Document:

Exhibit 4.2(v)

 

“CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTIONS OF THIS
DOCUMENT HAVE BEEN OMITTED AND HAVE BEEN SEPARATELY FILED WITH THE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.”

 

	
  DATE

  	
   

  	
  March 1st

  	
   

  	
  1999

  

 

 

AUTOGEN PTY LTD

 

and

 

KYOKUTO PHARMACEUTICAL INDUSTRIAL CO. LTD.

 

 

SOLE LICENCE - JAPAN

 

 

DUNHILL

 

MADDEN

 

B U T L E R

 

Solicitors

 

 

575 Bourke Street

MELBOURNE VIC 3000

Tel: (03) 9235 0235

Fax: (03)9629 1429

Ref: B O’Shea

BRISBANE  
CANBERRA   MELBOURNE  
SYDNEY

 

 

TABLE OF CONTENTS

 

	
  1. INTERPRETATION

  	
   

  
	
   

  	
   

  
	
  1.1 DEFINITIONS

  	
   

  
	
  1.2 CONSTRUCTION

  	
   

  
	
   

  	
   

  
	
  2. GRANT OF LICENCE

  	
   

  
	
   

  	
   

  
	
  2.1 GRANT OF LICENCE

  	
   

  
	
  2.2 MATTERS RESERVED TO AUTOGEN

  	
   

  
	
  2.3 WORLDWIDE LICENCE

  	
   

  
	
  2.4 MOST FAVOURED LICENSEE

  	
   

  
	
   

  	
   

  
	
  3. ROYALTIES AND UP FRONT PAYMENTS

  	
   

  
	
   

  	
   

  
	
  3.1 UPFRONT FEES

  	
   

  
	
  3.2 ROYALTY OBLIGATION

  	
   

  
	
   

  	
   

  
	
  4. REGISTRATION

  	
   

  
	
   

  	
   

  
	
  4.1 REGISTRATION OF PRODUCT

  	
   

  
	
  4.2 CONSENT FOR CLINICAL TRIALS

  	
   

  
	
  4.3 NOTIFICATIONS

  	
   

  
	
  4.4 FAILURE TO APPLY
  FOR REGISTRATION

  	
   

  
	
  4.5 REFUSAL OF REGISTRATION

  	
   

  
	
  4.6 MAINTENANCE OF REGISTRATIONS

  	
   

  
	
   

  	
   

  
	
  5.
  REPORTS

  	
   

  
	
   

  	
   

  
	
  5.1 REPORTING REQUIREMENTS

  	
   

  
	
  5.2 INTERNALLY USED PRODUCTS

  	
   

  
	
  5.3 TIME OF SALE

  	
   

  
	
  5.4 FOREIGN CURRENCIES

  	
   

  
	
  5.5 PAYMENT MECHANICS

  	
   

  
	
  5.6 KYOKUTO TO KEEP
  ACCOUNTS AND RECORDS

  	
   

  
	
  5.7 INSPECTION OF ACCOUNTS

  	
   

  
	
  5.8 SETTLEMENT OF DISCREPANCIES

  	
   

  
	
  5.9 COST OF AUDIT

  	
   

  
	
   

  	
   

  
	
  6. MARKETING OF PRODUCT

  	
   

  
	
   

  	
   

  
	
  6.1 KYOKUTO’S OBLIGATIONS

  	
   

  
	
  6.2 COMMENCEMENT OF MARKETING

  	
   

  
	
  6.3 PARALLEL EXPORTING:

  	
   

  
	
  6.4 INITIAL REPORTS

  	
   

  
	
  6.5 ONGOING REPORTS

  	
   

  
	
  6.6 NON COMPETITION

  	
   

  
	
  6.7 ADVERTISING AND PROMOTION MATERIAL

  	
   

  
	
   

  	
   

  
	
  7. SUB-LICENSING

  	
   

  
	
   

  	
   

  
	
  7.1 SUB-LICENSEES VERSUS DISTRIBUTORS

  	
   

  
	
  7.2 RIGHT TO SUB-LICENCE

  	
   

  
	
  7.3 SUB-LICENCES

  	
   

  
	
  7.4 NOTIFICATION OF SUB-LICENCE

  	
   

  
	
  7.5 CALCULATION OF ROYALTY FOR
  SUB-LICENCES:

  	
   

  
	
  7.6 UP-FRONT AND LUMP SUM FEES

  	
   

  
	
  7.7 ROYALTY REPORTING

  	
   

  
	
  7.8 NO LICENSING

  	
   

  
	
   

  	
   

  
	
  8.
  TRADE MARK

  	
   

  
	
   

  	
   

  
	
  8.1 TRADE MARK - KYOKUTO’S OBLIGATIONS

  	
   

  

 

i

 

	
  8.2 USE OF TRADE MARK AFTER TERMINATION

  	
   

  
	
   

  	
   

  
	
  9. MINIMUM ROYALTIES

  	
   

  
	
   

  	
   

  
	
  9.1 KYOKUTO’S OBLIGATION

  	
   

  
	
  9.2 SERIOUS FAILURE TO MEET TARGETS

  	
   

  
	
   

  	
   

  
	
  10.
  ASSISTANCE

  	
   

  
	
   

  	
   

  
	
  10. 1 PROVISION OF CONFIDENTIAL INFORMATION

  	
   

  
	
  10.2 PROVISION OF ASSISTANCE

  	
   

  
	
   

  	
   

  
	
  11. CONFIDENTIAL INFORMATION

  	
   

  
	
   

  	
   

  
	
  11.1 OBLIGATIONS TO AUTOGEN

  	
   

  
	
  11.2 OBLIGATIONS TO KYOKUTO

  	
   

  
	
  11.3 EXCEPTIONS TO OBLIGATIONS

  	
   

  
	
  11.4 RIGHTS IN CONFIDENTIAL INFORMATION

  	
   

  
	
  11.5 TERM OF OBLIGATION

  	
   

  
	
  11.6 PERMITTED DISCLOSURES

  	
   

  
	
  11.7 DELIVERY-UP OF CONFIDENTIAL
  INFORMATION

  	
   

  
	
  11.8 MARKET DISCLOSURE REQUIREMENTS

  	
   

  
	
   

  	
   

  
	
  12. IMPROVEMENTS

  	
   

  
	
   

  	
   

  
	
  12.1 BY KYOKUTO

  	
   

  
	
  12.2 BY AUTOGEN:

  	
   

  
	
  12.3 ADDITIONS TO LICENSED PATENTS

  	
   

  
	
  12.4 KYOKUTO KIT TECHNOLOGY

  	
   

  
	
   

  	
   

  
	
  13.
  LIABILITY

  	
   

  
	
   

  	
   

  
	
  13.1 RESPONSIBILITY FOR PRODUCTS

  	
   

  
	
  13.2 AUTOGEN NOT LIABLE

  	
   

  
	
   

  	
   

  
	
  14. INDEMNITIES

  	
   

  
	
   

  	
   

  
	
  14.1 INDEMNITY BY KYOKUTO

  	
   

  
	
  14.2 INDEMNITY BY AUTOGEN

  	
   

  
	
  14.3 NOTIFICATION REGARDING CERTAIN CLAIMS

  	
   

  
	
   

  	
   

  
	
  15.
  INSURANCE

  	
   

  
	
   

  	
   

  
	
  15.1 KYOKUTO TO INSURE DURING TERM

  	
   

  
	
  15.2 WARRANTY IN RESPECT OF IIVSURANCE

  	
   

  
	
  15.3 INSURANCE AFTER THE TERM

  	
   

  
	
  15.4 FURTHER OBLIGATIONS IN RESPECT OF
  INSURANCE

  	
   

  
	
  15.5 SUB-LICENSEES INSURANCE

  	
   

  
	
  15.6 AUTOGEN RIGHT TO INSURE AND RECOVER

  	
   

  
	
   

  	
   

  
	
  16. TERM AND TERMINATION

  	
   

  
	
   

  	
   

  
	
  16.1 TERM

  	
   

  
	
  16.2 TERMINATION FOR BREACH

  	
   

  
	
  16.3 TERMINATION IN DEFAULT OF PAYMENT

  	
   

  
	
  16.4 TERMINATION FOR INSOLVENCY

  	
   

  
	
  16.5 RECONSTRUCTION EXCEPTION

  	
   

  
	
  16.6 TERMINATION BY AUTOGEN

  	
   

  
	
  16.7 TERMINATION BY KYOKUTO

  	
   

  
	
  16.8 TERMINATION TO BE WITHOUT PREJUDICE

  	
   

  
	
   

  	
   

  
	
  17. OBLIGATIONS AND RIGHTS ON TERMINATION

  	
   

  
	
   

  	
   

  
	
  17.1 OBLIGATIONS OF KYOKUTO

  	
   

  
	
  17.2 OBLIGATIONS OF AUTOGEN

  	
   

  
	
  17.3 RIGHTS OF AUTOGEN

  	
   

  
	
  17.4 COMPLETION OF SALES TO THIRD PARTIES

  	
   

  

 

ii

 

	
  17.5 LIMITATION OF KYOKUTO’S RIGHTS

  	
   

  
	
   

  	
   

  
	
  18.
  WARRANTIES

  	
   

  
	
   

  	
   

  
	
  18.1 GENERAL WARRANTIES

  	
   

  
	
  18.2 SPECIFIC WARRANTY RE LICENSED PATENTS

  	
   

  
	
  18.3 WARRANTIES BY KYOKUTO

  	
   

  
	
  I 8.4 HEAD LICENCES

  	
   

  
	
   

  	
   

  
	
  19. PROTECTION OF LICENSED PATENTS

  	
   

  
	
   

  	
   

  
	
  19.1 MAINTENANCE OF THE LICENSED PATENTS

  	
   

  
	
  19.2 PARTIES TO CONFER :

  	
   

  
	
  19.3 SHARED PROCEEDINGS

  	
   

  
	
  19.4 AUTOGEN’S RIGHT TO ACT

  	
   

  
	
  19.5 KYOKUTO’S OBLIGATIONS 1F AUTOGEN ACTS

  	
   

  
	
  19.6 KYOKUTO’S RIGHT TO ACT

  	
   

  
	
  19.7 KYOKUTO’S PROCEEDINGS

  	
   

  
	
   

  	
   

  
	
  20. INFRINGEMENT OF OTHERS RIGHTS

  	
   

  
	
   

  	
   

  
	
  20.1 NOTIFICATION OF ACTION

  	
   

  
	
  20.2 AUTOGEN ACTION

  	
   

  
	
  20.3 KYOKUTO ACTION

  	
   

  
	
   

  	
   

  
	
  21. OTHER LICENCES

  	
   

  
	
   

  	
   

  
	
  21.1 SPECIAL DEFINTIONS

  	
   

  
	
  21.2 PARTIES INTENTION

  	
   

  
	
  21.3
  EXTRA RIGHTS

  	
   

  
	
  21.4 LICENCE BY AUTOGEN

  	
   

  
	
  21.5 LICENCE TO KYOKUTO

  	
   

  
	
  21.6 ROYALTY REDUCTION IF KYOKUTO TAKES
  LICENCE

  	
   

  
	
  21.7 LIMIT ON ROYALTY REDUCTION

  	
   

  
	
   

  	
   

  
	
  22. CONSTRUCTION OF PATENTS

  	
   

  
	
   

  	
   

  
	
  23. MANUFACTURE AND SUPPLY OF GAD

  	
   

  
	
   

  	
   

  
	
  24.
  FORCE MAJEURE

  	
   

  
	
   

  	
   

  
	
  24.1 PARTY NOT LIABLE

  	
   

  
	
  24.2 NOTICE OF FORCE MAJEURE

  	
   

  
	
  24.3 TERMINATION IN CASE OF FORCE MAJEURE

  	
   

  
	
   

  	
   

  
	
  25. NOTICES

  	
   

  
	
   

  	
   

  
	
  25.1 FORM OF NOTICE:

  	
   

  
	
  25.2 MANNER OF SERVICE

  	
   

  
	
  25.3 ADDRESS FOR SERVICE

  	
   

  
	
  25.4 TIME OF SERVICE

  	
   

  
	
   

  	
   

  
	
  26.
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  
	
  26.1 TIME OF ESSENCE

  	
   

  
	
  26.2
  SEVERANCE

  	
   

  
	
  26.3 WAIVER

  	
   

  
	
  26.4 RELATIONSHIP OF PARTIES

  	
   

  
	
  26.5 INJUNCTIVE RELIEF

  	
   

  
	
  26.6
  PROPER LAW

  	
   

  
	
  26.7 RULE OF CONSTRUCTION

  	
   

  
	
  26.8
  VARIATION

  	
   

  
	
  26.9
  ASSIGNMENT

  	
   

  
	
  26.10 FURTHER DOCUMENTS

  	
   

  
	
  26.11 COSTS AND TAXES

  	
   

  

 

iii

 

	
  26.12
  PAYMENT

  	
   

  
	
  26.13 INTEREST ON
  OVERDUE AMOUNTS

  	
   

  
	
  26.14 NOSET-OFF :

  	
   

  
	
  26.15 WITHHOLDING TAXES

  	
   

  
	
  26.16 COUNTERPARTS

  	
   

  
	
  26:17 REGISTRATION OF
  AGREEMENT

  	
   

  
	
  26.18 NOT
  OBLIGED TO ACT CONTRARY TO LAW

  	
   

  
	
  26.19 STATUTORY
  RIGHTS NOT LIMITED

  	
   

  
	
  26.20 CONSENTS

  	
   

  
	
  26.21 ENTIRE AGREEMENT

  	
   

  
	
  26.22 WAIVER OF CERTAIN
  RIGHTS

  	
   

  
	
   

  	
   

  
	
  SCHEDULE I

  	
  Part A - Licensed Patents

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Part B - Disclosure re Licensed
  Patents

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 2

  	
  Minimum Royalty

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 3

  	
  Manufacturing Arrangements

  	
   

  

 

iv

 

THIS AGREEMENT is
made on                      March 1st
,                      1999

 

BETWEEN

 

Autogen Pty Ltd (ACN 074 636 849)

 

of 210 Kings Way, South Melbourne, Melbourne, Australia, 3205

 

(“Autogen”)

 

AND

 

Kyokuto Pharmaceutical Industrial Co. Ltd.

 

of 1-1 Nihonbashi - Honcho 3 -chome, Chuo-Ku, Tokyo, Japan 103-0023

 

(“Kyokuto”)

 

RECITALS:

 

A.            Autogen
is the proprietor or licensee of certain patents and other intellectual
property and has agreed to grant to Kyokuto a sole licence of such patents and
intellectual property on the terms and conditions set out herein.

 

B.            Kyokuto
has expertise in the development registration and marketing of products, in
particular diagnostic products.

 

C.            The
products to be sold by Kyokuto utilise GAD, and the parties have agreed to
cooperate to procure a reliable and sufficient supply of GAD.

 

OPERATIVE PROVISIONS:

 

1.             INTERPRETATION

 

1.1          Definitions

 

In this agreement the following expressions
have the following meanings:

 

“Arms Length” means
in relation to a transaction or dealing a transaction or dealing which might
reasonably be expected to operate or apply between independent enterprises
dealing wholly independently with one another and where neither bears the other
any special duty or obligation and no special relationship exists between them
and where the only consideration is cash.

 

“Base Rate” means
the rate published as such by Westpac Banking Corporation from time to time and
if no such rate is at any time published the rate quoted by Westpac Banking
Corporation at that time on unsecured overdraft accommodation in excess of
$100,000.

 

 

“Business Day” means
a day on which the trading banks are open for general banking business in
Melbourne, Australia.

 

“Claim Asserted in Good Faith”
means and is limited to any claim asserted in any Licensed Patent which can
reasonably be considered to be patentable under the laws of the country where
filed having regard to any and all references, prior art, novelty,
inventiveness, utility and any and all other relevant legal criteria.

 

“Commencement Date”
means the date of execution of this agreement by the party last signing it.

 

“Confidential Information”
means technical, commercial and other information, know-how, drawings,
specifications and/or designs relating to the design, development, manufacture,
production, registration, promotion, distribution, marketing, performance or
sale of the Product and information concerning business transactions or
associations including other technical or commercial co-operation or collaborative
arrangements or financial arrangements with other persons or bodies or
customers (existing or potential or otherwise) or licensors or licensees where
the information is embodied in some Material Form, and without prejudice to the
generality of the foregoing includes:

 

(i)            all
experimental, manufacturing, process, analytical, packaging, product,
warehousing, quality control and quality assurance and marketing
specifications, standards, procedures, processes, methods, instructions and
techniques, samples, prototypes, formulae, writings of any kind, opinions or
otherwise unwritten data or in the form of computer software or computer
programs or any part thereof in any code or language relating to the Product;

 

(ii)           all
data and proprietary know-how relating to the manufacture of GAD or the use of
GAD in the Product;

 

(iii)          information
necessary or useful in obtaining Registration or approval from any Regulatory
Authority; and

 

(iv)          all
other information and other material supplied to or received by a party or its
Representatives from another party or Representatives on a confidential basis
pursuant to this agreement.

 

“Covered By” means
when used in the context that a Product is covered by a Subsisting Claim or a
Claim Asserted in Good Faith, that the Product or the normal method of
operation or customarily intended use of such Product must, when such Product
is manufactured, sold, or otherwise Exploited by Kyokuto or a Sub-Licensee
constitute (but for the Licence) an infringement of a Subsisting Claim or in
the period of 5 years from the Commencement Date an infringement of a Claim
Asserted in Good Faith, considered as if it were a Subsisting Claim.

 

“Delivery Point” means
such location(s) in the Territory as Kyokuto or its authorised agent shall
notify Autogen from time to time in writing.

 

“Dollars” or “$”
means Australian dollars.

 

2

 

“Exploit” means in
respect of a Product - to make, have made, hire, sell or otherwise dispose of
the Product, to offer to make, sell, hire or otherwise dispose of the Product,
to use or import it or keep it for the purpose of doing any of those things.

 

“Final Judgment”
Means a judgment or decree which becomes not further appealable or reviewable
through the exhaustion of all permissible applications for appeal, rehearing or
review by any superior court or tribunal or through the expiration of time
permitted for such applications.

 

“Force Majeure”
means any cause which is not within the reasonable control of the party affected
by it including, but not limited to, acts of God, industrial disputes of any
kind, war declared or undeclared, civil disturbance, acts or omissions of
Government or other competent authority, fire, lightning, explosion or flood.

 

“GAD” means the
engineered hybrid of the 65KD and 67KD Isoforms of Glutamic Acid Decarboxylase,
known as “GAD 67/65”, manufactured in accordance with the Licensed Patents.

 

“GAD Improvements”
means any improvements in respect of GAD, its manufacture or use or application
in a diagnostic product.

 

“GMP” means all
applicable laws of any Governmental Authority having jurisdiction over the
manufacture of GAD, which laws relate to current good manufacturing practices.

 

“Head Licensors”
means Monash university, International Diabetes Institute, Montech Pty Ltd,
Rondole Pty Ltd and Montech Medical Developments Pty Ltd.

 

“Improvements” means
any new Confidential Information or any improvement, innovation, invention or
development relating to the function, design, formulation, features, process of
or cost of manufacture of the Product.

 

“Insolvency Event”
means the happening of any of these events:

 

(i)            an
application is made to a court for an order (and is not withdrawn or dismissed
within 14 days of being made) or an order is made that a body corporate be
wound up;

 

(ii)           an
application is made to a court for an order (and is not withdrawn or dismissed
within 14 days of being made) to appoint a liquidator or provisional liquidator
in respect of a body corporate, or one of them is appointed, whether or not
under an order;

 

(iii)          a
receiver or manager or a receiver and manager or a controller or trustee (each
within the meaning given in section 9 of the Corporations Law) is
appointed over all or any part of the assets of a body corporate;

 

(iv)          a
meeting is convened or a resolution is passed to appoint an administrator or
controller (each within the meaning given in section 9 of the Corporations
Law) in respect of a body corporate;

 

3

 

(v)           a
body corporate enters into, or resolves to enter into, a scheme of arrangement
or composition with, or assignment for the benefit of, all or any class of its
creditors, or it proposes a reorganisation, moratorium or other administration
involving any of them (except to reconstruct or amalgamate while solvent on
terms approved by the other party);

 

(vi)          a
body corporate resolves to wind itself up, or otherwise dissolve itself, or
gives notice of its intention to do so, (except to reconstruct or amalgamate
while solvent on terms approved by the other party) or is otherwise wound up or
dissolved;

 

(vii)         a
body corporate is, or states that it is, unable to pay its debts when they fall
due;

 

(viii)        a
body corporate is, or makes a statement from which it may be reasonably deduced
by the other party that the body corporate is, the subject of an event
described in section 459C(2) or section 585 of the Corporations
Law;

 

(ix)           a
body corporate takes any step to obtain protection or is granted protection
from its creditors, under any applicable legislation;

 

(x)            a
person becomes insolvent under administration as defined in section 9 of
the Corporations Law or action is taken which could result in that event; or

 

(xi)           anything
analogous or having a substantially similar effect to any of these events
happens under the law of an applicable jurisdiction.

 

“Licence” means the
right and licence granted by Autogen to Kyokuto pursuant to this agreement.

