Document:

Exhibit 4.13

 

AFFYMAX, INC.,

Issuer

 

AND

 

[TRUSTEE],

Trustee

 

 

 

INDENTURE

 

Dated as of [·], 200  

 

 

Subordinated Debt Securities

 

 

TABLE OF
CONTENTS

 

	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
  DEFINITIONS

  	
  1

  
	
   

  	
  Section 1.01

  	
  Definitions of Terms

  	
  1

  
	
  ARTICLE 2

  	
  ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION
  AND EXCHANGE OF SECURITIES

  	
  5

  
	
   

  	
  Section 2.01

  	
  Designation and Terms of Securities

  	
  5

  
	
   

  	
  Section 2.02

  	
  Form of Securities and Trustee’s Certificate

  	
  8

  
	
   

  	
  Section 2.03

  	
  Denominations: Provisions for Payment

  	
  8

  
	
   

  	
  Section 2.04

  	
  Execution and Authentications

  	
  10

  
	
   

  	
  Section 2.05

  	
  Registration of Transfer and Exchange

  	
  10

  
	
   

  	
  Section 2.06

  	
  Temporary Securities

  	
  12

  
	
   

  	
  Section 2.07

  	
  Mutilated, Destroyed, Lost or Stolen Securities

  	
  12

  
	
   

  	
  Section 2.08

  	
  Cancellation

  	
  13

  
	
   

  	
  Section 2.09

  	
  Benefits of Indenture

  	
  13

  
	
   

  	
  Section 2.10

  	
  Authenticating Agent

  	
  13

  
	
   

  	
  Section 2.11

  	
  Global Securities

  	
  14

  
	
  ARTICLE 3

  	
  REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS

  	
  15

  
	
   

  	
  Section 3.01

  	
  Redemption

  	
  15

  
	
   

  	
  Section 3.02

  	
  Notice of Redemption

  	
  15

  
	
   

  	
  Section 3.03

  	
  Payment Upon Redemption

  	
  16

  
	
   

  	
  Section 3.04

  	
  Sinking Fund

  	
  17

  
	
   

  	
  Section 3.05

  	
  Satisfaction of Sinking Fund Payments with
  Securities

  	
  17

  
	
   

  	
  Section 3.06

  	
  Redemption of Securities for Sinking Fund

  	
  17

  
	
  ARTICLE 4

  	
  COVENANTS

  	
  18

  
	
   

  	
  Section 4.01

  	
  Payment of Principal, Premium and Interest

  	
  18

  
	
   

  	
  Section 4.02

  	
  Maintenance of Office or Agency

  	
  18

  
	
   

  	
  Section 4.03

  	
  Paying Agents

  	
  18

  
	
   

  	
  Section 4.04

  	
  Appointment to Fill Vacancy in Office of Trustee

  	
  20

  
	
   

  	
  Section 4.05

  	
  Compliance with Consolidation Provisions

  	
  20

  
	
  ARTICLE 5

  	
  SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY
  AND THE TRUSTEE

  	
  20

  
	
   

  	
  Section 5.01

  	
  Company to Furnish Trustee Names and Addresses of
  Securityholders

  	
  20

  
					

 

i

 

TABLE OF
CONTENTS

(CONTINUED)

 

	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 5.02

  	
  Preservation Of Information; Communications With
  Securityholders

  	
  20

  
	
   

  	
  Section 5.03

  	
  Reports by the Company

  	
  21

  
	
   

  	
  Section 5.04

  	
  Reports by the Trustee

  	
  21

  
	
  ARTICLE 6

  	
  REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT
  OF DEFAULT

  	
  22

  
	
   

  	
  Section 6.01

  	
  Events of Default

  	
  22

  
	
   

  	
  Section 6.02

  	
  Collection of Indebtedness and Suits for Enforcement
  by Trustee

  	
  23

  
	
   

  	
  Section 6.03

  	
  Application of Moneys Collected

  	
  25

  
	
   

  	
  Section 6.04

  	
  Limitation on Suits

  	
  25

  
	
   

  	
  Section 6.05

  	
  Rights and Remedies Cumulative; Delay or Omission
  Not Waiver

  	
  26

  
	
   

  	
  Section 6.06

  	
  Control by Securityholders

  	
  26

  
	
   

  	
  Section 6.07

  	
  Undertaking to Pay Costs

  	
  27

  
	
  ARTICLE 7

  	
  CONCERNING THE TRUSTEE

  	
  27

  
	
   

  	
  Section 7.01

  	
  Certain Duties and Responsibilities of Trustee

  	
  27

  
	
   

  	
  Section 7.02

  	
  Certain Rights of Trustee

  	
  28

  
	
   

  	
  Section 7.03

  	
  Trustee Not Responsible for Recitals or Issuance or
  Securities

  	
  30

  
	
   

  	
  Section 7.04

  	
  May Hold Securities

  	
  31

  
	
   

  	
  Section 7.05

  	
  Moneys Held in Trust

  	
  31

  
	
   

  	
  Section 7.06

  	
  Compensation and Reimbursement

  	
  31

  
	
   

  	
  Section 7.07

  	
  Reliance on Officer’s Certificate

  	
  32

  
	
   

  	
  Section 7.08

  	
  Disqualification; Conflicting Interests

  	
  32

  
	
   

  	
  Section 7.09

  	
  Corporate Trustee Required; Eligibility

  	
  32

  
	
   

  	
  Section 7.10

  	
  Resignation and Removal; Appointment of Successor

  	
  32

  
	
   

  	
  Section 7.11

  	
  Acceptance of Appointment By Successor

  	
  34

  
	
   

  	
  Section 7.12

  	
  Merger, Conversion, Consolidation or Succession to
  Business

  	
  35

  
	
   

  	
  Section 7.13

  	
  Preferential Collection of Claims Against the
  Company

  	
  35

  
	
   

  	
  Section 7.14

  	
  Notice of Default

  	
  35

  
	
  ARTICLE 8

  	
  CONCERNING THE SECURITYHOLDERS

  	
  36

  
	
   

  	
  Section 8.01

  	
  Evidence of Action by Securityholders

  	
  36

  
	
   

  	
  Section 8.02

  	
  Proof of Execution by Securityholders

  	
  36

  
					

 

ii

 

TABLE OF
CONTENTS

(CONTINUED)

 

	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 8.03

  	
  Who May be Deemed Owners

  	
  37

  
	
   

  	
  Section 8.04

  	
  Certain Securities Owned by Company Disregarded

  	
  37

  
	
   

  	
  Section 8.05

  	
  Actions Binding on Future Securityholders

  	
  37

  
	
  ARTICLE 9

  	
  SUPPLEMENTAL INDENTURES

  	
  38

  
	
   

  	
  Section 9.01

  	
  Supplemental Indentures Without the Consent of
  Securityholders

  	
  38

  
	
   

  	
  Section 9.02

  	
  Supplemental Indentures With Consent of
  Securityholders

  	
  39

  
	
   

  	
  Section 9.03

  	
  Effect of Supplemental Indentures

  	
  39

  
	
   

  	
  Section 9.04

  	
  Securities Affected by Supplemental Indentures

  	
  39

  
	
   

  	
  Section 9.05

  	
  Execution of Supplemental Indentures

  	
  40

  
	
  ARTICLE 10

  	
  SUCCESSOR ENTITY

  	
  40

  
	
   

  	
  Section 10.01

  	
  Company May Consolidate, Etc.

  	
  40

  
	
   

  	
  Section 10.02

  	
  Successor Entity Substituted

  	
  41

  
	
  ARTICLE 11

  	
  SATISFACTION AND DISCHARGE

  	
  41

  
	
   

  	
  Section 11.01

  	
  Satisfaction and Discharge of Indenture

  	
  41

  
	
   

  	
  Section 11.02

  	
  Discharge of Obligations

  	
  42

  
	
   

  	
  Section 11.03

  	
  Deposited Moneys to be Held in Trust

  	
  42

  
	
   

  	
  Section 11.04

  	
  Payment of Moneys Held by Paying Agents

  	
  42

  
	
   

  	
  Section 11.05

  	
  Repayment to Company

  	
  43

  
	
  ARTICLE 12

  	
  IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
  AND DIRECTORS

  	
  43

  
	
   

  	
  Section 12.01

  	
  No Recourse

  	
  43

  
	
  ARTICLE 13

  	
  MISCELLANEOUS PROVISIONS

  	
  44

  
	
   

  	
  Section 13.01

  	
  Effect on Successors and Assigns

  	
  44

  
	
   

  	
  Section 13.02

  	
  Actions by Successor

  	
  44

  
	
   

  	
  Section 13.03

  	
  Surrender of Company Powers

  	
  44

  
	
   

  	
  Section 13.04

  	
  Notices

  	
  44

  
	
   

  	
  Section 13.05

  	
  Governing Law

  	
  44

  
	
   

  	
  Section 13.06

  	
  Treatment of Securities as Debt

  	
  44

  
	
   

  	
  Section 13.07

  	
  Certificates and Opinions as to Conditions Precedent

  	
  45

  
	
   

  	
  Section 13.08

  	
  Payments on Business Days

  	
  45

  
	
   

  	
  Section 13.09

  	
  Conflict with Trust Indenture Act

  	
  45

  
					

 

iii

 

TABLE OF
CONTENTS

(CONTINUED)

 

	
   

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Section 13.10

  	
  Counterparts

  	
  45

  
	
   

  	
  Section 13.11

  	
  Separability

  	
  45

  
	
   

  	
  Section 13.12

  	
  Compliance Certificates

  	
  46

  
	
  ARTICLE 14

  	
  SUBORDINATION OF
  SECURITIES

  	
  46

  
	
   

  	
  Section 14.01

  	
  Subordination Terms

  	
  46

  
					

 

	
  (1)

  	
  This Table of Contents does not constitute part of
  the Indenture and shall not have any bearing on the interpretation of any of
  its terms or provisions.

  

 

iv

 

INDENTURE

 

INDENTURE, dated as of [·], 200   , among AFFYMAX,
INC.,  a Delaware corporation (the “Company”), and[TRUSTEE], as trustee (the “Trustee”):

 

WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the execution and delivery of this Indenture to provide for the
issuance of subordinated debt
securities (hereinafter referred to as the “Securities”), in an unlimited
aggregate principal amount to be issued from time to time in one or more series
as in this Indenture provided, as registered Securities without coupons, to be
authenticated by the certificate of the Trustee;

 

WHEREAS, to provide the terms and conditions upon which the
Securities are to be authenticated, issued and delivered, the Company has duly
authorized the execution of this Indenture; and

 

WHEREAS, all things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been done.

 

NOW, THEREFORE, in consideration of the premises and the purchase of
the Securities by the holders thereof, it is mutually covenanted and agreed as
follows for the equal and ratable benefit of the holders of Securities:

 

ARTICLE 1

 

DEFINITIONS

 

Section 1.01         Definitions of Terms.

 

The terms defined in this Section (except as in
this Indenture or any indenture supplemental hereto otherwise expressly
provided or unless the context otherwise requires) for all purposes of this
Indenture and of any indenture supplemental hereto shall have the respective
meanings specified in this Section and shall include the plural as well as
the singular.  All other terms used in
this Indenture that are defined in the Trust Indenture Act of 1939, as amended,
or that are by reference in such Act defined in the Securities Act of 1933, as
amended (except as herein or any indenture supplemental hereto otherwise
expressly provided or unless the context otherwise requires), shall have the
meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of the execution of this instrument.

 

“Authenticating
Agent” means an authenticating agent with respect to all or any
of the series of Securities appointed by the Trustee pursuant to Section 2.10.

 

“Bankruptcy
Law” means Title 11, U.S. Code, or any similar federal or state
law for the relief of debtors.

 

“Board
of Directors” means the Board of Directors (or the functional
equivalent thereof) of the Company or any duly authorized committee of such
Board.

 

1

 

“Board
Resolution” means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification.

 

“Business
Day” means, with respect to any series of Securities, any day
other than a day on which federal or state banking institutions in the Borough
of Manhattan, the City of New York, or in the city of the Corporate Trust
Office of the Trustee, are authorized or obligated by law, executive order or
regulation to close.

 

“Certificate”
means a certificate signed by any Officer. 
The Certificate need not comply with the provisions of Section 13.07.

 

“Commission”
means the Securities and Exchange Commission, as from time to time constituted,
created under the Exchange Act, or, if at any time after the execution of this
instrument such Commission is not existing and performing the duties now
assigned to it under the Trust Indenture Act, then the body performing such
duties at such time.

 

“Company”
means Affymax, Inc., a corporation duly organized and existing under the
laws of the State of Delaware, and, subject to the provisions of Article Ten,
shall also include its successors and assigns.

 

“Corporate
Trust Office” means the office of the Trustee at which, at any
particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at                                                                                                  
                                 .

 

“Custodian”
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.

 

“Defaulted
Interest” has the meaning set forth in Section 2.03.

 

“Depositary”
means, with respect to Securities of any series for which the Company shall
determine that such Securities will be issued as a Global Security, The
Depository Trust Company, another clearing agency, or any successor registered
as a clearing agency under the Exchange Act, or other applicable statute or
regulation, which, in each case, shall be designated by the Company pursuant to
either Section 2.01 or 2.11.

 

“Event
of Default” means, with respect to Securities of a particular
series, any event specified in Section 6.01, continued for the period of
time, if any, therein designated.

 

“Exchange Act”
means the United States Securities and Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the Commission thereunder.

 

“Global
Security” means a Security issued to evidence all or a part of
any series of Securities which is executed by the Company and authenticated and
delivered by the Trustee to the Depositary or pursuant to the Depositary’s
instruction, all in accordance with the Indenture, which shall be registered in
the name of the Depositary or its nominee.

 

2

 

“Governmental
Obligations” means securities that are (a) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
of America, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America that, in either case, are
not callable or redeemable at the option of the issuer thereof at any time
prior to the stated maturity of the Securities, and shall also include a depositary
receipt issued by a bank or trust company as custodian with respect to any such
Governmental Obligation or a specific payment of principal of or interest on
any such Governmental Obligation held by such custodian for the account of the
holder of such depositary receipt; provided, however, that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depositary receipt from any amount received by
the custodian in respect of the Governmental Obligation or the specific payment
of principal of or interest on the Governmental Obligation evidenced by such
depositary receipt.

 

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

 

“Indenture”
means this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more indentures supplemental hereto entered
into in accordance with the terms hereof and shall include the terms of
particular series of Securities established as contemplated by Section 2.01.

 

“Interest
Payment Date”, when used with respect to any installment of
interest on a Security of a particular series, means the date specified in such
Security or in a Board Resolution or in an indenture supplemental hereto with
respect to such series as the fixed date on which an installment of interest
with respect to Securities of that series is due and payable.

 

“Officer”
means, with respect to the Company, the chairman of the Board of Directors, a
chief executive officer, a president, a chief financial officer, a chief
operating officer, any executive vice president, any senior vice president, any
vice president, the treasurer or any assistant treasurer, the controller or any
assistant controller or the secretary or any assistant secretary.

 

“Officer’s Certificate”
means a certificate signed by any Officer. 
Each such certificate shall include the statements provided for in Section 13.07,
if and to the extent required by the provisions thereof.

 

“Opinion
of Counsel” means an opinion in writing subject to customary
exceptions of legal counsel, who may be an employee of or counsel for the
Company, that is delivered to the Trustee in accordance with the terms
hereof.  Each such opinion shall include
the statements provided for in Section 13.07, if and to the extent
required by the provisions thereof.

 

“Outstanding”,
when used with reference to Securities of any series, means, subject to the
provisions of Section 8.04, as of any particular time, all Securities of
that series theretofore authenticated and delivered by the Trustee under this
Indenture, except (a) Securities theretofore canceled by the Trustee or
any paying agent, or delivered to the Trustee or any paying agent for 

 

3

 

cancellation or that have
previously been canceled; (b) Securities or portions thereof for the
payment or redemption of which moneys or Governmental Obligations in the
necessary amount shall have been deposited in trust with the Trustee or with
any paying agent (other than the Company) or shall have been set aside and
segregated in trust by the Company (if the Company shall act as its own paying
agent); provided, however, that if such Securities or portions of such
Securities are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as provided in Article Three, or
provision satisfactory to the Trustee shall have been made for giving such
notice; and (c) Securities in lieu of or in substitution for which other
Securities shall have been authenticated and delivered pursuant to the terms of
Section 2.07.

 

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

 

“Predecessor
Security” of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 2.07 in lieu of a lost, destroyed
or stolen Security shall be deemed to evidence the same debt as the lost,
destroyed or stolen Security.

 

“Responsible Officer”
when used with respect to the Trustee means any officer of the Trustee assigned
by the Trustee to administer its corporate trust matters with respect to this
Indenture (which, for the avoidance of doubt, includes without limitation any
supplemental indenture hereto).

 

“Securities”
has the meaning stated in the first recital of this Indenture and more
particularly means any Securities authenticated and delivered under this
Indenture.

 

“Securityholder”,
“holder of Securities”, “registered holder”, or other similar
term, means the Person or Persons in whose name or names a particular Security
is registered on the Security Register kept for that purpose in accordance with
the terms of this Indenture.

 

“Security Register”
and “Security Registrar”
shall have the meanings as set forth in Section 2.05.

 

“Subsidiary”
means, with respect to any Person:

 

(1)          
any corporation or company a majority of whose capital stock with voting power,
under ordinary circumstances, to elect directors is, at the date of
determination, directly or indirectly, owned by such Person (a “subsidiary”), by one or more
subsidiaries of such Person or by such Person and one or more subsidiaries of
such Person;

 

(2)          
a partnership in which such Person or a subsidiary of such Person is, at the
date of determination, a general partner of such partnership; or

 

4

 

(3)          
any partnership, limited liability company or other Person in which such
Person, a subsidiary of such Person or such Person and one or more subsidiaries
of such Person, directly or indirectly, at the date of determination, have (x) at
least a majority ownership interest or (y) the power to elect or appoint
or direct the election or appointment of the managing partner or member of such
Person or, if applicable, a majority of the directors or other governing body
of such Person.

 

“Trustee”
means                                              ,
and, subject to the provisions of Article Seven, shall also include its
successors and assigns, and, if at any time there is more than one Person
acting in such capacity hereunder, “Trustee” shall mean each such Person.  The term “Trustee” as used with respect to a
particular series of the Securities shall mean the trustee with respect to that
series.

 

“Trust
Indenture Act” means the Trust Indenture Act of 1939, as
amended.

 

ARTICLE 2

 

ISSUE,
DESCRIPTION, TERMS, EXECUTION, REGISTRATION AND EXCHANGE OF SECURITIES

 

Section 2.01         Designation and Terms of Securities.

