Document:

fy09_8k09-02exhibitapa.htm

    Exhibit
10.1

     

     

     

    ASSET
PURCHASE AGREEMENT

    

    

    BY
AND AMONG

    

    

    TEGAL
CORPORATION, A DELAWARE CORPORATION,

    

    ALCATEL
MICRO MACHINING SYSTEMS,

    A
FRENCH CORPORATION,

    

    AND

    

    ALCATEL
LUCENT,

    A
FRENCH CORPORATION,

    

    DATED

    

    SEPTEMBER
2, 2008

    

    
      
        
          
 

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    ASSET PURCHASE
AGREEMENT

     

    This
ASSET PURCHASE AGREEMENT
(the “Agreement”), is dated
as of September 2, 2008, by and among Tegal Corporation, a Delaware
corporation (“Buyer”), Alcatel
Micro Machining Systems, a French corporation (“AMMS”), and Alcatel
Lucent, a French corporation (“Alcatel” and together
with AMMS, “Sellers”, and each a
“Seller”).  Buyer
and Sellers are sometimes collectively referred to herein as the “Parties” and
individually as a “Party.”

     

    W I T N E S S E T
H:

     

    WHEREAS,
Sellers are conducting, inter alia, activities related to the Business (as this
term is defined herein);

     

    WHEREAS,
Buyer has conducted a due diligence review of the Business and related assets
and has attended various presentations of the management regarding this Business
and carried out site visits;

     

    WHEREAS,
Sellers desire to sell, and Buyer desires to purchase, certain assets used in
the Business on the terms and conditions set forth in this
Agreement;

     

    WHEREAS,
capitalized terms used and not otherwise defined herein shall have the meanings
set forth in Article IX hereof.

     

    NOW
THEREFORE, in consideration of the foregoing and the mutual representations,
warranties, covenants, agreements, terms and conditions contained herein, the
parties hereto do hereby agree as follows:

     

    ARTICLE
I 

     

    SALE;
CLOSING

     

    1.1 Transfer of
Assets by
AMMS.  Subject
to the terms and conditions set forth in this Agreement, AMMS will sell, assign,
transfer and deliver to Buyer free and clear of all Encumbrances, except for
Permitted Encumbrances, the following:

     

    (a) The
assets listed on Section 1.1(a) of Seller Disclosure Schedule;

     

    (b) The
research and development and demonstration equipment listed on Section 1.1(b) of Seller
Disclosure Schedule;

     

    (c) The
Intellectual Property, other than Patents and trademarks containing the name
Alcatel, that is exclusively used or held for use for the operation of the
Business with respect to the AMMS Products, all of which is listed on Section
1.1(c) of Seller Disclosure Schedule (the “AMMS Intellectual
Property,” and together with the Alcatel Assets, “Business Intellectual
Property”). 

     

    (d) All of
AMMS’ rights and interests in any documents, files, records, databases and
electronic systems containing customer information, product documentation,
marketing information and other commercial information pertaining to the Assets,
the AMMS Products and the operation of the Business, except to the extent which
such rights and interests constitute Business Intellectual Property (“Business
Documentation”); and

    

    (e) All of
the copyrights included in the AMMS Intellectual Property held by the Sellers,
for the duration of the legal protection provided by U.S., French or other
foreign legislations and foreign agreements (and any extensions thereof), with
the right of Buyer to represent, copy, modify and adapt, by any and all means,
known or unknown, such copyrights ((a) through (e), collectively referred to as
the “AMMS
Assets”).

    

    1.2 Alcatel
Assets.  Subject
to the terms and conditions set forth in this Agreement and the Intellectual
Property Agreement, Alcatel will sell, assign, transfer and deliver to Buyer
free and clear of all Encumbrances, except for Permitted Encumbrances, all
Patents exclusively used or held for use in the operation of the Business with
respect to the AMMS Products, all of which Patents are listed on Section 1.2 of
the Seller Disclosure Schedule (the “Alcatel Assets” and
together with the AMMS Assets, the “Assets”).

     

    1.3 Assets Not
Transferred

     

    .  Buyer
and Sellers acknowledge and agree that no Seller is selling, conveying,
transferring, delivering or assigning any rights whatsoever to the Excluded
Assets to Buyer, and Buyer is not purchasing, taking delivery of or acquiring
any rights whatsoever to the Excluded Assets from any Seller.

     

    1.4 Alcatel Micro Machining
Systems Mark and Logo.  Subject
to the terms and conditions set forth in this Agreement and the Trademark
License Agreement, Alcatel will grant to Buyer the right to use the name and
logo “Alcatel Micro Machining Systems” as a mark in connection with the
Business.

     

    1.5 Assignment and Assumption of
Certain Liabilities

     

    .  On
the Closing Date, each Seller shall sell, assign, transfer, convey and deliver
to Buyer, as of the Closing Date, all of such Seller’s right, title and interest
in and to the Assumed Liabilities.  On the Closing Date, Buyer shall
assume and agree to observe and perform all of each Seller’s duties,
obligations, terms, provisions and covenants of, and to pay and discharge when
due, all of each Seller’s right, title and interest in and to the Assumed
Liabilities sold, assigned, transferred, conveyed or delivered to
Buyer.

    

    1.6 Non-Assumption of Excluded
Liabilities.  Except
for the Assumed Liabilities, Buyer shall not assume, shall not take subject to
and shall not be liable for, any liabilities or obligations of any kind or
nature, whether absolute, contingent, accrued, known or unknown, of any Seller
or any Affiliate thereof (the “Excluded
Liabilities”).  Without limiting the generality of the prior
sentence, Excluded Liabilities shall include, without limitation:

     

    (a) All
Indebtedness of any Seller;

     

    (b) All
liabilities related directly or indirectly to any Seller’s indemnification
obligations in existence as of the Closing Date;

     

    (c) All
liabilities resulting from Actions and Orders affecting or related to any Seller
or arising out of or related to the conduct of the Business prior to the Closing
Date, including, without limitation, those actual, pending and threatened
Actions set forth in Section 3.10 of Seller
Disclosure Schedule;

     

    (d) All
liabilities arising out of or relating to the Excluded Assets;

     

    (e) All
liabilities of any Seller or its Affiliates, or otherwise imposed on the Assets
or with respect to the Business, in respect of any Tax, including without
limitation (i) any liability of any Seller or its Affiliates for the Taxes of
any other Person under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign Law), as a transferee or successor, by
contract or otherwise, and (ii) any Property Taxes or Business Taxes (taxe
professionnelle);

     

    (f) All
liabilities and obligations resulting from, relating to or arising out of any
former operations of the Business (including without limitation any former
property or facility owned or leased by any Seller) that have been discontinued
or disposed of prior to the Closing Date or any existing or remaining operations
of Seller on or after the Closing Date;

     

    (g) All
liabilities arising from defects in products manufactured or from services
performed by or on behalf of any Seller on or prior to the Closing
Date;

     

    (h) Any
liabilities of any Seller to any holders of the Equity Securities of such
Seller, including, without limitation, any Indebtedness to any holders of the
Equity Securities of such Seller;

     

    (i) All
liabilities and obligations (including, without limitation, liabilities for
compensation, wages, bonuses, sales commissions, licensing commissions, vacation
time and vacation pay, pay in lieu of vacation, severance pay and benefits or
liabilities under any Plans of a Seller or for any claim of unfair labor
practice or under state, foreign or local unemployment compensation or worker’s
compensation Laws) relating to current or former employees of any Seller or
under any employment agreement to which any Seller is a party;

     

    (j) All
liabilities and obligations of any Affiliate of any Seller;

     

    (k) All
debts, liabilities or obligations whatsoever, that do not arise out of or relate
to the Business or that do not otherwise arise out of or relate to the Assets;
and

     

    (l) All
debts, liabilities and obligations whatsoever (including, without limitation,
liabilities for payment of sale commissions or ongoing monthly maintenance
commissions) due as of the Closing Date.

     

    1.7 Purchase
Price.

     

    (a) Subject
to the terms and conditions set forth in this Agreement, Buyer agrees to
purchase and acquire the Assets from Sellers for a purchase price of five
million dollars (US$5,000,000), payable to AMMS as set forth in Section 1.7(b) below (in the
aggregate, the “Purchase
Price”).

     

    (b) The
Purchase Price shall be payable on the Closing Date as follows:

     

    (i) One
million dollars (US$1,000,000) shall be payable by means of a cash payment by
Buyer by wire transfer of immediately available funds to an account designated
by Sellers; and

     

    (ii) a number
of shares of Buyer Common Stock (“Delivered Shares”)
equal to the quotient of (x) $4,000,000 divided by (y) the average of the
closing sales prices of Buyer Common Stock as reported on the Nasdaq Capital
Market on the five (5) consecutive trading days immediately prior to (but
excluding) the Closing Date shall be delivered to AMMS (either by delivery of
physical stock certificate in the name of AMMS or as otherwise agreed to by the
Parties).

     

    (iii) Buyer
shall assume the Assumed Liabilities.

     

    (c) Sellers
shall qualify as goods exporters for VAT purposes in relation to the transfer of
the Assets and shall take all steps necessary to ensure that the delivery of the
Assets to Buyer is treated as a dispatch or transportation of goods outside the
European Community that is exempt from any VAT.

     

    (d) The
Purchase Price is exclusive of any customs duties in relation to the import of
the Assets into the United States. Should any customs duties apply, they shall
be paid by Buyer in addition to the Purchase Price.

     

    (e) Subject
to the penalties provided in Article 1837 of the French General Tax Code, Seller
and Buyer represent that the Purchase Price specified herein is the entirety of
the agreed price.  They acknowledge that they have been informed of
the penalties which would be incurred in the event that this declaration is
proven to be false and expressly undertake that this Agreement shall not be
amended by any side letter increasing the Purchase Price.  The Parties
acknowledge and declare that they have agreed exclusively between themselves on
the amount of the Purchase Price.

     

    1.8 Transfer Taxes; Closing
Costs.  

     

    (a) Sellers
and Buyer shall each bear and timely pay 50% of all transfer, documentary,
sales, use, valued-added, gross receipts, stamp, registration and other similar
transfer Taxes, and all recording or filing fees, notarial fees and other
similar costs of Closing, that may be imposed, payable, collectible or incurred
(“Transfer
Taxes”), in connection with the transfer and sale of the Assets as
contemplated by the terms of this Agreement.  Sellers will, at
Sellers’ expense, file all necessary Tax Returns and other documentation with
respect to any such Transfer Taxes and shall file such Tax Returns within the
time prescribed by applicable Law, and Buyer will join in the execution of any
such Tax Returns and other documentation.  Sellers shall provide Buyer
with evidence satisfactory to Buyer that such Transfer Taxes have been timely
paid by Sellers.  Buyer shall pay the fees and costs of recording or
filing all applicable conveyancing instruments described in Section 1.12(a).  For the avoidance of doubt, if any
Transfer Taxes are required to be paid by Buyer, Buyer shall be obliged to remit
such sum in cash to Seller in addition to the Purchase Price.

     

    (b) All
Transfer Taxes incurred in connection with the transfer of the Delivered Shares
as contemplated by the terms of this Agreement shall be borne and timely paid by
Sellers.  Sellers will, at their own expense, file all necessary Tax
Returns and other documentation with respect to any such Transfer Taxes and
shall file such Tax Returns within the time prescribed by applicable Law, and
Buyer will join in the execution of any such Tax Returns and other
documentation.  Sellers shall provide Buyer with evidence satisfactory
to Buyer that such Transfer Taxes have been timely paid by
Sellers.  Sellers shall pay the fees and costs of recording or filing
all applicable conveyancing instruments described in Section 1.12(a).

     

    1.9 Allocation of the Purchase
Price.

     

    (a) The
Purchase Price (plus Assumed Liabilities, to the extent properly taken into
account under the Code), shall be allocated among the Assets and the covenants
of Sellers under Article VII of this Agreement as set forth in a schedule (the
“Allocation
Schedule”) (the allocation set forth on the Allocation Schedule, the
“Allocation”).  The
Allocation shall, to the extent applicable, be prepared in accordance with
Section 1060 of the Code and corresponding provisions of U.S. state and local
Tax Law. The Allocation Schedule shall be agreed to by the parties no later than
the Closing Date. 

     

    (b) If the
Purchase Price is adjusted pursuant to Section 4.4(d), the Allocation shall be adjusted as mutually
agreed by Buyer and Sellers.

     

    (c) Buyer and
Sellers shall file all applicable Tax Returns consistent with the
Allocation.  Neither Buyer nor any Seller shall take any Tax position
inconsistent with such Allocation and neither Buyer nor any Seller shall agree
to any proposed adjustment to the Allocation by any Taxing authority without
first giving the other party prior written notice; provided, however, that nothing
contained herein shall prevent Buyer or any Seller from settling any proposed
deficiency or adjustment by any Taxing authority based upon or arising out of
the Allocation, and neither Buyer nor any Seller shall be required to litigate
before any court any proposed deficiency or adjustment by any taxing authority
challenging such Allocation.

     

    1.10 Withholding.  All
sums payable by Buyer to Sellers under this Agreement shall be paid free and
clear of all deductions, withholdings, set-off or counterclaims whatsoever
except as may be required by Law.

     

    1.11 The
Closing.  The
Closing of the transactions provided for in this Agreement shall be held in
Menlo Park, California, at the offices of Latham & Watkins LLP, 140 Scott
Drive, Menlo Park, California at 10:00 a.m. on the tenth business day following
satisfaction or waiver of the conditions set forth in Article V (other than
those conditions that by their nature must be satisfied on the date of the
Closing) or at such other time and place as the parties may agree (the “Closing
Date”).

     

    1.12 Conveyances and Deliveries
at the Closing.

     

    (a) Deliveries by
Sellers.  On the Closing Date, each Seller shall deliver or
cause to be delivered to Buyer the following:

     

    (i) the
Ancillary Agreements to which such Seller is a party;

     

    (ii) a bill of
sale issued by AMMS to Buyer, substantially in the form of Exhibit A
hereto duly executed by AMMS;

     

    (iii) for the
Alcatel Assets, a duly executed Assignment of Patent Rights in substantially the
same form as set forth in Schedule C to the Intellectual Property
Agreement;

     

    (iv) such
other instruments of transfer reasonably requested by Buyer to transfer to and
vest in Buyer all of such Seller’s right, title and interest in and to the
Assets;

     

    (v) evidence
reasonably satisfactory to Buyer of all Approvals from third parties as are
required to consummate the transactions contemplated hereby; and

     

    (vi) such
other documents and instruments as are required pursuant to this Agreement or as
may reasonably be requested by Buyer or its counsel.

     

    (b) Deliveries by
Buyer.  On the Closing Date, Buyer shall deliver or cause to be
delivered the following:

     

    (i) the
Ancillary Agreements;

     

    (ii) the
payment required by Section 1.7(b)(i);

     

    (iii) the
payment required by Section 1.7(b)(ii);

     

    (iv) the bill
of sale referred to in Section 1.12(a)(ii), duly executed by Buyer; and

     

    (v) such
other documents and instruments as are required pursuant to this Agreement or as
may reasonably be requested by AMMS or its counsel.

     

    (c) Physical Delivery of
Tangible Assets.  At Buyer’s risk and expense, tangible Assets
shall be physically delivered to Buyer’s designated destination within a
reasonable period of time upon Seller’s receipt of written instructions to
Sellers indicating the destination and reasonable timing of
delivery.  To the extent not actually delivered on the Closing Date,
Sellers shall effect physical delivery of the tangible assets included in the
Assets to Buyer by providing Buyer with physical access to the locations of such
Assets.

     

    (d) Form of
Documents.  To the extent that a form of any document to be
delivered hereunder is not attached as an exhibit hereto, such documents shall
be in form and substance, and shall be executed and delivered in a manner,
reasonably satisfactory to Buyer.

     

    (e) Lock-up; Securities Laws
Restrictions; Legend.

     

    (i) Subject
to Section 1.12(e)(ii), each Seller acknowledges and agrees that the
Delivered Shares shall be subject to restrictions on transfer (the “Lock-up”) and no
Delivered Shares shall be sold, transferred, pledged, assigned, disposed of or
encumbered except as follows:

     

    (A) Upon the
first anniversary of the Closing Date, one-third (1/3) of the Delivered Shares
shall be released from the Lock-up and may be sold, transferred, pledged,
assigned, disposed of or encumbered in accordance with applicable federal, state
and foreign securities Laws;

     

    (B) Upon the
second anniversary of the Closing Date, an additional one-third (1/3) of the
Delivered Shares shall be released from the Lock-up and may be sold,
transferred, pledged, assigned, disposed of or encumbered in accordance with
applicable federal, state and foreign securities Laws;

     

    (C) Upon the
earlier of (x) the third year anniversary of the Closing Date and (y) the
termination, by mutual agreement of the Parties, of the obligations under
Section 4.13 the final one-third (1/3) of the
Delivered Shares shall be released from the Lock-up and may be sold,
transferred, pledged, assigned, disposed of or encumbered in accordance with
applicable federal, state and foreign securities Laws.

     

    (ii) Notwithstanding
Section 1.12(e)(i), any Seller may transfer Delivered Shares to
another member of the Alcatel Lucent Group, including without limitation, in
connection with a merger, consolidation, restructuring or other business
combination involving any Seller and any other member of the Alcatel Lucent
Group; provided that such transfer is effected in accordance with applicable
federal, state and foreign securities Laws.

     

    (iii) Upon
issuance at Closing, each certificate representing Delivered Shares shall bear a
legend stating:

     

    THE
ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR APPLICABLE STATE SECURITIES LAWS AND THESE SECURITIES MAY NOT BE SOLD
OR TRANSFERRED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SALE AND
TRANSFER IS EFFECTIVE UNDER THE SECURITIES ACT OR (II) THE TRANSACTION IS EXEMPT
FROM REGISTRATION UNDER THE SECURITIES ACT, AND IF THE ISSUER REQUESTS, AN
OPINION SATISFACTORY TO THE ISSUER TO SUCH EFFECT HAS BEEN RENDERED BY
COUNSEL.

    

    (iv) Upon
issuance at Closing, each certificate representing Delivered Shares shall bear a
legend stating:

     

    

    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A CONTRACTUAL LOCK-UP
PERIOD PURSUANT TO THAT CERTAIN ASSET PURCHASE AGREEMENT BY AND AMONG THE
ISSUER, ALCATEL MICRO MACHINING SYSTEMS AND ALCATEL LUCENT, IN ACCORDANCE WITH
AND SUBJECT TO SUCH LOCK-UP PERIOD, SUCH SECURITIES MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, DISPOSED OF, ENCUMBERED OR ASSIGNED AND THE ISSUER SHALL
NOT BE REQUIRED TO GIVE EFFECT TO ANY ATTEMPTED SALE, TRANSFER, PLEDGE,
DISPOSAL, ENCUMBRANCE OR ASSIGNMENT, EXCEPT AS PERMITTED THEREUNDER. UPON THE
WRITTEN REQUEST OF THE HOLDER OF THIS CERTIFICATE, THE ISSUER AGREES TO REMOVE
THIS RESTRICTIVE LEGEND (AND ANY STOP ORDER PLACED WITH ITS TRANSFER AGENT) WITH
RESPECT TO SUCH SECURITIES THAT ARE NO LONGER BOUND BY THE LOCK-UP
PERIOD.

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
II 

     

    REPRESENTATIONS
AND WARRANTIES OF BUYER

     

    Buyer
represents and warrants to Sellers as follows:

     

    2.1 Organization and Related
Matters.  Buyer
is a corporation duly organized, validly existing and in good standing under the
Laws of the State of Delaware.  Buyer has all necessary corporate
power and authority to carry on its business as now conducted.  Buyer
has the necessary corporate power and authority to execute, deliver and perform
this Agreement and the Ancillary Agreements and to consummate the transactions
contemplated hereby and thereby.

     

    2.2 Authorization.  The
execution, delivery and performance of this Agreement and the Ancillary
Agreements by Buyer and the consummation by Buyer of the transactions
contemplated hereby and thereby have been duly and validly authorized by the
board of directors of Buyer and by all other necessary corporate action on the
part of Buyer.  This Agreement has been, and each of the Ancillary
Agreements, upon execution thereof by Buyer, shall be, duly executed and
delivered by Buyer and constitutes or will constitute the legal, valid and
binding obligation of Buyer, enforceable against Buyer in accordance with its
terms except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar Laws and equitable principles
relating to or limiting creditors’ rights generally.

     

    2.3 No
Conflicts.  The
execution, delivery and performance of this Agreement and each of the Ancillary
Agreements by Buyer will not violate the provisions of, or constitute a breach
or default whether upon lapse of time and/or the occurrence of any act or event
or otherwise or require any Approval under (a) the charter documents or
by-laws of Buyer, (b) any Law to which Buyer is subject (provided that appropriate
regulatory Approvals are received as contemplated by Section 4.3), or (c) any material Contract to which Buyer
is a party.

     

    2.4 No Brokers or
Finders.  No
agent, broker, finder or investment or commercial banker, or other Person or
firm engaged by or acting on behalf of Buyer or its Affiliates in connection
with the negotiation, execution or performance of this Agreement or the
transactions contemplated by this Agreement, is or will be entitled to any
broker’s or finder’s or similar fees or other commissions as a result of this
Agreement or such transactions.

     

    2.5 Legal
Proceedings.  There
is no Order or Action pending or to the Knowledge of Buyer, threatened against
Buyer that individually or when aggregated with one or more other Orders or
Actions has or might reasonably be expected to have a material adverse effect on
Buyer’s ability to perform this Agreement.

     

    2.6 No Registration.  Assuming
that the representations and warranties of Sellers in Article III are true and
correct, no registration of the Delivered Shares under the Securities Act is
required in connection with the issuance of the Delivered Shares by Buyer to
AMMS as contemplated by this Agreement.

     

    2.7 Broker’s
Fees.  No
broker, investment banker, financial advisor or other Person is entitled to any
broker’s, finder’s, financial advisor’s or other similar fee or commission in
connection with the transactions contemplated hereby based upon arrangements
made by or on behalf of Buyer.

     

    2.8 Delivered
Shares.  The
Delivered Shares shall be validly issued, fully paid and nonassessable shares of
Buyer’s Common Stock and the holder of the Delivered Shares shall be afforded
the rights and benefits appurtenant thereto as set forth in the charter
documents or by-laws of Buyer.

     

    2.9 SEC
Filings

     

    .  Each
form, report and statement required to the filed by Buyer with the SEC (the
“Buyer SEC
Documents”) was filed in a timely manner and was prepared in all material
respects in accordance with applicable securities Law and Buyer has not received
any notice from the SEC that any matter in respect of Buyer SEC Documents is
currently the subject of any review, inquiry or investigation.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    ARTICLE
III

     

    REPRESENTATIONS
AND WARRANTIES OF SELLERS

     

    Each
Seller, jointly and severally, represent and warrant to Buyer as
follows:

     

    3.1 Organization, Subsidiaries,
etc.  Each
Seller is a corporation and is duly organized, validly existing and in good
standing under the Laws of France.  Each Seller has the necessary
power and authority to execute, deliver and perform this Agreement and each of
the Ancillary Agreements to which it is a party and to consummate the
transactions contemplated hereby and thereby.   AMMS is an
indirect wholly-owned Subsidiary of Alcatel.

     

    3.2 Authorization.  The
execution, delivery and performance of this Agreement and the Ancillary
Agreements to which such Seller is a party by such Seller and the consummation
by such Seller of the transactions contemplated hereby and thereby have been
duly and validly authorized by the board of directors of such Seller and by all
necessary actions of such Seller’s stockholders or other
equityholders.  The execution, delivery and performance of this
Agreement and the applicable Ancillary Agreements by such Seller and the
consummation by such Seller of the transactions contemplated hereby and thereby
are duly and validly authorized by all necessary corporate or other action on
the part of such Seller.  This Agreement has been, and each of the
applicable Ancillary Agreements, upon execution thereof by such Seller, shall
be, duly executed and delivered by such Seller and constitutes or will
constitute the legal, valid and binding obligation of such Seller, enforceable
against such Seller in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar Laws and equitable principles relating to or limiting creditors’ rights
generally.