 

“Licensed Patents”
means the patents and patent applications listed in Part A of Schedule 1 and includes any continuations,
continuations in part, divisions, registrations, confirmations, reissues,
renewals or extensions of term thereof and includes any corresponding patent or
patent application taken out or applied for in the Territory which is fairly
based upon or derived from any of the aforesaid patents.

 

“Licensed Technology”
means any copyright, patent, patent application, design (whether registered or
unregistered), Confidential Information, knowhow and other proprietary or
personal rights relating to the Product.

 

“Limitation Period”
means the longer of:

 

(i)            7
years after expiry or termination of this agreement; or

 

(ii)           until
the expiration of one year after the expiry of the longest limitation period
application to an action that may be brought in respect of Products either in
contract tort or pursuant to a statutory or other product liability regime.

 

4

 

“Loss” means any
loss, damage, cost, interest, expense, fee, penalty, fine, forfeiture,
assessment, demand, action, suit, claim, proceeding, cause of action, liability
or damages incurred by a person, and includes:

 

(i)            the
cost of any action taken by the person to protect itself against any loss or to
preserve any right has under this agreement;

 

(ii)           any
taxes or duties payable by the person in connection with this agreement (other
than tax on its assessable income); and

 

(iii)          where
applicable, legal costs on an indemnity basis or on a solicitor and own client
basis, whichever is the higher.

 

“Manufacture” means
the activities relating to production of GAD including, but not limited to,
production, quality control, release and storage and the tests and analyses
conducted in connection therewith, but excluding, for the avoidance of doubt,
activities relating to the manufacture of finished Products incorporating GAD.

 

“Marketing” means
the promotion, advertising, distribution and sale of the Product and includes a
product launch campaign.

 

“Material Form” in
relation to Information includes any form (whether visible or not) of storage
from which Information can be reproduced, and any form in which Information is
embodied or encoded.

 

“Minimum Royalty” in
respect of particular period of time, means the minimum royalty payable by
Kyokuto during that period as set out in Schedule 2.

 

“Month” means
calendar month.

 

“Net Sales Value” of
a Product means:

 

(i)            in
the case of Arms Length sale the gross amount invoiced by Kyokuto (or the
relevant sub-licensee) to any customer less any and all of the following:

 

(A)            packing,
crating, transportation or insurance charges or allowances included in such
amount;

 

(B)             trade,
quantity or cash discounts or rebates actually allowed and taken;

 

(C)             credits
or allowances given or made on account of price adjustments, recalls or
destruction requested or made by an appropriate government agency except to the
extent credit or payment or replacement is received from Autogen; and

 

(D)            any
tax (excluding income tax), excise or other governmental charge upon or measured
by the sale, transportation, delivery or use of the Product included in such
amount.

 

(ii)           in
any other case, the Arms Length sale price of the Product, as determined by
reference to the price at which the Product is sold to Arms Length parties.

 

5

 

“Party” means
Autogen or Kyokuto and their respective successors and permitted assigns and “parties”
means both of them.

 

“Product” means a
diagnostic kit incorporating GAD as the primary active constituent, and other
technology and materials sourced by or through Kyokuto, for use in the
diagnostic and presymptomatic detection of insulin dependent (Type 1) diabetes
mellitus (IDDM).

 

“Quarter” means each
period of three months commencing on the first days of each January, April, July and
October during the Term.

 

“Registration” means
the approval for the manufacture of the Product and approvals or permissions
that are necessary for obtaining the approval for the Marketing of the Product.

 

“Regulatory Authority”
means any and all bodies and organisations regulating the importation,
distribution, marketing or sale of the Product in the Territory.

 

“Related Corporation”
of an entity means another entity which is related to the first within the
meaning of section 50 of the Corporations Law or is in any economic entity
(as defined in any approved accounting standard) which contains the first.

 

“Representatives” of
a party means that party’s directors, officers, employees or agents.

 

“Required Insurance”
means:

 

(i)            public
liability insurance in respect of Losses up to a limit of $5,000,000 covering
property damage and personal injury as may be relevant to the performance of
Kyokuto’s obligations under this agreement to Autogen, including (without
limitation) liability, loss or damage due to negligent or malicious damage,
data corruption or loss, fire, theft, electrical and water damage; and

 

(ii)           product
liability insurance in respect of Losses up to a limit of $20,000,000 covering
any liability associated with use or misuse of the Product including false
readings, personal injury and consequential loss.

 

“Rights” means the
Licensed Patents and the Licensed Technology.

 

“Royalty Period”
means each Quarter during the Term provided that where the Term commences or
ends on a day other than first day of a Quarter the first and last reports will
be for only so much of the Royalty Period as occurs during the Term.

 

“Significant Competition”
means competition or potential competition to the Product from a third party’s
product which, notwithstanding the fact that it does not breach any Licensed
Patent:

 

(i)            is
in whole or in part intended to have the same function or effect as the
Product; or

 

(ii)           in
the country of manufacture or sale has taken or has the potential to take
significant market share from the Product or has prevented or deterred or

 

6

 

has the capacity to prevent or deter the
Product from obtaining significant market share.

 

“Subsisting Claim”
means and is limited to any valid claim of a validly issued unexpired and
non-lapsed Licensed Patent which is not the subject of opposition, challenge,
cancellation or interference proceedings or the subject of infringement. Where
a Licensed Patent has been issued in a country other than Australia without a
separate and independent examination by the relevant authorities of that
country that patent will be deemed to have a scope equivalent to the scope of
the claims of any corresponding Australian Patent which has had examination in
Australia.

 

“Term” means the
period during which this agreement is in force pursuant to clause l6,
and includes in respect of royalty obligations any further period pursuant to clause 17.4.

 

“Territory” means
Japan.

 

“Trade Mark” means
the trade mark agreed between Autogen and Kyokuto as the trade mark to be used
by Kyokuto for the Marketing of the Product.

 

“US$” means United
States dollars.

 

1.2          Construction

 

In this agreement unless the context
otherwise requires:

 

(a)         Business Day.  If any
day appointed or specified by this agreement for the payment of any money or
the doing of any act or thing falls on a day that is not a Business Day, the
day so appointed or specified shall be deemed to be the next day which is a
Business Day.

 

(b)         Collective references. Reference to any thing (including,
without limitation, any amount) is a reference to the whole or any part of it
and a reference to a group of things or persons is a reference to any one or
more of them.

 

(c)         Defined expressions. If a word or phrase is defined, cognate
words and phrases have corresponding definitions.

 

(d)         Gender. Words importing any gender include the other
genders.

 

(e)         Headings. Headings shall be ignored in construing this
document.

 

(f)          Joint liability. An obligation of two or more parties shall
bind them jointly and severally.

 

(g)         Joint
obligations. An obligation incurred in favour of two or more parties shall
be enforceable by them jointly and severally.

 

(h)         Month. Means a calendar month.

 

(i)          Numbers. Words importing the singular include the plural and
vice versa.

 

7

 

(j)          Parts of agreement. References to this agreement include its
recitals, schedules and annexures.

 

(k)         Persons. References to persons include corporations and
bodies politic.

 

(l)          Reconstituted bodies. References to a body which has ceased
to exist or has been reconstituted, amalgamated, reconstructed or merged, or
the functions of which have become exercisable by any other person or body in
its place, shall be taken to refer to the person or body established or
constituted in its place or the person or body by which its functions have
become exercisable.

 

(m)        Representatives
and assigns. References to a person include the legal personal
representatives, successors and permitted assigns of that person.

 

(n)         Statutory amendments. A reference to a statute, ordinance,
code or other law includes regulations and other statutory instruments under it
and consolidations, amendments, re-enactments or replacements of any of them (whether
of the same or any other legislative authority having jurisdiction).

 

(o)         Variation. References to this or any other document include
the document as varied or replaced, and notwithstanding any change in the
identity of the parties.

 

(p)         Writing.
References to writing include any mode of representing or reproducing words in
tangible and permanently visible form, and include telex and facsimile
transmissions.

 

2.             GRANT
OF LICENCE

 

2.1          Grant of
licence

 

Autogen hereby grants to Kyokuto with effect on and from the
Commencement Date a sole licence of the Rights, subject to the further
provisions of this agreement, in particular clauses 2.2
and 2.3, to Exploit the Product in the
Territory utilising the Licensed Patents and Licensed Technology for the purposes
of a diagnostic. This licence does not extend to:

 

(a)         a
right to use the Licensed Patents and Licensed Technology for the purposes of a
product for therapeutic or prophylactic as opposed to diagnostic, use in
humans; or

 

(b)         the
use of the Licensed Patents and Licensed Technology for the purposes of
Manufacturing GAD.

 

2.2          Matters
reserved to Autogen

 

Kyokuto agrees and acknowledges that during the Term Autogen may
appoint a third party in the Territory either exclusively or otherwise for:

 

(a)         the
manufacture of GAD utilising the Rights, where such GAD is for sale or use
anywhere in the world; and

 

8

 

(b)         the
use of the Rights for the manufacture and sale of a product for therapeutic or
prophylactic use in humans.

 

2.3          Worldwide
licence

 

Notwithstanding the grant of a sole licence to Kyokuto under clause 2.1, Kyokuto agrees that Autogen may grant a
non-exclusive licence in respect of the Rights in the Territory to manufacture
and sell a diagnostic using GAD but only if the licensee is also taking at
least a non-exclusive licence in respect of the Licensed Patents for the rest
of the world. Kyokuto now consents to such grant and acknowledges that it will
not constitute a breach of this agreement.

 

2.4          Most
favoured licensee

 

In the event that Autogen exercises its right under clause 2.3 to grant to a third party a further non-exclusive
licence in respect of the Rights in the Territory, then it will only do so on
the basis that the licence satisfies the following conditions or in the event
that the licence does not, that Autogen agrees to vary the relevant conditions
of this licence to be at least as favourable to Kyokuto. The conditions are:

 

(a)         the
net rate of royalty receivable by Autogen from the proposed licensee in respect
of its licensed products in the Territory is greater than or equal to the net
rate receivable by Autogen from Kyokuto on sales of Products, after taking into
account royalties due to third parties by Autogen in respect of such sales;

 

(b)         if
GAD is being supplied by Autogen to the proposed licensee the price at which
GAD is supplied to the relevant licensee is greater than or equal to the price
payable by Kyokuto;

 

(c)         unless
such licence is granted more than 2 years after the date of this Agreement, the
amount of any up front of lump sum payments made by the proposed licensee is
greater than or equal to US$100,000.00.

 

3.             ROYALTIES
AND UP FRONT PAYMENTS

 

3.1          Up front
fees

 

In consideration of the grant of the Licence by Autogen and Autogen’s
obligations under this agreement, Kyokuto agrees to pay to Autogen on the
Commencement Date an up front fee of US$100,000. This fee is not an advance
payment of royalties.

 

3.2          Royalty
Obligation

 

In consideration of the grant of the Licence Kyokuto hereby agrees to
pay to Autogen:

 

(a)         in
respect of sales of Products Covered By Licensed Patents in the Territory a
royalty equal to [*]% of the Net Sales Value of each Product sold; and

 

(b)         if
the Product is not Covered By Licensed Patents a royalty of [*]% of the Net
Sales Value of Products.

 

9

 

4.             REGISTRATION

 

4.1          Registration
of Product

 

Autogen must, at Autogen’s cost, provide Kyokuto with all chemistry,
quality control, other preclinical, data and clinical data and documentation in
Autogen’s possession which is of use to or will assist Kyokuto to apply for and
gain Registration. Autogen is however not required to undertake any clinical
trials or development work to assist Kyokuto. Kyokuto must forthwith after the
Commencement Date use reasonable endeavours to promptly:

 

(a)         complete
the development of the Product;

 

(b)         undertake
the relevant trials and other necessary activities required to seek
Registration of the Product in the Territory; and

 

(c)         apply
for and gain Registration of the Product in the Territory in its own name.

 

The cost of undertaking the above steps is to be borne by Kyokuto.

 

4.2          Consent
for clinical trials

 

Kyokuto shall not conduct or knowingly supply Product to any person who
intends to conduct any clinical trials or scientific study concerning or
utilising the Product (other than where such trial or study is to involve less
than 15 human subjects and does not require any prior Regulatory Authority
approval) without the prior written consent of Autogen, such consent not to be
unreasonably withheld.

 

4.3          Notifications

 

Kyokuto must provide Autogen with evidence of an application for
Registration and the gaining of Registration within 2 weeks of each of making
such application and gaining such Registration.

 

4.4          Failure
to apply for Registration

 

If Kyokuto fails to apply for Registration within 12 months the
Commencement Date, other than where the failure to so apply was attributable to
a failure by Autogen to comply with its obligations under this agreement,
Autogen may at its option terminate this agreement or convert the licence
granted to Kyokuto pursuant to clause 2.1 to a
nonexclusive licence for the Territory.

 

4.5          Refusal of
Registration

 

If an application by Kyokuto for Registration is refused, Kyokuto is
obliged to re-apply for Registration when so required by Autogen but such
requirement shall only be imposed if Autogen is of the reasonable belief,
following discussions with Kyokuto, that the reapplication will be approved. The
cost of making and prosecuting any such re-application shall be borne by
Kyokuto.

 

10

 

4.6          Maintenance
of Registrations

 

Kyokuto agrees to do all things necessary to ensure that all product
registrations and approvals in respect of the Products are maintained and to
provide Autogen with any and all documentation and information concerning any
variations to such product registrations or approvals. Such product
registrations and approvals include without limitation any registration
concerning the packaging or labelling of the Products.

 

5.             REPORTS

 

5.1          Reporting
requirements

 

Kyokuto shall within 60 days of the end of each Royalty Period provide
to Autogen a written report setting out in reasonably specific detail:

 

(a)         the
gross sales value of all Products which have been sold by Kyokuto and its
sub-licensees during the preceding Royalty Period and the calculation of Net
Sales Value from such gross sales,

 

(b)         the
calculation of the royalty payable on such Products, including details of the
currency conversion rates used, any taxes or other amounts withheld and any
adjustments on account of returns.

 

5.2          Internally
used Products

 

Any Products used or consumed by Kyokuto or any of its Related
Corporations in its or their own activities or other products shall be deemed
to have been sold at Kyokuto’s then current Arms Length selling price therefore
at the time of use or consumption and shall be included in an appropriate
royalty report and be subject to royalty. The preceding royalty obligation will
not apply to Product consumed as part of internal acceptance or quality
assurance testing, further research and development or in clinical trials to
test the safety and efficacy of the Product or otherwise required for the
purposes of Registration.

 

5.3          Time of Sale

 

A Product shall be deemed to be sold at the earlier of delivery to the
buyer, invoice to the buyer or payment by the buyer.

 

5.4          Foreign
currencies

 

Kyokuto shall calculate royalties in local currencies and convert the
same to Dollars (or to such other currency as Autogen may nominate from time to
time) at the ruling rate of exchange as on the last day of the Royalty Period.

 

5.5          Payment
mechanics

 

The royalty payable to Autogen shall be paid to a bank account
nominated by Autogen in Melbourne, Australia (or at such other location as
Autogen may stipulate from time to time) within sixty days of the end of each
Royalty Period.

 

11

 

5.6          Kyokuto
to keep accounts and records

 

Kyokuto shall keep and retain at least for a period of 36 months after
the end of the Royalty Period to which they relate, true and particular
accounts and records of all sales of Products sufficient to verify Kyokuto’s
calculation of Net Sales Value of Products sold, the calculation of royalty
based thereon and conversion of such amounts into the relevant currency.

 

5.7          Inspection
of accounts

 

At any time from the Commencement Date until the expiry of two years
after the end of the Term, Autogen or its duly authorised representatives
reasonably acceptable to Kyokuto shall have the right to inspect and audit from
time to time the accounts and records referred to in clause 5.6
and such other matters as are directly relevant to the calculation of the
amount of any payment due by Kyokuto to Autogen under this agreement and shall
be entitled to take copies of such records, on the following conditions:

 

(a)         inspection
shall be limited to 2 times in any 12 Month period;

 

(b)         inspections
shall take place during normal business hours and upon reasonable prior notice
to Kyokuto;

 

(c)         employees
of Autogen or its duly authorised representatives who inspect such accounts and
records must be suitably qualified personnel reasonably acceptable to Kyokuto
and shall:

 

(i)              prior
to inspecting such records and accounts, enter into a confidentiality agreement
with Kyokuto containing undertakings similar to those in clause 11;
and

 

(ii)             whilst
inspecting such records and accounts, abide by all of Kyokuto’s standard rules and
regulations;

 

(iii)            Autogen
shall indemnify and hold Kyokuto harmless from all liability resulting from any
negligence or any other activities on the part of Autogen’s employees or duly
authorised representatives inspecting such records and accounts.

 

5.8          Settlement
of discrepancies

 

If any discrepancy is found by Autogen then the amount thereof must be
paid within 7 days of demand therefore to Autogen.

 

5.9          Cost of
audit

 

Autogen must bear the cost of any examination under clause 5.7 unless a discrepancy of 5% or more in the amount
of any royalty payment is detected in which event Kyokuto must bear the expense
of the examination.

 

12

 

6.             MARKETING
OF PRODUCT

 

6.1          Kyokuto’s
obligations

 

Kyokuto must use its best endeavours, at the expense of Kyokuto, to:

 

(a)         promote,
distribute and sell the Product in the Territory in order to obtain the optimum
market potential for the Product;

 

(b)         provide
and maintain such suitable places of business for the storage, handling and
sale of the Product at such locations throughout the Territory as Kyokuto
thinks suitable;

 

(c)         provide
and maintain such marketing, sales and office staff to promote and sell the
Product in accordance with this agreement, such personnel to be deemed the
agents, representatives or employees of Kyokuto and not those of Autogen;

 

(d)         maintain
in the Territory sufficient stocks of the Product to meet the market demand for
the Product; and

 

(e)         no
later than 2 months prior to the commencement of each year during the Term
prepare sales and marketing plans in respect of the Product in the Territory
for discussion with Autogen.

 

6.2          Commencement
of Marketing

 

(a)         If
Marketing by Kyokuto has not commenced in the Territory within 3 months of
Kyokuto obtaining Registration or within such other time as agreed by the
parties and such failure to so commence Marketing is not attributable to any
failure by Autogen to comply with its obligations under this agreement, Autogen
may at its option by notice in writing to Kyokuto convert the Licence to a
non-exclusive licence or terminate this agreement.

 

(b)         Upon
the giving of notice by Autogen terminating Kyokuto’s Licence, the parties will
enter into good faith discussion with a view to determining if and upon what basis
any Registration may be transferred to Autogen and/or its nominee.

 

6.3          Parallel
exporting

 

To the extent permitted by the laws of the Territory, Kyokuto agrees:

 

(a)         not
to sell the Product in any country or to persons in any country outside the
Territory;

 

(b)         not
to sell or cause or knowingly permit to be sold Product to a third party within
the Territory where there are reasonable grounds for Kyokuto to suspect the
third party may, whether directly or indirectly, sell or cause Product to be
sold outside the Territory; and

 

(c)         to
sell all Product on the condition that such Product will not be exported by the
purchaser or sold to any third party whom the purchaser knows or ought
reasonably to know is likely to export such Product out of the Territory.

 

13

 

6.4          Initial
reports

 

Kyokuto shall within one month of the relevant dates submit to Autogen,
at Kyokuto’s cost, details of the date of commencement of Marketing and details
of the establishment of or change to any facilities referred to in clause 6.1(b).

 

6.5          Ongoing
reports

 

Kyokuto must on an annual basis keep Autogen reasonably informed as to
its proposed marketing activities in relation to the Products in the coming
year. In particular such report is to provide estimates of the pricing and
expected volumes for the Product, an outline of the distribution system, an
assessment of the market place and a detailed overview of the proposed
marketing and promotional strategies in respect of the Products.

 

6.6          Non
competition

 

Kyokuto covenants that neither it nor its Related Corporations will
during the Term make, sell or promote any product which could reasonably be
regarded as competitive with the Product.

 

6.7          Advertising
and promotion material

 

Kyokuto’s proposed publications in relation to the Product including
advertisements, sales and trade literature and instruction leaflets shall be
submitted to Autogen in draft form and may only be published after Autogen has
given its specific consent thereto in writing, such consent not to be
unreasonably withheld or delayed. Any references by Kyokuto to Autogen will
require the prior written approval of Autogen.

 

7.             SUB-LICENSING

 

7.1          Sub-licensees
versus distributors

 

If Kyokuto sells the Product to any Related Corporations, then they
will deemed to be sub-licensees and not distributors. In the event that Kyokuto
sells the Product in less than a fully finished form to a third party, such
that additional manufacturing steps other than final packaging are required, then
a sub-licence in accordance with this clause 7 will be required. In all other
cases, that is sales to non-Related Corporations where fully manufactured
(whether fully packed or not) Product is supplied, it will be at Kyokuto’s
election whether such persons become sub-licensees or distributors.

 

7.2          Right to
sub-licence

 

Subject to clause 7.1,
Kyokuto may grant sub-licences upon such terms and conditions as it may
arrange, provided Kyokuto and the sub-licences granted by it must strictly
comply with the provisions of this clause 7,
provided that Kyokuto is not entitled to licence a third party to manufacture
GAD.

