Document:

Option Agreement with Everett Poe

    
      

    

    Exhibit 10.24

     

    
 

    DATA
      CALL TECHNOLOGIES, INC.

    

    OPTION
      AGREEMENT

    

                                                                                                                                                                             Date:
      February
      28, 2007 

    

    To
      Whom
      It May Concern:

    

    DATA
      CALL TECHNOLOGIES, INC.
      (the
“Company”), for value received, hereby agrees to issue common stock purchase
      options entitling Everett
      Poe,
      or
      his
      assigns (“Holder”
      or “Option Holder”) to purchase an aggregate of 1,500,000 shares of the
      Company’s common stock (“Common Stock”). Such option is evidenced by an option
      certificate in the form attached hereto as Schedule 1 (such instrument being
      hereinafter referred to as a “Option,” and such Option and all instruments
      hereafter issued in replacement, substitution, combination or subdivision
      thereof being hereinafter collectively referred to as the “Option”). The Option
      is issued to Holder in consideration for services rendered to the Company as
      the
      Company’s employee. The number of shares of Common Stock purchasable upon
      exercise of the Option is subject to adjustment as provided in Section 5 below.
      The Option will be exercisable by the Option Holder (as defined below) as to
      all
      or any lesser number of shares of Common Stock covered thereby, at an initial
      purchase price of US $0.10 per share (the “Purchase Price”), subject to
      adjustment as provided in Section 5 below, for the exercise period defined
      in
      Section 3(a) below. This option evidences the grant of this Option by the
      Company’s Board of Directors on February 27, 2007, and as such, the effective
      date of this Option shall be February 27, 2007 (the “Effective Date”).

    

    
      	 	
              1.

            	
              Representations
                and Warranties.

            

    

    

    The
      Company represents and warrants to you as follows:

    

    
      	 	
              (a)

            	
              Corporate
                and Other Action.
                The Company has all requisite power and authority (corporate and
                other),
                and has taken all necessary corporate action, to authorize, execute,
                deliver and perform this Option Agreement, to execute, issue, sell
                and
                deliver the Option and a certificate or certificates evidencing the
                Option, to authorize and reserve for issue and, upon payment from
                time to
                time of the Purchase Price, to issue, sell and deliver, the shares
                of the
                Common Stock issuable upon exercise of the Option (“Shares”), and to
                perform all of its obligations under this Option Agreement and the
                Option.
                The Shares, when issued in accordance with this Option Agreement,
                will be
                duly authorized and validly issued and outstanding, fully paid and
                nonassessable and free of all liens, claims, encumbrances and preemptive
                rights. This Option Agreement and, when issued, each Option issued
                pursuant hereto, has been or will be duly executed and delivered
                by the
                Company and is or will be a legal, valid and binding agreement of
                the
                Company, enforceable in accordance with its terms. No authorization,
                approval, consent or other order of any governmental entity, regulatory
                authority or other third party is required for such authorization,
                execution, delivery, performance, issue or
                sale.

            

    

     

    
 

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	 	
              (b)

            	
              No
                Violation.
                The execution and delivery of this Option Agreement, the consummation
                of
                the transactions herein contemplated and the compliance with the
                terms and
                provisions of this Option Agreement and of the Option will not conflict
                with, or result in a breach of, or constitute a default or an event
                permitting acceleration under, any statute, the Articles of Incorporation
                or Bylaws of the Company or any indenture, mortgage, deed of trust,
                note,
                bank loan, credit agreement, franchise, license, lease, permit, or
                any
                other agreement, understanding, instrument, judgment, decree, order,
                statute, rule or regulation to which the Company is a party or by
                which it
                is bound.

            

    

    

    
      	 	
              2.

            	
              Transfer.

            

    

    

    
      	 	
              (a)

            	
              Transferability
                of Option.
                The Option Holder agrees that the Option is being acquired as an
                investment and not with a view to distribution thereof and that;
                the
                Option may not be transferred, sold, assigned or hypothecated except
                as
                provided herein. The Option Holder further acknowledges that the
                Option
                may not be transferred, sold, assigned or hypothecated unless pursuant
                to
                a registration statement that has become effective under the Securities
                Act of 1933, as amended (the “Act”), setting forth the terms of such
                offering and other pertinent data with respect thereto, or unless
                the
                Option Holder has provided the Company with an acceptable opinion
                from
                acceptable counsel that such registration is not required. Certificates
                representing the Option shall bear an appropriate legend. Notwithstanding
                the foregoing, any request to transfer the Option must be accompanied
                by
                the Form of Assignment and Transfer attached hereto as Schedule 2
                executed
                by the Option Holder.

            

    

    

    
      	 	
              (b)

            	
              Registration
                of Shares.
                You agree not to make any sale or other disposition of the Shares
                except
                pursuant to a registration statement which has become effective under
                the
                Act, setting forth the terms of such offering, the underwriting discount
                and commissions and any other pertinent data with respect thereto,
                unless
                you have provided the Company with an acceptable opinion of counsel
                acceptable to the Company that such registration is not required.
                Certificates representing the Shares, which are not registered as
                provided
                in this Section 2, shall bear an appropriate legend and be subject
                to a
                “stop-transfer” order.

            

    

    

    
      	 	
              3.

            	
              Exercise
                of Option, Partial Exercise.

            

    

    

    
      	 	
              (a)

            	
              Exercise
                Period.
                This Option shall expire and all rights hereunder shall be extinguished
                three (3) years from the Effective
                Date.

            

    

    

    
      	 	
              (b)

            	
              Exercise
                in Full.
                Subject to Section 3(a), a Option may be exercised in full by the
                Option
                Holder by surrender of the Option, with the Form of Subscription
                attached
                hereto as Schedule 3 executed by such Option Holder, to the Company,
                accompanied by payment as determined by 3(d) below, in the amount
                obtained
                by multiplying the number of Shares represented by the respective
                Option
                by the Purchase Price per share (after giving effect to any adjustments
                as
                provided in Section 5 below).

            

    

     

    
 

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    
      	 	
              (c)

            	
              Partial
                Exercise.
                Subject to Section 3(a), each Option may be exercised in part by
                the
                Option Holder by surrender of the Option, with the Form of Subscription
                attached hereto as Schedule 3 at the end thereof duly executed by
                such
                Option Holder, in the manner and at the place provided in Section
                3(b)
                above, accompanied by payment as determined by 3(d) below, in amount
                obtained by multiplying the number of Shares designated by the Option
                Holder in the Form of Subscription attached hereto as Schedule 3
                to the
                Option by the Purchase Price per share (after giving effect to any
                adjustments as provided in Section 5 below). Upon any such partial
                exercise, the Company at its expense will forthwith issue and deliver
                to
                or upon the order of the Option Holder a new Option of like tenor,
                in the
                name of the Option Holder subject to Section 2(a), calling in the
                aggregate for the purchase of the number of Shares equal to the number
                of
                such Shares called for on the face of the respective Option (after
                giving
                effect to any adjustment herein as provided in Section 5 below) minus
                the
                number of such Shares designated by the Option Holder in the
                aforementioned form of
                subscription.

            

    

    

    
      	 	
              (d)

            	
              Payment
                of Purchase Price.
                The Purchase Price may be made by any of the following or a combination
                thereof, at the election of the Option Holder:

            

    

     

    (i)      
      In cash; by wire transfer; by certified or cashier’s check, or money order;
      or

    

    (ii)      
      By delivery to the Company of an exercise notice that requests the Company
      to
      issue to the Option Holder the full number of shares as
      to which the Option is then exercisable, less the number of shares
      that have an aggregate Fair Market Value, as determined by the Board
      in its sole
      discretion at the time of exercise, equal to the aggregate purchase
      price of the shares to which such exercise relates.  (This method of
      exercise allows the Option Holder to use a portion of the shares issuable at
      the
      time of exercise as payment for the shares to which the Option relates and
      is often referred to as a "cashless exercise." For example, if the Option Holder
      elects to exercise 1,000 shares at an exercise price of $0.25 and the
      current Fair Market Value of the shares on the date of exercise is $1.00,
      the Option Holder can use 250 of the 1,000 shares at $1.00 per share to pay
      for the exercise of the entire Option (250 x $1.00 = $250.00) and
      receive only the remaining 750 shares).

     

    For
      purposes of this section, "Fair Market Value” shall be defined as the average
      closing price of the Common Stock (if actual sales price information on any
      trading day is not available, the closing bid price shall be used) for the
      five
      trading days prior to the date of exercise of this Option (the “Average Closing
      Bid Price”), as reported by the National Association of Securities Dealers
      Automated Quotation System (“NASDAQ”), or if the Common Stock is not traded on
      NASDAQ, the Average Closing Bid Price in the over-the-counter market; provided,
      however, that if the Common Stock is listed on a stock exchange, the Fair Market
      Value shall be the Average Closing Bid Price on such exchange; and, provided
      further, that if the Common Stock is not quoted or listed by any organization,
      the fair value of the Common Stock, as determined by the Board of Directors
      of
      the Company, whose determination shall be conclusive, shall be used).  In
      no event shall the Fair Market Value of any share of Common Stock be less than
      its par value.

     

    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

     

    
      	 	
              4.

            	
              Delivery
                of Stock Certificates on Exercise.

            

    

    

    Any
      exercise of the Option pursuant to Section 3 shall be deemed to have been
      effected immediately prior to the close of business on the date on which the
      Option together with the Form of Subscription and the payment for the aggregate
      Purchase Price shall have been received by the Company. At such time, the person
      or persons in whose name or names any certificate or certificates representing
      the Shares or Other Securities (as defined below) shall be issuable upon such
      exercise shall be deemed to have become the holder or holders of record of
      the
      Shares or Other Securities so purchased. As soon as practicable after the
      exercise of any Option in full or in part, and in any event within Ten (10)
      business days thereafter, the Company at its expense (including the payment
      by
      it of any applicable issue taxes) will cause to be issued in the name of, and
      delivered to the purchasing Option Holder, a certificate or certificates
      representing the number of fully paid and nonassessable shares of Common Stock
      or Other Securities to which such Option Holder shall be entitled upon such
      exercise, plus in lieu of any fractional share to which such Option Holder
      would
      otherwise be entitled, cash in an amount determined pursuant to Section 5(e).
      The term “Other Securities” refers to any stock (other than Common Stock), other
      securities or assets (including cash) of the Company or any other person
      (corporate or otherwise) which the Option Holder at any time shall be entitled
      to receive, or shall have received, upon the exercise of the Option, in lieu
      of
      or in addition to Common Stock, or which at any time shall be issuable or shall
      have been issued in exchange for or in replacement of Common Stock or Other
      Securities pursuant to Section 5 below or otherwise.

    

    
      	 	
              5.

            	
              Adjustment
                of Purchase Price and Number of Shares
                Purchasable.

            

    

    

    The
      Purchase Price and the number of Shares are subject to adjustment from time
      to
      time as set forth in this Section 5.

    

    
      	 	
              (a)

            	
              In
                case the Company shall at any time after the date of this Option
                Agreement
                (i) declare a dividend on the Common Stock in shares of its capital
                stock,
                (ii) subdivide the outstanding Common Stock, (iii) combine the outstanding
                Common Stock into a smaller number of Common Stock, or (iv) issue
                any
                shares of its capital stock by reclassification of the Common Stock
                (including any such reclassification in connection with a consolidation
                or
                merger in which the Company is the continuing corporation), then
                in each
                case the Purchase Price, and the number and kind of Shares receivable
                upon
                exercise, in effect at the time of the record date for such dividend
                or of
                the effective date of such subdivision, combination, or reclassification
                shall be proportionately adjusted so that the holder of any Option
                exercised after such time shall be entitled to receive the aggregate
                number and kind of Shares which, if such Option had been exercised
                immediately prior to such record date, he would have owned upon such
                exercise and been entitled to receive by virtue of such dividend,
                subdivision, combination, or reclassification. Such adjustment shall
                be
                made successively whenever any event listed above shall
                occur.