 

(a)           The aggregate principal amount of Securities that may
be authenticated and delivered under this Indenture is unlimited.  The Securities may be issued in one or more
series up to the aggregate principal amount of Securities of that series from
time to time authorized by or pursuant to a Board Resolution or pursuant to one
or more indentures supplemental hereto. 
Prior to the initial issuance of Securities of any series, there shall
be established in or pursuant to a Board Resolution, and set forth in an
Officer’s Certificate, or established in one or more indentures supplemental
hereto:

 

(1)           the title of the Securities of the series (which shall
distinguish the Securities of that series from all other Securities);

 

(2)   any limit upon the aggregate principal amount of the
Securities of that series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of that
series);

 

(3)   the date or dates on which the principal of the
Securities of the series is payable;

 

(4)   if the price
(expressed as a percentage of the aggregate principal amount thereof) at which
such Securities will be issued is a price other than the principal amount
thereof, the portion of the principal amount thereof payable upon declaration
of acceleration of the maturity thereof, or if applicable, the portion of the
principal amount of such Securities that is convertible into another security
or the method by which any such portion shall be determined;

 

5

 

(5)   the rate or rates at which the Securities of the
series shall bear interest or the manner of calculation of such rate or rates,
if any;

 

(6)   the date or dates from which such interest shall
accrue, the Interest Payment Dates on which such interest will be payable or
the manner of determination of such Interest Payment Dates, the place(s) of
payment, and the record date for the determination of holders to whom interest
is payable on any such Interest Payment Dates or the manner of determination of
such record dates;

 

(7)   the right, if any, to extend the interest payment
periods and the duration of such extension;

 

(8)   the period or periods within which, the price or
prices at which and the terms and conditions upon which Securities of the
series may be redeemed, converted or exchanged, in whole or in part;

 

(9)   the obligation, if any, of the Company to redeem or
purchase Securities of the series pursuant to any sinking fund, mandatory
redemption, or analogous provisions (including payments made in cash in
satisfaction of future sinking fund obligations) or at the option of a holder
thereof and the period or periods within which, the price or prices at which,
and the terms and conditions upon which, Securities of the series shall be
redeemed or purchased, in whole or in part, pursuant to such obligation;

 

(10) the form of the Securities of the series including the
form of the Certificate of Authentication for such series;

 

(11) if other than denominations of one thousand U.S.
dollars ($1,000) or any integral multiple thereof, the denominations in which
the Securities of the series shall be issuable;

 

(12) any and all other terms (including terms, to the
extent applicable, relating to any auction or remarketing of the Securities of
that series and any security for the obligations of the Company with respect to
such Securities) with respect to such series (which terms shall not be
inconsistent with the terms of this Indenture, as amended by any supplemental
indenture) including any terms which may be required by or advisable under
United States laws or regulations or advisable in connection with the marketing
of Securities of that series;

 

(13) whether the
Securities of the series shall be issued in whole or in part in the form of a
Global Security or Securities; the terms and conditions, if any, upon which
such Global Security or Securities may be exchanged in whole or in part for
other individual Securities; and the Depositary for such Global Security or
Securities;

 

(14) whether the Securities will be convertible into or
exchangeable for shares of common stock, preferred stock or other securities of
the Company or any other Person and, if so, the terms and conditions upon which
such Securities will be so convertible or exchangeable, including the
conversion or exchange price, as applicable, or how it will be calculated and
may be adjusted, any mandatory or optional (at the Company’s option or the 

 

6

 

holders’ option)
conversion or exchange features, and the applicable conversion or exchange
period;

 

(15) if other than the full principal amount thereof, the
portion of the principal amount of Securities of the series which shall be
payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.01;

 

(16) any additional or alternative events of default;

 

(17) additional or alternative covenants (which may
include, among other restrictions, restrictions on the Company’s ability or the
ability of the Company’s Subsidiaries to: 
incur additional indebtedness; issue additional securities; create
liens; pay dividends or make distributions in respect of the capital stock of
the Company or the Company’s Subsidiaries; redeem capital stock; place
restrictions on the Company’s Subsidiaries’ ability to pay dividends, make
distributions or transfer assets; make investments or other restricted
payments; sell or otherwise dispose of assets; enter into sale-leaseback
transactions; engage in transactions with stockholders or affiliates; issue or
sell stock of the Company’s Subsidiaries; or effect a consolidation or merger)
or financial covenants (which may include, among other financial covenants,
financial covenants that require the Company and its Subsidiaries to maintain
specified interest coverage, fixed charge, cash flow-based, asset-based or
other financial ratios) provided for with respect to the Securities of the
series;

 

(18) the currency or currencies, including
composite currencies, in which payment of the principal of (and premium, if
any) and interest, if any, on such Securities shall be payable (if other than
the currency of the United States of America), which unless otherwise specified
shall be the currency of the United States of America as at the time of payment
is legal tender for payment of public or private debts;

 

(19) if the principal of (and premium, if any)
or interest, if any, on such Securities is to be payable, at the election of
the Company or any Holder thereof, in a coin or currency other than that in
which such Securities are stated to be payable, then the period or periods
within which, and the terms and conditions upon which, such election may be
made;

 

(20) whether interest will be payable in cash
or additional Securities at the Company’s or the Securityholders’ option and
the terms and conditions upon which the election may be made;

 

(21) the terms and conditions, if any, upon which the
Company shall pay amounts in addition to the stated interest, premium, if any
and principal amounts of the Securities of the series to any Securityholder
that is not a “United States person” for federal tax purposes;

 

(22) additional or alternative provisions, if any, related
to defeasance and discharge of the offered Securities;

 

(23) the applicability of any guarantees;

 

7

 

(24) any restrictions on transfer, sale or assignment of
the Securities of the series;

 

(25) any other terms of the
series; and

 

(26) the subordination terms of
the Securities of the series.

 

All Securities of any one series shall be
substantially identical except as may otherwise be provided in or pursuant to
any such Board Resolution or in any indentures supplemental hereto.

 

If any of the terms of the series are established by
action taken pursuant to a Board Resolution of the Company, a copy of an
appropriate record of such action shall be certified by the secretary or an
assistant secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Officer’s Certificate of the Company setting forth the
terms of the series.

 

Securities of any particular series may be issued at
various times, with different dates on which the principal or any installment
of principal is payable, with different rates of interest, if any, or different
methods by which rates of interest may be determined, with different dates on
which such interest may be payable and with different redemption dates.

 

Section 2.02         Form of Securities and Trustee’s Certificate.

 

The Securities of any series and the Trustee’s
certificate of authentication to be borne by such Securities shall be
substantially of the tenor and purport as set forth in one or more indentures
supplemental hereto or as provided in a Board Resolution, and set forth in an
Officer’s Certificate, and they may have such letters, numbers or other marks
of identification or designation and such legends or endorsements printed,
lithographed or engraved thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Indenture, or as may be required
to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any securities exchange on which
Securities of that series may be listed, or to conform to usage.

 

Section 2.03         Denominations: Provisions for Payment.

 

The Securities shall be issuable as registered
Securities and in the denominations of one thousand U.S. dollars ($1,000) or
any integral multiple thereof, subject to Section 2.01(a)(10).  The Securities of a particular series shall
bear interest payable on the dates and at the rate specified with respect to
that series.  Subject to Section 2.01(a)(16),
the principal of and the interest on the Securities of any series, as well as
any premium thereon in case of redemption thereof prior to maturity, shall be
payable in the coin or currency of the United States of America that at the
time is legal tender for public and private debt, at the office or agency of
the Company maintained for that purpose. 
Each Security shall be dated the date of its authentication.  Interest on the Securities shall be computed
on the basis of a 360-day year composed of twelve 30-day months.

 

8

 

The interest installment on any Security that is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date for Securities of that series shall be paid to the Person in whose name
said Security (or one or more Predecessor Securities) is registered at the
close of business on the regular record date for such interest installment.  In the event that any Security of a
particular series or portion thereof is called for redemption and the
redemption date is subsequent to a regular record date with respect to any
Interest Payment Date and prior to such Interest Payment Date, interest on such
Security will be paid upon presentation and surrender of such Security as
provided in Section 3.03.

 

Any interest on any Security that is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date for
Securities of the same series (herein called “Defaulted Interest”) shall
forthwith cease to be payable to the registered holder on the relevant regular
record date by virtue of having been such holder; and such Defaulted Interest
shall be paid by the Company, at its election, as provided in clause (1) or
clause (2) below:

 

(1)           The Company may make payment of any Defaulted Interest
on Securities to the Persons in whose names such Securities (or their
respective Predecessor Securities) are registered at the close of business on a
special record date for the payment of such Defaulted Interest, which shall be
fixed in the following manner: the Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each such Security
and the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this clause
provided.  Thereupon the Trustee shall
fix a special record date for the payment of such Defaulted Interest which
shall not be more than 15 nor less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment.  The
Trustee shall promptly notify the Company of such special record date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the special record date therefor to be
mailed, first class postage prepaid, to each Securityholder at his or her
address as it appears in the Security Register (as hereinafter defined), not
less than 10 days prior to such special record date.  Notice of the proposed payment of such
Defaulted Interest and the special record date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose names
such Securities (or their respective Predecessor Securities) are registered on
such special record date.

 

(2)           The Company may make payment of any Defaulted Interest
on any Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities may be listed,
and upon such notice as may be required by such exchange, if, after notice
given by the Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the Trustee.

 

Unless otherwise set forth in a Board Resolution or
one or more indentures supplemental hereto establishing the terms of any series
of Securities pursuant to Section 2.01 hereof, the term “regular record
date” as used in this Section with respect to a series of Securities and
any Interest Payment Date for such series shall mean either the fifteenth day
of the month immediately 

 

9

 

preceding the month in
which an Interest Payment Date established for such series pursuant to Section 2.01
hereof shall occur, if such Interest Payment Date is the first day of a month,
or the first day of the month in which an Interest Payment Date established for
such series pursuant to Section 2.01 hereof shall occur, if such Interest
Payment Date is the fifteenth day of a month, whether or not such date is a
Business Day.

 

Subject to the foregoing provisions of this Section,
each Security of a series delivered under this Indenture upon transfer of or in
exchange for or in lieu of any other Security of such series shall carry the
rights to interest accrued and unpaid, and to accrue, that were carried by such
other Security.

 

Section 2.04         Execution and Authentications.

 

The Securities shall be signed on behalf of the
Company by one of its Officers. 
Signatures may be in the form of a manual or facsimile signature.

 

The Company may use the facsimile signature of any
Person who shall have been an Officer, notwithstanding the fact that at the
time the Securities shall be authenticated and delivered or disposed of such
Person shall have ceased to be such an officer of the Company.  The Securities may contain such notations,
legends or endorsements required by law, stock exchange rule or
usage.  Each Security shall be dated the
date of its authentication by the Trustee.

 

A Security shall not be valid until authenticated
manually by an authorized signatory of the Trustee, or by an Authenticating
Agent.  Such signature shall be
conclusive evidence that the Security so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.  At any time
and from time to time after the execution and delivery of this Indenture, the
Company may deliver Securities of any series executed by the Company to the
Trustee for authentication, together with a written order of the Company for
the authentication and delivery of such Securities, signed by an Officer, and
the Trustee in accordance with such written order shall authenticate and
deliver such Securities.

 

In authenticating such Securities and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, if requested, and
(subject to Section 7.01) shall be fully protected in relying upon, an
Opinion of Counsel stating that the form and terms thereof have been
established in conformity with the provisions of this Indenture.

 

The Trustee shall not be required to authenticate such
Securities if the issue of such Securities pursuant to this Indenture will
affect the Trustee’s own rights, duties or immunities under the Securities and
this Indenture or otherwise in a manner that is not reasonably acceptable to
the Trustee.

 

Section 2.05         Registration of Transfer and Exchange.

 

(a)           Securities of any series may be exchanged upon
presentation thereof at the office or agency of the Company designated for such
purpose, for other Securities of such series of authorized denominations, and
for a like aggregate principal amount, upon payment of a sum 

 

10

 

sufficient to cover any tax or other governmental
charge in relation thereto, all as provided in this Section.  In respect of any Securities so surrendered
for exchange, the Company shall execute, the Trustee shall authenticate and
such office or agency shall deliver in exchange therefor the Security or Securities
of the same series that the Securityholder making the exchange shall be
entitled to receive, bearing numbers not contemporaneously outstanding.

 

(b)           The Company shall keep, or cause to be kept, at its
office or agency designated for such purpose a register or registers (herein
referred to as the “Security Register”) in which, subject to such reasonable
regulations as it may prescribe, the Company shall register the Securities and
the transfers of Securities as in this Article provided and which at all
reasonable times shall be open for inspection by the Trustee.  The registrar for the purpose of registering
Securities and transfer of Securities as herein provided shall be appointed as
authorized by Board Resolution (the “Security Registrar”).

 

Upon surrender for transfer of any Security at the
office or agency of the Company designated for such purpose, the Company shall
execute, the Trustee shall authenticate and such office or agency shall deliver
in the name of the transferee or transferees a new Security or Securities of
the same series as the Security presented for a like aggregate principal
amount.

 

All Securities presented or surrendered for exchange
or registration of transfer, as provided in this Section, shall be accompanied
(if so required by the Company or the Security Registrar) by a written
instrument or instruments of transfer, in form satisfactory to the Company or
the Security Registrar, duly executed by the registered holder or by such
holder’s duly authorized attorney in writing.

 

(c)           Except as provided pursuant to Section 2.01
pursuant to a Board Resolution, and set forth in an Officer’s Certificate, or
established in one or more indentures supplemental to this Indenture, no
service charge shall be made for any exchange or registration of transfer of
Securities, or issue of new Securities in case of partial redemption of any
series, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge in relation thereto, other than exchanges
pursuant to Section 2.06, Section 3.03(b) and Section 9.04
not involving any transfer.

 

(d)           The Company shall not be required (i) to issue,
exchange or register the transfer of any Securities during a period beginning
at the opening of business 15 days before the day of the mailing of a notice of
redemption of less than all the Outstanding Securities of the same series and
ending at the close of business on the day of such mailing, nor (ii) to
register the transfer of or exchange any Securities of any series or portions
thereof called for redemption, other than the unredeemed portion of any such
Securities being redeemed in part.  The
provisions of this Section 2.05 are, with respect to any Global Security,
subject to Section 2.11 hereof.

 

The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Security (including any transfers between
or among depositary participants or beneficial owners of interests in any
Global Security) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and
when expressly required by the terms of, this Indenture, and to 

 

11

 

examine the same to
determine substantial compliance as to form with the express requirements
hereof.

 

Section 2.06         Temporary Securities.

 

Pending the preparation of definitive Securities of
any series, the Company may execute, and the Trustee shall authenticate and
deliver, temporary Securities (printed, lithographed or typewritten) of any
authorized denomination.  Such temporary
Securities shall be substantially in the form of the definitive Securities in
lieu of which they are issued, but with such omissions, insertions and
variations as may be appropriate for temporary Securities, all as may be
determined by the Company.  Every temporary
Security of any series shall be executed by the Company and be authenticated by
the Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Securities of such series.  Without unnecessary delay the Company will
execute and will furnish definitive Securities of such series and thereupon any
or all temporary Securities of such series may be surrendered in exchange
therefor (without charge to the holders), at the office or agency of the
Company designated for the purpose, and the Trustee shall authenticate and such
office or agency shall deliver in exchange for such temporary Securities an
equal aggregate principal amount of definitive Securities of such series,
unless the Company advises the Trustee to the effect that definitive Securities
need not be executed and furnished until further notice from the Company.  Until so exchanged, the temporary Securities
of such series shall be entitled to the same benefits under this Indenture as
definitive Securities of such series authenticated and delivered hereunder.

 

Section 2.07         Mutilated, Destroyed, Lost or Stolen Securities.

 

In case any temporary or definitive Security shall
become mutilated or be destroyed, lost or stolen, the Company (subject to the
next succeeding sentence) shall execute, and upon the Company’s request the
Trustee (subject as aforesaid) shall authenticate and deliver, a new Security
of the same series, bearing a number not contemporaneously outstanding, in
exchange and substitution for the mutilated Security, or in lieu of and in
substitution for the Security so destroyed, lost or stolen.  In every case the applicant for a substituted
Security shall furnish to the Company and the Trustee such security or
indemnity as may be required by them to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Company and the Trustee evidence to their satisfaction of the destruction,
loss or theft of the applicant’s Security and of the ownership thereof.  The Trustee may authenticate any such
substituted Security and deliver the same upon the written request or
authorization of any officer of the Company. 
Upon the issuance of any substituted Security, the Company may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith.

 

In case any Security that has matured or is about to
mature shall become mutilated or be destroyed, lost or stolen, the Company may,
instead of issuing a substitute Security, pay or authorize the payment of the
same (without surrender thereof except in the case of a mutilated Security) if
the applicant for such payment shall furnish to the Company and the Trustee
such security or indemnity as they may require to save them harmless, and, in
case of destruction, loss 

 

12

 

or theft, evidence to the
satisfaction of the Company and the Trustee of the destruction, loss or theft
of such Security and of the ownership thereof.

 

Every replacement Security issued pursuant to the
provisions of this Section shall constitute an additional contractual
obligation of the Company whether or not the mutilated, destroyed, lost or
stolen Security shall be found at any time, or be enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of the same series duly
issued hereunder.  All Securities shall
be held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities, and shall preclude (to the extent lawful) any and
all other rights or remedies, notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.

 

Section 2.08         Cancellation.

 

All Securities surrendered for the purpose of payment,
redemption, exchange or registration of transfer shall, if surrendered to the
Company or any paying agent, be delivered to the Trustee for cancellation, or,
if surrendered to the Trustee, shall be cancelled by it, and no Securities
shall be issued in lieu thereof except as expressly required or permitted by
any of the provisions of this Indenture. 
On request of the Company at the time of such surrender, the Trustee
shall deliver to the Company canceled Securities held by the Trustee.  In the absence of such request the Trustee
may dispose of canceled Securities in accordance with its standard procedures
and deliver a certificate of disposition to the Company.  If the Company shall otherwise acquire any of
the Securities, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities unless and
until the same are delivered to the Trustee for cancellation.

 

Section 2.09         Benefits of Indenture.

 

Nothing in this Indenture or in the Securities,
express or implied, shall give or be construed to give to any Person, other
than the parties hereto and the holders of the Securities (and, with respect to the provisions of Article Fourteen,
the holders of any indebtedness of the Company to which the Securities of any
series are subordinated) any legal or equitable right, remedy or claim
under or in respect of this Indenture, or under any covenant, condition or
provision herein contained; all such covenants, conditions and provisions being
for the sole benefit of the parties hereto and of the holders of the Securities
(and, with respect to the provisions of
Article Fourteen, the holders of any indebtedness of the Company to which
the Securities of any series are subordinated).

 

Section 2.10         Authenticating Agent.

 

So long as any of the Securities of any series remain
Outstanding there may be an Authenticating Agent for any or all such series of
Securities which the Trustee shall have the right to appoint.  Said Authenticating Agent shall be authorized
to act on behalf of the Trustee to authenticate Securities of such series
issued upon exchange, transfer or partial redemption thereof, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall 

 

13

 

be valid and obligatory
for all purposes as if authenticated by the Trustee hereunder.  All references in this Indenture to the
authentication of Securities by the Trustee shall be deemed to include authentication
by an Authenticating Agent for such series. 
Each Authenticating Agent shall be acceptable to the Company and shall
be a corporation that has a combined capital and surplus, as most recently
reported or determined by it, sufficient under the laws of any jurisdiction
under which it is organized or in which it is doing business to conduct a trust
business, and that is otherwise authorized under such laws to conduct such
business and is subject to supervision or examination by federal or state authorities.  If at any time any Authenticating Agent shall
cease to be eligible in accordance with these provisions, it shall resign
immediately.

 

Any Authenticating Agent may at any time resign by
giving written notice of resignation to the Trustee and to the Company.  The Trustee may at any time (and upon request
by the Company shall) terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and to the
Company.  Upon resignation, termination
or cessation of eligibility of any Authenticating Agent, the Trustee may
appoint an eligible successor Authenticating Agent acceptable to the
Company.  Any successor Authenticating
Agent, upon acceptance of its appointment hereunder, shall become vested with
all the rights, powers and duties of its predecessor hereunder as if originally
named as an Authenticating Agent pursuant hereto.

 

Section 2.11         Global Securities.

 

(a)           If the Company shall establish pursuant to Section 2.01
that the Securities of a particular series are to be issued as a Global
Security, then the Company shall execute and the Trustee shall, in accordance
with Section 2.04, authenticate and deliver, a Global Security that (i) shall
represent, and shall be denominated in an amount equal to the aggregate
principal amount of, all of the Outstanding Securities of such series, (ii) shall
be registered in the name of the Depositary or its nominee, (iii) shall be
delivered by the Trustee to the Depositary or pursuant to the Depositary’s
instruction and (iv) shall bear a legend substantially to the following
effect: “Except as otherwise provided in Section 2.11 of the Indenture,
this Security may be transferred, in whole but not in part, only to another
nominee of the Depositary or to a successor Depositary or to a nominee of such
successor Depositary.”