 

14

 

7.3          Sub-licences

 

Kyokuto shall have the right to grant sub-licences to a third party in
respect of the Product provided that Kyokuto complies with the obligations set
out in clause 7.4 and the sub-licence complies
with the following:

 

(a)         the
proposed sub-licencee being granted the sub-licence has the commercial capacity
to promote and exploit the relevant Product with due diligence and probity and
has at least sufficient skills and resources to comply with the obligations
placed upon Kyokuto in relation to that Product in the Territory;

 

(b)         neither
the proposed sub-licensee nor any of its Related Corporations:

 

(i)              manufactures,
distributes or sells products competitive with the Product; or

 

(ii)             is
engaged in litigation with Autogen or its Related Corporations, or any of the
Head Licensors.

 

(c)         the
sub-licence is wholly consistent with the terms of this Licence and in
particular:

 

(i)              such
sub-licence does not purport to extend or continue in any circumstances where
this Licence may be terminated, except in the circumstances set out in clause  17.1(f);

 

(ii)             the
sub-licensee acknowledges that Autogen owns the Rights;

 

(d)         the
sub-licence prohibits the sub-licensee from taking any action or allowing any
action to be taken which detracts from the ownership of the Rights by Autogen
or conflicts with the provisions contained in this Licence in relation to
prosecuting or defending the Licensed Patents or defending any allegation of
infringement of the Rights or the Trade Marks;

 

(e)         the
sub-licence is in the English language, executed by the sub-licensee and giving
its place of business;

 

(f)          the
sub-licence obliges the sub-licensee to pay to Kyokuto a royalty at least equal
to the royalty payable by Kyokuto to Autogen pursuant to clause 7.5;

 

(g)         the
sub-licence requires the sub-licensee to maintain all books, records and
accounts necessary to enable verification of Net Sales Value and royalties and
other income required to be paid by Kyokuto to Autogen and permits inspection
by Autogen on terms essentially identical to clauses 5.6
and 5.7;

 

(h)         the
sub-licence limits the duration of the sub-licence in respect of any Product
for the term of this agreement and further provides for the sub-licence to
terminate automatically upon the termination of this agreement, subject to clause 17.1(f) or upon an Insolvency Event occurring in
relation to the sub-licensee;

 

(i)          the
sub-licence prohibits the sub-licensee without the consent of Autogen from
assigning, transferring, mortgaging or parting with any of its rights under the
sub-licence;

 

15

 

(j)          the
sub-licence obliges the sub-licensee to maintain the insurances referred to in clause  15.5 and to
obtain and maintain the Registrations and approvals referred to in clause 4 as apply to that sub-licensee; and

 

(k)         the
sub-licence provides that all the terms and conditions of the sub-licence may
be enforced by Autogen against the Sub-licensee notwithstanding that Autogen is
not a party to the sub-licence or any rule of law or equity to the
contrary.

 

7.4          Notification
of sub-licence

 

Kyokuto must within one month of the entering into of a sub-licence
notify Autogen of the granting of the sub-licence and provide Autogen with
general details of the sub-licensee, including information as to its financial
affairs and resources and a copy of the executed sub-licence.

 

7.5          Calculation
of royalty for sub-licences

 

Where any Product is Exploited by a sub-licensee, the royalty payable
in respect of such Exploitation shall be calculated on the Net Sales Value of
such Product by the sublicensee on the same basis as set out in clause 3.2, and not as a proportion of the royalties or
other receipts which may be paid by the sub-licensee to Kyokuto pursuant to any
sublicence granted by Kyokuto. Kyokuto is directly liable to Autogen for the
payment of this royalty.

 

7.6          Up-front
and lump sum fees

 

In addition to the amounts provided for in clause 7.5
Kyokuto must pay to Autogen [*]% of any and all amounts received by Kyokuto
from any sub-licensees other than amounts calculated by reference to the net
sales price of Products or the number of products sold.

 

7.7          Royalty
reporting

 

Any payments due to Autogen under this clause 7
shall be included with Kyokuto’s reports and payments to be made under the
provisions of clause 5 for the Royalty Period in
which any such amounts become due and payable to Kyokuto.

 

7.8          No
licensing

 

Except as provide under the preceding provisions of this clause 7, Kyokuto may not grant any sub-licence of the
rights granted to it pursuant to this agreement without the prior written
consent of Autogen, such approval not to be withheld unless Autogen reasonably
believes:

 

(a)         any
proposed sub-licensee will not properly perform and discharge all of the
obligations of Kyokuto under this agreement in respect of the relevant
sublicensed Territory;

 

(b)         that
the proposed sub-licensee is not financially sound or will be unable to pay
royalties and other amounts payable under the relevant sub-licence as and when
they fall due;

 

16

 

(c)         there
are reasonable grounds to believe that the-proposed sub-licensee is likely to
conduct itself in a manner likely to endanger or cause injury to Autogen’s
reputation, the Trade Mark or the reputation, quality, image or character or
the Product;

 

(d)         the
proposed sub-licence is not wholly consistent with the terms of this licence
and in particular complies with clauses 7.3(b)(i), (ii), (c), (d),
(e), (f), (g), (i) and

 

In no circumstances will Autogen be obliged to provide its consent less
than 1 month after it is given a copy of the terms of the proposed sub-licence.

 

8.             TRADE MARK

 

8.1          Trade
mark - Kyokuto’s obligations

 

Kyokuto agrees:

 

(a)         to
use reasonable endeavours to promptly procure registration of the Trade Mark in
the Territory;

 

(b)         to
use the Trade mark as the sole product name or mark in relation to the Product,
other than its own corporate name;

 

(c)         not
use the Trade Mark except in relation to the Products; and

 

(d)         take
all steps reasonably required in the Territory to ensure that sufficient use of
the Trade mark is made therein to avoid abandonment by reason of non use and to
otherwise maintain the trade mark.

 

8.2          Use
of Trade Mark after termination

 

Following termination of expiry of this agreement, Kyokuto must cease
to use the Trade Mark in respect of any product or service, the same as,
similar to or which may be confused with the Product or otherwise in a manner
which may indicate a connection or association with Autogen or GAD.

 

9.             MINIMUM
ROYALTIES

 

9.1          Kyokuto’s
obligation

 

Kyokuto must during the periods set out in Schedule 2
use its best endeavours to achieve a minimum royalty payment in respect of the
Product equal to the amounts set out in that schedule. For the purposes of
determining any shortfall, any amounts paid by Kyokuto under clause 7.6 are to be excluded. Unless the total royalties
paid by Kyokuto in respect of a year already exceed the minimum royalty payment
for that year as specified in Schedule 2,
Kyokuto agrees to pay to Autogen on each royalty payment date at the end of
each Royalty Period in that year an amount, as and by way of minimum royalty
applicable for that year less the royalties already paid in that year, equal to
the lesser of.

 

(a)         25%
of the specified minimum royalty payment applicable for that year; or

 

17

 

(b)         the
minimum royalty payment applicable for that year less the royalties already
paid in that year.

 

9.2          Serious
failure to meet targets

 

In the event that in two successive years the royalties that would be
paid by Kyokuto except for the provisions of clause 9.1,
are less than 80% of the minimum royalties specified in Schedule 2
then Autogen may at its option:

 

(a)         terminate
this agreement by giving 3 months notice in writing to Kyokuto of its intention
so to do, the licence to terminate on the expiry of such notice; or

 

(b)         convert
Kyokuto’s licence to a non-exclusive licence in the Territory.

 

10.          ASSISTANCE

 

10.1        Provision
of Confidential Information

 

Autogen shall forthwith after the Commencement Date provide the
Confidential Information not already within Kyokuto’s possession or control to
Kyokuto and shall throughout the Term continue to provide to Kyokuto any GAD
Improvements.

 

10.2        Provision of
assistance

 

At the reasonable request of Kyokuto Autogen shall at reasonable
intervals throughout the Term provide personal instruction, assistance and
training in the Confidential Information to suitably qualified employees of
Kyokuto on the following terms:

 

(a)         instruction
assistance and training shall be limited to such numbers and for such period as
Autogen can satisfactorily instruct and supervise without unduly interfering
with Autogen’s own routines and current commitments and in this regard Autogen
will be the sole judge;

 

(b)         instruction
assistance and training shall embrace all aspects of the Confidential
Information;

 

(c)         suitably
qualified employees of Kyokuto will be given access to and an adequate
opportunity to study the Confidential Information; and

 

(d)         the
costs of the provision of such training and assistance shall be borne by
Kyokuto.

 

11.          CONFIDENTIAL
INFORMATION

 

11.1        Obligations
to Autogen

 

Subject to clauses 11.3
and 11.6, Kyokuto covenants with Autogen as
follows:

 

(a)         to
keep all Confidential Information belonging to Autogen or supplied to it by
Autogen, including the existence of such Confidential Information, strictly
secret and confidential (including from all its employees, servants and
agents),

 

18

 

exercising at least the same degree of care, as it uses to
maintain its own confidential information;

 

(b)         to
provide proper and secure storage for such Confidential Information within its
possession or control;

 

(c)         to
use such Confidential Information only for the purposes of this agreement and
not for any other activity or purpose whatsoever without the prior written
approval of Autogen; and

 

(d)         to
not copy or reduce to writing or any other medium any part of such Confidential
Information except as may be reasonably necessary for the purposes of this
agreement.

 

11.2        Obligations
to Kyokuto

 

Subject to clauses 11.3
and 11.6, Autogen covenants with Kyokuto as
follows:

 

(a)         to
keep all Confidential Information belonging to Kyokuto or supplied to it by
Kyokuto, including the existence of such Confidential Information, strictly
secret and confidential (including from all its employees, servants and
agents), exercising at least the same degree of care as it uses to maintain its
own confidential information;

 

(b)         to
provide proper and secure storage for such Confidential Information within its
possession or control;

 

(c)         to
use such Confidential Information only for the purposes of this agreement and
not for any other activity or purpose whatsoever without the prior written
approval of Kyokuto; and

 

(d)         to
not copy or reduce to writing or any other medium any part of such Confidential
Information except as may be reasonably necessary for the purposes of this
agreement.

 

11.3        Exceptions
to obligations

 

The obligations of confidence set out in clauses 11.1
and 11.2 shall not extend to Confidential
Information which:

 

(a)         at
the time of disclosure to a party is in the public domain or generally known in
the diagnostics industry;

 

(b)         after
disclosure to a party becomes part of the public domain otherwise than as a
result of the wrongful act of that party or one of that party’s disclosees;

 

(c)         a
party can show was in its possession at the time of disclosure and was not
acquired directly or indirectly from the other party; or

 

(d)         is
received from a third party provided that it was not acquired directly or
indirectly by that third party from a party to this agreement or under an
obligation of confidence;

 

19

 

(e)         is
required by compulsion of law to be disclosed;

 

provided that:

 

(f)          the
onus shall be on the party alleging the same to prove that one of the above
exceptions has application;

 

(g)         in
any case of uncertainty as to whether the obligations in clauses 11.1
or 11.2 have application to any
information, such information shall be treated as subject to the obligations
until advised otherwise by the party to whom the obligations are owed;

 

(h)         prior
to either party making any disclosure of information which is prima facie
confidential information in circumstances where the party that intends to
disclose the information is of the view that one of the above exceptions has
application, it must notify the other party of the facts and circumstances by
virtue of which it believes that it is entitled to disclose the information,
and must not disclose such information until either 14 days has elapsed or the
other party has indicated its consent to the disclosure of such information.

 

11.4        Rights
in Confidential Information

 

Each party acknowledges and agrees that each other party has made a
substantial investment in that party’s Confidential Information and has a
legitimate right to protect itself against wrongful disclosure or use of such
Confidential Information.

 

11.5        Term of
obligation

 

The obligations in this clause 11 shall
survive the expiry or termination of this agreement for whatever reason and
continue indefinitely, subject always to the exceptions included in clause 11.3.

 

11.6        Permitted
disclosures

 

Each party (“the first party”) shall be permitted to disclose
Confidential Information belonging to another party or supplied to it by
another party (“the other party”) to such of the first party’s Representatives
as require access to such information for the purposes of this agreement,
provided that:

 

(a)         only
such Confidential Information as needs to be disclosed to a person for the
purposes of this agreement will be disclosed to that person; and

 

(b)         the
first party shall:

 

(i)              have
obtained from each such person undertakings in favour of the other party
substantially in the form of the relevant obligations and undertakings in this clause  11 (but not
this clause 11.6);

 

(ii)             be
responsible for the performance of its Representatives’ undertakings referred
to in clause 11.6(b)(i); and

 

20

 

(iii)            take
whatever steps are reasonably necessary, including the institution of legal
proceedings, to ensure that each of its Representatives is bound by and
observes the terms of the undertakings referred to in clause 11.6(b)(i).

 

11.7        Delivery-up
of Confidential Information

 

All of a party’s Confidential Information and all materials containing
or embodying such Confidential Information and all copies of or extracts from
or notes on the same in the possession, power or control of another party or
any of its employees, servants or agents together with all forms and other
materials relating to practices and procedures in relation to the Confidential
Information to the extent possible shall:

 

(a)         in
the event of the expiration or sooner termination of this agreement, be
delivered up by the other party to the first party at the expense of the other
party; and

 

(b)         in
the event of any demand made by the first party be delivered up by the other
party to the first party at the expense of the first party.

 

11.8        Market
disclosure requirements

 

Nothing in this clause 11 will in any way restrict Autogen or its
Related Corporations from making whatever disclosures they may deem necessary
to fulfil the requirements of and their obligations under the Corporations Law
or the rules of the Australian Stock Exchange Limited.

 

12.          IMPROVEMENTS

 

12.1        By Kyokuto

 

Any GAD Improvements invented, discovered or acquired by Kyokuto during
the Term must promptly and without specific request be disclosed in full to
Autogen prior to any public use or disclosure of any such GAD Improvements to
any third party. Subject to the remaining provisions of this clause any such
GAD Improvements will be the property of Kyokuto and Kyokuto must grant to
Autogen a non-exclusive licence for a royalty to be agreed, such licence to
include the right to sub-licence such GAD Improvement for the duration of the
patent or other protection relating to such GAD Improvement. Kyokuto and
Autogen shall discuss in good faith and agree upon the rate of royalty
applicable to such licence. Autogen will be liable to account to Kyokuto for
the agreed share of any incremental remuneration or other consideration
received by Autogen from the use or licensing of such GAD Improvement.

 

12.2        By Autogen

 

Any Improvement invented, discovered or acquired by Autogen during the
Term shall be offered to Kyokuto by way of a non-exclusive licence to use any
such Improvement for the duration of the Term and upon the same terms, mutatis
mutandis, as are contained in this agreement. Such Improvement will be included
in the Rights without payment of any Royalty or Fee.

 

21

 

12.3        Additions
to Licensed Patents

 

Autogen agrees to advise Kyokuto promptly of the filing of any patent
application or of the issue of any patent which is legally or beneficially
owned by Autogen and which:

 

(a)         is
dominated by or dominates any patent or patent applications otherwise included
in Licensed Patents; or

 

(b)         relates
to any Product or describes and claims any improvements in or to any Product or
methods or processes of making or using the same,

 

such that the Exploitation of the Products in the Territory by Kyokuto
in accordance with the terms of this agreement would be Covered By such patent
or patent application then Kyokuto shall have an option to have such patent
included within Licensed Patents, such option to be exercised by notice in
writing to Autogen within 3 months of notification to Kyokuto. If Kyokuto does
exercise its option then such patents or patent applications will be included
in Licensed Patents without increase in the earned royalty rate specified in clause 3.

 

12.4        Kyokuto kit
technology

 

Kyokuto gives Autogen a right of first refusal in respect of the sale
and exploitation of the Product, outside of the Territory. In particular it is
agreed that Kyokuto will not offer the Product for sale outside of the
Territory, or offer to licence the diagnostic technology relevant to the
Product to any third party without first offering it to Autogen. In this regard
the following provisions will apply:

 

(a)         Kyokuto
will make a written offer to Autogen to either acquire the Product or licence
the relevant diagnostic technology;

 

(b)         the
offer must state, in reasonable detail, the terms and conditions on which the
offer is made, and must be open for acceptance for not less than 90 days;

 

(c)         during
the 90 day offer period, Kyokuto and Autogen must confer with each other, and
in good faith discuss and consider the offer;

 

(d)         if
the offer is not expressly accepted or rejected within the 90 day period, it
will be deemed to have been rejected at the end of the 90 day period;

 

(e)         if
no agreement is reached between, Kyokuto and Autogen, Kyokuto will be free to
negotiate the sale of the Product or the licensing of the relevant diagnostic
technology with any third party, subject always to the terms of this agreement,
and the other rights of Autogen outside of the Territory;

 

(f)          however,
Kyokuto may not enter into any agreement with any such third party unless
Kyokuto first affords Autogen a 60 day period to evaluate and meet or better
the third party offer. To this end, Kyokuto must provide Autogen with full
details of the third party offer;

 

(g)         if
Autogen meets or betters the third party offer, Kyokuto must accept the Autogen
offer; and

 

22

 

(h)         the
above provisions will apply for a period of 10 years or while royalties are
being paid to Autogen under this agreement, whichever is longer.

 

13.          LIABILITY

 

13.1        Responsibility
for Products

 

Kyokuto must ensure at all times during the Term that the Product is
manufactured, used and sold strictly in accordance with all relevant applicable
requirements and in the Territory and Kyokuto will be responsible for
conducting its own independent examination and verification of the accuracy and
suitability of Licensed Patents, Licensed Technology and Confidential
Information and for ensuring the same is suitable for the purposes for which
the same is to be provided.

 

13.2        Autogen not
liable

 

Autogen shall not be liable (in contract or tort or otherwise) to
compensate Kyokuto for any loss howsoever arising suffered by Kyokuto arising
directly or indirectly from the use of Licensed Patents, Licensed Technology or
the sale of the Product.

 

14.          INDEMNITIES

 

14.1        Indemnity by
Kyokuto

 

Kyokuto agrees to indemnify Autogen against and hold Autogen harmless
from any and all Losses arising from or in connection with:

 

(a)         a
breach by Kyokuto of any of its warranties or obligations under this agreement;

 

(b)         the
manufacture of the Products by Kyokuto;

 

(c)         the
storage, use, sale, shipping and Marketing of the Product by Kyokuto;

 

(d)         any
representations, express, implied or statutory made by Kyokuto as to the
efficacy or safety or use to be made by any purchaser of the Product including,
without limitation, representations made by reference to the labelling or
packaging or the Product;

 

(e)         it
shall be a term of any sub-licence granted by Kyokuto to any third party that
such third party agrees to the same extent and in the same terms as the
indemnities contained in this clause 14 to
indemnify Autogen and that the sub-licensee specifically agrees that it will
not challenge the standing of Autogen in the event of Autogen seeking to rely
upon such indemnification;

 

provided that Kyokuto shall not be required to provide indemnity with
respect to any Losses, to the extent they result from Autogen’s or its
Representatives negligence or breach of any of Autogen’s warranties or
obligations under this agreement, or from information about the Product
supplied by Autogen to Kyokuto.

 

23

 

14.2        Indemnity by
Autogen

 

Autogen agrees to indemnify Kyokuto and hold Kyokuto harmless from any
and all Losses, arising from or in connection with a breach by Autogen of any
of its warranties or obligations under this agreement provided that Autogen
shall not be required to provide indemnity with respect to any Losses, to the
extent they result from Kyokuto’s or its Representatives’ negligence or breach
of any of Kyokuto’s warranties or obligations under this agreement.

 

14.3        Notification
regarding certain claims

 

Kyokuto undertakes promptly to notify Autogen of the bringing or threat
of any claim or legal proceedings in the Territory involving the Products of
which Kyokuto becomes aware against or involving or implicating Autogen or any
of its Related Corporations or in any way touching upon or concerning the
commercial interests of Autogen. In any such case the following provisions
shall apply:

 

(a)         If
such claim or legal proceedings involves GAD Manufactured by Autogen or has as
a substantial element an allegation that properly manufactured GAD is unsafe or
has caused some loss or damage, then Autogen shall have the first right to
defend or prosecute such claim or legal proceeding in the Territory and should
Autogen undertake the defence or prosecution of any such claim or legal
proceedings, Kyokuto shall fully co-operate
with Autogen in relation to such action and the costs and expenses of any such
action shall be borne by Autogen and the proceeds of such action shall belong
to Autogen unless Kyokuto shall choose to participate in such action in which
case both parties shall bear their own costs of the action and the proceeds
shall be divided between the parties proportionately in accordance with the
costs expended by each party; in the event of Autogen choosing not to prosecute
or defend any such claim or legal proceedings Kyokuto may do so on its own
behalf and in that event Autogen shall fully co-operate with Kyokuto in
relation to such action, and the costs and expenses of any such action shall be
borne by Kyokuto and the proceeds of any such action or any action for which
there is no indemnification or for which indemnification- is not sought shall belong
to Kyokuto.