            

    

     

    
 

    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    
      	 	
              (b)

            	
              No
                adjustment in the Purchase Price shall be required if such adjustment
                is
                less than US $0.01; provided,
                however,
                that any adjustments which by reason of this subsection (b) are not
                required to be made shall be carried forward and taken into account
                in any
                subsequent adjustment. All calculations under this Section 5 shall
                be made
                to the nearest cent or to the nearest one-thousandth of a share,
                as the
                case may be.

            

    

    

    
      	 	
              (c)

            	
              Upon
                each adjustment of the Purchase Price as a result of the calculations
                made
                in subsection (a) of this Section 5, the Option outstanding prior
                to the
                making of the adjustment in the Purchase Price shall thereafter evidence
                the right to purchase, at the adjusted Purchase Price, that number
                of
                Shares (calculated to the nearest thousandth) obtained by (i) multiplying
                the number of Shares purchasable upon exercise of the Option immediately
                prior to adjustment of the number of Shares by the Purchase Price
                in
                effect prior to adjustment of the Purchase Price and (ii) dividing
                the
                product so obtained by the Purchase Price in effect immediately after
                such
                adjustment of the Purchase Price.

            

    

    

    
      	 	
              6.

            	
              Further
                Covenants of the Company.

            

    

    

    
      	 	
              (a)

            	
              Dilution
                or Impairments.
                The Company will not, by amendment of its certificate of incorporation
                or
                through any reorganization, transfer of assets, consolidation, merger
                or
                dissolution, avoid or seek to avoid the observance or performance
                of any
                of the terms of the Option or of this Option Agreement, but will
                at all
                times in good faith assist in the carrying out of all such terms
                and in
                the taking of all such action as may be necessary or appropriate
                in order
                to protect the rights of the Option Holder against dilution or other
                impairment. Without limiting the generality of the foregoing, the
                Company:

            

    

    

    
      	 	
              (i)

            	
              shall
                at all times reserve and keep available, solely for issuance and
                delivery
                upon the exercise of the Option, all shares of Common Stock (or Other
                Securities) from time to time issuable upon the exercise of the Option
                and
                shall take all necessary actions to ensure that the par value per
                share,
                if any, of the Common Stock (or Other Securities) is at all times
                equal to
                or less than the then effective Purchase Price per share;
                and

            

    

     

    
 

    
      
         

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	
              (ii)

            	
              will
                take all such action as may be necessary or appropriate in order
                that the
                Company may validly and legally issue fully paid and nonassessable
                shares
                of Common Stock or Other Securities upon the exercise of the Option
                from
                time to time outstanding.

            

    

    

    
      	 	
              (b)

            	
              Title
                to Stock.
                All Shares delivered upon the exercise of the Option shall be validly
                issued, fully paid and nonassessable; each Option Holder shall, upon
                such
                delivery, receive good and marketable title to the Shares, free and
                clear
                of all voting and other trust arrangements, liens, encumbrances,
                equities
                and claims whatsoever; and the Company shall have paid all taxes,
                if any,
                in respect of the issuance thereof.

            

    

    

    
      	 	
              (c)

            	
              Exchange
                of Option.
                Subject to Section 2(a) hereof, upon surrender for exchange of any
                Option
                to the Company, the Company at its expense will promptly issue and
                deliver
                to or upon the order of the holder thereof a new Option or like tenor,
                in
                the name of such holder, calling in the aggregate for the purchase
                of the
                number of Shares called for on the face of the Option surrendered.
                The
                Option and all rights thereunder are not transferable in whole or
                in part
                upon the books of the Company.

            

    

    

    
      	 	
              (d)

            	
              Replacement
                of Option.
                Upon receipt of evidence reasonably satisfactory to the Company of
                the
                loss, theft, destruction or mutilation of any Option and, in the
                case of
                any such loss, theft or destruction, upon delivery of an indemnity
                agreement reasonably satisfactory in form and amount to the Company
                or, in
                the case of any such mutilation, upon surrender and cancellation
                of such
                Option, the Company, at the expense of the Option Holder, will execute
                and
                deliver, in lieu thereof, a new Option of like
                tenor.

            

    

    

    
      	 	
              (e)

            	
              Fractional
                Shares.
                No fractional Shares are to be issued upon the exercise of any Option,
                but
                the Company shall round any fraction of a share to the nearest whole
                Share.

            

    

    

    
      	 	
              7.

            	
              Miscellaneous.

            

    

    

    All
      notices, certificates and other communications from or at the request of the
      Company to any Option Holder shall be mailed by first class, registered or
      certified mail, postage prepaid, to such address as may have been furnished
      to
      the Company in writing by such Option Holder, or, until an address is so
      furnished, to the address of the last holder of such Option who has so furnished
      an address to the Company, except as otherwise provided herein. This Option
      Agreement and any of the terms hereof may be changed, waived, discharged or
      terminated only by an instrument in writing signed by the party against which
      enforcement of such change, waiver, discharge or termination is sought. This
      Option Agreement shall be construed and enforced in accordance with and governed
      by the laws of the State of Texas. The headings in this Option Agreement are
      for
      purposes of reference only and shall not limit or otherwise affect any of the
      terms hereof. This Option Agreement, together with the forms of instruments
      annexed hereto as schedules, constitutes the full and complete agreement of
      the
      parties hereto with respect to the subject matter hereof. For purposes of this
      Option Agreement, a faxed signature shall constitute an original
      signature.

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    

    IN
      WITNESS WHEREOF, the Company has caused this Option Agreement to be executed
      on
      this 28th day of February 2007, to be effective as of February 27, 2007, in
      Houston, Texas, by its proper corporate officers, thereunto duly
      authorized.

    

    

    DATA
      CALL TECHNOLOGIES, INC.

    

    

    By________________________________________

        
      James Ammons, 

       
 Chief
      Executive Officer

     

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE 1

    

    OPTION

    

    THIS
      OPTION AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN
      REGISTERED UNDER: (A) THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), IN
      RELIANCE UPON THE EXEMPTIONS FROM REGISTRATION PROVIDED IN SECTIONS 3 AND 4
      OF
      SUCH ACT AND REGULATION S PROMULGATED THEREUNDER; OR (B) ANY STATE SECURITIES
      LAWS IN RELIANCE UPON APPLICABLE EXEMPTIONS THEREUNDER. THIS OPTION MAY NOT
      BE
      EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON UNLESS REGISTERED UNDER THE ACT
      OR
      AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. THIS OPTION MUST BE ACQUIRED
      FOR INVESTMENT ONLY FOR THE ACCOUNT OF THE INVESTOR, AND NEITHER THE OPTION
      NOR
      THE UNDERLYING STOCK MAY BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE PROVISIONS
      OF REGULATION S AND OTHER LAWS OR PURSUANT TO REGISTRATION UNDER THE ACT OR
      AN
      AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS INVOLVING THIS
      OPTION OR THE SECURITIES TO BE ISSUED UPON ITS EXERCISE MAY NOT BE CONDUCTED
      UNLESS IN COMPLIANCE WITH THE ACT.

    

     

    To
      Purchase 1,500,000 Shares

    of
      Common
      Stock

    DATA
      CALL TECHNOLOGIES, INC.

    

    

    This
      certifies that, for value received, the hereafter named registered owner is
      entitled, subject to the terms and conditions of this Option, until the
      expiration date, to purchase the number of shares (the “Shares”) set forth above
      of the common stock (“Common Stock”), of DATA CALL TECHNOLOGIES, INC. (the
“Company”) from the Company at the purchase price per share hereafter set forth
      below, on delivery of this Option to the Company with the exercise form duly
      executed and payment of the purchase price (in cash or by certified or bank
      cashier’s check payable to the order of the Company) for each Share purchased.
      This Option is subject to the terms of the Option Agreement between the parties
      thereto dated as of February 28, 2007, the terms of which are hereby
      incorporated herein. Reference is hereby made to such Option Agreement for
      a
      further statement of the rights of the holder of this Option, including, but
      not
      limited to the expiration dates of this Option as described in Section 3 of
      the
      Option Agreement.

    

    Registered
      Owner: Everett
      Poe   Date:
      February
      28, 2007, to be effective February 27, 2007  

    

    Purchase
      Price

    Per
      Share:  US
      $0.10

    

    Expiration
      Date:  February
      27, 2010, 5:00 p.m. Central Standard Time.

    

    WITNESS
      the signature of the Company’s authorized officer:

    

    DATA
      CALL TECHNOLOGIES, INC.

    

    

    

    By________________________________________

                                                                                                      
       
      James
      Ammons, Chief Executive Officer

     

    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SCHEDULE 2

    

    FORM
      OF ASSIGNMENT AND TRANSFER

    

    

    For
      value
      received, the undersigned hereby sells, assigns and transfers unto
      __________________________________ the right represented by the enclosed Option
      to purchase _________________ shares of Common Stock of DATA CALL TECHNOLOGIES,
      INC. to which the enclosed Option relates, and
      appoints ____________________Attorney
      to transfer such right on the books of DATA CALL TECHNOLOGIES, INC. with full
      power of substitution in the premises.

    

    The
      undersigned represents and warrants that the transfer of the enclosed Option
      is
      permitted by the terms of the Option Agreement pursuant to which the enclosed
      Option has been issued, and the transferee hereof, by his, her or its acceptance
      of this Agreement, represents and warrants that he, she or it is familiar with
      the terms of said Option Agreement and agrees to be bound by the terms thereof
      with the same force and effect as if a signatory thereto.

    

    Dated:______________

    

    

    ____________________________________________

    (Signature
      must conform in all respects to name of holder

    as
      specified on the face of the enclosed Option)

     

    ____________________________________________

    (Printed
      Name)

    

    ____________________________________________

    (Address)

    

    Signed
      in
      the presence of:

    

    ____________________________________

     

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

                SCHEDULE
      3

    FORM
      OF SUBSCRIPTION

                                           
      (To
      be
      signed only upon exercise of Option)

    

    

    To
      DATA
      CALL TECHNOLOGIES, INC.:

    

    The
      undersigned, the holder of the enclosed Option, hereby irrevocably elects to
      exercise the purchase right represented by such Option for, and to purchase
      thereunder, _____________-*
      shares
      of Common Stock of DATA CALL TECHNOLOGIES, INC. and herewith makes payment
      of US
      $_______________(or elects to pay for the exercise in shares of common stock
      pursuant to Section 3(d)(ii) of the Option Agreement as evidenced by the
      calculation below by checking this box o),
      and
      requests that the certificate or certificates for such shares be issued in
      the
      name of and delivered to the undersigned.

    

    Dated:______________

    ____________________________________________

    (Signature
      must conform in all respects to name of holder

    as
      specified on the face of the enclosed Option)

    

    ____________________________________________

    (Printed
      Name)

    

    ____________________________________________

    (Address)

    

    
      	
              (*)

            	
              Insert
                here the number of shares called for on the face of the Option or,
                in the
                case of a partial exercise, the portion thereof as to which the Option
                is
                being exercised, in either case without making any adjustment for
                additional Common Stock or any other stock or other securities or
                property
                which, pursuant to the adjustment provisions of the Option Agreement
                pursuant to which the Option was granted, may be delivered upon
                exercise.

            

    

    

    

    Calculation
      pursuant to Section 3(d)(ii) of the Option Agreement

    

    ________________
      = Total
      Shares Exercised 

    

    ________________
      = Purchase
      Price (as
      defined and adjusted in the Option Agreement)

    

    ________________
      = Fair
      Market Value
      -
the
      average closing price of the Common Stock (if actual sales price information
      on
      any trading day is not available, the closing bid price shall be used) for
      the
      five trading days prior to the date of exercise of this Option (the “Average
      Closing Bid Price”), as reported by the National Association of Securities
      Dealers Automated Quotation System (“NASDAQ”), or if the Common Stock is not
      traded on NASDAQ, the Average Closing Bid Price in the over-the-counter market;
      provided, however, that if the Common Stock is listed on a stock exchange,
      the
      Fair Market Value shall be the Average Closing Bid Price on such exchange;
      and,
      provided further, that if the Common Stock is not quoted or listed by any
      organization, the fair value of the Common Stock, as determined by the Board
      of
      Directors of the Company, whose determination shall be conclusive, shall be
      used).  In no event shall the Fair Market Value of any share of Common
      Stock be less than its par value.

