by which Borrower may be bound that requires the subordination in
right of payment of any of Borrower’s obligations subject to this Agreement to any other obligation
of Borrower.

     SECTION 2.8. PERMITS, FRANCHISES. Borrower possesses, and will hereafter possess, all
permits, consents, approvals, franchises and licenses required and rights to all trademarks, trade
names, patents, and fictitious names, if any, necessary to enable it to conduct the business in
which it is now engaged in compliance with applicable law.

     SECTION 2.9. ERISA. Borrower is in compliance in all material respects with all applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended or recodified from
time to time (“ERISA”); Borrower has not violated any provision of any defined employee pension
benefit plan (as defined in ERISA) maintained or contributed to by Borrower (each, a “Plan”); no
Reportable Event as defined in ERISA has occurred and is continuing with respect to any Plan
initiated by Borrower; Borrower has met its minimum funding requirements under ERISA with respect
to each Plan; and each Plan will be able to fulfill its benefit obligations as they come due in
accordance with the Plan documents and under generally accepted accounting principles.

     SECTION 2.10. OTHER OBLIGATIONS. Borrower is not in default on any obligation for borrowed
money, any purchase money obligation or any other material lease, commitment, contract, instrument
or obligation.

     SECTION 2.11. ENVIRONMENTAL MATTERS. Except as disclosed by Borrower to Bank in writing
prior to the date hereof, Borrower is in compliance in all material respects with all applicable
federal or state environmental, hazardous waste, health and safety statutes, and any rules or
regulations adopted pursuant thereto, which govern or affect any of Borrower’s operations and/or
properties, including without limitation, the Comprehensive Environmental

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Response, Compensation and Liability Act of 1980, the Superfund Amendments and Reauthorization Act
of 1986, the Federal Resource Conservation and Recovery Act of 1976, and the Federal Toxic
Substances Control Act, as any of the same may be amended, modified or supplemented from time to
time. None of the operations of Borrower is the subject of any federal or state investigation
evaluating whether any remedial action involving a material expenditure is needed to respond to a
release of any toxic or hazardous waste or substance into the environment. Borrower has no
material contingent liability in connection with any release of any toxic or hazardous waste or
substance into the environment.

ARTICLE III

CONDITIONS

     SECTION 3.1. CONDITIONS OF INITIAL EXTENSION OF CREDIT. The obligation of Bank to extend any
credit contemplated by this Agreement is subject to the fulfillment to Bank’s satisfaction of all
of the following conditions:

     (a) Approval of Bank Counsel. All legal matters incidental to the extension of credit
by Bank shall be satisfactory to Bank’s counsel.

     (b) Documentation. Bank shall have received, in form and substance satisfactory to
Bank, each of the following, duly executed:

	 	(i)	 	This Agreement and each promissory note or other instrument or document
required hereby;

	 	(ii)	 	Corporate Resolution: Borrowing;	 	 	 	 

	 	(iii)	 	Certificate of Incumbency;

	 	(iv)	 	Corporate Resolution: Continuing Guarantee;

	 	(v)	 	Continuing Security Agreement: Rights to Payment and Inventory;

	 	(vi)	 	Exhibit A to UCC Financing Statement;

	 	(vii)	 	Legal Opinion from MTL’s Israeli counsel;

	 	(viii)	 	Continuing Guaranty and Addendum thereto; and

	 	(ix)	 	Such other documents as Bank may require under any other Section of this
Agreement.

     (c) Financial Condition. There shall have been no material adverse change, as
determined by Bank, in the financial condition or business of Borrower or any guarantor
hereunder, nor any material decline, as determined by Bank, in the market value of any
collateral required hereunder or a substantial or material portion of the assets of Borrower
or
any such guarantor.

     (d) Insurance. Borrower shall have delivered to Bank evidence of insurance coverage
on all Borrower’s property, in form, substance, amounts, covering risks and issued by
companies satisfactory to Bank, and where required by Bank, with loss payable endorsements
in favor of Bank.

     SECTION 3.2. CONDITIONS OF EACH EXTENSION OF CREDIT. The obligation of Bank to make each
extension of credit requested by Borrower hereunder shall be subject to the fulfillment to Bank’s
satisfaction of each of the following conditions:

     (a) Compliance, The representations and warranties contained herein and in each
of the other Loan Documents shall be true on and as of the date of the signing of this Agreement

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and on the date of each extension of credit by Bank pursuant hereto, with the same effect as
though such representations and warranties had been made on and as of each such date (except that
representations in the first sentence of Section 2.5 shall be deemed to refer to the then most
recent audited financial statement delivered by Borrower to Bank hereunder and to the date of such
audited financial statement), and on each such date, no Event of Default as defined herein, and no
condition, event or act which with the giving of notice or the passage of time or both would
constitute such an Event of Default, shall have occurred and be continuing or shall exist.

     (b) Documentation. Bank shall have received all additional documents which may be
required in connection with such extension of credit.

ARTICLE IV

AFFIRMATIVE COVENANTS

     Borrower covenants that so long as Bank remains committed to extend credit to Borrower
pursuant hereto, or any liabilities (whether direct or contingent, liquidated or unliquidated) of
Borrower to Bank under any of the Loan Documents remain outstanding, and until payment in full of
all obligations of Borrower subject hereto, Borrower shall, unless Bank otherwise consents in
writing:

     SECTION 4.1. PUNCTUAL PAYMENTS. Punctually pay all principal, interest, fees or other
liabilities due under any of the Loan Documents at the times and place and in the manner specified
therein.

     SECTION 4.2. ACCOUNTING RECORDS. Maintain adequate books and records in accordance with
generally accepted accounting principles consistently applied, and permit any representative of
Bank, at any reasonable time, to inspect, audit and examine such books and records, to make copies
of the same, and to inspect the properties of Borrower.

     SECTION 4.3. FINANCIAL STATEMENTS. Provide to Bank all of the following, in form and
detail satisfactory to Bank:

     (a) not later than 120 days after and as of the end of each fiscal year, an audited
consolidated financial statement of Borrower and MTL, prepared by an independent certified
public accountant acceptable to Bank, to include a balance sheet, income statement, statement
of cash flow, and all supporting schedules and footnotes;

     (b) not later than 45 days after and as of the end of each fiscal quarter, a financial
statement of Borrower and MTL, prepared by Borrower and MTL, to include a balance sheet,
income statement and statement of cash flow;

     (c) not later than 30 days after the end of each month during which the outstanding
borrowings under the Line of Credit at any time exceeded Two Million Dollars ($2,000,000),
(i) monthly consolidating financial statements of Borrower and MTL, (ii) a monthly aged
accounts receivable and accounts payable report, and (iii) a monthly inventory report
reflecting
raw materials, work-in-process and finished goods, in each case as at the end of such month;

     (d) from time to time such other information as Bank may reasonably request.

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     SECTION 4.4. COMPLIANCE. Preserve and maintain all licenses, permits, governmental
approvals, rights, privileges and franchises necessary for the conduct of its business; and comply
with the provisions of all documents pursuant to which Borrower is organized and/or which govern
Borrower’s continued existence and with the requirements of all laws, rules, regulations and
orders of any governmental authority applicable to Borrower and/or its business.

     SECTION 4.5. INSURANCE. Maintain and keep in force insurance of the types and in amounts
customarily carried in lines of business similar to that of Borrower, including but not limited to
fire, extended coverage, public liability, flood, property damage and workers’ compensation, with
all such insurance carried with companies and in amounts satisfactory to Bank, and deliver to Bank
from time to time at Bank’s request schedules setting forth all insurance then in effect.

     SECTION 4.6. FACILITIES. Keep all properties useful or necessary to Borrower’s business in
good repair and condition, and from time to time make necessary repairs, renewals and replacements
thereto so that such properties shall be fully and efficiently preserved and maintained.

     SECTION 4.7. TAXES AND OTHER LIABILITIES. Pay and discharge when due any and all
indebtedness, obligations, assessments and taxes, both real or personal, including without
limitation federal and state income taxes and state and local property taxes and assessments,
except such (a) as Borrower may in good faith contest or as to which a bona fide dispute may arise,
and (b) for which Borrower has made provision, to Bank’s satisfaction, for eventual payment thereof
in the event Borrower is obligated to make such payment.

