Document:

Exhibit 4.1

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                                Geron Corporation

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                                    INDENTURE

                           Dated as of ________, _____

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                                [Name of Trustee]

                                     Trustee

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                                TABLE OF CONTENTS
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ARTICLE I.  DEFINITIONS AND INCORPORATION BY REFERENCE.........................1
         Section 1.1. Definitions..............................................1
         Section 1.2. Other Definitions........................................5
         Section 1.3. Incorporation by Reference of Trust Indenture Act........6
         Section 1.4. Rules of Construction....................................6

ARTICLE II.  THE SECURITIES....................................................7
         Section 2.1. Issuable in Series.......................................7
         Section 2.2. Establishment of Terms of Series of Securities...........7
         Section 2.3. Execution and Authentication............................10
         Section 2.4. Registrar and Paying Agent..............................11
         Section 2.5. Paying Agent to Hold Money in Trust.....................12
         Section 2.6. Securityholder Lists....................................12
         Section 2.7. Transfer and Exchange...................................12
         Section 2.8. Mutilated, Destroyed, Lost and Stolen Securities........13
         Section 2.9. Outstanding Securities..................................13
         Section 2.10. Treasury Securities....................................14
         Section 2.11. Temporary Securities...................................14
         Section 2.12. Cancellation...........................................14
         Section 2.13. Defaulted Interest.....................................15
         Section 2.14. Global Securities......................................15
         Section 2.15. CUSIP Numbers..........................................16

ARTICLE III.  REDEMPTION......................................................17
         Section 3.1. Notice to Trustee.......................................17
         Section 3.2. Selection of Securities to be Redeemed..................17
         Section 3.3. Notice of Redemption....................................17
         Section 3.4. Effect of Notice of Redemption..........................18
         Section 3.5. Deposit of Redemption Price.............................18
         Section 3.6. Securities Redeemed in Part.............................18

ARTICLE IV.  COVENANTS........................................................18
         Section 4.1. Payment of Principal and Interest.......................18
         Section 4.2. SEC Reports.............................................19
         Section 4.3. Compliance Certificate..................................19
         Section 4.4. Stay, Extension and Usury Laws..........................19
         Section 4.5. Corporate Existence.....................................19
         Section 4.6. Taxes...................................................20

ARTICLE V.  SUCCESSORS........................................................20
         Section 5.1. When Company May Merge, Etc.............................20
         Section 5.2. Successor Corporation Substituted.......................20

ARTICLE VI.  DEFAULTS AND REMEDIES............................................21
         Section 6.1. Events of Default.......................................21

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                                TABLE OF CONTENTS
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         Section 6.2. Acceleration of Maturity; Rescission and Annulment......23
         Section 6.3. Collection of Indebtedness and Suits for Enforcement
                      by Trustee..............................................24
         Section 6.4. Trustee May File Proofs of Claim........................25
         Section 6.5. Trustee May Enforce Claims Without Possession of
                      Securities..............................................25
         Section 6.6. Application of Money Collected..........................26
         Section 6.7. Limitation on Suits.....................................26
         Section 6.8. Unconditional Right of Holders to Receive Principal
                      and Interest............................................27
         Section 6.9. Restoration of Rights and Remedies......................27
         Section 6.10. Rights and Remedies Cumulative.........................27
         Section 6.11. Delay or Omission Not Waiver...........................27
         Section 6.12. Control by Holders.....................................28
         Section 6.13. Waiver of Past Defaults................................28
         Section 6.14. Undertaking for Costs..................................28

ARTICLE VII.  TRUSTEE.........................................................29
         Section 7.1. Duties of Trustee.......................................29
         Section 7.2. Rights of Trustee.......................................30
         Section 7.3. Individual Rights of Trustee............................31
         Section 7.4. Trustee's Disclaimer....................................31
         Section 7.5. Notice of Defaults......................................31
         Section 7.6. Reports by Trustee to Holders...........................32
         Section 7.7. Compensation and Indemnity..............................32
         Section 7.8. Replacement of Trustee..................................33
         Section 7.9. Successor Trustee by Merger, etc........................34
         Section 7.10. Eligibility; Disqualification..........................34
         Section 7.11. Preferential Collection of Claims Against Company......34

ARTICLE VIII.  SATISFACTION AND DISCHARGE; DEFEASANCE.........................34
         Section 8.1. Satisfaction and Discharge of Indenture.................34
         Section 8.2. Application of Trust Funds; Indemnification.............35
         Section 8.3. Legal Defeasance of Securities of any Series............36
         Section 8.4. Covenant Defeasance.....................................38
         Section 8.5. Repayment to Company....................................39

ARTICLE IX.  AMENDMENTS AND WAIVERS...........................................39
         Section 9.1. Without Consent of Holders..............................39
         Section 9.2. With Consent of Holders.................................40
         Section 9.3. Limitations.............................................40
         Section 9.4. Compliance with Trust Indenture Act.....................41
         Section 9.5. Revocation and Effect of Consents.......................41
         Section 9.6. Notation on or Exchange of Securities...................42
         Section 9.7. Trustee Protected.......................................42

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                                TABLE OF CONTENTS
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ARTICLE X.  MISCELLANEOUS.....................................................42
         Section 10.1. Trust Indenture Act Controls...........................42
         Section 10.2. Notices................................................42
         Section 10.3. Communication by Holders with Other Holders............43
         Section 10.4. Certificate and Opinion as to Conditions Precedent.....43
         Section 10.5. Statements Required in Certificate or Opinion..........44
         Section 10.6. Rules by Trustee and Agents............................44
         Section 10.7. Legal Holidays.........................................44
         Section 10.8. No Recourse Against Others.............................44
         Section 10.9. Counterparts...........................................45
         Section 10.10. Governing Laws........................................45
         Section 10.11. No Adverse Interpretation of Other Agreements.........45
         Section 10.12. Successors............................................45
         Section 10.13. Severability..........................................45
         Section 10.14. Table of Contents, Headings, Etc......................45
         Section 10.15. Securities in a Foreign Currency or in ECU............45
         Section 10.16. Judgment Currency.....................................46

ARTICLE XI.  SINKING FUNDS....................................................47
         Section 11.1. Applicability of Article...............................47
         Section 11.2. Satisfaction of Sinking Fund Payments with Securities..47
         Section 11.3. Redemption of Securities for Sinking Fund..............48

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                                GERON CORPORATION

         Reconciliation and tie between Trust Indenture Act of 1939 and
                     Indenture, dated as of __________, ____

ss.310(a)(1)  .................................................   7.10
      (a)(2)  .................................................   7.10
      (a)(3)  .................................................   Not Applicable
      (a)(4)  .................................................   Not Applicable
      (a)(5)  .................................................   7.10
         (b)  .................................................   7.10
  ss. 311(a)  .................................................   7.11
         (b)  .................................................   7.11
         (c)  .................................................   Not Applicable
  ss. 312(a)  .................................................   2.6
         (b)  .................................................   10.3
         (c)  .................................................   10.3
  ss. 313(a)  .................................................   7.6
      (b)(1)  .................................................   7.6
      (b)(2)  .................................................   7.6
      (c)(1)  .................................................   7.6
         (d)  .................................................   7.6
  ss. 314(a)  .................................................   4.2, 10.5
         (b)  .................................................   Not Applicable
      (c)(1)  .................................................   10.4
      (c)(2)  .................................................   10.4
      (c)(3)  .................................................   Not Applicable
         (d)  .................................................   Not Applicable
         (e)  .................................................   10.5
         (f)  .................................................   Not Applicable
  ss. 315(a)  .................................................   7.1
         (b)  .................................................   7.5
         (c)  .................................................   7.1
         (d)  .................................................   7.1
         (e)  .................................................   6.14
  ss. 316(a)  .................................................   2.10
   (a)(1)(A)  .................................................   6.12
   (a)(1)(B)  .................................................   6.13
         (b)  .................................................   6.8
ss.317(a)(1)  .................................................   6.3
      (a)(2)  .................................................   6.4
         (b)  .................................................   2.5
  ss. 318(a)  .................................................   10.1

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

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            Indenture dated as of ___________, ____ between Geron Corporation, a
Delaware corporation ("Company"), and [Name of Trustee], a ________________
("Trustee").

            Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Securities issued under
this Indenture.

                                   ARTICLE I.
                   DEFINITIONS AND INCORPORATION BY REFERENCE

      Section 1.1. Definitions.

            "Additional Amounts" means any additional amounts which are required
hereby or by any Security, under circumstances specified herein or therein, to
be paid by the Company in respect of certain taxes imposed on Holders specified
therein and which are owing to such Holders.

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

            "Agent" means any Registrar, Paying Agent or Service Agent.

            "Authorized Newspaper" means a newspaper in an official language of
the country of publication customarily published at least once a day for at
least five days in each calendar week and of general circulation in the place in
connection with which the term is used. If it shall be impractical in the
opinion of the Trustee to make any publication of any notice required hereby in
an Authorized Newspaper, any publication or other notice in lieu thereof that is
made or given by the Trustee shall constitute a sufficient publication of such
notice.

            "Bearer" means anyone in possession from time to time of a Bearer
Security.

            "Bearer Security" means any Security, including any interest coupon
appertaining thereto, that does not provide for the identification of the Holder
thereof.

            "Board of Directors" means the Board of Directors of the Company or
any duly authorized committee thereof.

            "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been adopted by the
Board of Directors or pursuant to authorization by the Board of Directors and to
be in full force and effect on the date of the certificate and delivered to the
Trustee.

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            "Business Day" means, unless otherwise provided by Board Resolution,
Officers' Certificate or supplemental indenture hereto for a particular Series,
any day except a Saturday, Sunday or a legal holiday in The City of New York or
the City of ___________ on which banking institutions are authorized or required
by law, regulation or executive order to close.

            "Company" means the party named as such above until a successor
replaces it and thereafter means the successor.

            "Company Order" means a written order signed in the name of the
Company by two Officers, one of whom must be the Company's principal executive
officer, principal financial officer or principal accounting officer.

            "Company Request" means a written request signed in the name of the
Company by its Chairman of the Board, a President or a Vice President, and by
its Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.

            "Conversion Price" means with respect to any series of Securities
which are convertible into Common Stock or Preferred Stock, the price per share
of Common Stock or Preferred Stock, as the case may be, at which the Securities
of such series are so convertible as set forth in the Board Resolution with
respect to such series (or in any supplemental indenture entered into pursuant
to Section 10.1 with respect to such series), as the same may be adjusted from
time to time in accordance with Section 8.5 (or such supplemental indenture
pursuant to Section 8.1).

            "Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered.

            "Debt" of any person as of any date means, without duplication, all
indebtedness of such person in respect of borrowed money, including all
interest, fees and expenses owed in respect thereto (whether or not the recourse
of the lender is to the whole of the assets of such person or only to a portion
thereof), or evidenced by bonds, notes, debentures or similar instruments.

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

            "Depository" means, with respect to the Securities of any Series
issuable or issued in whole or in part in the form of one or more Global
Securities, the person designated as Depository for such Series by the Company,
which Depository shall be a clearing agency registered under the Exchange Act;
and if at any time there is more than one such person, "Depository" as used with
respect to the Securities of any Series shall mean the Depository with respect
to the Securities of such Series.

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            "Discount Security" means any Security that provides for an amount
less than the stated principal amount thereof to be due and payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.2.

            "Dollars" means the currency of The United States of America.

            "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

            "Foreign Currency" means any currency or currency unit issued by a
government other than the government of The United States of America.

            "Foreign Government Obligations" means with respect to Securities of
any Series that are denominated in a Foreign Currency, (i) direct obligations of
the government that issued or caused to be issued such currency for the payment
of which obligations its full faith and credit is pledged or (ii) obligations of
a person controlled or supervised by or acting as an agency or instrumentality
of such government the timely payment of which is unconditionally guaranteed as
a full faith and credit obligation by such government, which, in either case
under clauses (i) or (ii), are not callable or redeemable at the option of the
issuer thereof.

            "Global Security" or "Global Securities" means a Security or
Securities, as the case may be, in the form established pursuant to Section 2.2
evidencing all or part of a Series of Securities, issued to the Depository for
such Series or its nominee, and registered in the name of such Depository or
nominee.

            "Holder" or "Securityholder" means a person in whose name a Security
is registered or the holder of a Bearer Security.

            "Indenture" means this Indenture as amended from time to time and
shall include the form and terms of particular Series of Securities established
as contemplated hereunder.

            "interest" with respect to any Discount Security which by its terms
bears interest only after Maturity, means interest payable after Maturity.

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

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

            "Officer" means the Chairman of the Board, any President, any
Vice-President, the Treasurer, the Secretary, any Assistant Treasurer or any
Assistant Secretary of the Company.

                                       3
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            "Officers' Certificate" means a certificate signed by two Officers,
one of whom must be the Company's principal executive officer, principal
financial officer or principal accounting officer.

            "Opinion of Counsel" means a written opinion of legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company.

            "person" means any individual, corporation, partnership, joint
venture, association, limited liability company, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.

            "principal" of a Security means the principal of the Security plus,
when appropriate, the premium, if any, on, and any Additional Amounts in respect
of, the Security.

            "Regular Record Date" for the interest payable on any Interest
Payment Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 2.2.

            "Responsible Officer" means any officer of the Trustee in its
Corporate Trust Office and also means, with respect to a particular corporate
trust matter, any other officer to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with a particular subject.

            "SEC" means the Securities and Exchange Commission.

            "Securities" means the debentures, notes or other debt instruments
of the Company of any Series authenticated and delivered under this Indenture.

            "Series" or "Series of Securities" means each series of debentures,
notes or other debt instruments of the Company created pursuant to Sections 2.1
and 2.2 hereof.

            "Significant Subsidiary" means (i) any direct or indirect Subsidiary
of the Company that would be a "significant subsidiary" as defined in Article 1,
Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act of 1933,
as amended, as such regulation is in effect on the date hereof, or (ii) any
group of direct or indirect Subsidiaries of the Company that, taken together as
a group, would be a "significant subsidiary" as defined in Article 1, Rule 1-02
of Regulation S-X, promulgated pursuant to the Securities Act of 1933, as
amended, as such regulation is in effect on the date hereof.

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

                                       4
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            "Subsidiary" of any specified person means any corporation of which
at least a majority of the outstanding stock having by the terms thereof
ordinary voting power for the election of directors of such corporation
(irrespective of whether or not at the time stock of any other class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time directly or indirectly owned by
such person, or by one or more other Subsidiaries, or by such person and one or
more other Subsidiaries.

            "TIA" means the Trust Indenture Act of 1939 (15 U.S. Code ss.ss.
77aaa-77bbbb) as in effect on the date of this Indenture; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"TIA" means, to the extent required by any such amendment, the Trust Indenture
Act as so amended.

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

            "U.S. Government Obligations" means securities which are (i) direct
obligations of The United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a person controlled or
supervised by and acting as an agency or instrumentality of The United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by The United States of America, and which in the case of (i)
and (ii) are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligation or a specific
payment of interest on or principal of any such U.S. Government Obligation held
by such custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation evidenced by such depository receipt.

      Section 1.2. Other Definitions.

                                                                      DEFINED IN
TERM                                                                    SECTION
----                                                                    -------

"Bankruptcy Law"                                                           6.1
"Conversion Stock"                                                         8.1
"Custodian"                                                                6.1
"Event of Default"                                                         6.1
"Journal"                                                                 11.15

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"Judgment Currency"                                                       11.16
"Legal Holiday"                                                           11.7
"mandatory sinking fund payment"                                          12.1
"Market Exchange Rate"                                                    11.15
"New York Banking Day"                                                    11.16
"optional sinking fund payment"                                           12.1
"Paying Agent"                                                             2.4
"Registrar"                                                                2.4
"Required Currency"                                                       11.16
"Service Agent"                                                            2.4
"successor person"                                                         5.1

      Section 1.3 Incorporation by Reference of Trust Indenture Act.

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

                        "Commission" means the SEC.

                        "indenture securities" means the Securities.

                        "indenture security holder" means a Securityholder.

                        "indenture to be qualified" means this Indenture.

                        "indenture trustee" or "institutional trustee" means the
                        Trustee.

                        "obligor" on the indenture securities means the Company
                        and any successor obligor upon the Securities.

            All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
and not otherwise defined herein are used herein as so defined.

      Section 1.4 Rules of Construction.

            Unless the context otherwise requires:

            (a) a term has the meaning assigned to it;

            (b) an accounting term not otherwise defined has the meaning
      assigned to it in accordance with generally accepted accounting
      principles;

                                       6
<PAGE>

            (c) references to "generally accepted accounting principles" shall
      mean generally accepted accounting principles in effect as of the time
      when and for the period as to which such accounting principles are to be
      applied;

            (d) "or" is not exclusive;

            (e) words in the singular include the plural, and in the plural
      include the singular; and

            (f) provisions apply to successive events and transactions.

                                  ARTICLE II.
                                 THE SECURITIES

      Section 2.1 Issuable in Series.

            The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is unlimited. The Securities
may be issued in one or more Series. All Securities of a Series shall be
identical except as may be set forth in a Board Resolution, a supplemental
indenture or an Officers' Certificate detailing the adoption of the terms
thereof pursuant to the authority granted under a Board Resolution. In the case
of Securities of a Series to be issued from time to time, the Board Resolution,
Officers' Certificate or supplemental indenture may provide for the method by
which specified terms (such as interest rate, maturity date, record date or date
from which interest shall accrue) are to be determined. Securities may differ
between Series in respect of any matters, provided that all Series of Securities
shall be equally and ratably entitled to the benefits of the Indenture.

      Section 2.2 Establishment of Terms of Series of Securities.

