Document:

Exhibit 4.4

 

 

GLOBALSTAR,
INC.

 

 

AND

 

 

U.S.
BANK, NATIONAL ASSOCIATION

 

 

Trustee

 

 

________________________

 

 

INDENTURE

 

 

DATED
AS OF 
               ,
20

 

________________________

 

 

SUBORDINATED
DEBT SECURITIES

 

 

 

 

GLOBALSTAR,
INC.

RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939, 

AS AMENDED, AND INDENTURE, DATED AS
OF               
          , 20

 

	
  TRUST INDENTURE ACT SECTION

  	
   

  	
  INDENTURE SECTION

  
	
   

  	
   

  	
   

  
	
  Section 310(a)(1)

  	
   

  	
  6.9

  
	
   

  	
  (a)(2)

  	
   

  	
  6.9

  
	
   

  	
  (a)(3)

  	
   

  	
  Not
  Applicable

  
	
   

  	
  (a)(4)

  	
   

  	
  Not
  Applicable

  
	
   

  	
  (a)(5)

  	
   

  	
  6.9

  
	
   

  	
  (b)

  	
   

  	
  6.8

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 311

  	
   

  	
  6.13

  
	
   

  	
   

  	
   

  
	
  Section 312(a)

  	
   

  	
  7.1,
  7.2(a)

  
	
   

  	
  (b)

  	
   

  	
  7.2(b)

  
	
   

  	
  (c)

  	
   

  	
  7.2(c)

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 313(a)

  	
   

  	
  7.3

  
	
   

  	
  (b)

  	
   

  	
  *

  
	
   

  	
  (c)

  	
   

  	
  *

  
	
   

  	
  (d)

  	
   

  	
  7.3

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 314(a)

  	
   

  	
  7.4

  
	
   

  	
  (a)(4)

  	
   

  	
  10.5

  
	
   

  	
  (b)

  	
   

  	
  Not
  Applicable

  
	
   

  	
  (c)(1)

  	
   

  	
  1.3

  
	
   

  	
  (c)(2)

  	
   

  	
  1.3

  
	
   

  	
  (c)(3)

  	
   

  	
  Not
  Applicable

  
	
   

  	
  (d)

  	
   

  	
  Not
  Applicable

  
	
   

  	
  (e)

  	
   

  	
  1.3

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 315(a)

  	
   

  	
  6.1(a)

  
	
   

  	
  (b)

  	
   

  	
  6.2

  
	
   

  	
  (c)

  	
   

  	
  6.1(b)

  
	
   

  	
  (d)

  	
   

  	
  6.1(c)

  
	
   

  	
  (d)(1)

  	
   

  	
  6.1(a)(1)

  
	
   

  	
  (d)(2)

  	
   

  	
  6.1(c)(2)

  
	
   

  	
  (d)(3)

  	
   

  	
  6.1(c)(3)

  
	
   

  	
  (e)

  	
   

  	
  5.14

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 316(a)

  	
   

  	
  1.1,
  1.2

  
	
   

  	
  (a)(1)(A)

  	
   

  	
  5.2,
  5.12

  
	
   

  	
  (a)(1)(B)

  	
   

  	
  5.13

  
	
   

  	
  (a)(2)

  	
   

  	
  Not
  Applicable

  
	
   

  	
  (b)

  	
   

  	
  5.8

  
	
   

  	
  (c)

  	
   

  	
  1.5(f)

  

 

 

	
  TRUST INDENTURE ACT SECTION

  	
   

  	
  INDENTURE SECTION

  
	
  Section 317(a)(1)

  	
   

  	
  5.3

  
	
   

  	
  (a)(2)

  	
   

  	
  5.4

  
	
   

  	
  (b)

  	
   

  	
  10.3

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 318(a)

  	
   

  	
  1.8

  

 

NOTE: This reconciliation and tie shall not,
for any purpose, be deemed to be a part of the Indenture.

 

*Deemed included pursuant to Section 318(c) of
the Trust Indenture Act

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  PARTIES

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  RECITALS OF THE COMPANY:

  	
   

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF
  GENERAL APPLICATION

  	
  1

  
	
  Section 1.1.

  	
  Definitions

  	
  1

  
	
  Section 1.2.

  	
  Incorporation by Reference of Trust
  Indenture Act

  	
  8

  
	
  Section 1.3.

  	
  Compliance Certificates and Opinions

  	
  9

  
	
  Section 1.4.

  	
  Form of Documents Delivered to Trustee

  	
  9

  
	
  Section 1.5.

  	
  Acts of Holders; Record Dates

  	
  10

  
	
  Section 1.6.

  	
  Notices, Etc, to Trustee and Company

  	
  11

  
	
  Section 1.7.

  	
  Notice to Holders; Waiver

  	
  12

  
	
  Section 1.8.

  	
  Conflict with Trust Indenture Act

  	
  12

  
	
  Section 1.9.

  	
  Effect of Headings and Table of Contents

  	
  12

  
	
  Section 1.10.

  	
  Successors and Assigns

  	
  12

  
	
  Section 1.11.

  	
  Separability Clause

  	
  13

  
	
  Section 1.12.

  	
  Benefits of Indenture

  	
  13

  
	
  Section 1.13.

  	
  Governing Law

  	
  13

  
	
  Section 1.14.

  	
  Legal Holidays

  	
  13

  
	
  Section 1.15.

  	
  Securities in a Composite Currency, Currency
  Unit or Foreign Currency

  	
  13

  
	
  Section 1.16.

  	
  Payment in Required Currency; Judgment
  Currency

  	
  14

  
	
  Section 1.17.

  	
  Language of Notices, Etc

  	
  14

  
	
  Section 1.18.

  	
  Incorporators, Shareholders, Officers and
  Directors of the Company Exempt from Individual Liability

  	
  14

  
	
   

  	
   

  
	
  ARTICLE TWO SECURITY FORMS

  	
  15

  
	
  Section 2.1.

  	
  Forms Generally

  	
  15

  
	
  Section 2.2.

  	
  Form of Face of Security

  	
  15

  
	
  Section 2.3.

  	
  Form of Reverse of Security

  	
  18

  
	
  Section 2.4.

  	
  Global Securities

  	
  22

  
	
  Section 2.5.

  	
  Form of Trustee’s Certificate of
  Authentication

  	
  23

  
	
   

  	
   

  
	
  ARTICLE THREE THE SECURITIES

  	
  23

  
	
  Section 3.1.

  	
  Amount Unlimited; Issuable in Series

  	
  23

  
	
  Section 3.2.

  	
  Denominations

  	
  26

  
	
  Section 3.3.

  	
  Execution, Authentication, Delivery and
  Dating

  	
  26

  
	
  Section 3.4.

  	
  Temporary Securities

  	
  28

  
	
  Section 3.5.

  	
  Registration, Registration of Transfer and
  Exchange

  	
  28

  
	
  Section 3.6.

  	
  Mutilated, Destroyed, Lost and Stolen
  Securities

  	
  31

  
	
  Section 3.7.

  	
  Payment of Interest; Interest Rights
  Preserved

  	
  31

  
	
  Section 3.8.

  	
  Persons Deemed Owners

  	
  32

  
	
  Section 3.9.

  	
  Cancellation

  	
  33

  
	
  Section 3.10.

  	
  Computation of Interest

  	
  33

  
	
  Section 3.11.

  	
  CUSIP or CINS Numbers

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE FOUR SATISFACTION AND DISCHARGE

  	
  34

  
						

 

i

 

	
  Section 4.1.

  	
  Satisfaction and Discharge of Indenture

  	
  34

  
	
  Section 4.2.

  	
  Application of Trust Money

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE FIVE REMEDIES

  	
  35

  
	
  Section 5.1.

  	
  Events of Default

  	
  35

  
	
  Section 5.2.

  	
  Acceleration of Maturity; Rescission and
  Annulment

  	
  36

  
	
  Section 5.3.

  	
  Collection of Indebtedness and Suits for
  Enforcement by Trustee

  	
  37

  
	
  Section 5.4.

  	
  Trustee May File Proofs of Claim

  	
  38

  
	
  Section 5.5.

  	
  Trustee May Enforce Claims Without
  Possession of Securities

  	
  39

  
	
  Section 5.6.

  	
  Application of Money Collected

  	
  39

  
	
  Section 5.7.

  	
  Limitation on Suits

  	
  39

  
	
  Section 5.8.

  	
  Unconditional Right of Holders to Receive Principal,
  Premium and Interest

  	
  40

  
	
  Section 5.9.

  	
  Restoration of Rights and Remedies

  	
  40

  
	
  Section 5.10.

  	
  Rights and Remedies Cumulative

  	
  40

  
	
  Section 5.11.

  	
  Delay or Omission Not Waiver

  	
  40

  
	
  Section 5.12.

  	
  Control by Holders

  	
  41

  
	
  Section 5.13.

  	
  Waiver of Past Defaults

  	
  41

  
	
  Section 5.14.

  	
  Undertaking for Costs

  	
  41

  
	
  Section 5.15.

  	
  Waiver of Stay or Extension Laws

  	
  42

  
	
   

  	
   

  	
   

  
	
  ARTICLE SIX THE TRUSTEE

  	
  42

  
	
  Section 6.1.

  	
  Certain Duties and Responsibilities

  	
  42

  
	
  Section 6.2.

  	
  Notice of Defaults

  	
  43

  
	
  Section 6.3.

  	
  Certain Rights of Trustee

  	
  43

  
	
  Section 6.4.

  	
  Not Responsible for Recitals or Issuance of
  Securities

  	
  45

  
	
  Section 6.5.

  	
  May Hold Securities

  	
  45

  
	
  Section 6.6.

  	
  Money Held in Trust

  	
  45

  
	
  Section 6.7.

  	
  Compensation and Reimbursement

  	
  45

  
	
  Section 6.8.

  	
  Disqualification; Conflicting Interests

  	
  46

  
	
  Section 6.9.

  	
  Corporate Trustee Required; Eligibility

  	
  46

  
	
  Section 6.10.

  	
  Resignation and Removal; Appointment of
  Successor

  	
  46

  
	
  Section 6.11.

  	
  Acceptance of Appointment by Successor

  	
  48

  
	
  Section 6.12.

  	
  Merger, Conversion, Consolidation or
  Succession to Business

  	
  49

  
	
  Section 6.13.

  	
  Preferential Collection of Claims Against
  Company

  	
  49

  
	
  Section 6.14.

  	
  Appointment of Authenticating Agent

  	
  50

  
	
   

  	
   

  	
   

  
	
  ARTICLE SEVEN HOLDERS’ LISTS AND REPORTS BY
  TRUSTEE AND COMPANY

  	
  51

  
	
  Section 7.1.

  	
  Company to Furnish Trustee Names and
  Addresses of Holders

  	
  51

  
	
  Section 7.2.

  	
  Preservation of Information; Communications
  to Holders

  	
  51

  
	
  Section 7.3.

  	
  Reports by Trustee

  	
  52

  
	
  Section 7.4.

  	
  Reports by Company

  	
  53

  
	
   

  	
   

  	
   

  
	
  ARTICLE EIGHT CONSOLIDATION, AMALGAMATION, MERGER
  AND SALE

  	
  53

  
	
  Section 8.1.

  	
  Company May Consolidate, Etc, Only on
  Certain Terms

  	
  53

  
	
  Section 8.2.

  	
  Successor Substituted

  	
  54

  
	
   

  	
   

  	
   

  
	
  ARTICLE NINE AMENDMENT, SUPPLEMENT AND WAIVER

  	
  54

  
	
  Section 9.1.

  	
  Without Consent of Holders

  	
  54

  
	
  Section 9.2.

  	
  With Consent of Holders

  	
  56

  
	
  Section 9.3.

  	
  Execution of Supplemental Indentures

  	
  58

  
	
  Section 9.4.

  	
  Effect of Supplemental Indentures

  	
  58

  

 

ii

 

	
  Section 9.5.

  	
  Conformity with Trust Indenture Act

  	
  58

  
	
  Section 9.6.

  	
  Reference in Securities to Supplemental
  Indentures

  	
  59

  
	
   

  	
   

  	
   

  
	
  ARTICLE TEN COVENANTS 

  	
  59

  
	
  Section 10.1.

  	
  Payment of Principal, Premium and Interest

  	
  59

  
	
  Section 10.2.

  	
  Maintenance of Office or Agency

  	
  59

  
	
  Section 10.3.

  	
  Money for Securities Payments to be Held in
  Trust

  	
  60

  
	
  Section 10.4.

  	
  Existence

  	
  61

  
	
  Section 10.5.

  	
  Statement by Officers as to Default

  	
  61

  
	
  Section 10.6.

  	
  Additional Amounts

  	
  61

  
	
   

  	
   

  	
   

  
	
  ARTICLE ELEVEN REDEMPTION OF SECURITIES 

  	
  62

  
	
  Section 11.1.

  	
  Applicability of Article

  	
  62

  
	
  Section 11.2.

  	
  Election to Redeem; Notice to Trustee

  	
  62

  
	
  Section 11.3.

  	
  Selection by Trustee of Securities to be
  Redeemed

  	
  62

  
	
  Section 11.4.

  	
  Notice of Redemption

  	
  63

  
	
  Section 11.5.

  	
  Deposit of Redemption Price

  	
  64

  
	
  Section 11.6.

  	
  Securities Payable on Redemption Date

  	
  64

  
	
  Section 11.7.

  	
  Securities Redeemed in Part

  	
  64

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWELVE SINKING FUNDS 

  	
  64

  
	
   

  	
   

  	
   

  
	
  Section 12.1.

  	
  Applicability of Article

  	
  64

  
	
  Section 12.2.

  	
  Satisfaction of Sinking Fund Payments with
  Securities

  	
  65

  
	
  Section 12.3.

  	
  Redemption of Securities for Sinking Fund

  	
  65

  
	
   

  	
   

  	
   

  
	
  ARTICLE THIRTEEN DEFEASANCE

  	
  65

  
	
  Section 13.1.

  	
  Option to Effect Legal Defeasance or
  Covenant Defeasance

  	
  65

  
	
  Section 13.2.

  	
  Legal Defeasance and Discharge

  	
  66

  
	
  Section 13.3.

  	
  Covenant Defeasance

  	
  66

  
	
  Section 13.4.

  	
  Conditions to Legal or Covenant Defeasance

  	
  67

  
	
  Section 13.5.

  	
  Deposited Money and U.S. Government
  Obligations to be Held in Trust, Other Miscellaneous Provisions

  	
  68

  
	
  Section 13.6.

  	
  Repayment

  	
  69

  
	
  Section 13.7.

  	
  Reinstatement

  	
  69

  
	
   

  	
   

  	
   

  
	
  ARTICLE FOURTEEN SUBORDINATION OF SECURITIES

  	
  69

  
	
  Section 14.1.

  	
  Securities Subordinated to Senior Debt

  	
  69

  
	
  Section 14.2.

  	
  No Payment on Securities in Certain
  Circumstances

  	
  70

  
	
  Section 14.3.

  	
  Payment over Proceeds upon Dissolution, Etc

  	
  71

  
	
  Section 14.4.

  	
  Subrogation

  	
  72

  
	
  Section 14.5.

  	
  Obligations of Company Unconditional

  	
  73

  
	
  Section 14.6.

  	
  Notice to Trustee

  	
  73

  
	
  Section 14.7.

  	
  Reliance on Judicial Order or Certificate
  of Liquidating Agent

  	
  74

  
	
  Section 14.8.

  	
  Trustee’s Relation to Senior Debt

  	
  74

  
	
  Section 14.9.

  	
  Subordination Rights Not Impaired by Acts
  or Omissions of the Company or Holders of Senior Debt

  	
  75

  
	
  Section 14.10.

  	
  Holders Authorize Trustee to Effectuate
  Subordination of Securities

  	
  75

  
	
  Section 14.11.

  	
  Not to Prevent Events of Default

  	
  75

  
	
  Section 14.12.

  	
  Trustee’s Compensation Not Prejudiced

  	
  75

  
	
  Section 14.13.

  	
  No Waiver of Subordination Provisions

  	
  76

  
	
  Section 14.14.

  	
  Payments May Be Paid Prior to
  Dissolution

  	
  76

  

 

iii

 

	
  Section 14.15.

  	
  Trust Moneys Not Subordinated

  	
  76

  

 

iv

 

PARTIES

 

INDENTURE, dated as of                  ,
20      , between GLOBALSTAR, INC., a corporation
duly organized and existing under the laws of the State of Delaware (herein
called the “Company”) and U.S. BANK, NATIONAL ASSOCIATION, a banking corporation
organized under the laws of the United States, as trustee (the “Trustee”).

 

RECITALS OF THE COMPANY:

 

The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time to time of its
unsecured subordinated debentures, notes or other evidences of indebtedness
(herein called the “Securities”), to be issued in one or more series as
provided in this Indenture.

 

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

 

This Indenture is subject to the provisions of the
Trust Indenture Act that are required to be a part of this Indenture and, to
the extent applicable, shall be governed by such provisions.

 

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

 

For and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is mutually covenanted
and agreed, for the equal and proportionate benefit of all Holders of the
Securities or of series thereof, as follows:

 

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

 

Section 1.1.    Definitions.

 

For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:

 

(a)       the terms
defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular;

 

(b)      all terms used
in this Indenture that are defined in the Trust Indenture Act, defined by a
Trust Indenture Act reference to another statute or defined by an SEC rule under
the Trust Indenture Act have the meanings so assigned to them;

 

(c)       all accounting
terms not otherwise defined herein have the meanings assigned to them in
accordance with GAAP;

 

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

 

1

 

(e)       the words “Article”
and “Section” refer to an Article and Section, respectively, of this
Indenture; and

 

(f)       the word “includes”
and its derivatives means “includes, but is not limited to” and corresponding
derivative definitions.

 

Certain terms, used principally in Article Six,
are defined in that Article.

 

“Act,” when used with respect to any Holder, has the
meaning specified in Section 1.5.

 

“Additional Defeasible Provision” means a covenant
or other provision contained that is (a) made part of this Indenture
pursuant to a supplemental indenture hereto, a Board Resolution or an Officer’s
Certificate delivered pursuant to Section 3.1, and (b) pursuant to
the terms set forth in such supplemental indenture, Board Resolution or Officer’s
Certificate, made subject to the provisions of Article Thirteen.

 

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

 

“Authenticating Agent” means any Person authorized
by the Trustee to act on behalf of the Trustee to authenticate Securities.

 

“Banking Day” means, in respect of any city, any
date on which commercial banks are open for business in that city.

 

“Bankruptcy Law” means any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law.

 

“Board of Directors” means the board of directors of
the Company or any duly authorized committee of that board to which the powers
of that board have been lawfully delegated.

 

“Board Resolution” means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Company, the
principal financial officer of the Company, any other authorized officer of the
Company, or a person duly authorized by any of them, in each case as
applicable, to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification, and delivered to the
Trustee. Where any provision of this Indenture refers to action to be taken
pursuant to a Board Resolution (including the establishment of any series of
the Securities and the forms and terms thereof), such action may be taken by
any committee, officer or employee of the Company authorized to take such
action by the Board of Directors as evidenced by a Board Resolution.

 

“Business Day,” when used with respect to any Place
of Payment or other location, means, except as otherwise provided as
contemplated by Section 3.1 with respect to any series of

 

2

 

Securities, each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in that
Place of Payment or other location are authorized or obligated by law,
executive order or regulation to close.

 

“CINS” means the CUSIP International Numbering
System.

 

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

 

“Company” means the Person named as the “Company” in
the first paragraph of this instrument until a successor or resulting
corporation shall have become such pursuant to the applicable provisions of
this Indenture, and thereafter “Company” shall mean such successor or resulting
corporation.

 

“Company Request” or “Company Order” means, in the
case of the Company, a written request or order signed in the name of the
Company by its Chairman of the Board, its Chief Executive Officer, its Chief
Financial Officer, its Chief Operating Officer, its President, any of its Vice
Presidents or any other duly authorized officer of the Company or any person
duly authorized by any of them, and delivered to the Trustee.

 

“Corporate Trust Office” means the office of the
Trustee at its address specified in Section 1.6 or such other address as
to which the Trustee may give notice to the Company.

 

“corporation” includes corporations, companies,
associations, partnerships, limited partnerships, limited liability companies,
joint-stock companies and trusts.

 

“Covenant Defeasance” has the meaning specified in Section 13.3.

 

“CUSIP” means the Committee on Uniform Securities
Identification Procedures.

 

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

 

“Debt” means any obligation created or assumed by
any Person for the repayment of money borrowed and any purchase money
obligation created or assumed by such Person and any guarantee of the
foregoing.

 

“Default” means, with respect to a series of
Securities, any event that is, or after notice or lapse of time or both would
be, an Event of Default.

 

“Defaulted Interest” has the meaning specified in Section 3.7.

 

“Definitive Security” means a security other than a
Global Security or a temporary Security.

 

“Depositary”
means, with respect to the Securities of any series issuable or issued in whole
or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities as contemplated by Section 3.1, until a successor
Depositary shall have become such pursuant to the applicable

 

3

 

provisions of this Indenture,
and thereafter shall mean or include each Person which is a Depositary
hereunder, and if at any time there is more than one such Person, shall be a
collective reference to such Persons.

 

“Designated Senior Debt” shall have the
meaning given to such term in any Board Resolution or indenture supplemental
hereto.

 

“Dollar” or “$” means the coin or currency of
the United States of America, which at the time of payment is legal tender for
the payment of public and private debts.

 

“Event of Default” has the meaning specified
in Section 5.1.

 

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

 

“Foreign Currency” means a currency used by
the government of a country other than the United States of America.

 

“GAAP” means generally accepted accounting
principles in the United States of America as in effect from time to time,
including those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession. All ratios and computations based on GAAP
contained in this Indenture will be computed in conformity with GAAP.

 

“Global Security” means a Security in global
form that evidences all or part of a series of Securities and is authenticated
and delivered to, and registered in the name of, the Depositary for the Securities
of such series or its nominee.

 

“Holder” means a Person in whose name a
Security is registered in the Security Register.

 

“Indenture” means this instrument as
originally executed or as it may from time to time be supplemented or amended
by one or more indentures supplemental hereto entered into pursuant to the
applicable provisions hereof, including, for all purposes of this instrument,
and any such supplemental indenture, the provisions of the Trust Indenture Act
that are deemed to be part of and govern this instrument and any such
supplemental indenture, respectively. The term “Indenture” also shall include
the terms of particular series of Securities established as contemplated by Section 3.1.

 

“interest,” when used with respect to an
Original Issue Discount Security which by its terms bears interest only after
Maturity, means interest payable after Maturity.

 

“Interest Payment Date,” when used with
respect to any Security, means the Stated Maturity of an installment of
interest on such Security.

 

“Judgment Currency” has the meaning specified
in Section 1.16.

 

“Legal Defeasance” has the meaning specified
in Section 13.2.

 

4

 

“mandatory sinking fund payment” has the
meaning specified in Section 12.1.

 

“Maturity,” when used with respect to any
Security, means the date on which the principal of such Security or an
installment of principal becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of acceleration, call for
redemption or otherwise.

 

“Notice of Default” means a written notice of
the kind specified in Section 5.1(d).

 

“Officer’s Certificate” means, in the case of
the Company, a certificate signed by the Chairman of the Board, the Chief
Executive Officer, the Chief Financial Officer, the Chief Operating Officer,
the President, any Vice President or any other duly authorized officer of the
Company, or a person duly authorized by any of them, and delivered to the
Trustee.

 

“Opinion of Counsel” means a written opinion
of counsel, who may be an employee of or counsel for the Company and who shall
be reasonably acceptable to the Trustee.

 

“optional sinking fund payment” has the
meaning specified in Section 12.1.

 

“Original Issue Discount Security” means any
Security which provides for an amount less than the principal amount thereof to
be due and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 5.2.

 

“Outstanding,” when used with respect to
Securities, means, as of the date of determination, all Securities theretofore
authenticated and delivered under this Indenture, except:

 

(a) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;

 

(b) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such Securities; provided, however,
that, if such Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;

 

(c) Securities which have been paid pursuant to Section 3.6
or in exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof satisfactory
to it that such Securities are held by a bona fide purchaser in whose hands
such Securities are valid obligations of the Company; and

 

(d) Securities, except to the extent provided in Section 13.2
and Section 13.3, with respect to which the Company has effected Legal
Defeasance or Covenant Defeasance as provided in Article Thirteen, which
Legal Defeasance or Covenant Defeasance then continues in effect;

 

5

 

provided,
however, that in determining whether the Holders of
the requisite principal amount of the Outstanding Securities have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
(i) the principal amount of an Original Issue Discount Security that shall
be deemed to be Outstanding shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon acceleration
of the Maturity thereof on such date pursuant to Section 5.2, (ii) the
principal amount of a Security denominated in one or more currencies or
currency units other than U.S. dollars shall be the U.S. dollar equivalent of
such currencies or currency units, determined in the manner provided as
contemplated by Section 3.1 on the date of original issuance of such Security
or by Section 1.15, if not otherwise so provided pursuant to Section 3.1,
of the principal amount (or, in the case of an Original Issue Discount
Security, the U.S. dollar equivalent (as so determined) on the date of original
issuance of such Security of the amount determined as provided in clause (i) above)
of such Security, and (iii) Securities owned by the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned as described in clause (iii) of the immediately
preceding sentence which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee’s right to act with respect to such Securities and that the pledgee is
not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor.

 

“Paying Agent” means any Person authorized by
the Company to pay the principal of and any premium or interest on any
Securities on behalf of the Company.

 

“Periodic Offering” means an offering of
Securities of a series from time to time, the specific terms of which
Securities, including, without limitation, the rate or rates of interest or
formula for determining the rate or rates of interest thereon, if any, the
Stated Maturity or Stated Maturities thereof, the original issue date or dates
thereof, the redemption provisions, if any, with respect thereto, and any other
terms specified as contemplated by Section 3.1 with respect thereto, are
to be determined by the Company upon the issuance of such Securities.

 

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

 

“Place of Payment,” when used with respect to
the Securities of any series, means, unless otherwise specifically provided for
with respect to such series as contemplated by Section 3.1, the office or
agency of the Company in the City of New York and such other place or places
where, subject to the provisions of Section 10.2, the principal of and any
premium and interest on the Securities of that series are payable as
contemplated by Section 3.1.

 

“Predecessor Security” of any particular
Security means every previous Security evidencing all or a portion of the same
debt as that evidenced by such particular Security; and, for the purposes of
this definition, any Security authenticated and delivered under Section 3.6
in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Security.

 

6

 

“Redemption Date,” when used with respect to
any Security to be redeemed, means the date fixed for such redemption by or
pursuant to this Indenture.

 

“Redemption Price,” when used with respect to
any Security to be redeemed, means the price at which it is to be redeemed
pursuant to this Indenture.

 

“Regular Record Date” for the interest
payable on any Interest Payment Date on the Securities of any series means the
date specified for that purpose as contemplated by Section 3.1.

 

“Required Currency” has the meaning specified
in Section 1.16.

 

“Responsible Officer” when used with respect
to the Trustee, means any officer within the Corporate Trust Administration of
the Trustee (or any successor group of the Trustee) or any other officer of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.

 

“SEC” means the Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act,
or, if at any time after the execution of this instrument such commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.

 

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

 

“Security Register” and “Security Registrar”
have the respective meanings specified in Section 3.5.

 

“Senior Debt” means (a) all Debt of the
Company, whether currently outstanding or hereafter issued, unless, by the
terms of the instrument creating or evidencing such Debt, it is provided that
such Debt is not superior in right of payment to the Securities, and (b) any
modifications, refunding, deferrals, renewals or extensions of any such Debt or
securities, notes or other evidence of Debt issued in exchange for such Debt;
provided that in no event shall “Senior Debt” include (i) Debt of the
Company owed or owing to any Subsidiary of the Company or any officer, director
or employee of the Company or any Subsidiary of the Company, (ii) Debt to
trade creditors or (iii) any liability for taxes owned or owing by the
Company.

 

“Significant Subsidiary” means any Subsidiary
that would be a “Significant Subsidiary” of the Company within the meaning of Rule 1-02
under Regulation S-X promulgated by the SEC.

 

“Special Record Date” for the payment of any
Defaulted Interest means a date fixed by the Trustee pursuant to Section 3.7.

 

“Stated Maturity,” when used with respect to
any Security or any installment of principal thereof or interest thereon, means
the date specified in such Security as the fixed date on which the principal of
such Security or such installment of principal or interest is due and payable.