     SECTION 4.8. LITIGATION. Promptly give notice in writing to Bank of any litigation pending
or threatened against Borrower.

     SECTION 4.9. FINANCIAL CONDITION. Maintain Borrower’s and MTL’s consolidated financial
condition as follows using generally accepted accounting principles consistently applied and used
consistently with prior practices (except to the extent modified by the definitions herein), with
compliance determined commencing with Borrower’s financial statements for the period ending March
31, 2005:

     (a) At no time less than $5,000,000 of unrestricted cash and/or short-term investments
and or short-term marketable securities (including the approximately $1,274,000 of existing
restricted cash on MTL’s consolidated balance sheet (in connection with a building lease in
Israel)), as reflected on Borrower’s and MTL’s consolidated balance sheet.

     (b) Quarterly net loss before taxes in any one of the first three fiscal quarters of fiscal
year 2005 not more than $1,000,000, determined as of the end of each such fiscal quarter;
quarterly net loss before taxes in the fourth fiscal quarter of fiscal year 2005 not more than $0,
determined as of the end of such fiscal quarter.

     (c) Tangible
Net Worth not less than $10,000,000 at any time after fiscal year 2005,
with “Tangible Net Worth” defined as the aggregate of total stockholders’ equity plus
subordinated debt less any intangible assets.

     SECTION 4.10. NOTICE TO BANK. Promptly (but in no event more than five (5) days after the
occurrence of each such event or matter) give written notice to Bank in reasonable

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detail of: (a) the occurrence of any Event of Default, or any condition, event or act which with
the giving of notice or the passage of time or both would constitute an Event of Default; (b) any
change in the name or the organizational structure of Borrower; (c) the occurrence and nature of
any Reportable Event or Prohibited Transaction, each as defined in ERISA, or any funding
deficiency with respect to any Plan; or (d) any termination or cancellation of any insurance
policy which Borrower is required to maintain, or any uninsured or partially uninsured loss
through liability or property damage, or through fire, theft or any other cause affecting
Borrower’s property.

ARTICLE V

NEGATIVE COVENANTS

     Borrower further covenants that so long as Bank remains committed to extend credit to Borrower
pursuant hereto, or any liabilities (whether direct or contingent, liquidated or unliquidated) of
Borrower to Bank under any of the Loan Documents remain outstanding, and until payment in full of
all obligations of Borrower subject hereto, Borrower will not without Bank’s prior written consent:

     SECTION 5.1. USE OF FUNDS. Use any of the proceeds of any credit extended hereunder
except for the purposes stated in Article I hereof.

     SECTION 5.2. OTHER INDEBTEDNESS. Create, incur, assume or permit to exist any
indebtedness or liabilities resulting from borrowings, loans or advances, whether secured or
unsecured, matured or unmatured, liquidated or unliquidated, joint or several, except (a) the
liabilities of Borrower to Bank, (b) any other liabilities of Borrower existing as of, and
disclosed to Bank prior to, the date hereof, (c) purchase money indebtedness and capital lease
obligations incurred in the normal course of business not to exceed an aggregate amount of
$1,000,000.00 in any fiscal year, and (d) unsecured loans from shareholders.

     SECTION 5.3. MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or consolidate with any
other entity; make any substantial change in the nature of Borrower’s business as conducted as of
the date hereof; acquire all or substantially all of the assets of any other entity; nor sell,
lease, transfer or otherwise dispose of all or a substantial or material portion of Borrower’s
assets except in the ordinary course of its business.

     SECTION 5.4. GUARANTIES. Guarantee or become liable in any way as surety, endorser
(other than as endorser of negotiable instruments for deposit or collection in the ordinary
course of business), accommodation endorser or otherwise for, nor pledge or hypothecate any
assets of Borrower as security for, any liabilities or obligations of any other person or
entity, except any of the foregoing in favor of Bank.

     SECTION 5.5. LOANS, ADVANCES, INVESTMENTS. Make any loans or advances to or investments in
any person or entity, except any of the foregoing existing as of, and disclosed to Bank prior to,
the date hereof, except (a) investments in marketable securities consistent with Borrower’s
investment policy approved from time to time by Borrower’s Board of Directors, and (b) loans,
advances and additional investments not to exceed an aggregate of $500,000 in any fiscal year.

     SECTION 5.6. PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to exist a security
interest in, or lien upon, all or any portion of Borrower’s assets now owned or hereafter acquired
(including without limitation, all IP), except (a) any of the foregoing in favor of Bank or

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which is existing as of, and disclosed to Bank in writing prior to, the date hereof, and (b)
security interests to secure obligations permitted under Section 5.2(c) hereof.

ARTICLE VI

EVENTS OF DEFAULT

     SECTION 6.1. The occurrence of any of the following shall constitute an “Event of
Default” under this Agreement:

     (a) Borrower shall fail to pay when due any principal, interest, fees or other amounts
payable under any of the Loan Documents.

     (b) Any financial statement or certificate furnished to Bank in connection with, or any
representation or warranty made by Borrower or any other party under this Agreement or any
other Loan Document shall prove to be incorrect, false or misleading in any material respect
when furnished or made.

     (c) Any default in the performance of or compliance with any obligation, agreement or
other provision contained herein or in any other Loan Document (other than those referred to in
subsections (a) and (b) above), and with respect to any such default which by its nature can be
cured, such default shall continue for a period of twenty (20) days from its occurrence.

     (d) Any default in the payment or performance of any obligation, or any defined event of
default, under the terms of any contract or instrument (other than any of the Loan Documents)
pursuant to which Borrower, any guarantor hereunder or any general partner or joint venturer in
any Borrower which is a partnership or joint venture (with each such guarantor, general partner
and/or joint venturer referred to herein as a “Third Party Obligor”) has incurred any debt or other
liability to any person or entity, including Bank.

     (e) The filing of a notice of judgment lien against Borrower or any Third Party Obligor; or
the recording of any abstract of judgment against Borrower or any Third Party Obligor in any
county in which Borrower or such Third Party Obligor has an interest in real property; or the
service of a notice of levy and/or of a writ of attachment or execution, or other like process,
against the assets of Borrower or any Third Party Obligor; or the entry of a judgment against
Borrower or any Third Party Obligor, and in each case, in an aggregate amount greater than
$500,000.

     (f) Borrower or any Third Party Obligor shall become insolvent, or shall suffer or
consent to or apply for the appointment of a receiver, trustee, custodian or liquidator of itself or
any of its property, or shall generally fail to pay its debts as they become due, or shall make a
general assignment for the benefit of creditors; Borrower or any Third Party Obligor shall file a
voluntary petition in bankruptcy, or seeking reorganization, in order to effect a plan or other
arrangement with creditors or any other relief under the Bankruptcy Reform Act, Title 11 of the
United States Code, as amended or recodified from time to time, or in the case of MTL, its
Israeli counterpart (“Bankruptcy Code”), or under any state, federal or Israeli law granting relief
to debtors, whether now or hereafter in effect; or any involuntary petition or proceeding pursuant
to the Bankruptcy Code or any other applicable state or federal law relating to bankruptcy,
reorganization or other relief for debtors is filed or commenced against Borrower or any Third
Party Obligor, or Borrower or any Third Party Obligor shall file an answer admitting the
jurisdiction of the court and the material allegations of any involuntary petition; or Borrower or
any Third Party Obligor shall be adjudicated a bankrupt, or an order for relief shall be entered

-10-

 

against Borrower or any Third Party Obligor by any court of competent jurisdiction under the
Bankruptcy Code or any other applicable state, federal or Israeli law relating to bankruptcy,
reorganization or other relief for debtors.

     (g) The death or incapacity of any individual Borrower or Third Party Obligor. The
dissolution or liquidation of any Borrower or Third Party Obligor which is a corporation,
partnership, joint venture or other type of entity; or Borrower or any such Third Party Obligor,
or any of its directors, stockholders or members, shall take action seeking to effect the
dissolution or liquidation of such Borrower or Third Party Obligor.

     (h) Any change in ownership of an aggregate of twenty-five percent (25%) or more of the
common stock of Borrower or the ownership interests of MTL.

