<SUBMISSION>
<ACCESSION-NUMBER>0000891618-02-001229
<TYPE>S-3
<PUBLIC-DOCUMENT-COUNT>7
<FILING-DATE>20020318
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>HARMONIC INC
<CIK>0000851310
<ASSIGNED-SIC>3663
<IRS-NUMBER>770201147
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>S-3
<ACT>33
<FILE-NUMBER>333-84430
<FILM-NUMBER>02577074
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>549 BALTIC WAY
<CITY>SUNNYVALE
<STATE>CA
<ZIP>94089
<PHONE>4085422500
</BUSINESS-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>HARMONIC LIGHTWAVES INC
<DATE-CHANGED>19950404
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>S-3
<SEQUENCE>1
<FILENAME>f77840ors-3.htm
<DESCRIPTION>FORM S-3
<TEXT>
<HTML>
<HEAD>
<TITLE>Harmonic Inc. Form S-3</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">As filed with the Securities and Exchange
Commission on March&nbsp;15, 2002</FONT></B>
</DIV>

<DIV align="right">
<B><FONT size="2">Registration
No.&nbsp;333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B>
</DIV>

<P align="left">
<HR size="1" width="100%" align="left" noshade>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>

<DIV align="center">
<B><FONT size="4">SECURITIES AND EXCHANGE COMMISSION</FONT></B>
</DIV>

<DIV align="center">
<B>Washington, D.C. 20549</B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="5">Form S-3</FONT></B>

<DIV align="center">
<B>REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933</B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="6">Harmonic Inc.</FONT></B>

<DIV align="center">
<I><FONT size="2">(Exact name of registrant as specified in its
charter)</FONT></I>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="51%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="46%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<B><FONT size="2">Delaware</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<B><FONT size="2">77-0201147</FONT></B></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<I><FONT size="2">(State or other jurisdiction of incorporation
	or organization)</FONT></I></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<I><FONT size="2">(I.R.S. Employer Identification
	Number)</FONT></I></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">549 Baltic Way, Sunnyvale, CA 94089,
(408)&nbsp;542-2500</FONT></B>

<DIV align="center">
<I><FONT size="2">(Address, including zip code, and telephone
number, including area code, of registrant&#146;s principal
executive offices)</FONT></I>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="2">Anthony J. Ley</FONT></B>

<DIV align="center">
<B><FONT size="2">President and Chief Executive
Officer</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">549 Baltic Way, Sunnyvale, CA 94089,
(408)&nbsp;542-2500</FONT></B>
</DIV>

<DIV align="center">
<I><FONT size="2">(Name, address, including zip code, and
telephone number, including area code, of agent for
service)</FONT></I>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><I><FONT size="2">Copies to:</FONT></I></B>

<DIV align="center">
<B><FONT size="2">Jeffrey D. Saper</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">John A. Fore</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Robert G. Day</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Daniel J. Weiser</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Kathleen D. Huryn</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Wilson Sonsini Goodrich &#38; Rosati</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Professional Corporation</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">650 Page Mill Road</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Palo Alto, CA 94304</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(650)&nbsp;493-9300</FONT></B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Approximate date of commencement of proposed
sale to the public: </FONT></B><FONT size="2">From time to time
after the effective date of this Registration Statement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the only securities being registered on this
Form are being offered pursuant to dividend or interest
reinvestment plans, please check the following
box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<DIV align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant
to Rule&nbsp;415 under the Securities Act of 1933, other than
securities offered only in connection with dividend or interest
reinvestment plans, check the following
box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#254;</FONT>
</FONT>
</DIV>

<DIV align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If this Form is filed to register additional
securities for an offering pursuant to Rule&nbsp;462(b) under
the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same
offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</FONT>
</DIV>

<DIV align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If this Form is a post-effective amendment filed
pursuant to Rule&nbsp;462(c) under the Securities Act, please
check the following box and list the Securities Act registration
statement number of the earlier effective registration statement
for the same
offering.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</FONT>
</DIV>

<DIV align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If delivery of the prospectus is expected to be
made pursuant to Rule&nbsp;434, please check the following
box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="2">CALCULATION OF REGISTRATION FEE</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="30%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="14%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="16%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
	<TD align="center" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<BR>
	<B><FONT size="2">Title of Each Class of<BR>
	Securities to be Registered</FONT></B></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<B><FONT size="2">Amount to be<BR>
	Registered</FONT></B></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<B><FONT size="2">Proposed&nbsp;Maximum<BR>
	Offering Price<BR>
	per unit(1)</FONT></B></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<B><FONT size="2">Proposed&nbsp;Maximum<BR>
	Offering Price<BR>
	Aggregate(2)</FONT></B></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<B><FONT size="2">Amount of<BR>
	Registration Fee</FONT></B></TD>
</TR>

<TR>
	<TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Common Stock, $0.001 par value
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">&#151;
	</FONT></TD>
</TR>

<TR>
	<TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Preferred Stock, $0.001 par value
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">&#151;
	</FONT></TD>
</TR>

<TR>
	<TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Debt Securities(3)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">&#151;
	</FONT></TD>
</TR>

<TR>
	<TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Warrants(4)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">&#151;
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">&#151;
	</FONT></TD>
</TR>

<TR>
	<TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total(5)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">$150,000,000(5)
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">100%
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">$150,000,000(5)
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="bottom">
	<FONT size="2">$13,800
	</FONT></TD>
</TR>

<TR>
	<TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(1)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">The proposed maximum offering price per unit will
	be determined from time to time by the Registrant in connection
	with the issuance by the Registrant of the securities registered
	hereunder.
	</FONT></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(2)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Estimated solely for the purpose of calculating
	the registration fee, which is calculated in accordance with
	Rule&nbsp;457(o) under the Securities Act.
	</FONT></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(3)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Or (i)&nbsp;if any debt securities are issued at
	an original issue discount, such greater principal amount at
	maturity as shall result in an aggregate initial offering price
	equal to the amount to be registered or (ii)&nbsp;if any debt
	securities are issued with a principal amount denominated in a
	foreign currency or composite currency, such principal amount as
	shall result in an aggregate initial offering price equivalent
	thereto in United States dollars at the time of initial offering.
	</FONT></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(4)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Includes warrants to purchase common stock.
	</FONT></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(5)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">The proposed maximum offering price per unit will
	be determined by us in connection with the issuance of the
	securities. The securities registered hereunder may be sold
	separately or as units with other securities registered hereby.
	</FONT></TD>
</TR>

</TABLE>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">The registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its
effective date until the registrant shall file a further
amendment which specifically states that this registration
statement shall thereafter become effective in accordance with
section&nbsp;8(a) of the Securities Act of 1933 or until this
registration statement shall become effective on such date as
the Commission, acting pursuant to said section&nbsp;8(a), may
determine.</FONT></B>

<P align="left">
<HR size="1" width="100%" align="left" noshade>

<DIV align="left">
<HR size="1" width="100%" align="left" noshade>
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<TABLE width="100%" border="1" cellpadding="5"><TR><TD>
<FONT size="2" color="#E8112D">The information in this
prospectus is not complete and may be changed. We may not sell
the securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus
is not an offer to sell these securities, and we are not
soliciting an offer to buy these securities in any state where
the offer or sale is not permitted.</FONT><FONT size="2"> <BR>
</FONT>
</TD></TR></TABLE>

<P align="center">
<B><FONT size="2" color="#E8112D">Subject to Completion, dated
March&nbsp;15, 2002</FONT></B>

<P align="left">
<B><FONT size="2">PROSPECTUS</FONT></B>

<P align="center">
<B><FONT size="4">$150,000,000</FONT></B>

<P align="center">
<B><FONT size="6">Harmonic Inc.</FONT></B>

<P align="center">
<B>By this prospectus, we may offer&nbsp;&#151;</B>

<P align="center">
<B><FONT size="4">Common Stock</FONT></B>

<DIV align="center">
<B><FONT size="4">Preferred Stock</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="4">Debt Securities</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="4">Warrants for Common Stock</FONT></B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B>See &#147;Risk Factors&#148; on page&nbsp;4 for information
you should</B>

<DIV align="center">
<B>consider before buying the securities.</B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our common stock is listed on the Nasdaq National
Market under the symbol &#147;HLIT.&#148; On March&nbsp;15,
2002, the last reported sale price of our common stock on the
Nasdaq National Market was $11.05 per share.
</FONT>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will provide specific terms of these
securities in supplements to this prospectus. You should read
this prospectus and any prospectus supplement carefully before
you invest.
</FONT>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This prospectus may not be used to offer and sell
securities unless accompanied by a prospectus supplement.
</FONT>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved
of these securities or determined if this prospectus is truthful
or complete. Any representation to the contrary is a criminal
offense.</FONT></B>

<P align="center">
<FONT size="2">This prospectus is
dated &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2002&nbsp;</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>

<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000"><FONT size="2">SUMMARY</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#001"><FONT size="2">RISK FACTORS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#002"><FONT size="2">USE OF PROCEEDS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#003"><FONT size="2">RATIO OF EARNINGS AVAILABLE TO COVER FIXED CHARGES</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#004"><FONT size="2">DESCRIPTION OF THE DEBT SECURITIES</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#005"><FONT size="2">DESCRIPTION OF PREFERRED STOCK</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#006"><FONT size="2">DESCRIPTION OF COMMON STOCK</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#007"><FONT size="2">DESCRIPTION OF THE WARRANTS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#008"><FONT size="2">PLAN OF DISTRIBUTION</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#009"><FONT size="2">LEGAL MATTERS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#010"><FONT size="2">EXPERTS</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#011"><FONT size="2">WHERE YOU CAN FIND MORE INFORMATION</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="#012"><FONT size="2">SIGNATURES</FONT></A></TD></TR>
<TR><TD colspan="9"><A HREF="f77840orex4-1.txt">EXHIBIT 4.1</A></TD></TR>
<TR><TD colspan="9"><A HREF="f77840orex4-2.txt">EXHIBIT 4.2</A></TD></TR>
<TR><TD colspan="9"><A HREF="f77840orex12-1.txt">EXHIBIT 12.1</A></TD></TR>
<TR><TD colspan="9"><A HREF="f77840orex23-1.txt">EXHIBIT 23.1</A></TD></TR>
<TR><TD colspan="9"><A HREF="f77840orex23-2.txt">EXHIBIT 23.2</A></TD></TR>
<TR><TD colspan="9"><A HREF="f77840orex25-1.txt">EXHIBIT 25.1</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">TABLE OF CONTENTS</FONT></B>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="90%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">SUMMARY
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">RISK FACTORS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">USE OF PROCEEDS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">RATIO OF EARNINGS AVAILABLE TO COVER FIXED CHARGES
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DESCRIPTION OF THE DEBT SECURITIES
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DESCRIPTION OF PREFERRED STOCK
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">24</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DESCRIPTION OF COMMON STOCK
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">25</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">DESCRIPTION OF THE WARRANTS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">26</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">PLAN OF DISTRIBUTION
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">LEGAL MATTERS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">28</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">EXPERTS
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">WHERE YOU CAN FIND MORE INFORMATION
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">29</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless stated otherwise, references in this
prospectus to &#147;Harmonic,&#148; &#147;we,&#148;
&#147;us,&#148; &#147;its&#148; or &#147;our&#148; refer to
Harmonic Inc., a Delaware corporation, and its subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each trademark, trade name or service mark of any
other company appearing in this prospectus belongs to its holder.
</FONT>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="2">SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This prospectus and the documents incorporated
herein by reference contain forward-looking statements within
the meaning of Section&nbsp;27A of the Securities Act and
Section&nbsp;21E of the Exchange Act. Words such as
&#147;anticipates,&#148; &#147;expects,&#148;
&#147;intends,&#148; &#147;may,&#148; &#147;will,&#148;
&#147;should,&#148; &#147;potential,&#148; &#147;continue,&#148;
&#147;further,&#148; &#147;plans,&#148; &#147;believes,&#148;
&#147;seeks,&#148; &#147;estimates,&#148; variations of such
words and similar expressions are intended to identify such
forward looking statements. These statements are not guarantees
of future performance and are subject to certain risks,
uncertainties and assumptions that are difficult to predict.
Therefore, actual results could differ materially from those
expressed or forecasted in any such forward-looking statements
as a result of certain factors, including those set forth in
&#147;Risk Factors,&#148; as well as those noted in similar
sections of the documents incorporated herein by reference. In
connection with forward-looking statements which appear in these
disclosures, investors should carefully review the factors set
forth in this prospectus under &#147;Risk Factors.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The cautionary statements contained in any
prospectus supplement under the caption &#147;Risk Factors&#148;
and other similar statements contained elsewhere in this
prospectus, including the documents that are incorporated by
reference, identify important factors with respect to such
forward-looking statements, including certain risks and
uncertainties that could cause our actual results, performance
or achievements expressed or implied by such forward-looking
statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although we believe that the expectations
reflected in such forward-looking statements are based upon
reasonable assumptions, no assurance can be given that such
expectations will be attained or that any deviations will not be
material. We disclaim any obligation or undertaking to
disseminate any updates or revision to any forward-looking
statement contained herein to reflect any change in our
expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.
</FONT>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH
THIS OFFERING OTHER THAN THOSE CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS AND ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT IN CONNECTION WITH THE OFFERING
</FONT>

<P align="center">

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<DIV align="left">
<FONT size="2">DESCRIBED HEREIN AND THEREIN, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THIS
PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT SHALL CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY OFFERED
SECURITIES IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH
PERSON TO MAKE SUCH AN OFFERING OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS OR ANY PROSPECTUS SUPPLEMENT NOR ANY
SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES IMPLY THAT THE
INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN OR IN
ANY PROSPECTUS SUPPLEMENT IS CORRECT AS OF ANY DATE SUBSEQUENT
TO THE DATE HEREOF OR OF SUCH PROSPECTUS SUPPLEMENT.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">IN CONNECTION WITH THE OFFERING OF CERTAIN
OFFERED SECURITIES, CERTAIN PERSONS PARTICIPATING IN SUCH
OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR
OTHERWISE AFFECT THE MARKET PRICES OF SUCH OFFERED SECURITIES OR
OTHER SECURITIES OF THE COMPANY, INCLUDING STABILIZING
TRANSACTIONS, SYNDICATE COVERING TRANSACTIONS AND THE IMPOSITION
OF PENALTY BIDS. SPECIFICALLY, SUCH PERSONS MAY OVERALLOT IN
CONNECTION WITH THE OFFERING AND MAY BID FOR AND PURCHASE THE
OFFERED SECURITIES IN THE OPEN MARKET.
</FONT>

<P align="center"><FONT size="2">ii
</FONT>

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<!-- link1 "<FONT size="2">SUMMARY</FONT>" -->
<DIV align="left"><A NAME="000"></A></DIV>

<P align="center">
<B><FONT size="2">SUMMARY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This prospectus is part of a Registration
Statement on Form&nbsp;S-3 that we filed with the Securities and
Exchange Commission using a &#147;shelf&#148; registration
process. Under this shelf process, we may sell any combination
of securities described in this prospectus in one or more
offerings, up to a total dollar amount of $150,000,000. This
prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will
provide a prospectus supplement that will contain specific
information about the terms of that offering. The prospectus
supplement may, along with information that is incorporated by
reference as described under the heading &#147;Where You Can
Find More Information,&#148; also add, update or change
information contained in this prospectus. You should read both
this prospectus and any prospectus supplement together with
additional information described below under the heading
&#147;Where You Can Find More Information.&#148;
</FONT>

<P align="center">
<B><FONT size="2">Harmonic Inc.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Harmonic designs, manufactures and sells a
variety of broadband solutions that allow communications service
providers around the world to deliver video, voice and data to
their subscribers. Harmonic&#146;s technically advanced fiber
optic, digital video and data delivery systems enable network
operators to provide a range of interactive and advanced digital
services that include digital video, high-speed Internet access,
telephony, HDTV, video and audio streaming, and video-on-demand.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Historically, almost all of our sales were
derived directly or indirectly from sales of fiber optic
transmission systems to cable television operators. With the
introduction of digital headend products beginning in 1997, we
broadened our product offering to enable delivery of digital
video, voice and data over satellite and wireless networks and
cable systems.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to further expand our digital systems
capability, Harmonic entered into a merger agreement with C-Cube
Microsystems Inc., or C-Cube, on October&nbsp;27, 1999, pursuant
to which C-Cube merged into Harmonic. Under the terms of the
merger agreement, C-Cube spun off its semiconductor business as
a separate publicly traded company prior to the May&nbsp;3, 2000
closing. C-Cube then merged into Harmonic and Harmonic therefore
acquired C-Cube&#146;s DiviCom business, which provides MPEG-2
encoding products and systems for digital television.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merged Company has been organized into two
product divisions, Broadband Access Networks, or BAN, for fiber
optic systems and Convergent Systems, or CS, for digital headend
systems. While the two divisions have been organized generally
around the pre-merger Harmonic fiber optics systems and the
DiviCom digital headend systems, respectively, these divisions
do not correspond to the pre-merger companies in significant
ways. For example, certain Harmonic product lines are now part
of the CS&nbsp;division.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Harmonic was initially incorporated in California
in June 1988 and reincorporated into Delaware in May 1995. Our
principal executive offices are located at 549&nbsp;Baltic Way,
Sunnyvale, California 94089. Our telephone number is
(408)&nbsp;542-2500.
</FONT>

<P align="left">
<B><FONT size="2">The Securities We May Offer</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may offer up to $150,000,000 of common stock,
preferred stock, debt securities, and warrants to purchase
common stock. A prospectus supplement, which we will provide to
you each time we offer securities, will describe the specific
amounts, prices, and terms of these securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may sell the securities to or through
underwriters, dealers or agents, or directly to purchasers. We,
as well as any agents acting on our behalf, reserve the sole
right to accept and to reject in whole or in part any proposed
purchase of securities. Each prospectus supplement will set
forth the names of any underwriters, dealers, or agents involved
in the sale of the securities described in that prospectus
supplement and any applicable fee, commission or discount
arrangements with them.
</FONT>

<P align="center"><FONT size="2">1
</FONT>

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<P align="left">
<B><FONT size="2">Debt Securities</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may offer secured or unsecured obligations in
the form of either senior or subordinated debt. The senior debt
securities and the subordinated debt securities are together
referred to in this prospectus as the &#147;debt
securities.&#148; The unsecured senior debt securities will
generally have the same rank in right of payment as our other
unsecured, unsubordinated debt. The subordinated debt securities
generally will be entitled to payment only after payment of our
senior debt. Senior debt generally includes all debt for money
borrowed by us, except debt that is stated in the instrument
governing the terms of that debt to be not senior to, or to have
the same rank in right of payment as, or to be expressly junior
to, the subordinated debt securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The senior and subordinated debt securities will
be issued under separate indentures between us and a trustee. We
have summarized the general features of the debt securities to
be governed by the indentures. These indentures have been filed
as exhibits to the registration statement
(No.&nbsp;333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;)
that we have filed with the Securities and Exchange Commission
(this prospectus being a part of that registration statement).
We encourage you to read these indentures. Instructions on how
you can get copies of these documents are provided below under
the heading &#147;Where You Can Find More Information.&#148;
</FONT>

<P align="left">
<B><FONT size="2">General Indenture Provisions that Apply to
Senior and Subordinated Debt</FONT></B>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Each indenture allows debt to be issued in series
	with terms particular to each series.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Neither indenture limits the amount of debt that
	we may issue or generally provides holders any protection should
	there be a highly leveraged transaction involving our company.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">The indentures allow us to merge or to
	consolidate with another United States entity or convey,
	transfer or lease our properties and assets substantially as an
	entirety to another United States entity, as long as certain
	conditions are met. If these events occur, the other entity will
	be required to assume our obligations on the debt securities and
	under the indentures, and we will be released from all
	liabilities and obligations, except in the case of a lease.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">The indentures provide that we and the respective
	trustee may generally amend the respective indenture with the
	consent of holders of a majority of the total principal amount
	of the debt outstanding in any series to change certain of our
	obligations or your rights concerning the debt. However, to
	change the payment of principal, interest, or adversely affect
	the right to convert or certain other matters, every holder in
	that series must consent.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">We may discharge the indentures and defease
	restrictive covenants by depositing sufficient funds with the
	trustee to pay the obligations when due, as long as certain
	conditions are met. The trustee would pay all amounts due to you
	on the debt from the deposited funds.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Events of Default</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each of the following is among the events of
default specified in the indentures:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Principal not paid when due;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Sinking fund payment not made when due;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Failure to pay interest for 30&nbsp;days;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Covenants not performed for 90&nbsp;days after
	notice; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Certain events of bankruptcy, insolvency or
	reorganization of Harmonic.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A prospectus supplement may describe deletions
of, or changes or additions to, the events of default.
</FONT>

<P align="left">
<B><FONT size="2">Remedies</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon an event of default, other than a
bankruptcy, insolvency or reorganization, the trustee or holders
of 25% of the principal amount outstanding in a series may
declare the outstanding principal plus accrued
</FONT>

<P align="center"><FONT size="2">2
</FONT>

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<DIV align="left">
<FONT size="2">interest, if any, immediately due and payable.
However, the holders of a majority in principal amount may,
under certain circumstances, rescind this action.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Subordination</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The subordinated indenture provides that the
subordinated debt securities will be subordinated to all senior
debt as defined in the subordinated indenture.
</FONT>

<P align="left">
<B><FONT size="2">Preferred Stock</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may issue preferred stock in one or more
series. Our board of directors as a committee designated by the
Board will determine the dividend, voting, and conversion rights
and other provisions at the time of sale. Each series of
preferred stock will be more fully described in the particular
prospectus supplement that will accompany this prospectus,
including redemption provisions, rights in the event of
liquidation, dissolution or the winding up of Harmonic, voting
rights and conversion rights.
</FONT>

<P align="left">
<B><FONT size="2">Common Stock</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may offer our common stock, par value $0.001
per share, either alone or underlying other registered
securities convertible into our common stock. Common stock
holders are entitled to receive dividends declared by our board
of directors out of funds legally available for the payment of
dividends, subject to rights, if any, of preferred stock
holders. Currently, we do not pay a dividend. Each holder of
common stock is entitled to one vote per share. The holders of
common stock have no preemptive rights or cumulative voting
rights.
</FONT>

<P align="left">
<B><FONT size="2">Warrants</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may issue warrants for the purchase of our
common stock.
</FONT>

<P align="center"><FONT size="2">3
</FONT>

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<!-- link1 "<FONT size="2">RISK FACTORS</FONT>" -->
<DIV align="left"><A NAME="001"></A></DIV>

<P align="center">
<B><FONT size="2">RISK FACTORS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Before you invest in any of our securities,
you should be aware of various risks, including those described
below. You should carefully consider these risk factors,
together with all of the other information included or
incorporated by reference in this prospectus and in the
prospectus supplement, before you decide whether to purchase any
of our securities. The risks set out below are not the only
risks we face.</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">If any of the following risks occur, our
business, financial condition and results of operations could be
materially adversely affected. In such case, the trading price
of our securities could decline, and you may lose all or part of
your investment.</FONT></I>

<P align="left">
<B><FONT size="2">We Depend On Cable And Satellite Industry
Capital Spending For A Substantial Portion Of Our Revenue And
Any Decrease Or Delay In Capital Spending In These Industries
Would Negatively Impact Our Resources, Operating Results And
Financial Condition.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to the merger with C-Cube, almost all of
Harmonic&#146;s historic sales had been derived from sales to
cable television operators and we expect these sales to
constitute a significant portion of net sales for the
foreseeable future. Almost all of the DiviCom business&#146;
historic sales had been derived from sales to satellite
operators, telephone companies and cable operators. Demand for
the combined company&#146;s products will depend on the
magnitude and timing of capital spending by cable television
operators, satellite operators, broadcasters and telephone
companies for constructing and upgrading of their systems.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These capital spending patterns are dependent on
a variety of factors, including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">access to financing;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">annual budget cycles;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the impact of industry consolidation;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the status of federal, local and foreign
	government regulation of telecommunications and television
	broadcasting;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">overall demand for communication services and the
	acceptance of new video, voice and data services;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">evolving industry standards and network
	architectures;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">competitive pressures;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">discretionary customer spending patterns;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">general economic conditions.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the past, specific factors contributing to
reduced capital spending have included:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">uncertainty related to development of digital
	video and cable modem industry standards;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">delays associated with the evaluation of new
	services and system architectures by many cable television
	operators;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">emphasis on generating revenue from existing
	customers by cable television operators instead of new
	construction or network upgrades; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">general economic conditions in domestic and
	international markets.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Recent developments in capital markets have
reduced access to funding for new and existing customers causing
delays in the timing and scale of deployments of our equipment,
as well as the postponement of certain projects by our
customers. During the past two years Harmonic and other vendors
received notification from significant customers, including
AT&#38;T Broadband, RCN and Bell South, that they were canceling
new projects, or delaying new orders to allow them to reduce
inventory levels which were in excess of their current
deployment requirements.
</FONT>

<P align="center"><FONT size="2">4
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The timing of deployment of our equipment can be
subject to a number of other risks, including the availability
of skilled engineering and technical personnel, the availability
of other equipment such as fiber optic cable, and the need for
local zoning and licensing approvals. We believe that changes in
our customers&#146; deployment plans have in recent quarters
delayed, and may in the future delay, the receipt of new orders
or the release of existing backlog. Since the majority of our
sales have been to relatively few customers, a delay in
equipment deployment at any one customer has in the past and
could have a material adverse effect on our sales in a
particular quarter. In this regard, the Company&#146;s sales
decreased each quarter from the second quarter of 2000 through
the first quarter of 2001 and were below our expectations in the
BAN and CS divisions as well as the expectations of securities
analysts, and the price of our Common Stock declined
significantly.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Cable television capital spending can be subject
to the effects of seasonality, with fewer construction and
upgrade projects typically occurring in winter months and
otherwise being affected by inclement weather.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">BAN division sales have decreased significantly
from the third quarter of 2000 and were 57% lower in 2001 than
in 2000. This was due to weak cable industry spending on
transmission upgrades, particularly reduced spending by AT&#38;T
Broadband and RCN. These two customers accounted for a total of
23% of sales in 2000 compared to a combined total of less than
5% of sales in 2001. CS division sales from the second quarter
of 2000 through the first quarter of 2001, consisting
principally of DiviCom products, were below DiviCom&#146;s sales
levels in 1999 and the first quarter of 2000, and were
significantly below our expectations at the time the DiviCom
merger was announced in October 1999. The lower CS sales were
attributable principally to reduced spending by satellite
operators. For a more detailed discussion regarding risks
related to AT&#38;T Broadband, RCN and other major customers,
see &#147;Our Customer Base Is Concentrated And The Loss Of One
Or More Of Our Key Customers Would Harm Our Business. The Loss
Of Any Key Customer Would Have A Negative Effect On Our
Business.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">CS&nbsp;division sales increased sequentially
during the second and third quarters of 2001 and increased 58%
during the second half of 2001 compared to the first half of the
year, primarily due to demand for our next-generation digital
systems such as the Narrowcast Services Gateway, or NSG, and the
MV50 encoder. CS&nbsp;sales of the MV50 encoder during 2001
benefited in particular from the expansion of local channel
offerings and compliance with FCC &#147;must carry&#148;
regulations by domestic direct broadcast satellite, or DBS,
operators. We anticipate that, in light of the announced merger
of EchoStar and DirecTV and expectations that operators will add
fewer new markets in 2002, our revenue from domestic DBS
operators is likely to decline in 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Due to the uncertainty of the capital spending
plans of our customers and seasonal weakness, we expect a slight
sequential sales decline during the first quarter of 2002.
Harmonic expects to report a loss at least through the first
half of 2002, and cannot predict when it will return to
profitability.
</FONT>