 

(b)           Notwithstanding the provisions of Section 2.05,
the Global Security of a series may be transferred, in whole but not in part
and in the manner provided in Section 2.05, only to another nominee of the
Depositary for such series, or to a successor Depositary for such series
selected or approved by the Company or to a nominee of such successor
Depositary.

 

(c)           If at any time the Depositary for a series of the
Securities notifies the Company that it is unwilling or unable to continue as
Depositary for such series or if at any time the Depositary for such series
shall no longer be registered or in good standing under the Exchange Act, or
other applicable statute or regulation, and a successor Depositary for such
series is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such condition, as the case may be, or
if an Event of Default has occurred and is continuing and the Company has
received a request from the Depositary or from the Trustee, this Section 2.11
shall no longer be applicable to the Securities of such series and the Company 

 

14

 

will execute, and subject to Section 2.04, the
Trustee will authenticate and deliver the Securities of such series in
definitive registered form without coupons, in authorized denominations, and in
an aggregate principal amount equal to the principal amount of the Global
Security of such series in exchange for such Global Security.  In addition, the Company may at any time
determine that the Securities of any series shall no longer be represented by a
Global Security and that the provisions of this Section 2.11 shall no
longer apply to the Securities of such series. 
In such event the Company will execute and, subject to Section 2.04,
the Trustee, upon receipt of an Officer’s Certificate evidencing such
determination by the Company, will authenticate and deliver the Securities of
such series in definitive registered form without coupons, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Security of such series in exchange for such Global
Security.  Upon the exchange of the
Global Security for such Securities in definitive registered form without
coupons, in authorized denominations, the Global Security shall be canceled by
the Trustee.  Such Securities in
definitive registered form issued in exchange for the Global Security pursuant
to this Section 2.11(c) shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee.  The Trustee shall deliver such Securities to
the Depositary for delivery to the Persons in whose names such Securities are
so registered.

 

ARTICLE 3

 

REDEMPTION OF SECURITIES AND SINKING FUND
PROVISIONS

 

Section 3.01         Redemption.

 

The Company may redeem the Securities of any series
issued hereunder on and after the dates and in accordance with the terms
established for such series pursuant to Section 2.01 hereof.

 

Section 3.02         Notice of Redemption.

 

(a)   In case the Company shall desire to exercise such
right to redeem all or, as the case may be, a portion of the Securities of any
series in accordance with any right the Company reserved for itself to do so
pursuant to Section 2.01 hereof, the Company shall, or shall cause the
Trustee to, give notice of such redemption to holders of the Securities of such
series to be redeemed by mailing, first class postage prepaid, a notice of such
redemption not less than 30 days and not more than 90 days before the date
fixed for redemption of that series to such holders at their last addresses as
they shall appear upon the Security Register, unless a shorter period is
specified in the Securities to be redeemed. 
Any notice that is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the registered
holder receives the notice.  In any case,
failure duly to give such notice to the holder of any Security of any series
designated for redemption in whole or in part, or any defect in the notice,
shall not affect the validity of the proceedings for the redemption of any
other Securities of such series or any other series.  In the case of any redemption of Securities
prior to the expiration of any restriction on such redemption provided in the
terms of such Securities or elsewhere in this Indenture, the Company shall
furnish the Trustee with an Officer’s Certificate evidencing compliance with
any such restriction.

 

15

 

Each such notice of redemption shall specify the date
fixed for redemption and the redemption price at which Securities of that
series are to be redeemed, and shall state that payment of the redemption price
of such Securities to be redeemed will be made at the office or agency of the
Company, upon presentation and surrender of such Securities, that interest
accrued to the date fixed for redemption will be paid as specified in said
notice, that from and after said date interest will cease to accrue and that
the redemption is from a sinking fund, if such is the case.  If less than all the Securities of a series
are to be redeemed, the notice to the holders of Securities of that series to
be redeemed in part shall specify the particular Securities to be so redeemed.

 

In case any Security is to be redeemed in part only,
the notice that relates to such Security shall state the portion of the
principal amount thereof to be redeemed, and shall state that on and after the
redemption date, upon surrender of such Security, a new Security or Securities
of such series in principal amount equal to the unredeemed portion thereof will
be issued.

 

(b)           If less than all the Securities of a series are to be
redeemed, the Company shall give the Trustee at least 45 days’ notice (unless a
shorter notice shall be satisfactory to the Trustee) in advance of the date
fixed for redemption as to the aggregate principal amount of Securities of the
series to be redeemed, and thereupon the Trustee shall select, by lot or in
such other manner as it shall deem appropriate and fair in its discretion and
that may provide for the selection of a portion or portions (equal to one
thousand U.S. dollars ($1,000) or any integral multiple thereof) of the
principal amount of such Securities of a denomination larger than $1,000, the
Securities to be redeemed and shall thereafter promptly notify the Company in
writing of the numbers of the Securities to be redeemed, in whole or in
part.  The Company may, if and whenever
it shall so elect, by delivery of instructions signed on its behalf by an
Officer, instruct the Trustee or any paying agent to call all or any part of
the Securities of a particular series for redemption and to give notice of
redemption in the manner set forth in this Section, such notice to be in the
name of the Company or its own name as the Trustee or such paying agent may
deem advisable.  In any case in which
notice of redemption is to be given by the Trustee or any such paying agent,
the Company shall deliver or cause to be delivered to, or permit to remain
with, the Trustee or such paying agent, as the case may be, such Security
Register, transfer books or other records, or suitable copies or extracts
therefrom, sufficient to enable the Trustee or such paying agent to give any
notice by mail that may be required under the provisions of this Section.

 

Section 3.03         Payment Upon Redemption.

 

(a)           If the giving of notice of redemption shall have been
completed as above provided, the Securities or portions of Securities of the
series to be redeemed specified in such notice shall become due and payable on
the date and at the place stated in such notice at the applicable redemption
price, together with interest accrued to the date fixed for redemption and
interest on such Securities or portions of Securities shall cease to accrue on
and after the date fixed for redemption, unless the Company shall default in
the payment of such redemption price and accrued interest with respect to any
such Security or portion thereof.  On
presentation and surrender of such Securities on or after the date fixed for
redemption at the place of payment specified in the notice, said Securities
shall be paid and redeemed at the applicable redemption price for such series,
together with interest accrued thereon to the date fixed for redemption (but 

 

16

 

if the date fixed for redemption is an interest
payment date, the interest installment payable on such date shall be payable to
the registered holder at the close of business on the applicable record date
pursuant to Section 2.03).

 

(b)           Upon presentation of any Security of such series that
is to be redeemed in part only, the Company shall execute and the Trustee shall
authenticate and the office or agency where the Security is presented shall
deliver to the holder thereof, at the expense of the Company, a new Security of
the same series of authorized denominations in principal amount equal to the
unredeemed portion of the Security so presented.

 

Section 3.04         Sinking Fund.

 

The provisions of Sections 3.04, 3.05 and 3.06 shall
be applicable to any sinking fund for the retirement of Securities of a series,
except as otherwise specified as contemplated by Section 2.01 for
Securities of such series.

 

The minimum amount of any sinking fund payment
provided for by the terms of Securities of any series is herein referred to as
a “mandatory sinking fund payment,” and any payment in excess of such minimum
amount provided for by the terms of Securities of any series is herein referred
to as an “optional sinking fund payment”. 
If provided for by the terms of Securities of any series, the cash
amount of any sinking fund payment may be subject to reduction as provided in Section 3.05.  Each sinking fund payment shall be applied to
the redemption of Securities of any series as provided for by the terms of
Securities of such series.

 

Section 3.05         Satisfaction of Sinking Fund Payments with Securities.

 

The Company (i) may deliver Outstanding
Securities of a series and (ii) may apply as a credit Securities of a
series that have been redeemed either at the election of the Company pursuant
to the terms of such Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Securities, in
each case in satisfaction of all or any part of any sinking fund payment with
respect to the Securities of such series required to be made pursuant to the
terms of such Securities as provided for by the terms of such series, provided
that such Securities have not been previously so credited.  Such Securities shall be received and
credited for such purpose by the Trustee at the redemption price specified in
such Securities for redemption through operation of the sinking fund and the
amount of such sinking fund payment shall be reduced accordingly.

 

Section 3.06         Redemption of Securities for Sinking Fund.

 

Not less than 45 days prior to each sinking fund
payment date for any series of Securities (unless a shorter period shall be
satisfactory to the Trustee), the Company will deliver to the Trustee an
Officer’s Certificate specifying the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of the series, the portion
thereof, if any, that is to be satisfied by delivering and crediting Securities
of that series pursuant to Section 3.05 and the basis for such credit and
will, together with such Officer’s Certificate, deliver to the Trustee any
Securities to be so delivered.  Not less
than 30 days before each such sinking fund payment date the Trustee shall
select the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 3.02 and cause notice of the redemption
thereof to be given in the name of 

 

17

 

and at the expense of the
Company in the manner provided in Section 3.02.  Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Section 3.03.

 

ARTICLE 4

COVENANTS

 

Section 4.01         Payment of Principal, Premium and Interest.

 

The Company will duly and
punctually pay or cause to be paid the principal of (and premium, if any) and
interest on the Securities of that series at the time and place and in the
manner provided herein and established with respect to such Securities.
Payments of principal on the Securities may be made at the time provided herein
and established with respect to such Securities by U.S. dollar check drawn on
and mailed to the address of the Securityholder entitled thereto as such
address shall appear in the Security Register, or U.S. dollar wire transfer to,
a U.S. dollar account if such Securityholder shall have furnished wire
instructions to the Trustee no later than 15 days prior to the relevant payment
date. Payments of interest on the Securities may be made at the time provided
herein and established with respect to such Securities by U.S. dollar check
mailed to the address of the Securityholder entitled thereto as such address
shall appear in the Security Register, or U.S. dollar wire transfer to, a U.S.
dollar account if such Securityholder shall have furnished wire instructions in
writing to the Security Registrar and the Trustee no later than 15 days prior
to the relevant payment date.

 

Section 4.02         Maintenance of Office or Agency.

 

So long as any series of the Securities remain
Outstanding, the Company agrees to maintain an office or agency with respect to
each such series and at such other location or locations as may be designated
as provided in this Section 4.02, where (i) Securities of that series
may be presented for payment, (ii) Securities of that series may be
presented as herein above authorized for registration of transfer and exchange,
and (iii) notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be given or served, such
designation to continue with respect to such office or agency until the Company
shall, by written notice signed by any officer authorized to sign an Officer’s
Certificate and delivered to the Trustee, designate some other office or agency
for such purposes or any of them.  If at
any time the Company shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, notices and demands.  The Company initially appoints the Corporate
Trust Office of the Trustee as its paying agent with respect to the Securities.

 

Section 4.03         Paying Agents.

 

(a)   If the Company shall appoint one or more paying agents
for all or any series of the Securities, other than the Trustee, the Company
will cause each such paying agent to 

 

18

 

execute and deliver to
the Trustee an instrument in which such agent shall agree with the Trustee,
subject to the provisions of this Section:

 

(1)           that it will hold all sums held by it as such agent
for the payment of the principal of (and premium, if any) or interest on the
Securities of that series (whether such sums have been paid to it by the
Company or by any other obligor of such Securities) in trust for the benefit of
the Persons entitled thereto;

 

(2)           that it will give the Trustee notice of any failure by
the Company (or by any other obligor of such Securities) to make any payment of
the principal of (and premium, if any) or interest on the Securities of that
series when the same shall be due and payable;

 

(3)           that it will, at any time during the continuance of
any failure referred to in the preceding paragraph (a)(2) above, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held
in trust by such paying agent; and

 

(4)           that it will perform all other duties of paying agent
as set forth in this Indenture.

 

(b)           If the Company shall act as its own paying agent with
respect to any series of the Securities, it will on or before each due date of
the principal of (and premium, if any) or interest on Securities of that
series, set aside, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay such principal (and premium, if any)
or interest so becoming due on Securities of that series until such sums shall
be paid to such Persons or otherwise disposed of as herein provided and will
promptly notify the Trustee of such action, or any failure (by it or any other
obligor on such Securities) to take such action.  Whenever the Company shall have one or more
paying agents for any series of Securities, it will, prior to each due date of
the principal of (and premium, if any) or interest on any Securities of that
series, deposit with the paying agent a sum sufficient to pay the principal
(and premium, if any) or interest so becoming due, such sum to be held in trust
for the benefit of the Persons entitled to such principal, premium or interest,
and (unless such paying agent is the Trustee) the Company will promptly notify
the Trustee of this action or failure so to act.

 

(c)           Notwithstanding anything in this Section to the
contrary, (i) the agreement to hold sums in trust as provided in this Section is
subject to the provisions of Section 11.05, and (ii) the Company may
at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture or for any other purpose, pay, or direct any paying agent to
pay, to the Trustee all sums held in trust by the Company or such paying agent,
such sums to be held by the Trustee upon the same terms and conditions as those
upon which such sums were held by the Company or such paying agent; and, upon
such payment by the Company or any paying agent to the Trustee, the Company or
such paying agent shall be released from all further liability with respect to
such money.

 

19

 

Section 4.04         Appointment to Fill Vacancy in Office of Trustee.

 

The Company, whenever necessary to avoid or fill a
vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.10,
a Trustee, so that there shall at all times be a Trustee hereunder.

 

Section 4.05         Compliance with Consolidation Provisions.

 

The Company will not, while any of the Securities
remain Outstanding, consolidate with or merge into any other Person, in either
case where the Company is not the survivor of such transaction, or sell or
convey all or substantially all of its property to any other Person unless the
provisions of Article Ten hereof are complied with.

 

ARTICLE 5

SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE

 

Section 5.01         Company to Furnish Trustee Names and Addresses of Securityholders.

 

The Company will furnish or cause to be furnished to
the Trustee (a) within 15 days after each regular record date (as defined
in Section 2.03) a list, in such form as the Trustee may reasonably
require, of the names and addresses of the holders of each series of Securities
as of such regular record date, provided that the Company shall not be
obligated to furnish or cause to furnish such list at any time that the list
shall not differ in any respect from the most recent list furnished to the
Trustee by the Company and (b) at such other times as the Trustee may
request in writing within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished; provided, however, that, in either
case, no such list need be furnished for any series for which the Trustee shall
be the Security Registrar.

 

Section 5.02         Preservation Of Information; Communications With Securityholders.

 

(a)           The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of Securities contained in the most recent list furnished to it as
provided in Section 5.01 and as to the names and addresses of holders of
Securities received by the Trustee in its capacity as Security Registrar (if
acting in such capacity).

 

(b)           The Trustee may destroy any list furnished to it as
provided in Section 5.01 upon receipt of a new list so furnished.

 

(c)           Securityholders may communicate as provided in Section 312(b) of
the Trust Indenture Act with other Securityholders with respect to their rights
under this Indenture or under the Securities, and, in connection with any such
communications, the Trustee shall satisfy its obligations under Section 312(b) of
the Trust Indenture Act in accordance with the provisions of Section 312(b) of
the Trust Indenture Act.

 

20

 

Section 5.03         Reports by the Company.

 

(a)           The Company covenants and agrees to provide (which
delivery may be via electronic mail) to the Trustee within 30 days, after the
Company files the same with the Commission, copies of the annual reports and of
the information, documents and other reports (or copies of such portions of any
of the foregoing as the Commission may from time to time by rules and
regulations prescribe) that the Company is required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act;
provided, however, the Company shall not be required to deliver to the Trustee
any materials for which the Company has sought and received confidential
treatment by the Commission; and provided further, that so long as such filings
by the Company are available on the Commission’s Electronic Data Gathering,
Analysis and Retrieval System (EDGAR), or Interactive Data Electronic
Applications (IDEA), or any successor system, such filings shall be deemed to
have been filed with the Trustee for purposes hereof without any further action
required by the Company; provided that an electronic link to such filing,
together with an electronic notice of such filing have been sent to the
Trustee.  For the avoidance of doubt, a
failure by the Company to file annual reports, information and other reports
with the SEC within the time period prescribed thereof by the Commission shall
not be deemed a breach of this Section 5.03.

 

(b)           Delivery of reports, information and documents to the
Trustee under Section 5.03 is for informational purposes only and the
information and the Trustee’s receipt of the foregoing shall not constitute
constructive notice of any information contained therein, or determinable from
information contained therein including the Company’s compliance with any of
their covenants thereunder (as to which the Trustee is entitled to rely
exclusively on an Officer’s Certificate).

 

Section 5.04         Reports by the Trustee.

 

(a)           If required by Section 313(a) of the Trust
Indenture Act, the Trustee, within sixty (60) days after each May 1, shall
transmit by mail, first class postage prepaid, to the Securityholders, as their
names and addresses appear upon the Security Register, a brief report dated as
of such May 1, which complies with Section 313(a) of the Trust
Indenture Act.

 

(b)           The Trustee shall comply with Section 313(b) and
313(c) of the Trust Indenture Act.

 

(c)           A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with the Company, with
each securities exchange upon which any Securities are listed (if so listed)
and also with the Commission.  The
Company agrees to notify the Trustee when any Securities become listed on any
securities exchange.

 

21

 

ARTICLE 6

REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT

 

Section 6.01         Events of Default.

 

(a)           Whenever used herein with respect to Securities of a
particular series, “Event of Default” means any one or more of the following
events that has occurred and is continuing:

 

(1)           the Company defaults in the payment of any installment
of interest upon any of the Securities of that series, as and when the same
shall become due and payable, and such default continues for a period of 90
days; provided, however, that a valid extension of an interest payment period
by the Company in accordance with the terms of any indenture supplemental
hereto shall not constitute a default in the payment of interest for this
purpose;

 

(2)           the Company defaults in the payment of the principal
of (or premium, if any, on) any of the Securities of that series as and when
the same shall become due and payable whether at maturity, upon redemption, by
declaration or otherwise, or in any payment required by any sinking or
analogous fund established with respect to that series; provided, however, that
a valid extension of the maturity of such Securities in accordance with the
terms of any indenture supplemental hereto shall not constitute a default in
the payment of principal or premium, if any;

 

(3)           the Company fails to observe or perform any other of
its covenants or agreements with respect to that series contained in this
Indenture or otherwise established with respect to that series of Securities
pursuant to Section 2.01 hereof (other than a covenant or agreement that
has been expressly included in this Indenture solely for the benefit of one or
more series of Securities other than such series) for a period of 90 days after
the date on which written notice of such failure, requiring the same to be
remedied and stating that such notice is a “Notice of Default” hereunder, shall
have been given to the Company by the Trustee, by registered or certified mail,
or to the Company and the Trustee by the holders of at least 25% in principal
amount of the Securities of that series at the time Outstanding;

 

(4)           the Company pursuant to or within the meaning of any
Bankruptcy Law (i) commences a voluntary case, (ii) consents to the
entry of an order for relief against it in an involuntary case, (iii) consents
to the appointment of a Custodian of it or for all or substantially all of its
property or (iv) makes a general assignment for the benefit of its
creditors; or

 

(5)           a court of competent jurisdiction enters an order
under any Bankruptcy Law that (i) is for relief against the Company in an
involuntary case, (ii) appoints a Custodian of the Company for all or
substantially all of its property or (iii) orders the liquidation of the
Company, and the order or decree remains unstayed and in effect for 90 days.