            At or prior to the issuance of any Securities within a Series, the
following shall be established (as to the Series generally, in the case of
Subsection 2.2.1 and either as to such Securities within the Series or as to the
Series generally in the case of Subsections 2.2.2 through 2.2.22) by a Board
Resolution, a supplemental indenture or an Officers' Certificate pursuant to
authority granted under a Board Resolution:

            2.2.1 the title of the Series (which shall distinguish the
Securities of that particular Series from the Securities of any other Series);

            2.2.2 the price or prices (expressed as a percentage of the
principal amount thereof) at which the Securities of the Series will be issued;

            2.2.3 any limit upon the aggregate principal amount of the
Securities of the Series which may be authenticated and delivered under this
Indenture (except for

                                       7
<PAGE>

Securities authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities of the Series pursuant to Section
2.7, 2.8, 2.11, 3.6 or 9.6);

            2.2.4 the date or dates on which the principal of the Securities of
the Series is payable;

            2.2.5 the rate or rates (which may be fixed or variable) per annum
or, if applicable, the method used to determine such rate or rates (including,
but not limited to, any commodity, commodity index, stock exchange index or
financial index) at which the Securities of the Series shall bear interest, if
any, the date or dates from which such interest, if any, shall accrue, the date
or dates on which such interest, if any, shall commence, the Interest Payment
Dates on which such interst and be payable and any regular record date for the
interest payable on any interest payment date;

            2.2.6 the place or places where the principal of and interest, if
any, on the Securities of the Series shall be payable, or the method of such
payment, if by wire transfer, mail or other means;

            2.2.7 if applicable, the period or periods within which the price or
prices at which and the terms and conditions upon which the Securities of the
Series may be redeemed, in whole or in part, at the option of the Company;

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

            2.2.9 the dates, if any, on which and the price or prices at which
the Securities of the Series will be repurchased by the Company at the option of
the Holders thereof and other detailed terms and provisions of such repurchase
obligations;

            2.2.10 if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which the Securities of the Series shall
be issuable;

            2.2.11 the forms of the Securities of the Series in bearer or fully
registered form (and, if in fully registered form, whether the Securities will
be issuable as Global Securities);

            2.2.12 if other than the principal amount thereof, the portion of
the principal amount of the Securities of the Series that shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section 6.2;

                                       8
<PAGE>

            2.2.13 the currency of denomination of the Securities of the Series,
which may be Dollars or any Foreign Currency, and the agency or organization, if
any, responsible for overseeing such composite currency;

            2.2.14 the designation of the currency, currencies or currency units
in which payment of the principal of and interest, if any, on the Securities of
the Series will be made;

            2.2.15 if payments of principal of or interest, if any, on the
Securities of the Series are to be made in one or more currencies or currency
units other than that or those in which such Securities are denominated, the
manner in which the exchange rate with respect to such payments will be
determined;

            2.2.16 the manner in which the amounts of payment of principal of or
interest, if any, on the Securities of the Series will be determined, if such
amounts may be determined by reference to an index based on a currency or
currencies or by reference to a commodity, commodity index, stock exchange index
or financial index;

            2.2.17 if the Securities of the series are convertible into Common
Stock or Preferred Stock, the Conversion Price therefor, the period during which
such Securities are convertible and any terms and conditions for the conversion
of such Securities which differ from Article VIII;

            2.2.18 the provisions, if any, relating to any security provided for
the Securities of the Series;

            2.2.19 any addition to or change in the Events of Default which
applies to any Securities of the Series and any change in the right of the
Trustee or the requisite Holders of such Securities to declare the principal
amount thereof due and payable pursuant to Section 6.2;

            2.2.20 any addition to or change in the covenants set forth in
Articles IV or V which applies to Securities of the Series;

            2.2.21 any other terms of the Securities of the Series (which terms
shall not be inconsistent with the provisions of this Indenture, except as
permitted by Section 9.1, but which may modify or delete any provision of this
Indenture insofar as it applies to such Series); and

            2.2.22 any depositories, interest rate calculation agents, exchange
rate calculation agents or other agents with respect to Securities of such
Series if other than those appointed herein.

                                       9
<PAGE>

            All Securities of any one Series need not be issued at the same time
and may be issued from time to time, consistent with the terms of this
Indenture, if so provided by or pursuant to the Board Resolution, supplemental
indenture or Officers' Certificate referred to above, and the authorized
principal amount of any Series may not be increased to provide for issuances of
additional Securities of such Series, unless otherwise provided in such Board
Resolution, supplemental indenture or Officers' Certificate.

      Section 2.3 Execution and Authentication.

            Two Officers shall sign the Securities for the Company by manual or
facsimile signature.

            If an Officer whose signature is on a Security no longer holds that
office at the time the Security is authenticated, the Security shall
nevertheless be valid.

            A Security shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.

            The Trustee shall at any time, and from time to time, authenticate
Securities for original issue in the principal amount provided in the Board
Resolution, supplemental indenture hereto or Officers' Certificate, upon receipt
by the Trustee of a Company Order. Such Company Order may authorize
authentication and delivery pursuant to oral or electronic instructions from the
Company or its duly authorized agent or agents, which oral instructions shall be
promptly confirmed in writing. Each Security shall be dated the date of its
authentication unless otherwise provided by a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate.

            The aggregate principal amount of Securities of any Series
outstanding at any time may not exceed any limit upon the maximum principal
amount for such Series set forth in the Board Resolution, supplemental indenture
hereto or Officers' Certificate delivered pursuant to Section 2.2, except as
provided in Section 2.8.

            Prior to the issuance of Securities of any Series, the Trustee shall
have received and (subject to Section 7.2) shall be fully protected in relying
on: (a) the Board Resolution, supplemental indenture hereto or Officers'
Certificate establishing the form of the Securities of that Series or of
Securities within that Series and the terms of the Securities of that Series or
of Securities within that Series, (b) an Officers' Certificate complying with
Section 10.4, and (c) an Opinion of Counsel complying with Section 10.4.

            The Trustee shall have the right to decline to authenticate and
deliver any Securities of such Series: (a) if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken; or (b) if the
Trustee in good faith by its board of directors or trustees, executive committee
or a trust committee of directors and/or vice-presidents shall

                                       10
<PAGE>

determine that such action would expose the Trustee to personal liability to
Holders of any then outstanding Series of Securities.

            The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate.

      Section 2.4 Registrar and Paying Agent.

            The Company shall maintain, with respect to each Series of
Securities, at the place or places specified with respect to such Series
pursuant to Section 2.2, an office or agency where Securities of such Series may
be presented or surrendered for payment ("Paying Agent"), where Securities of
such Series may be surrendered for registration of transfer or exchange
("Registrar") and where notices and demands to or upon the Company in respect of
the Securities of such Series and this Indenture may be served ("Service
Agent"). The Registrar shall keep a register with respect to each Series of
Securities and to their transfer and exchange. The Company will give prompt
written notice to the Trustee of the name and address, and any change in the
name or address, of each Registrar, Paying Agent or Service Agent. If at any
time the Company shall fail to maintain any such required Registrar, Paying
Agent or Service Agent or shall fail to furnish the Trustee with the name and
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.

            The Company may also from time to time designate one or more
co-registrars, additional paying agents or additional service agents and may
from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligations to maintain a Registrar, Paying Agent and Service Agent in each
place so specified pursuant to Section 2.2 for Securities of any Series for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the name or address of any such
co-registrar, additional paying agent or additional service agent. The term
"Registrar" includes any co-registrar; the term "Paying Agent" includes any
additional paying agent; and the term "Service Agent" includes any additional
service agent.

            The Company hereby appoints the Trustee the initial Registrar,
Paying Agent and Service Agent for each Series unless another Registrar, Paying
Agent or Service Agent, as the case may be, is appointed prior to the time
Securities of that Series are first issued.

                                       11
<PAGE>

      Section 2.5 Paying Agent to Hold Money in Trust.

            The Company shall require each Paying Agent other than the Trustee
to agree in writing that the Paying Agent will hold in trust, for the benefit of
Securityholders of any Series of Securities, or the Trustee, all money held by
the Paying Agent for the payment of principal of or interest on the Series of
Securities, and will notify the Trustee of any default by the Company in making
any such payment. While any such default continues, the Trustee may require a
Paying Agent to pay all money held by it to the Trustee. The Company at any time
may require a Paying Agent to pay all money held by it to the Trustee. Upon
payment over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of Securityholders of any Series of Securities all money
held by it as Paying Agent.

      Section 2.6 Securityholder Lists.

            The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders of each Series of Securities and shall otherwise comply with TIA
ss. 312(a). If the Trustee is not the Registrar, the Company shall furnish to
the Trustee at least ten days before each interest payment date and at such
other times as the Trustee may request in writing a list, in such form and as of
such date as the Trustee may reasonably require, of the names and addresses of
Securityholders of each Series of Securities.

      Section 2.7 Transfer and Exchange.

            Where Securities of a Series are presented to the Registrar or a
co-registrar with a request to register a transfer or to exchange them for an
equal principal amount of Securities of the same Series, the Registrar shall
register the transfer or make the exchange if its requirements for such
transactions are met. To permit registrations of transfers and exchanges, the
Trustee shall authenticate Securities at the Registrar's request. No service
charge shall be made for any registration of transfer or exchange (except as
otherwise expressly permitted herein), but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer tax or similar
governmental charge payable upon exchanges pursuant to Sections 2.11, 3.6 or
9.6).

            Neither the Company nor the Registrar shall be required (a) to
issue, register the transfer of, or exchange Securities of any Series for the
period beginning at the opening of business fifteen days immediately preceding
the mailing of a notice of redemption of Securities of that Series selected for
redemption and ending at the close of business on the day of such mailing, or
(b) to register the transfer of or exchange Securities of any Series selected,
called or being called for redemption as a whole or the portion being redeemed
of any such Securities selected, called or being called for redemption in part.

                                       12
<PAGE>

      Section 2.8 Mutilated, Destroyed, Lost and Stolen Securities.

            If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same Series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.

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

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

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

            Every new Security of any Series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that Series duly issued hereunder.

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

      Section 2.9 Outstanding Securities.

            The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those canceled by it, those delivered to
it for cancellation, those reductions in the interest on a Global Security
effected by the Trustee in accordance with the provisions hereof and those
described in this Section as not outstanding.

                                       13
<PAGE>

            If a Security is replaced pursuant to Section 2.8, it ceases to be
outstanding until the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.

            If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds on the Maturity of Securities of a Series money
sufficient to pay such Securities payable on that date, then on and after that
date such Securities of the Series cease to be outstanding and interest on them
ceases to accrue.

            A Security does not cease to be outstanding because the Company or
an Affiliate holds the Security.

            In determining whether the Holders of the requisite principal amount
of outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of a
Discount Security that shall be deemed to be outstanding for such purposes shall
be the amount of the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 6.2.

      Section 2.10 Treasury Securities.

            In determining whether the Holders of the required principal amount
of Securities of a Series have concurred in any request, demand, authorization,
direction, notice, consent or waiver Securities of a Series owned by the Company
or an Affiliate shall be disregarded, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
request, demand, authorization, direction, notice, consent or waiver only
Securities of a Series that the Trustee knows are so owned shall be so
disregarded.

      Section 2.11 Temporary Securities.

            Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities upon a Company
Order. Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare and
the Trustee upon request shall authenticate definitive Securities of the same
Series and date of maturity in exchange for temporary Securities. Until so
exchanged, temporary securities shall have the same rights under this Indenture
as the definitive Securities.

      Section 2.12 Cancellation.

            The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee shall cancel all Securities

                                       14
<PAGE>

surrendered for transfer, exchange, payment, replacement or cancellation and
shall destroy such canceled Securities (subject to the record retention
requirement of the Exchange Act) and deliver a certificate of such destruction
to the Company, unless the Company otherwise directs. The Company may not issue
new Securities to replace Securities that it has paid or delivered to the
Trustee for cancellation.

      Section 2.13 Defaulted Interest.

            If the Company defaults in a payment of interest on a Series of
Securities, it shall pay the defaulted interest, plus, to the extent permitted
by law, any interest payable on the defaulted interest, to the persons who are
Securityholders of the Series on a subsequent special record date. The Company
shall fix the record date and payment date. At least 30 days before the record
date, the Company shall mail to the Trustee and to each Securityholder of the
Series a notice that states the record date, the payment date and the amount of
interest to be paid. The Company may pay defaulted interest in any other lawful
manner.

            Section 2.14 Global Securities.

            2.14.1 Terms of Securities. A Board Resolution, a supplemental
indenture hereto or an Officers' Certificate shall establish whether the
Securities of a Series shall be issued in whole or in part in the form of one or
more Global Securities and the Depository for such Global Security or
Securities.

            2.14.2 Transfer and Exchange. Notwithstanding any provisions to the
contrary contained in Section 2.7 of the Indenture and in addition thereto, any
Global Security shall be exchangeable pursuant to Section 2.7 of the Indenture
for Securities registered in the names of Holders other than the Depository for
such Security or its nominee only if (i) such Depository notifies the Company
that it is unwilling or unable to continue as Depository for such Global
Security or if at any time such Depository ceases to be a clearing agency
registered under the Exchange Act, and, in either case, the Company fails to
appoint a successor Depository within 90 days of such event, (ii) the Company
executes and delivers to the Trustee an Officers' Certificate to the effect that
such Global Security shall be so exchangeable or (iii) an Event of Default with
respect to the Securities represented by such Global Security shall have
happened and be continuing. Any Global Security that is exchangeable pursuant to
the preceding sentence shall be exchangeable for Securities registered in such
names as the Depository shall direct in writing in an aggregate principal amount
equal to the principal amount of the Global Security with like tenor and terms.

            Except as provided in this Section 2.14.2, a Global Security may not
be transferred except as a whole by the Depository with respect to such Global
Security to a nominee of such Depository, by a nominee of such Depository to
such Depository or another

                                       15
<PAGE>

nominee of such Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such a successor Depository.

            2.14.3 Legend. Any Global Security issued hereunder shall bear a
legend in substantially the following form:

            "This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of the
Depository or a nominee of the Depository. This Security is exchangeable for
Securities registered in the name of a person other than the Depository or its
nominee only in the limited circumstances described in the Indenture, and may
not be transferred except as a whole by the Depository to a nominee of the
Depository, by a nominee of the Depository to the Depository or another nominee
of the Depository or by the Depository or any such nominee to a successor
Depository or a nominee of such a successor Depository."

            2.14.4 Acts of Holders. The Depository, as a Holder, may appoint
agents and otherwise authorize participants to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action which a Holder
is entitled to give or take under the Indenture.

            2.14.5 Payments. Notwithstanding the other provisions of this
Indenture, unless otherwise specified as contemplated by Section 2.2, payment of
the principal of and interest, if any, on any Global Security shall be made to
the Holder thereof.

            2.14.6 Consents, Declaration and Directions. Except as provided in
Section 2.14.5, the Company, the Trustee and any Agent shall treat a person as
the Holder of such principal amount of outstanding Securities of such Series
represented by a Global Security as shall be specified in a written statement of
the Depositary with respect to such Global Security, for purposes of obtaining
any consents, declarations, waivers or directions required to be given by the
Holders pursuant to this Indenture.

      Section 2.15 CUSIP Numbers.

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

                                       16
<PAGE>

                                  ARTICLE III.
                                   REDEMPTION

      Section 3.1 Notice to Trustee.

            The Company may, with respect to any Series of Securities, reserve
the right to redeem and pay the Series of Securities or may covenant to redeem
and pay the Series of Securities or any part thereof prior to the Stated
Maturity thereof at such time and on such terms as provided for in such
Securities. If a Series of Securities is redeemable and the Company wants or is
obligated to redeem prior to the Stated Maturity thereof all or part of the
Series of Securities pursuant to the terms of such Securities, it shall notify
the Trustee of the redemption date and the principal amount of Series of
Securities to be redeemed. The Company shall give the notice at least 45 days
before the redemption date (or such shorter notice as may be acceptable to the
Trustee).

      Section 3.2 Selection of Securities to be Redeemed.

            Unless otherwise indicated for a particular Series by a Board
Resolution, a supplemental indenture or an Officers' Certificate, if less than
all the Securities of a Series are to be redeemed, the Trustee shall select the
Securities of the Series to be redeemed in any manner that the Trustee deems
fair and appropriate. The Trustee shall make the selection from Securities of
the Series outstanding not previously called for redemption. The Trustee may
select for redemption portions of the principal of Securities of the Series that
have denominations larger than $1,000. Securities of the Series and portions of
them it selects shall be in amounts of $1,000 or whole multiples of $1,000 or,
with respect to Securities of any Series issuable in other denominations
pursuant to Section 2.2.10, the minimum principal denomination for each Series
and integral multiples thereof. Provisions of this Indenture that apply to
Securities of a Series called for redemption also apply to portions of
Securities of that Series called for redemption.

      Section 3.3 Notice of Redemption.

            Unless otherwise indicated for a particular Series by Board
Resolution, a supplemental indenture hereto or an Officers' Certificate, at
least 30 days but not more than 60 days before a redemption date, the Company
shall mail a notice of redemption by first-class mail to each Holder whose
Securities are to be redeemed and if any Bearer Securities are outstanding,
publish on one occasion a notice in an Authorized Newspaper.

            The notice shall identify the Securities of the Series to be
redeemed and shall state:

            (a) the redemption date;

            (b) the redemption price;

                                       17
<PAGE>

            (c) the name and address of the Paying Agent;

            (d) that Securities of the Series called for redemption must be
      surrendered to the Paying Agent to collect the redemption price;

            (e) that interest on Securities of the Series called for redemption
      ceases to accrue on and after the redemption date; and

            (f) any other information as may be required by the terms of the
      particular Series or the Securities of a Series being redeemed.

            At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense.

      Section 3.4 Effect of Notice of Redemption.

            Once notice of redemption is mailed or published as provided in
Section 3.3, Securities of a Series called for redemption become due and payable
on the redemption date and at the redemption price. A notice of redemption may
not be conditional. Upon surrender to the Paying Agent, such Securities shall be
paid at the redemption price plus accrued interest to the redemption date.

      Section 3.5 Deposit of Redemption Price.

            On or before the redemption date, the Company shall deposit with the
Paying Agent money sufficient to pay the redemption price of and accrued
interest, if any, on all Securities to be redeemed on that date.

      Section 3.6 Securities Redeemed in Part.

            Upon surrender of a Security that is redeemed in part, the Trustee
shall authenticate for the Holder a new Security of the same Series and the same
maturity equal in principal amount to the unredeemed portion of the Security
surrendered.

                                   ARTICLE IV.
                                    COVENANTS

      Section 4.1 Payment of Principal and Interest.

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

                                       18
<PAGE>

      Section 4.2 SEC Reports.

            The Company shall deliver to the Trustee within 15 days after it
files them with the SEC copies of the annual reports and of the information,
documents, and other reports (or copies of such portions of any of the foregoing
as the SEC may by rules and regulations prescribe) which the Company is required
to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The
Company also shall comply with the other provisions of TIA ss. 314(a).

      Section 4.3 Compliance Certificate.

            The Company shall deliver to the Trustee, within 90 days after the
end of each fiscal year of the Company, an Officers' Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his knowledge the Company has kept, observed, performed and fulfilled each and
every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions hereof
(or, if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he may have knowledge).

            The Company will, so long as any of the Securities are outstanding,
deliver to the Trustee, forthwith upon becoming aware of any Default or Event of
Default, an Officers' Certificate specifying such Default or Event of Default
and what action the Company is taking or proposes to take with respect thereto.

      Section 4.4 Stay, Extension and Usury Laws.

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

      Section 4.5 Corporate Existence.

            Subject to Article V, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate, partnership or other existence of each Significant
Subsidiary in accordance with the respective organizational documents of each
Significant Subsidiary and the rights (charter and statutory), licenses and

                                       19
<PAGE>

franchises of the Company and its Significant Subsidiaries; provided, however,
that the Company shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any Significant
Subsidiary, if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
its Subsidiaries taken as a whole and that the loss thereof is not adverse in
any material respect to the Holders.

      Section 4.6 Taxes.

            The Company shall, and shall cause each of its Significant
Subsidiaries to, pay prior to delinquency all taxes, assessments and
governmental levies, except as contested in good faith and by appropriate
proceedings.

                                   ARTICLE V.
                                   SUCCESSORS

      Section 5.1 When Company May Merge, Etc.

            The Company shall not consolidate with or merge into, or convey,
transfer or lease all or substantially all of its properties and assets to, any
person (a "successor person"), and may not permit any person to merge into, or
convey, transfer or lease its properties and assets substantially as an entirety
to, the Company, unless:

            (a) the successor person (if any) is a corporation, partnership,
      trust or other entity organized and validly existing under the laws of any
      U.S. domestic jurisdiction and expressly assumes the Company's obligations
      on the Securities and under this Indenture and

            (b) immediately after giving effect to the transaction, no Default
      or Event of Default, shall have occurred and be continuing.