 

7

 

“Subsidiary” means (a) a corporation
more than 50% of the outstanding voting stock of which is owned, directly or
indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries or (b) any partnership or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned. For the purposes
of this definition, “voting stock” means capital stock or equity interests which
ordinarily have voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.

 

“Trustee” means the Person named as the
“Trustee” in the first paragraph of this instrument until a successor Trustee
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter “Trustee” shall mean or include each Person who is then a
Trustee hereunder, and if at any time there is more than one such Person,
“Trustee” as used with respect to the Securities of any series shall mean the
Trustee with respect to Securities of that series.

 

“Trust Indenture Act” means the Trust
Indenture Act of 1939, as amended, as in force at the date as of which this
instrument was executed, except as provided in Section 9.5; provided, however, that if the Trust Indenture Act of 1939
is amended after such date, “Trust Indenture Act” means, to the extent required
by any such amendment, the Trust Indenture Act of 1939 as so amended.

 

“U.S. Person” shall have the meaning assigned
to such term in Section 7701(a)(30) of the Code.

 

“U.S. Government Obligations” means
securities which are (a) direct obligations of the United States for the
payment of which its full faith and credit is pledged, or (b) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States, the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States, each of
which are not callable or redeemable at the option of the issuer thereof.

 

“Vice President,” when used with respect to
the Company or the Trustee, means any vice president, regardless of whether
designated by a number or a word or words added before or after the title “vice
president.”

 

Section 1.2.            Incorporation
by Reference of Trust Indenture Act.

 

Whenever this Indenture refers to a provision
of the Trust Indenture Act, the provision is incorporated by reference in and
made a part of this Indenture. The following Trust Indenture Act terms used in
this Indenture have the following meanings:

 

“commission” means the SEC.

 

“indenture securities” means the Securities.

 

“indenture security holder” means a Holder.

 

“indenture to be qualified” means this Indenture.

 

8

 

“indenture trustee” or “institutional
trustee” means the Trustee.

 

“obligor” on the indenture securities means
the Company or any other obligor on the indenture securities.

 

All terms used in this Indenture that are
defined by the Trust Indenture Act, defined by a Trust Indenture Act reference
to another statute or defined by an SEC rule under the Trust Indenture Act
have the meanings so assigned to them.

 

Section 1.3.            Compliance
Certificates and Opinions.

 

Upon any application or request by the
Company to the Trustee to take any action under any provision of this
Indenture, the Company shall furnish to the Trustee an Officer’s Certificate
stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished except as required under Section 314(c) of the Trust
Indenture Act.

 

Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this Indenture (except
for certificates provided for in Section 10.5) shall include:

 

(a)       a
statement that each individual signing such certificate or opinion has read
such covenant or condition and the definitions herein relating thereto;

 

(b)       a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;

 

(c)       a
statement that, in the opinion of each such individual, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether such covenant or condition has been complied
with; and

 

(d)       a
statement as to whether, in the opinion of each such individual, such condition
or covenant has been complied with.

 

Section 1.4.                                   Form of
Documents Delivered to Trustee.

 

In any case where several matters are
required to be certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or covered by the
opinion of, only one such Person, or that they be so certified or covered by
only one document, but one such Person may certify or give an opinion with
respect to some matters and one or more other such Persons as to other matters,
and any such Person may certify or give an opinion as to such matters in one or
several documents.

 

9

 

Any certificate or opinion of an officer of
the Company may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless such officer
knows or, in the exercise of reasonable care, should know that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or opinion
of counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information with respect to such factual matters is in
the possession of the Company unless such counsel knows that the certificate or
opinion or representations with respect to such matters are erroneous.

 

Where any Person is required to make, give or
execute two or more applications, requests, consents, certificates, statements,
opinions or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.

 

Section 1.5.                                   Acts of Holders;
Record Dates.

 

(a)       Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed (either physically or by means of a facsimile or an electronic
transmission, provided that such electronic
transmission is transmitted through the facilities of a Depositary) by such
Holders in person or by agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the “Act” of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section 315
of the Trust Indenture Act) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.

 

(b)       The
fact and date of the execution by any Person of any such instrument or writing
may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.

 

(c)       The
ownership, principal amount and serial numbers of Securities held by any
Person, and the date of commencement of such Person’s holding of same, shall be
proved by the Security Register.

 

(d)       Any
request, demand, authorization, direction, notice, consent, waiver or other Act
of the Holder of any Security shall bind every future Holder of the same

 

10

 

Security and the Holder of every Security issued upon the registration
of transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, regardless of whether notation of such action is made upon
such Security.

 

(e)           Without
limiting the foregoing, a Holder entitled to give or take any action hereunder
with regard to any particular Security may do so with regard to all or any part
of the principal amount of such Security or by one or more duly appointed
agents each of which may do so pursuant to such appointment with regard to all or
any different part of such principal amount.

 

(f)            The
Company may set any day as the record date for the purpose of determining the
Holders of Outstanding Securities of any series entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other Act
provided or permitted by this Indenture to be given or taken by Holders of
Securities of such series, but the Company shall have no obligation to do so.
With regard to any record date set pursuant to this paragraph, the Holders of
Outstanding Securities of the relevant series on such record date (or their
duly appointed agents), and only such Persons, shall be entitled to give or
take the relevant action, regardless of whether such Holders remain Holders
after such record date.

 

Section 1.6.                                   Notices, Etc., to
Trustee and Company.

 

(a)           Any
notice or communication by the Company or the Trustee to the others is duly
given if in writing and delivered in Person or mailed by first class mail
(registered or certified, return receipt requested), telecopier or overnight
air courier guaranteeing next day delivery, to the others’ address:

 

If to the Company:

 

c/o Globalstar, Inc. 

461 So. Milpitas Blvd

Milpitas, CA 95035

Facsimile:  408-933-4949

Attention:  Chief Financial Officer

 

If to the Trustee:

 

U.S. Bank National Association, as Trustee 

Corporate Trust Dept. CN-OH-W6CT

425 Walnut Street

Cincinnati, OH 45202

Facsimile:  513-632-5511

 

(b)           The
Company or the Trustee, by notice to the others, may designate additional or
different addresses for subsequent notices or communications.

 

11

 

(c)       All
notices and communications (other than those sent to Holders) shall be deemed
to have been duly given: at the time delivered by hand, if personally
delivered; three Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.

 

Section 1.7.                                   Notice to
Holders; Waiver.

 

Where this Indenture provides for notice to
Holders of any event, such notice shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, first-class postage prepaid,
to each Holder affected by such event, at his address as it appears in the
Security Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice. In any case where
notice to Holders is given by mail, neither the failure to mail such notice,
nor any defect in any notice so mailed, to any particular Holder shall affect
the sufficiency of such notice with respect to other Holders. Any notice mailed
to a Holder in the manner herein prescribed shall be conclusively deemed to
have been received by such Holder, regardless of whether such Holder actually
receives such notice.

 

Where this Indenture provides for notice in
any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.

 

In case by reason of the suspension of
regular mail service or by reason of any other cause it shall be impracticable
to give such notice by mail, then such notification as shall be made with the
approval of the Trustee shall constitute a sufficient notification for every
purpose hereunder.

 

Section 1.8.                                   Conflict with
Trust Indenture Act.

 

If any provision hereof limits, qualifies or
conflicts with a provision of the Trust Indenture Act that is required under
such Act to be a part of and govern this Indenture, the latter provision shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or
excluded, as the case may be.

 

Section 1.9.                                   Effect of
Headings and Table of Contents.

 

The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.

 

Section 1.10.                             Successors and Assigns.

 

All covenants and agreements in this
Indenture by the Company shall bind their respective successors and assigns,
whether so expressed or not.

 

12

 

Section 1.11.                             Separability Clause.

 

In case any provision in this Indenture or in
the Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.

 

Section 1.12.          Benefits
of Indenture.

 

Nothing in this Indenture or in the
Securities express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, the holders of Senior Debt and the
Holders, any benefit or any legal or equitable right, remedy or claim under
this Indenture.

 

Section 1.13.                             Governing Law.

 

THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

Section 1.14.                             Legal Holidays.

 

In any case where any Interest Payment Date,
Redemption Date or Stated Maturity of any Security shall not be a Business Day
at any Place of Payment, then (notwithstanding any other provision of this
Indenture or of the Securities (other than a provision of the Securities of any
series that specifically states that such provision shall apply in lieu of this
Section 1.14)) payment of interest or principal and any premium need not
be made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date, or at the Stated
Maturity, provided that no interest shall accrue
for the period from and after such Interest Payment Date, Redemption Date or
Stated Maturity, as the case may be.

 

Section 1.15.                             Securities in a
Composite Currency, Currency Unit or Foreign Currency.

 

Unless otherwise specified in an Officer’s
Certificate delivered pursuant to Section 3.1 of this Indenture with
respect to a particular series of Securities, whenever for purposes of this
Indenture any action may be taken by the Holders of a specified percentage in
aggregate principal amount of Securities of all series or all series affected
by a particular action at the time Outstanding and, at such time, there are
Outstanding Securities of any series which are denominated in a coin, currency
or currencies other than Dollars (including, but not limited to, any composite
currency, currency units or Foreign Currency), then the principal amount of
Securities of such series which shall be deemed to be Outstanding for the
purpose of taking such action shall be that amount of Dollars that could be
obtained for such amount at the Market Exchange Rate. For purposes of this Section 1.15,
the term “Market Exchange Rate” shall mean the noon Dollar buying rate in The
City of New York for cable transfers of such currency or currencies as
published by the Federal Reserve Bank of New York, as of the most recent
available date. If such Market Exchange Rate is not so available for any reason
with respect to such currency, the Trustee shall use, in its sole discretion
and without liability on its part, such quotation of the Federal Reserve Bank
of New York as of the most recent available date, or quotations or rates of
exchange from one or more major banks in The City of New York or in the country
of issue of the currency in question, which for purposes of euros shall be
Brussels, Belgium, or such other quotations or rates of exchange as the Trustee
shall deem appropriate. The provisions of this paragraph shall apply in
determining the equivalent principal amount in

 

13

 

respect of Securities of a series denominated
in a currency other than Dollars in connection with any action taken by Holders
of Securities pursuant to the terms of this Indenture.

 

All decisions and determinations of the
Trustee regarding the Market Exchange Rate or any alternative determination
provided for in the preceding paragraph shall be in its sole discretion and
shall, in the absence of manifest error, be conclusive to the extent permitted
by law for all purposes and irrevocably binding upon the Issuer and all
Holders.

 

Section 1.16.                             Payment in Required
Currency; Judgment Currency.

 

The Company agrees, to the fullest extent
that it may effectively do so under applicable law, that (a) if for the
purpose of obtaining judgment in any court it is necessary to convert the sum
due in respect of the principal of or interest on the Securities of any series
(the “Required Currency”) into a currency in which a judgment will be rendered
(the “Judgment Currency”), the rate of exchange used shall be the rate at which
in accordance with normal banking procedures the Trustee could purchase in The
City of New York the Required Currency with the Judgment Currency on the day on
which final unappealable judgment is entered, unless such day is not a Banking
Day, then, to the extent permitted by applicable law, the rate of exchange used
shall be the rate at which in accordance with normal banking procedures the
Trustee could purchase in The City of New York the Required Currency with the
Judgment Currency on the Banking Day next preceding the day on which final
unappealable judgment is entered and (b) its obligations under this
Indenture to make payments in the Required Currency (i) shall not be
discharged or satisfied by any tender, or any recovery pursuant to any judgment
(regardless of whether entered in accordance with subclause (a)), in any
currency other than the Required Currency, except to the extent that such
tender or recovery shall result in the actual receipt, by the payee, of the
full amount of the Required Currency expressed to be payable in respect of such
payments, (ii) shall be enforceable as an alternative or additional cause
of action for the purpose of recovering in the Required Currency the amount, if
any, by which such actual receipt shall fall short of the full amount of the
Required Currency so expressed to be payable and (iii) shall not be
affected by judgment being obtained for any other sum due under this Indenture.

 

Section 1.17.                             Language of Notices,
Etc.

 

Any request, demand, authorization, direction,
notice, consent, waiver or Act required or permitted under this Indenture shall
be in the English language, except that any published notice may be in an
official language of the country of publication.

 

Section 1.18.          Incorporators,
Shareholders, Officers and Directors of the Company Exempt from Individual
Liability.

 

No recourse under or upon any obligation,
covenant or agreement of or contained in this Indenture or of or contained in
any Security or for any claim based thereon or otherwise in respect thereof, or
in any Security or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, member, officer,
manager or director, as such, past, present or future, of the Company or any
successor Person, either directly or through the Company or any successor
Person, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, it being
expressly

 

 

14

 

understood that all such
liability is hereby expressly waived and released as a condition of, and as a
part of the consideration for, the execution of this Indenture and the issue of
the Securities.

 

ARTICLE
TWO

SECURITY FORMS

 

Section 2.1.                                   Forms Generally.

 

The Securities of each series shall be in
substantially the form set forth in this Article Two, or in such other
form or forms as shall be established by or pursuant to a Board Resolution or
in one or more indentures supplemental hereto, in each case with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon
as may be required to comply with the rules of any securities exchange or
as may, consistently herewith, be determined by the officers executing such
Securities as evidenced by their execution thereof.

 

The definitive Securities shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities, as
evidenced by their execution thereof. If the form of Securities of any series
is established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by an authorized officer
or other authorized person on behalf of the Company and delivered to the
Trustee at or prior to the delivery of the Company Order contemplated by Section 3.3
for the authentication and delivery of such Securities.

 

The forms of Global Securities of any series
shall have such provisions and legends as are customary for Securities of such
series in global form, including without limitation any legend required by the
Depositary for the Securities of such series.

 

Section 2.2.                                   Form of Face
of Security.

 

[If the
Security is an Original Issue Discount Security, insert—FOR PURPOSES
OF SECTION 1275 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS
AMENDED, THE AMOUNT OF THE ORIGINAL ISSUE DISCOUNT IS
                           ,
THE ISSUE DATE IS                      ,
20       [AND] [    ,] THE YIELD TO MATURITY IS                         
[    ,] [AND THE ORIGINAL ISSUE DISCOUNT
FOR THE SHORT ACCRUAL PERIOD IS
                             
AND THE METHOD USED TO DETERMINE THE YIELD THEREFOR IS
                                                      ]]

 

[Insert any other legend
required by the Code or the regulations thereunder.]

 

[If a Global
Security,—insert legend required by Section 2.4 of the Indenture]
[If applicable, insert —UNLESS THIS
SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION, TO THE COMPANY OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS

 

15

 

REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), 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.]

 

GLOBALSTAR, INC.

 

[TITLE OF SECURITY]

 

No
                                                                                                                                                          U.S.
$

 

[CUSIP No.    ]

 

GLOBALSTAR, INC., a company
duly incorporated under the laws of the State of Delaware (herein called the “Company,”
which term includes any successor or resulting Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
                              ,
or registered assigns, the principal sum
of              
United States Dollars on
                                .
[If the Security is to bear interest prior to
Maturity, insert—, and to pay interest thereon from
                              
or from the most recent Interest Payment Date to which interest has been paid
or duly provided for, semi-annually on
                                  
and
                               
in each year, commencing                          
, at the rate of
            % per annum,
until the principal hereof is paid or made available for payment [if applicable, insert—, and at the rate of     % per annum on any overdue principal and
premium and on any installment of interest (to the extent that the payment of
such interest shall be legally enforceable)]. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the 
                               
or
                                        
(regardless of whether a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture].

 

[If the Security
is not to bear interest prior to Maturity, insert—The principal of
this Security shall not bear interest except in the case of a default in
payment of principal upon acceleration, upon redemption or at Stated Maturity
and in such case the overdue principal of this Security shall bear interest at
the rate of         % per annum (to the
extent that the payment of such interest shall be legally enforceable), which
shall accrue from the date of such default in payment to the date payment of
such principal has been made or duly provided for. Interest on any overdue

 

16

 

principal shall be payable on
demand. Any such interest on any overdue principal that is not so paid on
demand shall bear interest at the rate of       
% per annum (to the extent that the payment of such interest shall be legally
enforceable), which shall accrue from the date of such demand for payment to
the date payment of such interest has been made or duly provided for, and such
interest shall also be payable on demand.]

 

[If a Global
Security, insert—Payment of the principal of (and premium, if any)
and [if applicable, insert—any such] interest
on this Security will be made by transfer of immediately available funds to a
bank account in                  designated
by the Holder in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts
[state other currency].]

 

[If a
Definitive Security, insert—Payment of the principal of (and
premium, if any) and [if applicable, insert—any such] interest on this Security
will be made at the office or agency of the Company maintained for that purpose
in                      ,
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts] [state other
currency] [or subject to any laws or regulations applicable thereto and to the
right of the Company (as provided in the Indenture) to rescind the designation of
any such Paying Agent, at the [main] offices of
                        
in                             ,
or at such other offices or agencies as the Company may designate, by [United
States Dollar] [state other currency] check drawn on, or transfer to a [United
States Dollar] account maintained by the payee with, a bank in The City of New
York (so long as the applicable Paying Agency has received proper transfer
instructions in writing at least
                  days
prior to the payment date)] [if applicable, insert—;
provided, however, that payment of
interest may be made at the option of the Company by [United States Dollar]
[state other currency] check mailed to the addresses of the Persons entitled
thereto as such addresses shall appear in the Security Register] [or by
transfer to a [United States Dollar] [state other currency] account maintained
by the payee with a bank in The City of New York [state other Place of Payment]
(so long as the applicable Paying Agent has received proper transfer instructions
in writing by the record date prior to the applicable Interest Payment Date)].]

 

Reference is hereby made to the
further provisions of this Security set forth on the reverse hereof, which
further provisions shall for all purposes have the same effect as if set forth
at this place.

 

Unless the certificate of
authentication hereon has been executed by the Trustee referred to on the
reverse hereof by manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any purpose.

 

IN WITNESS WHEREOF, the Company has caused
this instrument to be duly executed.

 

Dated:

 

	
   

  	
  GLOBALSTAR,
  INC.

  
	
   

  
	
   

  	
  By:

  	
   

  

 

17

 

Section 2.3.                                   Form of
Reverse of Security.

 

This Security is one of a duly
authorized issue of subordinated securities of the Company (herein called the “Securities”),
issued and to be issued in one or more series under an Indenture, dated as of
                ,
20       (herein called the “Indenture”), between
the Company and U.S. Bank National Association (herein called the “Trustee,”
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for
a statement, of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered. As provided in the Indenture, the Securities may
be issued in one or more series, which different series may be issued in
various aggregate principal amounts, may mature at different times, may bear
interest, if any, at different rates, may be subject to different redemption
provisions, if any, may be subject to different sinking, purchase or analogous
funds, if any, may be subject to different covenants and Events of Default and
may otherwise vary as in the Indenture provided or permitted. This Security is
one of the series designated on the face hereof [, limited in aggregate
principal amount to $                ].

 

This security is the general,
unsecured, subordinated obligation of the Company.

 

[If
applicable, insert—The Securities of this series are subject to
redemption upon not less than      days’
notice by mail, [if applicable, insert, —(1) on
               
in any year commencing with the year             
and ending with the year               
through operation of the sinking fund for this series at a Redemption Price
equal to 100% of the principal amount, and (2) ] at any time [on or after                    ,
20        ], as a whole or in part, at
the election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [on or before           ,
            %, and
if redeemed] during the 12-month period beginning            
of the years indicated,

 

	
  Year

  	
   

  	
  Redemption Date

  	
   

  	
  Year

  	
   

  	
  Redemption Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

and thereafter at a Redemption
Price equal to           % of
the principal amount, together in the case of any such redemption [if applicable, insert—(whether through operation of the
sinking fund or otherwise)] with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
record dates referred to on the face hereof, all as provided in the Indenture.]

 

[If
applicable, insert—The Securities of this series are subject to
redemption upon not less than     nor
more than      days’ notice by mail, (1) on
           in any year
commencing with the year and ending with the year           
through operation of the sinking fund for this series at the Redemption Prices
for redemption through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below, and (2) at anytime
[on or after

 

18

 

             ],
as a whole or in part, at the election of the Company, at the Redemption Prices
for redemption otherwise than through operation of the sinking fund (expressed
as percentages of the principal amount) set forth in the table below: If
redeemed during the 12-month period beginning             
of the years indicated,

 

	
  Year

  	
   

  	
  Redemption Price for

  Redemption Through

  Operation of the Sinking Fund

  	
   

  	
  Redemption Price for

  Redemption Otherwise

  Than Through Operation

  of the Sinking Fund

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

and thereafter at a Redemption
Price equal to         % of the
principal amount, together in the case of any such redemption (whether through
operation of the sinking fund or otherwise) with accrued interest to the
Redemption Date, but interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of such Securities, or
one or more Predecessor Securities, of record at the close of business on the
relevant record dates referred to on the face hereof, all as provided in the
Indenture.]

 

[If
applicable, insert—Notwithstanding the foregoing, the Company may
not, prior to                 ,
redeem any Securities of this series as contemplated by [clause (2) of]
the preceding paragraph as a part of, or in anticipation of, any refunding
operation by the application, directly or indirectly, of moneys borrowed having
an interest cost to the Company (calculated in accordance with generally
accepted financial practice) of less than        %
per annum.]

 

[If
applicable, insert—The sinking fund for this series provides for the
redemption on            in
each year beginning with the year          
and ending with the year          of
[not less than] $         [ (“mandatory
sinking fund”) and not more than $          ]
aggregate principal amount of Securities of this series. [Securities of this
series acquired or redeemed by the Company otherwise than through [mandatory]
sinking fund payments may be credited against subsequent [mandatory] sinking
fund payments otherwise required to be made [If
applicable, insert— in the inverse order in which they become due].]

 

[If the
Securities are subject to redemption in part of any kind, insert—In
the event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.]

 

[If
applicable, insert—The Securities of this series are not redeemable
prior to Stated Maturity.]

 

[If the
Security is not an Original Issue Discount Security, insert—If an Event of Default with respect to Securities of
this series shall occur and be continuing, the principal of the Securities of
this series may be declared due and payable in the manner and with the effect
provided in the Indenture.]

 

19

 

[If the
Security is an Original Issue Discount Security, insert —If an Event of Default with respect to Securities of
this series shall occur and be continuing, an amount of principal of the
Securities of this series may be declared due and payable in the manner and
with the effect provided in the Indenture. Such amount shall be equal to —insert formula for determining the amount. Upon payment (i) of
the amount of principal so declared due and payable and (ii) of interest
on any overdue principal and overdue interest (in each case to the extent that
the payment of such interest shall be legally enforceable), all of the Company’s
obligations in respect of the payment of the principal of and interest, if any,
on the Securities of this series shall terminate.]

 

The Indenture permits, with
certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and the rights of the
Holders of the Securities of each series to be affected under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of a
majority in principal amount of the Securities at the time Outstanding of each
series to be affected. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of the Securities of each
series at the time Outstanding, on behalf of the Holders of all Securities of such
series, to waive compliance by the Company 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 Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and
of any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, regardless of whether notation of such consent or
waiver is made upon this Security.

 

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

 

[If a Global
Security, insert—This Global Security or portion hereof may not be
exchanged for Definitive Securities of this series except in the limited
circumstances provided in the Indenture. The holders of beneficial interests in
this Global Security will not be entitled to receive physical delivery of
Definitive Securities except as described in the Indenture and will not be
considered the Holders thereof for any purpose under the Indenture.]

 

[If a
Definitive Security, insert—As provided in the Indenture and subject
to certain limitations therein set forth, the transfer of this Security is
registerable in the Security Register, upon surrender of this Security for
registration of transfer at the office or agency of the Company in [If applicable, insert—any place where the principal of and
any premium and interest on this Security are payable] [If
applicable, insert—The City of New York [, or, subject to any laws
or regulations applicable thereto and to the right of the Company (limited as
provided in the Indenture) to rescind the designation of any such transfer
agent, at the [main] offices of                     
in                       
or at such other offices or agencies as the Company may designate]], duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.]

 

20

 

The Securities of this series
are issuable only in registered form without coupons in denominations of U.S. $          
and any integral multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Securities of this series are
exchangeable for a like aggregate principal amount of Securities of this series
and of like tenor of a different authorized denomination, as requested by the
Holder surrendering the same.

 

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

 

Prior to due presentment of
this Security for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name this
Security is registered as the owner hereof for all purposes, regardless of
whether this Security be overdue, and none of the Company, the Trustee nor any
such agent shall be affected by notice to the contrary.

 

This Security is subordinated
in right of payment to Senior Debt, to the extent and in the manner provided in
the Indenture.

 

No recourse under or upon any
obligation, covenant or agreement of or contained in the Indenture or of or
contained in any Security, or for any claim based thereon or otherwise in
respect thereof, or in any Security, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, member, officer, manager or director, as such, past, present or
future, of the Company or of any successor Person, either directly or through
the Company or any successor Person, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment, penalty
or otherwise; it being expressly understood that all such liability is hereby
expressly waived and released by the acceptance hereof and as a condition of,
and as part of the consideration for, the Securities and the execution of the Indenture.

 

The Indenture provides that the
Company (a) will be discharged from any and all obligations in respect of
the Securities (except for certain obligations described in the Indenture), or (b) need
not comply with certain restrictive covenants of the Indenture, in each case if
the Company deposits, in trust, with the Trustee money or U.S. Government
Obligations (or a combination thereof) which through the payment of interest
thereon and principal thereof in accordance with their terms will provide money,
in an amount sufficient to pay all the principal of and interest on the
Securities, but such money need not be segregated from other funds except to
the extent required by law.

 

Except as otherwise defined
herein, all terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.

 

[If a
Definitive Security, insert as a separate page—

 

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

 

	
   

  
	
  (Please
  Print or Typewrite Name and Address of Assignee)

  

 

21

 

the within instrument of
GLOBALSTAR, INC. and does hereby irrevocably constitute and appoint              
Attorney to transfer said instrument on the books of the within-named Company,
with full power of substitution in the premises.

 

Please Insert Social Security
or Other Identifying Number of Assignee:

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature)

  
				

 

NOTICE: The signature to this
assignment must correspond with the name as written upon the face of the within
instrument in every particular, without alteration or enlargement or any change
whatever.]

 

Section 2.4.                                   Global
Securities.

 

Every Global Security authenticated and
delivered hereunder shall bear a legend in
substantially the following form:

 

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED
TO, OR REGISTERED OR EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY
PERSON OTHER THAN THE DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE
REGISTERED, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

EVERY SECURITY AUTHENTICATED AND DELIVERED
UPON REGISTRATION OF TRANSFER OF, OR IN EXCHANGE FOR OR IN LIEU OF, THIS
SECURITY SHALL BE A GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN SUCH
LIMITED CIRCUMSTANCES.

 

If Securities of a series are issuable in
whole or in part in the form of one or more Global Securities, as specified as
contemplated by Section 3.1, then, notwithstanding clause (i) of Section 3.1
and the provisions of Section 3.2, any Global Security shall represent
such of the Outstanding Securities of such series as shall be specified therein
and may provide that it shall represent the aggregate amount of Outstanding
Securities from time to time endorsed thereon and that the aggregate amount of
Outstanding Securities represented thereby may from time to time be reduced or
increased, as the case may be, to reflect exchanges. Any endorsement of a
Global Security to reflect the amount, or any reduction or increase in the
amount, of Outstanding Securities represented thereby shall be made in such
manner and upon instructions given by such Person or Persons as shall be
specified therein or in a Company Order. Subject to the provisions of Section 3.3,
Section 3.4 and Section 3.5, the Trustee shall deliver and redeliver
any Global Security in the manner and upon instructions given by the Person or
Persons specified therein or in the applicable Company Order. Any instructions
by the Company with respect to endorsement

 

22

 

or delivery or redelivery of a
Global Security shall be in a Company Order (which need not comply with Section 1.3
and need not be accompanied by an Opinion of Counsel).

 

The provisions of the last sentence of Section 3.3
shall apply to any Security represented by a Global Security if such Security
was never issued and sold by the Company and the Company delivers to the
Trustee the Global Security together with a Company Order (which need not
comply with Section 1.3 and need not be accompanied by an Opinion of
Counsel) with regard to the reduction or increase, as the case may be, in the
principal amount of Securities represented thereby, together with the written
statement contemplated by the last sentence of Section 3.3.

 

Section 2.5.                                   Form of
Trustee’s Certificate of Authentication .

 

The Trustee’s certificate(s) of
authentication shall be in substantially the following form:

 

This is one of the Securities of the series
designated [insert title of applicable series] referred to in the
within-mentioned Indenture.