 

(b)           In each and every such case (other than an Event of
Default specified in clause (4) or clause (5) above), unless the
principal of all the Securities of that series shall have 

 

22

 

already become due and payable, either the Trustee or
the holders of not less than 25% in aggregate principal amount of the
Securities of that series then Outstanding hereunder, by notice in writing to
the Company (and to the Trustee if given by such Securityholders), may declare
the principal of (and premium, if any, on) and accrued and unpaid interest on
all the Securities of that series to be due and payable immediately, and upon
any such declaration the same shall become and shall be immediately due and
payable.  If an Event of Default
specified in clause (4) or clause (5) above occurs, the principal of
and accrued and unpaid interest on all the Securities of that series shall
automatically be immediately due and payable without any declaration or other
act on the part of the Trustee or the holders of the Securities.

 

(c)           At any time after the principal of (and premium, if
any, on) and accrued and unpaid interest on the Securities of that series shall
have been so declared due and payable, and before any judgment or decree for
the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the holders of a majority in aggregate principal amount
of the Securities of that series then Outstanding hereunder, by written notice
to the Company and the Trustee, may rescind and annul such declaration and its
consequences if: (i) the Company has paid or deposited with the Trustee a
sum sufficient to pay all matured installments of interest upon all the
Securities of that series and the principal of (and premium, if any, on) any
and all Securities of that series that shall have become due otherwise than by
acceleration (with interest upon such principal and premium, if any, and, to
the extent that such payment is enforceable under applicable law, upon overdue
installments of interest, at the rate per annum expressed in the Securities of
that series to the date of such payment or deposit) and the amount payable to
the Trustee under Section 7.06, and (ii) any and all Events of
Default under the Indenture with respect to such series, other than the
nonpayment of principal on (and premium, if any, on) and accrued and unpaid
interest on Securities of that series that shall not have become due by their
terms, shall have been remedied or waived as provided in Section 6.06.

 

No such rescission and annulment shall extend to or
shall affect any subsequent default or impair any right consequent thereon.

 

(d)           In case the Trustee shall have proceeded to enforce
any right with respect to Securities of that series under this Indenture and
such proceedings shall have been discontinued or abandoned because of such
rescission or annulment or for any other reason or shall have been determined adversely
to the Trustee, then and in every such case, subject to any determination in
such proceedings, the Company and the Trustee shall be restored respectively to
their former positions and rights hereunder, and all rights, remedies and
powers of the Company and the Trustee shall continue as though no such
proceedings had been taken.

 

Section 6.02         Collection of Indebtedness and Suits for Enforcement by Trustee.

 

(a)           The Company covenants that (i) in case it shall
default in the payment of any installment of interest on any of the Securities
of a series, or in any payment required by any sinking or analogous fund
established with respect to that series as and when the same shall have become
due and payable, and such default shall have continued for a period of 90 days,
or (ii) in case it shall default in the payment of the principal of (or
premium, if any, on) any of the Securities of a series when the same shall have
become due and payable, whether upon maturity of the Securities of a series or
upon redemption or upon declaration or otherwise then, upon 

 

23

 

demand of the Trustee, the Company will pay to the
Trustee, for the benefit of the holders of the Securities of that series, the
whole amount that then shall have been become due and payable on all such
Securities for principal (and premium, if any) or interest, or both, as the
case may be, with interest upon the overdue principal (and premium, if any) and
(to the extent that payment of such interest is enforceable under applicable
law) upon overdue installments of interest at the rate per annum expressed in
the Securities of that series; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, and the
amount payable to the Trustee under Section 7.06.

 

(b)           If the Company shall fail to pay such amounts
forthwith upon such demand, the Trustee, in its own name and as trustee of an
express trust, shall be entitled and empowered to institute any action or proceedings
at law or in equity for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Company or other obligor
upon the Securities of that series and collect the moneys adjudged or decreed
to be payable in the manner provided by law or equity out of the property of
the Company or other obligor upon the Securities of that series, wherever
situated.

 

(c)           In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement, composition or judicial
proceedings affecting the Company, or its creditors or property, the Trustee
shall have power to intervene in such proceedings and take any action therein
that may be permitted by the court and shall (except as may be otherwise
provided by law) be entitled to file such proofs of claim and other papers and
documents as may be necessary or advisable in order to have the claims of the
Trustee and of the holders of Securities of such series allowed for the entire
amount due and payable by the Company under the Indenture at the date of
institution of such proceedings and for any additional amount that may become
due and payable by the Company after such date, and to collect and receive any
moneys or other property payable or deliverable on any such claim, and to
distribute the same after the deduction of the amount payable to the Trustee
under Section 7.06; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the holders of Securities of
such series to make such payments to the Trustee, and, in the event that the
Trustee shall consent to the making of such payments directly to such
Securityholders, to pay to the Trustee any amount due it under Section 7.06.

 

(d)           All rights of action and of asserting claims under
this Indenture, or under any of the terms established with respect to
Securities of that series, may be enforced by the Trustee without the
possession of any of such Securities, or the production thereof at any trial or
other proceeding relative thereto, and any such suit or proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for payment to the Trustee
of any amounts due under Section 7.06, be for the ratable benefit of the
holders of the Securities of such series.

 

In case of an Event of Default hereunder, the Trustee
may in its discretion proceed to protect and enforce the rights vested in it by
this Indenture by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any of such rights, either at law or
in equity or in bankruptcy or otherwise, whether for the specific enforcement
of any covenant or agreement contained in the Indenture or in aid of the
exercise of any power 

 

24

 

granted in this
Indenture, or to enforce any other legal or equitable right vested in the
Trustee by this Indenture or by law.

 

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

 

Section 6.03         Application of Moneys Collected.

 

Any moneys collected by the Trustee pursuant to this Article with
respect to a particular series of Securities shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the
distribution of such moneys on account of principal (or premium, if any) or
interest, upon presentation of the Securities of that series, and notation
thereon of the payment, if only partially paid, and upon surrender thereof if
fully paid:

 

FIRST: To the
payment of all indebtedness of the Company to which such series of Securities
is subordinated to the extent required by Section 7.06 and any
subordination terms of the series specified as contemplated by Article Fourteen;

 

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

 

THIRD: To the payment of the remainder, if any, to the
Company or any other Person lawfully entitled thereto.

 

Section 6.04         Limitation on Suits.

 

No holder of any Security of any series shall have any
right by virtue or by availing of any provision of this Indenture to institute
any suit, action or proceeding in equity or at law upon or under or with
respect to this Indenture or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless (i) such holder previously shall
have given to the Trustee written notice of an Event of Default and of the
continuance thereof with respect to the Securities of such series specifying
such Event of Default, as hereinbefore provided; (ii) the holders of not
less than 25% in aggregate principal amount of the Securities of such series
then Outstanding shall have made written request upon the Trustee to institute
such action, suit or proceeding in its own name as Trustee hereunder; (iii) such
holder or holders shall have offered to the Trustee such reasonable indemnity
as it may require against the costs, expenses and liabilities to be incurred
therein or thereby; (iv) the Trustee for 90 days after its receipt of such
notice, request and offer of indemnity, shall have failed to institute any such
action, suit or proceeding and (v) during such 90 day period, the holders
of a majority in principal amount of the Securities of that series do not give
the Trustee a direction inconsistent with the request.

 

25

 

Notwithstanding anything contained herein to the
contrary or any other provisions of this Indenture, the right of any holder of
any Security to receive payment of the principal of (and premium, if any) and
interest on such Security, as therein provided, on or after the respective due
dates expressed in such Security (or in the case of redemption, on the
redemption date), or to institute suit for the enforcement of any such payment
on or after such respective dates or redemption date, shall not be impaired or
affected without the consent of such holder and by accepting a Security
hereunder it is expressly understood, intended and covenanted by the taker and
holder of every Security of such series with every other such taker and holder
and the Trustee, that no one or more holders of Securities of such series shall
have any right in any manner whatsoever by virtue or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of the
holders of any other of such Securities, or to obtain or seek to obtain
priority over or preference to any other such holder, or to enforce any right
under this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all holders of Securities of such series.  For the protection and enforcement of the
provisions of this Section, each and every Securityholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.

 

Section 6.05         Rights and Remedies Cumulative; Delay or Omission Not Waiver.

 

(a)           Except as otherwise provided in Section 2.07, all
powers and remedies given by this Article to the Trustee or to the
Securityholders shall, to the extent permitted by law, be deemed cumulative and
not exclusive of any other powers and remedies available to the Trustee or the
holders of the Securities, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture or otherwise established with respect to such Securities.

 

(b)           No delay or omission of the Trustee or of any holder
of any of the Securities to exercise any right or power accruing upon any Event
of Default occurring and continuing as aforesaid shall impair any such right or
power, or shall be construed to be a waiver of any such default or an
acquiescence therein; and, subject to the provisions of Section 6.04,
every power and remedy given by this Article or by law to the Trustee or
the Securityholders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Securityholders.

 

Section 6.06         Control by Securityholders.

 

The holders of a majority in aggregate principal
amount of the Securities of any series at the time Outstanding, determined in
accordance with Section 8.04, shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee with respect
to such series; provided, however, that such direction shall not be in conflict
with any rule of law or with this Indenture or subject the Trustee in its
sole discretion to personal liability. 
Subject to the provisions of Section 7.01, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good faith
shall, by a Responsible Officer or officers of the Trustee, determine that the
proceeding so directed, subject to the Trustee’s duties under the Trust
Indenture Act, would involve the Trustee in personal liability or might be
unduly prejudicial to the Securityholders not involved in the proceeding.  The holders of a majority in aggregate
principal 

 

26

 

amount of the Securities
of any series at the time Outstanding affected thereby, determined in
accordance with Section 8.04, may on behalf of the holders of all of the
Securities of such series waive any past default in the performance of any of
the covenants contained herein or established pursuant to Section 2.01
with respect to such series and its consequences, except a default in the
payment of the principal of, or premium, if any, or interest on, any of the
Securities of that series as and when the same shall become due by the terms of
such Securities otherwise than by acceleration (unless such default has been
cured and a sum sufficient to pay all matured installments of interest and
principal and any premium has been deposited with the Trustee (in accordance
with Section 6.01(c)).  Upon any
such waiver, the default covered thereby shall be deemed to be cured for all
purposes of this Indenture and the Company, the Trustee and the holders of the
Securities of such series shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.

 

Section 6.07         Undertaking to Pay Costs.

 

All parties to this Indenture agree, and each holder
of any Securities by such holder’s acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys’ fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Securityholder,
or group of Securityholders, holding more than 10% in aggregate principal amount
of the Outstanding Securities of any series, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Security of such series, on or after the
respective due dates expressed in such Security or established pursuant to this
Indenture.

 

ARTICLE 7

CONCERNING THE TRUSTEE

 

Section 7.01         Certain Duties and Responsibilities of Trustee.

 

(a)           The Trustee, prior to the occurrence of an Event of
Default with respect to the Securities of a series and after the curing of all
Events of Default with respect to the Securities of that series that may have
occurred, shall undertake to perform with respect to the Securities of such
series such duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants shall be read into this Indenture against
the Trustee.  In case an Event of Default
with respect to the Securities of a series has occurred (that has not been
cured or waived), the Trustee shall exercise with respect to Securities of that
series such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.

 

27

 

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

 

(i)            prior to the occurrence of an Event of Default with
respect to the Securities of a series and after the curing or waiving of all
such Events of Default with respect to that series that may have occurred:

 

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

 

(B)          in the absence of bad faith on the part of the
Trustee, the Trustee may with respect to the Securities of such series
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case
of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not they conform to
the requirements of this Indenture;

 

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

 

(iii)         the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with the
direction of the holders of not less than a majority in principal amount of the
Securities of any series at the time Outstanding relating to the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee under this
Indenture with respect to the Securities of that series; and

 

(iv)          none of the provisions contained in this Indenture
shall require the Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers if there is reasonable ground for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Indenture or adequate indemnity against
such risk is not reasonably assured to it.

 

Section 7.02         Certain Rights of Trustee.

 

Except as otherwise
provided in Section 7.01:

 

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

 

28

 

(b)           Any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Board Resolution or an
instrument signed in the name of the Company by any authorized officer of the
Company (unless other evidence in respect thereof is specifically prescribed
herein);

 

(c)           The Trustee may consult with counsel and the written
advice of such counsel or, if requested, any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action taken or
suffered or omitted hereunder in good faith and in reliance thereon;

 

(d)           The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request,
order or direction of any of the Securityholders pursuant to the provisions of
this Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that may be incurred therein or thereby; nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of an Event
of Default with respect to a series of the Securities (that has not been cured
or waived), to exercise with respect to Securities of that series such of the
rights and powers vested in it by this Indenture, and to use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs;

 

(e)           The Trustee shall not be liable for any action taken
or omitted to be taken by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Indenture;

 

(f)            The Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond, security, or other papers or documents, unless requested in
writing so to do by the holders of not less than a majority in principal amount
of the Outstanding Securities of the particular series affected thereby
(determined as provided in Section 8.04); provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such costs, expenses or liabilities as a condition
to so proceeding.  The reasonable expense
of every such examination shall be paid by the Company or, if paid by the
Trustee, shall be repaid by the Company upon demand;

 

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

 

(h)           In no event shall the Trustee be responsible or liable
for any failure or delay in the performance of its obligations hereunder
arising out of or caused by, directly or indirectly, forces beyond its control,
including, without limitation, strikes, work stoppages, accidents, acts of war
or terrorism, civil or military disturbances, nuclear or natural catastrophes 

 

29

 

or acts of God, and interruptions, loss or
malfunctions of utilities, communications or computer (software and hardware)
services; it being understood that the Trustee shall use reasonable efforts
which are consistent with accepted practices in the banking industry to resume
performance as soon as practicable under the circumstances;

 

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

 

(j)            The Trustee agrees to accept and act upon instructions
or directions pursuant to this Indenture sent by unsecured e-mail, facsimile
transmission or other similar unsecured electronic methods; provided, however,
that (a) the party providing such written instructions, subsequent to such
transmission of written instructions, shall provide the originally executed
instructions or directions to the Trustee in a timely manner, and (b) such
originally executed instructions or directions shall be signed by an authorized
representative of the party providing such instructions or directions.  If the party elects to give the Trustee
e-mail or facsimile instructions (or instructions by a similar electronic
method) and the Trustee in its discretion elects to act upon such instructions,
the Trustee’s understanding of such instructions shall be deemed
controlling.  The Trustee shall not be
liable for any losses, costs or expenses arising directly or indirectly from
the Trustee’s reliance upon and compliance with such instructions
notwithstanding such instructions conflict or are inconsistent with a
subsequent written instruction.  The
party providing electronic instructions agrees to assume all risks arising out
of the use of such electronic methods to submit instructions and directions to
the Trustee, including without limitation the risk of the Trustee acting on
unauthorized instructions, and the risk or interception and misuse by third
parties.

 

In addition, the Trustee shall not be deemed to have
knowledge of any Default or Event of Default until the Trustee shall have
received written notification in the manner set forth in this Indenture or a
Responsible Officer of the Trustee shall have obtained actual knowledge.

 

Section 7.03         Trustee Not Responsible for Recitals or Issuance or Securities.

 

(a)           The recitals contained herein and in the Securities
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same.

 

(b)           The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Securities.

 

(c)           The Trustee shall not be accountable for the use or
application by the Company of any of the Securities or of the proceeds of such
Securities, or for the use or application of any moneys paid over by the
Trustee in accordance with any provision of this Indenture or established
pursuant to Section 2.01, or for the use or application of any moneys
received by any paying agent other than the Trustee.

 

30

 

Section 7.04         May Hold Securities.

 

The Trustee or any paying agent or Security Registrar,
in its individual or any other capacity, may become the owner or pledgee of
Securities with the same rights it would have if it were not Trustee, paying
agent or Security Registrar.

 

Section 7.05         Moneys Held in Trust.

 

Subject to the provisions of Section 11.05, all
moneys received by the Trustee shall, until used or applied as herein provided,
be held in trust for the purposes for which they were received, but need not be
segregated from other funds except to the extent required by law.  The Trustee shall be under no liability for
interest on any moneys received by it hereunder except such as it may agree
with the Company to pay thereon.

 

Section 7.06         Compensation and Reimbursement.

 

(a)           The Company covenants and agrees to pay to the
Trustee, and the Trustee shall be entitled to, such reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) as the Company and the Trustee
may from time to time agree in writing, for all services rendered by it in the
execution of the trusts hereby created and in the exercise and performance of
any of the powers and duties hereunder of the Trustee, and, except as otherwise
expressly provided herein, the Company will pay or reimburse the Trustee upon
its request for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of
its counsel and of all Persons not regularly in its employ), except any such
expense, disbursement or advance as may arise from its negligence or bad faith
and except as the Company and Trustee may from time to time agree in
writing.  The Company also covenants to
indemnify the Trustee (and its officers, agents, directors and employees) for,
and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on the part of the Trustee and arising out of
or in connection with the acceptance or administration of this trust, including
the reasonable costs and expenses of defending itself against any claim of
liability in the premises.

 

(b)           The obligations of the Company under this Section to
compensate and indemnify the Trustee and to pay or reimburse the Trustee for
reasonable expenses, disbursements and advances shall constitute  indebtedness
of the Company to which the Securities are subordinated.  Such additional indebtedness shall be secured
by a lien prior to that of the Securities upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the holders of particular Securities.

 

(c)           To ensure the Company’s payment obligations in this
Section, the Trustee shall have a lien prior to the Securities on all funds or
property held or collected by the Trustee, except that held in trust to pay
principal of or interest on particular Securities.  When the Trustee incurs expenses or renders
services in connection with an Event of Default specified in Section 6.01(4) or
(5), the expenses (including the reasonable fees and expenses of its counsel)
and the compensation for services in connection therewith are to constitute expenses
of administration 

 

31

 

under any bankruptcy law.  The
provisions of this Section 7.06 shall survive the termination of this
Indenture and the resignation or removal of the Trustee.

 

Section 7.07         Reliance on Officer’s Certificate.

 

Except as otherwise provided in Section 7.01,
whenever in the administration of the provisions of this Indenture the Trustee
shall deem it reasonably necessary or desirable that a matter be proved or
established prior to taking or suffering or omitting to take any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee, be deemed to be conclusively proved and established by an
Officer’s Certificate delivered to the Trustee and such certificate, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted to be taken by
it under the provisions of this Indenture upon the faith thereof.

 

Section 7.08         Disqualification; Conflicting Interests.

 

If the Trustee has or shall acquire any “conflicting
interest” within the meaning of Section 310(b) of the Trust Indenture
Act, the Trustee and the Company shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.

 

Section 7.09         Corporate Trustee Required; Eligibility.

 

There shall at all times be a Trustee with respect to
the Securities issued hereunder which shall at all times be a corporation
organized and doing business under the laws of the United States of America or
any state or territory thereof or of the District of Columbia, or a corporation
or other Person permitted to act as trustee by the Commission, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least fifty million U.S. dollars ($50,000,000), and subject to
supervision or examination by federal, state, territorial, or District of
Columbia authority.

 

If such corporation or other Person publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation or other Person
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. 
The Company may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Company, serve as
Trustee.  In case at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section,
the Trustee shall resign immediately in the manner and with the effect specified
in Section 7.10.

 

Section 7.10         Resignation and Removal; Appointment of Successor.

 

(a)           The Trustee or any successor hereafter appointed may
at any time resign with respect to the Securities of one or more series by
giving written notice thereof to the Company and by transmitting notice of
resignation by mail, first class postage prepaid, to the Securityholders of
such series, as their names and addresses appear upon the Security
Register.  Upon receiving such notice of
resignation, the Company shall promptly appoint a successor 

 

32

 

trustee with respect to Securities of such series by
written instrument, in duplicate, executed by order of the Board of Directors,
one copy of which instrument shall be delivered to the resigning Trustee and
one copy to the successor trustee.  If no
successor trustee shall have been so appointed and have accepted appointment
within 30 days after the mailing of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee with respect to Securities of such series, or any
Securityholder of that series who has been a bona fide holder of a Security or
Securities for at least six months may on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee.  Such court may thereupon after
such notice, if any, as it may deem proper and prescribe, appoint a successor
trustee.