     

    3.3 Absence of Certain Changes
or Events.  Since
May 31, 2008, there has not been any:

     

    (a) Revaluation
by any Seller of any of the Assets, including without limitation writing down
the value of goodwill or inventory or writing off notes or accounts
receivable;

     

    (b) Destruction
or Loss (whether or not covered by insurance) materially adversely affecting the
Assets;

     

    (c) Amendment,
cancellation or termination of any Contract, commitment, agreement, transaction
or Permit relating to the Assets or entry into any Contract, commitment,
agreement, transaction or Permit which is not in the ordinary course of
business, including without limitation any employment or consulting
agreements;

     

    (d) Mortgage,
pledge or other encumbrance of any Assets, except purchase money mortgages
arising in the ordinary course of business;

     

    (e) Sale,
assignment or transfer of any of the Assets, other than in the ordinary course
of business;

     

    (f) Existence
of any other event or condition which in any one case or in the aggregate has or
might reasonably be expected to have a material adverse effect on the Assets;
or

     

    (g) Agreement
by any Seller to do any of the things described in the preceding clauses (a)
through (f) other than as expressly provided for herein.

     

    3.4 No
Conflicts.  Except
as set forth in Section 3.4 of Seller Disclosure
Schedule the execution and delivery of this Agreement and each of the Ancillary
Agreements by the applicable Seller(s) and the consummation of the transactions
contemplated hereby and thereby will not (a) violate the provisions of, or
constitute a breach or default (or any act or event which would constitute a
breach or default but for the lapse of time or absence of notice of such breach
or default), or result in the creation or vesting of any payment or other right
of any Person, under (i) the charter documents or by-laws (or similar
governing documents) of any Seller, (ii) to the Sellers’ knowledge, any Law
to which any Seller or any of the Assets is subject (provided that all required
regulatory Approvals are received as contemplated by Section 4.3), or (iii) any Contract to which any of the
Assets is subject or (b) result in the imposition of any Encumbrance
against any of the Assets.

     

    3.5 Consents,
etc.  Section
3.5 of Seller Disclosure Schedule lists all
Permits, Orders and Approvals of any Governmental Entity or any other Person
required to be obtained by any Seller in order to execute and deliver this
Agreement and consummate the transactions contemplated
hereunder.  Each Seller has obtained all such Permits, Orders and
Approvals necessary for the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.  To the
Knowledge of Sellers, none of the Assets fall within the scope of Article L.
151-3 of the French Code Monétaire et Financier dealing with foreign investments
in France, and accordingly, this transaction is not subject to the prior
authorization of any French Governmental Entities pursuant to the same
regulation.

     

    3.6 Government Authorizations
and Compliance with Laws.

     

    (a) Section
3.6(a) of Seller
Disclosure Schedule contains a complete and accurate list of all Permits held by
AMMS which are the only Permits necessary for AMMS to operate the Assets as they
were operated until the Closing.  AMMS is not in Default, nor has it
received any notice of any claim of Default, with respect to any such
Permit.  

     

    (b) Except as
set forth in Section 3.6(b) of Seller Disclosure Schedule, the Assets has been
operated at all times in compliance with all applicable Laws and
Orders.  Except as set forth in Section 3.6(b) of Seller
Disclosure Schedule, for the last five (5) years no notice has been received by
any Seller and no investigation or review is pending or, to the Knowledge of
Sellers, threatened by any Governmental Entity with respect to (i) any
alleged violation by AMMS of any Law or (ii) any alleged failure to have
any Permit required in connection with the operation of the
Assets.  Except as set forth in Section 3.6(b) of Seller
Disclosure Schedule, neither Seller has conducted any internal investigation
concerning any alleged violation of any Law applicable to AMMS or the Assets
(regardless of the outcome of such investigation) on the part of AMMS or any of
its Affiliates or any of its Representatives.

     

    3.7 Tax
Matters.  Except
to the extent a breach of any of the following could not give rise to an
Encumbrance on the Assets, adversely affect the Business, or result in a
liability of Buyer or its Affiliates for Taxes:

     

    (a) each
Seller has timely filed (taking into account any extensions of time for such
filings that have been properly and timely requested by such Seller) all Tax
Returns that were required to be filed;

     

    (b) All such
Tax Returns are complete and accurate in all material respects;

     

    (c) All Taxes
owed by each Seller (whether or not shown on any Tax Return) have been
paid;

     

    (d) No Seller
is currently the beneficiary of any extension of time within which to file any
Tax Return;

     

    (e) No claim
has ever been made by an authority in a jurisdiction in which a Seller does not
file Tax Returns that such Seller is or may be subject to taxation by that
jurisdiction;

     

    (f) There are
no pending or, to the Seller’s Knowledge, threatened audits, investigations,
disputes, notices of deficiency, claims or other Actions for or relating to any
Liability for Taxes of any Seller; or

     

    (g) No Seller
has waived any statute of limitations in respect of Taxes or agreed to any
extension of time with respect to a Tax assessment or deficiency.

     

    3.8 Title to and Condition of
Properties; Absence of Liens and Encumbrances, etc.; Sufficiency of
Assets.

     

    (a) Title to Properties; Absence
of Liens and Encumbrances, etc.  Each of AMMS and Alcatel has
good and marketable title (or valid leasehold interests in all properties held
under lease) to all AMMS Assets or Alcatel Assets, respectively, in each case
free and clear of all Encumbrances, except for Permitted Encumbrances, and all
such Assets conform in all material respects to all applicable Laws relating to
their construction, use and operation.  Each Seller has all rights,
power and authority to sell, convey, assign, transfer and deliver its respective
Assets to Buyer in accordance with the terms of this Agreement.

     

    (b) Condition of
Properties.  All Assets are insured to the extent and in a
manner customary in Sellers’ industry.  Such Assets include all
Permits or other rights required by Law or appurtenant thereto.  All
AMMS Assets are in a good state of maintenance and repair (except for ordinary
wear and tear).

     

    (c) Notwithstanding
the foregoing, this Section shall not apply to Intellectual Property (which is
covered by Section 3.11).

     

    3.9 Principal Customers and
Suppliers.  Section 3.9 of Seller Disclosure Schedule lists the ten
largest customers and ten largest suppliers of the Business, based upon dollar
volume of business with AMMS during the fiscal year ended December 31, 2007 and
the volume of business with each such customer or supplier.  Since
December 31, 2007, no customer or supplier has suspended, terminated or
materially reduced its business with AMMS, or indicated its intent to suspend,
terminate or materially reduce its business with AMMS other than normal
fluctuations in the ordinary course of business.  Section 3.9 of Seller Disclosure Schedule lists all customer
Contracts that terminate in 2008 with the dates of termination of
each.

     

    3.10 Litigation.  Except
as set forth in Section 3.10 of Seller
Disclosure Schedule, there is no Order or Action pending or, to the Knowledge of
Sellers, threatened (a) against any Seller or its respective directors or
officers as such or affecting any of the Assets, (b) which seeks to
prohibit, restrict or delay consummation of the transactions contemplated by
this Agreement or the Ancillary Agreements or any of the conditions to
consummation of such transactions, or (d) in which AMMS is a
plaintiff.  No Seller is in Default with respect to or subject to any
Order, and there are no unsatisfied judgments against any Seller or the
Assets.

     

    3.11 Intellectual Property.

     

    (a) The
Business Intellectual Property and the Licensed Intellectual Property (as
defined in the Intellectual Property Agreement) (collectively, the “Intellectual Property
Rights”), are, as of the Closing Date, all the Intellectual Property
owned or controlled by Sellers or their respective Affiliates used or held for
use in the operation of the Business as being conducted as of the Closing Date
with respect to the AMMS Products, and, to the Knowledge of the Alcatel Lucent
Intellectual Property and Standards Group, the Bosch patent license is the only
patent license under third party patent rights entered into by the Sellers
specifically for the purpose of operating the Business.  Except as
specifically set forth in Section 3.11(a) of Seller Disclosure Schedule, as of the Closing
Date (1) AMMS owns the AMMS Intellectual Property, (2) Alcatel owns the Alcatel
Assets, and (3) the Business Intellectual Property and Business Documentation
are free of any Encumbrances, other than Permitted Encumbrances, and will be
fully transferable.  Sellers or their respective Affiliates are
up-to-date with the payment of all applicable fees associated with the filing
and maintenance of the Business Intellectual Property that is filed as a patent
application or issued patent (the “Registered Patented Business
IP”), and have carried out all formalities necessary to ensure that the
Registered Patented Business IP is validly registered in the name of the
applicable Seller or its Affiliates as of the Closing Date.  Except as
specifically set forth in Section 3.11(a) of Seller Disclosure Schedule, none of the
Registered Patented Business IP has been found invalid or unenforceable for any
reason in any administrative, arbitration, judicial or other proceeding.
Furthermore, Sellers have not received in the past three (3) years any written
notice from any third party (other than a patent office, patent administration
office, or any of Sellers’ patent counsels) explicitly stating that the
Registered Patented Business IP may be invalid or unenforceable.

     

    (b) Except as
specifically set forth in Section  3.11(b) of the Seller Disclosure Schedule, there is not
pending against the Sellers or any of their respective Affiliates any Action by
any third party contesting the validity, enforceability, ownership, registration
or use by the Sellers or any of their respective Affiliates of any Business
Intellectual Property or alleging that the operation of the Business with
respect to the AMMS Products has infringed, misappropriated, or otherwise
violated any Intellectual Property of any third party, and to the Knowledge of
the Alcatel Lucent Intellectual Property and Standards Group, no such Actions
are threatened.  Except as set forth on Section 3.11(b) of the Seller
Disclosure Schedule, to the Knowledge of the Alcatel Lucent Intellectual
Property and Standards Group, the operation of the Business with respect to the
AMMS Products has not infringed, misappropriated, or otherwise violated any
Intellectual Property of any third party in the past three (3)
years.   Except as set forth on Section 3.11(b) of the Seller
Disclosure Schedule, to the Knowledge of the Intellectual Property and Standards
Group, no third party is infringing, misappropriating, or otherwise violating
any Business Intellectual Property.

     

    (c) Except as
set forth in Section 3.11(c) of the Seller Disclosure Schedule, Sellers have
used commercially reasonable efforts to obtain assignments of ownership of the
Business Intellectual Property from all employees and consultants of the Sellers
who have contributed to the creation or development of the Business Intellectual
Property.  Except as set forth in Section 3.11(c) of the Seller
Disclosure Schedule, to the Knowledge of the Alcatel Lucent Intellectual
Property and Standards Group, in the past three (3) years no written notice has
been received by Sellers from an employee or consultant of a Seller claiming an
ownership interest in the Business Intellectual Property created by such
employee or consultant.  Sellers have taken commercially reasonable
steps to protect the confidentiality and prevent disclosure of their trade
secrets and other confidential and proprietary information contained within the
Business Intellectual Property and Business Documentation.

     

    (d) To the
Knowledge of the Alcatel Lucent Intellectual Property and Standards Group,
except for the non-exclusive licenses and rights granted in the Intellectual
Property Agreement, and the non-exclusive licenses granted prior to the Closing
Date to the licensees listed in Section 3.11(d) of the Seller Disclosure Schedule, no licenses
under the Alcatel Assets for the manufacture, use or sale of the AMMS Products
have been granted, other than (i) customary non-exclusive licenses entered into
in the normal course of business by Sellers or any of their Affiliates (such as,
but not limited to, customer agreements), or (ii) customary non-exclusive
licenses for development purposes included in development collaboration
agreements entered into by Sellers or any of their Affiliates.

     

    3.12 Books and
Records.  AMMS
has made and kept (and given Buyer access to) Books and Records and accounts,
which, in reasonable detail, fairly reflect in all material respects the
activities, transactions and dispositions in relation with the
Assets.

     

    3.13 No Brokers or
Finders.  No
agent, broker, finder or investment or commercial banker, or other Person or
firm engaged by or acting on behalf of any Seller or its Affiliates in
connection with the negotiation, execution or performance of this Agreement or
the transactions contemplated by this Agreement, is or will be entitled to any
broker’s or finder’s or similar fees or other commissions as a result of this
Agreement or such transactions.

     

    3.14 No Other Agreements to Sell
the Assets.  No
Seller nor any of its officers, directors, stockholders or Affiliates has any
commitment or legal obligation, absolute or contingent, to any other Person
other than Buyer to sell, assign, transfer, effect a sale of, or grant an
exclusive license with respect to, any of the Assets (other than non-exclusive
licenses of products or Intellectual Property in the ordinary course of
business), to sell or effect a sale of the capital stock of such Seller, to
effect any merger, consolidation, liquidation, dissolution or other
reorganization of such Seller, or to enter into any agreement or cause the
entering into of an agreement with respect to any of the foregoing.

     

    3.15 Solvency.  Immediately
prior to and immediately following the consummation of the purchase of the
Assets by Buyer from Sellers as contemplated by this Agreement and the Ancillary
Agreements, none of the Sellers have been, are or will be insolvent (en état de cessation de
paiements) or subject to any safeguard, bankruptcy or insolvency
proceedings, nor to any other proceedings with regard to the prevention or
resolution of business difficulties nor in any situation likely to result in
such proceedings.

     

    3.16 Purchase Entirely for Own
Account.  This
Agreement is made with Sellers in reliance upon Sellers’ representation to
Buyer, which by each Seller’s execution of this Agreement such Seller hereby
confirms, that the Delivered Shares will be acquired for investment for AMMS’
own account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof in violation of the Securities Act, and that
AMMS has no present intention of selling, granting any participation in, or
otherwise distributing the same in violation of the Securities
Act.  By executing this Agreement, AMMS further represents that it do
not presently have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participations to such person or to any third
person, with respect to any of the Delivered Shares.  AMMS was not
been formed for the specific purpose of acquiring the Delivered
Shares.

     

    3.17 Sellers
Qualification.  Each
Seller is an accredited investor as defined in Rule 501(a) of Regulation D
promulgated under the Securities Act, is experienced in evaluating companies
such as Buyer, is able to fend for itself in transactions related to the
acquisition of securities such as the ones contemplated by this Agreement, has
such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of its prospective investment in
Buyer, and has the ability to bear the economic risks of the investment,
including but not limited to the loss of its investment.  Each Seller
understands that the offering and sale of such securities is being made in
reliance on Rule 506 of Regulation D promulgated under the Securities Act based,
in part, upon the representations, warranties and agreements contained in this
Agreement.

     

    3.18 Residence.  Each
Seller’s principal office location is identified in the address of such Seller
set forth in Section 8.2.

     

    3.19 Labor
Matters.  Sellers
have informed and consulted, where necessary, relevant employee representatives
prior to the signature of this Agreement.

     

    3.20 Purchase
Price.  No
creditor of either Seller, nor any other third party, shall have the right to
make a claim (opposition) against the Buyer
in relation to the Purchase Price being paid to Sellers.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
IV 

     

    COVENANTS
AND AGREEMENTS

     

    4.1 Expenses.  Each
party hereto shall pay all of its own fees, costs and expenses (including,
without limitation, those of advisors, financial advisors, lawyers or
accountants) incurred by it in connection with the negotiation, preparation,
execution, delivery and performance of this Agreement and the transactions
contemplated hereby. 

     

    4.2 Publicity.  No
party hereto shall issue any press release or other public statement, with
respect to the existence of this Agreement or the transactions contemplated
hereby, except as may be required by Law (if so required, such press release or
public statement shall be made only after consultation among the parties
hereto), or as consented to by the parties.

     

    4.3 Additional Agreements;
Approvals; Consents.  Upon
the terms and subject to the conditions set forth in this Agreement, each of the
parties agrees, both before and after the Closing, to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other party in doing, all things necessary, proper or advisable to
confirm and further the effectiveness of, in the most expeditious manner
practicable, the transfer of the Assets to Buyer and the other transactions
contemplated by this Agreement. The actions contemplated by this Section 4.3 may include, but are not limited
to:  (a) the procurement of any Approvals from all Governmental
Entities and the making of any necessary registrations or filings (including
filings with Governmental Entities) and the taking of all reasonable steps as
may be necessary to obtain an Approval from, or to avoid an action or proceeding
by, any Governmental Entity, (b) giving all notices to, and making all
registrations and filings with third parties, including without limitation
submissions of information requested by Governmental Entities, (c) obtaining all
necessary Permits required to be obtained under applicable Laws, (d) the defense
of any Actions whether judicial or administrative, challenging this Agreement
and the consummation of the transactions contemplated hereby, including seeking
to have any stay or temporary restraining order entered by any court or other
Governmental Entity vacated or reversed, (e) the execution and delivery of any
additional instruments (including additional instruments conveying or assigning
the Assets) necessary to consummate the transactions contemplated by this
Agreement, (f) using commercially reasonable efforts to acquire the full
ownership of the Designated Licensed Patent and, if successful, transfer the
same to Buyer without further consideration pursuant to an assignment agreement
substantially similar to the assignment agreement set forth on Schedule C to the
Intellectual Property Agreement and (g) the fulfillment of all conditions to
this Agreement.  Nothing in this Section 4.3 shall be considered a waiver by Buyer of any
condition to Buyer’s obligation to consummate the transactions contemplated
hereby or of any Seller’s obligations under any section of this Agreement to
have obtained all necessary Approvals of any Governmental Entities or third
parties prior to or on the Closing Date and Buyer expressly reserves all
remedies hereunder relating to any breach by any Seller of any representation or
warranty or covenant in respect hereof.  Notwithstanding the
foregoing, Buyer shall not be required to agree to the divestiture of any asset
or the modification of this Agreement in connection with the actions referred to
in clause (a) or clause (b) above.  

     

    4.4 Books and Records; Tax
Matters; Tax Returns.  

     

    (a) From and
after the Closing Date, to the extent reasonably requested by any party hereto,
each party hereto shall, and shall cause their respective Affiliates to,
cooperate with and make available to the other party, during normal business
hours, all Books and Records, information and employees (without substantial
disruption of employment), as well as, to the extent permitted by the applicable
Laws and regulations, access to, and the cooperation of, the auditors of such
party, retained and remaining in existence after the Closing which are necessary
or useful in connection with any Tax inquiry, audit, investigation or dispute,
the preparation of Tax Returns, the making of any election relating to Taxes,
any litigation or investigation or any other matter requiring any such Books and
Records, information or employees, or access to such auditors, for any
reasonable business purpose.  The party requesting any such Books and
Records, information or employees, or access to such auditors, shall bear all of
the out-of-pocket costs and expenses (including, without limitation, attorneys’
fees, but excluding any reimbursement for salaries or benefits) reasonably
incurred in connection with providing such Books and Records, information or
employees, or access to such auditors.  Any information obtained
pursuant to this Section 4.4 or pursuant to
any other Section hereof providing for the sharing of information or the review
of any Tax Return or other schedule relating to Taxes shall be subject to
Section 7.3.  Each of Buyer and
Sellers shall retain all books and records with respect to Taxes pertaining to
the Assets for a period of at least four (4) years following the Closing
Date.

     

    (b) To the
extent not otherwise provided in this Agreement, Sellers shall be responsible
for and shall promptly pay when due all Property Taxes or Business Tax (taxe professionnelle) levied
with respect to the Assets attributable to the Pre-Closing Tax
Period.  All Property Taxes or Business Tax (taxe professionnelle) levied
with respect to the Assets for the Straddle Period shall be borne by
Sellers.  Upon receipt of any bill for such Property Taxes or Business
Tax (taxe
professionnelle), Buyer shall present a statement to Sellers setting
forth the amount of reimbursement to which Buyer is entitled under this Section
4.4(b) together with
such supporting evidence.  Sellers shall pay such amount to Buyer
within ten (10) days after delivery of such statement.  In the event
that Buyer makes any payment for which it is entitled to reimbursement under
this Section 4.4(b),
Sellers shall make such reimbursement promptly but in no event later than ten
(10) days after the presentation of a statement setting forth the amount of
reimbursement to which Buyer is entitled along with such supporting evidence as
is reasonably necessary to set the amount of reimbursement.

     

    (c) Sellers
shall promptly notify Buyer in writing upon receipt by any Seller of notice of
any pending or threatened Tax audits or assessments relating to the income,
properties or operations of any Seller that reasonably may be expected to relate
to or give rise to a lien on the Assets or the Business.  Each of
Buyer and Sellers shall promptly notify the other in writing upon receipt of
notice of any pending or threatened Tax audit or assessment challenging the
Allocation.

     

    (d) Any
payments made to any party pursuant to Article VI  shall constitute an
adjustment of the Purchase Price for Tax purposes and shall be treated as such
by Buyer and Sellers on their Tax Returns to the extent permitted by
Law.

    

    (e) Seller
shall file with the Tax authorities, within the required time limits, a
declaration for the sale of business resulting from the transfer of the Assets,
pursuant to Article 201 of the French General Tax Code.  Such filing
shall start the three-month period provided for by Article 1684 of the French
General Tax Code.  Seller shall provide satisfactory evidence to Buyer
that such filing has been made to the competent authorities within the
aforementioned time limits and shall fully indemnify Buyer from any Damages that
Buyer may suffer as a result of the provisions of Article 1684 of the French
General Tax Code.

     

    4.5 Notification of Certain
Matters.  Sellers
shall give prompt notice to Buyer, and Buyer shall give prompt notice to
Sellers, after becoming aware of (a) the occurrence, or failure to occur,
of any event that would be likely to cause any representation or warranty
contained in this Agreement to be untrue or inaccurate in any material respect
at any time and (b) any failure of Buyer or any Seller, as the case may be,
to comply with or satisfy, in any material respect, any covenant, condition or
agreement to be complied with or satisfied by it under this
Agreement.  No such notification shall affect, or be deemed to cure
any breach of, the representations, warranties, covenants and agreements of the
parties or the conditions to their respective obligations
hereunder.  The notification obligations of each party set forth in
this Section 4.5 shall expire concurrently with the
expiration of such party’s indemnification obligations set forth in Article VI
herein.  Sellers shall also give prompt notice to Buyer of any
Default, or any claim made by, or Action threatened or commenced against, any
Seller.

     

    4.6 Audit
Assistance.  From
and after the Closing Date, to the extent reasonably requested by Buyer in
connection with (a) any audit of Buyer’s consolidated financial statements, (b)
any separate presentation to be prepared by Buyer of the financial statements of
the Business (including, without limitation, any such separate presentation of
the Business as a “significant subsidiary” or a “business acquired” within the
meaning of the accounting rules of the Securities and Exchange Commission), or
(c) any presentation to be prepared by Buyer of the pro forma effects of Buyer’s
acquisition of the Business, AMMS shall  (i) assist in the
preparation of any such financial statements or pro forma presentation and
(ii) provide any records and other information requested by Buyer in connection
therewith  all at the cost and expense of Buyer.

     

    4.7 Investigation by
Buyer.  Subject
to the Confidentiality Agreement, from the date hereof through the Closing Date,
each Seller shall, and shall cause its Representatives to, afford the
Representatives of Buyer and its affiliates complete access at all reasonable
times to the Assets for the purpose of inspecting the same, and to the officers,
employees, agents, attorneys, accountants, properties, Books and Records and
Contracts of AMMS, and shall furnish Buyer and its Representatives all data and
information as Buyer or its affiliates, through their respective
Representatives, may reasonably request.

