Document:

EX-10.1

 

2007 Stock Incentive Plan

of

Osteotech Inc.

1. Purpose of this Plan

     The purpose of this 2007 Stock Incentive Plan is to enhance the long-term stockholder value of
Osteotech Inc. by offering opportunities to eligible individuals to participate in the growth in
value of the equity of Osteotech Inc.

2. Definitions and Rules of Interpretation

     2.1 Definitions.

     This Plan uses the following defined terms:

          (a) “Administrator” means the Board or the Committee, or any officer or employee of
the Company to whom the Board or the Committee delegates authority to administer this Plan.

          (b) “Affiliate” means a “parent” or “subsidiary” (as each is defined in Section 424
of the Code) of the Company, and any other entity that the Board or Committee designates as an
“Affiliate” for purposes of this Plan.

          (c) “Applicable Law” means any and all laws of whatever jurisdiction, within or
without the United States, and the rules of any stock exchange or quotation system on which Shares
are listed or quoted, applicable to the taking or refraining from taking of any action under this
Plan, including the administration of this Plan and the issuance or transfer of Awards or Award
Shares.

          (d) “Award” means a Stock Award, SAR, or Option granted in accordance with the terms
of this Plan. An Award may include a “re-load” Option under terms established by the Administrator
to permit the grant of a new Option upon the exercise of the previous Option.

          (e) “Award Agreement” means the document evidencing the grant of an Award.

          (f) “Award Shares” means Shares covered by an outstanding Award or purchased under
an Award.

          (g) “Awardee” means: (i) a person to whom an Award has been granted, including a
holder of a Substitute Award, or (ii) a person to whom an Award has been transferred in accordance
with all applicable requirements of Sections 6.5, 7(h), and 17.

          (h) “Board” means the Board of Directors of the Company.

 

          (i) “Cause” means (i) the Awardee’s actions on behalf of the Company or any
Affiliate, without the authorization of the Board or the President and Chief Executive Officer of
the Company, which actions are knowingly for the pecuniary benefit of the Awardee or members of his
or her family and which actions materially and adversely effect the business or affairs of the
Company or any Affiliate, or (ii) the Awardee fails in any material respect to observe and perform
his or her obligations under any employment agreement with the Company or the Awardee’s Employee
Confidential Information, Invention and Non Competition Agreement with the Company which failure is
not cured within twenty (20) days after written notice thereof is given to the Awardee by the
Company, or (iii) the commission by the Awardee of an act involving embezzlement or fraud against
the Company (other than non-material expense account issues) or commission or conviction of a
felony or (iv) the repeated use by the Awardee of alcohol in a manner which impairs his or her
duties or the use of any controlled substance other than under a physicians prescription.

          (j) “Change in Control” means (i) a “Board Change” which shall have occurred if a
majority of the seats (not counting vacant seats) on the Company’s Board were to be occupied by
individuals who were neither (A) nominated by a majority of the Incumbent Directors (as defined
below) nor (B) appointed by Directors so nominated; or (ii) the acquisition by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a
“Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of a majority of the then outstanding voting securities of the Company (the “Outstanding
Company Voting Securities”); provided, however, that the following acquisitions shall not
constitute a Change in Control: (A) any acquisition by the Company, or (B) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation
controlled by the Company, or (C) any public offering, private placement or other issuance by the
Company of its voting securities; or (iii) a merger or consolidation of the Company with another
entity in which neither the Company nor a corporation that, prior to the merger or consolidation,
was a subsidiary of the Company, shall be the surviving entity; or (iv) a merger or consolidation
of the Company following which (A) the Company or a corporation that, prior to the merger or
consolidation, was a subsidiary of the Company shall be the surviving entity and (B) a majority of
the Outstanding Company Voting Securities is owned by a Person or Persons who were not beneficial
owners (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of a majority of
the Outstanding Company Voting Securities immediately prior to such merger or consolidation; or (v)
a voluntary or involuntary liquidation of the Company; or (vi) a sale or disposition by the Company
of at least 80% of its assets in a single transaction or a series of transactions (other than a
sale or disposition of assets to a subsidiary of the Company in a transaction not involving a
Change in Control or a change in control of such subsidiary). An “Incumbent Director” is a member
of the Board who has been either (A) nominated by a majority of the Directors of the Company then
in office or (B) appointed by Directors so nominated, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of either an actual or threatened
election contest or other actual or threatened solicitation of proxies or consents by or on behalf
of a Person (as defined below) other than the Board.

          (k) “Code” means the Internal Revenue Code of 1986.

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          (l) “Committee” means a committee composed of Company Directors appointed in
accordance with the Company’s charter documents and Section 4.

          (m) “Company” means Osteotech Inc., a Delaware corporation.

          (n) “Company Director” means a member of the Board.

          (o) “Consultant” means an individual or an entity who (including as an employee or
agent of an entity that) provides bona fide services to the Company or an Affiliate not in
connection with the offer or sale of securities in a capital-raising transaction, but who is not an
Employee.

          (p) “Director” means a member of the Board of Directors of the Company or an
Affiliate.

          (q) “Domestic Relations Order” means a “domestic relations order” as defined in, and
otherwise meeting the requirements of, Section 414(p) of the Code, except that reference to a
“plan” in that definition shall be to this Plan.

          (r) “Effective Date” means the date the stockholders of the Company approve the
Plan. In the event the stockholders do not approve the Plan, the Plan shall be null and void and
no terms of the Plan shall take effect.

          (s) “Employee” means a regular employee of the Company or an Affiliate, including an
officer or Director, who is treated as an employee in the personnel records of the Company or an
Affiliate, but not individuals who are classified by the Company or an Affiliate as: (i) leased
from or otherwise employed by a third party, (ii) independent contractors, or (iii) intermittent or
temporary workers. The Company’s or an Affiliate’s classification of an individual as an
“Employee” (or as not an “Employee”) for purposes of this Plan shall not be altered retroactively
even if that classification is changed retroactively for another purpose as a result of an audit,
litigation or otherwise. An Awardee shall not cease to be an Employee due to transfers between
locations of the Company, or between the Company and an Affiliate, or to any successor to the
Company or an Affiliate that assumes the Awardee’s Options under Section 10. Neither service as a
Director nor receipt of a director’s fee shall be sufficient to make a Director an “Employee.”

          (t) “Exchange Act” means the Securities Exchange Act of 1934.

          (u) “Executive” means, if the Company has any class of any equity security
registered under Section 12 of the Exchange Act, an individual who is subject to Section 16 of the
Exchange Act or who is a “covered employee” under Section 162(m) of the Code, in either case
because of the individual’s relationship with the Company or an Affiliate. If the Company does not
have any class of any equity security registered under Section 12 of the Exchange Act, “Executive”
means any officer elected or appointed by the Board.

          (v) “Expiration Date” means, with respect to an Award, the date stated in the Award
Agreement as the expiration date of the Award or, if no such date is stated in the Award

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Agreement, then the last day of the maximum exercise period for the Award, disregarding the
effect of an Awardee’s Termination or any other event that would shorten that period.

          (w) “Fair Market Value” means the value of Shares as determined under Section 18.2.

          (x) “Grant Date” means the date the Administrator approves the grant of an Award.
However, if the Administrator specifies that an Award’s Grant Date is a future date or the date on
which a condition is satisfied, the Grant Date for such Award is that future date or the date that
the condition is satisfied.

          (y) “Incentive Stock Option” means an Option intended to qualify as an incentive
stock option under Section 422 of the Code and designated as an Incentive Stock Option in the Award
Agreement for that Option.

          (z) “Nonstatutory Option” means any Option other than an Incentive Stock Option.

          (aa) “Objectively Determinable Performance Condition” shall mean any one or more of
the following performance criteria, either individually, alternatively or in any combination,
applied to either the Company as a whole or to a business unit, Affiliate or business segment,
either individually, alternatively or in any combination, and measured either annually or
cumulatively over a period of years, on an absolute basis or relative to a pre-established target,
to previous years’ results or to a designated comparison group, in each case as specified by the
Committee in the Award and may include actual, growth, or performance-to-target for: (i) cash flow,
including free cash flow; (ii) earnings (including revenue, gross margin, operating profit,
earnings before interest and taxes, earnings before taxes, and net earnings) or earnings per share;
(iii) stock price; (iv) return on equity or average stockholders’ equity; (v) total stockholder
return, either actual or relative to share price or market capitalization; (vi) return on capital;
(vii) return on assets or net assets; (viii) return on investment or invested capital; (ix) return
on operating revenue; (x) income, net income, operating income, net operating income, operating
profit, net operating profit, or operating margin (with or without regard to
amortization/impairment of goodwill); (xi) market share or applications won; (xii) operational
performance, including orders, backlog, deferred revenues, revenue per employee, overhead, days
sales outstanding, inventory turns, or other expense levels; (xiii) stockholder value or return
relative to the moving average of the S&P 500 Index or a peer group index; (xiv) asset turns; (xv)
development, regulatory approval and market introduction of new products and technologies, (xvi)
objective strategic plan development and implementation (including individually designed goals and
objectives that are consistent with the Awardee’s specific duties and responsibilities and that are
designed to improve the financial performance of the Company, an Affiliate, or a specific business
unit thereof and that are consistent with and derived from the strategic operating plan of the
Company, an Affiliate or any of their business units for the applicable performance period) and
(xvii) any other similar conditions. The Committee may appropriately adjust any evaluation of
performance under an Objectively Determinable Performance Condition to exclude any of the following
events that occurs during a performance period: (A) asset write-downs; (B) litigation or claim
judgments or settlements; (C) the effect of

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changes in tax law, accounting principles or other such laws or provisions affecting reported
results; (D) accruals for reorganization and restructuring programs; (E) any extraordinary
non-recurring items as described in Accounting Principles Board Opinion No. 30 and/or in
management’s discussion and analysis of financial condition and results of operations appearing in
the Company’s annual report to stockholders for the applicable year and (F) any events that the
Board deems to be unusual, infrequent or extraordinary.