 

(b)         In
any other case Kyokuto shall have the first right to defend or prosecute such
claim or legal proceeding in the Territory and should Kyokuto undertake the
defence or prosecution of any such claim or legal proceedings in the Territory,
Autogen shall fully co-operate with Kyokuto in relation to such action and the
costs and expenses of any such action shall be borne by Kyokuto and the
proceeds of such action shall belong to Kyokuto unless Autogen shall choose to
participate in such action in which case both parties shall bear their own
costs of the action and the proceeds shall be divided between the parties
proportionately in accordance with the costs expended by each party; in the
event of Kyokuto choosing not to prosecute or defend any such claim or legal
proceedings Autogen may do so on its own behalf and in that event Kyokuto shall
fully co-operate with Kyokuto in relation to
such action, and the costs and expenses of any such action shall be borne by
Autogen and the proceeds of any such action or any action of which there is no
indemnification or for which indemnification is not sought shall belong to
Autogen.

 

24

 

(c)         Kyokuto
agrees not to make, without Autogen’s express written authority, any admission
of liability to a claimant or plaintiff or his or her legal representative or
insurer in respect of such claim or threatened claim or such proceedings or
threatened proceedings in the Territory.

 

(d)         Kyokuto
agrees not to make, without Autogen’s written authority, any settlement or
compromise of such claim or threatened claim or such proceedings or threatened
proceedings.

 

15.          INSURANCE

 

15.1        Kyokuto
to insure during Term

 

Kyokuto must have and must maintain for the Term the Required Insurance.
The Required Insurance must be with a reputable insurer and name Autogen as an
additional insured.

 

15.2        Warranty
in respect of insurance

 

Kyokuto warrants that it is not aware of any fact which would prevent
the insurance effected by it pursuant to this clause sustaining a claim being
made in the context of this agreement.

 

15.3        Insurance
after the Term

 

Kyokuto must maintain equivalent insurance coverage in place until
expiry of the Limitation Period unless Autogen, acting reasonably, agrees with Kyokuto
that:

 

(a)         such
insurance is not available;

 

(b)         such
insurance cannot be negotiated on reasonable commercial terms;

 

(c)         alternative
arrangements satisfactory to Autogen have been put in place; or

 

(d)         the
continuation of such insurance is no longer required by Autogen.

 

15.4        Further
obligations in respect of insurance

 

Kyokuto must:

 

(a)         prior
to the Commencement Date, obtain a certificate from a reputable insurance
broker confirming that the insurance required by this clause 15
(the “Insurance”) is in effect;

 

(b)         during
the Term and until expiry of the Limitation Period promptly notify Autogen:

 

if it becomes aware that any of the
conditions precedent to the issuance and operation of the Insurance are not, or
are no longer, satisfied;

 

(ii)             if
it has made or is making claims under the Insurance which may materially affect
the cover provided by the Insurance; or

 

25

 

(iii)            if
it becomes aware that the Insurance has been, or is about to be cancelled, or a
notice of cancellation or other material notice under or in relation to the
Insurance has been or is about to be issued by the insurers (and, upon the
issuance of any such notice, it must provide a copy of the notice to Autogen).

 

15.5        Sub-licensees
insurance

 

Kyokuto shall procure that all of its sub-licensees:

 

(a)         maintain
adequate product liability and third party liability insurance in respect of
their activities pursuant to their respective sub-licences; and

 

(b)         ensure
that all policies of insurance taken out by any sub-licensee note the interest
of Autogen thereon, and that such policies specifically extend to cover the
liability of the sub-licensee to Autogen and Kyokuto pursuant to the
indemnities required to be contained the relevant sub-licence in accordance
with clause 14.1(e).

 

15.6        Autogen
right to insure and recover

 

If Kyokuto fails to itself, or to procure its sub-licensees to, take
out and maintain insurance strictly as required by this clause 15,
Autogen is entitled to effect and maintain on behalf of Kyokuto the Required
Insurance in its own name, and the cost of any such insurance shall be to the
account of Kyokuto and must be paid by Kyokuto to Autogen within 14 days of
demand being made therefor.

 

16.          TERM AND
TERMINATION

 

16.1        Term

 

Subject to clauses 16.2, 16.3, 16.4, 16.6, 18
and 23, the term of this agreement and the
rights granted hereunder is for 15 years or so long as the Product is still
Covered By a Licensed Patent, whichever is the longer.

 

16.2        Termination
for breach

 

If one party breaches any term, provision or obligation of this
agreement (the “Defaulting Party”) and the Defaulting Party fails to:

 

(a)         remedy
such breach within 60 days after receipt of notice from the other party
requiring remedy of the breach; or

 

(b)         if
the breach cannot be remedied within the said 60 day period, commence action
within the said 60 day period to remedy the breach and undertake in writing to
the other party to complete remedy of the breach as soon as practicable
thereafter;

 

the other party shall have the right to terminate this agreement
immediately upon the expiration of the said period of 60 days by written notice
to the Defaulting Party.

 

26

 

16.3        Termination
in default of payment

 

Notwithstanding anything contained in clause 16.2,
this agreement may be forthwith terminated by a party by giving notice to the
other party if that other party defaults in the payment of any money due by
that other party to the first party under this agreement and such default
continues for a period of 30 days after notice has been given to the other
party demanding the payment of such money.

 

16.4        Termination
for insolvency

 

Notwithstanding anything contained in clause 16.2,
this agreement may be terminated by a party giving notice to the other party
upon the happening of any of the following events in respect of that other
parry:

 

(a)         an
Insolvency Event in respect of that other party; or

 

(b)         if
the other party is in breach of an undertaking given pursuant to clause 16.2(b).

 

16.5        Reconstruction exception

 

A winding up or liquidation for the purposes of reconstruction or
amalgamation by the other party shall not be an event permitting or giving
rise, to termination if after that reconstruction or amalgamation the resulting
corporation becomes bound by the terms of this agreement by way of assignment
or novation.

 

16.6        Termination
by Autogen

 

Autogen may terminate this Agreement upon notice to Kyokuto if:

 

(a)         a
person or persons who did not previously hold (whether directly or indirectly
through one or more persons) more than fifty percent of the issued voting
capital of Kyokuto or any of Kyokuto’s holding companies (if any), obtains
(whether directly or indirectly through one or more persons) more than fifty
percent of the issued voting capital of Kyokuto or a holding company (if any)
of Kyokuto;

 

(b)         Kyokuto
or any of its Related Corporations sells, manufactures or becomes engaged in
distribution of products which are competitive with the Products; or

 

(c)         if
Kyokuto or any of its sub-licensees (if any) challenges or seeks or causes to
be challenged the validity of the Licensed Patents.

 

16.7        Termination
by Kyokuto

 

Kyokuto may terminate this agreement upon notice to Autogen if a person
or persons that did not previously hold (whether directly or indirectly through
one or more persons) more than fifty percent of the issued voting capital of
Autogen or any of Autogen’s holding companies (if any), obtains (whether directly
or indirectly through one or more persons) more than 50% of the issued voting
capital of Autogen or a holding company (if any) of Autogen.

 

27

 

16.8        Termination
to be without prejudice

 

Any termination of this agreement shall be without prejudice to the
rights which a party has against the other in respect of anything done or
omitted to be done hereunder prior to such termination or in respect of any
sums or other claims outstanding at the time of termination_

 

17.          OBLIGATIONS
AND RIGHTS ON TERMINATION

 

17.1        Obligations
of Kyokuto

 

Immediately upon termination or expiration of this agreement, but
subject to clause 17.4, Kyokuto shall:

 

(a)         pay
all outstanding balances of the royalty payable in accordance with the terms of
this agreement;

 

(b)         remove
all signs, advertising displays, labels and the like identifying Kyokuto as a
licensee and thereafter Kyokuto will not use such signs and displays in
connection with any business conducted by it and will not in any way refer to
its previous association with the Rights for any commercial purpose whatsoever;

 

(c)         not
conduct its business so as to falsely reflect discredit on Autogen or the
Rights; and

 

(d)         at
Autogen’s option and request terminate or assign to Autogen any sub-licence
granted by Kyokuto hereunder.

 

17.2        Obligations
of Autogen

 

Immediately upon termination or expiration of this agreement, Autogen
shall:

 

(a)         as
soon as conveniently possible reconcile all accounts relating to Kyokuto;

 

(b)         accept
all outstanding balances within existing terms of settlement within the. terms
of this agreement;

 

(c)         remove
all signs, advertising displays, labels and the like identifying Kyokuto as a
licensee of the Rights in respect of the Territory and thereafter Autogen will
not use such signs and displays in connection with any business conducted by it
for any commercial purpose whatsoever; and

 

(d)         not
conduct its business so as to falsely reflect discredit on Kyokuto.

 

17.3        Rights of
Autogen

 

Following termination and expiration of this agreement, Autogen or any
person that Autogen may designate, shall be entitled, without incurring any
liability or responsibility to Kyokuto, to negotiate or consummate arrangements
for another party to act as Autogen’s licensee of the rights for some or all of
the Territory

 

28

 

17.4        Completion
of sales to third parties

 

Following termination or expiration of this agreement, but subject to clause  17.3:

 

(a)         Kyokuto
shall have the right to freely sell and supply to any of its customers such
stock of Product that Kyokuto has on hand at the date of termination or
expiration of this agreement, but Kyokuto is not entitled, save in the case of
termination arising from breach by Autogen, to manufacture any further Product
except to use up, raw materials and work-in-progress owned by Kyokuto as at the
date of termination.

 

(b)         If
Kyokuto has not sold and supplied such stock of Product on hand or any part of
it within 6 months from the date of termination or expiration of this
agreement, then at the expiry of that 6 month period, Kyokuto must destroy or
otherwise deal with such remaining Product in a manner acceptable to Autogen.

 

(c)         Any
transactions between the parties pursuant to this clause shall not be construed
as a renewal of this agreement nor as a waiver of termination, but shall be
governed by terms identical to this agreement mutatis mutandis.

 

(d)         If
Kyokuto sells Products after termination of this agreement pursuant to this clause 17.4 then Kyokuto shall ensure that in the period of
6 months contemplated by this clause 17.4
that it will not market the Products in a manner likely to or calculated to
damage the market credibility, integrity or ordinary price structures of the
Product or the Trade Mark.

 

(e)         All
such stocks-on-hand, and Product manufactured from work in progress shall be
conclusively deemed to have been sold by the end of the said period of 6 months
and Kyokuto shall thereupon make an appropriate royalty payment to Autogen in
respect thereto along with a written statement containing sufficient data to
enable Autogen to verify the correctness of such payment.

 

17.5        Limitation
of Kyokuto’s rights

 

Upon termination or expiration of this agreement for any reason,
Kyokuto shall not be entitled to compensation for goodwill which may have
accrued to it through the marketing of the Product in the Territory.

 

18.          WARRANTIES

 

18.1        General
warranties

 

Each party represents and warrants to the other that:

 

(a)         it
has all necessary powers and authorisations necessary to enter into this
agreement and observe its obligations hereunder and allow this agreement to be
enforced against it; and

 

(b)         this
agreement does not contravene any law, regulation or official directive or any
obligations or undertakings by which it or any of its assets are bound or cause
a limitation on its powers to be exceeded; and

 

29

 

(c)         there
does not presently exist any event which would either now or with the effluxion
of time entitle the other party to terminate this agreement pursuant to clause 16; and

 

(d)         it
is not a party to any pending or threatened action or proceeding affecting it
or any of its assets before. a court, governmental agency,
commission or arbitrator where an adverse outcome could reasonably be expected
to adversely impact upon the performance of its obligations under this
agreement; and

 

(e)         it
has no immunity from the jurisdiction of a court or from legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution, execution or otherwise).

 

18.2        Specific
warranty re Licensed Patents

 

Autogen warrants to Kyokuto that:

 

(a)         as
at the date of this agreement it has disclosed to Kyokuto details of all prior
art sighted by Autogen by way of international search in relation to the
Licensed Patents (which is also listed in Part B of Schedule 1);
and

 

(b)         except
as disclosed in Part B of Schedule 1, as at the date of this
agreement it is unaware of any other patent which has not been disclosed to
Kyokuto and which may be infringed by Kyokuto exercising the Licensed Patents
in accordance with the terms of this agreement.

 

18.3        Warranties
by Kyokuto

 

Kyokuto warrants to Autogen that:

 

(a)         it
will obtain or has obtained from its Representatives who have access to the
Confidential Information written obligations to treat such information as
confidential strictly in accordance with this agreement.

 

(b)         that
it has ‘made its own enquiries into the validity and enforceability of the
Licensed Patents and satisfied itself that the Licensed Patents and the
Confidential Information do not infringe the intellectual property rights of
any third party, and that, save as provided in clause 20.2,
it assumes any and all risk in relation to such infringement.

 

(c)         it
will ensure that the storage and Marketing of the Product does not breach any
law, statute, rule or regulation relating to the Product.

 

18.4        Head
Licences

 

Kyokuto acknowledges that various of the Rights are licensed by Autogen
from the Head Licensors pursuant to various licences (the “Head Licences”).
Autogen acknowledges that the only express basis in the Head Licences on which
the Head Licensors can terminate the Head Licences is for non-payment of funds
by Autogen. Autogen agrees to use reasonable endeavours to maintain the Head
Licences and not breach them or otherwise cause them to terminate. Kyokuto
specifically agrees that this agreement will terminate in the event that any of
the Head Licences are terminated by the relevant Head

 

30

 

Licensor.  Provided that the
termination of any Head Licence is not due to or results directly or indirectly
from any act or omission of Kyokuto, Autogen agrees to indemnify Kyokuto
against any direct loss or damage it suffers as a result of the termination of
this agreement, but limited in any event to the total of all royalties actually
received by Autogen from Kyokuto under this agreement. In no circumstances will
Autogen be liable for any Indirect or consequential 1osSeS Suffered by Kyokuto
in such circumstances.

 

19.          PROTECTION
OF LICENSED PATENTS

 

19.1        Maintenance
of the Licensed Patents

 

Autogen shall be responsible for the cost of preparing filing
prosecuting and maintaining the Licensed Patents but nothing expressed or
implied herein shall necessarily obligate Autogen to institute legal
proceedings to protect same.

 

19.2        Parties to
confer

 

If during the Term a party becomes aware of circumstances amounting to
an infringement of or challenge to the Licensed Patents in the Territory, that
party shall promptly notify the other party, whereafter the parties shall
confer together in good faith to determine how best to terminate the
infringement or challenge.

 

19.3        Shared
proceedings

 

If Kyokuto and Autogen mutually agree, legal proceedings in the
Territory may be instituted on the basis that all costs and expenses thereof
will be borne and shared equally between Kyokuto and Autogen (proceedings
instituted on such a basis being herein called “shared proceedings”) in which
case:

 

(a)         whilst
shared proceedings are being diligently prosecuted Kyokuto shall continue to
make royalty reports to Autogen and shall continue to pay royalties on sales of
Products in such country on the same basis as applied prior to the shared
proceedings;

 

(b)         if
as a result of shared proceedings a Final Judgment is obtained holding all
applicable claims of Licensed Patents being infringed invalid, or holding
adversely as to inventorship of such Licensed Patents, or construing all
applicable claims of such Licensed Patents so as not to apply to Products, such
that clause 3.2(a) no longer applies,
Kyokuto is still obliged to make further royalty payments to Autogen in respect
of Products sold after the date of such Final Judgment in accordance with clause 3.2(b);

 

(c)         all
costs and expenses of and incidental to shared proceedings will be borne by
Kyokuto as to one-half thereof and by Autogen as to the other half thereof
unless and to the extent collected from the party against whom shared
proceedings were brought;

 

(d)         any
damages or other moneys recovered in any shared proceedings will be shared
equally as to one-half thereof by Kyokuto and as to the other half thereof by
Autogen; and

 

31

 

(e)         shared
proceedings may be terminated, compromised or otherwise settled upon such terms
as may be agreed by Kyokuto and Autogen, including if necessary, the granting
of a non-exclusive licence to a third party, notwithstanding that the Kyokuto
licence may otherwise be exclusive (subject to the other provisions of this
agreement). Kyokuto will not have any responsibility or obligation to initiate
any legal proceedings anywhere other than in the Territory.

 

19.4        Autogen’s
right to act

 

If there is no mutual agreement within one month after the date of the
notice referred to in clause  19.2 to institute shared proceedings under clause 19.3 then Autogen shall:

 

(a)         within
3 months after the date of such notice, either to terminate such infringement
or challenge; or

 

(b)         commence
and diligently prosecute proceedings to terminate such infringement or
challenge.

 

19.5        Kyokuto’s
obligations if Autogen acts

 

Whilst Autogen is complying with clause  19.4:

 

(a)         Kyokuto
must continue to make royalty reports calculated in accordance with clause 3.2(a) pursuant to clause 5,
but is only obliged to make royalty payments in accordance with clause  3.2(b) (the
balance being withheld by Kyokuto) (other than in respect to sales made prior
to the date of first infringement which otherwise attracted a full royalty
obligation under clause  3 which
has not previously been satisfied) until the successful termination of such
proceedings or cessation of the infringement or challenge occurs;

 

(b)         if
Autogen in proceedings instituted by it under clause 19.4
receives a Final Judgment holding all applicable claims of Licensed Patents
being infringed invalid, or holding adversely as to inventorship of such
Licensed Patents, or construing all applicable claims of such Licensed Patents
so as not to apply to Products for which royalties have been accrued by
Kyokuto, then all moneys withheld under clause 19.5(a) may
be retained by Kyokuto for its own benefit absolutely otherwise Kyokuto must
pay the same to Autogen forthwith upon receipt of the Final Judgment;

 

(c)         all
costs and expenses of any proceedings instituted by Autogen under clause 19.4 will be borne by Autogen unless collected from
the party against whom the proceedings are brought;

 

(d)         any
damages or other moneys recovered in any such proceedings will be retained by
Autogen; and

 

(e)         Autogen
shall have the right to terminate compromise or otherwise settle any
proceedings it may elect to bring under clause 19.4
upon such terms as it deems appropriate, including the right to grant a
non-exclusive licence under Licensed Patents to any third party.

 

32

 

19.6        Kyokuto’s
right to act

 

If at any time Autogen is not complying with clause 19.4,
Kyokuto may give a notice in writing to Autogen that it intends to take its own
proceedings at the expiration of the period of one month. If in that period
Autogen does not comply with clause 19.4
Kyokuto shall have the right, but not the obligation, to at anytime within the
next 3 months bring proceedings as it may see fit to terminate the infringement
or challenge or to recover damages resulting therefrom, or both.

 

19.7        Kyokuto’s
proceedings

 

Upon the commencement of proceedings by Kyokuto pursuant to clause 19.6 and during the pendency thereof:

 

(a)         Kyokuto
shall continue to make royalty reports to Autogen calculated in accordance with
clause 3.2(a) pursuant to clause 5.1 but is only obliged to make royalty payments in
accordance with clause 3.2(b) (the balance
being withheld by Kyokuto) (other than in respect to sales made prior to the
date of first infringement which otherwise attracted a royalty obligation which
has not previously been satisfied) until the successful termination of such
proceedings or cessation of the infringement or challenge occurs;

 

(b)         Autogen
shall furnish to Kyokuto, upon the request of Kyokuto, all evidence and
information in its possession and control pertaining to any such proceedings
and Autogen shall join therein on a non-controlling basis to the extent
requested by Kyokuto. If the furnishing of evidence and information as
aforesaid is likely to involve Autogen in any material expense Kyokuto will
enter into negotiations in good faith with a view to reaching a reasonable
agreement as to the extent to which Autogen should be reimbursed therefor;

 

(c)         If
Kyokuto receives a Final Judgment holding all applicable claims of Licensed
Patents being infringed invalid, or holding adversely as to inventorship of
such Licensed Patents or construing all applicable claims of such Licensed
Patents so as not to apply to Products for which royalties have been accrued by
Kyokuto, then all moneys withheld under clause  19.7(a) may be retained by Kyokuto for its own benefit
absolutely otherwise Kyokuto must pay the same to Autogen forthwith upon
receipt of Final Judgment (less any amounts Kyokuto is entitled to deduct under
clause 19.7(d));

 

(d)         upon
any successful completion such proceedings, or upon cessation of such
infringement or challenge, the amounts of any judgment or settlement of past infringement
or challenge actually paid to Kyokuto shall be firstly applied to reimburse
Kyokuto for its costs and expenses in prosecuting such proceedings and the
balance, if any, shall be retained by Kyokuto;

 

(e)         if
the amount of any such judgment or settlement is insufficient to cover Kyokuto’s
costs and expenses in prosecuting such proceedings, then the costs and expenses
of Kyokuto, or the remainder thereof (as the case may be) will be reimbursed to
Kyokuto out of payments withheld pursuant to clause 19.7(a) and,
if necessary, out of any and all future royalty payments which would otherwise
become payable by Kyokuto provided that unlike shared proceedings under clause 19.3 Autogen will not be personally liable to
reimburse Kyokuto

 

33

 

for any of the costs and expenses incurred by Kyokuto as a result of
proceedings taken by Kyokuto under clause 19.6
except out of royalty payments as aforesaid and then only out of royalty
payments accrued but not paid or out of future royalty payments and not in any
event out of royalty payments previously actually made to Autogen.

 

20.          INFRINGEMENT
OF OTHERS RIGHTS

 

20.1        Notification
of action

 

In the event that legal action is threatened or commenced against
Kyokuto arising out of Kyokuto’s use of the Rights, Kyokuto must not make any
admissions or enter into any substantive steps in connection therewith but must
promptly notify Autogen.