 

(b)           In case at any time any one of the following shall
occur:

 

(i)            the Trustee shall fail to comply with the provisions
of Section 7.08 after written request therefor by the Company or by any
Securityholder who has been a bona fide holder of a Security or Securities for
at least six months; or

 

(ii)           the Trustee shall cease to be eligible in accordance
with the provisions of Section 7.09 and shall fail to resign after written
request therefor by the Company or by any such Securityholder; or

 

(iii)         the Trustee shall become incapable of acting, or shall
be adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy
proceeding, or a receiver of the Trustee or of its property shall be appointed
or consented to, or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation;

 

then, in any such case, the Company may remove the
Trustee with respect to all Securities and appoint a successor trustee by
written instrument, in duplicate, executed by order of the Board of Directors,
one copy of which instrument shall be delivered to the Trustee so removed and
one copy to the successor trustee, or any Securityholder who has been a bona
fide holder of a Security or Securities for at least six months may, on behalf
of that holder and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor trustee.  Such court may
thereupon after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.

 

(c)           The holders of a majority in aggregate principal
amount of the Securities of any series at the time Outstanding may at any time
remove the Trustee with respect to such series by so notifying the Trustee and
the Company and may appoint a successor Trustee for such series with the
consent of the Company.

 

(d)           Any resignation or removal of the Trustee and
appointment of a successor trustee with respect to the Securities of a series
pursuant to any of the provisions of this Section shall become effective
upon acceptance of appointment by the successor trustee as provided in Section 7.11.

 

33

 

(e)           Any successor trustee appointed pursuant to this Section may
be appointed with respect to the Securities of one or more series or all of
such series, and at any time there shall be only one Trustee with respect to
the Securities of any particular series.

 

Section 7.11         Acceptance of Appointment By Successor.

 

(a)           In case of the appointment hereunder of a successor
trustee with respect to all Securities, every such successor trustee so
appointed shall execute, acknowledge and deliver to the Company and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company or the successor trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor trustee all the rights, powers, and trusts of
the retiring Trustee and shall duly assign, transfer and deliver to such
successor trustee all property and money held by such retiring Trustee
hereunder.

 

(b)           In case of the appointment hereunder of a successor
trustee with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor trustee shall accept such appointment
and which (i) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each successor trustee
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor trustee relates, (ii) shall contain such provisions as shall be
deemed necessary or desirable to confirm that all the rights, powers, trusts
and duties of the retiring Trustee with respect to the Securities of that or
those series as to which the retiring Trustee is not retiring shall continue to
be vested in the retiring Trustee, and (iii) shall add to or change any of
the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee,
it being understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust, that each such Trustee
shall be trustee of a trust or trusts hereunder separate and apart from any
trust or trusts hereunder administered by any other such Trustee and that no
Trustee shall be responsible for any act or failure to act on the part of any
other Trustee hereunder; and upon the execution and delivery of such
supplemental indenture the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein, such retiring Trustee shall
with respect to the Securities of that or those series to which the appointment
of such successor trustee relates have no further responsibility for the
exercise of rights and powers or for the performance of the duties and
obligations vested in the Trustee under this Indenture, and each such successor
trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor trustee relates; but, on request of the Company or any successor
trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor trustee, to the extent contemplated by such supplemental indenture,
the property and money held by such retiring Trustee hereunder with respect to the
Securities of that or those series to which the appointment of such successor
trustee relates.

 

34

 

(c)           Upon request of any such successor trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor trustee all such rights, powers and
trusts referred to in paragraph (a) or (b) of this Section, as the
case may be.

 

(d)           No successor trustee shall accept its appointment
unless at the time of such acceptance such successor trustee shall be qualified
and eligible under this Article.

 

(e)           Upon acceptance of appointment by a successor trustee
as provided in this Section, the Company shall transmit notice of the
succession of such trustee hereunder by mail, first class postage prepaid, to
the Securityholders, as their names and addresses appear upon the Security
Register.  If the Company fails to
transmit such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be
transmitted at the expense of the Company.

 

Section 7.12         Merger, Conversion, Consolidation or Succession to Business.

 

Any corporation into which the Trustee may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Trustee, including the administration of the trust created by this Indenture,
shall be the successor of the Trustee hereunder, provided that such corporation
shall be qualified under the provisions of Section 7.08 and eligible under
the provisions of Section 7.09, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding. 
In case any Securities shall have been authenticated, but not delivered,
by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.

 

Section 7.13         Preferential Collection of Claims Against the Company.

 

The Trustee shall comply with Section 311(a) of
the Trust Indenture Act, excluding any creditor relationship described in Section 311(b) of
the Trust Indenture Act.  A Trustee who
has resigned or been removed shall be subject to Section 311(a) of
the Trust Indenture Act to the extent included therein.

 

Section 7.14         Notice of Default

 

If any Event of Default occurs and is continuing and
if such Event of Default is known to a Responsible Officer of the Trustee, the
Trustee shall mail to each Securityholder in the manner and to the extent
provided in Section 313(c) of the Trust Indenture Act notice of the
Event of Default within the earlier of 90 days after it occurs and 30 days
after it is known to a Responsible Officer of the Trustee or written notice of
it is received by the Trustee, unless such Event of Default has been cured; provided, however, that, except in the
case of a default in the payment of the principal of (or premium, if any) or
interest on any Security, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a 

 

35

 

trust committee of
directors and/or Responsible Officers of the Trustee in good faith determine
that the withholding of such notice is in the interest of the Securityholders.

 

ARTICLE 8

CONCERNING THE SECURITYHOLDERS

 

Section 8.01         Evidence of Action by Securityholders.

 

Whenever in this Indenture it is provided that the
holders of a majority or specified percentage in aggregate principal amount of
the Securities of a particular series may take any action (including the making
of any demand or request, the giving of any notice, consent or waiver or the
taking of any other action), the fact that at the time of taking any such
action the holders of such majority or specified percentage of that series have
joined therein may be evidenced by any instrument or any number of instruments
of similar tenor executed by such holders of Securities of that series in person
or by agent or proxy appointed in writing.

 

If the Company shall solicit from the Securityholders
of any series any request, demand, authorization, direction, notice, consent,
waiver or other action, the Company may, at its option, as evidenced by an Officer’s
Certificate, fix in advance a record date for such series for the determination
of Securityholders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other action, but the Company shall have
no obligation to do so.  If such a record
date is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other action may be given before or after the record date, but only
the Securityholders of record at the close of business on the record date shall
be deemed to be Securityholders for the purposes of determining whether
Securityholders of the requisite proportion of Outstanding Securities of that
series have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other action, and for that
purpose the Outstanding Securities of that series shall be computed as of the
record date; provided, however, that no such authorization, agreement or
consent by such Securityholders on the record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture
not later than six months after the record date.

 

Section 8.02         Proof of Execution by Securityholders.

 

Subject to the provisions of Section 7.01, proof
of the execution of any instrument by a Securityholder (such proof will not
require notarization) or his agent or proxy and proof of the holding by any
Person of any of the Securities shall be sufficient if made in the following
manner:

 

(a)           The fact and date of the execution by any such Person
of any instrument may be proved in any reasonable manner acceptable to the
Trustee.

 

(b)           The ownership of Securities shall be proved by the
Security Register of such Securities or by a certificate of the Security Registrar
thereof.

 

The Trustee may require
such additional proof of any matter referred to in this Section as it
shall deem necessary.

 

36

 

Section 8.03         Who May be Deemed Owners.

 

Prior to the due presentment for registration of
transfer of any Security, the Company, the Trustee, any paying agent and any
Security Registrar may deem and treat the Person in whose name such Security
shall be registered upon the books of the Company as the absolute owner of such
Security (whether or not such Security shall be overdue and notwithstanding any
notice of ownership or writing thereon made by anyone other than the Security
Registrar) for the purpose of receiving payment of or on account of the
principal of, premium, if any, and (subject to Section 2.03) interest on
such Security and for all other purposes; and neither the Company nor the
Trustee nor any paying agent nor any Security Registrar shall be affected by
any notice to the contrary.

 

Section 8.04         Certain Securities Owned by Company Disregarded.

 

In determining whether the holders of the requisite
aggregate principal amount of Securities of a particular series have concurred
in any direction, consent or waiver under this Indenture, the Securities of
that series that are owned by the Company or any other obligor on the
Securities of that series or by any Person directly or indirectly controlling
or controlled by or under common control with the Company or any other obligor
on the Securities of that series shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver, only Securities of such series that the
Trustee actually knows are so owned shall be so disregarded.  The Securities so owned that have been
pledged in good faith may be regarded as Outstanding for the purposes of this
Section, if the pledgee shall establish to the satisfaction of the Trustee the
pledgee’s right so to act with respect to such Securities and that the pledgee
is not a Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any such other
obligor.  In case of a dispute as to such
right, any decision by the Trustee taken upon the advice of counsel shall be
full protection to the Trustee.

 

Section 8.05         Actions Binding on Future Securityholders.

 

At any time prior to (but not after) the evidencing to
the Trustee, as provided in Section 8.01, of the taking of any action by
the holders of the majority or percentage in aggregate principal amount of the
Securities of a particular series specified in this Indenture in connection
with such action, any holder of a Security of that series that is shown by the
evidence to be included in the Securities the holders of which have consented
to such action may, by filing written notice with the Trustee, and upon proof
of holding as provided in Section 8.02, revoke such action so far as
concerns such Security.  Except as
aforesaid any such action taken by the holder of any Security shall be
conclusive and binding upon such holder and upon all future holders and owners
of such Security, and of any Security issued in exchange therefor, on
registration of transfer thereof or in place thereof, irrespective of whether
or not any notation in regard thereto is made upon such Security.  Any action taken by the holders of the majority
or percentage in aggregate principal amount of the Securities of a particular
series specified in this Indenture in connection with such action shall be
conclusively binding upon the Company, the Trustee and the holders of all the
Securities of that series.

 

37

 

ARTICLE 9

SUPPLEMENTAL INDENTURES

 

Section 9.01         Supplemental Indentures Without the Consent of Securityholders.

 

In addition to any supplemental indenture otherwise
authorized by this Indenture, the Company and the Trustee may from time to time
and at any time enter into an indenture or indentures supplemental hereto
(which shall conform to the provisions of the Trust Indenture Act as then in
effect), without the consent of the Securityholders, for one or more of the
following purposes:

 

(a)           to cure any ambiguity, defect, or inconsistency herein
or in the Securities of any series;

 

(b)           to comply with Article Ten;

 

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

 

(d)           to add to the covenants, restrictions, conditions or
provisions relating to the Company for the benefit of the holders of all or any
series of Securities (and if such covenants, restrictions, conditions or
provisions are to be for the benefit of less than all series of Securities,
stating that such covenants, restrictions, conditions or provisions are
expressly being included solely for the benefit of such series), to make the
occurrence, or the occurrence and the continuance, of a default in any such
additional covenants, restrictions, conditions or provisions an Event of
Default, or to surrender any right or power herein conferred upon the Company;

 

(e)           to add to, delete from, or revise the conditions,
limitations, and restrictions on the authorized amount, terms, or purposes of
issue, authentication, and delivery of Securities, as herein set forth;

 

(f)            to make any change that does not adversely affect the
rights of any Securityholder in any material respect;

 

(g)           to provide for the issuance of and establish the form
and terms and conditions of the Securities of any series as provided in Section 2.01,
to establish the form of any certifications required to be furnished pursuant
to the terms of this Indenture or any series of Securities, or to add to the
rights of the holders of any series of Securities;

 

(h)           to evidence and provide for the acceptance of
appointment hereunder by a successor trustee; or

 

(i)            to comply with any requirements of the Commission or
any successor in connection with the qualification of this Indenture under the
Trust Indenture Act.

 

The Trustee is hereby authorized to join with the
Company in the execution of any such supplemental indenture, and to make any
further appropriate agreements and stipulations that 

 

38

 

may be therein contained,
but the Trustee shall not be obligated to enter into any such supplemental
indenture that affects the Trustee’s own rights, duties or immunities under
this Indenture or otherwise.

 

Any supplemental indenture authorized by the
provisions of this Section may be executed by the Company and the Trustee
without the consent of the holders of any of the Securities at the time
Outstanding, notwithstanding any of the provisions of Section 9.02.

 

Section 9.02         Supplemental Indentures With Consent of Securityholders.

 

With the consent (evidenced as provided in Section 8.01)
of the holders of not less than a majority in aggregate principal amount of the
Securities of each series affected by such supplemental indenture or indentures
at the time Outstanding, the Company, when authorized by a Board Resolution,
and the Trustee may from time to time and at any time enter into an indenture
or indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as then in effect) for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Indenture or of any supplemental indenture or of modifying in any manner not covered
by Section 9.01 the rights of the holders of the Securities of such series
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the holders of each Security then Outstanding and
affected thereby, (a) extend the fixed maturity of any Securities of any
series, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any premium payable upon the
redemption thereof or (b) reduce the aforesaid percentage of Securities,
the holders of which are required to consent to any such supplemental
indenture.

 

It shall not be necessary for the consent of the
Securityholders of any series affected thereby under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such consent shall approve the substance thereof.

 

Section 9.03         Effect of Supplemental Indentures.

 

Upon the execution of any supplemental indenture
pursuant to the provisions of this Article or of Section 10.01, this
Indenture shall, with respect to such series, be and be deemed to be modified
and amended in accordance therewith and the respective rights, limitations of
rights, obligations, duties and immunities under this Indenture of the Trustee,
the Company and the holders of Securities of the series affected thereby shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.

 

Section 9.04         Securities Affected by Supplemental Indentures.

 

Securities of any series affected by a supplemental
indenture, authenticated and delivered after the execution of such supplemental
indenture pursuant to the provisions of this Article or of Section 10.01,
may bear a notation in form approved by the Company, provided such form meets
the requirements of any securities exchange upon which such series may be
listed, as to any matter provided for in such supplemental indenture.  If the Company shall so determine, new
Securities of that series so modified as to conform, in the opinion of the
Board of Directors, to 

 

39

 

any modification of this
Indenture contained in any such supplemental indenture may be prepared by the
Company, authenticated by the Trustee and delivered in exchange for the
Securities of that series then Outstanding.

 

Section 9.05         Execution of Supplemental Indentures.

 

Upon the request of the Company, accompanied by its
Board Resolutions authorizing the execution of any such supplemental indenture,
and upon the filing with the Trustee of evidence of the consent of
Securityholders required to consent thereto as aforesaid, the Trustee shall
join with the Company in the execution of such supplemental indenture unless
such supplemental indenture affects the Trustee’s own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion but shall not be obligated to enter into such supplemental
indenture. The Trustee, subject to the provisions of Section 7.01, shall
receive an Officer’s Certificate or an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant to this Article is
authorized or permitted by the terms of this Article and that all
conditions precedent to the execution of the supplemental indenture have been
complied with; provided, however, that such Officer’s Certificate or Opinion of
Counsel need not be provided in connection with the execution of a supplemental
indenture that establishes the terms of a series of Securities pursuant to Section 2.01
hereof.

 

Promptly after the execution by the Company and the
Trustee of any supplemental indenture pursuant to the provisions of this
Section, the Company shall (or shall direct the Trustee to) transmit by mail,
first class postage prepaid, a notice, setting forth in general terms the
substance of such supplemental indenture, to the Securityholders of all series
affected thereby .as their names and addresses appear upon the Security
Register. Any failure of the Company to mail, or cause the mailing of, such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.

 

ARTICLE 10

SUCCESSOR ENTITY

 

Section 10.01       Company May Consolidate, Etc.

 

Nothing contained in this Indenture shall prevent any
consolidation or merger of the Company with or into any other Person (whether
or not affiliated with the Company) or successive consolidations or mergers in
which the Company or its successor or successors shall be a party or parties,
or shall prevent any sale, conveyance, transfer or other disposition of the
property of the Company or its successor or successors as an entirety, or
substantially as an entirety, to any other corporation (whether or not
affiliated with the Company or its successor or successors) authorized to acquire
and operate the same; provided, however, (a) the Company hereby covenants
and agrees that, upon any such consolidation or merger (in each case, if the
Company is not the survivor of such transaction), sale, conveyance, transfer or
other disposition, the due and punctual payment of the principal of (premium,
if any) and interest on all of the Securities of all series in accordance with
the terms of each series, according to their tenor, and the due and punctual
performance and observance of all the covenants and conditions of this
Indenture with respect to each series or established with respect to such
series pursuant to 

 

40

 

Section 2.01 to be
kept or performed by the Company shall be expressly assumed, by supplemental
indenture (which shall conform to the provisions of the Trust Indenture Act, as
then in effect) reasonably satisfactory in form to the Trustee executed and
delivered to the Trustee by the entity formed by such consolidation, or into
which the Company shall have been merged, or by the entity which shall have
acquired such property and (b) in the event that the Securities of any
series then Outstanding are convertible into or exchangeable for shares of
common stock or other securities of the Company, such entity shall, by such
supplemental indenture, make provision so that the Securityholders of
Securities of that series shall thereafter be entitled to receive upon
conversion or exchange of such Securities the number of securities or property
to which a holder of the number of shares of common stock or other securities
of the Company deliverable upon conversion or exchange of those Securities
would have been entitled had such conversion or exchange occurred immediately
prior to such consolidation, merger, sale, conveyance, transfer or other
disposition.

 

Section 10.02       Successor Entity Substituted.

 

(a)           In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition and upon the assumption by the
successor entity by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the obligations set forth
under Section 10.01 on all of the Securities of all series Outstanding,
such successor entity shall succeed to and be substituted for the Company with
the same effect as if it had been named as the Company herein, and thereupon
the predecessor corporation shall be relieved of all obligations and covenants
under this Indenture and the Securities.

 

(b)           In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition, such changes in phraseology and form
(but not in substance) may be made in the Securities thereafter to be issued as
may be appropriate.

 

(c)           Nothing contained in this Article shall require
any action by the Company in the case of a consolidation or merger of any
Person into the Company where the Company is the survivor of such transaction,
or the acquisition by the Company, by purchase or otherwise, of all or any part
of the property of any other Person (whether or not affiliated with the
Company).

 

ARTICLE 11

SATISFACTION AND DISCHARGE

 

Section 11.01       Satisfaction and Discharge of Indenture.

 

If at any time: (a) the Company shall have
delivered to the Trustee for cancellation all Securities of a series
theretofore authenticated and not delivered to the Trustee for cancellation
(other than any Securities that shall have been destroyed, lost or stolen and
that shall have been replaced or paid as provided in Section 2.07 and
Securities for whose payment money or Governmental Obligations have theretofore
been deposited in trust or segregated and held in trust by the Company and
thereupon repaid to the Company or discharged from such trust, as provided in Section 11.05);
or (b) all such Securities of a particular series not theretofore
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms 

 

41

 

to become due and payable
within one year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption, and the Company shall deposit or cause to be deposited with the
Trustee as trust funds the entire amount in moneys or Governmental Obligations
or a combination thereof, sufficient in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay at maturity or upon redemption all
Securities of that series not theretofore delivered to the Trustee for
cancellation, including principal (and premium, if any) and interest due or to
become due to such date of maturity or date fixed for redemption, as the case
may be, and if the Company shall also pay or cause to be paid all other sums
payable hereunder with respect to such series by the Company then this
Indenture shall thereupon cease to be of further effect with respect to such
series except for the provisions of Sections 2.03, 2.05, 2.07, 4.01, 4.02, 4.03
and 7.10, that shall survive until the date of maturity or redemption date, as
the case may be, and Sections 7.06 and 11.05, that shall survive to such date
and thereafter, and the Trustee, on demand of the Company and at the cost and
expense of the Company shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture with respect to such series.