     

    4.8 Conduct of
Business.  From
the date hereof through the Closing, each Seller shall not, except as
specifically contemplated by this Agreement or as consented to by Buyer in
writing:

    

    (a) Enter
into, extend, materially modify, terminate or renew any Transferred Contract or
Licensed Right, except in the ordinary course of business;

     

    (b) Sell,
assign, transfer, convey, lease, mortgage, pledge or otherwise dispose of or
encumber any of the Assets, or any interests therein, except in the ordinary
course of business and, without limiting the generality of the foregoing, such
Seller will produce, maintain and sell its products consistent with its past
practices;

     

    (c) Fail to
maintain the Assets in substantially their current state of repair, excepting
normal wear and tear or fail to replace consistent with such Seller’s past
practice inoperable, worn-out or obsolete or destroyed Assets;

    

    (d) Intentionally
do any other act which would cause any representation or warranty of such Seller
in this Agreement to be or become untrue in any material respect;
or

     

    (e) Enter
into any agreement, or otherwise become obligated, to do any action prohibited
hereunder.

     

    4.9 No Solicitation of Other
Proposals.  Except
as expressly permitted by the terms of this Agreement, each Seller shall not,
directly or indirectly, take (and such Seller shall not authorize or permit any
of its Representatives or, to the extent within such Seller’s control, other
Affiliates to take) any action to (i) encourage (including by way of furnishing
non-public information), solicit, initiate or facilitate any Takeover Proposal,
(ii) enter into any agreement with respect to any Takeover Proposal or enter
into any agreement, arrangement or understanding requiring such Seller to
abandon, terminate or fail to consummate the Asset Sale or any other transaction
contemplated by this Agreement, or (iii) participate in any way in
discussions or negotiations with, or furnish any information to, any Person in
connection with, or take any other action to facilitate any inquiries or the
making of any proposal that constitutes, or could reasonably be expected to lead
to, any Takeover Proposal.

     

    4.10 Business
Transition.

     

    (a) AMMS will
maintain a team of senior executives of AMMS (the “Transition Team”) at
AMMS’ headquarters in Annecy, France, for the purpose of facilitating the
transition of the Business to Buyer for a period of six (6) months after the
Closing Date (the “Transition Period”).
The Transition Team shall initially consist of the individuals named in Exhibit
B attached hereto. Initial participation levels shall be set forth on
Exhibit
B attached hereto. Team membership and level of participation during the
Transition Period may be changed by mutual agreement of the
Parties.  AMMS shall also be allowed to replace any member of the
Transition Team at its convenience in the event of temporary non-availability,
dismissal for misconduct or resignation.  In such case, AMMS shall to
the extent reasonably possible, provide for a replacement with equivalent
experience and competencies.  Expenses related to the formation and
maintenance of the Transition Team during the Transition Period, including,
salaries, benefits, and overhead shall be borne solely by AMMS; provided, however, that travel, food
and lodging outside France requested by Buyer shall be borne by
Buyer.  Upon written notice to AMMS, Buyer shall have the right to
extend the Transition Period (the “Extended Transition
Period”) on a month-to-month basis for a period of no more than three (3)
months beyond the expiration of the initial Transition Period.  Buyer
shall bear the direct costs associated with the Transition Team during the
Extended Transition Period, in accordance with the budget set forth in Exhibit
B attached hereto. The budget is exclusive of VAT and any customs duties,
which as the case may be, shall be borne by Buyer in addition to the
budget.

     

    (b) At
Buyer’s request, AMMS shall provide sufficient facilities and personnel to Buyer
to enable Buyer to perform applications and/or process development activities
related to the Business for a period not to exceed three (3) months following
the Closing Date.  Buyer shall bear the direct costs associated with
any such applications and/or process development activities, including salaries,
travel expenses and the consumables costs of such activities in accordance with
the budget set forth in Exhibit
C attached hereto.

     

    4.11 Inventory.  Until
the expiration of the rights and obligations under Section 4.13 of this Agreement, Buyer may purchase, as and
when needed by Buyer, from AMMS’ existing inventory of subassemblies and
systems, the initial list of which is stated in Exhibit
D at a price equal to eighty percent (80%) of AMMS’ net book value of
such inventory at the time of such purchase, as reported in AMMS’ most recent
financial statements. This list will be updated by AMMS from time to time and
provided in writing to Buyer.

     

    4.12 Appointment of
Director.  Until
the later of (a) the termination, by mutual agreement of Buyer and AMMS, or
expiration of the rights and obligations under Section 4.13 and (b) when the Alcatel Group beneficially owns,
directly or indirectly, less than five percent (5%) of the Total Shares
Outstanding of Buyer:

     

    

    (a) Buyer
shall take such actions as shall be necessary to cause a designee  (a
“Designee”),
who shall be an executive of AMMS or AVTF, to be appointed to Buyer’s board of
directors, effective as of the Closing Date, to serve until the annual meeting
of Buyer’s stockholders to be held in 2008. The initial Designee shall be Mr.
Gilbert Bellini.

     

    (b) Subject
to fiduciary duties under applicable Law, Buyer shall take such actions as shall
be reasonably necessary to cause a Designee to be nominated for election to
Buyer’s board of directors at the annual meeting of Buyer’s stockholders to be
held in 2008 and each subsequent annual meeting thereafter.

     

    (c) AMMS
shall have the right to remove such Designee at any time, by delivery of written
notice to Buyer.  Buyer shall have the right to remove such Designee
for cause in accordance with applicable Law.  In the case of a vacancy
for any reason (including by reason of death, resignation, retirement or removal
pursuant to the preceding sentence), the vacancy shall be filled with a
replacement Designee selected by AMMS or AVTF and Buyer shall take such actions
as shall be necessary to cause such replacement Designee to be appointed to
Buyer’s board of directors.

     

    4.13 Customer
Services.  Until
the earlier of (i) the third anniversary of the Closing Date and (ii)
termination by mutual agreement of Buyer and AMMS, AMMS and Buyer shall agree to
the following:

     

    (a) AMMS Installed Base Customer
Services.

     

    (i) Subject
to Section 4.13(a)(ii) and 4.13(d) hereof, AMMS will continue, after the Closing
Date, to be in charge of and responsible for the provision of the Customer
Services to AMMS Installed Base Customers, as these Customer Services were
conducted by AMMS prior to the Closing.

     

    (ii) Until the
earlier of (A) the third anniversary of the Closing Date or (B) the purchase by
Buyer of Seller’s Customer Services business as provided in Section 4.13(d) hereof, Buyer
shall not solicit (except in connection with a proposed sale by Buyer of an AMMS
Product or other Buyer product to such AMMS Installed Base Customer on or after
the Closing Date) nor shall it provide Customer Services to any AMMS Installed
Base Customer, unless either (x) an AMMS Installed Base Customer purchases a
system or module directly from Buyer, or (y) an AMMS Installed Base Customer,
either directly to AMMS or through Buyer, specifically requests that Buyer
provide such Customer Services.  Any such request shall be reviewed
and approved by Seller in a timely manner and shall not be unreasonably
denied.  In addition, Seller may request in writing that Buyer assume
the provision of Customer Services to any AMMS Installed Base Customer and Buyer
shall agrees to use its commercially reasonable efforts to do so, provided that
if Buyer reasonably determines that it is not in the best interests of Buyer to
assume such Customer Services, Buyer shall not be obligated to do so. For the
avoidance of doubt, nothing in this Section 4.13(a)(ii) shall obligate
Buyer to purchase Customer Services from AMMS for Products sold by Buyer to AMMS
Installed Base Customers on or after the Closing Date, nor restrict Buyer from
providing services to any customers that are not identified on Schedule
9.2(b).

     

    (iii) Upon
receipt of Buyer’s written notice, AMMS shall provide Customer Services to the
AMMS Installed Base Customers with respect to Products sold by Buyer to AMMS
Installed Base Customers on or after the Closing Date, such Customer Services to
be performed by AMMS at Buyer’s expense in accordance with the service charges
schedule attached hereto as Exhibit
H and in
accordance with AMMS standard terms and conditions.  In any case where
AMMS is providing Customer Services, AMMS agrees to perform such Customer
Services with reasonable care and in accordance with AMMS’ best practices, which
in no case shall be lower than the standards AMMS applies in connection with the
Business as it is being conducted as of the Closing Date.

     

    (b) AMMS Final Test
Services.  Until the expiration of the six (6)-month period
immediately following the Closing Date, upon receipt of Buyer’s written notice,
AMMS shall provide Final Test Services for Products sold or to be sold by Buyer
to AMMS Installed Base Customers and/or existing or new customers of
Buyer.  Such Final Test Services shall be performed at Buyer’s expense
in accordance with the service charges schedule attached hereto as Exhibit
H and in
accordance with AMMS standard terms and conditions.  Such Final Test
Services shall be performed with reasonable care and in accordance with AMMS’
best practices, which in no case shall be lower than the standards AMMS applies
in connection with the Business as it is being conducted as of the Closing
Date.

     

    (c)  No
Warranty.  With respect to Section 4.13(a)(i), no warranty
whatsoever is given by AMMS that an AMMS Installed Base Customer will remain
with AMMS or that AMMS will continue to serve such AMMS Installed Base
Customer if AMMS considers, in its absolute and reasonable discretion, that such
AMMS Installed Base
Customer is not fulfilling its obligations under such AMMS Installed Base
Customer’s contract with AMMS.  In the event that AMMS refuses or
discontinues providing Customer Services to any AMMS Installed Base Customer,
Seller shall notify Buyer in writing within ten (10) business days.

     

    (d) Purchase
Option.  Buyer, at its sole discretion and upon delivery of
written notice to AMMS on or prior to the third anniversary of the Closing Date,
shall have the option to purchase all or a portion of the Customer Services from
AMMS, at a cash price to be determined by Buyer and AMMS.

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
V

     

    CONDITIONS
TO THE CLOSING

     

    5.1 Conditions to the Closing
Relating to Buyer.  Buyer’s
obligation to consummate the transactions contemplated hereby is subject to the
fulfillment, prior to or at the Closing Date, of each of the following
conditions:

     

    (a) Representations, Warranties
and Covenants.  All representations and warranties of Sellers
contained in this Agreement and qualified by the words “material,” “material
adverse effect” and similar phrases shall be true and correct in all respects,
and all representations and warranties of Sellers contained in this Agreement
that are not so qualified shall be true and correct in all material respects, in
each case, at and as of the date of this Agreement and at and as of the Closing
Date, except for those representations and warranties that speak as of a
particular date, which will continue to be true and correct as of such date, and
Sellers shall have performed and satisfied in all material respects all
agreements and covenants required hereby to be performed by it prior to or on
the Closing Date.

     

    (b) Regulatory Consents,
Authorizations, etc.  All consents, authorizations, Orders and
Approvals of, and filings and registrations with any Governmental Entity or any
other Person which are required for or in connection with the execution and
delivery of this Agreement and the consummation by each party hereto of the
transactions contemplated hereby, shall have been obtained or made.

     

    (c) Litigation; Other
Events.  No Law shall have been enacted, entered, issued,
promulgated or enforced by any Governmental Entity, nor shall any Action be
pending or threatened, which questions the validity or legality of, or prohibits
or restricts or, if successful, would prohibit or restrict, the transactions
contemplated by this Agreement or would not permit the Business as presently
conducted to continue unimpaired following the Closing Date or which would have
any material adverse effect on the right or ability of Buyer to own, operate,
possess or transfer the Assets after the Closing.

     

    (d) Deliveries.  The
deliveries referred to in Section 1.12(a) shall
have been made.

     

    (e) Material
Changes.  Since May 31, 2008, there shall not have been any
material adverse change to the condition of the Assets.

     

    (f) Conveyancing Documents;
Release of Encumbrances.  Each Seller shall have executed and
delivered each of the applicable documents described in Section 1.12 hereof so as to effect the transfer and
assignment to Buyer of all right, title and interest in and to the Assets and
each Seller shall have filed (where necessary) and delivered to Buyer all
documents necessary to release the Assets from all Encumbrances which documents
shall be in a form reasonably satisfactory to Buyer.

     

    5.2 Conditions to the Closing
Related to Sellers.  Each
Seller’s obligation to consummate the transactions contemplated hereby is
subject to the fulfillment, prior to or at the Closing Date, of each of the
following conditions:

     

    (a) Representations, Warranties
and Covenants.  All representations and warranties of Buyer
contained in this Agreement and qualified by the words “material,” “material
adverse effect” and similar phrases shall be true and correct in all respects,
and all representations and warranties of Buyer contained in this Agreement that
are not so qualified shall be true and correct in all material respects, in each
case, at and as of the date of this Agreement and at and as of the Closing Date,
except for those representations and warranties that speak as of a particular
date, which will continue to be true and correct as of such date, and Buyer
shall have performed and satisfied in all material respects all agreements and
covenants required hereby to be performed by it prior to or on the Closing
Date.

     

    (b) Regulatory Consents,
Authorizations, etc.  All consents, authorizations, Orders and
Approvals of, and filings and registrations with any Governmental Entity or any
other Person which are required for or in connection with the execution and
delivery of this Agreement and the consummation by each party hereto of the
transactions contemplated hereby, shall have been obtained or made.

     

    (c) Litigation; Other
Events.  No Law shall have been enacted, entered, issued,
promulgated or enforced by any Governmental Entity, nor shall any Action be
pending or threatened, which questions the validity or legality of, or prohibits
or restricts or, if successful, would prohibit or restrict, the transactions
contemplated by this Agreement.

     

    (d) Deliveries.  The
deliveries referred to in Section 1.12(b) shall
have been made.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
VI

     

    INDEMNITY

     

    6.1 Survival of
Indemnity.  The
representations and warranties by Sellers set forth in Article III hereof shall
survive eighteen (18) months after the Closing Date, provided that the
representations and warranties contained in Section 3.7 (Tax Matters) and covenants and agreements
relating to Taxes shall survive until the expiration of the applicable statute
of limitations plus ninety (90) days, and the covenants and agreements of
Sellers set forth in this Agreement shall survive in accordance with their terms
or, if no term is indicated, for eighteen (18) months after the Closing
Date.  A Claim with respect to a breach of a representation or
warranty or a breach or nonperformance of a covenant or agreement may be brought
only prior to the applicable expiration date.

     

    6.2 Indemnification by
Sellers.

     

    (a) Sellers
shall indemnify, save and hold harmless Buyer, its Affiliates and their
respective Representatives from and against any and all costs, losses, Taxes,
Liabilities, obligations, damages, lawsuits, judgments, settlements, awards,
deficiencies, claims, demands, expenses (including reasonable costs of
investigation and reasonable attorneys’ fees and expenses), interest, fines,
penalties, costs of mitigation, and other losses actually paid to third parties
(herein, “Damages”), incurred
in connection with, arising out of, resulting from or incident to (i) any breach
of a representation or warranty of any Seller contained in this Agreement; (ii)
any breach of any covenant of any Seller contained in this Agreement; (iii) the
Ancillary Agreements; (iv) any Excluded Asset or Excluded Liability; or (v) any
claim related to, or any Action or Order resulting from, any matter described on
Section 3.11(b) of the Seller Disclosure Schedule
and attributable to any AMMS Product sold on or after to the Closing Date
regardless of how such Damages may arise (whether by joinder or
otherwise).  For the avoidance of doubt, in no case shall this Section
6.2 be applicable for any Damages arising out of or
related to Assumed Liabilities. The term “Damages” as used in this Article VI is
not limited to matters asserted by third parties against any Seller or Buyer,
but includes Damages incurred or sustained by any Seller or Buyer in the absence
of third party claims.  Payments by Buyer of amounts for which Buyer
is indemnified hereunder shall not be a condition precedent to
recovery.  Sellers’ obligation to indemnify Buyer shall not limit any
other rights, including without limitation rights of contribution, which any
Party may have under statute or common Law.

     

    (b) Sellers
shall not be liable for any Claims under Section 6.2(a) until the
aggregate amount due in respect of such Claims exceeds $50,000 (the “Threshold”), provided
only breaches giving rise to Damages of not less than $10,000 shall be taken
into account in computing such Threshold.  If such aggregate amount
exceeds $50,000, then Sellers shall be, jointly and severally, only liable for
the amount of such Claims exceeding the Threshold, provided, however, in no event shall
Sellers’ liability under Section 6.2(a) exceed $1,000,000; provided, however, the
foregoing limitations of liability in this Section 6.2(b) shall not be
applicable to Damages arising out of or related to Excluded Assets or Excluded
Liabilities.

     

    (c) By
exception to all provisions of Section 6.2(b) above, Sellers shall be liable for any Claims
under Section 6.2(a)
above which are related directly or indirectly to any breach of Sellers’
representation under Section 3.19 and for the
consequences of the application by a judge of the provisions related to the
European Acquired Rights Directive (2001/23/EC) and any applicable national
implementing legislation of any Member State of the European Union, in
particular Articles L1224-1 and L2261-14 of the French Labor Code, provided a claim is made
against Buyer or AMMS or its respective Affiliates within twelve (12) months
from the Closing Date.

     

    (d) Regardless
of any disclosure thereof or in connection therewith to Buyer and by exception
to all provisions of Section 6.2(b) above, Sellers shall indemnify and hold Buyer
harmless from and against any and all Damages suffered by Buyer resulting from
any claim related to, or any Action or Order resulting from, any matter
described on (i) Section 3.10 of the Seller
Disclosure Schedule regardless of how such Damages may arise (whether by joinder
or otherwise), or (ii) Section 3.11(b) of the
Seller Disclosure Schedule that is attributable to any AMMS Product sold before
the Closing Date regardless of how such Damages may arise (whether by joinder or
otherwise) and provided such claim is brought within eighteen (18) months of the
Closing Date; provided,
however, that Sellers’ indemnity obligations under this Section 6.2(d) shall not be
applicable to the extent such claim, Action or Order is based on an infringement
or other claim attributable to Buyer’s modification of any AMMS
Product.

     

    (e) Notwithstanding
anything to the contrary in this Agreement or in the Ancillary Agreements, in no
event shall Sellers be liable for indirect or consequential damages (to include,
without limitation, loss of profits or loss of revenues but it being understood
that, for purposes of Section 6.2(c) hereof, salaries, compensation or other employment
benefits shall not be considered indirect or consequential damages and shall be
comprised in Damages). All Claims shall be measured net of any insurance
recoveries received by Buyer in respect of such Claim.

     

    6.3 Indemnification by
Buyer.

     

    (a) The
representations and warranties of Buyer set forth herein in Article II hereof
shall survive until the eighteen (18) month anniversary of the Closing
Date.  Buyer shall indemnify and save and hold harmless Sellers, its
Affiliates and their Representatives from and against any and all Damages
incurred in connection with, arising out of, resulting from or incident to (i)
any breach of any representation or warranty made by Buyer contained in this
Agreement; (ii) any breach of any covenant made by Buyer contained in this
Agreement; (iii) the Ancillary Agreements; or (iv) from and after the Closing,
any Assumed Liability.  For the avoidance of doubt, in no case shall
this Section 6.3 be applicable for any Damages
arising out of or related to Excluded Assets or Excluded Liabilities. Payments
by a Seller of amounts for which such Seller is indemnified hereunder shall not
be a condition precedent to recovery.  Buyer’s obligation to indemnify
Sellers shall not limit any other rights, including without limitation rights of
contribution, which any Party may have under statute or common Law.

     

    (b) Buyer
shall not be liable for any Claims under Section 6.3(a) until the aggregate amount due in respect of
such Claims exceeds Threshold, provided only breaches giving rise to Damages of
not less than $10,000 shall be taken into account in computing such
Threshold.  If such aggregate amount exceeds $50,000, then Buyer shall
be only liable for only the amount of such Claims exceeding the Threshold, provided, however, in no event shall
Buyer’s liability under Section 6.3(a) exceed
$1,000,000; provided,
however, the foregoing limitations of liability in this Section 6.3(b) shall not be applicable to Damages arising out
of or related to Assumed Liabilities.

     

    (c) Notwithstanding
anything to the contrary in this Agreement or in the Ancillary Agreements, in no
event shall Buyer be liable for indirect or consequential damages (to include,
without limitation, loss of profits or loss of revenues). All Claims shall be
measured net of any insurance recoveries received by Seller in respect of such
Claim.

     

    6.4 Determination of
Indemnification.

     

    The amount of any indemnification
payable hereunder on account of Damages shall be determined after reduction on
account of:

     

    (a) if and to
the extent that the relevant Damages are due to a Party’s
negligence;

     

    (b) if and to
the extent that a Party or any of its Affiliate has received recovery for the
relevant Damages from any other Person (including under any insurance policy);
and

     

    (c) if and to
the extent that the relevant Damages arise or is increased as a result of any
voluntary act or omission of a Party after the Closing.

     

    6.5 Procedure.

     

    (a) Defense of
Claims.  If a claim for Damages (a “Claim”) is to be made
by a Party entitled to indemnification (“Indemnified Party”)
hereunder against the Party from whom indemnification is sought (the “Indemnifying Party”),
the Party claiming such indemnification shall, subject to this Section 6.5, give written notice (a “Claim Notice”) to the
Indemnifying Party as soon as practicable after the Party entitled to
indemnification becomes aware of any fact, condition or event which may give
rise to Damages for which indemnification may be sought under this Section 6.5.  If any lawsuit or enforcement action
is filed against any Party entitled to the benefit of indemnity hereunder,
written notice thereof shall be given to the Indemnifying Party as promptly as
practicable (and in any event within fifteen (15) calendar days after the
service of the citation or summons).  The failure of any Indemnified
Party to give timely notice hereunder shall not affect rights to indemnification
hereunder, except to the extent that the Indemnifying Party demonstrates actual
damage caused by such failure.  After such notice, if the Indemnifying
Party shall acknowledge in writing to the Indemnified Party that the
Indemnifying Party shall be obligated under the terms of its indemnity hereunder
in connection with such lawsuit or action, then the Indemnifying Party shall be
entitled, if it so elects at its own cost, risk and expense, (i) to take control
of the defense and investigation of such lawsuit or action, (ii) to employ and
engage attorneys of its own choice to handle and defend the same unless the
named parties to such action or proceeding include both the Indemnifying Party
and the Indemnified Party and the Indemnified Party has been advised in writing
by counsel that there may be one or more legal defenses available to such
Indemnified Party that are different from or additional to those available to
the Indemnifying Party, in which event the Indemnified Party shall be entitled,
at the Indemnifying Party’s cost, risk and expense, to separate counsel of its
own choosing, and (iii) to compromise or settle such Claim, which compromise or
settlement shall be made only with the written consent of the Indemnified Party,
such consent not to be unreasonably withheld; provided, however, that this sentence
shall not apply to Claims relating to Taxes.  If the Indemnifying
Party fails to assume the defense of such Claim within fifteen (15) calendar
days after receipt of the Claim Notice, the Indemnified Party against which such
Claim has been asserted will (upon delivering notice to such effect to the
Indemnifying Party) have the right to undertake, at the Indemnifying Party’s
cost and expense, the defense, compromise or settlement of such Claim on behalf
of and for the account and risk of the Indemnifying Party.  In the
event the Indemnified Party assumes the defense of the Claim, the Indemnified
Party will keep the Indemnifying Party reasonably informed of the progress of
any such defense, compromise or settlement.  The Indemnifying Party
shall be liable for any previously approved settlement of any action effected
pursuant to and in accordance with this Section 6.5
and for any final judgment (subject to any right of appeal), and the
Indemnifying Party agrees to indemnify and hold harmless the Indemnified Party
from and against any Damages by reason of such settlement or
judgment.

     

    (b) Cooperation.  The
Indemnified Party shall cooperate in all reasonable respects with the
Indemnifying Party and such attorneys in the investigation, trial and defense of
such lawsuit or action and any appeal arising therefrom; provided, however, that the Indemnified
Party may, at its own cost, participate in the investigation, trial and defense
of such lawsuit or action and any appeal arising therefrom.  For the
avoidance of doubt, nothing contained in this Section 6.5(b) shall affect the
Indemnified Party’s right to employ and engage separate counsel in accordance
with Section 6.5(a)(ii).  The Parties shall cooperate with
each other in any notifications to insurers.

