Document:

Exhibit 4.1

LEXAR
MEDIA, INC.

2000
EQUITY INCENTIVE PLAN

As Adopted January 21,
2000

As Amended April 20,
2004

As Amended February 10, 2006

1.             PURPOSE.
The purpose of this Plan is to provide incentives to attract, retain and
motivate eligible persons whose present and potential contributions are
important to the success of the Company, its Parent and Subsidiaries, by
offering them an opportunity to participate in the Company’s future performance
through awards of Options, Restricted Stock and Stock Bonuses. Capitalized
terms not defined in the text are defined in Section 23.

2.             SHARES SUBJECT TO THE PLAN.

2.1           Number of Shares Available.
Subject to Sections 2.2 and 18, the total number of Shares reserved and
available for grant and issuance pursuant to this Plan will be 8,000,000 Shares
plus Shares that are subject to: (a) issuance upon exercise of an Option
but cease to be subject to such Option for any reason other than exercise of
such Option; (b) an Award granted hereunder but are forfeited or are repurchased
by the Company at the original issue price; and (c) an Award that
otherwise terminates without Shares being issued. In addition, any authorized
shares not issued or subject to outstanding grants under the Company’s 1996
Stock Option/Stock Issuance Plan (the “Prior Plan”)
on the Effective Date (as defined below) and any shares issued under the Prior
Plan that are forfeited or repurchased by the Company or that are issuable upon
exercise of options granted pursuant to the Prior Plan that expire or become
unexercisable for any reason without having been exercised in full, will no
longer be available for grant and issuance under the Prior Plan, but will be
available for grant and issuance under this Plan. In addition, on each January 1,
the aggregate number of Shares reserved and available for grant and issuance
pursuant to this Plan will be increased automatically by a number of Shares
equal to 5% of the total outstanding shares of the Company as of the
immediately preceding December 31, provided that no more than 50,000,000
shares shall be issued as ISOs (as defined in Section 5 below). At all
times the Company shall reserve and keep available a sufficient number of
Shares as shall be required to satisfy the requirements of all outstanding
Options granted under this Plan and all other outstanding but unvested Awards
granted under this Plan.

2.2           Adjustment of Shares. In the
event that the number of outstanding shares is changed by a stock dividend,
recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification or similar change in the capital structure of the Company
without consideration, then (a) the number of Shares reserved for issuance
under this Plan, (b) the number of Shares that may be granted pursuant to
Sections 3 and 9 below, (c) the Exercise Prices of and number of Shares
subject to outstanding Options, and (d) the number of Shares subject to
other outstanding Awards will be proportionately adjusted, subject to any
required action by the Board or the stockholders of the Company and compliance
with applicable securities laws;

 

provided,
however, that fractions of a Share will not be issued but will either be
replaced by a cash payment equal to the Fair Market Value of such fraction of a
Share or will be rounded up to the nearest whole Share, as determined by the
Committee.

3.             ELIGIBILITY.
ISOs (as defined in Section 5 below) may be granted only to employees
(including officers and directors who are also employees) of the Company or of
a Parent or Subsidiary of the Company. All other Awards may be granted to
employees, officers, directors, consultants, independent contractors and
advisors of the Company or any Parent or Subsidiary of the Company; provided
such consultants, contractors and advisors render bona fide services not in
connection with the offer and sale of securities in a capital-raising
transaction. No person will be eligible to receive more than 2,000,000 Shares
in any calendar year under this Plan pursuant to the grant of Awards hereunder,
other than new employees of the Company or of a Parent or Subsidiary of the
Company (including new employees who are also officers and directors of the
Company or any Parent or Subsidiary of the Company), who are eligible to
receive up to a maximum of 3,000,000 Shares in the calendar year in which they
commence their employment. A person may be granted more than one Award under
this Plan.

4.             ADMINISTRATION.

4.1           Committee Authority. This Plan
will be administered by the Committee or by the Board acting as the Committee.
Except for automatic grants to Outside Directors pursuant to Section 9
hereof, and subject to the general purposes, terms and conditions of this Plan,
and to the direction of the Board, the Committee will have full power to
implement and carry out this Plan. Except for automatic grants to Outside
Directors pursuant to Section 9 hereof, the Committee will have the
authority to:

(a)          construe
and interpret this Plan, any Award Agreement and any other agreement or
document executed pursuant to this Plan;

(b)            prescribe,
amend and rescind rules and regulations relating to this Plan or any
Award;

(c)           select
persons to receive Awards;

(d)          
determine the form and terms of Awards;

(e)           determine
the number of Shares or other consideration subject to Awards;

(f)                                  determine
whether Awards will be granted singly, in combination with, in tandem with, in
replacement of, or as alternatives to, other Awards under this Plan or any
other incentive or compensation plan of the Company or any Parent or Subsidiary
of the Company;

(g)           grant
waivers of Plan or Award conditions;

(h)           determine
the vesting, exercisability and payment of Awards;

 

(i)            correct
any defect, supply any omission or reconcile any inconsistency in this Plan,
any Award or any Award Agreement;

(j)            determine
whether an Award has been earned; and

(k)           make
all other determinations necessary or advisable for the administration of this
Plan.

4.2           Committee Discretion. Except
for automatic grants to Outside Directors pursuant to Section 9 hereof,
any determination made by the Committee with respect to any Award will be made
in its sole discretion at the time of grant of the Award or, unless in
contravention of any express term of this Plan or Award, at any later time, and
such determination will be final and binding on the Company and on all persons
having an interest in any Award under this Plan. The Committee may delegate to
one or more officers of the Company the authority to grant an Award under this
Plan to Participants who are not Insiders of the Company.

5.             OPTIONS.
The Committee may grant Options to eligible persons and will determine whether
such Options will be Incentive Stock Options within the meaning of the Code (“ISO”) or Nonqualified Stock Options
(“NQSOs”), the number of Shares
subject to the Option, the Exercise Price of the Option, the period during
which the Option may be exercised, and all other terms and conditions of the
Option, subject to the following:

5.1           Form of Option Grant. Each
Option granted under this Plan will be evidenced by an Award Agreement which
will expressly identify the Option as an ISO or an NQSO (“Stock
Option Agreement”), and, except as otherwise required by the
terms of Section 9 hereof, will be in such form and contain such
provisions (which need not be the same for each Participant) as the Committee
may from time to time approve, and which will comply with and be subject to the
terms and conditions of this Plan.