<P align="left">
<B><FONT size="2">Our Customer Base Is Concentrated And The Loss
Of One Or More Of Our Key Customers Would Harm Our Business. The
Loss Of Any Key Customer Would Have A Negative Effect On Our
Business.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Historically, a majority of our sales and sales
of DiviCom have been to relatively few customers, and due in
part to the consolidation of ownership of cable television and
direct broadcast satellite systems, we expect this customer
concentration to continue in the foreseeable future. Sales to
our ten largest customers in 2001, 2000, and 1999 accounted for
approximately 49%, 52% and 75% of net sales, respectively.
Although we are attempting to broaden our customer base by
penetrating new markets such as the telco and broadcast markets,
we expect to see continuing industry consolidation and customer
concentration due in part to the significant capital costs of
constructing broadband networks. For example, Comcast and
AT&#38;T Broadband, and EchoStar and DirecTV have announced
plans to merge. Both combinations are subject to regulatory and
shareholder approvals, among other conditions. In 2001, sales to
DirecTV and Charter Communications accounted for 13% and 11% of
net sales, respectively, compared to less than 10% for each of
these customers in 2000 and 1999. In 2000, sales to AT&#38;T
Broadband accounted for 12% of net sales compared to 41% in
1999. In addition, in 2000 RCN represented 11% of net sales. No
other customer accounted for more than 10% of our net sales in
2001, 2000, or 1999. The loss of DirecTV or Charter
Communications, or any other
</FONT>

<P align="center"><FONT size="2">5
</FONT>

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<DIV align="left">
<FONT size="2">significant customer or any reduction in orders
by DirecTV, Charter Communications or any significant customer,
or our failure to qualify our products with a significant
customer could adversely affect our business, operating results
and liquidity. We cannot currently predict the impact of the
acquisition of DirecTV by EchoStar, if approved, on our future
sales. In addition, we cannot assure you that sales to other
customers will compensate for the reduction in sales to AT&#38;T
Broadband and RCN nor can we predict the impact of the AT&#38;T
Broadband merger with Comcast on our future sales. Our sales are
made on a purchase order or system contract basis, and none of
our customers has entered into a long-term agreement requiring
it to purchase our products. The loss of, or any reduction in
orders from, a significant customer would harm our business.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">Our Operating Results Are Likely To Fluctuate
Significantly And May Fail To Meet Or Exceed The Expectations Of
Securities Analysts Or Investors, Causing Our Stock Price To
Decline.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our operating results have fluctuated in the past
and are likely to continue to fluctuate in the future, on an
annual and a quarterly basis, as a result of several factors,
many of which are outside of our control. Some of the factors
that may cause these fluctuations include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the level and timing of capital spending of our
	customers, both in the U.S.&nbsp;and in foreign markets;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">changes in market demand;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the timing and amount of customer orders;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the timing of revenue from systems contracts
	which may span several quarters;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">competitive market conditions;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">our unpredictable sales cycles;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">new product introductions by our competitors or
	by us;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">changes in domestic and international regulatory
	environments;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">market acceptance of new or existing products;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the cost and availability of components,
	subassemblies and modules;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the mix of our customer base and sales channels;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the mix of our products sold;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">our development of custom products and software;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the level of international sales; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">economic conditions specific to the cable and
	satellite industries, and general economic conditions.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, we often recognize a substantial
portion of our revenues in the last month of the quarter. We
establish our expenditure levels for product development and
other operating expenses based on projected sales levels, and
expenses are relatively fixed in the short term. Accordingly,
variations in timing of sales can cause significant fluctuations
in operating results. In addition, because a significant portion
of our business is derived from orders placed by a limited
number of large customers, the timing of such orders can also
cause significant fluctuations in our operating results. Our
expenses for any given quarter are typically based on expected
sales and if sales are below expectations, our operating results
may be adversely impacted by our inability to adjust spending to
compensate for the shortfall. As a result of all these factors,
our operating results in one or more future periods may fail to
meet or exceed the expectations of securities analysts or
investors. In that event, the trading price of our common stock
would likely decline. In this regard, due to lower than expected
sales in each quarter from the second quarter of 2000 through
the first quarter of 2001, we failed to meet our internal
expectations, as well as the expectations of securities analysts
and investors, and the price of our common stock declined
significantly.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the September&nbsp;11, 2001
terrorist attacks in New York City and Washington, D.C., the
United States and global economies have weakened and may
continue to deteriorate, which may impair our
</FONT>

<P align="center"><FONT size="2">6
</FONT>

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<DIV align="left">
<FONT size="2">ability to ship our products within the United
States and internationally, and may result in further decreases
in our revenues and cause our stock price to decline. In
addition, it is anticipated that in the wake of these events,
the United States and global capital markets will experience a
period of continuing volatility. These events may have a
negative impact on our business as a result of the cautious
purchasing behavior of customers.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">We May Need Additional Capital In The Future
And May Not Be Able To Secure Adequate Funds On Terms Acceptable
To Us.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">While we expect to report a loss at least through
the first half of 2002, we currently believe that our existing
liquidity sources, including bank line of credit and factoring
facilities will satisfy our requirements for at least the next
twelve months. We may need to raise additional funds if our
estimates change or prove inaccurate or in order for us to
respond to unforeseen technological or marketing hurdles, or to
take advantage of unanticipated opportunities. Our ability to
raise funds may be adversely affected by a number of factors
relating to Harmonic, as well as factors beyond our control,
including increased market uncertainty following the events of
September&nbsp;11, 2001 and the ongoing U.S. war on terrorism.
There can be no assurance that such financing will be available
on terms acceptable to us, if at all.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, we may review other potential
acquisitions that would complement our existing product
offerings, enhance our technical capabilities or expand our
marketing and sales presence. While we have no current
agreements or negotiations underway with respect to any
potential acquisition, any future transaction of this nature
could require potentially significant amounts of capital. If
adequate funds are not available, or are not available on
acceptable terms, we may not be able to take advantage of market
opportunities, to develop new products or to otherwise respond
to competitive pressures.
</FONT>

<P align="left">
<B><FONT size="2">We Depend On Our International Sales And Are
Subject To The Risks Associated With International Operations,
Which May Negatively Affect Our Operating Results.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Sales to customers outside of the United States
in 2001, 2000 and 1999 represented 40%, 36% and 30%, of net
sales, respectively, and we expect that international sales will
continue to represent a substantial portion of our net sales for
the foreseeable future. Our international operations are subject
to a number of risks, including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">changes in foreign government regulations and
	telecommunications standards;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">import and export license requirements, tariffs,
	taxes and other trade barriers;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">fluctuations in currency exchange rates;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">difficulty in collecting accounts receivable;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the burden of complying with a wide variety of
	foreign laws, treaties and technical standards;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">difficulty in staffing and managing foreign
	operations; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">political and economic instability.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">While our international sales have typically been
denominated in U.S. dollars, fluctuations in currency exchange
rates could cause our products to become relatively more
expensive to customers in a particular country, leading to a
reduction in sales or profitability in that country. Following
implementation of the final phase of the Euro changeover
effective January&nbsp;1, 2002, we expect a higher portion of
our European business to be denominated in Euros which may
subject us to increased foreign currency risk. Gains and losses
on the conversion to U.S. dollars of accounts receivable,
accounts payable and other monetary assets and liabilities
arising from international operations may contribute to
fluctuations in operating results. Furthermore, payment cycles
for international customers are typically longer than those for
customers in the United States. Unpredictable sales cycles could
cause us to fail to meet or exceed the expectations of security
analysts and investors for any given period. In addition,
foreign markets may not develop in the future.
</FONT>

<P align="center"><FONT size="2">7
</FONT>

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<P align="left">
<B><FONT size="2">We Must Be Able To Manage Expenses And
Inventory Risks Associated With Meeting The Demand Of Our
Customers.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">From time to time, we receive indications from
our customers as to their future plans and requirements to
ensure that we will be prepared to meet their demand for our
products. If actual orders differ materially from these
indications, our ability to manage inventory and expenses may be
affected. In addition, if we fail to meet customers&#146; supply
expectations, we may lose business from such customers. If we
enter into purchase commitments to acquire materials, or expend
resources to manufacture products and such products are not
purchased by our customers, our business and operating results
could suffer. In this regard, our gross margins and operating
results for the last five quarters were adversely affected by
provisions for excess and obsolete inventories of approximately
$49&nbsp;million.
</FONT>

<P align="left">
<B><FONT size="2">The Markets In Which We Operate Are Intensely
Competitive And Many Of Our Competitors Are Larger And More
Established.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The markets for cable television fiber optics
systems and digital video broadcasting systems are extremely
competitive and have been characterized by rapid technological
change and declining average selling prices.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Harmonic&#146;s competitors in the cable
television fiber optics systems business include corporations
such as Arris (a company owned in part by Nortel and AT&#38;T),
C-Cor.net, Motorola, Philips and Scientific-Atlanta.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the digital and video broadcasting systems
business, we compete broadly with vertically integrated system
suppliers including Motorola, Scientific-Atlanta, Tandberg,
Thomson Multimedia and Philips, and in certain product lines
with Cisco and Terayon and a number of smaller companies.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Most of our competitors are substantially larger
and have greater financial, technical, marketing and other
resources than Harmonic. Many of these large organizations are
in a better position to withstand any significant reduction in
capital spending by customers in these markets. They often have
broader product lines and market focus and will therefore not be
as susceptible to downturns in a particular market. In addition,
many of our competitors have been in operation longer than we
have and therefore have more long standing and established
relationships with domestic and foreign customers. We may not be
able to compete successfully in the future and competition may
harm our business.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If any of our competitors&#146; products or
technologies were to become the industry standard, our business
could be seriously harmed. For example, U.S. cable operators
have to date mostly purchased proprietary digital systems from
Motorola and Scientific-Atlanta. While certain operators have
made limited purchases of the &#147;open&#148; systems provided
by Harmonic, we cannot assure you that our digital products will
find broad market acceptance with U.S. cable operators. In
addition, companies that have historically not had a large
presence in the broadband communications equipment market have
begun recently to expand their market share through mergers and
acquisitions. The continued consolidation of our competitors
could have a significant negative impact on us. Further, our
competitors, particularly competitors of our digital and video
broadcasting systems&#146; business, may bundle their products
or incorporate functionality into existing products in a manner
that discourages users from purchasing our products or which may
require us to lower our selling prices resulting in lower gross
margins.
</FONT>

<P align="left">
<B><FONT size="2">Broadband Communications Markets Are
Relatively Immature And Characterized By Rapid Technological
Change.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Broadband communications markets are relatively
immature, making it difficult to accurately predict the
markets&#146; future growth rates, sizes or technological
directions. In view of the evolving nature of these markets, it
is possible that cable television operators, telephone companies
or other suppliers of broadband wireless and satellite services
will decide to adopt alternative architectures or technologies
that are incompatible with our current or future products. If we
are unable to design, develop, manufacture and sell products
that incorporate or are compatible with these new architectures
or technologies, our business will suffer.
</FONT>

<P align="center"><FONT size="2">8
</FONT>

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<P align="left">
<B><FONT size="2">We Need To Develop And Introduce New And
Enhanced Products In A Timely Manner To Remain
Competitive.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Broadband communications markets are
characterized by continuing technological advancement, changes
in customer requirements and evolving industry standards. To
compete successfully, we must design, develop, manufacture and
sell new or enhanced products that provide increasingly higher
levels of performance and reliability. However, we may not be
able to successfully develop or introduce these products, if our
products:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">are not cost effective,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">are not brought to market in a timely manner,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">are not in accordance with evolving industry
	standards and architectures, or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">fail to achieve market acceptance.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, to successfully develop and market
our planned products, we must retain and continue to attract
personnel with appropriate experience and expertise. Competition
for qualified personnel is intense. We may not be successful in
retaining and attracting qualified personnel.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Also, to successfully develop and market certain
of our planned products for digital applications, we may be
required to enter into technology development or licensing
agreements with third parties. We cannot assure you that we will
be able to enter into any necessary technology development or
licensing agreement on terms acceptable to us, or at all. The
failure to enter into technology development or licensing
agreements when necessary could limit our ability to develop and
market new products and, accordingly, could materially and
adversely affect our business and operating results.
</FONT>

<P align="left">
<B><FONT size="2">We Need To Effectively Manage Our Operations
And The Cyclical Nature Of Our Business.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The growth of our operations and cyclical nature
of our business has placed, and is expected to continue to
place, a significant strain on our personnel, management and
other resources. This strain has been exacerbated by the
acquisition of DiviCom and the subsequent loss of numerous
employees, including senior management. In addition, we reduced
our work force by approximately 30% during 2001 due to reduced
industry spending and demand for our products. Our ability to
manage our business effectively in the future, including any
future growth, will require us to train, motivate and manage our
employees successfully, to attract and integrate new employees
into our overall operations, to retain key employees and to
continue to improve our operational, financial and management
systems. In particular, in April 2001 we implemented a new
management information system. We believe this new system
significantly affects many aspects of our business, including
accounting, manufacturing operations, purchasing, sales and
marketing functions. The successful operation of this system is
critical to our business. While the initial phase of
implementation has been successful, there can be no assurance
that we will complete the transition to the new system in an
efficient, cost-effective or timely manner or that the new
information system will be adequate to support all of our
operations. If we fail to manage our existing operations or any
future growth effectively, our business could suffer.
</FONT>

<P align="left">
<B><FONT size="2">Competition For Qualified Personnel Is
Intense, And We May Not Be Successful In Attracting And
Retaining Personnel.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our future success will depend, to a significant
extent, on the ability of our management to operate effectively,
both individually and as a group. We are dependent on our
ability to retain and motivate high caliber personnel, in
addition to attracting new personnel. In spite of the current
worldwide economic slowdown, competition for qualified technical
and other personnel remains intense, particularly in the San
Francisco Bay Area and Israel, and we may not be successful in
attracting and retaining such personnel.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Competitors and others have in the past and may
in the future attempt to recruit our employees. While our
employees are required to sign standard agreements concerning
confidentiality and ownership of inventions, we generally do not
have employment contracts or noncompetition agreements with any
of our
</FONT>

<P align="center"><FONT size="2">9
</FONT>

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<DIV align="left">
<FONT size="2">personnel. The loss of the services of any of our
key personnel, the inability to attract or retain qualified
personnel in the future or delays in hiring required personnel,
particularly engineers and other technical personnel, could
negatively affect our business.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">We Are Liable For C-Cube&#146;s Pre-Merger Tax
Liabilities, Including Tax Liabilities Resulting From The
Spin-Off Of Its Semiconductor Business.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The spin-off of C-Cube&#146;s semiconductor
business gave rise to a significant tax liability of
approximately $320&nbsp;million based on a valuation of the
semiconductor business of $1.1&nbsp;billion. The estimated
liability was paid in 2000. Under state law, Harmonic generally
is liable for all of C-Cube&#146;s debts, including
C-Cube&#146;s liability for taxes resulting from the spin-off
and other pre-merger tax liabilities. C-Cube retained and
transferred to Harmonic in the merger an amount of cash and
other consideration sufficient to pay this liability as well as
all other tax liabilities of C-Cube and its subsidiaries for
periods prior to the merger. The merger agreement stipulates
that Harmonic will be indemnified by the spun-off semiconductor
business if the cash reserves are not sufficient to satisfy all
of C-Cube&#146;s tax liabilities for periods prior to the
merger. If for any reason, the spun-off semiconductor business
does not have sufficient cash to pay such taxes, or if there are
additional taxes due with respect to the non-semiconductor
business and Harmonic cannot be indemnified by C-Cube, Harmonic
generally will remain liable, and such liability could have a
material adverse effect on Harmonic. The spun-off semiconductor
business was recently acquired by LSI Logic, which assumed these
obligations to Harmonic.
</FONT>

<P align="left">
<B><FONT size="2">Due To The Structure Of The Merger
Transaction, Harmonic Is Liable For C-Cube&#146;s General
Pre-Merger Liabilities And Any Liabilities Relating To
C-Cube&#146;s Semiconductor Business For Which The Spun-off
Semiconductor Business Is Unable To Indemnify
Harmonic.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The merger of C-Cube into Harmonic, with Harmonic
as the surviving entity, resulted in our assuming all of the
liabilities of C-Cube at the time of the merger. Pursuant to the
merger agreement, Harmonic is indemnified by the spun-off
semiconductor business for liabilities associated with
C-Cube&#146;s historic semiconductor business. However, if LSI
Logic is unable to fulfill its indemnification obligations to
Harmonic or if general liability claims not specifically
associated with C-Cube&#146;s historic semiconductor business
are asserted, we would have to assume such obligations. Those
obligations could adversely effect our financial condition.
</FONT>

<P align="left">
<B><FONT size="2">We May Be Subject To Risks Associated With
Other Acquisitions.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have made and may make investments in
complementary companies, products or technologies. If we make
acquisitions, we could have difficulty assimilating or retaining
the acquired companies&#146; personnel and operations or
integrating the acquired technology or products into ours. These
difficulties could disrupt our ongoing business, distract our
management and employees and increase our expenses. Moreover,
our operating results may suffer because of acquisition-related
expenses, amortization of intangible assets and impairment of
acquired goodwill or intangible assets. Furthermore, we may have
to incur debt or issue equity securities to pay for any future
acquisitions, the issuance of which could be dilutive to our
existing shareholders. If we are unable to successfully address
any of these risks, our business, financial condition and
operating results could be harmed.
</FONT>

<P align="left">
<B><FONT size="2">Difficulties In The Development And Production
Of Video Encoding Chips By C-Cube&#146;s Spun-off Semiconductor
Business May Adversely Impact Us.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The DiviCom business and C-Cube semiconductor
business collaborated on the production and development of two
video encoding microelectronic chips prior to the merger. In
connection with the merger, Harmonic and the spun-off
semiconductor business entered into a contractual relationship
under which Harmonic will have access to certain of the spun-off
semiconductor business technologies and products which the
DiviCom business previously depended on for its product and
service offerings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">However, under the contractual relationships
between Harmonic and the spun-off semiconductor business, which
was recently acquired by LSI&nbsp;Logic, the semiconductor
business does not have a firm
</FONT>

<P align="center"><FONT size="2">10
</FONT>

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<DIV align="left">
<FONT size="2">commitment to continue the development of video
encoding microelectronic chips. As a result, the semiconductor
business may choose not to continue future development of the
chips for any reason. The semiconductor business may also
encounter in the future technological difficulties in the
production and development of the chips. If the spun-off
semiconductor business is not able to or does not sustain its
development and production efforts in this area, we may not be
able to fully recognize the benefits of the acquisition. See
&#147;Supply, License and Development Agreement&#148; at
page&nbsp;60 of the joint proxy statement filed with the
Securities and Exchange Commission on March&nbsp;23, 2000, for
further details of Harmonic&#146;s business relationship with
the spun-off semiconductor business after the merger.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">If Sales Forecasted For A Particular Period
Are Not Realized In That Period Due To The Unpredictable Sales
Cycles Of Our Products, Our Operating Results For That Period
Will Be Harmed.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The sales cycles of many of our products,
particularly our newer products and products sold
internationally, are typically unpredictable and usually involve:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">a significant technical evaluation;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">a commitment of capital and other resources by
	cable, satellite, and other network operators;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">capital expenditures;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">time required to engineer the deployment of new
	technologies or services within broadband networks; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">testing and acceptance of new technologies that
	affect key operations.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For these and other reasons, our sales cycles
generally last three to six months, but can last up to
12&nbsp;months. If orders forecasted for a specific customer for
a particular quarter do not occur in that quarter, our operating
results for that quarter could be substantially lower than
anticipated.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of the merger, a significant portion
of our revenue is derived from solution contracts. A substantial
portion of CS division revenues are from solution contracts that
include a combination of product sales as well as design,
installation and integration services. Revenue forecasts for
solution contracts are based on the estimated timing of the
design, installation and integration of projects. Because the
solution contracts generally span several quarters and revenue
recognition is based on progress under the contract, the timing
of revenue is difficult to predict and could result in lower
than expected revenue in any particular quarter.
</FONT>

<P align="left">
<B><FONT size="2">Our Failure To Adequately Protect Our
Proprietary Rights May Adversely Affect Us.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We currently hold 39&nbsp;issued United States
patents and 8&nbsp;issued foreign patents, and have a number of
patent applications pending. Although we attempt to protect our
intellectual property rights through patents, trademarks,
copyrights, licensing arrangements, maintaining certain
technology as trade secrets and other measures, we cannot assure
you that any patent, trademark, copyright or other intellectual
property rights owned by us will not be invalidated,
circumvented or challenged, that such intellectual property
rights will provide competitive advantages to us or that any of
our pending or future patent applications will be issued with
the scope of the claims sought by us, if at all. We cannot
assure you that others will not develop technologies that are
similar or superior to our technology, duplicate our technology
or design around the patents that we own. In addition, effective
patent, copyright and trade secret protection may be unavailable
or limited in certain foreign countries in which we do business
or may do business in the future.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that the future success of our
business will depend on our ability to translate the
technological expertise and innovation of our personnel into new
and enhanced products. We generally enter into confidentiality
or license agreements with our employees, consultants, vendors
and customers as needed, and generally limit access to and
distribution of our proprietary information. Nevertheless, we
cannot assure you that the steps taken by us will prevent
misappropriation of our technology. In addition, we have taken
in the past, and may take in the future, legal action to enforce
our patents and other intellectual property rights, to protect
our trade secrets, to determine the validity and scope of the
proprietary rights of others, or to defend
</FONT>

<P align="center"><FONT size="2">11
</FONT>

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<DIV align="left">
<FONT size="2">against claims of infringement or invalidity.
Such litigation could result in substantial costs and diversion
of resources and could negatively effect our business, operating
results, financial position and liquidity.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to successfully develop and market
certain of our planned products for digital applications, we may
be required to enter into technology development or licensing
agreements with third parties. Although many companies are often
willing to enter into such technology development or licensing
agreements, we cannot assure you that such agreements will be
negotiated on terms acceptable to us, or at all. The failure to
enter into technology development or licensing agreements, when
necessary, could limit our ability to develop and market new
products and could cause our business to suffer.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Harmonic&#146;s industry is characterized by the
existence of a large number of patents and frequent claims and
related litigation regarding patent and other intellectual
property rights. In particular, leading companies in the
telecommunications industry have extensive patent portfolios.
From time to time, third parties, including these leading
companies, have asserted and may assert exclusive patent,
copyright, trademark and other intellectual property rights
against us or our customers. Indeed, a number of third parties,
including leading companies, have asserted patent rights to
technologies that are important to us. We expect to increasingly
be subject to infringement claims asserted by third parties as
the numbers of products and competitors in the
telecommunications industry grow. In this regard, since December
2000, we have been in communication with several of
Harmonic&#146;s customers who have been contacted by one of
these leading companies that believes certain of our products
require a license under a number of their patents. We currently
are reviewing the identified patents to examine whether we
consider a license necessary. While it is our understanding that
the third party is willing to grant our customers a
non-exclusive license under the identified patents, there can be
no assurance that the terms of any offered license would be
acceptable to our customers or that failure to obtain a license
or the costs associated with any license would not cause our
operating results to be materially adversely affected.
</FONT>

<P align="left">
<B><FONT size="2">We Purchase Several Key Components,
Subassemblies And Modules Used In The Manufacture Or Integration
Of Our Products From Sole Or Limited Sources, And We Are
Increasingly Dependent On Contract Manufacturers.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Many components, subassemblies and modules
necessary for the manufacture or integration of our products are
obtained from a sole supplier or a limited group of suppliers.
Our reliance on sole or limited suppliers, particularly foreign
suppliers, and our increased reliance on subcontractors since
the merger with C-Cube involves several risks, including a
potential inability to obtain an adequate supply of required
components, subassemblies or modules and reduced control over
pricing, quality and timely delivery of components,
subassemblies or modules. In particular, certain optical
components have in the past been in short supply and are
available only from a small number of suppliers, including sole
source suppliers. While we expend considerable efforts to
qualify additional optical component sources, consolidation of
suppliers in the industry and the small number of viable
alternatives have limited the results of these efforts. We do
not generally maintain long-term agreements with any of our
suppliers or subcontractors. An inability to obtain adequate
deliveries or any other circumstance that would require us to
seek alternative sources of supply could affect our ability to
ship our products on a timely basis, which could damage
relationships with current and prospective customers and harm
our business. We attempt to limit this risk by maintaining
safety stocks of these components, subassemblies and modules. As
a result of this investment in inventories, we have in the past
and in the future may be subject to risk of excess and obsolete
inventories, which could harm our business. In this regard, our
gross margins and operating results for the last five quarters
were adversely affected by excess and obsolete inventory charges
of approximately $49&nbsp;million.
</FONT>

<P align="left">
<B><FONT size="2">We Face Risks Associated With Having Important
Facilities And Resources Located In Israel.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Harmonic maintains two facilities in the State of
Israel with a total of approximately 80&nbsp;employees. The
personnel at these facilities represent a significant portion of
our research and development operations. Accordingly, we are
directly influenced by the political, economic and military
conditions affecting Israel, and any major hostilities involving
Israel or the interruption or curtailment of trade between
Israel and its present trading partners could significantly harm
our business. The September terrorist attacks, the ongoing
U.S.&nbsp;war
</FONT>