 

 

	
   

  	
   

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Officer

  

 

 

ARTICLE
THREE

THE SECURITIES

 

Section 3.1.                                   Amount Unlimited;
Issuable in Series.

 

The aggregate principal amount of Securities
which may be authenticated and delivered under this Indenture is unlimited.

 

The Securities may be issued in one or more
series. There shall be established in or pursuant to a Board Resolution, and
set forth, or determined in the manner provided, in an Officer’s Certificate,
or established in one or more indentures supplemental hereto, prior to the
issuance of Securities of any series,

 

(a)       the
title of the Securities of the series (which shall distinguish the Securities
of the series from all other Securities and which may be part of a series of
Securities previously issued);

 

(b)       any
limit upon the aggregate principal amount of the Securities of the series which
may be authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities of the series pursuant to Section 3.4,
Section 3.5, Section 3.6, Section 9.6 or Section 11.7 and
except for any Securities which, pursuant to Section 3.3, are deemed never
to have been authenticated and delivered hereunder);

 

23

 

(c)       the Person to whom any interest on a Security of the
series shall be payable, if other than the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest;

 

(d)       the date or dates on which the principal of the
Securities of the series is payable or the method of determination thereof;

 

(e)       the rate or rates at which the Securities of the
series shall bear interest, if any, or the formula, method or provision
pursuant to which such rate or rates are determined, the date or dates from
which such interest shall accrue or the method of determination thereof, the
Interest Payment Dates on which such interest shall be payable and the Regular
Record Date for the interest payable on any Interest Payment Date;

 

(f)        the place or places where, subject to the provisions
of Section 10.2, the principal of and any premium and interest on
Securities of the series shall be payable, Securities of the series may be
surrendered for registration of transfer, Securities of the series may be
surrendered for exchange and notices, and demands to or upon the Company in
respect of the Securities of the series and this Indenture may be served;

 

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

 

(h)       the obligation, if any, of the Company to redeem or
purchase Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of a Holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions upon
which Securities of the series shall be redeemed or purchased, in whole or in
part, pursuant to such obligation;

 

(i)        if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which Securities of the series
shall be issuable;

 

(j)        whether payment of principal of and premium, if any,
and interest, if any, on the Securities of the series shall be without
deduction for taxes, assessments or governmental charges paid by Holders of the
series;

 

(k)       if other than the principal amount thereof, the
portion of the principal amount of Securities of the series which shall be
payable upon declaration of acceleration of the Maturity thereof pursuant to Section 5.2;

 

(l)        if the amount of payments of principal of and any
premium or interest on the Securities of the series may be determined with
reference to an index, the manner in which such amounts shall be determined;

 

(m)      if and as applicable, that the Securities of the
series shall be issuable in whole or in part in the form of one or more Global
Securities and, in such case, the Depositary or Depositaries for such Global
Security or Global Securities and any 

 

24

 

circumstances other than those set forth in Section 3.5 in which
any such Global Security may be transferred to, and registered and exchanged
for Securities registered in the name of, a Person other than the Depositary
for such Global Security or a nominee thereof and in which any such transfer
may be registered;

 

(n)       any deletions from, modifications of or additions to
the Events of Default set forth in Section 5.1 or the covenants of the
Company set forth in Article Ten with respect to the Securities of such
series;

 

(o)       whether and under what circumstances the Company
will pay additional amounts on the Securities of the series held by a Person
who is not a U.S. Person in respect of any tax, assessment or governmental
charge withheld or deducted and, if so, whether the Company will have the
option to redeem the Securities of the series rather than pay such additional
amounts;

 

(p)       if the Securities of the series are to be issuable
in definitive form (whether upon original issue or upon exchange of a temporary
Security of such series) only upon receipt of certain certificates or other
documents or satisfaction of other conditions, the form and terms of such
certificates, documents or conditions;

 

(q)       if the Securities of the series are to be
convertible into or exchangeable for any other security or property of the
Company, including, without limitation, securities of another Person held by the
Company or its Affiliates and, if so, the terms thereof;

 

(r)        if other than as provided in Section 13.2 and Section 13.3,
the means of Legal Defeasance or Covenant Defeasance as may be specified for
the Securities of the series;

 

(s)       if other than the Trustee, the identity of the
initial Security Registrar and any initial Paying Agent; and

 

(t)        any other terms of the series (which terms shall not
be inconsistent with the provisions of this Indenture).

 

All Securities of any one series shall be
substantially identical except as to denomination and except as may otherwise
be provided in or pursuant to the Board Resolution referred to above and
(subject to Section 3.3) set forth, or determined in the manner provided,
in the Officer’s Certificate referred to above or in any such indenture
supplemental hereto.

 

All Securities of any one series need not be issued
at the same time and, unless otherwise provided, a series may be reopened,
without the consent of the Holders, for increases in the aggregate principal amount
of such series of Securities and issuances of additional Securities of such
series or for the establishment of additional terms with respect to the
Securities of such series.

 

If any of the terms of the series are established by
action taken by or pursuant to a Board Resolution, a copy of an appropriate
record of such action shall be certified by an authorized officer or other
authorized person on behalf of the Company and delivered to the Trustee at or 

 

25

 

prior to the delivery of the Officer’s
Certificate setting forth, or providing the manner for determining, the terms
of the series.

 

With respect to Securities of a series subject to a
Periodic Offering, such Board Resolution or Officer’s Certificate may provide
general terms for Securities of such series and provide either that the
specific terms of particular Securities of such series shall be specified in a
Company Order or that such terms shall be determined by the Company or one or
more agents thereof designated in an Officer’s Certificate, in accordance with
a Company Order.

 

Section 3.2.            Denominations.

 

The Securities of each series shall be issuable in
registered form without coupons in such denominations as shall be specified as
contemplated by Section 3.1. In the absence of any such provisions with
respect to the Securities of any series, the Securities of such series shall be
issuable in denominations of $1,000 and any integral multiple thereof.

 

Section 3.3.            Execution,
Authentication, Delivery and Dating.

 

The Securities shall be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer, its
President, its Chief Financial Officer or any of its Vice Presidents and need
not be attested. The signature of any of these officers on the Securities may
be manual or facsimile.

 

Securities bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the
Company shall bind the Company notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Securities or did not hold such offices at the date of such Securities.

 

At any time and from time to time after the
execution and delivery of this Indenture, the Company may deliver Securities of
any series executed by the Company to the Trustee for authentication, together
with a Company Order for the authentication and delivery of such Securities,
and the Trustee in accordance with the Company Order shall authenticate and
deliver such Securities; provided, however, that in the case of Securities
offered in a Periodic Offering, the Trustee shall authenticate and deliver such
Securities from time to time in accordance with such other procedures
(including, without limitation, the receipt by the Trustee of oral or
electronic instructions from the Company or its duly authorized agents,
thereafter promptly confirmed in writing) acceptable to the Trustee as may be
specified by or pursuant to a Company Order delivered to the Trustee prior to
the time of the first authentication of Securities of such series. If the forms
or terms of the Securities of the series have been established in or pursuant
to one or more Board Resolutions as permitted by Section 2.1 and Section 3.1,
in authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive such documents as it may reasonably
request. The Trustee shall also be entitled to receive, and (subject to Section 6.1)
shall be fully protected in relying upon, an Opinion of Counsel stating,

 

(a)       if the form or forms of such Securities has been
established in or pursuant to a Board Resolution as permitted by Section 2.1,
that each such form has been established in conformity with the provisions of
this Indenture;

 

26

 

(b)       if the terms of such Securities have been, or in the
case of Securities of a series offered in a Periodic Offering will be,
established in or pursuant to a Board Resolution as permitted by Section 3.1,
that such terms have been, or in the case of Securities of a series offered in
a Periodic Offering will be, established in conformity with the provisions of
this Indenture, subject, in the case of Securities of a series offered in a
Periodic Offering, to any conditions specified in such Opinion of Counsel; and

 

(c)       that such Securities when authenticated and
delivered by the Trustee and issued by the Company in the manner and subject to
any conditions and assumptions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Company enforceable in
accordance with their terms, subject to the following limitations: (i) bankruptcy,
insolvency, moratorium, reorganization, liquidation, fraudulent conveyance or
transfer and other similar laws of general applicability relating to or
affecting the enforcement of creditors’ rights, or to general equity
principles, (ii) the availability of equitable remedies being subject to
the discretion of the court to which application therefor is made; and (iii) such
other usual and customary matters as shall be specified in such Opinion of
Counsel.

 

If such form or forms or terms have been so
established, the Trustee shall not be required to authenticate such Securities
if the issue of such Securities pursuant to this Indenture will affect the
Trustee’s own rights, duties or immunities under the Securities and this
Indenture or otherwise in a manner which is not reasonably acceptable to the
Trustee.

 

Notwithstanding the provisions of Section 3.1
and of the preceding paragraph, if all Securities of a series are not to be
originally issued at one time, it shall not be necessary to deliver the
Officer’s Certificate otherwise required pursuant to Section 3.1 or the
Company Order and Opinion of Counsel otherwise required pursuant to such
preceding paragraph at or prior to the time of authentication of each Security
of such series if such documents are delivered at or prior to the
authentication upon original issuance of the first Security of such series to
be issued.

 

With respect to Securities of a series offered in a
Periodic Offering, the Trustee may rely, as to the authorization by the Company
of any of such Securities, on the form or forms and terms thereof and the
legality, validity, binding effect and enforceability thereof, upon the Opinion
of Counsel and the other documents delivered pursuant to Section 2.1 and Section 3.1
and this Section, as applicable, in connection with the first authentication of
Securities of such series.

 

Each Security shall be dated the date of its
authentication.

 

No Security shall be entitled to any benefit under
this Indenture or be valid or obligatory for any purpose unless there appears
on such Security a certificate of authentication substantially in the form
provided for herein executed by the Trustee by manual signature of an
authorized officer, and such certificate upon any Security shall be conclusive
evidence, and the only evidence, that such Security has been duly authenticated
and delivered hereunder and is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Security shall have been authenticated
and delivered hereunder but never issued and sold by the Company, and the
Company shall deliver such Security to the Trustee for cancellation as provided
in Section 3.9 

 

27

 

for all purposes of this Indenture such
Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.

 

Section 3.4.            Temporary
Securities.

 

Pending the preparation of Definitive Securities of
any series, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the Definitive Securities in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities
may determine, as evidenced by their execution of such Securities.

 

If temporary Securities of any series are issued,
the Company will cause Definitive Securities of that series to be prepared
without unreasonable delay. After the preparation of Definitive Securities of
such series, the temporary Securities of such series shall be exchangeable for
Definitive Securities of such series upon surrender of the temporary Securities
of such series at the office or agency of the Company in a Place of Payment for
that series, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities of any series the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of Definitive Securities of the same series and tenor of
authorized denominations. Until so exchanged the temporary Securities of any series
shall in all respects be entitled to the same benefits under this Indenture as
Definitive Securities of such series.

 

Section 3.5.            Registration,
Registration of Transfer and Exchange.

 

The Company shall cause to be kept at the office or
agency of the Company in the Borough of Manhattan, the City of New York or in
any other office or agency of the Company in a Place of Payment required by Section 10.2
a register (the register maintained in such office being herein sometimes
referred to as the “Security Register”) in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for the registration
of Securities and of transfers of Securities. The Trustee is hereby appointed
as the initial “Security Registrar” for the purpose of registering Securities
and transfers of Securities as herein provided, and its corporate trust office
in New York City, which, at the date hereof, is located at 100 Wall Street, New
York, New York 10005, is the initial office or agency in the Borough of
Manhattan where the Securities Register will be maintained. The Company may at
any time replace such Security Registrar, change such office or agency or act
as its own Security Registrar. The Company will give prompt written notice to
the Trustee of any change of the Security Registrar or of the location of such
office or agency.

 

Upon surrender for registration of transfer of any
Security of any series at the office or agency maintained pursuant to Section 10.2
for such purpose, the Company shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferees, one or
more new Securities of the same series and tenor, of any authorized
denominations and of a like aggregate principal amount.

 

28

 

At the option of the Holder, Securities of any
series (except a Global Security) may be exchanged for other Securities of the
same series and tenor, of any authorized denominations and of a like aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute and the Trustee shall authenticate and deliver the
Securities, which the Holder making the exchange is entitled to receive.

 

All Securities issued upon any registration of
transfer or exchange of Securities shall be the valid obligations of the
Company evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer or
exchange.

 

Every Security presented or surrendered for
registration of transfer or for exchange shall (if so required by the Company
or the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed, by the Holder thereof or his attorney duly authorized in writing.

 

No service charge shall be made for any registration
of transfer or exchange of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 3.4, Section 9.6
or Section 11.7 not involving any transfer.

 

The Company shall not be required (a) to issue,
register the transfer of or exchange Securities of any series during a period
beginning at, the opening of business 15 days before the day of the mailing of
a notice of redemption of Securities of that series selected for redemption
under Section 11.3 and ending at the close of business on the day of such
mailing, or (b) to register the transfer of or exchange any Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part.

 

Notwithstanding any other provisions of this
Indenture and except as otherwise specified with respect to any particular
series of Securities as contemplated by Section 3.1, a Global Security
representing all or a portion of the Securities of a series may not be
transferred, except as a whole by the Depositary for such series to a nominee
of such Depositary or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or by such Depositary or any such nominee to
a successor Depositary for such series or a nominee of such successor
Depositary. Every Security authenticated and delivered upon registration of,
transfer of, or in exchange for or in lieu of, a Global Security shall be a
Global Security except as provided in the two paragraphs immediately following.

 

If at any time the Depositary for any Securities of
a series represented by one or more Global Securities notifies the Company that
it is unwilling or unable to continue as Depositary for such Securities or if
at any time the Depositary for such Securities shall no longer be eligible to
continue as Depositary under Section 3.1 or ceases to be a clearing agency
registered under the Exchange Act, the Company shall appoint a successor
Depositary with respect to such Securities. If a successor Depositary for such
Securities is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company’s
election pursuant to Section 3.1 that such Securities be represented by
one or more 

 

29

 

Global Securities shall no longer be
effective and the Company will execute and the Trustee, upon receipt of a Company
Order for the authentication and delivery of Definitive Securities of such
series, will authenticate and deliver, Securities of such series in definitive
registered form without coupons, in any authorized denominations, in an
aggregate principal amount equal to the principal amount of the Global Security
or Securities representing such Securities in exchange for such Global Security
or Securities registered in the names of such Persons as the Depositary shall
direct.

 

The Company may at any time and in its sole
discretion determine that the Securities of any series issued in the form of
one or more Global Securities shall no longer be represented by a Global
Security or Securities. In such event, the Company will execute and the
Trustee, upon receipt of a Company Order for the authentication and delivery of
the Definitive Securities of such series, will authenticate and deliver,
Securities of such series in definitive registered form without coupons, in any
authorized denominations, in an aggregate principal amount equal to the
principal amount of the Global Security or Securities representing such
Securities in exchange for such Global Security or Securities registered in the
names of such Persons as the Depositary shall direct.

 

If specified by the Company pursuant to Section 3.1
with respect to Securities represented by a Global Security, the Depositary for
such Global Security may surrender such Global Security in exchange in whole or
in part for Securities of the same series and tenor in definitive registered
form on such terms as are acceptable to the Company, the Trustee and such
Depositary. Thereupon, the Company shall execute, and the Trustee, upon receipt
of a Company Order for the authentication and delivery of Securities in
definitive registered form, shall authenticate and deliver, without service
charge,

 

(a)       to the Person specified by such Depositary a new
Security or Securities of the same series and tenor, of any authorized
denominations as requested by such Person, in an aggregate principal amount
equal to and in exchange for such Person’s beneficial interest in the Global
Security; and

 

(b)       to such Depositary a new Global Security in a
denomination equal to the difference, if any, between the principal amount of
the surrendered Global Security and the aggregate principal amount of
Securities authenticated and delivered pursuant to clause (a) above.

 

Every Person who takes or holds any beneficial
interest in a Global Security agrees that:

 

(a) the Company and the Trustee may deal with the Depositary as
sole owner of the Global Security and as the authorized representative of such
Person;

 

(b) such Person’s rights in the Global Security shall be exercised
only through the Depositary and shall be limited to those established by law
and agreement between such Person and the Depositary and/or direct and indirect
participants of the Depositary;

 

(c) the Depositary and its participants make book-entry transfers
of beneficial ownership among, and receive and transmit distributions of
principal and interest on the Global Securities to, such Persons in accordance
with their own procedures; and

 

30

 

(d) none of the Company, the Trustee, nor any agent of any of them
will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests of a
Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.

 

Section 3.6.            Mutilated, Destroyed,
Lost and Stolen Securities.

 

If any mutilated Security is surrendered to the
Trustee, together with, in proper cases, such security or indemnity as may be
required by the Company or the Trustee to save each of them and any agent of
any of them harmless, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Security of the same series
and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.

 

If there shall be delivered to the Company and the
Trustee (a) evidence to their satisfaction of the destruction, loss or
theft of any Security and (b) such security or indemnity as may be
required by them to save each of them and any agent of either of them harmless,
then, in the absence of notice to the Company or the Trustee that such Security
has been acquired by a bona fide purchaser, the Company shall execute and upon
its request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security, a new Security of the same series and of
like tenor and principal amount and bearing a number not contemporaneously
outstanding.

 

In case any such mutilated, destroyed, lost or
stolen Security has become or is about to become due and payable, the Company
in its discretion may, instead of issuing a new Security, pay such Security.

 

Upon the issuance of any new Security under this
Section, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Trustee) connected
therewith.

 

Every new Security of any series issued pursuant to
this Section in lieu of any destroyed, lost or stolen Security shall
constitute an original additional contractual obligation of the Company
regardless of whether the destroyed, lost or stolen Security shall be at any
time enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series duly issued hereunder.

 

The provisions of this Section are exclusive
and shall preclude (to the extent lawful) all other rights and remedies with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Securities.

 

Section 3.7.            Payment of
Interest; Interest Rights Preserved.

 

Except as otherwise provided as contemplated by Section 3.1
with respect to any series of Securities, interest on any Security which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest.

 

31

 

Any interest on any Security of any series which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at
its election in each case, as provided in clause (a) or (b) below:

 

(a)       The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid on
each Security of such series and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount of money equal
to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when deposited to
be held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. Thereupon, the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which shall be not more
than 15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the Company
of such Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first-class postage prepaid, to each
Holder of Securities of such series at his address as it appears in the Security
Register, not less than 10 days prior to such Special Record Date. Notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to the
Persons in whose names the Securities of such series (or their respective
Predecessor Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following clause
(b).

 

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

 

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

 

Section 3.8.            Persons Deemed
Owners.

 

Except as otherwise provided as contemplated by Section 3.1
with respect to any series of Securities, prior to due presentment of a
Security for registration of transfer, the Company, the 

 

32

 

Trustee and any agent thereof may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of and any premium and
(subject to Section 3.5 and Section 3.7) any interest on such
Security and for all other purposes whatsoever, regardless of whether such
Security be overdue, and none of the Company, the Trustee nor any agent of any
of them shall be affected by notice to the contrary.

 

No holder of any beneficial interest in any Global
Security held on its behalf by a Depositary shall have any rights under this
Indenture with respect to such Global Security, and such Depositary may be
treated by the Company, the Trustee and any agent thereof as the owner of such
Global Security for all purposes whatsoever.

 

Section 3.9.            Cancellation.

 

All Securities surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly canceled by it. The Company may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company may have acquired in
any manner whatsoever, and may deliver to the Trustee (or to any other Person
for delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Company has not issued and sold, and all
Securities so delivered shall be promptly canceled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
canceled as provided in this Section, except as expressly permitted by this
Indenture. All canceled Securities held by the Trustee shall be disposed of in
accordance with its customary practices, and the Trustee shall thereafter
deliver to the Company a certificate with respect to such disposition from time
to time upon written request.

 

Section 3.10.          Computation of
Interest.

 

Except as otherwise specified as contemplated by Section 3.1
for Securities of any series, interest on the Securities of each series shall
be computed on the basis of a year of twelve 30-day months.

 

Section 3.11.          CUSIP or CINS Numbers.

 

The Company in issuing the Securities may use “CUSIP” or “CINS” numbers
(if then generally in use, and in addition to the other identification numbers
printed on the Securities), and, if so, the Trustee shall use “CUSIP” or “CINS”
numbers in notices of redemption as a convenience to Holders; provided,
however, that any such notice may state that no representation is made as to
the correctness of such “CUSIP” or “CINS” numbers either as printed on the
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Securities,
and any such redemption shall not be affected by any defect in or omission of
such “CUSIP” or “CINS” numbers.

 

33

 

ARTICLE FOUR

SATISFACTION AND DISCHARGE

 

Section 4.1.            Satisfaction and Discharge of
Indenture.

 

This Indenture shall cease to be of further effect
and will be discharged with respect to the Securities of any series (except as
to any surviving rights of registration of transfer or exchange of Securities
and certain rights of the Trustee, in each case, herein expressly provided
for), and the Trustee, upon Company Request and at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture with respect to such Securities, when:

 

(a)       either

 

(i)            all such Securities theretofore authenticated and
delivered (other than (A) such Securities which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section 3.6,
and (B) such Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as provided in Section 10.3)
have been delivered to the Trustee for cancellation; or

 

(ii)           all such
Securities not theretofore delivered to the Trustee for cancellation:

 

(A)     have become due
and payable, or

 

(B)      will become due
and payable at their Stated Maturity within one year, or

 

(C)      are to be
called for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company,

 

and
the Company, in the case of (A), (B) or (C) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for such
purpose an amount sufficient to pay and discharge the entire indebtedness on
such Securities not theretofore delivered to the Trustee for cancellation, for
principal (and premium, if any) and interest to the date of such deposit (in
the case of Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be, together with instructions
from the Company irrevocably directing the Trustee to apply such funds to the
payment thereof at maturity or redemption, as the case may be;

 

(b)       the
Company has paid or caused to be paid all other sums payable hereunder by the
Company with respect to such Securities; and

 

(c)       the
Company has delivered to the Trustee an Officer’s Certificate and an Opinion of
Counsel, which, taken together, state that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture with
respect to such Securities have been complied with.

 

34

 

Notwithstanding the satisfaction and
discharge of this Indenture with respect to the Securities of any series, (x) the
obligations of the Company to the Trustee under Section 6.7, the
obligations of the Trustee to any Authenticating Agent under Section 6.14
and the right of the Trustee to resign under Section 6.10 shall survive,
and (y) if money shall have been deposited with the Trustee pursuant to
clause (a) of this Section, the obligations of the Company and the Trustee
under Section 4.2, Section 6.6 and Section 10.2 and the last
paragraph of Section 10.3 shall survive.

 

Section 4.2.            Application
of Trust Money.

 

Subject to the provisions of the last paragraph of Section 10.3,
all money deposited with the Trustee pursuant to Section 4.1 shall be held
in trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium
and interest for whose payment such money has been deposited with the Trustee.

 

ARTICLE FIVE

REMEDIES

 

Section 5.1.            Events of Default.

 

“Event of Default,” wherever used herein with
respect to Securities of any series, means any one of the following events
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):

 

(a)       default
in the payment of any interest upon any Security of that series when it becomes
due and payable, and continuance of such default for a period of 30 days
(regardless of whether such payment is prohibited by the provisions of Article Fourteen
hereof); or

 

(b)       default
in the payment of the principal of (or premium, if any, on) any Security of that
series at its Maturity (regardless of whether such payment is prohibited by the
provisions of Article Fourteen hereof); or

 

(c)       default
in the performance, or breach, of the covenant set forth in Section 8.1;
or

 

(d)       default
in the performance, or breach, of any covenant in this Indenture (other than
the covenant in Section 8.1 or any other covenant a default in whose
performance or whose breach is elsewhere in this Section specifically
dealt with or which has expressly been included in this Indenture solely for
the benefit of a series of Securities other than that series), and continuance
of such default or breach for a period of 60 days after there has been given,
by registered or certified mail, to the Company by

 

35

 

the Trustee or to the Company and the Trustee by the Holders of at
least 25% in principal amount of the Outstanding Securities of that series a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a “Notice of Default” hereunder; or

 

(e)       the
Company or any Significant Subsidiary pursuant to or within the meaning of any
Bankruptcy Law (i) commences a voluntary case or proceeding, (ii) consents
to the entry of any decree or order for relief against it in an involuntary
case or proceeding, (iii) consents to the appointment of a Custodian of it
or for all or substantially all of its property, (iv) makes a general
assignment for the benefit of its creditors, (v) consents to or acquiesces
in the institution of a bankruptcy or an insolvency proceeding against it, (vi) takes
any corporate action to authorize or effect any of the foregoing, or (vii) takes
any comparable action under any foreign laws relating to insolvency; or

 

(f)        a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that (i) is for relief against the Company or any Significant
Subsidiary in an involuntary case, (ii) appoints a Custodian of the
Company or any Significant Subsidiary for all or substantially all of its
property, or (iii) orders the liquidation or winding up of the Company or
any Significant Subsidiary; and the order or decree remains unstayed and in
effect for 30 consecutive days; or

 

(g)       default
in the deposit of any sinking fund payment when due; or

 

(h)       any
other Event of Default provided with respect to Securities of that series in
accordance with Section 3.1.

 

Section 5.2.            Acceleration of Maturity;
Rescission and Annulment.

 

If an Event of Default with respect to Securities of
any series at the time Outstanding occurs and is continuing, then in every such
case the Trustee or the Holders of at least 25% in aggregate principal amount
of the Outstanding Securities of that series may declare the principal amount
(or, if the Securities of that series are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms of that
series), together with any accrued and unpaid interest thereon, of all of the
Securities of that series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such principal amount (or specified amount), together with any
accrued and unpaid interest thereon, shall become immediately due and payable.
Notwithstanding the foregoing, if an Event of Default specified in clause (e) or
(f) of Section 5.1 occurs, the Securities of any series at the time
Outstanding shall be due and payable immediately without further action or
notice.

 

At any time after such a declaration of acceleration
with respect to Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article Five provided, the Holders of a majority in
principal amount of the Outstanding Securities of that series, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if:

 

36

 

(a)       the
Company has paid or deposited with the Trustee a sum sufficient to pay:

 

(i)    all
overdue interest on all Securities of that series,

 

(ii)   the
principal of (and premium, if any, on) any Securities of that series which have
become due otherwise than by such declaration of acceleration and any interest
thereon at the rate or rates prescribed therefor in such Securities,

 

(iii)  to
the extent that payment of such interest is lawful, interest upon overdue
interest at the rate or rates prescribed therefor in such Securities, and

 

(iv)  all
sums paid or advanced by the Trustee hereunder and the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel;
and

 

(b)       all
Events of Default with respect to Securities of that series, other than the
non-payment of the principal of Securities of that series which have become due
solely by such declaration of acceleration, have been cured or waived as
provided in Section 5.13.

 

No such rescission shall affect any subsequent
default or impair any right consequent thereon.

 

Section 5.3.            Collection of Indebtedness and
Suits for Enforcement by Trustee.

 

The Company covenants that if:

 

(a)       default
is made in the payment of any installment of interest on any Security when such
interest becomes due and payable and such default continues for a period of 30
days (regardless of whether such payment is prohibited by the provisions of Article Fourteen
hereof), or

 

(b)       default
is made in the payment of the principal of (or premium, if any, on) any
Security at the Maturity thereof (regardless of whether such payment is
prohibited by the provisions of Article Fourteen hereof),

 

the Company will, upon demand of the Trustee,
pay to it, for the benefit of the Holders of such Securities, the whole amount
then due and payable on such Securities for principal and any premium and
interest and, to the extent that payment of such interest shall be legally
enforceable, interest on any overdue principal and any premium and on any
overdue interest, at the rate or rates prescribed therefor in such Securities,
and, in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.

 

If the Company fails to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as trustee of an express
trust, may institute a judicial proceeding for the collection of the sums so
due and unpaid, may prosecute such proceeding to judgment or final decree and

 

37

 

may enforce the same against the Company or
any other obligor upon such Securities and collect the moneys adjudged or
decreed to be payable in the manner provided by law out of the property of the
Company or any other obligor upon such Securities, wherever situated.

 

If an Event of Default with respect to Securities of
any series occurs and is continuing, the Trustee may in its discretion proceed
to protect and enforce its rights and the rights of the Holders of Securities
of such series by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy.

 

Section 5.4.            Trustee May File Proofs of
Claim.