      

    

    

             
      Total
      Shares Exercised x Purchase Price

    _______________
      =  Shares to be Issued  =  Total Shares
      Exercised      
 -------------------------------------------------- 

    Fair
      Market Valuenotes.pdf -- Converted by SECPublisher 4.0, created by BCL Technologies Inc., for SEC Filing

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF
THE INDENTURE (HEREINAFTER DEFINED) AND IS REGISTERED IN THE NAME OF A
DEPOSITARY (AS DEFINED IN THE INDENTURE) OR A NOMINEE OF A DEPOSITARY. THIS NOTE
IS NOT EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE
REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”),
TO THE TRUST (HEREINAFTER DEFINED) OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND UNLESS ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN. 

	CUSIP No.:
      44982X AA 5  	  	 
         Principal Amount: U.S. $400,000,000  	  	  
	  
	ING USA GLOBAL FUNDING TRUST
      1 
	  
	SECURED MEDIUM-TERM
      NOTES 
	  
	Original Issue Date: 
      September 22, 2005  	  	Floating Rate Note: [ ]
      Yes [X] No. If yes,  
	Issue Price: 
      99.781%  	  	                       
      Regular Floating
      Rate Notes [  ]  	  	  
	Stated Maturity Date:
      October 1, 2010  	  	 
                     
           Inverse Floating Rate Notes [  ]  	  	  
	Settlement Date: 
      September 22, 2005  	  	                      
      Floating Rate/Fixed
      Rate Notes [  ] 	  	  
	Securities Exchange
      Listing: [X] Yes [ ] No. If yes,  	  	 
                     
           Fixed Rate/Floating Rate Notes [  ] 	  	  
	 
                       indicate name(s) of
      Securities Exchange(s):  	  	 
                     
           Interest Rate:  	  	  
	New York Stock Exchange. 
    	  	                       Interest Rate
      Basis(es):  	  	  
	Depositary: The Depository
      Trust Company  	  	 
                     
           LIBOR [ ]  	  	  
	Authorized Denominations:
      $1,000  	  	 
                     
           [ ] LIBOR Reuters Page:  	  	  
	Collateral held in the
      Trust: ING USA Annuity and Life  	  	               
             [ ] LIBOR Moneyline Telerate Page:  
	 
       Insurance
      Company Funding Agreement No. RMTN-  	  	                      
      LIBOR
      Currency:	  	  
	 
       1, all
      proceeds of the Funding Agreement and all  	  	                      
      EURIBOR [
      ]                    
    	  	  
	 
       rights and
      books and records pertaining to the  	  	                      
      CMT Rate [
      ]             
    	  	  
	 
       foregoing.  	  	                      
      Designated CMT
      Moneyline             	  	  
	Additional Amounts to be
      Paid: [ ] Yes [X] No  	  	                      
      Telerate
      Page:        
	Interest Rate or
      Formula:  	  		  	 

1

	Fixed Rate Note: [X] Yes [ ] No. If yes,  	  	 
                         
                         
                       If Telerate Page
      7052:  
	 
                       Interest Rate:
      4.50%  	  	  	  	 
                         
                         
                       [ ] Weekly
      Average  
	               
         Interest Payment Frequency: Semi-annually  	  	 
                         
                         
                       [ ] Monthly
      Average  
	               
         Interest Payment Dates: The first day of each 
	  	 
                         
                       Designated CMT Maturity
      Index:  
	April and October and the Maturity Date,
      commencing  	  	 
                       CD Rate [ ] 
    
	April 1,
      2006.  	  	  	  	 
                       Commercial Paper Rate [
      ]  
	 
                       Day Count
      Convention:  	  	As indicated on the  	  	  
	reverse
      hereof.  	  	  	  	 
                       Eleventh District Cost of
      Funds Rate [ ]  
	 
                       Additional/Other
      Terms:  	  	Not applicable  	  	 
                       Federal Funds Rate [
      ]  
	Amortizing Note: [ ] Yes [X] No. If yes,  	  	 
                       Prime Rate [
      ]  
	               
         Amortization schedule or formula:  	  	 
                       Treasury Rate [
      ]  
	 
                       Additional/Other
      Terms:  	  	  	  	 
                       Index
      Maturity:  
	Discount Note: [ ] Yes [X] No. If yes,  	  	 
                       Spread and/or Spread
      Multiplier:  
	               
         Total
      Amount of Discount:  	  	 
                       Initial Interest Rate, if
      any:  
	               
         Initial
      Accrual Period of Discount:  	  	 
                       Initial Interest Reset
      Date:  
	 
                       Interest Payment
      Dates:  	  	  	  	 
                       Interest Reset
      Dates:  
	 
                       Additional/Other
      Terms:  	  	  	  	 
                       Interest Determination
      Date(s):  
	Redemption Provisions: [ ] Yes [X] No. If yes, 
    	  	 
                       Interest Payment
      Dates:  
	 
                       Initial Redemption
      Date:  	  	  	  	 
                       Maximum Interest Rate, if
      any:  
	               
         Initial
      Redemption Percentage:  	  	 
                       Minimum Interest Rate, if
      any:  
	               
         Annual
      Redemption Percentage Reduction,  	  	 
                       Fixed Rate Commencement
      Date, if any:  
	      if
      any:  	  	  	  	 
                       Floating Rate Commencement
      Date, if any:  
	 
                       Additional/Other
      Terms:  	  	  	  	 
                       Fixed Interest Rate, if
      any:  
	Repayment Provisions: [ ] Yes [X] No. If yes, 
	  	 
                       Day Count
      Convention:  
	 
                       Repayment
      Date(s):  	  	  	  	 
                       Additional/Other
      Terms:  
	 
                       Repayment
      Price:  	  	  	  	Regular Record Date(s):
      The date that is fifteen (15)  
	 
                       Additional/Other
      Terms:  	  	  	  	calendar days prior to the
      applicable Interest Payment  
	  	  	  	  	Date.  
	  	  	  	  	Sinking Fund: Not
      applicable  
	  	  	  	  	Specified Currency: U.S.
      Dollars  
	  	  	  	  	Exchange Rate Agent: Not
      applicable  
	  	  	  	  	Calculation Agent: Not
      applicable  
	  	  	  	  	Additional/Other Terms:
      Not applicable  

     The ING USA Global
Funding Trust designated above (the “Trust”), for value received, hereby
promises to pay to Cede & Co., or its registered assigns, the Principal
Amount specified above on the Stated Maturity Date specified above and, if so
specified above, to pay interest thereon from the Original Issue Date specified
above or from the most recent Interest Payment Date specified above to which
interest has been paid or duly provided for at the rate per annum determined in
accordance with the provisions on the reverse hereof and as specified above,
until the principal hereof is paid or made available for payment. Unless
otherwise specified above, payments of principal, premium, if any, and interest
hereon will be made in the lawful currency of the United States of
America

2

(“U.S. Dollars” or “United States Dollars”). If
the Specified Currency specified above is other than U.S. Dollars, the Holder
(as defined in the Indenture) shall receive such payments in such Foreign
Currency (as hereinafter defined). The “Principal Amount” of this Note at any
time means (1) if this Note is a Discount Note (as hereinafter defined), the
Amortized Face Amount (as hereinafter defined) at such time and (2) in all other
cases, the Principal Amount hereof. Capitalized terms not otherwise defined
herein shall have their meanings set forth in the Indenture, dated as of the
date of the Pricing Supplement (the “Indenture”), between Citibank, N.A., as the
indenture trustee (the “Indenture Trustee”), and the Trust, or on the face
hereof. 

     This Note will
mature on the Stated Maturity Date, unless its principal (or any installment of
its principal) becomes due and payable prior to the Stated Maturity Date,
whether, as applicable, by the declaration of acceleration of maturity, notice
of redemption by the Trust or otherwise (the Stated Maturity Date or any date
prior to the Stated Maturity Date on which this Note becomes due and payable, as
the case may be, is referred to as the “Maturity Date”). 

     A “Discount Note”
is any Note that has an Issue Price that is less than 100% of the Principal
Amount thereof by more than a percentage equal to the product of 0.25% and the
number of full years to the Stated Maturity Date. 

     Unless otherwise
specified above, the interest payable on each Interest Payment Date or the
Maturity Date will be the amount of interest accrued from and including the
Original Issue Date or from and including the last Interest Payment Date to
which interest has been paid or duly provided for, as the case may be, to, but
excluding, such Interest Payment Date or the Maturity Date, as the case may be.

     Unless otherwise
specified above, the interest payable on any Interest Payment Date will be paid
to the Person that was the Holder on the Regular Record Date for such Interest
Payment Date, which Regular Record Date shall be the fifteenth
(15th) calendar day,
whether or not a Business Day, immediately preceding the related Interest
Payment Date; provided
that, notwithstanding any provision of the Indenture to the contrary, interest
payable on any Maturity Date shall be payable to the Person to whom principal
shall be payable; and provided,
further, that unless otherwise specified above, in
the case of a Note initially issued between a Regular Record Date and the
Interest Payment Date relating to such Regular Record Date, interest for the
period beginning on the Original Issue Date and ending on such Interest Payment
Date shall be paid on the Interest Payment Date following the next succeeding
Regular Record Date to the Holder on such next succeeding Regular Record Date.

     Payments of
principal of, and premium, if any, and interest and other amounts due and owing,
if any, will be made through the Indenture Trustee to the account of DTC or its
nominee and will be made in accordance with depositary arrangements with DTC.

     Unless otherwise
specified on the face hereof, the Holder hereof will not be obligated to pay any
administrative costs imposed by banks in making payments in immediately
available funds by the Trust. Unless otherwise specified on the face
hereof,

3

any tax assessment or governmental charge imposed upon payments hereunder, including, without limitation, any withholding tax, will be borne by the Holder hereof. 

     REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF.  SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

     Unless the certificate of authentication hereon shall have been executed by the Indenture Trustee pursuant to the Indenture, this Note shall not be entitled to any benefit under such Indenture or be
valid or obligatory for any purpose. 

4

     IN WITNESS WHEREOF,
the Trust has caused this instrument to be duly executed, by manual or facsimile
signature. 

	  	  	  	  	The ING USA GLOBAL FUNDING TRUST  
	  	  	  	  	SPECIFIED ON THE FACE OF THIS NOTE  
	  
	Dated:  	  	Original Issue Date  	  	By: U.S. Bank National Association, not in
      its  
	  	  	  	  	individual capacity but solely as Trustee. 
    
	  
	  
	  
	  	  	  	  	By:________________________
	  	  	  	  	       
         Authorized
      Officer  

	 	
      CERTIFICATE OF AUTHENTICATION
      

                 
      This is one of the Notes of the ING USA Global Funding Trust specified on
      the 
face of this Note referred to in the
      within-mentioned Indenture. 

CITIBANK, N.A. 
As
Indenture Trustee 
Dated: Original Issue Date

By: 
Authorized Signatory

5

	[REVERSE FORM OF
      NOTE]

Section 1. General. This Note is one of a duly
authorized issue of Notes of the Trust. The Notes are issued pursuant to the
Indenture. 

	Section 2. Currency.

     (a) Unless
specified otherwise on the face hereof, this Note is denominated in, and
payments of principal, premium, if any, and/or interest, if any, will be made in
U.S. Dollars. If specified as the Specified Currency, this Note may be
denominated in, and payments of principal, premium, if any, and/or interest, if
any, may be made in a single currency other than U.S. Dollars (a “Foreign
Currency”). If this Note is denominated in a Foreign Currency, the Holder of
this Note is required to pay for this Note in the Specified
Currency. 