<P align="center"><FONT size="2">12
</FONT>

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<DIV align="left">
<FONT size="2">on terrorism and the escalation of terrorist
attacks and hostilities within Israel have heightened these
risks. We cannot assure you that the protraction or escalation
of current tensions in the Middle East will not adversely affect
our business and results of operations.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, most of our employees in Israel are
currently obligated to perform annual reserve duty in the Israel
Defense Forces and are subject to being called for active
military duty at any time. We cannot predict the effect of these
obligations on Harmonic in the future.
</FONT>

<P align="left">
<B><FONT size="2">We Are The Subject Of Securities
Class&nbsp;Action Claims And Other Litigation Which, If
Adversely Determined, Could Harm Our Business And Operating
Results.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Between June&nbsp;28 and August&nbsp;25, 2000,
several actions alleging violations of the federal securities
laws by Harmonic and certain of its officers and directors (some
of whom are no longer with Harmonic) were filed in or removed to
the United States District Court for the Northern District of
California. The actions subsequently were consolidated.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A consolidated complaint, filed on
December&nbsp;7, 2000, was brought on behalf of a purported
class of persons who purchased Harmonic&#146;s publicly traded
securities between January&nbsp;19 and June&nbsp;26, 2000. The
complaint also alleged claims on behalf of a purported subclass
of persons who purchased C-Cube securities between
January&nbsp;19 and May&nbsp;3, 2000. In addition to Harmonic
and certain of its officers and directors, the complaint also
named C-Cube Microsystems Inc. and several of its officers and
directors as defendants. The complaint alleged that, by making
false or misleading statements regarding Harmonic&#146;s
prospects and customers and its acquisition of C-Cube, certain
defendants violated sections&nbsp;10(b) and 20(a) of the
Securities Exchange Act of 1934. The complaint also alleged that
certain defendants violated section 14(a) of the Exchange Act
and sections&nbsp;11, 12(a)(2), and 15 of the Securities Act of
1933 by filing a false or misleading registration statement,
prospectus, and joint proxy in connection with the C-Cube
acquisition.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On July&nbsp;3, 2001, the Court dismissed the
consolidated complaint with leave to amend. An amended complaint
alleging the same claims against the same defendants was filed
on August&nbsp;13, 2001. Defendants moved to dismiss the amended
complaint on September&nbsp;24, 2001. Pursuant to the
Court&#146;s July&nbsp;3, 2001 order, no hearing on the motions
will be held unless the Court sets one.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A derivative action purporting to be on behalf of
Harmonic was filed against its then-current directors in the
Superior Court for the County of Santa Clara on
September&nbsp;5, 2000. Harmonic also was named as a nominal
defendant. The complaint is based on allegations similar to
those found in the securities class actions and claims that the
defendants breached their fiduciary duties by, among other
things, causing Harmonic to violate federal securities laws. The
derivative action was removed to the United States District
Court for the Northern District of California on
September&nbsp;20, 2000. All deadlines in this action have been
stayed pending resolution of the motions to dismiss the
securities actions. A case management conference is scheduled
for April&nbsp;5, 2002.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Based on its review of the complaints filed in
the securities class action, Harmonic believes that it has
meritorious defenses and intends to defend itself vigorously.
There can be no assurance, however, that Harmonic will prevail.
An unfavorable outcome of this litigation could have a material
adverse effect on Harmonic&#146;s business, operating results,
financial position and liquidity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In November 2001, we were sued in Tennessee state
court by a company alleging breach of contract and breach of a
Tennessee statute relating to retailers and suppliers. The suit
has a claim for $2.5&nbsp;million and other unspecified damages,
lost profits and attorneys&#146; fees. The suit has since been
removed to Federal Court and a trial date has been set for June
2003. Harmonic believes that it has meritorious defenses and
will defend the suit vigorously. However, we cannot assure you
that an unfavorable outcome will not adversely impact our
business, operating results, financial position and liquidity.
</FONT>

<P align="left">
<B><FONT size="2">Our Stock Price May Be Volatile.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The market price of our common stock has
fluctuated significantly in the past, particularly in recent
years, and is likely to fluctuate in the future. In addition,
the securities markets have experienced significant
</FONT>

<P align="center"><FONT size="2">13
</FONT>

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<DIV align="left">
<FONT size="2">price and volume fluctuations and the market
prices of the securities of technology companies have been
especially volatile. Investors may be unable to resell their
shares of our common stock at or above their purchase price. In
the past, companies that have experienced volatility in the
market price of their stock have been the object of securities
class action litigation.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">We Rely On A Continuous Power Supply To
Conduct Our Operations, And California&#146;s Current Electrical
And Natural Gas Crisis Could Disrupt Our Operations And Increase
Our Expenses.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We rely on a continuous power supply for
manufacturing and to conduct our business operations.
Interruptions in electrical power supplies in California in the
early part of last year could recur in the future. In addition,
the cost of electricity and natural gas has risen significantly.
Power outages could disrupt our manufacturing and business
operations and those of many of our suppliers, and could cause
us to fail to meet production schedules and commitments to
customers and other third parties. Any disruption to our
operations or those of our suppliers could result in damage to
our current and prospective business relationships and could
result in lost revenue and additional expenses, thereby harming
our business and operating results.
</FONT>

<P align="left">
<B><FONT size="2">Our Certificate Of Incorporation And Bylaws
And Delaware Law Contain Provisions That Could Discourage A
Takeover.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Provisions of our Amended and Restated
Certificate of Incorporation, Bylaws, and Delaware law could
make it more difficult for a third party to acquire us, even if
doing so would be beneficial to our stockholders.
</FONT>

<P align="center"><FONT size="2">14
</FONT>

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<!-- link1 "<FONT size="2">USE OF PROCEEDS</FONT>" -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="center">
<B><FONT size="2">USE OF PROCEEDS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise indicated in the prospectus
supplement, the net proceeds from the sale of securities offered
by this prospectus will be used for general corporate purposes,
including capital expenditures and to meet working capital
needs. We expect from time to time to evaluate the acquisition
of businesses, products and technologies for which a portion of
the net proceeds may be used. Pending such uses, we will invest
the net proceeds in interest-bearing securities.
</FONT>

<!-- link1 "<FONT size="2">RATIO OF EARNINGS AVAILABLE TO COVER FIXED CHARGES</FONT>" -->
<DIV align="left"><A NAME="003"></A></DIV>

<P align="center">
<B><FONT size="2">RATIO OF EARNINGS AVAILABLE TO COVER FIXED
CHARGES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The ratio of earnings to combined fixed charges
and preferred stock dividends is identical to the ratio of
earnings to fixed charges because we have not issued any
preferred stock. The ratio of earnings to fixed charges and the
ratio of earnings to combined fixed charges and preferred stock
dividends for each of the periods indicated is as follows:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="60%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="19"></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><B><FONT size="1">Fiscal Year Ended December 31,</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="19" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1997</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1998</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">1999</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2000</FONT></B></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">2001</FONT></B></TD>
</TR>

<TR>
	<TD></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Ratio of earnings available to cover fixed
	charges(a)
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">12:1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">51:1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left">
<HR size="1" width="18%" align="left" noshade>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="4%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">(a)&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Due to our losses in 1998, 2000, and 2001, the
	ratio coverage was less than 1:1. Additional earnings of
	$21.5&nbsp;million, $1.7&nbsp;billion, and $167.2&nbsp;million
	would have been required in each of those periods, respectively,
	to achieve a coverage of 1:1.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In calculating the ratio of earnings available to
cover fixed charges, &#147;earnings&#148; consist of net income
(loss) before provisions for income taxes plus fixed charges.
Fixed charges consist of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">interest expense; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">one-third of our rental expense, which we believe
	to be representative of interest attributable to rentals.
	</FONT></TD>
</TR>

</TABLE>

<!-- link1 "<FONT size="2">DESCRIPTION OF THE DEBT SECURITIES</FONT>" -->
<DIV align="left"><A NAME="004"></A></DIV>

<P align="center">
<B><FONT size="2">DESCRIPTION OF THE DEBT SECURITIES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The debt securities may be either secured or
unsecured and will either be our senior debt securities or our
subordinated debt securities. The debt securities will be issued
under one or more separate indentures between us and a trustee.
Senior debt securities will be issued under a senior indenture
and subordinated debt securities will be issued under a
subordinated indenture. Together, the senior indenture and
subordinated indenture are called indentures. This prospectus,
together with the applicable prospectus supplement, will
describe all the material terms of a particular series of debt
securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following is a summary of selected provisions
and definitions of the indentures. The summary of selected
provisions of the indentures and the debt securities appearing
below is not complete and is subject to, and qualified entirely
by reference to, all of the provisions of the applicable
indenture and certificates evidencing the applicable debt
securities. For additional information, you should look at the
applicable indenture and the certificate evidencing the
applicable debt security that is filed as an exhibit to the
registration statement which includes this prospectus. In this
description of the debt securities, the words
&#147;Harmonic&#148;, &#147;we&#148;, &#147;us,&#148;
&#147;its&#148; or &#147;our&#148; refer only to Harmonic Inc.
and not to any of our subsidiaries.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following description sets forth selected
general terms and provisions of the applicable indenture and
debt securities to which any prospectus supplement may relate.
Other specific terms of the applicable indenture and debt
securities will be described in the applicable prospectus
supplement. If any particular terms of the indenture or debt
securities described in a prospectus supplement differ from any
of the terms described below, then the terms described below
will be deemed to have been superceded by that prospectus
supplement.
</FONT>

<P align="center"><FONT size="2">15
</FONT>
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<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Debt securities may be issued in separate series
without limitation as to aggregate principal amount. We may
specify a maximum aggregate principal amount for the debt
securities of any series.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are not limited as to the amount of debt
securities we may issue under the indentures. Unless otherwise
provided in a prospectus supplement, a series of debt securities
may be reopened to issue additional debt securities of such
series.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The prospectus supplement relating to a
particular series of debt securities will set forth:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">whether the debt securities are senior or
	subordinated,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the offering price,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the title,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any limit on the aggregate principal amount,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the person who shall be entitled to receive
	interest, if other than the record holder on the record date,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the date or dates the principal will be payable,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the interest rate or rates, which may be fixed or
	variable, if any, the date interest will accrue, the interest
	payment dates and the regular record dates or the method for
	calculating the dates and rates,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the place where payments may be made,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any mandatory or optional redemption provisions
	or sinking fund provisions and any applicable redemption or
	purchase prices associated with these provisions,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if issued other than in denominations of U.S.
	$1,000 or any multiple of U.S. $1,000, the denominations in
	which the debt securities shall be issuable,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if applicable, the method for determining how the
	principal, premium, if any, or interest will be calculated by
	reference to an index or formula,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if other than U.S. currency, the currency or
	currency units in which principal, premium, if any, or interest
	will be payable and whether we or a holder may elect payment to
	be made in a different currency,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the portion of the principal amount that will be
	payable upon acceleration of maturity, if other than the entire
	principal amount,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if the principal amount payable at stated
	maturity will not be determinable as of any date prior to stated
	maturity, the amount or method for determining the amount which
	will be deemed to be the principal amount,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if applicable, whether the debt securities shall
	be subject to the defeasance provisions described below under
	&#147;Satisfaction and discharge; defeasance&#148; or such other
	defeasance provisions specified in the applicable prospectus
	supplement for the debt securities,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any conversion or exchange provisions,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">whether the debt securities will be issuable in
	the form of a global security,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any subordination provisions applicable to the
	subordinated debt securities if different from those described
	below under &#147;Subordinated Debt Securities,&#148;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any paying agents, authenticating agents,
	security registrars or other agents for the debt securities,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any provisions relating to any security provided
	for the debt securities, including any provisions regarding the
	circumstances under which collateral may be released or
	substituted,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any deletions of, or changes or additions to, the
	events of default, acceleration provisions or covenants,
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">16
</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any provisions relating to guaranties for the
	securities and any circumstances under which there may be
	additional obligors; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any other specific terms of such debt securities.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise specified in the prospectus
supplement, the debt securities will be registered debt
securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Debt securities may be sold at a substantial
discount below their stated principal amount, bearing no
interest or interest at a rate which at time of issuance is
below market rates. The United States federal income tax
considerations applicable to debt securities sold at a discount
will be described in the applicable prospectus supplement.
</FONT>

<P align="left">
<B><FONT size="2">Exchange and Transfer</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Debt securities may be transferred or exchanged
at the office of the security registrar or at the office of any
transfer agent designated by us.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will not impose a service charge for any
transfer or exchange, but we may require holders to pay any tax
or other governmental charges associated with any transfer or
exchange.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of any partial redemption of debt
securities of any series, we will not be required to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">issue, register the transfer of, or exchange, any
	debt security of that series during a period beginning at the
	opening of business 15&nbsp;days before the day of mailing of a
	notice of redemption and ending at the close of business on the
	day of the mailing, or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">register the transfer of or exchange any debt
	security of that series selected for redemption, in whole or in
	part, except the unredeemed portion being redeemed in part.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have initially appointed the trustee as the
security registrar. Any transfer agent, and any other security
registrar, will be named in the prospectus supplement. We may
designate additional transfer agents or change transfer agents
or change the office of the transfer agent. However, we will be
required to maintain a transfer agent in each place of payment
for the debt securities of each series.
</FONT>

<P align="left">
<B><FONT size="2">Global Securities</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The debt securities of any series may be
represented, in whole or in part, by one or more global
securities. Each global security will:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">be registered in the name of a depositary, or its
	nominee, that we will identify in a prospectus supplement,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">be deposited with the depositary or nominee or
	custodian, and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">bear any required legends.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No global security may be exchanged in whole or
in part for debt securities registered in the name of any person
other than the depositary or any nominee unless:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the depositary has notified us that it is
	unwilling or unable to continue as depositary or has ceased to
	be qualified to act as depositary,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">an event of default is continuing with respect to
	the debt securities of the applicable series, or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any other circumstance described in a prospectus
	supplement has occurred permitting or requiring the issuance of
	any such security.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As long as the depositary, or its nominee, is the
registered owner of a global security, the depositary or nominee
will be considered the sole owner and holder of the debt
securities represented by the global security
</FONT>

<P align="center"><FONT size="2">17
</FONT>

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<DIV align="left">
<FONT size="2">for all purposes under the indentures. Except in
the above limited circumstances, owners of beneficial interests
in a global security will not be:
</FONT>
</DIV>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">entitled to have the debt securities registered
	in their names,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">entitled to physical delivery of certificated
	debt securities, or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">considered to be holders of those debt securities
	under the indenture.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Payments on a global security will be made to the
depositary or its nominee as the holder of the global security.
Some jurisdictions have laws that require that certain
purchasers of securities take physical delivery of such
securities in definitive form. These laws may impair the ability
to transfer beneficial interests in a global security.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Institutions that have accounts with the
depositary or its nominee are referred to as
&#147;participants.&#148; Ownership of beneficial interests in a
global security will be limited to participants and to persons
that may hold beneficial interests through participants. The
depositary will credit, on its book-entry registration and
transfer system, the respective principal amounts of debt
securities represented by the global security to the accounts of
its participants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Ownership of beneficial interests in a global
security will be shown on and effected through records
maintained by the depositary, with respect to participants&#146;
interests, or any participant, with respect to interests of
persons held by participants on their behalf.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Payments, transfers and exchanges relating to
beneficial interests in a global security will be subject to
policies and procedures of the depositary. The depositary
policies and procedures may change from time to time. Neither we
nor any trustee will have any responsibility or liability for
the depositary&#146;s or any participant&#146;s records with
respect to beneficial interests in a global security.
</FONT>

<P align="left">
<B><FONT size="2">Payment and Paying Agents</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise indicated in a prospectus
supplement, the provisions described in this paragraph will
apply to the debt securities. Payment of interest on a debt
security on any interest payment date will be made to the person
in whose name the debt security is registered at the close of
business on the regular record date. Payment on debt securities
of a particular series will be payable at the office of a paying
agent or paying agents designated by us. However, at our option,
we may pay interest by mailing a check to the record holder. The
corporate trust office will be designated as our sole paying
agent.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may also name any other paying agents in a
prospectus supplement. We may designate additional paying
agents, change paying agents or change the office of any paying
agent. However, we will be required to maintain a paying agent
in each place of payment for the debt securities of a particular
series.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All moneys paid by us to a paying agent for
payment on any debt security which remain unclaimed for a period
ending the earlier of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">10 business days prior to the date the money
	would be turned over to the applicable state, or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">at the end of two years after such payment was
	due,
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">will be repaid to us. Thereafter, the holder may
look only to us for such payment.
</FONT>

<P align="left">
<B><FONT size="2">No Protection in the Event of a Change of
Control</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise indicated in a prospectus
supplement with respect to a particular series of debt series,
the debt securities will not contain any provisions which may
afford holders of the debt securities protection in the event we
have a change in control or in the event of a highly leveraged
transaction (whether or not such transaction results in a change
in control).
</FONT>

<P align="center"><FONT size="2">18
</FONT>

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<P align="left">
<B><FONT size="2">Covenants</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless otherwise indicated in a prospectus
supplement, the debt securities will not contain any restrictive
covenants, including covenants restricting either us or any of
our subsidiaries from incurring, issuing, assuming or
guarantying any indebtedness secured by a lien on any of our or
our subsidiaries&#146; property or capital stock, or restricting
either us or any of our subsidiaries from entering into sale and
leaseback transactions.
</FONT>

<P align="left">
<B><FONT size="2">Consolidation, Merger and Sale of
Assets</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless we indicate otherwise in a prospectus
supplement, we may not consolidate with or merge into any other
person, in a transaction in which we are not the surviving
corporation, or convey, transfer or lease our properties and
assets substantially as an entirety to, any person, unless:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the successor entity, if any, is a U.S.
	corporation, limited liability company, partnership or trust,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the successor entity assumes our obligations on
	the debt securities and under the indentures,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">immediately after giving effect to the
	transaction, no default or event of default shall have occurred
	and be continuing, and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">certain other conditions are met.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Events of Default</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless we indicate otherwise in a prospectus
supplement, the following will be events of default for any
series of debt securities under the indentures:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(1)&nbsp;we fail to pay principal of or any
	premium on any debt security of that series when due,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(2)&nbsp;we fail to pay any interest on any debt
	security of that series for 30&nbsp;days after it becomes due,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(3)&nbsp;we fail to deposit any sinking fund
	payment when due,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(4)&nbsp;we fail to perform any other covenant in
	the indenture and such failure continues for 90&nbsp;days after
	we are given the notice required in the indentures, and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(5)&nbsp;certain events including bankruptcy,
	insolvency or reorganization of Harmonic.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Additional or different events of default
applicable to a series of debt securities may be described in a
prospectus supplement. An event of default of one series of debt
securities is not necessarily an event of default for any other
series of debt securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The trustee may withhold notice to the holders of
any default, except defaults in the payment of principal,
premium, if any, interest, any sinking fund installment on, or
with respect to any conversion right of, the debt securities of
such series. However, the trustee must consider it to be in the
interest of the holders of the debt securities of such series to
withhold this notice.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless we indicate otherwise in a prospectus
supplement, if an event of default, other than an event of
default described in clause&nbsp;(5) above, shall occur and be
continuing, either the trustee or the holders of at least 25% in
aggregate principal amount of the outstanding securities of that
series may declare the principal amount of the debt securities
of that series (or if any debt securities of that series are
original issue discount securities, such other amount as may be
specified in the applicable prospectus supplement), together
with accrued and unpaid interest, if any, thereon to be due and
payable immediately.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If an event of default described in
clause&nbsp;(5) above shall occur, the principal amount of all
the debt securities of that series (or if any debt securities of
that series are original issue discount securities, such other
amount as may be specified in the applicable prospectus
supplement), together with accrued and unpaid interest, if any,
thereon will automatically become immediately due and payable.
Any payment by us on the subordinated debt securities following
any such acceleration will be subject to the subordination
provisions described below under &#147;Subordinated Debt
Securities.&#148;
</FONT>

<P align="center"><FONT size="2">19
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After acceleration the holders of a majority in
aggregate principal amount of the outstanding securities of that
series may, under certain circumstances, rescind and annul such
acceleration if all events of default, other than the
non-payment of accelerated principal, or other specified
amounts, have been cured or waived.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Other than the duty to act with the required care
during an event of default, the trustee will not be obligated to
exercise any of its rights or powers at the request of the
holders unless the holders shall have offered to the trustee
reasonable indemnity. Generally, the holders of a majority in
aggregate principal amount of the outstanding debt securities of
any series will have the right to direct the time, method and
place of conducting of any proceeding for any remedy available
to the trustee or exercising any trust or power conferred on the
trustee.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A holder will not have any right to institute any
proceeding under the indentures, or for the appointment of a
receiver or a trustee, or for any other remedy under the
indentures, unless:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(1)&nbsp;the holder has previously given to the
	trustee written notice of a continuing event of default with
	respect to the debt securities of that series,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(2)&nbsp;the holders of at least a majority in
	aggregate principal amount of the outstanding debt securities of
	that series have made a written request and have offered
	reasonable indemnity to the trustee to institute the proceeding,
	and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(3)&nbsp;the trustee has failed to institute the
	proceeding and has not received direction inconsistent with the
	original request from the holders of a majority in aggregate
	principal amount of the outstanding debt securities of that
	series within 60&nbsp;days after the original request.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Holders may, however, sue to enforce the payment
of principal, premium or interest on any debt security on or
after the due date or to enforce the right, if any, to convert
any debt security (if the debt security is convertible) without
following the procedures listed in (1)&nbsp;through
(3)&nbsp;above.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will furnish the trustee an annual statement
by our officers as to whether or not we are in default in the
performance of the conditions and covenants under the indenture
and, if so, specifying all known defaults.
</FONT>

<P align="left">
<B><FONT size="2">Modification and Waiver</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Unless we indicate otherwise in a prospectus
supplement, Harmonic and the applicable trustee may make
modifications and amendments to an indenture with the consent of
the holders of a majority in aggregate principal amount of the
outstanding securities of each series affected by the
modification or amendment.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may also make modifications and amendments to
the indentures for the benefit of holders without their consent,
for certain purposes including, but not limited to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">providing for our successor to assume the
	covenants under the indenture,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">adding covenants or events of default,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">making certain changes to facilitate the issuance
	of the securities,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">securing the securities,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">providing for a successor trustee or additional
	trustees,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">curing any ambiguities or inconsistencies,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">providing for guaranties of, or additional
	obligors on, the securities;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">permitting of facilitating the defeasance and
	discharge of the securities, and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">other changes specified in the indenture.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">20
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">However, neither we nor the trustee may make any
modification or amendment without the consent of the holder of
each outstanding security of that series affected by the
modification or amendment if such modification or amendment
would:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">change the stated maturity of any debt security,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reduce the principal, premium, if any, or
	interest on any debt security,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">reduce the principal of an original issue
	discount security or any other debt security payable on
	acceleration of maturity,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">change the place of payment or the currency in
	which any debt security is payable,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">impair the right to enforce any payment after the
	stated maturity or redemption date,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if subordinated debt securities, modify the
	subordination provisions in a materially adverse manner to the
	holders,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">adversely affect the right to convert any debt
	security if the debt security is a convertible debt security, or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">change the provisions in the indenture that
	relate to modifying or amending the indenture.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Satisfaction and Discharge;
Defeasance</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may be discharged from our obligations on the
debt securities of any series that have matured or will mature
or be redeemed within one year if we deposit enough money with
the trustee to pay all the principal, interest and any premium
due to the stated maturity date or redemption date of the debt
securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each indenture contains a provision that permits
us to elect either or both of the following:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">We may elect to be discharged from all of our
	obligations, subject to limited exceptions, with respect to any
	series of debt securities then outstanding. If we make this
	election, the holders of the debt securities of the series will
	not be entitled to the benefits of the indenture, except for the
	rights of holders to receive payments on debt securities or the
	registration of transfer and exchange of debt securities and
	replacement of lost, stolen or mutilated debt securities.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">We may elect to be released from our obligations
	under some or all of any financial or restrictive covenants
	applicable to the series of debt securities to which the
	election relates and from the consequences of an event of
	default resulting from a breach of these covenants.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To make either of the above elections, we must
deposit in trust with the trustee enough money to pay in full
the principal, interest and premium on the debt securities. This
amount may be made in cash and/or U.S.&nbsp;government
obligations or, in the case of debt securities denominated in a
currency other than United States dollars, foreign government
obligations. As a condition to either of the above elections, we
must deliver to the trustee an opinion of counsel that the
holders of the debt securities will not recognize income, gain
or loss for federal income tax purposes as a result of the
action.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;foreign government obligations&#148; means,
with respect to debt securities of any series that are
denominated in a currency other than U.S. dollars:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">direct obligations of the government that issued
	or caused to be issued the currency in which such securities are
	denominated and for the payment of which obligations its full
	faith and credit is pledged, or, with respect to debt securities
	of any series which are denominated in euros, direct obligations
	of certain members of the European Union for the payment of
	which obligations the full faith and credit of such member is
	pledged, which in each case are not callable or redeemable at
	the option of the issuer thereof; or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">obligations of a person controlled or supervised
	by or acting as an agency or instrumentality of that government
	the timely payment of which is unconditionally guaranteed as a
	full faith and credit obligation by that government, which are
	not callable or redeemable at the option of the issuer thereof.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">21
</FONT>

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<P align="left">
<B><FONT size="2">Notices</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Notices to holders will be given by mail to the
addresses of the holders in the security register.
</FONT>

<P align="left">
<B><FONT size="2">Governing Law</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indentures and the debt securities will be
governed by, and construed under, the laws of the State of New
York, without regard to principles of conflicts of laws.
</FONT>

<P align="left">
<B><FONT size="2">No Personal Liability of Directors, Officers,
Employees and Stockholders</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No incorporator, stockholder, employee, agent,
officer, director or subsidiary of ours will have any liability
for any obligations of ours, or because of the creation of any
indebtedness under the debt securities, the indentures or
supplemental indentures. The indentures provide that all such
liability is expressly waived and released as a condition of,
and as a consideration for, the execution of such indentures and
the issuance of the debt securities.
</FONT>

<P align="left">
<B><FONT size="2">Regarding the Trustee</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indentures limit the right of the trustee,
should it become a creditor of Harmonic, to obtain payment of
claims or secure its claims.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The trustee is permitted to engage in certain
other transactions. However, if the trustee acquires any
conflicting interest, and there is a default under the debt
securities of any series for which it is trustee, the trustee
must eliminate the conflict or resign.
</FONT>