5.2           Date of Grant. The date of
grant of an Option will be the date on which the Committee makes the
determination to grant such Option, unless otherwise specified by the
Committee. The Stock Option Agreement and a copy of this Plan will be delivered
to the Participant within a reasonable time after the granting of the Option.

5.3           Exercise Period. Options may be
exercisable within the times or upon the events determined by the Committee as
set forth in the Stock Option Agreement governing such Option; provided,
however, that no Option will be exercisable after the expiration of ten (10) years
from the date the Option is granted; and provided further that no ISO
granted to a person who directly or by attribution owns more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or of any Parent or Subsidiary of the Company (“Ten Percent
Stockholder”) will be exercisable after the expiration of five (5) years
from the date the ISO is granted. The Committee also may provide for Options to
become exercisable at one time or from time to time, periodically or otherwise,
in such number of Shares or percentage of Shares as the Committee determines.

 

5.4           Exercise Price. The Exercise
Price of an Option will be determined by the Committee when the Option is
granted and may be not less than 85% of the Fair Market Value of the Shares on
the date of grant; provided that: (i) the Exercise Price of an ISO will be
not less than 100% of the Fair Market Value of the Shares on the date of grant;
and (ii) the Exercise Price of any ISO granted to a Ten Percent
Stockholder will not be less than 110% of the Fair Market Value of the Shares
on the date of grant. Payment for the Shares purchased may be made in
accordance with Section 8 of this Plan.

5.5           Method of Exercise. Options may
be exercised only by delivery to the Company of a written stock option exercise
agreement (the “Exercise Agreement”) in a
form approved by the Committee (which need not be the same for each
Participant), stating the number of Shares being purchased, the restrictions
imposed on the Shares purchased under such Exercise Agreement, if any, and such
representations and agreements regarding Participant’s investment intent and
access to information and other matters, if any, as may be required or
desirable by the Company to comply with applicable securities laws, together
with payment in full of the Exercise Price for the number of Shares being
purchased.

5.6           Termination. Notwithstanding
the exercise periods set forth in the Stock Option Agreement, exercise of an
Option will always be subject to the following:

(a)                                If the Participant is
Terminated for any reason except death or Disability, then the Participant may
exercise such Participant’s Options only to the extent that such Options would
have been exercisable upon the Termination Date no later than three (3) months
after the Termination Date (or such shorter or longer time period not exceeding
five (5) years as may be determined by the Committee, with any exercise
beyond three (3) months after the Termination Date deemed to be an NQSO),
but in any event, no later than the expiration date of the Options.

(b)                 If the Participant is Terminated because
of Participant’s death or Disability (or the Participant dies within three (3) months
after a Termination other than for Cause or because of Participant’s
Disability), then Participant’s Options may be exercised only to the extent
that such Options would have been exercisable by Participant on the Termination
Date and must be exercised by Participant (or Participant’s legal
representative or authorized assignee) no later than twelve (12) months after
the Termination Date (or such shorter or longer time period not exceeding five (5) years
as may be determined by the Committee, with any such exercise beyond (a) three
(3) months after the Termination Date when the Termination is for any
reason other than the Participant’s death or Disability, or (b) twelve
(12) months after the Termination Date when the Termination is for Participant’s
death or Disability, deemed to be an NQSO), but in any event no later than the
expiration date of the Options.

(c)                                Notwithstanding the provisions in paragraph 5.6(a) above, if a
Participant is terminated for Cause, neither the Participant, the Participant’s
estate nor such other person who may then hold the Option shall be entitled to

 

exercise any Option with respect to any Shares whatsoever,
after termination of service, whether or not after termination of service the
Participant may receive payment from the Company or Subsidiary for vacation
pay, for services rendered prior to termination, for services rendered for the
day on which termination occurs, for salary in lieu of notice, or for any other
benefits. In making such determination, the Board shall give the Participant an
opportunity to present to the Board evidence on his behalf. For the purpose of
this paragraph, termination of service shall be deemed to occur on the date
when the Company dispatches notice or advice to the Participant that his
service is terminated.

5.7             Limitations on Exercise. The
Committee may specify a reasonable minimum number of Shares that may be
purchased on any exercise of an Option, provided that such minimum number will
not prevent Participant from exercising the Option for the full number of
Shares for which it is then exercisable.

5.8           Limitations on ISO. The
aggregate Fair Market Value (determined as of the date of grant) of Shares with
respect to which ISO are exercisable for the first time by a Participant during
any calendar year (under this Plan or under any other incentive stock option
plan of the Company, Parent or Subsidiary of the Company) will not exceed
$100,000. If the Fair Market Value of Shares on the date of grant with respect
to which ISO are exercisable for the first time by a Participant during any
calendar year exceeds $100,000, then the Options for the first $100,000 worth
of Shares to become exercisable in such calendar year will be ISO and the
Options for the amount in excess of $100,000 that become exercisable in that
calendar year will be NQSOs. In the event that the Code or the regulations
promulgated thereunder are amended after the Effective Date of this Plan to
provide for a different limit on the Fair Market Value of Shares permitted to
be subject to ISO, such different limit will be automatically incorporated
herein and will apply to any Options granted after the effective date of such
amendment.

5.9           Modification, Extension or Renewal.
The Committee may modify, extend or renew outstanding Options and authorize the
grant of new Options in substitution therefor, provided that any such action
may not, without the written consent of a Participant, impair any of such
Participant’s rights under any Option previously granted. Any outstanding ISO
that is modified, extended, renewed or otherwise altered will be treated in
accordance with Section 424(h) of the Code. The Committee may reduce
the Exercise Price of outstanding Options without the consent of Participants
affected by a written notice to them; provided, however, that the
Exercise Price may not be reduced below the minimum Exercise Price that would
be permitted under Section 5.4 of this Plan for Options granted on the
date the action is taken to reduce the Exercise Price.

5.10           No Disqualification.
Notwithstanding any other provision in this Plan, no term of this Plan relating
to ISO will be interpreted, amended or altered, nor will any discretion or
authority granted under this Plan be exercised, so as to disqualify this Plan
under Section 422 of the Code or, without the consent of the Participant
affected, to disqualify any ISO under Section 422 of the Code.