     SECTION 6.2. REMEDIES. Upon the occurrence of any Event of Default: (a) all indebtedness of
Borrower under each of the Loan Documents, any term thereof to the contrary notwithstanding, shall
at Bank’s option and without notice become immediately due and payable without presentment, demand,
protest or notice of dishonor, all of which are hereby expressly waived by each Borrower; (b) the
obligation, if any, of Bank to extend any further credit under any of the Loan Documents shall
immediately cease and terminate; and (c) Bank shall have all rights, powers and remedies available
under each of the Loan Documents, or accorded by law, including without limitation the right to
resort to any or all security for any credit subject hereto and to exercise any or all of the
rights of a beneficiary or secured party pursuant to applicable law. All rights, powers and
remedies of Bank may be exercised at any time by Bank and from time to time after the occurrence of
an Event of Default, are cumulative and not exclusive, and shall be in addition to any other
rights, powers or remedies provided by law or equity.

ARTICLE VII

 MISCELLANEOUS

     SECTION 7.1. NO WAIVER. No delay, failure or discontinuance of Bank in exercising any
right, power or remedy under any of the Loan Documents shall affect or operate as a waiver of such
right, power or remedy; nor shall any single or partial exercise of any such right, power or remedy
preclude, waive or otherwise affect any other or further exercise thereof or the exercise of any
other right, power or remedy. Any waiver, permit, consent or approval of any kind by Bank of any
breach of or default under any of the Loan Documents must be in writing and shall be effective only
to the extent set forth in such writing.

     SECTION 7.2. NOTICES. All notices, requests and demands which any party is required or may
desire to give to any other party under any provision of this Agreement must be in writing
delivered to each party at the following address:

			
	BORROWER:	 	MELLANOX TECHNOLOGIES, INC.

2900 Stender Way

Santa Clara, CA 95054

			
	BANK:	 	WELLS FARGO BANK, NATIONAL ASSOCIATION

Peninsula Technology Group #05681 

400 Hamilton Avenue 

Palo Alto, CA 94301

-11-

 

or to such other address as any party may designate by written notice to all other parties.
Each such notice, request and demand shall be deemed given or made as follows: (a) if sent by hand
delivery, upon delivery; (b) if sent by mail, upon the earlier of the date of receipt or three (3)
days after deposit in the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy,
upon receipt.

     SECTION 7.3. COSTS, EXPENSES AND ATTORNEYS’ FEES. Borrower shall pay to Bank immediately upon
demand the full amount of all payments, advances, charges, costs and expenses, including reasonable
attorneys’ fees (to include outside counsel fees and all allocated costs of Bank’s in-house
counsel), expended or incurred by Bank in connection with (a) the negotiation and preparation of
this Agreement and the other Loan Documents, Bank’s continued administration hereof and thereof,
and the preparation of any amendments and waivers hereto and thereto, (b) the enforcement of Bank’s rights and/or the collection of any amounts which become due to Bank under any of the Loan
Documents, and (c) the prosecution or defense of any action in any way related to any of the Loan
Documents, including without limitation, any action for declaratory relief, whether incurred at the
trial or appellate level, in an arbitration proceeding or otherwise, and including any of the
foregoing incurred in connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other person) relating to
any Borrower or any other person or entity. There are no legal expenses to be reimbursed related to
the initial documentation.

     SECTION
7.4. SUCCESSORS, ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit
of the heirs, executors, administrators, legal representatives, successors and assigns of the
parties; provided however, that Borrower may not assign or transfer its interest hereunder without
Bank’s prior written consent. Bank reserves the right to sell, assign, transfer, negotiate or grant
participations in all or any part of, or any interest in, Bank’s rights and benefits under each of
the Loan Documents. In connection therewith, Bank may disclose all documents and information which
Bank now has or may hereafter acquire relating to any credit subject hereto, Borrower or its
business, any guarantor hereunder or the business of such guarantor, or any collateral required
hereunder.

     SECTION 7.5. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other Loan Documents constitute
the entire agreement between Borrower and Bank with respect to each credit subject hereto and
supersede all prior negotiations, communications, discussions and correspondence concerning the
subject matter hereof. This Agreement may be amended or modified only in writing signed by each
party hereto.

     SECTION 7.6. NO THIRD PARTY BENEFICIARIES. This Agreement is made and entered into for the sole
protection and benefit of the parties hereto and their respective permitted successors and assigns,
and no other person or entity shall be a third party beneficiary of, or have any direct or indirect
cause of action or claim in connection with, this Agreement or any other of the Loan Documents to
which it is not a party.

     SECTION 7.7. TIME. Time is of the essence of each and every provision of this Agreement and each
other of the Loan Documents.

     SECTION 7.8. SEVERABILITY OF PROVISIONS. If any provision of this Agreement shall be prohibited by
or invalid under applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision or any remaining
provisions of this Agreement.

	 	 	 
	S:\Documentation\TEAM1\PEN\LEGAL\mellanox-

	 	                  -12-
	202NEW.doc
	 	 
	AU #05681     OBGR #51 9713 8389
	 	 

 

     SECTION 7.9. COUNTERPARTS. This Agreement may be executed in any number of counterparts,
each of which when executed and delivered shall be deemed to be an original, and all of which when
taken together shall constitute one and the same Agreement.

     SECTION 7.10. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.

     SECTION 7.11. ARBITRATION.

     (a) Arbitration. The parties hereto agree, upon demand by any party, to submit to
binding arbitration all claims, disputes and controversies between or among them (and their
respective employees, officers, directors, attorneys, and other agents), whether in tort, contract
or otherwise arising out of or relating to in any way (i) the loan and related Loan Documents
which are the subject of this Agreement and its negotiation, execution, collateralization,
administration, repayment, modification, extension, substitution, formation, inducement,
enforcement, default or termination; or (ii) requests for additional credit.

     (b) Governing Rules. Any arbitration proceeding will (i) proceed in a location in
California selected by the American Arbitration Association (“AAA”); (ii) be governed by the
Federal Arbitration Act (Title 9 of the United States Code), notwithstanding any conflicting
choice of law provision in any of the documents between the parties; and (iii) be conducted by
the AAA, or such other administrator as the parties shall mutually agree upon, in accordance
with the AAA’s commercial dispute resolution procedures, unless the claim or counterclaim is at
least $1,000,000.00 exclusive of claimed interest, arbitration fees and costs in which case the
arbitration shall be conducted in accordance with the AAA’s optional procedures for large,
complex commercial disputes (the commercial dispute resolution procedures or the optional
procedures for large, complex commercial disputes to be referred to, as applicable, as the
“Rules”). If there is any inconsistency between the terms hereof and the Rules, the terms and
procedures set forth herein shall control. Any party who fails or refuses to submit to arbitration
following a demand by any other party shall bear all costs and expenses incurred by such other
party in compelling arbitration of any dispute. Nothing contained herein shall be deemed to be a
waiver by any party that is a bank of the protections afforded to it under 12 U.S.C. §91 or
any similar applicable state law.

     (c) No Waiver of Provisional Remedies, Self-Help and Foreclosure. The arbitration
requirement does not limit the right of any party to (i) foreclose against real or personal
property
collateral; (ii) exercise self-help remedies relating to collateral or proceeds of collateral such as
setoff or repossession; or (iii) obtain provisional or ancillary remedies such as replevin,
injunctive relief, attachment or the appointment of a receiver, before during or after the
pendency of any arbitration proceeding. This exclusion does not constitute a waiver of the
right
or obligation of any party to submit any dispute to arbitration or reference hereunder,
including
those arising from the exercise of the actions detailed in sections (i), (ii) and (iii) of
this
paragraph.