     (b) Unless
specified otherwise on the face hereof, if this Note is denominated in a Foreign
Currency, the Trust is obligated to make payments of principal of, and premium,
if any, and interest, if any, on, this Note in the Specified Currency. Any
amounts so payable by the Trust in the Specified Currency will be converted by
the Exchange Rate Agent into U.S. Dollars for payment to the Holder hereof
unless otherwise specified on the face of this Note or the Holder elects, in the
manner described below, to receive these amounts in the Specified Currency. If
this Note is denominated in a Foreign Currency, any U.S. Dollar amount to be
received by the Holder hereof will be based on the highest bid quotation in The
City of New York received by the Exchange Rate Agent at approximately 11:00
A.M., New York City time, on the second Business Day preceding the applicable
payment date from three recognized foreign exchange dealers (one of whom may be
the Exchange Rate Agent) selected by the Exchange Rate Agent and approved by the
Trust for the purchase by the quoting dealer of the Specified Currency for U.S.
Dollars for settlement on that payment date in the aggregate amount of the
Specified Currency payable to all Holders of the Notes scheduled to receive U.S.
Dollar payments and at which the applicable dealer commits to execute a
contract. All currency exchange costs will be borne by the Holders of the Notes
by deductions from any payments. If three bid quotations are not available,
payments will be made in the Specified Currency. If this Note is denominated in
a Foreign Currency, the Holder of this Note may elect to receive all or a
specified portion of any payment of principal, premium, if any, and/or interest,
if any, in the Specified Currency by submitting a written request to the
Indenture Trustee at its Corporate Trust Office in The City of New York on or
prior to the applicable Regular Record Date or at least 15 calendar days prior
to the Maturity Date, as the case may be. This written request may be mailed or
hand delivered or sent by cable, telex or other form of facsimile transmission.
This election will remain in effect until revoked by written notice delivered to
the Indenture Trustee on or prior to a Regular Record Date or at least 15
calendar days prior to the Maturity Date, as the case may be. The Holder of a
Note denominated in a Foreign Currency to be held in the name of a broker or
nominee should contact their broker or nominee to determine whether and how an
election to receive payments in the Specified Currency may be made. Unless
specified otherwise on the face hereof, if the Specified Currency is other than
U.S. Dollars, a beneficial owner of a Note represented by a global security
which elects to

6

receive payments of principal, premium, if any,
and/or interest, if any, in the Specified Currency must notify the Participant
through which it owns its interest on or prior to the applicable Regular Record
Date or at least 15 calendar days prior to the Maturity Date, as the case may
be, of its election. The applicable Participant must notify DTC of its election
on or prior to the third Business Day after the applicable Regular Record Date
or at least 12 calendar days prior to the Maturity Date, as the case may be, and
DTC will notify the Indenture Trustee of that election on or prior to the fifth
Business Day after the applicable Regular Record Date or at least ten calendar
days prior the Maturity Date, as the case may be. If complete instructions are
received by the Participant from the applicable beneficial owner and forwarded
by the Participant to DTC, and by DTC to the Indenture Trustee, on or prior to
such dates, then the applicable beneficial owner will receive payments in the
Specified Currency. 

     (c) The Trust will
indemnify the Holder hereof against any loss incurred as a result of any
judgment or order being given or made for any amount due under this Note and
that judgment or order requiring payment in a currency (the “Judgment Currency”)
other than the Specified Currency, and as a result of any variation between: (i)
the rate of exchange at which the Specified Currency amount is converted into
the Judgment Currency for the purpose of that judgment or order; and (ii) the
rate of exchange at which the Holder, on the date of payment of that judgment or
order, is able to purchase the Specified Currency with the amount of the
Judgment Currency actually received. 

     (d) Unless
otherwise specified on the face hereof, if payment hereon is required to be made
in a Foreign Currency and such currency is unavailable due to the imposition of
exchange controls or other circumstances beyond the Trust’s control, then the
Trust will be entitled to make payments with respect hereto in U.S. Dollars on
the basis of the Market Exchange Rate (as hereinafter defined), computed by the
Exchange Rate Agent, on the second Business Day prior to the particular payment
or, if the Market Exchange Rate is not then available, on the basis of the most
recently available Market Exchange Rate. 

     (e) The “Market
Exchange Rate” for the Foreign Currency shall mean the noon dollar buying rate
in The City of New York for cable transfers for the Foreign Currency as
certified for customs purposes (or, if not so certified, as otherwise
determined) by the Federal Reserve Bank of New York. 

     (f) All
determinations made by the Exchange Rate Agent shall be at its sole discretion
and shall, in the absence of manifest error, be conclusive for all purposes and
binding on the Holder hereof. 

     (g) All costs of
exchange in respect of this Note, if denominated in a Foreign Currency, will be
borne by the Holder hereof. 

Section 3. Determination of Interest Rate and Certain Other
Terms. 

	(a)      	Fixed Rate Notes. If this Note is specified on the face hereof as a “Fixed Rate
      Note”: 
	 

7

(i) This Note will bear interest at the rate per
annum specified on the face hereof. Interest on this Note will be computed on
the basis of a 360-day year of twelve 30-day months. 

	(ii)  	  	Unless otherwise
      specified on the face hereof, the Interest Payment  
	Dates for this Note will
      be as follows:  	  	  
	  
	       Interest Payment
      Frequency  	  	Interest
      Payment Dates  
	
      

    		
      

    
	  
	       Monthly  	  	Fifteenth day of each
      calendar  
	  	  	  	  	month, beginning in the
      first  
	  	  	  	  	calendar month following
      the month  
	  	  	  	  	this Note was
      issued.  
	  
	       Quarterly  	  	Fifteenth day of every
      third calendar  
	  	  	  	  	month, beginning in the
      third  
	  	  	  	  	calendar month following
      the month  
	  	  	  	  	this Note was
      issued.  
	  
	       Semi-annual  	  	Fifteenth day of every
      sixth calendar  
	  	  	  	  	month, beginning in the
      sixth  
	  	  	  	  	calendar month following
      the month  
	  	  	  	  	this Note was
      issued.  
	  
	       Annual  	  	Fifteenth day of every
      twelfth  
	  	  	  	  	calendar month, beginning
      in the  
	  	  	  	  	twelfth calendar month
      following the  
	  	  	  	  	month this Note was
      issued.  

	 	(iii)      	If any Interest Payment Date or the Maturity Date of this Note
      falls on a day that is not a Business Day, the
      Trust will make the required payment of principal, premium, if any, and/or
      interest or other amounts on the next succeeding Business Day, and no
      additional interest will accrue in respect of the payment made on that
      next succeeding Business Day. 
	 
	 	
	 
	(b)      	Floating Rate Notes. If this Note is specified on the face hereof as a “Floating
      Rate Note”: 
	 
	 	(i)      	Interest Rate Basis. Interest on
      this Note will be determined by reference to the
      applicable Interest Rate Basis or Interest Rate Bases, which may, as
      described below, include the CD Rate, the CMT Rate, the Commercial Paper
      Rate, the Eleventh District Cost of Funds Rate, the Federal Funds Rate,
      LIBOR, EURIBOR, the Prime Rate or the Treasury Rate (each as defined
      below). 
	 
	 	
	 
	 	(ii)      	Effective Rate. The rate derived
      from the applicable Interest Rate Basis will be
      determined in accordance with the related provisions below. The interest
      rate in effect on each day will be based on: (1) if that day is an
      Interest Reset Date, the rate determined as of the Interest Determination
      Date immediately preceding that Interest Reset Date; or (2) if that day is
      not an 
	 
	 	
	 

8

Interest Reset Date, the rate determined as of
the Interest Determination Date immediately preceding the most recent Interest
Reset Date. 

(iii) Spread; Spread
Multiplier; Index Maturity. The “Spread” is the
number of basis points (one one-hundredth of a percentage point) specified on
the face hereof to be added to or subtracted from the related Interest Rate
Basis or Interest Rate Bases applicable to this Note. The “Spread Multiplier” is
the percentage specified on the face hereof of the related Interest Rate Basis
or Interest Rate Bases applicable to this Note by which the Interest Rate Basis
or Interest Rate Bases will be multiplied to determine the applicable interest
rate. The “Index Maturity” is the period to maturity of the instrument or
obligation with respect to which the related Interest Rate Basis or Interest
Rate Bases will be calculated.

(iv) Regular Floating
Rate Note. Unless this Note is specified on the face
hereof as a Floating Rate/Fixed Rate Note, a Fixed Rate/Floating Rate Note or an
Inverse Floating Rate Note, this Note (a “Regular Floating Rate Note”) will bear
interest at the rate determined by reference to the applicable Interest Rate
Basis or Interest Rate Bases: (1) plus or minus the applicable Spread, if any;
and/or (2) multiplied by the applicable Spread Multiplier, if any. Commencing on
the first Interest Reset Date, the rate at which interest on this Regular
Floating Rate Note is payable will be reset as of each Interest Reset Date;
provided, however, that
the interest rate in effect for the period, if any, from the Original Issue Date
to the first Interest Reset Date will be the Initial Interest Rate. 

(v) Floating
Rate/Fixed Rate Notes. If this Note is specified on
the face hereof as a “Floating Rate/Fixed Rate Note”, this Note will bear
interest at the rate determined by reference to the applicable Interest Rate
Basis or Interest Rate Bases: (1) plus or minus the applicable Spread, if any;
and/or (2) multiplied by the applicable Spread Multiplier, if any. Commencing on
the first Interest Reset Date, the rate at which this Floating Rate/Fixed Rate
Note is payable will be reset as of each Interest Reset Date; provided, however, that: (A) the interest
rate in effect for the period, if any, from the Original Issue Date to the first
Interest Reset Date will be the Initial Interest Rate specified on the face
hereof; and (B) the interest rate in effect commencing on the Fixed Rate
Commencement Date will be the Fixed Interest Rate, if specified on the face
hereof, or, if not so specified, the interest rate in effect on the day
immediately preceding the Fixed Rate Commencement Date. 

(vi) Fixed
Rate/Floating Rate Notes. If this Note is specified
on the face hereof as a “Fixed Rate/Floating Rate Note”, this Note will bear
interest at the rate per annum specified on the face hereof as the Fixed
Interest Rate; provided, however, that commencing on the Floating Rate Commencement Date, this Note
will bear interest at the rate determined by reference to the applicable
Interest Rate Basis or Interest Rate Bases: (1) plus or minus the

9

applicable Spread, if any; and/or (2) multiplied
by the applicable Spread Multiplier, if any. Commencing on the first Interest
Reset Date, the rate at which this Fixed Rate/Floating Rate Note is payable will
be reset as of each Interest Reset Date. 

(vii) Inverse Floating
Rate Notes. If this Note is specified on the face
hereof as an “Inverse Floating Rate Note”, this Note will bear interest at the
Fixed Interest Rate minus the rate determined by reference to the applicable
Interest Rate Basis or Interest Rate Bases: (1) plus or minus the applicable
Spread, if any; and/or (2) multiplied by the applicable Spread Multiplier, if
any; provided, however,
that interest on this Inverse Floating Rate Note will not be less than zero.
Commencing on the first Interest Reset Date, the rate at which interest on this
Inverse Floating Rate Note is payable will be reset as of each Interest Reset
Date; provided, however,
that the interest rate in effect for the period, if any, from the Original Issue
Date to the first Interest Reset Date will be the Initial Interest Rate.