            The Company shall deliver to the Trustee prior to the consummation
of the proposed transaction an Officers' Certificate to the foregoing effect and
an Opinion of Counsel stating that the proposed transaction and such
supplemental indenture comply with this Indenture.

      Section 5.2 Successor Corporation Substituted.

            Upon any consolidation or merger, or any sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company in
accordance with Section 5.1, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this

                                       20
<PAGE>

Indenture with the same effect as if such successor person has been named as the
Company herein; provided, however, that the predecessor Company in the case of a
sale, lease, conveyance or other disposition shall not be released from the
obligation to pay the principal of and interest, if any, on the Securities.

                                  ARTICLE VI.
                              DEFAULTS AND REMEDIES

      Section 6.1 Events of Default.

            "Event of Default," wherever used herein with respect to Securities
of any Series, means any one of the following events, unless in the establishing
Board Resolution, supplemental indenture or Officers' Certificate, it is
provided that such Series shall not have the benefit of said Event of Default:

            (a) default in the payment of any interest on any Security of that
      Series when it becomes due and payable, and continuance of such default
      for a period of 30 days (unless the entire amount of such payment is
      deposited by the Company with the Trustee or with a Paying Agent prior to
      the expiration of such period of 30 days); or

            (b) default in the payment of the principal of any Security of that
      Series at its Maturity; or

            (c) default in the deposit of any sinking fund payment, when and as
      due in respect of any Security of that Series; or

            (d) default in the performance or breach of any covenant or warranty
      of the Company in this Indenture (other than a covenant or warranty that
      has been included in this Indenture solely for the benefit of a Series of
      Securities other than that Series), which default continues uncured for a
      period of 60 days after there has been given, by registered or certified
      mail, to the Company by the Trustee or to the Company and the Trustee by
      the Holders of at least 25% in principal amount of the outstanding
      Securities of that Series a written notice specifying such default or
      breach and requiring it to be remedied and stating that such notice is a
      "Notice of Default" hereunder; or

            (e) a default under any Debt of the Company (including a default
      with respect to Securities of any Series other than that Series) or any
      Subsidiary, whether such Debt now exists or shall hereafter be created, if
      (A) such default results from the failure to pay any such Debt when it
      becomes due, (B) the principal amount of such Debt, together with the
      principal amount of any other such Debt in default for failure to pay
      principal at stated final maturity or the maturity of which has been so
      accelerated, aggregates $500,000 or more at any one time outstanding, and
      (C) such Debt is not discharged or such acceleration is not rescinded or
      annulled within 10 days after written notice to the

                                       21
<PAGE>

      Company by the holder or holders of such Debt in the manner provided for
      in the applicable debt instrument; or

            (f) the Company or any of its Significant Subsidiaries pursuant to
      or within the meaning of any Bankruptcy Law:

                  (i) commences a voluntary case,

                  (ii) consents to the entry of an order for relief against it
            in an involuntary case,

                  (iii) consents to the appointment of a Custodian of it or for
            all or substantially all of its property,

                  (iv) makes a general assignment for the benefit of its
            creditors, or

                  (v) generally is unable to pay its debts as the same become
            due; or

            (g) a court of competent jurisdiction enters an order or decree
      under any Bankruptcy Law that:

                  (i) is for relief against the Company or any of its
            Significant Subsidiaries in an involuntary case,

                  (ii) appoints a Custodian of the Company or any of its
            Significant Subsidiaries or for all or substantially all of its
            property, or

                  (iii) orders the liquidation of the Company or any of its
            Significant Subsidiaries,

and the order or decree remains unstayed and in effect for 60 days; or

            (h) any other Event of Default provided with respect to Securities
      of that Series, which is specified in a Board Resolution, a supplemental
      indenture hereto or an Officers' Certificate, in accordance with Section
      2.2.18.

            The term "Bankruptcy Law" means title 11, U.S. Code or any similar
Federal or State law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.

                                       22
<PAGE>

      Section 6.2 Acceleration of Maturity; Rescission and Annulment.

            If an Event of Default with respect to Securities of any Series at
the time outstanding occurs and is continuing (other than an Event of Default
referred to in Section 6.1(f) or (g)) then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the outstanding Securities
of that Series may declare the principal amount (or, if any Securities of that
Series are Discount Securities, such portion of the principal amount as may be
specified in the terms of such Securities) of and accrued and unpaid interest,
if any, on all of the Securities of that Series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) and accrued and unpaid interest, if any, shall become immediately due
and payable. If an Event of Default specified in Section 6.1(f) or (g) shall
occur, the principal amount (or specified amount) of and accrued and unpaid
interest, if any, on all outstanding Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.

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

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

                  (i) all overdue interest, if any, on all Securities of that
            Series,

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

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

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

and

            (b) all Events of Default with respect to Securities of that Series,
      other than the non-payment of the principal of Securities of that Series
      which have become due

                                       23
<PAGE>

      solely by such declaration of acceleration, have been cured or waived as
      provided in Section 6.13.

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

      Section 6.3 Collection of Indebtedness and Suits for Enforcement by
Trustee.

            The Company covenants that if

            (a) default is made in the payment of any interest on any Security
      when such interest becomes due and payable and such default continues for
      a period of 30 days, or

            (b) default is made in the payment of principal of any Security at
      the Maturity thereof, or

            (c) default is made in the deposit of any sinking fund payment when
      and as due by the terms of a Security,

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

            If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or deemed to be payable in the manner provided by law out of the
property of the Company or any other obligor upon such Securities, wherever
situated.

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

                                       24
<PAGE>

      Section 6.4 Trustee May File Proofs of Claim.

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

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

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7.

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

      Section 6.5 Trustee May Enforce Claims Without Possession of Securities.

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

                                       25
<PAGE>

      Section 6.6 Application of Money Collected.

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

            First: To the payment of all amounts due the Trustee under Section
7.7; and

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

            Third: To the Company.

      Section 6.7 Limitation on Suits.

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

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

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

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

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

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

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or

                                       26
<PAGE>

preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.

      Section 6.8 Unconditional Right of Holders to Receive Principal and
Interest.

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

      Section 6.9 Restoration of Rights and Remedies.

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

      Section 6.10 Rights and Remedies Cumulative.

            Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in Section 2.8, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

      Section 6.11 Delay or Omission Not Waiver.

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

                                       27
<PAGE>

      Section 6.12 Control by Holders.

            The Holders of a majority in principal amount of the outstanding
Securities of any Series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such Series, provided that

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

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

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

      Section 6.13 Waiver of Past Defaults.

            The Holders of not less than a majority in principal amount of the
outstanding Securities of any Series may on behalf of the Holders of all the
Securities of such Series waive any past Default hereunder with respect to such
Series and its consequences, except a Default in the payment of the principal of
or interest on any Security of such Series (provided, however, that the Holders
of a majority in principal amount of the outstanding Securities of any Series
may rescind an acceleration and its consequences, including any related payment
default that resulted from such acceleration). Upon any such waiver, such
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereon.

      Section 6.14 Undertaking for Costs.

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

                                       28
<PAGE>

Securities of any Series, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of or interest on any Security on or
after the Stated Maturity or Stated Maturities expressed in such Security (or,
in the case of redemption, on the redemption date).

                                  ARTICLE VII.
                                     TRUSTEE

      Section 7.1 Duties of Trustee.

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

            (b) Except during the continuance of an Event of Default:

                  (i) The Trustee need perform only those duties that are
            specifically set forth in this Indenture and no others.

                  (ii) In the absence of bad faith on its part, the Trustee may
            conclusively rely, as to the truth of the statements and the
            correctness of the opinions expressed therein, upon Officers'
            Certificates or Opinions of Counsel furnished to the Trustee and
            conforming to the requirements of this Indenture; however, in the
            case of any such Officers' Certificates or Opinions of Counsel which
            by any provisions hereof are specifically required to be furnished
            to the Trustee, the Trustee shall examine such Officers'
            Certificates and Opinions of Counsel to determine whether or not
            they conform to the requirements of this Indenture.

            (c) The Trustee may not be relieved from liability for its own
      negligent action, its own negligent failure to act or its own willful
      misconduct, except that:

                  (i) This paragraph does not limit the effect of paragraph (b)
            of this Section.

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

                  (iii) The Trustee shall not be liable with respect to any
            action taken, suffered or omitted to be taken by it with respect to
            Securities of any Series in good faith in accordance with the
            direction of the Holders of a majority in principal amount of the
            outstanding Securities of such Series

                                       29
<PAGE>

            relating to the time, method and place of conducting any proceeding
            for any remedy available to the Trustee, or exercising any trust or
            power conferred upon the Trustee, under this Indenture with respect
            to the Securities of such Series.

            (d) Every provision of this Indenture that in any way relates to the
      Trustee is subject to paragraph (a), (b) and (c) of this Section.

            (e) The Trustee may refuse to perform any duty or exercise any right
      or power unless it receives indemnity satisfactory to it against any loss,
      liability or expense.

            (f) The Trustee shall not be liable for interest on any money
      received by it except as the Trustee may agree in writing with the
      Company. Money held in trust by the Trustee need not be segregated from
      other funds except to the extent required by law.

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

            (h) The Paying Agent, the Registrar and any authenticating agent
      shall be entitled to the protections, immunities and standard of care as
      are set forth in paragraphs (a), (b) and (c) of this Section with respect
      to the Trustee.

      Section 7.2 Rights of Trustee.

            (a) The Trustee may rely on and shall be protected in acting or
      refraining from acting upon any document believed by it to be genuine and
      to have been signed or presented by the proper person. The Trustee need
      not investigate any fact or matter stated in the document.

            (b) Before the Trustee acts or refrains from acting, it may require
      an Officers' Certificate or an Opinion of Counsel. The Trustee shall not
      be liable for any action it takes or omits to take in good faith in
      reliance on such Officers' Certificate or Opinion of Counsel.

            (c) The Trustee may act through agents and shall not be responsible
      for the misconduct or negligence of any agent appointed with due care. No
      Depository shall be deemed an agent of the Trustee and the Trustee shall
      not be responsible for any act or omission by any Depository.

                                       30
<PAGE>

            (d) The Trustee shall not be liable for any action it takes or omits
      to take in good faith which it believes to be authorized or within its
      rights or powers.

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

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

      Section 7.3 Individual Rights of Trustee.

            The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate with the same rights it would have if it were not Trustee. Any Agent
may do the same with like rights. The Trustee is also subject to Sections 7.10
and 7.11.

      Section 7.4 Trustee's Disclaimer.

            The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Securities, it shall not be accountable for the
Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement in the Securities other than its authentication.

      Section 7.5 Notice of Defaults.

            If a Default or Event of Default occurs and is continuing with
respect to the Securities of any Series and if it is known to a Responsible
Officer of the Trustee, the Trustee shall mail to each Securityholder of the
Securities of that Series and, if any Bearer Securities are outstanding, publish
on one occasion in an Authorized Newspaper, notice of a Default or Event of
Default within 90 days after it occurs or, if later, after a Responsible Officer
of the Trustee has knowledge of such Default or Event of Default. Except in the
case of a Default or Event of Default in payment of principal of or interest on
any Security of any Series, the Trustee may withhold the notice if and so long
as its corporate trust committee or a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of
Securityholders of that Series.

                                       31
<PAGE>

      Section 7.6 Reports by Trustee to Holders.

            Within 60 days after May 15 in each year, the Trustee shall transmit
by mail to all Securityholders, as their names and addresses appear on the
register kept by the Registrar and, if any Bearer Securities are outstanding,
publish in an Authorized Newspaper, a brief report dated as of such May 15, in
accordance with, and to the extent required under, TIA ss. 313.

            A copy of each report at the time of its mailing to Securityholders
of any Series shall be filed with the SEC and each stock exchange on which the
Securities of that Series are listed. The Company shall promptly notify the
Trustee when Securities of any Series are listed on any stock exchange.

      Section 7.7 Compensation and Indemnity.

            The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred by it. Such expenses shall include the reasonable compensation and
expenses of the Trustee's agents and counsel.

            The Company shall indemnify the Trustee (including the cost of
defending itself) against any loss, liability or expense incurred by it except
as set forth in the next paragraph in the performance of its duties under this
Indenture as Trustee or Agent. The Trustee shall notify the Company promptly of
any claim for which it may seek indemnity. The Company shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may have separate
counsel and the Company shall pay the reasonable fees and expenses of such
counsel. The Company need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld. This indemnification shall
apply to officers, directors, employees, shareholders and agents of the Trustee.

            The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee or by any officer, director, employee,
shareholder or agent of the Trustee through negligence or bad faith.

            To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities of any Series on all money or
property held or collected by the Trustee, except that held in trust to pay
principal and interest on particular Securities of that Series.

            When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.1(f) or (g) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.

                                       32
<PAGE>

      Section 7.8 Replacement of Trustee.

            A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.

            The Trustee may resign with respect to the Securities of one or more
Series by so notifying the Company. The Holders of a majority in principal
amount of the Securities of any Series may remove the Trustee with respect to
that Series by so notifying the Trustee and the Company. The Company may remove
the Trustee with respect to Securities of one or more Series if:

            (a) the Trustee fails to comply with Section 7.10;

            (b) the Trustee is adjudged a bankrupt or an insolvent or an order
      for relief is entered with respect to the Trustee under any Bankruptcy
      Law;

            (c) a Custodian or public officer takes charge of the Trustee or its
      property; or

            (d) the Trustee becomes incapable of acting.

            If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Securities may appoint
a successor Trustee to replace the successor Trustee appointed by the Company.

            If a successor Trustee with respect to the Securities of any one or
more Series does not take office within 60 days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Company or the Holders of at
least 10% in principal amount of the Securities of the applicable Series may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.

            If the Trustee with respect to the Securities of any one or more
Series fails to comply with Section 7.10, any Securityholder of the applicable
Series may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.

            A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee subject to the lien provided for in Section 7.7, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
with respect to each Series of Securities for which it is acting as Trustee
under this Indenture. A successor Trustee

                                       33
<PAGE>

shall mail a notice of its succession to each Securityholder of each such Series
and, if any Bearer Securities are outstanding, publish such notice on one
occasion in an Authorized Newspaper. Notwithstanding replacement of the Trustee
pursuant to this Section 7.8, the Company's obligations under Section 7.7 hereof
shall continue for the benefit of the retiring trustee with respect to expenses
and liabilities incurred by it prior to such replacement.

      Section 7.9 Successor Trustee by Merger, etc.

            If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.

      Section 7.10 Eligibility; Disqualification.

            This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee shall always have a
combined capital and surplus of at least $25,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b).

      Section 7.11 Preferential Collection of Claims Against Company.

            The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated.

                                 ARTICLE VIII.
                     SATISFACTION AND DISCHARGE; DEFEASANCE

      Section 8.1 Satisfaction and Discharge of Indenture.

            This Indenture shall upon Company Order cease to be of further
effect (except as hereinafter provided in this Section 8.1), and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when

            (a) either

                  (i) all Securities theretofore authenticated and delivered
            (other than Securities that have been destroyed, lost or stolen and
            that have been replaced or paid) have been delivered to the Trustee
            for cancellation; or

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

                              (1) have become due and payable, or

                                       34
<PAGE>

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

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

                              (4) are deemed paid and discharged pursuant to
                  Section 8.3, as applicable;

and the Company, in the case of (1), (2) or (3) above, has deposited or caused
to be deposited with the Trustee as trust funds in trust an amount sufficient
for the purpose of paying and discharging the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation, for
principal and interest to the date of such deposit (in the case of Securities
which have become due and payable on or prior to the date of such deposit) or to
the Stated Maturity or redemption date, as the case may be;

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

            (c) the Company has delivered to the Trustee an Officers'
      Certificate and an Opinion of Counsel, each stating that all conditions
      precedent herein provided for relating to the satisfaction and discharge
      of this Indenture have been complied with.

            Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 7.7, and, if money
shall have been deposited with the Trustee pursuant to clause (a) of this
Section, the provisions of Sections 2.4, 2.7, 2.8, 8.1, 8.2 and 8.5 shall
survive.

      Section 8.2 Application of Trust Funds; Indemnification.

            (a) Subject to the provisions of Section 8.5, all money deposited
      with the Trustee pursuant to Section 8.1, all money and U.S. Government
      Obligations or Foreign Government Obligations deposited with the Trustee
      pursuant to Section 8.3 or 8.4 and all money received by the Trustee in
      respect of U.S. Government Obligations or Foreign Government Obligations
      deposited with the Trustee pursuant to Section 8.3 or 8.4, shall be held
      in trust and applied by it, in accordance with the provisions of the
      Securities and this Indenture, to the payment, either directly or through
      any Paying Agent (including the Company acting as its own Paying Agent) as
      the Trustee may determine, to the persons entitled thereto, of the
      principal and interest for whose payment such money has been deposited
      with or received by the Trustee or to make mandatory sinking fund payments
      or analogous payments as contemplated by Sections 8.3 or 8.4.

                                       35
<PAGE>

            (b) The Company shall pay and shall indemnify the Trustee against
      any tax, fee or other charge imposed on or assessed against U.S.
      Government Obligations or Foreign Government Obligations deposited
      pursuant to Sections 8.3 or 8.4 or the interest and principal received in
      respect of such obligations other than any payable by or on behalf of
      Holders.

            (c) The Trustee shall deliver or pay to the Company from time to
      time upon Company Request any U.S. Government Obligations or Foreign
      Government Obligations or money held by it as provided in Sections 8.3 or
      8.4 which, in the opinion of a nationally recognized firm of independent
      certified public accountants expressed in a written certification thereof
      delivered to the Trustee, are then in excess of the amount thereof which
      then would have been required to be deposited for the purpose for which
      such U.S. Government Obligations or Foreign Government Obligations or
      money were deposited or received. This provision shall not authorize the
      sale by the Trustee of any U.S. Government Obligations or Foreign
      Government Obligations held under this Indenture.

      Section 8.3 Legal Defeasance of Securities of any Series.