     (d) Arbitrator Qualifications and Powers. Any arbitration proceeding in which the
amount in controversy is $5,000,000.00 or less will be decided by a single arbitrator selected
according to the Rules, and who shall not render an award of greater than $5,000,000.00. Any
dispute in which the amount in controversy exceeds $5,000,000.00 shall be decided by majority
vote of a panel of three arbitrators; provided however, that all three arbitrators must
actively
participate in all hearings and deliberations. The arbitrator will be a neutral attorney
licensed in
the State of California or a neutral retired judge of the state or federal judiciary of
California, in

-13-

 

either case with a minimum of ten years experience in the substantive law applicable to the subject
matter of the dispute to be arbitrated. The arbitrator will determine whether or not an issue is
arbitratable and will give effect to the statutes of limitation in determining any claim. In any
arbitration proceeding the arbitrator will decide (by documents only or with a hearing at the
arbitrator’s discretion) any pre-hearing motions which are similar to motions to dismiss for
failure to state a claim or motions for summary adjudication. The arbitrator shall resolve all
disputes in accordance with the substantive law of California and may grant any remedy or relief
that a court of such state could order or grant within the scope hereof and such ancillary relief
as is necessary to make effective any award. The arbitrator shall also have the power to award
recovery of all costs and fees, to impose sanctions and to take such other action as the arbitrator
deems necessary to the same extent a judge could pursuant to the Federal Rules of Civil Procedure,
the California Rules of Civil Procedure or other applicable law. Judgment upon the award rendered
by the arbitrator may be entered in any court having jurisdiction. The institution and maintenance
of an action for judicial relief or pursuit of a provisional or ancillary remedy shall not
constitute a waiver of the right of any party, including the plaintiff, to submit the controversy
or claim to arbitration if any other party contests such action for judicial relief.

     (e) Discovery. In any arbitration proceeding discovery will be permitted in accordance
with the Rules. All discovery shall be expressly limited to matters directly relevant to the
dispute
being arbitrated and must be completed no later than 20 days before the hearing date and
within 180 days of the filing of the dispute with the AAA. Any requests for an extension of
the
discovery periods, or any discovery disputes, will be subject to final determination by the
arbitrator upon a showing that the request for discovery is essential for the party’s
presentation
and that no alternative means for obtaining information is available.

     (f) Class Proceedings and Consolidations. The resolution of any dispute arising
pursuant to the terms of this Agreement shall be determined by a separate arbitration
proceeding and such dispute shall not be consolidated with other disputes or included in any
class proceeding.

     (g) Payment Of Arbitration Costs And Fees. The arbitrator shall award all costs and
expenses of the arbitration proceeding.

     (h) Real Property Collateral; Judicial Reference. Notwithstanding anything herein
to the contrary, no dispute shall be submitted to arbitration if the dispute concerns indebtedness
secured directly or indirectly, in whole or in part, by any real property unless (i) the holder of
the mortgage, lien or security interest specifically elects in writing to proceed with the
arbitration, or (ii) all parties to the arbitration waive any rights or benefits that might accrue
to them by virtue of the single action rule statute of California, thereby agreeing that all
indebtedness and obligations of the parties, and all mortgages, liens and security interests
securing such indebtedness and obligations, shall remain fully valid and enforceable. If any such
dispute is not submitted to arbitration, the dispute shall be referred to a referee in accordance
with California Code of Civil Procedure Section 638 et seq., and this general reference agreement
is intended to be specifically enforceable in accordance with said Section 638. A referee with the
qualifications required herein for arbitrators shall be selected pursuant to the AAA’s selection
procedures. Judgment upon the decision rendered by a referee shall be entered in the court in which
such proceeding was commenced in accordance with California Code of Civil Procedure Sections 644
and 645.

     (i) Miscellaneous. To the maximum extent practicable, the AAA, the arbitrators
and the parties shall take all action required to conclude any arbitration proceeding within 180
days of

-14-

 

the filing of the dispute with the AAA. No arbitrator or other party to an arbitration proceeding
may disclose the existence, content or results thereof, except for disclosures of information by a
party required in the ordinary course of its business or by applicable law or regulation. If more
than one agreement for arbitration by or between the parties potentially applies to a dispute, the
arbitration provision most directly related to the Loan Documents or the subject matter of the
dispute shall control. This arbitration provision shall survive termination, amendment or
expiration of any of the Loan Documents or any relationship between the parties.

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

	 	 	 	 	 	 	 
	 	 	MELLANOX TECHNOLOGIES, INC.

	 	 	 	WELLS FARGO BANK,

NATIONAL ASSOCIATION
	 	 	 
	 	 	 	 
	By:
	 	/s/ E. Waldman

	 	By:	 	 
	 	 	 

	 	 	 	 
	 	 	Eyal Waldman

	 	 	 	E. Lawrence Hyde
	 	 	President and Chief Executive Officer

	 	 	 	Vice President
	 	 	 
	 	 	 	 
	By:
	 	/s/ Michael Gray
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	Michael Gray
	 	 	 	 
	 	 	Chief Financial Officer
	 	 	 	 

-15-

 

FIRST AMENDMENT TO CREDIT AGREEMENT

     THIS AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of June 30, 2006, by
and between MELLANOX TECHNOLOGIES, INC., a California corporation (“Borrower”), and WELLS FARGO
BANK, NATIONAL ASSOCIATION (“Bank”).

RECITALS

     WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and conditions of that
certain Credit Agreement between Borrower and Bank dated as of August 16, 2005, as amended from
time to time (“Credit Agreement”).

     WHEREAS, Bank and Borrower have agreed to certain changes in the terms and conditions set
forth in the Credit Agreement and have agreed to amend the Credit Agreement to reflect said
changes.

     NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows:

     1. Sections 1.5 and 1.6 are hereby renumbered as Sections 1.4 and 1.5, respectively.

     2. Section 4.1 is hereby deleted in its entirety, and the following substituted therefor:

     “SECTION 4.1. PUNCTUAL PAYMENTS.
Punctually pay all principal, interest, fees or other liabilities
due under any of the Loan Documents at the times and place and in
the manner specified therein, and immediately upon demand by Bank,
the amount by which the outstanding principal balance of any credit
subject hereto at any time exceeds any limitation on borrowings
applicable thereto.”

     3. Section 4.9 is hereby deleted in its entirety, and the following substituted therefor:

     “SECTION 4.9. FINANCIAL CONDITION. Maintain
Borrower’s and MTL’s consolidated financial condition as follows
using generally accepted accounting principles consistently applied
and used consistently with prior practices (except to the extent
modified by the definitions herein), with compliance determined
commencing with Borrower’s financial statements for the period
ending June 30, 2006:

     (a) At no time less than $7,500,000.00 of unrestricted
cash and/or short-term investments and or short-term marketable
securities (including the approximately $1,266,000.00 of existing
restricted cash on MTL’s consolidated balance sheet (in connection
with a building lease in Israel)), as reflected on Borrower’s and
MTL’s consolidated balance sheet.

-1-

 

     (b) Net income after taxes not less than $1.00 on
an annual basis, determined as of each fiscal year end, and pre-tax
profit not less than $1.00 on a quarterly basis, determined as of
each second, third and fourth quarters end.”

     4. Prior to the effectiveness of this Amendment, the Credit Agreement included a
minimum Tangible Net Worth requirement. As of March 31, 2006, Borrower may have been in violation
of its Tangible Net Worth requirement depending on the accounting treatment to be accorded to
Borrower’s Series D Redeemable Convertible Preferred Shares. To the extent that Borrower may have
been in violation thereof, Bank hereby waives said violation.

     5. The following is added to the Credit Agreement as Section 4.11:

     “4.11. Accounts, Maintain, and cause MTL to maintain, its
respective primary depository and investment accounts at Bank.”

     6. Except as specifically provided herein, all terms and conditions of the Credit
Agreement remain in full force and effect, without waiver or modification. All terms defined in
the Credit Agreement shall have the same meaning when used in this Amendment. This
Amendment and the Credit Agreement shall be read together, as one document.

7.
Borrower hereby remakes all representations and warranties contained in the
Credit Agreement and reaffirms all covenants set forth therein. Borrower further certifies that as
of the date of this Amendment there exists no Event of Default as defined in the Credit
Agreement, nor any condition, act or event which with the giving of notice or the passage of time
or both would constitute any such Event of Default.

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

	 	 	 	 	 	 	 
	 	 	MELLANOX TECHNOLOGIES, INC.