(viii) Interest Reset
Dates The period
between Interest Reset Dates will be the “Interest Period.” Unless otherwise
specified on the face hereof, the Interest Reset Dates will be, in the case of
this Floating Rate Note if by its terms it resets: (1) daily—each business day;
(2) weekly—the Wednesday of each week, with the exception of any weekly reset
Floating Rate Note as to which the Treasury Rate is an applicable Interest Rate
Basis, which will reset the Tuesday of each week; (3) monthly—the fifteenth day
of each calendar month, with the exception of any monthly reset Floating Rate
Note as to which the Eleventh District Cost of Funds Rate is an applicable
Interest Rate Basis, which will reset on the first calendar day of the month;
(4) quarterly—the fifteenth day of March, June, September and December of each
year; (5) semi-annually—the fifteenth day of the two months of each year
specified on the face hereof; and (6) annually—the fifteenth day of the month of
each year specified on the face hereof; provided,
however, that, with respect to a Floating Rate/Fixed
Rate Note, the rate of interest thereon will not reset after the particular
Fixed Rate Commencement Date. If any Interest Reset Date for this Floating Rate
Note would otherwise be a day that is not a Business Day, the particular
Interest Reset Date will be postponed to the next succeeding Business Day,
except that in the case of a Floating Rate Note as to which LIBOR is an
applicable Interest Rate Basis and that Business Day falls in the next
succeeding calendar month, the particular Interest Reset Date will be the
immediately preceding Business Day. 

(ix) Interest
Determination Dates. The interest rate applicable to
a Floating Rate Note for an Interest Period commencing on the related Interest
Reset Date will be determined by reference to the applicable Interest Rate Basis
as of the particular “Interest Determination Date”, which will be: (1) with
respect to the Commercial Paper Rate, Federal Funds Rate and the Prime Rate—the
Business Day immediately preceding the related Interest Reset Date; (2) with
respect to the CD Rate and the CMT Rate—the second

10

Business Day preceding the related Interest Reset
Date; (3) with respect to the Eleventh District Cost of Funds Rate—the last
working day of the month immediately preceding the related Interest Reset Date
on which the Federal Home Loan Bank of San Francisco publishes the Eleventh
District Index (as defined below); (4) with respect to LIBOR and EURIBOR—the
second London Banking Day (as defined below) preceding the related Interest
Reset Date; and (5) with respect to the Treasury Rate—the day of the week in
which the related Interest Reset Date falls on which day Treasury Bills (as
defined below) are normally auctioned (i.e., Treasury Bills are normally sold at
auction on Monday of each week, unless that day is a legal holiday, in which
case the auction is normally held on the following Tuesday, except that the
auction may be held on the preceding Friday); provided, however, that if an auction is
held on the Friday of the week preceding the related Interest Reset Date, the
Interest Determination Date will be the preceding Friday. The Interest
Determination Date pertaining to a Floating Rate Note, the interest rate of
which is determined with reference to two or more Interest Rate Bases, will be
the latest Business Day which is at least two Business Days before the related
Interest Reset Date for the applicable Floating Rate Note on which each Interest
Reset Basis is determinable. “London Banking Day” means a day on which
commercial banks are open for business (including dealings in the LIBOR
Currency, as hereinafter defined) in London.

(x) Calculation
Dates. The interest rate applicable to each Interest
Period will be determined by the Calculation Agent on or prior to the
Calculation Date (as defined below), except with respect to LIBOR, EURIBOR and
the Eleventh District Cost of Funds Rate, which will be determined on the
particular Interest Determination Date. Upon request of the Holder of a Floating
Rate Note, the Calculation Agent will disclose the interest rate then in effect
and, if determined, the interest rate that will become effective as a result of
a determination made for the next succeeding Interest Reset Date with respect to
such Floating Rate Note. The “Calculation Date”, if applicable, pertaining to
any Interest Determination Date will be the earlier of: (1) the tenth calendar
day after the particular Interest Determination Date or, if such day is not a
Business Day, the next succeeding Business Day; or (2) the Business Day
immediately preceding the applicable Interest Payment Date or the Maturity Date,
as the case may be. 

(xi) Maximum or
Minimum Interest Rate. If specified on the face
hereof, this Note may have either or both of a Maximum Interest Rate or a
Minimum Interest Rate. If a Maximum Interest Rate is so designated, the interest
rate for a Floating Rate Note cannot ever exceed such Maximum Interest Rate and
in the event that the interest rate on any Interest Reset Date would exceed such
Maximum Interest Rate (as if no Maximum Interest Rate were in effect) then the
interest rate on such Interest Reset Date shall be the Maximum Interest Rate. If
a Minimum Interest Rate is so designated, the interest rate for a Floating Rate
Note cannot ever be less than such Minimum Interest

11

Rate and in the event that the interest rate on
any Interest Reset Date would be less than such Minimum Interest Rate (as if no
Minimum Interest Rate were in effect) then the interest rate on such Interest
Reset Date shall be the Minimum Interest Rate. Notwithstanding anything to the
contrary contained herein, the interest rate on a Floating Rate Note shall not
exceed the maximum interest rate permitted by applicable law.

(xii) Interest
Payments Unless otherwise
specified on the face hereof, the Interest Payment Dates will be, in the case of
a Floating Rate Note which resets: (1) daily, weekly or monthly—the fifteenth
day of each calendar month or on the fifteenth day of March, June, September and
December of each year, as specified on the face hereof; (2) quarterly—the
fifteenth day of March, June, September and December of each year; (3)
semi-annually—the fifteenth day of the two months of each year specified on the
face hereof; and (4) annually—the fifteenth day of the month of each year as
specified on the face hereof. In addition, the Maturity Date will also be an
Interest Payment Date. If any Interest Payment Date other than the Maturity Date
for this Floating Rate Note would otherwise be a day that is not a Business Day,
such Interest Payment Date will be postponed to the next succeeding Business
Day, except that in the case of a Floating Rate Note as to which LIBOR is an
applicable Interest Rate Basis and that Business Day falls in the next
succeeding calendar month, the particular Interest Payment Date will be the
immediately preceding Business Day. If the Maturity Date of a Floating Rate Note
falls on a day that is not a Business Day, the Trust will make the required
payment of principal, premium, if any, and interest or other amounts on the next
succeeding Business Day, and no additional interest will accrue in respect of
the payment made on that next succeeding Business Day.

(xiii) Rounding. Unless otherwise specified on
the face hereof, all percentages resulting from any calculation on this Floating
Rate Note will be rounded to the nearest one hundred-thousandth of a percentage
point, with five one-millionths of a percentage point rounded upwards. All
dollar amounts used in or resulting from any calculation on this Floating Rate
Note will be rounded, in the case of U.S. Dollars, to the nearest cent or, in
the case of a Foreign Currency, to the nearest unit (with one-half cent or unit
being rounded upwards).

(xiv) Interest
Factor. With respect to this Floating Rate Note,
accrued interest is calculated by multiplying the principal amount of such Note
by an accrued interest factor. The accrued interest factor is computed by adding
the interest factor calculated for each day in the particular Interest Period.
The interest factor for each day will be computed by dividing the interest rate
applicable to such day by 360, in the case of a Floating Rate Note as to which
the CD Rate, the Commercial Paper Rate, the Eleventh District Cost of Funds
Rate, the Federal Funds Rate, LIBOR, EURIBOR or the Prime Rate is an applicable
Interest Rate Basis, or by the actual number of days in the year, in the case of
a Floating Rate Note as to which the CMT Rate or the Treasury

12

Rate is an applicable Interest Rate Basis. The
interest factor for a Floating Rate Note as to which the interest rate is
calculated with reference to two or more Interest Rate Bases will be calculated
in each period in the same manner as if only the applicable Interest Rate Basis
specified above applied. 

(xv) Determination of
Interest Rate Basis. The Calculation Agent shall
determine the rate derived from each Interest Rate Basis in accordance with the
following provisions. 

(A) CD Rate
Notes. If the Interest Rate Basis is the CD Rate,
this Note shall be deemed a “CD Rate Note.” Unless otherwise specified on the
face hereof, “CD Rate” means: (1) the rate on the particular Interest
Determination Date for negotiable United States dollar certificates of deposit
having the Index Maturity specified on the face hereof as published in H.15(519)
(as defined below) under the caption “CDs (secondary market)”; or (2) if the
rate referred to in clause (1) is not so published by 3:00 P.M., New York City
time, on the related Calculation Date, the rate on the particular Interest
Determination Date for negotiable United States dollar certificates of deposit
of the particular Index Maturity as published in H.15 Daily Update (as defined
below), or other recognized electronic source used for the purpose of displaying
the applicable rate, under the caption “CDs (secondary market)”; or (3) if the
rate referred to in clause (2) is not so published by 3:00 P.M., New York City
time, on the related Calculation Date, the rate on the particular Interest
Determination Date calculated by the Calculation Agent as the arithmetic mean of
the secondary market offered rates as of 10:00 A.M., New York City time, on that
Interest Determination Date, of three leading non-bank dealers in negotiable
United States dollar certificates of deposit in The City of New York (which may
include the purchasing agent or its affiliates) selected by the Calculation
Agent for negotiable United States dollar certificates of deposit of major
United States money market banks for negotiable United States certificates of
deposit with a remaining maturity closest to the particular Index Maturity in an
amount that is representative for a single transaction in that market at that
time; or (4) if the dealers so selected by the Calculation Agent are not quoting
as mentioned in clause (3), the CD Rate in effect on the particular Interest
Determination Date. “H.15(519)” means the weekly statistical release designated
as H.15(519), or any successor publication, published by the Board of Governors
of the Federal Reserve System. “H.15 Daily Update” means the daily update of
H.15(519), available through the world-wide-web site of the Board of Governors
of the Federal Reserve System at http://www.federalreserve.gov/releases/H15/
update, or any successor site or publication. 

(B) CMT Rate
Notes. If the Interest Rate Basis is the CMT Rate,
this Note shall be deemed a “CMT Rate Note.” Unless otherwise specified on the
face hereof, “CMT Rate” means: 

13

(1) if CMT Moneyline Telerate Page 7051 is
specified on the face hereof: 

	i.      	the percentage equal to the
      yield for United States Treasury securities at “constant maturity” having
      the Index Maturity specified on the face hereof as published in
      H. 15(519) under the caption
      “Treasury Constant Maturities”, as the yield is displayed
      on Moneyline Telerate (or any successor service) on page 7051 (or any
      other page as may replace the specified page on that service) (“Moneyline
      Telerate Page 7051”), for the particular Interest Determination Date;
      or 
	 	     	 
	ii.      	if the rate referred to in
      clause (i) does not so appear on Moneyline Telerate Page 7051, the
      percentage equal to the yield for United States Treasury securities at
      “constant maturity” having the particular Index Maturity and for the
      particular Interest Determination Date as published in H. 15(519) under the caption
      “Treasury Constant Maturities”; or 
	 
	iii.      	if the rate referred to in
      clause (ii) does not so appear in H.15(519), the rate on the particular Interest Determination
      Date for the period of the particular Index Maturity as
      may then be published by either the Federal Reserve System Board of
      Governors or the United States Department of the Treasury that the
      Calculation Agent determines to be comparable to the rate which would
      otherwise have been published in H.15(519);
    or 
	 
	iv.      	if the rate referred to in
      clause (iii) is not so published, the rate on the particular Interest
      Determination Date calculated by the Calculation Agent as a yield to
      maturity based on the arithmetic mean of the secondary market bid prices
      at approximately 3:30 P.M., New York City time, on that Interest
      Determination Date of three leading primary United States government
      securities dealers in The City of New York (which may include the
      purchasing agent or its affiliates) (each, a “Reference Dealer”) selected
      by the Calculation Agent from five Reference Dealers selected by the
      Calculation Agent and eliminating the highest quotation, or, in the event
      of equality, one of the highest, and the lowest quotation or, in the event
      of equality, one of the lowest, for United States Treasury securities with
      an original maturity equal to the particular Index Maturity, a remaining
      term to maturity no more than one year shorter than that Index Maturity
      and in a principal 
	 