          (bb) “Officer” means an officer of the Company as defined in Rule 16a-1 adopted
under the Exchange Act.

          (cc) “Option” means a right to purchase Shares of the Company granted under this
Plan.

          (dd) “Option Price” means the price payable under an Option for Shares, not
including any amount payable in respect of withholding or other taxes.

          (ee) “Option Shares” means Shares covered by an outstanding Option or purchased
under an Option.

          (ff) “Plan” means this 2007 Stock Incentive Plan of Osteotech Inc.

          (gg) “Purchase Price” means the price payable under a Stock Award for Shares, not
including any amount payable in respect of withholding or other taxes.

          (hh) “Rule 16b-3” means Rule 16b-3 adopted under Section 16(b) of the Exchange Act.

          (ii) “SAR” or “Stock Appreciation Right” means a right to receive cash and/or Shares
based on a change in the Fair Market Value of a specific number of Shares pursuant to an Award
Agreement, as described in Section 8.1.

          (jj) “Securities Act” means the Securities Act of 1933.

          (kk) “Share” means a share of the common stock of the Company or other securities
substituted for the common stock under Section 10.

          (ll) “Stock Award” means an offer by the Company to sell or issue Shares, including
Shares subject to certain restrictions pursuant to the Award Agreement as described in Section 8.2
or, as determined by the Committee, a notional account representing the right to be paid an amount
based on Shares. Types of Awards which may be granted as Stock Awards include such awards as are
commonly known as restricted stock, deferred stock, restricted stock units, performance shares,
phantom stock or similar types of awards as determined by the Administrator.

          (mm) “Substitute Award” means a Substitute Option, Substitute SAR or Substitute
Stock Award granted in accordance with Sections 6.6, 8.1(d) and 8.2(e) of this Plan.

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          (nn) “Substitute Option” means an Option granted in substitution for, or upon the
conversion of, an option granted by another entity to purchase equity securities in the granting
entity.

          (oo) “Substitute SAR” means a SAR granted in substitution for, or upon the
conversion of, a stock appreciation right granted by another entity with respect to equity
securities in the granting entity.

          (pp) “Substitute Stock Award” means a Stock Award granted in substitution for, or
upon the conversion of, a stock award granted by another entity to purchase equity securities in
the granting entity.

          (qq) “Termination” means that the Awardee has ceased to be, with or without any
cause or reason, an Employee, Director or Consultant. Unless so determined by the Administrator,
or otherwise provided in this Plan, “Termination” shall include a change in status from an Employee
to a Consultant or Director but not from a Consultant or Director to an Employee. An event that
causes an Affiliate to cease being an Affiliate shall be treated as the “Termination” of that
Affiliate’s Employees, Directors, and Consultants.

     2.2 Rules of Interpretation. Any reference to a “Section,” without more, is to a
Section of this Plan. Captions and titles are used for convenience in this Plan and shall not, by
themselves, determine the meaning of this Plan. Except when otherwise indicated by the context,
the singular includes the plural and vice versa. Any reference to a statute is also a reference to
the applicable rules and regulations adopted under that statute. Any reference to a statute, rule
or regulation, or to a section of a statute, rule or regulation, is a reference to that statute,
rule, regulation, or section as amended from time to time, both before and after the Effective Date
and including any successor provisions.

3. Shares Subject to this Plan; Term of this Plan

     3.1 Number of Award Shares. The Shares issuable under this Plan shall be authorized
but unissued or reacquired Shares, including Shares repurchased by the Company on the open market.
Subject to adjustment under Section 10, the number of Shares initially reserved for issuance or
sale over the term of this Plan shall be 1,400,000. Except as required by Applicable Law, Shares
shall not reduce the number of Shares reserved for issuance under this Plan until the actual date
of delivery of the Shares to the Awardee. Shares subject to Awards granted under this Plan that
are cancelled, expire or are forfeited or repurchased (including without limitation any such Shares
that have been issued under the Award to the Awardee) shall be available for re-grant or
re-issuance under the Plan following such cancellation, expiration, forfeiture or repurchase. If
an Awardee pays the exercise or purchase price of an Award granted under the Plan through the
withholding of Award Shares or the tender of Shares, or if Shares are withheld from the Award or
otherwise tendered to satisfy any applicable withholding obligations, the number of Shares so
tendered or withheld
shall become available for re-grant or re-issuance thereafter under the Plan following such
tender or withholding.

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     3.2 Term of this Plan.

          (a) This Plan shall be effective on, and Awards may be granted under this Plan on
and after, the earliest the date on which the Plan has been both adopted by the Board and approved
by the Company’s stockholders.

          (b) Subject to the provisions of Section 13, Awards may be granted under this Plan
for a period of ten years from the latest date the Company’s stockholders approve this Plan,
including any subsequent amendment or restatement of this Plan approved by the Company’s
stockholders.

4. Administration

     4.1 General.

          (a) The Board shall have ultimate responsibility for administering this Plan. The
Board may delegate certain of its responsibilities to a Committee, which shall consist of at least
two members of the Board. The Board or the Committee may further delegate its responsibilities to
any Employee of the Company or any Affiliate. Where this Plan specifies that an action is to be
taken or a determination made by the Board, only the Board may take that action or make that
determination. Where this Plan specifies that an action is to be taken or a determination made by
the Committee, only the Committee may take that action or make that determination; provided that,
the Board shall always be authorized to take any action or make any determination that could have
been taken or made by the Committee. Where this Plan references the “Administrator,” the action
may be taken or determination made by the Board, the Committee, or other Administrator. However,
only the Board or the Committee may approve, or otherwise take actions or make determinations with
respect to, grants of Awards to Executives or Directors, and an Administrator other than the Board
or the Committee may grant or otherwise take actions or make determinations with respect to Awards
only to the extent such authority is delegated to such Administrator by the Committee or the Board
and only within the guidelines established by the Board or Committee. Moreover, all actions and
determinations by any Administrator are subject to the provisions of this Plan.

          (b) So long as the Company has registered and outstanding a class of equity
securities under Section 12 of the Exchange Act, to more effectively comply with various legal and
regulatory requirements the Committee should, though is not required if circumstances otherwise
suggest and such requirements are taken into account, consist of Company Directors who are
“Non-Employee Directors” as defined in Rule 16b-3 and, after the expiration of any transition
period permitted by Treasury Regulations Section 1.162-27(h)(3), who are “outside directors” as
defined in Section 162(m) of the Code. So long as the Shares are listed with Nasdaq, the Committee
shall comply with applicable Nasdaq rules and listing standards.

     4.2 Authority of the Board or the Committee.
Subject to the other provisions of this Plan, the Board or the Committee shall have the
authority to:

          (a) grant Awards, including Substitute Awards;

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          (b) determine the Fair Market Value of Shares;

          (c) determine the Option Price and the Purchase Price of Awards;

          (d) select the Awardees;

          (e) determine the times Awards are granted;

          (f) determine the number of Shares subject to each Award;

          (g) determine the methods of payment that may be used to purchase Award Shares;

          (h) determine the methods of payment that may be used to satisfy withholding tax
obligations;

          (i) determine the other terms of each Award, including but not limited to the time
or times at and the conditions upon which Awards may be exercised or become vested, whether and
under what conditions an Award is assignable, whether an Option is a Nonstatutory Option or an
Incentive Stock Option, automatic cancellation of the Award if certain objective requirements
determined by the Administration are not met, and whether the Award or Award Shares are subject to
any forfeiture or other conditions;

          (j) modify or amend any Award;

          (k) authorize any person to sign any Award Agreement or other document related to
this Plan on behalf of the Company;

          (l) determine the form of any Award Agreement or other document related to this
Plan, and whether that document, including signatures, may be in electronic form;

          (m) interpret this Plan and any Award Agreement or document related to this Plan;

          (n) correct any defect, remedy any omission, or reconcile any inconsistency in this
Plan, any Award Agreement or any other document related to this Plan;

          (o) adopt, amend, and revoke rules and regulations under this Plan, including rules
and regulations relating to sub-plans and Plan addenda;

          (p) adopt, amend, and revoke special rules and procedures which may be inconsistent
with the terms of this Plan, set forth (if the Committee or Board so chooses) in sub-
plans regarding (for example) the operation and administration of this Plan and the terms of
Awards, if and to the extent necessary or useful to accommodate non-U.S. Applicable Laws and
practices as they apply to Awards and Award Shares held by, or granted or issued to, persons
working or resident outside of the United States or employed by Affiliates incorporated outside the
United States;

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          (q) determine whether a transaction or event should be treated as a Change in
Control, as well as the effect of a Change of Control on Awards; and

          (r) make all other determinations the Committee or Board deems necessary or
advisable for the administration of this Plan.

     4.3 Scope of Discretion. Subject to the provisions of this Section 4.3, on all
matters for which this Plan confers the authority, right or power on the Board, the Committee, or
other Administrator to make decisions, that body may make those decisions in its sole and absolute
discretion. Those decisions will be final, binding and conclusive. In making its decisions, the
Board, Committee or other Administrator need not treat all persons eligible to receive Awards, all
Awardees, all Awards or all Award Shares the same way. Notwithstanding anything herein to the
contrary, and except as provided in Section 13.3, the discretion of the Board, Committee or other
Administrator is subject to the specific provisions and specific limitations of this Plan, as well
as all rights conferred on specific Awardees by Award Agreements and other agreements.

5. Persons Eligible to Receive Awards

     5.1 Eligible Individuals. Awards (including Substitute Awards) may be granted to,
and only to, Employees, Directors and Consultants. However, Incentive Stock Options may only be
granted to Employees, as provided in Section 7(g).