            Unless this Section 8.3 is otherwise specified, pursuant to Section
2.2.20, to be inapplicable to Securities of any Series, the Company shall be
deemed to have paid and discharged the entire indebtedness on all the
outstanding Securities of such Series on the 91st day after the date of the
deposit referred to in subparagraph (d) hereof, and the provisions of this
Indenture, as it relates to such outstanding Securities of such Series, shall no
longer be in effect (and the Trustee, at the expense of the Company, shall, at
Company Request, execute proper instruments acknowledging the same), except as
to:

            (a) the rights of Holders of Securities of such Series to receive,
      from the trust funds described in subparagraph (d) hereof, (i) payment of
      the principal of and each installment of principal of and interest on the
      outstanding Securities of such Series on the Stated Maturity of such
      principal or installment of principal or interest and (ii) the benefit of
      any mandatory sinking fund payments applicable to the Securities of such
      Series on the day on which such payments are due and payable in accordance
      with the terms of this Indenture and the Securities of such Series;

            (b) the provisions of Sections 2.4, 2.7, 2.8, 8.2, 8.3 and 8.5; and

            (c) the rights, powers, trust and immunities of the Trustee
      hereunder;

provided that, the following conditions shall have been satisfied:

            (d) the Company shall have deposited or caused to be deposited
      irrevocably with the Trustee as trust funds in trust for the purpose of
      making the following payments,

                                       36
<PAGE>

      specifically pledged as security for and dedicated solely to the benefit
      of the Holders of such Securities (i) in the case of Securities of such
      Series denominated in Dollars, cash in Dollars (or such other money or
      currencies as shall then be legal tender in the United States) and/or U.S.
      Government Obligations, or (ii) in the case of Securities of such Series
      denominated in a Foreign Currency (other than a composite currency), money
      and/or Foreign Government Obligations, which through the payment of
      interest and principal in respect thereof, in accordance with their terms,
      will provide (and without reinvestment and assuming no tax liability will
      be imposed on such Trustee), not later than one day before the due date of
      any payment of money, an amount in cash, sufficient, in the opinion of a
      nationally recognized firm of independent public accountants expressed in
      a written certification thereof delivered to the Trustee, to pay and
      discharge each installment of principal (including mandatory sinking fund
      or analogous payments) of and interest, if any, on all the Securities of
      such Series on the dates such installments of interest or principal are
      due;

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

            (f) no Default or Event of Default with respect to the Securities of
      such Series shall have occurred and be continuing on the date of such
      deposit or during the period ending on the 91st day after such date;

            (g) the Company shall have delivered to the Trustee an Officers'
      Certificate and an Opinion of Counsel to the effect that (i) the Company
      has received from, or there has been published by, the Internal Revenue
      Service a ruling, or (ii) since the date of execution of this Indenture,
      there has been a change in the applicable Federal income tax law, in
      either case to the effect that, and based thereon such Opinion of Counsel
      shall confirm that, the Holders of the Securities of such Series will not
      recognize income, gain or loss for Federal income tax purposes as a result
      of such deposit, defeasance and discharge and will be subject to Federal
      income tax on the same amount and in the same manner and at the same times
      as would have been the case if such deposit, defeasance and discharge had
      not occurred;

            (h) the Company shall have delivered to the Trustee an Officers'
      Certificate stating that the deposit was not made by the Company with the
      intent of preferring the Holders of the Securities of such Series over any
      other creditors of the company or with the intent of defeating, hindering,
      delaying or defrauding any other creditors of the Company;

            (i) such deposit shall not result in the trust arising from such
      deposit constituting an investment company (as defined in the Investment
      Company Act of 1940,

                                       37
<PAGE>

      as amended), or such trust shall be qualified under such Act or exempt
      from regulation thereunder; and

            (j) the Company shall have delivered to the Trustee an Officers'
      Certificate and an Opinion of Counsel, each stating that all conditions
      precedent provided for relating to the defeasance contemplated by this
      Section have been complied with.

      Section 8.4 Covenant Defeasance.

            Unless this Section 8.4 is otherwise specified pursuant to Section
2.2.20 to be inapplicable to Securities of any Series, on and after the 91st day
after the date of the deposit referred to in subparagraph (a) hereof, the
Company may omit to comply with any term, provision or condition set forth under
Sections 4.2, 4.3, 4.4, 4.5, 4.6, and 5.1 as well as any additional covenants
contained in a supplemental indenture hereto for a particular Series of
Securities or a Board Resolution or an Officers' Certificate delivered pursuant
to Section 2.2.20 (and the failure to comply with any such covenants shall not
constitute a Default or Event of Default under Section 6.1) and the occurrence
of any event described in clause (e) of Section 6.1 shall not constitute a
Default or Event of Default hereunder, with respect to the Securities of such
Series, provided that the following conditions shall have been satisfied:

            (a) With reference to this Section 8.4, the Company has deposited or
      caused to be irrevocably deposited (except as provided in Section 8.2(c))
      with the Trustee as trust funds in trust, specifically pledged as security
      for, and dedicated solely to, the benefit of the Holders of such
      Securities (i) in the case of Securities of such Series denominated in
      Dollars, cash in Dollars (or such other money or currencies as shall then
      be legal tender in the United States) and/or U.S. Government Obligations,
      or (ii) in the case of Securities of such Series denominated in a Foreign
      Currency (other than a composite currency), money and/or Foreign
      Government Obligations, which through the payment of interest and
      principal in respect thereof, in accordance with their terms, will provide
      (and without reinvestment and assuming no tax liability will be imposed on
      such Trustee), not later than one day before the due date of any payment
      of money, an amount in cash, sufficient, in the opinion of a nationally
      recognized firm of independent certified public accountants expressed in a
      written certification thereof delivered to the Trustee, to pay principal
      and interest, if any, on and any mandatory sinking fund in respect of the
      Securities of such Series on the dates such installments of interest or
      principal are due;

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

            (c) No Default or Event of Default with respect to the Securities of
      such Series shall have occurred and be continuing on the date of such
      deposit or during the period ending on the 91st day after such date;

                                       38
<PAGE>

            (d) the Company shall have delivered to the Trustee an Opinion of
      Counsel confirming that Holders of the Securities of such Series will not
      recognize income, gain or loss for federal income tax purposes as a result
      of such deposit and defeasance and will be subject to federal income tax
      on the same amounts, in the same manner and at the same times as would
      have been the case if such deposit and defeasance had not occurred;

            (e) the Company shall have delivered to the Trustee an Officers'
      Certificate stating the deposit was not made by the Company with the
      intent of preferring the Holders of the Securities of such Series over any
      other creditors of the Company or with the intent of defeating, hindering,
      delaying or defrauding any other creditors of the Company; and

            (f) The Company shall have delivered to the Trustee an Officers'
      Certificate and an Opinion of Counsel, each stating that all conditions
      precedent herein provided for relating to the defeasance contemplated by
      this Section have been complied with.

      Section 8.5 Repayment to Company.

            The Trustee and the Paying Agent shall pay to the Company upon
request any money held by them for the payment of principal and interest that
remains unclaimed for two years. After that, Securityholders entitled to the
money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another person.

                                  ARTICLE IX.
                             AMENDMENTS AND WAIVERS

      Section 9.1 Without Consent of Holders.

            The Company and the Trustee may amend or supplement this Indenture
or the Securities of one or more Series without the consent of any
Securityholder:

            (a) to cure any ambiguity, defect or inconsistency;

            (b) to comply with Article V;

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

            (d) to make any change that does not adversely affect the rights of
      any Securityholder;

            (e) to provide for the issuance of and establish the form and terms
      and conditions of Securities of any Series as permitted by this Indenture;

                                       39
<PAGE>

            (f) to evidence and provide for the acceptance of appointment
      hereunder by a successor Trustee with respect to the Securities of one or
      more Series and to add to or change any of the provisions of this
      Indenture as shall be necessary to provide for or facilitate the
      administration of the trusts hereunder by more than one Trustee; or

            (g) to comply with requirements of the SEC in order to effect or
      maintain the qualification of this Indenture under the TIA.

      Section 9.2 With Consent of Holders.

            The Company and the Trustee may enter into a supplemental indenture
with the written consent of the Holders of at least a majority in principal
amount of the outstanding Securities of each Series affected by such
supplemental indenture (including consents obtained in connection with a tender
offer or exchange offer for the Securities of such Series), for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying in
any manner the rights of the Securityholders of each such Series. Except as
provided in Section 6.13, the Holders of at least a majority in principal amount
of the outstanding Securities of each Series affected by such waiver by notice
to the Trustee (including consents obtained in connection with a tender offer or
exchange offer for the Securities of such Series) may waive compliance by the
Company with any provision of this Indenture or the Securities with respect to
such Series.

            It shall not be necessary for the consent of the Holders of
Securities under this Section 9.2 to approve the particular form of any proposed
supplemental indenture or waiver, but it shall be sufficient if such consent
approves the substance thereof. After a supplemental indenture or waiver under
this section becomes effective, the Company shall mail to the Holders of
Securities affected thereby and, if any Bearer Securities affected thereby are
outstanding, publish on one occasion in an Authorized Newspaper, a notice
briefly describing the supplemental indenture or waiver. Any failure by the
Company to mail or publish such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture or waiver.

      Section 9.3 Limitations.

            Without the consent of each Securityholder affected, an amendment or
waiver may not:

            (a) change the amount of Securities whose Holders must consent to an
      amendment, supplement or waiver;

            (b) reduce the rate of or extend the time for payment of interest
      (including default interest) on any Security;

                                       40
<PAGE>

            (c) reduce the principal or change the Stated Maturity of any
      Security or reduce the amount of, or postpone the date fixed for, the
      payment of any sinking fund or analogous obligation;

            (d) reduce the principal amount of Discount Securities payable upon
      acceleration of the maturity thereof;

            (e) waive a Default or Event of Default in the payment of the
      principal of or interest, if any, on any Security (except a rescission of
      acceleration of the Securities of any Series by the Holders of at least a
      majority in principal amount of the outstanding Securities of such Series
      and a waiver of the payment default that resulted from such acceleration);

            (f) make the principal of or interest, if any, on any Security
      payable in any currency other than that stated in the Security;

            (g) make any change in Sections 6.8, 6.13, 9.3 (this sentence),
      10.15 or 10.16; or

            (h) waive a redemption payment with respect to any Security or
      change any of the provisions with respect to the redemption of any
      Securities.

      Section 9.4 Compliance with Trust Indenture Act.

            Every amendment to this Indenture or the Securities of one or more
Series shall be set forth in a supplemental indenture hereto that complies with
the TIA as then in effect.

      Section 9.5 Revocation and Effect of Consents.

            Until an amendment or waiver becomes effective, a consent to it by a
Holder of a Security is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of a Security if the Trustee receives the
notice of revocation before the date the amendment or waiver becomes effective.

            Any amendment or waiver once effective shall bind every
Securityholder of each Series affected by such amendment or waiver unless it is
of the type described in any of clauses (a) through (g) of Section 9.3. In that
case, the amendment or waiver shall bind each Holder of a Security who has
consented to it and every subsequent Holder of a Security or portion of a
Security that evidences the same debt as the consenting Holder's Security.

                                       41
<PAGE>

      Section 9.6 Notation on or Exchange of Securities.

            The Trustee may place an appropriate notation about an amendment or
waiver on any Security of any Series thereafter authenticated. The Company in
exchange for Securities of that Series may issue and the Trustee shall
authenticate upon request new Securities of that Series that reflect the
amendment or waiver.

      Section 9.7 Trustee Protected.

            In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 7.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee shall sign all
supplemental indentures, except that the Trustee need not sign any supplemental
indenture that adversely affects its rights.

                                   ARTICLE X.
                                  MISCELLANEOUS

      Section 10.1 Trust Indenture Act Controls.

            If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required or deemed to be included in this
Indenture by the TIA, such required or deemed provision shall control.

      Section 10.2 Notices.

            Any notice or communication by the Company or the Trustee to the
other is duly given if in writing and delivered in person or mailed by
first-class mail:

if to the Company:

                        __________________
                        Geron Corporation
                        230 Constitution Drive
                        Menlo Park, California 94025
                        (650) 473-7700

                        Attention: Chief Financial Officer

                                       42
<PAGE>

if to the Trustee:

                        [Name of Trustee]
                        [Address]
                        _________________________
                        _________________________
                        Attention: ______________

            The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.

            Any notice or communication to a Securityholder shall be mailed by
first-class mail to his address shown on the register kept by the Registrar and,
if any Bearer Securities are outstanding, published in an Authorized Newspaper.
Failure to mail a notice or communication to a Securityholder of any Series or
any defect in it shall not affect its sufficiency with respect to other
Securityholders of that or any other Series.

            If a notice or communication is mailed or published in the manner
provided above, within the time prescribed, it is duly given, whether or not the
Securityholder receives it.

            If the Company mails a notice or communication to Securityholders,
it shall mail a copy to the Trustee and each Agent at the same time.

      Section 10.3 Communication by Holders with Other Holders.

            Securityholders of any Series may communicate pursuant to TIA ss.
312(b) with other Securityholders of that Series or any other Series with
respect to their rights under this Indenture or the Securities of that Series or
all Series. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss. 312(c).

      Section 10.4 Certificate and Opinion as to Conditions Precedent.

            Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee:

            (a) an Officers' Certificate stating that, in the opinion of the
      signers, all conditions precedent, if any, provided for in this Indenture
      relating to the proposed action have been complied with; and

            (b) an Opinion of Counsel stating that, in the opinion of such
      counsel, all such conditions precedent have been complied with.

                                       43
<PAGE>

      Section 10.5 Statements Required in Certificate or Opinion.

            Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA
ss. 314(e) and shall include:

            (a) a statement that the person making such certificate or opinion
      has read such covenant or condition;

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

            (c) a statement that, in the opinion of such person, he has made
      such examination or investigation as is necessary to enable him to express
      an informed opinion as to whether or not such covenant or condition has
      been complied with; and

            (d) a statement as to whether or not, in the opinion of such person,
      such condition or covenant has been complied with.

      Section 10.6 Rules by Trustee and Agents.

            The Trustee may make reasonable rules for action by or a meeting of
Securityholders of one or more Series. Any Agent may make reasonable rules and
set reasonable requirements for its functions.

      Section 10.7 Legal Holidays.

            Unless otherwise provided by Board Resolution, Officers' Certificate
or supplemental indenture for a particular Series, a "Legal Holiday" is any day
that is not a Business Day. If a payment date is a Legal Holiday at a place of
payment, payment may be made at that place on the next succeeding day that is
not a Legal Holiday, and no interest shall accrue for the intervening period.

      Section 10.8 No Recourse Against Others.

            A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. Each Securityholder by accepting a
Security waives and releases all such liability. The waiver and release are part
of the consideration for the issue of the Securities.

                                       44
<PAGE>

      Section 10.9 Counterparts.

            This Indenture may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

      Section 10.10 Governing Laws.

            THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH
STATE, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.

      Section 10.11 No Adverse Interpretation of Other Agreements.

            This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or a Subsidiary. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.

      Section 10.12 Successors.

            All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.

      Section 10.13 Severability.

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

      Section 10.14 Table of Contents, Headings, Etc.

            The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.

      Section 10.15 Securities in a Foreign Currency.

            Unless otherwise specified in a Board Resolution, a supplemental
indenture hereto or an Officers' Certificate delivered pursuant to Section 2.2
of this Indenture with respect to a particular Series of Securities, whenever
for purposes of this Indenture any action may be taken by the Holders of a
specified percentage in aggregate principal amount of Securities of all Series
or all Series affected by a particular action at the time outstanding and, at
such time, there

                                       45
<PAGE>

are outstanding Securities of any Series which are denominated in a coin or
currency other than Dollars, then the principal amount of Securities of such
Series which shall be deemed to be outstanding for the purpose of taking such
action shall be that amount of Dollars that could be obtained for such amount at
the Market Exchange Rate at such time. For purposes of this Section 10.15,
"Market Exchange Rate" shall mean the noon Dollar buying rate in New York City
for cable transfers of that currency as published by the Federal Reserve Bank of
New York. If such Market Exchange Rate is not available for any reason with
respect to such currency, the Trustee shall use, in its sole discretion and
without liability on its part, such quotation of the Federal Reserve Bank of New
York as of the most recent available date, or quotations from one or more major
banks in The City of New York or in the country of issue of the currency in
question or such other quotations as the Trustee, upon consultation with the
Company, shall deem appropriate. The provisions of this paragraph shall apply in
determining the equivalent principal amount in respect of Securities of a Series
denominated in currency other than Dollars in connection with any action taken
by Holders of Securities pursuant to the terms of this Indenture.

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

      Section 10.16 Judgment Currency.

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

                                       46
<PAGE>

be affected by judgment being obtained for any other sum due under this
Indenture. For purposes of the foregoing, "New York Banking Day" means any day
except a Saturday, Sunday or a legal holiday in The City of New York on which
banking institutions are authorized or required by law, regulation or executive
order to close.

                                  ARTICLE XI.
                                  SINKING FUNDS

      Section 11.1 Applicability of Article.

            The provisions of this Article shall be applicable to any sinking
fund for the retirement of the Securities of a Series, except as otherwise
permitted or required by any form of Security of such Series issued pursuant to
this Indenture.

            The minimum amount of any sinking fund payment provided for by the
terms of the Securities of any Series is herein referred to as a "mandatory
sinking fund payment" and any other amount provided for by the terms of
Securities of such Series is herein referred to as an "optional sinking fund
payment." If provided for by the terms of Securities of any Series, the cash
amount of any sinking fund payment may be subject to reduction as provided in
Section 11.2. Each sinking fund payment shall be applied to the redemption of
Securities of any Series as provided for by the terms of the Securities of such
Series.

      Section 11.2 Satisfaction of Sinking Fund Payments with Securities.

            The Company may, in satisfaction of all or any part of any sinking
fund payment with respect to the Securities of any Series to be made pursuant to
the terms of such Securities (1) deliver outstanding Securities of such Series
to which such sinking fund payment is applicable (other than any of such
Securities previously called for mandatory sinking fund redemption) and (2)
apply as credit Securities of such Series to which such sinking fund payment is
applicable and which have been redeemed either at the election of the Company
pursuant to the terms of such Series of Securities (except pursuant to any
mandatory sinking fund) or through the application of permitted optional sinking
fund payments or other optional redemptions pursuant to the terms of such
Securities, provided that such Securities have not been previously so credited.
Such Securities shall be received by the Trustee, together with an Officers'
Certificate with respect thereto, not later than 15 days prior to the date on
which the Trustee begins the process of selecting Securities for redemption, and
shall be credited for such purpose by the Trustee at the price specified in such
Securities for redemption through operation of the sinking fund and the amount
of such sinking fund payment shall be reduced accordingly. If as a result of the
delivery or credit of Securities in lieu of cash payments pursuant to this
Section 11.2, the principal amount of Securities of such Series to be redeemed
in order to exhaust the aforesaid cash payment shall be less than $100,000, the
Trustee need not call Securities of such Series for redemption, except upon
receipt of a Company Order that such action be taken, and such cash payment
shall be held by the Trustee or a Paying Agent and applied to the next

                                       47
<PAGE>

succeeding sinking fund payment, provided, however, that the Trustee or such
Paying Agent shall from time to time upon receipt of a Company Order pay over
and deliver to the Company any cash payment so being held by the Trustee or such
Paying Agent upon delivery by the Company to the Trustee of Securities of that
Series purchased by the Company having an unpaid principal amount equal to the
cash payment required to be released to the Company.

      Section 11.3 Redemption of Securities for Sinking Fund.

            Not less than 45 days (unless otherwise indicated in the Board
Resolution, supplemental indenture hereto or Officers' Certificate in respect of
a particular Series of Securities) prior to each sinking fund payment date for
any Series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that Series pursuant to the terms of that Series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that Series pursuant to Section 11.2, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
the Company shall thereupon be obligated to pay the amount therein specified.
Not less than 30 days (unless otherwise indicated in the Board Resolution,
Officers' Certificate or supplemental indenture in respect of a particular
Series of Securities) before each such sinking fund payment date the Trustee
shall select the Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 3.2 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 3.3. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 3.4, 3.5 and 3.6.