	 	 	 	WELLS FARGO BANK,

NATIONAL ASSOCIATION
	 	 	 
	 	 	 	 
	By:
	 	/s/
E. Waldman

	 	By:
	 	/s/ E. Lawrence Hyde
	 	 	 

	 	 	 	 
	 	 	Eyal Waldman
	 	 	 	E. Lawrence Hyde
	 	 	President and Chief Executive Officer

	 	 	 	Vice President
	 	 	 
	 	 	 	 
	By:
	 	/s/ Michael Gray
	 	 	 	 
	 	 	 
	 	 	 	 
	 	 	Michael Gray
	 	 	 	 
	 	 	Chief Financial Officer
	 	 	 	 

-2-

 

			
	 	 	 
	WELLS FARGO
	 	REVOLVING LINE OF CREDIT NOTE
	 	 	 
	$5,000,000.00
	 	Palo Alto, California

August 16, 2005

FOR VALUE
RECEIVED, the undersigned Mellanox Technologies, Inc. (“Borrower”) promises to pay to the
order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its office at Peninsula Technology
RCBO, 400 Hamilton Avenue, Palo Alto, CA 94301, or at such other place as the holder hereof may
designate, in lawful money of the United States of America and in immediately available funds, the
principal sum of $5,000,000.00, or so much thereof as may be advanced and be outstanding, with
Interest thereon, to be computed on each advance from the date of its disbursement as set forth
herein.

1. DEFINITIONS:

     As used herein, the following terms shall have the meanings set forth after each, and any other
term defined in this Note shall have the meaning set forth at the place defined:

1.1 “Business Day” means any day except a Saturday, Sunday or any other day on which commercial
banks in California are authorized or required by law to close.

1.2 “Fixed Rate Term” means a period commencing on a Business Day and continuing for 1, 2, 3, 6 or
12 months, as designated by Borrower, during which all or a portion of the outstanding principal
balance of this Note bears interest determined in relation to LIBOR; provided however, that no
Fixed Rate Term may be selected for a principal amount less than $5,000,000.00; and provided
further, that no Fixed Rate Term shall extend beyond the scheduled maturity date hereof. If any
Fixed Rate Term would end on a day which is not a Business Day, then such Fixed Rate Term shall be
extended to the next succeeding Business Day.

1.3 “LIBOR” means the rate per annum (rounded upward, if necessary, to the nearest whole 1/8 of 1%)
determined by dividing Base LIBOR by a percentage equal to 100% less any LIBOR Reserve Percentage.

(a) “Base LIBOR” means the rate per annum for United States dollar deposits quoted by Bank as the
Inter-Bank Market Offered Rate, with the understanding that such rate is quoted by Bank for the
purpose of calculating effective rates of interest for loans making
reference thereto, on the first
day of a Fixed Rate Term for delivery of funds on said date for a period of time approximately
equal to the number of days in such Fixed Rate Term and in an amount approximately equal to the
principal amount to which such Fixed Rate Term applies. Borrower understands and agrees that Bank
may base its quotation of the Inter-Bank Market Offered Rate upon such offers or other market
indicators of the Inter-Bank Market as Bank in its discretion deems appropriate including, but not
limited to, the rate offered for U.S. dollar deposits on the London
Inter-Bank Market.

(b) “LIBOR Reserve Percentage” means the reserve percentage prescribed by the Board of Governors of
the Federal Reserve System (or any successor) for “Eurocurrency Liabilities” (as defined in
Regulation D of the Federal Reserve Board, as amended), adjusted by Bank for expected changes in
such reserve percentage during the applicable Fixed Rate Term.

1.4 “Prime Rate” means at any time the rate of interest most recently announced within Bank at its
principal office as its Prime Rate, with the understanding that the Prime Rate is one of Bank’s
base rates and serves as the basis upon which effective rates of interest are calculated for those loans
making reference thereto, and is evidenced by the recording thereof after its announcement in such
internal publication or publications as Bank may designate.

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2. INTEREST:

2.1
Interest. The outstanding principal balance of this Note shall bear interest (computed
on the basis of a 360-day year, actual days elapsed) either (a) at a fluctuating rate per annum
.7500% below the Prime Rate in effect from time to time, or (b) at a fixed rate per annum
determined by Bank to be 2.100% above LIBOR in effect on the first day of the applicable Fixed Rate
Term. When interest is determined in relation to the Prime Rate, each change in the rate of
interest hereunder shall become effective on the date each Prime Rate change is announced within
Bank. With respect to each LIBOR selection option selected hereunder, Bank is hereby authorized to
note the date, principal amount, interest rate and Fixed Rate Term applicable thereto and any
payments made thereon on Bank’s books and records (either manually or by electronic entry) and/or
on any schedule attached to this Note, which notations shall be prima facie evidence of the
accuracy of the information noted.

2.2 Selection of Interest Rate Options. At any time any portion of this Notes bears
interest determined in relation to LIBOR, it may continued by Borrower at the end of the Fixed Rate
Term applicable thereto so that all or a portion thereof bears interest determined in relation to
the Prime Rate or to LIBOR for a new Fixed Rate Term designated by Borrower. At any time any
portion of this Note bears Interest determined in relation to the Prime Rate, Borrower may convert
all or a portion thereof so that it bears interest determined in relation to LIBOR for a Fixed Rate
Term designated by Borrower. At such time as Borrower requests an advance hereunder or wishes to
select a LIBOR option for all or a portion of the outstanding principal balance hereof, and at the
end of each Fixed Rate Term, Borrower shall give Bank notice specifying: (a) the interest rate
option selected by Borrower; (b) the principal amount subject thereto; and (c) for each LIBOR
selection, the length of the applicable Fixed Rate Term. Any such notice may be given by telephone
(or such other electronic method as Bank may permit) so long as, with respect to each LIBOR
selection, (i) if requested by Bank, Borrower provides to Bank written confirmation thereof not
later than 3 Business Days after such notice is given, and (ii) such notice is given to Bank prior
to 10:00 a.m. on the fist day of the Fixed Rate Term, or at a later time during any Business Day if
Bank, at its sole option but without obligation to do so, accepts Borrower’s notice and quotes a
fixed rate to Borrower. If Borrower does not immediately accept a fixed rate when quoted by Bank,
the quoted rate shall expire and any subsequent LIBOR request from
Borrower shall be subject to a redetermination by Bank of the
applicable fixed rate. If no specific designation of interest is made
at the time any advance is requested hereunder or at the end of any
Fixed Rate Term, Borrower shall be deemed to have
made a Prime Rate interest selection for such advance or the principal amount to which such Fixed
Rate Term applied.

2.3 Taxes and Regulatory Costs. Borrower shall pay to Bank immediately upon demand, in
addition to any other amounts due or to become due hereunder, any and all (a) withholdings,
interest equalization taxes, stamp taxes or other taxes (except income and franchise taxes) imposed
by any domestic or foreign governmental authority and related in any manner to LIBOR, and (b)
future, supplemental, emergency or other changes in the LIBOR Reserve Percentage, assessment rates
imposed by the Federal Deposit Insurance Corporation, or similar requirements or costs imposed by
any domestic or foreign governmental authority or resulting from compliance by Bank with any
request or directive (whether or not having the force of law) from any central bank or other
governmental authority and related in any manner to LIBOR to the extent they are not included in
the calculation of LIBOR. In determining which of the foregoing are
attributable to any LIBOR option available to Borrower hereunder, any reasonable allocation made by Bank among its operations shall be
conclusive and binding upon Borrower.

2.4
Payment of Interest. Interest accrued on this Note shall
be payable on the last day of
each month, commencing August 31, 2005.

2.5 Default Interest. From and after the maturity date of this Note, or such earlier date
as all principal owing hereunder becomes due and payable by acceleration or otherwise, the
outstanding principal balance of this Note shall bear interest until paid in full at an increased
rate per annum (computed on the basis of a 360-day year, actual days elapsed) equal to 4% above the
rate of interest from time to time applicable to this Note.

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3. BORROWING AND REPAYMENT:

3.1 Borrowing and Repayment. Borrower may from time to time during the term of this Note
borrow, partially or wholly repay its outstanding borrowings, and reborrow, subject to all of the
limitations, terms and conditions of this Note and of the Credit Agreement between Borrower and
Bank defined below; provided however, that the total outstanding borrowings under this Note shall
not at any time exceed the principal amount stated above. The unpaid principal balance of this
obligation at any time shall be the total amounts advanced hereunder by the holder hereof less the
amount of principal payments made hereon by or for any Borrower, which balance may be endorsed hereon
from time to time by the holder. The outstanding principal balance of this Note shall be due and
payable in full on June 30, 2007.