     5.2 Section 162(m) Limitation.

          (a) Options and SARs. Subject to the provisions of this Section 5.2, for so long as
the Company is a “publicly held corporation” within the meaning of Section 162(m) of the Code, no
Employee may be granted one or more Options or SARs within any fiscal year of the Company under
this Plan giving him or her the right to purchase or be issued more than 500,000 Shares under such
Options or SARs, or to receive compensation calculated with reference to more than that number of
Shares under Options and SARs, subject to adjustment pursuant to Section 10. If an Option or SAR
is cancelled without being exercised or if the Option Price of an Option is reduced, that cancelled
or repriced Option or SAR shall continue to be counted against the annual limit on Options and SARs
that may be granted to any individual under this Section 5.2. Notwithstanding anything herein to
the contrary, a new Employee of the Company or an Affiliate shall be eligible to be granted in the
fiscal year in which he or she commences employment Options and SARs giving him or her the right to
purchase or be issued up to a
maximum of 1,000,000 Shares, or to receive compensation calculated with reference to that
number of Shares under such Options and SARs, subject to adjustment pursuant to Section 10.

          (b) Stock Awards. Any Stock Award intended as “qualified performance-based
compensation” within the meaning of Section 162(m) of the Code, whether granted solely under this
Plan or pursuant to the terms of any other stockholder-approved compensation plan awards which are
intended to comply with Code Section 162(m), must be granted, vest or become exercisable contingent
on the achievement of one or more Objectively Determinable Performance Conditions. The Committee
shall have the discretion to determine the time and manner of compliance with Section 162(m) of the
Code. No Employee may be granted one or

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more Stock Awards within any fiscal year of the Company
under this Plan giving him or her the right to purchase or be issued more than 500,000 Shares under
such Stock Awards, or to receive compensation calculated with reference to more than that number of
Shares under Stock Awards, subject to adjustment pursuant to Section 10.

6. Terms and Conditions of Options

     The following rules apply to all Options:

     6.1 Price. Except as otherwise provided, no Option may have a per-Share Option
Price less than the par value of a Share on the Grant Date. Except as provided in Section 10, once
an Option is granted it shall not be subject to amendment or substitution without stockholder
approval if the effect is to lower the exercise price or otherwise address a circumstance where the
fair market value of the Shares exceeds the exercise price of the Option.

     6.2 Term. No Option shall be exercisable after its Expiration Date. No Option may
have an Expiration Date that is more than ten years after its Grant Date. Additional provisions
regarding the term of Incentive Stock Options are provided in Sections 7(a) and 7(e).

     6.3 Vesting. Options shall vest and become exercisable: (a) on the Grant Date, or
(b) in accordance with a schedule related to the Grant Date, the date the Optionee’s directorship,
employment or consultancy begins, or a different date specified in the Option Agreement.
Additional provisions regarding the vesting of Incentive Stock Options are provided in Section
7(c).

     6.4 Form and Method of Payment.

          (a) The Board or Committee shall determine the acceptable form and method of payment
for exercising an Option. So long as there is no material adverse accounting consequence during
the term of the Award or at the time of exercise, the Board or Committee may require the delivery
of Shares with a Fair Market Value equal to the excess of the Fair Market Value of the aggregate
number of Shares for which the Option is being exercised over the aggregate Option Price for the
number of Shares for which the Option is being exercised. The difference between the full number
of Shares covered by the exercised portion of the Award
and the number of Shares actually delivered shall be restored to the amount of Shares reserved
for issuance under Section 3.1.

          (b) Unless otherwise prohibited by the Board or Committee, acceptable forms of
payment for Option Shares can include cash, check or wire transfer, denominated in U.S. dollars
except as specified by the Administrator for non-U.S. Employees or non-U.S. sub-plans.

          (c) In addition, the Administrator may permit payment to be made by any of the
following methods:

               (i) the surrender of Shares to the Company, or the designation of Shares, in either
case whether such Shares are subject to the Option or not, that have a Fair

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Market Value on the
date of surrender to the Company equal to the Option Price of the Shares as to which the Option is
being exercised;

               (ii) provided that a public market exists for the Shares, consideration received by
the Company under a procedure under which a licensed broker-dealer advances funds on behalf of an
Optionee or sells Option Shares on behalf of an Optionee (a “Cashless Exercise Procedure”); and

               (iii) any combination of the methods of payment permitted by any paragraph of this
Section 6.4.

          (d) The Administrator may also permit any other form or method of payment for Option
Shares permitted by Applicable Law.

     6.5 Nonassignability of Options. Except as determined by the Administrator, no
Option shall be assignable or otherwise transferable by the Optionee except by will or by the laws
of descent and distribution. However, Options may be transferred and exercised in accordance with
a Domestic Relations Order, or in any manner allowed under the Form S-8 rules if so permitted by
the Administrator and may be exercised by a guardian or conservator appointed to act for the
Optionee. Incentive Stock Options may only be assigned in compliance with Section 7(h).

     6.6 Substitute Options. The Board may cause the Company to grant Substitute Options
in connection with the acquisition by the Company or an Affiliate of equity securities of any
entity (including by merger, tender offer, or other similar transaction) or of all or a portion of
the assets of any entity. Any such substitution shall be effective on the effective date of the
acquisition. Substitute Options may be Nonstatutory Options or Incentive Stock Options. Unless
and to the extent specified otherwise by the Board, Substitute Options shall have the same terms
and conditions as the options they replace, except that (subject to the provisions of Section 10)
Substitute Options shall be Options to purchase Shares rather than equity securities of the
granting entity and shall have an Option Price determined by the Board.

7. Incentive Stock Options

     The following rules apply only to Incentive Stock Options and only to the extent these rules
are more restrictive than the rules that would otherwise apply under this Plan. With the consent
of the Optionee, or where this Plan provides that an action may be taken notwithstanding any other
provision of this Plan, the Administrator may deviate from the requirements of this Section,
notwithstanding that any Incentive Stock Option modified by the Administrator will thereafter be
treated as a Nonstatutory Option.

          (a) Except as provided in Section 7(e), the Expiration Date of an Incentive Stock
Option shall not be later than ten years from its Grant Date, with the result that no Incentive
Stock Option may be exercised after the expiration of ten years from its Grant Date.

          (b) No Incentive Stock Option may be granted more than ten years from the date this
Plan was approved or amended by the Board consistent with the requirements of Section 422 of the
Code and any applicable guidance.

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          (c) Options intended to be incentive stock options under Section 422 of the Code
that are granted to any single Optionee under all incentive stock option plans of the Company and
its Affiliates, including incentive stock options granted under this Plan, may not vest at a rate
of more than $100,000 in Fair Market Value of Shares (measured on the grant dates of the options)
during any calendar year. For this purpose, an option vests with respect to a given share of stock
the first time its holder may purchase that share, notwithstanding any right of the Company to
repurchase that share. Unless the administrator of that option plan specifies otherwise in the
related agreement governing the option, this vesting limitation shall be applied by, to the extent
necessary to satisfy this $100,000 rule, treating certain stock options that were intended to be
Incentive Stock Options under Section 422 of the Code as Nonstatutory Options. The reclassification
of stock options or portions of stock options as Nonstatutory Options shall be determined by the
Company consistent with Internal Revenue Service guidance. This Section 7(c) shall not cause an
Incentive Stock Option to vest before its original vesting date or cause an Incentive Stock Option
that has already or would otherwise be vested to cease to vest or be vested.

          (d) In order for an Incentive Stock Option to be exercised for any form of payment
other than those described in Section 6.4(b), that right must be stated at the time of grant in the
Option Agreement relating to that Incentive Stock Option.

          (e) Any Incentive Stock Option granted to a Ten Percent Stockholder, must have an
Expiration Date that is not later than five years from its Grant Date, with the result that no such
Option may be exercised after the expiration of five years from the Grant Date. A “Ten Percent
Stockholder” is any person who, directly or by attribution under Section 424(d) of the Code, owns
stock possessing more than ten percent of the total combined voting power of all classes of stock
of the Company or of any Affiliate on the Grant Date.

          (f) The Option Price of an Incentive Stock Option shall never be less than the Fair
Market Value of the Shares at the Grant Date. The Option Price for the Shares covered by
an Incentive Stock Option granted to a Ten Percent Stockholder shall never be less than 110%
of the Fair Market Value of the Shares at the Grant Date.

          (g) Incentive Stock Options may be granted only to Employees.

          (h) No rights under an Incentive Stock Option may be transferred by the Optionee,
other than by will or the laws of descent and distribution. During the life of the Optionee, an
Incentive Stock Option may be exercised only by the Optionee. The Company’s compliance with a
Domestic Relations Order, or the exercise of an Incentive Stock Option by a guardian or conservator
appointed to act for the Optionee, shall not violate this Section 7(h).

          (i) An Incentive Stock Option shall be treated as a Nonstatutory Option if it
remains exercisable after, and is not exercised within, the three-month period beginning with the
Optionee’s Termination for any reason other than the Optionee’s death or disability (as defined in
Section 22(e) of the Code). In the case of the Termination of an Employee due to death, an
Incentive Stock Option shall continue to be treated as an Incentive Stock Option if it remains
exercisable after, and is not exercised within, the three month period after the Optionee’s

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Termination provided it is exercised before the Expiration Date. In the case of the Termination of
the Employee due to disability, an Incentive Stock Option shall be treated as a Nonstatutory Option
if it remains exercisable after, and is not exercised within, one year after the Optionee’s
Termination.

8. Stock Appreciation Rights and Stock Awards

     8.1 Stock Appreciation Rights. The following rules apply to SARs:

          (a) General. SARs may be granted either alone, in addition to, or in tandem with
other Awards granted under this Plan. The Administrator may grant SARs to eligible participants
subject to terms and conditions not inconsistent with this Plan and determined by the
Administrator. The specific terms and conditions applicable to the Awardee shall be provided for in
the Award Agreement. SARs shall be exercisable, in whole or in part, at such times as the
Administrator shall specify in the Award Agreement. The grant or vesting of a SAR may be made
contingent on the achievement of Objectively Determinable Performance Conditions. Except as
provided in Section 10, once an SAR is granted it shall not be subject to amendment or substitution
without stockholder approval if the effect is to lower the exercise price or otherwise address a
circumstance where the fair market value of the Shares exceeds the exercise price of the SAR.