     

    (c) Equitable Relief; No
Waiver.  Nothing in this Agreement shall (i) limit the right of
any Party to seek specific performance of, or equitable relief with respect to,
another Party with respect to a breach of any covenant or agreement set forth in
this Agreement or (ii) be deemed a waiver by any Party to this Agreement of any
right or remedy which such Party may have at Law or in equity based on any claim
of fraud.

     

    6.6 No
Set-off.  Buyer
and its Affiliates are not authorized at any time without the prior written
consent of AMMS, and Sellers and its Affiliates are not authorized at any time
without the prior written consent of Buyer, to set off any amounts due or which
may become due hereunder or under any agreement entered into in connection with
this Agreement or the Ancillary Agreements or the transactions contemplated
hereby or thereby, against any obligations which may become due under this
Article VI.

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
VII

     

    NON-COMPETE
& NON-DISCLOSURE

     

    7.1 Sellers
Non-Compete.

     

    (a)  As
a material inducement to Buyer’s willingness to enter into and perform this
Agreement and to purchase the Assets and for the consideration to be paid or
provided to Sellers in connection with such purchase, each Seller agrees that it
and its controlled Affiliates will not Compete (as defined below), at any time
for three (3) years
after the expiration of the obligations set forth in Section 4.13 hereof (such period, the “Non-Competition
Period”).  For purposes of this Section 7.1, “Compete” means
directly or indirectly, for its or own benefit or as agent for another,
participate in the ownership of (except as the passive holder of less than five
percent (5%) of the outstanding shares of any class of a corporation whose stock
is listed on any national or regional securities exchange), or management or
control of, any present or future business enterprise that competes with the
Business, or carry on activities competing with the Business, as the same was
conducted by AMMS as of the Closing Date.  For the avoidance of doubt,
immediately prior to the Closing Date, AMMS shall cease all sales of AMMS
Products to any AMMS Installed Base Customer or any other Person; provided, however, that this Article
VII is not intended to prohibit AMMS or Buyer from benefiting from its rights or
performing its obligations pursuant to this Agreement or the Ancillary
Agreements, including without limitation, Section 4.13 hereof, and provided that this
Article VII is not intended to prevent any Affiliate of the Seller from carrying
on activities with competitors of Buyer, to the extent that those activities
conducted by such Affiliate of Seller do not compete with the
Business.

     

    (b) Sellers
acknowledge and agree that the provisions of this Section 7.1 have been specifically negotiated and carefully
tailored with a view to preventing the serious and irreparable injury that Buyer
will suffer in the event any Seller Competes during the Non-Competition Period,
and is intended to assure that Buyer receives the full value of the Assets and
the Business, including its goodwill, in consideration of the Purchase Price
paid by Buyer hereunder.  Sellers further acknowledge that a breach by
any Seller of this Section 7.1 will cause
irreparable injury and damage to Buyer, the exact amount of which would be
difficult to ascertain, and that the remedies at Law for any such breach would
be inadequate.  Accordingly, if any Seller breaches this Section 7.1, Buyer shall be entitled to injunctive relief
without posting bond or other security and Sellers shall not object thereto on
the grounds that money damages would be adequate; provided, however, that Buyer may
elect, at its option, to seek damages instead of injunctive relief by virtue of
such breach.

     

    (c) In the
event that, despite the express agreement of Buyer and Sellers, any provision of
this Section 7.1 shall be determined by any court
or other tribunal of competent jurisdiction to be unenforceable for any reason
whatsoever, the parties agree that this Section 7.1
shall be interpreted to extend only over the maximum period of time for which it
may be enforceable, and/or over the maximum geographical areas as to which it
may be enforceable, and/or over the broadest competitive activities as to which
it may be enforceable, and/or to the maximum extent in any and all other
respects as to which it may be enforceable, all as determined by such court or
tribunal.

     

    7.2 Mutual
Non-Compete.  Each
of the Parties agrees that it and its controlled Affiliates will not Compete in
the Field of Services (as defined below), at any time during the Non-Competition
Period.  For purposes of this Section 7.2, “Compete in the Field of
Services” means directly or indirectly, for such Party or its own benefit
or as agent for another, participate in the ownership of (except as the passive
holder of less than five percent (5%) of the outstanding shares of any class of
a corporation whose stock is listed on any national or regional securities
exchange), or management or control of any present or future business enterprise
that competes with the other Party in the Field of Services as the same may be
conducted by the other Party and its Affiliates as of the Closing
Date.  For the avoidance of doubt, this Article VII is not intended
(i) to prohibit Buyer from conducting the Business, including but not limited to
selling AMMS Products and providing Customer Services pursuant to Section 4.13 to the AMMS Installed Base Customers or any other
Person or prohibit AMMS or Buyer from benefiting from its rights or performing
its obligations pursuant to this Agreement or the Ancillary Agreements,
including without limitation providing Customer Services pursuant to Section 4.13 hereof and (ii) to prevent any Affiliate of the
Seller from conducting activities with competitors of Buyer, to the extent that
those activities do not compete in the Field of Services.

    

    7.3 Non-Disclosure.  In
addition to AMMS’ obligations under the Confidentiality Agreement, at all times
from and after the Closing Date, Sellers shall keep secret and retain in
strictest confidence and shall not, except with the express prior written
consent of Buyer, directly or indirectly disclose, communicate or divulge to any
Person, or use for the benefit of any Person, any confidential or proprietary
information or material relating to Buyer’s or Seller’ operations or businesses
(including, but not limited to, the Business) which it may have learned as an
owner, stockholder, employee, officer or director of any Seller or in connection
with the negotiation of this Agreement.  Confidential or proprietary
information or material includes, without limitation, the following types of
information or material regarding Buyer, its direct or indirect parents,
Affiliates or related companies: proprietary data processing systems and
software; corporate information, including contractual arrangements, plans,
strategies, tactics, policies, resolutions, patent, copyright, trademark, and
trade name applications, designs, technologies, inventions, know-how, and any
litigation or negotiations; marketing information and methods, including sales
or product plans, products, product lines, proposed products, pricing policies,
fees, strategies, methods, vendors, customers, customer lists, prospects, or
market research data; financial information, including cost and performance
data, debt arrangements, equity structures, investors and holdings; operational
and scientific information, including trade secrets, technical information, and
personnel information, including personnel lists, resumes, personnel data, terms
of employment agreements, organizational structure, and performance evaluations
(collectively, “Proprietary
Information”).  The restriction contained in the preceding
sentence shall not apply to any Proprietary Information to the extent that (a)
such information is or hereafter becomes generally available to the public
without a breach of this Agreement, (b) disclosure is made to a Governmental
Entity where it is necessary or appropriate to disclose such information to such
Governmental Entity having jurisdiction over the parties, or (c) disclosure is
otherwise required by Law.  To avoid confusion, the restrictions set
forth in this Section 7.3 apply to any disclosure
by any Seller of any information related to the terms of or existence of, or
matters discussed in the course of negotiating, this Agreement. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
VIII

     

    MISCELLANEOUS

     

    8.1 Termination.

     

    (a) Termination Prior To
Closing.  This Agreement may be terminated at any time prior to
Closing:

     

    (i) by mutual
written consent of Buyer and Sellers;

     

    (ii) by Buyer
or Sellers if the Closing shall not have occurred on or before September 30,
2008 (the “Outside
Date”); provided, however, that this provision
shall not be available to Buyer if Sellers have the right to terminate this
Agreement under clause (iv) of this Section 8.1(a), and this provision shall not be available to
Sellers if Buyer has the right to terminate this Agreement under clause (iii) of
this Section 8.1(a);

     

    (iii) by Buyer
if there is a material breach of any representation or warranty set forth in
Article III hereof or any covenant or agreement to be complied with or performed
by any Seller pursuant to the terms of this Agreement or the failure of a
condition set forth in Section 5.1 to be satisfied
(and such condition is not waived in writing by Buyer) on or prior to the
Closing Date, or the occurrence of any event which results or would result in
the failure of a condition set forth in Section 5.1
to be satisfied on or prior to the Closing Date; provided that Buyer may not
terminate this Agreement prior to the fifth day following the occurrence of such
failure if such failure is capable of being cured and such Seller is using
reasonable best efforts to cure such failure; or

     

    (iv) by
Sellers if there is a material breach of any representation or warranty set
forth in Article II hereof or of any covenant or agreement to be complied with
or performed by Buyer pursuant to the terms of this Agreement or the failure of
a condition set forth in Section 5.2 to be
satisfied (and such condition is not waived in writing by Sellers) on or prior
to the Closing Date, or the occurrence of any event which results or would
result in the failure of a condition set forth in Section 5.2 to be satisfied on or prior to the Closing Date;
provided that Sellers
may not terminate this Agreement prior to the fifth day following the occurrence
of such failure if such failure is capable of being cured and Buyer is using
reasonable best efforts to cure such failure.

     

    (b) In the Event of Termination
Prior To Closing.  In the event of termination prior to Closing
of this Agreement:

     

    (i) each
Party will redeliver all documents, work papers and other material of the other
party relating to the transactions contemplated hereby, whether so obtained
before or after the execution hereof, to the party furnishing the
same;

     

    (ii) the
provisions of the Confidentiality Agreement shall continue in full force and
effect; and

     

    (iii) no Party
hereto shall have any Liability to the other Parties to this Agreement,
except:

     

    (A) as stated
in subsections (i) and (ii) of this Section 8.1(b), or

     

    (B) for any
willful breach of this Agreement occurring prior to the proper termination of
this Agreement.

     

    The
foregoing provisions of this Section 8.1(b)(iii) shall not limit
or restrict the availability of specific performance or other injunctive relief
to the extent that specific performance or such other relief would otherwise be
available to a party hereunder.  The parties acknowledge that the
provisions of this Section 8.1 are an integral part
of this Agreement and that without these provisions the parties would not enter
into this Agreement.

     

    (c) Termination of Agreement
After Closing.  This Agreement may be terminated at any time
after Closing:

     

    (i) by mutual
written consent of Buyer and Sellers;

     

    (ii) by Buyer
if there is a material breach of any covenant or agreement to be complied with
or performed by any Seller pursuant to the terms of this Agreement after the
Closing Date, including but not limited to Section 4.13 hereof; provided that Buyer may not
terminate this Agreement prior to the fifth day following the occurrence of such
failure if such failure is capable of being cured and such Seller is using
reasonable best efforts to cure such failure; or

     

    (iii) by AMMS
if there is a material breach of any covenant or agreement to be complied with
or performed by Buyer pursuant to the terms of this Agreement after the Closing
Date, including but not limited to Section 4.13 hereof, provided that Sellers may not
terminate this Agreement prior to the fifth day following the occurrence of such
failure if such failure is capable of being cured and Buyer is using reasonable
best efforts to cure such failure.

     

    8.2 Notices.  All
notices and other communications provided for herein shall be in writing and
shall be deemed to have been duly given when delivered personally or when sent
by telex, telecopy or other electronic or digital transmission method
(including, but not limited to, in portable document format by electronic mail)
or three (3) business days after being mailed by registered or certified mail,
return receipt requested, postage prepaid, to the party to whom it is directed
or one (1) business day after being sent via a nationally recognized courier
service for next business day delivery, to the party to whom it is
directed:

     

    If to
Buyer, to:

    

    Tegal
Corporation

    2201
South McDowell Boulevard

    Petaluma,
CA 94954

    Attention:  Thomas
R. Mika, Chairman, President & Chief
Executive      Officer

    Facsimile:  +1.707.763.0415

    

    With
copies to:

    

    Latham
& Watkins LLP

    140 Scott
Drive

    Menlo
Park, California 94025

    Attention:  Robert
Phillips

    Facsimile:  +1.650.463.2600

    

    If to
Sellers, to:

    

    Alcatel
Micro Machining Systems

    98,
avenue de Brogny – BP 2069

    74009
Annecy Cedex, France

    Attention:  Gilbert
Bellini, President

    Facsimile:  +33(4).50.65.76.44

    

    and

    

    Alcatel
Lucent

    Legal
Department

    54, rue
La Boétie 75008 Paris, France

    Attention:
Pascal REMY

    Facsimile:
+33 (1).40.76.14.81

    

    or for
any party, at such other address as such party shall have specified in writing
to each of the others in accordance with this Section 8.2.

     

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

     

    8.4 Section
Headings.  The
section headings of this Agreement are for convenience of reference only and
shall not be deemed to limit or affect any of the provisions
hereof.

     

    8.5 Amendments; No
Waivers.  

     

    (a) Any
provision of this Agreement may be waived or amended if, and only if, such
amendment or waiver is in writing and signed by each of the parties
hereto.

     

    (b) No
failure by any party hereto to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement, or to exercise any
right or remedy consequent upon a breach hereof, shall constitute a waiver of
any such breach or any other covenant, duty, agreement or condition
hereof.

     

    8.6 Entire Agreement; No
Assignment.  This
Agreement (including the Exhibits hereto, Seller Disclosure Schedule and any
amendments hereto), the Ancillary Agreements and the Confidentiality Agreement
(a) constitute the entire agreement and understandings of the parties
hereto and supersedes all prior agreements and understandings, both written and
oral, among the parties hereto with respect to the subject matter hereof
including, without limitation, the letter of intent dated June 6, 2008,
(b) are not intended to confer upon any other Person any rights or remedies
hereunder, and (c) this Agreement shall not be assigned, by operation of
Law or otherwise prior to the Closing.  In the case of any
conflict  between this Agreement and the bill of sale to be delivered
by Sellers to Buyer in accordance with Section 1.12(a)(ii) of this Agreement, the terms of this
Agreement shall prevail.

     

    8.7 No Third Party
Beneficiaries.  Neither
any Seller nor Buyer intends for this Agreement or the Ancillary Agreements to
create any rights or obligations except as between Sellers and Buyer, and no
other Person shall be treated as third-party beneficiaries hereunder or
thereunder.

     

    8.8 Governing
Law.  This
Agreement shall be governed by and construed in accordance with the Laws of the
State of New York (without regard to the choice of Law provisions
thereof).

     

    8.9 Severability.  If
it is determined by a court of competent jurisdiction that any provision of this
Agreement is invalid under applicable Law, such provision shall be ineffective
only to the extent of such invalidity, without invalidating the remainder of
this Agreement.

     

    8.10 Cumulative
Remedies.  All
rights and remedies of either party hereto are cumulative of each other and of
every other right or remedy such party may otherwise have at Law or in equity,
and the exercise of one or more rights or remedies shall not prejudice or impair
the concurrent or subsequent exercise of other rights or remedies.

     

    8.11 Arbitration.  THE
PARTIES HERETO AGREE THAT ANY DISPUTE, CONTROVERSY OR CLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR BREACH THEREOF (“DISPUTE”), SHALL BE
SUBJECT TO A MANDATORY PERIOD OF THIRTY (30) DAYS DURING WHICH THE PARTIES SHALL
(I) EACH APPOINT ONE OR MORE REPRESENTATIVES AND (II) THE REPRESENTATIVES SHALL
MEET IN A TIMELY MANNER FOR THE PURPOSE OF ATTEMPTING TO RESOLVE THE
DISPUTE.  THE REPRESENTATIVES SHALL NEGOTIATE IN GOOD FAITH TO RESOLVE
THE DISPUTE WITHOUT RESORT TO FORMAL PROCEEDINGS.  DURING THE COURSE
OF SUCH NEGOTIATIONS, THE PARTIES SHALL COMPLY WITH ALL REASONABLE REQUESTS FOR
ACCESS TO RELEVANT INFORMATION.  FORMAL PROCEEDINGS FOR THE
ARBITRATION OF SUCH DISPUTE MAY NOT BE COMMENCED UNTIL THE EXPIRATION OF THE
FOREGOING MANDATORY THIRTY- (30)-DAY PERIOD.  BOTH PARTIES SHALL
CONTINUE TO PERFORM THEIR RESPECTIVE OBLIGATIONS HEREUNDER DURING THE
NEGOTIATIONS BY REPRESENTATIVES ATTEMPTING TO RESOLVE THE
DISPUTE.  FOLLOWING THE EXPIRATION OF THE MANDATORY THIRTY- (30)-DAY
PERIOD PROVIDED IN SECTION 9.11 (A) HEREOF, ANY UNRESOLVED DISPUTE SHALL BE
SETTLED BY ARBITRATION UNDER THE RULES OF CONCILIATION AND ARBITRATION OF THE
INTERNATIONAL CHAMBER OF COMMERCE, BY ONE OR MORE ARBITRATORS APPOINTED IN
ACCORDANCE WITH SUCH RULES. THE ARBITRATION SHALL TAKE PLACE IN GENEVA
(SWITZERLAND) IN ENGLISH.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    ARTICLE
IX

     

    DEFINITIONS

     

    9.1 General.  

     

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

     

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

     

    (b) All
accounting terms not otherwise defined herein have the meanings assigned under
GAAP,

     

    (c) All
references in this Agreement to designated “Articles,” “Sections” and other
subdivisions are to the designated Articles, Sections and other subdivisions of
the body of this Agreement,

     

    (d) Pronouns
of either gender or neuter shall include, as appropriate, the other pronoun
forms, and

     

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

     

    9.2 Definitions.  As
used in this Agreement and the Exhibits and Schedules delivered pursuant to this
Agreement, the following definitions shall apply.  

     

    “Action” means any
action, complaint, petition, investigation, suit or other proceeding, whether
civil or criminal, in Law or in equity, or before any arbitrator or Governmental
Entity.

     

    “Affiliate” means a
Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, a specified
Person.

     

    “Agreement” means this
Agreement by and among Buyer and Sellers, as amended or supplemented together
with all Exhibits and Schedules attached or incorporated by
reference.

     

    “Alcatel” has the
meaning set forth in the preamble to this Agreement.

     

    “Alcatel Assets” has
the meaning set forth in Section 1.2
of  this Agreement.

     

    “Alcatel Lucent Group”
means Alcatel Lucent and its Subsidiaries.

     

    “Alcatel Lucent Intellectual
Property Agreement” means the intellectual property transfer and license
agreement, dated as of the Closing Date, substantially in the form attached
hereto as Exhibit
F.

     

    “Alcatel Lucent Intellectual
Property and Standards Group” means those members of the Alcatel Lucent
Intellectual Property and Standards Law Group who oversee, review or regularly
deal with intellectual property related legal matters.

     

    “Allocation” has the
meaning set forth in Section 1.9(a)
hereof.

     

    “Allocation Schedule”
has the meaning set forth in Section 1.9(a)
hereof.

     

    “AMMS” has the meaning
set forth in the preamble to this Agreement.

     

    “AMMS Assets” has the
meaning set forth in Section 1.1(e) of this
Agreement

     

    “AMMS Products” means
those Products that are manufactured on behalf of and marketed by AMMS or its
Affiliates as of  the Closing Date, the list of which is attached as
Schedule 9.2(a).

     

    “AMMS Installed Base
Customers” means customers of AMMS that have purchased or agreed to
purchase AMMS Products at any time prior to the Closing Date.

     

    “AMMS Intellectual
Property” has the meaning set forth in Section 1.1(c) of this Agreement

     

    “Ancillary
Agreements” means the Trademark License Agreement, the Intellectual
Property Agreement and the Preferred Supplier Agreement.

     

    “Approval” means any
approval, authorization, consent, qualification or registration, or any waiver
of any of the foregoing, required to be obtained from, or any notice, statement
or other communication required to be filed with or delivered to, any
Governmental Entity or any other Person.

     

    “Associate” of a
Person means (a) a corporation or organization (other than any Seller or a party
to this Agreement) of which such Person or any Associate is an officer, director
or partner or is, directly or indirectly, the beneficial owner of ten percent
(10%) or more of any class of Equity Securities, (b) any trust or other estate
in which such Person or any Associate has a substantial beneficial interest or
as to which such Person serves as trustee or in a similar capacity, and (c) any
relative or spouse of such Person or any relative of such spouse who has the
same home as such Person.

     

    “Asset Sale” means the
sale by Sellers and the purchase by Buyer of the Assets pursuant to the terms
hereof.

     

    “Assets” has the
meaning set forth in Section 1.2 of this
Agreement.

     

    “Assumed Liabilities”
shall mean Liabilities arising after the Closing Date in connection with the
ownership of the Assets.

     

    “AVTF” shall mean
Alcatel Vacuum Technology France, a French corporation.

     

    “Balance Sheet” shall
mean the audited balance sheet as of December 31, 2007.

     

    “Books and Records”
means (a) all records and lists of each Seller pertaining to the Assets, (b) all
records and lists pertaining to the Business, customers, suppliers or personnel
of AMMS, (c) all product, business and marketing plans of AMMS, and (d) all
books, ledgers, files, reports, plans, drawings and operating records of every
kind maintained by AMMS, but excluding the originals (but not copies) of AMMS’
Statuts, corporate seals, minute books, stock books and other corporate or
comparable organizational records having to do with the organization and
capitalization of AMMS and all income Tax records.

     

    “Business” means the
business of developing, manufacturing and selling the AMMS Products, as
conducted by the Sellers as at the Closing Date.

     

     “Business
Documentation” has the meaning set forth in Section 1.1(d) hereof.

     

    “Business Intellectual
Property” has the meaning set forth in Section 1.1(c) hereof.

     

    “Business Tax” means
taxe professionnelle as
governed by Articles 1447 et
seq. of the French Tax Code (Code général des
impôts).

    

    “Buyer” has the
meaning set forth in the preamble to this Agreement.

     

    “Buyer Common Stock”
means the common stock, par value $0.01, per share of Buyer.

     

    “Buyer SEC Documents”
has the meaning set forth in Section 2.9
hereof.

     

    “Claim” has the
meaning set forth in Section 6.5(a)
hereof.

     

    “Claim Notice” has the
meaning set forth in Section 6.5(a)
hereof.

     

    “Closing” means the
consummation of the Asset Sale and the other transactions contemplated by this
Agreement.

     

    “Closing Date” has the
meaning set forth in Section 1.11
hereof.

     

    “Code” means the
Internal Revenue Code of 1986, as amended from time to time, and the applicable
regulations thereunder.

     

    “Compete” has the
meaning set forth in Section 7.1(a)
hereof.

     

    “Compete in the Field of
Services” has the meaning set forth in Section 7.2 hereof.

     

    “Confidentiality
Agreement” means that certain Mutual Non-Disclosure Agreement, dated
April 27, 2008, by and between Buyer and AMMS.

     

    “Contract” means any
agreement, arrangement, bond, insurance policy, commitment, franchise,
indemnity, indenture, instrument, lease, license, insurance policy or
understanding, whether or not in writing.

     

    “Customer Services”
has the meaning set forth in Section 4.13(a)
hereof.

     

    “Damages” has the
meaning set forth in Section 6.2(a)
hereof.

     

    “Default” means (a) a
breach of or default under any Contract, (b) the occurrence of an event that
with the passage of time or the giving of notice or both would constitute a
breach of or default under any Contract, or (c) the occurrence of an event that
with or without the passage of time or the giving of notice or both would give
rise to a right of termination, renegotiation or acceleration under any
Contract.

     

    “Delivered Shares” has
the meaning set forth in Section 1.7(b)
hereof.

     

    “Designated Licensed
Patent” means the following  Patent family (known as ALU
ref.104381 METHODE ET APPAREILLAGE DE GRAVURE ANISOTROPE DU SILICIUM PERMETTANT
D'OBTENIR DES MOTIFS A HAUT FACTEUR D'ASPECT): French patent application N° FR
0200032, International patent application N° PCT/FR2002/04588, European patent
application N° EP 02806334.5 and Japanese patent application N° JP
2003-560972.

     

     “Designee” has the
meaning set forth in Section 4.12(a)
hereof.