<P align="left">
<B><FONT size="2">Subordinated Debt Securities</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The indebtedness evidenced by the subordinated
debt securities of any series is subordinated to the extent
provided in the subordinated indenture and the applicable
prospectus supplement to the prior payment in full, in cash or
other payment satisfactory to the holders of senior debt, of all
senior debt, including any senior debt securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon any distribution of our assets upon any
dissolution, winding up, liquidation or reorganization, payments
on the subordinated debt securities will be subordinated in
right of payment to the prior payment in full in cash or other
payment satisfactory to holders of senior debt of all senior
debt.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the event of any acceleration of the
subordinated debt securities because of an event of default,
holders of any senior debt would be entitled to payment in full
in cash or other payment satisfactory to holders of senior debt
of all senior debt before the holders of subordinated debt
securities are entitled to receive any payment or distribution.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are required to promptly notify holders of
senior debt or their representatives under the subordinated
indenture if payment of the subordinated debt securities is
accelerated because of an event of default.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the subordinated indenture, we may also not
make payment on the subordinated debt securities if:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">a default in the payment of senior debt occurs
	and is continuing beyond any grace period (a &#147;payment
	default&#148;), or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any other default occurs and is continuing with
	respect to designated senior debt that permits holders of
	designated senior debt to accelerate its maturity, and the
	trustee receives a payment blockage notice from us or some other
	person permitted to give the notice under the subordinated
	indenture (a &#147;non-payment default&#148;).
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">22
</FONT>

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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may and shall resume payments on the
subordinated debt securities:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">in case of a payment default, when the default is
	cured or waived or ceases to exist, and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">in case of a nonpayment default, the earlier of
	when the default is cured or waived or ceases to exist or
	179&nbsp;days after the receipt of the payment blockage notice
	if the maturity of the designated senior debt has not been
	accelerated.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No new payment blockage period may start unless
365&nbsp;days have elapsed from the effectiveness of the prior
payment blockage notice.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">No nonpayment default that existed or was
continuing on the date of delivery of any payment blockage
notice to the trustee shall be the basis for a subsequent
payment blockage notice.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As a result of these subordination provisions, in
the event of our bankruptcy, dissolution or reorganization,
holders of senior debt may receive more, ratably, and holders of
the subordinated debt securities may receive less, ratably, than
our other creditors. The subordination provisions will not
prevent the occurrence of any event of default under the
subordinated indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The subordination provisions will not apply to
payments from money or government obligations held in trust by
the trustee for the payment of principal, interest and premium,
if any, on subordinated debt securities pursuant to the
provisions described under &#147;&#151;&nbsp;Satisfaction and
discharge; defeasance,&#148; if the subordination provisions
were not violated at the time the money or government
obligations were deposited into trust.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the trustee or any holder receives any payment
that should not have been made to them in contravention of
subordination provisions before all senior debt is paid in full
in cash or other payment satisfactory to holders of senior debt,
then such payment will be held in trust for the holders of
senior debt.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Senior debt securities will constitute senior
debt under the subordinated indenture.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Additional or different subordination provisions
may be described in a prospectus supplement relating to a
particular series of debt securities.
</FONT>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Definitions</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;designated senior debt&#148; means our
obligations under any of our senior debt that expressly provides
that it is &#147;designated senior debt.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;indebtedness&#148; means:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(1)&nbsp;all of our indebtedness, obligations and
	other liabilities for:
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="10%"></TD>
	<TD width="1%"></TD>
	<TD width="89%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">borrowed money, including our obligations in
	respect of overdrafts, foreign exchange contracts, currency
	exchange agreements, interest rate protection agreements, and
	any loans or advances from banks, whether or not evidenced by
	notes or similar instruments, or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">evidenced by bonds, debentures, notes or similar
	instruments, whether or not the recourse of the lender is to the
	whole of our assets or to only a portion of our assets, other
	than any account payable or other accrued current liability or
	obligation incurred in the ordinary course of business in
	connection with the obtaining of materials or services,
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(2)&nbsp;all of our reimbursement obligations and
	other liabilities with respect to letters of credit, bank
	guarantees or bankers&#146; acceptances,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(3)&nbsp;all of our obligations and liabilities
	in respect of leases required, in conformity with generally
	accepted accounting principles, to be accounted for as
	capitalized lease obligations on our balance sheet,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(4)&nbsp;all of our obligations and other
	liabilities under any other any lease or related document
	(including a purchase agreement) in connection with the lease of
	real property which provides that we are contractually obligated
	to purchase or cause a third party to purchase the leased
	property and thereby
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">23
</FONT>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">guarantee a minimum residual value of the leased
	property to the lessor and our obligations under such lease or
	related document to purchase or to cause a third party to
	purchase such leased property,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(5)&nbsp;all of our obligations with respect to
	an interest rate or other swap, cap or collar agreement or other
	similar instrument or agreement or foreign currency hedge,
	exchange, purchase or similar instrument or agreement,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(6)&nbsp;all of our direct or indirect guaranties
	or similar agreements in respect of, and obligations or
	liabilities to purchase or otherwise acquire or otherwise assure
	a creditor against loss in respect of, indebtedness, obligations
	or liabilities of another person of the kind described in
	clauses&nbsp;(1) through&nbsp;(5),
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(7)&nbsp;any of our indebtedness or other
	obligations described in clauses&nbsp;(1) through&nbsp;(6)
	secured by any mortgage, pledge, lien or other encumbrance
	existing on property which is owned or held by us regardless of
	whether the indebtedness or other obligation secured thereby
	shall have been assumed by us and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(8)&nbsp;any and all deferrals, renewals,
	extensions, refundings, amendments, modifications or supplements
	to, any indebtedness, obligation or liability of the kind
	described in clauses&nbsp;(1) through&nbsp;(7).
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;senior debt&#148; means the principal of,
premium, if any, interest, including all interest accruing
subsequent to the commencement of any bankruptcy or similar
proceeding, rent and all fees, costs, expenses and other amounts
accrued or due in connection with our indebtedness, including
all deferrals, renewals, extensions or refundings of, or
modifications or supplements to, that indebtedness. Senior debt
shall not include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any debt that expressly provides it shall not be
	senior in right of payment to the subordinated debt securities
	or expressly provides that such indebtedness is on the same
	basis or &#147;junior&#148; to the subordinated debt securities,
	or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">debt to any of our subsidiaries, a majority of
	the voting stock of which is owned, directly or indirectly, by
	us.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">&#147;subsidiary&#148; means any entity of which
more than a majority of the outstanding voting stock having the
power to elect a majority of the board of directors of such
entity (in the case of a corporation) is, or of which at least a
majority of the equity interests (in the case of an entity which
is not a corporation) are at the time owned, directly or
indirectly, by us or by one or more or our other subsidiaries or
by a combination of us and our other subsidiaries. For purposes
of this definition, &#147;voting stock&#148; means stock which
ordinarily has voting power for the election of directors,
whether at all times or so long as no senior class of stock has
such voting power by reason of any contingency.
</FONT>

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<P align="center">
<B><FONT size="2">DESCRIPTION OF PREFERRED STOCK</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The board of directors has the authority, without
further action by the stockholders, to issue up to 5,000,000
shares of preferred stock in one or more series and to fix the
rights, preferences, privileges and restrictions thereof,
including dividend rights, conversion rights, voting rights,
terms of redemption, liquidation preferences, sinking fund terms
and the number of shares constituting any series or the
designation of such series, without any further vote or action
by stockholders. No shares of preferred stock of Harmonic are
outstanding.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our board of directors has the authority, without
stockholder consent, subject to certain limitations imposed by
law or our bylaws, to issue one or more series of preferred
stock at any time. The rights, preferences and restrictions of
the preferred stock of each series will be fixed by the
certificate of designation relating to each particular series. A
prospectus supplement relating to each such series will specify
the terms of the preferred stock as determined by our board of
directors, including the following:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the number of shares in any series,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the designation for any series by number, letter
	or title that shall distinguish the series from any other series
	of preferred stock,
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">24
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the dividend rate and whether dividends on that
	series of preferred stock will be cumulative, noncumulative or
	partially cumulative,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the voting rights of that series of preferred
	stock, if any,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the conversion provisions applicable to that
	series of preferred stock, if any,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the redemption or sinking fund provisions
	applicable to that series of preferred stock, if any,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the liquidation preference per share of that
	series of preferred stock, if any, and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the terms of any other preferences or rights, if
	any, applicable to that series of preferred stock.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will describe the specific terms of a
particular series of preferred stock in the prospectus
supplement relating to that series. The description of preferred
stock set forth above and in any description of the terms of a
particular series of preferred stock in the related prospectus
supplement will not be complete. You should refer to the
applicable certificate of designation for such series of
preferred stock for complete information with respect to such
preferred stock. The prospectus supplement will also contain a
description of certain U.S.&nbsp;federal income tax consequences
relating to the preferred stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although it has no present intention to do so,
our board of directors, without stockholder approval, may issue
preferred stock with voting and conversion rights which could
adversely affect the voting power of the holders of common
stock. If we issue preferred stock, it may have the effect of
delaying, deferring or preventing a change of control.
</FONT>

<!-- link1 "<FONT size="2">DESCRIPTION OF COMMON STOCK</FONT>" -->
<DIV align="left"><A NAME="006"></A></DIV>

<P align="center">
<B><FONT size="2">DESCRIPTION OF COMMON STOCK</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Harmonic is authorized to issue up to 150,000,000
shares of common stock, $0.001 par value per share. As of
March&nbsp;1, 59,470,455&nbsp;shares of Harmonic&#146;s common
stock were outstanding. The holders of common stock are entitled
to one vote for each share held of record on all matters
submitted to a vote of the stockholders.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subject to preferences that may be applicable to
any outstanding preferred stock, the holders of common stock are
entitled to receive ratably such dividends, if any, as may be
declared from time to time by the Board of Directors out of
funds legally available for the purpose. In the event of a
liquidation, dissolution or winding up of Harmonic, the holders
of common stock are entitled to share ratably in all assets
remaining after payment of liabilities, subject to prior
distribution rights of preferred stock, if any, then
outstanding. The common stock has no preemptive or conversion
rights or other subscription rights. There are no redemption or
sinking fund provisions applicable to the common stock. All
outstanding shares of common stock are fully paid and
nonassessable, and the shares of common stock to be issued upon
the closing of this offering will be fully paid and
nonassessable.
</FONT>

<P align="left">
<B><FONT size="2">Anti-Takeover Provisions</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Certain provisions of Delaware law and
Harmonic&#146;s restated certificate of incorporation and bylaws
could make more difficult the acquisition of Harmonic by means
of a tender offer, a proxy contest or otherwise and removal of
incumbent officers and directors. These provisions, summarized
below, are expected to discourage certain types of coercive
takeover practices and inadequate takeover bids and to encourage
persons seeking to acquire control of Harmonic to first
negotiate with Harmonic. Harmonic believes that the benefits of
increased protection of Harmonic&#146;s potential ability to
negotiate with the proponent of an unfriendly or unsolicited
proposal to acquire or restructure Harmonic outweigh the
disadvantages of discouraging such proposals because, among
other things, negotiation of such proposals could result in an
improvement of their terms.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Delaware Law</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are subject to the provisions of
Section&nbsp;203 of the Delaware General Corporation Law, an
anti-takeover law. In general, the statute prohibits a
publicly-held Delaware corporation from engaging in a
&#147;business combination&#148; with an &#147;interested
stockholder&#148; for a period of three years after the date of
the
</FONT>

<P align="center"><FONT size="2">25
</FONT>
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<DIV align="left">
<FONT size="2">transaction in which the person became an
interested stockholder, unless the business combination is
approved in a prescribed manner. For purposes of
Section&nbsp;203, a &#147;business combination&#148; includes a
merger, asset sale, or other transaction resulting in a
financial benefit to the interested stockholder, and an
&#147;interested stockholder&#148; is a person who, together
with affiliates and associates, owns (or within three years
prior, did own) 15% or more of the corporation&#146;s voting
stock. A corporation may &#147;opt out&#148; of this statute,
which we have not done. Existence of this provision would be
expected to have an anti-takeover effect with respect to
transactions not approved in advance by the Board of Directors,
including discouraging attempts that might result in a premium
over the market price for the shares of common stock held by
stockholders.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD></TD>
	<TD>
	<B><I><FONT size="2">Certificate of Incorporation and Bylaws
	Provisions</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Harmonic&#146;s restated certificate of
incorporation and bylaws do not provide for cumulative voting in
the election of directors. The authorization of undesignated
preferred stock makes it possible for the Board of Directors to
issue preferred stock with voting or other rights or preferences
that could impede the success of any attempt to change control
of Harmonic. These and other provisions may have the effect of
deterring hostile takeovers or delaying changes in control or
management of Harmonic.
</FONT>

<!-- link1 "<FONT size="2">DESCRIPTION OF THE WARRANTS</FONT>" -->
<DIV align="left"><A NAME="007"></A></DIV>

<P align="center">
<B><FONT size="2">DESCRIPTION OF THE WARRANTS</FONT></B>

<P align="left">
<B><FONT size="2">General</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may issue warrants for the purchase of our
common stock. Each series of warrants will be issued under a
separate warrant agreement to be entered into between us and a
bank or trust company, as warrant agent. The warrant agent will
act solely as our agent in connection with the warrants. The
warrant agent will not have any obligation or relationship of
agency or trust for or with any holders or beneficial owners of
warrants. This summary of certain provisions of the warrants is
not complete. For the complete terms of a particular series of
warrants, you should refer to the prospectus supplement for that
series of warrants and the warrant agreement for that particular
series.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The prospectus supplement relating to a
particular series of warrants to purchase our common stock will
describe the terms of the warrants, including the following:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the title of the warrants,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the offering price for the warrants, if any,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the aggregate number of the warrants,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the designation and terms of the common stock or
	preferred stock that may be purchased upon exercise of the
	warrants,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the number of shares of common stock or preferred
	stock that may be purchased upon exercise of a warrant and the
	exercise price for the warrants,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the dates on which the right to exercise the
	warrants shall commence and expire,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if applicable, the minimum or maximum amount of
	the warrants that may be exercised at any one time,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the currency or currency units in which the
	offering price, if any, and the exercise price are payable,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">if applicable, a discussion of material United
	States Federal income tax considerations,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the antidilution provisions of the warrants, if
	any,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">the redemption or call provisions, if any,
	applicable to the warrants,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any provisions with respect to holder&#146;s
	right to require us to repurchase the warrants upon a change in
	control, and
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">26
</FONT>

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<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">any additional terms of the warrants, including
	terms, procedures, and limitations relating to the exchange,
	exercise and settlement of the warrants.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Holders of equity warrants will not be entitled:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">to vote, consent or receive dividends,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">receive notice as stockholders with respect to
	any meeting of stockholders for the election of our directors or
	any other matter, or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">exercise any rights as stockholders of Harmonic.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As set forth in the applicable prospectus
supplement, the exercise price and the number of shares of
common stock purchasable upon exercise of the warrant will be
subject to adjustment in certain events, including the issuance
of a stock dividend to any holders of common stock, a stock
split, reverse stock split, combination, subdivision or
reclassification of common stock, and such other events, if any,
specified in the applicable prospectus supplement.
</FONT>

<P align="center"><FONT size="2">27
</FONT>

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<!-- link1 "<FONT size="2">PLAN OF DISTRIBUTION</FONT>" -->
<DIV align="left"><A NAME="008"></A></DIV>

<P align="center">
<B><FONT size="2">PLAN OF DISTRIBUTION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may sell the securities:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">through one or more underwriters or dealers,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">directly to purchasers,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">through agents, or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">through a combination of any of these methods of
	sale.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may distribute the securities from time to
time in one or more transactions:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">at a fixed price or prices, which may be changed
	from time to time,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">at market prices prevailing at the times of sale,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">at prices related to such prevailing market
	prices, or
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">at negotiated prices.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will describe the method of distribution of
each series of securities in the applicable prospectus
supplement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may determine the price or other terms of the
securities offered under this prospectus by use of an electronic
auction. We will describe how any auction will determine the
price or any other terms, how potential investors may
participate in the auction and the nature of the obligations of
the underwriter, dealer or agent in the applicable prospectus
supplement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Underwriters, dealers or agents may receive
compensation in the form of discounts, concessions or
commissions from us or our purchasers as their agents in
connection with the sale of securities. These underwriters,
dealers or agents may be considered to be underwriters under the
Securities Act. As a result, discounts, commissions, or profits
on resale received by the underwriters, dealers or agents may be
treated as underwriting discounts and commissions. Each
prospectus supplement will identify any such underwriter, dealer
or agent, and describe any compensation received by them from
us. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be
changed from time to time.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Underwriters, dealers and agents may be entitled
to indemnification by us against certain civil liabilities,
including liabilities under the Securities Act, or to
contribution with respect to payments made by the underwriters,
dealers or agents, under agreements between us and the
underwriters, dealers and agents.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may grant underwriters who participate in the
distribution of securities an option to purchase additional
securities to cover over-allotments, if any, in connection with
the distribution.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Some securities which we may issue under this
prospectus may be new issues of securities with no established
trading market. Underwriters involved in the public offering and
sale of these series of securities may make a market in the
securities. However, they are not obligated to make a market and
may discontinue market making activity at any time. No assurance
can be given as to the liquidity of the trading market for any
securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Underwriters or agents and their associates may
be customers of, engage in transactions with or perform services
for us in the ordinary course of business.
</FONT>

<!-- link1 "<FONT size="2">LEGAL MATTERS</FONT>" -->
<DIV align="left"><A NAME="009"></A></DIV>

<P align="center">
<B><FONT size="2">LEGAL MATTERS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Wilson Sonsini Goodrich &#38; Rosati,
Professional Corporation, Palo Alto, California, will pass upon
the validity of the issuance of the securities offered by this
prospectus.
</FONT>

<P align="center"><FONT size="2">28
</FONT>

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<!-- link1 "<FONT size="2">EXPERTS</FONT>" -->
<DIV align="left"><A NAME="010"></A></DIV>

<P align="center">
<B><FONT size="2">EXPERTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consolidated financial statements
incorporated in this prospectus by reference to the Annual
Report on Form 10-K of Harmonic Inc. for the year ended
December&nbsp;31, 2001 have been so incorporated in reliance on
the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in
auditing and accounting.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The financial statements of the Divicom business
for each of the three years in the period ended
December&nbsp;31, 1999 are incorporated in this prospectus by
reference from Harmonic Inc.&#146;s Form&nbsp;8-K dated on or
about March&nbsp;15, 2002 have been audited by Deloitte &#38;
Touche LLP, independent auditors, as stated in their report,
which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.
</FONT>

<!-- link1 "<FONT size="2">WHERE YOU CAN FIND MORE INFORMATION</FONT>" -->
<DIV align="left"><A NAME="011"></A></DIV>

<P align="center">
<B><FONT size="2">WHERE YOU CAN FIND MORE INFORMATION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We file reports, proxy statements, and other
information with the Securities and Exchange Commission. Copies
of our reports, proxy statements, and other information may be
inspected at the public reference facilities maintained by the
SEC:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="60%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<FONT size="2">Judiciary Plaza<BR>
	450 Fifth Street, N.W.<BR>
	Room&nbsp;1024<BR>
	Washington, D.C. 20549
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Citicorp Center<BR>
	500 West Madison Street<BR>
	Suite&nbsp;1400<BR>
	Chicago, Illinois 60661-2511
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Copies of these materials may be obtained by mail
at prescribed rates from the public reference section of the SEC
at the addresses indicated above or by calling the SEC at
1-800-SEC-0330. Our reports, proxy statements and other
information filed with the SEC are also available to the public
over the Internet at the Commission&#146;s world wide web site
at http://www.sec.gov.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Reports, proxy statements, and other information
concerning Harmonic may also be inspected at The National
Association of Securities Dealers, 1735&nbsp;K&nbsp;Street,
N.W., Washington, D.C. 20006.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">This prospectus includes information that has
not been delivered or presented to you but is &#147;incorporated
by reference.&#148; This means that we have disclosed important
information to you by referring you to another document filed
separately with the SEC. The information incorporated by
reference is considered to be a part of this prospectus, and
information that we file later with the Commission will
automatically update and supersede this information.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following documents, which were filed by
Harmonic with the SEC, are incorporated by reference into this
prospectus:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="1%"></TD>
	<TD width="96%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Annual Report on Form&nbsp;10-K for the fiscal
	year ended December&nbsp;31, 2001;
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">Current Report on Form&nbsp;8-K filed on
	March&nbsp;15, 2002; and
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">&#149;&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">The description of our common stock contained in
	our registration statement on Form&nbsp;8-A, filed with the
	Commission on April&nbsp;6, 1995 under section&nbsp;12(g) of the
	Exchange Act, including any amendment or report filed for the
	purpose of updating such description.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All documents we may file under
Section&nbsp;13(a), 13(c), 14, or&nbsp;15(d) of the Securities
Exchange Act after the filing of the foregoing documents are
incorporated by reference into and will be deemed a part of this
prospectus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">You should rely only on the information
contained in this prospectus or on information to which we have
referred you. We have not authorized anyone else to provide you
with any information.</FONT></B>

<P align="center"><FONT size="2">29
</FONT>
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<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will provide to each person who so requests,
including any beneficial owner to whom a prospectus is
delivered, a copy of these filings. You may request a copy of
these filings, at no cost, by writing or telephoning us at the
following address:
</FONT>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Harmonic
Inc.
</FONT>

<DIV align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;549
Baltic Way
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sunnyvale,
CA 94089
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Telephone:
(408)&nbsp;542-2500
</FONT>
</DIV>

<DIV align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attention:
Investor Relations
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are not making an offer of these securities in
any state where the offer is not permitted. You should not
assume the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the
front of those documents.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have filed a registration statement under the
Securities Act of 1933 with respect to the securities we propose
to issue under this prospectus. This prospectus does not contain
all the information set forth in the registration statement
because certain parts of the registration statement are omitted
as provided by the rules and regulations of the SEC. You may
obtain a copy of the registration statement at the sources and
locations identified above.
</FONT>

<P align="center"><FONT size="2">30
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">PART II</FONT></B>

<P align="center">
<B><FONT size="2">INFORMATION NOT REQUIRED IN THE
PROSPECTUS</FONT></B>

<P align="left">
<B><FONT size="2">Item&nbsp;14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Other
expenses of issuance and distribution</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The aggregate estimated (other than the
registration fee) expenses to be paid by the registrant in
connection with this offering are as follows:
</FONT>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="86%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Securities and Exchange Commission registration
	fee
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">13,800</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Trustee&#146;s fees and expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Accounting fees and expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">200,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Legal fees and expenses of the registrant
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">175,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Printing and engraving
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">50,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Blue sky fees and expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Transfer agent fees and expenses
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">15,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Miscellaneous
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">16,200</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="1" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
	<TD align="left" valign="top">
	<DIV style="margin-left:10px; text-indent:-10px">
	<FONT size="2">Total
	</FONT></DIV>
	</TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
	<TD align="right" valign="bottom" nowrap><FONT size="2">500,000</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left"><HR size="4" noshade></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">Item&nbsp;15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Indemnification
of directors and officers of Harmonic Inc.</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Bylaws limit the liability of our directors
and officers for expenses to the maximum extent permitted by
Delaware law. Delaware law provides that directors of a
corporation will not be personally liable for monetary damages
for breach of their fiduciary duties as directors, except for
liability (i)&nbsp;for any breach of their duty of loyalty to
the corporation or its stockholders; (ii)&nbsp;for acts or
omissions not in good faith or that involve intentional
misconduct or a knowing violation of law; (iii)&nbsp;for
unlawful payments of dividends or unlawful stock repurchases or
redemptions as provided in Section 174 of the Delaware General
Corporation Law; or (iv)&nbsp;for any transaction from which the
director derived an improper personal benefit.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Certificate of Incorporation provides that we
must indemnify our directors and may indemnify our other
officers, employees and agents to the fullest extent permitted
by law.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have entered into agreements to indemnify our
directors and officers, in addition to indemnification provided
for in our Bylaws. These agreements, among other things,
indemnify our directors and officers for certain expenses
(including attorneys&#146; fees), judgments, fines and
settlement amounts incurred by any such person in any action or
proceeding, including any action by or in the right of Harmonic,
arising out of such person&#146;s services as a Harmonic
director or officer, any subsidiary of Harmonic or any other
company or enterprise to which the person provides services at
our request.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Harmonic&#146;s Bylaws also permit us to secure
insurance on behalf of any officer, director, employee or other
agent for any liability arising out of his or her actions in
such capacity, regardless of whether the Bylaws would permit
indemnification. We also maintain an insurance policy insuring
our directors and officers against liability for certain acts
and omissions while acting in their official capacities.
</FONT>

<P align="left">
<B><FONT size="2">Item&nbsp;16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exhibits</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following exhibits are filed herewith or
incorporated by reference herein:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="83%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Exhibit Title</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Underwriting Agreement*
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Restated Certificate of Incorporation, as
	amended**
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Bylaws**
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Senior Indenture
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Subordinated Indenture
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-1
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="85%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Exhibit Title</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Senior Debt Security (included in
	Exhibit&nbsp;4.1)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Subordinated Debt Security (included in
	Exhibit&nbsp;4.2)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Certificate of Designation***
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Preferred Stock Certificate***
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Warrant Agreement***
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Warrant Certificate***
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">5.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Opinion of Wilson Sonsini Goodrich &#38; Rosati,
	Professional Corporation*
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">12.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Computation of Ratio of Earnings Available to
	Cover Fixed Charges
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">23.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of PricewaterhouseCoopers, LLP,
	independent accountants
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">23.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of Deloitte &#38; Touche LLP, independent
	auditors
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">23.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of Wilson Sonsini Goodrich &#38; Rosati,
	Professional Corporation (included in Exhibit&nbsp;5.1)*
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">24.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Power of Attorney of certain directors and
	officers of registrant (see page&nbsp;II-4 of this Form&nbsp;S-3)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">25.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form&nbsp;T-1 Statement of Eligibility of Trustee
	for Debt Securities under the Trust Indenture Act of 1939
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="7%"></TD>
	<TD width="93%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*</FONT></TD>
	<TD align="left">
	<FONT size="2">To be filed by amendment or by a report on
	Form&nbsp;8-K pursuant to Section&nbsp;601 of
	Regulation&nbsp;S-K.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">&nbsp; **</FONT></TD>
	<TD align="left">
	<FONT size="2">Previously filed as an Exhibit to the
	Company&#146;s Form&nbsp;10-K for the year ended
	December&nbsp;31, 2001.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="5%"></TD>
	<TD width="95%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">***</FONT></TD>
	<TD align="left">
	<FONT size="2">To be filed as an exhibit to a report pursuant to
	Section&nbsp;13(a) or 15(d) of the Securities Act of 1934.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Item&nbsp;17.<I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Undertakings</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The undersigned registrant hereby undertakes:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(1)&nbsp;To file, during any period in which
	offers or sales are being made, a post-effective amendment to
	this registration statement:
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="6%"></TD>
	<TD width="94%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(a)&nbsp;To include any prospectus required by
	Section 10(a)(3) of the Securities Act,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(b)&nbsp;To reflect in the prospectus any facts
	or events arising after the effective date of the registration
	statement (or the most recent post-effective amendment thereof)
	which, individually or in the aggregate, represent a fundamental
	change in the information set forth in the registration
	statement. Notwithstanding the foregoing, any increase or
	decrease in volume of securities offered (if the total dollar
	value of securities offered would not exceed that which was
	registered) and any deviation from the low or high end of the
	estimated maximum offering range may be reflected in the form of
	prospectus filed with the Commission pursuant to
	Rule&nbsp;424(b) if, in the aggregate, the changes in volume and
	price represent no more than a 20&nbsp;percent change in the
	maximum aggregate offering price set forth in the
	&#147;Calculation of Registration Fee&#148; table in the
	effective registration statement,
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(c)&nbsp;To include any material information with
	respect to the plan of distribution not previously disclosed in
	the Registration Statement or any material change to such
	information in the Registration Statement;
	</FONT></TD>
</TR>