6.             RESTRICTED STOCK.
A Restricted Stock Award is an offer by the Company to sell to an eligible
person Shares that are subject to restrictions. The Committee will determine

 

to whom an offer will be
made, the number of Shares the person may purchase, the price to be paid (the “Purchase Price”), the restrictions
to which the Shares will be subject, and all other terms and conditions of the
Restricted Stock Award, subject to the following:

6.1           Form of Restricted Stock Award.
All purchases under a Restricted Stock Award made pursuant to this Plan will be
evidenced by an Award Agreement (“Restricted Stock Purchase
Agreement”) that will be in such form (which need not be the
same for each Participant) as the Committee will from time to time approve, and
will comply with and be subject to the terms and conditions of this Plan. The
offer of Restricted Stock will be accepted by the Participant’s execution and
delivery of the Restricted Stock Purchase Agreement and full payment for the
Shares to the Company within thirty (30) days from the date the Restricted
Stock Purchase Agreement is delivered to the person. If such person does not
execute and deliver the Restricted Stock Purchase Agreement along with full
payment for the Shares to the Company within thirty (30) days, then the offer
will terminate, unless otherwise determined by the Committee.

6.2           Purchase Price. The Purchase
Price of Shares sold pursuant to a Restricted Stock Award will be determined by
the Committee on the date the Restricted Stock Award is granted, except in the
case of a sale to a Ten Percent Stockholder, in which case the Purchase Price
will be 100% of the Fair Market Value. Payment of the Purchase Price may be
made in accordance with Section 8 of this Plan.

6.3           Terms of Restricted Stock Awards.
Restricted Stock Awards shall be subject to such restrictions as the Committee
may impose. These restrictions may be based upon completion of a specified
number of years of service with the Company or upon completion of the
performance goals as set out in advance in the Participant’s individual
Restricted Stock Purchase Agreement. Restricted Stock Awards may vary from
Participant to Participant and between groups of Participants. Prior to the
grant of a Restricted Stock Award, the Committee shall: (a) determine the
nature, length and starting date of any Performance Period for the Restricted
Stock Award; (b) select from among the Performance Factors to be used to
measure performance goals, if any; and (c) determine the number of Shares
that may be awarded to the Participant. Prior to the payment of any Restricted
Stock Award, the Committee shall determine the extent to which such Restricted
Stock Award has been earned. Performance Periods may overlap and Participants
may participate simultaneously with respect to Restricted Stock Awards that are
subject to different Performance Periods and having different performance goals
and other criteria.

6.4           Termination During Performance
Period. If a Participant is Terminated during a Performance Period for any
reason, then such Participant will be entitled to payment (whether in Shares,
cash or otherwise) with respect to the Restricted Stock Award only to the
extent earned as of the date of Termination in accordance with the Restricted
Stock Purchase Agreement, unless the Committee will determine otherwise.

 

7.             STOCK BONUSES.

7.1           Awards of Stock Bonuses. A
Stock Bonus is an award of Shares (which may consist of Restricted Stock) for
services rendered to the Company or any Parent or Subsidiary of the Company. A
Stock Bonus may be awarded for past services already rendered to the Company,
or any Parent or Subsidiary of the Company pursuant to an Award Agreement (the “Stock Bonus Agreement”) that will be
in such form (which need not be the same for each Participant) as the Committee
will from time to time approve, and will comply with and be subject to the
terms and conditions of this Plan. A Stock Bonus may be awarded upon
satisfaction of such performance goals as are set out in advance in the
Participant’s individual Award Agreement (the “Performance
Stock Bonus Agreement”) that will be in such form (which need
not be the same for each Participant) as the Committee will from time to time
approve, and will comply with and be subject to the terms and conditions of
this Plan. Stock Bonuses may vary from Participant to Participant and between
groups of Participants, and may be based upon the achievement of the Company,
Parent or Subsidiary and/or individual performance factors or upon such other
criteria as the Committee may determine.

7.2           Terms of Stock Bonuses. The
Committee will determine the number of Shares to be awarded to the Participant.
If the Stock Bonus is being earned upon the satisfaction of performance goals
pursuant to a Performance Stock Bonus Agreement, then the Committee will: (a) determine
the nature, length and starting date of any Performance Period for each Stock
Bonus; (b) select from among the Performance Factors to be used to measure
the performance, if any; and (c) determine the number of Shares that may
be awarded to the Participant. Prior to the payment of any Stock Bonus, the
Committee shall determine the extent to which such Stock Bonuses have been
earned. Performance Periods may overlap and Participants may participate
simultaneously with respect to Stock Bonuses that are subject to different
Performance Periods and different performance goals and other criteria. The
number of Shares may be fixed or may vary in accordance with such performance
goals and criteria as may be determined by the Committee. The Committee may
adjust the performance goals applicable to the Stock Bonuses to take into
account changes in law and accounting or tax rules and to make such
adjustments as the Committee deems necessary or appropriate to reflect the
impact of extraordinary or unusual items, events or circumstances to avoid
windfalls or hardships.

7.3           Form of Payment. The
earned portion of a Stock Bonus may be paid currently or on a deferred basis
with such interest or dividend equivalent, if any, as the Committee may
determine. Payment may be made in the form of cash or whole Shares or a
combination thereof, either in a lump sum payment or in installments, all as
the Committee will determine.

8.             PAYMENT FOR SHARE PURCHASES.

8.1             Payment. Payment for Shares
purchased pursuant to this Plan may be made in cash (by check) or, where
expressly approved for the Participant by the Committee and where permitted by
law:

(a)                                by cancellation of
indebtedness of the Company to the Participant;

 

(b)                               by surrender of shares
that either: (1) have been owned by Participant for more than six (6) months
and have been paid for within the meaning of SEC Rule 144 (and, if such
shares were purchased from the Company by use of a promissory note, such note
has been fully paid with respect to such shares); or (2) were obtained by
Participant in the public market;

(c)                                by tender of a full
recourse promissory note having such terms as may be approved by the Committee
and bearing interest at a rate sufficient to avoid imputation of income under Sections
483 and 1274 of the Code; provided, however, that Participants
who are not employees or directors of the Company will not be entitled to
purchase Shares with a promissory note unless the note is adequately secured by
collateral other than the Shares;

(d)                               by waiver of compensation
due or accrued to the Participant for services rendered;

(e)                                with respect only to
purchases upon exercise of an Option, and provided that a public market for the
Company’s stock exists:

(1)                                through a “same day sale”
commitment from the Participant and a broker-dealer that is a member of the
National Association of Securities Dealers (an “NASD
Dealer”) whereby the Participant irrevocably elects to exercise
the Option and to sell a portion of the Shares so purchased to pay for the
Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of
such Shares to forward the Exercise Price directly to the Company; or

(2)                                through a “margin”
commitment from the Participant and a NASD Dealer whereby the Participant
irrevocably elects to exercise the Option and to pledge the Shares so purchased
to the NASD Dealer in a margin account as security for a loan from the NASD
Dealer in the amount of the Exercise Price, and whereby the NASD Dealer
irrevocably commits upon receipt of such Shares to forward the Exercise Price
directly to the Company; or

 (f)                                  by any combination of
the foregoing.