     

    “Dispute” has the
meaning set forth in Section 8.11
hereof.

     

    “Encumbrance” means
any claim, charge, easement, encumbrance, lease, covenant, security interest,
mortgage, lien, option, pledge, rights of others, restriction (whether on
voting, sale, transfer, disposition or otherwise), or other encumbrance
whatsoever, whether imposed by agreement, understanding, Law, equity or
otherwise, except for any restrictions on transfer generally arising under any
applicable federal or state securities Law.

     

    “Equity Securities”
means any capital stock or other equity interest or any securities convertible
into or exchangeable for capital stock or any other rights, warrants or options
to acquire any of the foregoing securities.

     

    “Excluded Assets”,
notwithstanding any other provision of this Agreement, means all assets and
properties of the Sellers other than the Assets, including without limitation
Contracts in effect at the Closing, book orders as of the Closing Date and the
maintenance and support of the AMMS Installed Base Customers as of the Closing
Date.

     

    “Excluded Liabilities”
has the meaning set forth in Section 1.6
hereof.

     

    “Expenses” includes
all reasonable out-of-pocket expenses (including, without limitation, all fees
and expenses of counsel, accountants, investment bankers, experts and
consultants to a party hereto and its affiliates) incurred by a party or on its
behalf in connection with or related to the authorization, preparation,
negotiation, execution and performance of this Agreement and the transactions
contemplated hereby.

     

    “Extended Transition
Period” has the meaning set forth in Section 4.10.

     

    “Field of Services”
means the development, manufacturing and sale of capital equipment for
semiconductor or MEMS processing supplied to third-parties.

     

    “Final Test Services”
means providing system-level functional tests to verify performance of the
Products against published specifications for process control and material
handling and calibration of all analog set-points versus actual performance, as
well as a system burn-in under simulated process conditions, and are performed
on the Products prior to shipment to the Customer.

     

    “GAAP” means
accounting principles generally accepted in France.

     

    “Governmental Entity”
means any government or any agency, bureau, board, commission, court,
department, official, political subdivision, tribunal or other instrumentality
of any government, whether federal, state or local, domestic or
foreign.

     

    “Indebtedness” means
the outstanding principal balance of, and any accrued and unpaid interest, fees
and other amounts (including any prepayment penalties) payable by any Seller on
any indebtedness (including, without limitation, promissory notes, loans,
agreements, indentures, evidences of indebtedness, letters of credit and
guarantees) to any bank or other financial institution or other financing
source, or other unaffiliated lender (including any lessor on a capital lease),
any other outstanding obligations (including bank overdrafts) of any Seller to
any bank or other financial institution or other financing source, or other
unaffiliated lender (including any lessor on a capital lease) as of the Closing
Date (not including any trade payables), and the outstanding principal balance
of, and any accrued and unpaid interest, fees and other amounts payable on, any
Seller’s notes payable and any other obligations to any stockholder, former
stockholder or any Affiliate or Associate of any Seller as of the Closing
Date.

     

    “Indemnified Party”
has the meaning set forth in Section 6.5(a)
hereof.

     

    “Indemnifying Party”
has the meaning set forth in Section 6.5(a)
hereof.

     

    “Intellectual
Property” means all of the following intellectual property rights:
(i)  patents, pending and filed patent applications, and patent
disclosures, together with all provisionals, reissue patents, continuations,
continuations-in-part and divisions thereof (“Patents”), (ii)
trademarks, including goodwill associated therewith, (iii)  copyrights
and copyright applications, (iv) trade secrets and other confidential and
non-public business or technical information, including research and development
data, records and reports, know-how, manufacturing and production processes and
techniques, specifications, designs, drawings, (v) all copies and tangible
embodiments of the foregoing (in whatever form or medium), and (vi) and the
right to sue for any past, present or future claims or causes of action arising
out of or related to any infringement or misappropriation of any of the
foregoing, and the right to obtain legal and/or equitable relief
therefore.

     

    “Intellectual Property
Rights” has the meaning set forth in Section 3.11(a) hereof.

     

    “IRS” means the United
States Internal Revenue Service or any successor.

     

    “Knowledge” shall
mean, with respect to an entity, the knowledge of the key executive officers of
that entity after reasonable inquiry, and with respect to an individual, the
actual knowledge of that individual after reasonable inquiry.

     

    “Law” means any
constitutional provision, laws, statutes, ordinances, regulations, rules, notice
requirements, court decisions, agency guidelines, interpretations, principles of
law and Orders of any Governmental Entity, including without limitation
environmental laws, energy, motor vehicle safety, public utility, zoning,
building and health codes, occupational safety and health and laws respecting
employment practices, employee documentation, terms and conditions of employment
and wages and hours.

     

    “Lock-up” has the
meaning set forth in Section 1.12(e)(i)
hereof.

     

    “Loss” means any
action, cost, damage, disbursement, expense, liability, loss, deficiency,
diminution in value, obligation, penalty or settlement of any kind or nature,
whether foreseeable or unforeseeable, including but not limited to, interest or
other carrying costs, penalties, legal, accounting and other professional fees
and expenses incurred in the investigation, collection, prosecution and defense
of claims and amounts paid in settlement, that may be imposed on or otherwise
incurred or suffered by the specified Person.

     

    “MEMS” means
micro-electrical mechanical systems.

     

    “Non-Competition
Period” has the meaning set forth in Section 7.1(a) hereof.

     

    “Order” means any
decree, injunction, judgment, order, ruling, assessment or writ of any
Governmental Entity.

     

    “Outside Date” has the
meaning set forth in Section 8.1(a)(ii)
hereof.

     

    “Party” has the
meaning set forth in the preamble to this Agreement.

     

    “Patents” has the
meaning set forth in Section 9.2
hereof.

     

    “Permit” means any
license, permit, franchise, certificate of authority, Approval or any waiver of
the foregoing, required to be issued by any Governmental Entity.

     

    “Permitted
Encumbrances” means (i) statutory liens for Taxes not yet due,
(ii) assessments, governmental charges or levies or the Encumbrances of
materialmen, carriers, landlords and like Persons, all of which are in relation
to sums that are not yet due and payable, (iii) Encumbrances that will be
released and discharged at or prior to the Closing, (v) Encumbrances that
are not material in amount or do not materially detract from the value of or
materially impair the existing use of the property affected by such
Encumbrances,  (vi) workers or unemployment compensation liens
arising in the ordinary course of business consistent with past practices, and
(vii) all non-exclusive licenses granted by any of the Sellers or their
respective Affiliates prior to the Closing Date.

     

    “Person” means an
association, a corporation, an individual, a partnership, a trust, a firm or any
other entity, group or organization, including a Governmental
Entity.

     

    “Plan” means any
retirement, pension, profit-sharing, money purchase, deferred compensation,
incentive compensation, bonus, stock option, stock purchase, severance pay,
unemployment benefit, vacation pay, savings, medical, dental, post-retirement
medical, accident, disability, weekly income, salary continuation, health, life
or other insurance, fringe benefit, or other employee benefit plan, program,
agreement, or arrangement maintained or contributed to by any Seller or such
Seller’s Affiliates.

     

    “Pre-Closing Tax
Period” means any Tax period ending on or before the Closing Date and
that portion of any Straddle Period ending on the Closing Date.

     

    “Preferred Supplier
Agreement” means the preferred supplier agreement, dated as of the
Closing Date, substantially in the form attached hereto as Exhibit
G.

     

    “Products” means (i)
single wafer etching capital equipment based on the use of Inductively Coupled
Plasma (ICP sources, and (ii) Low Temperature Plasma Enhanced Chemical Vapor
Deposition (LT-PECVD) capital equipment.  For the avoidance of doubt,
the Products shall not include Physical Vapor Deposition (PVD)
equipments.

     

    “Property Taxes” means
all real property Taxes, personal property Taxes and similar ad valorem
Taxes.

     

    “Proprietary
Information” has the meaning set forth in Section 7.3 hereof.

     

    “Purchase Price” has
the meaning set forth in Section 1.7(a)
hereof.

     

    “Registered Patented Business
IP” has the meaning set forth in Section 3.11(a) hereof.

     

    “Representative” means
any officer, director, principal, attorney, advisor, agent, employee or other
representative.

     

    “Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

     

    “Seller” has the
meaning set forth in the preamble to this Agreement.

     

    “Seller Disclosure
Schedule” means Seller Disclosure Schedule dated the date hereof and
delivered by Sellers to Buyer and annexed hereto.  The Sections of
Seller Disclosure Schedule shall be numbered to correspond to the applicable
Section of this Agreement and, together with all matters under such heading,
shall be deemed to qualify only that section.

     

    “Straddle Period”
means any Tax period beginning before or on and ending after the Closing
Date.

     

    “Subsidiary” means,
with respect to any Person, any corporation, partnership, limited liability
company or other organization, whether incorporated or unincorporated, of which
such Person or any other subsidiary of such Person beneficially owns a majority
of the voting or equity securities.

     

    “Takeover Proposal”
means any proposal or offer from any Person (other than Buyer and its
Affiliates) providing for any: (a) acquisition (whether in a single transaction
or a series of related transactions) of the Assets or the Business, or (b)
merger, consolidation, share exchange, business combination, recapitalization or
similar transaction involving any Seller, in each case, other than the Asset
Sale.

     

    “Tax” or “Taxes” means any
federal, state, local or foreign income, gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental, customs duties, capital stock, franchise, profits, withholding,
social security, unemployment, escheat, disability, real property, personal
property, sales, use, transfer, registration, ad valorem, value added,
alternative or add-on minimum or estimated tax or other tax of any kind
whatsoever, including any interest, penalty or addition thereto, whether
disputed or not and including any obligation to indemnify or otherwise assume or
succeed to the Tax liability of any other Person.

     

    “Tax Return” means any
return, declaration, report, claim for refund, or information return or
statement relating to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.

     

    “Threshold” has the
meaning set forth in Section 6.2(b).

     

    “Total Shares
Outstanding” means the number of shares of Buyer Common Stock issued and
outstanding as of the date of such calculation, including for the purposes of
this Agreement, the Delivered Shares issuable to AMMS pursuant to this Agreement
and excluding for the purposes of this Agreement, any securities convertible
into or exchangeable for shares of Buyer Common Stock or any other rights,
warrants or options to acquire any of the foregoing securities.

     

    “Transfer Taxes” shall
have the meaning given in Section 1.8(a).

     

    “Trademark License
Agreement” means the trademark license agreement, dated as of the Closing
Date, substantially in the form attached hereto as Exhibit
E.

     

    “Transition Period”
has the meaning set forth in Section 4.10.

     

    “Transition Team” has
the meaning set forth in Section 4.10.

     

    “VAT” means value
added taxes.

     

    * *
*

     

    
      
        
           

          

           

        

         

      

      
         

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written:

     

                                    ALCATEL MICRO
MACHINING SYSTEMS, a French corporation

     

                                    By     /s/
Gilbert
Bellini

                                    Name: Gilbert
Bellini

                                    Title:  President

     

                                    ALCATEL LUCENT, a
French corporation

     

                                    By:     /s/
Hubert
de Pesquidoux

                                    Name:  Hubert
de Pesquidoux

                                    Title: Chief
Financial Officer

     

                                    TEGAL CORPORATION, a
Delaware corporation

     

                                    By:     /s/  Thomas
R. Mika

                                    Name:  Thomas
R. Mika

                                    Title:    President
and Chief Executive Officer

     

    

     

    

     

    
      
        
          SIGNATURE
PAGE TO ASSET PURCHASE AGREEMENT

          

          

           

        

         

      

       

       

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     

    Schedules

     

    Seller
Disclosure Schedule

     

    Allocation
Schedule

     

    Schedule
9.2(a) (AMMS Products)

     

    Schedule
9.2(b) (Installed Base AMMS Customers)

     

    Exhibits

     

     

    
      	
               
      

            	
              A

            	
              Form
      of Bill of Sale

            

    

     

     

    
      	
               
      

            	
              B

            	
              Budget
      for Extended Transition Period

            

    

     

     

    
      	
               
      

            	
              C

            	
              Budget
      for Applications and/or Process Development
  Activities

            

    

     

     

    
      	
               
      

            	
              D

            	
              Inventory
      of Subassemblies and Systems

            

    

     

     

    
      	
               
      

            	
              E

            	
              Trademark
      License Agreement

            

    

     

     

    
      	
               
      

            	
              F

            	
              Intellectual
      Property Agreement

            

    

     

     

    
      	
               
      

            	
              G

            	
              Preferred
      Supplier Agreement

            

    

     

     

    
      	
               
      

            	
              H

            	
              Customer
      Services and Final Test Services
ScheduleExhibit 4.1

    

     

    
      
        

      

     

     

    MORGAN
STANLEY

     

     

    AND

    
 

     

    THE BANK
OF NEW YORK MELLON,

    as Unit
Agent, as Trustee and Paying

    Agent
under the Indenture referred to

    herein,
and as Warrant Agent under the

    Warrant
Agreement referred to herein

     

    

     

     

     

    UNIT
AGREEMENT

    (For Units
Without Holders’ Obligations)

    
 

     

    Dated as
of August 29, 2008

     

    

     

    

     

    
      
        

      

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

    

    TABLE
OF CONTENTS

     

    
      
        

      
PAGE

    
      	
              ARTICLE 1

            
	
              Definitions and Other Provisions of General
      Application

            
	 
	
              Section
      1.01.  Definitions

            	
              2

            
	
              ARTICLE 2

            
	
              Units

            
	 
	
              Section
      2.01.  Forms
      Generally

            	
              7

            
	
              Section 2.02.  Form of
      Certificate of Authentication and Countersignature

            	
              7

            
	
              Section 2.03.  Amount
      Unlimited;
      Issuable in Series

            	
              8

            
	
              Section 2.04.  Denominations

            	
              9

            
	
              Section 2.05.  Rights and
      Obligations Evidenced by the Units

            	
              9

            
	
              Section 2.06.  Execution,
      Authentication, Delivery and Dating

            	
              9

            
	
              Section 2.07.  Temporary Unit
      Certificates

            	
              10

            
	
              Section 2.08.  Registration of
      Transfer and Exchange; Global Units

            	
              10

            
	
              Section 2.09.  Mutilated,
      Destroyed, Lost and Stolen Unit Certificates

            	
              13

            
	
              Section 2.10.  Persons Deemed
      Owners

            	
              14

            
	
              Section 2.11.  Cancellation

            	
              15

            
	
              Section 2.12.  Exchange of
      Global Units and Definitive Units

            	
              15

            
	 	 
	
              ARTICLE 3

            
	
              Separation of Units

            
	 
	
              Section
      3.01.  Separation of
      Units

            	
              16

            
	 	 
	
              ARTICLE 4

            
	
              Other Provisions Relating to Rights of Holders of
      Units

            
	 
	
              Section
      4.01.  Holder May
      Enforce Rights

            	
              17

            
	 	 
	
              ARTICLE 5

            
	
              The Agent

            
	 
	
              Section
      5.01.  Certain Duties
      and Responsibilities

            	
              17

            
	
              Section 5.02.  Certain Rights of
      Agent

            	
              18

            
	
              Section 5.03.  Not Responsible
      for Recitals or Issuance of Units

            	
              19

            
	
              Section 5.04.  May Hold
      Units

            	
              19

            
	
              Section 5.05. Compensation and
      Reimbursement

            	
              19

            
	
              Section 5.06.  Corporate Agent
      Required; Eligibility

            	
              20

            
	
              Section 5.07.  Resignation and
      Removal;
      Appointment of Successor

            	
              21

            
	
              Section 5.08.  Acceptance of
      Appointment by Successor

            	
              22

            
	
              Section 5.09.  Merger,
      Conversion, Consolidation or Succession to
      Business

            	
              22

            

    

     

    
      
        
        

      

      
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              Section 5.10.  Tax
      Compliance

            	
              22

            
	 	 
	
              ARTICLE 6

            
	
              Consolidation, Merger, Sale or
      Conveyance

            
	 
	
              Section
      6.01.  Covenant Not to
      Merge, Consolidate, Sell or Convey Property Except Under Certain
      Conditions

            	
              23

            
	
              Section 6.02.  Rights and Duties
      of Successor Company

            	
              24

            
	
              Section 6.03.  Opinion of
      Counsel to Agent

            	
              24

            
	 	 
	
              ARTICLE 7

            
	
              Miscellaneous Provisions

            
	 
	
              Section
      7.01.  Amendments

            	
              24

            
	
              Section 7.02.  Incorporators,
      Stockholders, Officers and Directors of the Company Immune from
      Liability

            	
              26

            
	
              Section
      7.03.  Compliance
      Certificates and Opinions

            	
              27

            
	
              Section 7.04.  Form of Documents
      Delivered to Agent

            	
              27

            
	
              Section 7.05.  Maintenance of Office or
      Agency

            	
              28

            
	
              Section 7.06.  Notices,
      Etc.

            	
              29

            
	
              Section 7.07.  Notices to
      Holders; Waiver

            	
              29

            
	
              Section 7.08.  Effect of
      Headings and Table of Contents

            	
              29

            
	
              Section 7.09.  Successors and
      Assigns

            	
              29

            
	
              Section 7.10.  Separability
      Clause

            	
              29

            
	
              Section 7.11.  Benefits of
      Agreement

            	
              30

            
	
              Section 7.12.  Governing Law;
      Waiver of Trial
      by Jury

            	
              30

            
	
              Section 7.13.  Counterparts

            	
              30

            
	
              Section 7.14.  Inspection of
      Agreement

            	
              30

            

    

     

    
      
        
        

      

      
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    UNIT
AGREEMENT, dated as of August 29, 2008, by and among MORGAN STANLEY, a Delaware
corporation (the “Company”) and THE BANK OF NEW
YORK MELLON, a New York banking corporation (“The Bank of New York Mellon”),
acting solely as unit agent under this Agreement (in its capacity as unit agent,
the “Agent”, except to
the extent that this Agreement specifically states that the Agent is acting in
another capacity), The Bank of New York Mellon (formerly known as The Bank of
New York, as successor to JPMorgan Chase Bank, N.A. (formerly known as JPMorgan
Chase Bank)), as trustee and paying agent under the Indenture described below
(in its capacity as trustee under the Indenture, the “Trustee” and, in its capacity
as paying agent under the Indenture, the “Paying Agent”), and The Bank
of New York Mellon (formerly known as The Bank of New York, as successor to
JPMorgan Chase Bank, N.A. (formerly known as JPMorgan Chase Bank)), as Warrant
Agent under the Warrant Agreement described below (in its capacity as Warrant
Agent under the Warrant Agreement, the “Warrant Agent”).

     

    WHEREAS,
the Company has entered into a Senior Indenture dated as of November 1, 2004
between the Company and the Trustee (as supplemented, the “Indenture”);

     

    WHEREAS,
the Company has duly authorized the issuance, from time to time, pursuant to the
Indenture of senior debt securities (the “Notes”);

     

    WHEREAS,
the Company has entered into a Warrant Agreement (the “Warrant Agreement”) dated as
of November 1, 2004 between the Company and the Warrant Agent;

     

    WHEREAS,
the Company has duly authorized the issuance, from time to time, pursuant to the
Warrant Agreement of warrants (“Warrants”) to purchase or sell
(i) securities issued by the Company or by an entity affiliated or not
affiliated with the Company, a basket of such securities, an index or indices of
such securities or any other property, (ii) currencies, (iii) commodities or
(iv) any combination thereof, in each case on terms to be determined at the time
of sale;

     

    WHEREAS,
the Company has duly authorized the issuance, from time to time, of purchase
contracts to be governed by the Indenture and that require holders to satisfy
their obligations thereunder upon issuance of such purchase contracts (the
“Pre-Paid Purchase
Contracts”);

     

    WHEREAS,
the Company desires to provide for the issuance, from time to time, pursuant to
this Agreement of units (“Units”) consisting of
Warrants, Pre-Paid Purchase Contracts or Notes, or any combination
thereof;

     

    

    NOW,
THEREFORE, in consideration of the premises and the purchases of the Units by
the holders thereof, the Company, the Agent, the Warrant Agent and the Trustee
and Paying Agent mutually covenant and agree as follows:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
1

    Definitions
and Other Provisions of General Application

     

    Section
1.01.  Definitions.  For
all purposes of this Agreement, except as otherwise expressly provided or unless
the context otherwise requires: (i) the terms defined in this Article have the
meanings assigned to them in this Article and include the plural as well as the
singular; (ii) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States in effect at the time of any computation; and
(iii) the words “herein”, “hereof” and “hereunder” and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision.

     

    “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”, with respect to any
specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.

     

    “Agent” means the Person named
as the “Agent” in the
first paragraph of this Agreement until a successor Agent shall have become such
pursuant to the applicable provisions of this Agreement, and thereafter “Agent” shall mean such
successor Person.

     

    “Agreement” means this
instrument as originally executed or as it may from time to time be supplemented
or amended by one or more agreements supplemental hereto entered into pursuant
to the applicable provisions hereof.

     

    “Board of Directors” means the
board of directors of the Company or any other committee duly authorized to act
on its behalf with respect to this Agreement.

     

    “Board Resolution” means one or
more resolutions, certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted or consented to by the Board of Directors and
to be in full force and effect on the date of such certification and delivered
to the Agent.

     

    “Business Day” means any day,
other than a Saturday or Sunday, that is neither a legal holiday nor a day on
which banking institutions are authorized or required by law or regulation to
close in The City of New York.

     

    “Calculation Agent” means
Morgan Stanley & Co. Incorporated, or any successor, unless otherwise
specified in accordance with Section 2.03.

     

    “Clearing System” means DTC,
Clearstream Banking Société Anonyme, Luxembourg, and its successors and assigns,
Euroclear Bank, S.A./N.V., as

     

    
      
        
        

      

      
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    operator
of the Euroclear System, and its successors and assigns and any other Clearing
System specified in the relevant administrative procedures.

     

    “Corporate Trust Office” means
the office of the Agent at which at any particular time its corporate trust
business shall be principally administered, which office at the date hereof is
located at 101 Barclay Street 8W, New York, New York 10286.

     

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

     

    “Debt Security Register” with
respect to any Notes or Pre-Paid Purchase Contracts constituting a part of the
Units of any series means the security register of the Company maintained by the
Trustee pursuant to the Indenture.

     

    “Definitive Securities” means
any Security in definitive form.

     

    “Definitive Unit” means any
Unit comprised of Definitive Securities.

     

    “Depositary” means DTC, or any
successor as the Holder of any Global Units.

     

    “DTC” means The Depository
Trust Company or its nominee.

     

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

     

    “Final Separation Date” means
the last date on which a Unit may be separated into its component
parts.

     

    “Global Note” means a global
Note in bearer or registered form originally issued as part of a Global Unit of
any series.

     

    “Global Pre-Paid Purchase
Contract” means a global Pre-Paid Purchase Contract issued under the
Indenture in bearer or registered form originally issued as part of a Global
Unit of any series.

     

    “Global Securities” means the
Global Warrant, the Global Note, and/or the Global Pre-Paid Purchase Contract,
as applicable, constituting the Units of any series.

     

    “Global Unit” means any Unit
that comprises one or more Global Securities and is represented by a Global Unit
Certificate.

     

    “Global Unit Certificate” means
a global Unit Certificate in bearer or registered form.

     

    
      
        
        

      

      
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    “Global Warrant” means a global
Warrant in bearer or registered form originally issued as part of a Global Unit
of any series.

     

    “Holder” means (i) in the case
of any Registered Security or Registered Unit, the Person in whose name such
Registered Security or the Registered Securities constituting a part of such
Registered Unit are registered on the Security Register or Unit Register, as
applicable, and (ii) in the case of any Unregistered Security or Unregistered
Unit, the bearer of such Security or Unit.