</TABLE>

<P align="left">
<I><FONT size="2">provided, however,</FONT></I><FONT size="2">
that clauses (a)&nbsp;and (b)&nbsp;do not apply if the
information required to be included in a post-effective
amendment by such clauses is contained in periodic reports filed
with or furnished to the Securities and Exchange Commission by
the registrant pursuant to Section&nbsp;13 or Section&nbsp;15(d)
of the Securities Exchange Act of 1934 (the &#147;Exchange
Act&#148;) that are incorporated by reference in the
registration statement.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(2)&nbsp;That, for the purpose of determining any
	liability under the Securities Act, each such post-effective
	amendment shall be deemed a new registration statement relating
	to the securities offered therein, and the offering of such
	securities at that time shall be deemed to be the initial bona
	fide offering thereof.
	</FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">II-2
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(3)&nbsp;To remove from registration by means of
	a post-effective amendment any of the securities being
	registered which remain unsold at the termination of the
	offering.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(4)&nbsp;That, for purposes of determining any
	liability under the Securities Act, each filing of the
	registrant&#146;s annual report pursuant to Section&nbsp;13(a)
	or Section&nbsp;15(d) of the Exchange Act that is incorporated
	by reference in this registration statement shall be deemed to
	be a new registration statement relating to the securities
	offered therein, and the offering of such securities at that
	time shall be deemed to be the initial bona fide offering
	thereof.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Insofar as indemnification for liabilities
arising under the Securities Act may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the provisions described under Item&nbsp;15 above, or otherwise,
the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final
adjudication of such issue.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The undersigned registrant hereby undertakes that:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="3%"></TD>
	<TD width="97%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(1)&nbsp;For purposes of determining any
	liability under the Securities Act of 1933, the information
	omitted from the form of prospectus filed as part of this
	registration statement in reliance upon Rule 430A and contained
	in a form of prospectus filed by the registrant pursuant to
	Rule&nbsp;424(b)(1) or (4)&nbsp;or 497(h) under the Securities
	Act shall be deemed to be part of this registration statement as
	of the time it was declared effective.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
	<FONT size="2">(2)&nbsp;For the purpose of determining any
	liability under the Securities Act of 1933, each post-effective
	amendment that contains a form of prospectus shall be deemed to
	be a new registration statement relating to the securities
	offered therein, and the offering of such securities at that
	time shall be deemed to be the initial bona fide offering
	thereof.
	</FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The undersigned registrant hereby undertakes to
file an application for the purpose of determining the
eligibility of the trustee to act under subsection (a)&nbsp;of
Section&nbsp;310 of the Trust Indenture Act in accordance with
the rules and regulations prescribed by the Securities and
Exchange Commission under Section&nbsp;305(b)(2) of the Trust
Indenture Act.
</FONT>

<P align="center"><FONT size="2">II-3
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "<FONT size="2">SIGNATURES</FONT>" -->
<DIV align="left"><A NAME="012"></A></DIV>

<P align="center">
<B><FONT size="2">SIGNATURES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act, the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on
Form&nbsp;S-3 and has duly caused this Registration Statement on
Form&nbsp;S-3 to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Sunnyvale, State of
California, on March&nbsp;15, 2002.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<FONT size="2">HARMONIC INC.
	</FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="2%"></TD>
	<TD width="58%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD><FONT size="2">By:&nbsp;</FONT></TD>
	<TD align="left">
	<FONT size="2">/s/ ROBIN N. DICKSON
	</FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="40%"></TD>
	<TD width="60%"></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="left">
	<HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="center">
	<FONT size="2">Robin N. Dickson,
	</FONT></TD>
</TR>

<TR valign="top">
	<TD>&nbsp;</TD>
	<TD align="center">
	<I><FONT size="2">Chief Financial Officer</FONT></I></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">POWER OF ATTORNEY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">KNOW ALL PERSONS BY THESE PRESENTS, that each
person whose signature appears below constitutes and appoints
Anthony&nbsp;J. Ley and Robin&nbsp;N. Dickson and each of them
individually, as his or her true and lawful attorneys-in-fact
and agents with full power of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any
and all capacities to sign the Registration Statement filed
herewith and any or all amendments to said Registration
Statement (including post-effective amendments and registration
statements filed pursuant to Rule&nbsp;462(b) under the
Securities Act of 1933, as amended, and otherwise), and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission granting unto said attorneys-in-fact and agents the
full power and authority to do and perform each and every act
and thing requisite and necessary to be done in and about the
foregoing, as full to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or his or her
substitute, may lawfully do or cause to be done by virtue
thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act, this Registration Statement has been signed by the
following persons in the capacities and on the dates indicated:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="42%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="17%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Signature</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ ANTHONY J. LEY<BR>
	<HR size="1" noshade>Anthony J. Ley
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Chief Executive Officer and President<BR>
	(Principal Executive Officer)<BR>
	and Chairman of the<BR>
	Board of Directors
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">March&nbsp;15, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ ROBIN N. DICKSON<BR>
	<HR size="1" noshade>Robin N. Dickson
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Chief Financial Officer<BR>
	(Principal Financial and<BR>
	Accounting Officer)
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">March&nbsp;15, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ DAVID R. VAN VALKENBURG<BR>
	<HR size="1" noshade>David R. Van Valkenburg
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">March&nbsp;15, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ E. FLOYD KVAMME<BR>
	<HR size="1" noshade>E. Floyd Kvamme
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">March&nbsp;15, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ DAVID A. LANE<BR>
	<HR size="1" noshade>David A. Lane
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">March&nbsp;15, 2002
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-4
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="42%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="35%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="17%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" nowrap><B><FONT size="1">Signature</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ LEWIS SOLOMON<BR>
	<HR size="1" noshade>Lewis Solomon
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">March&nbsp;15, 2002
	</FONT></TD>
</TR>

<TR>
	<TD colspan="5"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD align="center" valign="top">
	<FONT size="2">/s/ MICHEL L. VAILLAUD<BR>
	<HR size="1" noshade>Michel L. Vaillaud
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="center" valign="top">
	<FONT size="2">Director
	</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">March&nbsp;15, 2002
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-5
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">EXHIBIT INDEX</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
	<TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
	<TD width="85%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
	<TD></TD>
	<TD></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
	<TD></TD>
	<TD align="center" nowrap><B><FONT size="1">Exhibit Title</FONT></B></TD>
</TR>

<TR>
	<TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
	<TD></TD>
	<TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">1.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Underwriting Agreement*
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Restated Certificate of Incorporation, as
	amended**
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">3.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Bylaws**
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Senior Indenture
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Subordinated Indenture
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Senior Debt Security (included in
	Exhibit&nbsp;4.1)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.4</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Subordinated Debt Security (included in
	Exhibit&nbsp;4.2)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.5</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Certificate of Designation***
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.6</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Preferred Stock Certificate***
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.7</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Warrant Agreement***
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">4.8</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form of Warrant Certificate***
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">5.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Opinion of Wilson Sonsini Goodrich &#38; Rosati,
	Professional Corporation*
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">12.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Computation of Ratio of Earnings Available to
	Cover Fixed Charges
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">23.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of PricewaterhouseCoopers, LLP,
	independent accountants
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">23.2</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of Deloitte &#38; Touche LLP, independent
	auditors
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">23.3</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Consent of Wilson Sonsini Goodrich &#38; Rosati,
	Professional Corporation (included in Exhibit&nbsp;5.1)*
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">24.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Power of Attorney of certain directors and
	officers of registrant (see page&nbsp;II-4 of this Form&nbsp;S-3)
	</FONT></TD>
</TR>

<TR>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="right" valign="top" nowrap><FONT size="2">25.1</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD><FONT size="2">&nbsp;</FONT></TD>
	<TD align="left" valign="top">
	<FONT size="2">Form&nbsp;T-1 Statement of Eligibility of Trustee
	for Debt Securities under the Trust Indenture Act of 1939
	</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
	<TD width="5%"></TD>
	<TD width="95%"></TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">&nbsp;&nbsp;*</FONT></TD>
	<TD align="left">
	<FONT size="2">To be filed by amendment or by a report on
	Form&nbsp;8-K pursuant to Section&nbsp;601 of
	Regulation&nbsp;S-K.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">&nbsp;**</FONT></TD>
	<TD align="left">
	<FONT size="2">Previously filed as an Exhibit to the
	Company&#146;s Form&nbsp;10-K for the year ended
	December&nbsp;31, 2001.
	</FONT></TD>
</TR>

<TR>
	<TD>&nbsp;</TD>
</TR>

<TR valign="top">
	<TD><FONT size="2">***</FONT></TD>
	<TD align="left">
	<FONT size="2">To be filed as an exhibit to a report pursuant to
	Section&nbsp;13(a) or 15(d) of the Securities Act of 1934.
	</FONT></TD>
</TR>

</TABLE>
</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>3
<FILENAME>f77840orex4-1.txt
<DESCRIPTION>EXHIBIT 4.1
<TEXT>
<PAGE>
                                                                     EXHIBIT 4.1

                                  HARMONIC INC.

                                       TO

                         U.S. BANK NATIONAL ASSOCIATION

                                   AS TRUSTEE

                                    INDENTURE

                          DATED AS OF ___________, 200_









                             SENIOR DEBT SECURITIES


<PAGE>


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                               PAGE
                                                                                               ----
<S>                                                                                            <C>
ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION...............................1

        Section 1.1   Definitions...............................................................1
        Section 1.2   Compliance Certificates and Opinions......................................8
        Section 1.3   Form of Documents Delivered to Trustee....................................9
        Section 1.4   Acts of Holders; Record Dates.............................................9
        Section 1.5   Notices, etc.............................................................11
        Section 1.6   Notice to Holders; Waiver................................................12
        Section 1.7   Conflict with Trust Indenture Act........................................12
        Section 1.8   Effect of Headings and Table of Contents.................................12
        Section 1.9   Successors and Assigns...................................................12
        Section 1.10  Separability Clause......................................................12
        Section 1.11  Benefits of Indenture....................................................13
        Section 1.12  Governing Law............................................................13
        Section 1.13  Legal Holidays...........................................................13
        Section 1.14  Indenture and Securities Solely Corporate Obligations....................13
        Section 1.15  Indenture May be Executed in Counterparts................................13

ARTICLE 2 SECURITY FORMS.......................................................................14

        Section 2.1   Forms Generally..........................................................14
        Section 2.2   Form of Face of Security.................................................14
        Section 2.3   Form of Reverse of Security..............................................16
        Section 2.4   Form of Legend for Global Securities.....................................20
        Section 2.5   Form of Trustee's Certificate of Authentication..........................21
        Section 2.6   Form of Conversion Notice................................................21

ARTICLE 3 THE SECURITIES.......................................................................23

        Section 3.1   Amount Unlimited; Issuable in Series.....................................23
        Section 3.2   Denominations............................................................25
        Section 3.3   Execution, Authentication, Delivery and Dating...........................26
        Section 3.4   Temporary Securities.....................................................27
        Section 3.5   Registration; Registration of Transfer and Exchange......................28
        Section 3.6   Mutilated, Destroyed, Lost and Stolen Securities.........................29
        Section 3.7   Payment of Interest; Interest Rights Preserved...........................30
        Section 3.8   Persons Deemed Owners....................................................31
        Section 3.9   Cancellation.............................................................32
        Section 3.10  Computation of Interest..................................................32

ARTICLE 4 SATISFACTION AND DISCHARGE...........................................................32

        Section 4.1   Satisfaction and Discharge of Indenture..................................32
</TABLE>


                                      -i-
<PAGE>


                               TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<S>                                                                                           <C>
        Section 4.2   Application of Trust Money...............................................33

ARTICLE 5 REMEDIES.............................................................................33

        Section 5.1   Events of Default........................................................33
        Section 5.2   Acceleration of Maturity; Rescission and Annulment.......................35
        Section 5.3   Collection of Indebtedness and Suits for Enforcement by Trustee..........36
        Section 5.4   Trustee May File Proofs of Claim.........................................36
        Section 5.5   Trustee May Enforce Claims Without Possession of Securities..............37
        Section 5.6   Application of Money Collected...........................................37
        Section 5.7   Limitation on Suits......................................................37
        Section 5.8   Unconditional Right of Holders to Receive Principal, Premium and Interest
                      and to Convert...........................................................38
        Section 5.9   Restoration of Rights and Remedies.......................................38
        Section 5.10  Rights and Remedies Cumulative...........................................38
        Section 5.11  Delay or Omission Not Waiver.............................................39
        Section 5.12  Control by Holders.......................................................39
        Section 5.13  Waiver of Past Defaults..................................................39
        Section 5.14  Undertaking for Costs....................................................40
        Section 5.15  Waiver of Usury, Stay or Extension Laws..................................40

ARTICLE 6 THE TRUSTEE..........................................................................40

        Section 6.1   Certain Duties and Responsibilities......................................40
        Section 6.2   Notice of Defaults.......................................................40
        Section 6.3   Certain Rights of Trustee................................................41
        Section 6.4   Not Responsible for Recitals or Issuance of Securities...................42
        Section 6.5   May Hold Securities and Act as Trustee under Other Indentures............42
        Section 6.6   Money Held in Trust......................................................42
        Section 6.7   Compensation and Reimbursement...........................................42
        Section 6.8   Conflicting Interests....................................................43
        Section 6.9   Corporate Trustee Required; Eligibility..................................43
        Section 6.10  Resignation and Removal; Appointment of Successor........................43
        Section 6.11  Acceptance of Appointment by Successor...................................45
        Section 6.12  Merger, Conversion, Consolidation or Succession to Business..............46
        Section 6.13  Preferential Collection of Claims Against Company........................46
        Section 6.14  Appointment of Authenticating Agent......................................46

ARTICLE 7 HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY....................................48

        Section 7.1   Company to Furnish Trustee Names and Addresses of Holders................48
        Section 7.2   Preservation of Information; Communications to Holders...................48
        Section 7.3   Reports by Trustee.......................................................49
</TABLE>


                                      -ii-
<PAGE>


                               TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<S>                                                                                           <C>
        Section 7.4   Reports by Company.......................................................49

ARTICLE 8 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE.................................49

        Section 8.1   Company May Consolidate, etc. Only on Certain Terms.......................49
        Section 8.2   Successor Substituted....................................................50

ARTICLE 9 SUPPLEMENTAL INDENTURES..............................................................51

        Section 9.1   Supplemental Indentures Without Consent of Holders.......................51
        Section 9.2   Supplemental Indentures with Consent of Holders..........................52
        Section 9.3   Execution of Supplemental Indentures.....................................53
        Section 9.4   Effect of Supplemental Indentures........................................53
        Section 9.5   Conformity with Trust Indenture Act......................................54
        Section 9.6   Reference in Securities to Supplemental Indentures.......................54

ARTICLE 10 COVENANTS...........................................................................54

        Section 10.1  Payment of Principal, Premium and Interest...............................54
        Section 10.2  Maintenance of Office or Agency..........................................54
        Section 10.3  Money for Securities Payments to be Held in Trust........................55
        Section 10.4  Statement by Officers as to Default......................................56
        Section 10.5  Existence................................................................56
        Section 10.6  Maintenance of Properties................................................56
        Section 10.7  Payment of Taxes and Other Claims........................................56
        Section 10.8  Waiver of Certain Covenants..............................................57

ARTICLE 11 REDEMPTION OF SECURITIES............................................................57

        Section 11.1  Applicability of Article.................................................57
        Section 11.2  Election to Redeem; Notice to Trustee....................................57
        Section 11.3  Selection by Trustee of Securities to Be Redeemed........................57
        Section 11.4  Notice of Redemption.....................................................58
        Section 11.5  Deposit of Redemption Price..............................................59
        Section 11.6  Securities Payable on Redemption Date....................................59
        Section 11.7  Securities Redeemed in Part..............................................60

ARTICLE 12 SINKING FUNDS.......................................................................60

        Section 12.1  Applicability of Article.................................................60
        Section 12.2  Satisfaction of Sinking Fund Payments with Securities....................60
        Section 12.3  Redemption of Securities for Sinking Fund................................61

ARTICLE 13 DEFEASANCE AND COVENANT DEFEASANCE..................................................61

        Section 13.1  Company's Option to Effect Defeasance or Covenant Defeasance.............61
        Section 13.2  Defeasance and Discharge.................................................61
</TABLE>


                                     -iii-
<PAGE>


                               TABLE OF CONTENTS
                                   (CONTINUED)


<TABLE>
<S>                                                                                           <C>
        Section 13.3  Covenant Defeasance......................................................62
        Section 13.4  Conditions to Defeasance or Covenant Defeasance..........................63
        Section 13.5  Deposited Money, U.S. Government Obligations and Foreign Government
                      Obligations to be Held in Trust, Miscellaneous Provisions................65
        Section 13.6  Reinstatement............................................................65

ARTICLE 14 CONVERSION OF SECURITIES............................................................66

        Section 14.1  Applicability of Article.................................................66
        Section 14.2  Exercise of Conversion Privilege.........................................66
        Section 14.3  No Fractional Shares.....................................................67
        Section 14.4  Adjustment of Conversion Price...........................................68
        Section 14.5  Notice of Certain Corporate Actions......................................68
        Section 14.6  Reservation of Shares of Common Stock....................................69
        Section 14.7  Payment of Certain Taxes upon Conversion.................................69
        Section 14.8  Nonassessability.........................................................69
        Section 14.9  Provision in Case of Consolidation, Merger or Sale of Assets.............69
        Section 14.10 Duties of Trustee Regarding Conversion...................................70
        Section 14.11 Repayment of Certain Funds upon Conversion...............................71
</TABLE>


                                      -iv-
<PAGE>


        Certain Sections of this Indenture relating to Sections 310 through 318,
inclusive, of the Trust Indenture Act of 1939:

<TABLE>
<S>                                                                                <C>
Section 310(a)(1).............................................................................6.9
            (a)(2)............................................................................6.9
            (a)(3).................................................................Not Applicable
            (a)(4).................................................................Not Applicable
            (b).........................................................................6.8, 6.10
Section 311(a)...............................................................................6.13
            (b)..............................................................................6.13
Section 312(a)...........................................................................7.1, 7.2
            (b)...............................................................................7.2
            (c)...............................................................................7.2
Section 313(a)................................................................................7.3
            (b)...............................................................................7.3
            (c)...............................................................................7.3
            (d)...............................................................................7.3
Section 314(a)................................................................................7.4
            (a)(4).....................................................................10.1, 10.4
            (b)....................................................................Not Applicable
            (c)(1)............................................................................1.2
            (c)(2)............................................................................1.2
            (c)(3).................................................................Not Applicable
            (d)....................................................................Not Applicable
            (e)...............................................................................1.2
Section 315(a)................................................................................6.1
            (b)...............................................................................6.2
            (c)...............................................................................6.1
            (d)...............................................................................6.1
            (e)..............................................................................5.14
Section 316(a)................................................................................1.1
            (a)(1)(A)...................................................................5.2, 5.12
            (a)(1)(B)........................................................................5.13
            (a)(2).................................................................Not Applicable
            (b)...............................................................................5.8
            (c)...............................................................................1.4
Section 317(a)(1).............................................................................5.3
            (a)(2)............................................................................5.4
            (b)..............................................................................10.3
Section 318(a)................................................................................1.7
</TABLE>


NOTE:    This reconciliation and tie shall not, for any purpose, be deemed to be
         a part of the Indenture.


                                      -v-
<PAGE>

        INDENTURE, dated as of ____________, 200_, between Harmonic Inc., a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), having its principal executive office at 549
Baltic Way, Sunnyvale, California 94089, and U.S. Bank National Association, a
national banking association, as Trustee (herein called the "Trustee").

                             RECITALS OF THE COMPANY

        The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as provided in this Indenture.

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

                   NOW, THEREFORE, THIS INDENTURE WITNESSETH:

        For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of series
thereof appertaining, as follows:

                                    ARTICLE 1

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 1.1 DEFINITIONS.

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

               (1) the terms defined in this Article have the meanings assigned
        to them in this Article and include the plural as well as the singular;

               (2) all other terms used herein which are defined in the Trust
        Indenture Act, either directly or by reference therein, have the
        meanings assigned to them therein;

               (3) all accounting terms not otherwise defined herein have the
        meanings assigned to them in accordance with generally accepted
        accounting principles in the United States of America, and, except as
        otherwise herein expressly provided, the term "generally accepted
        accounting principles" with respect to any computation required or
        permitted hereunder shall mean such accounting principles in the United
        States of America as are generally accepted at the date of such
        computation;

               (4) all references to "$" refer to the lawful currency of the
        United States of America;

               (5) unless the context otherwise requires, any reference to an
        "Article" or a "Section" refers to an Article or a Section, as the case
        may be, of this Indenture; and


<PAGE>

               (6) the words "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.

        "Act," when used with respect to any Holder, has the meaning specified
in Section 1.4.

        "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person.

        "Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more series.

        "Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that board empowered to act for it with
respect to this Indenture.

        "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, and delivered to the Trustee.

        "Business Day," when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.

        "Commission" means the Securities and Exchange Commission, 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.

        "Common Stock" includes any stock of any class of the Company which has
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding-up of the Company
and which is not subject to redemption by the Company; provided, however,
subject to the provisions of Section 14.9, shares issuable upon conversion of
Securities shall include only shares of the class designated as Common Stock of
the Company at the date of this Indenture or shares of any class or classes
resulting from any reclassification or reclassifications thereof and which have
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding-up of the Company
and which are not subject to redemption by the Company; provided, further that
if at any time there shall be more than one such resulting class, the shares of
each such class then so issuable shall be substantially in the proportion which
the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.

        "Company" means the corporation named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.


                                      -2-
<PAGE>


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

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

        "Corporate Trust Office" means the corporate trust office of the Trustee
at 180 East Fifth Street, St. Paul, Minnesota 55101, Attention: Corporate Trust
Department, or such other office, designated by the Trustee by written notice to
the Company, at which at any particular time its corporate trust business shall
be administered.

        "corporation" means a corporation, association, company, joint-stock
company or business trust.

        "Covenant Defeasance" has the meaning specified in Section 13.3.

        "Defaulted Interest" has the meaning specified in Section 3.7.

        "Defeasance" has the meaning specified in Section 13.2.

        "Depositary" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities as contemplated by Section 3.1.

        "euro" or "euros" means the currency adopted by those nations
participating in the third stage of the economic and monetary union provisions
of the Treaty on European Union, signed at Maastricht on February 7, 1992.

        "European Economic Area" means the member nations of the European
Economic Area pursuant to the Oporto Agreement on the European Economic Area
dated May 2, 1992, as amended.

        "European Union" means the member nations of the European Union
established by the Treaty of European Union, signed at Maastricht on February 2,
1992, which amended the Treaty of Rome establishing the European Community.

        "Event of Default" has the meaning specified in Section 5.1.

        "Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.

        "Expiration Date" has the meaning specified in Section 1.4.


                                      -3-
<PAGE>


        "Foreign Government Obligation" means with respect to Securities of any
series which are not denominated in the currency of the United States of America
(x) any security which is (i) a direct obligation of the government which issued
or caused to be issued the currency in which such security is denominated and
for the payment of which obligations its full faith and credit is pledged or,
with respect to Securities of any series which are denominated in euros, a
direct obligation of any member nation of the European Union for the payment of
which obligation the full faith and credit of the respective nation is pledged
so long as such nation has a credit rating at least equal to that of the highest
rated member nation of the European Economic Area, or (ii) an obligation of a
Person controlled or supervised by and acting as an agency or instrumentality of
a government specified in clause (i) above the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the such
government, which, in either case (i) or (ii), is not callable or redeemable at
the option of the issuer thereof, and (y) any depositary receipt issued by a
bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with
respect to any Foreign Government Obligation which is specified in clause (x)
above and held by such bank for the account of the holder of such depositary
receipt, or with respect to any specific payment of principal of or interest on
any Foreign Government Obligation which is so specified and held, provided 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 Foreign Government
Obligation or the specific payment of principal or interest evidenced by such
depositary receipt.

        "Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 2.4 (or such
legend as may be specified as contemplated by Section 3.1 for such Securities).

        "Holder" means a Person in whose name a Security is registered in the
Security Register.

        "Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 3.1; provided,
however, that if at any time more than one Person is acting as Trustee under
this Indenture due to the appointment of one or more separate Trustees for any
one or more separate series of Securities, "Indenture" shall mean, with respect
to such series of Securities for which any such Person is Trustee, 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 pursuant
to the applicable provisions hereof and shall include the terms of particular
series of Securities for which such Person is Trustee established as
contemplated by Section 3.1, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is not
Trustee, regardless of when such terms or provisions were adopted, and exclusive
of any provisions or terms adopted by means of one or more indentures
supplemental hereto executed and delivered after such Person had become such
Trustee, but to which such person, as such Trustee, was not a party; provided,
further that in the event that this Indenture is supplemented or amended by one
or


                                      -4-
<PAGE>


more indentures supplemental hereto which are only applicable to certain series
of Securities, the term "Indenture" for a particular series of Securities shall
only include the supplemental indentures applicable thereto.

        "interest," when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means interest
payable after Maturity.

        "Interest Payment Date," when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.