 

In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company or any other
obligor upon the Securities, their property or their creditors, the Trustee
(irrespective of whether the principal of the Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment
of overdue principal or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise,

 

(a)       to
file and prove a claim for the whole amount of principal (and premium, if any)
and interest owing and unpaid in respect of the Securities and to file such
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel)
and of the Holders allowed in such judicial proceeding, and

 

(b)       to
collect and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same;

 

and any custodian, receiver, assignee,
trustee, liquidator, sequestrator or other similar official in any such
judicial proceeding is hereby authorized by each Holder to make such payments
to the Trustee and, if the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section 6.7.

 

No provision of this Indenture shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Holder any plan of reorganization, compromise, arrangement, adjustment
or composition affecting the Securities or the rights of any Holder thereof or
to authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding; provided, however, that the Trustee may, on behalf of the
Holders, vote for the election of a trustee in bankruptcy or similar official
and be a member of a creditors’ or other similar committee.

 

38

 

Section 5.5.            Trustee May Enforce Claims
Without Possession of Securities.

 

All rights of action and claims under this Indenture
or the Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities in respect of which
such judgment has been recovered.

 

Section 5.6.            Application of Money Collected.

 

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

 

FIRST:
To the payment of all amounts due the Trustee under Section 6.7;

 

SECOND:
Subject to Article Fourteen, to the payment of the amounts then due and
unpaid for principal of and any premium and interest on the Securities in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities for principal and any premium and interest,
respectively; and

 

THIRD:
The balance, if any, to the Company.

 

Section 5.7.            Limitation on Suits.

 

No Holder of any Security of any series shall have
any right to institute any proceeding, judicial or otherwise, with respect to
this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:

 

(a)       such
Holder has previously given written notice to the Trustee of a continuing Event
of Default with respect to the Securities of that series;

 

(b)       the
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
hereunder;

 

(c)       such
Holder or Holders have offered to the Trustee reasonable indemnity against the
costs, expenses and liabilities to be incurred in compliance with such request;

 

(d)       the
Trustee for 60 days after its receipt of such notice, request and offer of
indemnity has failed to institute any such proceeding; and

 

39

 

(e)       no
direction inconsistent with such written request has been given to the Trustee
during such 60-day period by the Holders of a majority in principal amount of
the Outstanding Securities of that series;

 

it being understood and intended that no one
or more of such Holders shall have any right in any manner whatever by virtue
of, or by availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other of such Holders, or to obtain or to seek to
obtain priority or preference over any other of such Holders or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all such Holders.

 

Section 5.8.            Unconditional Right of Holders to
Receive Principal, Premium and Interest.

 

Notwithstanding any other provision in this
Indenture, the Holder of any Security shall have the right, which is absolute
and unconditional, to receive payment of the principal of and any premium and
(subject to Section 3.5 and Section 3.7) interest on such Security on
the Stated Maturity or Maturities expressed in such Security (or, in the case
of redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.

 

Section 5.9.            Restoration of Rights and
Remedies.

 

If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, the Trustee
and the Holders shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been instituted.

 

Section 5.10.          Rights and Remedies Cumulative.

 

Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities in
the last paragraph of Section 3.6, no right or remedy herein conferred
upon or reserved to the Trustee or to the Holders is intended to be exclusive
of any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.

 

Section 5.11.          Delay or Omission Not Waiver.

 

To fullest extent permitted by applicable law, no
delay or omission of the Trustee or of any Holder of any Securities to exercise
any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article Five or
by law to the Trustee or to the Holders may be exercised from time to time, and
as often as may be deemed expedient, by the Trustee or by the Holders, as the
case may be.

 

40

 

Section 5.12.          Control by Holders.

 

The Holders of not less than a majority in principal
amount of the Outstanding Securities of any series shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee, with respect to the Securities of such series; provided, however,
that:

 

(a)       such
direction shall not be in conflict with any rule of law or with this
Indenture;

 

(b)       the
Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction; and

 

(c)       subject
to the provisions of Section 6.1, the Trustee shall have the right to
decline to follow any such direction if the Trustee in good faith shall
determine that the proceeding so directed would involve the Trustee in personal
liability.

 

Section 5.13.          Waiver of Past Defaults.

 

By written notice to the Company and the Trustee,
the Holders of not less than a majority in principal amount of the Outstanding
Securities of any series may on behalf of the Holders of all the Securities of
such series waive any past default hereunder with respect to such series and
its consequences, except:

 

(a)       a
continuing default in the payment of the principal of or any premium or
interest on any Security of such series, or

 

(b)       a
default in respect of a covenant or provision hereof which under Article Nine
cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.

 

Upon any such waiver, such default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Indenture, but no such waiver shall
extend to any subsequent or other default or impair any right consequent
thereon.

 

Section 5.14.          Undertaking for Costs.

 

All parties to this Indenture agree, and each Holder
of any Security by his acceptance thereof shall be deemed to have agreed, that
any court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any party
litigant, other than the Trustee, in such suit of an undertaking to pay the
costs of such suit, and that such court may in its discretion assess reasonable
costs, including reasonable attorneys’ fees, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section 5.14 shall
not apply to any suit instituted by the Company, to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities
of any series, or to any suit instituted by any Holder for the

 

41

 

enforcement of the payment of the principal
of (or premium, if any) or interest on any Security on or after the Stated
Maturity or Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).

 

Section 5.15.          Waiver of Stay or Extension Laws.

 

The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which
may affect the covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.

 

ARTICLE SIX

THE TRUSTEE

 

Section 6.1.            Certain Duties and
Responsibilities.

 

(a)       Except
during the continuance of an Event of Default,

 

(i)    the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and as are provided by the Trust
Indenture Act, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and

 

(ii)   in
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture; but in the case of any such certificates
or opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether they conform to the requirements of this Indenture.

 

(b)       In
case an Event of Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.

 

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

 

(i)    this
Subsection shall not be construed to limit the effect of Subsection (a) of
this Section;

 

42

 

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

 

(iii)  the
Trustee shall not be liable with respect to any action taken or omitted to be
taken by it in good faith in accordance with the direction of the Holders of a
majority in principal amount of the Outstanding Securities of any series, given
pursuant to Section 5.12, relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this Indenture
with respect to the Securities of such series; and

 

(iv)  no
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.

 

(d)           Regardless
of whether therein expressly so provided, every provision of this Indenture
relating to the conduct or affecting the liability of or affording protection
to the Trustee shall be subject to the provisions of this Section.

 

Section 6.2.            Notice of Defaults.

 

Within 90 days after the occurrence of any Default
hereunder with respect to the Securities of any series, the Trustee shall
transmit by mail to all Holders of Securities of such series, as their names
and addresses appear in the Security Register, notice of such Default hereunder
known to the Trustee, unless such Default shall have been cured or waived;
provided, however, that, except in the case of a Default in the payment of the
principal of or any premium or interest on any Security of such series or in
the payment of any sinking fund installment with respect to Securities of such
series, the Trustee may withhold from Holders of Securities notice of any
continuing Default or Event of Default if the Trustee in good faith determines
that the withholding of such notice is in the interest of the Holders of
Securities of such series; and, provided, further, that in the case of any
Default of the character specified in Section 5.1(c) with respect to
Securities of such series, no such notice to Holders shall be given until at
least 90 days after the occurrence thereof and that in the case of any Default
of the character specified in Section 5.1(d) with respect to
Securities of such series, no such notice to Holders shall be given until at
least 180 days after the occurrence thereof.

 

Section 6.3.            Certain Rights of Trustee.

 

Subject to the provisions of Section 6.1:

 

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

 

43

 

(b)       any
request or direction of the Company mentioned herein shall be sufficiently
evidenced by a Company Request or Company Order (other than delivery of any
Security to the Trustee for authentication and delivery pursuant to Section 3.3,
which shall be sufficiently evidenced as provided therein) and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;

 

(c)       whenever
in the administration of this Indenture the Trustee shall deem it desirable
that a matter be proved or established prior to taking, suffering or omitting
any action hereunder, the Trustee (unless other evidence be herein specifically
prescribed) shall be entitled to receive and may, in the absence of bad faith
on its part, rely upon an Officer’s Certificate;

 

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

 

(e)       the
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the
Holders pursuant to this Indenture, unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;

 

(f)        the
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney;

 

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

 

(h)       the
Trustee may request that the Company deliver an Officer’s Certificate setting
forth the names of individuals and/or titles of officers authorized at such
time to take specified actions pursuant to this Indenture, which Officer’s
Certificate may be signed by any person authorized to sign an Officer’s
Certificate, including any person specified as so authorized in any such
certificate previously delivered and not superseded;

 

(i)        the
Trustee shall be entitled to the rights and protections afforded to the Trustee
pursuant to this Article Six in acting as a Paying Agent or Security
Registrar hereunder; and

 

44

 

(j)        the
Trustee shall not be deemed to have notice of any Default or Event of Default
unless a Responsible Officer of the Trustee has actual knowledge thereof or
unless written notice of any event which is in fact such a default is received
by the Trustee at the Corporate Trust Office of the Trustee, and such notice
references the Notes and this Indenture.

 

Section 6.4.                                   Not Responsible
for Recitals or Issuance of Securities.

 

The recitals contained herein and in the Securities,
except the Trustee’s certificates of authentication, shall be taken as the
statements of the Company and the Trustee or any Authenticating Agent assumes
no responsibility for their correctness. Neither the Trustee nor any
Authenticating Agent makes any representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.

 

Section 6.5.                                   May Hold
Securities.

 

The Trustee, any Authenticating Agent, any Paying
Agent, any Security Registrar or any other agent of the Company in its
individual or any other capacity, may become the owner or pledgee of Securities
and, subject to Sections 310(b) and 311 of the Trust Indenture Act and Section 6.8,
Section 6.9 and Section 6.13, may otherwise deal with the Company
with the same rights it would have if it were not Trustee, Authenticating
Agent, Paying Agent, Security Registrar or such other agent.

 

Section 6.6.                                   Money Held in
Trust.

 

Money held by the Trustee in trust hereunder need
not be segregated from other funds except to the extent required by law. The
Trustee shall be under no liability for interest on any money received by it
hereunder except as otherwise agreed in writing with the Company.

 

Section 6.7.                                   Compensation
and Reimbursement.

 

The Company agrees:

 

(a)       to
pay to the Trustee from time to time reasonable compensation for all services
rendered by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);

 

(b)       except
as otherwise expressly provided herein, to reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses and disbursements of
its agents and counsel), except any such expense, disbursement or advance as
may be attributable to its negligence or bad faith; and

 

(c)       to
indemnify each of the Trustee and its officers, directors, agents and employees
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or willful misconduct on its part, arising out of or in
connection with 

 

45

 

the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder.

 

As security for the performance of the obligations
of the Company under this Section the Trustee shall have a lien prior to
the Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the payment of principal of (and premium,
if any) or interest on particular Securities.

 

Without limiting any rights available to the Trustee
under applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.1(e) or Section 5.1(f),
the expenses (including the reasonable charges and expenses of its counsel) and
the compensation for the services of the Trustee are intended to constitute
expenses of administration under any applicable Bankruptcy Law.

 

The provisions of this Section 6.7 shall
survive the satisfaction and discharge of this Indenture and the Legal
Defeasance of the Securities.

 

Section 6.8.                                   Disqualification;
Conflicting Interests.

 

Reference is made to Section 310(b) of the
Trust Indenture Act. There shall be excluded from the operation of Section 310(b)(1) of
the Trust Indenture Act this Indenture with respect to the Securities of more
than one series.

 

Section 6.9.                                   Corporate
Trustee Required; Eligibility.

 

There shall at all times be a Trustee hereunder
which shall be a corporation organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus required by the Trust Indenture Act, subject to
supervision or examination by Federal or State authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. The Trustee shall not be an obligor upon the
Securities or an Affiliate thereof. If at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this Article Six.

 

Section 6.10.                             Resignation and
Removal; Appointment of Successor.

 

(a)       No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 6.11.

 

(b)       The
Trustee may resign at any time with respect to the Securities of one or more
series by giving written notice thereof to the Company. If the instrument of
acceptance by a successor Trustee required by Section 6.11 shall not have
been delivered 

 

46

 

to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.

 

(c)       The
Trustee may be removed at any time with respect to the Securities of any series
by Act of the Holders of a majority in principal amount of the Outstanding
Securities of such series, delivered to the Trustee and to the Company.

 

(d)       If
at any time:

 

(i)    the
Trustee shall fail to comply with Section 310(b) of the Trust
Indenture Act after written request therefor by the Company or by any Holder
who has been a bona fide Holder of a Security for at least six months, or

 

(ii)   the
Trustee shall cease to be eligible under Section 6.9 and shall fail to
resign after written request therefor by the Company or by any such Holder, or

 

(iii)  the
Trustee shall become incapable of acting or shall be adjudged a bankrupt or
insolvent or a receiver of the Trustee or of its property shall be appointed or
any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, (A) the Company by a Board Resolution
may remove the Trustee with respect to all Securities, or (B) subject to Section 5.14,
any Holder who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee with respect
to all Securities and the appointment of a successor Trustee or Trustees.

 

(e)       If
the Trustee shall resign, be removed or become incapable of acting, or if a
vacancy shall occur in the office of Trustee for any cause, with respect to the
Securities of one or more series, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such successor Trustee
may be appointed with respect to the Securities of one or more or all of such
series and that at any time there shall be only one Trustee with respect to the
Securities of any particular series) and shall comply with the applicable
requirements of Section 6.11. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 6.11, become the
successor Trustee with respect to the Securities of such series and to that
extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities of any series shall have been
so appointed by the Company or the Holders and accepted appointment in the
manner required by Section 6.11, any Holder who has been a bona fide
Holder of a Security of such series for 

 

47

 

at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series.

 

(f)        The
Company shall give notice of each resignation and each removal of the Trustee
with respect to the Securities of any series and each appointment of a
successor Trustee with respect to the Securities of any series to all Holders
of Securities of such series in the manner provided in Section 1.7. Each
notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.

 

Section 6.11.                             Acceptance of
Appointment by Successor.

 

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

 

(b)       In
case of the appointment hereunder of a successor Trustee with respect to the
Securities of one or more (but not all) series, the Company, the retiring
Trustee and each successor Trustee with respect to the Securities of one or more
series shall execute and deliver an indenture supplemental hereto wherein each
successor Trustee shall accept such appointment and which (i) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of
that or those series to which the appointment of such successor Trustee
relates, (ii) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (iii) shall add to or change any of the provisions
of this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to 

 

48

 

which the appointment of such successor Trustee relates; but, on
request of the Company or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such successor Trustee
relates.

 

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

 

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

 

Section 6.12.                             Merger,
Conversion, Consolidation or Succession to Business.

 

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

 

Section 6.13.                             Preferential
Collection of Claims Against Company.

 

Reference is made to Section 311 of the Trust
Indenture Act. For purposes of Section 311(b) of the Trust Indenture Act,

 

(a)       the
term “cash transaction” means any transaction in which full payment for goods
or securities sold is made within seven days after delivery of the goods or
securities in currency or in checks or other orders drawn upon banks or bankers
and payable upon demand;

 

(b)       the
term “self-liquidating paper” means any draft, bill of exchange, acceptance or
obligation which is made, drawn, negotiated or incurred by the Company for the
purpose of financing the purchase, processing, manufacturing, shipment, storage
or sale of goods, wares or merchandise and which is secured by documents
evidencing title to, possession of, or a lien upon, the goods, wares or
merchandise or the receivables or proceeds arising from the sale of the goods,
wares or merchandise previously constituting the security, provided the
security is received by the Trustee simultaneously with the creation of the
creditor relationship with the Company arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation.

 

49

 

Section 6.14.                             Appointment of
Authenticating Agent.

 

The Trustee may appoint an Authenticating Agent or
Agents with respect to one or more series of Securities which shall be authorized
to act on behalf of the Trustee to authenticate Securities of such series
issued upon exchange, registration of transfer or partial redemption thereof or
pursuant to Section 3.6, and Securities so authenticated shall be entitled
to the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee’s certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State
thereof or the District of Columbia, authorized under such laws to act as
Authenticating Agent, having a combined capital and surplus of not less than
$50,000,000 and subject to supervision or examination by Federal or State
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section, such Authenticating Agent
shall resign immediately in the manner and with the effect specified in this
Section.

 

Any corporation into which an Authenticating Agent
may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which
such Authenticating Agent shall be a party, or any corporation succeeding to
all or substantially all of the corporate agency or corporate trust business of
an Authenticating Agent, shall continue to be an Authenticating Agent, provided
such corporation shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.

 

An Authenticating Agent may resign at any time by
giving written notice thereof to the Trustee and to the Company. The Trustee
may at any time terminate the agency of an Authenticating Agent by giving
written notice thereof to such Authenticating Agent and to the Company. Upon
receiving such a notice of resignation or upon such a termination, or in case
at any time such Authenticating Agent shall cease to be eligible in accordance
with the provisions of this Section, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall mail
written notice of such appointment by first-class mail, postage prepaid, to all
Holders of Securities of the series with respect to which such Authenticating
Agent will serve, as their names and addresses appear in the Security Register.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.

 

50

 

Except with respect to an Authenticating Agent
appointed at the request of the Company, the Trustee agrees to pay to each
Authenticating Agent from time to time reasonable compensation for its services
under this Section 6.14, and the Trustee shall be entitled to be
reimbursed by the Company for such payments, subject to the provisions of Section 6.7.

 

If an appointment with respect to one or more series
is made pursuant to this Section 6.14, the Securities of such series may
have endorsed thereon, in addition to the Trustee’s certificate of
authentication, an alternate certificate of authentication in the following
form:

 

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

 

	
   

  	
   

  	
   

  
	
   

  	
  As Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  As Authenticating Agent

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  
				

 

ARTICLE SEVEN

HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY

 

Section 7.1.                                   Company to
Furnish Trustee Names and Addresses of Holders.

 

The Company will furnish or cause to be furnished to
the Trustee:

 

(a)       semi-annually,
not more than 15 days after each Regular Record Date for a series of
Securities, a list for such series of Securities, in such form as the Trustee
may reasonably require, of the names and addresses of the Holders of Securities
of such series as of such Regular Record Date, and

 

(b)       at
such other times as the Trustee may request in writing, within 30 days after
the receipt by the Company of any such request, a list of similar form and content
as of a date not more than 15 days prior to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar, no such list need be furnished with respect to such series of
Securities.

 

Section 7.2.                                   Preservation of
Information; Communications to Holders.

 

(a)       The
Trustee shall preserve, in as current a form as is reasonably practicable, the
names and addresses of Holders contained in the most recent list furnished to
the Trustee as provided in Section 7.1 and the names and addresses of
Holders received by the Trustee in its capacity as Security Registrar. The
Trustee may destroy any list furnished to it as provided in Section 7.1
upon receipt of a new list so furnished.

 

51

 

(b)       If
three or more Holders (herein referred to as “applicants”) apply in writing to
the Trustee, and furnish to the Trustee reasonable proof that each such
applicant has owned a Security for a period of at least six months preceding the
date of such application, and such application states that the applicants
desire to communicate with other Holders with respect to their rights under
this Indenture or under the Securities and is accompanied by a copy of the form
of proxy or other communication which such applicants propose to transmit, then
the Trustee shall, within five business days after the receipt of such
application, at its election, either

 

(i)    afford
such applicants access to the information preserved at the time by the Trustee
in accordance with Section 7.2(a), or

 

(ii)   inform
such applicants as to the approximate number of Holders whose names and
addresses appear in the information preserved at the time by the Trustee in
accordance with Section 7.2(a), and as to the approximate cost of mailing
to such Holders the form of proxy or other communication, if any, specified in
such application.

 

If
the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder whose name and address appear in the information preserved
at the time by the Trustee in accordance with Section 7.2(a) a copy
of the form of proxy or other communication which is specified in such request,
with reasonable promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the reasonable expenses
of mailing, unless within five days after such tender the Trustee shall mail to
such applicants and file with the SEC, together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interest of the Holders or
would be in violation of applicable law. Such written statement shall specify
the basis of such opinion. If the SEC, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, the SEC shall find, after notice and
opportunity for hearing, that all the objections so sustained have been met and
shall enter an order so declaring, the Trustee shall mail copies of such
material to all such Holders with reasonable promptness after the entry of such
order and the renewal of such tender; otherwise the Trustee shall be relieved
of any obligation or duty to such applicants respecting their application.

 

(c)       Every
Holder of Securities, by receiving and holding the same, agrees with the
Company and the Trustee that none of the Company nor the Trustee nor any agent
of any of them shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of the Holders in accordance
with Section 7.2(b), regardless of the source from which such information
was derived, and that the Trustee shall not be held accountable by reason of
mailing any material pursuant to a request made under Section 7.2(b).

 

52

 

Section 7.3.                                   Reports by
Trustee.

 

Any Trustee’s report required pursuant to Section 313(a) of
the Trust Indenture Act shall be dated as of May 15, and shall be
transmitted within 60 days after May 15 of each year (but in all events at
intervals of not more than 12 months), commencing with the year
20       , by mail to all Holders, as their
names and addresses appear in the Security Register. A copy of each such report
shall, at the time of such transmission to Holders, be filed by the Trustee
with each stock exchange upon which any Securities are listed, with the SEC and
with the Company. The Company will notify the Trustee when any Securities are
listed on any stock exchange.

 

Section 7.4.                                   Reports by
Company.

 

The Company shall:

 

(a)       file
with the Trustee, within 15 days after the Company files the same with the SEC,
copies of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the SEC may from
time to time by rules and regulations prescribe) which the Company may be
required to file with the SEC pursuant to Section 13 or Section 15(d) of
the Exchange Act; or, if the Company is not required to file information,
documents or reports pursuant to either of said Sections, then it shall file
with the Trustee and the SEC, in accordance with rules and regulations
prescribed from time to time by the SEC, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13
of the Exchange Act in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in such rules and
regulations;

 

(b)       file
with the Trustee and the SEC, in accordance with rules and regulations prescribed
from time to time by the SEC, such additional information, documents and
reports with respect to compliance by the Company with the conditions and
covenants of this Indenture as may be required from time to time by such rules and
regulations; and

 

(c)       transmit
by mail to all Holders, as their names and addresses appear in the Security
Register, within 30 days after the filing thereof with the Trustee, such
summaries of any information, documents and reports required to be filed by the
Company pursuant to clauses (a) and (b) of this Section as may
be required by rules and regulations prescribed from time to time by the
SEC.

 

ARTICLE EIGHT

CONSOLIDATION, AMALGAMATION, MERGER AND SALE

 

Section 8.1.                                   Company May Consolidate,
Etc., Only on Certain Terms.

 

The
Company shall not consolidate or merge with or into any other Person or sell,
convey, transfer, lease or otherwise dispose of all or substantially all of the
properties and assets of the Company on a consolidated basis to any other
Person, and shall not permit any Person to consolidate or merge into the
Company, unless:

 

53

 

(a)           either:
(i) the Company is the surviving corporation; or (ii) the Person
formed by or surviving any such consolidation, amalgamation or merger or
resulting from such conversion (if other than the Company) or to which such
sale, assignment, transfer, conveyance or other disposition has been made is a
corporation, limited liability company or limited partnership organized or
existing under the laws of the United States, any state of the United States or
the District of Columbia;

 

(b)           the
Person formed by or surviving any such conversion, consolidation, amalgamation
or merger (if other than the Company) or the Person to which such sale,
assignment, transfer, conveyance or other disposition has been made assumes all
the obligations of the Company under the Securities and this Indenture pursuant
to agreements reasonably satisfactory to the Trustee; provided that, unless
such Person is a corporation, a corporate co-issuer of the Securities will be
added to this Indenture by agreements reasonably satisfactory to the Trustee;

 

(c)           immediately
before and after giving pro forma effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have occurred and be continuing; and

 

(d)           the
Company has delivered to the Trustee an Officer’s Certificate and an Opinion of
Counsel, each stating that such consolidation, amalgamation, merger,
conveyance, sale, transfer or lease and such supplemental indenture, if any,
comply with this Article Eight and that all conditions precedent herein
provided for relating to such transaction have been complied with.

 

Section 8.2.            Successor
Substituted.

 

Upon any consolidation or merger of the Company with
or into any other Person or any sale, conveyance, transfer, lease or other
disposition of all or substantially all of the properties and assets of the
Company on a consolidated basis in accordance with Section 8.1, the
successor or resulting Person formed by or resulting upon such consolidation or
merger (if other than the Company) or to which such sale, conveyance, transfer,
lease or other disposition is made shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor Person had been named as the Company
herein, and thereafter, except in the case of a lease, the predecessor Company
shall be relieved of all obligations and covenants under this Indenture and the
Securities.

 

ARTICLE NINE

AMENDMENT,
SUPPLEMENT AND WAIVER

 

Section 9.1.                                   Without Consent
of Holders.

 

The Company and the Trustee may amend or supplement
this indenture or the Securities without the consent of any holder of a
Security:

 

54

 

(a)           to
cure any ambiguity or to correct or supplement any provision herein that may be
inconsistent with any other provision herein in a manner that does not
adversely affect the rights of any Holder of Securities in any material
respect; or

 

(b)           to
evidence the succession of another Person to the Company and the assumption by
any such successor of the covenants of the Company herein and, to the extent
applicable, to the Securities; or

 

(c)           to
provide for uncertificated Securities in addition to or in place of certificated
Securities; provided that the uncertificated Securities are issued in
registered form for purposes of Section 163(f) of the Code, or in the
manner such that the uncertificated Securities are described in Section 163(f)(2)(B) of
the Code; or

 

(d)           to
secure the Securities of any series; or

 

(e)           to
add to the covenants of the Company such further covenants, restrictions,
conditions or provisions as the Company shall consider to be appropriate for
the benefit of the Holders of all or any series of Securities (and if such
covenants, restrictions, conditions or provisions are to be for the benefit of
less than all series of Securities, stating that such covenants are expressly
being included solely for the benefit of such series) or to surrender any right
or power herein conferred upon the Company and to make the occurrence, or the
occurrence and continuance, of a Default in any such additional covenants,
restrictions, conditions or provisions an Event of Default permitting the
enforcement of all or any of the several remedies provided in this Indenture as
herein set forth; provided, that in respect of any such additional covenant,
restriction, condition or provision such supplemental indenture may provide for
a particular period of grace after default (which period may be shorter or
longer than that allowed in the case of other defaults) or may provide for an
immediate enforcement upon such an Event of Default or may limit the remedies
available to the Trustee upon such an Event of Default or may limit the right
of the Holders of a majority in aggregate principal amount of the Securities of
such series to waive such an Event of Default; or

 

(f)            to
make any change to any provision of this Indenture that does not adversely
affect the rights or interests of any Holder of Securities; or

 

(g)           to
provide for the issuance of additional Securities in accordance with the
provisions set forth in this Indenture on the date of this Indenture; or

 

(h)           to
add any additional Defaults or Events of Default in respect of all or any
series of Securities; or

 

(i)            to
add to, change or eliminate any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of Securities
in bearer form, registrable or not registrable as to principal, and with or
without interest coupons; or

 

(j)            to
change or eliminate any of the provisions of this Indenture; provided that any
such change or elimination shall become effective only when there is no
Security 

 

55

 

Outstanding of any series created prior to the execution of such
supplemental indenture that is entitled to the benefit of such provision; or

 

(k)           to
establish the form or terms of Securities of any series as permitted by Section 2.1
and Section 3.1, including to reopen any series of any Securities as
permitted under Section 3.1; or

 

(l)            to
evidence and provide for the acceptance of appointment hereunder by a successor
Trustee with respect to the Securities of one or more series and to add to or
change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 6.11(b); or

 

(m)          to
conform the text of this Indenture (and/or any supplemental indenture) or any
debt securities issued thereunder to any provision of a description of such
debt securities appearing in a prospectus or prospectus supplement or an
offering memorandum or offering circular to the extent that such provision was
intended to be a verbatim recreation of a provision of the indenture (and/or
any supplemental indenture) or any debt securities issued thereunder; or

 

(n)           to
modify, eliminate or add to the provisions of this Indenture to such extent as
shall be necessary to effect the qualification of this Indenture under the
Trust Indenture Act or under any similar federal statute subsequently enacted,
and to add to this Indenture such other provisions as may be expressly required
under the Trust Indenture Act.

 

After an amendment under this Section 9.1
becomes effective, the Company shall mail to Holders a notice briefly
describing such amendment. The failure to give such notice to Holders, or any
defect therein, shall not impair or affect the validity of an amendment under
this Section 9.1.