 

Section 11.02       Discharge of Obligations.

 

If at any time all such Securities of a particular
series not heretofore delivered to the Trustee for cancellation or that have
not become due and payable as described in Section 11.01 shall have been
paid by the Company by depositing irrevocably with the Trustee as trust funds
moneys or an amount of Governmental Obligations sufficient to pay at maturity
or upon redemption all such Securities of that series not theretofore delivered
to the Trustee for cancellation, including principal (and premium, if any) and
interest due or to become due to such date of maturity or date fixed for
redemption, as the case may be, and if the Company shall also pay or cause to
be paid all other sums payable hereunder by the Company with respect to such
series, then after the date such moneys or Governmental Obligations, as the
case may be, are deposited with the Trustee the obligations of the Company
under this Indenture with respect to such series shall cease to be of further
effect except for the provisions of Sections 2.03, 2.05, 2.07, 4,01, 4.02,
4,03, 7.06, 7.10 and 11.05 hereof that shall survive until such Securities
shall mature and be paid.

 

Thereafter, Sections 7.06 and 11.05 shall survive.

 

Section 11.03       Deposited Moneys to be Held in Trust.

 

All moneys or Governmental Obligations deposited with
the Trustee pursuant to Sections 11.01 or 11.02 shall be held in trust and
shall be available for payment as due, either directly or through any paying
agent (including the Company acting as its own paying agent), to the holders of
the particular series of Securities for the payment or redemption of which such
moneys or Governmental Obligations have been deposited with the Trustee.

 

Section 11.04       Payment of Moneys Held by Paying Agents.

 

In connection with the satisfaction and discharge of
this Indenture all moneys or Governmental Obligations then held by any paying
agent under the provisions of this Indenture 

 

42

 

shall, upon demand of the
Company, be paid to the Trustee and thereupon such paying agent shall be
released from all further liability with respect to such moneys or Governmental
Obligations.

 

Section 11.05       Repayment to Company.

 

Any moneys or Governmental Obligations deposited with
any paying agent or the Trustee, or then held by the Company, in trust for
payment of principal of or premium, if any, or interest on the Securities of a
particular series that are not applied but remain unclaimed by the holders of
such Securities for at least two years after the date upon which the principal
of (and premium, if any) or interest on such Securities shall have respectively
become due and payable, or such other shorter period set forth in applicable
escheat or abandoned or unclaimed property law, shall be repaid to the Company
on May 31 of each year or upon the Company’s request or (if then held by
the Company) shall be discharged from such trust; and thereupon the paying
agent and the Trustee shall be released from all further liability with respect
to such moneys or Governmental Obligations, and the holder of any of the
Securities entitled to receive such payment shall thereafter, as a general
creditor, look only to the Company for the payment thereof.

 

ARTICLE 12

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

 

Section 12.01       No Recourse.

 

No recourse under or upon any obligation, covenant or
agreement of this Indenture, or of any Security, or for any claim based thereon
or otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer or director, past, present or future as such, of the
Company or of any predecessor or successor corporation, either directly or
through the Company or any such predecessor or successor corporation, whether
by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall
attach to, or is or shall be incurred by, the incorporators, stockholders,
officers or directors as such, of the Company or of any predecessor or
successor corporation, or any of them, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any of the Securities
or implied therefrom; and that any and all such personal liability of every
name and nature, either at common law or in equity or by constitution or
statute, of, and any and all such rights and claims against, every such
incorporator, stockholder, officer or director as such, because of the creation
of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Securities or implied therefrom, are hereby expressly waived and released
as a condition of, and as a consideration for, the execution of this Indenture
and the issuance of such Securities.

 

43

 

ARTICLE 13

MISCELLANEOUS PROVISIONS

 

Section 13.01       Effect on Successors and Assigns.

 

All the covenants, stipulations, promises and
agreements in this Indenture made by or on behalf of the Company shall bind its
successors and assigns, whether so expressed or not.

 

Section 13.02       Actions by Successor.

 

Any act or proceeding by any provision of this
Indenture authorized or required to be done or performed by any board,
committee or officer of the Company shall and may be done and performed with
like force and effect by the corresponding board, committee or officer of any
corporation that shall at the time be the lawful successor of the Company.

 

Section 13.03       Surrender of Company Powers.

 

The Company by instrument in writing executed by
authority of its Board of Directors and delivered to the Trustee may surrender
any of the powers reserved to the Company, and thereupon such power so
surrendered shall terminate both as to the Company and as to any successor
corporation.

 

Section 13.04       Notices.

 

Except as otherwise expressly provided herein, any
notice, request or demand that by any provision of this Indenture is required
or permitted to be given, made or served by the Trustee or by the holders of
Securities or by any other Person pursuant to this Indenture to or on the
Company may be given or served by being deposited in first class mail, postage
prepaid, addressed (until another address is filed in writing by the Company
with the Trustee), as follows: Affymax, Inc., 4001 Miranda Avenue, Palo
Alto, California 94304, Attn: Chief Financial Officer.  Any notice, election, request or demand by
the Company or any Securityholder or by any other Person pursuant to this
Indenture to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made in writing at the Corporate
Trust Office of the Trustee.

 

Section 13.05       Governing Law.

 

This Indenture and each Security shall be deemed to be
a contract made under the internal laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of said State, except
to the extent that the Trust Indenture Act is applicable.

 

Section 13.06       Treatment of Securities as Debt.

 

It is intended that the Securities will be treated as
indebtedness and not as equity for federal income tax purposes.  The provisions of this Indenture shall be
interpreted to further this intention.

 

44

 

Section 13.07       Certificates and Opinions as to Conditions Precedent.

 

(a)           Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officer’s Certificate stating that all
conditions precedent provided for in this Indenture (other than the certificate
to be delivered pursuant to Section 13.12) relating to the proposed action
have been complied with and, if requested, an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent have been complied
with, except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.

 

(b)           Each certificate or opinion provided for in this Indenture
and delivered to the Trustee with respect to compliance with a condition or
covenant in this Indenture shall include (i) a statement that the Person
making such certificate or opinion has read such covenant or condition; (ii) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based; (iii) a statement that, in the opinion of such Person, he has
made such examination or investigation as is reasonably necessary to enable him
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and (iv) a statement as to whether or not, in the
opinion of such Person, such condition or covenant has been complied with.

 

Section 13.08       Payments on Business Days.

 

Except as provided pursuant to Section 2.01
pursuant to a Board Resolution, and set forth in an Officer’s Certificate, or
established in one or more indentures supplemental to this Indenture, in any
case where the date of maturity of interest or principal of any Security or the
date of redemption of any Security shall not be a Business Day, then payment of
interest or principal (and premium, if any) may be made on the next succeeding
Business Day with the same force and effect as if made on the nominal date of
maturity or redemption, and no interest shall accrue for the period after such
nominal date.

 

Section 13.09       Conflict with Trust Indenture Act.

 

If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by Sections
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.

 

Section 13.10       Counterparts.

 

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

 

Section 13.11       Separability.

 

In case any one or more of the provisions contained in
this Indenture or in the Securities of any series shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this 

 

45

 

Indenture or of such
Securities, but this Indenture and such Securities shall be construed as if
such invalid or illegal or unenforceable provision had never been contained
herein or therein.

 

Section 13.12       Compliance Certificates.

 

The Company shall deliver to the Trustee, within 120
days after the end of each fiscal year during which any Securities of any
series were outstanding, an officer’s certificate stating whether or not the
signers know of any Event of Default that occurred during such fiscal
year.  Such certificate shall contain a
certification from the principal executive officer, principal financial officer
or principal accounting officer of the Company that a review has been conducted
of the activities of the Company and the Company’s performance under this
Indenture and that the Company has complied with all conditions and covenants
under this Indenture.  For purposes of
this Section 13.12, such compliance shall be determined without regard to
any period of grace or requirement of notice provided under this
Indenture.  If the officer of the Company
signing such certificate has knowledge of such an Event of Default, the
certificate shall describe any such Event of Default and its status.

 

ARTICLE 14

SUBORDINATION OF SECURITIES

 

Section 14.01       Subordination Terms.

 

The payment by the Company
of the principal of, premium, if any, and interest on any series of Securities
issued hereunder shall be subordinated to the extent set forth in an indenture
supplemental hereto relating to such series.

 

46

 

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

 

	
   

  	
  AFFYMAX, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [TRUSTEE], as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

47

 

CROSS-REFERENCE TABLE (1)

 

	
  Section of
  Trust Indenture Act of 1939, as Amended

  	
   

  	
  Section of Indenture

  
	
  310(a)

  	
   

  	
  7.09

  
	
  310(b)

  	
   

  	
  7.08

  
	
   

  	
   

  	
  7.10

  
	
  310(c)

  	
   

  	
  Inapplicable

  
	
  311(a)

  	
   

  	
  7.13

  
	
  311(b)

  	
   

  	
  7.13

  
	
  311(c)

  	
   

  	
  Inapplicable

  
	
  312(a)

  	
   

  	
  5.01

  
	
   

  	
   

  	
  5.02(a)

  
	
  312(b)

  	
   

  	
  5.02(c)

  
	
  312(c)

  	
   

  	
  5.02(c)

  
	
  313(a)

  	
   

  	
  5.04(a)

  
	
  313(b)

  	
   

  	
  5.04(b)

  
	
  313(c)

  	
   

  	
  5.04(a)

  
	
   

  	
   

  	
  5.04(b)

  
	
  313(d)

  	
   

  	
  5.04(c)

  
	
  314(a)

  	
   

  	
  5.03

  
	
   

  	
   

  	
  13.12

  
	
  314(b)

  	
   

  	
  Inapplicable

  
	
  314(c)

  	
   

  	
  13.07(a)

  
	
  314(d)

  	
   

  	
  Inapplicable

  
	
  314(e)

  	
   

  	
  13.07(b)

  
	
  314(f)

  	
   

  	
  Inapplicable

  
	
  315(a)

  	
   

  	
  7.01(a)

  
	
   

  	
   

  	
  7.01(b)

  
	
  315(b)

  	
   

  	
  7.14

  
	
  315(c)

  	
   

  	
  7.01

  
	
  315(d)

  	
   

  	
  7.01(b)

  
	
  315(e)

  	
   

  	
  6.07

  
	
  316(a)

  	
   

  	
  6.06

  
	
   

  	
   

  	
  8.04

  
	
  316(b)

  	
   

  	
  6.04

  
	
  316(c)

  	
   

  	
  8.01

  
	
  317(a)

  	
   

  	
  6.02

  
	
  317(b)

  	
   

  	
  4.03

  
	
  318(a)

  	
   

  	
  13.09

  

 

(1)   This Cross-Reference Table does not
constitute part of the Indenture and shall not have any bearing on the
interpretation of any of its terms or provisions.

 

48Exhibit
4.16

 

AFFYMAX,
INC.

 

and

 

        ,
AS WARRANT AGENT

 

FORM OF
COMMON STOCK

WARRANT
AGREEMENT

 

DATED
AS OF         

 

 

AFFYMAX,
INC.

 

FORM OF
COMMON STOCK WARRANT AGREEMENT

 

COMMON STOCK WARRANT AGREEMENT (this “Agreement”),
dated as of                     
between Affymax, Inc. ,  a Delaware
corporation (the “Company”)
and 
                    
, a [corporation] [national banking association] organized and existing under
the laws of 
                      and having a corporate trust office in
                    
, as warrant agent (the “Warrant Agent”).

 

WHEREAS, the Company proposes to sell [if Warrants are sold with other
securities—[title of such other securities being offered] (the “Other Securities”) with] warrant
certificates evidencing one or more warrants (the “Warrants” or, individually, a “Warrant”) representing the right to purchase Common Stock of
the Company, par value $0.0001 per share (the “Warrant Securities”), such warrant certificates and other
warrant certificates issued pursuant to this Agreement being herein called the “Warrant
Certificates”; and

 

WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing so to act, in
connection with the issuance, registration, transfer, exchange, exercise and
replacement of the Warrant Certificates, and in this Agreement wishes to set
forth, among other things, the form and provisions of the Warrant Certificates
and the terms and conditions on which they may be issued, registered, transferred,
exchanged, exercised and replaced.

 

NOW THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:

 

ARTICLE
1

 

ISSUANCE
OF WARRANTS AND EXECUTION AND DELIVERY OF WARRANT CERTIFICATES

 

1.1                          Issuance Of Warrants.  [If Warrants alone—Upon
issuance, each Warrant Certificate shall evidence one or more Warrants.] [If Other Securities and Warrants—
Warrant Certificates shall be [initially] issued in connection with the
issuance of the Other Securities [but shall be separately transferable on and
after 
                      (the “Detachable
Date”)] [and shall not be separately transferable] and each Warrant
Certificate shall evidence one or more Warrants.] Each Warrant evidenced
thereby shall represent the right, subject to the provisions contained herein
and therein, to purchase one Warrant Security.  [If Other Securities and Warrants—
Warrant Certificates shall be initially issued in units with the Other
Securities and each Warrant Certificate included in such a unit shall
evidence 
                      Warrants for each [$
              principal amount] [
                      shares] of Other Securities included in such
unit.]

 

1.2                          Execution And Delivery
Of Warrant Certificates.  Each Warrant Certificate, whenever issued, shall be in
registered form substantially in the form set forth in  Exhibit A  hereto, shall be dated the date of its
countersignature by the Warrant Agent and may have such letters, numbers, or
other marks of identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as the officers of the Company
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange on which the Warrants may be listed, or to conform to
usage.  The Warrant Certificates shall be signed on behalf of the
Company by any of its present or future chief executive officers, presidents,
senior vice presidents, vice presidents, chief financial officers, chief legal
officers, treasurers, assistant treasurers, controllers, assistant controllers,
secretaries or assistant secretaries under its corporate seal reproduced
thereon.  Such signatures may be manual or facsimile signatures of
such authorized officers and may be imprinted or otherwise reproduced on the
Warrant Certificates.  The seal of the Company may be in the form of
a facsimile thereof and may be impressed, affixed, imprinted or otherwise
reproduced on the Warrant Certificates.

 

No Warrant Certificate
shall be valid for any purpose, and no Warrant evidenced thereby shall be
exercisable, until such Warrant Certificate has been countersigned by the
manual signature of the Warrant Agent.  Such signature by the Warrant
Agent upon any Warrant Certificate executed by the Company shall be conclusive
evidence that the Warrant Certificate so countersigned has been duly issued
hereunder.

 

In case any officer of
the Company who shall have signed any of the Warrant Certificates either
manually or by facsimile signature shall cease to be such officer before the
Warrant Certificates so signed shall have been countersigned and delivered by
the Warrant Agent, such Warrant Certificates may be countersigned and delivered
notwithstanding that the person who signed Warrant Certificates ceased to be
such officer of the Company; and any Warrant Certificate may be signed on
behalf of the Company by such persons as, at the actual date of the execution
of such Warrant Certificate, shall be the proper officers of the Company,
although at the date of the execution of this Agreement any such person was not
such officer.

 

The term “holder” or “holder
of a Warrant Certificate” as used herein shall mean any person in whose name at
the time any Warrant Certificate shall be registered upon the books to be
maintained by the Warrant Agent for that purpose [ If Other Securities and Warrants are not immediately
detachable— or upon the registration of the Other Securities
prior to the Detachable Date.  Prior 

 

 

to the Detachable Date,
the Company will, or will cause the registrar of the Other Securities to, make
available at all times to the Warrant Agent such information as to holders of
the Other Securities as may be necessary to keep the Warrant Agent’s records up
to date].

 

1.3                          Issuance Of Warrant
Certificates.  Warrant
Certificates evidencing the right to purchase Warrant Securities may be
executed by the Company and delivered to the Warrant Agent upon the execution
of this Warrant Agreement or from time to time thereafter.  The
Warrant Agent shall, upon receipt of Warrant Certificates duly executed on
behalf of the Company, countersign such Warrant Certificates and shall deliver
such Warrant Certificates to or upon the order of the Company.

 

ARTICLE
2

 

WARRANT
PRICE, DURATION AND EXERCISE OF WARRANTS

 

2.1                          Warrant Price.  During the period specified in
Section 2.2, each Warrant shall, subject to the terms of this Warrant
Agreement and the applicable Warrant Certificate, entitle the holder thereof to
purchase the number of Warrant Securities specified in the applicable Warrant
Certificate at an exercise price of $
              per Warrant Security, subject to adjustment
upon the occurrence of certain events, as hereinafter provided.  Such
purchase price per Warrant Security is referred to in this Agreement as the “Warrant Price.”

 

2.2                          Duration Of Warrants.  Each Warrant may be
exercised in whole or in part at any time, as specified herein, on or after
[the date thereof] [
                    
] and at or before [
             ] p.m.,
[              ]
time, on [
                    ]  or such later date as the Company may
designate by notice to the Warrant Agent and the holders of Warrant
Certificates mailed to their addresses as set forth in the record books of the
Warrant Agent (the “Expiration Date”).  Each
Warrant not exercised at or before [
             ] p.m.,
[              ]
time, on the Expiration Date shall become void, and all rights of the holder of
the Warrant Certificate evidencing such Warrant under this Agreement shall
cease.

 

2.3                          Exercise Of Warrants.

 

(a)                                  During the period specified in Section 2.2,
the Warrants may be exercised to purchase a whole number of Warrant Securities
in registered form by providing certain information as set forth on the reverse
side of the Warrant Certificate and by paying in full, in lawful money of the
United States of America, [in cash or by certified check or official bank check
in New York Clearing House funds] [by bank wire transfer in immediately
available funds] the Warrant Price for each Warrant Security with respect to
which a Warrant is being exercised to the Warrant Agent at its corporate trust
office, provided that such exercise is subject to receipt within five business
days of such payment by the Warrant Agent of the Warrant Certificate with the
form of election to purchase Warrant Securities set forth on the reverse side
of the Warrant Certificate properly completed and duly executed.  The
date on which payment in full of the Warrant Price is received by the Warrant
Agent shall, subject to receipt of the Warrant Certificate as aforesaid, be
deemed to be the date on which the Warrant is exercised; provided, however,
that if, at the date of receipt of such Warrant Certificates and payment in
full of the Warrant Price, the transfer books for the Warrant Securities
purchasable upon the exercise of such Warrants shall be closed, no such receipt
of such Warrant Certificates and no such payment of such Warrant Price shall be
effective to constitute the person so designated to be named as the holder of
record of such Warrant Securities on such date, but shall be effective to
constitute such person as the holder of record of such Warrant Securities for
all purposes at the opening of business on the next succeeding day on which the
transfer books for the Warrant Securities purchasable upon the exercise of such
Warrants shall be opened, and the certificates for the Warrant Securities in
respect of which such Warrants are then exercised shall be issuable as of the
date on such next succeeding day on which the transfer books shall next be
opened, and until such date the Company shall be under no duty to deliver any
certificate for such Warrant Securities.  The Warrant Agent shall
deposit all funds received by it in payment of the Warrant Price in an account
of the Company maintained with it and shall advise the Company by telephone at
the end of each day on which a payment for the exercise of Warrants is received
of the amount so deposited to its account.  The Warrant Agent shall
promptly confirm such telephone advice to the Company in writing.

 

(b)                                  The Warrant Agent shall, from time to
time, as promptly as practicable, advise the Company of (i) the number of
Warrant Securities with respect to which Warrants were exercised, (ii) the
instructions of each holder of the Warrant Certificates evidencing such
Warrants with respect to delivery of the Warrant Securities to which such
holder is entitled upon such exercise, (iii) delivery of Warrant
Certificates evidencing the balance, if any, of the Warrants for the remaining
Warrant Securities after such exercise, and (iv) such other information as
the Company shall reasonably require.