        "Investment Company Act" means the Investment Company Act of 1940 and
any statute successor thereto, in each case as amended from time to time.

        "Maturity," when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, repurchase at the option of the Holder, upon
redemption or otherwise.

         "Notice of Default" means a written notice of the kind specified in
Section 5.1(4).

        "Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, Chief Executive Officer, the President
or a Vice President, and by the principal financial officer, the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company,
and delivered to the Trustee. One of the officers signing an Officers'
Certificate given pursuant to Section 10.4 shall be the principal executive,
financial or accounting officer of the Company.

        "Opinion of Counsel" means a written opinion of counsel, who may be
counsel for, or an employee of, the Company, and who shall be reasonably
acceptable to the Trustee.

        "Original Issue Discount Security" means any Security which provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 5.2.

        "Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except

                (1) Securities theretofore canceled by the Trustee or delivered
        to the Trustee for cancellation;

                (2) Securities for whose payment or redemption money in the
        necessary amount has been theretofore deposited with the Trustee or any
        Paying Agent (other than the Company) in trust or set aside and
        segregated in trust by the Company (if the Company shall act as its own
        Paying Agent) for the Holders of such Securities; provided that, if such
        Securities are to be redeemed, notice of such redemption has been duly
        given pursuant to this Indenture or provision therefor satisfactory to
        the Trustee has been made;


                                      -5-
<PAGE>


                (3) Securities as to which Defeasance has been effected pursuant
        to Section 13.2; and

                (4) Securities which have been paid pursuant to Section 3.6 or
        in exchange for or in lieu of which other Securities have been
        authenticated and delivered pursuant to this Indenture, other than any
        such Securities in respect of which there shall have been presented to
        the Trustee proof satisfactory to it that such Securities are held by a
        bona fide purchaser in whose hands such Securities are valid obligations
        of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be the amount of
the principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 5.2, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Security is not determinable, the principal amount of such Security which shall
be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 3.1, (C) the principal amount of a Security denominated
in one or more non-U.S. dollar currencies or currency units which shall be
deemed to be Outstanding shall be the U.S. dollar equivalent, determined as of
such date in the manner provided as contemplated by Section 3.1, of the
principal amount of such Security (or, in the case of a Security described in
clause (A) or (B) above, of the amount determined as provided in such clause),
and (D) Securities owned by the Company or any other obligor upon the Securities
or any Affiliate of the Company or of such other obligor shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent, waiver or other action, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor.

        "Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.

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

         "Place of Payment," when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 3.1.

        "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 3.6 in exchange for or in


                                      -6-
<PAGE>


lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.

        "Record Date" means any Regular Record Date or Special Record Date.

        "Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.

        "Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.

        "Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 3.1.

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

        "Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.

        "Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.5.

        "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.

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

        "Subsidiary" means a Person of which at least a majority of the
outstanding voting stock having the power to elect a majority of the board of
directors of such Person (in the case of a corporation) is, or of which at least
a majority of the equity interests (in the case of a Person which is not a
corporation) are, at the time owned, directly or indirectly, by the Company or
by one or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.

        "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.


                                      -7-
<PAGE>


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

        "U.S. Government Obligation" means (x) any security which is (i) a
direct obligation of the United States of America for the payment of which the
full faith and credit of the United States of America is pledged or (ii) an
obligation 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, which, in either case (i) or (ii), is not callable or
redeemable at the option of the issuer thereof, and (y) any depositary receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any U.S. Government Obligation which is specified in
clause (x) above and held by such bank for the account of the holder of such
depositary receipt, or with respect to any specific payment of principal of or
interest on any U.S. Government Obligation which is so specified and held,
provided 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 U.S.
Government Obligation or the specific payment of principal or interest evidenced
by such depositary receipt.

        "Vice President," when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."

SECTION 1.2 COMPLIANCE CERTIFICATES AND OPINIONS.

        Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.

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

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

               (2) 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;


                                      -8-
<PAGE>


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

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

SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.

        In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

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

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

SECTION 1.4 ACTS OF HOLDERS; RECORD DATES.

Any request, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given, made or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. The
Trustee shall promptly deliver to the Company copies of all such instrument or
instruments delivered to the Trustee. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.


                                      -9-
<PAGE>


        The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him or her the execution thereof. Where such
execution is by a signer acting in a capacity other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority. The fact and date of the execution of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner which the Trustee deems sufficient.

        The ownership of Securities shall be proved by the Security Register.

        Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.

        The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, vote, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided that the
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities of such
series on such record date. Nothing in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be canceled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Trustee in writing and to each Holder of Securities of the relevant series in
the manner set forth in Section 1.6.

        The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 5.2, (iii) any request to institute
proceedings referred to in Section 5.7(2) or (iv) any direction referred to in
Section 5.12, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be


                                      -10-
<PAGE>


entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be canceled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Company's expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Company in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 1.6.

        With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
Section 1.6, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.

        Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.

SECTION 1.5 NOTICES, ETC., to Trustee and Company.

        Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,

                (1) the Trustee by any Holder or by the Company shall be
        sufficient for every purpose hereunder if made, given, furnished or
        filed in writing (or by facsimile transmissions, provided that oral
        confirmation of receipt shall have been received) to or with the Trustee
        at its Corporate Trust Office, Attention: Corporate Trust Department, or

                (2) the Company by the Trustee or by any Holder shall be
        sufficient for every purpose hereunder (unless otherwise herein
        expressly provided) if in writing and mailed, first-class postage
        prepaid, personally delivered or sent via overnight courier to the
        Company addressed to it at the address of its principal


                                      -11-
<PAGE>


        office specified in the first paragraph of this instrument or at any
        other address previously furnished in writing to the Trustee by the
        Company, Attention: Chief Financial Officer.

SECTION 1.6 NOTICE TO HOLDERS; WAIVER.

        Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, or delivered by hand or
overnight courier to each Holder affected by such event, at its address as it
appears in the Security Register, not later than the latest date (if any), and
not earlier than the earliest date (if any), prescribed for the giving of such
notice. Neither the failure to mail or deliver by hand or overnight courier any
notice, nor any defect in any notice so mailed or delivered by hand or overnight
courier, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.

        In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.

SECTION 1.7 CONFLICT WITH TRUST INDENTURE ACT.

        If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act which is required under the Trust Indenture Act to be
a part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act which may be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or to be excluded, as the
case may be.

SECTION 1.8 EFFECT OF HEADINGS AND TABLE OF CONTENTS.

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

SECTION 1.9 SUCCESSORS AND ASSIGNS.

        All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.

SECTION 1.10 SEPARABILITY CLAUSE.

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


                                      -12-
<PAGE>


SECTION 1.11 BENEFITS OF INDENTURE.

        Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.

SECTION 1.12 GOVERNING LAW.

        THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO SUCH
STATE'S CONFLICTS OF LAWS PRINCIPLES.

SECTION 1.13 LEGAL HOLIDAYS.

        In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security or the last date on which a Holder has the right to
convert a Security at a particular conversion price shall not be a Business Day
at any Place of Payment, then (notwithstanding any other provision of this
Indenture or of the Securities (other than a provision of any Security which
specifically states that such provision shall apply in lieu of this Section))
payment of interest or principal (and premium, if any) or, if applicable to a
particular series of Securities, conversion need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, at the Stated Maturity or on such last day for
conversion, as the case may be.

SECTION 1.14 INDENTURE AND SECURITIES SOLELY CORPORATE OBLIGATIONS.

        No recourse for the payment of the principal of or premium, if any, or
interest on any Security, or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in this Indenture or in any supplemental indenture or in any
Security, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, employee, agent, officer, or
director or subsidiary, as such, past, present or future, of the Company or of
any successor corporation, either directly or through the Company or any
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 all such liability is hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and the issue of the Securities.

SECTION 1.15 INDENTURE MAY BE EXECUTED IN COUNTERPARTS.

        This instrument 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.


                                      -13-
<PAGE>


                                    ARTICLE 2

                                 SECURITY FORMS

SECTION 2.1 FORMS GENERALLY.

        The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof. If the form of Securities of any series is established by
action taken pursuant to a Board Resolution, 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 Company
Order contemplated by Section 3.3 for the authentication and delivery of such
Securities. Any such Board Resolution or record of such action shall have
attached thereto a true and correct copy of the form of Security referred to
therein approved by or pursuant to such Board Resolution.

        The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.

SECTION 2.2 FORM OF FACE OF SECURITY.

        [INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE
REGULATIONS THEREUNDER.]

                                  HARMONIC INC.

NO.  __________                                                      $__________

                                                              CUSIP:____________

      ---------------------------------------------------------------------

        Harmonic Inc., a corporation duly organized and existing under the laws
of Delaware (herein called the "Company," which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to ____________, or registered assigns, the principal sum of
_____________ dollars on _____________________________ [IF THE SECURITY IS TO
BEAR INTEREST PRIOR TO MATURITY, INSERT -- , and to pay interest thereon from
__________ or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semi-annually on ___________ and __________ in
each year, commencing _________ at the rate of


                                      -14-
<PAGE>


___% per annum, until the principal hereof is paid or made available for payment
[IF APPLICABLE, INSERT -- , provided that any principal and premium, and any
such installment of interest, which is overdue shall bear interest at the rate
of ___% per annum (to the extent that the payment of such interest shall be
legally enforceable), from the dates such amounts are due until they are paid or
made available for payment, and such interest shall be payable on demand]. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, which shall be
the ______ or ______ (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture].

        [IF THE SECURITY IS NOT TO BEAR INTEREST PRIOR TO MATURITY, INSERT --
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal and any overdue premium shall
bear interest at the rate of ___% per annum (to the extent that the payment of
such interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment. Interest on any overdue
principal or premium shall be payable on demand. [Any such interest on overdue
principal or premium which is not paid on demand shall bear interest at the rate
of ___% per annum (to the extent that the payment of such interest on interest
shall be legally enforceable), from the date of such demand until the amount so
demanded is paid or made available for payment. Interest on any overdue interest
shall be payable on demand.]]

        Payment of the principal of (and premium, if any) and [IF APPLICABLE,
INSERT -- any such] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in _______, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts [IF APPLICABLE, INSERT -- ;
provided, however, that at the option of the Company payment of interest may be
made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register].

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

        Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.


                                      -15-
<PAGE>


        IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

Dated:                                             Harmonic Inc.
      ------------
                                                   By:
                                                      --------------------------
                                                   Title:
                                                         -----------------------
ATTEST:

---------------------------------

SECTION 2.3 FORM OF REVERSE OF SECURITY.

        This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of __________ (herein called the
"Indenture," which term shall have the meaning assigned to it in such
instrument), between the Company and U.S. Bank National Association, as Trustee
(herein called the "Trustee," which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture and all indentures
supplemental thereto for a statement of the respective rights, limitations of
rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof [IF APPLICABLE, INSERT -- , limited in aggregate
principal amount to $________].

        [IF APPLICABLE, INSERT -- The Securities of this series are subject to
redemption upon not less than [IF APPLICABLE, INSERT -- 30] days' notice by
mail, [IF APPLICABLE, INSERT-- (1) on __________ in any year commencing with the
year ________ and ending with the year ________ through operation of the sinking
fund for this series at a Redemption Price equal to 100% of the principal
amount, and (2)] at any time [IF APPLICABLE, INSERT-- on or after __________,
20__], as a whole or in part, at the election of the Company, at the following
Redemption Prices (expressed as percentages of the principal amount): If
redeemed [IF APPLICABLE, INSERT-- on or before __________, ___%, and if
redeemed] during the 12-month period beginning ____________ of the years
indicated,

<TABLE>
<CAPTION>
YEAR              REDEMPTION PRICE            YEAR            REDEMPTION PRICE
----              ----------------            ----            ----------------
<S>               <C>                         <C>             <C>
</TABLE>


and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption [IF APPLICABLE, INSERT-- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or


                                      -16-
<PAGE>


one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]

        [IF APPLICABLE, INSERT-- The Securities of this series are subject to
redemption upon not less than [if applicable, insert 30] days' notice by mail,
(1) on __________ in any year commencing with the year _____ and ending with the
year _____ through operation of the sinking fund for this series at the
Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table below,
and (2) at any time [IF APPLICABLE, INSERT-- on or after __________], as a whole
or in part, at the election of the Company, at the Redemption Prices for
redemption otherwise than through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below: If redeemed
during the 12-month period beginning __________ of the years indicated,

<TABLE>
<CAPTION>
                                                  REDEMPTION PRICE FOR
                   REDEMPTION PRICE FOR           REDEMPTION OTHERWISE
                    REDEMPTION THROUGH                THAN THROUGH
                     OPERATION OF THE               OPERATION OF THE
    YEAR               SINKING FUND                   SINKING FUND
    ----               ------------                   ------------
    <S>            <C>                            <C>
</TABLE>

and thereafter at a Redemption Price equal to ____% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]

        [IF APPLICABLE, INSERT -- Notwithstanding the foregoing, the Company may
not, prior to __________, redeem any Securities of this series as contemplated
by [IF APPLICABLE, INSERT-- clause (2) of] the preceding paragraph as a part of,
or in anticipation of, any refunding operation by the application, directly or
indirectly, of moneys borrowed having an interest cost to the Company
(calculated in accordance with generally accepted financial practice) of less
than ___% per annum.]

        [IF APPLICABLE, INSERT-- The sinking fund for this series provides for
the redemption on __________ in each year beginning with the year ______ and
ending with the year ______ of [IF APPLICABLE, INSERT-- not less than $_______
("mandatory sinking fund") and not more than] $_______ aggregate principal
amount of Securities of this series. Securities of this series acquired or
redeemed by the Company otherwise than through [IF APPLICABLE, INSERT--
mandatory] sinking fund payments may be credited against subsequent [IF
APPLICABLE, INSERT -- mandatory] sinking fund payments otherwise required to be
made [IF APPLICABLE, INSERT-- , in the inverse order in which they become due].]

        [IF THE SECURITY IS SUBJECT TO REDEMPTION OF ANY KIND, INSERT -- In the
event of redemption of this Security in part only, a new Security or Securities
of this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.]


                                      -17-
<PAGE>


        [IF APPLICABLE, INSERT-- The Indenture contains provisions for
defeasance at any time of [the entire indebtedness of this Security] [or]
[certain restrictive covenants and Events of Default with respect to this
Security] [, in each case] upon compliance with certain conditions set forth in
the Indenture.]

        [IF THE SECURITY IS CONVERTIBLE INTO COMMON STOCK OF THE COMPANY,
INSERT-- Subject to the provisions of the Indenture, the Holder of this Security
is entitled, at its option, at any time on or before [insert date] (except that,
in case this Security or any portion hereof shall be called for redemption, such
right shall terminate with respect to this Security or portion hereof, as the
case may be, so called for redemption at the close of business on the first
Business Day next preceding the date fixed for redemption as provided in the
Indenture unless the Company defaults in making the payment due upon
redemption), to convert the principal amount of this Security (or any portion
hereof which is $1,000 or an integral multiple thereof), into fully paid and
non-assessable shares (calculated as to each conversion to the nearest 1/100th
of a share) of the Common Stock of the Company, as said shares shall be
constituted at the date of conversion, at the conversion price of $______
principal amount of Securities for each share of Common Stock, or at the
adjusted conversion price in effect at the date of conversion determined as
provided in the Indenture, upon surrender of this Security, together with the
conversion notice hereon duly executed, to the Company at the designated office
or agency of the Company in __________, accompanied (if so required by the
Company) by instruments of transfer, in form satisfactory to the Company and to
the Trustee, duly executed by the Holder or by its duly authorized attorney in
writing. Such surrender shall, if made during any period beginning at the close
of business on a Regular Record Date and ending at the opening of business on
the Interest Payment Date next following such Regular Record Date (unless this
Security or the portion being converted shall have been called for redemption on
a Redemption Date during the period beginning at the close of business on a
Regular Record Date and ending at the opening of business on the first Business
Day after the next succeeding Interest Payment Date, or if such Interest Payment
Date is not a Business Day, the second such Business Day), also be accompanied
by payment in funds acceptable to the Company of an amount equal to the interest
payable on such Interest Payment Date on the principal amount of this Security
then being converted. Subject to the aforesaid requirement for payment and, in
the case of a conversion after the Regular Record Date next preceding any
Interest Payment Date and on or before such Interest Payment Date, to the right
of the Holder of this Security (or any Predecessor Security) of record at such
Regular Record Date to receive an installment of interest (with certain
exceptions provided in the Indenture), no adjustment is to be made on conversion
for interest accrued hereon or for dividends on shares of Common Stock issued on
conversion. The Company is not required to issue fractional shares upon any such
conversion, but shall make adjustment therefor in cash on the basis of the
current market value of such fractional interest as provided in the Indenture.
The conversion price is subject to adjustment as provided in the Indenture. In
addition, the Indenture provides that in case of certain consolidations or
mergers to which the Company is a party or the sale of substantially all of the
assets of the Company, the Indenture shall be amended, without the consent of
any Holders of Securities, so that this Security, if then outstanding, will be
convertible thereafter, during the period this Security shall be convertible as
specified above, only into the kind and amount of securities, cash and other
property receivable upon the consolidation, merger or sale by a holder of the
number of shares of Common Stock into which this Security might have been


                                      -18-
<PAGE>


converted immediately prior to such consolidation, merger or sale (assuming such
holder of Common Stock failed to exercise any rights of election and received
per share the kind and amount received per share by a plurality of non-electing
shares). In the event of conversion of this Security in part only, a new
Security or Securities for the unconverted portion hereof shall be issued in the
name of the Holder hereof upon the cancellation hereof.]

        [IF THE SECURITY IS CONVERTIBLE INTO OTHER SECURITIES OF THE COMPANY,
SPECIFY THE CONVERSION FEATURES.]

        [IF THE SECURITY IS NOT AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT --
If an Event of Default with respect to Securities of this series shall occur and
be continuing, the principal of the Securities of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.]

        [IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- INSERT FORMULA FOR DETERMINING THE
AMOUNT. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal, premium and interest (in each
case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and premium and interest, if any, on the Securities of this series
shall terminate.]

        The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of more than 50% in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.

        As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than a majority in principal
amount of the Securities of this series at the time Outstanding shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default as Trustee and offered the Trustee reasonable indemnity, and the
Trustee shall not have received from the Holders of a majority in principal
amount of Securities of this series at the time Outstanding a direction
inconsistent with such request,


                                      -19-
<PAGE>


and shall have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The foregoing shall not
apply to any suit instituted by the Holder of this Security for the enforcement
of any payment of principal hereof or any premium or interest hereon on or after
the respective due dates expressed herein.

        No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.

        As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or its
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.

        The Securities of this series are issuable only in registered form
without coupons in denominations of $______ and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate principal
amount of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

        No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

        Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

        All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.

SECTION 2.4   FORM OF LEGEND FOR GLOBAL SECURITIES.

        UNLESS otherwise specified as contemplated by Section 3.1 for the
Securities evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF


                                      -20-
<PAGE>


A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE
OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE
OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH
DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE.

SECTION 2.5   FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.

        The Trustee's certificates of authentication shall be in substantially
the following form:

        This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.

                                                 U.S. Bank National Association,
                                                 as Trustee

                                                 By:
                                                    --------------------------
                                                        Authorized Officer

SECTION 2.6   FORM OF CONVERSION NOTICE.

        Conversion notices shall be in substantially the following form:
To Harmonic Inc.:

        The undersigned owner of this Security hereby irrevocably exercises the
option to convert this Security, or portion hereof (which is $1,000 or an
integral multiple thereof) below designated, into shares of Common Stock of the
Company in accordance with the terms of the Indenture referred to in this
Security, and directs that the shares issuable and deliverable upon the
conversion, together with any check in payment for fractional shares and any
Securities representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If this Notice is being delivered on a date after the close of
business on a Regular Record Date and prior to the opening of business on the
related Interest Payment Date (unless this Security or the portion thereof being
converted has been called for redemption on a Redemption Date during the period
beginning at the close of business on a Regular Record Date and ending at the
opening of business on the first Business Day after the next succeeding Interest
Payment Date, or if such Interest Payment Date is not a Business Day, the second
such Business Day), this Notice is accompanied by payment, in funds acceptable
to the Company, of an amount equal to the interest payable on such Interest
Payment Date of the principal of this Security to be converted. If shares are to
be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect hereto. Any amount required to
be paid by the undersigned on account of interest accompanies this Security.


                                      -21-
<PAGE>


         Principal Amount to be Converted
(in an integral multiple of $1,000, if less than all)

       U.S.$_________

Dated: ___________

                                             Signature(s) must be guaranteed by
                                             an eligible guarantor institution
                                             (banks, stock brokers, savings and
                                             loan associations and credit unions
                                             with membership in an approved
                                             signature guarantee medallion
                                             program) pursuant to Securities and
                                             Exchange Commission Rule 17Ad-15.

                                             -----------------------------------
                                             Signature Guaranty

        Fill in for registration of shares of Common Stock and Security if to be
issued otherwise than to the registered Holder.

--------------------------------------         ---------------------------------
(Name)                                         Social Security or Other Taxpayer
                                               Identification Number

--------------------------------------
(Address)


--------------------------------------
Please print Name and Address
(including zip code)

[The above conversion notice is to be modified, as appropriate, for conversion
into other securities or property of the Company.]


                                      -22-
<PAGE>


                                    ARTICLE 3

                                 THE SECURITIES

SECTION 3.1   AMOUNT UNLIMITED; ISSUABLE IN SERIES.

        The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.

        The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 3.3,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of any series,

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

                (2) any limit upon the aggregate principal amount of the
        Securities of the series which may be authenticated and delivered under
        this Indenture (except for Securities authenticated and delivered upon
        registration of transfer of, or in exchange for, or in lieu of, other
        Securities of the series pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.7
        and except for any Securities which, pursuant to Section 3.3, are deemed
        never to have been authenticated and delivered hereunder);

                (3) the Person to whom any interest on a Security of the series
        shall be payable, if other than the Person in whose name that Security
        (or one or more Predecessor Securities) is registered at the close of
        business on the Regular Record Date for such interest;

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

                (5) the rate or rates (which may be fixed or variable) at which
        any Securities of the series shall bear interest, if any, the date or
        dates from which any such interest shall accrue, the Interest Payment
        Dates on which any such interest shall be payable and the Regular Record
        Date for any such interest payable on any Interest Payment Date (or the
        method for determining the dates and rates);

                (6) the place or places where the principal of and any premium
        and interest on any Securities of the series shall be payable;

                (7) the period or periods within which, the price or prices at
        which and the terms and conditions upon which any Securities of the
        series may be redeemed, in whole or in part, at the option of the
        Company and, if other than by a Board Resolution, the manner in which
        any election by the Company to redeem the Securities shall be evidenced;


                                      -23-
<PAGE>


                (8) the obligation, if any, of the Company to redeem or purchase
        any Securities of the series pursuant to any sinking fund or analogous
        provisions or at the option of the Holder thereof and the period or
        periods within which, the price or prices at which and the terms and
        conditions upon which any Securities of the series shall be redeemed or
        purchased, in whole or in part, pursuant to such obligation;

                (9) if other than denominations of $1,000 and any integral
        multiple thereof, the denominations in which any Securities of the
        series shall be issuable;

                (10) if the amount of principal of or any premium or interest on
        any Securities of the series may be determined with reference to an
        index or pursuant to a formula, the manner in which such amounts shall
        be determined;

                (11) if other than the currency of the United States of America,
        the currency, currencies or currency units in which the principal of or
        any premium or interest on any Securities of the series shall be payable
        and the manner of determining the equivalent thereof in the currency of
        the United States of America for any purpose, including for purposes of
        the definition of "Outstanding" in Section 1.1;

                (12) if the principal of or any premium or interest on any
        Securities of the series is to be payable, at the election of the
        Company or the Holder thereof, in one or more currencies or currency
        units other than that or those in which such Securities are stated to be
        payable, the currency, currencies or currency units in which the
        principal of or any premium or interest on such Securities as to which
        such election is made shall be payable, the periods within which and the
        terms and conditions upon which such election is to be made and the
        amount so payable (or the manner in which such amount shall be
        determined);

                (13) if other than the entire principal amount thereof, the
        portion of the principal amount of any Securities of the series which
        shall be payable upon declaration of acceleration of the Maturity
        thereof pursuant to Section 5.2;

                (14) if the principal amount payable at the Stated Maturity of
        any Securities of the series will not be determinable as of any one or
        more dates prior to the Stated Maturity, the amount which shall be
        deemed to be the principal amount of such Securities as of any such date
        for any purpose thereunder or hereunder, including the principal amount
        thereof which shall be due and payable upon any Maturity other than the
        Stated Maturity or which shall be deemed to be Outstanding as of any
        date prior to the Stated Maturity (or, in any such case, the manner in
        which such amount deemed to be the principal amount shall be
        determined);

                (15) if applicable, that the Securities of the series, in whole
        or any specified part, shall be defeasible pursuant to Section 13.2 or
        Section 13.3 or both such Sections, or any other defeasance provisions
        applicable to any Securities of the series, and, if other than by a
        Board Resolution, the manner in which any election by the Company to
        defease such Securities shall be evidenced;


                                      -24-
<PAGE>


                (16) if applicable, the terms of any right to convert or
        exchange Securities of the series into shares of Common Stock of the
        Company or other securities or property;

                (17) if applicable, that any Securities of the series shall be
        issuable in whole or in part in the form of one or more Global
        Securities and, in such case, the respective Depositaries for such
        Global Securities, the form of any legend or legends which shall be
        borne by any such Global Security in addition to or in lieu of that set
        forth in Section 2.4 and any circumstances in addition to or in lieu of
        those set forth in clause (2) of the last paragraph of Section 3.5 in
        which any such Global Security may be exchanged in whole or in part for
        Securities registered, and any transfer of such Global Security in whole
        or in part may be registered, in the name or names of Persons other than
        the Depositary for such Global Security or a nominee thereof;

                (18) any addition to or change in the Events of Default which
        applies to any Securities of the series and any change in the right of
        the Trustee or the requisite Holders of such Securities to declare the
        principal amount thereof due and payable pursuant to Section 5.2;

                (19) any addition to or change in the covenants set forth in
        Article 10 which applies to Securities of the series;

                (20) any Authenticating Agents, Paying Agents, Security
        Registrars or such other agents necessary in connection with the
        issuance of the Securities of such series, including, without
        limitation, Exchange Rate Agents and Calculation Agents;

                (21) if applicable, the terms of any security that will be
        provided for a series of Securities, including any provisions regarding
        the circumstances under which collateral may be released or substituted;

                (22) if applicable, the terms of any guaranties for the
        Securities and any circumstances under which there may be additional
        obligors on the Securities; and


                (23) any other terms of the series (which terms shall not be
        inconsistent with the provisions of this Indenture, except as permitted
        by Section 9.1(5)).