 

Upon the request of the Company accompanied by a
resolution of its Board of Directors authorizing the execution of any such
amended or supplemental indenture, the Trustee is hereby authorized to join
with the Company in the execution of any such supplemental indenture, to make
any further appropriate agreements and stipulations that may be therein
contained and to accept the conveyance, transfer, assignment, mortgage, charge
or pledge of any property thereunder, but the Trustee shall not be obligated to
enter into any such supplemental indenture that affects the Trustee’s own
rights, duties or immunities under this Indenture or otherwise.

 

Section 9.2.                                   With Consent of
Holders.

 

The Company and the Trustee may amend or supplement
this Indenture and the Securities with the consent of the Holders of a majority
in aggregate principal amount of the Outstanding Securities of each series of
Securities affected by such amendment or supplemental indenture, with each such
series voting as a separate class (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for Securities) and, subject to Section 5.8 and Section 5.13 hereof,
any existing Default or Event of Default or compliance with any provision of
this Indenture or the Securities may be waived with 

 

56

 

respect to each series of Securities with the
consent of the Holders of a majority in principal amount of the Outstanding
Securities of such series voting as a separate class (including consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Securities).

 

Upon the request of the Company accompanied by a
resolution of its Board of Directors authorizing the execution of any such
amended or supplemental indenture, and upon the filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Holders of
Securities as aforesaid, and upon receipt by the Trustee of the documents
described in Section 6.3 hereof, the Trustee will join with the Company in
the execution of such amended or supplemental indenture unless such amended or
supplemental indenture directly affects the Trustee’s own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but will not be obligated to, enter into such amended or
supplemental Indenture.

 

It is not be necessary for the consent of the
Holders of Securities under this Section 9.2 to approve the particular
form of any proposed amendment or waiver, but it is sufficient if such consent
approves the substance of the proposed amendment or waiver.

 

After an amendment, supplement or waiver under this Section 9.2
becomes effective, the Company will mail to the Holders of Securities affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, will not,
however, in any way impair or affect the validity of any such amended or
supplemental indenture or waiver. Subject to Section 5.8 and Section 5.13
hereof, the application of or compliance with, either generally or in any
particular instance, of any provision of this Indenture or the Securities may
be waived as to each series of Securities by the Holders of a majority in
aggregate principal amount of the Outstanding Securities of such series.
However, without the consent of each Holder affected, an amendment or waiver
under this Section 9.2 may not (with respect to any Securities held by a
non-consenting Holder):

 

(a)           change
the Stated Maturity of the principal of, or any installment of principal of or
interest on, any Security, or reduce the principal amount thereof or the rate
of interest thereon or any premium payable upon the redemption thereof, or
reduce the amount of the principal of an Original Issue Discount Security that
would be due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 5.2, or change any Place of Payment where, or
the coin or currency in which, any Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the enforcement
of any such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date); or

 

(b)           reduce
the percentage in principal amount of the Outstanding Securities of any series,
the consent of whose Holders is required for any such supplemental indenture,
or the consent of whose Holders is required for any waiver (of compliance with
certain provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture; or

 

(c)           modify
any of the provisions of this Section 9.2, Section 5.8, Section 5.13
or Section 10.6, except to increase any such percentage or to provide that
certain other 

 

57

 

provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby, provided,
however, that this clause (c) shall not be deemed to require the consent
of any Holder with respect to changes in the references to “the Trustee” and
concomitant changes in this Section, or the deletion of this proviso, in
accordance with the requirements of Section 6.11(b) and Section 9.1(h);
or

 

(d)           waive a
redemption payment with respect to any Security; provided, however, that any
purchase or repurchase of Securities shall not be deemed a redemption of the
Securities; or

 

(e)           make any change
in the foregoing amendment and waiver provisions.

 

A
supplemental indenture that changes or eliminates any covenant or other
provision of this Indenture that has expressly been included solely for the
benefit of one or more particular series of Securities, or that modifies the
rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.

 

It shall not be necessary for any Act of Holders
under this Section 9.2 to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act shall approve
the substance thereof.

 

Section 9.3.                                   Execution of
Supplemental Indentures.

 

In executing, or accepting the additional trusts
created by, any supplemental indenture permitted by this Article or the
modifications thereby of the trusts created by this Indenture, the Trustee
shall be entitled to receive, and (subject to Section 6.1) shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee’s own rights, duties or immunities under
this Indenture or otherwise.

 

Section 9.4.                                   Effect of
Supplemental Indentures.

 

Upon the execution of any supplemental indenture
under this Article Nine, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a part of this Indenture
for all purposes; and every Holder of Securities theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.

 

Section 9.5.                                   Conformity with
Trust Indenture Act.

 

Every supplemental indenture executed pursuant to
this Article Nine shall conform to the requirements of the Trust Indenture
Act as then in effect.

 

58

 

Section 9.6.                                   Reference in Securities
to Supplemental Indentures.

 

Securities of any series authenticated and delivered
after the execution of any supplemental indenture pursuant to this Article Nine
may, and shall if required by the Trustee, bear a notation in form approved by
the Trustee as to any matter provided for in such supplemental indenture. If
the Company shall so determine, new Securities of any series so modified as to
conform, in the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such series.

 

ARTICLE TEN

COVENANTS

 

Section 10.1.                             Payment of Principal,
Premium and Interest.

 

The Company covenants and agrees for the benefit of
each series of Securities that it will duly and punctually pay the principal of
and any premium and interest on the Securities of that series in accordance
with the terms of the Securities and this Indenture.

 

Section 10.2.                             Maintenance of Office or
Agency.

 

The Company will maintain in the Borough of
Manhattan, The City of New York, an office or agency (which may be an office of
the Trustee or Registrar or agent of the Trustee or Registrar) where Securities
of that series may be presented or surrendered for payment, where Securities of
that series may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Company in respect of the Securities
of that series and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the Corporate Trust Office of the Trustee.

 

The Company may also from time to time designate one
or more other offices or agencies where the Securities of one or more series
may be presented or surrendered for any or all such purposes and may from time
to time rescind such designations; provided, however, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in the Borough of Manhattan, The City of New York
for such purposes. The Company will give prompt written notice to the Trustee
of any such designation or rescission and of any change in the location of any
such other office or agency.

 

Except as otherwise specified with respect to a
series of Securities as contemplated by Section 3.1, the Company hereby
initially designates the office of the Trustee located at 100 Wall Street, New
York, New York 10005, as the Company’s office or agency for each such purpose
for each series of Securities.

 

59

 

Section 10.3.                             Money for Securities
Payments to be Held in Trust.

 

If the Company shall at any time act as its own
Paying Agent, with respect to any series of Securities, it will, on or before
each due date of the principal of and any premium or interest on any of the
Securities of that series, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal and any premium
and interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee
of its action or failure so to act.

 

Whenever the Company shall have one or more Paying Agents
for any series of Securities, it will, prior to each due date of the principal
of and any premium or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay the principal and any premium or interest
so becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act. For purposes of this Section 10.3, should a due date
for principal of and any premium or interest on, or sinking fund payment with
respect to any series of Securities not be on a Business Day, such payment
shall be due on the next Business Day without any interest for the period from
the due date until such Business Day.

 

The Company will cause each Paying Agent for any
series of Securities other than the Trustee to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject
to the provisions of this Section, that such Paying Agent will:

 

(a)           hold
all sums held by it for the payment of the principal of and any premium or
interest on Securities of that series in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided;

 

(b)           give
the Trustee notice of any Default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment of principal and any premium
or interest on the Securities of that series; and

 

(c)           at
any time during the continuance of any such Default, upon the written request
of the Trustee, forthwith pay to the Trustee all sums so held in trust by such
Paying Agent.

 

The Company may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for any other
purpose, pay, or by Company Order direct any Paying Agent to pay, to the
Trustee all sums held in trust by the Company or such Paying Agent, such sums to
be held by the Trustee upon the same trusts as those upon which such sums were
held by the Company or such Paying Agent; and, upon such payment by any Paying
Agent to the Trustee, such Paying Agent shall be released from all further
liability with respect to such money.

 

Subject to any applicable escheat or abandoned
property laws, any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of and any
premium or interest on any Security of any series and remaining unclaimed for
one year after such principal and any premium or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by
the Company) shall be

 

60

 

discharged from such trust; and the Holder of
such Security shall thereafter, as an unsecured general creditor, look only to
the Company for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; provided, however, that the Trustee
or such Paying Agent, before being required to make any such repayment, may at
the expense of the Company cause to be published once, in a newspaper published
in the English language, customarily published on each Business Day and of
general circulation in the Borough of Manhattan, The City of New York, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company.

 

Section 10.4.          Existence.

 

Subject to Article Eight, the Company will do
or cause to be done all things necessary to preserve and keep in full force and
effect its existence, rights (charter and statutory) and franchises; provided, however, that
the Company shall not be required to preserve any such right or franchise if
the Company shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company.

 

Section 10.5.          Statement
by Officers as to Default.

 

Annually, within 150 days after the close of each
fiscal year beginning with the first fiscal year during which one or more
series of Securities are Outstanding, the Company will deliver to the Trustee a
brief certificate (which need not include the statements set forth in Section 1.3)
from the principal executive officer, principal financial officer or principal
accounting officer of the Company as to his or her knowledge of the Company’s
compliance (without regard to any period of grace or requirement of notice
provided herein) with all conditions and covenants under the Indenture and, if
the Company shall be in Default, specifying all such Defaults and the nature
and status thereof of which such officer has knowledge.

 

Section 10.6.          Additional
Amounts.

 

If the Securities of a series provide for the
payment of additional amounts (as provided in Section 3.1(o)), at least 10
days prior to the first Interest Payment Date with respect to that series of
Securities and at least 10 days prior to each date of payment of principal of,
premium, if any, or interest on the Securities of that series if there has been
a change with respect to the matters set forth in the below-mentioned Officer’s
Certificate, the Company shall furnish to the Trustee and the principal Paying
Agent, if other than the Trustee, an Officer’s Certificate instructing the
Trustee and such Paying Agent whether such payment of principal of, premium, if
any, or interest on the Securities of that series shall be made to holders of
the Securities of that series without withholding or deduction for or on
account of any tax, assessment or other governmental charge described in the
Securities of that series. If any such withholding or deduction shall be
required, then such Officer’s Certificate shall specify by country the amount,
if any, required to be withheld or deducted on such payments to such holders
and shall certify the fact that additional amounts will be payable and the
amounts so payable to each holder, and the Company shall pay to the Trustee or
such Paying Agent the additional amounts required to be paid by this Section.
The Company covenants to indemnify the Trustee and any Paying Agent for, and to

 

61

 

hold them harmless against, any loss,
liability or expense reasonably incurred without negligence or bad faith on
their part arising out of or in connection with actions taken or omitted by any
of them in reliance on any Officer’s Certificate furnished pursuant to this Section 10.6.

 

Whenever in this Indenture there is mentioned, in
any context, the payment of the principal of or any premium, interest or any
other amounts on, or in respect of, any Securities of any series, such mention
shall be deemed to include mention of the payment of additional amounts
provided by the terms of such series established hereby or pursuant hereto to
the extent that, in such context, additional amounts are, were or would be
payable in respect thereof pursuant to such terms, and express mention of the
payment of additional amounts (if applicable) in any provision hereof shall not
be construed as excluding the payment of additional amounts in those provisions
hereof where such express mention is not made.

 

ARTICLE ELEVEN

REDEMPTION OF SECURITIES

 

Section 11.1.                             Applicability of
Article.

 

Securities of any series which are redeemable before
their Stated Maturity shall be redeemable in accordance with their terms and
(except as otherwise specified as contemplated by Section 3.1 for
Securities of any series) in accordance with this Article Eleven.

 

Section 11.2.                             Election to Redeem;
Notice to Trustee.

 

The election of the Company to redeem any Securities
shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company of less than all the Securities of any series, the
Company shall, at least 15 days prior to the last date for the giving of notice
of such redemption (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date and of the principal
amount of Securities of such series to be redeemed and, if applicable, of the
tenor of the Securities to be redeemed. In the case of any redemption of
Securities (a) prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture or (b) pursuant to an election of the Company that is subject to
a condition specified in the terms of the Securities of the series to be
redeemed, the Company shall furnish the Trustee with an Officer’s Certificate
evidencing compliance with such restriction or condition.

 

Section 11.3.                             Selection by Trustee of
Securities to be Redeemed.

 

If less than all the Securities of any series are to
be redeemed (unless all of the Securities of such series and of a specified
tenor are to be redeemed), the particular Securities to be redeemed shall be
selected not more than 45 days prior to the Redemption Date by the Trustee,
from the Outstanding Securities of such series not previously called for
redemption, by lot, pro rata or by another method as the Trustee shall deem
fair and appropriate, including any method required by the Depository with
respect to any Global Securities (and in such manner as is not prohibited by
applicable legal requirements) and which may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for
Securities of that

 

62

 

series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series.

 

The Trustee shall promptly notify the Company in
writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed. If the Securities of any series to be redeemed consist of Securities
having different dates on which the principal is payable or different rates of
interest, or different methods by which interest may be determined or have any
other different tenor or terms, then the Company may, by written notice to the
Trustee, direct that the Securities of such series to be redeemed shall be
selected from among the groups of such Securities having specified tenor or
terms and the Trustee shall thereafter select the particular Securities to be
redeemed in the manner set forth in the preceding paragraph from among the
group of such Securities so specified.

 

For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to the redemption of
Securities shall relate, in the case of any Securities redeemed or to be
redeemed only in part, to the portion of the principal amount of such
Securities which has been or is to be redeemed.

 

Section 11.4.                             Notice of Redemption.

 

Notice of redemption shall be given by first-class
mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to
the Redemption Date, to each Holder of Securities to be redeemed, at his
address appearing in the Security Register.

 

All notices of redemption shall state:

 

(a)           the
Redemption Date,

 

(b)           the
Redemption Price, or if not then ascertainable, the manner of calculation
thereof,

 

(c)           if
less than all the Outstanding Securities of any series are to be redeemed, the
identification (and, in the case of partial redemption, the principal amounts)
of the particular Securities to be redeemed,

 

(d)           that
on the Redemption Date the Redemption Price will become due and payable upon
each such Security to be redeemed and, if applicable, that interest thereon
will cease to accrue on and after said date,

 

(e)           the
place or places where such Securities are to be surrendered for payment of the
Redemption Price, and

 

(f)            that
the redemption is for a sinking fund, if such is the case.

 

Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company’s request, by the
Trustee in the name and at the expense of the Company.

 

63

 

Section 11.5.                             Deposit of Redemption
Price.

 

Prior to any Redemption Date, the Company shall
deposit with the Trustee or with a Paying Agent (or, if the Company is acting
as its own Paying Agent, segregate and hold in trust as provided in Section 10.3)
an amount of money sufficient to pay the Redemption Price of, and (except if
the Redemption Date shall be an Interest Payment Date) accrued interest on, all
the Securities which are to be redeemed on that date.

 

Section 11.6.                             Securities Payable on
Redemption Date.

 

Notice of redemption having been given as aforesaid,
the Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender
of any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest to the Redemption Date; provided, however, that unless
otherwise specified with respect to Securities of any series as contemplated in
Section 3.1, installments of interest whose Stated Maturity is on or prior
to the Redemption Date shall be payable to the Holders of such Securities, or
one or more Predecessor Securities, registered as such at the close of business
on the relevant record dates according to their terms and the provisions of Section 3.7.

 

If any Security called for redemption shall not be
so paid upon surrender thereof for redemption, the principal (and premium, if
any) shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Security.

 

Section 11.7.                             Securities Redeemed in
Part.

 

Any Security which is to be redeemed only in part
shall be surrendered at a Place of Payment therefor (with, if the Company or
the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing), and the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder of
such Security without service charge, a new Security or Securities of the same
series and tenor, of any authorized denomination as requested by such Holder,
in aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered.

 

ARTICLE TWELVE

SINKING FUNDS

 

Section 12.1.                             Applicability of
Article.

 

The provisions of this Article Twelve shall be
applicable to any sinking fund for the retirement of Securities of a series
except as otherwise specified as contemplated by Section 3.1 for
Securities of such series.

 

64

 

The minimum amount of any sinking fund payment
provided for by the terms of Securities of any series is herein referred to as
a “mandatory sinking fund payment,” and any payment in excess of such minimum amount
provided for by the terms of Securities of any series is herein referred to as
an “optional sinking fund payment.” If provided for by the terms of Securities
of any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 12.2. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.

 

Section 12.2.          Satisfaction
of Sinking Fund Payments with Securities.

 

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

 

Section 12.3.          Redemption
of Securities for Sinking Fund.

 

Not less than 45 days prior to each sinking fund
payment date for any series of Securities (unless a shorter period shall be
satisfactory to the Trustee), the Company will deliver to the Trustee an
Officer’s Certificate specifying the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting
Securities of that series pursuant to Section 12.2 and stating the basis
for such credit and that such Securities have not been previously so credited,
and will also deliver to the Trustee any Securities to be so delivered. Not
less than 30 days before each such sinking fund payment date the Trustee shall
select the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 11.3 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 11.4. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Section 11.6 and Section 11.7.

 

ARTICLE THIRTEEN

DEFEASANCE

 

Section 13.1.          Option
to Effect Legal Defeasance or Covenant Defeasance.

 

The Company may, at the option of its Board of
Directors evidenced by a resolution set forth in an Officer’s Certificate, and
at any time, elect to have either Section 13.2 or Section 13.3

 

65

 

hereof be applied to all outstanding
Securities upon compliance with the conditions set forth below in this Article Thirteen.

 

Section 13.2.                             Legal Defeasance and
Discharge.

 

Upon the Company’s exercise under Section 13.1
hereof of the option applicable to this Section 13.2, the Company will,
subject to the satisfaction of the conditions set forth in Section 13.4
hereof, be deemed to have been discharged from their obligations with respect
to all outstanding Securities on the date the conditions set forth below are
satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance
means that the Company will be deemed to have paid and discharged the entire
Debt represented by the outstanding Securities, which will thereafter be deemed
to be “outstanding” only for the purposes of Section 13.5 hereof and the
other sections of this Indenture referred to in clauses (a) and (b) below,
and to have satisfied all their other obligations under such Securities and
this Indenture (and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging the same), except for
the following provisions which will survive until otherwise terminated or
discharged hereunder:

 

(a)           the
rights of Holders of Outstanding Securities to receive payments in respect of
the principal of, or interest or premium, if any, on such Securities when such
payments are due from the trust referred to in Section 13.4 hereof;

 

(b)           the
Company’s obligations with respect to such Securities under Section 3.4, Section 3.5,
Section 3.6, Section 10.2 and Section 10.3 hereof;

 

(c)           the
rights, powers, trusts, duties and immunities of the Trustee hereunder and the
Company’s obligations in connection therewith; and

 

(d)           this
Article Thirteen.

 

Subject to compliance with this Article Thirteen,
the Company may exercise its option under this Section 13.2
notwithstanding the prior exercise of its option under Section 13.3
hereof.

 

Section 13.3.                             Covenant Defeasance.

 

Upon the Company’s exercise under Section 13.1
hereof of the option applicable to this Section 13.3, the Company will,
subject to the satisfaction of the conditions set forth in Section 13.4
hereof, be released from each of their obligations under the covenants
contained in Section 7.4, Section 8.1 and Section 10.4 hereof as
well as any Additional Defeasible Provisions (such release and termination
hereinafter referred to as “Covenant Defeasance”), and the Securities will
thereafter be deemed not “outstanding” for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but will continue to be deemed
“outstanding” for all other purposes hereunder (it being understood that such
Securities will not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding
Securities, the Company may omit to comply with and will have no liability in
respect of any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such

 

66

 

covenant to any other provision herein or in
any other document and such omission to comply will not constitute a Default or
an Event of Default under Section 5.1 hereof, but, except as specified
above, the remainder of this Indenture and such Securities will be unaffected
thereby. In addition, upon the Company’s exercise under Section 13.1
hereof of the option applicable to this Section 13.3 hereof, subject to
the satisfaction of the conditions set forth in Section 13.4 hereof, Section 5.1(c) and
Section 5.1(d) hereof and will not constitute Events of Default.

 

Section 13.4.                             Conditions to Legal or
Covenant Defeasance.

 

In order to exercise either Legal Defeasance or
Covenant Defeasance under either Section 13.2 or Section 13.3 hereof:

 

(a)           the
Company must irrevocably deposit with the Trustee, in trust, for the benefit of
the Holders of the Securities, cash in U.S. dollars, non-callable U.S.
Government Obligations, or a combination of cash in U.S. dollars and
non-callable U.S. Government Obligations, in such amounts as will be
sufficient, in the opinion of a nationally recognized investment bank,
appraisal firm, or firm of independent public accountants to pay the principal
of, or interest and premium, if any, on the Outstanding Securities on the
stated date for payment thereof or on the applicable redemption date, as the
case may be, and the Company must specify whether the Securities are being
defeased to such stated date for payment or to a particular redemption date;

 

(b)           in
the case of an election under Section 13.2 hereof, the Company must
deliver to the Trustee an Opinion of Counsel confirming that:

 

(i)    the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling; or

 

(ii)   since
the Issue Date, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such Opinion of
Counsel will confirm that, the Holders of the Outstanding Securities will not
recognize income, gain or loss for federal income tax purposes as a result of
such Legal Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Legal Defeasance had not occurred;

 

(c)           in
the case of an election under Section 13.3 hereof, the Company must
deliver to the Trustee an Opinion of Counsel confirming that the Holders of the
Outstanding Securities will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be subject
to federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Covenant Defeasance had not occurred;

 

(d)           no
Default or Event of Default has occurred and is continuing on the date of such
deposit (other than a Default or Event of Default resulting from the borrowing
of funds to be applied to such deposit);

 

67

 

(e)           the
deposit will not result in a breach or violation of, or constitute a default
under, any other instrument to which the Company is a party or by which the
Company is bound;

 

(f)            such
Legal Defeasance or Covenant Defeasance will not result in a breach or
violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;

 

(g)           the
Company must deliver to the Trustee an Officer’s Certificate stating that the
deposit was not made by the Company with the intent of preferring the Holders
of Securities over the other creditors of the Company with the intent of
defeating, hindering, delaying or defrauding any other creditors of the Company
or others;

 

(h)           the
Company must deliver to the Trustee an Officer’s Certificate, stating that all
conditions precedent set forth in clauses (a) through (g) of this Section 13.4
have been complied with; and

 

(i)            the
Company must deliver to the Trustee an Opinion of Counsel (which Opinion of
Counsel may be subject to customary assumptions, qualifications and exclusions),
stating that all conditions precedent set forth in clauses (b), (c) and (e) of
this Section 13.4 have been complied with; provided that the Opinion of
Counsel with respect to clause (e) of this Section 13.4 may be to the
knowledge of such counsel.

 

Section 13.5.                             Deposited Money and
U.S. Government Obligations to be Held in Trust, Other Miscellaneous
Provisions.

 

Subject to Section 13.6 hereof, all money and
non-callable U.S. Government Obligation (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 13.5, the “Trustee”) pursuant to Section 13.4
hereof in respect of the Outstanding Securities will be held in trust and
applied by the Trustee, in accordance with the provisions of such Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine, to
the Holders of such Securities of all sums due and to become due thereon in
respect of principal, premium, if any, and interest, but such money need not be
segregated from other funds except to the extent required by law.

 

The Company will pay and indemnify the Trustee
against any tax, fee or other charge imposed on or assessed against the cash or
non-callable U.S. Government Obligations deposited pursuant to Section 13.4
hereof or the principal and interest received in respect thereof other than any
such tax, fee or other charge which by law is for the account of the Holders of
the Outstanding Securities.

 

Notwithstanding anything in this Article Thirteen
to the contrary, the Trustee will deliver or pay to the Company from time to
time upon the request of the Company any money or non-callable U.S. Government
Obligations held by it as provided in Section 13.4 hereof which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee (which
may be the opinion delivered under Section

 

68

 

13.4(a) hereof), are in excess of the
amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.

 

Section 13.6.                             Repayment.

 

Any money deposited with the Trustee or any Paying
Agent, or then held by the Company, in trust for the payment of the principal
of, premium, if any, or interest on any Security and remaining unclaimed for
two years after such principal, premium, if any, or interest has become due and
payable shall be paid to the Company on its request or (if then held by the
Company) will be discharged from such trust; and the Holder of such Security
will thereafter be permitted to look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such
trust money, and all liability of the Company as trustee thereof, will
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in the New York Times and The Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which will not be less than 30 days from the date
of such notification or publication, any unclaimed balance of such money then
remaining will be repaid to the Company.

 

Section 13.7.                             Reinstatement.

 

If the Trustee or Paying Agent is unable to apply
any United States dollars or non-callable U.S. Government Obligations in
accordance with Section 13.2 or Section 13.3 hereof, as the case may
be, by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Company’s obligations under this Indenture and the Securities will be revived
and reinstated as though no deposit had occurred pursuant to Section 13.2
or Section 13.3 hereof until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section 13.2 or Section 13.3
hereof, as the case may be; provided, however, that, if the Company makes any
payment of principal of, premium, if any, or interest on any Note following the
reinstatement of its obligations, the Company will be subrogated to the rights
of the Holders of such Securities to receive such payment from the money held
by the Trustee or Paying Agent.

 

ARTICLE FOURTEEN

SUBORDINATION OF SECURITIES

 

Section 14.1.                             Securities Subordinated
to Senior Debt.

 

The Company and the Trustee each covenants and
agrees, and each Holder, by its acceptance of a Security, likewise covenants
and agrees that all Securities shall be issued subject to the provisions of
this Article Fourteen; and each Person holding any Security, whether upon
original issue or upon transfer, assignment or exchange thereof, accepts and
agrees that the payment of the principal of, interest and premium, if any, on
each and all of the Securities shall, to the extent and in the manner set forth
in this Article Fourteen, be subordinated in right of payment to the prior
payment in full, in cash or cash equivalents, of all existing and future Senior
Debt.

 

69

 

Section 14.2.                             No Payment on
Securities in Certain Circumstances.

 

(a)           No
direct or indirect payment by or on behalf of the Company of the principal of,
interest and premium, if any, on each and all of the Securities (other than
with the money, securities or proceeds held under any defeasance trust
established in accordance with this Indenture), whether pursuant to the terms
of the Securities or upon acceleration or otherwise shall be made if, at the
time of such payment, there exists a default in the payment of all or any
portion of the obligations on any Senior Debt and such default shall not have
been cured or waived or the benefits of this sentence waived by or on behalf of
the holders of such Senior Debt.

 

(b)           During
the continuance of any other event of default with respect to any Designated
Senior Debt pursuant to which the maturity thereof may be accelerated, upon
receipt by the Trustee of written notice from the trustee or other
representative for the holders of such Designated Senior Debt (or the holders
of at least a majority in principal amount of such Designated Senior Debt then
outstanding), no payment of the principal of, interest or premium, if any, on
each and all of the Securities (other than with the money, securities or
proceeds held under any defeasance trust established in accordance with this
Indenture) may be made by or on behalf of the Company upon or in respect of the
Securities for a period (a “Payment Blockage Period”) commencing on the date of
receipt of such notice and ending 179 days thereafter (unless, in each case,
such Payment Blockage Period has been terminated by written notice to the
Trustee from such trustee of, or other representatives for, such holders or by
payment in full in cash or cash equivalents of such Designated Senior Debt or
such event of default has been cured or waived). Not more than one Payment
Blockage Period may be commenced with respect to the Securities during any
period of 360 consecutive days. Notwithstanding anything in this Indenture to
the contrary, there must be 180 consecutive days in any 360-day period in which
no Payment Blockage Period is in effect. No event of default that existed or
was continuing (it being acknowledged that any subsequent action that would
give rise to an event of default pursuant to any provision under which an event
of default previously existed or was continuing shall constitute a new event of
default for this purpose) on the date of the commencement of any Payment
Blockage Period with respect to the Designated Senior Debt initiating such
Payment Blockage Period shall be, or shall be made, the basis for the
commencement of a second Payment Blockage Period by the trustee or other
representative for the holders of such Designated Senior Debt, whether or not
within a period of 360 consecutive days, unless such event of default shall
have been cured or waived for a period of not less than 90 consecutive days.