                                       48
<PAGE>

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

                                        Geron Corporation

                                        By: ____________________________________
                                            Name:
                                            Its:

                                        [Name of Trustee]

                                        By: ____________________________________
                                            Name:
                                            Its:ex4-1

 

EXHIBIT 4.1

Name: ________________

SUBSCRIPTION AGREEMENT

     SUBSCRIPTION AGREEMENT (this “Agreement”) made as of the date set forth on
the signature page hereof between Bioject Medical Technologies Inc., an Oregon
corporation (the “Company”) and the undersigned (the “Subscriber”).

WITNESSETH:

     WHEREAS, the Company is offering in a private placement to accredited
investors (the “Offering”) 350,000 shares of its common stock, no par value
(the “Common Stock”) at a price equal to $11.00 (the “Closing Price”) (the
“Offering Price”). The shares of Common Stock offered hereby are sometimes
referred to as the “Securities;” and

     WHEREAS, the Subscriber desires to purchase that number of Securities set
forth on the signature page hereof on the terms and conditions hereinafter set
forth; and

     WHEREAS, the Company has engaged Leerink Swann & Company (the “Placement
Agent”) as placement agent for the Offering on a “best-efforts” basis.

     NOW, THEREFORE, in consideration of the premises and the mutual
representations and covenants hereinafter set forth, the parties hereto agree
as follows:

I. SUBSCRIPTION FOR SECURITIES AND REPRESENTATIONS BY SUBSCRIBER

     1.1 Subject to the terms and conditions hereinafter set forth, the
Subscriber hereby irrevocably subscribes for and agrees to purchase from the
Company such Securities as is set forth upon the signature page hereof and the
Company agrees to sell such Securities to the Subscriber for said purchase
price subject to the Company’s right to sell to the Subscriber such lesser
number of Securities as the Company may, in its sole discretion, deem necessary
or desirable. The purchase price is payable by wire transfer of immediately
available funds or money order made payable to the Company contemporaneously
with the execution and delivery of this Agreement by the Subscriber. The funds
will be held by the Company until the Closing is confirmed by the Company and
Placement Agent. If the Closing does not occur, the funds will be returned to
the Subscriber. All wires should be sent to:

	 	U.S. National Bank

Tualatin Branch

7755 S.W. Nyberg Road

P.O. Box 474

Tualatin, OR 97062

Contact: Kara Thompson, Business Banking Officer

Phone: 503-431-6006

Bioject, Inc.       EIN: 93-0881020

General Account

ABA: 123000220

Account #: 1 536 0565 7920

 

 

     Certificates for the shares of Common Stock will be delivered by the
Company to the Subscriber promptly following the Closing (as herein defined).

     1.2 The Subscriber recognizes that the purchase of Securities involves a
high degree of risk in that (i) the Company remains a development stage
business with a limited operating history and may require substantial funds in
addition to the proceeds of the Offering; (ii) an investment in the Company is
highly speculative and only investors who can afford the loss of their entire
investment should consider investing in the Company; (iii) the Subscriber may
not be able to liquidate its investment; (iv) transferability of the Securities
is extremely limited; and (v) in the event of a disposition, the Subscriber
could sustain the loss of its entire investment. The Subscriber has carefully
reviewed the risk factors set forth on Exhibit A attached hereto.

     1.3 The Subscriber represents that the Subscriber is an “accredited
investor” as such term is defined in Rule 501 of Regulation D promulgated under
the Securities Act of 1933, as amended, (the “Act”), as indicated by the
responses to the questions contained in Section VII hereof, and that the
Subscriber is able to bear the economic risk and illiquidity of an investment
in the Securities.

     1.4 The Subscriber hereby acknowledges and represents that (i) the
Subscriber has prior investment experience, including investment in non-listed
and unregistered securities, or that the Subscriber has employed the services
of an investment advisor, attorney and/or accountant to read all of the
documents furnished or made available by the Company both to the Subscriber and
to all other prospective investors to evaluate the merits and risks of such an
investment on the Subscriber’s behalf; (ii) the Subscriber recognizes the
highly speculative nature of an investment in the Securities; and (iii) the
Subscriber is able to bear the economic risk and illiquidity which the
Subscriber assumes by investing in the Securities.

     1.5 The Subscriber (i) hereby acknowledges careful review of Exhibit A
attached hereto, and that it has had a reasonable opportunity to review the
filings of the Company with the SEC (as herein defined) under the Act or the
Exchange Act (herein defined) and exhibits thereto on the SEC’s EDGAR database
or otherwise; (ii) hereby represents that the Subscriber has been furnished by
the Company during the course of this transaction with all information
regarding the Company which the Subscriber has requested or desired to know;
(iii) has been afforded the opportunity to ask questions of and receive answers
from duly authorized officers or other representatives of the Company
concerning the terms and conditions of the Offering; and (iv) has received any
additional information which the Subscriber has requested.

     1.6 (a) In making the decision to invest in the Securities, the Subscriber
has relied solely upon the information provided by the filings of the Company
with the SEC and this Agreement, including Exhibit A attached hereto. To the
extent necessary, the Subscriber has retained, at its own expense, and relied
upon the advice of appropriate professionals regarding the investment, tax and
legal merits and consequences of this Agreement and its purchase of the
Securities hereunder. The Subscriber acknowledges and agrees that the
Placement Agent has not supplied any information to the Subscriber and that the
Subscriber has not relied upon the

2

 

independent investigation or verification, if any, which may have been
undertaken by the Placement Agent.

          (b) The Subscriber represents that (i) the Subscriber was contacted
regarding the sale of the Securities by the Placement Agent (or an authorized
agent or representative thereof) with whom the Subscriber had a prior
substantial pre-existing relationship and (ii) no Securities were offered or
sold to it by means of any form of general solicitation or general advertising,
and in connection therewith the Subscriber did not (A) receive or review any
advertisement, article, notice or other communication published in a newspaper
or magazine or similar media or broadcast over television or radio, whether
closed circuit or generally available; or (B) attend any seminar, meeting or
industry investor conference whose attendees were invited by any general
solicitation or general advertising.

     1.7 The Subscriber hereby acknowledges that the Offering has not been
reviewed by the United States Securities and Exchange Commission (the “SEC”)
because of the Company’s representations that this Offering is intended to be
exempt from the registration requirements of Section 5 of the Act pursuant to
Sections 3(b), 4(2) and 4(6) thereof and Regulation D promulgated under the
Act. The Subscriber agrees that the Subscriber will not sell or otherwise
transfer the Securities unless they are registered under the Act or unless an
exemption from such registration is available.

     1.8 The Subscriber understands that none of the Securities have been
registered under the Act by reason of a claimed exemption under the provisions
of the Act which depends, in part, upon the Subscriber’s investment intention.
In this connection, the Subscriber hereby represents that the Subscriber is
purchasing the Securities for the Subscriber’s own account for investment and
not with a view toward the resale or distribution thereof to others. The
Subscriber, if an entity, was not formed for the purpose of purchasing the
Securities. The Subscriber understands that Rule 144 promulgated under the Act
requires, among other conditions, a one-year holding period prior to the resale
(in limited amounts) of securities acquired in a non-public offering without
having to satisfy the registration requirements under the Act.

     1.9 The Subscriber understands and hereby acknowledges that the Company is
under no obligation to register the Securities under the Act or any state
securities or “blue sky” laws other than as set forth in Section V. The
Subscriber consents that the Company may, if it desires, permit the transfer of
the Securities out of the Subscriber’s name only when the Subscriber’s request
for transfer is accompanied by an opinion of counsel reasonably satisfactory to
the Company that neither the sale nor the proposed transfer results in a
violation of the Act or any applicable state “blue sky” laws (collectively,
“Securities Laws”).

     1.10 The Subscriber consents to the placement of a legend on any
certificate or other document evidencing the Securities indicating that such
Securities have not been registered under the Act or any state securities or
“blue sky” laws and setting forth or referring to the restrictions on
transferability and sale thereof contained in this Agreement. The Subscriber is
aware that the Company will make a notation in its appropriate records and
issue “stop transfer”

3

 

instructions to its transfer agent with respect to the restrictions on the
transferability of such Securities.

     1.11 The Subscriber understands that the Company will review this
Agreement and, if such Subscriber is an individual, hereby gives authority to
the Company to call Subscriber’s bank or place of employment (in a call in
which the Placement Agent participates) or otherwise review the financial
standing of the Subscriber; and it is further agreed that upon their mutual
agreement the Placement Agent and the Company reserve the unrestricted right,
without further documentation or agreement on the part of the Subscriber, to
reject or limit any subscription, to accept subscriptions for Securities and to
close the Offering to the Subscriber at any time.

     1.12 The Subscriber hereby represents that the address of the Subscriber
furnished by the Subscriber on the signature page hereof is the Subscriber’s
principal residence if the Subscriber is an individual or its principal
business address if it is a corporation or other entity.

     1.13 The Subscriber represents that the Subscriber has full power and
authority (corporate, statutory and otherwise) to execute and deliver this
Agreement and to purchase the Securities subscribed for hereby. This Agreement
constitutes the legal, valid and binding obligation of the Subscriber,
enforceable against the Subscriber in accordance with its terms.

     1.14 If the Subscriber is a corporation, partnership, limited liability
company, trust, employee benefit plan, individual retirement account, Keogh
Plan, or other entity, then (a) it is authorized and qualified to become an
investor in the Company and the person signing this Agreement on behalf of such
entity has been duly authorized by such entity to do so, (b) it is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, and (c) the investment made herein is in
accordance with the investment objectives and risk tolerance of this
subscribing entity.

     1.15 The Subscriber acknowledges that if he or she is a registered
representative of a National Association of Securities Dealers, Inc. (“NASD”)
member firm, he or she must give such firm the notice required by the NASD’s
Rules of Fair Practice, receipt of which must be acknowledged by such firm in
Section 7.4 below.

     1.16 The Subscriber represents and warrants that it has not engaged,
consented to nor authorized any broker, finder or intermediary to act on its
behalf, directly or indirectly, as a broker, finder or intermediary in
connection with the transactions contemplated by this Agreement. The
Subscriber shall indemnify and hold harmless the Company from and against all
fees, commissions or other payments owing to any such person or firm acting on
behalf of such Subscriber hereunder.

     1.17 The Subscriber acknowledges that (a) the Company has engaged,
consented to and authorized the Placement Agent in connection with the
transactions contemplated by this Agreement, (b) the Company shall pay the
Placement Agent a commission and reimburse the Placement Agent’s expenses in
accordance with the Placement Agency

4

 

Agreement (as defined in Section 5.1(c) below), and the Company shall indemnify
and hold harmless the Subscriber from and against all fees, commissions or
other payments owing by the Company to the Placement Agent or any other person
or firm acting on behalf of the Company hereunder and (c) registered
representatives of the Placement Agent and/or its designees (including, without
limitation, registered representatives of the Placement Agent and/or its
designees who participate in the Offering and sale of the securities sold in
the Offering) will be paid a portion of the commissions paid to the Placement
Agent including a portion of the Placement Warrants (as defined in Section
5.1(c) below).

     1.18 The Subscriber, whose name appears on the signature line below, shall
be the beneficial owner of the Securities for which such Subscriber subscribes.

     1.19 The Subscriber agrees that from the time the Subscriber first
received this Agreement until a point in time equal to the earlier of (i) the
date that the Registration Statement (as defined in Section 5.2(a)) is declared
effective by the SEC or (ii) four months from the date of the Agreement, the
Subscriber has not and shall not, directly or indirectly, through related
parties, affiliates or otherwise, (A) sell “short” or “short against the box”
(as those terms are generally understood) any equity security of the Company or
(B) otherwise engage in any transaction that involves hedging of the
Subscriber’s position in any equity security of the Company.

II. REPRESENTATIONS BY THE COMPANY

     The Company hereby represents and warrants to the Subscriber that:

     2.1 Organization and Qualification. The Company is a corporation duly
organized and validly existing under the laws of the State of Oregon and has
full corporate power and lawful authority to conduct its business as described
in its SEC filings. The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the nature of
the business conducted or as proposed to be conducted in its SEC filings, by it
or the properties owned, leased or operated by it, makes such qualification or
licensing necessary and where the failure to be so qualified or licensed would
have a material adverse effect upon the business, prospects or financial
condition of the Company.

     2.2 Capitalization and Voting Rights. The authorized, issued and
outstanding capital stock of the Company is as set forth in its SEC filings;
all issued and outstanding shares of capital stock of the Company are validly
issued, fully paid and nonassessable. Except as set forth in the Company’s SEC
filings, there are no outstanding options, warrants, agreements, commitments,
convertible securities, preemptive rights or other rights to subscribe for or
to purchase any shares of capital stock of the Company nor are there any
agreements, promises or commitments to issue any of the foregoing, or
discussions concerning same. Except as set forth in the Company’s SEC filings,
in this Agreement and as otherwise required by law, there are no restrictions
upon the voting or transfer of the Securities pursuant to the Company’s
Articles of Incorporation, as amended, (the “Articles of Incorporation”),
By-laws or other governing documents or any agreement or other instruments to
which the Company is a party or by which the Company is bound.

5

 

     2.3 Authorization; Enforceability. The Company has all corporate right,
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. All corporate action on the part of the
Company, its directors and stockholders necessary for the authorization,
execution, delivery and performance of this Agreement by the Company, the
authorization, sale, issuance and delivery of the Securities and the
performance of the Company’s obligations hereunder has been taken. This
Agreement has been duly executed and delivered by the Company and constitutes a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to laws of general application
relating to bankruptcy, insolvency and the relief of debtors and rules of law
governing specific performance, injunctive relief or other equitable remedies,
and to limitations of public policy. The Securities have been duly and validly
authorized and, upon the issuance and delivery thereof and payment therefor as
contemplated by this Agreement, will be free and clear of liens, duly and
validly authorized and issued, fully paid and nonassessable. The issuance and
sale of the Securities contemplated hereby will not give rise to any preemptive
rights or rights of first refusal on behalf of any person.

     2.4 No Conflict; Governmental Consents.

          (a) The execution and delivery by the Company of this Agreement, the
consummation of the transactions contemplated hereby and the offer and sale of
the Securities will not result in the violation of any law, statute, rule,
regulation, order, writ, injunction, judgment or decree of any court or
governmental authority to or by which the Company is bound, or of any provision
of the Articles of Incorporation or By-laws of the Company, and will not
conflict with, or result in a breach or violation of, any of the terms or
provisions of, or constitute (with due notice or lapse of time or both) a
default under, any lease, loan agreement, mortgage, security agreement, trust
indenture or other agreement or instrument to which the Company is a party or
by which it is bound or to which any of its properties or assets is subject,
nor result in the creation or imposition of any lien upon any of the properties
or assets of the Company.

          (b) No consent, waiver, approval, authorization or other order of any
governmental authority or other third-party is required to be obtained by the
Company in connection with the authorization, execution and delivery of this
Agreement or with the authorization, issuance and sale of the Securities,
except such filings as may be required to be made, and which shall have been
made at or prior to the required time (except with respect to the Notification
Form: Listing of Additional Shares with The Nasdaq Stock Market, Inc.
(“Nasdaq”) which will be filed prior to closing), with the SEC, the NASD and
the Nasdaq, and with any state or foreign blue sky or securities regulatory
authority.

     2.5 Licenses. The Company has all licenses, permits and other
governmental authorizations currently required for the conduct of its business
or ownership of properties and is in all material respects complying therewith,
except for any licenses, permits or other governmental authorizations which
would not materially adversely affect the business, property, financial
condition, results of operations or prospects of the Company.

6

 

     2.6 Litigation. The Company knows of no pending or threatened legal or
governmental proceedings against the Company which could materially adversely
affect the business, property, financial condition, results of operations or
prospects of the Company.

     2.7 Accuracy of Reports. All reports required to be filed by the Company
within the three years prior to the date of this Agreement under the Securities
Exchange Act of 1934, as amended, (the “Exchange Act”), have been duly and
timely filed with the SEC, complied at the time of filing in all material
respects with the requirements of their respective forms and, were complete and
correct in all material respects as of the dates at which the information was
furnished, and contained (as of such dates) no untrue statement of a material
fact or omitted to state a material fact necessary in order to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading.

     2.8 Investment Company. The Company is not an “investment company” within
the meaning of such term under the Investment Company Act of 1940, as amended,
and the rules and regulations of the SEC thereunder.

     2.9 Listing. The Company will file a Notification Form: Listing of
Additional Shares with the Nasdaq SmallCap Market and hereby represents and
warrants to the Placement Agent and the Subscriber that it will take any other
necessary action in accordance with the rules of the Nasdaq SmallCap Market to
enable the Securities (and the Common Stock issuable upon exercise of the
Placement Warrants as defined in Section 5.1 (c)) to trade on the Nasdaq
SmallCap Market.

     2.10 No Material Adverse Change. Since the filing of the Company’s most
recent Quarterly Report on Form 10-Q, (i) there has not been any material
adverse change (financial or otherwise) in the assets, properties, financial
condition, operating results or business of the Company, and (ii) there has
been no event or condition of any character that might have a material adverse
effect (financial or otherwise) in the assets, properties, financial condition,
operating results or business of the Company.

     2.11 Financial Statements. The financial statements included in the
Company’s most recent Annual Report on Form 10-K, as amended, for the fiscal
year ended March 31, 2001 and all other reports filed by the Company pursuant
to the Exchange Act since the filing of such Annual Report on Form 10-K, as
amended, and prior to the date hereof (collectively, the “SEC Filings”) present
fairly and accurately in all material respects the financial position of the
Company as of the dates shown and its results of operations and cash flows for
the periods shown, and such financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis. Except as set forth in the financial statements of the
Company included in the SEC Filings filed prior to the date hereof, to the best
of the Company’s knowledge, the Company has no liabilities, contingent or
otherwise, except those which individually or in the aggregate are not material
to the financial condition or operating results of the Company.

     2.12 Compliance with Laws. Neither the Company nor, to the Company’s
knowledge, any Person acting on its behalf has conducted any general
solicitation or general

7

 

advertising (as those terms are used in Regulation D of
the Act) in connection with the offer or sale of the Securities. Neither the
Company nor any of its Affiliates, nor, to the Company’s knowledge, any Person
acting on its or their behalf has, directly or indirectly, made any offers or
sales of any security or solicited any offers to buy any security, under
circumstances that would adversely affect reliance by the Company on Section
4(2) of the Act for the exemption from registration for the transactions
contemplated hereby or would require registration of the Securities under the
Act. The Company is in compliance with all applicable Nasdaq continued listing
requirements. There are no proceedings pending or to the Company’s knowledge
threatened against the Company relating to the continued listing of the
Company’s Common Stock on the Nasdaq SmallCap Market and the Company has not
received any notice of, nor to the knowledge of the Company is there any basis
for, the delisting of the Common Stock from the Nasdaq SmallCap Market.

III. TERMS OF SUBSCRIPTION

     3.1 The Offering is for 350,000 shares of Common Stock. The Securities are
offered on a “best efforts” basis.

     3.2 Upon the mutual consent of the Company and the Placement Agent, this
Offering may close (the “Closing”) prior to the sale of all 350,000 shares of
Common Stock and there is no assurance that all 350,000 shares of Common Stock
will be sold. The Closing shall occur no later than December 31, 2001, subject
to change at the discretion of the Company and the Placement Agent (the
“Closing Date”). The purchase price is payable by personal or business check,
wire transfer of immediately available funds or money order made payable as
provided in Section 1.1.