        All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to the
Board Resolution referred to above and (subject to Section 3.3) set forth, or
determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.

        If any of the terms of the series are established by action taken
pursuant to a Board Resolution, 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 Officers'
Certificate setting forth the terms of the series.

SECTION 3.2   DENOMINATIONS.

        The Securities of each series shall be issuable only in registered form
without coupons and only in such denominations as shall be specified as
contemplated by Section 3.1. In the absence of


                                      -25-
<PAGE>


any such specified denomination with respect to the Securities of any series,
the Securities of such series shall be issuable in denominations of $1,000 and
any integral multiple thereof.

SECTION 3.3   EXECUTION, AUTHENTICATION, DELIVERY AND DATING.

        The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its Chief Executive
Officer, its principal financial officer, its President or one of its Vice
Presidents, attested by its Treasurer, its Secretary or one of its Assistant
Treasurers or Assistant Secretaries. The signature of any of these officers on
the Securities may be manual or facsimile.

        Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.

        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 Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by Sections 2.1 and 3.1,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 6.1) shall be fully protected in
relying upon, a copy of such Board Resolution, the Officers' Certificate setting
forth the terms of the series and an Opinion of Counsel, with such Opinion of
Counsel stating,

               (1) if the form of such Securities has been established by or
        pursuant to Board Resolution as permitted by Section 2.1, that such form
        has been established in conformity with the provisions of this
        Indenture;

               (2) if the terms of such Securities have been established by or
        pursuant to Board Resolution as permitted by Section 3.1, that such
        terms have been established in conformity with the provisions of this
        Indenture; and

               (3) that such Securities, when authenticated and delivered by the
        Trustee and issued by the Company in the manner and subject to any
        conditions specified in such Opinion of Counsel, will constitute valid
        and legally binding obligations of the Company enforceable in accordance
        with their terms, subject to bankruptcy, insolvency, fraudulent
        transfer, reorganization, moratorium and similar laws of general
        applicability relating to or affecting creditors' rights and to general
        equity principles.

        If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the


                                      -26-
<PAGE>


Trustee's own rights, duties or immunities under the Securities and this
Indenture or otherwise in a manner which is not reasonably acceptable to the
Trustee.

        Notwithstanding the provisions of Section 3.1 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.

        Each Security shall be dated the date of its authentication.

        No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 3.9, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.

        Neither the Company nor the Trustee shall have any responsibility for
any defect in the CUSIP number that appears on any Security, check, advice of
payment or redemption notice, and any such document may contain a statement to
the effect that CUSIP numbers have been assigned by an independent service for
convenience of reference and that neither the Company nor the Trustee shall be
liable for any inaccuracy in such numbers.

SECTION 3.4   TEMPORARY SECURITIES.

        Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.

        If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series, the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor one or more definitive
Securities of the same series, of any authorized denominations and of like tenor
and aggregate


                                      -27-
<PAGE>


principal amount. Until so exchanged, the temporary Securities of any series
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series and tenor.

SECTION 3.5   REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.

        The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.

        Upon surrender for registration of transfer of any Security of a series
at the office or agency of the Company in a Place of Payment for that series,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Securities
of the same series, of any authorized denominations and of like tenor and
aggregate principal amount.

        At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
like tenor and aggregate principal amount, upon surrender of the Securities to
be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.

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

        Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or its attorney duly authorized in writing.

        No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4, 9.6 or 11.7 not involving any transfer.

        If the Securities of any series (or of any series and specified tenor)
are to be redeemed in part, the Company shall not be required (A) to issue,
register the transfer of or exchange any Securities of that series (or of that
series and specified tenor, as the case may be) during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of any such Securities selected for redemption under Section 11.3 and
ending at the close of business on the day of such mailing, or (B) to register
the transfer of or exchange any Security so selected for redemption in whole or
in part, except the unredeemed portion of any Security being redeemed in part.


                                      -28-
<PAGE>


        The provisions of clauses (1), (2), (3) and (4) below shall apply only
to Global Securities:

               (1) Each Global Security authenticated under this Indenture shall
        be registered in the name of the Depositary designated for such Global
        Security or a nominee thereof and delivered to such Depositary or a
        nominee thereof or custodian therefor, and each such Global Security
        shall constitute a single Security for all purposes of this Indenture.

               (2) Notwithstanding any other provision in this Indenture, no
        Global Security may be exchanged in whole or in part for Securities
        registered, and no transfer of a Global Security in whole or in part may
        be registered, in the name of any Person other than the Depositary for
        such Global Security or a nominee thereof unless (A) such Depositary (i)
        has notified the Company that it is unwilling or unable to continue as
        Depositary for such Global Security or (ii) has ceased to be a clearing
        agency registered under the Exchange Act, (B) there shall have occurred
        and be continuing an Event of Default with respect to such Global
        Security or (C) there shall exist such circumstances, if any, in
        addition to or in lieu of the foregoing as have been specified for this
        purpose as contemplated by Section 3.1.

               (3) Subject to clause (2) above, any exchange of a Global
        Security for other Securities may be made in whole or in part, and all
        Securities issued in exchange for a Global Security or any portion
        thereof shall be registered in such names as the Depositary for such
        Global Security shall direct.

               (4) Every Security authenticated and delivered upon registration
        of transfer of, or in exchange for or in lieu of, a Global Security or
        any portion thereof, whether pursuant to this Section, Section 3.4, 3.6,
        9.6 or 11.7 or otherwise, shall be authenticated and delivered in the
        form of, and shall be, a Global Security, unless such Security is
        registered in the name of a Person other than the Depositary for such
        Global Security or a nominee thereof.

SECTION 3.6   MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.

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

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

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


                                      -29-
<PAGE>


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

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

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

SECTION 3.7   PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.

        Except as otherwise provided as contemplated by Section 3.1 with respect
to any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.

        Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:

                (1) The Company may elect to make payment of any Defaulted
        Interest to the Persons in whose names the Securities of such series (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 Security of such series 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 be not more than
        15 days and not 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


                                      -30-
<PAGE>


        Interest and the Special Record Date therefor to be given to each Holder
        of Securities of such series in the manner set forth in Section 1.6, 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 so mailed, such Defaulted Interest shall be paid to
        the Persons in whose names the Securities of such series (or their
        respective Predecessor Securities) are registered at the close of
        business on such Special Record Date and shall no longer be payable
        pursuant to the following clause (2).

               (2) The Company may make payment of any Defaulted Interest on the
        Securities of any series 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.

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

        Subject to the provisions of Section 14.2, in the case of any Security
(or any part thereof) which is converted after any Regular Record Date and on or
prior to the next succeeding Interest Payment Date (other than any Security the
principal of (or premium, if any, on) which shall become due and payable,
whether at Stated Maturity or by declaration of acceleration or otherwise prior
to such Interest Payment Date), interest whose Stated Maturity is on such
Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion and such interest (whether or not punctually
paid or duly provided for) shall be paid to the Person in whose name that
Security (or any one or more Predecessor Securities) is registered at the close
of business on such Regular Record Date. Except as otherwise expressly provided
in the immediately preceding sentence or in Section 14.2, in the case of any
Security (or any part thereof) which is converted, interest whose Stated
Maturity is after the date of conversion of such Security (or such part thereof)
shall not be payable.

SECTION 3.8   PERSONS DEEMED OWNERS.

        Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of and any premium and
(subject to Section 3.7) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.


                                      -31-
<PAGE>


SECTION 3.9   CANCELLATION.

        All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to the
Trustee for cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities so delivered shall be promptly
canceled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Securities held by the
Trustee shall be disposed of in accordance with its customary procedures.

SECTION 3.10  COMPUTATION OF INTEREST.

        Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.

                                    ARTICLE 4

                           SATISFACTION AND DISCHARGE

SECTION 4.1   SATISFACTION AND DISCHARGE OF INDENTURE.

        This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when

               (1)    either

                    (A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 3.6 and (ii) Securities for
whose payment money has theretofore been deposited in trust or segregated and
held in trust by the Trustee or the Company and thereafter repaid to the Company
or discharged from such trust, as provided in Section 10.3) have been delivered
to the Trustee for cancellation; or

                    (B) all such Securities not theretofore delivered to the
Trustee for cancellation

                       (i) have become due and payable, or


                                      -32-
<PAGE>


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

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

and the Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the purpose
money in an amount sufficient to pay and discharge the entire indebtedness on
such Securities not theretofore delivered to the Trustee for cancellation, for
principal and any premium and interest to the date of such deposit (in the case
of Securities which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;

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

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

        Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Trustee to any Authenticating Agent under Section 6.14 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive.

SECTION 4.2   APPLICATION OF TRUST MONEY.

        Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.

                                    ARTICLE 5

                                    REMEDIES

SECTION 5.1   EVENTS OF DEFAULT.

        "Event of Default," wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be


                                      -33-
<PAGE>


voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body), unless in the Board Resolution,
supplemental indenture or Officers' Certificate establishing such series, it is
provided that such series shall not have the benefit of said Event of Default:

                (1) default in the payment of any interest upon any Security of
        that series when it becomes due and payable, and continuance of such
        default for a period of 30 days; or

                (2) default in the payment of the principal of or any premium on
        any Security of that series at its Maturity; or

                (3) default in the deposit of any sinking fund payment, when and
        as due by the terms of a Security of that series; or

                (4) default in the performance, or breach, of any covenant or
        warranty of the Company in this Indenture (other than a covenant or
        warranty a default in whose performance or whose breach is elsewhere in
        this Section specifically dealt with or which has expressly been
        included in this Indenture solely for the benefit of series of
        Securities other than that series), and continuance of such default or
        breach for a period of 90 days after there has been given, by registered
        or certified mail, to the Company by the Trustee or to the Company and
        the Trustee by the Holders of at least 25% in principal amount of the
        Outstanding Securities of that series a written notice specifying such
        default or breach and requiring it to be remedied and stating that such
        notice is a "Notice of Default" hereunder; or

                (5) the entry by a court having jurisdiction in the premises of
        (A) a decree or order for relief in respect of the Company in an
        involuntary case or proceeding under any applicable Federal or State
        bankruptcy, insolvency, reorganization or other similar law or (B) a
        decree or order adjudging the Company a bankrupt or insolvent, or
        approving as properly filed a petition seeking reorganization,
        arrangement, adjustment or composition of or in respect of the Company
        under any applicable Federal or State law, or appointing a custodian,
        receiver, liquidator, assignee, trustee, sequestrator or other similar
        official of the Company or of any substantial part of its property, or
        ordering the winding up or liquidation of its affairs, and the
        continuance of any such decree or order for relief or any such other
        decree or order unstayed and in effect for a period of 90 consecutive
        days; or

                (6) the commencement by the Company of a voluntary case or
        proceeding under any applicable Federal or State bankruptcy, insolvency,
        reorganization or other similar law or of any other case or proceeding
        to be adjudicated a bankrupt or insolvent, or the consent by it to the
        entry of a decree or order for relief in respect of the Company in an
        involuntary case or proceeding under any applicable Federal or State
        bankruptcy, insolvency, reorganization or other similar law or to the
        commencement of any bankruptcy or insolvency case or proceeding against
        it, or the filing by it of a petition or answer or consent seeking
        reorganization or relief under any applicable Federal or State law, or
        the consent by it to the filing of such petition or to the appointment
        of or taking possession by a custodian, receiver, liquidator, assignee,
        trustee, sequestrator or other similar official of the Company or of any


                                      -34-
<PAGE>


        substantial part of its property, or the making by it of an assignment
        for the benefit of creditors, or the admission by it in writing of its
        inability to pay its debts generally as they become due, or the taking
        of corporate action by the Company in furtherance of any such action; or

                (7) any other Event of Default provided with respect to
        Securities of that series in the Board Resolution, supplemental
        indenture or Officers' Certificate establishing that series.

SECTION 5.2   ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.

        Unless the Board Resolution, supplemental indenture or Officers'
Certificate establishing such series provides otherwise, if an Event of Default
(other than an Event of Default specified in Section 5.1(5) or 5.1(6)) with
respect to Securities of any series at the time Outstanding occurs and is
continuing, then in every such case the Trustee or the Holders of not less than
25% in principal amount of the Outstanding Securities of that series may declare
the principal amount of all the Securities of that series (or, if any Securities
of that series are Original Issue Discount Securities, such portion of the
principal amount of such Securities as may be specified by the terms thereof),
and premium, if any, together with accrued and unpaid interest, if any, thereon,
to be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount), and premium, if any, together with accrued and
unpaid interest, if any, thereon, shall become immediately due and payable. If
an Event of Default specified in Section 5.1(5) or 5.1(6) with respect to
Securities of any series at the time Outstanding occurs, the principal amount of
all the Securities of that series (or, if any Securities of that series are
Original Issue Discount Securities, such portion of the principal amount of such
Securities as may be specified by the terms thereof), and premium, if any,
together with accrued and unpaid interest, if any, thereon, shall automatically,
and without any declaration or other action on the part of the Trustee or any
Holder, become immediately due and payable.

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

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

                      (A) all overdue interest on all Securities of that series,

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

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


                                      -35-
<PAGE>


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

               (2) all Events of Default with respect to Securities of that
        series, other than the non-payment of the principal of Securities of
        that series which have become due solely by such declaration of
        acceleration, have been cured or waived as provided in Section 5.13. No
        such rescission shall affect any subsequent default or impair any right
        consequent thereon.

SECTION 5.3   COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.

        The Company covenants that if

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

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

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

SECTION 5.4   TRUSTEE MAY FILE PROOFS OF CLAIM.

        In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any


                                      -36-
<PAGE>


amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 6.7.

        No provision of this Indenture shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and be a member of a creditors'
or other similar committee.

SECTION 5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.

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

SECTION 5.6 APPLICATION OF MONEY COLLECTED.

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

        FIRST: To the payment of all amounts due the Trustee under Section 6.7;

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

        THIRD: The balance, if any, to the Company or any other Person or
Persons entitled thereto.

SECTION 5.7 LIMITATION ON SUITS.

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

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


                                      -37-
<PAGE>


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

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

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

               (5) no direction inconsistent with such written request has been
        given to the Trustee during such 60-day period by the Holders of a
        majority in principal amount of the Outstanding Securities of that
        series; it being understood and intended that no one or more of such
        Holders shall have any right in any manner whatever by virtue of, or by
        availing of, any provision of this Indenture to affect, disturb or
        prejudice the rights of any other of such Holders, or to obtain or to
        seek to obtain priority or preference over any other of such Holders or
        to enforce any right under this Indenture, except in the manner herein
        provided and for the equal and ratable benefit of all of such Holders.

SECTION 5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST AND TO CONVERT.

        Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Section 3.7)
interest on such Security on the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date), to convert
such Securities in accordance with Article 14 to the extent that such right to
convert is applicable to such Security, and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.

SECTION 5.9 RESTORATION OF RIGHTS AND REMEDIES.

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

SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE.

        Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 3.6, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and


                                      -38-
<PAGE>


in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

SECTION 5.11 DELAY OR OMISSION NOT WAIVER.

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

SECTION 5.12 CONTROL BY HOLDERS.

        The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that

                (1) such direction shall not be in conflict with any rule of law
        or with this Indenture and the Trustee shall not have determined that
        the action so directed would be unjustly prejudicial to Holders of
        Securities of that series, or any other series, not taking part in such
        direction; and

                (2) the Trustee may take any other action deemed proper by the
        Trustee which is not inconsistent with such direction or this Indenture.

SECTION 5.13 WAIVER OF PAST DEFAULTS.

        The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except

                (1) a default in the payment of the principal of or any premium
        or interest on any Security of such series as and when the same shall
        become due and payable by the terms thereof, otherwise than by
        acceleration (unless such default has been cured and a sum sufficient to
        pay all matured installments of interest, principal and premium, if any,
        has been deposited with the Trustee), or

                (2) to the extent such right is applicable to such Security, a
        failure by the Company on request to convert any Security into Common
        Stock; or

                (3) in respect of a covenant or provision hereof which under
        Article 9 cannot be modified or amended without the consent of the
        Holder of each Outstanding Security of such series affected.


                                      -39-
<PAGE>


        Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.

SECTION 5.14 UNDERTAKING FOR COSTS.

        In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company or in any suit for the
enforcement of the right to convert any Security in accordance with Article 14.

SECTION 5.15 WAIVER OF USURY, STAY OR EXTENSION LAWS.

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

                                    ARTICLE 6

                                   THE TRUSTEE

SECTION 6.1 CERTAIN DUTIES AND RESPONSIBILITIES.

        The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.

SECTION 6.2 NOTICE OF DEFAULTS.

                If a default occurs hereunder with respect to Securities of any
        series, the Trustee shall give the Holders of Securities of such series
        notice of such default as and to the extent provided by the Trust
        Indenture Act; provided, however, that except in the case of a default
        in the payment of


                                      -40-
<PAGE>


principal of (or premium, if any) or interest on any Securities of such series
or in the payment of any sinking fund installment or any conversion right
applicable to Securities of such series, the Trustee shall be protected in
withholding such notice if and so long as a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the interests of the holders of Securities of such series;
provided, further, however, that in the case of any default of the character
specified in Section 5.1(4) with respect to Securities of such series, no such
notice to Holders shall be given until at least 60 days after the occurrence
thereof. For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default with respect to Securities of such series.

        Except with respect to Section 10.1, the Trustee shall have no duty to
inquire as to the performance of the Company with respect to the covenants
contained in Article 10. In addition, the Trustee shall not be deemed to have
knowledge of an Event of Default except (i) any Default or Event of Default
occurring pursuant to Sections 5.1(1) 5.1(2) and 5.(3) (defaults in payments on
the Securities) or (ii) any Default or Event of Default of which the Trustee
shall have received written notification or obtained actual knowledge.

        Delivery of reports, information and documents to the Trustee under
Section 7.4 is for informational purposes only 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 hereunder (as to which the
Trustee is entitled to rely conclusively on Officers' Certificates).

SECTION 6.3 CERTAIN RIGHTS OF TRUSTEE.

        Subject to the provisions of Section 6.1:

                (1) in the absence of bad faith on the part of the Trustee, the
        Trustee may rely and shall be protected in acting or refraining from
        acting upon any resolution, certificate, statement, instrument, opinion,
        report, notice, request, direction, consent, order, bond, debenture,
        note, other evidence of indebtedness or other paper or document believed
        by it to be genuine and to have been signed or presented by the proper
        party or parties;

                (2) any request or direction of the Company mentioned herein
        shall be sufficiently evidenced by a Company Request or Company Order,
        and any resolution of the Board of Directors shall be sufficiently
        evidenced by a Board Resolution;

                (3) whenever in the administration of this Indenture the Trustee
        shall deem it desirable that a matter be proved or established prior to
        taking, suffering or omitting any action hereunder, the Trustee (unless
        other evidence be herein specifically prescribed) is entitled to and
        may, in the absence of bad faith on its part, rely upon an Officers'
        Certificate;

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

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

                (6) 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, direction,
        consent, order, bond, debenture, note, other evidence of indebtedness or
        other paper or document, but the Trustee, in its discretion, may make
        such further inquiry or investigation into such facts or matters as it
        may see fit, and, if the Trustee shall determine to


                                      -41-
<PAGE>


        make such further inquiry or investigation, it shall be entitled to
        examine the books, records and premises of the Company, personally or by
        agent or attorney; and

                (7) 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.

SECTION 6.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.

        The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity, sufficiency or priority of this Indenture or of the Securities.
Neither the Trustee nor any Authenticating Agent shall be accountable for the
use or application by the Company of Securities or the proceeds thereof.

SECTION 6.5 MAY HOLD SECURITIES AND ACT AS TRUSTEE UNDER OTHER INDENTURES.

        The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
6.8 and 6.13, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.

        Subject to the limitations imposed by the Trust Indenture Act, nothing
in this Indenture shall prohibit the Trustee from becoming and acting as trustee
under other indentures under which other securities, or certificates of interest
of participation in other securities, of the Company are outstanding in the same
manner as if it were not Trustee hereunder.

SECTION 6.6 MONEY HELD IN TRUST.

        Money held by the Trustee in trust hereunder 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 money received by it hereunder except as otherwise
agreed with the Company.

SECTION 6.7 COMPENSATION AND REIMBURSEMENT.

        The Company agrees:

               (1) to pay to the Trustee from time to time reasonable
        compensation for all services rendered by it hereunder (which
        compensation shall not be limited by any provision of law in regard to
        the compensation of a trustee of an express trust);


                                      -42-
<PAGE>


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

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

        When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.1(5) or Section 5.1(6) hereof occurs, the
expenses and the compensation for the services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of administration
under any applicable bankruptcy, insolvency, reorganization or similar law.

SECTION 6.8 CONFLICTING INTERESTS.

        If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by  the Trust Indenture Act, the Trustee shall not be deemed to have a
conflicting interest by virtue of being a trustee under this Indenture with
respect to Securities of more than one series.

SECTION 6.9 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.

        There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities of each series, which may be Trustee hereunder for
Securities of one or more other series. Each Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has (or if the
Trustee is a member of a bank holding company system, its bank holding company
has) a combined capital and surplus of at least $50,000,000. If any such Person
or bank holding company publishes reports of condition at least annually,
pursuant to law or to the requirements of its supervising or examining
authority, then for the purposes of this Section and to the extent permitted by
the Trust Indenture Act, the combined capital and surplus of such Person or bank
holding company shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time the
Trustee with respect to the Securities of any series shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.

SECTION 6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

        No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.11.

        The Trustee may resign at any time with respect to the Securities of one
or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 6.11 shall
not have been delivered to the Trustee within 30 days after the giving


                                      -43-
<PAGE>


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 the Securities of such series.

        The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.

        If at any time:

               (1) the Trustee shall fail to comply with Section 6.8 after
        written request therefor by the Company or by any Holder who has been a
        bona fide Holder of a Security for at least six months, or

               (2) the Trustee shall cease to be eligible under Section 6.9 and
        shall fail to resign after written request therefor by the Company or by
        any such Holder, or

               (3) the Trustee shall become incapable of acting or shall be
        adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
        property shall be appointed 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, (A)
        the Company by a Board Resolution may remove the Trustee with respect to
        all Securities, or (B) subject to Section 5.14, any Holder who has been
        a bona fide Holder of a Security for at least six months may, on behalf
        of himself and all others similarly situated, petition any court of
        competent jurisdiction for the removal of the Trustee with respect to
        all Securities and the appointment of a successor Trustee or Trustees.

        If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with respect to
the Securities of any particular series) and shall comply with the applicable
requirements of Section 6.11. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 6.11, become the
successor Trustee with respect to the Securities of such series and to that
extent supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of any series shall have been so
appointed by the Company or the Holders and accepted appointment in the manner
required by Section 6.11, the retiring Trustee may petition, or any Holder who
has been a bona fide Holder of a Security of such series for at least six months
may petition, on behalf of himself and all others similarly situated, any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.


                                      -44-
<PAGE>


        The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series to all Holders
of Securities of such series in the manner provided in Section 1.6. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.

SECTION 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

        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.

        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 (1) 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, (2) if the retiring Trustee
is not retiring with respect to all Securities, 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 (3) 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 and 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 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 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 all 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.


                                      -45-
<PAGE>


        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 the
first or second preceding paragraph, as the case may be.

        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.

SECTION 6.12 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 all or substantially all 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 such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. 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. In the
event that any Securities shall not have been authenticated by such predecessor
Trustee, any such successor Trustee may authenticate and deliver such Securities
in either its own name or that of such predecessor Trustee, with the full force
and effect which this Indenture provides for the certificate of authentication
of the Trustee.

SECTION 6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

        If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).

SECTION 6.14 APPOINTMENT OF AUTHENTICATING AGENT.

        The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer or partial redemption thereof
or pursuant to Section 3.6, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having (or if the Authenticating Agent is a member of a bank holding
company system, its bank holding company has) a combined capital and surplus of
not less than $50,000,000 and subject to supervision or examination by Federal
or State authority. If such Authenticating Agent publishes reports of condition
at least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such


                                      -46-
<PAGE>


Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.

        Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.

        An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.6 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.

        The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 6.7.

        If an appointment with respect to one or more series is made pursuant to
this Section 6.12, the Securities of such series may have endorsed thereon, in
lieu of the Trustee's certificate of authentication, an alternative certificate
of authentication in the following form:


                                      -47-
<PAGE>


        This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

                                          U.S. Bank National Association,
                                          As Trustee


                                          By:
                                             -----------------------------------
                                                As Authenticating Agent

                                          By:
                                             -----------------------------------
                                                Authorized Officer

                                    ARTICLE 7

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 7.1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.

        The Company will furnish or cause to be furnished to the Trustee

               (1) semi-annually, not later than 15 days after the Regular
        Record Date for each respective series of Securities, a list, in such
        form as the Trustee may reasonably require, of the names and addresses
        of the Holders of Securities of each series as of such Regular Record
        Date, as the case may be, or if there is no Regular Record Date for such
        series of Securities, semi-annually, and

               (2) 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 that no such list need be furnished by the Company to the Trustee so
long as the Trustee is acting as Security Registrar.

SECTION 7.2 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.

        The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.

        The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act.


                                      -48-
<PAGE>


        Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.

SECTION 7.3 REPORTS BY TRUSTEE.

        The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.

        Reports so required to be transmitted at stated intervals of not more
than 12 months shall be transmitted no later than July 15 in each calendar year,
commencing with the first July 15 after the first issuance of Securities
pursuant to this Indenture.

        A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.

SECTION 7.4 REPORTS BY COMPANY.

        The Company shall file with the Trustee and the Commission, and transmit
to Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to the Trust Indenture Act; provided that any
such information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.

                                    ARTICLE 8

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 8.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.