3.2 Advances. Advances hereunder, to the total amount of the principal sum available
hereunder, may be made by the holder at the oral or written request of (a) Eyal Waldman or Michael
Gray, any one acting alone, who are authorized to request advances and direct the disposition of
any advances until written notice of the revocation of such authority is received by the holder at
that office designated above, or (b) any person, with respect to advances deposited to the credit
of any deposit account of any Borrower, which advances, when so deposited, shall be conclusively
presumed to have been made to or for the benefit of each Borrower regardless of the fact that
persons other than those authorized to request advances may have authority to draw against such
account. The holder shall have no obligation to determine whether any person requesting an advance
is or has been authorized by any Borrower.

3.3. Application of Payments. Each payment made on this Note shall be credited first, to
any interest then due and second, to the outstanding principal balance hereof. All payments
credited to principal shall be applied first, to the outstanding principal balance of this Note
which bears interest determined in relation to the Prime Rate, if any, and second, to the
outstanding principal balance of this Note which bears interest determined in relation to LIBOR,
which such payments applied to the oldest Fixed Rate Term first.

4. PREPAYMENT:

4.1 Prime Rate. Borrower may repay principal on any portion of this Note which bears
interest determined in relation to the Prime Rate at any time, in any amount and without penalty.

4.2 LIBOR. Borrower may prepay principal on any portion of this Note which bears interest
determined in relation to LIBOR at any time and in the minimum amount of $500,000.00; provided
however, that if the outstanding principal balance of such portion of this Note is less than said
amount, the minimum prepayment amount shall be the entire outstanding principal balance thereof. In
consideration of Bank providing this prepayment option to Borrower; or if any such portion of this
Note shall become due and payable at any time prior to the last day of the Fixed Rate Term
applicable thereto by acceleration or otherwise, Borrower shall pay to Bank immediately upon demand
a fee which is the sum of the discounted monthly differences for each month from the month of
prepayment through the month in which such Fixed Rate Term matures, calculated as follows for each
such month:

(a) Determine the amount of interest which would have accrued each month on the amount
prepaid at the interest rate applicable to such amount had it remained outstanding until the last
day of the Fixed Rate Term applicable thereto.

(b) Subtract from the amount determined in (a) above the amount of interest which would have
accrued for the same month on the amount prepaid for the remaining term of such Fixed Rate Term at
LIBOR in effect on the date of prepayment for new loans made for such term and in a principal
amount equal to the amount prepaid.

(c) If the result obtained in (b) for any month is greater than zero, discount that difference by
LIBOR used in (b) above.

20050603057/Page 3

PROMNOTE.CA (04/05)

Revolving Line of Credit Note

05681, #5197138389

 

 

Each Borrower acknowledges that prepayment of such amount may result in Bank incurring
additional costs, expenses and/or liabilities, and that it is difficult to ascertain the full
extent of such costs, expenses and/or liabilities. Each Borrower, therefore, agrees to pay the
above-described prepayment fee and agrees that said amount represents a reasonable estimate of the
prepayment costs, expenses and/or liabilities of Bank. If Borrower fails to pay any prepayment fee
when due, the amount of such prepayment fee shall thereafter bear interest until paid at a rate per
annum 2.000% above the Prime Rate in effect from time to time
(computed on the basis of a 360-day
year, actual days elapsed). Each change in the rate of interest on any such past due prepayment fee
shall become effective on the date each Prime Rate change is announced within Bank.

5. EVENTS OF DEFAULT:

     This Note is made pursuant to and is subject to the terms and conditions of that certain
Credit Agreement between Borrower and Bank dated as of August 16, 2005, as amended from time to
time (the “Credit Agreement”). Any default in the payment or performance of any obligation under
this Note, or any defined event of default under the Credit Agreement, shall constitute an “Event
of Default” under this Note.

6. MISCELLANEOUS:

6.1 Remedies. Upon the occurrence of any Event of Default, the holder of this Note, at
the holder’s option, may declare all sums of principal and interest outstanding hereunder to be
immediately due and payable without presentment, demand, notice of nonperformance, notice of
protest, protest or notice of dishonor, all of which are expressly waived by each Borrower,
and the obligation, if any, of the holder to extend any further credit hereunder shall
immediately cease and terminate. Each Borrower shall pay to the holder immediately upon the
demand the full amount of all payments, advances, charges, costs and expenses, including
reasonable attorneys’ fees (to include outside counsel fees and all allocated costs of the
holder’s in-house counsel), expended or incurred by the holder in connection with the
enforcement of the holder’s rights and/or the collection of any amounts which become due to
the holder under this Note, and the prosecution or defense of any action in any way related to
this Note, including without limitation, any action for declaratory relief, whether incurred
at the trial or appellate level, in an arbitration proceeding or otherwise, and including any
of the foregoing incurred in connection with any bankruptcy proceeding (including without
limitation, any adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to any Borrower or any other person or entity.

6.2 Obligations Joint and Several. Should more than one person or entity sign this Note
as a Borrower, the obligations of each such Borrower shall be joint and several.

6.3 Governing Law. This Note shall be governed by and construed in accordance with the
laws of the State of California.

IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first written above.

Mellanox Technologies, Inc.

	 	 	 	 	 
	By:

	 	/s/ Eyal Waldman
	 	 
	 

	 	 	 	 
	 

	 	Eyal Waldman, President & Chief Executive Officer	 	 
	 
	 	 	 	 
	By:

	 	/s/ Michael Gray	 	 
	 

	 	 	 	 
	 

	 	Michael Gray, Chief Financial Officer	 	 

	 	 	 
	PROMNOTE.CA
(04/05)

	 	                                          20050603057
/ Page 4
	Revolving Line of Credit Note
	 	 
	05681,#5197138389
	 	 

 

ADDENDUM TO PROMISSORY NOTE

     THIS ADDENDUM is attached to and made a part of that certain promissory note executed by
MELLANOX TECHNOLOGIES, INC. (“Borrower”) and payable to WELLS FARGO BANK, NATIONAL ASSOCIATION
(“Bank”), or order, dated as of August 16, 2005, in the principal amount of Five Million Dollars
($5,000,000.00) (the “Note).

     The first sentence of Section 2.1 of the Note is hereby amended to read in its entirety as
follows:

The outstanding principal balance of this Note shall bear interest (computed on the basis of a
360-day year, actual day elapsed), as follows: (1) at any time the outstanding principal balance is
less than or equal to $2,000,000.00, either (a) at a fluctuating rate per annum .7500% below the
Prime Rate in effect from time to time, or (b) at a fixed rate per annum determined by Bank to be
2.1000% above LIBOR in effect on the first day of the applicable Fixed Rate Term, and (2) at any
time the outstanding principal balance is greater than $2,000,000.00, either (x) at a fluctuating
rate per annum 1.7500% below the Prime Rate in effect from time to time, or (y) at a fixed rate per
annum determined by Bank to be 1.100% above LIBOR in effect on the first day of the applicable
Fixed Rate Term.

     IN WITNESS WHEREOF, this Addendum has been executed as of the same date as the Note.

	 	 	 
	Mellanox Technologies, Inc.
	 
	 	 
	By:

	 	/s/ Eyal Waldman
	 

	 	 
	 

	 	Eyal Waldman, President & Chief Executive Officer
	 
	 	 
	By:

	 	/s/ Michael Gray
	 

	 	 
	 

	 	Michael Gray, Chief Financial OfficerTHIS NOTE IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY.  THIS NOTE
IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS
A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE
REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

Unless
this Note is presented by an authorized representative of The Depository Trust
Company, a New York corporation (55 Water Street, New York, New York) ("DTC"),
to the Corporation or its agent for registration of transfer, exchange or
payment, and this Note is registered in the name of Cede & Co. or such
other name as requested by an authorized representative of DTC, and unless any
payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.