     3.3 The Subscriber hereby authorizes and directs the Company to deliver
the Securities to be issued to the Subscriber pursuant to this Agreement
directly to the Subscriber’s account maintained by the Placement Agent or, if
no such account exists, to the residential or business address indicated on the
signature page hereto.

     3.4 The Subscriber hereby authorizes and directs the Company to return any
funds related to unaccepted subscriptions to the same account from which the
funds were drawn, including any customer account maintained with the Placement
Agent.

IV. CONDITIONS TO OBLIGATIONS OF THE SUBSCRIBERS AND THE COMPANY

     4.1 The Subscribers’ obligation to purchase the Securities at the Closing
is subject to the fulfillment on or prior to the Closing Date of the following
conditions, which conditions may be waived at the option of each Subscriber to
the extent permitted by law:

          (a) Representations and Warranties. The representations and warranties
made by the Company in Section II hereof shall be true and correct in all
material

8

 

respects when made, and shall be true and correct in all material
respects on the Closing Date with the same force and effect as if they had been
made on and as of said date.

          (b) Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by the Company on or prior to such purchase shall
have been performed or complied with in all material respects.

          (c) No Legal Order Pending. There shall not then be in effect any legal or
other order enjoining or restraining the transactions contemplated by this
Agreement.

          (d) No Law Prohibiting or Restricting Such Sale. There shall not be in
effect any law, rule or regulation prohibiting or restricting such sale or
requiring any consent or approval of any person to issue the Securities which
consent or approval shall not have been obtained (except as may otherwise be
provided in this Agreement).

          (e) Legal Opinion. Upon the Closing, counsel to the Company shall have
delivered to the Placement Agent for the benefit of the Subscribers a legal
opinion with respect to such legal matters relating to this Agreement as the
Placement Agent may reasonably require.

     4.2 The Company’s obligation to sell the Securities at the Closing is
subject to the fulfillment on or prior to the Closing Date of the following
conditions, which conditions may be waived at the option of the Company to the
extent permitted by law:

          (a) Acknowledgements, Representations and Warranties. The
acknowledgements, representations and warranties made by the Subscriber in
Section I hereof shall be true and correct in all material respects when made,
and shall be true and correct in all material respects on the Closing Date with
the same force and effect as if they had been made on and as of said date. If
any such representations, warranties or acknowledgements shall not be true and
accurate in any respect prior to the Closing, the undersigned shall give
immediate written notice of such fact to the Company, to the Placement Agent,
and to his representatives, if any, specifying which representations,
warranties or acknowledgements are not true and accurate and the reason
therefor.

          (b) Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by the Subscriber on or prior to such purchase shall
have been performed or complied with in all material respects.

          (c) No Legal Order Pending. There shall not then be in effect any legal
or other order enjoining or restraining the transactions contemplated by this
Agreement.

          (d) No Law Prohibiting or Restricting Such Sale. There shall not be in
effect any law, rule or regulation prohibiting or restricting such sale or
requiring any consent or
approval of any person to issue the Securities which consent or approval shall
not have been obtained (except as may otherwise be provided in this Agreement).

9

 

V. REGISTRATION RIGHTS

     5.1 As used in this Agreement, the following terms shall have the
following meanings:

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

          (b) “Business Day” shall mean a day, Monday through Friday, on which banks
are generally open for business in each of New York, New York; Boston,
Massachusetts; and Portland, Oregon.

          (c) “Holders” shall mean the Subscriber and any person holding Registrable
Securities as defined below (including the Registrable Securities underlying
the warrants to be issued to the Placement Agent (the “Placement Warrants”) to
be granted to the Placement Agent and/or their designees pursuant to the
engagement letter between the Company and the Placement Agent dated October 23,
2001, (the “Placement Agency Agreement”)), a holder of the Placement Warrants,
or any person to whom the rights under Section V have been transferred in
accordance with Section 5.10 hereof, and who, if known by the Company, shall be
specifically named by the Company as selling stockholders in the Registration
Statement (as defined below).

          (d) “Person” shall mean any person, individual, corporation, limited
liability company, partnership, trust or other nongovernmental entity or any
governmental agency, court, authority or other body (whether foreign, federal,
state, local or otherwise).

          (e) The terms “register,” “registered” and “registration” refer to the
registration effected by preparing and filing with the SEC a registration
statement in compliance with the Act, and the declaration or ordering by the
SEC of the effectiveness of such registration statement.

          (f) “Registrable Securities” shall mean (i) the Common Stock, and (ii)
shares of Common Stock issuable upon the exercise of the Placement Warrants;
provided, however, that securities shall only be treated as Registrable
Securities if and only for so long as they (A) have not been disposed of
pursuant to a registration statement declared effective by the SEC, (B) have
not been sold in a transaction exempt from the registration and prospectus
delivery requirements of the Act so that all transfer restrictions and
restrictive legends with
respect thereto are removed upon the consummation of such sale, and (C) are
held by a Holder or a permitted transferee pursuant to Section 5.10.

10

 

          (g) “Registration Expenses” shall mean all expenses incurred by the
Company in complying with Section 5.2 hereof, including, without limitation,
all registration, qualification and filing fees, printing expenses, escrow
fees, fees and expenses of counsel for the Company, blue sky fees and expenses
and the expense of any special audits incident to, or required by, any such
registration (but excluding the aggregate fees of legal counsel for all
Holders).

          (h) “Registration Statement” shall have the meaning ascribed to such term
in Section 5.2 (a).

          (i) “Registration Period” shall have the meaning ascribed to such term in
Section 5.4 (a).

          (j) “Selling Expenses” shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and the aggregate
fees and expenses of legal counsel for all Holders.

     5.2 (a) The Company shall, as soon as practicable, but not later than
thirty (30) business days after the Closing Date (the “Filing Date”), (i) use
its best efforts to file with the SEC a registration statement on Form S-3 (or
if not eligible for such form, on such other form on which the Company is
eligible) (the “Registration Statement”) with respect to the resale of the
Registerable Securities and use its best efforts to have such Registration
Statement declared effective by the SEC as soon thereafter as is practical and
(ii) cause such Registration Statement to remain effective for the Registration
Period.

          (b) If the Registration Statement is not filed on or prior to the Filing
Date, then for each successive thirty (30) day period beyond the Filing Date,
the Company shall pay to each Subscriber, in cash, as liquidated damages and
not as a penalty, one percent (1%) of the aggregate purchase price previously
paid by such Subscriber for Securities (or a pro rata amount for any periods
less than thirty (30) days) until such time as the filing is made; provided,
however, such Subscriber shall not be entitled to such cash payment if and to
the extent that such delays are the result of the failure of such Subscriber to
provide the Company with written information necessary to complete the
Registration Statement by the Filing Date.

     5.3 All Registration Expenses incurred in connection with any
registration, qualification, exemption or compliance pursuant to Section 5.2
shall be borne by the Company. All Selling Expenses relating to the sale of
securities registered by or on behalf of Holders shall be borne by such Holders
pro rata on the basis of the number of securities so registered.

     5.4 In the case of the registration, qualification, exemption or
compliance effected by the Company pursuant to this Agreement, the Company
shall, upon reasonable request, inform each Holder as to the status of such
registration, qualification, exemption and compliance. At its expense the
Company shall:

          (a) use its best efforts to keep such registration, and any qualification,
exemption or compliance under state securities laws which the Holders
reasonably request the

11

 

Company to obtain, continuously effective as to all
Registrable Securities until the Holders have completed the distribution
described in the registration statement relating thereto. The period of time
during which the Company is required hereunder to keep the Registration
Statement effective is referred to herein as “the Registration Period.”
Notwithstanding the foregoing, at the Company’s election, the Company may cease
to keep such registration, qualification, exemption or compliance effective
with respect to any Registrable Securities, and the registration rights of a
Holder with respect to such Registrable Securities shall expire, at such time
as the Holder may sell all Registrable Securities then held by such Holder
under Rule 144 under the Act in a three-month period, but this sentence shall
not relieve the Company of any obligation to comply with this Section V as to
any shares of Common Stock issuable upon exercise of the Placement Warrants;

          (b) advise the Holders (or in the case of (ii) below, to advise the
Placement Agent):

               (i) when the Registration Statement or any amendment thereto has been
filed with the SEC and when the Registration Statement or any post-effective
amendment thereto has become effective;

               (ii) of any request by the SEC for amendments or supplements to the
Registration Statement or the prospectus included therein or for additional
information;

               (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for such purpose;

               (iv) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Registrable Securities included therein
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose; and

               (v) subject to the limitations set forth in Section 5.7(b)(ii) hereof, of
the happening of any event that requires the making of any changes in the
Registration Statement or the prospectus so that, as of such date, the
statements therein are not misleading and do not omit to state a material fact
required to be stated therein or necessary to make the statements therein (in
the case of the prospectus, in the light of the circumstances under which they
were made) not misleading;

          (c) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of any Registration Statement at the earliest
possible time;

          (d) furnish to each Holder, without charge, at least one copy of such
Registration Statement and any post-effective amendment or supplement thereto,
including
financial statements and schedules, and, if the Holder so requests in writing,
all exhibits (excluding those incorporated by reference) in the form filed with
the SEC;

12

 

          (e) during the Registration Period, deliver to each Holder, without
charge, a reasonable number of copies of the prospectus included in such
Registration Statement and any amendment or supplement thereto as such Holder
may reasonably request; and the Company consents to the use, consistent with
the provisions hereof, of the prospectus and any amendment or supplement
thereto by each of the selling Holders of Registrable Securities in connection
with the offering and sale of the Registrable Securities covered by the
prospectus and any amendment or supplement thereto;

          (f) during the Registration Period, deliver to each Holder, without
charge, (i) as soon as practicable (but in the case of the annual report of the
Company to its stockholders, within 120 days after the end of each fiscal year
of the Company) one copy of: (A) its annual report to its stockholders, if any
(which annual report shall contain financial statements audited in accordance
with generally accepted accounting principles in the United States of America
by a firm of certified public accountants of recognized standing); (B) if not
included in substance in its annual report to stockholders, its annual report
on Form 10-K (or similar form); (C) a copy of the full Registration Statement
(excluding exhibits); (ii) upon reasonable request, all exhibits excluded by
the parenthetical to the immediately preceding clause (C); and (iii) such other
documents as may be reasonably requested.

          (g) prior to any public offering of Registrable Securities pursuant to the
Registration Statement, register or qualify or obtain an exemption for the
offer and sale under the securities or blue sky laws of such jurisdictions as
any such Holders reasonably request in writing, provided that the Company shall
not for any such purpose be required to qualify generally to transact business
as a foreign corporation in any jurisdiction where it is not so qualified or to
consent to general service of process in any such jurisdiction, and do any and
all other acts or things reasonably necessary or advisable to enable the offer
and sale in such jurisdictions of the Registrable Securities covered by the
Registration Statement;

          (h) cooperate with the Holders to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold
pursuant to the Registration Statement free of any restrictive legends to the
extent not required at such time and in such denominations and registered in
such names as Holders may request at least five (5) business days prior to
sales of Registrable Securities pursuant to the Registration Statement;

          (i) upon the occurrence of any event contemplated by Section 5.4(b)(v)
above, the Company shall promptly prepare a post-effective amendment to the
Registration Statement or a supplement to the related prospectus, or file any
other required document so that, as thereafter delivered to purchasers of the
Registrable Securities included therein, the prospectus will not include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and

          (j) use its best efforts to comply with all applicable rules and
regulations of the SEC, and make generally available to the Holders not later
than 45 days (or 90 days if the fiscal quarter is the fourth fiscal quarter)
after the end of its fiscal quarter in which the

13

 

first anniversary date of the
effective date of the Registration Statement occurs, an earnings statement
satisfying the provisions of Section 11(a) of the Act.

     5.5 The Holders shall have no right to take any action to restrain, enjoin
or otherwise delay any registration pursuant to Section 5.2 hereof as a result
of any controversy that may arise with respect to the interpretation or
implementation of this Agreement.

     5.6 (a) To the extent permitted by law, the Company shall indemnify each
Holder, each underwriter of the Registrable Securities and each person
controlling such Holder and each such underwriter within the meaning of Section
15 of the Act, with respect to which any registration, qualification or
compliance has been sought pursuant to this Agreement, against all claims,
losses, expenses, costs, damages and liabilities (or action in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened (subject to Section 5.6(c) below), arising
out of or based on (i) any untrue statement (or alleged untrue statement) of a
material fact contained in any registration statement, prospectus or offering
circular, or any amendment or supplement thereof, incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances in which they were made, or (ii) any violation or alleged
violation by the Company of the Act, the Exchange Act, or any rule or
regulation promulgated under the Act or the Exchange Act, and shall reimburse
each Holder, each underwriter of the Registrable Securities and each person
controlling such Holder and each such underwriter, for reasonable legal and
other expenses, in connection with investigating or defending any such claim,
loss, damage, liability or action as and when incurred; provided that the
Company shall not be liable in any such case to the extent that any untrue
statement or omission or allegation thereof is made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Holder or underwriter and stated to be specifically for use in preparation
of such registration statement, prospectus or offering circular; provided that
the Company shall not be liable in any such case where the claim, loss, damage
or liability arises out of or is related to the failure of the Holder to comply
with the covenants and agreements contained in Section 5.7 hereof, and except
that the foregoing indemnity agreement is subject to the condition that,
insofar as it relates to any such untrue statement or alleged untrue statement
or omission or alleged omission made in the preliminary prospectus but
eliminated or remedied in the amended prospectus on file with the SEC at the
time the registration statement becomes effective or in the amended prospectus
filed with the SEC pursuant to Rule 424(b) of the Act or in the prospectus
subject to completion under Rule 434 of the Act, which together meet the
requirements of Section 10(a) of the Act (the “Final Prospectus”), such
indemnity agreement shall not inure to the benefit of any such Holder, any such
underwriter or any such controlling person, if a copy of the Final Prospectus
furnished by the Company to the Holder for delivery was not furnished to the
person or entity asserting the loss, liability, claim or damage at or prior to
the time such furnishing is required by the Act and the Final Prospectus would
have cured the defect giving rise to such loss, liability, claim or damage.
Notwithstanding any provision herein to the contrary, the Company shall
reimburse each Holder, upon such Holder’s demand, for all
reasonably necessary expenses and costs which are incurred, as and when
incurred, by such Holder as a result of the indemnification claims described in
this Section 5.6(a). Such demand may be made from time to time prior to
resolution of the claim. In no event shall the Company

14

 

be liable for the
expenses and costs of more than one attorney on behalf of the Holders unless in
the reasonable judgement of a Holder, based upon written advice of its
counsel, a conflict of interest exists between the Holders with respect to such
claims, in which case the Company shall reimburse the Holders for additional
attorneys.

          (b) Each Holder will severally, if Registrable Securities held by such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers, each underwriter of the Registrable Securities and
each person who controls the Company and each underwriter of the Registrable
Securities within the meaning of Section 15 of the Act, against all claims,
losses, expenses, costs, damages and liabilities (or actions in respect
thereof), including any of the foregoing incurred in settlement of any
litigation, commenced or threatened (subject to Section 5.6(c) below), arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any registration statement, prospectus or offering
circular, or any amendment or supplement thereof, incident to any such
registration, qualification or compliance or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances in which they were made, and will reimburse the Company, such
directors and officers, each underwriter of the Registrable Securities and each
person controlling the Company and each underwriter of the Registrable
Securities for reasonable legal and any other expenses or costs reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action as incurred, in each case to the extent, but only
to the extent, that such untrue statement or omission or allegation thereof is
made in reliance upon, and in conformity with, written information furnished to
the Company by or on behalf of the Holder and stated to be specifically for use
in preparation of such registration statement, prospectus or offering circular;
provided that the indemnity shall not apply to the extent that such claim,
loss, damage or liability results from the fact that a current copy of the
prospectus or offering circular was not made available to the Holder and such
current copy of the prospectus or offering circular would have cured the defect
giving rise to such loss, claim, expense, costs, damage or liability.
Notwithstanding the foregoing, in no event shall a Holder be liable for any
such claims, losses, expenses, costs, damages or liabilities in excess of the
proceeds received by such Holder in that offering, except in the event of fraud
by such Holder.

          (c) Each party entitled to indemnification under this Section 5.6 (the
“Indemnified Party”) shall give notice to the party required to provide
indemnification (the “Indemnifying Party”) promptly after such Indemnified
Party has actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of any such claim
or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or litigation,
shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense with its own counsel at such Indemnified Party’s expense unless the
named parties to any proceeding covered hereby (including any impleaded
parties) include both the Company or any others the Company may designate and
one
or more Indemnified Persons, and representation of the Indemnified Persons and
such other parties by the same counsel would be inappropriate due to actual or
potential differing interests between them, and provided further that the
failure of any Indemnified Party to give notice as

15

 

provided herein shall not
relieve the Indemnifying Party of its obligations under this Agreement, unless
such failure is materially prejudicial to the Indemnifying Party in defending
such claim or litigation. An Indemnifying Party shall not be liable for any
settlement of an action or claim effected without its written consent (which
consent will not be unreasonably withheld).

          (d) If the indemnification provided for in this Section 5.6 is held by a
court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, liability, claim, damage, cost or expense referred to
therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party thereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage, cost or
expense in such proportion as is appropriate to reflect the relative fault of
the Indemnifying Party on the one hand and of the Indemnified Party on the
other in connection with the statements or omissions which resulted in such
loss, liability, claim, damage, cost or expense as well as any other relevant
equitable considerations. The relative fault of the Indemnifying Party and of
the Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied or which
should have been supplied by the Indemnifying Party or by the Indemnified Party
and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

     5.7 (a) Subject to the limitations set forth in Section 5.7(b)(ii) below,
upon receipt of any notice from the Company of the happening of any event
requiring the preparation of a supplement or amendment to a prospectus relating
to Registrable Securities so that, as thereafter delivered to the Holders, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, each Holder shall forthwith discontinue
disposition of Registrable Securities pursuant to the registration statement
contemplated by Section 5.2 until its receipt of copies of the supplemented or
amended prospectus from the Company and, if so directed by the Company, each
Holder shall deliver to the Company all copies, other than permanent file
copies then in such Holder’s possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such notice.

          (b) Any Holder which owns five percent (5%) or more (and with respect to
5.7(b)(ii), “any Holder”) of the Company’s outstanding Common Stock shall
suspend, upon request of the Company, any disposition of Registrable Securities
pursuant to the Registration Statement and prospectus contemplated by Section
5.2 during (i) any period not to exceed one 180-day period within any one
12-month period the Company requires in connection with an underwritten
offering of equity securities and (ii) any period, not to exceed two 45-day
periods within any twelve month period, when the Company determines in good
faith that offers and sales pursuant thereto should not be made by reason of
the presence of material undisclosed circumstances or developments with respect
to which the disclosure that would be required in such a prospectus is
premature, would have an adverse effect on the Company or is otherwise
inadvisable.