          (b) Exercise of SARs. Upon the exercise of an SAR, in whole or in part, an Awardee
shall be entitled to a payment in an amount equal to the excess of the Fair Market Value of a fixed
number of Shares covered by the exercised portion of the SAR on the date of exercise, over the Fair
Market Value of the Shares covered by the exercised portion of the SAR on the Grant Date. The
amount due to the Awardee upon the exercise of a SAR shall be paid in cash, Shares or a combination
thereof, as specified in the Award Agreement, over the period or periods specified in the Award
Agreement. An Award Agreement may place limits on the
amount that may be paid over any specified period or periods upon the exercise of a SAR, on an
aggregate basis or as to any Awardee. A SAR shall be considered exercised when the Company
receives written notice of exercise in accordance with the terms of the Award Agreement from the
person entitled to exercise the SAR. If a SAR has been granted in tandem with an Option, upon the
exercise of the SAR, the number of shares that may be purchased pursuant to the Option shall be
reduced by the number of shares with respect to which the SAR is exercised.

          (c) Nonassignability of SARs. Except as determined by the Administrator, no SAR
shall be assignable or otherwise transferable by the Awardee except by will or by the laws of
descent and distribution. Notwithstanding anything herein to the contrary, SARs may be transferred
and exercised in accordance with a Domestic Relations Order or in any manner allowed under the Form
S-8 rules if so permitted by the Administrator.

          (d) Substitute SARs. The Board may cause the Company to grant Substitute SARs in
connection with the acquisition by the Company or an Affiliate of equity securities of any entity
(including by merger) or all or a portion of the assets of any entity. Any such substitution shall
be effective on the effective date of the acquisition. Unless and to the extent specified
otherwise by the Board, Substitute SARs shall have the same terms and conditions as

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the awards they
replace, except that (subject to the provisions of Section 10) Substitute SARs shall be exercisable
with respect to the Fair Market Value of Shares rather than with regard to the value of equity
securities of the granting entity and shall be on terms that, as determined by the Board in its
sole and absolute discretion, properly reflects the substitution.

     8.2 Stock Awards. The following rules apply to all Stock Awards:

          (a) General. The specific terms and conditions of a Stock Award applicable to the
Awardee shall be provided for in the Award Agreement. The Award Agreement shall state the number of
Shares that the Awardee shall be entitled to receive or purchase, the terms and conditions on which
the Shares shall vest, the price to be paid (if any), whether Shares are to be delivered at the
time of grant or at some deferred date specified in the Award Agreement, whether the Award is
payable solely in Shares, cash or either and, if applicable, the time within which the Awardee must
accept such offer. The offer shall be accepted by execution of the Award Agreement. The
Administrator may require that all Shares subject to a right of repurchase or risk of forfeiture be
held in escrow until such repurchase right or risk of forfeiture lapses. The grant or vesting of a
Stock Award may be made contingent on the achievement of Objectively Determinable Performance
Conditions. Total Awards under this Section 8 which are determined solely by reference to the
lapse of time shall not exceed 50% of the Shares available for grant under this Plan. Awards
subject to the limit in the immediately preceding sentence shall not include Awards which do not
vest.

          (b) Right of Repurchase. If so provided in the Award Agreement, Award Shares
acquired pursuant to a Stock Award may be subject to repurchase by the Company or an Affiliate if
not vested in accordance with the Award Agreement.

          (c) Form of Payment. If the Awardee is required to pay any amount to purchase
Shares subject to the Stock Award, then the Administrator shall determine the acceptable form and
method of payment for exercising a Stock Award. Acceptable forms of payment for all Award Shares
are cash, check or wire transfer, denominated in U.S. dollars except as specified by the
Administrator for non-U.S. sub-plans. In addition, the Administrator may permit payment to be made
by any of the methods permitted with respect to the exercise of Options pursuant to Section 6.4.

          (d) Nonassignability of Stock Awards. Except as determined by the Administrator, no
Stock Award shall be assignable or otherwise transferable by the Awardee except by will or by the
laws of descent and distribution. Notwithstanding anything to the contrary herein, Stock Awards
may be transferred and exercised in accordance with a Domestic Relations Order and in any manner
allowed under the Form S-8 rules if so permitted by the Administrator.

          (e) Substitute Stock Award. The Board may cause the Company to grant Substitute
Stock Awards in connection with the acquisition by the Company or an Affiliate of equity securities
of any entity (including by merger) or all or a portion of the assets of any entity. Unless and to
the extent specified otherwise by the Board, Substitute Stock Awards shall have the same terms and
conditions as the stock awards they replace, except that (subject to the

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provisions of Section 10)
Substitute Stock Awards shall be Stock Awards to purchase Shares rather than equity securities of
the granting entity and shall have a Purchase Price that, as determined by the Board in its sole
and absolute discretion, properly reflects the substitution. Any such Substitute Stock Award shall
be effective on the effective date of the acquisition.

9. Exercise of Awards

     9.1 In General. An Award shall be exercisable in accordance with this Plan and the
Award Agreement under which it is granted.

     9.2 Time of Exercise. Options and Stock Awards shall be considered exercised when
the Company (or its authorized agent) receives: (a) written (including electronic) notice of
exercise from the person entitled to exercise the Option or Stock Award, (b) full payment, or
provision for payment, in a form and method approved by the Administrator, for the Shares for which
the Option or Stock Award is being exercised, and (c) if applicable, payment, or provision for
payment, in a form approved by the Administrator, of all applicable withholding taxes due upon
exercise. An Award may not be exercised for a fraction of a Share. SARs shall be considered
exercised when the Company receives written notice of the exercise from the person entitled to
exercise the SAR.

     9.3 Issuance of Award Shares.
The Company shall issue Award Shares in the name of the person properly exercising the Award.
If the Awardee is that person and so requests, the Award Shares shall be issued in the name of the
Awardee and the Awardee’s spouse. The Company shall endeavor to issue Award Shares promptly after
an Award is exercised or after the Grant Date of a Stock Award, as applicable. Until Award Shares
are actually issued, as evidenced by the appropriate entry on the stock register of the Company or
its transfer agent, the Awardee will not have the rights of a stockholder with respect to those
Award Shares, even though the Awardee has completed all the steps necessary to exercise the Award.
No adjustment shall be made for any dividend, distribution, or other right for which the record
date precedes the date the Award Shares are issued, except as provided in Section 10 or with regard
to Stock Awards, except as set forth in the Award Agreement.

     9.4 Termination.

          (a) In General. Except as provided in an Award Agreement or in writing by the
Administrator, including in an Award Agreement, and as otherwise provided in Sections 9.4(b), (c),
and (d) after an Awardee’s Termination for other than Cause, the Awardee’s Awards shall be
exercisable to the extent (but only to the extent) they are vested on the date of that Termination
and only during the ninety (90) days after the Termination, but in no event after the Expiration
Date. Except as provided in an Award Agreement, or otherwise in writing by the Administrator
(including, pursuant to Section 9.4(d)(ii)), an Award shall terminate as to all Shares that are
unvested as of the Awardee’s date of Termination for any reason. Unless otherwise provided in the
Award Agreement, in the event of Termination for Cause the Award may not be exercised after the
date of Termination (even as to vested Shares). To the extent the Awardee does not exercise an
Award within the time specified for exercise, the Award shall automatically terminate.

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          (b) Leaves of Absence. Unless otherwise provided in the Award Agreement, no Award
may be exercised more than three months after the beginning of a leave of absence, other than a
personal or medical leave approved by an authorized representative of the Company with employment
guaranteed upon return. Awards shall not continue to vest during a leave of absence, unless
otherwise determined by the Administrator with respect to an approved personal or medical leave
with employment guaranteed upon return.

          (c) Death or Disability. Unless otherwise provided by the Administrator, if an
Awardee’s Termination is due to death or disability (as determined by the Administrator with
respect to all Awards other than Incentive Stock Options and as defined by Section 22(e) of the
Code with respect to Incentive Stock Options), all Awards of that Awardee to the extent exercisable
at the date of that Termination may be exercised for one year after that Termination, but in no
event after the Expiration Date. In the case of Termination due to death, an Award may be
exercised as provided in Section 17. In the case of Termination due to disability, if a guardian
or conservator has been appointed to act for the Awardee and been granted this authority as part of
that appointment, that guardian or conservator may exercise the Award on behalf of the Awardee.
Death or disability occurring after an Awardee’s Termination shall not cause the Termination to be
treated as having occurred due to death or disability. To the extent an Award
is not so exercised within the time specified for its exercise, the Award shall automatically
terminate.

          (d) Administrator Discretion. Notwithstanding the provisions of Section 9.4
(a)-(c), the Plan Administrator shall have complete discretion, exercisable either at the time an
Award is granted or at any time while the Award remains outstanding, to:

               (i) After considering any tax and accounting consequences of such change, extend the
period of time for which the Award is to remain exercisable, following the Awardee’s Termination,
from the limited exercise period otherwise in effect for that Award to such greater period of time
as the Administrator shall deem appropriate, but in no event beyond the Expiration Date; and/or

               (ii) Permit the Award to be exercised, during the applicable post-Termination
exercise period, not only with respect to the number of vested Shares for which such Award may be
exercisable at the time of the Awardee’s Termination but also with respect to one or more
additional installments in which the Awardee would have vested had the Awardee not been subject to
Termination.