     

    “Indenture” has the meaning
specified in the first recital in this Agreement.

     

    “Initial Separation Eligibility
Date” means the date on which a Unit may first be separated into its
component parts.

     

    “Issuer Order” means a written
order or request signed in the name of the Company by the Chairman of the Board,
Chief Executive Officer, the President or a Co-President, the Chief Financial
Officer, any Executive Vice-President, the Chief Administrative Officer, the
Chief Legal Officer, the Treasurer, any Assistant Treasurer or any other person
authorized by the Board of Directors and delivered to the Agent.

     

    “Note” has the meaning stated
in the second recital in this Agreement.

     

    “Officer’s Certificate” means a
certificate signed by the Chairman of the Board, Chief Executive Officer, the
President or a Co-President, the Chief Financial Officer, any Executive
Vice-President, the Chief Administrative Officer, the Chief Legal Officer, the
Treasurer, any Assistant Treasurer of the Company or any other person authorized
by the Board of Directors and delivered to the Agent.

     

    “Opinion of Counsel” means an
opinion in writing signed by legal counsel, who may be an employee of or counsel
to the Company and who shall otherwise be satisfactory to the
Agent.

     

    “Optional Definitive Unit
Request” has the meaning set forth in Section 2.12.

     

    “Outstanding”, with respect to
any Unit, Note, Pre-Paid Purchase Contract or Warrant means, as of the date of
determination, all Units, Notes, Pre-Paid Purchase Contracts or Warrants, as the
case may be, evidenced by Units theretofore authenticated, countersigned,
executed and delivered under this Agreement, except:

     

    (A)    Units,
Notes, Pre-Paid Purchase Contracts and Warrants theretofore deemed cancelled,
cancelled by the Agent, Warrant Agent or Trustee, as the case may be, or
delivered to the Agent, Warrant Agent or Trustee, as the case may be, for
cancellation, in each case pursuant to the

     

    
      
        
        

      

      
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    provisions
of this Agreement, the Warrant Agreement or the Indenture; and

     

    (B)     Units,
Notes, Pre-Paid Purchase Contracts and Warrants evidenced by Unit Certificates
in exchange for or in lieu of which other Unit Certificates have been
authenticated, countersigned, executed and delivered pursuant to this Agreement,
other than any such Units, Notes, Pre-Paid Purchase Contracts or Warrants, as
the case may be, evidenced by a Unit Certificate in respect of which there shall
have been presented to the Agent proof satisfactory to it that such Unit
Certificate is held by a bona fide purchaser in whose hands the Units, Notes,
Pre-Paid Purchase Contracts and Warrants, as the case may be, evidenced by such
Unit Certificate are valid obligations of the Company;

     

    provided, however, that in determining
whether the Holders of the requisite number of Outstanding Units, Notes,
Pre-Paid Purchase Contracts and Warrants, as the case may be, have given any
request, demand, authorization, direction, notice, consent or waiver hereunder,
Units, Notes, Pre-Paid Purchase Contracts and Warrants owned by the Company or
any Affiliate of the Company shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Agent shall be protected in
relying upon any such request, demand, authorization, direction, notice, consent
or waiver, only Units, Notes, Pre-Paid Purchase Contracts and Warrants which the
Agent knows to be so owned shall be so disregarded.  Units, Notes,
Pre-Paid Purchase Contracts and Warrants that are so owned but that have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Agent the pledgee’s right so to act with respect to
such Units, Notes, Pre-Paid Purchase Contracts or Warrants and that the pledgee
is not the Company or any Affiliate of the Company.

     

    “Paying Agent” means any Person
authorized by the Company to pay any sums payable by the Company; provided that such Person
shall be a bank or trust company organized and in good standing under the laws
of the United States, any State thereof or the District of Columbia, having
(together with its parent) capital, surplus and undivided profits aggregating at
least $50,000,000 or any foreign branch or office of such a bank or trust
company, and, subject to the foregoing, may be an Affiliate of the
Company.

     

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

     

    “Pre-Paid Purchase Contracts”
has the meaning stated in the fifth recital in this Agreement and more
particularly means any Pre-Paid Purchase Contracts issued under the Indenture
originally issued as part of a Unit of any series.

     

    
      
        
        

      

      
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    “Registered Note” means any
Note issued under the Indenture registered on the Debt Security
Register.

     

    “Registered Pre-Paid Purchase
Contracts” means any Pre-Paid Purchase Contracts registered on the Debt
Security Register.

     

    “Registered Security” means any
of a Registered Note, Registered Pre-Paid Purchase Contract or Registered
Warrant.

     

    “Registered Unit” means any
Unit in registered form consisting of Registered Securities registered on the
Unit Register.

     

    “Registered Warrant” means any
Warrant in registered form registered on the Warrant Register.

     

    “Responsible Officer” when used
with respect to the Agent, shall mean an officer of the Agent in the Corporate
Trust Office, having direct responsibility for the administration of this
Agreement, and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer’s knowledge of and
familiarity with the particular subject.

     

    “Security” means any of a Note,
Pre-Paid Purchase Contract or Warrant.

     

    “Security Register” means
either a Debt Security Register or a Warrant Register.

     

    “Trading Day” means a day on
which trading is generally conducted on the New York Stock Exchange LLC, the
American Stock Exchange LLC, The NASDAQ Stock Market LLC, the Chicago Mercantile
Exchange and the Chicago Board of Options Exchange and in the over-the-counter
market for equity securities in the United States.

     

    “Trustee”, with respect to
Notes or Pre-Paid Purchase Contracts, means the Person acting as Trustee under
the Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of such Indenture, and thereafter “Trustee” shall mean such
successor Trustee.

     

    “Unit” has the meaning stated
in the sixth recital to this Agreement.

     

    “Unit Certificate” means a
certificate evidencing the rights and obligations of the Company and a Holder
with respect to the number of Units specified on such certificate.

     

    “Unregistered Security” means
any Security in bearer form.

     

    “Unregistered Unit” means any
Unit in bearer form consisting of Unregistered Securities.

     

    
      
        
        

      

      
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    “Unit Register” has the meaning
specified in Section 2.08.

     

    “Warrants” has the meaning
stated in the fourth recital of this Agreement, and in this Agreement refers to
any Warrants originally issued as part of a Unit of any series.

     

    “Warrant Agreement” has the
meaning stated in the third recital of this Agreement.

     

    “Warrant Register” with respect
to any Warrants constituting a part of the Units means the warrant register of
the Company maintained by the Warrant Agent pursuant to the Warrant
Agreement.

     

     

    ARTICLE
2

    Units

     

    Section
2.01.  Forms
Generally. (a) The Units of each series shall be substantially in
the form of, in the case of Registered Units, Exhibit A, and in the case of
temporary Unregistered Units, permanent Unregistered Units and definitive
Unregistered Units, Exhibit B-1, Exhibit B-2 and Exhibit B-3 respectively, or in
such form (not inconsistent with this Agreement) as shall be established by or
pursuant to one or more Board Resolutions (as set forth in a Board Resolution
or, to the extent established pursuant to rather than set forth in a Board
Resolution, an Officer’s Certificate detailing such
establishment).  The Unit Certificates may have imprinted or otherwise
reproduced thereon such letters, numbers or other marks of identification or
designation and such legends or endorsements as the officers of the Company
executing the Securities constituting a part thereof may approve (execution
thereof to be conclusive evidence of such approval) and that are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto, or
with any rule or regulation of any self-regulatory organization on which the
Units of such series may be listed or quoted or of any securities depository or
to conform to general usage.

     

    (b)  The
Unit Certificates shall be printed, lithographed or engraved on steel engraved
borders or may be produced in any other manner, all as determined by the
officers executing such Unit Certificates, as evidenced by their execution of
the Securities constituting a part of the Units evidenced by such Unit
Certificates.

     

    Section
2.02.  Form of
Certificate of Authentication and Countersignature.  The form
of the Trustee’s certificate of authentication of the Notes and Pre-Paid
Purchase Contracts and the form of the Warrant Agent’s countersignature of the
Warrants, each constituting a part of the Units of any series, shall be
substantially in such form as set forth in the Indenture or the Warrant
Agreement, as applicable.

     

    
      
        
        

      

      
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    Section
2.03.  Amount
Unlimited; Issuable in Series.  (a) The aggregate number of
Units that may be authenticated, countersigned and delivered under this
Agreement is unlimited.

     

    The Units
may be issued in one or more series. There shall be established, upon the order
of the Company (contained in an Issuer Order) or pursuant to such procedures
acceptable to the Agent as may be specified from time to time by an Issuer
Order, prior to the initial issuance of Units of any series:

     

    (i)     
the designation of the Units of the series, which shall distinguish the Units of
the series from the Units of all other series;

     

    (ii)    
any limit upon the aggregate number of Units of the series that may be
authenticated and delivered under this Agreement (disregarding any Units
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Units of the series pursuant to Section 2.07, 2.08,
2.09 or 2.12);

     

    (iii)   
the designation of the Securities constituting a part of the Units of the
series;

     

    (iv)   
whether, on what terms and in accordance with what procedures any Securities
constituting a part of the Units of the series may be separated from the Units
of the series and the other Securities constituting a part of such Units and, if
separable, the designation of the Initial Separation Eligibility Date and the
Final Separation Date;

     

    (v)    
whether the Units of the series will be issuable as Registered Units (and if so,
whether such Units will be issuable in global form) or Unregistered Units (and
if so, whether such Units will be issuable in global form), or any combination
of the foregoing, any restrictions applicable to the offer, sale or delivery of
Unregistered Securities, the procedures for exchanging temporary Unregistered
Units for permanent Unregistered Units and, if applicable, procedures for
exchanging permanent Unregistered Units for definitive Unregistered Units and
vice versa and, if other than as provided in Section 2.08, the terms upon which
Unregistered Units of any series may be exchanged for Registered Units of such
series and vice versa;

     

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

     

    (vii)  
any trustees, depositaries, authenticating or paying agents, transfer agents or
registrars, calculation agents, exchange agents or any other agents with respect
to the Units of such series;

     

    
      
        
        

      

      
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    (viii) 
any events of default or covenants with respect to the Units of such series;
and

     

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

     

    (b)  All
Units of any one series shall be substantially identical, except as may
otherwise be provided by or pursuant to the Issuer Order or procedures referred
to above. All Units 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 Agreement, if
so provided by or pursuant to such Board Resolution or such Issuer
Order.

     

    Notwithstanding
Section 2.03(a)(ii) hereof and unless otherwise expressly provided with respect
to a series of Securities, the aggregate number of Units of a series may be
increased and additional Units of such series may be issued up to a maximum
aggregate number authorized with respect to such series as
increased.

     

    Section
2.04.  Denominations.  Units of any
series shall be issuable only in denominations of a single Unit and any integral
multiple thereof.

     

    Section
2.05.  Rights and
Obligations Evidenced by the Units.  Units of any series shall
evidence the ownership by the Holder thereof of (a) the principal amount of
Notes, if any, specified on the face of a Unit Certificate representing
Definitive Units or in Schedule A attached to any Unit Certificate representing
Global Units, (b) the number of Warrants, if any, specified on the face of
a Unit Certificate representing Definitive Units or in Schedule A attached to
any Unit Certificate representing Global Units and (c) the number of
Pre-Paid Purchase Contracts, if any, specified on the face of a Unit Certificate
representing Definitive Units or in Schedule A attached to any Unit Certificate
representing Global Units or, in each case, otherwise determinable from the face
of the Unit Certificate or from Schedule A thereto.

     

    Section
2.06.  Execution,
Authentication, Delivery and Dating. Upon the execution and delivery of
this Agreement, and from time to time thereafter, the Company may deliver,
subject to any limitation on the aggregate principal amount of Notes or the
number of Warrants or Pre-Paid Purchase Contracts, if any, represented thereby,
an unlimited number of Unit Certificates (including the Securities executed by
the Company constituting the Units evidenced by such Unit Certificates) to the
Trustee, Warrant Agent and/or the Agent for authentication and countersignature,
as the case may be, of the Securities comprised by such Units, together with its
Issuer Orders for authentication and countersignature of such Securities, and
the Trustee in accordance with the Indenture and the Issuer Order of the Company
shall authenticate the Notes and Pre-Paid Purchase Contracts, if any,
constituting a part of the Units evidenced by such Unit Certificates and the
Warrant Agent in accordance with the Warrant Agreement and the Issuer Order of
the Company shall countersign the Warrants

     

    
      
        
        

      

      
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    constituting
a part of the Units evidenced by such Unit Certificates and each shall deliver
such Unit Certificates upon the order of the Company.

     

    Any Notes
or Pre-Paid Purchase Contracts constituting a part of the Units of any series
shall be executed on behalf of the Company in accordance with the terms of the
Indenture.  Any Warrants constituting a part of the Units of any
series shall be executed on behalf of the Company in accordance with the terms
of the Warrant Agreement.

     

    Section
2.07.  Temporary
Unit Certificates.  Pending the
preparation of Unit Certificates for any series, the Company may execute and
deliver to the Trustee and/or the Warrant Agent, as appropriate, and the Trustee
and/or the Warrant Agent, as appropriate, shall authenticate, countersign and
deliver, as appropriate, in lieu of such Unit Certificates, temporary Unit
Certificates for such series.  Temporary Unit Certificates shall be in
substantially the form of the Unit Certificates of such series, but with such
omissions, insertions and variations as may be appropriate for temporary Unit
Certificates, all as may be determined by the Company with the concurrence of
the Trustee, Warrant Agent and/or Agent, as appropriate, as evidenced by the
execution and authentication and/or countersignature of the Securities
constituting a part of the Units evidenced thereby, as applicable.

     

    If
temporary Unit Certificates for any series are issued, the Company will cause
definitive Unit Certificates for such series to be prepared without unreasonable
delay. After the preparation of such definitive Unit Certificates, the temporary
Unit Certificates shall be exchangeable therefor upon surrender of temporary
Registered Units of such series at the Corporate Trust Office, at the expense of
the Company and without charge to any Holder and, in the case of Unregistered
Units, at any agency maintained for such purpose as specified pursuant to
Section 2.03.  Upon surrender for cancellation of any one or more
temporary Unit Certificates, the Company shall execute and deliver to the
Trustee, the Warrant Agent and/or the Agent, and the Trustee and/or the Warrant
Agent shall authenticate or countersign and deliver, as appropriate, in exchange
therefor definitive Unit Certificates of the same series of like tenor, of
authorized denominations and evidencing a like number of Units as the temporary
Unit Certificate or Certificates so surrendered. Until so exchanged, the
temporary Unit Certificates of any series shall in all respects evidence the
same benefits and the same obligations under any Notes or Pre-Paid Purchase
Contracts or Warrants constituting parts of such Units, the Indenture, the
Warrant Agreement and this Agreement as definitive Unit Certificates of such
series, unless otherwise specified pursuant to Section 2.03

     

    Section
2.08.  Registration
of Transfer and Exchange; Global Units.  The Agent shall keep
at its Corporate Trust Office for each series of Registered Units a register
(the register maintained in such office being herein referred to as the “Unit Register”) in which,
subject to such reasonable regulations as it may prescribe, the Agent shall
provide for the registration of the Units of any series.

     

    
      
        
        

      

      
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    At the
option of the Holder thereof, Registered Units of any series (other than a
registered Global Unit, except as set forth below) may be transferred or
exchanged for a Registered Unit or Registered Units of such series having
authorized denominations evidencing the number of Units transferred or
exchanged, upon surrender of such Registered Units to be so transferred or
exchanged at the Corporate Trust Office of the Agent upon payment, if the
Company shall so require, of the charges hereinafter provided. If the Units of
any series are issued in both registered and unregistered form, except as
otherwise specified pursuant to Section 2.03, at the option of the Holder
thereof, Unregistered Units of such series may be exchanged for Registered Units
of such series having authorized denominations and evidencing the number of
Units transferred or exchanged, upon surrender of such Unregistered Units to be
so transferred or exchanged at the Corporate Trust Office of the Agent and upon
payment, if the Company shall so require, of the charges hereinafter
provided.  At the option of the Holder thereof, if Unregistered Units
of any series are issued in more than one authorized denomination, except as
otherwise specified pursuant to Section 2.03, such Unregistered Units may be
exchanged for Unregistered Units of such series having authorized denominations
evidencing the number of Units exchanged, upon surrender of such Unregistered
Units to be so exchanged at the Corporate Trust Office of the Agent or as
specified pursuant to Section 2.03, and upon payment, if the Company shall so
require, of the charges hereinafter provided. Unless otherwise specified
pursuant to Section 2.03, Registered Units of any series may not be exchanged
for Unregistered Units of such series. Whenever any Units are so surrendered for
transfer or exchange, the Company shall execute, and the Trustee and/or Warrant
Agent, as appropriate, shall authenticate and/or countersign, as the case may
be, and deliver the Units which the Holder making the transfer or exchange is
entitled to receive.  All Units (including the Securities constituting
part of such Units) surrendered upon any exchange or transfer provided for in
this Agreement shall be promptly cancelled and disposed of by the Agent and the
Agent will deliver a certificate of disposition thereof to the Company and to
the Trustee and the Warrant Agent, as applicable.

     

    Unregistered
Units shall be transferable by delivery.

     

    Subject to
Section 2.12, if the Company shall establish pursuant to Section 2.03 that the
Units of a series are to be evidenced by one or more Global Units, then the
Company shall execute and the Warrant Agent and Trustee shall, in accordance
with this Section and Section 2.06, countersign and authenticate, as
appropriate, and deliver one or more Global Unit Certificates that (i) shall
evidence all or a portion of the Units of such series issued in such form and
not yet cancelled, (ii) in the case of Registered Units, shall be registered in
the name of the Depositary for such Units or the nominee of such Depositary,
(iii) shall be delivered by the Agent to the Depositary for such Units or
pursuant to such Depositary’s instructions and (iv) in the case of Registered
Units, shall bear a legend substantially to the following effect: “Unless and
until it is exchanged in whole or in part for Units in definitive registered
form, this Unit Certificate may

     

    
      
        
        

      

      
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    not be
transferred except as a whole by the Depositary to the nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.” Whenever Global Units of any series are
exchanged for Definitive Units of such series or whenever Definitive Units of
any series are exchanged for Global Units of such series, the Agent shall cause,
as applicable: (i) Schedule A of the Global Note, if any, to be endorsed to
reflect any increase or decrease, as the case may be, in the principal amount of
the Note, if any, that are comprised by Global Units as a result of such
exchange, (ii) Schedule A of the Global Pre-Paid Purchase Contract, if any, be
endorsed to reflect any increase or decrease, as the case may be, in the number
of Pre-Paid Purchase Contracts, if any, that are comprised by the Global Units
as a result of such Exchange and (iii) Schedule A of the Global Warrant, if any,
to be endorsed to reflect any increase or decrease, as the case may be, in the
number of Warrants, if any, that are comprised by the Global Units as a result
of such exchange.

     

    All Unit
Certificates authenticated, countersigned and executed upon any registration of
transfer or exchange of a Unit Certificate shall evidence the ownership of the
principal amount of Note, if any, specified therein or on the face thereof or
otherwise evidenced thereby, the number of Pre-Paid Purchase Contracts, if any,
specified therein or on the face thereof or otherwise evidenced thereby and the
number of Warrants, if any, specified therein or on the face thereof or
otherwise evidenced thereby and shall be entitled to the same benefits, and be
subject to the same obligations, under the Indenture, the Warrant Agreement and
this Agreement as the Units evidenced by the Unit Certificate surrendered upon
such registration of transfer or exchange.

     

    Every Unit
Certificate presented or surrendered for registration of transfer or for
exchange shall (if so required by the Company or the Agent) be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Company and the Agent, duly executed by the Holder thereof or his attorney duly
authorized in writing. Except as otherwise provided herein with respect to the
Units, the Agent shall register the transfer or exchange of any outstanding Unit
Certificate upon the Unit Register at its Corporate Trust Office.

     

    No service
charge shall be made for any transfer or exchange of a Unit, but the Company and
the Agent may require payment from the Holder of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Units, other than any exchanges pursuant
to Section 2.09 not involving any transfer.

     

    Notwithstanding
the foregoing, and subject to Section 2.08 of the Indenture, the Company shall
not be obligated to execute and deliver to the Trustee, the Warrant Agent or the
Agent, and none of the Trustee, under the terms of the Indenture, or the Warrant
Agent, under the terms of the Warrant Agreement, shall be obligated to
authenticate or countersign any Unit Certificate presented or

     

    
      
        
        

      

      
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    surrendered
for registration of transfer or for exchange of any Note, Pre-Paid Purchase
Contract or Warrant evidenced thereby or any Unit Certificate evidencing a
Definitive Unit to be issued in exchange for interests in Global Units or to
reflect any increase or decrease in a Global Unit, Global Note, Pre-Paid
Purchase Contract or Global Warrant (i) during the period beginning any time on
or after the opening of business 15 days before the day of mailing of a notice
of redemption or of any other exercise of any right held by the Company with
respect to the Unit (or any Security constituting a part of the Units of such
series) and ending at the close of business on the day of the giving of such
notice, (ii) that evidences or would evidence any such Unit or Security selected
or called for redemption or with respect to which such right has been exercised
or (iii) at any other date specified pursuant to Section 2.03.

     

    Section
2.09.  Mutilated,
Destroyed, Lost and Stolen Unit Certificates.  If any mutilated
Unit Certificate is surrendered to the Agent, the Company shall execute and
deliver to the Trustee and the Warrant Agent, as appropriate, and the Trustee
and the Warrant Agent shall authenticate, countersign and deliver, as
appropriate, in exchange therefor new Securities comprised by Units of the same
series, of like tenor and evidenced by a new Unit Certificate evidencing the
same number of Units and bearing a number not contemporaneously
outstanding.

     

    If there
shall be delivered to the Company and the Trustee and the Warrant Agent and/or
the Agent, as appropriate, (i) evidence to their satisfaction of the
destruction, loss or theft of any Unit Certificate and (ii) such security or
indemnity as may be required by them to hold each of them and any agent of any
of them harmless, then, in the absence of notice to the Company and the Trustee
and the Warrant Agent as appropriate, that such Unit Certificate has been
acquired by a bona fide purchaser, the Company shall execute and deliver to the
Trustee and the Warrant Agent and/or the Agent, as appropriate, and the Trustee
(in accordance with the provisions of the Indenture) and the Warrant Agent (in
accordance with the provisions of the Warrant Agreement) shall authenticate and
countersign and the Agent shall deliver to the Holder, as appropriate, in lieu
of any such destroyed, lost or stolen Unit Certificate, new Securities comprised
by Units of the same series, of like tenor and evidenced by a new Unit
Certificate evidencing the same number of Units and bearing a number not
contemporaneously outstanding.

     

    Unless
otherwise specified pursuant to Section 2.03, notwithstanding the foregoing, the
Company shall not be obligated to execute and deliver to the Trustee, the
Warrant Agent or the Agent, and none of the Trustee (under the Indenture), the
Warrant Agent (under the Warrant Agreement), or the Agent shall be obligated to
authenticate, countersign or deliver to the Holder, a new Unit Certificate (or
any Security constituting a part of such Unit) under this Section 2.09 (i)
during the period beginning any time on or after the opening of business 15 days
before the day of mailing of a notice of redemption or of any other exercise of
any right held by the Company with respect to the Unit (or any Security
constituting a part of such Unit) and ending at the close of business on the day
of the giving of such notice, (a) that evidences any Unit or
Security

     

    
      
        
        

      

      
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    selected
or called for redemption or with respect to which such right has been exercised,
or (b) at any other date specified pursuant to Section 2.03.  In lieu
of delivery of a new Unit Certificate, upon satisfaction of the applicable
conditions specified in clauses (i) and (ii) of the preceding paragraph, the
Agent shall deliver or cause to be delivered on the applicable redemption date,
exercise date or settlement date for Pre-Paid Purchase Contracts, (i) in respect
of Notes, Warrants or Pre-Paid Purchase Contracts constituting a part of the
Units evidenced by such Unit Certificate that are selected or called for
redemption, the redemption price of such Notes, Warrants or Pre-Paid Purchase
Contracts or (ii) in respect of Warrants constituting a part of the Units
evidenced by such Unit Certificate with respect to which exercise of any such
right has taken place, (x) the amount deliverable with respect to such Warrants
or (y) if a default under the Warrant Agreement or Warrant has occurred by
virtue of the Company’s having failed to deliver the amount deliverable against,
in the case of any such Warrants, tender by the Agent of the exercise price or
other amount, as the case may be, such amount, if any, received by the Agent
from the Holder in respect of exercise of such Warrants.