 

(c)           In
the event that, notwithstanding the foregoing, any payment shall be received by
the Trustee or any Holder when such payment is prohibited by clause (a) or
(b) above, the Trustee shall promptly notify the holders of Senior Debt of
such prohibited payment and such payment shall be held in trust for the benefit
of, and shall be paid over or delivered to, the holders of Senior Debt or their
respective representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Debt may have been issued, as their
respective interests may appear, but only to the extent that, upon notice from
the Trustee to the holders of Senior Debt that such prohibited payment has been
made, the holders of the Senior Debt (or their representative or
representatives 

 

70

 

of a trustee) within 30 days of receipt of such notice from the Trustee
notify the Trustee of the amounts then due and owing on the Senior Debt, if
any, and only the amounts specified in such notice to the Trustee shall be paid
to the holders of Senior Debt and any excess above such amounts due and owing
on Senior Debt shall be paid to the Company.

 

Section 14.3.                             Payment over Proceeds
upon Dissolution, Etc.

 

(a)           Upon
any payment or distribution of assets or securities of the Company of any kind
or character, whether in cash, property or securities (other than with the
money, securities or proceeds held under any defeasance trust established in
accordance with this Indenture), in connection with any dissolution or winding
up or total or partial liquidation or reorganization of the Company, whether
voluntary or involuntary, or in bankruptcy, insolvency, receivership or other proceedings
or other marshalling of assets for the benefit of creditors, all amounts due or
to become due upon all Senior Debt shall first be paid in full, in cash or cash
equivalents, before the Holders or the Trustee on their behalf shall be
entitled to receive any payment by (or on behalf of) the Company on account of
the Securities, or any payment to acquire any of the Securities for cash,
property or securities, or any distribution with respect to the Securities of
any cash, property or securities. Before any payment may be made by, or on
behalf of, the Company on any Security (other than with the money, securities
or proceeds held under any defeasance trust established in accordance with this
Indenture), in connection with any such dissolution, winding up, liquidation or
reorganization, any payment or distribution of assets or securities for the
Company of any kind or character, whether in cash, property or securities, to
which the Holders or the Trustee on their behalf would be entitled, but for the
provisions of this Article Fourteen, shall be made by the Company or by
any receiver, trustee in bankruptcy, liquidating trustee, agent or other
similar Person making such payment or distribution or by the Holders or the
Trustee if received by them or it, directly to the holders of Senior Debt (pro
rata to such holders on the basis of the respective amounts of Senior Debt held
by such holders) or their representatives or to any trustee or trustees under
any indenture pursuant to which any such Senior Debt may have been issued, as
their respective interests appear, to the extent necessary to pay all such
Senior Debt in full, in cash or cash equivalents, after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
such Senior Debt.

 

(b)           To
the extent any payment of Senior Debt (whether by or on behalf of the Company,
as proceeds of security or enforcement of any right of setoff or otherwise) is
declared to be fraudulent or preferential, set aside or required to be paid to
any receiver, trustee in bankruptcy, liquidating trustee, agent or other
similar Person under any bankruptcy, insolvency, receivership, fraudulent
conveyance or similar law, then if such payment is recovered by, or paid over
to, such receiver, trustee in bankruptcy, liquidating trustee or other similar
Person, the Senior Debt or part thereof originally intended to be satisfied
shall be deemed to be reinstated and outstanding as if such payment had not
occurred. To the extent the obligation to repay any Senior Debt is declared to
be fraudulent, invalid, or otherwise set aside under any bankruptcy,
insolvency, receivership, fraudulent conveyance or similar law, then the
obligation so declared fraudulent, invalid or otherwise set aside (and all
other amounts that would come due with respect thereto had such obligation not
been so affected) shall be deemed to be reinstated and 

 

71

 

outstanding as Senior Debt for all purposes hereof as if such
declaration, invalidity or setting aside had not occurred.

 

(c)           In the event
that, notwithstanding the provision in clause (a) above prohibiting such
payment or distribution, any payment or distribution of assets or securities of
the Company of any kind or character, whether in cash, property or securities,
shall be received by the Trustee or any Holder at a time when such payment or
distribution is prohibited by clause (a) above and before all obligations
in respect of Senior Debt are paid in full, in cash or cash equivalents, such
payment or distribution shall be received and held in trust for the benefit of,
and shall be paid over or delivered to, the holders of Senior Debt (pro rata to
such holders on the basis of the respective amounts of Senior Debt held by such
holders) or their representatives or to any trustee or trustees under any
indenture pursuant to which any such Senior Debt may have been issued, as their
respective interests appear, for application to the payment of all such Senior
Debt remaining unpaid, in cash or cash equivalents, after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
such Senior Debt.

 

(d)           For purposes of
this Section 14.3, the words “cash, property or securities” shall not be
deemed to include, so long as the effect of this clause is not to cause the
Securities to be treated in any case or proceeding or similar event described
in this Section 14.3 as part of the same class of claims as the Senior
Debt or any class of claims pari passu with, or senior to, the Senior Debt for
any payment or distribution, securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment that are subordinated,
at least to the extent that the Securities are subordinated, to the payment of
all Senior Debt then outstanding; provided that (i) if a new corporation
results from such reorganization or readjustment, such corporation assumes the
Senior Debt and (ii) the rights of the holders of the Senior Debt are not,
without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company with or into, another corporation or the liquidation or dissolution of
the Company following the sale, conveyance, transfer, lease or other
disposition of all or substantially all of its property and assets to another
corporation upon the terms and conditions provided in Section 8.1 of this
Indenture shall not be deemed a dissolution, winding up, liquidation or
reorganization for the purposes of this Section 14.3 if such other
corporation shall, as a part of such consolidation, merger, sale, conveyance,
transfer, lease or other disposition, comply (to the extent required) with the
conditions stated in Section 8.1 of this Indenture.

 

Section 14.4.          Subrogation.

 

(a)       Upon
the payment in full of all Senior Debt in cash or cash equivalents, the Holders
shall be subrogated to the rights of the holders of Senior Debt to receive
payments or distributions of cash, property or securities of the Company made
on such Senior Debt until the principal of, premium, if any, and interest on
the Securities shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of the Senior Debt of
any cash, property or securities to which the Holders or the Trustee on their
behalf would be entitled except for the provisions of this Article Fourteen,
and no payment pursuant to the provisions of this Article Fourteen to the 

 

72

 

holders of Senior Debt by the Holders or the Trustee on their behalf
shall, as between the Company, its creditors other than holders of Senior Debt,
and the Holders, be deemed to be a payment by the Company to or on account of
the Senior Debt. It is understood that the provisions of this Article Fourteen
are intended solely for the purpose of defining the relative rights of the
Holders, on the one hand, and the holders of the Senior Debt, on the other
hand.

 

(b)           If
any payment or distribution to which the Holders would otherwise have been
entitled but for the provisions of this Article Fourteen shall have been
applied, pursuant to the provisions of this Article Fourteen, to the
payment of all amounts payable under Senior Debt, then, and in such case, the
Holders shall be entitled to receive from the holders of such Senior Debt any
payments or distributions received by such holders of Senior Debt in excess of
the amount required to make payment in full, in cash or cash equivalents, of such
Senior Debt of such holders.

 

Section 14.5.                             Obligations of Company
Unconditional.

 

(a)           Nothing
contained in this Article Fourteen or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as among the Company and the
Holders, the obligation of the Company, which is absolute and unconditional, to
pay to the Holders the principal of, premium, if any, and interest on the
Securities as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
Holders and creditors of the Company other than the holders of the Senior Debt,
nor shall anything herein or therein prevent the Holders or the Trustee on
their behalf from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this Article Fourteen
of the holders of the Senior Debt.

 

(b)           Without
limiting the generality of the foregoing, nothing contained in this Article Fourteen
will restrict the right of the Trustee or the Holders to take any action to
declare the Securities to be due and payable prior to their Stated Maturity
pursuant to Section 5.1 of this Indenture or to pursue any rights or
remedies hereunder; provided, however, that all Senior Debt then due and
payable or thereafter declared to be due and payable shall first be paid in
full, in cash or cash equivalents, before the Holders or the Trustee are
entitled to receive any direct or indirect payment from the Company with respect
to any Security.

 

Section 14.6.                             Notice to Trustee.

 

(a)           The
Company shall give prompt written notice to the Trustee of any fact known to
the Company that would prohibit the making of any payment to or by the Trustee
in respect of the Securities pursuant to the provisions of this Article Fourteen.
The Trustee shall not be charged with the knowledge of the existence of any
default or event of default with respect to any Senior Debt or of any other
facts that would prohibit the making of any payment to or by the Trustee unless
and until the Trustee shall have received notice in writing at its Corporate
Trust Office to that effect signed by an Officer of the Company, or by a holder
of Senior Debt or trustee or agent thereof; and prior to the 

 

73

 

receipt of any such written notice, the Trustee shall, subject to Article Six,
be entitled to assume that no such facts exist; provided that, if the Trustee
shall not have received the notice provided for in this Section 14.6 at
least two Business Days prior to the date upon which, by the terms of this
Indenture, any monies shall become payable for any purpose (including, without
limitation, the payment of the principal of, premium, if any, or interest on
any Security), then, notwithstanding anything herein to the contrary, the
Trustee shall have full power and authority to receive any monies from the
Company and to apply the same to the purpose for which they were received, and
shall not be affected by any notice to the contrary that may be received by it
on or after such prior date except for an acceleration of the Securities prior
to such application. Nothing contained in this Section 14.6 shall limit
the right of the holders of Senior Debt to recover payments as contemplated by
this Article Fourteen. The foregoing shall not apply if the Paying Agent
is the Company. The Trustee shall be entitled to rely on the delivery to it of
a written notice by a Person representing himself or itself to be a holder of
any Senior Debt (or a trustee on behalf of, or other representative of, such
holder) to establish that such notice has been given by a holder of such Senior
Debt or a trustee or representative on behalf of any such holder.

 

(b)           In
the event that the Trustee determines in good faith that any evidence is
required with respect to the right of any Person as a holder of Senior Debt to
participate in any payment or distribution pursuant to this Article Fourteen,
the Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Debt held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article Fourteen and, if such evidence is not furnished
to the Trustee, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.

 

Section 14.7.                             Reliance on Judicial
Order or Certificate of Liquidating Agent.

 

Upon any payment or distribution of assets or
securities referred to in this Article Fourteen, the Trustee and the
Holders shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which bankruptcy, dissolution, winding up,
liquidation or reorganization proceedings are pending, or upon a certificate of
the receiver, trustee in bankruptcy, liquidating trustee, agent or other
similar Person making such payment or distribution, delivered to the Trustee or
to the Holders for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of the Senior Debt and other Debt
of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this Article Fourteen.

 

Section 14.8.                             Trustee’s Relation to
Senior Debt.

 

(a)           The
Trustee and any Paying Agent shall be entitled to all the rights set forth in
this Article Fourteen with respect to any Senior Debt that may at any time
be held by it in its individual or any other capacity to the same extent as any
other holder of Senior Debt and nothing in this Indenture shall deprive the
Trustee or any Paying Agent of any of its rights as such holder.

 

74

 

(b)           With
respect to the holders of Senior Debt, the Trustee undertakes to perform or to
observe only such of its covenants and obligations as are specifically set
forth in this Article Fourteen, and no implied covenants or obligations
with respect to the holders of Senior Debt shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of Senior Debt (except as provided in Section 14.2 and Section 14.3
of this Indenture) and shall not be liable to any such holders if the Trustee
shall in good faith mistakenly pay over or distribute to Holders of Securities
or to the Company or to any other person cash, property or securities to which
any holders of Senior Debt shall be entitled by virtue of this Article Fourteen
or otherwise.

 

Section 14.9.                             Subordination Rights
Not Impaired by Acts or Omissions of the Company or Holders of Senior Debt.

 

No right of any present or future holders of any
Senior Debt to enforce subordination as provided in this Article Fourteen
will at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such holder, or by any noncompliance by the Company with the terms of
this Indenture, regardless of any knowledge thereof that any such holder may
have or otherwise be charged with. The provisions of this Article Fourteen
are intended to be for the benefit of, and shall be enforceable directly by,
the holders of Senior Debt.

 

Section 14.10.                       Holders Authorize Trustee to
Effectuate Subordination of Securities.

 

Each Holder by his acceptance of any Securities
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article Fourteen, and appoints the Trustee his attorney-in-fact for
such purposes, including, in the event of any dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy,
insolvency, receivership, reorganization or similar proceedings or upon an
assignment for the benefit of creditors or otherwise) tending towards
liquidation of the property and assets of the Company, the filing of a claim
for the unpaid balance of its Securities in the form required in those
proceedings. If the Trustee does not file a proper claim or proof in
indebtedness in the form required in such proceeding at least 30 days before
the expiration of the time to file such claim or claims, each holder of Senior
Debt is hereby authorized to file an appropriate claim for and on behalf of the
Holders.

 

Section 14.11.                       Not to Prevent Events of
Default.

 

The failure to make a payment on account of
principal of, premium, if any, or interest on the Securities by reason of any
provision of this Article Fourteen will not be construed as preventing the
occurrence of an Event of Default.

 

Section 14.12.                       Trustee’s Compensation Not
Prejudiced.

 

Nothing in this Article Fourteen will apply to
amounts due to the Trustee pursuant to other sections of this Indenture,
including Section 6.7.

 

75

 

Section 14.13.                       No Waiver of Subordination
Provisions.

 

Without in any way limiting the generality of Section 14.9,
the holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Trustee or the Holders, without incurring
responsibility to the Holders and without impairing or releasing the
subordination provided in this Article Fourteen or the obligations
hereunder of the Holders to the holders of Senior Debt, do any one or more of
the following: (a) change the manner, place or terms of payment or extend
the time of payment of, or renew or alter, Senior Debt or any instrument
evidencing the same or any agreement under which Senior Debt is outstanding or
secured; (b) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (c) release any
Person liable in any manner for the collection of Senior Debt; and (d) exercise
or refrain from exercising any rights against the Company and any other Person.

 

Section 14.14.                       Payments May Be Paid
Prior to Dissolution.

 

Nothing contained in this Article Fourteen or
elsewhere in this Indenture shall prevent (i) the Company, except under
the conditions described in Section 14.2 or Section 14.3, from making
payments of principal of, premium, if any, and interest on the Securities, or
from depositing with the Trustee any money for such payments, or (ii) the
application by the Trustee of any money deposited with it for the purpose of
making such payments of principal of, premium, if any, and interest on the
Securities to the holders entitled thereto unless, at least two Business Days
prior to the date upon which such payment becomes due and payable, the Trustee
shall have received the written notice provided for in Section 14.2(b) of
this Indenture (or there shall have been an acceleration of the Securities
prior to such application) or in Section 14.15 of this Indenture. The
Company shall give prompt written notice to the Trustee of any dissolution,
winding up, liquidation or reorganization of the Company.

 

Section 14.15.                       Trust Moneys Not
Subordinated.

 

Notwithstanding anything contained herein to the
contrary, payments from money or the proceeds of U.S. Government Obligations
held in trust under Article Four by the Trustee for the payment of
principal of, premium, if any, and interest on the Securities shall not be
subordinated to the prior payment of any Senior Debt (provided that, at the
time deposited, such deposit did not violate any then outstanding Senior Debt),
and none of the Holders shall be obligated to pay over any such amount to any
holder of Senior Debt.

 

***

 

76

 

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

 

IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.

 

	
   

  	
  GLOBALSTAR,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  U.S.
  BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:EXHIBIT 10.5

 

COMBIMATRIX CORPORATION

 

2006 STOCK INCENTIVE PLAN

 

(as amended January 31, 2008)

 

ARTICLE
ONE

 

GENERAL
PROVISIONS

 

I.              PURPOSE OF THE PLAN

 

This CombiMatrix Corporation 2006 Stock Incentive Plan
is intended to promote the interests of CombiMatrix Corporation, a Delaware
corporation, by providing eligible persons in the Corporation’s Service with
the opportunity to acquire a proprietary interest, or otherwise increase their
proprietary interest, in the Corporation as an incentive for them to remain in
such Service.

 

Capitalized terms shall have the meanings assigned to
such terms in the attached Appendix.

 

II.            STRUCTURE OF THE PLAN

 

A.            The Plan shall be
divided into three separate equity incentive programs:

 

·              the Discretionary
Option/Stock Appreciation Right Grant Program under which eligible persons may,
at the discretion of the Plan Administrator, be granted options to purchase
shares of Common Stock,

 

·              the Stock Issuance
Program under which eligible persons may, at the discretion of the Plan
Administrator, be issued shares of Common Stock directly, either through the
immediate purchase of such shares or as a bonus for services rendered the
Corporation (or any Parent or Subsidiary),

 

·              the Automatic Option
Grant Program under which eligible non-employee Board members shall
automatically receive option grants at designated intervals over their period
of continued Board Service, and

 

B.            The provisions of
Articles One and Five shall apply to all equity incentive programs under the
Plan and shall govern the interests of all persons under the Plan.

 

III.           ADMINISTRATION OF THE PLAN

 

A.            The Committee shall
have sole and exclusive authority to administer the Discretionary Option Grant
and Stock Issuance Programs with respect to Section 16 Insiders. Administration
of the Discretionary Option Grant and Stock Issuance Programs with respect to
all other persons eligible to participate in those programs may, at the Board’s
discretion, be vested in the Committee, or the Board may retain the power to
administer those programs with respect to all such persons. Other than with
respect to Section 16 Insiders, the Board may also appoint an Executive
Officer Committee to administer the Discretionary Option Program and Stock
Issuance Program, subject to the applicable limitations and requirements of the
Delaware Corporate Law.  However, any
discretionary option grants or stock issuances to members of the Committee must
be authorized and approved by a disinterested majority of the Board.

 

B.            Members of the
Committee or, if applicable, the Executive Officer Committee, shall serve for
such period of time as the Board may determine and may be removed by the Board
at any time.

 

 

C.            The Plan Administrator
shall, within the scope of its administrative functions under the Plan, have
full power and authority (subject to the provisions of the Plan) to establish
such rules and regulations as it may deem appropriate for proper
administration of the Discretionary Option Grant and Stock Issuance Programs
and to make such determinations under, and issue such interpretations of, the
provisions of those programs and any outstanding options or stock issuances
thereunder as it may deem necessary or advisable. Decisions of the Plan
Administrator within the scope of its administrative functions under the Plan
shall be final and binding on all parties who have an interest in the
Discretionary Option Grant and Stock Issuance Programs under its jurisdiction
or any stock option or stock issuance thereunder.

 

D.            Service on the
Committee shall constitute Service as a Board member, and members of each such
committee shall accordingly be entitled to full indemnification and
reimbursement as Board members for their service on such committee. No member
of the Committee or, if applicable, the Executive Officer Committee, shall be
liable for any act or omission made in good faith with respect to the Plan or
any option grants or stock issuances under the Plan.

 

E.             Administration of the
Automatic Option Grant Program shall be self-executing in accordance with the
terms of those programs, and no Plan Administrator shall exercise any
discretionary functions with respect to any option grants or stock issuances
made under those programs.

 

IV.           ELIGIBILITY

 

A.            The persons eligible
to participate in the Discretionary Option Grant and Stock Issuance Programs
are as follows:

 

(i)            Employees,

 

(ii)           non-employee members of
the Board or the board of directors of any Parent or Subsidiary, and

 

(iii)          consultants and other
independent advisors who provide services to the Corporation (or any Parent or
Subsidiary).

 

B.            The Plan Administrator
shall, within the scope of its administrative jurisdiction under the Plan, have
full authority to determine, (i) with respect to the option grants under
the Discretionary Option Grant Program, which eligible persons are to receive
such grants, the time or times when those grants are to be made, the number of
shares to be covered by each such grant, the status of the granted option as
either an Incentive Option or a Non-Statutory Option, if, and the extent to
which, each option is to be exercisable at a different time or times than those
times set forth in Section I.B.1. of Article Two of the Plan, the
vesting schedule (if any) applicable to the option shares and the maximum term
for which the option is to remain outstanding and (ii) with respect to
stock issuances under the Stock Issuance Program, which eligible persons are to
receive such issuances, the time or times when the issuances are to be made,
the number of shares to be issued to each Participant, the vesting schedule (if
any) applicable to the issued shares and the consideration for such shares.

 

C.            The Plan Administrator
shall have the absolute discretion either to grant options in accordance with
the Discretionary Option/Stock Appreciation Right Grant Program or to effect
stock issuances in accordance with the Stock Issuance Program.

 

D.            The individuals who
shall be eligible to participate in the Automatic Option Grant Program shall be
limited to (i) those individuals who first become non-employee Board
members after the Plan Effective Date, whether through appointment by the Board
or election by the Corporation’s stockholders, and (ii) those individuals
who continue to serve as non-employee Board members on the first business day
in each calendar year following the Plan Effective Date and during the term of
the Plan, including any individuals who first became non-employee Board members
prior to such Plan Effective Date. A non-employee Board member who has
previously been in the employ of the Corporation (or any Parent or Subsidiary)
shall not be eligible to receive an option grant under the Automatic Option
Grant Program at the time he or she first becomes a non-employee Board member,
but shall be eligible to receive periodic option grants under the Automatic
Option Grant Program while he or she continues to serve as a non-employee Board
member.

 

2

 

V.            STOCK SUBJECT TO THE PLAN

 

A.            The stock issuable
under the Plan shall be shares of authorized but unissued or reacquired Common
Stock, including shares repurchased by the Corporation on the open market. The
number of shares of Common Stock initially reserved for issuance over the term
of the Plan shall not exceed 8,100,000 shares of Common Stock.  For purposes of clarification, the shares of
Common Stock subject to the Assumed Options are not included in the 8,100,000
share of Common Stock reserved hereunder for issuance pursuant to this
paragraph, though the shares of Common Stock subject to the Assumed Options may
become available for grant under this Plan to the extent provided in Article One,
Section V.D. below.

 

B.            The number of shares
of Common Stock available for issuance under the Plan shall automatically
increase on the first trading day of January each calendar year during the
term of the Plan, beginning with calendar year 2007, by an amount equal to
three percent (3%) of the total number of shares of Common Stock outstanding on
the last trading day in December of the immediately preceding calendar
year.  The maximum aggregate number of
shares of Common Stock that may be issued under the Plan (as adjusted for all
such annual increases) through Incentive Options shall be 30,000,000 shares of
Common Stock.

 

C.            At such time as stock option or stock
appreciation rights granted under the Plan may qualify as performance-based
compensation under Code Section 162(m), no one person participating in the
Plan may receive stock options or separately exercisable stock appreciation
rights for more than 200,000 shares of Common Stock in the aggregate per
calendar year.  At such time as direct
stock issuances or share right awards granted under the Plan may qualify as
performance-based compensation under Code Section 162(m), no one person
participating in the Plan may receive direct stock issuances or share right
awards for more than 200,000 shares of Common Stock in the aggregate per
calendar year. In addition, the maximum dollar value payable to any one
Participant with respect to awards granted under Article Five, Section VIII.B.
is $1,000,000 per calendar year.

 

D.            Shares of Common Stock
subject to outstanding options, Assumed Options or stock appreciation rights
shall be available for subsequent issuance under the Plan to the extent such
shares are not issued pursuant to such options, Assumed Options or stock
appreciation rights prior to the expiration, termination or cancellation of
such options, Assumed Options or stock appreciation rights for any reason.  Shares of Common Stock subject to outstanding
share right awards shall be available for subsequent issuance under the Plan to
the extent those share right awards expire, terminate or are cancelled for any
reason prior to the issuance of all shares of Common Stock subject to such
share right awards. Unvested shares issued under the Plan and subsequently
cancelled, forfeited or repurchased by the Corporation, at a price per share
not greater than the original issue price paid per share, pursuant to the
Corporation’s repurchase rights under the Plan shall be added back to the
number of shares of Common Stock reserved for issuance under the Plan.  In addition, (i) should no shares of
Common Stock be delivered upon the exercise of a stock appreciation right or (ii) should
the exercise price of an option under the Plan or an Assumed Option be paid
with shares of Common Stock (either shares previously held by the individual
exercising the option or shares deducted from the option) or (iii) should
shares of Common Stock otherwise issuable under the Plan or pursuant to or an
Assumed Option be withheld by the Corporation in satisfaction of the
withholding taxes incurred in connection with the exercise of an option, an
Assumed Option or stock appreciation right or in connection with a stock
issuance (including a share right award) under the Plan, then the number of
shares of Common Stock available for issuance under the Plan shall be reduced
by the net number of shares issued to the holder of the award, and not by the
gross number of shares of Common Stock for which the option, Assumed Option or
stock appreciation right is exercised or which vest or are issued pursuant to
the stock issuance (including a share right award).

 

E.             If any change is made
to the Common Stock by reason of any stock split, stock dividend,
recapitalization, merger, reorganization, combination of shares, exchange of
shares or other change affecting the outstanding Common Stock as a class
without the Corporation’s receipt of consideration, appropriate adjustments
shall be made by the Plan Administrator to (i) the maximum number, type
and/or class of securities issuable under the Plan, (ii) the maximum
number, type and/or class of securities for which any one person may be granted
(x) stock options and separately exercisable stock appreciation rights and
(y) direct stock issuances and share right awards under the Plan per
calendar year, (iii) the number, type and/or class of securities for which
grants are subsequently to be made under the Automatic Option Grant Program to
new and continuing non-employee Board members, (iv) the number, type
and/or class of securities and the exercise price per share in effect under
each outstanding option and stock appreciation right under the Plan, (v) the
number, kind and/or class of securities under each share right award, and (vi) the
maximum number, type and/or class of securities by which the share reserve is
to increase automatically each calendar year pursuant to the provisions of Section V.B.
of this Article One. 

 

3

 

Such adjustments to the
outstanding awards are to be effected in a manner which shall preclude the
enlargement or dilution of rights and benefits under such options. The
adjustments determined by the Plan Administrator shall be final, binding and
conclusive.

 

ARTICLE
TWO

 

DISCRETIONARY
OPTION/STOCK APPRECIATION RIGHT GRANT PROGRAM

 

I.              OPTION TERMS

 

 Each option
shall be evidenced by one or more documents in the form approved by the Plan
Administrator; provided, however, that each such document shall comply with the
terms specified below. Each document evidencing an Incentive Option shall, in
addition, be subject to the provisions of the Plan applicable to such options.

 

A.            EXERCISE PRICE.

 

1.             The exercise price
per share shall be fixed by the Plan Administrator but shall not be less than
one hundred percent (100%) of the Fair Market Value per share of Common Stock
on the option grant date.

 

2.             The exercise price
shall become immediately due upon exercise of the option and shall, subject to
the provisions of the documents evidencing the option, be payable in one or
more of the forms specified below:

 

(i)            cash
or check made payable to the Corporation, or

 

(ii)           shares of Common Stock
held for the requisite period necessary to avoid a charge to the Corporation’s
earnings for financial reporting purposes and valued at Fair Market Value on
the Exercise Date (including the cancellation of shares of Common Stock subject
to the option), or

 

(iii)          to the extent the option
is exercised for vested shares, through a special sale and remittance procedure
pursuant to which the Optionee shall concurrently provide irrevocable
instructions to (a) a Corporation-designated brokerage firm to effect the
immediate sale of the purchased shares and remit to the Corporation, out of the
sale proceeds available on the settlement date, sufficient funds to cover the
aggregate exercise price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be withheld by
the Corporation by reason of such exercise and (b) the Corporation to
deliver the certificates for the purchased shares directly to such brokerage
firm in order to complete the sale, or

 

(iv)          Any other form of legal
consideration, as determined by the Plan Administrator and specifically
included in the stock option agreement.

 

Except to the extent such sale and remittance
procedure is utilized, payment of the exercise price for the purchased shares
must be made on the Exercise Date.

 

B.            EXERCISE AND TERM OF
OPTIONS.

 

1.             Each option shall
vest and be exercisable at such time or times, during such period and for such
number of shares as shall be determined by the Plan Administrator and set forth
in the documents evidencing the option.

 

4

 

2.             Notwithstanding any
other provision of the Plan, no option shall have a term in excess of ten (10) years
measured from the option grant date.

 

C.            EFFECT OF TERMINATION
OF SERVICE.

 

1.             The following
provisions shall govern the exercise of any options held by the Optionee at the
time of cessation of Service or death:

 

(i)            Termination of
Service.  Subject to earlier
termination of the option as otherwise provided in the Plan and unless
otherwise specifically provided by the Plan Administrator with respect to an
option and set forth in the award agreement (either at grant or by amendment at
a later time), an option shall remain exercisable, to the extent vested, after
a Optionee’s termination of Service only during the applicable time period determined
in accordance with this Section and thereafter shall terminate and no
longer be exercisable:

 

(A)          Death or Permanent
Disability.  If the Optionee’s
Service terminates because of the death or Permanent Disability of the
Optionee, the option, to the extent unexercised, vested and exercisable on the
date on which the Optionee’s Service terminated, may be exercised by the Optionee
(or the Optionee’s legal representative or estate, as applicable) at any time
prior to the expiration of twelve (12) months (or such other period of time as
determined by the Plan Administrator, in its discretion) after the date on
which the Optionee’s Service terminated, but in any event only with respect to
the unexercised and vested portion of the option and not after the maximum term
of the option.