THIS
NOTE IS NOT A SAVINGS ACCOUNT OR A DEPOSIT, IS NOT AN OBLIGATION OF OR
GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF BANK OF AMERICA
CORPORATION, AND IS NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR
ANY OTHER GOVERNMENTAL AGENCY.  

REGISTERED                                                                                                 $500,000,000

NUMBER R-1                                                                                                CUSIP:
060505 CP 7    

ORIGINAL ISSUE DATE:  September
27, 2006                                                                                              

MATURITY DATE:  September 25,
2009

BASE RATE:  Three-Month LIBOR                                                                                

INDEX MATURITY: Three Months                                                                                                               

SPREAD:  From Original Issue
Date through March 27, 2008 = 0.01%

           From March
28, 2008 through the Maturity Date or earlier redemption date = 0.12%                                          

INTEREST PAYMENT DATES: March 28, June 28, September 28
and December 28 of each year

INTEREST RESET DATES: March 28,
June 28, September 28 and December 28 of each year

INTEREST DETERMINATION DATES: 
Two London banking days prior to each Interest Payment Date

RECORD DATES:  One business
day prior to each Interest Payment Date for book-entry only notes; 

          March 15,
June 15, September 15 and December 15 of each year for notes not held in
book-entry only form           

REDEMPTION DATES:  March 28, 2008 and each Interest
Payment Date thereafter                                                            

INITIAL REDEMPTION
PERCENTAGE:  100%                                                            

CALCULATION AGENT:  The Bank of New York

 

BANK OF AMERICA
CORPORATION

CALLABLE THREE-MONTH LIBOR 

SENIOR NOTES, DUE SEPTEMBER 2009

BANK OF
AMERICA CORPORATION, a Delaware corporation (herein called the "Corporation,"
which term includes any successor corporation under the Indenture referred to
on the reverse hereof), for value received, hereby promises to pay to CEDE
& CO., or registered assigns, the principal sum of FIVE HUNDRED MILLION
DOLLARS ($500,000,000) on September 25, 2009 (except to the extent redeemed or
repaid prior to that date).  The Corporation will pay interest on such
principal amount for each quarterly interest period from the Original Issue
Date through March 27, 2008 at a floating rate equal to Three-Month LIBOR (as
defined below) plus the Spread of 0.01%.  The Corporation will pay interest on
such principal amount for each quarterly interest period from March 28, 2008 to
the Maturity Date or earlier redemption date at a floating rate equal to
Three-Month LIBOR plus the Spread of 0.12%.  Interest shall be payable
commencing on the first Interest Payment Date succeeding the Original Issue
Date and on each Interest Payment Date thereafter and on the Maturity Date.  If
the Corporation shall

 

 default in the payment of interest due on an Interest
Payment Date, then this Note shall bear interest from the next preceding
Interest Payment Date for which interest has been paid, or, if no interest has
been paid on the Notes, from the Original Issue Date.  

Interest on
this Note will accrue from the Original Issue Date until the principal amount
is paid or duly provided for and will be computed as described in this Note. 
Interest payable on this Note on any Interest Payment Date or on the Maturity
Date will include interest accrued from, and including, the preceding Interest
Payment Date for which interest has been paid or duly provided for (or from,
and including, the Original Issue Date if no interest has been paid or duly
provided for, as the case may be) to, but excluding, such Interest Payment Date
or Maturity Date, as the case may be.  If any Interest Payment Date falls on a
day that is not a Business Day (as defined below), such Interest Payment Date
shall be the following day that is a Business Day (and no interest will accrue
as a result of that postponement), except if such next Business Day falls in
the next calendar month, such Interest Payment Date will be the preceding day
that is a Business Day; and if the Maturity Date falls on a day that is not a
Business Day, principal or interest payable with respect to such Maturity Date
will be paid on the next Business Day with the same force and effect as if made
on such Maturity Date, and no additional interest shall accrue for the period
from and after such Maturity Date.  Interest will be calculated using the
actual number of days in an interest period and a 360-day year. 

An interest
period is the period beginning on the Original Issue Date or an Interest
Payment Date and ending on the date immediately preceding the next following
Interest Payment Date or Maturity Date, as the case may be.  The interest rate
on this Note in effect for each interest period will be determined by the
Calculation Agent using Three-Month LIBOR on the Interest Determination Date
for that interest period.  The Calculation Agent will add Three-Month LIBOR as
determined on the Interest Determination Date to the applicable Spread to
calculate the interest rate in effect for the applicable interest period.  

"Three-Month LIBOR"
means the London interbank offered rate for deposits of at least $1,000,000 in
U.S. dollars having an index maturity of three months, as that rate appears on
Telerate page 3750 at approximately 11:00 a.m., London time, on the Interest
Determination Date.  A "London banking day" is any day on which dealings in
deposits in U.S. dollars are transacted in the London interbank market.

If no offered
rate appears on Telerate page 3750 on an Interest Determination Date at
approximately 11:00 a.m., London time, then the Calculation Agent (after
consultation with the Corporation) will select four major banks in the London
interbank market and will request each of their principal London offices to
provide a quotation of the rate at which three-month deposits in U.S. dollars
in amounts of at least $1,000,000 are offered by it to prime banks in the
London interbank market, on that date and at that time, that is representative
of single transactions at that time.  If at least two quotations are provided, Three-Month
LIBOR will be the arithmetic average of the quotations provided.  Otherwise,
the Calculation Agent will select three major banks in New York City and shall
request each of them to provide a quotation of the rate offered by it at
approximately 11:00 a.m., New York City time, on the Interest Determination
Date for loans in U.S. dollars to leading European banks having an index
maturity of three months for the applicable interest period in an amount of at
least $1,000,000 that is representative of single transactions at that time. 
If three quotations are provided, Three-Month LIBOR will be the

                                                                                    
2

 arithmetic
average of the quotations provided.  Otherwise, Three-Month LIBOR for the next
interest period will be equal to Three-Month LIBOR in effect for the then
current interest period.

The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will be paid to the person in whose name this Note (or one or more
predecessor Notes evidencing all or a portion of the same debt as this Note) is
registered at the close of business on the Record Date for such Interest
Payment Date, whether or not a Business Day.  "Business Day" means any weekday
that is not a legal holiday in New York, New York or Charlotte, North Carolina
and is not a day on which banking institutions in those cities are authorized
or required by law or regulation to be closed and that also is a London banking
day.  

The principal
of and interest on this Note are payable in immediately available funds in such
coin or currency of the United States as at the time of payment is legal tender
for payment of public and private debts, at the office or agency of the
Corporation in New York or such other places that the Corporation shall
designate as provided in such Indenture; provided, however, that interest may
be paid, at the option of the Corporation, by check mailed to the person
entitled thereto at his address last appearing on the registry books of the
Corporation relating to the Notes.  Notwithstanding the preceding sentence,
payments of principal of and interest payable on the Maturity Date will be made
by wire transfer of immediately available funds to a designated account
maintained in the United States upon (i) receipt of written notice by the
Issuing and Paying Agent (as described on the reverse hereof) from the
registered holder hereof not less than one Business Day prior to the due date
of such principal and (ii) presentation of this Note to the Issuing and Paying
Agent, at The Bank of New York, 101 Barclay Street, New York, New York 10286. 
Any interest not punctually paid or duly provided for shall be payable as
provided in such Indenture.   

Reference is
made to the further provisions of this Note set forth on the reverse hereof,
which shall have the same effect as though fully set forth at this place.

Unless the
certificate of authentication hereon has been executed by the Trustee or by an
authenticating agent on behalf of the Trustee by manual signature, this Note
shall not be entitled to any benefit under such Indenture or be valid or
obligatory for any purpose.

                                                                                                  
3

 

IN WITNESS
WHEREOF, the Corporation has caused this Note to be duly executed, by manual or
facsimile signature, under its corporate seal or a facsimile thereof.

BANK OF
AMERICA CORPORATION

By:
_______________________________

[SEAL]                                                            Title:
Senior Vice President

ATTEST:

By:______________________

   Assistant Secretary

                                                                                       
4

CERTIFICATE
OF AUTHENTICATION

This is one of
the Securities of the series designated therein referred to in the
within-mentioned Indenture.