14

	 	amount that is representative for a
      single transaction in the securities in that market at that time;
      or 
	 
	v.      	if fewer than five but more than two of
      the prices referred to in clause (iv) are provided as requested, the rate
      on the particular Interest Determination Date calculated by the
      Calculation Agent based on the arithmetic mean of the bid prices obtained
      and neither the highest nor the lowest of the quotations shall be
      eliminated; or 
	 
	vi.      	if fewer than three prices referred to
      in clause (iv) are provided as requested, the rate on the particular
      Interest Determination Date calculated by the Calculation Agent as a yield
      to maturity based on the arithmetic mean of the secondary market bid
      prices as of approximately 3:30 P.M., New York City time, on that Interest
      Determination Date of three Reference Dealers selected by the Calculation
      Agent from five Reference Dealers selected by the Calculation Agent and
      eliminating the highest quotation or, in the event of equality, one of the
      highest and the lowest quotation or, in the event of equality, one of the
      lowest, for United States Treasury securities with an original maturity
      greater than the particular Index Maturity, a remaining term to maturity
      closest to that Index Maturity and in a principal amount that is
      representative for a single transaction in the securities in that market
      at that time; or 
	 
	vii.      	if fewer than five but more than two
      prices referred to in clause (vi) are provided as requested, the rate on
      the particular Interest Determination Date calculated by the Calculation
      Agent based on the arithmetic mean of the bid prices obtained and neither
      the highest nor the lowest of the quotations will be eliminated; or
    
	 
	viii.     
	if fewer than three prices referred to
      in clause (vi) are provided as requested, the CMT Rate in effect on the
      particular Interest Determination Date; or 
	 

(2) if CMT Moneyline Telerate Page 7052 is
specified on the face hereof: 

	i.      	the percentage equal to the one-week or
      one-month, as specified on the face hereof, average yield for United
      States Treasury securities at “constant maturity” having the Index
      Maturity specified on the face hereof as published in H.15(519) opposite
      the caption “Treasury 
	 

15

	 	Constant Maturities”, as the
      yield is displayed on Moneyline Telerate (or any successor service) (on
      page 7052 or any other page as may replace the specified page on that
      service) (“Moneyline Telerate Page 7052”), for the week or month, as
      applicable, ended immediately preceding the week or month, as applicable,
      in which the particular Interest Determination Date falls; or

	 
	ii.      	if the rate referred to in
      clause (i) does not so appear on Moneyline Telerate Page 7052, the
      percentage equal to the one-week or one-month, as specified on the face
      hereof, average yield for United States Treasury securities at “constant
      maturity” having the particular Index Maturity and for the week or month,
      as applicable, preceding the particular Interest Determination Date as
      published in H. 15(519) opposite the caption “Treasury
      Constant Maturities”;
    or   
	 	   	
	iii.      	if the rate referred to in
      clause (ii) does not so appear in H. 15(519), the one-week or
      one-month, as specified on the face hereof, average yield
      for United States Treasury securities at “constant maturity” having the
      particular Index Maturity as otherwise announced by the Federal Reserve
      Bank of New York for the week or month, as applicable, ended immediately
      preceding the week or month, as applicable, in which the particular
      Interest Determination Date falls; or   
	 	    	
	iv.      	if the rate referred to in
      clause (iii) is not so published, the rate on the particular Interest
      Determination Date calculated by the Calculation Agent as a yield to
      maturity based on the arithmetic mean of the secondary market bid prices
      at approximately 3:30 P.M., New York City time, on that Interest
      Determination Date of three Reference Dealers selected by the Calculation
      Agent from five Reference Dealers selected by the Calculation Agent and
      eliminating the highest quotation, or, in the event of equality, one of
      the highest, and the lowest quotation or, in the event of equality, one of
      the lowest, for United States Treasury securities with an original
      maturity equal to the particular Index Maturity, a remaining term to
      maturity no more than one year shorter than that Index Maturity and in a
      principal amount that is representative for a single transaction in the
      securities in that market at that time; or 
	 
	v.      	if fewer than five but more
      than two of the prices referred to in clause (iv) are provided as
      requested, the rate on the 
	 

16

	 	particular Interest Determination Date
      calculated by the Calculation Agent based on the arithmetic mean of the
      bid prices obtained and neither the highest nor the lowest of the
      quotations shall be eliminated; or 
	 
	vi.      	if fewer than three prices referred to
      in clause (iv) are provided as requested, the rate on the particular
      Interest Determination Date calculated by the Calculation Agent as a yield
      to maturity based on the arithmetic mean of the secondary market bid
      prices as of approximately 3:30 P.M., New York City time, on that Interest
      Determination Date of three Reference Dealers selected by the Calculation
      Agent from five Reference Dealers selected by the Calculation Agent and
      eliminating the highest quotation or, in the event of equality, one of the
      highest and the lowest quotation or, in the event of equality, one of the
      lowest, for United States Treasury securities with an original maturity
      greater than the particular Index Maturity, a remaining term to maturity
      closest to that Index Maturity and in a principal amount that is
      representative for a single transaction in the securities in that market
      at the time; or 
	 
	vii.      	if fewer than five but more than two
      prices referred to in clause (vi) are provided as requested, the rate on
      the particular Interest Determination Date calculated by the Calculation
      Agent based on the arithmetic mean of the bid prices obtained and neither
      the highest nor the lowest of the quotations will be eliminated; or
    
	 
	viii.     
	if fewer than three prices referred to
      in clause (vi) are provided as requested, the CMT Rate in effect on that
      Interest Determination Date. 
	 

If two United States Treasury securities with an
original maturity greater than the Index Maturity specified on the face hereof
have remaining terms to maturity equally close to the particular Index Maturity,
the quotes for the United States Treasury security with the shorter original
remaining term to maturity will be used. 

(C) Commercial Paper
Rate Notes. If the Interest Rate Basis is the
Commercial Paper Rate, this Note shall be deemed a “Commercial Paper Rate Note.”
Unless otherwise specified on the face hereof, “Commercial Paper Rate” means:
(1) the Money Market Yield (as defined below) on the particular Interest
Determination Date of the rate for commercial paper having the Index Maturity
specified on the face hereof as published in H.15(519) under the caption
“Commercial Paper—Nonfinancial”; or (2) if

17

the rate referred to in clause (1) is not so
published by 3:00 P.M., New York City time, on the related Calculation Date, the
Money Market Yield of the rate on the particular Interest Determination Date for
commercial paper having the particular Index Maturity as published in H.15 Daily
Update, or such other recognized electronic source used for the purpose of
displaying the applicable rate, under the caption “Commercial
Paper—Nonfinancial”; or (3) if the rate referred to in clause (2) is not so
published by 3:00 P.M., New York City time, on the related Calculation Date, the
rate on the particular Interest Determination Date calculated by the Calculation
Agent as the Money Market Yield of the arithmetic mean of the offered rates at
approximately 11:00 A.M., New York City time, on that Interest Determination
Date of three leading dealers of United States dollar commercial paper in The
City of New York (which may include the purchasing agent or its affiliates)
selected by the Calculation Agent for commercial paper having the particular
Index Maturity placed for industrial issuers whose bond rating is “Aa”, or the
equivalent, from a nationally recognized statistical rating organization; or (4)
if the dealers so selected by the Calculation Agent are not quoting as mentioned
in clause (3), the Commercial Paper Rate in effect on the particular Interest
Determination Date. “Money Market Yield” means a yield (expressed as a
percentage) calculated in accordance with the following formula: 

	Money Market Yield
      =  	  	D x 360  	  	x 100  
			
      

    		
	  	  	360 – (D x M)  	  	 

where “D” refers to the applicable per annum rate
for commercial paper quoted on a bank discount basis and expressed as a decimal,
and “M” refers to the actual number of days in the applicable Interest Period.
(D) Eleventh District Cost of Funds Rate
Notes. If the Interest Rate Basis is the Eleventh
District Cost of Funds Rate, this Note shall be deemed an “Eleventh District
Cost of Funds Rate Note.” Unless otherwise specified on the face hereof,
“Eleventh District Cost of Funds Rate” means: (1) the rate equal to the monthly
weighted average cost of funds for the calendar month immediately preceding the
month in which the particular Interest Determination Date falls as set forth
under the caption “11th District” on the display on Moneyline Telerate (or any
successor service) on page 7058 (or any other page as may replace the specified
page on that service) (“Moneyline Telerate Page 7058”) as of 11:00 A.M., San
Francisco time, on that Interest Determination Date; or (2) if the rate referred
to in clause (1) does not so appear on Moneyline Telerate Page 7058, the monthly
weighted average cost of funds paid by member institutions of the Eleventh
Federal Home Loan Bank District that was most recently announced (the “Eleventh
District Index”) by the Federal Home Loan Bank of San Francisco as the cost of
funds for the calendar month immediately preceding that Interest Determination
Date; or (3) if the Federal Home Loan Bank of San Francisco fails to announce
the Eleventh District Index on or prior to the particular Interest Determination
Date for

18

the calendar month immediately preceding that
Interest Determination Date, the Eleventh District Cost of Funds Rate in effect
on the particular Interest Determination Date. 

(E) Federal Funds Rate
Notes. If the Interest Rate Basis is the Federal
Funds Rate, this Note shall be deemed a “Federal Funds Rate Note.” Unless
otherwise specified on the face hereof, “Federal Funds Rate” means: (1) the rate
on the particular Interest Determination Date for United States dollar federal
funds as published in H.15(519) under the caption “Federal Funds (Effective)”
and displayed on Moneyline Telerate (or any successor service) on page 120 (or
any other page as may replace the specified page on that service) (“Moneyline
Telerate Page 120”); or (2) if the rate referred to in clause (1) does not so
appear on Moneyline Telerate Page 120 or is not so published by 3:00 P.M., New
York City time, on the related Calculation Date, the rate on the particular
Interest Determination Date for United States dollar federal funds as published
in H.15 Daily Update, or such other recognized electronic source used for the
purpose of displaying the applicable rate, under the caption “Federal Funds
(Effective)”; or (3) if the rate referred to in clause (2) is not so published
by 3:00 P.M., New York City time, on the related Calculation Date, the rate on
the particular Interest Determination Date calculated by the Calculation Agent
as the arithmetic mean of the rates for the last transaction in overnight United
States dollar federal funds arranged by three leading brokers of United States
dollar federal funds transactions in The City of New York (which may include the
purchasing agent or its affiliates) selected by the Calculation Agent prior to
9:00 A.M., New York City time, on that Interest Determination Date; or (4) if
the brokers so selected by the Calculation Agent are not quoting as mentioned in
clause (3), the Federal Funds Rate in effect on the particular Interest
Determination Date. 