 

(B)           Termination for
Misconduct.  Notwithstanding any
other provision of the Plan to the contrary, if the Optionee’s Service is
terminated for Misconduct or should the Optionee otherwise engage in Misconduct
while holding one or more outstanding options, then all such options shall
terminate immediately and cease to be outstanding.

 

(C)           Other Termination of
Service.  If the Optionee’s Service
terminates for any reason, except Permanent Disability, death or Misconduct,
the option, to the extent unexercised, vested and exercisable by the Optionee
on the date on which the Optionee’s Service terminated, may be exercised by the
Optionee at any time prior to the expiration of ninety (90) days (or such
longer or shorter period of time as determined by the Plan Administrator, in
its discretion) after the date on which the Optionee’s Service terminated, but
in any event only with respect to the unexercised and vested portion of the
option and not the maximum term of the option.

 

(ii)           Any option held by the
Optionee at the time of death and exercisable in whole or in part at that time
may be subsequently exercised by the personal representative of the Optionee’s
estate or by the person or persons to whom the option is transferred pursuant
to the Optionee’s will or the laws of descent and distribution or by the
Optionee’s designated beneficiary or beneficiaries of that option.

 

(iii)          During the applicable
post-Service exercise period, the option may not be exercised in the aggregate
for more than the number of vested shares for which the option is exercisable
on the date of the Optionee’s cessation of Service. Upon the expiration of the
applicable exercise period or (if earlier) upon the expiration of the option
term, the option shall terminate and cease to be outstanding for any vested
shares for which the option has not been exercised. However, the option shall,
immediately upon the Optionee’s cessation of Service, terminate and cease to be
outstanding to the extent the option is not otherwise at that time exercisable
for vested shares.

 

2.             The Plan
Administrator shall have complete discretion, exercisable either at the time an
option is granted or at any time while the option remains outstanding, to:

 

(i)            extend the period of time for which
the option is to remain exercisable following the Optionee’s cessation of
Service from the limited exercise period otherwise in effect for that option to
such greater period of time as the Plan Administrator shall deem appropriate,
but in no event beyond the expiration of the option term and in no event to
such extent to make the option subject to Section 409A (unless given the
prior consent of the Optionee), and/or

 

5

 

(ii)           permit the option to be
exercised, during the applicable post-Service exercise period, not only with
respect to the number of vested shares of Common Stock for which such option is
exercisable at the time of the Optionee’s cessation of Service but also with
respect to one or more additional installments in which the Optionee would have
vested had the Optionee continued in Service.

 

D.            STOCKHOLDER RIGHTS.
The holder of an option shall have no stockholder rights with respect to the
shares subject to the option until such person shall have exercised the option,
paid the exercise price and become a holder of record of the purchased shares.

 

E.             REPURCHASE RIGHTS.   The Plan
Administrator shall have the discretion to grant options which are exercisable
for unvested shares of Common Stock. 
Should the Optionee cease Service while holding such unvested shares,
the Corporation shall have the right, but not the obligation, to repurchase any
or all of those unvested shares at a price per share equal to the lower of (i) the exercise price
paid per share or (ii) the Fair Market Value per share of Common Stock at
the time of the Optionee’s cessation of Service.  The terms upon which such repurchase right
shall be exercisable (including the period and procedure for exercise and the
appropriate vesting schedule for the purchased shares) shall be established by
the Plan Administrator and set forth in the document evidencing such repurchase
right.

 

F.             LIMITED
TRANSFERABILITY OF OPTIONS. During the lifetime of the Optionee, Incentive
Options shall be exercisable only by the Optionee and shall not be assignable
or transferable other than by will or the laws of descent and distribution
following the Optionee’s death. Non-Statutory Options shall be subject to the
same limitation, except as otherwise determined by the Plan Administrator,
including an assignment to the Optionee’s Immediate Family.  To the extent that a Non-Statutory Option is
assigned, the assigned portion may only be exercised by the person or persons
who acquire a proprietary interest in the option pursuant to the assignment.
The terms applicable to the assigned portion shall be the same as those in
effect for the option immediately prior to such assignment and shall be set
forth in such documents issued to the assignee as the Plan Administrator may
deem appropriate. Notwithstanding the foregoing, the Optionee may also
designate one or more persons as the beneficiary or beneficiaries of his or her
outstanding options under this Article Two, and those options shall, in
accordance with such designation, automatically be transferred to such
beneficiary or beneficiaries upon the Optionee’s death while holding those
options. Such beneficiary or beneficiaries shall take the transferred options
subject to all the terms and conditions of the applicable agreement evidencing
each such transferred option, including (without limitation) the limited time
period during which the option may be exercised following the Optionee’s death.

 

II.            INCENTIVE OPTIONS

 

The terms specified below shall be applicable to all
Incentive Options. Except as modified by the provisions of this Section II,
all the provisions of Articles One and Two shall be applicable to Incentive
Options. Options which are specifically designated as Non-Statutory Options
when issued under the Plan shall not be subject to the terms of this Section II.

 

A.            ELIGIBILITY. Incentive
Options may only be granted to Employees.

 

B.            EXERCISE PRICE. The
exercise price per share shall not be less than one hundred percent (100%) of
the Fair Market Value per share of Common Stock on the option grant date.

 

C.            DOLLAR LIMITATION. The
aggregate Fair Market Value of the shares of Common Stock (determined as of the
respective date or dates of grant) for which one or more options granted to any
Employee under the Plan (or any other option plan of the Corporation or any
Parent or Subsidiary) may for the first time become exercisable as Incentive
Options during any one calendar year shall not exceed the sum of One Hundred
Thousand Dollars ($100,000). To the extent the Employee holds two (2) or
more such options which become exercisable for the first time in the same
calendar year, the foregoing limitation on the exercisability of such options as
Incentive Options shall be applied on the basis of the order in which such
options are granted.  

 

6

 

To the extent that the
options exceed this limit, the excess amount shall be considered Non-Statutory
Options.

 

D.            FAILURE TO QUALIFY AS
INCENTIVE OPTION.  To the extent that any
option governed by this Plan does not qualify as an Incentive Option, by reason
of the dollar limitation described in Section II.C of this Article Two
or for any other reason, such option shall be exercisable as a Non-Statutory
Option under the Federal tax laws.

 

E.             10% STOCKHOLDER. If
any Employee to whom an Incentive Option is granted is a 10% Stockholder, then
the exercise price per share shall not be less than one hundred ten percent
(110%) of the Fair Market Value per share of Common Stock on the option grant
date, and the option term shall not exceed five (5) years measured from
the option grant date.

 

III.           STOCK APPRECIATION RIGHT TERMS

 

The
Plan Administrator may grant stock appreciation rights either in conjunction
with all or part of any option or without regard to any option, in each case
upon such terms and conditions as the Plan Administrator may establish in its
sole discretion, not inconsistent with the provisions of the Plan.  Each stock appreciation right shall be
evidenced by one or more documents in the form approved by the Plan
Administrator; provided, however, that each such document shall comply
with the terms specified below.

 

A.            RIGHT TO PAYMENT.

 

1.             Each stock
appreciation right shall confer on the Participant to whom it is granted a
right to receive, upon exercise thereof, the excess of (A) the Fair Market
Value of one share of Common Stock on the date of exercise over (B) the
per share strike price of the stock appreciation right.

 

2.             The Plan
Administrator shall determine the method of settlement, form of consideration
payable in settlement and method by or forms in which shares of Common Stock
will be delivered or deemed to be delivered to Participants.

 

3.             The strike price per
share shall be fixed by the Plan Administrator but shall not be less than one
hundred percent (100%) of the Fair Market Value per share of Common Stock on
the stock appreciation right grant date.

 

B.            EXERCISE AND TERM OF
STOCK APPRECIATION RIGHTS.   Each stock appreciation right shall be
exercisable at such time or times, during such period and for such number of
shares as shall be determined by the Plan Administrator and set forth in the
documents evidencing the stock appreciation right.  However, no stock appreciation right shall
have a term in excess of ten (10) years measured from the stock
appreciation right grant date.

 

C.            EFFECT OF TERMINATION
OF SERVICE.

 

1.             The following
provisions shall govern the exercise of any stock appreciation rights held by
the Participant at the time of cessation of Service or death:

 

(i)            Any stock appreciation
right outstanding at the time of the Participant’s cessation of Service for any
reason shall remain exercisable for such period of time thereafter as shall be
determined by the Plan Administrator and set forth in the documents evidencing
the stock appreciation right, but no such stock appreciation right shall be
exercisable after the expiration of the stock appreciation right term.

 

7

 

(ii)           Any stock appreciation
right held by the Participant at the time of death and exercisable in whole or
in part at that time may be subsequently exercised by the personal
representative of the Participant’s estate or by the person or persons to whom
the stock appreciation right is transferred pursuant to the Participant’s will
or the laws of inheritance or by the Participant’s designated beneficiary or
beneficiaries of that stock appreciation right.

 

(iii)          Should the Participant’s
Service be terminated for Misconduct or should the Participant otherwise engage
in Misconduct while holding one or more outstanding stock appreciation rights
under this Article Two, then all those stock appreciation rights shall
terminate immediately and cease to be outstanding.

 

(iv)          During the applicable
post-Service exercise period, the stock appreciation right may not be exercised
in the aggregate for more than the number of vested shares for which the stock
appreciation right is exercisable on the date of the Participant’s cessation of
Service.  Upon the expiration of the
applicable exercise period or (if earlier) upon the expiration of the stock
appreciation right term, the stock appreciation right shall terminate and cease
to be outstanding for any vested shares for which the stock appreciation right
has not been exercised.  However, the
stock appreciation right shall, immediately upon the Participant’s cessation of
Service, terminate and cease to be outstanding to the extent the stock
appreciation right is not otherwise at that time exercisable for vested shares.

 

2.             The Plan Administrator
shall have complete discretion, exercisable either at the time an stock
appreciation right is granted or at any time while the stock appreciation right
remains outstanding, to:

 

(i)            extend the period of
time for which the stock appreciation right is to remain exercisable following
the Participant’s cessation of Service from the limited exercise period
otherwise in effect for that stock appreciation right to such greater period of
time as the Plan Administrator shall deem appropriate, but in no event beyond
the expiration of the stock appreciation right term, and/or

 

(ii)           permit the stock
appreciation right to be exercised, during the applicable post-Service exercise
period, not only with respect to the number of vested shares of Common Stock
for which such stock appreciation right is exercisable at the time of the
Participant’s cessation of Service but also with respect to one or more
additional installments in which the Participant would have vested had the
Participant continued in Service.

 

D.            STOCKHOLDER
RIGHTS.  The holder of an stock
appreciation right shall have no stockholder rights with respect to the shares
subject to the stock appreciation right until such person shall have exercised
the stock appreciation right, received shares of common stock in connection
with such exercise and become a holder of record of the purchased shares.

 

8

 

E.             LIMITED
TRANSFERABILITY OF STOCK APPRECIATION RIGHTS. 
During the lifetime of the Participant, stock appreciation rights shall
be exercisable only by the Participant and shall not be assignable or
transferable other than by will or the laws of inheritance following the
Participant’s death, except that the Plan Administrator may structure one or
more stock appreciation rights under the Discretionary Option/Stock
Appreciation Right Grant Program so that each such stock appreciation right may
be assigned in whole or in part during the Participant’s lifetime to one or
more members of the Participant’s family or to a trust established exclusively
for one or more such family members or to Participant’s former spouse, to the
extent such assignment is in connection with the Participant’s estate plan or
pursuant to a domestic relations order. 
The assigned portion may only be exercised by the person or persons who
acquire a proprietary interest in the stock appreciation right pursuant to the
assignment.  The terms applicable to the
assigned portion shall be the same as those in effect for the stock
appreciation right immediately prior to such assignment and shall be set forth
in such documents issued to the assignee as the Plan Administrator may deem
appropriate.  Notwithstanding the
foregoing, the Participant may also designate one or more persons as the
beneficiary or beneficiaries of his or her outstanding stock appreciation
rights under this Article Two, and those stock appreciation rights shall,
in accordance with such designation, automatically be transferred to such
beneficiary or beneficiaries upon the Participant’s death while holding those
stock appreciation rights.  Such
beneficiary or beneficiaries shall take the transferred stock appreciation
rights subject to all the terms and conditions of the applicable agreement
evidencing each such transferred stock appreciation right, including (without
limitation) the limited time period during which the stock appreciation right
may be exercised following the Participant’s death.

 

IV.           CHANGE IN CONTROL/HOSTILE TAKE-OVER

 

A.            Except as otherwise
provided in this Section IV, none of the outstanding options or stock
appreciation rights under the Discretionary Option/Stock Appreciation Right
Grant Program shall vest in whole or in part on an accelerated basis upon the
occurrence of a Change in Control, and those options and stock appreciation
rights may be assumed, continued or substituted for by any successor
corporation in the Change in Control.

 

B.            Except as otherwise
provided in this Section IV, none of the outstanding repurchase rights
under the Discretionary Option/Stock Appreciation Right Grant Program shall
terminate on an accelerated basis upon the occurrence of a Change in Control,
and those rights shall be assignable to any successor corporation in the Change
in Control.

 

C.            Unless an option or
stock appreciation right is assumed, continued or substituted for by the
successor corporation (or parent thereof) or otherwise continued in full force
and effect pursuant to the terms of the Change in Control transaction, if a
Change in Control occurs while the Optionee remains in Service, the shares of
Common Stock at the time subject to each outstanding option or stock
appreciation right held by such Optionee but not otherwise vested shall
automatically accelerate so that each such option or stock appreciation right
shall, immediately prior to the effective date of the Change in Control, vest
and become exercisable for all the shares of Common Stock at the time subject
to such option or stock appreciation right and may be exercised for any or all
of those shares as fully vested shares of Common Stock.   The Corporation shall provide each holder of
an option or a stock appreciation right that is accelerated in accordance with
this paragraph at least five (5) business days notice of the vesting
acceleration.  Immediately following the
consummation of the Change in Control, each option or stock appreciation right
shall terminate and cease to be outstanding, except to the extent assumed or
substituted for by the successor corporation (or parent thereof) or otherwise
continued in full force and effect pursuant to the express terms of the Change
in Control transaction.

 

D.            The Plan Administrator
shall have the discretionary authority to structure one or more options or
stock appreciation rights grants under the Discretionary Option/Stock Appreciation
Right Grant Program so that the vesting and exercisability of each option or
stock appreciation right shall automatically accelerate in whole or in part,
either (i) immediately prior to the effective date of that Change in
Control or Hostile Takeover, and become exercisable for all the shares of
Common Stock at the time or (ii) upon an event occurring after the Change
in Control or Hostile Takeover (including a termination of employment).    In addition, the Plan Administrator may
structure one or more of the Corporation’s repurchase rights so that those
rights shall immediately terminate, in whole or in part, with respect to any
shares held by the Participant (and the shares subject to those terminated repurchase
rights shall accordingly vest in full ) either (i) immediately prior to
the effective date of that Change in Control or Hostile Takeover, or (ii) upon
an event occurring after the Change in Control or Hostile Takeover (including a
termination of employment).

 

9

 

E.             Each option which is
assumed or substituted for in connection with a Change in Control or otherwise
continued in effect shall be appropriately adjusted, immediately after such
Change in Control, to apply to the number and class of securities which would
have been issuable to the Optionee in consummation of such Change in Control
had the option been exercised immediately prior to such Change in Control.
Appropriate adjustments to reflect such Change in Control shall also be made to
(i) the exercise price payable per share under each outstanding option,
provided the aggregate exercise price payable for such securities shall remain
the same, (ii) the maximum number, type and/or class of securities
available for issuance over the remaining term of the Plan, (iii) the
maximum number, type and/or class of securities by which the share reserve is
to increase each calendar year pursuant to the automatic share increase
provisions of the Plan and (iv) the maximum number, type and/or class of
securities for which any one person may be granted options, separately
exercisable stock appreciation rights and direct stock issuances or share right
awards under the Plan per calendar year. 
To the extent the actual holders of the Corporation’s outstanding Common
Stock receive cash consideration for their Common Stock in consummation of the
Change in Control transaction, the successor corporation may, in connection
with the assumption of the outstanding options under the Discretionary Option
Grant Program, substitute one or more shares of its own common stock (or those
of its parent) with a fair market value equivalent to the cash consideration
paid per share of Common Stock in such Change in Control transaction.

 

F.             Unless otherwise
determined by the Plan Administrator and expressly set forth in the documents
evidencing the option, each option outstanding under the Discretionary
Option/Stock Appreciation Right Grant Program at the time of a Hostile
Take-Over but not otherwise exercisable for all the shares of Common Stock
subject to such option at that time shall, immediately prior to the effective
date of a Hostile Take-Over, automatically vest and become exercisable for all
the shares of Common Stock at that time subject to such options on an
accelerated basis and may be exercised for any or all of such shares as fully
vested shares of Common Stock. In addition, all of the Corporation’s repurchase
rights under the Discretionary Option/Stock Appreciation Right Grant Program
shall terminate automatically upon the consummation of such Hostile Take-Over,
and the shares subject to those terminated rights shall thereupon immediately
vest in full, except to the extent such accelerated vesting is precluded by
limitations imposed by the Plan Administrator at the time the repurchase right
is issued.  Each option so accelerated
shall remain exercisable for fully vested shares of Common Stock until the
expiration or sooner termination of the option term.

 

G.            The portion of any
Incentive Option accelerated in connection with a Change in Control or Hostile
Take-Over shall remain exercisable as an Incentive Option only to the extent
the applicable One Hundred Thousand Dollar ($100,000) limitation is not
exceeded. To the extent such dollar limitation is exceeded, the excess accelerated
portion of such option shall be exercisable as a Non-Statutory Option under the
Federal tax laws.

 

H.            The grant of options
under the Discretionary Option/Stock Appreciation Right Grant Program shall in
no way affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.

 

V.            CANCELLATION AND REGRANT OF OPTIONS

 

The Plan Administrator shall have the authority to
effect, at any time and from time to time, with the consent of the affected
option holders, the cancellation of any or all outstanding options under the
Discretionary Option/Stock Appreciation Right Grant Program (including
outstanding options incorporated from the Predecessor Plans) and to grant (i) in
substitution new options or stock appreciation rights covering the same or a
different number of shares of Common Stock but with an exercise price per share
calculated based upon the Fair Market Value per share of Common Stock on the
new grant date; (ii) stock issuances (including share right awards); (iii) cash;
or (iv) other property.

 

10

 

ARTICLE
THREE

 

STOCK
ISSUANCE PROGRAM

 

I.                                         STOCK ISSUANCE TERMS

 

Shares of Common Stock
may be issued under the Stock Issuance Program through direct and immediate
issuances without any intervening option grants. Each such stock issuance shall
be evidenced by a Stock Issuance Agreement which complies with the terms
specified below. Shares of Common Stock may also be issued under the Stock
Issuance Program pursuant to share right awards which entitle the recipients to
receive those shares upon the attainment of designated performance goals.

 

A.                                   PURCHASE
PRICE.

 

1.                                       The
purchase price per share shall be fixed by the Plan Administrator, but shall
not be less than any legal limit required under state law.

 

2.                                       Shares
of Common Stock may be issued under the Stock Issuance Program for any of the
following items of consideration which the Plan Administrator may deem
appropriate in each individual instance:

 

(i)                           cash
or check made payable to the Corporation for one hundred percent of the Fair
Market Value of the shares of Common Stock to be purchased,

 

(ii)                        past
services rendered to the Corporation (or any Parent or Subsidiary),

 

(iii)                     services
to be rendered to the Corporation (or any Parent or Subsidiary) during the
vesting period, or

 

(iv)                    any
other form of legal consideration that may be acceptable to the Plan
Administrator.

 

B.                                     VESTING
PROVISIONS.

 

1.                                       Shares
of Common Stock issued under the Stock Issuance Program may, in the discretion
of the Plan Administrator, be fully and immediately vested upon issuance or may
vest in one or more installments over the Participant’s period of Service or
upon attainment of specified performance objectives. The elements of the
vesting schedule applicable to any unvested shares of Common Stock issued under
the Stock Issuance Program shall be determined by the Plan Administrator and
incorporated into the Stock Issuance Agreement. Shares of Common Stock may also
be issued under the Stock Issuance Program pursuant to share right awards which
entitle the recipients to receive those shares upon the attainment of
designated performance goals or in one or more installments over the
Participant’s period of Service. Upon the attainment of such performance goals
or Service period, fully vested shares of Common Stock shall be issued in
satisfaction of those share right awards.

 

2.                                       Any
new, substituted or additional securities or other property (including money
paid other than as a regular cash dividend) which the Participant may have the
right to receive with respect to the Participant’s unvested shares of Common
Stock by reason of any stock dividend, stock split, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation’s receipt of
consideration shall be issued subject to (i) the same vesting requirements
applicable to the Participant’s unvested shares of Common Stock and (ii) such
escrow arrangements as the Plan Administrator shall deem appropriate.

 

11

 

3.                                       The
Participant shall have full stockholder rights with respect to any shares of
Common Stock issued to the Participant under the Stock Issuance Program,
whether or not the Participant’s interest in those shares is vested.
Accordingly, the Participant shall have the right to vote such shares and to
receive any regular cash dividends paid on such shares.

 

4.                                       Should
the Participant cease to remain in Service while holding one or more unvested
shares of Common Stock issued under the Stock Issuance Program or should the
performance objectives not be attained with respect to one or more such
unvested shares of Common Stock, then those shares shall be immediately
surrendered to the Corporation for cancellation, and the Participant shall have
no further stockholder rights with respect to those shares.  To the extent the surrendered shares were
previously issued to the Participant for consideration paid in cash or cash
equivalent (including the Participant’s purchase-money indebtedness), the
Corporation shall repay to the Participant the lower
of (i) the cash consideration paid for the surrendered
shares or (ii) the Fair Market Value of those shares at the time of
cancellation.

 

5.                                       The
Plan Administrator may in its discretion waive the surrender and cancellation
of one or more unvested shares of Common Stock which would otherwise occur upon
the cessation of the Participant’s Service or the non-attainment of the
performance objectives applicable to those shares. Such waiver shall result in
the immediate vesting of the Participant’s interest in the shares of Common
Stock as to which the waiver applies. Such waiver may be effected at any time,
whether before or after the Participant’s cessation of Service or the
attainment or non-attainment of the applicable performance objectives.

 

6.                                       Outstanding
share right awards under the Stock Issuance Program shall automatically
terminate, and no shares of Common Stock shall actually be issued in
satisfaction of those awards, if the performance goals or Service requirements
established for such awards are not attained. The Plan Administrator, however,
shall have the discretionary authority to issue shares of Common Stock under
one or more outstanding share right awards as to which the designated
performance goals or Service requirements have not been attained.

 

II.                                     CHANGE IN CONTROL/HOSTILE TAKE-OVER

 

A.                                   Except
as otherwise provided in this Section II, none of the outstanding
repurchase rights under the Stock Issuance Program shall terminate on an
accelerated basis upon the occurrence of a Change in Control, and those rights
shall be assignable to any successor corporation in the Change in Control.  Except as otherwise provided in this Section II,
none of the outstanding share right awards under the Stock Issuance Program
shall vest in whole or in part on an accelerated basis upon the occurrence of a
Change in Control, and those share right awards may be assumed, continued or
substituted for by any successor corporation in the Change in Control.

 

B.                                     To
the extent that the outstanding repurchase rights under the Stock Issuance
Program are not assigned to any successor corporation in the Change in Control
and are not continued by the Corporation, such outstanding repurchase rights
under the Stock Issuance Program shall terminate immediately prior to and
contingent upon the occurrence of the Change in Control.

 

C.                                     Unless
a share right award is assumed or substituted for by the successor corporation
(or parent thereof) or otherwise continued in full force and effect pursuant to
the terms of the Change in Control transaction, if a Change in Control occurs
while the Participant remains in Service, the shares of Common Stock at the
time subject to each a share right award held by such Participant but not
otherwise vested shall automatically accelerate so that each such Participant
shall, immediately prior to the effective date of the Change in Control, vest
for all the shares of Common Stock at the time subject to such share right
award  and such fully vested shares of
Common Stock shall be delivered to the Participant immediately prior to and
contingent upon the Change in Control. 
The Corporation shall provide each holder of a share right award that is
accelerated in accordance with this paragraph at least five (5) business
days notice of the vesting acceleration. 
Immediately following the consummation of the Change in Control, each
option or stock appreciation right shall terminate and cease to be outstanding,
except to the extent assumed or substituted for by the successor corporation
(or parent thereof) or otherwise continued in full force and effect pursuant to
the express terms of the Change in Control transaction.

 

12

 

D.                                    To
the extent a share right award is not assumed, continued or substituted for by
the successor corporation (or parent thereof) or otherwise continued in full
force and effect pursuant to the terms of the Change in Control transaction,
then such share right award shall become fully vested and shares of Common
Stock deliverable under the share right award shall be delivered immediately
prior to and contingent upon the Change in Control.  The Corporation shall provide each holder of
a share right award that is accelerated in accordance with this paragraph at
least five (5) business days notice of the vesting acceleration.

 

E.                                      Immediately
following the consummation of the Change in Control, all outstanding share
right awards under the Stock Issuance Program shall terminate and cease to be
outstanding, except to the extent assumed, continued or substituted for by the
successor corporation (or parent thereof) or otherwise continued in full force
and effect pursuant to the terms of the Change in Control transaction.

 

F.                                      All
of the Corporation’s outstanding repurchase rights under the Stock Issuance
Program shall terminate automatically, and all the shares of Common Stock
subject to those terminated rights shall immediately vest in full, in the event
of any Hostile Take-Over, except to the extent such accelerated vesting is
precluded by other limitations imposed in the Stock Issuance Agreement.  All the shares of Common Stock subject to
outstanding share right awards shall immediately vest in full, in the event of
any Hostile Take-Over, except to the extent such accelerated vesting is precluded
by other limitations imposed in the Share Right Award Agreement.

 

G.                                     The
Plan Administrator may, in its discretion, structure one or more of the
Corporation’s repurchase rights so that those rights shall immediately
terminate, in whole or in part, with respect to any shares held by the
Participant (and the shares subject to those terminated repurchase rights shall
accordingly vest in full) either (i) immediately prior to the effective
date of that Change in Control or Hostile Takeover, or (ii) upon an event
occurring after the Change in Control or Hostile Takeover (including a
termination of a Participant’s Service).  
In addition, the Plan Administrator shall have the discretionary
authority to structure one or more share right awards grants under the Stock
Issuance Program so that the vesting of each share right shall automatically
accelerate in whole or in part, either (i) immediately prior to the
effective date of that Change in Control or Hostile Takeover, or (ii) upon
an event occurring after the Change in Control or Hostile Takeover (including a
termination of employment).

 

H.                                    Each
share right award which is assumed or substituted for in connection with a
Change in Control or otherwise continued in effect shall be appropriately
adjusted, immediately after such Change in Control, to convert the number and
class of securities which would have been issuable to the Participant in
consummation of such Change in Control had the shares of Common Stock subject
to the share right award been issued immediately prior to such Change in
Control to the type and amount of consideration received by the holders of
Common Stock in the Change in Control. 
To the extent the actual holders of the Corporation’s outstanding Common
Stock receive cash consideration for their Common Stock in consummation of the
Change in Control, the successor corporation may, in connection with the
assumption or substitution of the outstanding share right awards under the
Stock Issuance Program, substitute one or more shares of its own common stock
or that of any parent or publicly traded Subsidiary, with a fair market value
equivalent to the cash consideration paid per share of Common Stock in such
Change in Control transaction.

 

III.                               SHARE ESCROW/LEGENDS

 

Unvested shares may, in
the Plan Administrator’s discretion, be held in escrow by the Corporation until
the Participant’s interest in such shares vests or may be issued directly to
the Participant with restrictive legends on the certificates evidencing those
unvested shares.

 

13

 

ARTICLE
FOUR

 

AUTOMATIC
OPTION GRANT PROGRAM

 

I.                                       OPTION TERMS

 

A.                                   GRANT
DATES. Option grants shall be made on the dates specified below:

 

1.                                       Each
individual who is first elected or appointed as a non-employee Board member at
any time on or after the Plan Effective Date shall automatically be granted, on
the date of such initial election or appointment, a Non-Statutory Option to
purchase 3,000 shares of Common Stock, provided that individual has not
previously been in the employ of the Corporation or any Parent or Subsidiary.