 

(c)                                  As soon as practicable after the exercise
of any Warrant, the Company shall issue to or upon the order of the holder of
the Warrant Certificate evidencing such Warrant the Warrant Securities to which
such holder is entitled, in fully registered form, registered in such name or
names as may be directed by such holder.  If fewer than all of the
Warrants evidenced by such Warrant Certificate are exercised, the Company shall
execute, and an authorized officer of the Warrant Agent shall manually
countersign and deliver, a new Warrant Certificate evidencing Warrants for the
number of Warrant Securities remaining unexercised.

 

(d)                                  The Company shall not be required to pay
any stamp or other tax or other governmental charge required to be paid in
connection with any transfer involved in the issue of the Warrant Securities,
and in the event that any such transfer is involved, the Company shall not be
required to issue or deliver any Warrant Security until such tax or other
charge shall have been paid or it has been established to the Company’s
satisfaction that no such tax or other charge is due.

 

 

(e)                                  Prior to the issuance of any Warrants
there shall have been reserved, and the Company shall at all times through the
Expiration Date keep reserved, out of its authorized but unissued Warrant
Securities, a number of shares sufficient to provide for the exercise of the
Warrants.

 

ARTICLE
3

 

OTHER
PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANT CERTIFICATES

 

3.1                          No Rights As Warrant
Securityholder Conferred By Warrants Or Warrant Certificates.  No Warrant Certificate or
Warrant evidenced thereby shall entitle the holder thereof to any of the rights
of a holder of Warrant Securities, including, without limitation, the right to
receive the payment of dividends or distributions, if any, on the Warrant
Securities or to exercise any voting rights, except to the extent expressly set
forth in this Agreement or the applicable Warrant Certificate.

 

3.2                          Lost, Stolen, Mutilated
Or Destroyed Warrant Certificates.  Upon receipt by the Warrant Agent of
evidence reasonably satisfactory to it and the Company of the ownership of and
the loss, theft, destruction or mutilation of any Warrant Certificate and/or
indemnity reasonably satisfactory to the Warrant Agent and the Company and, in
the case of mutilation, upon surrender of the mutilated Warrant Certificate to
the Warrant Agent for cancellation, then, in the absence of notice to the
Company or the Warrant Agent that such Warrant Certificate has been acquired by
a bona fide purchaser, the Company shall execute, and an authorized officer of
the Warrant Agent shall manually countersign and deliver, in exchange for or in
lieu of the lost, stolen, destroyed or mutilated Warrant Certificate, a new
Warrant Certificate of the same tenor and evidencing Warrants for a like number
of Warrant Securities.  Upon the issuance of any new Warrant
Certificate under this Section 3.2, the Company may require the payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Warrant Agent) in connection therewith.  Every
substitute Warrant Certificate executed and delivered pursuant to this Section 3.2
in lieu of any lost, stolen or destroyed Warrant Certificate shall represent an
additional contractual obligation of the Company, whether or not the lost,
stolen or destroyed Warrant Certificate shall be at any time enforceable by
anyone, and shall be entitled to the benefits of this Agreement equally and
proportionately with any and all other Warrant Certificates duly executed and
delivered hereunder.  The provisions of this Section 3.2 are
exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement of mutilated, lost, stolen or
destroyed Warrant Certificates.

 

3.3                          Holder Of Warrant
Certificate May Enforce Rights.  Notwithstanding any of the provisions of
this Agreement, any holder of a Warrant Certificate, without the consent of the
Warrant Agent, the holder of any Warrant Securities or the holder of any other
Warrant Certificate, may, in such holder’s own behalf and for such holder’s own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company suitable to enforce, or otherwise in respect of, such
holder’s right to exercise the Warrants evidenced by such holder’s Warrant
Certificate in the manner provided in such holder’s Warrant Certificate and in
this Agreement.

 

3.4                          Adjustments.

 

(a)                                  In case the Company shall at any time
subdivide its outstanding shares of Common Stock into a greater number of
shares, the Warrant Price in effect immediately prior to such subdivision shall
be proportionately reduced and the number of Warrant Securities purchasable
under the Warrants shall be proportionately increased.  Conversely,
in case the outstanding shares of Common Stock of the Company shall be combined
into a smaller number of shares, the Warrant Price in effect immediately prior
to such combination shall be proportionately increased and the number of
Warrant Securities purchasable under the Warrants shall be proportionately
decreased.

 

(b)                                  If at any time or from time to time the
holders of Common Stock (or any shares of stock or other securities at the time
receivable upon the exercise of the Warrants) shall have received or become
entitled to receive, without payment therefore,

 

(i)                                    Common Stock or any shares of stock or
other securities which are at any time directly or indirectly convertible into
or exchangeable for Common Stock, or any rights or options to subscribe for,
purchase or otherwise acquire any of the foregoing by way of dividend or other
distribution;

 

(ii)                                any cash paid or payable otherwise than
as a cash dividend paid or payable out of the Company’s current or retained
earnings;

 

(iii)                            any evidence of the Company’s
indebtedness or rights to subscribe for or purchase the Company’s indebtedness;
or

 

(iv)                               Common Stock or additional stock or other
securities or property (including cash) by way of spinoff, split-up,
reclassification, combination of shares or similar corporate rearrangement
(other than shares of Common Stock issued as a stock split or adjustments in
respect of which shall be covered by the terms of Section 3.4(a) above),
then and in each such case, the holder of each Warrant shall, upon the exercise
of the Warrant, be entitled to receive, in addition to the number of Warrant
Securities receivable thereupon, and without payment of any additional
consideration therefore, the amount of stock and other securities and property
(including cash and indebtedness or rights to subscribe for or purchase
indebtedness) which such holder would hold on the date of such exercise had he
been the holder of record of such Warrant Securities as of the date on which
holders of 

 

 

Common Stock received or
became entitled to receive such shares or all other additional stock and other
securities and property.

 

(c)                                  In case of (i) any reclassification,
capital reorganization, or change in the Common Stock of the Company (other
than as a result of a subdivision, combination, or stock dividend provided for
in Section 3.4(a) or Section 3.4(b) above), (ii) share
exchange, merger or similar transaction of the Company with or into another
person or entity (other than a share exchange, merger or similar transaction in
which the Company is the acquiring or surviving corporation and which does not
result in any change in the Common Stock other than the issuance of additional
shares of Common Stock) or (iii) the sale, exchange, lease, transfer or
other disposition of all or substantially all of the properties and assets of
the Company as an entirety (in any such case, a “Reorganization Event”), then, as a condition of such
Reorganization Event, lawful provisions shall be made, and duly executed
documents evidencing the same from the Company or its successor shall be
delivered to the holders of the Warrants, so that the holders of the Warrants
shall have the right at any time prior to the expiration of the Warrants to
purchase, at a total price equal to that payable upon the exercise of the
Warrants, the kind and amount of shares of stock and other securities and
property receivable in connection with such Reorganization Event by a holder of
the same number of Warrant Securities as were purchasable by the holders of the
Warrants immediately prior to such Reorganization Event.  In any such
case appropriate provisions shall be made with respect to the rights and interests
of the holders of the Warrants so that the provisions hereof shall thereafter
be applicable with respect to any shares of stock or other securities and
property deliverable upon exercise the Warrants, and appropriate adjustments
shall be made to the Warrant Price payable hereunder provided the aggregate
purchase price shall remain the same.  In the case of any transaction
described in clauses (ii) and (iii) above, the Company shall
thereupon be relieved of any further obligation hereunder or under the
Warrants, and the Company as the predecessor corporation may thereupon or at
any time thereafter be dissolved, wound up or liquidated.  Such
successor or assuming entity thereupon may cause to be signed, and may issue
either in its own name or in the name of the Company, any or all of the
Warrants issuable hereunder which heretofore shall not have been signed by the
Company, and may execute and deliver securities in its own name, in fulfillment
of its obligations to deliver Warrant Securities upon exercise of the Warrants.  All
the Warrants so issued shall in all respects have the same legal rank and
benefit under this Agreement as the Warrants theretofore or thereafter issued
in accordance with the terms of this Agreement as though all of such Warrants had
been issued at the date of the execution hereof.  In any case of any
such Reorganization Event, such changes in phraseology and form (but not in
substance) may be made in the Warrants thereafter to be issued as may be
appropriate.  The Warrant Agent may receive a written opinion of
legal counsel as conclusive evidence that any such Reorganization Event
complies with the provisions of this Section 3.4.

 

(d)                                  The Company may, at its option, at any
time until the Expiration Date, reduce the then current Warrant Price to any
amount deemed appropriate by the Board of Directors of the Company for any
period not exceeding twenty consecutive days (as evidenced in a resolution
adopted by such Board of Directors), but only upon giving the notices required
by Section 3.5 at least ten days prior to taking such action.

 

(e)                                  Except as herein otherwise expressly
provided, no adjustment in the Warrant Price shall be made by reason of the
issuance of shares of Common Stock, or securities convertible into or
exchangeable for shares of Common Stock, or securities carrying the right to
purchase any of the foregoing or for any other reason whatsoever.

 

(f)                                    No fractional Warrant Securities shall be
issued upon the exercise of Warrants.  If more than one Warrant shall
be exercised at one time by the same holder, the number of full Warrant
Securities which shall be issuable upon such exercise shall be computed on the
basis of the aggregate number of Warrant Securities purchased pursuant to the
Warrants so exercised.  Instead of any fractional Warrant Security
which would otherwise be issuable upon exercise of any Warrant, the Company
shall pay a cash adjustment in respect of such fraction in an amount equal to
the same fraction of the last reported sale price (or bid price if there were
no sales) per Warrant Security, in either case as reported on the principal
registered national securities exchange on which the Warrant Securities are
listed or admitted to trading on the business day that next precedes the day of
exercise or, if the Warrant Securities are not then listed or admitted to
trading on any registered national securities exchange, the average of the
closing high bid and low asked prices as reported on the OTC Bulletin Board
Service (the “OTC Bulletin Board”)
operated by the Financial Industry Regulatory Authority, Inc. (“FINRA”) or, if not available on the OTC
Bulletin Board, then the average of the closing high bid and low asked prices
as reported on any other U.S. quotation medium or inter-dealer quotation system
on such date, or if on any such date the Warrant Securities are not listed or
admitted to trading on a registered national securities exchange, are not
included in the OTC Bulletin Board, and are not quoted on any other U.S.
quotation medium or inter-dealer quotation system, an amount equal to the same
fraction of the average of the closing bid and asked prices as furnished by any
FINRA member firm selected from time to time by the Company for that purpose at
the close of business on the business day that next precedes the day of
exercise.

 

(g)                                 Whenever the Warrant Price then in effect
is adjusted as herein provided, the Company shall mail to each holder of the
Warrants at such holder’s address as it shall appear on the books of the
Company a statement setting forth the adjusted Warrant Price then and
thereafter effective under the provisions hereof, together with the facts, in
reasonable detail, upon which such adjustment is based.

 

3.5                          Notice To Warrantholders.  In case the Company shall (a) effect
any dividend or distribution described in Section 3.4(b), (b) effect
any Reorganization Event, (c) make any distribution on or in respect of
the Common Stock in connection with the dissolution, liquidation or winding up
of the Company, or (d) reduce the then current Warrant Price pursuant to Section 3.4(d),
then the Company shall mail to each holder of Warrants at such holder’s address
as it shall appear on the books of the Warrant Agent, at least ten days prior
to the applicable date hereinafter specified, a notice stating (x) the
record date for such dividend or distribution, or, if a record is not to be
taken, the date as of which the holders of record of Common Stock that will be
entitled to such dividend or distribution are to be determined, (y) the
date on which such Reorganization Event, dissolution, liquidation or 

 

 

winding up is expected to
become effective, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such Reorganization
Event, dissolution, liquidation or winding up, or (z) the first date on
which the then current Warrant Price shall be reduced pursuant to Section 3.4(d).  No
failure to mail such notice nor any defect therein or in the mailing thereof
shall affect any such transaction or any adjustment in the Warrant Price
required by Section 3.4.

 

3.6                          [If The Warrants Are
Subject To Acceleration By The Company, Insert—Acceleration Of Warrants By The
Company.

 

(a)                                  At any time on or after
                    ,
the Company shall have the right to accelerate any or all Warrants at any time
by causing them to expire at the close of business on the day next preceding a
specified date (the “Acceleration Date”),
if the Market Price (as hereinafter defined) of the Common Stock equals or
exceeds 
            
percent (
             %) of
the then effective Warrant Price on any twenty Trading Days (as hereinafter
defined) within a period of thirty consecutive Trading Days ending no more than
five Trading Days prior to the date on which the Company gives notice to the
Warrant Agent of its election to accelerate the Warrants.

 

(b)                                  “Market Price” for each Trading Day shall be, if the
Common Stock is listed or admitted to trading on any registered national
securities exchange, the last reported sale price, regular way (or, if no such
price is reported, the average of the reported closing bid and asked prices,
regular way) of Common Stock, in either case as reported on the principal
registered national securities exchange on which the Common Stock is listed or
admitted to trading or, if not listed or admitted to trading on any registered
national securities exchange, the average of the closing high bid and low asked
prices as reported on the OTC Bulletin Board operated by FINRA, or if not
available on the OTC Bulletin Board, then the average of the closing high bid
and low asked prices as reported on any other U.S. quotation medium or
inter-dealer quotation system, or if on any such date the shares of Common
Stock are not listed or admitted to trading on a registered national securities
exchange, are not included in the OTC Bulletin Board, and are not quoted on any
other U.S. quotation medium or inter-dealer quotation system, the average of
the closing bid and asked prices as furnished by any FINRA member firm selected
from time to time by the Company for that purpose. “Trading Day” shall be each Monday through Friday, other than
any day on which securities are not traded in the system or on the exchange
that is the principal market for the Common Stock, as determined by the Board
of Directors of the Company.

 

(c)                                  In the event of an acceleration of less
than all of the Warrants, the Warrant Agent shall select the Warrants to be
accelerated by lot, pro rata or in such other manner as it deems, in its
discretion, to be fair and appropriate.

 

(d)                                  Notice of an acceleration specifying the
Acceleration Date shall be sent by mail first class, postage prepaid, to each
registered holder of a Warrant Certificate representing a Warrant accelerated
at such holder’s address appearing on the books of the Warrant Agent not more
than sixty days nor less than thirty days before the Acceleration
Date.  Such notice of an acceleration also shall be given no more
than twenty days, and no less than ten days, prior to the mailing of notice to
registered holders of Warrants pursuant to this Section 3.6, by
publication at least once in a newspaper of general circulation in the City of
New York.

 

(e)                                  Any Warrant accelerated may be exercised
until
[            ] p.m.,
[            ]
time, on the business day next preceding the Acceleration Date.  The
Warrant Price shall be payable as provided in Section 2.]

 

ARTICLE
4

 

EXCHANGE
AND TRANSFER OF WARRANT CERTIFICATES

 

4.1                          Exchange And Transfer Of
Warrant Certificates.  [If Other Securities with Warrants
which are immediately detachable— Upon] [If Other Securities
with Warrants which are not immediately detachable— Prior to the
Detachable Date, a Warrant Certificate may be exchanged or transferred only
together with the Other Security to which the Warrant Certificate was initially
attached, and only for the purpose of effecting or in conjunction with an
exchange or transfer of such Other Security.  Prior to any Detachable
Date, each transfer of the Other Security shall operate also to transfer the
related Warrant Certificates.  After the Detachable Date, upon]
surrender at the corporate trust office of the Warrant Agent, Warrant
Certificates evidencing Warrants may be exchanged for Warrant Certificates in
other denominations evidencing such Warrants or the transfer thereof may be
registered in whole or in part; provided that such other Warrant Certificates
evidence Warrants for the same aggregate number of Warrant Securities as the
Warrant Certificates so surrendered.  The Warrant Agent shall keep,
at its corporate trust office, books in which, subject to such reasonable
regulations as it may prescribe, it shall register Warrant Certificates and
exchanges and transfers of outstanding Warrant Certificates, upon surrender of
the Warrant Certificates to the Warrant Agent at its corporate trust office for
exchange or registration of transfer, properly endorsed or accompanied by
appropriate instruments of registration of transfer and written instructions for
transfer, all in form satisfactory to the Company and the Warrant
Agent.  No service charge shall be made for any exchange or
registration of transfer of Warrant Certificates, but the Company may require
payment of a sum sufficient to cover any stamp or other tax or other
governmental charge that may be imposed in connection with any such exchange or
registration of transfer.  Whenever any Warrant Certificates are so
surrendered for exchange or registration of transfer, an authorized officer of
the Warrant Agent shall manually countersign and deliver to the person or
persons entitled thereto a Warrant Certificate or Warrant Certificates duly
authorized and executed by the Company, as so requested.  The Warrant
Agent shall not be required to effect any exchange or registration of transfer
which will result in the issuance of a Warrant Certificate evidencing a Warrant
for a fraction of a Warrant Security or a number of Warrants for a whole number
of Warrant Securities and a fraction of a Warrant Security.  All 

 

 

Warrant Certificates
issued upon any exchange or registration of transfer of Warrant Certificates
shall be the valid obligations of the Company, evidencing the same obligations
and entitled to the same benefits under this Agreement as the Warrant Certificate
surrendered for such exchange or registration of transfer.

 

4.2                          Treatment Of Holders Of
Warrant Certificates.  [If Other Securities and Warrants are
not immediately detachable— Prior to the Detachable Date, the
Company, the Warrant Agent and all other persons may treat the owner of the
Other Security as the owner of the Warrant Certificates initially attached
thereto for any purpose and as the person entitled to exercise the rights
represented by the Warrants evidenced by such Warrant Certificates, any notice
to the contrary notwithstanding.  After the Detachable Date and prior
to due presentment of a Warrant Certificate for registration of transfer, the]
[The] Company, the Warrant Agent and all other persons may treat the registered
holder of a Warrant Certificate as the absolute owner thereof for any purpose
and as the person entitled to exercise the rights represented by the Warrants
evidenced thereby, any notice to the contrary notwithstanding.

 

4.3                          Cancellation Of Warrant
Certificates.  Any
Warrant Certificate surrendered for exchange, registration of transfer or
exercise of the Warrants evidenced thereby shall, if surrendered to the
Company, be delivered to the Warrant Agent and all Warrant Certificates
surrendered or so delivered to the Warrant Agent shall be promptly canceled by
the Warrant Agent and shall not be reissued and, except as expressly permitted
by this Agreement, no Warrant Certificate shall be issued hereunder in exchange
therefor or in lieu thereof.

 

The Warrant Agent shall
deliver to the Company from time to time or otherwise dispose of canceled
Warrant Certificates in a manner satisfactory to the Company.

 

ARTICLE
5

 

CONCERNING
THE WARRANT AGENT

 

5.1                          Warrant Agent.  The Company hereby appoints
                    
as Warrant Agent of the Company in respect of the Warrants and the Warrant
Certificates upon the terms and subject to the conditions herein set forth,
and 
                      hereby accepts such
appointment.  The Warrant Agent shall have the powers and authority
granted to and conferred upon it in the Warrant Certificates and hereby and
such further powers and authority to act on behalf of the Company as the
Company may hereafter grant to or confer upon it.  All of the terms
and provisions with respect to such powers and authority contained in the
Warrant Certificates are subject to and governed by the terms and provisions
hereof.