 

20.2        Autogen
action

 

If such legal action against Kyokuto arises out of the use of the Rights
in accordance with the terms and conditions agreed in relation to the Products,
then Autogen shall have the right and obligation to defend and/or assist in the
defence of such litigation and shall bear the costs and expenses of such
defence.

 

Autogen shall attempt to settle, defend or compromise such claim on
terms acceptable to it and in particular on the basis that it shares with or
pays to the relevant claimant not more than fifty percent of the royalties to
which Autogen may be entitled under this agreement. If Autogen is unable to
secure a settlement or compromise of the third party claim on that basis, then
unless a mutually satisfactory arrangement can be reached between Autogen,
Kyokuto and the third party, Autogen may terminate this agreement by notice to
Kyokuto.

 

20.3        Kyokuto
action

 

If such legal action against Kyokuto relates to use of the Rights
outside the scope of the Licence granted to Kyokuto under this agreement or
otherwise in breach of this agreement, Kyokuto is solely responsible for the
defence of such action at its own cost. Autogen will, if requested, comply with
any reasonable request for assistance made by Kyokuto subject to Kyokuto
reimbursing Autogen for any costs and expenses incurred by Autogen”.

 

21.          OTHER
LICENCES

 

21.1        Special
definitions

 

In this clause 21, the following
expressions have the following meanings:

 

“Base Royalty Rate”
means the rate of royalty that would otherwise be payable by Kyokuto to Autogen
but for the provisions of this clause 21.

 

“Necessary Licence”
means a licence of Other Rights which is required by Kyokuto in order for it to
Exploit a Product containing GAD (but not to manufacture GAD) as

 

34

 

contemplated by this agreement, but which would not be required if such
Product did not contain GAD, and for the sake of clarity:

 

(i)              excludes:

 

(A)          the
Rights; and

 

(B)         any
diagnostic technology, or technology required to manufacture, use or sell a
diagnostic; and

 

(ii)             “required”,
when used in above context, means that if Kyokuto was to Exploit a Product
containing GAD (but not to manufacture GAD) as contemplated by this agreement
without such licence it would infringe the valid patent of a third party.

 

“Other Rights” means
any proprietary or personal right arising from intellectual activity in the
business, industrial, scientific or artistic fields. It includes a copyright,
design (whether registered or unregistered), trademark (whether registered or
unregistered), patent or patent application or invention, circuit layout,
knowhow or confidential information.

 

21.2        Parties
intention

 

The intention of the parties is that, recognising that the use of GAD
in a Product may require the use by Kyokuto of Other Rights, that Autogen will
be obliged, within limits, to deal with the holders of those Other Rights, with
a view to procuring for Kyokuto and its Sub-licensees, a licence in respect of
those Other Rights to enable them to use GAD in Products. The obligations of
Autogen in this regard are not to be absolute but rather to use all reasonable
endeavours to procure such licences within the limits of this clause, and on
the basis, that it is expected that the ongoing “cost” of such licences are
borne by Autogen out of its royalty share as otherwise provided by this agreement.

 

21.3        Extra Rights

 

In the event that it is determined that there is a Necessary Licence,
then Autogen will be solely responsible for endeavouring to procure the
Necessary Licence, either:

 

(a)         by
way of securing a licence of the relevant Other Rights in accordance with clause 21.4, in which case those Other Rights will be added
to the Rights and accordingly incorporated in this agreement; or

 

(b)         by
procuring of the grant in favour of Kyokuto, on terms reasonably acceptable to
Kyokuto of a licence in respect of the relevant
Other Rights in accordance with clause 21.5,
whereupon there will a reduction in the Base Royalty Rate in accordance with clause 21.6.

 

21.4        Licence by
Autogen

 

Autogen may satisfy its obligations under this clause 21
by procuring the grant in its favour of a licence in respect of the Other
Rights, which enables those Other Rights to be included in the Licence, with
the consequence that the use of those Other Rights by Kyokuto does not infringe
the valid patent rights of the relevant third party. In such a case Autogen is
solely responsible for the payment to the relevant third party of any royalty
due to that third party in respect of the use of the Other Rights in respect of
Products.

 

35

 

21.5        Licence to
Kyokuto

 

Autogen may satisfy its obligations under this clause 21
by procuring the grant in favour of Kyokuto directly of a licence from the
owner of the Other Rights, which enables Kyokuto to use GAD in the Products in
the Territory. Such licence may be on terms generally similar to those
contained in this agreement or on such other usual terms as may be proposed.
Kyokuto agrees that it will assist in this process and enter into any relevant
negotiations in good faith. If the owner of the Other Rights seeks any up front
payment then that will be the responsibility of Autogen.

 

21.6        Royalty
reduction if Kyokuto takes licence

 

In the event that a licence is procured in favour of Kyokuto in
accordance with clause 21.5, then the royalty rate
payable to Autogen under this agreement, will, subject to clause 21.7,
be reduced by the amount of the royalty payable to the owner of the Other
Rights. If by reason of the operation of clause 21.7,
the full amount of such royalty is not reflected in a comparable reduction in
the royalty payable to Autogen, then Kyokuto is responsible for such excess.

 

21.7        Limit on
royalty reduction

 

Autogen will not be obliged to procure for itself or Kyokuto a licence
from a third party under  clause  21.3, if as a
result of doing so the Net Royalty Rate is less than half of the Base Royalty
Rate. However in such circumstances, Autogen will not immediately terminate
this agreement but will discuss with Kyokuto as to how best the situation can
be resolved in the light of the then state of Kyokuto’s business using the
Product.

 

NRR = BRR - ALR - KLR

 

Where:

 

NRR is the Net Royalty Rate

 

BRR is the Base Royalty Rate

 

ALR is the rate of royalty payable to a third party in respect of sales
of Products under a licence procured by Autogen under clause 21.4.

 

KLR is the rate of the additional royalty payable by Kyokuto to a third
party in respect of Products under a licence procured by Autogen under clause 21.5.

 

22.          CONSTRUCTION
OF PATENTS

 

If in any proceedings in which the validity infringement or priority of
any claim of any patent or patent application included in Licensed Patents is
in issue a Final Judgment is obtained the construction placed upon any such
claim by such Final Judgment shall be thereafter followed not only as to such
claim but as to all claims to which such construction applies with respect to
acts occurring thereafter.

 

36

 

23.          MANUFACTURE
AND SUPPLY OF GAD

 

In the event that Autogen is going to supply Kyokuto with GAD, the
parties will enter into a further formal arrangement for the supply of GAD,
such arrangement to be based around the terms contained in Schedule 3.

 

Autogen acknowledges that Kyokuto is initially seeking to source
supplies of GAD from the Oriental Yeast Co. Ltd. Autogen consents to the
manufacture of GAD by Oriental Yeast Co. Ltd. solely for use by Kyokuto under
this agreement. Kyokuto agrees to facilitate a brief but formal agreement
between Autogen and Oriental Yeast Co. Ltd. to
document such manufacture on a royalty free basis.

 

24.          FORCE
MAJEURE

 

24.1        Party not
liable

 

Where a party is required under this agreement to perform an obligation
or do any act or thing by a designated time or date (other than an obligation
to make payment) (“Obligation”),
the party shall not be liable for any delay in performing or for failure to
perform an Obligation where the delay or failure arises from Force Majeure and
that party has complied with this clause.

 

24.2        Notice of
Force Majeure

 

A party who claims Force Majeure shall:

 

(a)         give
the other party prompt notice of the Force Majeure with reasonably full
particulars and an estimate of the extent and duration of its delay in
performance, or inability to perform; and

 

(b)         use
all possible diligence to remove the Force Majeure as quickly as possible
provided that this shall not oblige the party to settle on terms unsatisfactory
to that party any strike, lockout or other labour difficulty, or any
investigation or proceeding by any governmental authority or any litigation by
any third party.

 

24.3        Termination
in case of Force Majeure

 

If the delay continues beyond 10 Business Days, after the notice given
under clause 24.2, the parties shall meet to
discuss in good faith a mutually satisfactory resolution of the problem and, if
unable to achieve such a resolution within a further 10 Business Days, either
party may elect to terminate this agreement by 5 Business Days prior written
notice to the other.

 

25.          NOTICES

 

25.1        Form of
Notice

 

Any notice, approval, consent or other communication (“notice”) from
one party to another (“Recipient”) must be in writing and be signed by a person
duly authorised by the person giving the notice.

 

37

 

25.2        Manner of
Service

 

A notice must be served by:

 

(a)         leaving
it at the Recipient’s address;

 

(b)         sending
it by ordinary pre-paid post (airmail if being sent from or to a place outside
of Australia) to the Recipient’s address; or

 

(c)         sending
it by facsimile to the facsimile number of the Recipient.

 

25.3        Address for
Service

 

Until other details are specified by a Party as its address or
facsimile number for service the following shall apply:

 

Autogen

 

	
  Address :

  	
  210 Kings Way, South Melbourne 3205, Australia

  
	
   

  	
   

  
	
  Facsimile :

  	
  613 9234 1198

  
	
   

  	
   

  
	
  Attention :

  	
  Company Secretary

  
	
   

  	
   

  
	
  Kyokuto

  	
   

  
	
   

  	
   

  
	
  Address :

  	
  3333 - 26 Kamitezuna, Takahagi City. 318, Japan

  
	
   

  	
   

  
	
  Facsimile :

  	
  81 293 23 7324

  
	
   

  	
   

  
	
  Attention :

  	
  General Manager, Takahagi Works

  

 

25.4        Time of
Service

 

A letter or facsimile shall be taken to be served:

 

(a)         in
the case of a delivered letter, on the day of delivery, unless delivery is made
on a non Business Day or after 4:30 p.m. on a Business Day, in which case
it shall be taken to be served on the next Business Day;

 

(b)         in
the case of a posted letter, on the third (or seventh in the case of airmail)
Business Day after posting; and

 

(c)         in
the case of a facsimile, on receipt by the party giving the notice of a
transmission confirmation report, unless within one Business Day of receipt the
Recipient has informed the party giving the notice that the transmission was
incomplete or garbled, provided that in any case if transmission is completed
after 4:30 p.m. (local time in the place of receipt) or is received on a
non Business Day, the notice shall be taken to be served on the next Business
Day.

 

38

 

26.          MISCELLANEOUS

 

26.1        Time of
essence

 

Time will be of the essence of the obligations of each party to each
other under this agreement.

 

26.2        Severance

 

If any provision shall be held invalid or unenforceable, in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall only
affect such provision or part thereof in such jurisdiction, and shall not in
any manner affect the provision in this agreement in any other jurisdiction. To
the extent legally permissible an arrangement which reflects the original
intent of the parties shall be substituted for such invalid or unenforceable
provision.

 

26.3        Waiver

 

The failure, delay, relaxation or indulgence by any party in exercising
any power or right given to that party under this agreement will not operate as
a waiver of that power or right, nor will any single exercise of a power or
right preclude any other or further exercise of it or the exercise of any other
power or right under this agreement. A power or right may only be waived in
writing, signed by the party to be bound by the waiver.

 

26.4        Relationship
of parties

 

Nothing contained in this agreement shall be construed so as to place
any party in the relationship of principal, employee, agent, partner, joint
venturer or legal representative of any other party. The parties expressly
agree and acknowledge that each of the parties is an independent contracting
party and does not, unless expressly provided, have the authority or power for
or on behalf of any other party to enter into any contract, to incur debts, to
accept money, to assume any obligations or to make any warranties or
representations.

 

26.5        Injunctive
relief

 

If there is any conduct or threatened conduct which is or may be a
breach of this agreement, Kyokuto acknowledges that damages may be inadequate
compensation for such a breach and that Autogen shall be entitled to apply to
any court of competent jurisdiction for interim or permanent injunctive relief
or both restraining Kyokuto from committing any breach or threatened breach of
this agreement without showing or proving any actual damage sustained by
Autogen. Such rights and remedies will be cumulative and in addition to any
other rights or remedies which Autogen may be entitled to at law or in equity.

 

26.6        Proper law

 

This agreement shall be construed in accordance with and governed by
the laws of Victoria, Australia and its form, execution, validity, construction
and effect shall be determined in accordance with the laws of Victoria. The
parties agree that any dispute arising out of this Agreement shall be resolved
by arbitration pursuant to the Law and procedures laid down by the
International Chamber of Commerce. The arbitration shall

 

39

 

take place at the address of the party that does not commence the
arbitration, or at some appropriate adjacent location.

 

26.7        Rule of
construction

 

No rule of construction applies to this agreement to the
disadvantage of a party because that party was responsible for the preparation
of this agreement or any part of it.

 

26.8        Variation

 

Any modification, alteration, change or variation of any term or
condition of this agreement must be in writing, executed by all parties.

 

26.9        Assignment

 

(a)         This
agreement is personal to Kyokuto and Kyokuto shall not be entitled to assign in
whole or in part without the prior written consent of Autogen.

 

(b)         Autogen
may assign both the benefit and the burden of this agreement to a third party,
provided such assignment also assigns to such third party the relevant
intellectual property rights necessary for the property performance of this
agreement. Autogen may assign, mortgage or charge its royalty entitlement to
any party without restriction. None of the aforesaid assignments shall be
binding on Kyokuto until such assignment is notified to Kyokuto.

 

26.10      Further
documents

 

Each party agrees that it will forthwith upon the request of the other
party execute and deliver all such instruments and agreements and will take all
such other actions as the other party may reasonably request from time to time
in order to give effect to the provisions and purposes of this agreement.

 

26.11      Costs and
Taxes

 

Each party must pay its own costs and expenses in relation to the
negotiation, preparation, execution, delivery, stamping and registration,
completion, variation and discharge of this agreement and Kyokuto must pay any
Tax in respect of the execution, delivery, performance, release, discharge,
amendment, enforcement or attempted enforcement or otherwise of any of the
following:

 

(a)         this
agreement;

 

(b)         any
agreement or document entered into or signed under this agreement;

 

any transaction contemplated under this agreement;
and

 

(d)         any
payment made or received in respect of this agreement.

 

26.12      Payment

 

Any payment due under this agreement may be made or tendered by a
cheque drawn by a bank as defined by the Banking Act 1959 (C’th).

 

40

 

26.13      Interest
on overdue amounts

 

If any amount due under this agreement is not paid when due, then the
party obliged to make payment must pay to the other party interest at the Base
Rate on the amount due and payable, accruing from day to day and to be computed
from the date for payment of the amount until payment of the amount in full.

 

26.14      No set-off

 

Kyokuto is not entitled to set-off against any payments required to be
made by it under this agreement any amounts owed to it by Autogen, or the
amount of any claims by it against Autogen.

 

26.15      Withholding
taxes

 

If Kyokuto is legally obliged to deduct or withhold any tax from any
payment, in particular any royalty payment, to be made to Autogen hereunder,
then if such payment is made from Japan for tax purposes Kyokuto shall on
request provide Autogen with receipts and any other evidence from relevant
revenue authorities which may be required by Autogen for its own tax affairs,
and in any other case Kyokuto shall be obliged to gross up such payment so that
the net payment actually received by Autogen equals the amount which Kyokuto is
prima facie required to pay.

 

26.16      Counterparts

 

This agreement may be executed in counterparts, and by the parties on
separate or the same counterparts, each of which shall be deemed an original,
but all of which shall constitute one and the same instrument.

 

26.17      Registration
of agreement

 

If this agreement or any associated transaction is required by the law
of any country to be either approved or registered in any country or with any
governmental agency, Kyokuto shall be responsible for obtaining such approval
or registration including without limiting the generality of the foregoing,
causing this agreement to be stamped, recorded and registered at its cost in
such country. Autogen agrees to co-operate in any such application or
registration procedure. Kyokuto shall furnish proof of compliance with the
foregoing to Autogen when and if Autogen so requires.

 

26.18      Not
obliged to act contrary to law

 

No party shall be obliged to carry out or perform any of the terms of
this agreement where doing so would constitute a violation of any treaty, law,
code or regulation of any governmental authority whether local, national or
supranational. In any event the other terms of this agreement shall
nevertheless continue and the parties must use all reasonable endeavours to
re-negotiate and amend this agreement so that the performance of this agreement
as so amended will not involve any such violation.

 

41

 

26.19      Statutory
rights not limited

 

The powers, remedies and rights conferred upon the parties by or under
any statute shall (except to the extent inconsistent with the terms and
provisions expressed in this agreement) be in addition to the powers, remedies
and rights conferred by this agreement.

 

26.20      Consents

 

Unless this agreement provides otherwise and to the extent permitted by
law, a party may, in its absolute discretion, conditionally or unconditionally
give or withhold any approval or consent permitted or required to be given by
it pursuant to this agreement.

 

26.21      Entire
agreement

 

This agreement constitutes the entire agreement between the parties in
relation to the subject matter of this agreement. Any prior arrangements,
agreements, representations or undertakings are superseded and, except as
expressly provided, each party acknowledges that it has not relied on any
arrangement, agreement, representation or understanding which is not expressly
set out in this agreement.

 

26.22      Waiver of
certain rights

 

Kyokuto agrees not to make and waives any right it may have to make any
claim against Autogen or its Representatives under section 52 of the Trade Practices Act 1974, or the corresponding provision of
any state or territory enactment, for any statement or representation made
prior to entering into this agreement.

 

42

 

SCHEDULE 1

 

PART A

 

Licensed Patents

 

(Referred to in clause 1.1,
definition of “Licensed Patents”)

 

	
  Document No.

  	
   

  	
  Inventors

  	
   

  	
  Applicant

  	
   

  	
  Earliest
  priority date

  	
   

  	
  Principal
  development

  
	
  1.

  	
   

  	
  *WO 94/18568

  	
   

  	
  Mackay, Rowley, Zimmet

  	
   

  	
  Monash University

  	
   

  	
  9-Feb-93

  	
   

  	
  Dimers and obligomers of
  GAD required to create autoantigenic reactivity with IDDM sera

  
	
  2.

  	
   

  	
  *PCT/AU98/00025

  	
   

  	
  Mackay, Rowley, Zimmet

  	
   

  	
  Monash University

  	
   

  	
  21-Jan-97

  	
   

  	
  Expression in yeast of
  antigenically active, recombinant hybrid glutamic acid decarboxylase

  

 

*Licensed Patent is the Japanese patent or patent application
corresponding to these Australian patent applications.

 

PART B

 

Disclosure re Licensed Patents

 

(Referred to in clause 18.2,
Specific Warranty re Licensed Patents)

 

The following is a list of patents which Autogen have disclosed to
Kyokuto as details of all prior art sighted by Autogen by way of international
search in elation to the Licensed Patents.

 

	
  Patent

  	
   

  	
  Japanese
  Application No.

  	
   

  	
  Inventors

  	
   

  	
  Applicant

  	
   

  	
  Earliest
  priorty date

  	
   

  	
  Principal
  development

  
	
  1.

  	
   

  	
  WO 90/07117

  	
   

  	
  —

  	
   

  	
  Atkinson, Maclaren

  	
   

  	
  University of Florida

  	
   

  	
  23-Dec-88

  	
   

  	
  64 K Antigens; also
  contemplated the detection of autoantibodies to 64K serine kinase

  
													

 

i

 

	
  Patent

  	
   

  	
  Japanese
  Application No.

  	
   

  	
  Inventors

  	
   

  	
  Applicant

  	
   

  	
  Earliest
  priority date

  	
   

  	
  Principal
  development

  
	
  2.

  	
   

  	
  WO 92/03733

  	
   

  	
  9227408, 1515651

  	
   

  	
  Atkinson, Maclaren

  	
   

  	
  University of Florida

  	
   

  	
  17-Aug-90

  	
   

  	
  64K antigen AD; combination of
  GAD protein + ICA + ISA

  
	
  3.

  	
   

  	
  WO 92/04632

  	
   

  	
  91516703, 94523340

  	
   

  	
  Baekkeskov et al

  	
   

  	
  Regents of the University of
  California and Yale University

  	
   

  	
  7-Sep-90

  	
   

  	
  Low mwt GAD and high mwt GAD
  isoforms

  
	
  4.

  	
   

  	
  EP 519469

  	
   

  	
  92158195, 95509191

  	
   

  	
  —

  	
   

  	
  The Regents of the
  University of California

  	
   

  	
  21-Sep-90

  	
   

  	
  Polypeptides from GAD
  with the formula X-Pro-Glu+Val-Lys-Y–Lys-Z

  
	
  5.

  	
   

  	
  WO 92/05446

  	
   

  	
  91518259

  	
   

  	
  Tobin, Erlanger, Kaufman

  	
   

  	
  The Regents of the
  University of California

  	
   

  	
  21-Sep-90

  	
   

  	
  GAD65 cDNA
  recombinant technology

  
	
  6.

  	
   

  	
  EP 499176 (Abstract)

  	
   

  	
  9227942

  	
   

  	
  —

  	
   

  	
  Boehringer Mannheim GMBH

  	
   

  	
  14-Feb-91

  	
   

  	
  Monoclonal IgG
  antibodies against islet cell; use in production of GAD

  
	
  7.

  	
   

  	
  WO 92/14485

  	
   

  	
  92504792

  	
   

  	
  Harrison et al

  	
   

  	
  Amrad Corporation Limited

  	
   

  	
  22-Feb-91

  	
   

  	
  Nucleic acid to GAD67 isoform

  
	
  8.

  	
   

  	
  WO 92/19972

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  Novo Nordisk A/S

  	
   

  	
  3-May-91

  	
   

  	
  IMR GAD = 67kD GAD

  
	
  9.