8.2             Loan Guarantees. The
Committee may help the Participant pay for Shares purchased under this Plan by
authorizing a guarantee by the Company of a third-party loan to the
Participant.

9.               AUTOMATIC GRANTS TO OUTSIDE DIRECTORS.

9.1             Types of Options and Shares.
Options granted under this Plan and subject to this Section 9 shall be
NQSOs.

 

9.2             Eligibility. Options subject
to this Section 9 shall be granted only to Outside Directors.

9.3           Initial Grant. Each Outside
Director who first becomes a member of the Board on or after the Effective Date
will automatically be granted an Option for 50,000 Shares (an “Initial Grant”) on the date such
Outside Director first becomes a member of the Board. Each Outside Director who
became a member of the Board prior to the Effective Date will automatically be
granted an Option for 25,000 Shares immediately following the Effective Date.

9.4             Succeeding Grant. Immediately
following each Annual Meeting of stockholders, each Outside Director will
automatically be granted an Option for 20,000 Shares (a “Succeeding
Grant”), provided the Outside Director is a member of the Board
on such date and has served continuously as a member of the Board for a period
of at least one year since the date of such Outside Director’s Initial Grant.
Notwithstanding anything in this Section 9.4 to the contrary, the Board
may make discretionary supplemental grants to an Outside Director who has
served for less than one year from the date of such Outside Director’s Initial
Grant, provided that no Outside Director may receive more than 70,000
Shares in any calendar year pursuant to this Section 9.

9.5           Vesting. The date an Outside Director
receives an Initial Grant or a Succeeding Grant is referred to in this Plan as
the “Start Date” for such Option.

(a)                                Initial
Grants. Each Initial Grant will vest (i) as to twenty-five percent
(25%) of the Shares on the earlier of (A) the one (1) year
anniversary of the Start Date or (B) the next succeeding Annual Meeting
where such Outside Director is not serving as an Outside Director following
such Annual Meeting but such person is an Outside Director on the day
immediately preceding such Annual Meeting and (ii) as to 2.08333% of the
Shares on each subsequent monthly anniversary thereafter, so long as the
Outside Director continuously remains a director or consultant of the Company.

(b)                                 Succeeding
Grants. Each Succeeding Grant will vest (i) as to twenty-five percent
(25%) of the Shares on the earlier of (A) the one (1) year
anniversary of the Start Date or (B) the next succeeding Annual Meeting
where such Outside Director is not serving as an Outside Director following
such Annual Meeting but such person is an Outside Director on the day
immediately preceding such Annual Meeting and (ii) as to 2.08333% of the
Shares on each subsequent monthly anniversary thereafter, so long as the
Outside Director continuously remains a director or consultant of the Company.

Notwithstanding any
provision to the contrary, in the event of a Corporate Transaction described in
Section 18.1, the vesting of all options granted to Outside Directors
pursuant to this Section 9 will accelerate and such options will become
exercisable in full prior to the consummation of such event at such times and
on such conditions as the Committee determines, and must be exercised, if at
all, within three months of the consummation of said event. Any options not
exercised within such three-month period shall expire.

 

9.6           Exercise Price. The exercise
price of an Option pursuant to an Initial Grant and Succeeding Grant shall be
the Fair Market Value of the Shares, at the time that the Option is granted.

10.          WITHHOLDING TAXES.

10.1         Withholding Generally. Whenever
Shares are to be issued in satisfaction of Awards granted under this Plan, the
Company may require the Participant to remit to the Company an amount
sufficient to satisfy federal, state and local withholding tax requirements
prior to the delivery of any certificate or certificates for such Shares.
Whenever, under this Plan, payments in satisfaction of Awards are to be made in
cash, such payment will be net of an amount sufficient to satisfy federal,
state, and local withholding tax requirements.

10.2         Stock Withholding. When, under
applicable tax laws, a Participant incurs tax liability in connection with the
exercise or vesting of any Award that is subject to tax withholding and the
Participant is obligated to pay the Company the amount required to be withheld,
the Committee may in its sole discretion allow the Participant to satisfy the
minimum withholding tax obligation by electing to have the Company withhold
from the Shares to be issued that number of Shares having a Fair Market Value
equal to the minimum amount required to be withheld, determined on the date
that the amount of tax to be withheld is to be determined. All elections by a
Participant to have Shares withheld for this purpose will be made in accordance
with the requirements established by the Committee and be in writing in a form
acceptable to the Committee.

11.            TRANSFERABILITY.

11.1          Except as otherwise provided in this Section 11,
Awards granted under this Plan, and any interest therein, will not be
transferable or assignable by Participant, and may not be made subject to
execution, attachment or similar process, otherwise than by will or by the laws
of descent and distribution or as determined by the Committee and set forth in
the Award Agreement with respect to Awards that are not ISOs.

11.2         All Awards other than NQSO’s. All
Awards other than NQSO’s shall be exercisable: (i) during the Participant’s
lifetime, only by (A) the Participant, or (B) the Participant’s
guardian or legal representative; and (ii) after Participant’s death, by
the legal representative of the Participant’s heirs or legatees.

11.3         NQSOs. Unless otherwise
restricted by the Committee, an NQSO shall be exercisable: (i) during the
Participant’s lifetime only by (A) the Participant, (B) the
Participant’s guardian or legal representative, (C) a Family Member of the
Participant who has acquired the NQSO by “permitted transfer;” and (ii) after
Participant’s death, by the legal representative of the Participant’s heirs or
legatees. “Permitted transfer” means, as authorized by this Plan and the
Committee in an NQSO, any transfer effected by the Participant during the
Participant’s lifetime of an interest in such NQSO but only such transfers
which are by gift or domestic relations order. A permitted transfer does not
include any transfer for value and neither of the following are transfers for
value: (a) a transfer of under a domestic relations order in settlement of
marital

 

property rights or (b) a
transfer to an entity in which more than fifty percent of the voting interests
are owned by Family Members or the Participant in exchange for an interest in
that entity.