 

2.                                       On
the first business day in each calendar year following the Plan Effective Date
and during the term of the Plan, each non-employee Board member then in office,
shall automatically be granted a Non-Statutory Option to purchase 3,000 shares
of Common Stock, provided such individual has served as a non-employee Board
member for at least six (6) months. There shall be no limit on the number
of such option grants any one non-employee Board member may receive over his or
her period of Service on the Board, and non-employee Board members who have
previously been in the employ of the Corporation (or any Parent or Subsidiary)
or who joined the Board prior to the Plan Effective Date shall be eligible to receive
one or more such annual option grants over their period of continued Board
Service.

 

B.                                     EXERCISE
PRICE.

 

1.                                       The
exercise price per share shall be equal to one hundred percent (100%) of the
Fair Market Value per share of Common Stock on the option grant date.

 

2.                                       The
exercise price shall be payable in one or more of the alternative forms
authorized under the Discretionary Option Grant Program. Except to the extent
the sale and remittance procedure specified thereunder is utilized, payment of
the exercise price for the purchased shares must be made on the Exercise Date.

 

C.                                     OPTION
TERM. Each option shall have a maximum term of ten (10) years measured
from the option grant date.

 

D.                                    EXERCISE
AND VESTING OF OPTIONS.

 

Each option
granted pursuant to this Automatic Option Grant Program shall become
exercisable in a series of four (4) equal quarterly installments upon the
Optionee’s completion of each three (3) months of continuous Service as a
Board member over the 12-month period measured from the option grant date.

 

E.                                      LIMITED
TRANSFERABILITY OF OPTIONS. Each option under this Article Four may be
assigned in whole or in part during the Optionee’s lifetime to one or more
members of the Optionee’s Immediate Family or to a trust established
exclusively for the Optionee or one or more Members of the Optionee’s Immediate
Family or to Optionee’s former spouse, to the extent such assignment is in
connection with the Optionee’s estate plan or pursuant to domestic relations
order. The assigned portion may only be exercised by the person or persons who
acquire a proprietary interest in the option pursuant to the assignment. The
terms applicable to the assigned portion shall be the same as those in effect
for the option immediately prior to such assignment and shall be set forth in
such documents issued to the assignee as the Plan Administrator may deem
appropriate. The Optionee may also designate one or more persons as the
beneficiary or beneficiaries of his or her outstanding options under this Article Four,
and those options shall, in accordance with such designation, automatically be
transferred to such beneficiary or beneficiaries upon the Optionee’s death
while holding those options. Such beneficiary or beneficiaries shall take the
transferred options subject to all the terms and conditions of the applicable
agreement evidencing each such transferred option, including (without
limitation) the limited time period during which the option may be exercised
following the Optionee’s death.

 

14

 

F.                                      TERMINATION
OF BOARD SERVICE. The following provisions shall govern the exercise of any
options held by the Optionee at the time the Optionee ceases to serve as a
Board member for any reason:

 

(i)                                     The
Optionee (or, in the event of Optionee’s death, the personal representative of
the Optionee’s estate or the person or persons to whom the option is
transferred pursuant to the Optionee’s will or the laws of descent and
distribution or the designated beneficiary or beneficiaries of such option)
shall have a six (6)-month period following the date of such cessation of Board
Service in which to exercise each such option.

 

(ii)                                  During
the six (6)-month post-Service exercise period, the option may not be exercised
in the aggregate for more than the number of vested shares of Common Stock for
which the option is exercisable at the time of the Optionee’s cessation of
Board Service.

 

(iii)                               In
no event shall the option remain exercisable after the expiration of the option
term. Upon the expiration of the six (6)-month post-Service exercise period or
(if earlier) upon the expiration of the option term, the option shall terminate
and cease to be outstanding for any shares for which the option has not been
exercised. However, the option shall, immediately upon the Optionee’s cessation
of Board Service for any reason, terminate and cease to be outstanding to the
extent the option is not otherwise at that time exercisable.

 

II.                                   CHANGE IN CONTROL/ HOSTILE TAKE-OVER

 

A.                                   In
the event of any Change in Control while the Optionee remains a Board member,
the shares of Common Stock at the time subject to each outstanding option held
by such Optionee under the Automatic Option Grant Program but not otherwise
vested shall automatically accelerate so that each such option shall,
immediately prior to the effective date of the Change in Control, vest and
become exercisable for all the shares of Common Stock at the time subject to
such option and may be exercised for any or all of those shares as fully vested
shares of Common Stock. Immediately following the consummation of the Change in
Control, each automatic option grant shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or
parent thereof) or otherwise continued in full force and effect pursuant to the
express terms of the Change in Control transaction.

 

B.                                     In
the event of a Hostile Take-Over while the Optionee remains a Board member, the
shares of Common Stock at the time subject to each option outstanding under the
Automatic Option Grant Program but not otherwise vested shall automatically
accelerate so that each such option shall, immediately prior to the effective
date of the Hostile Take-Over, vest and become exercisable for all the shares
of Common Stock at the time subject to such option and may be exercised for any
or all of those shares as fully vested shares of Common Stock. Each such option
shall remain exercisable for such fully-vested option shares until the
expiration or sooner termination of the option term or the surrender of the
option in connection with that Hostile Take-Over.

 

C.                                     All
outstanding repurchase rights under the Automatic Option Grant Program shall
automatically terminate, and the shares of Common Stock subject to those
terminated rights shall immediately vest in full, in the event of any Change in
Control or Hostile Take-Over.

 

D.                                    Upon
the occurrence of a Hostile Take-Over, the Optionee shall have a thirty
(30)-day period in which to surrender to the Corporation each of his or her
outstanding automatic option grants.  The
Optionee shall in return be entitled to a cash payment from the Corporation in
an amount equal to the excess of (i) the Take-Over Price of the shares of
Common Stock at the time subject to each surrendered option (whether or not the
Optionee is otherwise at the time vested in those shares) over (ii) the
aggregate exercise price payable for such shares. Such cash payment shall be
paid within five (5) days following the surrender of the option to the
Corporation.  The Plan Administrator
shall, at the time the option with such limited stock appreciation right is
granted under the Automatic Option Grant Program, pre-approve any subsequent
exercise of that right in accordance with the terms of this Paragraph D.  Accordingly, no further approval of the Plan
Administrator or the Board shall be required at the time of the actual option
surrender and cash payment.

 

15

 

E.                                      Each
option which is assumed in connection with a Change in Control or otherwise
continued in full force and effect shall be appropriately adjusted, immediately
after such Change in Control, to apply to the number and class of securities
which would have been issuable to the Optionee in consummation of such Change
in Control had the option been exercised immediately prior to such Change in
Control. Appropriate adjustments shall also be made to the exercise price
payable per share under each outstanding option, provided the aggregate
exercise price payable for such securities shall remain the same.  To the extent the actual holders of the
Corporation’s outstanding Common Stock receive cash consideration for their
Common Stock in consummation of the Change in Control transaction, the
successor corporation may, in connection with the assumption of the outstanding
options under the Automatic Option Grant Program, substitute one or more shares
of its own common stock with a fair market value equivalent to the cash
consideration paid per share of Common Stock in such Change in Control
transaction.

 

F.                                      The
grant of options under the Automatic Option Grant Program shall in no way
affect the right of the Corporation to adjust, reclassify, reorganize or
otherwise change its capital or business structure or to merge, consolidate,
dissolve, liquidate or sell or transfer all or any part of its business or
assets.

 

III.                               REMAINING TERMS

 

The remaining terms of
each option granted under the Automatic Option Grant Program shall be the same
as the terms in effect for option grants made under the Discretionary Option
Grant Program.

 

ARTICLE
FIVE

 

MISCELLANEOUS

 

I.                                         NO FRACTIONAL SHARES

 

No fractional shares of
Common Stock shall be issued or delivered pursuant to the Plan, and the Plan
Administrator shall determine whether cash shall be paid in lieu of any
fractional shares or whether such fractional shares or any rights thereto shall
be canceled, terminated or otherwise eliminated.

 

II.                                     TAX WITHHOLDING

 

A.                                   The
Corporation’s obligation to deliver shares of Common Stock upon a stock
issuance, or the exercise of options or stock appreciation rights or the
issuance or vesting of such shares under the Plan shall be subject to the
satisfaction of all applicable income and employment tax withholding
requirements.  The Corporation shall also
make appropriate arrangements to satisfy all applicable foreign tax withholding
requirements which may be imposed in connection with the grant or exercise of
options or stock appreciation rights under the Plan or the issuance or vesting
of shares of Common Stock under the Plan.

 

B.                                     The
Plan Administrator may, in its discretion, provide in the respective award
agreement that (i) the Corporation, in its discretion, may determine that
shares of Common Stock from the award be withheld by the Corporation in
satisfaction of all or part of the Withholding Taxes which may become payable
in connection with the an award granted under the Plan (pursuant to Article Five
Section II.B.1.) and (ii) any or all Optionees or Participants under
the Plan (other than the non-employee Board members) with the right to use
shares of Common Stock in satisfaction of all or part of the Withholding Taxes
to which such individuals may become subject in connection with the grant or
exercise of their options or stock appreciation rights or the issuance or
vesting of their shares.  Such right to
an individual may be provided to any such holder in either or both of the
following formats:

 

1.                                       Stock
Withholding:  The election to have
the Corporation withhold, from the shares of Common Stock otherwise issuable
upon the exercise of options or stock appreciation rights or the issuance or
the vesting of such shares, a portion of those shares with an aggregate Fair
Market Value equal to the percentage of the Withholding Taxes (not to exceed
one hundred percent (100%) of the minimum Withholding Taxes required be law)
designated by the holder.

 

16

 

2.                                       Stock
Delivery:  The election to deliver to
the Corporation, at the time the option or stock appreciation right is granted
or exercised or the shares are issued or vest, one or more shares of Common
Stock previously acquired by such holder (other than in connection with the
option or stock appreciation right exercise or share vesting triggering the
Withholding Taxes) with an aggregate Fair Market Value equal to the percentage
of the Withholding Taxes (not to exceed one hundred percent (100%) of the
minimum Withholding Taxes required be law) designated by the holder.

 

III.                                 EFFECTIVE DATE AND TERM OF THE PLAN

 

A.                                   The
Plan shall become effective immediately upon the Plan Effective Date.  Options may be granted under the
Discretionary Option/Stock Appreciation Right Grant Program at any time on or
after the Plan Effective Date, and the initial option grants under the
Automatic Option Grant Program shall be made on the Plan Effective Date to any
non-employee Board members eligible for such grants at that time. However, no
options granted under the Plan may be exercised, and no shares shall be issued
under the Plan, until the Plan is approved by the Corporation’s stockholders.
If such stockholder approval is not obtained within twelve (12) months after
the Plan Effective Date, then all options previously granted under this Plan
shall terminate and cease to be outstanding, and no further options shall be
granted and no shares shall be issued under the Plan.

 

B.                                     The
Plan shall terminate upon the earliest of (i) the tenth anniversary of the
Plan Effective Date, (ii) the tenth anniversary of the approval of the
Plan by the Corporation’s stockholders, (iii) the date on which all shares
available for issuance under the Plan shall have been issued as fully-vested
shares or (iv) the termination of all outstanding awards in connection
with a Change in Control.  Upon such Plan
termination, all option grants and unvested stock issuances outstanding at that
time shall thereafter continue to have force and effect in accordance with the
provisions of the documents evidencing such grants or issuances.

 

IV.                                AMENDMENT OF THE PLAN

 

A.                                   The
Board shall have complete and exclusive power and authority to amend or modify
the Plan or any outstanding award granted under the Plan in any or all
respects.  However, no such amendment or
modification shall adversely affect the rights and obligations with respect to
stock options, stock appreciation rights or unvested stock issuances at the
time outstanding, including share right awards, under the Plan unless the
Optionee or the Participant consents to such amendment or modification.  Notwithstanding the foregoing, any amendment
to either increase the number of shares that may be issued under the Plan or
the Persons eligible to receive awards under the Plan shall require stockholder
approval.  In addition, certain
amendments may require stockholder approval pursuant to applicable laws or
regulations.

 

B.                                     Options
to purchase shares of Common Stock may be granted under the Discretionary
Option/Stock Appreciation Right Grant Program and shares of Common Stock may be
issued under the Stock Issuance Program that are in each instance in excess of
the number of shares then available for issuance under the Plan, provided any
excess shares actually issued under those programs shall be held in escrow
until there is obtained stockholder approval of an amendment sufficiently
increasing the number of shares of Common Stock available for issuance under
the Plan. If such stockholder approval is not obtained within twelve (12)
months after the date the first such excess issuances are made, then (i) any
unexercised options granted on the basis of such excess shares shall terminate
and cease to be outstanding and (ii) the Corporation shall promptly refund
to the Optionees and the Participants the exercise or purchase price paid for
any excess shares issued under the Plan and held in escrow, together with
interest (at the short term applicable federal rate) for the period the shares
were held in escrow, and such shares shall thereupon be automatically cancelled
and cease to be outstanding.

 

V.                                    USE OF PROCEEDS

 

Any cash proceeds
received by the Corporation from the sale of shares of Common Stock under the
Plan shall be used for general corporate purposes.

 

17

 

VI.                              REGULATORY APPROVALS

 

A.                                   The
implementation of the Plan, the granting of any stock option under the Plan and
the issuance of any shares of Common Stock (i) upon the exercise of any
granted option or (ii) under the Stock Issuance Program shall be subject
to the Corporation’s procurement of all approvals and permits required by
regulatory authorities having jurisdiction over the Plan, the stock options
granted under it and the shares of Common Stock issued pursuant to it.

 

B.                                     No
shares of Common Stock or other assets shall be issued or delivered under the
Plan unless and until there shall have been compliance with all applicable
requirements of Federal and state securities laws, including the filing and
effectiveness of the Form S-8 registration statement for the shares of
Common Stock issuable under the Plan, and all applicable listing requirements
of any stock exchange (or the Nasdaq National Market, if applicable) on which
Common Stock is then listed for trading.

 

VII.                          NO EMPLOYMENT/SERVICE RIGHTS

 

Nothing in the Plan shall
confer upon any Optionee or Participant any right to continue in Service for
any period of specific duration or interfere with or otherwise restrict in any
way the rights of the Corporation (or any Parent or Subsidiary employing or
retaining such person) or of any Optionee or Participant, which rights are
hereby expressly reserved by each, to terminate such person’s Service at any
time for any reason, with or without cause.

 

VIII.                     SECTION 162(M)

 

A.                                   STOCK
OPTIONS AND STOCK APPRECIATION RIGHTS.

 

It is the intent of the
Corporation that any options or stock appreciation rights granted under the
Plan to a “covered employee” (as that term is defined in Section 162(m) of
the Code) with an exercise price of not less than the Fair Market Value per
share of Common Stock on the date of grant shall qualify as “qualified
performance-based compensation” (within the meaning of Treas. Reg.
§ 1.162-27(e)) to the extent that options or stock appreciation rights
granted under the Plan may qualify as “qualified performance-based compensation”
and the Plan shall be interpreted consistently with such intent.  In furtherance of the foregoing, if and to
the extent that the Corporation intends that an option or a stock appreciation
right granted under the Plan to any covered employee shall qualify as qualified
performance-based compensation, all decisions regarding the grant of such
option or stock appreciation right shall be made only by members of the
Committee who qualify as “outside directors” within the meaning of Treas. Reg.
§ 1.162-27(e)(3).

 

B.                                     PERFORMANCE
AWARDS.

 

The Plan
Administrator shall also have the discretionary authority, consistent with Code
Section 162(m), to structure (i) cash bonuses, (ii) stock
options, (iii) stock appreciation rights and (iv) stock issuances,
including share right awards, so that (x) the cash bonuses are only payable,
(y) the shares of Common Stock received upon exercise of the stock option
or stock appreciation right and (z) the shares of Common Stock subject to
such stock issuances shall only vest or be issuable upon the achievement of
certain pre-established objective corporate performance goals based on one or
more of the following criteria: (1) earnings per share; (2) revenues
or margins; (3) cash flow; (4) operating margin; (5) return on
net assets, investment, capital, or equity; (6) direct contribution; (7) net
income; pretax earnings; (8) earnings before interest and taxes; earnings
before interest, taxes, depreciation and amortization; earnings after interest
expense and before extraordinary or special items; operating income; income
before interest income or expense, unusual items and income taxes, local, state
or federal and excluding budgeted and actual bonuses which might be paid under
any ongoing bonus plans of the Company; (9) working capital; (10) management
of fixed costs or variable costs; (11) identification or consummation of
investment opportunities or completion of specified projects in accordance with
corporate business plans, including strategic mergers, acquisitions or
divestitures; (12) total shareholder return; and (13) debt reduction.
In addition, such performance goals may be based upon the attainment of
specified levels of the Corporation’s performance under one or more of the
measures described above relative to the performance of other entities and may
also be based on the performance of any of the Corporation’s business units or
divisions or any Parent or Subsidiary. Performance goals may include a minimum
threshold level of performance below which no award will be earned, levels of
performance at which specified portions of an award will be earned and a
maximum level of performance at which an award will be fully earned.  

 

18

 

In furtherance of the
foregoing, if and to the extent that the Corporation intends that an award
granted under the Plan pursuant to this paragraph to any covered employee shall
qualify as qualified performance-based compensation, all decisions regarding
the grant of such award shall be made only by members of the Committee who
qualify as “outside directors” within the meaning of Treas. Reg.
§ 1.162-27(e)(3).

 

19

 

APPENDIX

 

The following
definitions shall be in effect under the Plan:

 

A.                             ASSUMED
OPTIONS shall mean the stock options assumed by the Corporation from Acacia
Research that were exercisable for Acacia Research - CombiMatrix stock and
which include, but are not limited to, the options outstanding as of the date
of the Transaction that were granted under the Acacia Research Corporation 2002
CombiMatrix Stock Incentive Plan, the CombiMatrix Corporation 1998 Stock Option
Plan, the CombiMatrix Corporation 2000 Stock Awards Plan and the Acacia
Research Corporation 1996 Stock Option Plan.

 

B.                             AUTOMATIC
OPTION GRANT PROGRAM shall mean the automatic option grant program in effect
under Article Four of the Plan.

 

C.                               BOARD
shall mean the Corporation’s Board of Directors.

 

D.                              CERTIFICATE
OF INCORPORATION shall mean the Certificate of Incorporation of CombiMatrix
Corporation filed with the Delaware Secretary of State on the Plan Effective
Date and all subsequent amendments, supplements, modifications and replacements
thereof.

 

E.                                CHANGE
IN CONTROL shall mean a change in ownership or control of the Corporation
effected through any of the following transactions:

 

(i)           a
stockholder-approved merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation’s outstanding securities are transferred to a person or persons
different from the persons holding those securities immediately prior to such
transaction, or

 

(ii)        a
sale, transfer or other disposition of all or substantially all of the
Corporation’s assets to an entity which is not a Subsidiary of the Corporation,
or

 

(iii)      the acquisition, directly or indirectly by any
person or related group of persons (other than the Corporation or a person that
directly or indirectly controls, is controlled by, or is under common control
with, the Corporation), of beneficial ownership (within the meaning of Rule 13d-3
of the 1934 Act) of securities possessing more than fifty percent (50%) of the
total combined voting power of the Corporation’s outstanding securities
pursuant to a tender or exchange offer made directly to the Corporation’s
stockholders.

 

F.                                CODE
shall mean the Internal Revenue Code of 1986, as amended.

 

G.                               COMMITTEE
shall mean the committee of two (2) or more non-employee Board members
appointed by the Board to administer the Discretionary Option/Stock
Appreciation Right Grant Program with respect to Section 16 Insiders.

 

H.                              COMMON
STOCK shall mean the Corporation’s Common Stock (as defined in the Certificate
of Incorporation).

 

I.                                   CORPORATION
shall mean CombiMatrix Corporation, a Delaware corporation, and any corporate
successor to all or substantially all of the assets or voting stock of
CombiMatrix Corporation, which shall by appropriate action adopt the Plan.

 

J.                                  DISCRETIONARY
OPTION/STOCK APPRECIATION RIGHT GRANT PROGRAM shall mean the Discretionary
Option/Stock Appreciation Right Grant Program in effect under Article Two
of the Plan.

 

A1

 

K.                                    EMPLOYEE
shall mean an individual who is in the employ of the Corporation (or any Parent
or Subsidiary), subject to the control and direction of the employer entity as
to both the work to be performed and the manner and method of performance.

 

L.                                      EXECUTIVE
OFFICER COMMITTEE  shall mean the committee
comprised of two (2) or more executive officers of the Corporation
appointed by the Board to administer the Discretionary Option/Stock
Appreciation Right Grant Program and Stock Issuance Program with respect to
persons other than Section 16 Insiders, but subject to the applicable
limitations and requirements of the Delaware Corporate Law.

 

M.                                 EXERCISE
DATE shall mean the date on which the Corporation shall have received written
notice of the option exercise.

 

N.                                    FAIR
MARKET VALUE per share of Common Stock on any relevant date shall be determined
in accordance with the following provisions:

 

(i)                                      If
the Common Stock is at the time traded on the Nasdaq National Market, then the
Fair Market Value shall be the closing selling price per share of Common Stock
on the date in question, as such price is reported on the Nasdaq National
Market. If there is no closing selling price for the Common Stock on the date
in question, then the Fair Market Value shall be the closing selling price on
the last preceding date for which such quotation exists.

 

(ii)                                   If
the Common Stock is at the time listed on any Stock Exchange, then the Fair
Market Value shall be the closing selling price per share of Common Stock on
the date in question on the Stock Exchange determined by the Plan Administrator
to be the primary market for the Common Stock, as such price is officially
quoted in the composite tape of transactions on such exchange. If there is no
closing selling price for the Common Stock on the date in question, then the
Fair Market Value shall be the closing selling price on the last preceding date
for which such quotation exists.

 

(iii)                                If
the Common Stock is at the time not traded on the Nasdaq National Market or
listed on any Stock Exchange, but is regularly traded in any over-the-counter
market, then the Fair Market Value shall be the average of the bid and asked
prices per share of Common Stock in such over-the-counter market on the date in
question.  If there are no bid and asked
prices on the date in question, then the Fair Market Value shall be the average
of the bid and asked prices in such over-the-counter market on the last
preceding date for which such prices exist.

 

(iv)                               If
the Common Stock is at the time not traded as described in (i), (ii) or (iii) above,
then the Fair Market Value of a share of Common Stock shall be determined by
the Plan Administrator, after taking into account such factors as it deems
appropriate.

 

O.                                    HOSTILE
TAKE-OVER shall mean either of the following events effecting a change in
control or ownership of the Corporation:

 

(i)                                      the
acquisition, directly or indirectly, by any person or related group of persons
(other than the Corporation or a person that directly or indirectly controls,
is controlled by, or is under common control with, the Corporation) of
beneficial ownership (within the meaning of Rule 13d-3 of the 1934 Act) of
securities possessing more than fifty percent (50%) of the total combined
voting power of the Corporation’s outstanding securities pursuant to a tender
or exchange offer made directly to the Corporation’s stockholders which the
Board does not recommend such stockholders to accept, or

 

(ii)                                   a
change in the composition of the Board over a period of thirty-six (36)
consecutive months or less such that a majority of the Board members ceases, by
reason of one or more contested elections for Board membership, to be comprised
of individuals who either (A) have been Board members continuously since
the beginning of such period or (B) have been elected or nominated for
election as Board members during such period by at least a majority of the
Board members described in clause (A) who were still in office at the time
the Board approved such election or nomination.

 

A2

 

P.                                IMMEDIATE
FAMILY shall mean any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law and shall include adoptive
relationships.

 

Q.                               INCENTIVE
OPTION shall mean an option which satisfies the requirements of Code Section 422.

 

R.                              MISCONDUCT
shall, with respect to any Participant, have the meaning specified in the
Participant’s award agreement.  In the
absence of any definition in the award agreement, “Misconduct” shall have the
equivalent meaning or the same meaning as “misconduct” or “cause” set forth in
any employment, consulting or other agreement for the performance of services
between the Participant and the Corporation or, in the absence of any such
agreement or any such definition in such agreement, such term shall mean the
commission of any act of fraud, embezzlement or dishonesty by the Optionee or
Participant, any unauthorized use or disclosure by such person of confidential
information or trade secrets of the Corporation (or any Parent or Subsidiary),
or any other intentional misconduct by such person adversely affecting the business
or affairs of the Corporation (or any Parent or Subsidiary)in a material
manner. The foregoing definition shall not be deemed to be inclusive of all the
acts or omissions which the Corporation (or any Parent or Subsidiary) may
consider as grounds for the dismissal or discharge of any Optionee, Participant
or other person in the Service of the Corporation (or any Parent or
Subsidiary).

 

S.                                    1934
ACT shall mean the Securities Exchange Act of 1934, as amended.

 

T.                                   NON-STATUTORY
OPTION shall mean an option not intended to satisfy the requirements of Code Section 422.

 

U.                                  OPTIONEE
shall mean any person to whom an option is granted under the Discretionary
Option Grant Program, the Automatic Option Grant Program.

 

V.                                   PARENT
shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations ending with the Corporation, provided each corporation in the
unbroken chain (other than the Corporation) owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

 

W.                              PARTICIPANT
shall mean any person who is issued shares of Common Stock under the Stock
Issuance Program.

 

X.                                PERMANENT
DISABILITY OR PERMANENTLY DISABLED shall mean the inability of the Optionee or
the Participant to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or to be of continuous duration of twelve (12) months or more.
However, solely for purposes of the Automatic Option Grant Program, Permanent
Disability or Permanently Disabled shall mean the inability of the non-employee
Board member to perform his or her usual duties as a Board member by reason of
any medically determinable physical or mental impairment expected to result in
death or to be of continuous duration of twelve (12) months or more.

 

Y.                                PLAN
shall mean the Corporation’s 2006 Stock Incentive Plan, as set forth in this
document.

 

Z.                                 PLAN
ADMINISTRATOR shall mean the particular body, whether the Committee or the
Board, which is authorized to administer the Discretionary Option Grant and
Stock Issuance Programs with respect to one or more classes of eligible
persons, to the extent such entity is carrying out its administrative functions
under those programs with respect to the persons under its jurisdiction.

 

AA.                    PLAN EFFECTIVE
DATE shall mean the date on which the Plan is approved by the stockholders of
the Corporation.

 

A3

 

BB.                           SECTION 16
INSIDER shall mean an officer or director of the Corporation subject to the
short-swing profit liabilities of Section 16 of the 1934 Act.

 

CC.                           SERVICE
shall mean the performance of services for the Corporation (or any Parent or
Subsidiary) by a person in the capacity of an Employee, a non-employee member
of the board of directors or a consultant or independent advisor, except to the
extent otherwise specifically provided in the documents evidencing the option
grant or stock issuance.

 

DD.                         STOCK
EXCHANGE shall mean either the, Nasdaq National Market, the American Stock
Exchange or the New York Stock Exchange.

 

EE.                             STOCK
ISSUANCE AGREEMENT shall mean the agreement entered into by the Corporation and
the Participant at the time of issuance of shares of Common Stock under the
Stock Issuance Program.

 

FF.                             STOCK
ISSUANCE PROGRAM shall mean the stock issuance program in effect under Article Three
of the Plan.

 

GG.                           SUBSIDIARY
shall mean any corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the Corporation, provided each corporation (other
than the last corporation) in the unbroken chain owns, at the time of the
determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.

 

HH.                         TAKE-OVER
PRICE shall mean the greater of (i) the Fair Market Value per share of
Common Stock on the date the option is surrendered to the Corporation in
connection with a Hostile Take-Over or, if applicable, (ii) the highest
reported price per share of Common Stock paid by the tender offeror in
effecting the Hostile Take-Over through the acquisition of such Common Stock.
However, if the surrendered option is an Incentive Option, the Take-Over Price
shall not exceed the price per share described in clause (i) above.

 

II.                                   10%
STOCKHOLDER shall mean the owner of stock (as determined under Code Section 424(d))
possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Corporation (or any Parent or Subsidiary).

 

JJ.                                 WITHHOLDING
TAXES shall mean the minimum Federal, state and local income and employment
withholding taxes to which the holder of options or unvested shares of Common
Stock may become subject in connection with the exercise of those options or
the vesting of those shares.

 

A4

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