          (c) As a condition to the inclusion of its Registrable Securities, each
Holder shall furnish to the Company such information regarding such Holder, the
securities of

16

 

the Company owned beneficially or of record by such Holder and
the distribution proposed by such Holder as the Company may request in writing
because it is required in connection with any registration, qualification or
compliance referred to in this Section V.

          (d) With respect to any sale of Registrable Securities pursuant to a
Registration Statement filed pursuant to this Section V, each Holder hereby
covenants with the Company not to make any sale of the Registrable Securities
without effectively causing the prospectus delivery requirements under the Act
to be satisfied.

          (e) Each Holder acknowledges and agrees that the Registrable Securities
sold pursuant to the Registration Statement described in this Section are not
transferable on the books of the Company unless the stock certificate submitted
to the transfer agent evidencing such Registrable Securities is accompanied by
a certificate reasonably satisfactory to the Company to the effect that (i) the
Registrable Securities have been sold in accordance with such Registration
Statement and (ii) the requirement of delivering a current prospectus has been
satisfied.

          (f) Each Holder shall not take any action with respect to any distribution
deemed to be made pursuant to such registration statement, which would
constitute a violation of Regulation M under the Exchange Act or any other
applicable rule, regulation or law.

          (g) At the end of the period during which the Company is obligated to keep
the Registration Statement current and effective as described above, the
Holders of Registrable Securities included in the Registration Statement and
the shares underlying the Placement Warrants shall discontinue sales of shares
pursuant to such Registration Statement upon receipt of notice from the Company
of its intention to remove from registration the shares covered by such
Registration Statement which remain unsold.

     5.8 With a view to making available to the Holders the benefits of certain
rules and regulations of the SEC which at any time permit the sale of the
Registrable Securities to the public without registration, the Company shall
use its reasonable best efforts:

          (a) to make and keep public information available, as those terms are
understood and defined in Rule 144 under the Act, at all times;

          (b) to file with the SEC in a timely manner all reports and other
documents required of the Company under the Exchange Act; and

          (c) so long as a Holder owns any Registrable Securities, to furnish to
such Holder upon any reasonable request a written statement by the Company as
to its compliance with Rule 144 under the Act, and of the Exchange Act, and a
copy of the most recent annual or quarterly report of the Company, and such
other reports and documents of the
Company as such Holder may reasonably request in availing itself of any rule or
regulation of the SEC allowing a Holder to sell any such securities without
registration.

17

 

     5.9 With the written consent of the Company and the Holders holding a
majority of the Registerable Securities that are then outstanding, any
provision of this Section V may be waived (either generally or in a particular
instance, either retroactively or prospectively and either for a specified
period of time or indefinitely) or amended. Upon the effectuation of each such
waiver or amendment, the Company shall promptly give written notice thereof to
the Holders, if any, who have not previously received notice thereof or
consented thereto in writing.

     5.10 The rights and obligations of the Holders under this Section V may
not be assigned or transferred to or assumed by any transferee or assignee
except (i) to a transferee that acquires at least 20% of such Holder’s
Registerable Securities or (ii) to an Affiliate or limited or general partner
of a Holder; provided that such transfer was not in violation of this Agreement
or the Securities Laws.

VI. MISCELLANEOUS

     6.1 Any notice or other communication given hereunder shall be deemed
sufficient in writing and sent by (a) telecopy or facsimile at the address or
number designated below (if delivered on a business day during normal business
hours where such notice is to be received); or (b) registered or certified
mail, return receipt requested, or delivered by hand against written receipt
therefor, addressed to Bioject Medical Technologies Inc., 7620 S.W. Bridgeport
Road, Portland, Oregon 97224, Facsimile: (503) 620-6431, Attention: James C.
O’Shea, with a copy to Leerink Swann & Company, 60 State Street, 15th Floor,
Boston, Massachusetts 02019, Facsimile (617) 918-4724, Attention: Stuart R.
Barich. Notices shall be deemed to have been given or delivered on the date of
mailing, except notices of change of address, which shall be deemed to have
been given or delivered when received.

     6.2 Except as set forth in Section 5.9, this Agreement shall not be
changed, modified or amended except by a writing signed by the parties to be
charged, and this Agreement may not be discharged except by performance in
accordance with its terms or by a writing signed by the party to be charged.

     6.3 Upon the execution and delivery of this Agreement by the Subscriber,
this Agreement shall become a binding obligation of the Subscriber with respect
to the purchase of Securities as herein provided, subject to acceptance by the
Company and the Placement Agent; subject, however, to the right hereby reserved
to the Company to enter into the same agreements with other subscribers and to
add and/or delete other persons as subscribers.

     6.4 Notwithstanding the place where this Agreement may be executed by any
of the parties hereto, the parties expressly agree that all the terms and
provisions hereof shall be construed in accordance with and governed by the
laws of the State of Oregon without regard to principles of conflicts of law.

     6.5 The holding of any provision of this Agreement to be invalid or
unenforceable by a court of competent jurisdiction shall not affect any other
provision of this Agreement, which shall remain in full force and effect. If
any provision of this Agreement shall be declared by a court of competent
jurisdiction to be invalid, illegal or incapable of being

18

 

enforced in whole or
in part, such provision shall be interpreted so as to remain enforceable to the
maximum extent permissible consistent with applicable law and the remaining
conditions and provisions or portions thereof shall nevertheless remain in full
force and effect and enforceable to the extent they are valid, legal and
enforceable, and no provisions shall be deemed dependent upon any other
covenant or provision unless so expressed herein.

     6.6 It is agreed that a waiver by either party of a breach of any
provision of this Agreement shall not operate, or be construed, as a waiver of
any subsequent breach by that same party.

     6.7 The parties agree to execute and deliver all such further documents,
agreements and instruments and take such other and further action as may be
necessary or appropriate to carry out the purposes and intent of this
Agreement.

     6.8 This Agreement may be executed in two or more counterparts each of
which shall be deemed an original, but all of which shall together constitute
one and the same instrument.

     6.9 The Subscriber agrees not to issue any public statement with respect
to the Subscriber’s investment or proposed investment in the Company or the
terms of any agreement or covenant between them and the Company without the
Company’s prior written consent, except such disclosures as may be required
under applicable law or under any applicable order, rule or regulation.

     6.10 Nothing in this Agreement shall create or be deemed to create any
rights in any person or entity not a party to this Agreement, except for the
holders of Registrable Securities.

     6.11 Any pronoun herein shall include all genders and/or the plural or
singular as appropriate from the context.

19

 

Name: ________________________

VII. CONFIDENTIAL INVESTOR QUESTIONNAIRE

     7.1 The Subscriber represents and warrants that he, she or it comes within
one category marked below, and that for any category marked, he, she or it has
truthfully set forth, where applicable, the factual basis or reason the
Subscriber comes within that category. ALL INFORMATION IN RESPONSE TO THIS
SECTION VII WILL BE KEPT STRICTLY CONFIDENTIAL. The undersigned agrees to
furnish any additional information which the Company deems necessary in order
to verify the answers set forth below.

	 	 	 	 
	Category A ___	 	
The undersigned is an individual (not a partnership, corporation,
etc.) whose individual net worth, or joint net worth with his or her
spouse, presently exceeds $1,000,000.
	 
	 	 	 	
Explanation. In calculating net worth you may
include equity in personal property and real
estate, including your principal residence, cash,
short-term investments, stock and securities.
Equity in personal property and real estate should
be based on the fair market value of such property
less debt secured by such property.
	 
	Category B ___	 	
The undersigned is an individual (not a partnership, corporation,
etc.) who had an individual income in excess of $200,000 in each of the
two most recent years, or joint income with his or her spouse in excess of
$300,000 in each of those years (in each case including foreign income,
tax exempt income and full amount of capital gains and losses but
excluding any income of other family members and any unrealized capital
appreciation) and has a reasonable expectation of reaching the same income
level in the current year.
	 
	Category C ___	 	
The undersigned is a director or executive officer of the Company.
	 
	Category D ___	 	
The undersigned is a bank; a savings and loan association; insurance
company; registered investment company; registered business development
company; licensed small business investment company or “SBIC”; or employee
benefit plan within the meaning of Title 1 of Employee Retirement Income
Security Act or “ERISA” and (a) the investment decision is made by a plan
fiduciary which is either a bank, savings and loan association, insurance
company or registered investment advisor, or (b) the plan has total assets
in excess of $5,000,000 or is a self-directed plan with investment
decisions made solely by persons that are accredited investors.
	 	 	
     
	 	 	

 

(describe entity)

20

 

	 	 	 
	Category E ___	 	
The undersigned is a private business development company as defined
in section 202(a)(22) of the Investment Advisors Act of 1940.
	 	 	
     
	 	 	

 

(describe entity)
	 
	Category F ___	 	
The undersigned is either a corporation, partnership, Massachusetts
business trust, or nonprofit organization within the meaning of Section
501(c)(3) of the Internal Revenue Code, in each case not formed for the
specific purpose of acquiring the Securities and with total assets in
excess of $5,000,000.
	 	 	
     
	 	 	

 

(describe entity)
	 
	Category G ___	 	
The undersigned is a trust with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring
the Securities where the purchase is directed by a
“sophisticated person” as defined in Regulation
506(b)(2)(ii) under the Act.
	 
	Category H ___	 	
The undersigned hereby certifies that it is an accredited
investor because all of its equity owners are accredited
investors. The Company, in its sole discretion, may request
information regarding the basis on which such equity owners
are accredited.
	 
	Category I ___	 	
The undersigned hereby certifies that it is an accredited
investor because it has total assets in excess of $5,000,000
and was not formed for the specific purpose of acquiring the
Securities.
	 
	Category J ___	 	
The undersigned is not within any of the categories above and
is therefore not an accredited investor.

The Company will notify a prospective Subscriber whether such Subscriber is
eligible to purchase Securities pursuant to this Agreement (and the Company, in
its sole discretion, retains the right to accept or reject all such purchases).
The undersigned agrees that it will notify the Company at any time on or prior
to the Closing Date in the event that the representations and warranties in
this Investor Questionnaire shall cease to be true, accurate and complete.

21

 

     7.2 SUITABILITY (please answer each question)

(a)  For an individual Subscriber, please describe your current employment,
including the company by which you are employed and its principal business:

 

 

 

 

(b)  For an individual Subscriber, please describe any college or graduate
degrees held by you:

 

 

 

 

(c)  For all Subscribers, please list types of prior investments:

 

 

 

 

(d)  For all Subscribers, please state whether you have participated in other
private placements before:

YES_______       NO_______

(e)  If your answer to question (d) above was “YES”, please indicate frequency
of such prior participation in private placements of:

	 	 	 	     	 	     	 
	 	 	 	 	 	 	Biotechnology,
	 	 	 	 	 	 	Pharmaceutical and
	 	 	Public	 	Private	 	Other Life Science
	 	 	Companies	 	Companies	 	Companies*
	 	 	
	 	
	 	

	Frequently	 	
     
	 	     
	 	     
	 	 	
	 	
	 	

	Occasionally	 	
     
	 	     
	 	     
	 	 	
	 	
	 	

	Never	 	
     
	 	     
	 	     
	 	 	
	 	
	 	

     *indicate how many companies, whether public or private, are in the
biotechnology, pharmaceutical or other life sciences sectors.

22

 

(f)  For an individual Subscriber, do you expect your current level of income to
significantly decrease in the foreseeable future?

YES_______       NO_______

(g)  For trust, corporate, partnership and other institutional Subscribers, do
you expect your total assets to significantly decrease in the foreseeable
future?

YES_______       NO_______

(h)  For all Subscribers, do you have any other investments or contingent
liabilities which you reasonably anticipate could cause you to need sudden cash
requirements in excess of cash readily available to you?

YES_______       NO_______

(i)  For all Subscribers, are you familiar with the risk aspects and the
non-liquidity of investments such as the securities for which you seek to
subscribe?

YES_______       NO_______

(j)  For all Subscribers, do you understand that there is no guarantee of
financial return on this investment and that you run the risk of losing your
entire investment?

YES_______       NO_______

     7.3 MANNER IN WHICH TITLE IS TO BE HELD. (circle one)

	 	 	 
	(a)	 	
Individual Ownership
	(b)	 	
Community Property
	(c)	 	
Joint Tenant with Right of
Survivorship (both parties
must sign)
	(d)	 	
Partnership*
	(e)	 	
Tenants in Common
	(f)	 	
Company*
	(g)	 	
Trust*
	(h)	 	
Other

     *If Securities are being subscribed for by an entity, the attached
Certificate of Signatory must also be completed.

23

 

     7.4 NASD AFFILIATION.

Are you affiliated or associated with an NASD member firm (please check one)?

YES _________       NO __________

If yes, please describe:**

     **If Subscriber is a Registered Representative with an NASD member firm,
have the
following acknowledgment signed by the appropriate party:

The undersigned NASD member firm acknowledges receipt of the notice
required by Article 3, Sections 28(a) and (b) of the Rules of Fair
Practice.

	 	

Name of NASD Member Firm	 

	 	By:	 	 
	 	 	

Authorized Officer — Signature	 

	 	

Authorized Officer — Printed Name	 

	 	Date:	 	, 2001
	 	 	
	 

24

 

     7.5 STOCK OWNERSHIP

Do you beneficially own any shares of the Company’s Common Stock or any
securities convertible into or exercisable for shares of the Company’s Common
Stock?

YES _________       NO __________

If yes, please describe, including number of shares:

     7.6 COMPANY RELIANCE ON THIS QUESTIONNAIRE

The undersigned is informed of the significance to the Company of the foregoing
representations and answers contained in this Section VII and such answers have
been provided under the assumption that the Company and its counsel will rely
on them.

25

 

	 	 	 	 	 
	SIGNATURE PAGE	 	Date Signed: _____________ , 2001
	 
	Number of shares:	 	 	 	     
	 	 	 	

	Multiplied by Offering Price per share:	 	
x
	$	 
	 	 	 	 	

	Equals subscription amount:	 	
=
	$	 
	 	 	 	 	

	 	 	 
	
	 	

	Signature	 	
Second Signature (if purchasing jointly)
	 
	
	 	

	Printed Name	 	
Printed Second Name
	 
	
	 	

	Entity Name	 	
Entity Name
	 
	
	 	

	Address	 	
Address
	 
	
	 	

	City, State and Zip Code	 	
City, State and Zip Code
	 
	
	 	

	Telephone-Business	 	
Telephone — Business
	 
	
	 	

	Facsimile-Business	 	
Facsimile — Business
	 
	
	 	

	Tax ID # or Social Security #	 	
Tax ID # or Social Security #

	 	 
	Name in which securities should be issued:	 
	 	

	 	 
	Leerink Swann & Company Account Number:	 
	 	

26

 

This Subscription Agreement is agreed to and accepted as of ______________ , 2001.

	 	 
	 	
BIOJECT MEDICAL TECHNOLOGIES INC.
	 
	 	By:
	 
	 	

	 	
Name: James C. O’Shea

Title: Chairman and Chief Executive Officer

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CERTIFICATE OF SIGNATORY

(To be completed if Securities are being subscribed for by an entity)

     I, _________________________________, am the ___________________________________

of _________________________________________________ (the “Entity”).

     I certify that I am empowered and duly authorized by the Entity to execute
and carry out the terms of the Subscription Agreement and to purchase and hold
the Securities, and certify further that the Subscription Agreement has been
duly and validly executed on behalf of the Entity and constitutes a legal and
binding obligation of the Entity.

     IN WITNESS WHEREOF, I have set my hand this ____ day of ____, 2001.

	 	

(Signature)

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EXHIBIT A – RISK FACTORS

     An investment in the Securities offered hereby is highly speculative in
nature, involves a high degree of risk and should not be purchased by persons
who cannot afford a loss of their entire investment. Each prospective investor
should consider carefully the risks inherent in and affecting both the business
of the Company and the value of the Securities and speculative factors
including, without limitation, the following risk factors, as well as other
information contained in this Agreement and filings of the Company with the SEC
before making an investment in the Securities.

     RESTRICTIONS ON TRANSFERABILITY

     The Shares have not been registered under the Securities Act. Although
the Company has an agreement to register such securities for resale by
investors, there can be no assurance that a registration statement will be
declared effective by the SEC. Without an effective registration statement,
prior to a transfer the Company may require an opinion of counsel reasonably
satisfactory to the Company that neither the sale nor the proposed transfer
results in a violation of the Securities Act or any applicable state securities
or “blue sky” laws, and a written agreement by any subsequent transferee that
such party agrees to be bound by the terms of any agreement that may be entered
into between the investors and the Company in connection with the Offering.

     NO PAYMENT OF DIVIDENDS

     The Company has never paid and does not intend to pay any dividends on its
Common Stock in the future. The Company intends to retain any earnings to fund
operations and future growth.

     NO MINIMUM OFFERING COMMITMENT

     Because the Offering is being made on a “best efforts” basis, rather than
a “firm commitment” basis, no assurance can be given that any sales of the
Securities will be made or that the Offering proceeds will be sufficient to
effectively implement the courses of action identified in the “Use of Proceeds”
section.

     FACTORS AFFECTING FUTURE RESULTS OF THE COMPANY

FOR THE PURPOSES OF THE FOLLOWING RISK FACTORS, THE USE OF THE TERMS “WE”,
“OUR”, “US” OR WORDS OF SIMILAR EFFECT SHALL REFER TO THE COMPANY.

If our products are not accepted by the market, our business could fail. Our
success will depend on market acceptance of our needle-free injection drug
delivery systems, the Biojector 2000 system and the Vitajet system and on
market acceptance of other products under development. If our products do not
achieve market acceptance, our business could fail. Currently, the dominant
technology used for intramuscular and subcutaneous injections is the
hollow-needle syringe. Use of the Biojector 2000 system for intramuscular and
subcutaneous injections eliminates the risk associated with needle syringes;
however, the cost per injection is significantly higher. The Biojector 2000,
the Iject system, the Vitajet system or any of our products under development
may be unable to compete successfully with needle-syringes. A previous
needle-free injection system manufactured by us did not achieve market
acceptance and is no longer being marketed.

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We may be unable to enter into additional strategic corporate licensing and
supply agreements or maintain existing agreements, which could cause our
business to suffer. A key component of our sales and marketing strategy is to
enter into licensing and supply arrangements with leading pharmaceutical and
biotechnology companies for whose products our technology provides either
increased medical effectiveness or a higher degree of market acceptance. If we
cannot enter into these agreements on terms favorable to us or at all, our
business may suffer. In January 1995, we entered into an agreement with
Hoffman La Roche Pharmaceuticals, whereby the parties anticipated that the
product development phase of the agreement would develop into a supply and
distribution agreement between us and Roche. In June 1999, Roche advised us
that due to a longer and more costly than expected regulatory process to gain
clearance to use the B-2020 in conjunction with Roche’s products, Roche had
changed its marketing strategy. In making that change in marketing strategy,
Roche abandoned its exclusive distribution rights to the B-2020 and did not
seek a supply of the B-2020 from us. In July 1998, we entered into an
agreement with Merck & Co., whereby the parties anticipated that the initial
July 1998 agreement would lead to a long-term licensing and supply agreement
between the two companies. In February 1999, Merck & Co. advised us that it
would not continue, at that time, to pursue exclusive license to or supply of
our products. Both of these agreements resulted in significant short-term
revenue. Neither agreement developed into the long-term revenue stream
anticipated by our strategic partnering strategy. We may be unable to enter
into future licensing or supply agreements with major pharmaceutical or
biotechnology companies. Even if we enter into these agreements, they may not
result in sustainable long-term revenues which, when combined with revenues
from product sales, could be sufficient for us to operate profitably.