12.          PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES..

12.1         Voting and Dividends. No
Participant will have any of the rights of a stockholder with respect to any
Shares until the Shares are issued to the Participant. After Shares are issued
to the Participant, the Participant will be a stockholder and have all the
rights of a stockholder with respect to such Shares, including the right to vote
and receive all dividends or other distributions made or paid with respect to
such Shares; provided, that if such Shares are Restricted Stock, then
any new, additional or different securities the Participant may become entitled
to receive with respect to such Shares by virtue of a stock dividend, stock
split or any other change in the corporate or capital structure of the Company
will be subject to the same restrictions as the Restricted Stock; provided,
further, that the Participant will have no right to retain such stock
dividends or stock distributions with respect to Shares that are repurchased at
the Participant’s Purchase Price or Exercise Price pursuant to Section 12.

12.2         Financial Statements. The Company
will provide financial statements to each Participant prior to such Participant’s
purchase of Shares under this Plan, and to each Participant annually during the
period such Participant has Awards outstanding; provided, however,
the Company will not be required to provide such financial statements to
Participants whose services in connection with the Company assure them access
to equivalent information.

12.3         Restrictions on Shares. At the
discretion of the Committee, the Company may reserve to itself and/or its
assignee(s) in the Award Agreement a right to repurchase a portion of or
all Unvested Shares held by a Participant following such Participant’s
Termination at any time within ninety (90) days after the later of Participant’s
Termination Date and the date Participant purchases Shares under this Plan, for
cash and/or cancellation of purchase money indebtedness, at the Participant’s
Exercise Price or Purchase Price, as the case may be.

13.          CERTIFICATES.
All certificates for Shares or other securities delivered under this Plan will
be subject to such stock transfer orders, legends and other restrictions as the
Committee may deem necessary or advisable, including restrictions under any
applicable federal, state or foreign securities law, or any rules, regulations
and other requirements of the SEC or any stock exchange or automated quotation
system upon which the Shares may be listed or quoted.

14.          ESCROW; PLEDGE OF SHARES.
To enforce any restrictions on a Participant’s Shares, the Committee may
require the Participant to deposit all certificates representing Shares,
together with stock powers or other instruments of transfer approved by the
Committee, appropriately endorsed in blank, with the Company or an agent
designated by the Company to hold in escrow until such restrictions have lapsed
or terminated, and the Committee may cause a legend or legends referencing such
restrictions to be placed on the certificates. Any Participant who is permitted
to execute a promissory note as partial or full consideration for the purchase
of Shares under this Plan will be required to pledge and deposit with the
Company all or part of the Shares so purchased as collateral to secure the
payment of Participant’s obligation to the Company under the promissory note; provided,
however, that the Committee may require

 

or accept other or
additional forms of collateral to secure the payment of such obligation and, in
any event, the Company will have full recourse against the Participant under
the promissory note notwithstanding any pledge of the Participant’s Shares or
other collateral. In connection with any pledge of the Shares, Participant will
be required to execute and deliver a written pledge agreement in such form as
the Committee will from time to time approve. The Shares purchased with the
promissory note may be released from the pledge on a pro rata basis as the
promissory note is paid.

15.        EXCHANGE AND BUYOUT OF AWARDS.
The Committee may, at any time or from time to time, authorize the Company,
with the consent of the respective Participants, to issue new Awards in exchange
for the surrender and cancellation of any or all outstanding Awards. The
Committee may at any time buy from a Participant an Award previously granted
with payment in cash, Shares (including Restricted Stock) or other
consideration, based on such terms and conditions as the Committee and the
Participant may agree.

16.        SECURITIES LAW AND OTHER REGULATORY
COMPLIANCE. An Award will not be effective unless such
Award is in compliance with all applicable federal and state securities laws, rules and
regulations of any governmental body, and the requirements of any stock
exchange or automated quotation system upon which the Shares may then be listed
or quoted, as they are in effect on the date of grant of the Award and also on
the date of exercise or other issuance. Notwithstanding any other provision in
this Plan, the Company will have no obligation to issue or deliver certificates
for Shares under this Plan prior to: (a) obtaining any approvals from
governmental agencies that the Company determines are necessary or advisable;
and/or (b) completion of any registration or other qualification of such
Shares under any state or federal law or ruling of any governmental body that
the Company determines to be necessary or advisable. The Company will be under
no obligation to register the Shares with the SEC or to effect compliance with
the registration, qualification or listing requirements of any state securities
laws, stock exchange or automated quotation system, and the Company will have
no liability for any inability or failure to do so.

17.        NO OBLIGATION TO EMPLOY.
Nothing in this Plan or any Award granted under this Plan will confer or be
deemed to confer on any Participant any right to continue in the employ of, or
to continue any other relationship with, the Company or any Parent or
Subsidiary of the Company or limit in any way the right of the Company or any
Parent or Subsidiary of the Company to terminate Participant’s employment or
other relationship at any time, with or without cause.

18.          CORPORATE
TRANSACTIONS.

18.1         Assumption or Replacement of Awards
by Successor. Except for automatic grants to Outside Directors pursuant to Section 9
hereof, in the event of (a) a dissolution or liquidation of the Company, (b) a
merger or consolidation in which the Company is not the surviving corporation
(other than a merger or consolidation with a wholly-owned subsidiary, a
reincorporation of the Company in a different jurisdiction, or other
transaction in which there is no substantial change in the stockholders of the
Company or their relative stock holdings and the Awards granted under this Plan
are assumed, converted or replaced by the successor corporation, which
assumption will be binding on all Participants), (c) a merger in