  	
   

  	
  WO 92/20811

  	
   

  	
  93500208

  	
   

  	
  Lernmark et al

  	
   

  	
  University of Washington and
  Zymogenetics Inc.

  	
   

  	
  15-May-91

  	
   

  	
  Purified GAD + construct

  
	
  10.

  	
   

  	
  WO 92/21979

  	
   

  	
  93500663

  	
   

  	
  —

  	
   

  	
  Board of Regent, The
  University of Texas System

  	
   

  	
  3-Jun-91

  	
   

  	
  Cells with GAD epitope

  
	
  11.

  	
   

  	
  WO 93/13420 (Abstract)

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  Joslin, Diabetes Center

  	
   

  	
  26-Dec-91

  	
   

  	
  Islet cell AB-restricted
  rICA-GAD absorbed–non restricted nrICA-GAD absorbed

  
	
  12.

  	
   

  	
  US Patent No.5.200318

  	
   

  	
  93109139

  	
   

  	
  Rabin, Knowles

  	
   

  	
  Miles Inc.

  	
   

  	
  13-May-92

  	
   

  	
  GAD/ICA512 or
  UAD/ICA512/ICA 12 panel

  
	
  13.

  	
   

  	
  JP06094708 (Abstract)

  	
   

  	
  6094708

  	
   

  	
  —

  	
   

  	
  NKK Corporation

  	
   

  	
  9-Sep-92

  	
   

  	
  GAD + carrier

  
	
  14.

  	
   

  	
  Wo 94/10297)

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  Elias Entwicklungslabor
  Immunoassays

  	
   

  	
  4-Nov-92

  	
   

  	
  GAD-1 and GAD-2

  

 

ii

 

	
  Patent

  	
   

  	
  Japanese
  Application No.

  	
   

  	
  Inventors

  	
   

  	
  Applicant

  	
   

  	
  Earliest
  priority date

  	
   

  	
  Principal
  development

  
	
   

  	
   

  	
  (Abstract)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  GMB

  	
   

  	
   

  	
   

  	
  Immunoassay

  
	
  15.

  	
   

  	
  WO94/12529

  (Abstract)

  	
   

  	
  94513497

  	
   

  	
  —

  	
   

  	
  The Regents of the University
  of California

  	
   

  	
  3-Dec-92

  	
   

  	
  Solid support + fusion
  polypeptides with GAD 65

  
	
  16.

  	
   

  	
  US Patent No. 5,547,847

  	
   

  	
  —

  	
   

  	
  Hagopian et al

  	
   

  	
  Unversity of Washington

  	
   

  	
  7-Sep-93

  	
   

  	
  Assay for anti-GAD provides method
  for aiding diagnosis and classification and predicting clinical course of
  IDDM

  

 

iii

 

SCHEDULE 2

 

Minimum Royalty

 

(Referred to in clause 9.1))

 

	
  Year 1

  	
   

  	
  Nil

  
	
   

  	
   

  	
   

  
	
  Year 2

  	
   

  	
  [*]

  
	
   

  	
   

  	
   

  
	
  Year 3 and after

  	
   

  	
  [*]

  

 

 

SCHEDULE 3

 

Manufacturing Arrangements

 

MANUFACTURE AND SUPPLY OF GAD

 

“Forecasting and Ordering Procedures” means
the procedures attached hereto as Annexure “A”
concerning, inter alia:

 

(i)            the
provision by Kyokuto or its authorised agent to Autogen of written forecasts of
its requirements of GAD;

 

(ii)           the
acceptance or modification of such forecasts;

 

(iii)          the
submission by Kyokuto or its authorised agent to Autogen of firm purchase
orders for GAD; and

 

(iv)          the
progression, delivery and execution of such orders,

 

as the same may be amended or modified from time to time by mutual
agreement between Kyokuto and Autogen.

 

“GAD Specifications” means the specifications
for the GAD as set out in Annexure “B”,
as varied from time to time by Autogen in accordance with this agreement.

 

l.              Purchase and Sale

 

During the Term, and subject to the terms and conditions set forth
herein, Autogen hereby agrees to Manufacture or have Manufactured and sell to
Kyokuto, and Kyokuto hereby agrees to purchase from Autogen all of Kyokuto’s
requirements of GAD for use by Kyokuto solely in the manufacture of Products
for sale in the Territory in accordance with this agreement.

 

2.             Forecasting and
Ordering Procedures.

 

Autogen and Kyokuto undertake to comply with their respective
obligations set out in the Forecasting and Ordering Procedures.

 

3.             Prices

 

(a)           During
the initial year of the Term Autogen will sell, and Kyokuto will purchase, GAD
at the price set forth in Annexure “C”.
Thereafter, at any time during the Term, Autogen may increase or decrease the
price to be paid by Kyokuto for GAD upon 30 days prior written notice. All
Taxes as may be imposed from time to time on such price and the cost of
insurance and transport will be added to the purchase price and paid by Kyokuto.

 

(b)           Kyokuto
may give Autogen notice of its desire to renegotiate the price for GAD.

 

 

4.             Exclusion of standard
forms

 

In ordering and delivering GAD, Autogen, Kyokuto or its authorised
agent, as the case may be, may employ their respective standard forms, but
nothing in those forms shall be construed to modify, amend or supplement the
terms of this agreement and, in the case of any conflict herewith, the terms of
this agreement shall prevail.

 

5.             Delivery

 

(a)           Autogen
shall deliver or cause to be delivered in accordance with the Forecasting and
Ordering Procedures GAD supplied hereunder to the Delivery Point.

 

(b)           Autogen
will, at Kyokuto’s expense, insure or procure the insurance of, the GAD while
in transit to the Delivery Point against such customary risks and for such
amounts as may be agreed from time to time in writing between Autogen and
Kyokuto.

 

(c)           All
shipments of Product shall be F.O.B. manufacturing site, freight collect.

 

(d)           Title
to, and risk of loss with respect to, the GAD shall pass to Kyokuto when the
GAD is placed in the possession of the carrier at the Manufacturing site.

 

(e)           Autogen
must obtain at its own risk and cost any licence or other official
authorisation and carry out all customs formalities necessary for the
exportation of GAD from its country of origin into the Territory.

 

(f)            Kyokuto
shall obtain or caused to be obtained through its authorised agent at its own
risk and cost any licence or other official authorisation and carry out all
customs formalities necessary for the importation of GAD into the Territory.

 

6.             Payment

 

Payment in full for GAD purchased hereunder shall be made by Kyokuto to
Autogen in Australian Dollars, or such other currency as may be agreed at the
time of invoice, and shall become due and payable within 60 days of the date of
invoice or such longer period as the parties may mutually agree in writing.
Products shall be invoiced on or after shipment. Payment for each shipment of
GAD shall be made by wire transfer to an account provided in writing by Autogen
or as otherwise reasonably specified by Autogen. Payment for shipments of GAD
by Autogen to Kyokuto made prior to the date of execution of this agreement
shall be due and payable in full within 10 days of execution of this agreement.

 

7.             Quality

 

(a)           Autogen
covenants that all the Products delivered hereunder shall be Manufactured in
accordance with, and shall comply with, and conform to, the GAD Specifications.

 

(b)           Kyokuto
undertakes or shall cause its authorised agent to undertake that each shipment of
GAD delivered by Autogen hereunder shall be subject to visual inspection by or
on behalf of Kyokuto and that, in the event that such inspection shall reveal
or Kyokuto otherwise discovers that the said shipment (or any part thereof)
does not comply with the GAD Specifications, Kyokuto or its authorised agent
shall notify Autogen accordingly, including the basis for such non-

 

2

 

compliance; provided that Kyokuto or its authorised agent shall be
required to make the notification aforesaid within 30 days of the date of
receipt of the said shipment or 30 days of discovery in the event that
non-compliance as aforesaid could not reasonably have been discovered by such
visual inspection.

 

(c)           In
the event that Autogen receives notification from Kyokuto or its authorised
agent pursuant to clause 7(b) that any shipment of GAD (or any part
thereof) supplied by Autogen to Kyokuto does not comply with the GAD
Specifications, Autogen shall (if such notification is accepted by Autogen or
is agreed or confirmed pursuant to clause 7(d)) request Kyokuto or its
authorised agent either to arrange for the said shipment (or the defective part
thereof) to be returned to Autogen or (if Autogen shall so direct) to the
company that has manufactured the said shipment at Autogen’s expense or to
destroy the said shipment (or any part thereof) at Autogen’s expense in a
manner stipulated by Autogen in accordance with the GAD Specifications or to
retain the said shipment (or the defective part thereof) until further notice.
Autogen shall then, within 90 days following receipt of such notification from
Kyokuto, either:

 

(i)         supply
Kyokuto at no additional cost with an equivalent quantity of GAD in compliance
with the GAD Specifications; or

 

(ii)        if
agreed by the Parties, refund the price paid by Kyokuto for the noncomplying
GAD. In addition, if such non-complying GAD has been formulated into Products,
Autogen shall refund the price paid by Kyokuto for the manufacture of such
Products.

 

(d)           In
the event of any dispute between Autogen and Kyokuto as to whether or not
Autogen has manufactured and supplied any shipment of GAD (or any part thereof)
in compliance with the GAD Specifications, Autogen and Kyokuto shall attempt to
resolve the matter amicably. If within 30 days of the dispute having arisen the
matter has not been resolved, either Autogen or Kyokuto shall have the right to
request that the matter be referred to an independent laboratory acceptable to
both of them and the decision of such laboratory shall be final and binding on
both of them.

 

(e)           The
remedies specified in this clause 7 constitute the exclusive remedy of Kyokuto
against Autogen and the entire liability of Autogen in connection with any
rejected shipment of GAD and, any nonconforming GAD which is not rejected by
Kyokuto pursuant to the terms shall be deemed to have been approved and
accepted by Kyokuto and not be subject to subsequent revocation of acceptance.

 

(f)            In
no event shall Autogen be liable to Kyokuto for any indirect, incidental,
special or consequential damages, including, but not limited to, any claim for
damages based upon lost profits.

 

8.             Import/Export
Regulations

 

Applicable law and regulations may make it illegal to import certain
products into certain countries. Any orders placed by Kyokuto for GAD are
executed at the Kyokuto’s risk in so far as these restrictions are concerned
and Kyokuto shall bear the full cost of compliance with such restrictions. All
orders must be accompanied by the appropriate export/import permits.

 

3

 

9.             Quantitative
Deficiencies

 

Kyokuto shall inform Autogen of any claim relating to quantitative
deficiencies in GAD within 15 days following actual receipt by Kyokuto which
Kyokuto considers to have been caused prior to shipment hereunder. Any claim
for a quantitative defect which is not made within such 15 days shall be deemed
to have been waived by Kyokuto. In the event Kyokuto determines there is a
quantitative deficiency from the applicable order the parties shall investigate
such deficiency and Kyokuto shall only be obligated to pay for actual
quantities delivered.

 

10.           Shelf Life

 

Autogen will not deliver to Kyokuto any GAD that has less than {{         }}
months of shelf life remaining without the prior written consent of Kyokuto,
which consent shall not be unreasonably withheld.

 

11.           Use of GAD

 

Kyokuto shall use the GAD purchased from Autogen solely for use in
Products sold by Kyokuto in the Territory pursuant to this agreement.

 

4

 

	
  EXECUTED as an agreement

  	
   

  	
  

  
	
   

  	
   

  
	
   

  	
   

  
	
  The common seal of Autogen Pty Ltd

  	
  )

  
	
  is affixed in accordance with its articles

  	
  )

  
	
   of association in the presence
  of

  	
  )

  
	
   

  	
   

  
	
  /s/ JOSEPH ISAAC GUTNICK

  	
   

  
	
  /s/ PETER JAMES LEE

  	
   

  
	
  Director

  	
  JOSEPH ISAAC GUTNICK

  
	
  Secretary

  	
  PETER JAMES LEE

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  The common seal of Kyokuto

  	
  )

  	
  

  
	
  Pharmaceutical Industrial Co. Ltd. is

  	
  )

  
	
  affixed in accordance with its articles of

  	
  )

  
	
   association in the presence
  of:

  	
  )

  
	
   

  	
   

  	
   

  
	
  /s/ Hiroshi Kikuch

  	
   

  	
   

  
	
  President

  	
  Hiroshi Kikuch

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Kazanobu Tanno

  	
   

  	
   

  
	
  Director

  	
  Kazanobu TannoQuickLinks
 -- Click here to rapidly navigate through this document

 
 

EXHIBIT 4.7    
    

FORM OF SENIOR DEBT

SECURITIES INDENTURE  

SUPERIOR ESSEX INC.  

INDENTURE  

DATED AS OF                            ,
200    

THE BANK OF NEW YORK TRUST COMPANY, N.A.  

 TRUSTEE  

SENIOR
DEBT SECURITIES 

  

 
 

TABLE OF CONTENTS    
    

	ARTICLE I.    DEFINITIONS AND INCORPORATION BY REFERENCE	 	1
	 	Section 1.1.	 	Definitions	 	1
	 	Section 1.2.	 	Definitions	 	4
	 	Section 1.3.	 	Incorporation by Reference of Trust Indenture Act	 	4
	ARTICLE II.    SECURITIES	 	5
	 	Section 2.1.	 	Amount Unlimited; Issuable in Series	 	5
	 	Section 2.2.	 	Establishment of Terms of Series of Securities	 	5
	 	Section 2.3.	 	Authentication and Delivery of Securities	 	7
	 	Section 2.4.	 	Execution of Securities; Trustee's Certificate of Authentication; Form of Securities	 	8
	 	Section 2.5.	 	Registrar and Paying Agent	 	8
	 	Section 2.6.	 	Paying Agent to Hold Money in Trust	 	9
	 	Section 2.7.	 	Securityholder Lists	 	9
	 	Section 2.8.	 	Transfer and Exchange	 	9
	 	Section 2.9.	 	Mutilated, Destroyed, Lost and Stolen Securities	 	10
	 	Section 2.10.	 	Outstanding Securities	 	10
	 	Section 2.11.	 	Treasury Securities	 	11
	 	Section 2.12.	 	Temporary Securities	 	11
	 	Section 2.13.	 	Cancellation	 	11
	 	Section 2.14.	 	Defaulted Interest	 	11
	 	Section 2.15.	 	Global Securities	 	12
	 	Section 2.16.	 	CUSIP Numbers	 	12
	ARTICLE III.    REDEMPTION	 	13
	 	Section 3.1.	 	Notice to Trustee	 	13
	 	Section 3.2.	 	Selection of Securities to be Redeemed	 	13
	 	Section 3.3.	 	Notice of Redemption	 	13
	 	Section 3.4.	 	Effect of Notice of Redemption	 	14
	 	Section 3.5.	 	Deposit of Redemption Price	 	14
	 	Section 3.6.	 	Securities Redeemed in Part	 	14
	ARTICLE IV.    COVENANTS	 	14
	 	Section 4.1.	 	Payment of Principal and Interest	 	14
	 	Section 4.2.	 	SEC Reports	 	14
	 	Section 4.3.	 	Compliance Certificate	 	15
	 	Section 4.4.	 	Stay, Extension and Usury Laws	 	15
	 	Section 4.5.	 	Corporate Existence	 	15
	ARTICLE V.    SUCCESSORS	 	15
	 	Section 5.1.	 	When Company May Merge, Etc	 	15
	 	Section 5.2.	 	Successor Corporation Substituted	 	16
	ARTICLE VI.    DEFAULTS AND REMEDIES	 	16
	 	Section 6.1.	 	Events of Default	 	16
	 	Section 6.2.	 	Acceleration of Maturity; Rescission and Annulment	 	17
	 	Section 6.3.	 	Collection of Indebtedness and Suits for Enforcement by Trustee	 	18
	 	Section 6.4.	 	Trustee May File Proofs of Claim	 	18
	 	Section 6.5.	 	Trustee May Enforce Claims Without Possession of Securities	 	19
	 	Section 6.6.	 	Application of Money Collected	 	19
	 	Section 6.7.	 	Limitation on Suits	 	19
	 	Section 6.8.	 	Unconditional Right of Holders to Receive Principal and Interest	 	20
	 	Section 6.9.	 	Restoration of Rights and Remedies	 	20
	 	Section 6.10.	 	Rights and Remedies Cumulative	 	20
	 	 	 	 	 

i

 

	 	Section 6.11.	 	Delay or Omission Not Waiver	 	20
	 	Section 6.12.	 	Control by Holders	 	20
	 	Section 6.13.	 	Waiver of Past Defaults	 	20
	 	Section 6.14.	 	Undertaking for Costs	 	21
	ARTICLE VII.    TRUSTEE	 	21
	 	Section 7.1.	 	Duties of Trustee	 	21
	 	Section 7.2.	 	Rights of Trustee	 	22
	 	Section 7.3.	 	Individual Rights of Trustee	 	23
	 	Section 7.4.	 	Trustee's Disclaimer	 	23
	 	Section 7.5.	 	Notice of Defaults	 	23
	 	Section 7.6.	 	Reports by Trustee to Holders	 	23
	 	Section 7.7.	 	Compensation and Indemnity	 	23
	 	Section 7.8.	 	Replacement of Trustee	 	24
	 	Section 7.9.	 	Successor Trustee by Merger, Etc	 	25
	 	Section 7.10.	 	Eligibility; Disqualification	 	25
	 	Section 7.11.	 	Preferential Collection of Claims Against Company	 	25
	ARTICLE VIII.    SATISFACTION AND DISCHARGE; DEFEASANCE	 	25
	 	Section 8.1.	 	Satisfaction and Discharge of Indenture	 	25
	 	Section 8.2.	 	Application of Trust Funds; Indemnification	 	26
	 	Section 8.3.	 	Legal Defeasance of Securities of any Series	 	26
	 	Section 8.4.	 	Covenant Defeasance	 	27
	 	Section 8.5.	 	Repayment to Company	 	27
	ARTICLE IX.    AMENDMENTS AND WAIVERS	 	28
	 	Section 9.1.	 	Without Consent of Holders	 	28
	 	Section 9.2.	 	With Consent of Holders	 	28
	 	Section 9.3.	 	Compliance with Trust Indenture Act	 	29
	 	Section 9.4.	 	Revocation and Effect of Consents	 	29
	 	Section 9.5.	 	Notation on or Exchange of Securities	 	29
	 	Section 9.6.	 	Trustee Protected	 	29
	ARTICLE X.    MISCELLANEOUS	 	30
	 	Section 10.1.	 	Trust Indenture Act Controls	 	30
	 	Section 10.2.	 	Notices	 	30
	 	Section 10.3.	 	Communication by Holders with Other Holders	 	31
	 	Section 10.4.	 	Certificate and Opinion as to Conditions Precedent	 	31
	 	Section 10.5.	 	Statements Required in Certificate or Opinion	 	31
	 	Section 10.6.	 	Rules by Trustee and Agents	 	31
	 	Section 10.7.	 	Legal Holidays	 	31
	 	Section 10.8.	 	No Recourse Against Others	 	31
	 	Section 10.9.	 	Counterparts	 	32
	 	Section 10.11.	 	No Adverse Interpretation of Other Agreements	 	32
	 	Section 10.12.	 	Successors	 	32
	 	Section 10.13.	 	Severability	 	32
	 	Section 10.14.	 	Table of Contents, Headings, Etc	 	32
	ARTICLE XI.    SINKING FUNDS	 	32
	 	Section 11.1.	 	Applicability of Article	 	32
	 	Section 11.2.	 	Satisfaction of Sinking Fund Payments with Securities	 	32
	 	Section 11.3.	 	Redemption of Securities for Sinking Fund	 	33
	ARTICLE XII.    GUARANTEES	 	33
	 	Section 12.1.	 	Unconditional Guarantee	 	33
	 	Section 12.2.	 	Limitation of Subsidiary Guarantor's Liability	 	34
	 	Section 12.3.	 	Contribution	 	34
	 	 	 	 	 

ii

 

	 	Section 12.4.	 	Execution and Delivery of Subsidiary Guarantees	 	36
	 	Section 12.5.	 	Addition of Subsidiary Guarantors	 	36
	 	Section 12.6.	 	Severability	 	36

iii

 
SUPERIOR ESSEX INC.  

Reconciliation
and tie between the Trust Indenture Act of 1939 and

Indenture, dated as of                            , 200    . 