(F) LIBOR
Notes. If the Interest Rate Basis is LIBOR, this
Note shall be deemed a “LIBOR Note.” Unless otherwise specified on the face
hereof, “LIBOR” means: (1) if “LIBOR Moneyline Telerate” is specified on the
face hereof or if neither “LIBOR Reuters” nor “LIBOR Moneyline Telerate” is
specified on the face hereof as the method for calculating LIBOR, the rate for
deposits in the LIBOR Currency having the Index Maturity specified on the face
hereof, commencing on the related Interest Reset Date, that appears on the LIBOR
Page (as defined below) as of 11:00 A.M., London time, on the particular
Interest Determination Date; or (2) if “LIBOR Reuters” is specified on the face
hereof, the arithmetic mean of the offered rates, calculated by the Calculation
Agent, or the offered rate, if the LIBOR Page by its terms provides only for a
single rate, for deposits in the LIBOR Currency having the particular Index
Maturity, commencing on the related Interest Reset Date, that appear or appears,
as the case may be, on the LIBOR Page as of 11:00 A.M., London time, on the
particular Interest Determination Date; or (3) if fewer

19

than two offered rates appear, or no rate
appears, as the case may be, on the particular Interest Determination Date on
the LIBOR Page as specified in clause (1) or (2), as applicable, the rate
calculated by the Calculation Agent of at least two offered quotations obtained
by the Calculation Agent after requesting the principal London offices of each
of four major reference banks (which may include affiliates of the purchasing
agent) in the London interbank market to provide the Calculation Agent with its
offered quotation for deposits in the LIBOR Currency for the period of the
particular Index Maturity, commencing on the related Interest Reset Date, to
prime banks in the London interbank market at approximately 11:00 A.M., London
time, on that Interest Determination Date and in a principal amount that is
representative for a single transaction in the LIBOR Currency in that market at
that time; or (4) if fewer than two offered quotations referred to in clause (3)
are provided as requested, the rate calculated by the Calculation Agent as the
arithmetic mean of the rates quoted at approximately 11:00 A.M., in the
applicable Principal Financial Center, on the particular Interest Determination
Date by three major banks (which may include affiliates of the purchasing agent)
in that Principal Financial Center selected by the Calculation Agent for loans
in the LIBOR Currency to leading European banks, having the particular Index
Maturity and in a principal amount that is representative for a single
transaction in the LIBOR Currency in that market at that time; or (5) if the
banks so selected by the Calculation Agent are not quoting as mentioned in
clause (4), LIBOR in effect on the particular Interest Determination Date.
“LIBOR Currency” means the currency specified on the face hereof as to which
LIBOR shall be calculated or, if no currency is specified on the face hereof,
United States Dollars. “LIBOR Page” means either: (1) if “LIBOR Reuters” is
specified on the face hereof, the display on the Reuter Monitor Money Rates
Service (or any successor service) on the page specified on the face hereof (or
any other page as may replace that page on that service) for the purpose of
displaying the London interbank rates of major banks for the LIBOR Currency; or
(2) if “LIBOR Moneyline Telerate” is specified on the face hereof or neither
“LIBOR Reuters” nor “LIBOR Moneyline Telerate” is specified on the face hereof
as the method for calculating LIBOR, the display on Moneyline Telerate (or any
successor service) on the page specified on the face hereof (or any other page
as may replace such page on such service) for the purpose of displaying the
London interbank rates of major banks for the LIBOR Currency. 

(G) EURIBOR
Notes. If the Interest Rate Basis is EURIBOR, this
Note shall be deemed a “EURIBOR Note.” Unless otherwise specified on the face
hereof, “EURIBOR” means: (1) with respect to any Interest Determination Date
relating to this EURIBOR Note (a “EURIBOR Interest Determination Date”), the
rate for deposits in euros as sponsored, calculated and published jointly by the
European Banking Federation and ACI – The Financial Market Association, or any
company established by the joint sponsors for purposes of compiling and
publishing those rates,

20

having the Index Maturity specified on the face
hereof, commencing on the applicable Interest Reset Date, as the rate appears on
Moneyline Telerate or any successor service, on page 248 (or any other page as
may replace that specified page on the service) (“Moneyline Telerate Page 248”)
as of 11:00 A.M., Brussels time, on the applicable EURIBOR Interest
Determination Date; or (2) if such rate does not appear on Moneyline Telerate
Page 248, or is not so published by 11:00 A.M., Brussels time, on the applicable
EURIBOR Interest Determination Date, such rate will be calculated by the
Calculation Agent and will be the arithmetic mean of at least two quotations
obtained by the Calculation Agent after requesting the principal Euro-zone (as
defined below) offices of four major banks in the Euro-zone interbank market to
provide the Calculation Agent with its offered quotation for deposits in euros
for the period of the Index Maturity specified on the face hereof, commencing on
the applicable Interest Reset Date, to prime banks in the Euro-zone interbank
market at approximately 11:00 A.M., Brussels time, on the applicable EURIBOR
Interest Determination Date and in a principal amount not less than the
equivalent of $1 million in euros that is representative for a single
transaction in euro in the market at that time; or (3) if fewer than two such
quotations are so provided, the rate on the applicable EURIBOR Interest
Determination Date will be calculated by the Calculation Agent and will be the
arithmetic mean of the rates quoted at approximately 11:00 A.M., Brussels time,
on such EURIBOR Interest Determination Date by four major banks in the Euro-zone
for loans in euro to leading European banks, having the Index Maturity specified
on the face hereof, commencing on the applicable Interest Reset Date and in a
principal amount not less than the equivalent of $1 million in euros that is
representative for a single transaction in euros in the market at that time; or
(4) if the banks so selected by the Calculation Agent are not quoting as
mentioned above, EURIBOR will be EURIBOR in effect on the applicable EURIBOR
Interest Determination Date. “Euro-zone” means the region comprised of member
states of the European Union that have adopted the single currency in accordance
with the treaty establishing the European Community, as amended by the treaty on
European Union. 

(H) Prime Rate
Notes. If the Interest Rate Basis is the Prime Rate,
this Note shall be deemed a “Prime Rate Note.” Unless otherwise specified on the
face hereof, “Prime Rate” means: (1) the rate on the particular Interest
Determination Date as published in H.15(519) under the caption “Bank Prime
Loan”; or (2) if the rate referred to in clause (1) is not so published by 3:00
P.M., New York City time, on the related Calculation Date, the rate on the
particular Interest Determination Date as published in H.15 Daily Update, or
such other recognized electronic source used for the purpose of displaying the
applicable rate, under the caption “Bank Prime Loan”; or (3) if the rate
referred to in clause (2) is not so published by 3:00 P.M., New York City time,
on the related Calculation Date, the rate on the particular Interest
Determination Date calculated by the Calculation Agent

21

as the arithmetic mean of the rates of interest
publicly announced by each bank that appears on the Reuters Screen US PRIME 1
Page (as defined below) as the applicable bank’s prime rate or base lending rate
as of 11:00 A.M., New York City time, on that Interest Determination Date; or
(4) if fewer than four rates referred to in clause (3) are so published by 3:00
p.m., New York City time, on the related Calculation Date, the rate calculated
by the Calculation Agent as the particular Interest Determination Date
calculated by the Calculation Agent as the arithmetic mean of the prime rates or
base lending rates quoted on the basis of the actual number of days in the year
divided by a 360-day year as of the close of business on that Interest
Determination Date by three major banks (which may include affiliates of the
purchasing agent) in The City of New York selected by the Calculation Agent; or
(5) if the banks so selected by the Calculation Agent are not quoting as
mentioned in clause (4), the Prime Rate in effect on the particular Interest
Determination Date. “Reuters Screen US PRIME 1 Page” means the display on the
Reuter Monitor Money Rates Service (or any successor service) on the “US PRIME
1” page (or any other page as may replace that page on that service) for the
purpose of displaying prime rates or base lending rates of major United States
banks. 

(I) Treasury Rate
Notes. If the Interest Rate Basis is the Treasury
Rate, this Note shall be deemed a “Treasury Rate Note.” Unless otherwise
specified on the face hereof, “Treasury Rate” means: (1) the rate from the
auction held on the Interest Determination Date (the “Auction”) of direct
obligations of the United States (“Treasury Bills”) having the Index Maturity
specified on the face hereof under the caption “INVESTMENT RATE” on the display
on Moneyline Telerate (or any successor service) on page 56 (or any other page
as may replace that page on that service) (“Moneyline Telerate Page 56”) or page
57 (or any other page as may replace that page on that service) (“Moneyline
Telerate Page 57”); or (2) if the rate referred to in clause (1) is not so
published by 3:00 P.M., New York City time, on the related Calculation Date, the
Bond Equivalent Yield (as defined below) of the rate for the applicable Treasury
Bills as published in H.15 Daily Update, or another recognized electronic source
used for the purpose of displaying the applicable rate, under the caption “U.S.
Government Securities/Treasury Bills/Auction High”; or (3) if the rate referred
to in clause (2) is not so published by 3:00 P.M., New York City time, on the
related Calculation Date, the Bond Equivalent Yield of the auction rate of the
applicable Treasury Bills as announced by the United States Department of the
Treasury; or (4) if the rate referred to in clause (3) is not so announced by
the United States Department of the Treasury, or if the Auction is not held, the
Bond Equivalent Yield of the rate on the particular Interest Determination Date
of the applicable Treasury Bills as published in H.15(519) under the caption
“U.S. Government Securities/Treasury Bills/Secondary Market”; or (5) if the rate
referred to in clause (4) is not so published by 3:00 P.M., New York

22

City time, on the related Calculation Date, the
rate on the particular Interest Determination Date of the applicable Treasury
Bills as published in H.15 Daily Update, or another recognized electronic source
used for the purpose of displaying the applicable rate, under the caption “U.S.
Government Securities/Treasury Bills/Secondary Market”; or (6) if the rate
referred to in clause (5) is not so published by 3:00 P.M., New York City time,
on the related Calculation Date, the rate on the particular Interest
Determination Date calculated by the Calculation Agent as the Bond Equivalent
Yield of the arithmetic mean of the secondary market bid rates, as of
approximately 3:30 P.M., New York City time, on that Interest Determination
Date, of three primary United States government securities dealers (which may
include the purchasing agent or its affiliates) selected by the Calculation
Agent, for the issue of Treasury Bills with a remaining maturity closest to the
Index Maturity specified on the face hereof; or (7) if the dealers so selected
by the Calculation Agent are not quoting as mentioned in clause (6), the
Treasury Rate in effect on the particular Interest Determination Date. “Bond
Equivalent Yield” means a yield (expressed as a percentage) calculated in
accordance with the following formula: 

	Bond Equivalent Yield
      =  	  	D x N  	  	x 100  
			
      

    		
	  	  	360 – (D x M)  	  	 

where “D” refers to the applicable per annum rate
for Treasury Bills quoted on a bank discount basis and expressed as a decimal,
“N” refers to 365 or 366, as the case may be, and “M” refers to the actual
number of days in the applicable Interest Period. 

	(c)      	Discount
      Notes. If this Note is specified on the face
      hereof as a “Discount Note”: 
	 
	 	(i)      	Principal and
      Interest. This Note will bear interest in the
      same manner as set forth in Section 3(a) above,
      and payments of principal and interest shall be made as set forth on the
      face hereof. Discount Notes may not bear any interest currently or may
      bear interest at a rate that is below market rates at the time of
      issuance. The difference between the Issue Price of a Discount Note and
      par is referred to as the “Discount”. 
	 	
	 	(ii)      	Redemption; Repayment;
      Acceleration. In the event a Discount Note is
      redeemed, repaid or accelerated, the amount payable to
      the Holder of such Discount Note will be equal to the sum of: (A) the
      Issue Price (increased by any accruals of Discount) and, in the event of
      any redemption of such Discount Note, if applicable, multiplied by the
      Initial Redemption Percentage (as adjusted by the Annual Redemption
      Percentage Reduction, if applicable); and (B) any unpaid interest accrued
      on such Discount Note to the Maturity Date (“Amortized Face Amount”).
      Unless otherwise specified on the face hereof, for purposes of determining
      the amount of Discount that has accrued as of any date on which a
      redemption, repayment or acceleration of
    maturity  
	 	

23

occurs for a Discount Note, a Discount will be
accrued using a constant yield method. The constant yield will be calculated
using a 30-day month, 360-day year convention, a compounding period that, except
for the Initial Period (as defined below), corresponds to the shortest period
between Interest Payment Dates for the applicable Discount Note (with ratable
accruals within a compounding period), a coupon rate equal to the initial coupon
rate applicable to the applicable Discount Note and an assumption that the
maturity of such Discount Note will not be accelerated. If the period from the
date of issue to the first Interest Payment Date for a Discount Note (the
“Initial Period”) is shorter than the compounding period for such Discount Note,
a proportionate amount of the yield for an entire compounding period will be
accrued. If the Initial Period is longer than the compounding period, then the
period will be divided into a regular compounding period and a short period with
the short period being treated as provided above. 

     (d) Amortizing Notes. If this Note is
specified on the face hereof as an “Amortizing Note”, this Note will bear
interest in the same manner as set forth in Section 3(a) above, and payments on
principal, premium, if any, and interest will be made as set forth on the face
hereof and/or in accordance with Schedule
I attached hereto. The Trust will make payments
combining principal, premium (if any) and interest, if applicable, on the dates
and in the amounts set forth in the table appearing in Schedule I attached to this Note or in
accordance with the formula specified on the face hereof. Payments made hereon
will be applied first to interest due and payable hereon and then to the
reduction of the unpaid principal amount hereof. 