 

which the Company
is the surviving corporation but after which the stockholders of the Company
immediately prior to such merger (other than any stockholder that merges, or
which owns or controls another corporation that merges, with the Company in
such merger) cease to own their shares or other equity interest in the Company,
(d) the sale of substantially all of the assets of the Company, or (e) the
acquisition, sale, or transfer of more than 50% of the outstanding shares of
the Company by tender offer or similar transaction (each, a “Corporate Transaction”), (i) the
vesting of all outstanding Awards will accelerate as to an additional 25% of
the Shares that are unvested on the date of the Corporate Transaction and, (ii) thereafter,
unless otherwise set forth below, all unvested shares subject to outstanding
Awards will continue to vest in equal monthly installments over the remaining
original vesting term as set forth in the Award Agreement. Upon a Corporate
Transaction, all outstanding Awards shall be assumed by the successor or
acquiring corporation (if any), which assumption will be binding on all
Participants. In the alternative, the successor or acquiring corporation may
substitute equivalent Awards or provide substantially similar consideration to
Participants as was provided to shareholders (after taking into account the
existing provisions of the Awards). The successor corporation may also issue,
in place of outstanding unvested Shares of the Company held by the
Participants, substantially similar shares or other property subject to repurchase
restrictions no less favorable to the Participant. In the event such successor
corporation (if any) refuses to assume or substitute Awards, as provided above,
pursuant to a Corporate Transaction described in this Subsection 18.1, such
Awards will expire on such Corporate Transaction at such time and on such
conditions as the Committee will determine. Notwithstanding anything in this
Plan to the contrary, the Committee may, in its sole discretion, provide that
the vesting of any or all Awards granted pursuant to this Plan will accelerate
upon a Corporate Transaction described in this Section 18. If the
Committee exercises such discretion with respect to Options, such Options will
become exercisable in full prior to the consummation of such event at such time
and on such conditions as the Committee determines, and if such Options are not
exercised prior to the consummation of the Corporate Transaction, they shall
terminate at such time as determined by the Committee.

18.2         Other Treatment of Awards. Subject
to any greater rights granted to Participants under the foregoing provisions of
this Section 18, in the event of the occurrence of any Corporate
Transaction described in Section 18.1, any outstanding Awards will be
treated as provided in the applicable agreement or plan of merger,
consolidation, dissolution, liquidation, or sale of assets.

18.3         Assumption of Awards by the Company.
The Company, from time to time, also may substitute or assume outstanding
awards granted by another company, whether in connection with an acquisition of
such other company or otherwise, by either; (a) granting an Award under
this Plan in substitution of such other company’s award; or (b) assuming
such award as if it had been granted under this Plan if the terms of such
assumed award could be applied to an Award granted under this Plan. Such
substitution or assumption will be permissible if the holder of the substituted
or assumed award would have been eligible to be granted an Award under this
Plan if the other company had applied the rules of this Plan to such
grant. In the event the Company assumes an award granted by another company,
the terms and conditions of such award will remain unchanged (except
that the exercise price and the number and nature of Shares issuable upon exercise
of any such option will be adjusted appropriately pursuant to Section 424(a) of
the Code). In the event the Company elects to grant a new Option rather than

 

assuming an existing
option, such new Option may be granted with a similarly adjusted Exercise
Price.

19.          ADOPTION AND STOCKHOLDER APPROVAL.
This Plan will become effective on the date on which the registration statement
filed by the Company with the SEC under the Securities Act registering the
initial public offering of the Company’s Common Stock is declared effective by
the SEC (the “Effective Date”). This Plan
shall be approved by the stockholders of the Company (excluding Shares issued
pursuant to this Plan), consistent with applicable laws, within twelve (12)
months before or after the date this Plan is adopted by the Board. Upon the
Effective Date, the Committee may grant Awards pursuant to this Plan; provided,
however, that: (a) no Option may be exercised prior to initial
stockholder approval of this Plan; (b) no Option granted pursuant to an
increase in the number of Shares subject to this Plan approved by the Board
will be exercised prior to the time such increase has been approved by the
stockholders of the Company; (c) in the event that initial stockholder
approval is not obtained within the time period provided herein, all Awards
granted hereunder shall be cancelled, any Shares issued pursuant to any Awards
shall be cancelled and any purchase of Shares issued hereunder shall be
rescinded; and (d) in the event that stockholder approval of such increase
is not obtained within the time period provided herein, all Awards granted
pursuant to such increase will be cancelled, any Shares issued pursuant to any
Award granted pursuant to such increase will be cancelled, and any purchase of
Shares pursuant to such increase will be rescinded.

20.          TERM OF PLAN/GOVERNING LAW.
Unless earlier terminated as provided herein, this Plan will terminate ten (10) years
from the date this Plan is adopted by the Board or, if earlier, the date of
stockholder approval. This Plan and all agreements thereunder shall be governed
by and construed in accordance with the laws of the State of California.

21.          AMENDMENT OR TERMINATION OF PLAN.
The Board may at any time terminate or amend this Plan in any respect, including
without limitation amendment of any form of Award Agreement or instrument to be
executed pursuant to this Plan; provided, however, that the Board
will not, without the approval of the stockholders of the Company, amend this
Plan in any manner that requires such stockholder approval.

22.            NONEXCLUSIVITY OF THE PLAN.
Neither the adoption of this Plan by the Board, the submission of this Plan to
the stockholders of the Company for approval, nor any provision of this Plan
will be construed as creating any limitations on the power of the Board to
adopt such additional compensation arrangements as it may deem desirable,
including, without limitation, the granting of stock options and bonuses
otherwise than under this Plan, and such arrangements may be either generally
applicable or applicable only in specific cases.

23.            DEFINITIONS. As used in this
Plan, the following terms will have the following meanings:

“Award”
means any award under this Plan, including any Option, Restricted Stock or
Stock Bonus.

 

“Award Agreement”
means, with respect to each Award, the signed written agreement between the
Company and the Participant setting forth the terms and conditions of the
Award.

“Board” means the Board of Directors
of the Company.

“Cause” means the commission of an act
of theft, embezzlement, fraud, dishonesty or a breach of fiduciary duty to the
Company or a Parent or Subsidiary of the Company.

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

“Committee” means the Compensation
Committee of the Board.

“Company” means Lexar Media, Inc.
or any successor corporation.

“Disability” means a disability,
whether temporary or permanent, partial or total, as determined by the
Committee.

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

“Exercise Price” means the price at
which a holder of an Option may purchase the Shares issuable upon exercise of
the Option.

“Fair Market Value” means, as of any
date, the value of a share of the Company’s Common Stock determined as follows:

(a)                                  
if such Common Stock is then quoted on the Nasdaq National Market, its closing
price on the Nasdaq National Market on the date of determination as reported in
The Wall Street Journal;

(b)                                 
if such Common Stock is publicly traded and is then listed on a national
securities exchange, its closing price on the date of determination on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading as reported in The Wall Street Journal;

(c)                                if such Common Stock is
publicly traded but is not quoted on the Nasdaq National Market nor listed or
admitted to trading on a national securities exchange, the average of the
closing bid and asked prices on the date of determination as reported in The
Wall Street Journal;

 (d)                               in the case of an Award
made on the Effective Date, the price per share at which shares of the Company’s
Common Stock are initially offered for sale to the public by the Company’s
underwriters in the initial public offering of the Company’s Common Stock
pursuant to a registration statement filed with the SEC under the Securities
Act; or

 

(e)                                  if
none of the foregoing is applicable, by the Committee in good faith.