Dated:  September 27, 2006

THE BANK OF NEW YORK, 

                                                                        as Trustee

By:__________________________

                           Authorized Signatory

               
5

[Reverse
of Note]

BANK OF AMERICA CORPORATION

Callable THREE-MONTH LIBOR

SENIOR NOTES, DUE SEPTEMBER 2009

This Note is
one of a duly authorized series of Securities of the Corporation unlimited in
aggregate principal amount issued and to be issued under an Indenture dated
January 1, 1995 (herein called the "Indenture"), between the Corporation
(successor to NationsBank Corporation) and The Bank of New York, as Trustee
(successor in interest to U.S. Bank Trust National Association, as successor
trustee to BankAmerica National Trust Company, herein called the "Trustee,"
which term includes any successor trustee under the Indenture), as supplemented
by a First Supplemental Indenture dated September 18, 1998, a Second
Supplemental Indenture dated May 7, 2001, a Third Supplemental Indenture
dated July 28, 2004 and a Fourth Supplemental Indenture dated April 28, 2006,
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights thereunder of the Corporation,
the Trustee and the holders of the Notes (as defined herein), and the terms
upon which the Notes are, and are to be, authenticated and delivered.  The
series of which this Note is a part also is designated as the Corporation's
Callable Three-Month LIBOR Senior Notes, due September 2009 (herein called the
"Notes"), initially in the principal amount of $1,750,000,000.  The amount of
Notes of this series may be increased by the Corporation in the future.  The
Trustee initially shall act as Security Registrar and Authenticating and Issuing
and Paying Agent in connection with the Notes.  

The Notes are
not subject to any sinking fund.  

            The provisions of Section 14.02 and Section 14.03 of the
Indenture do not apply the Notes.

            Subject to the provisions of Article III of the
Indenture, all, but not less than all, of the Notes of this series may be
redeemed at the option of the Corporation on March 28, 2008 and on any subsequent
Interest Payment Date, by giving not less than 15 nor more than 60 calendar
days' notice to the Trustee and the holders of the Notes.

            Prior to the publication of any notice of redemption,
the Corporation shall deliver to the Trustee a certificate signed by the Chief
Financial Officer or a Senior Vice President of the Corporation stating that
the Corporation is entitled to effect such redemption and setting forth a
statement of facts showing the conditions precedent to the right to redeem.

           Notes so redeemed will be redeemed at 100% of their
principal amount together with interest accrued up to, but excluding, the date
of redemption.

           As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Note may be registered on
the Security Register or registry books of the Corporation relating to the
Notes, upon surrender of this Note for registration of transfer at the office
or agency of the Corporation designated by it pursuant to the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Corporation and

                                                                                             
6

 the Trustee or the Security Registrar duly
executed by the registered holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Notes, of authorized denominations and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees.

           No service charge will be made for any such registration
of transfer or exchange, but the Corporation may require payment of a sum
sufficient to cover any tax, assessment or other governmental charge payable in
connection therewith.

          Prior to due presentment for registration of transfer of
this Note, the Corporation, the Trustee, the Issuing and Paying Agent, and any
agent of the Corporation may treat the person in whose name this Note is
registered as the absolute owner hereof for the purpose of receiving payment as
herein provided and for all other purposes, whether or not this Note be
overdue, and neither the Corporation, the Trustee, the Issuing and Paying
Agent, nor any such agent of the Corporation shall be affected by notice to the
contrary.

         The Notes are issuable only as registered notes without
coupons in denominations of $5,000 and whole multiples of $5,000.  As provided
in the Indenture, and subject to certain limitations therein set forth, the
Notes are exchangeable for a like aggregate principal amount of notes of
different authorized denominations, as requested by the holder surrendering the
same.

          If an Event of Default (defined in the Indenture as (i)
the Corporation's failure to pay the principal of (or premium, if any, on) any
Notes when due, or to pay interest on the Notes within 30 days after the same
becomes due, (ii) the Corporation's breach of its other covenants contained in
this Note or in the Indenture, which breach is not cured within 90 days after
written notice by the Trustee or the holders of at least 25% in outstanding
principal amount of all Securities issued under the Indenture and affected
thereby, and (iii) certain events involving the bankruptcy, insolvency or
liquidation of the Corporation) shall occur with respect to the Notes, the
principal of all the Notes may be declared due and payable in the manner and
with the effect provided in the Indenture.

The Indenture
permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Corporation and the
rights of the holders of the Notes under the Indenture at any time by the
Corporation with the consent of the holders of not less than 662⁄3% in
aggregate principal amount of the Notes then outstanding and all other
Securities then outstanding under the Indenture and affected by such amendment
and modification.  The Indenture also contains provisions permitting the
holders of a majority in aggregate principal amount of the Notes then
outstanding and all other Securities then outstanding under the Indenture and
affected thereby, on behalf of the holders of all such Securities, to waive
compliance by the Corporation with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences.  Any such
consent or waiver by the holder of this Note shall be conclusive and binding
upon such holder and upon all future holders of this Note and of any Note
issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Note.

                                                                                       
7

 

No reference
herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Corporation, which is absolute and
unconditional, to pay the principal of and interest on this Note at the times,
place, and rate, and in the coin or currency, herein prescribed.

No recourse
shall be had for the payment of the principal of or the interest on this Note,
or for any claim based hereon, or otherwise in respect hereof, or based on or
in respect of the Indenture or any indenture supplemental thereto, against any
incorporator, stockholder, officer, or director, as such, past, present, or
future, of the Corporation or any 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, all such liability being, by the
acceptance hereof and as part of the consideration for issue hereof, expressly
waived and released.

            The Notes of this series shall be dated the date of
their authentication.

            All terms used in this Note which are not defined
herein, but are defined in the Indenture shall have the meanings assigned to
them in the Indenture.

If the Notes
are to be issued and outstanding pursuant to a book-entry system, the following
paragraph is applicable: The Notes are being issued by means of a book-entry
system with no physical distribution of certificates to be made except as
provided in the Indenture.  The book-entry system maintained by DTC will
evidence ownership of the Notes, with transfers of ownership effected on the
records of DTC and its participants pursuant to rules and procedures
established by DTC and its participants.  The Corporation will recognize Cede
& Co., as nominee of DTC, while the registered holder of the Notes, as the
owner of the Notes for all purposes, including payment of principal, premium,
if any, and interest, notices, and voting.  Transfers of the principal,
premium, if any, and interest to beneficial owners of the Notes by participants
of DTC will be the responsibility of such participants and other nominees of
such beneficial owners.  So long as the book-entry system is in effect, the
selection of any Notes to be redeemed will be determined by DTC pursuant to
rules and procedures established by DTC and its participants.  The Corporation
will not be responsible or liable of such transfers or payments or for
maintaining, supervising, or reviewing the records maintained by DTC, its
participants, or persons acting through such participants.

                                                                                
8

ABBREVIATIONS

The following
abbreviations, when used in the inscription on the face of the within Note
shall be construed as though they were written out in full according to
applicable laws or regulations:

TEN COM‐‐   as tenants
in common

                        TEN ENT‐‐     as
tenants by the entireties

                        JT TEN‐‐         as
joint tenants with right of survivorship and not as tenants in common

                        UNIF GIFT MIN ACT‐‐............................Custodian..............................

                                                                       (Cust)                                 
(Minor)

Under Uniform Gifts to Minors Act

.........................................................

                                                                      (State)

Additional
abbreviations may also be used though not in the above list.

__________________________________

ASSIGNMENT

FOR VALUE
RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

[PLEASE PRINT OR
TYPEWRITE NAME AND ADDRESS

INCLUDING
ZIP CODE, OF ASSIGNEE]

_____________________________________________________________________________

_____________________________________________________________________________

_____________________________________________________________________________

Please Insert Social Security or Other 

               Identifying
Number of Assignee: ______________________________

the within Note and all rights
thereunder, hereby irrevocably constituting and appointing
_____________________________________ Attorney to transfer said Note on the
books of the Corporation, with full power of substitution in the premises.

Dated: _______________________               _________________________________________

NOTICE: The signature to this assignment must correspond
with the name as it appears upon the face of the within Note in every
particular, without alteration or enlargement or any change whatever and must
be guaranteed.

                                                                                              
9

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