We have a history of losses and may never be
profitable. Since our formation
in 1985, we have incurred significant annual operating losses and negative cash
flow. At September 30, 2001, we had an accumulated deficit of $67 million.
$54 million of the accumulated deficit relates to losses incurred in the
needle-free segment of our operations. Approximately $13 million of the
accumulated deficit relates to losses from our operations to develop the blood
glucose monitoring technology. We may never be profitable, which could have a
negative effect on our stock price. Historically, our revenues have been
derived primarily from licensing and technology fees and from limited product
sales. The product sales were principally sales to dealers in order to stock
their inventories and to Homecare Management Inc., a company that we no longer
sell to. More recently, we have sold our products to end-users, primarily to
public health clinics for vaccinations and to nursing organizations for flu
immunizations. We have not attained profitability at these sales levels. We
may never be able to generate significant revenues or achieve profitability.

We have reduced our sales force and may be unable to penetrate targeted market
segments. In late fiscal 1998 and early fiscal 1999, we dramatically reduced
our direct product sales force from one national and five district sales
managers and we currently have one national sales manager who is focused on
specifically targeted market segments. This reduced sales force may not have
sufficient resources to adequately penetrate one or more of the targeted market
segments. Further, if the sales force is successful in penetrating one or more
of the targeted market segments, we are unable to assure you that our products
will be accepted in those segments or that product acceptance will result in
product revenues which, together with revenues from corporate licensing and
supply agreements, will be sufficient for us to operate profitably.

We may never receive future royalties from the blood glucose monitoring
technology, which could cause our financial condition to suffer. In May
1999, rather than continue to fund the cost of its development, we entered into
negotiations to sell Marathon Medical Technologies Inc.’s blood glucose
monitoring technology, and certain fixed assets related to developing the
technology, to a third party. The sale was completed on June 30, 1999. The
terms of the sale of the blood glucose monitoring technology provide for us to
receive a royalty on net sales of future products, if any, which may be
developed from the licensed technology. The agreement calls for a royalty of
three percent of net sales until we have received total royalty payments of $10
million. The agreement then calls for royalty payments of one percent of net
sales thereafter. Future products may never be successfully developed from the
blood glucose monitoring technology, and if products are developed, they may
not be

30

 

commercially successful, which would mean that we would receive no future
royalties and this could cause our financial condition to suffer.

We will need additional financing in the future, and if we cannot obtain the
necessary financing our business could fail. To date, our revenues from
operations have not been sufficient to meet our cash requirements. As a result,
since our inception in 1985, we have financed our operations, working capital
needs and capital expenditures primarily from private placements of securities,
exercises of stock options and warrants, proceeds received from our initial
public offering in 1986, proceeds received from a public offering of Common
Stock in November 1993, licensing and technology revenues, equity investments
from Elan and Amgen, proceeds from the sale of the glucose monitoring
technology, proceeds received from a private placement of Common Stock in July
and August 2000, proceeds received from two private placements of Common Stock
in May and June 2001, and through sales of products. We do not have a credit
facility. We plan to fund our future cash requirements through revenues, debt,
and sales of equity securities. However, we may be unable to obtain the
financing sufficient to fund our business activities on favorable terms or at
all. Failure to obtain adequate financing would have a material adverse impact
on our business. In addition, sale of our equity securities on unfavorable
terms to meet our obligations could result in material dilution to the existing
shareholders.

We have outstanding convertible preferred stock, which is convertible into
Common Stock at prices which may be lower than market price at the time of
conversion which could result in dilution to existing Common Stock holders.
Our Common Stock is subject to the rights and preferences of the Series A and C
Convertible Preferred Stock, which may be converted into Common Stock at prices
which may be lower than market price at the time of conversion, causing
substantial dilution to existing holders of Common Stock. Each share of Series
A and Series C Convertible Preferred Stock is convertible into two shares of
Common Stock. In October, 2004, unless it is converted earlier by the holders
or redeemed by us, the shares of Series A and C Convertible Preferred Stock and
accrued but unpaid dividends on the Series A Convertible Preferred Stock
convert automatically into Common Stock.

     We have limited manufacturing experience, and may be unable to produce our
products at the unit costs necessary for the products to be competitive in the
market, which could cause our financial condition to suffer. We have limited
experience manufacturing our products in commercially viable quantities. We
have increased our production capacity for the Biojector 2000 system and the
Vitajet product line through automation of, and changes in, production methods,
in order to achieve savings through higher volumes of production. If we are
unable to do so, then our results of operations and financial condition could
suffer. The current cost per injection of the Biojector 2000 system and Vitajet
product line is substantially higher than that of traditional needle-syringes,
our principal competition. A key element of our business strategy has been to
reduce the overall manufacturing cost through automating production and
packaging. This automation is substantially complete. There can be no assurance
that we will achieve sales and manufacturing volumes necessary to realize cost
savings from volume production at levels necessary to result in significant
unit manufacturing cost reductions. Failure to do so will continue to make
competing with needle-syringes on the basis of cost very difficult and will
adversely affect our financial condition and results of operations. We may be
unable to successfully manufacture devices at a unit cost that will allow the
product to be sold profitably. Failure to do so would adversely affect our
financial condition and results of operations.

We are subject to extensive government regulation and must continue to comply
with these regulations or our business could suffer. Our products and
manufacturing operations are subject to extensive government regulation in both
the U.S. and abroad. If we cannot comply with these regulations, we may be
unable to distribute our products, which could cause our business to suffer or
fail. In the U.S., the development, manufacture, marketing and promotion of
medical devices are regulated by the Food and Drug Administration (“FDA”) under
the Federal Food, Drug, and Cosmetic Act (“FD&C”). In 1987, we received
clearance from the FDA under Section 510(k) of the FD&C to market a hand-held
CO2-powered needle-free injection system. The FD&C provides that new premarket
notifications under Section 510(k) of the FD&C are required to be filed when,
among other things, there is a major change or modification in the intended use
of a device or a change or

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modification to a legally marketed device that could significantly affect its
safety or effectiveness. A device manufacturer is expected to make the initial
determination as to whether the change to its device or its intended use is of
a kind that would necessitate the filing of a new 510(k) notification. Although
the Biojector 2000 system incorporates changes from the system with respect to
which our 1987 510(k) marketing clearance was received and expands its intended
use, we made the determination that these were not major changes or
modifications in intended use or changes in the device that could significantly
affect the safety or effectiveness of the device. Accordingly, we further
concluded that the 1987 510(k) clearance permitted us to market the Biojector
2000 system in the U.S. In June 1994, we received clearance from the FDA under
510(k) to market a version of our Biojector 2000 system in a configuration
targeted at high volume injection applications. In October 1996, we received
510(k) clearance for a needle-free disposable vial access device. In March
1997, we received additional 510(k) clearance for certain enhancements to our
Biojector 2000 system. In June 2000, we received 510(k) clearance for the
cool.click, a modified Vitajet. In March 2001, we received 510(k) clearance for
the SeroJet, a modified Vitajet. In April 2001, we received 501(k) clearance to
market a reconstitution kit and vial injector. The FDA may not concur with our
determination that our current and future products can be qualified by means of
a 510(k) submission.

     Future changes to manufacturing procedures could require that we file a
new 510(k) notification. Also, future products, product enhancements or
changes, or changes in product use may require clearance under Section 510(k),
or they may require FDA premarket approval (“PMA”) or other regulatory
clearances. PMAs and regulatory clearances other than 510(k) clearance
generally involve more extensive prefiling testing than a 510(k) clearance and
a longer FDA review process. Under current FDA policy, applications involving
pre-filled syringes would be evaluated by the FDA as drugs rather than devices,
requiring FDA new drug applications or abbreviated new drug applications.
Depending on the circumstances, drug regulation can be much more extensive and
time consuming than device regulation.

     FDA regulatory processes are time consuming and expensive. Product
applications submitted by the Company may not be cleared or approved by the
FDA. In addition, our products must be manufactured in compliance with Good
Manufacturing Practices as specified in regulations under the FD&C. The FDA has
broad discretion in enforcing the FD&C, and noncompliance with the FD&C could
result in a variety of regulatory actions ranging from product detentions,
device alerts or field corrections, to mandatory recalls, seizures, injunctive
actions, and civil or criminal penalties.

If we cannot meet international product standards, we will be unable to
distribute our products outside of the United States, which could cause our
business to suffer. Distribution of our products in countries other than the
U.S. may be subject to regulation in those countries. Failure to satisfy these
regulations would impact our ability to sell our products in these countries
and could cause our business to suffer. In January 1999, we received
certification from TUV Product Services for our quality system, which meets the
requirements of ISO 9001 and EN 46001. In November 1999, we received
certification from TUV Product Services for the applicable requirements of
EC-Directive 93/42/EEC Annex. II.3 Medical Device Directive. This certification
allows us to label our products with the CE Mark and sell them in the European
Community. We may be unable to continue to meet the standards of ISO 9001 or CE
Mark certification.

If the healthcare industry limits coverage or reimbursement levels, the
acceptance of our products could suffer. The price of our products exceeds
the price of needle-syringes and if coverage or reimbursement levels are
reduced, market acceptance of our products could be harmed. The healthcare
industry is subject to changing political, economic and regulatory influences
that may affect the procurement practices and operations of healthcare
facilities. During the past several years, the healthcare industry has been
subject to increased government regulation of reimbursement rates and capital
expenditures. Among other things, third party payers are increasingly
attempting to contain or reduce healthcare costs by limiting both coverage and
levels of reimbursement for healthcare products and procedures. Because the
price of the Biojector 2000 system and Vitajet product line exceeds the price
of a needle-syringe, cost control policies of third party payers, including

32

 

government agencies, may adversely affect acceptance and use of the Biojector
2000 system and Vitajet product line.

We are highly dependent on third-party relationships, and our business could
suffer if we cannot maintain these relationships. We are dependent on third
parties for distribution of the Biojector 2000 system to certain market
segments, for the manufacture of component parts, and for assistance with the
development and distribution of future application-specific systems. If we
cannot maintain these relationships, or if the third parties are unable to
provide the services we require, our business could suffer.

     Our current manufacturing processes for the Biojector 2000 jet injector
and disposable syringes as well as manufacturing processes to produce the
Vitajet consist primarily of assembling component parts supplied by outside
suppliers. Some of these components are currently obtained from single sources,
with some components requiring significant production lead times. In the past,
we have experienced delays in the delivery of certain components. To date, such
delays have not had a material adverse effect on our operations. We may
experience delays in the future, and these delays could have a material adverse
effect on our financial condition and results of operations.

     In the past, we have entered into agreements with certain major
pharmaceutical or biotechnology companies for development and distribution of
needle-free injection systems and for use of our needle-free injection systems
in conjunction with the pharmaceutical companies’ products. In all cases to
date, these companies have had the right to terminate those agreements at
certain phases as defined in the agreements. In several instances, those
agreements have been terminated before yielding sustained long-term licensing
or product sales revenues. Entering into agreements of this nature is an
important part of our overall business strategy. We may be unable to interest
any major pharmaceutical or biotechnology companies in entering into such
agreements. If interested parties are found, we may be unsuccessful at
negotiating and entering into long-term licensing and supply agreements with
the interested parties. Further, if such agreements are entered into, there can
be no assurance that the companies’ interest and participation in the
agreements and projects will continue and result in long-term, sustainable
revenues as contemplated by this aspect of our overall business strategy.
Failure to enter into future licensing and product supply agreements with major
pharmaceutical or biotechnology companies and failure of those future
agreements to result in significant, sustainable long-term revenues could
adversely affect our financial condition.

If we are unable to manage our growth, our results of operations could suffer.
If our products achieve market acceptance or if we are successful in entering
into product supply agreements with major pharmaceutical or biotechnology
companies, we expect to experience rapid growth. Such growth would require
expanded customer service and support, increased personnel, expanded
operational and financial systems, and implementing new and expanded control
procedures. We may be unable to attract sufficient qualified personnel or
successfully manage expanded operations. As we expand, we may periodically
experience constraints that would adversely affect our ability to satisfy
customer demand in a timely fashion. Failure to manage growth effectively could
adversely affect our financial condition and results of operations.

We may be unable to compete in the medical equipment field, which could cause
our business to fail. The medical equipment market is highly competitive and
competition is likely to intensify. If we cannot compete, our business will
fail. Our products compete primarily with traditional needle-syringes, “safety
syringes” and also with other alternative drug delivery systems. While we
believe our products provide a superior drug delivery method, there can be no
assurance that we will be able to compete successfully with existing or newly
developed drug delivery products. Many of our competitors have longer operating
histories as well as substantially greater financial, technical, marketing and
customer support resources. One or more of these competitors may develop an
alternative drug delivery system that competes more directly with our products,
and our products may be unable to compete successfully with such a product.

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We are dependent on a single technology, and if it cannot compete or find
market acceptance, our business will suffer. Our strategy has been to focus
our development and marketing efforts on our needle-free injection technology.
Focus on this single technology leaves us vulnerable to competing products and
alternative drug delivery systems. If our technology cannot find market
acceptance or cannot compete against other technologies, business will suffer.
We perceive that healthcare providers’ desire to minimize the use of the
traditional needle-syringe has stimulated development of a variety of
alternative drug delivery systems such as “safety syringes,” jet injection
systems, nasal delivery systems and transdermal diffusion “patches”. In
addition, pharmaceutical companies frequently attempt to develop drugs for oral
delivery instead of injection. While we believe that for the foreseeable future
there will continue to be a significant need for injections, alternative drug
delivery methods may be developed which are preferable to injection.

We rely on patents and proprietary rights to protect our proprietary
technology. We rely on a combination of trade secrets, confidentiality
agreements and procedures, and patents to protect our proprietary technologies.
We have been granted a number of patents in the United States and several
patents in other countries covering certain technology embodied in our current
jet injection system and certain manufacturing processes. Additional patent
applications are pending in the U.S. and certain foreign countries. The claims
contained in any patent application may not be allowed, or any patent or our
patents collectively may not provide adequate protection for our products and
technology. In the absence of patent protection, we may be vulnerable to
competitors who attempt to copy our products or gain access to our trade
secrets and know-how. In addition, the laws of foreign countries may not
protect our proprietary rights to this technology to the same extent as the
laws of the U.S. We believe we have independently developed our technology and
attempt to ensure that our products do not infringe the proprietary rights of
others. We know of no such infringement claims. However, any claims could have
a material adverse affect on our financial condition and results of operations.

If our products fail or cause harm, we could be subject to substantial product
liability, which could cause our business to suffer. Producers of medical
devices may face substantial liability for damages in the event of product
failure or if it is alleged the product caused harm. We currently maintain
product liability insurance and, to date, have experienced only one product
liability claim. There can be no assurance, however, that we will not be
subject to a number of such claims, that our product liability insurance would
cover such claims, or that adequate insurance will continue to be available to
us on acceptable terms in the future. Our business could be adversely affected
by product liability claims or by the cost of insuring against such claims.

We are highly dependent on our key employees, and our business could suffer if
they were to leave. Our success depends on the retention of our executive
officers, Mr. James O’Shea, Mr. John Gandolfo, Mr. Michael Temple, Dr. Richard
Stout, Mr. Michael Redmond, and other key employees. Competition exists for
qualified personnel and our success will depend, in part, on attracting and
retaining qualified personnel. Failure in these efforts could have a material
adverse effect on our business, financial condition or results of operations.

There are a large number of shares eligible for sale into the public market in
the near future, which may reduce the price of our Common Stock. The market
price of our Common Stock could decline as a result of sales of a large number
of shares of our Common Stock in the market, or the perception that such sales
could occur. We have a large number of shares of Common Stock outstanding and
available for resale beginning at various points in time in the future. These
sales also might make it more difficult for us to sell equity securities in the
future at a time and at a price that we deem appropriate. The shares of our
Common Stock currently outstanding will become eligible for sale without
registration pursuant to Rule 144 under the Securities Act, subject to certain
conditions of Rule 144. Certain holders of our Common Stock also have certain
demand and piggyback registration rights enabling them to register their shares
under the Securities Act for sale. We have registered approximately 11 million
shares for resale on Form S-3 registration statements, including approximately
3.3 million shares issuable upon exercise of warrants and 2.2 million shares
issuable upon conversion of preferred stock held by Elan Pharmaceutical
Investments, Ltd. In addition, we have approximately 1 million shares of Common
Stock reserved for issuance under our stock option plan. As of September 30,
2001,

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options to purchase approximately 1.3 million shares of Common Stock were
outstanding and will be eligible for sale in the public market from time to
time subject to vesting. These stock options generally have exercise prices
significantly below the current price of our Common Stock. The possible sale of
a significant number of these shares may cause the price of our Common Stock to
fall.

We may be unable to maintain our listing on Nasdaq, which could cause our stock
price to fall and decrease the liquidity of our Common Stock. Our Common
Stock is quoted on the Nasdaq SmallCap Market. If we cannot comply with the
continuing requirements, we may be delisted which could cause the stock price
to fall and decrease the liquidity of our Common Stock for existing
shareholders. There are a number of continuing requirements that must be met in
order for the Common Stock to remain eligible for quotation on the Nasdaq
SmallCap Market. The failure to meet the maintenance criteria in the future
could result in the delisting of our Common Stock from Nasdaq. In such event,
trading, if any, in the Common Stock may then continue to be conducted in the
non- Nasdaq over-the-counter market. As a result, an investor may find it more
difficult to dispose of or to obtain accurate quotations as to the market value
of our Common Stock. In addition, if the Common Stock were delisted from
trading on Nasdaq and the trading price of the Common Stock were less than
$5.00 per share, trading in the Common Stock would also be subject to the
requirements of certain rules promulgated under the Exchange Act, which require
additional disclosure by broker-dealers in connection with any trades involving
a stock defined as a penny stock. The additional burdens imposed on
broker-dealers may discourage broker-dealers from effecting transactions in
penny stocks, which could reduce the liquidity of the shares of Common Stock
and thereby have a material adverse effect on the trading market for the
securities.

Our stock price may be highly volatile, which increases the risk of securities
litigation. The market for our Common Stock and for the securities of other
early-stage, small market-capitalization companies has been highly volatile in
recent years. This increases the risk of securities litigation relating to such
volatility. We believe that factors such as quarter-to-quarter fluctuations in
financial results, reduction in the number of outstanding shares due to the
recent reverse stock split, new product introductions by us or our competition,
public announcements, changing regulatory environments, sales of Common Stock
by certain existing shareholders, substantial product orders and announcement
of licensing or product supply agreements with major pharmaceutical or
biotechnology companies could contribute to the volatility of the price of our
Common Stock, causing it to fluctuate dramatically. General economic trends
such as recessionary cycles and changing interest rates may also adversely
affect the market price of our Common Stock.

35

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