          (e) Consulting or Employment Relationship. Nothing in this Plan or in any Award
Agreement, and no Award or the fact that an Award remains unvested or that Award Shares remain
subject to repurchase rights or other forfeiture conditions, shall: (A) interfere with or limit
the right of the Company or any Affiliate to terminate the employment or consultancy of any Awardee
at any time, whether with or without cause or reason, and with or without the payment of severance
or any other compensation or payment, or (B) interfere with the application of any provision in any
of the Company’s or any Affiliate’s charter documents or Applicable Law relating to the election,
appointment, term of office, or removal of a Director.

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10. Certain Transactions and Events

     10.1 In General. Except as provided in this Section 10, the existence of
outstanding Awards shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations,
exchanges, or other changes in the Company’s capital structure or its business, or any merger or
consolidation of the Company or any issuance of Shares or other securities or subscription rights
thereto, or any issuance of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Shares or other securities of the Company or the rights thereof, or the dissolution
or liquidation of the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar character or otherwise.
Further, except as expressly provided in this Section 10 or otherwise expressly provided for in a
writing approved by the Board or Committee, (i) the issuance by the Company of shares of stock or
any class of securities convertible into shares of stock of any class, for cash, property, labor or
services, upon direct sale, upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares or other
securities, (ii) the payment of a dividend in property other than Shares, or (iii) the occurrence
of any similar transaction, and in
any case whether or not for fair value, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number of Shares subject to Options or other Awards theretofore
granted or the purchase or repurchase price per Share.

     10.2 Changes in Capital Structure. In the event of any stock split, reverse stock
split or stock dividend, the (a) the number and type of Shares that may be granted subject to
Awards granted under this Plan, (b) the number and type of Awards that may be granted to any
individual under this Plan, (c) the terms of any SAR, (d) the Purchase Price or repurchase price of
any Stock Award, (e) the Option Price and number and class of securities issuable under each
outstanding Option, and (f) the repurchase price of any securities substituted for Award Shares
that are subject to repurchase rights shall be adjusted proportionately in order to prevent
dilution or enlargement of the benefits or potential benefits intended to be provided under the
Awards. The specific adjustments to be made to effectuate the intent of the preceding sentence
shall be determined by the Board or Committee, whose determination in this regard shall be final
and binding on all parties. In the event of any other change to the capital structure of the
Company, the Board or Committee shall have the discretion to determine what if any adjustments
shall be made. Unless the Board or Committee specifies otherwise, any securities issuable as a
result of any such adjustments shall be rounded down to the next lower whole security. The Board
or Committee need not adopt the same rules for each Award or each Awardee.

     10.3 Change of Control Transactions. In the event of a Change of Control, any or
all outstanding Awards shall be subject to the definitive agreement governing the Change of Control
transaction. Such transaction agreement may provide, without limitation and in a manner that is
binding on all parties, for (1) the assumption, substitution or replacement with equivalent awards
of outstanding Awards (but in each case adjusted to reflect the transaction terms) by the surviving
corporation or its parent, (2) continuation of outstanding Awards (but again adjusted to reflect
the transaction terms) by the Company if the Company is a surviving corporation, (3) accelerated
vesting, or lapse of repurchase rights or forfeiture conditions applicable to, and accelerated
expiration or termination of, the outstanding Awards, or (4) settlement of outstanding

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Awards
(including termination thereof) in cash. Except for adjustments to reflect the transaction terms
as referenced above or, to the extent any Award or Award Shares are subject to accelerated vesting
or lapse of restrictions approved by the Board or Committee upon specific events or conditions (and
then only to the extent such acceleration benefits are reflected in the transaction agreement, the
applicable Award Agreement or another written agreement between the participant and the Company),
any outstanding Awards that are assumed, substituted, replaced with equivalent awards or continued
shall continue following the transaction to be subject to the same vesting or other restrictions
that applied to the original Award. The Administrator need not adopt the same rules or apply the
same treatment for each Award or Awardee.

     10.4 Dissolution. Notwithstanding anything herein to the contrary, in the event of
a dissolution or liquidation of the Company, to the extent an Award has not been exercised or the
Shares subject
thereto have not been issued in full prior to the earlier of the completion of the transaction
or the applicable Award Expiration Date, then outstanding Awards shall terminate immediately prior
to the transaction.

11. Award Grants to Non-Employee Directors

     11.1 General.

     Consistent with the terms of this Plan and as reflected in individual Award Agreements, the
Administrator or, if required by Applicable Law, the Board, may grant Awards to Directors who are
not Employees (“Non-Employee Directors”) on such terms and conditions as it determines, including
to provide for satisfaction of Director fee or retainer payments through issuance of Awards under
the Plan. Such Awards may be done by establishing an annual or other periodic grant program, or
may done through action taken to approve individual Awards from time to time. To the extent that
the Administrator or the Board from time to time establish an annual or other periodic grant
program for Non-Employee Directors, it may at any time amend, suspend or terminate such program
with respect to Awards that have not yet been granted, without the need for approval from any
Non-Employee Director who might otherwise have benefited from such Awards or from the stockholders.

     11.2 Non-Employee Director Award Guidelines

     Awards granted by the Board pursuant to Section 11.1 may be granted only with the approval of
the Committee or a majority of the Company Directors then serving on the Board who meet the
director independence standards of Nasdaq (or such other primary exchange or system on which Shares
are traded or quoted).

12. Tax Matters

     12.1 Tax Withholding.

          (a) General. Whenever Awards are granted, Award Shares vest, are issued or become
free of restrictions, or Awards or Award Shares are transferred, the Company may require the
Awardee to remit to the Company an amount sufficient to satisfy any applicable tax withholding
requirement, whether the related tax is imposed on the Awardee or the Company.

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The Company shall
have no obligation to deliver Award Shares or release Award Shares from an escrow or permit a
transfer of Award Shares until the Awardee has satisfied those tax withholding obligations. The
Awardee accepts this requirement as a condition of his or her receipt of the Award. To the extent
any payment in satisfaction of Awards is made in cash, the payment will be reduced by an amount
sufficient to satisfy all tax withholding requirements.

          (b) Method of Payment. The Awardee shall pay any required withholding using the
forms of consideration described in Section 6.4(b), except that, in the discretion of the
Administrator, the Company may also permit the Awardee to use any of the forms of payment described
in Section 6.4(c). If the Administrator permits Award Shares to be withheld from the Award to
satisfy applicable withholding obligations, the Fair Market Value of the Award Shares withheld, as
determined as of the date of withholding, shall not exceed the amount determined by
the applicable minimum statutory withholding rates to the extent the Administrator determines
such limit is necessary or advisable in light of generally accepted accounting principles.

     12.2 Reporting of Dispositions. Any holder of Option Shares acquired under an
Incentive Stock Option shall promptly notify the Administrator, following such procedures as the
Administrator may require, of the sale or other disposition of any of those Option Shares if the
disposition occurs during: (a) the longer of two years after the Grant Date of the Incentive Stock
Option and one year after the date the Incentive Stock Option was exercised, or (b) such other
period as the Administrator has established.

     12.3 Liability for Applicable Taxes.

     Regardless of any action the Company or the Awardee’s employer (the “Employer”) takes with
respect to any or all income tax, social security, payroll tax, payment on account, other
tax-related withholding or information reporting (“Tax-Related Items”), the Awardee acknowledges
and agrees that the ultimate liability for all Tax-Related Items legally due by him is and remains
the Awardee ‘s responsibility and that the Company and or the Employer (i) make no representations
nor undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of
an Award; and (ii) do not commit to structure the terms or any aspect of an Award granted hereunder
to reduce or eliminate the Awardee ‘s liability for Tax-Related Items. The Awardee shall pay the
Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be
required to withhold as a result of the Awardee’s participation in the Plan that cannot be
satisfied by the means previously described. The Company may refuse to deliver any benefit under
the Plan if the Awardee fails to comply with his or her obligations in connection with the
Tax-Related Items.

13. Compliance with Law

     13.1 General. The grant of Awards and the issuance and subsequent transfer of Award
Shares shall be subject to compliance with all Applicable Law, including all applicable securities
laws. Awards may not be exercised, and Award Shares may not be transferred, in violation of
Applicable Law. Thus, for example, Awards may not be exercised or issued unless: (a) a
registration statement under the Securities Act is then in effect with respect to the related Award
Shares, or (b) in the opinion of legal counsel to the Company, those Award Shares may

19

 

be issued in
accordance with an applicable exemption from the registration requirements of the Securities Act
and any other applicable securities laws. The failure or inability of the Company to obtain from
any regulatory body the authority considered by the Company’s legal counsel to be necessary or
useful for the lawful issuance of any Award Shares or their subsequent transfer shall relieve the
Company of any liability for failing to issue those Award Shares or permitting their transfer. As
a condition to the exercise of any Award or the transfer of any Award Shares, the Company may
require the Awardee to satisfy any requirements or qualifications that may be necessary or
appropriate to comply with or evidence compliance with any Applicable Law. The Company shall have
no liability to any Awardee or any party who might claim through the Awardee to the extent that the
Awardee (or his or her permitted transferee) is required to forfeit an Award, or the benefits
received or to be received under an Award, pursuant to any Applicable Law.

     13.2 Tax Matters. Notwithstanding anything to the contrary contained herein, to the
extent that the Administrator determines that any Award granted under the Plan is subject to Code
Section 409A and unless otherwise specified in the applicable Award Agreement, the Award Agreement
evidencing such Award shall incorporate the terms and conditions necessary for such Award to avoid
the consequences described in Code Section 409A(a)(1), and to the maximum extent permitted under
Applicable Law (and unless otherwise stated in the applicable Award Agreement), the Plan and the
Award Agreements shall be interpreted in a manner that results in their conforming to the
requirements of Code Section 409A(a)(2), (3) and (4) and any Department of Treasury or Internal
Revenue Service regulations or other interpretive guidance issued under Section 409A (whenever
issued, the “Guidance”). Notwithstanding anything to the contrary in this Plan (and unless the
Award Agreement provides otherwise, with specific reference to this sentence), to the extent that
an Awardee holding an Award that constitutes “deferred compensation” under Section 409A and the
Guidance is a “specified employee” (also as defined thereunder), no distribution or payment of any
amount shall be made before a date that is six months following the date of such Awardee’s
“separation from service” (as defined in Section 409A and the Guidance) or, if earlier, the date of
the Awardee’s death.