     

    Upon the
issuance of any new Unit Certificate under this Section, the Company and the
Agent 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 Agent) connected
therewith.

     

    Every new
Unit Certificate executed pursuant to this Section in lieu of any destroyed,
lost or stolen Unit Certificate shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Unit Certificate (and the Securities evidenced thereby) shall be at any
time enforceable by anyone, and shall be entitled to all the benefits of this
Agreement equally and proportionately with any and all other Unit Certificates
delivered 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 Unit Certificates.

     

    Section
2.10.  Persons
Deemed Owners.

     

    (a)    Prior
to due presentment of a certificate evidencing a Registered Unit of any series
for registration of transfer, the Company, the Trustee, the Warrant Agent and
the Agent, as appropriate, and any agent of the Company, the Trustee, the
Warrant Agent or the Agent, as appropriate, may treat the Person in whose name
any Registered Security evidenced by such Unit Certificate is registered as the
owner of the Units evidenced thereby for all purposes whatsoever, whether or not
payment with respect to any Security constituting a part of the Units evidenced
thereby shall be overdue and notwithstanding any notice to the contrary. None of
the Company, the Trustee, the Warrant Agent, the

     

    
      
        
        

      

      
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    Agent or
any agent of the Company, the Trustee, the Warrant Agent or the Agent shall be
affected by notice to the contrary.

     

    (b)    The
Company, the Trustee, the Warrant Agent and the Agent, as appropriate, and any
agent of the Company, the Trustee, the Warrant Agent or the Agent, as
appropriate, may treat the bearer of a certificate evidencing an Unregistered
Unit as the absolute owner of the Units evidenced thereby for all purposes
whatsoever whether or not payment with respect to any Security constituting a
part of the Units evidenced thereby shall be overdue and notwithstanding any
notice to the contrary. None of the Company, the Trustee, the Warrant Agent, the
Agent or
any agent of the Company, the Trustee, the Warrant Agent or the Agent shall be
affected by notice to the contrary.

     

    Section
2.11.  Cancellation.  All
Unit Certificates surrendered for payment, and all Unit Certificates surrendered
for redemption of any Notes or Pre-Paid Purchase Contracts or exercise of any
Warrants evidenced thereby shall, if surrendered to any Person other than the
Trustee, the Warrant Agent or the Agent, as appropriate, be delivered to the
Trustee, the Warrant Agent and/or the Agent, as appropriate, and, if not already
cancelled, any Note, Pre-Paid Purchase Contract or Warrant evidenced by such
Units shall be promptly cancelled by the Trustee, the Warrant Agent and/or the
Agent, as appropriate.  The Company may at any time deliver to the
Trustee, the Warrant Agent and/or the Agent, as appropriate, for cancellation
any Unit Certificates previously authenticated, countersigned and delivered
hereunder, under the Warrant Agreement and under the Indenture, which the
Company may have acquired in any manner whatsoever, and all Unit Certificates so
delivered shall, upon Issuer Order of the Company, be promptly cancelled by the
Trustee, Warrant Agent and/or the Agent, as appropriate. No Unit Certificates
shall be authenticated and countersigned in lieu of or in exchange for any Unit
Certificates cancelled as provided in this Section, except as permitted by this
Agreement. All cancelled Unit Certificates held by the Agent shall be disposed
of in accordance with its customary procedures and a certificate of their
disposition shall be delivered by the Agent to the Company, unless by Issuer
Order the Company shall direct that cancelled Unit Certificates be returned to
it.

     

    If the
Company or any Affiliate of the Company shall acquire any Unit Certificate, such
acquisition shall not operate as a cancellation of such Unit Certificate unless
and until such Unit Certificate is delivered to the Trustee, the Warrant Agent
and/or the Agent, as appropriate, for the purpose of cancellation.

     

    Section
2.12.  Exchange of
Global Units and Definitive Units. In the case of Registered Units, Holders of Global Units
of any series shall receive Definitive Units of such series in exchange for
interests in such Global Units if DTC notifies the Company that it is unwilling
or unable to continue as Depositary with respect to the Global Units of such
series or if at any time it ceases to be a clearing agency under the Exchange
Act, and a successor Depositary registered as a clearing agency under the
Exchange Act is not appointed by the Company within

     

    
      
        
        

      

      
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    90 days
after receipt of such notice or after it becomes aware that DTC has ceased to be
such a clearing agency.

     

    If so
provided pursuant to Section 2.03, interests in such Global Units may also be
transferred or exchanged for Definitive Units upon the request of the Depositary
to the Trustee, the Warrant Agent and/or the Agent, as appropriate, to
authenticate and countersign as the case may be, Unit Certificates representing
Definitive Units (such request being referred to herein as an “Optional Definitive Unit
Request”).

     

    Definitive
Units exchanged for interests in Global Units pursuant to this Section 2.12
shall be denominated in the amounts and registered in the name of such Person or
Persons as the Depositary shall instruct the Agent, the Warrant Agent and the
Trustee, as appropriate.

     

    Whenever
Global Units are exchanged for Definitive Units the Agent shall cause Schedule A
of the Global Unit to be endorsed to reflect any decrease in the Global Units as
a result of such exchange, whereupon the Global Unit Certificate or Certificates
shall be canceled and disposed of in accordance with Section 2.11.

     

    If so
specified pursuant to Section 2.03, Holders of Definitive Units may transfer or
exchange such Definitive Units for interests in Global Units by depositing the
Unit Certificates evidencing such Definitive Units with the Agent and requesting
the Agent, the Warrant Agent and the Trustee, as appropriate, to effect such
exchange.  The Agent shall notify the Depositary of any such exchange
and, upon delivery to the Agent, the Warrant Agent and the Trustee, as
appropriate, of the Unit Certificates evidencing the Definitive Units to be so
transferred or exchanged, the Agent shall cause Schedule A of the Global Unit to
be endorsed to reflect any increase in the Global Units as a result of such
exchange, whereupon the Unit Certificate or Certificates evidencing such
Definitive Units shall be canceled and disposed of in accordance with Section
2.11 and Unit Certificates evidencing the remaining Definitive Units, if any,
will be issued in accordance with Section 2.08.

     

    ARTICLE
3

    Separation
of Units

     

    Section
3.01.  Separation of
Units.  On any Business Day that is also a Trading Day on or
after the Initial Separation Eligibility Date until no later than 10:00 a.m., or
at such other time as may be specified pursuant to Section 2.03, on the Final
Separation Date, the Holder of a Unit may elect to separate a Unit into its
constituent Securities in accordance with the separation and notification
procedures set forth in the Unit Certificate.  Upon receipt by the
Agent of such notice and the completion of any required separation procedures,
the Agent shall take the necessary steps to effect such
separation.  Whenever Units in global form are separated, the Agent
shall cause Schedule A of the Global Unit to be endorsed

     

    
      
        
        

      

      
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    and the
Unit Register to be updated to reflect any decrease in the Global Units as a
result of such separation, the Trustee and Paying Agent shall cause Schedule A
of the Global Note and/or the Global Pre-Paid Purchase Contract to be endorsed
to reflect such separation and the Warrant Agent shall cause Schedule A of the
Global Warrant to be endorsed to reflect such separation. 

     

     

    ARTICLE
4

    Other
Provisions Relating to Rights of Holders of Units

     

    Section
4.01.  Holder May
Enforce Rights.  Any Holder of a Unit may, without the consent
of the Agent, the Depositary, any participant of the Depositary or any other
Holder, in and for its own behalf, enforce, and may institute and maintain, any
suit, action or proceeding against the Company suitable to enforce, or otherwise
in respect of, its rights under this Agreement; provided that a Holder of a
Unit may only enforce its rights under the Securities comprised by such Unit in
accordance with the terms of the Indenture and the Warrant Agreement, as
applicable.

     

     

    ARTICLE
5

    The
Agent

     

    Section
5.01.  Certain
Duties and Responsibilities. (a) The Agent undertakes to perform
such duties and only such duties as are specifically set forth in this
Agreement.

     

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

     

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

     

    (ii)  in
the absence of bad faith on its part, the Agent may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any statements, certificates or opinions furnished to the Agent and
conforming to the requirements of this Agreement or the Units but in the case of
any such statements, certificates or opinions that by any provision hereof are
specifically required to be furnished to the Agent, the Agent shall be under a
duty to examine the same to determine whether or not they conform to the
requirements of this Agreement or the Units, as applicable.

     

    
      
        
        

      

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

     

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

     

    (e)  Whether
or not therein expressly so provided, every provision of this Agreement relating
to the conduct or affecting the liability of or affording protection to the
Agent shall be subject to the provisions of this Section.

     

    (f)  The
Agent is acting solely as agent for the Company hereunder and owes no fiduciary
duties to any person by virtue of this Agreement.

     

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

     

    (h)  In
no event shall the Agent be responsible or liable for any failure or delay in
the performance of its obligations under this Agreement or the Units arising out
of or caused by, directly or indirectly, forces beyond its reasonable control,
including without limitation strikes, work stoppages, accidents, acts of war or
terrorism, civil or military disturbances, nuclear or natural catastrophes or
acts of God, and, provided such events are beyond the reasonable control of the
Agent, interruptions, loss or malfunctions of utilities, communications or
computer (software or hardware) services.

     

    Section
5.02.  Certain
Rights of Agent.  Subject to the provisions of Section
5.01:

     

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

     

    (b)  any
request, direction, order or demand of the Company mentioned herein shall be
sufficiently evidenced by an Officer’s Certificate or Issuer Order and any
resolution of the Board of Directors of the Company, as the case may be, may be
sufficiently evidenced by a Board Resolution;

     

    (c)  the
Agent may consult with counsel and the written advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and

     

    
      
        
        

      

      
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    protection
with respect to any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon in accordance with such advice or Opinion of
Counsel;

     

    (d)  the
Agent shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, appraisal, bond, debenture, note,
coupon, security or other paper or document, but the Agent, in its discretion,
may make reasonable further inquiry or investigation into such facts or matters
related to the issuance of the Notes or the Warrants, as the case may be, and,
if the Agent shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the Company, at
reasonable times during normal business hours, personally or by agent or
attorney;

     

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

     

    (f)  the
Agent shall not be liable for any action taken or omitted by it in good faith
and believed by it to be authorized or within the discretion, rights or powers
conferred upon it by this Agreement.

     

    Section
5.03.  Not
Responsible for Recitals or Issuance of Units.  The recitals
contained herein, in the Indenture, in the Warrant Agreement and in the Units,
except the Trustee’s and Warrant Agent’s certificates of authentication or
countersignature, shall be taken as the statements of the Company, and none of
the Trustee, Agent or the Warrant Agent assumes any responsibility for their
correctness.  The Agent makes no representations as to the validity or
sufficiency of this Agreement or of the Units.  None of the Trustee,
Agent or the Warrant Agent shall be accountable for the use or application by
the Company of the proceeds with respect to Units or be responsible for
exercising any remedy hereunder on behalf of the Holders, except as expressly
provided in this Agreement.

     

    Section
5.04.  May Hold
Units.  The Agent, the Trustee, the Warrant Agent, or any other
agent of the Company, the Trustee, the Warrant Agent, or the Agent, in its
individual or any other capacity, may become the owner or pledgee of Units and
may otherwise deal with the Company and receive, collect, hold and retain
collections from the Company with the same rights it would have if it were not
such other agent, the Trustee, the Warrant Agent or the Agent.

     

    Section
5.05.  Compensation
and Reimbursement.  The Company agrees:

     

    (a)  to
pay to the Agent from time to time reasonable compensation for all services
rendered by it hereunder (which compensation shall not be limited
by

     

    
      
        
        

      

      
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    any
provision of law with regard to the compensation of a trustee of an express
trust);

     

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

     

    (c)  to
indemnify the Agent and any predecessor Agent for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration of this Agreement and its duties hereunder, including the costs
and expenses of defending itself against or investigating any claim of liability
in connection with the exercise or performance of any of its powers or duties
hereunder.

     

    The
obligations of the Company under this Section to compensate and indemnify the
Agent and any predecessor Agent and to pay or reimburse the Agent and any
predecessor Agent for expenses, disbursements and advances shall constitute
additional indebtedness hereunder and shall survive the resignation or removal
of such Agent or predecessor Agent or the termination hereof. Such additional
indebtedness shall be a senior claim to that of the Units upon all property and
funds held or collected by the Agent as such, except funds held in trust for the
benefit of the Holders of particular Units, and the Units are hereby
subordinated to such senior claim.

     

    Section
5.06.  Corporate
Agent Required; Eligibility.  There shall at all times be an
Agent hereunder which shall be a corporation organized and doing business under
the laws of the United States of America, any State thereof or the District of
Columbia, having, together with its parent, a combined capital and surplus of at
least $50,000,000, subject to supervision or examination by Federal, State or
District of Columbia authority and willing to act on reasonable terms. If such
corporation, or its parent, publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.  The Agent hereunder shall at all times be the Trustee
under the Indenture and the Warrant Agent under the Warrant Agreement, subject
to receipt of an Opinion of Counsel that the same Person is precluded by law
from acting in such capacities.  If at any time the Agent shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.  The Agent may appoint one or more sub-agents with
offices or agencies in a city or cities outside the United States.

     

    
      
        
        

      

      
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    Section
5.07.  Resignation
and Removal; Appointment of Successor. (a) No resignation or
removal of the Agent and no appointment of a successor Agent pursuant to this
Article shall become effective until the acceptance of appointment by the
successor Agent in accordance with the applicable requirements of Section
5.08.

     

    (b)  The
Agent may resign by giving written notice thereof to the Company and the
Holders, in accordance with Section 7.06 and Section 7.07, 60 days prior to the
effective date of such resignation. The Agent may be removed at any time upon 60
days’ notice by the filing with it of an instrument in writing signed on behalf
of the Company and specifying such removal and the date when it is intended to
become effective. If the instrument of acceptance by a successor Agent required
by Section 5.08 shall not have been delivered to the Agent within 30 days after
the giving of such notice of resignation, the resigning Agent may petition any
court of competent jurisdiction for the appointment of a successor
Agent.

     

    (c)  If
at any time (i) the Agent shall cease to be eligible under Section 5.06, or
shall cease to be eligible as Trustee under the Indenture or as Warrant Agent
under the Warrant Agreement, and shall fail to resign after written request
therefor by the Company or by any Holder, or (ii) the Agent shall become
incapable of acting with respect to the Units or shall be adjudged a bankrupt or
insolvent, or a receiver or liquidator of the Agent or of its property shall be
appointed or any public officer shall take charge or control of the Agent or of
its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, (A) the Company, by Board Resolution, may
remove the Agent and appoint a successor Agent, or (B) any Holder who has been a
bona fide Holder of a
Unit for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Agent and the appointment of a successor Agent or Agents.  Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Agent and appoint a successor Agent.

     

    (d)  If
the Agent shall resign, be removed or become incapable of acting, or if a
vacancy shall occur in the office of Agent for any cause, the Company, by Board
Resolution, shall promptly appoint a successor Agent or Agents (other than the
Company) and shall comply with the applicable requirements of Section
5.08.  If no successor Agent shall have been so appointed by the
Company and accepted appointment in the manner required by Section 5.08, any
Holder who has been a bona fide Holder of a Unit for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Agent.

     

    (e)  The
Company shall give, or shall cause such successor Agent to give, notice of each
resignation and each removal of the Agent and each appointment of a successor
Agent to all Holders of Units in accordance with 

     

    
      
        
        

      

      
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    Section
7.07.  Each notice shall include the name of the successor Agent and
the address of its Corporate Trust Office.

     

    Section
5.08.  Acceptance of
Appointment by Successor.  (a) In case of the appointment
hereunder of a successor Agent, every such successor Agent so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Agent an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Agent shall become effective and such successor Agent, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, agencies and duties of the retiring Agent, with like effect as if
originally named as Agent hereunder; but, on the request of the Company or the
successor Agent, such retiring Agent shall, upon payment of all amounts due and
payable to it pursuant to Section 5.05, execute and deliver an instrument
transferring to such successor Agent all the rights and powers of the retiring
Agent and shall duly assign, transfer and deliver to such successor Agent all
property and money held by such retiring Agent hereunder. Any retiring Agent
shall, nonetheless, retain a prior claim upon all property or funds held or
collected by such Agent to secure any amounts then due it pursuant to Section
5.05.

     

    (b)  Upon
request of any such successor Agent, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor Agent all such rights, powers and agencies referred to in paragraph
(a) of this Section.

     

    (c)  No
successor Agent shall accept its appointment unless at the time of such
acceptance such successor Agent shall be eligible under this
Article.

     

    (d)  Upon
acceptance of appointment by any successor Agent as provided in this Section,
the Company shall give notice thereof to the Holders of Units in accordance with
Section 7.07. If the acceptance of appointment is substantially contemporaneous
with the resignation of the Agent, then the notice called for by the preceding
sentence may be combined with the notice called for by Section
5.07.  If the Company fails to give such notice within ten days after
acceptance of appointment by the successor Agent, the successor Agent shall
cause such notice to be given at the expense of the Company.

     

    Section
5.09.  Merger,
Conversion, Consolidation or Succession to Business.  Any
corporation into which the Agent may be merged or converted or with which it may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Agent shall be a party, or any corporation succeeding
to all or substantially all the agency business of the Agent, shall be the
successor of the Agent hereunder, without the execution or filing of any paper
or any further act on the part of any of the parties hereto, provided that such
corporation shall be otherwise eligible under this Article.

     

    Section
5.10.  Tax
Compliance.  (a) The Agent, on its own behalf and on behalf of
the Company, will comply with all applicable certification,
information

     

    
      
        
        

      

      
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    reporting
and withholding (including “backup” withholding)
requirements imposed by applicable United States, federal and New York State tax
laws, regulations or administrative practice (i) with respect to payments on, or
transfer or redemption of the Notes, the Pre-paid Purchase Contracts or the
Warrants or (ii) if specifically instructed by the Company, with respect to the
issuance, delivery, holding, or exercise of rights (other than by payment,
transfer or redemption) under the Notes, the Pre-paid Purchase Contracts or the
Warrants. Such compliance shall include, without limitation, the preparation and
timely filing of required returns with respect to, and the timely payment of,
all amounts required to be withheld to the appropriate taxing authority or its
designated agent. The Company will provide to the Agent such information as it
may reasonably request in order to comply with this Section.

     

    (b)  The
Agent shall comply with any direction received from the Company with respect to
the application of such requirements to particular payments or holders or in
other particular circumstances, and may for purposes of this Agreement rely on
any such direction in accordance with the provisions of Section 5.01(b)(2)
hereof.

     

    (c)  The
Agent shall maintain all appropriate records documenting compliance with such
requirements, and shall make such records available on request at reasonable
times during normal business hours to the Company or to their authorized
representatives duly authorized in writing.

     

    (d)  Unless
otherwise specified in an applicable pricing supplement, the Company by the
issuance and sale of any Unit, and any Holder of a Unit by its acceptance
thereof, agree to (in the absence of any applicable administrative ruling or
judicial determination to the contrary) treat the Securities that constitute any
Unit as separate securities and to file all United States federal, state and
local tax returns consistent with the treatment of such Unit as constituted by
separate securities.  Further, the Company agrees, and the Holders
shall be deemed to agree, not to file any tax returns, or take a position with
any tax authority, that is inconsistent with the characterization of the Notes
as debt for all U.S. federal tax purposes.

     

    (e)  Issuances
of Unregistered Units will be in accordance with the U.S. federal tax “TEFRA D
Rules” as discussed in an applicable pricing supplement.

     

     

    ARTICLE
6

    Consolidation,
Merger, Sale or Conveyance

     

    Section
6.01.  Covenant Not
to Merge, Consolidate, Sell or Convey Property Except Under Certain
Conditions.  The Company covenants that it will not merge or
consolidate with any other corporation or sell, convey or lease all or
substantially all of its assets to any Person, firm or corporation, except that
the Company may merge or consolidate with, or sell, convey or lease all
or

     

    
      
        
        

      

      
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    substantially
all of its assets to, any other corporation, provided that (i) the Company
shall be the continuing corporation, or the successor corporation (if other than
the Company) shall be a corporation organized and existing under the laws of the
United States of America, or any state thereof or the District of Columbia, and
such corporation shall assume the due and punctual performance and observance of
all of the covenants and conditions of this Agreement to be performed by the
Company by supplemental agreement in form satisfactory to the Agent executed and
delivered to the Agent by such corporation, and (ii) neither the Company nor
such successor corporation immediately after such merger or consolidation, or
such sale, conveyance or lease shall be in default in the performance of any
such covenant or condition.

     

    Section
6.02.  Rights and
Duties of Successor Company.  In case of any such
consolidation, merger, sale or conveyance and upon any such assumption by the
successor corporation, such successor corporation shall succeed to and be
substituted for the Company with the same effect as if it had been named herein
as the Company. Such successor corporation thereupon may cause to be signed, and
may issue (subject to the provisions of the Indenture and the Warrant Agreement)
either in its own name or in the name of Morgan Stanley any or all of the Notes,
Pre-Paid Purchase Contracts and/or Warrants issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Agent; and, upon
the order of such successor corporation, instead of the Company, and subject to
all the terms, conditions and limitations in this Agreement prescribed, the
Trustee, the Warrant Agent and the Agent shall authenticate, countersign and
deliver, as applicable, any Notes, Pre-Paid Purchase Contracts or Warrants that
previously shall have been signed and delivered by the officers of the Company
to the Trustee and the Warrant Agent for authentication and countersignature,
and any Notes, Pre-Paid Purchase Contracts and/or Warrants evidencing Units
which such successor corporation thereafter shall cause to be signed and
delivered to the Trustee and the Warrant Agent for such purpose.

     

    In case of
any such consolidation, merger, sale, conveyance or lease such change in
phraseology and form (but not in substance) may be made in the Unit Certificates
thereafter to be issued as may be appropriate.

     

    Section
6.03.  Opinion of
Counsel to Agent.  The Agent subject to Sections 5.01 and 5.02
may receive an Opinion of Counsel as conclusive evidence that any such
consolidation, merger, sale, conveyance or lease, and any such assumption,
complies with the provisions of this Article.

     

     

    ARTICLE
7

    Miscellaneous
Provisions

     

    Section
7.01.  Amendments.  (a)
This Agreement and the terms of the Units may be amended (by means of an
agreement supplemental hereto or otherwise) by the Company and the Agent,
without the consent of the Holders, (i)

     

    
      
        
        

      

      
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    for the
purpose of curing any ambiguity, or of curing, correcting or supplementing any
defective or inconsistent provision contained herein or therein, (ii) to
evidence and provide for the acceptance of appointment hereunder by a successor
Agent with respect to the Units or (iii) in any other manner which the Company
may deem necessary or desirable and which will not adversely affect the
interests of the affected Holders.