	Section 310	 	(a)(1)	 	7.10
	 	 	(a)(2)	 	7.10
	 	 	(a)(3)	 	Not Applicable
	 	 	(a)(4)	 	Not Applicable
	 	 	(a)(5)	 	7.10
	 	 	(b)	 	7.10
	 	 	(c)	 	Not Applicable
	Section 311	 	(a)	 	7.11
	 	 	(b)	 	7.11
	 	 	(c)	 	Not Applicable
	Section 312	 	(a)	 	2.7
	 	 	(b)	 	10.3
	 	 	(c)	 	10.3
	Section 313	 	(a)	 	7.6
	 	 	(b)(1)	 	7.6
	 	 	(b)(2)	 	7.6
	 	 	(c)(1)	 	7.6
	 	 	(d)	 	7.6
	Section 314	 	(a)	 	4.2, 10.2, 10.5
	 	 	(b)	 	Not Applicable
	 	 	(c)(1)	 	10.4
	 	 	(c)(2)	 	10.4
	 	 	(c)(3)	 	Not Applicable
	 	 	(d)	 	Not Applicable
	 	 	(e)	 	10.5
	 	 	(f)	 	Not Applicable
	Section 315	 	(a)	 	7.1
	 	 	(b)	 	7.5
	 	 	(c)	 	7.1
	 	 	(d)	 	7.1
	 	 	(e)	 	6.14
	Section 316	 	(a)	 	2.10
	 	 	(a)(1)(A)	 	6.12
	 	 	(a)(1)(B)	 	6.13
	 	 	(a)(2)	 	Not Applicable
	 	 	(b)	 	6.8
	Section 317	 	(a)(1)	 	6.3
	 	 	(a)(2)	 	6.4
	 	 	(b)	 	2.6
	Section 318	 	(a)	 	10.1

iv

INDENTURE  

        Indenture dated as
of                            , 200    , between Superior Essex Inc., a Delaware
corporation (the "Company"), and The Bank
of New York Trust Company, N.A., a national banking association ("Trustee"). 

WITNESSETH  

        WHEREAS, the Company has duly authorized the issuance, execution and delivery, from time to time, of its unsecured debentures, notes or other evidences of
indebtedness (hereinafter referred to as the "Securities"), without limit as to principal amount, issuable in one or more Series (as hereinafter defined), the amount and terms of each such Series to
be determined as hereinafter provided; and, to provide the terms and conditions upon which the Securities are to be authenticated, issued and delivered, the Company has duly authorized the execution
of this Indenture; 

        WHEREAS,
all things necessary to make this Indenture a valid indenture and agreement according to its terms have been done; 

        NOW,
THEREFORE: 

        In
consideration of the premises and the purchases of the Securities by the holders thereof, the Company and the Trustee mutually covenant and agree for the equal and proportionate
benefit of the respective holders from time to time of the Securities as follows: 

ARTICLE I.

DEFINITIONS AND INCORPORATION BY REFERENCE  

        Section 1.1.    Definitions. 

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

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

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

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

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

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

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

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

 

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

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

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

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

        "Corporate
Trust Office" means the office of the Trustee located in Atlanta, Georgia, or such other office as may be designated by the Trustee to the Company in writing. 

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

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

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

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

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

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

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

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

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

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

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

2

 

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

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

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

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

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

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

        "SEC"
means the Securities and Exchange Commission. 

        "Securities"
has the meaning given such item in the preamble hereto. 

        "Securities
Act" means the Securities Act of 1933, as amended. 

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

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

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

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

        "Subsidiary
Guarantee" means a guarantee by any Subsidiary Guarantor of the Company's payment obligations under the Securities. 

        "Subsidiary
Guarantor" means (i) each Subsidiary of the Company executing this Indenture, (ii) each Subsidiary of the Company that executes a supplemental indenture and
becomes a guarantor of the Company's payment obligations under the Securities pursuant to Section 12.5, and (iii) any Subsidiary of the Company that is a successor corporation of any
Subsidiary of the Company referred to in clauses (i) and (ii). 

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

3

 

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

        Section 1.2.    Definitions. 

	TERM
 
	 	DEFINED IN

SECTION

	"Bankruptcy Law"	 	6.1
	"Custodian"	 	6.1
	"Government Obligations"	 	8.3
	"Legal Holiday"	 	10.7
	"mandatory sinking fund payment"	 	11.1
	"optional sinking fund payment"	 	11.1
	"Paying Agent"	 	2.5
	"Registrar"	 	2.5
	"Service Agent"	 	2.5
	"successor person"	 	5.1

        Section 1.3.    Incorporation
by Reference of Trust Indenture Act. 

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

        "Commission"
means the SEC. 

        "indenture
securities" means the Securities. 

        "indenture
security holder" means a Securityholder. 

        "indenture
to be qualified" means this Indenture. 

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

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

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

        Section 1.4.    Rules
of Construction. 

        Unless
the context otherwise requires: 

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

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

        (c)   "or"
is not exclusive; 

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

        (e)   provisions
apply to successive events and transactions. 

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ARTICLE II.

SECURITIES  

        Section 2.1.    Amount Unlimited; Issuable in Series. 

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

        Section 2.2.    Establishment
of Terms of Series of Securities. 

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

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

        2.2.2.    any
limit upon the aggregate principal amount of the Securities of the Series which may be authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the Series pursuant to Section 2.8, 2.9, 2.10, 3.6 or 9.5); 

        2.2.3.    the
forms of the Securities of the Series in bearer or fully-registered form, whether any Securities of the Series may be represented initially by a Security in
temporary or permanent global form and, if so, the initial Depository with respect to any such temporary or permanent global Security and, as applicable, whether and the circumstances under which
beneficial owners of interests in any such temporary or permanent global Security may exchange such interests for Securities of such Series and of like tenor of any authorized form and denomination,
and any other terms required for the
establishment of a Series of Securities in bearer form, including, but not limited to, tax compliance procedures; 

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

        2.2.5.    the
person to whom any interest on any Security of the Series issued in fully-registered form shall be payable, if other than the person in whose name that Security
is registered at the close of business on the regular record date for such interest, and the manner in which, the person to whom, any interest on any Security of the Series issued in bearer form shall
be payable, if otherwise than upon presentation and surrender of the coupons appertaining thereto as they severally mature, and the extent to which, or the manner in which (including any certification
requirement and other terms and conditions under which), any interest payable on a temporary or permanent global Security on an interest payment date will be paid if other than as described herein; 

        2.2.6.    the
date or dates on which the principal of the Securities of the Series is payable or the method or methods, if any, used to determine those dates; 

        2.2.7.    the
rate or rates (which may be fixed or variable) per annum or, if applicable, the method used to determine such rate or rates (including, but not limited to, any
commodity, commodity index, 

5

 

stock
exchange index or financial index) at which the Securities of the Series shall bear interest, if any, the date or dates from which such interest, if any, shall accrue, the date or dates on which
such interest, if any, shall commence and be payable and any regular record date for the interest payable on any interest payment date; 

        2.2.8.    the
place or places where and the manner in which the principal of and interest, if any, on the Securities of the Series shall be payable, any Securities of the
Series issued as Registered Securities may be surrendered for registration of transfer, Securities of the Series may be surrendered for exchange and notices and demands to or upon the Company in
respect of the Securities of the Series and this Indenture may be served; 

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

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

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

        2.2.12.    the
currency or currencies, including composite currencies, in which payment of the principal of or interest on the Securities of the Series shall be payable if
other than the currency of the United States, and if so, whether the Securities of the Series may be satisfied and discharged other than as provided in Article VIII; 

        2.2.13    if
the amount of payments of principal of or interest on the Securities of the Series is to be determined with reference to an index, formula or other method, or
based on a coin or currency other than that in which the Securities of the Series are stated to be payable, the manner in which such amounts shall be determined and the calculation agent, if any, with
respect thereto; 

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

        2.2.15.    if
the Holders of Securities of the Series may convert or exchange the Securities into or for securities of the Company or other property, the period or periods
within which, the rate or rates at which and the terms and conditions upon which Securities of the Series may be converted or exchanged, in whole or in part; 

        2.2.16.    any
terms applicable to Discount Securities of the Series, if any, including the issue price thereof and the rate or rates at which the original issue discount will
accrue; 

        2.2.17.    whether
the Securities of the Series, in whole or any specified part, shall not be defeasible pursuant to Section 8.3 or Section 8.4 or both such
Sections and, if other than by an Officer's Certificate, the manner in which any election by the Company to defease such Securities shall be evidenced; 

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

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

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

6

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

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

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

        Section 2.3.    Authentication
and Delivery of Securities. 

        At
any time and from time to time after the execution and delivery of this Indenture, the Company may deliver any Series of Securities executed by the Company to the Trustee for
authentication by it, and the Trustee shall thereupon authenticate and deliver said Securities to or upon a Company Order, without any further corporate action by the Company. If the form or terms of
such Series of Securities have been established in or pursuant to one or more Board Resolutions or a supplemental indenture as permitted by this Section 2.3 and Section 2.2, in
authenticating such Securities and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to
Section 7.1) shall be fully protected in relying upon: 

         (1)  each
Board Resolution relating to such Series of Securities; 

         (2)  an
executed supplemental indenture, if any, relating to such series of Securities; 

         (3)  an
Officers' Certificate setting forth the form and terms of the Securities, stating that the form and terms of the Securities have been established pursuant to
Section 2.2 and subparagraph 2.4.3 and comply with this Indenture, and covering such other matters as the Trustee may reasonably request; 

         (4)  an
Opinion of Counsel to the effect that: 

         (a)  if
the form of such Securities has been established by or pursuant to resolutions of the Board of Directors of the Company as permitted by subparagraph 2.4.3 that such
form has been established in conformity with the provisions of this Indenture; 

         (b)  if
the terms of such Securities have been established by or pursuant to Board Resolutions as permitted by Section 2.1, that such terms have been established in
conformity with the provisions of this Indenture; 

         (c)  that
such Securities, when authenticated and delivered by the Trustee and executed and issued by the Company in the manner and subject to any conditions specified in
such Opinion of Counsel, will be valid and binding obligations of the Company, except as any rights thereunder may be limited by bankruptcy, insolvency and other similar laws affecting the enforcement
of creditor's rights generally and by general equity principles; 

         (d)  that
all laws and requirements in respect of the execution and delivery by the Company of such Securities have been complied with and that authentication and delivery of
the Securities by the Trustee will not violate the terms of this Indenture; and 

         (e)  covering
such other matters as the Trustee may reasonably request. 

7

 

        Each
Registered Security shall be dated the date of its authentication. Any Series of Bearer Securities shall be dated as provided in the Board Resolution or the provisions of the
supplemental indenture creating such Series. 

        Section 2.4.    Execution
of Securities; Trustee's Certificate of Authentication; Form of Securities. 

        2.4.1.    Two
Officers shall sign the Securities for the Company by manual or facsimile signature. If an Officer whose signature is on a Security no longer holds that office at
the time the Security is authenticated, the Security shall nevertheless be valid. 

        2.4.2.    Only
such Securities bearing a certificate of authentication executed by the Trustee by the manual signature of one of its Responsible Officers, shall be entitled to
the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by the Trustee upon any Security executed by the Company shall be conclusive evidence that the Security so
authenticated has been duly authenticated and delivered hereunder and that the Holder is entitled to the benefits of this Indenture. 

        The
Trustee shall have the right to decline to authenticate and deliver any Securities of such Series: (a) if the Trustee, being advised by counsel, determines that such action
may not lawfully be taken; or (b) if the Trustee in good faith shall determine that such action would expose the Trustee to personal liability to Holders of any then outstanding Series of
Securities. 

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

        2.4.3.    The
Securities of each series shall be substantially of the tenor and purport as shall be authorized by a Board Resolution or in an indenture or indentures
supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification or designation and such legends or endorsements thereon as the Board of Directors of the Company may deem appropriate and as are not inconsistent with the provisions of
this Indenture, 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 stock exchange on which the Securities may be
listed, or to conform to usage. 

        The
definitive Securities may be printed, lithographed or fully or partly engraved or produced in any other manner, all as determined by the officers executing such Securities, as
evidenced by their executions thereof. 

        Section 2.5.    Registrar
and Paying Agent. 

        The
Company shall maintain, with respect to each Series of Securities, an office or agency where Securities of such Series may be presented or surrendered for payment ("Paying Agent"),
where Securities of such Series may be surrendered for registration of transfer or exchange ("Registrar") and where notices and demands to or upon the Company in respect of the Securities of such
Series and this Indenture may be served ("Service Agent"). The Registrar shall keep a register with respect to each Series of Securities and to their transfer and exchange. 

        The
Corporate Trust Office of the Trustee shall be such office or agency for all of the aforesaid purposes unless the Company shall maintain some other office or agency for such purposes
and The Company will give prompt written notice to the Trustee of the name and address, and any change in the name or address, of each Registrar, Paying Agent or Service Agent. If at any time the
Company shall fail to maintain any such required Registrar, Paying Agent or Service Agent or shall fail to furnish the Trustee with the name and address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices
and demands. 

8

 

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

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

        Section 2.6.    Paying
Agent to Hold Money in Trust. 

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

        Section 2.7.    Securityholder
Lists. 

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

        Section 2.8.    Transfer
and Exchange. 

        Upon
surrender for registration of transfer of any Security at the office or agency of the Company designated for such purposes, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of any authorized denomination or denominations of a like aggregate principal amount and
tenor. No service charge shall be made for any registration of transfer or exchange (except as otherwise expressly permitted herein), but the Company may require payment of a sum sufficient to cover
any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer tax or similar governmental charge payable upon exchanges pursuant to Sections 2.12, 3.6
or 9.5). 

        At
the option of the Holder, Registered Securities of any Series may be exchanged for other Registered Securities of the same Series of any authorized denomination or denominations, of a
like aggregate principal amount and tenor, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive. Bearer Securities may not be issued in exchange for Registered
Securities. 

9

 

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

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

        Neither
the Company nor the Registrar shall be required (a) to issue, register the transfer of, or exchange Securities of any Series for the period beginning at the opening of
business 15 days
immediately preceding the mailing of a notice of redemption of Securities of that Series selected for redemption and ending at the close of business on the day of such mailing, or (b) to
register the transfer of or exchange Securities of any Series selected, called or being called for redemption as a whole or the portion being redeemed of any such Securities selected, called or being
called for redemption in part. 

        Section 2.9.    Mutilated,
Destroyed, Lost and Stolen Securities. 

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

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

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

        Upon
the issuance of any new Security under this Section 2.9, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. 

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

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

        Section 2.10.    Outstanding
Securities. 

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

10

 

        If
a Security is replaced pursuant to Section 2.9, it ceases to be outstanding until the Trustee receives proof satisfactory to it that the replaced Security is held by a bona
fide purchaser. 

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

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

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

        Section 2.11.    Treasury
Securities. 

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

        Section 2.12.    Temporary
Securities. 

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

        Section 2.13.    Cancellation.

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

        Section 2.14.    Defaulted
Interest. 

        Unless
the terms of a Series of Securities adopted pursuant to Section 2.2 shall provide otherwise, if the Company defaults in a payment of interest on a Series of Securities, it
shall pay the defaulted interest, plus, to the extent permitted by law, any interest payable on the defaulted interest, to the persons who are Securityholders of the Series on a subsequent special
record date. The Company shall fix the record date and payment date. At least 30 days before the record date, the Company shall mail to the Trustee and to each Securityholder of the
Series a notice that states the record date, the payment date and the amount of interest to be paid. The Company may pay defaulted interest in any other lawful manner. 

11

 

        Section 2.15.    Global
Securities. 

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

        2.15.2.    Transfer
and Exchange. Notwithstanding any provisions to the contrary contained in Section 2.8 of the Indenture and in addition thereto, any Global Security
shall be exchangeable pursuant to Section 2.8 of the Indenture for Securities registered in the names of Holders other than the Depository for such Security or its nominee only if
(i) such Depository notifies the Company that it is unwilling or unable to continue as Depository for such Global Security or if at any time such Depository ceases to be a clearing agency
registered under the Exchange Act, and, in either case, the Company fails to appoint a successor Depository within 90 days of such event, (ii) the Company executes and delivers to the
Trustee an Officers' Certificate to the effect that such Global Security shall be so exchangeable or (iii) an Event of Default with respect to the Securities represented by such Global Security
shall have happened and be continuing. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Securities registered in such names as the Depository shall
direct in writing in an aggregate principal amount equal to the principal amount of the Global Security with like tenor and terms. 

        Except
as provided in this Section 2.15.2, a Global Security may not be transferred except as a whole by the Depository with respect to such Global Security to a nominee of such
Depository, by a nominee of such Depository to such Depository or another nominee of such Depository or by the Depository or any such nominee to a successor Depository or a nominee of such a successor
Depository. 

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

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

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

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

        2.15.6.    Consents,
Declaration and Directions. Except as provided in subparagraph 2.15.5, the Company, the Trustee and any Agent shall treat a person as the Holder of such
principal amount of outstanding Securities of such Series represented by a Global Security as shall be specified in a written statement of
the Depository with respect to such Global Security, for purposes of obtaining any consents, declarations, waivers or directions required to be given by the Holders pursuant to this Indenture. 

        Section 2.16.    CUSIP
Numbers. 

        The
Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; 

12

 

provided
that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other elements of identification printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. 

ARTICLE III.

REDEMPTION  

        Section 3.1.    Notice to Trustee. 

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

        Section 3.2.    Selection
of Securities to be Redeemed. 

        Unless
otherwise indicated for a particular Series by a Board Resolution, a supplemental indenture or an Officers' Certificate, if less than all the Securities of a Series are to be
redeemed, the Trustee shall select the Securities of the Series to be redeemed by lot or in any other manner that the Trustee deems fair and appropriate. The Trustee shall make the selection from
Securities of the Series outstanding not previously called for redemption. The Trustee may select for redemption portions of the principal of Securities of the Series that have denominations larger
than $1,000. Securities of the Series and portions of them it selects shall be in amounts of $1,000 or whole multiples of $1,000 or, with respect
to Securities of any Series issuable in other denominations pursuant to Section 2.2.11, the minimum principal denomination for each Series and integral multiples thereof. Provisions of this
Indenture that apply to Securities of a Series called for redemption also apply to portions of Securities of that Series called for redemption. 

        Section 3.3.    Notice
of Redemption. 

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

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

         (a)  the
redemption date; 

         (b)  the
redemption price; 

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

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

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

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

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

        Section 3.4.    Effect
of Notice of Redemption. 

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

        Section 3.5.    Deposit
of Redemption Price. 

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

        Section 3.6.    Securities
Redeemed in Part. 

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

ARTICLE IV.

COVENANTS  

        Section 4.1.    Payment of Principal and Interest. 

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

        Section 4.2.    SEC
Reports. 

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

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        Section 4.3.    Compliance Certificate. 

        The
Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Company, an Officers' Certificate stating that a review of the activities of the
Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed
and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his knowledge the Company has kept, observed, performed
and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions hereof (or, if a Default or
Event of Default shall have occurred, describing all such Defaults or Events of Default of which he may have knowledge). 

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

        Section 4.4.    Stay,
Extension and Usury Laws. 

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

        Section 4.5.    Corporate
Existence. 

        Subject
to Article V, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and the corporate,
partnership or other existence of each Significant Subsidiary in accordance with the respective organizational documents of each Significant Subsidiary and the rights (charter and statutory), licenses
and franchises of the Company and its
Significant Subsidiaries; provided, however, that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any
Significant Subsidiary, if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries taken as a
whole and that the loss thereof is not adverse in any material respect to the Holders. 

ARTICLE V.

SUCCESSORS  

        Section 5.1.    When Company May Merge, Etc. 

        The
Company shall not consolidate with or merge with or into any other person or convey, transfer or lease its properties and assets substantially as an entirety to any person, unless: 

         (a)  either
(1) the Company shall be the continuing corporation or (2) the person (if other than the Company) formed by such consolidation or into which the
Company is merged or the person which acquires by conveyance, transfer or lease the properties and assets of the Company substantially as an entirety (i) shall be a corporation, partnership,
limited liability company, trust or other entity organized and validly existing under the laws of the United States or any state thereof or the District of Columbia and (ii) shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the 

15

 

Trustee,
in form satisfactory to the Trustee, all of the obligations of the Company under the Securities and this Indenture; 

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

         (c)  the
Company shall have delivered to the Trustee an Officer's Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or
lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, comply with this Article and that all conditions precedent herein provided for
relating to such transaction have been satisfied. 

        Section 5.2.    Successor
Corporation Substituted. 

        Upon
any consolidation or merger, or any sale, lease, conveyance or other disposition of the properties and assets substantially as an entirety of the Company in accordance with
Section 5.1, the successor person formed by any such consolidation or into which the Company is merged or the successor person to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of the Company under this Indenture with the same effect as if such successor had been named as the Company herein; and thereafter,
except in the case of a lease of its properties and assets substantially as an entirety, the Company shall be discharged from all obligations and covenants under this Indenture and the Securities. 

ARTICLE VI.

DEFAULTS AND REMEDIES  

        Section 6.1.    Events of Default. 

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

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

         (b)  the
Company fails to comply with any of its agreements in the Securities or this Indenture (other than those referred to in clause (a) above and other than a
covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically deal with or which has been expressly included in this Indenture solely for the benefit of
a Series of Securities other than such Series) and such failure continues for 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in principal amount of the outstanding Securities of that Series a written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder; 

         (c)  the
Company pursuant to or within the meaning of any Bankruptcy Law: 

          (i)  commences
a voluntary case, 

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

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

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

16

 

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

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

          (i)  is
for relief against the Company in an involuntary case, 

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

        (iii)  orders
the liquidation of the Company or any of its Significant Subsidiaries, and the order or decree remains unstayed and in effect for 60 days; or 

         (e)  any
other Event of Default provided with respect to Securities of that Series, which is specified in a Board Resolution, a supplemental indenture hereto or an Officers'
Certificate, in accordance with Section 2.2 hereof. 

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

        Section 6.2.    Acceleration
of Maturity; Rescission and Annulment. 