14. Amendment or Termination of this Plan or Outstanding Awards

     14.1 Amendment and Termination. The Board may at any time amend, suspend, or
terminate this Plan.

     14.2 Stockholder Approval. The Company shall obtain the approval of the Company’s
stockholders for any amendment to this Plan if stockholder approval is necessary or desirable to
comply with any Applicable Law or with the requirements applicable to the grant of Awards intended
to be Incentive Stock Options; provided however that the Company shall obtain stockholder approval
of any of the following: (a) other than an increase under Section 10.2, an increase to the Shares
reserved for issuance hereunder; (b) an expansion of the class of persons eligible to receive
Awards hereunder; or (c) otherwise than as provided under Section 10, any amendment of outstanding
Options or SARs that effects a repricing of such Awards or other lowering of the original Option
Price or grant date Fair Market Value that applies to a SAR. For Stock Awards to continue to be
eligible to qualify as “performance-based compensation” under Code Section 162(m), the Company’s
stockholders must re-approve the material terms of the

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performance goals included in the Plan by
the date of the first stockholder meeting that occurs in the fifth year following the year in which
the stockholders first approved the Plan. The Board may also, but need not, require that the
Company’s stockholders approve any other amendments to this Plan.

     14.3 Effect.
No amendment, suspension, or termination of this Plan, and no modification of any Award even
in the absence of an amendment, suspension, or termination of this Plan, shall impair any existing
contractual rights of any Awardee unless the affected Awardee consents to the amendment,
suspension, termination, or modification. Notwithstanding anything herein to the contrary, no such
consent shall be required if the Board determines, in its sole and absolute discretion, that the
amendment, suspension, termination, or modification: (a) is required or advisable in order for the
Company, this Plan or the Award to satisfy Applicable Law, to meet the requirements of any
accounting standard or to avoid any adverse accounting treatment, or (b) in connection with any
transaction or event described in Section 10, is in the best interests of the Company or its
stockholders. The Board may, but need not, take the tax or accounting consequences to affected
Awardees into consideration in acting under the preceding sentence. Those decisions shall be
final, binding and conclusive. Termination of this Plan shall not affect the Administrator’s
ability to exercise the powers granted to it under this Plan with respect to Awards granted before
the termination of Award Shares issued under such Awards even if those Award Shares are issued
after the termination.

15. Reserved Rights

     15.1 Nonexclusivity of this Plan. This Plan shall not limit the power of the
Company or any Affiliate to adopt other incentive arrangements including, for example, the grant or
issuance of stock options, stock, or other equity-based rights under other plans.

     15.2 Unfunded Plan. This Plan shall be unfunded. Although bookkeeping accounts may
be established with respect to Awardees, any such accounts will be used merely as a convenience.
The Company shall not be required to segregate any assets on account of this Plan, the grant of
Awards, or the issuance of Award Shares. The Company and the Administrator shall not be deemed to
be a trustee of stock or cash to be awarded under this Plan. Any obligations of the Company to any
Awardee shall be based solely upon contracts entered into under this Plan, such as Award
Agreements. No such obligations shall be deemed to be secured by any pledge or other encumbrance
on any assets of the Company. Neither the Company nor the Administrator shall be required to give
any security or bond for the performance of any such obligations.

16. Special Arrangements Regarding Award Shares

     16.1 Escrow of Stock Certificates. To enforce any restrictions on Award Shares, the
Administrator may require their holder to deposit the certificates representing Award Shares, with
stock powers or other transfer instruments approved by the Administrator endorsed in blank, with
the Company or an agent of the Company to hold in escrow until the restrictions have lapsed or
terminated. The Administrator may also cause a legend or legends referencing the restrictions to
be placed on the certificates.

     16.2 Repurchase Rights.

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          (a) General. If a Stock Award is subject to vesting or other forfeiture conditions,
the Company shall have the right, during such period after the Awardee’s Termination as is
specified by the Administrator to repurchase any or all of the Award Shares that were unvested or
otherwise subject to forfeiture as of the date of that Termination. The repurchase price shall be
such price as is determined by the Administrator and set forth in the Award Agreement, subject to
adjustment under Section 10. The repurchase price shall be paid in cash. The Company may assign
this right of repurchase.

          (b) Procedure. The Company or its assignee may choose to give the Awardee a written
notice of exercise of its repurchase rights under this Section 16.2. However, the Company’s
failure to give such a notice shall not affect its rights to repurchase Award Shares. The Company
must, however, tender the repurchase price during the period specified in this Section 16.2 for
exercising its repurchase rights in order to exercise such rights.

     16.3 Deferral of Award Benefits. The Administrator may in its discretion and upon
such terms and conditions as it determines appropriate permit one or more Awardees whom it selects
to (a) defer compensation payable pursuant to the terms of an Award, or (b) defer compensation
arising outside, even if in connection with, the terms of this Plan pursuant to a program that
provides for deferred payment in satisfaction of such other compensation amounts through or in
connection with the issuance of one or more Awards. Any such deferral arrangement shall be
evidenced by an Award Agreement in such form as the Administrator shall from time to time
establish, and no such deferral arrangement shall be a valid and binding obligation unless
evidenced by a fully executed Award Agreement, the form of which the Administrator has approved,
including through the Administrator’s establishing a written program (the “Program”) under this
Plan to govern the form of Award Agreements participating in such Program. Any such Award
Agreement or Program shall specify the treatment of dividends or dividend equivalent rights (if
any) that apply to Awards governed thereby, and shall further provide that any elections governing
payment of amounts pursuant to such Program shall be in writing, shall be delivered to the Company
or its agent in a form and manner that complies with Code Section 409A and the Guidance, and shall
specify the amount to be distributed in settlement of the deferral arrangement, as well as the time
and form of such distribution in a manner required by the Administrator, and shall specify the
amount to be distributed in settlement of the deferral arrangement, as well as the time and form of
such distribution.

17. Beneficiaries

     An Awardee may file a written designation of one or more beneficiaries who are to receive the
Awardee’s rights under the Awardee’s Awards after the Awardee’s death. An Awardee may change such
a designation at any time by written notice. If an Awardee designates a beneficiary, the
beneficiary may exercise the Awardee’s Awards after the Awardee’s death. If an Awardee dies when
the Awardee has no living beneficiary designated under this Plan, the
Company shall allow the executor or administrator of the Awardee’s estate to exercise the
Award or, if there is none, the person entitled to exercise the Option under the Awardee’s will or
the laws of descent and distribution; provided the Company may require of any such person,

22

 

evidence
of authority to act in such capacity as it deems appropriate. In any case, no Award may be
exercised after its Expiration Date.

18. Miscellaneous

     18.1 Governing Law. This Plan, the Award Agreements and all other agreements
entered into under this Plan, and all actions taken under this Plan or in connection with Awards or
Award Shares, shall be governed by the laws of the State of Delaware.

     18.2 Determination of Value. Fair Market Value shall be determined as follows:

          (a) Listed Stock. If the Shares are traded on any established stock exchange or
quoted on a national market system, Fair Market Value shall be the closing sales price for the
Shares as quoted on that stock exchange or system for the date the value is to be determined (the
“Value Date”) as reported in The Wall Street Journal or a similar publication. If no sales are
reported as having occurred on the Value Date, Fair Market Value shall be that closing sales price
for the last preceding trading day on which sales of Shares are reported as having occurred. If no
sales are reported as having occurred during the five trading days before the Value Date, Fair
Market Value shall be the closing bid for Shares on the Value Date (or on the last preceding date
on which a closing bid for the Shares was made). If Shares are listed on multiple exchanges or
systems, Fair Market Value shall be based on sales or bid prices on the primary exchange or system
on which Shares are traded or quoted.

          (b) Stock Quoted by Securities Dealer. If Shares are regularly quoted by a
recognized securities dealer but selling prices are not reported on any established stock exchange
or quoted on a national market system, Fair Market Value shall be the mean between the high bid and
low asked prices on the Value Date. If no prices are quoted for the Value Date, Fair Market Value
shall be the mean between the high bid and low asked prices on the last preceding trading day on
which any bid and asked prices were quoted.

          (c) No Established Market. If Shares are not traded on any established stock
exchange or quoted on a national market system and are not quoted by a recognized securities
dealer, and unless otherwise required by Applicable Law, the Administrator (following guidelines
established by the Board or Committee) will determine Fair Market Value in good faith using any
reasonable valuation method. The Administrator will consider the following factors, and any others
it considers significant, in determining Fair Market Value: (i) the price at which other securities
of the Company have been issued to purchasers other than Employees, Directors, or Consultants, (ii)
the Company’s stockholder’s equity, prospective earning power, dividend-paying capacity, present
value of future cash flows, and value of tangible and intangible assets, if any, and (iii) any
other relevant factors, including the economic outlook for
the Company and the Company’s industry, the Company’s position in that industry, the Company’s
goodwill and other intellectual property, and the values of securities of other businesses in the
same industry.

     18.3 Reservation of Shares. During the term of this Plan, the Company shall at all
times reserve and keep available such number of Shares as are still issuable under this Plan.

23

 

     18.4 Electronic Communications. Any Award Agreement, notice of exercise of an
Award, or other document required or permitted by this Plan may be delivered in writing or, to the
extent determined by the Administrator, electronically. Signatures may also be electronic if
permitted by the Administrator.