 

5.2                          Conditions Of Warrant
Agent’s Obligations.  The
Warrant Agent accepts its obligations herein set forth upon the terms and
conditions hereof, including the following to all of which the Company agrees
and to all of which the rights hereunder of the holders from time to time of
the Warrant Certificates shall be subject:

 

(a)                                  Compensation And
Indemnification.  The
Company agrees promptly to pay the Warrant Agent the compensation to be agreed
upon with the Company for all services rendered by the Warrant Agent and to
reimburse the Warrant Agent for reasonable out-of-pocket expenses (including
reasonable counsel fees) incurred without negligence, bad faith or willful
misconduct by the Warrant Agent in connection with the services rendered
hereunder by the Warrant Agent.  The Company also agrees to indemnify
the Warrant Agent for, and to hold it harmless against, any loss, liability or
expense incurred without negligence, bad faith or willful misconduct on the
part of the Warrant Agent, arising out of or in connection with its acting as
Warrant Agent hereunder, including the reasonable costs and expenses of
defending against any claim of such liability.

 

(b)                                  Agent For The Company.  In acting under this Warrant
Agreement and in connection with the Warrant Certificates, the Warrant Agent is
acting solely as agent of the Company and does not assume any obligations or
relationship of agency or trust for or with any of the holders of Warrant
Certificates or beneficial owners of Warrants.

 

(c)                                  Counsel.  The Warrant Agent may
consult with counsel satisfactory to it, which may include counsel for the
Company, and the written advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance with the advice of such
counsel.

 

(d)                                  Documents.  The Warrant Agent shall be
protected and shall incur no liability for or in respect of any action taken or
omitted by it in reliance upon any Warrant Certificate, notice, direction,
consent, certificate, affidavit, statement or other paper or document
reasonably believed by it to be genuine and to have been presented or signed by
the proper parties.

 

(e)                                  Certain Transactions.  The Warrant Agent, and its
officers, directors and employees, may become the owner of, or acquire any
interest in, Warrants, with the same rights that it or they would have if it
were not the Warrant Agent hereunder, and, to the extent permitted by
applicable law, it or they may engage or be interested in any financial or
other transaction with the Company and may act on, or as depositary, trustee or
agent for, any committee or body of holders of Warrant Securities or other
obligations of the Company as freely as if it were not the Warrant Agent
hereunder.  Nothing in this Warrant Agreement shall be deemed to
prevent the Warrant Agent from acting as trustee under any indenture to which
the Company is a party.

 

(f)                                    No Liability For
Interest.  Unless
otherwise agreed with the Company, the Warrant Agent shall have no liability
for interest on any monies at any time received by it pursuant to any of the
provisions of this Agreement or of the Warrant Certificates.

 

 

(g)                                 No Liability For
Invalidity.  The
Warrant Agent shall have no liability with respect to any invalidity of this
Agreement or any of the Warrant Certificates (except as to the Warrant Agent’s
countersignature thereon).

 

(h)                                 No Responsibility For
Representations.  The
Warrant Agent shall not be responsible for any of the recitals or
representations herein or in the Warrant Certificates (except as to the Warrant
Agent’s countersignature thereon), all of which are made solely by the Company.

 

(i)                                    No Implied Obligations.  The Warrant Agent shall be
obligated to perform only such duties as are herein and in the Warrant
Certificates specifically set forth and no implied duties or obligations shall
be read into this Agreement or the Warrant Certificates against the Warrant
Agent.  The Warrant Agent shall not be under any obligation to take
any action hereunder which may tend to involve it in any expense or liability,
the payment of which within a reasonable time is not, in its reasonable opinion,
assured to it.  The Warrant Agent shall not be accountable or under
any duty or responsibility for the use by the Company of any of the Warrant
Certificates authenticated by the Warrant Agent and delivered by it to the
Company pursuant to this Agreement or for the application by the Company of the
proceeds of the Warrant Certificates.  The Warrant Agent shall have
no duty or responsibility in case of any default by the Company in the
performance of its covenants or agreements contained herein or in the Warrant
Certificates or in the case of the receipt of any written demand from a holder
of a Warrant Certificate with respect to such default, including, without
limiting the generality of the foregoing, any duty or responsibility to
initiate or attempt to initiate any proceedings at law or otherwise or, except
as provided in Section 6.2 hereof, to make any demand upon the Company.

 

5.3                          Resignation, Removal And
Appointment Of Successors.

 

(a)                                  The Company agrees, for the benefit of
the holders from time to time of the Warrant Certificates, that there shall at
all times be a Warrant Agent hereunder until all the Warrants have been
exercised or are no longer exercisable.

 

(b)                                  The Warrant Agent may at any time resign
as agent by giving written notice to the Company of such intention on its part,
specifying the date on which its desired resignation shall become effective;
provided that such date shall not be less than three months after the date on
which such notice is given unless the Company otherwise agrees.  The
Warrant Agent hereunder may be removed at any time by the filing with it of an
instrument in writing signed by or on behalf of the Company and specifying such
removal and the intended date when it shall become effective.  Such
resignation or removal shall take effect upon the appointment by the Company,
as hereinafter provided, of a successor Warrant Agent (which shall be a bank or
trust company authorized under the laws of the jurisdiction of its organization
to exercise corporate trust powers) and the acceptance of such appointment by
such successor Warrant Agent.  The obligation of the Company under Section 5.2(a) shall
continue to the extent set forth therein notwithstanding the resignation or
removal of the Warrant Agent.

 

(c)                                  In case at any time the Warrant Agent
shall resign, or shall be removed, or shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or shall commence a voluntary case
under the Federal bankruptcy laws, as now or hereafter constituted, or under
any other applicable Federal or state bankruptcy, insolvency or similar law or
shall consent to the appointment of or taking possession by a receiver,
custodian, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Warrant Agent or its property or affairs, or shall make an
assignment for the benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become due, or shall take
corporate action in furtherance of any such action, or a decree or order for
relief by a court having jurisdiction in the premises shall have been entered
in respect of the Warrant Agent in an involuntary case under the Federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
Federal or state bankruptcy, insolvency or similar law, or a decree or order by
a court having jurisdiction in the premises shall have been entered for the
appointment of a receiver, custodian, liquidator, assignee, trustee,
sequestrator (or similar official) of the Warrant Agent or of its property or
affairs, or any public officer shall take charge or control of the Warrant
Agent or of its property or affairs for the purpose of rehabilitation,
conservation, winding up or liquidation, a successor Warrant Agent, qualified
as aforesaid, shall be appointed by the Company by an instrument in writing,
filed with the successor Warrant Agent.  Upon the appointment as
aforesaid of a successor Warrant Agent and acceptance by the successor Warrant
Agent of such appointment, the Warrant Agent shall cease to be Warrant Agent
hereunder.

 

(d)                                  Any successor Warrant Agent appointed
hereunder shall execute, acknowledge and deliver to its predecessor and to the
Company an instrument accepting such appointment hereunder, and thereupon such
successor Warrant Agent, without any further act, deed or conveyance, shall
become vested with all the authority, rights, powers, trusts, immunities,
duties and obligations of such predecessor with like effect as if originally
named as Warrant Agent hereunder, and such predecessor, upon payment of its
charges and disbursements then unpaid, shall thereupon become obligated to
transfer, deliver and pay over, and such successor Warrant Agent shall be
entitled to receive, all monies, securities and other property on deposit with
or held by such predecessor, as Warrant Agent hereunder.

 

(e)                                  Any corporation into which the Warrant
Agent hereunder may be merged or converted or any corporation with which the
Warrant Agent may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Warrant Agent shall be a
party, or any corporation to which the Warrant Agent shall sell or otherwise
transfer all or substantially all the assets and business of the Warrant Agent,
provided that it shall be qualified as aforesaid, shall be the successor
Warrant Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto.

 

 

ARTICLE
6

 

MISCELLANEOUS

 

6.1                          Amendment.  This Agreement may be
amended by the parties hereto, without the consent of the holder of any Warrant
Certificate, for the purpose of curing any ambiguity, or of curing, correcting
or supplementing any defective provision contained herein, or making any other
provisions with respect to matters or questions arising under this Agreement as
the Company and the Warrant Agent may deem necessary or desirable; provided
that such action shall not materially adversely affect the interests of the
holders of the Warrant Certificates.

 

6.2                          Notices And Demands To
The Company And Warrant Agent.  If the Warrant Agent shall receive any
notice or demand addressed to the Company by the holder of a Warrant
Certificate pursuant to the provisions of the Warrant Certificates, the Warrant
Agent shall promptly forward such notice or demand to the Company.

 

6.3                          Addresses.  Any communication from the
Company to the Warrant Agent with respect to this Agreement shall be addressed
to 
                
, Attention: 
                  and any communication from the Warrant Agent
to the Company with respect to this Agreement shall be addressed to Affymax, Inc.,
4001 Miranda Avenue, Palo Alto, CA 94304, Attention: Chief Financial Officer
(or such other address as shall be specified in writing by the Warrant Agent or
by the Company).

 

6.4                          Governing Law.  This Agreement and each
Warrant Certificate issued hereunder shall be governed by and construed in
accordance with the laws of the State of New York.

 

6.5                          Delivery Of Prospectus.  The Company shall furnish to
the Warrant Agent sufficient copies of a prospectus meeting the requirements of
the Securities Act of 1933, as amended, relating to the Warrant Securities
deliverable upon exercise of the Warrants (the “Prospectus”), and the Warrant Agent agrees that upon the
exercise of any Warrant, the Warrant Agent will deliver to the holder of the
Warrant Certificate evidencing such Warrant, prior to or concurrently with the
delivery of the Warrant Securities issued upon such exercise, a Prospectus.

 

The Warrant Agent shall
not, by reason of any such delivery, assume any responsibility for the accuracy
or adequacy of such Prospectus.

 

6.6                          Obtaining Of
Governmental Approvals.  The Company will from time to time take all action which
may be necessary to obtain and keep effective any and all permits, consents and
approvals of governmental agencies and authorities and securities act filings
under United States Federal and state laws (including without limitation a
registration statement in respect of the Warrants and Warrant Securities under
the Securities Act of 1933, as amended), which may be or become requisite in
connection with the issuance, sale, transfer, and delivery of the Warrant
Securities issued upon exercise of the Warrants, the issuance, sale, transfer
and delivery of the Warrants or upon the expiration of the period during which
the Warrants are exercisable.

 

6.7                          Persons Having Rights
Under Warrant Agreement.  Nothing in this Agreement shall give to any person other
than the Company, the Warrant Agent and the holders of the Warrant Certificates
any right, remedy or claim under or by reason of this Agreement.

 

6.8                          Headings.  The descriptive headings of
the several Articles and Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.

 

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

 

6.10                   Inspection Of Agreement.  A copy of this Agreement
shall be available at all reasonable times at the principal corporate trust
office of the Warrant Agent for inspection by the holder of any Warrant
Certificate.  The Warrant Agent may require such holder to submit his
Warrant Certificate for inspection by it.

 

 

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

 

	
   

  	
   

  	
  AFFYMAX, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WARRANT AGENT

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

[SIGNATURE PAGE TO
COMMON STOCK WARRANT AGREEMENT]

 

 

EXHIBIT
A

 

FORM OF
WARRANT CERTIFICATE

[FACE
OF WARRANT CERTIFICATE]

 

	
  [[Form if Warrants
  are attached to Other Securities and are not immediately detachable.]

  	
   

  	
  [Prior to         ,
  this Warrant Certificate cannot be transferred or exchanged unless attached
  to a [Title of Other Securities].]

  
	
   

  	
   

  	
   

  
	
  [Form of Legend if
  Warrants are not immediately exercisable.]

  	
   

  	
  [Prior to         
  Warrants evidenced by this Warrant Certificate cannot be exercised.]

  

 

EXERCISABLE ONLY
IF COUNTERSIGNED BY THE WARRANT AGENT AS PROVIDED HEREIN

 

VOID AFTER
[        ] P.M.,
[            ]
TIME, ON                     ,

 

 

AFFYMAX,
INC.

WARRANT
CERTIFICATE REPRESENTING

WARRANTS
TO PURCHASE

COMMON
STOCK, PAR VALUE $0.0001 PER SHARE

 

	
  No.

  	
  Warrants

  

 

This certifies that
                    
or registered assigns is the registered owner of the above indicated number of
Warrants, each Warrant entitling such owner [if Warrants are attached to Other Securities and are
not immediately detachable— , subject to the registered owner
qualifying as a “Holder” of this Warrant Certificate, as hereinafter defined),]
to purchase, at any time [after [
         ] p.m., [
             ]
time, [on 
                  and] on or before [
         ] p.m., [
             ]
time, on
                
,                        shares of Common Stock, par value $0.01 per
share (the “Warrant Securities”),
of Affymax, Inc.  (the “Company”)
on the following basis: during the period from 
                    
, through and including 
                    
, the exercise price per Warrant Security will be $
             ,
subject to adjustment as provided in the Warrant Agreement (as hereinafter
defined) (the “Warrant Price”).  The
Holder may exercise the Warrants evidenced hereby by providing certain
information set forth on the back hereof and by paying in full, in lawful money
of the United States of America, [in cash or by certified check or official
bank check in New York Clearing House funds] [by bank wire transfer in
immediately available funds], the Warrant Price for each Warrant Security with
respect to which this Warrant is exercised to the Warrant Agent (as hereinafter
defined) and by surrendering this Warrant Certificate, with the purchase form
on the back hereof duly executed, at the corporate trust office of [name of
Warrant Agent], or its successor as warrant agent (the “Warrant Agent”), which is, on the date
hereof, at the address specified on the reverse hereof, and upon compliance
with and subject to the conditions set forth herein and in the Warrant
Agreement (as hereinafter defined).

 

The term “Holder” as used herein shall mean [if
Warrants are attached to Other Securities and are not immediately
detachable—prior to 
                    
, 
              (the “Detachable
Date”), the registered owner of the Company’s [title of Other
Securities] to which this Warrant Certificate was initially attached, and after
such Detachable Date,] the person in whose name at the time this Warrant
Certificate shall be registered upon the books to be maintained by the Warrant
Agent for that purpose pursuant to Section 4 of the Warrant Agreement.

 

The Warrants evidenced by
this Warrant Certificate may be exercised to purchase a whole number of Warrant
Securities in registered form.  Upon any exercise of fewer than all
of the Warrants evidenced by this Warrant Certificate, there shall be issued to
the Holder hereof a new Warrant Certificate evidencing Warrants for the number
of Warrant Securities remaining unexercised.

 

This Warrant Certificate
is issued under and in accordance with the Warrant Agreement dated as of
                    ,
             (the “Warrant Agreement”), between the Company
and the Warrant Agent and is subject to the terms and provisions contained in
the Warrant Agreement, to all of which terms and provisions the Holder of this
Warrant Certificate consents by acceptance hereof.  Copies of the
Warrant Agreement are on file at the above-mentioned office of the Warrant
Agent.

 

[If Warrants are attached to Other
Securities and are not immediately detachable - Prior to the
Detachable Date, this Warrant Certificate may be exchanged or transferred only
together with the [Title of Other Securities] (the “Other Securities”) to which this Warrant Certificate was
initially attached, and only for the purpose of effecting or in conjunction
with, an exchange or transfer of such Other Security.  Additionally,
on or prior to the Detachable Date, each transfer of such Other Security on the
register of the Other Securities shall operate also to transfer this Warrant
Certificate.  After such date, transfer of this] [If Warrants are attached to Other
Securities and are immediately detachable -  Transfer of this] Warrant Certificate may be
registered when this Warrant Certificate is surrendered at the corporate trust
office of the Warrant Agent by the registered owner or such owner’s assigns, in
the manner and subject to the limitations provided in the Warrant Agreement.

 

[If Other Securities with Warrants
which are not immediately detachable - Except as provided in the
immediately preceding paragraph, after] [If Other Securities with Warrants which are immediately
detachable or Warrants alone - 
After] countersignature by the Warrant Agent and prior to the expiration
of this Warrant Certificate, this Warrant Certificate may be exchanged at the
corporate trust office of the Warrant Agent for Warrant Certificates
representing Warrants for the same aggregate number of Warrant Securities.

 

This Warrant Certificate
shall not entitle the Holder hereof to any of the rights of a holder of the
Warrant Securities, including, without limitation, the right to receive
payments of dividends or distributions, if any, on the Warrant Securities
(except to the extent set forth in the Warrant Agreement) or to exercise any
voting rights.

 

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

 

This Warrant Certificate
shall not be valid or obligatory for any purpose until countersigned by the
Warrant Agent.

 

 

IN WITNESS WHEREOF, the Company has
caused this Warrant to be executed in its name and on its behalf by the
facsimile signatures of its duly authorized officers.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AFFYMAX, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Attest:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  :

  	
   

  	
  Countersigned

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  As Warrant Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized
  Signature

  

 

 

[REVERSE
OF WARRANT CERTIFICATE]

 

(Instructions
for Exercise of Warrant)

 

To exercise any Warrants
evidenced hereby for Warrant Securities (as hereinafter defined), the Holder
must pay, in lawful money of the United States of America, [in cash or by
certified check or official bank check in New York Clearing House funds] [by
bank wire transfer in immediately available funds], the Warrant Price in full
for Warrants exercised, to [Warrant Agent] [address of Warrant Agent],
Attn: 
                    
, which payment must specify the name of the Holder and the number of Warrants
exercised by such Holder.  In addition, the Holder must complete the
information required below and present this Warrant Certificate in person or by
mail (certified or registered mail is recommended) to the Warrant Agent at the
appropriate address set forth above.  This Warrant Certificate,
completed and duly executed, must be received by the Warrant Agent within five
business days of the payment.

 

(To be executed
upon exercise of Warrants)

 

The undersigned hereby
irrevocably elects to exercise
                    
Warrants, evidenced by this Warrant Certificate, to purchase 
                      shares of the Common Stock, par value $0.0001
per share (the “Warrant Securities”),
of Affymax, Inc. and represents that he has tendered payment for such
Warrant Securities, in lawful money of the United States of America, [in cash
or by certified check or official bank check in New York Clearing House funds]
[by bank wire transfer in immediately available funds], to the order of Affymax, Inc.,
c/o [insert name and address of Warrant Agent], in the amount of $
              in accordance with the terms
hereof.  The undersigned requests that said Warrant Securities be in
fully registered form in the authorized denominations, registered in such names
and delivered all as specified in accordance with the instructions set forth
below.

 

If the number of Warrants
exercised is less than all of the Warrants evidenced hereby, the undersigned
requests that a new Warrant Certificate evidencing the Warrants for the number
of Warrant Securities remaining unexercised be issued and delivered to the
undersigned unless otherwise specified in the instructions below.

 

	
  Dated:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Please Print

  
	
   

  	
   

  
	
   

  	
   

  
	
  Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Insert Social Security
  or Other Identifying Number of Holder)

  	
   

  

 

	
  Signature Guaranteed:

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  

 

(Signature must conform
in all respects to name of holder as specified on the face of this Warrant
Certificate and must bear a signature guarantee by a FINRA member firm).

 

This Warrant may be
exercised at the following addresses:

 

By hand at:

 

 

 

By mail at:

 

 

[Instructions as to form
and delivery of Warrant Securities and, if applicable, Warrant Certificates
evidencing Warrants for the number of Warrant Securities remaining
unexercised—complete as appropriate.]

 

 

ASSIGNMENT

 

[Form of
assignment to be executed if Warrant Holder desires to transfer Warrant)

 

FOR VALUE RECEIVED,
                    
hereby sells, assigns and transfers unto:

 

 

	
   

  	
   

  	
   

  
	
  (Please print name and
  address including zip code)

  	
   

  	
  Please print Social
  Security or other identifying number

  

 

the right represented by
the within Warrant to purchase
                    
shares of [Title of Warrant Securities] of Affymax, Inc. to which the
within Warrant relates and appoints 
                      attorney to transfer such right on the books
of the Warrant Agent with full power of substitution in the premises.

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  

 

 

(Signature must
conform in all respects to name of holder as specified on the face of the
Warrant)

 

	
  Signature Guaranteed

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