“Family Member”
includes any of the following:

(a)                                  child,
stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law of the Participant, including
any such person with such relationship to the Participant by adoption;

(b)                                 any
person (other than a tenant or employee) sharing the Participant’s household;

(c)                                  
a trust in which the persons in (a) and (b) have more than fifty
percent of the beneficial interest;

(d)                               a foundation in which the
persons in (a) and (b) or the Participant control the management of
assets; or

(e)                                any other entity in
which the persons in (a) and (b) or the Participant own more than
fifty percent of the voting interest.

“Insider” means an officer or
director of the Company or any other person whose transactions in the Company’s
Common Stock are subject to Section 16 of the Exchange Act.

“Option” means an award of an option
to purchase Shares pursuant to Section 5.

“Outside Director” means a member of
the Board who is not an employee of the Company or any Parent, Subsidiary or Affiliate
of the Company.

“Parent” means any corporation (other
than the Company) in an unbroken chain of corporations ending with the Company
if each of such corporations other than the Company owns stock possessing 50%
or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.

“Participant” means a person who
receives an Award under this Plan.

“Performance
Factors” means the factors selected by the Committee from among
the following measures to determine whether the performance goals established
by the Committee and applicable to Awards have been satisfied:

(a)           Net revenue and/or net revenue growth;

(b)                               Earnings before income
taxes and amortization and/or earnings before income taxes and amortization
growth;

(c)           Operating income and/or operating
income growth;

 

(d)            Net income and/or net income growth;

(e)           Earnings per share and/or earnings per
share growth;

(f)             Total stockholder return and/or
total stockholder return growth;

(g)            Return on equity;

(h)            Operating cash flow return on
income;

(i)            Adjusted operating cash flow return
on income;

(j)             Economic value added; and

(k)            Individual confidential business
objectives.

“Performance Period” means the period
of service determined by the Committee, not to exceed five years, during which
years of service or performance is to be measured for Restricted Stock Awards
or Stock Bonuses.

“Plan” means this Lexar Media, Inc.
2000 Equity Incentive Plan, as amended from time to time.

“Restricted Stock Award” means an
award of Shares pursuant to Section 6.

“SEC” means the Securities and
Exchange Commission.

“Securities Act” means the Securities
Act of 1933, as amended.

“Shares” means shares of the Company’s
Common Stock reserved for issuance under this Plan, as adjusted pursuant to
Sections 2 and 18, and any successor security.

“Stock Bonus” means an award of
Shares, or cash in lieu of Shares, pursuant to Section 7.

“Subsidiary” means any corporation
(other than the Company) in an unbroken chain of corporations beginning with
the Company if each of the corporations other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

“Termination” or “Terminated” means, for purposes of
this Plan with respect to a Participant, that the Participant has for any
reason ceased to provide services as an employee, officer, director,
consultant, independent contractor, or advisor to the Company or a Parent or
Subsidiary of the Company. An employee will not be deemed to have ceased to
provide services in the case of (i) sick leave, (ii) military leave,
or (iii) any other leave of absence approved by the Committee, provided,
that such leave is for a period of not more than 90 days, unless

 

reemployment upon the
expiration of such leave is guaranteed by contract or statute or unless
provided otherwise pursuant to formal policy adopted from time to time by the
Company and issued and promulgated to employees in writing. In the case of any
employee on an approved leave of absence, the Committee may make such
provisions respecting suspension of vesting of the Award while on leave from
the employ of the Company or a Subsidiary as it may deem appropriate, except that
in no event may an Option be exercised after the expiration of the term set
forth in the Option agreement. The Committee will have sole discretion to
determine whether a Participant has ceased to provide services and the
effective date on which the Participant ceased to provide services (the “Termination Date”).

“Unvested Shares” means “Unvested
Shares” as defined in the Award Agreement.

“Vested Shares” means “Vested Shares”
as defined in the Award Agreement.EXHIBIT 4.1

 

June 23, 2006

 

 

Kentucky Utilities Company

(as Borrower)

 

 

Fidelia Corporation

(as Lender)

 

 

LOAN AGREEMENT

 

 

 

Contents

Clause

	
  

  	
   

  	
   

  	
  Page

  	
   

  
	
  1.

  	
   

  	
  DEFINITIONS

  	
  1

  	
   

  
	
  2.

  	
   

  	
  TERM LOAN

  	
  2

  	
   

  
	
  3.

  	
   

  	
  AVAILABILITY
  OF REQUESTS

  	
  2

  	
   

  
	
  4.

  	
   

  	
  INTEREST

  	
  2

  	
   

  
	
  5.

  	
   

  	
  REPAYMENT
  AND PREPAYMENT

  	
  3

  	
   

  
	
  6.

  	
   

  	
  PAYMENTS

  	
  3

  	
   

  
	
  7.

  	
   

  	
  TERMINATION
  EVENTS

  	
  4

  	
   

  
	
  8.

  	
   

  	
  OPERATIONAL
  BREAKDOWN

  	
  4

  	
   

  
	
  9.

  	
   

  	
  NOTICES

  	
  5

  	
   

  
	
  10.

  	
   

  	
  ASSIGNMENT

  	
  5

  	
   

  
	
  11.

  	
   

  	
  SEVERABILITY

  	
  5

  	
   

  
	
  12.

  	
   

  	
  COUNTERPARTS

  	
  5

  	
   

  
	
  13.

  	
   

  	
  LAW

  	
  6

  	
   

  

 

 

 

THIS AGREEMENT
made on June 23, 2006

Between

KENTUCKY UTILITIES COMPANY,
a Kentucky corporation, as borrower (the Borrower);
and

FIDELIA CORPORATION,
a Delaware corporation, as lender (the Lender).

Whereas

(A)          The Lender and the Borrower hereby
enter into an agreement for the provision by the Lender to the Borrower of a
loan in the amount of  $50,000,000 (the
Loan Amount).