     18.5 Notices. Unless the Administrator specifies otherwise, any notice to the
Company under any Option Agreement or with respect to any Awards or Award Shares shall be in
writing (or, if so authorized by Section 18.4, communicated electronically), shall be addressed to
the Secretary of the Company, and shall only be effective when received by the Secretary of the
Company.

24exv4w1

 

RESIDENTIAL CAPITAL, LLC

Floating Rate Note due 2010

	 	 	 	 	 
	No. A-1
	 	ISIN: XS0307840735
	 
	 	COMMON CODE NO.: 030784073
	 
	 	CUSIP: 76114EAD4
	 
	 	 	 	€600,000,000

THIS SECURITY IS A GLOBAL NOTE 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 EXCHANGED
IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE COMMON DEPOSITARY
FOR CLEARSTREAM BANKING, SOCIETE ANONYME (“CLEARSTREAM, LUXEMBOURG”) OR EUROCLEAR BANK S.A./N.V.
(“EUROCLEAR”), TO THE CORPORATION OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF BT GLOBNET NOMINEES LIMITED (“BT GLOBNET”)
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE COMMON DEPOSITARY (AND
ANY PAYMENT IS MADE TO BT GLOBNET OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE COMMON DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, INASMUCH AS THE REGISTERED OWNER HEREOF, BT GLOBNET, HAS
AN INTEREST HEREIN .

1

 

     RESIDENTIAL CAPITAL, LLC a Delaware limited liability company (hereinafter called the
“Company,” which term includes any successor Person under the Indenture referred to below), for
value received, hereby promises to pay to BT Globnet Nominees Limited, or registered assigns, the
principal sum of Six Hundred Million Euros on September 27, 2010, and to pay interest thereon for
each Interest Period (as defined herein) at a rate per annum equal to EURIBOR (as defined herein)
as determined by the Calculation Agent (as defined herein) on the Interest Determination Date (as
defined herein) for such Interest Period plus 1.45%. The interest rate in effect on this Note
during the initial Interest Period is 5.609% per annum. The interest rate on this Note will be
reset on the applicable Interest Reset Date (as defined herein) for each Interest Period. Promptly
upon determination, the Calculation Agent will inform the Company of the interest rate on this Note
for each Interest Period. Interest on this Note is payable quarterly on March 27, June 27,
September 27 and December 27 of each year, commencing September 27, 2007. Interest shall be
calculated on the basis of the actual number of days in an Interest Period and a 360-day year. The
interest rate on this Note shall be subject to adjustment from time to time as set forth in the
immediately succeeding paragraph and on the reverse of this Note, until the principal hereof is
paid or made available for payment.

     If any Interest Reset Date and Interest Payment Date with respect to this Note would otherwise
be a day that is not a Business Day, such Interest Reset Date and Interest Payment Date shall be
the next succeeding Business Day and interest shall accrue for the period up to but not including
such Interest Reset Date and Interest Payment Date on the next succeeding Business Day. If the
Maturity Date is not a Business Day, then the principal amount of this Note plus accrued and unpaid
interest hereon shall be paid on the next succeeding Business Day and no interest shall accrue from
the Maturity Date or any day thereafter.

     Whenever in this Note or in the Indenture there is a reference, in any context, to the payment
of the principal of, premium, if any, or interest on, or in respect of, any Note, such mention
shall be deemed to include mention of the payment of Adjustment Interest (as defined on the reverse
of this Note) (if any) payable as described in this Note to the extent that, in such context,
Adjustment Interest is, was or would be payable in respect of this Note and express mention of the
payment of Adjustment Interest (if any) in any provisions of this Note shall not be construed as
excluding Adjustment Interest in those provisions of this Note where such express mention is not
made.

     “Calculation Agent” means Deutsche Bank AG, London Branch, and its successors and assigns.

     “Interest Determination Date” means, with respect to any Interest Period, the date that is two
Settlement Days prior to the Interest Reset Date for such Interest Period.

     “Interest Period” means the period commencing on an Interest Payment Date (or, in the case of
the initial Interest Period, commencing on the Issue Date) and ending on the day preceding the next
following Interest Payment Date (or, in the case of the last such Interest Period ending on the day
preceding the Maturity Date); the initial Interest Period shall commence on the Issue Date and end
on September 26, 2007.

2

 

     “Interest Reset Date” means, with respect to any Interest Period (other than the initial
Interest Period), the first day of such Interest Period.

     “EURIBOR” with respect to each Interest Reset Date shall be determined by the Calculation
Agent as follows:

     (i) EURIBOR will be equal to the Euro interbank offered rate for deposits in Euros having a
maturity of three months which appears on the Reuters EURIBOR01 Page as of 11:00 a.m. Brussels
time, on the Interest Determination Date for the applicable Interest Reset Date. ‘‘Reuters
EURIBOR01 Page’’ means the display page so designated on the Reuters Monitor Money Rates Service or
any other page that may replace that page on that service for the purpose of displaying comparable
rates or prices.

     (ii) If an applicable rate does not appear on the Reuters EURIBOR01 Page, the rate for that
day will be determined on the basis of the rates at which deposits in Euros, having the applicable
maturity and in a principal amount of not less than €1,000,000, are offered at approximately 11:00
a.m., Brussels time on that Interest Determination Date for the applicable Interest Reset Date to
prime banks in the Eurozone interbank market by the Reference Banks. The Calculation Agent will
request the principal Eurozone office of each Reference Bank to provide a quotation of its rate. If
the Reference Banks provide at least two quotations, the rate for that day will be the arithmetic
mean of the quotations. If the Reference Banks provide fewer than two quotations, the rate for that
day will be the arithmetic mean of the rates quoted by major banks in the Euro-zone, selected by
the Calculation Agent, at approximately 11:00 a.m., Brussels time, on that Interest Determination
Date, for loans in Euros to leading European banks having the applicable maturity and in a
principal amount of not less than €1,000,000. If the banks selected as described above are not
providing quotations, for the period until the next Interest Reset Date, EURIBOR will be the same
as the rate determined for the immediately preceding Interest Reset Date.

     “Settlement Day” means any day on which TARGET (the Trans-European Automated Real-time Gross
Settlement Express Transfer System) is open which is also a day on which banks in New York City are
open for business.

     “Reference Banks” means four major banks in the Euro-zone interbank market selected by the
calculation agent.

     All percentages resulting from calculation of the interest rate with respect to this Note will
be rounded, if necessary, to the nearest one-hundred thousandth of a percentage point, with five
one-millionth of a percentage point rounded upward (e.g., 9.876545% (or .09876545) would be rounded
to 9.87655% (or .0987655) and 9.876544% (or .09876544) would be rounded to 9.87654% (or .0987654)),
and all dollar amounts in or resulting from any such calculation will be rounded to the nearest
cent (with one-half cent being rounded upward).

     The interest payable, and punctually paid or duly provided for on any Interest Payment Date
will, as provided in the Indenture, be paid to the Person in whose name this Note (or one or more
Predecessor Notes) is registered at the close of business on the Regular Record Date for such
interest, which shall be March 12, June 12, September 12 or December 12 (whether or not a

3

 

Business Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date and shall be paid to the Person in whose name this Note (or one
or more Predecessor Notes) is registered at the close of business on a subsequent Record Date for
the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to
Holders of Notes of this series not less than fifteen days preceding such subsequent Record Date,
such Record Date to be not less than five days preceding the date of payment of such defaulted
interest.

     This Note is not redeemable by the Company prior to maturity and is not subject to any sinking
fund.

     Payment of the principal of (and premium, if any) and interest on this Note shall be made at
the office or agency of the Company maintained for that purpose in New York, New York or
Luxembourg, in such coin or currency of the European Union as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the option of the
Company payment of interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.

4

 

     Reference is hereby made to the further provisions of this Note 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 Note 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 under its
corporate seal.

Dated:
June     , 2007

	 	 	 	 	 
	 	RESIDENTIAL CAPITAL , LLC

a Delaware limited liability company

 	 
	 	By:  	 	 
	 	 	Sanjiv Khattri 	 
	 	 	Chief Financial Officer and Director 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	 	 
	 	 	William F. Casey 

Treasurer 	 
	 	 	 	 
	 

CERTIFICATE OF AUTHENTICATION

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

	 	 	 	 	 
	 	DEUTSCHE BANK TRUST COMPANY 

AMERICAS, as Trustee

By: DEUTSCHE BANK NATIONAL TRUST COMPANY

 	 
	 	By:  	 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 
	 	 	 
	 	By:  	
 	 
	 	 	Authorized Signatory 	 
	 	 	 	 
	 

 

 

[Reverse of Note]

     This Note is one of a duly authorized issue of securities of the Company (herein called the
“Notes”), issued and to be issued in one or more series under an Indenture, dated as of June 24,
2005, as supplemented by a Second Supplemental Indenture, dated as of November 21, 2005 (as so
supplemented and as it may from time to time be further supplemented or amended by one or more
indentures supplemental thereto, the “Indenture”), among the Company, the Guarantors described
therein and Deutsche Bank Trust Company Americas, as trustee (herein called the “Trustee”, which
term includes any successor trustee under the Indenture), and reference is hereby made to the
Indenture for a statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the
Notes are, and are to be, authenticated and delivered. This Note is one of the series designated
on the face hereof, limited in aggregate principal amount to €600,000,000; provided that the
Company may from time to time, without notice to or the consent of the Holders of Notes, create and
issue further Notes of this series (the “Additional Notes”) having the same terms and ranking
equally and ratably with the Notes in all respects, or in all respects except for the payment of
interest accruing prior to the Issue Date or except for the first payment of interest following the
Issue Date of such Additional Notes. Any Additional Notes will be consolidated and form a single
series with the Notes and shall have the same terms as to status, redemption or otherwise as the
Notes.