Section 4. Redemption. If no redemption right is
set forth on the face hereof, this Note may not be redeemed prior to the Stated
Maturity Date, except as set forth in the Indenture or in Section 10 hereof. In
the case of a Note that is not a Discount Note, if a redemption right is set
forth on the face of this Note, the Trust shall elect to redeem this Note on the
Interest Payment Date after the Initial Redemption Date set forth on the face
hereof on which the Funding Agreement is to be redeemed in whole or in part by
ING USA Annuity and Life Insurance Company (“ING USA”) (each, a “Redemption
Date”), in which case this Note must be redeemed on such Redemption Date in
whole or in part, as applicable, prior to the Stated Maturity Date, in
increments of $1,000 at the applicable Redemption Price (as defined below),
together with unpaid interest, if any, accrued thereon to, but excluding, the
applicable Redemption Date. “Redemption Price” shall mean an amount equal to the
Initial Redemption Percentage (as adjusted by the Annual Redemption Percentage Reduction, if
applicable) multiplied by the unpaid Principal Amount of this Note to be
redeemed. The unpaid Principal Amount of this Note to be redeemed shall be
determined by multiplying (1) the Outstanding Principal Amount of this Note by
(2) the quotient derived by dividing (A) the outstanding principal amount of the
Funding Agreement to be redeemed by ING USA by (B) the outstanding principal
amount of the Funding Agreement. The Initial Redemption Percentage, if any,
applicable to this Note shall decline at each anniversary of the Initial
Redemption Date by an amount equal to the applicable Annual Redemption
Percentage Reduction, if any, until the Redemption Price is equal to 100% of the
unpaid amount thereof to be redeemed. Notice must be given not more than sixty
(60) nor less than thirty (30) calendar days prior

24

to the proposed Redemption Date. In the event of
redemption of this Note in part only, a new Note for the unredeemed portion
hereof shall be issued in the name of the Holder hereof upon the surrender
hereof. If less than all of this Note is redeemed, the Indenture Trustee will
select by lot or, in its discretion, on a pro rata basis, the amount of the
interest of each direct Participant in the Trust to be redeemed. 

Section 5. Sinking Funds and Amortizing Notes.
Unless specified on the face hereof, this Note will not be subject to, or
entitled to the benefit of, any sinking fund. If this Note is an Amortizing
Note, this Note may pay an amount in respect of both interest and principal
amortized over the life of this Note. 

Section 6. Repayment. If no repayment right is
set forth on the face hereof, this Note may not be repaid at the option of the
Holder hereof prior to the Stated Maturity Date. If a repayment right is granted
on the face of this Note, this Note may be subject to repayment at the option of
the Holder on any Interest Payment Date on and after the date, if any, indicated
on the face hereof (each, a “Repayment Date”). On any Repayment Date, unless
otherwise specified on the face hereof, this Note shall be repayable in whole or
in part in increments of $1,000 at the option of the Holder hereof at a
repayment price equal to 100% of the Principal Amount to be repaid, together
with interest thereon payable to the Repayment Date. For this Note to be repaid
in whole or in part at the option of the Holder hereof, this Note must be
received by the Indenture Trustee, with the form entitled “Option to Elect
Repayment”, below, duly completed by the Indenture Trustee. Exercise of such
repayment option by the Holder hereof shall be irrevocable. 

Section 7. Modifications and Waivers. The
Indenture contains provisions permitting the Trust and the Indenture Trustee (1)
at any time and from time to time without notice to, or the consent of, the
Holders of any Notes issued under the Indenture to enter into one or more
supplemental indentures for certain enumerated purposes and (2) with the consent
of the Holders of a majority in aggregate principal amount of the Outstanding
Notes affected thereby, to enter into one or more supplemental indentures for
the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, the Indenture or of modifying in any
manner the rights of Holders of Notes under the Indenture; provided, that, with respect to certain
enumerated provisions, no such supplemental indenture shall be entered into
without the consent of the Holder of each Note affected thereby. Any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not notation of such consent or waiver is made upon this Note
or such other Notes. 

Section 8. Obligations Unconditional. No
reference herein to the Indenture and no provisions of this Note or of the
Indenture shall impair the right of each Holder of any Note, which is absolute
and unconditional, to receive payment of the principal of, and any interest on,
and premium, if any, on, such Note on the respective Stated Maturity Date or
redemption date thereof and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder. Section 9. Events of Default. If an Event of
Default with respect to this Note shall occur and be continuing, the principal
of, and all other amounts payable on, the Notes 

25

may be declared due and payable, or may be automatically accelerated, as the case may be, in the manner and with the effect provided in the Indenture. In the event that this Note is a Discount Note, the amount of principal of this
Note that becomes due and payable upon such acceleration shall be equal to the amount calculated as set forth in Section 3(c) hereof. 

Section 10. Withholding; Tax Event and Redemption. All amounts due on this Note will be made without any applicable withholding or deduction for or on
account of any present or future taxes, duties, levies, assessments or other governmental charges of whatever nature imposed or levied by or on behalf of any governmental authority, unless such withholding or deduction is required by law. Unless
otherwise specified on the face hereof, the Trust will not pay any additional amounts to the Holder of this Note in respect of such withholding or deduction, any such withholding or deduction will not give rise to an event of default or any
independent right or obligation to redeem this Note and the Holder will be deemed for all purposes to have received cash in an amount equal to the portion of such withholding or deduction that is attributable to such Holder’s interest in this
Note as equitably determined by the Trust. 

     If (1) a Tax Event (defined below) as to the Funding Agreement occurs and (2) ING USA redeems the Funding Agreement in whole or in part, the Trust will redeem the Notes, subject to the terms and
conditions of Section 2.04 of the Indenture, at the Tax Event Redemption Price (defined below) together with unpaid interest accrued thereon to the applicable redemption date. “Tax
Event” means that ING USA shall have received an opinion of independent legal counsel stating in effect that as a result of (a) any amendment to, or change (including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing authority thereof or therein or (b) any amendment to, or change in, an interpretation or application of any such laws or regulations by any governmental authority in the United
States, which amendment or change is enacted, promulgated, issued or announced on or after the effective date of the Funding Agreement, there is more than an insubstantial risk that (i) the Trust is, or will be within ninety (90) days of the date
thereof, subject to U.S. federal income tax with respect to interest accrued or received on the Funding Agreement or (ii) the Trust is, or will be within ninety (90) days of the date thereof, subject to more than a de minimis amount of taxes, duties
or other governmental charges. “Tax Event Redemption Price” means an amount equal to the unpaid principal amount of this Note to be redeemed, which shall be determined by multiplying (1) the Outstanding Principal Amount of this Note by (2)
the quotient derived by dividing (A) the outstanding principal amount to be redeemed by ING USA of the Funding Agreement by (B) the outstanding principal amount of the Funding Agreement. 

Section 11. Listing. Unless otherwise specified on the face hereof, this Note will not be listed on any securities exchange. 

Section 12. Collateral. The Collateral for this Note includes the Funding Agreement specified on the face hereof. 

Section 13. No Recourse Against Certain Persons. No recourse shall be had for the
payment of any principal, interest or any other sums at any time owing under the terms of this Note, or for any claim based hereon, or otherwise in respect hereof, or based on or in 

26

respect of the Indenture or any indenture
supplemental thereto, against the Nonrecourse Parties, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise, all such personal liability being, by the acceptance
hereof and as part of the consideration for issue hereof, expressly waived and
released. 

	Section 14. Miscellaneous.

     (a) This Note is
issuable only as a registered Note without coupons in denominations of $1,000
and any integral multiple in excess thereof unless otherwise specified on the
face of this Note. 

     (b) Prior to due
presentment for registration of transfer of this Note, the Trust, the Indenture
Trustee, the Registrar, the Paying Agent, any Agent and any other agent of the
Trust or the Indenture Trustee may treat the Person in whose name this Note is
registered as the owner hereof for the purpose of receiving payment as herein
provided and for all other purposes, whether or not this Note shall be overdue,
and none of the Trust, the Indenture Trustee, the Registrar, the Paying Agent,
any Agent or any other agent of the Trust or the Indenture Trustee shall be
affected by notice to the contrary. 

     (c) The Notes are
being issued by means of a book-entry-only system with no physical distribution
of certificates to be made except as provided in the Indenture. The book-entry
system maintained by DTC will evidence ownership of the Notes, with transfers of
ownership effected on the records of DTC and its Participants pursuant to rules
and procedures established by DTC and its Participants. The Trust and the
Indenture Trustee will recognize Cede & Co., as nominee of DTC, as the
registered owner of the Notes and as the Holder of the Notes for all purposes,
including payment of principal, premium (if any) and interest, notices and
voting. Transfer of principal, premium (if any) and interest to participants of
DTC will be the responsibility of DTC, and transfer of principal, premium (if
any) and interest to beneficial holders of the Notes by Participants of DTC will
be the responsibility of such Participants and other nominees of such beneficial
holders. So long as the book-entry system is in effect, the selection of any
Notes to be redeemed or repaid will be determined by DTC pursuant to rules and
procedures established by DTC and its Participants. Neither the Trust nor the
Indenture Trustee will not be responsible or liable for such transfers or
payments or for maintaining, supervising or reviewing the records maintained by
DTC, its Participants or persons acting through such Participants. 

     (d) This Note or
portion hereof may not be exchanged for Definitive Notes, except in the limited
circumstances provided for in the Indenture. The transfer or exchange of
Definitive Notes shall be subject to the terms of the Indenture. No service
charge will be made for any registration of transfer or exchange, but the Trust
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. 

Section 15. GOVERNING LAW. THIS NOTE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK. 

27

	OPTION TO ELECT
      REPAYMENT

     The undersigned
hereby irrevocably request(s) and instruct(s) the Trust to repay this Note (or
portion hereof specified below) pursuant to its terms at a price equal to the
Principal Amount hereof together with interest to the repayment date, to the
undersigned, at: 

______________________________________________________________________________

______________________________________________________________________________

(Please print or typewrite name and address of
the undersigned). 

     For this Note to be
repaid, the Indenture Trustee (or the Paying Agent on behalf of the Indenture
Trustee) must receive at its Corporate Trust Office, or at such other place or
places of which the Trust shall from time to time notify the Holder of this
Note, not more than sixty (60) nor less than thirty (30) days prior to a
Repayment Date, if any, shown on the face of this Note, this Note with this
“Option to Elect Repayment” form duly completed. 

     If less than the
entire Principal Amount of this Note is to be repaid, specify the portion hereof
(which shall be in increments of $1,000) which the Holder elects to have repaid
and specify the denomination or denominations (which shall be $ ______ or an
integral multiple of $1,000 in excess of $______) of the Notes to be issued to
the Holder for the portion of this Note not being repaid (in the absence of any
such specification, one such Note will be issued for the portion not being
repaid). 

	$  _________________________	  	  
			
      

    
	  
	DATE: _____________________ 	  	NOTICE: The signature on this  
	  	  	Option to Elect Repayment must  
	  	  	correspond with the name as  
	  	  	written upon the face of this Note  
	  	  	in every particular, without  
	  	  	alteration or enlargement or any  
	  	  	change whatever.  
	  
	Principal Amount to be repaid, if amount to
      be  	  	Fill in for registration of Notes  
	repaid is less than the Principal Amount of
      this  	  	if to be issued otherwise than  
	Note (Principal Amount remaining must be an 
    	  	to the registered Holder:  
	authorized denomination)  	  	  
	  	  	Name: ___________________  
	$______________________	  	Address:_________________  
			________________________
	  	  	(Please print name and  
	  	  	address including zip code) 

SOCIAL SECURITY OR OTHER TAXPAYER ID
NUMBER:_________________________ 

28

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