     

    (b)  The
Company and the Agent may modify or amend this Agreement (by means of an
agreement supplemental hereto or otherwise) with the consent of Holders holding
not less than a majority in number of the then outstanding Units affected
thereby for any purpose; provided, however, that no such
modification or amendment that materially and adversely affects the exercise or
separation rights of the affected Holders or reduces the percentage of the
number of outstanding Units, the consent of the Holders of which is required for
modification or amendment of this Agreement, may be made without the consent of
each Holder affected thereby. In the case of Units evidenced by one or more
Global Unit Certificates, the Company and the Agent shall be entitled to rely
upon certification in form satisfactory to each of them that any requisite
consent has been obtained from holders of beneficial ownership interests in the
relevant Global Unit Certificate. Such certification may be provided by
participants of the Depositary acting on behalf of such beneficial owners of
Units, provided that
any such certification is accompanied by a certification from the Depositary as
to the Unit holdings of such participants.

     

    (c)  Upon
the request of the Company, accompanied by a copy of a Board Resolution (which
Board Resolution may provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined in accordance
with or pursuant to an Officer’s Certificate) authorizing the execution of any
such amendment, and upon the filing with the Agent of evidence of the consent of
Holders as aforesaid, the Agent shall join with the Company in the execution of
such amendment unless such amendment affects the Agent’s own rights, duties or
immunities under this Agreement or otherwise, in which case the Agent may in its
discretion, but shall not be obligated to, enter into such
amendment.  In executing, or accepting the additional duties created
by, any amendment permitted by this Section, the Agent shall be entitled to
receive, and shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such amendment is authorized or permitted by this
Agreement.  The fact and date of the execution of any consent of
Holders, or the authority of the Person executing the same, may be proved by the
certificate of any notary public or other officer of any jurisdiction authorized
to take acknowledgments of deeds or administer oaths that the person executing
such instruments acknowledged to him the execution thereof, or by an affidavit
of a witness to such execution sworn to before any such notary or other such
officer.  Where such execution is by or on behalf of any legal entity
other than an individual, such certificate or affidavit shall also constitute
sufficient proof of the authority of the person executing the
same.  The fact of the holding by any Holder of an Unregistered Unit
of any series, and the identifying number of such Unit

     

    
      
        
        

      

      
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    and the
date of his holding the same, may be proved by the production of such Unit or by
a certificate executed by any trust company, bank, banker or recognized
securities dealer wherever situated satisfactory to the Agent, if such
certificate shall be deemed by the Agent to be satisfactory.  Each
such certificate shall be dated and shall state that on the date thereof a Unit
of such series bearing a specified identifying number was deposited with or
exhibited to such trust company, bank, banker or recognized securities dealer by
the Person named in such certificate.  Any such certificate may be
issued in respect of one or more Unregistered Units of one or more series
specified therein.  The holding by the Person named in any such
certificate of any Unregistered Units of any series specified therein shall be
presumed to continue for a period of one year from the date of such certificate
unless at the time of any determination of such holding (1) another certificate
bearing a later date issued in respect of the same Units shall be produced, or
(2) the Unit of such series specified in such certificate shall be produced by
some other Person, or (3) the Units of such series specified in such certificate
shall have ceased to be Outstanding.  The fact and date of the
execution of any such consent and the amount and number of Units of any series
held by such Person so executing such consent and the amount and numbers of any
Unit or Units for such series may also be proven in accordance with such
reasonable rules and regulations as may be prescribed by the Agent or in any
other manner which the Agent may deem sufficient.  In the case of
Registered Units, the ownership of such Units shall be proved by the Unit
Register or by a certificate of the Agent, as registrar for the
Units.  Without limiting the generality of Section 7.01(c), a Clearing
System that is or whose nominee or common depositary or a nominee thereof is a
Holder of an unregistered Global Unit may allow its accountholders who have
beneficial interests in such unregistered Global Note credited to accounts with
such Clearing System to direct such Clearing System in taking actions hereunder
(through its nominee or common depositary or a nominee thereof) through such
Clearing System’s standing instructions and customary practices.  The
Clearing System shall report only one result of its solicitation of proxies to
the Agent.

     

    (d)  It
shall not be necessary for the consent of the Holders under this Section to
approve the particular form of any proposed amendment, but it shall be
sufficient if such consent shall approve the substance thereof.

     

    (e)  The
Company may set a record date for purposes of determining the identity of
Holders of Registered Units entitled to consent to any action by consent
authorized or permitted hereby. Such record date shall be the later of 30 days
prior to the first solicitation of such consent or the date of the most recent
list of Holders of Registered Units furnished to the Agent. The ownership of
Registered Units shall be proved by the Unit Register.

     

    Section
7.02.  Incorporators,
Stockholders, Officers and Directors of the Company Immune from
Liability.  No recourse under or upon any obligation, covenant
or agreement contained in this Agreement, or in any Warrant Agreement or any
Notes, Pre-Paid Purchase Contracts and/or Warrants, or because of
any

     

    
      
        
        

      

      
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    indebtedness
evidenced thereby, shall be had against any incorporator, or against any past,
present or future stockholder, officer, attorney-in-fact or director, as such,
of the Company or of any successor corporation, either directly or through the
Company or any successor corporation, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or penalty or
by any legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance of the Units by the Holders
thereof and as part of the consideration for the issue thereof, provided that nothing in this
Article shall impair the obligations, covenants and agreements of the Company
contained in this Agreement and in any Notes, Pre-Paid Purchase Contracts and/or
Warrants constituting a part of the Units.

     

    Section
7.03.  Compliance
Certificates and Opinions.  Except as otherwise expressly
provided by this Agreement, upon any application or request by the Company to
the Agent to take any action under any provision of this Agreement, the Company,
as applicable, shall furnish to the Agent an Officer’s Certificate stating that
all conditions precedent, if any, provided for in this Agreement relating to the
proposed action have been complied with and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Agreement relating to such particular application or request, no
additional certificate or opinion need be furnished.

     

    Every
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Agreement shall include:

     

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

     

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

     

    (iii)  a
statement that, in the opinion of each such individual, 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

     

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

     

    Section
7.04.  Form of
Documents Delivered to Agent.  In any case where several
matters are required to be certified by, or covered by an opinion of, any
specified Person, it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be so certified
or

     

    
      
        
        

      

      
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    covered by
only one document, but one such Person may certify or give an opinion with
respect to some matters and one or more other such Persons as to other matters,
and any such Person may certify or give an opinion as to such matters in one or
several documents.

     

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

     

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

     

    Section
7.05.  Maintenance
of Office or Agency.  So long as Units are authorized for
issuance pursuant to this Agreement or are outstanding hereunder, the Company
will maintain in the Borough of Manhattan, The City of New York, an office or
agency where Units may be presented or surrendered for delivery, where Units may
be surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of Units and this Agreement may be
served. The Company hereby initially designates the Agent as its office or
agency in the Borough of Manhattan, The City of New York, for each of said
purposes. The Company will give prompt written notice to the Agent of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Agent with the name and address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Agent, and the Company hereby appoints the Agent
as its agent to receive all such presentations, surrenders, notices and
demands.

     

    The
Company may also from time to time designate one or more other offices or
agencies where Units may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligations to maintain offices or agencies provided for in this Section. The
Company will give prompt written notice to the Agent of any such designation or
rescission and of any change in the location of any such other office or
agency.

     

    
      
        
        

      

      
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    Section
7.06.  Notices,
Etc.  Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Agreement to be made upon, given or furnished to, or filed
with,

     

    (a)  the
Agent, by any Holder or by the Company shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if made, given, furnished
or filed in writing and personally delivered or mailed, first-class postage
prepaid, to the Agent at its Corporate Trust Office, Attention: Corporate
Finance, or at any other address previously furnished in writing by the Agent to
the Holders and the Company, or

     

    (b)  the
Company by the Agent or by any Holder shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if made, given, furnished
or filed in writing and personally delivered or mailed, first-class postage
prepaid, addressed to the Company at 1585 Broadway, New York, New York 10036,
Attention: Treasurer, or at any other address previously furnished in writing to
the Agent by the Company.

     

    Section
7.07.  Notices to
Holders; Waiver.  The Company may cause notice to be given to
the Holders by providing the Agent with a form of notice to be (a) in the case
of Definitive Units, distributed by the Agent to the Holders by first class
mail, or (b) in the case of Global Units, made available by the Depositary to
its participants in accordance with the custom and practices of the
Depositary.

     

    Where this
Agreement provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice.

     

    Waivers of
notice by Holders shall be filed with the Agent, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver.

     

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

     

    Section
7.09.  Successors
and Assigns.  All covenants and agreements in this Agreement,
the Units and the Unit Certificates by the Company shall bind its successors and
assigns, whether so expressed or not.

     

    Section
7.10.  Separability
Clause.  In case any provision in this Agreement or in the
Units, Unit Certificates or Notes, Pre-Paid Contracts or Warrants shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions hereof and thereof shall not in any way be affected or
impaired thereby.

     

    
      
        
        

      

      
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    Section
7.11.  Benefits of
Agreement.  Nothing in this Agreement or in the Units, Unit
Certificates, the Indenture, Pre-Paid Contracts or the Warrant Agreement, the
Notes or the Warrants, express or implied, shall give to any Person, other than
the parties hereto and their successors hereunder and the Holders of any Units,
any benefits or any legal or equitable right, remedy or claim under this
Agreement.

     

    Section
7.12.  Governing
Law; Waiver of Trial by Jury.  This Agreement, the Units, the
Unit Certificate, the Notes, the Pre-Paid Contracts and the Warrants shall be
governed and construed in accordance with the laws of the State of New
York.  The Company and the Agent irrevocably waive, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.

     

    Section
7.13.  Counterparts.  This
Agreement may be executed in any number of counterparts by the parties hereto on
separate counterparts, each of which, when so executed and delivered, shall be
deemed an original, but all such counterparts shall together constitute one and
the same instrument.

     

    Section
7.14.  Inspection of
Agreement.  A copy of this Agreement shall be available at all
reasonable times during normal business hours at the Corporate Trust Office of
the Agent for inspection by any Holder.

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    IN WITNESS
WHEREOF, the Company, the Agent, the Trustee and the Warrant Agent have duly
executed this Agreement as of the day and year first above set
forth.

     

    
      	
              MORGAN
      STANLEY

            	 
	 	 
	 	 
	
              By:

            	

              /s/
      DANIEL B. PARK

            	 
	 	Name:	
              Daniel
      B. Park

            	 
	 	Title:	
              Assistant
      Treasurer

            	 

    

     

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    

    
       

      
        	
                THE
      BANK OF NEW YORK MELLON,

                as
      Unit Agent

              	 
	 	 
	 	 
	
                By:

              	/s/
      SCOTT I. KLEIN	 
	 	Name:	
                Scott I.
      Klein

              	 
	 	Title:	
                Authorized
      Signatory

              	 

      

       

      
         

        
          	
                  THE
      BANK OF NEW YORK MELLON,

                  as
      Trustee and Paying Agent under the Indenture

                
	 	 
	 	 
	
                  By:

                	/s/ SCOTT I. KLEIN	 
	 	Name:	
                  
                    Scott I.
      Klein

                  

                	 
	 	Title:	
                  Authorized
      Signatory

                	 

        

         

        
          
            
              
                 

                
                  	
                          THE
      BANK OF NEW YORK MELLON,

                          as
      Warrent Agent under the Warrant Agreement

                        
	 	 
	 	 
	
                          By:

                        	/s/ SCOTT I. KLEIN	 
	 	Name:	
                          
                            Scott I.
      Klein

                          

                        	 
	 	Title:	
                          Authorized
      Signatory

                        	 

                

                 

                
                  
                    
                       

                    

                  

                

              

              
                
                  
                  

                

                
                  
                  

                  
                    

                  

                

                
                  
                  

                

                 

              

            

          

        

      

    

    EXHIBIT
A

     

    [INSERT IN
GLOBAL UNIT CERTIFICATE FOR REGISTERED UNITS]

     

    [FACE]

     

    [This Unit
Certificate is a Global Unit Certificate within the meaning of the Unit
Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company (the “Depositary”) or a nominee of
the Depositary. Unless and until it is exchanged in whole or in part for Units
in definitive registered form, this Unit Certificate may not be transferred
except as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the Depositary
or by the Depositary or any such nominee to a successor Depositary or a nominee
of such successor Depositary).

     

    Unless
this Unit Certificate is presented by an authorized representative of The
Depositary (55 Water Street, New York) to Morgan Stanley or its agent for
registration of transfer, exchange or payment, and any Unit issued is registered
in the name of Cede & Co. or such other name as requested by an authorized
representative of the Depositary and any payment hereon is made to Cede &
Co. or such other entity as is requested by an authorized representative of the
Depositary, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.]

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

       

    

    UNIT
CERTIFICATE FOR REGISTERED UNITS

     

    (issuable
in integral multiples of whole Units)

     

    Evidencing
the Ownership or Rights of the Holder Under the Securities

    Specified
Below

     

    

     

    [Specify
Securities Constituting Part of these Units]

     

    CUSIP No.
__________

     

    Certificate
No.:_____ 

     

    Number of
Units: See Schedule A1

     

    This Unit
Certificate certifies that ______________________ (the “Holder”), or registered
assigns, is the registered owner of
[     (  ) Units]2 [the number of Units
specified in Schedule A hereto].3

     

    Each Unit
represents ownership by the Holder of [specify Securities constituting parts of
the Unit], subject to the Unit Agreement (the “Unit Agreement”) dated as of
August 29, 2008 between Morgan Stanley and The Bank of New York Mellon, as
Agent, as Trustee and Paying Agent under the Indenture referred to therein, and
as Warrant Agent under the Warrant Agreement referred to therein.

     

    [Other
Terms of Units:]

     

     

      
        

      

    

    
      1  Insert
in registered Global Unit Certificates.

       

    

    
      2  Insert
in Definitive Registered Units

       

    

    
      3  Insert
in registered Global Unit Certificates.

       

      
        
          
          

        

        
          A-2

          
            

          

        

        
          
          

        

         

      

    

     [INSERT
APPROPRIATE NOTE, PRE-PAID PURCHASE CONTRACT OR WARRANT CERTIFICATES, AS
APPLICABLE]

     

     

     

     

     

     

    
    

     

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

            

    

     

     

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
A

    [INSERT IN
GLOBAL

    UNIT
CERTIFICATE FOR REGISTERED UNITS

    SCHEDULE
OF REDUCTIONS]

     

    The
initial number of Units represented by this Global Unit Certificate is
_________. In accordance with the Unit Agreement pursuant to which this Global
Unit Certificate has been issued, the following reductions of the number of
Units represented by this Global Unit Certificate have occurred:

     

    
      	
              Date
      of Reduction

            	
              Number
      Reduced by Separation of the Component Parts of this Unit

            	
              [Number
      Reduced by Exercise of Warrants]4

            	
              Number
      of Units Outstanding Following any such Reduction

            	
              Notation
      Made by or on Behalf of Paying Agent

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

    

    

    
 

     

      
        

      

    

    
      4 Add such
other means of reduction under the terms of the Units

    

     

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

       

    

    [FORM
OF ASSIGNMENT]

     

    FOR VALUE
RECEIVED, the undersigned assigns and transfers the Unit(s) represented by this
Certificate to:

     

    _________________
(Insert assignee’s social security or tax identification number)

     

    _________________
(Insert address and zip code of assignee)

     

    and
irrevocably appoints _________________

     

    agent to
transfer this Unit Certificate on the books of the Corporation. The agent may
substitute another to act for him or her.

     

    Date:

     

    Signature(s):

     

    
      	 
      
	 
      
	
              (Sign
      exactly as your name appears on the other side of this
      Certificate)

            

    

    

    NOTICE:
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
SEC Rule 17Ad-15.

     

    
      
        
        

      

      
        A-5

        
          

        

      

      
        
        

      

       

    

    EXHIBIT
B-1

     

    [FORM OF
TEMPORARY GLOBAL UNIT CERTIFICATE FOR UNREGISTERED UNITS]

     

     (issuable
in integral multiples of whole Units)

     

    Evidencing
the Ownership or Rights of the Holder Under the Securities

    Specified
Below

     

    ANY
UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(J) AND l287(A) OF THE INTERNAL REVENUE
CODE.

    

     

    [Specify
Securities Constituting Part of these Units]

     

    CUSIP No.
__________

     

    Certificate
No.:_____                                                      

    Number of
Units: See Schedule A

     

    This
Temporary Unit Certificate certifies that the bearer hereof (the “Holder”), is the owner of the
number of Units specified in Schedule A hereto.

     

    Each Unit
represents ownership by the Holder of [specify Securities constituting parts of
the Unit], subject to the Unit Agreement (the “Unit Agreement”) dated as of
August 29, 2008 among Morgan Stanley, The Bank of New York Mellon, as Agent (the
“Unit Agent”), as
Trustee and Paying Agent under the Indenture referred to therein, and as Warrant
Agent under the Warrant Agreement referred to therein.

     

    This Unit
is issued in temporary global bearer form and represents all or a portion of a
duly authorized issue of the Units Without Holders’ Obligations (the “Units”) of the
Issuer.  The Units are issuable under the Unit Agreement.

     

    Except as
otherwise provided herein, this Unit Certificate is governed by the terms and
conditions of the Permanent Global Unit Certificate for Unregistered Units (the
“Permanent Global Unit
Certificate”) to be issued in exchange for this Unit, which terms and
conditions are hereby incorporated by reference herein mutatis mutandis and shall be
binding on Morgan Stanley and the Holder hereof as if fully set forth
herein.  The form of the Permanent Global Unit Certificate is attached
hereto.

     

    Upon
exchange of any portion of this Unit for an interest in the Permanent Global
Unit Certificate, the Unit Agent shall cause Schedule A of this Unit to be
endorsed to reflect the reduction of the number of Units evidenced hereby by an
amount equal to the aggregate number of Units being so
exchanged.  Except as otherwise provided herein, until exchanged for a
Permanent Global Unit Certificate, this Unit shall in all respects be entitled
to the same benefits under the Unit Agreement as a duly delivered Permanent
Global Unit Certificate.

     

    
      
        
        

      

      
        B-1-1

        
          

        

      

      
        
        

      

       

    

     [INSERT
APPROPRIATE NOTE, PRE-PAID PURCHASE CONTRACT OR WARRANT CERTIFICATES, AS
APPLICABLE]

     

     

     

     

     

     

    
    

     

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

            

    

    
 

    
      
        
        

      

      
        B-1-2

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
A

     

    TEMPORARY
GLOBAL

    UNIT
CERTIFICATE FOR UNREGISTERED UNITS5

    SCHEDULE
OF EXCHANGES

     

    The
initial number of Units represented by this Temporary Global Unit Certificate is
_________. Exchange of this Temporary Global Unit for a Permanent Global Unit
shall only be made upon satisfaction of any conditions or restrictions set forth
in any Global Note constituting part of this Temporary Global Unit. In
accordance with the Unit Agreement pursuant to which this Temporary Global Unit
Certificate has been issued, the following exchanges of the number of Units
represented by this Temporary Global Unit Certificate have
occurred:

     

    
      	
              Date
      of Reduction

            	
              Number
      Reduced by Exchange for a Permanent Unregistered Unit

            	
              Number
      of Temporary Global Units Outstanding Following any such Exchange or
      Reduction

            	
              Notation
      Made by or on Behalf of Agent

            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      

    

    

    

      
        

      

    

    
      5
Unregistered Units shall not include cash-settled Warrants.

       

      
        
          
          

        

        
          B-1-3

          
            

          

        

        
          
          

        

         

      

    

    EXHIBIT
B-2

    

     

    [FORM OF
PERMANENT GLOBAL UNIT CERTIFICATE FOR UNREGISTERED UNITS]

     

    (issuable
in integral multiples of whole Units)

     

    Evidencing
the Ownership or Rights of the Holder Under the Securities

    Specified
Below

     

    ANY
UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(J) AND l287(A) OF THE INTERNAL REVENUE
CODE.

    

     

    [Specify
Securities Constituting Part of these Units]

     

    CUSIP No.
__________

     

    Certificate
No.:_____                                                      

    Number of
Units: See Schedule A

     

    This Unit
Certificate certifies that the bearer hereof  (the “Holder”), is
the  owner of [the number of Units specified in Schedule A
hereto].

     

    Each Unit
represents ownership by the Holder of [specify Securities constituting parts of
the Unit], subject to the Unit Agreement (the “Unit Agreement”) dated as of
August 29, 2008 between Morgan Stanley and The Bank of New York Mellon, as
Agent, as Trustee and Paying Agent under the Indenture referred to therein, and
as Warrant Agent under the Warrant Agreement referred to therein.

     

    [Other
Terms of Units:]

     

    

     

     [INSERT
APPROPRIATE NOTE, PRE-PAID PURCHASE CONTRACT OR WARRANT CERTIFICATES, AS
APPLICABLE]

     

    
      
        
        

      

      
        B-2-1

        
          

        

      

      
        
        

      

       

    

    SCHEDULE
A

     

    PERMANENT
GLOBAL

    UNIT
CERTIFICATE REPRESENTING UNREGISTERED UNITS6

    SCHEDULE
OF EXCHANGES/INCREASES/REDUCTIONS

     

    The
initial number of Units represented by this Permanent Global Unit Certificate is
_________. Exchange of a Temporary Global Unit for this Permanent Global Unit
shall only be made upon satisfaction of any conditions or restrictions set forth
in any Global Note constituting part of the Temporary Global Unit. In accordance
with the Unit Agreement pursuant to which this Permanent Global Unit Certificate
has been issued, the following exchanges, increases or reductions of the number
of Units represented by this Permanent Global Unit Certificate have
occurred:

     

    
      	
              Date
      of Exchange or Reduction

            	
              Number
      Increased by Exchange of a Temporary Unregistered Unit for a Permanent
      Unregistered Unit

            	
              Number
      Reduced by Separation of the Component Parts of this Unit

            	
              [Number
      Reduced by Exercise of Warrants]7

            	
              Number
      Reduced or Increased by Exchange in respect of a Definitive
      Unit

            	
              Number
      of Permanent Global Units Outstanding Following any such Exchange,
      Increase or Reduction

            	
              Notation
      Made by or on Behalf of Agent

            
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      	 
      

    

    

      
        

      

    

    
      6
Unregistered Units shall not include cash-settled Warrants.

       

    

    
      7 Add such
other means of reduction under the terms of the Units.

    

    
       

      
        
        

      

      
        B-2-2

        
          

        

      

      
        
        

      

       

    

    
      EXHIBIT
B-3

    

     

    [FORM OF
UNIT CERTIFICATE FOR UNREGISTERED DEFINITIVE UNITS]

     

    (issuable
in integral multiples of whole Units)

     

    Evidencing
the Ownership or Rights of the Holder Under the Securities

    Specified
Below

     

    ANY
UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN SECTIONS 165(J) AND l287(A) OF THE INTERNAL REVENUE
CODE.

    

     

    [Specify
Securities Constituting Part of these Units]

     

    CUSIP No.
__________

     

    Certificate
No.:_____                                                      

    Number of
Units:

     

    This Unit
Certificate certifies that the bearer (the “Holder”), is the owner of the
number of Units specified above.

     

    Each Unit
represents ownership by the Holder of [specify Securities constituting parts of
the Unit], subject to the Unit Agreement (the “Unit Agreement”) dated as of
August 29, 2008 among Morgan Stanley, The Bank of New York Mellon, as Agent, as
Trustee and Paying Agent under the Indenture referred to therein, and as Warrant
Agent under the Warrant Agreement referred to therein.

     

    

     

    

     

    [Other
terms of Units]

     

    
      
        
        

      

      
        B-3-1

        
          

        

      

      
        
        

      

    

     

     [INSERT
APPROPRIATE NOTE, PRE-PAID PURCHASE CONTRACT OR WARRANT CERTIFICATES, AS
APPLICABLE]

     

     

     

     

     

     

     

    
    

     

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

            

    

     

     

    B-3-2

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