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

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

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

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

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

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

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

         (b)  all
Events of Default with respect to Securities of that Series, other than the non-payment of the principal of Securities of that Series which have become
due solely by such declaration of acceleration, have been cured or waived as provided in Section 6.13. 

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

17

 

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

        The
Company covenants that if 

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

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

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

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

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

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

        Section 6.4.    Trustee
May File Proofs of Claim. 

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

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

         (b)  to
collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same, and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable 

18

 

compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.7. 

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

        Section 6.5.    Trustee
May Enforce Claims Without Possession of Securities. 

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

        Section 6.6.    Application
of Money Collected. 

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

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

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

        Third:
To the Company. 

        Section 6.7.    Limitation
on Suits. 

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

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

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

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

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

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

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

19

 

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

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

        Notwithstanding
any other provision in this Indenture, the right, which is absolute and unconditional, of any Holder of any Security to receive payment of the principal of and interest
on such Security on the Stated Maturity or Maturities expressed in such Security (or in the case of redemption, on the redemption date) held by such Holder, on or after the respective due dates
expressed in the Securities or any redemption date, or to bring suit for the enforcement of any such payment on or after the respective dates, shall not be impaired or affected adversely without the
consent of each such Holder. 

        Section 6.9.    Restoration
of Rights and Remedies. 

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

        Section 6.10.    Rights
and Remedies Cumulative. 

        Except
as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in Section 2.9, no right or remedy herein conferred upon
or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right or remedy. 

        Section 6.11.    Delay
or Omission Not Waiver. 

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

        Section 6.12.    Control
by Holders. 

        The
Holders of a majority in principal amount of the outstanding Securities of any Series shall have the right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such Series. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or that the Trustee determines in good faith is unduly prejudicial to the rights of other Holders or would involve the Trustee in personal liability. 

        Section 6.13.    Waiver
of Past Defaults. 

        The
Holders of a majority in aggregate principal amount of the outstanding Securities of any Series, by notice to the Trustee (and without notice to any other Holder), may on behalf of
the Holders of all of the Securities of such Series waive an existing Default with respect to such Series and its consequences except that the consent of the Holders of 100% of the Securities of such
Series shall be required to waive (a) an Event of Default described in Section 6.1(a) with respect to such Series or 

20

 

(b) a
Default in respect of a provision that under Section 9.2 cannot be amended without the consent of the Holder of each outstanding Security of the Series affected. When a Default is
waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or impair any consequent right. 

        Section 6.14.    Undertaking
for Costs. 

        All
parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 6.14 shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the outstanding Securities of
any Series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of or interest on any Security on or after the Stated Maturity or Stated Maturities expressed in
such Security (or, in the case of redemption, on the redemption date). 

ARTICLE VII.

TRUSTEE  

        Section 7.1.    Duties of Trustee. 

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

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

          (i)  The
Trustee need perform only those duties that are specifically set forth in this Indenture and no others. The permissive right of the Trustee to take or refrain from
taking any action hereunder shall not be construed as a duty. 

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

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

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

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

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

21

 

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

         (d)  Every
provision of this Indenture that in any way relates to the Trustee is subject to paragraph (a), (b) and (c) of this Section 7.1. 

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

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

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

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

        Section 7.2.    Rights
of Trustee. 

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

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

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

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

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

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

22

   
        Section 7.3.    Individual Rights of Trustee. 

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

        Section 7.4.    Trustee's
Disclaimer. 

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

        Section 7.5.    Notice
of Defaults. 

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

        Section 7.6.    Reports
by Trustee to Holders. 

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

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

        Section 7.7.    Compensation
and Indemnity. 

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

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

23

 

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

        To
secure the Company's payment obligations in this Section 7.7, the Trustee shall have a lien prior to the Securities of any Series on all money or property held or collected by
the Trustee, except that held in trust to pay principal and interest on particular Securities of that Series. 

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

        Section 7.8.    Replacement
of Trustee. 

        A
resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this
Section 7.8. 

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

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

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

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

         (d)  the
Trustee becomes incapable of acting. 

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

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

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

        A
successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Immediately after that, the retiring Trustee shall transfer all
property held by it as Trustee to the successor Trustee subject to the lien provided for in Section 7.7, the resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee with respect to each Series of Securities for which it is acting as Trustee under this Indenture. A successor Trustee
shall mail a notice of its succession to each Securityholder of each such Series and, if any Bearer Securities are outstanding, publish such notice on one occasion in an Authorized Newspaper.
Notwithstanding replacement of the Trustee pursuant to this Section 7.8, the Company's obligations under Section 7.7 hereof shall continue for the benefit of the retiring trustee with
respect to reasonable expenses and liabilities incurred by it prior to such replacement. 

24

 

        Section 7.9.    Successor
Trustee by Merger, Etc. 

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

        Section 7.10.    Eligibility;
Disqualification. 

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

        Section 7.11.    Preferential
Collection of Claims Against Company. 

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

ARTICLE VIII.

SATISFACTION AND DISCHARGE; DEFEASANCE  

        Section 8.1.    Satisfaction and Discharge of Indenture. 

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

         (a)  either

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

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

         (1)  have
become due and payable, or 

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

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

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

and
the Company, in the case of (1), (2) or (3) above, has deposited or caused to be deposited with the Trustee in trust an amount, without reinvestment, which is sufficient for the
purpose of paying and discharging the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal and interest to the date of such deposit (in the
case of Securities which have become due and payable on or prior to the date of such deposit) or to the Stated Maturity or redemption date, as the case may be; 

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

25

 

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

        Notwithstanding
the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.7, and, if money shall have been deposited with the
Trustee pursuant to clause (a) of this Section, the provisions of Sections 2.5, 2.8, 2.9, 8.1, 8.2 and 8.5 shall survive. 

        Section 8.2.    Application
of Trust Funds; Indemnification. 

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

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

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

        Section 8.3.    Legal
Defeasance of Securities of any Series. 

        Unless
this Section 8.3 is otherwise specified, pursuant to subparagraph 2.2.17, to be inapplicable to Securities of any Series, the Company shall be deemed to have paid and
discharged the entire indebtedness on all the outstanding Securities of such Series on the date of the deposit referred to in subparagraph (c)(1) hereof, and the provisions of this Indenture, as it
relates to such outstanding Securities of such Series, shall no longer be in effect (and the Trustee, at the expense of the Company, shall, at Company Request, execute proper instruments acknowledging
the same), except as to: 

         (a)  the
rights of Holders of Securities of such Series to receive, from the trust funds described in subparagraph (c)(1) hereof, (i) payment of the principal of and
each installment of principal of and interest on the outstanding Securities of such Series on the Stated Maturity of such principal or installment of principal or interest and (ii) the benefit
of any mandatory sinking fund payments applicable to the Securities of such Series on the day on which such payments are due and payable in accordance with the terms of this Indenture and the
Securities of such Series; 

         (b)  the
provisions of Sections 2.5, 2.8, 2.9, 8.2, 8.3 and 8.5; and 

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

provided
that, the following conditions shall have been satisfied: 

         (1)  The
Company shall have irrevocably deposited with the Trustee, in trust, (i) sufficient funds in the currency or currency unit in which the Securities of such
Series are denominated to pay, without 

26

 

reinvestment,
the principal of and interest to Stated Maturity (or redemption) on, the Securities of such Series, or (ii) such amount of direct obligations of, or obligations the principal of
and interest on which are fully guaranteed by, the government which issued the currency in which the Securities of such series are denominated ("Government Obligations"), and which are not subject to
prepayment, redemption or call, as will, together with the predetermined and certain income to accrue thereon without consideration of any reinvestment thereof, be sufficient to pay when due the
principal of, and interest to Stated Maturity (or redemption) on, the Securities of such Series. 

         (2)  The
Company shall (i) have delivered an Opinion of Counsel that the Company has met all of the conditions precedent to such defeasance and that the Holders of the
Securities of such Series will not recognize income, gain or loss for United States Federal income tax purposes as a result of such defeasance, and will be subject to tax in the same manner as if no
defeasance and discharge or covenant defeasance, as the case may be, had occurred or (ii) the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that (A) the
Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date this Indenture was first executed, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel in the United States shall confirm that, the holders of outstanding Securities of that
particular Series will not recognize income, gain or loss for federal income tax purposes as a result of such defeasance. 

        Section 8.4.    Covenant
Defeasance. 

        Unless
this Section 8.4 is otherwise specified pursuant to subparagraph 2.2.17 to be inapplicable to Securities of any Series, on the date of the deposit referred to in
subparagraph (a) hereof, the Company may omit to comply with any term, provision or condition set forth under Sections 4.2, 4.3, 4.4, 4.5 and 5.1 as well as any additional covenants contained
in a supplemental indenture hereto for a particular Series of Securities or a Board Resolution or an Officers' Certificate delivered pursuant to Section 2.2.21 (and the failure to comply with
any such covenants shall not constitute a Default or Event of Default under Section 6.1) and the occurrence of any event described in clause (e) of Section 6.1 shall not
constitute a Default or Event of Default hereunder, with respect to the Securities of such Series, provided that the following conditions shall have been satisfied: 

         (a)  The
Company shall have irrevocably deposited with the Trustee, in trust, (i) sufficient funds in the currency or currency unit in which the Securities of such
Series are denominated to pay the principal of and interest to Stated Maturity (or redemption) on, the Securities of such Series, or (ii) such amount of Government Obligations, which are not
subject to prepayment, redemption or call, as will, together with the predetermined and certain income to accrue thereon without consideration of any reinvestment thereof, be sufficient to pay when
due the principal of, and interest to Stated Maturity (or redemption) on, the Securities of such Series. 

         (b)  The
Company shall have delivered an Opinion of Counsel that the Company has met all of the conditions precedent to such defeasance and that the Holders of the Securities
of such series will not recognize income, gain or loss for United States Federal income tax purposes as a result of such defeasance, and will be subject to tax in the same manner as if no defeasance
and discharge or covenant defeasance, as the case may be, had occurred. 

        Section 8.5.    Repayment
to Company. 

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

27

 

ARTICLE IX.

AMENDMENTS AND WAIVERS  

        Section 9.1.    Without Consent of Holders. 

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

         (a)  to
evidence the succession of another corporation to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities; 

         (b)  to
add to the covenants, agreements and obligations of the Company for the benefit of the Holders of all of the Securities or any Series thereof, or to surrender any
right or power herein conferred upon the Company; 

         (c)  to
establish the forms or terms of Securities of any Series; 

         (d)  to
evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change
any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of
Section 7.8; 

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

          (f)  to
add to, change or eliminate any of the provisions of this Indenture (which addition, change or elimination may apply to one or more Series of Securities), provided
that any such addition, change or elimination shall neither (i) apply to any Security of any Series created prior to the execution of such supplemental indenture and entitled to the benefit of
such provision nor (ii) modify the rights of the Holder of any such Security with respect to such provision; 

         (g)  to
secure the Securities; or 

         (h)  to
make any other change that does not adversely affect the rights of any Securityholder in any material respect. 

        Section 9.2.    With
Consent of Holders. 

        With
the written consent of the Holders of at least a majority in aggregate principal amount of the outstanding Securities of each Series affected by such supplemental indenture, the
Company and the Trustee may amend this Indenture or the Securities of any Series or may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of the Securities of such series and any related coupons under
this Indenture; provided, however, that no such amendment or supplemental indenture shall, without the consent of the Holder of each outstanding Security affected thereby: 

         (a)  change
the Stated Maturity of the principal of, or any installment of principal or interest on, any such Security or reduce the principal amount thereof or the rate of
interest thereon or any premium payable upon redemption thereof or reduce the amount of principal of any such Discount Security that would be due and payable upon a declaration of acceleration of
maturity thereof pursuant to Section 6.2, or change the coin or currency in which, any principal of, or any installment of interest on, any such Security is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the redemption date); 

         (b)  reduce
the percentage in principal amount of the outstanding Securities of any series, the consent of whose Holders is required for any such amendment or supplemental
indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this 

28

 

Indenture
or certain defaults hereunder and their consequences) with respect to the Securities of such Series provided for in this Indenture; or 

         (c)  modify
any of the provisions of this Section, Section 6.4 or 6.7, except to increase the percentage of outstanding Securities of such Series required for such
actions to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each outstanding Security affected thereby. 

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

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

        After
an amendment or supplemental indenture under this Section 9.2 becomes effective, the Company shall mail to each Holder of the particular Securities affected thereby and, if
any Bearer Securities affected thereby are outstanding, publish on one occasion in an Authorized Newspaper, a notice briefly describing the amendment. Any failure by the Company to mail or publish
such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amendment or supplemental indenture. 

        Section 9.3.    Compliance
with Trust Indenture Act. 

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

        Section 9.4.    Revocation
and Effect of Consents. 

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

        Any
amendment or waiver once effective shall bind every Securityholder of each Series affected by such amendment or waiver unless it is of the type described in any of clauses
(a) through (c) of Section 9.2. In that case, the amendment or waiver shall bind each Holder of a Security who has consented to it and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's Security. 

        Section 9.5.
Notation on or Exchange of Securities. 

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

        Section 9.6.    Trustee
Protected. 

        In
executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article IX or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section 7.1) shall be fully protected in relying upon, an Opinion 

29

 

of
Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee shall sign all supplemental indentures, except that the Trustee need not
sign any supplemental indenture that adversely affects its rights. 

ARTICLE X.

MISCELLANEOUS  

        Section 10.1.    Trust Indenture Act Controls. 

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

        Section 10.2.    Notices.

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

if
to the Company: 

Superior
Essex Inc.

150 Interstate North Parkway

Atlanta, Georgia 30339

Attention: Chief Financial Officer

Fax:            

if
to the Trustee: 

The
Bank of New York Trust Company, N.A.

100 Ashford Center North, Suite 520

Atlanta, Georgia 30338

Attention: Corporate Trust Department

Fax:            

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

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

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

30

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

        Section 10.3.    Communication
by Holders with Other Holders. 

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

        Section 10.4.    Certificate
and Opinion as to Conditions Precedent. 

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

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

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

        Section 10.5.    Statements
Required in Certificate or Opinion. 

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

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

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

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

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

        Section 10.6.    Rules
by Trustee and Agents. 

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

        Section 10.7.    Legal
Holidays. 

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

        Section 10.8.    No
Recourse Against Others. 

        A
director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of
the consideration for the issue of the Securities. All Securities, including Global Securities, shall bear a legend in a form substantially setting forth the foregoing statements in this
Section 10.8. 

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        Section 10.9.    Counterparts.

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

        Section 10.10.    Governing
Laws. 

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

        Section 10.11.    No
Adverse Interpretation of Other Agreements. 

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

        Section 10.12.    Successors.

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

        Section 10.13.    Severability.

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

        Section 10.14.    Table
of Contents, Headings, Etc. 

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

ARTICLE XI.

SINKING FUNDS  

        Section 11.1.    Applicability of Article. 

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

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

        Section 11.2.    Satisfaction
of Sinking Fund Payments with Securities. 

        The
Company may, in satisfaction of all or any part of any sinking fund payment with respect to the Securities of any Series to be made pursuant to the terms of such Securities
(1) deliver outstanding Securities of such Series to which such sinking fund payment is applicable (other than any of such Securities previously called for mandatory sinking fund redemption)
and (2) apply as a credit Securities 

32

 

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

        Section 11.3.    Redemption
of Securities for Sinking Fund. 

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

ARTICLE XII.

GUARANTEES  

        Section 12.1.    Unconditional Guarantee. 

         (a)  Each
Subsidiary Guarantor hereby, jointly and severally, unconditionally guarantees to each Holder and to the Trustee the due and punctual payment of the principal of,
and interest on the Securities and all other amounts due and payable under this Indenture and the Securities by the Company whether at maturity, by acceleration, redemption, repurchase or otherwise,
including, without limitation, interest on the overdue principal of and interest on the Securities, to the extent lawful, all in accordance with the terms hereof and thereof; subject, however, to the
limitations set forth in this Article XII. 

         (b)  Failing
payment when due of any amount so guaranteed for whatever reason, the Subsidiary Guarantors will be jointly and severally obligated to pay the same immediately.
Each Subsidiary 

33

 

Guarantor
hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Securities or this Indenture, the absence of any action
to enforce the same, any waiver or consent by any Holder of the Securities with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the
same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Subsidiary Guarantor hereby waives diligence, presentment, demand of
payments, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that this Subsidiary Guarantee will not be discharged except by complete performance of the obligations contained in the Securities, this Indenture and in the Subsidiary Guarantee. If
any Holder or the Trustee is required by any court or otherwise to return to the Company, any Subsidiary Guarantor, or any custodian, trustee, liquidator or other similar official acting in relation
to the Company or any Subsidiary Guarantor, any amount paid by the Company or any Subsidiary Guarantor to the Trustee or such Holder, the Subsidiary Guarantee, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Subsidiary Guarantor agrees it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby. Each Subsidiary Guarantor further agrees that, as between each Subsidiary Guarantor, on the one hand, and the Holders and the
Trustee, on the other hand, (1) the maturity of the payment of principal of, interest, if any, and additional interest, if any, with respect to the Securities guaranteed hereby may be
accelerated as provided in Article VI for the purposes of the applicable Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect
of the obligations guaranteed in this Indenture, and (2) in the event of any acceleration of such obligations as provided in Article VI, such obligations (whether or not due and payable)
shall forthwith become due and payable by each Subsidiary Guarantor for the purpose of the applicable Subsidiary Guarantee. 

         (c)  A
director, officer, employee or stockholder, as such, of an Subsidiary Guarantor shall not have any liability for any obligations of such Subsidiary Guarantor under
this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. 

        Section 12.2.    Limitation
of Subsidiary Guarantor's Liability. 

        Each
Subsidiary Guarantor and by its acceptance hereof each Holder of Securities hereby confirms that it is the intention of all such parties that the guarantee by such Subsidiary
Guarantor pursuant to its Subsidiary Guarantee not constitute a fraudulent transfer or conveyance for purposes of any federal, state or foreign law. To effectuate the foregoing intention, the Holders
of Securities and each Subsidiary Guarantor hereby irrevocably agree that the obligations of each Subsidiary Guarantor under its Subsidiary Guarantee shall be limited to the maximum amount as will,
after giving effect to all other contingent and fixed liabilities of such Subsidiary Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor under its Subsidiary Guarantee, result in the obligations of such Subsidiary Guarantor under the Subsidiary Guarantee not
constituting a fraudulent conveyance or fraudulent transfer under federal, state or foreign law. 

        Section 12.3.    Contribution.

        In
order to provide for just and equitable contribution among the Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the event any payment or distribution is made
by any Subsidiary Guarantor (a "Funding Guarantor") under the Subsidiary Guarantee, such Funding Guarantor shall be entitled to a contribution from each other Subsidiary Guarantor for all payments,
damages and expenses incurred by the Funding Guarantor in discharging the Company's obligations with respect to the Securities or any other Subsidiary Guarantor's obligations with respect to the
Subsidiary Guarantee. 

34

 

        Section 12.4.    Execution
and Delivery of Subsidiary Guarantees. 

        Each
Subsidiary Guarantor hereby agrees that its execution and delivery of this Indenture or any supplemental indentures pursuant to Article IX shall evidence its Subsidiary
Guarantee set forth in Section 12.1 without the need for any further notation on the Securities. 

        Each
of the Subsidiary Guarantors hereby agrees that its Subsidiary Guarantee set forth in Section 12.1 shall remain in full force and effect notwithstanding any failure to
endorse on each Security a notation relating to such Subsidiary Guarantee. 

        If
an Officer of a Subsidiary Guarantor whose signature is on this Indenture or any supplemental indenture no longer holds that office at the time the Trustee authenticates such
Securities or at any time thereafter, such Subsidiary Guarantor's Subsidiary Guarantee shall be valid nevertheless. 

        The
delivery of any Security by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of any Subsidiary Guarantee set forth in this Indenture on behalf
of the Subsidiary Guarantor. 

        Section 12.5    Addition
of Subsidiary Guarantors. 

        Any
Person that was not a Subsidiary Guarantor on the date hereof may become a Subsidiary Guarantor by executing and delivering to the Trustee (A) a supplemental indenture in form
and substance satisfactory to the Trustee, which subjects such Person to the provisions (including the representations and warranties) of this Indenture as a Subsidiary Guarantor and (B) an
Opinion of Counsel and Officer's Certificate to the effect that such supplemental indenture has been duly authorized and executed by such Person and constitutes the legal, valid, binding and
enforceable obligation of such Person (subject to customary exceptions concerning creditor's rights and equitable principles as may be acceptable to the Trustee in its discretion and provided that no
opinion need be rendered concerning the enforceability of the Subsidiary Guarantee). 

        Section 12.6.    Severability.

        In
case any provision of this Subsidiary Guarantee shall be invalid, illegal or unenforceable, that portion of such provision that is not invalid, illegal or unenforceable shall remain
in effect, and the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 

35

 

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

	 	 	SUPERIOR ESSEX INC.
	

 	
 	

By:	
 	

    

	 	 	Title:	 	 
	

 	
 	

THE BANK OF NEW YORK TRUST COMPANY, N.A.
	

 	
 	

By:	
 	

    

	 	 	Title:	 	 
	

 	
 	

SUBSIDIARY GUARANTORS, AS APPLICABLE
	

 	
 	

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EXHIBIT 4.7

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