     Upon the occurrence of a Rating Change (as defined herein), this Note will bear interest at a
rate equal to the rate that would be applicable without any adjustment plus the applicable interest
rate adjustment (each an “Interest Rate Adjustment”), if any, set forth below. Each Interest Rate
Adjustment will be effective on the next Business Day after the Rating Change has occurred.
Thereafter, the Interest Rate Adjustment will remain in effect until the next Rating Change that
results in a different Interest Rate Adjustment as set forth below. That portion of interest
accruing as a result of an Interest Rate Adjustment is referred to in this Note as “Adjustment
Interest.” The Company will give prompt notice to the Trustee of any Rating Change and any related
Interest Rate Adjustment.

INTEREST RATE ADJUSTMENTS

At any time the Notes are rated by two or more Rating Agencies (as defined
herein) and the ratings are:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Below
Investment Grade by
one (and not more
than one) Rating
Agency

	 	One Rating Category
Below Investment
Grade by two or
more Rating
Agencies (and not
Two or More Rating
Categories Below
Investment Grade by
any Rating Agency).
	 	Two or More Rating
Categories Below
Investment Grade by
one (and not more
than one) Rating
Agency and One
Rating Category
Below Investment
Grade by any other
Rating Agency
	 	Two or More Rating
Categories Below
Investment Grade by
two or more Rating
Agencies.

	 

	 	 	 	 	 	 
	0.50%

	 	 	1.00	%	 	 	1.50	%	 	 	2.00	%

6

 

     If at any time the Notes are rated by only one Rating Agency and the rating is One Rating
Category Below Investment Grade, the Interest Rate Adjustment will be 1.00%. If at any time the
Notes are rated by only one Rating Agency and the rating is Two or More Rating Categories Below
Investment Grade, the Interest Rate Adjustment will be 2.00%. If at any time the Notes are not
rated by any Rating Agency, the Interest Rate Adjustment will be 2.00%.

     The interest rate on this Note will permanently cease to be subject to any adjustment set
forth above if (i) the Notes become rated Baa2, BBB and BBB or higher by each of Moody’s Investors
Service, Inc., Standard & Poor’s Ratings Group and Fitch, Inc., respectively (or two of these
ratings if only rated by two Rating Agencies), with a stable or positive or equivalent outlook by
each of the Rating Agencies or (ii) after the Company exercises its right under the Indenture to
defease the entire indebtedness of the Notes referred to below.

     “Below Investment Grade” means the Notes are rated lower than Baa3, BBB- or BBB- by Moody’s
Investors Service, Inc., Standard & Poor’s Ratings Group or Fitch, Inc., respectively.

     “One Rating Category Below Investment Grade” means the Notes are rated Ba1, BB+ or BB+ by
Moody’s Investors Service, Inc., Standard & Poor’s Ratings Group or Fitch, Inc., respectively.

     “Rating Agencies” means Moody’s Investors Service, Inc., Standard & Poor’s Ratings Group and
Fitch, Inc. and their respective successors, individually and/or collectively, as the context
requires.

     “Rating Change” means any change in any rating of the Notes or the Notes cease to be rated by
any Rating Agency and thereafter are rated by such Rating Agency.

     “Two or More Rating Categories Below Investment Grade” means the Notes are rated Ba2, BB or BB
or lower by Moody’s Investors Service, Inc., Standard & Poor’s Ratings Group or Fitch, Inc.,
respectively.

     The Indenture contains provisions for defeasance at any time of the entire indebtedness of the
Notes or certain restrictive covenants and Events of Default with respect to the Notes, in each
case upon compliance with certain conditions set forth in the Indenture.

     In addition to the Events of Default described in the Indenture, an Event of Default shall
also include:

	 	 	The failure of the Company or the failure of any of the Guarantors to perform any term or
provision of any evidence of indebtedness (including the Indenture), whether such
indebtedness now exists or shall hereafter be created, or any other condition shall occur,
and as a result of the occurrence of which default or condition any indebtedness in an
amount in excess of $50,000,000 shall become or be declared to be due and payable, or the
Company or any of its Guarantors shall be obligated to purchase any such indebtedness, prior
to the date on which it would otherwise become due and payable, or any indebtedness in an
amount in excess of $50,000,000 shall not be paid when due at its stated maturity.

7

 

     If an Event of Default with respect to Notes of this series shall occur and be continuing, the
principal of the Notes of this series may be declared due and payable in the manner and with the
effect provided in the Indenture.

     The Indenture permits, with certain exceptions as therein provided, the Company, each
Guarantor and the Trustee to enter into from time to time indentures supplemental to the Indenture
for the purpose of adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights
of the Holders of the Securities (including the Holders of the Notes), in each case, with the
consent of the Holders of not less than a majority of the aggregate principal amount of the
Securities of all series at the time outstanding affected by such supplemental indenture (voting as
a class). The Indenture also contains provisions permitting the Holders of specified percentages
in aggregate principal amount of the Notes of each series at the time outstanding, on behalf of the
Holders of all Notes 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 Note shall be conclusive and binding upon such Holder and
upon all future Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver
is made upon such Note.

     As provided in and subject to the provisions of the Indenture, the Holder of this Note shall
not have the right to institute any action or proceeding with respect to the Indenture or for the
appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall
have previously given the Trustee written notice of a continuing default with respect to the Notes
of this series, and the Holders of not less than 25% in aggregate principal amount of the Notes of
this series at the time outstanding shall have made written request to the Trustee to institute
such action or proceedings in its own name as Trustee and offered the Trustee reasonable indemnity,
and the Trustee shall not have received from the Holders of a majority in aggregate principal
amount of the Securities of any or all series affected (voting as a single class) at the time
outstanding a direction inconsistent with such request, and the Trustee shall have failed to
institute any such action or proceeding for 60 days after receipt of such notice, request and offer
of indemnity.

     Notwithstanding any other provision of the Indenture or this Note, the right of any Holder of
this Note to receive payment of the principal of, and interest on, this Note on or after the
respective due dates expressed in this Note, or to institute suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected without the consent of
such Holder.

     As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Note is registrable in the Security Register, upon surrender of this Note for
registration of transfer at the office or agency of the Company specified in the Indenture, duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company
and the Trustee duly executed by the Holder hereof or such Holder’s attorney duly authorized in
writing, and thereupon the Company shall execute and the Trustee shall authenticate and deliver in
the name of the transferee(s) one or more new Notes of this series for the same aggregate principal
amount.

8

 

     The Notes of this series are issuable only in registered form without coupons in denominations
of €50,000 and any integral multiple of €1,000 in excess thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Notes of this series are
exchangeable for a like aggregate principal amount of Notes 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 to a Holder 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 imposed in connection therewith. Prior to due presentment of this Note 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 Note is registered as the owner hereof for all purposes, whether or not this
Note be overdue, and none of the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.

     All terms used in this Note which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.

     This Note shall be governed by and construed in accordance with the laws of the State of New
York.

9

 

GUARANTEE

     Each of the undersigned (the “Guarantors”) hereby jointly and severally unconditionally
guarantees, to the extent set forth in the Indenture dated as of June 24, 2005, as supplemented by
the Second Supplemental Indenture, dated as of November 21, 2005 (as amended, restated or
supplemented from time to time, the “Indenture”), among Residential Capital, LLC, as issuer, the
Guarantors and Deutsche Bank Trust Company Americas, as Trustee, and subject to the provisions of
the Indenture, (a) the due and punctual payment of the principal of, and premium, if any, and
interest on the Notes, when and as the same shall become due and payable, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on overdue principal of, and
premium and, to the extent permitted by law, interest, and the due and punctual performance of all
other obligations of the Issuer to the Holders or the Trustee, all in accordance with the terms set
forth in Article Fourteen of the Indenture, and (b) in case of any extension of time of payment or
renewal of any Notes or any of such other obligations, that the same shall be promptly paid in full
when due or performed in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise.

     The obligations of the Guarantors to the Holders and to the Trustee pursuant to this Guarantee
and the Indenture are expressly set forth in Article Fourteen of the Indenture and reference is
hereby made to the Indenture for the precise terms and limitations of this Guarantee.

     IN WITNESS WHEREOF, each of the Guarantors has caused this Guarantee to be signed by a duly
authorized officer.

Dated: June     , 2007

THE GUARANTORS:

	 	 	 	 	 
	 	GMAC RESIDENTIAL HOLDING COMPANY, LLC,

as Guarantor

 	 
	 	By:  	 	 
	 	 	Name:  	William F. Casey 	 
	 	 	Title:  	Treasurer 	 
	 
	 	GMAC MORTGAGE, LLC,

as Guarantor

 	 
	 	By:  	 	 
	 	 	Name:  	William F. Casey 	 
	 	 	Title:  	Treasurer 	 

10

 

	 	 	 	 	 

	 	 	 	 	 
	 	GMAC-RFC HOLDING COMPANY, LLC,

as Guarantor

 	 
	 	By:  	 	 
	 	 	Name:  	John M. Peterson 	 
	 	 	Title:  	Treasurer 	 
	 
	 	RESIDENTIAL FUNDING COMPANY, LLC,

as Guarantor

 	 
	 	By:  	 	 
	 	 	Name:  	John M. Peterson 	 
	 	 	Title:  	Treasurer 	 
	 
	 	HOMECOMINGS FINANCIAL, LLC,

as Guarantor

 	 
	 	By:  	 	 
	 	 	Name:  	John M. Peterson 	 
	 	 	Title:  	Treasurer 	 

11

 

	 	 	 	 	 

ASSIGNMENT FORM

To assign this Note, fill in the form below:

I or we assign and transfer this Note to

 

(Print or type assignee’s name, address and zip code)

 

(Insert assignee’s Soc. Sec. or Tax I.D. No.)

and irrevocably appoint                      agent to transfer this Note on the
books of the Company. The agent may substitute another to act for him.

	 	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Your Signature:	 	 
	 

	 	 

	 	 	 	 
	 	 

          Sign exactly as your name appears on the other side of this Note.

12

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