Now it is hereby agreed
as follows:

1.              Definitions

1.1                                 In
this Agreement

Business
Day means a day on which banks in New York are generally
open

Default
Interest Rate means: the rate, as determined by the
Lender, applying to the principal element of an overdue amount under Clause
6.3, calculated as the sum of the interest rate in effect immediately before
the due date of such amount, plus 1%;

Effective
Date shall have the meaning given to it in Clause 2.1;

Final
Repayment Date means June 23, 2036;

Interest
Payment Date means June 23rd and December 23rd
of each year during the term of this agreement, provided, that:

any Interest Payment Date
which  is not a Business Day shall be
extended to the next succeeding Business Day;

Loan
Amount means $50,000,000;

Maturity
Date means the Final Repayment Date;

  1
 
  
 

 

Request
means a request for the Loan Amount from the Borrower to the Lender under the
terms of clause 3.1;

Termination
Event means an event specified as such in Clause 7;

Value
Date means the date upon which cleared funds are made
available to the Borrower by the Lender pursuant to a Request made in
accordance with Clause 3.1. Such date shall be a Business Day as defined
herein.

2.                                      Term
Loan

2.1                                 This Agreement shall come into effect on June 23,
2006 (the “Effective Date”).

2.2                                 The Lender grants to the Borrower upon the terms and
conditions of this Agreement a term loan in an amount of $50,000,000.

2.3                                 The new indebtedness shall be evidenced by a note in
substantially the form of Exhibit “A” attached hereto.

3.              Availability of
Requests

3.1                                 On the Effective Date, the Borrower will submit a
request (the “Request”) to the Lender for the Loan Amount, such Request
specifying the Value Date, the Maturity Date and the bank account to which
payment is to be made. The Request shall be submitted to the Lender by the
Borrower and delivered in accordance with Clause 9.3.

4.              Interest

4.1                                 The rate of interest on the Loan Amount is 6.33%.

4.2                                 Interest shall accrue on the basis of a 360-day
year consisting of twelve 30 day months upon the Loan Amount.

4.3                                 Interest shall be payable in arrears on each Interest
Payment Date.

  2
 
  
 

 

5.              Repayment and Prepayment

5.1                                 The Borrower shall repay the Loan Amount together with
all interest accrued thereon and all other amounts due from the Borrower
hereunder on the Final Repayment Date, whereupon this Agreement shall be
terminated.

5.2                                 On any Interest Payment Date, and with at least three
business day’s prior written notice, the Borrower shall be entitled to prepay
any amount of the loan outstanding, provided such payment is not less than
$1,000,000 and, provided further, the Borrower shall pay a prepayment charge
equal to the present value of the difference between (i) the interest
payable provided in this loan agreement and (ii) the interest payable at
the prevailing interest rate at the time of prepayment, for the period from the
date of prepayment through the Maturity Date, 
which difference, if negative, shall be deemed to be zero. The present
value will be determined using the prevailing interest rate at the time of the
prepayment as the discount rate.

5.3                                 A certificate from the Lender as to the amount due at
any time from the Borrower to the Lender under this Agreement shall, in the
absence of manifest error, be conclusive.

6.              Payments

6.1                                 All payments of principal to be made to the Lender by
the Borrower shall be made on the Final Repayment Date, or on an Interest
Payment Date under Clause (5.2) to such account as the Lender shall have
specified.

6.2                                 Interest shall be payable in arrears on each Interest
Payment Date.

6.3                                 If and to the extent that full payment of any amount
due hereunder is not made by the Borrower on the due date then, interest shall
be charged at the Default Interest Rate on such overdue amount from the date of
such default to the date payment is received by the Lender.

  3
 
  
 

 

7.             Termination Events

7.1                                 The Borrower shall notify the Lender of any Event of
Default (and the steps, if any, being taken to remedy it) promptly upon
becoming aware of it.

7.2           The
following shall constitute an Event of Default hereunder:

7.2.1                        Default is made by the Borrower in the payment of any
sum due under this Agreement and such default continues for a period of 10
Business Days;

7.2.2                        Bankruptcy proceedings are initiated against the
Borrower;

7.2.3                        The Borrower leaves the E.ON Group (i.e. the companies
consolidated in EON AG’s balance sheet);

If
a Termination Event occurs under Clause (7.2.2) of this section, the Loan
Amount outstanding together with interest will become due and payable
immediately.

If
a Termination Event occurs according to Clauses (7.2.1) or (7.2.3) of this
Section, Lender shall at its discretion grant Borrower a reasonable grace
period unless such grace period shall be detrimental to the Lender. If the
Termination Event is uncured at the expiration of such period, the Loan Amount
outstanding together with interest will become due and payable immediately.

8.             Operational
Breakdown

8.1                                 The
Borrower is not liable for any damages incurred by the Lender and the Lender is
not liable for any damages incurred by the Borrower caused by Acts of God or
other circumstances incurred by one party for which the other party cannot be
held responsible (i.e. power outages, strikes, lock-outs, domestic and foreign
acts of government and the like).

  4
 
  
 

 

9.             Notices

9.1                                 Each communication to be made in respect of this
Agreement shall be made in writing but, unless otherwise stated, may be made by
facsimile transmission or letter.

9.2                                 Communications to the Borrower shall be addressed to:
Kentucky Utilities Company, 220 W. Main St., Louisville, KY 40202, Attn:
Treasurer fax# (502) 627-4742 except for confirmations which should be
sent to the attention of Joe Barnes.

9.3                                 Communications to the Lender shall be addressed to:
Fidelia Corporation, 919 N. Market Street, Suite 504, Wilmington, Delaware
19801, fax# (302) 778-5514, Attn: President.

10.                               Assignment

10.1                           The Lender may at any time assign, novate or otherwise
transfer all or any part of its rights and obligations under this Agreement to
any affiliate of the Lender.

11.          Severability

11.1                           If any
of the provisions of this Agreement becomes invalid, illegal or unenforceable
in any respect under any law, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired.

12.          Counterparts

12.1                           This
Agreement may be executed in any number of counterparts that shall together
constitute one Agreement. Any party may enter into an Agreement by signing any
such counterpart.

  5
 
  
 

 

13.          Law

13.1                           This
Agreement shall be governed by and construed for all purposes in accordance
with the laws of Delaware.

IN
WITNESS whereof the parties have executed this Agreement the
day and year first above written.

SIGNED by _/s/ Daniel K. Arbough  

Daniel K. Arbough, Treasurer 

for and on behalf of 

Kentucky Utilities Company

SIGNED by _/s/ Udo Koch
          Udo Koch, President
          Fidelia Corporation

 

  6

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