        The Company shall not consolidate with or merge into any other Person
(in a transaction in which the Company is not the surviving corporation) or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, unless:

                (1) in case the Company shall consolidate with or merge into
        another Person (in a transaction in which the Company is not the
        surviving corporation) or convey, transfer or lease its properties and
        assets substantially as an entirety to any Person, the Person formed by
        such consolidation or into which the Company is merged or the Person
        which acquires by conveyance or transfer, or which leases, the
        properties and assets of the Company


                                      -49-
<PAGE>


        substantially as an entirety shall be a corporation, limited liability
        company, partnership or trust, shall be organized and validly existing
        under the laws of the United States of America, any State thereof or the
        District of Columbia and shall expressly assume, by an indenture
        supplemental hereto, executed and delivered to the Trustee, in form
        satisfactory to the Trustee, the due and punctual payment of the
        principal of and any premium and interest on all the Securities and the
        performance or observance of every covenant of this Indenture on the
        part of the Company to be performed or observed and the conversion
        rights shall be provided for in accordance with Article 14, if
        applicable, or as otherwise specified pursuant to Section 3.1, by
        supplemental indenture satisfactory in form to the Trustee, executed and
        delivered to the Trustee, by the Person (if other than the Company)
        formed by such consolidation or into which the Company shall have been
        merged or by the Person which shall have acquired the Company's assets;

               (2) immediately after giving effect to such transaction and
        treating any indebtedness which becomes an obligation of the Company or
        any Subsidiary as a result of such transaction as having been incurred
        by the Company or such Subsidiary at the time of such transaction, no
        Event of Default, and no event which, after notice or lapse of time or
        both, would become an Event of Default, shall have happened and be
        continuing; and

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

SECTION 8.2 SUCCESSOR SUBSTITUTED.

        Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 8.1, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.


                                      -50-
<PAGE>


                                    ARTICLE 9

                             SUPPLEMENTAL INDENTURES

SECTION 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.

        Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:

                (1) to evidence the succession of another Person to the Company,
        or successive successions, and the assumption by any such successor of
        the covenants of the Company herein and in the Securities in compliance
        with Article 8; or

                (2) to add to the covenants of the Company for the benefit of
        the Holders of all or any series of Securities (and if such covenants
        are to be for the benefit of less than all series of Securities, stating
        that such covenants are expressly being included solely for the benefit
        of such series) or to surrender any right or power herein conferred upon
        the Company; or

                (3) to add any additional Events of Default for the benefit of
        the Holders of all or any series of Securities (and if such additional
        Events of Default are to be for the benefit of less than all series of
        Securities, stating that such additional Events of Default are expressly
        being included solely for the benefit of such series); or

                (4) to add to or change any of the provisions of this Indenture
        to such extent as shall be necessary to permit or facilitate the
        issuance of Securities in bearer form, registrable or not registrable as
        to principal, and with or without interest coupons, or to permit or
        facilitate the issuance of Securities in uncertificated form; or

                (5) to add to, change or eliminate any of the provisions of this
        Indenture in respect of one or more series of Securities, provided that
        any such addition, change or elimination (A) shall neither (i) apply to
        any Security of any series created prior to the execution of such
        supplemental indenture and entitled to the benefit of such provision nor
        (ii) modify the rights of the Holder of any such Security with respect
        to such provision or (B) shall become effective only when there is no
        such Security Outstanding; or

                (6) to secure the Securities, including provisions regarding
        the circumstances under which collateral may be released or substituted;
        or

                (7) to add or provide for a guaranty of the Securities or
        additional obligors on the Securities; or

                (8) to establish the form or terms of Securities of any series
        as permitted by Sections 2.1 and 3.1; or

                (9) to evidence and provide for the acceptance of appointment
        hereunder by a successor Trustee with respect to the Securities of one
        or more series and to add to or change


                                      -51-
<PAGE>


        any of the provisions of this Indenture as shall be necessary to provide
        for or facilitate the administration of the trusts hereunder by more
        than one Trustee, pursuant to the requirements of Section 6.11; or

               (10) to cure any ambiguity, to correct or supplement any
        provision herein which may be defective or inconsistent with any other
        provision herein, or to make any other provisions with respect to
        matters or questions arising under this Indenture, provided that such
        action pursuant to this clause (10) shall not adversely affect the
        interests of the Holders of Securities of any series in any material
        respect; or

               (11) to supplement any of the provisions of the Indenture to such
        extent as shall be necessary to permit or facilitate the defeasance and
        discharge of any series of Securities pursuant to Articles 4 and 13,
        provided that any such action shall not adversely affect the interests
        of the Holders of Securities of such series or any other series of
        Securities in any material respect.

SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.

        With the consent of the Holders of a majority in principal amount of the
Outstanding Securities of each series affected by such supplemental indenture,
by Act of said Holders delivered to the Company and the Trustee, the Company,
when authorized by a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities of such series under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,

               (1) change the Stated Maturity of the principal of, or any
        installment of principal of or interest on, any Security, or reduce the
        principal amount thereof or the rate of interest thereon or any premium
        payable upon the redemption thereof, or reduce the amount of the
        principal of an Original Issue Discount Security or any other Security
        which would be due and payable upon a declaration of acceleration of the
        Maturity thereof pursuant to Section 5.2, or change the coin or currency
        in which, any Security or any premium or interest thereon is payable, or
        impair the right to institute suit for the enforcement of any such
        payment on or after the Stated Maturity thereof (or, in the case of
        redemption, on or after the Redemption Date), or modify the provisions
        of this Indenture in the case of Securities of any series that are
        convertible into Securities or other securities of the Company,
        adversely affect the right of Holders to convert any of the Securities
        of such series other than as provided in or pursuant to this Indenture,
        or


                                      -52-
<PAGE>


               (2) reduce the percentage in principal amount of the Outstanding
        Securities of any series, the consent of whose Holders is required for
        any such supplemental indenture, or the consent of whose Holders is
        required for any waiver (of compliance with certain provisions of this
        Indenture or certain defaults hereunder and their consequences) provided
        for in this Indenture, or

               (3) modify any of the provisions of this Section, Section 5.13 or
        Section 10.8, except to increase any such percentage or to provide that
        certain other provisions of this Indenture cannot be modified or waived
        without the consent of the Holder of each Outstanding Security affected
        thereby; provided, however, that this clause shall not be deemed to
        require the consent of any Holder with respect to changes in the
        references to "the Trustee" and concomitant changes in this Section and
        Section 10.8, or the deletion of this proviso, in accordance with the
        requirements of Sections 6.11 and 9.1(8), or

               (4) if applicable, make any change that adversely affects the
        right to convert any security as provided in Article 14 or pursuant to
        Section 3.1 (except as permitted by Section 9.1(9)) or decrease the
        conversion rate or increase the conversion price of any such security.

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

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

SECTION 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES.

        In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Sections 6.1 and 6.3) shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

SECTION 9.4 EFFECT OF SUPPLEMENTAL INDENTURES.

        Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.


                                      -53-
<PAGE>


SECTION 9.5 CONFORMITY WITH TRUST INDENTURE ACT.

        Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.

SECTION 9.6 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.

        Securities of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.

                                   ARTICLE 10

                                    COVENANTS

SECTION 10.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.

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

SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY.

        The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange, where Securities of that series may be
surrendered for conversion and where notices and demands to or upon the Company
in respect of the Securities of that series and this Indenture may be served.
The Company will give prompt written notice to the Trustee of the location, and
any change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands. Unless otherwise provided
in a supplemental indenture or pursuant to Section 3.1 hereof, the Place of
Payment for any series of Securities shall be the Corporate Trust Office of the
Trustee.

        The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such


                                      -54-
<PAGE>


designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in each Place of Payment for
Securities of any series for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.

SECTION 10.3 MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.

        If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.

        Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, on or prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.

        The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will (1) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.

        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
by Company Order 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 trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.

        Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for a period
ending on the earlier of the date that is ten Business Days prior to the date
such money would escheat to the State or two years after such principal, premium
or interest has become due and payable shall be paid to the Company on Company
Request, or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent,


                                      -55-
<PAGE>


before being required to make any such repayment, may at the expense of the
Company cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in each Place of Payment, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.

SECTION 10.4 STATEMENT BY OFFICERS AS TO DEFAULT.

        The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge. The fiscal year of the Company currently ends on
December 31; and the Company will give the Trustee prompt written notice of any
change of its fiscal year.

SECTION 10.5 EXISTENCE.

        Subject to Article 8, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence.

SECTION 10.6 MAINTENANCE OF PROPERTIES.

        The Company will cause all properties used or useful in the conduct of
its business to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as, and to the extent, in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section shall prevent the Company from discontinuing the operation or
maintenance of any of such properties if such discontinuance is, in the judgment
of the Company, desirable in the conduct of its business and not disadvantageous
in any material respect to the Holders.

SECTION 10.7 PAYMENT OF TAXES AND OTHER CLAIMS.

        The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or upon the income,
profits or property of the Company, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim (i) whose amount, applicability or validity is being
contested in good faith by appropriate proceedings or (ii) if the failure to pay
or


                                      -56-
<PAGE>


discharge would not have a material adverse effect on the assets, business,
operations, properties or condition (financial or otherwise) of the Company and
its subsidiaries, taken as a whole.

SECTION 10.8 WAIVER OF CERTAIN COVENANTS.

        Except as otherwise specified as contemplated by Section 3.1 for
Securities of such series, the Company may, with respect to the Securities of
any series, omit in any particular instance to comply with any term, provision
or condition set forth in any covenant provided pursuant to Section 3.1(19),
9.1(2), 9.1(7), 10.6 or 10.7 for the benefit of the Holders of such series if
before the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Securities of such series shall, by Act of
such Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect.

                                   ARTICLE 11

                            REDEMPTION OF SECURITIES

SECTION 11.1 APPLICABILITY OF ARTICLE.

        Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 3.1 for such Securities) in
accordance with this Article.

SECTION 11.2 ELECTION TO REDEEM; NOTICE TO TRUSTEE.

        The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution or in another manner specified as contemplated by Section
3.1 for such Securities. In case of any redemption at the election of the
Company of less than all the Securities of any series (including any such
redemption affecting only a single Security), the Company shall, at least 45
days prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to the Trustee), notify the Trustee of such Redemption
Date, of the principal amount of Securities of such series to be redeemed and,
if applicable, of the tenor of the Securities to be redeemed. 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 Officers' Certificate
evidencing compliance with such restriction.

SECTION 11.3 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.

        If less than all the Securities of any series are to be redeemed (unless
all the Securities of such series and of a specified tenor are to be redeemed or
unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 45 days


                                      -57-
<PAGE>


prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by lot, or in the Trustee's
discretion, on a pro-rata basis, provided that the unredeemed portion of the
principal amount of any Security shall be in an authorized denomination (which
shall not be less than the minimum authorized denomination) for such Security.
If less than all the Securities of such series and of a specified tenor are to
be redeemed (unless such redemption affects only a single Security), the
particular Securities to be redeemed shall be selected not more than 45 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series and specified tenor not previously called for redemption in
accordance with the preceding sentence.

        If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed (so
far as may be) to be the portion selected for redemption. Securities which have
been converted during a selection of Securities to be redeemed shall be treated
by the Trustee as Outstanding for the purpose of such selection.

        The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in case of any Securities
selected for partial redemption as aforesaid, the principal amount thereof to be
redeemed.

        The provisions of the three preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.

        For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.

SECTION 11.4 NOTICE OF REDEMPTION.

        Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not fewer than 30 nor more than 60 days prior to the Redemption
Date, unless a shorter period is specified in the Securities to be redeemed, to
each Holder of Securities to be redeemed, at its address appearing in the
Security Register.

        All notices of redemption shall state:

               (1)    the Redemption Date,

               (2)    the Redemption Price (including accrued interest, if any),


                                      -58-
<PAGE>


                (3) if less than all the Outstanding Securities of any series
        consisting of more than a single Security are to be redeemed, the
        identification (and, in the case of partial redemption of any such
        Securities, the principal amounts) of the particular Securities to be
        redeemed and, if less than all the Outstanding Securities of any series
        consisting of a single Security are to be redeemed, the principal amount
        of the particular Security to be redeemed,

                (4) in case any Security is redeemed in part only, that on and
        after the Redemption Date, upon surrender of the Security, the Holder of
        such Security will receive, without charge, a new Security or Securities
        of authorized denominations for the principal amount thereof remaining
        unredeemed;

                (5) that on the Redemption Date the Redemption Price will become
        due and payable upon each such Security to be redeemed and, if
        applicable, that interest thereon will cease to accrue on and after said
        date,

                (6) the place or places where each such Security is to be
        surrendered for payment of the Redemption Price,

                (7) if applicable, the conversion price, the date on which the
        right to convert the principal of the Securities or the portions thereof
        to be redeemed will terminate, and the place or places where such
        Securities may be surrendered for conversion,

                (8) that the redemption is for a sinking fund, if such is the
        case, and

                (9) the CUSIP number or numbers and/or common code(s) of the
        Security being redeemed.

        Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.

SECTION 11.5 DEPOSIT OF REDEMPTION PRICE.

        On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 10.3) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.

        If any Security called for redemption is converted, any money deposited
with the Trustee or with a Paying Agent or so segregated and held in trust for
the redemption of such Security shall (subject to the right of any Holder of
such Security to receive interest as provided in the last paragraph of Section
3.7) be paid to the Company on Company Request, or if then held by the Company,
shall be discharged from such trust.

SECTION 11.6 SECURITIES PAYABLE ON REDEMPTION DATE.

Notice of redemption having been given as aforesaid, the Securities so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any such


                                      -59-
<PAGE>


Security for redemption in accordance with said notice, such Security shall be
paid by the Company at the Redemption Price, together with accrued interest to
the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 3.1, installments of interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 3.7.

        If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.

SECTION 11.7 SECURITIES REDEEMED IN PART.

        Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or its attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.

                                   ARTICLE 12

                                  SINKING FUNDS

SECTION 12.1 APPLICABILITY OF ARTICLE.

        The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of any series except as otherwise specified as
contemplated by Section 3.1 for such Securities.

        The minimum amount of any sinking fund payment provided for by the terms
of any Securities 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
such Securities is herein referred to as an "optional sinking fund payment." If
provided for by the terms of any Securities, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 12.2. Each sinking
fund payment shall be applied to the redemption of Securities as provided for by
the terms of such Securities.

SECTION 12.2 SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.

        The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed


                                      -60-
<PAGE>


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 any Securities of such series
required to be made pursuant to the terms of such Securities as and to the
extent provided for by the terms of such Securities; provided that the
Securities to be so credited have not been previously so credited. The
Securities to be so credited shall be received and credited for such purpose by
the Trustee at the Redemption Price, as specified in the Securities so to be
redeemed, for redemption through operation of the sinking fund and the amount of
such sinking fund payment shall be reduced accordingly.

SECTION 12.3 REDEMPTION OF SECURITIES FOR SINKING FUND.

        Not fewer than 60 days prior to each sinking fund payment date for any
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for such
Securities pursuant to the terms of such Securities, the portion thereof, if
any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities pursuant to
Section 12.2 and will also deliver to the Trustee any Securities to be so
delivered. Not fewer than 30 days prior to 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 11.3 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 11.4. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 11.6 and 11.7.

                                   ARTICLE 13

                       DEFEASANCE AND COVENANT DEFEASANCE

SECTION 13.1 COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.

        The Company may elect, at its option at any time, to have Section 13.2
or Section 13.3 applied to any Securities or any series of Securities, as the
case may be, designated pursuant to Section 3.1 as being defeasible pursuant to
such Section 13.2 or 13.3, in accordance with any applicable requirements
provided pursuant to Section 3.1 and upon compliance with the conditions set
forth below in this Article. Any such election shall be evidenced by a Board
Resolution or in another manner specified as contemplated by Section 3.1 for
such Securities.

SECTION 13.2 DEFEASANCE AND DISCHARGE.

        Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, the
Company shall be deemed to have been discharged from its obligations with
respect to such Securities as provided in this Section on and after the date the
conditions set forth in Section 13.4 are satisfied (hereinafter called
"Defeasance"). For this purpose, such Defeasance means that the Company shall be
deemed to have paid and


                                      -61-
<PAGE>


discharged the entire indebtedness represented by such Securities and to have
satisfied all its other obligations under such Securities and this Indenture
insofar as such Securities are concerned (and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging the same), subject to
the following which shall survive until otherwise terminated or discharged
hereunder:

                (1) the rights of Holders of such Securities to receive, solely
        from the trust fund described in Section 13.4 and as more fully set
        forth in such Section, payments in respect of the principal of and any
        premium and interest on such Securities when payments are due,

                (2) the Company's obligations with respect to such Securities
        under Sections 3.4, 3.5, 3.6, 10.2 and 10.3, and, if applicable, Article
        14,

                (3) the rights, powers, trusts, duties and immunities of the
        Trustee hereunder, and

                (4) this Article.

        Subject to compliance with this Article, the Company may exercise its
option (if any) to have this Section applied to any Securities notwithstanding
the prior exercise of its option (if any) to have Section 13.3 applied to such
Securities.

SECTION 13.3 COVENANT DEFEASANCE.

        Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be,

                (1) the Company shall be released from its obligations under
        Sections 10.6 and 10.7 and any covenants provided pursuant to Sections
        3.1(19), 9.1(2) or 9.1(7), or for the benefit of the Holders of such
        Securities and

                (2) the occurrence of any event specified in Section 5.1(4)
        (with respect to any of Sections 10.6 and 10.7 and any such covenants
        provided pursuant to Section 3.1(19), 9.1(2) or 9.1(7)) and the
        occurrence of any other Event of Default specified pursuant to Section
        3.1 shall be deemed not to be or result in an Event of Default,

in each case with respect to such Securities or any series of Securities as
provided in this Section on and after the date the conditions set forth in
Section 13.4 are satisfied (hereinafter called "Covenant Defeasance"). For this
purpose, such Covenant Defeasance means that, with respect to such Securities,
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such specified Section (to
the extent so specified in the case of Section 5.1(4) and the occurrence of any
Event of Default specified pursuant to Section 3.1), whether directly or
indirectly by reason of any reference elsewhere herein to any such Section or by
reason of any reference in any such Section to any other provision herein or in
any other document, but the remainder of this Indenture and such Securities
shall be unaffected thereby.


                                      -62-
<PAGE>


SECTION 13.4 CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.

        The following shall be the conditions to the application of Section 13.2
or Section 13.3 to any Securities or any series of Securities, as the case may
be:

               (1) The Company shall irrevocably have deposited or caused to be
        deposited with the Trustee (or another trustee which satisfies the
        requirements contemplated by Section 6.9 and agrees to comply with the
        provisions of this Article applicable to it) as trust funds in trust for
        the purpose of making the following payments, specifically pledged as
        security for, and dedicated solely to, the benefits of the Holders of
        such Securities,

                      (A) in the case of Securities of a series denominated in
               currency of the United States of America,

                             (i) cash in currency of the United States of
                      America in an amount, or

                             (ii) U.S. Government Obligations which through the
                      scheduled payment of principal and interest in respect
                      thereof in accordance with their terms will provide, not
                      later than one day before the due date of any payment, an
                      amount in cash, or

                             (iii)  a combination thereof, or

                      (B) in the case of Securities of a series denominated in
               currency other than that of the United States of America,

                             (i) cash in the currency in which such series of
                      Securities is denominated in an amount, or

                             (ii) Foreign Government Obligations which through
                      the scheduled payment of principal and interest in respect
                      thereof in accordance with their terms will provide, not
                      later than one day before the due date of any payment, an
                      amount in cash, or

                             (iii)  a combination thereof,

        in each case 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 and discharge, and which shall
        be applied by the Trustee (or any such other qualifying trustee) to pay
        and discharge, the principal of and any premium and interest on such
        Securities on the respective Stated Maturities, in accordance with the
        terms of this Indenture and such Securities.

                (2) In the event of an election to have Section 13.2 apply to
        any Securities or any series of Securities, as the case may be, the
        Company shall have delivered to the Trustee an


                                      -63-
<PAGE>


        Opinion of Counsel stating that (A) the Company has received from, or
        there has been published by, the Internal Revenue Service a ruling or
        (B) since the date of this instrument, there has been a change in the
        applicable Federal income tax law, in either case (A) or (B) to the
        effect that, and based thereon such opinion shall confirm that, the
        Holders of such Securities will not recognize gain or loss for Federal
        income tax purposes as a result of the deposit, Defeasance and discharge
        to be effected with respect to such Securities and will be subject to
        Federal income tax on the same amount, in the same manner and at the
        same times as would be the case if such deposit, Defeasance and
        discharge were not to occur.

               (3) In the event of an election to have Section 13.3 apply to any
        Securities or any series of Securities, as the case may be, the Company
        shall have delivered to the Trustee an Opinion of Counsel to the effect
        that the Holders of such Securities will not recognize gain or loss for
        Federal income tax purposes as a result of the deposit and Covenant
        Defeasance to be effected with respect to such Securities and will be
        subject to Federal income tax on the same amount, in the same manner and
        at the same times as would be the case if such deposit and Covenant
        Defeasance were not to occur.

               (4) The Company shall have delivered to the Trustee an Officers'
        Certificate to the effect that neither such Securities nor any other
        Securities of the same series, if then listed on any securities
        exchange, will be delisted as a result of such deposit.

               (5) No event which is, or after notice or lapse of time or both
        would become, an Event of Default with respect to such Securities or any
        other Securities shall have occurred and be continuing at the time of
        such deposit or, with regard to any such event specified in Sections
        5.1(5) and (6), at any time on or prior to the 90th day after the date
        of such deposit (it being understood that this condition shall not be
        deemed satisfied until after such 90th day).

               (6) Such Defeasance or Covenant Defeasance shall not cause the
        Trustee to have a conflicting interest within the meaning of the Trust
        Indenture Act (assuming all Securities are in default within the meaning
        of such Act).

               (7) Such Defeasance or Covenant Defeasance shall not result in a
        breach or violation of, or constitute a default under, this Indenture or
        any other agreement or instrument to which the Company is a party or by
        which it is bound.

               (8) Such Defeasance or Covenant Defeasance shall not result in
        the trust arising from such deposit constituting an investment company
        within the meaning of the Investment Company Act unless such trust shall
        be registered under such Act or exempt from registration thereunder.

               (9) The Company shall have delivered to the Trustee an Officers'
        Certificate and an Opinion of Counsel, each stating that all conditions
        precedent with respect to such Defeasance or Covenant Defeasance have
        been complied with.


                                      -64-
<PAGE>


SECTION 13.5 DEPOSITED MONEY, U. S. GOVERNMENT OBLIGATIONS AND FOREIGN
GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST; MISCELLANEOUS PROVISIONS.

        Subject to the provisions of the last paragraph of Section 10.3, all
money, U.S. Government Obligations and Foreign Government Obligations (including
the proceeds thereof) deposited with the Trustee or other qualifying trustee
(solely for purposes of this Section and Section 13.6, the Trustee and any such
other trustee are referred to collectively as the "Trustee") pursuant to Section
13.4 in respect of any Securities shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become due
thereon in respect of principal and any premium and interest, but money so held
in trust need not be segregated from other funds except to the extent required
by law. The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations or
Foreign Government Obligations deposited pursuant to Section 13.4 or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of Outstanding
Securities. Anything in this Article to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money, U.S. Government Obligations or Foreign Government Obligations
held by it as provided in Section 13.4 with respect to any Securities which, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect the Defeasance or Covenant Defeasance, as the case may be, with respect
to such Securities.

SECTION 13.6 REINSTATEMENT.

        If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 13.2 or 13.3 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 13.5 with respect to such Securities
in accordance with this Article; provided, however, that if the Company makes
any payment of principal of or any premium or interest on any such Security
following such reinstatement of its obligations, the Company shall be subrogated
to the rights (if any) of the Holders of such Securities to receive such payment
from the money so held in trust.


                                      -65-
<PAGE>


                                   ARTICLE 14

                            CONVERSION OF SECURITIES

SECTION 14.1 APPLICABILITY OF ARTICLE.

        The provisions of this Article shall be applicable to the Securities of
any series which are convertible into shares of Common Stock of the Company, and
the issuance of such shares of Common Stock upon the conversion of such
Securities, except as otherwise specified as contemplated by Section 3.1 for the
Securities of such series.

SECTION 14.2 EXERCISE OF CONVERSION PRIVILEGE.

        In order to exercise a conversion privilege, the Holder of a Security of
a series with such a privilege shall surrender such Security to the Company at
the office or agency maintained for that purpose pursuant to Section 10.2,
accompanied by a duly executed conversion notice to the Company substantially in
the form set forth in Section 2.6 stating that the Holder elects to convert such
Security or a specified portion thereof. Such notice shall also state, if
different from the name and address of such Holder, the name or names (with
address) in which the certificate or certificates for shares of Common Stock
which shall be issuable on such conversion shall be issued. Securities
surrendered for conversion shall (if so required by the Company or the Trustee)
be duly endorsed by or accompanied by instruments of transfer in forms
satisfactory to the Company and the Trustee duly executed by the Holder or its
attorney duly authorized in writing; and Securities so surrendered for
conversion (in whole or in part) during the period from the close of business on
any Regular Record Date to the opening of business on the next succeeding
Interest Payment Date (excluding Securities or portions thereof called for
redemption during the period beginning at the close of business on a Regular
Record Date and ending at the opening of business on the first Business Day
after the next succeeding Interest Payment Date, or if such Interest Payment
Date is not a Business Day, the second such Business Day) shall also be
accompanied by payment in funds acceptable to the Company of an amount equal to
the interest payable on such Interest Payment Date on the principal amount of
such Security then being converted, and such interest shall be payable to such
Holder notwithstanding the conversion of such Security, subject to the
provisions of Section 3.7 relating to the payment of Defaulted Interest by the
Company. As promptly as practicable after the receipt of such notice and of any
payment required pursuant to a Board Resolution and, subject to Section 3.3, set
forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto setting forth the
terms of such series of Security, and the surrender of such Security in
accordance with such reasonable regulations as the Company may prescribe, the
Company shall issue and shall deliver, at the office or agency at which such
Security is surrendered, to such Holder or on its written order, a certificate
or certificates for the number of full shares of Common Stock issuable upon the
conversion of such Security (or specified portion thereof), in accordance with
the provisions of such Board Resolution, Officers' Certificate or supplemental
indenture, and cash as provided therein in respect of any fractional share of
such Common Stock otherwise issuable upon such conversion.


                                      -66-
<PAGE>


Such conversion shall be deemed to have been effected immediately prior to the
close of business on the date on which such notice and such payment, if
required, shall have been received in proper order for conversion by the Company
and such Security shall have been surrendered as aforesaid (unless such Holder
shall have so surrendered such Security and shall have instructed the Company to
effect the conversion on a particular date following such surrender and such
Holder shall be entitled to convert such Security on such date, in which case
such conversion shall be deemed to be effected immediately prior to the close of
business on such date) and at such time the rights of the Holder of such
Security as such Security Holder shall cease and the person or persons in whose
name or names any certificate or certificates for shares of Common Stock of the
Company shall be issuable upon such conversion shall be deemed to have become
the Holder or Holders of record of the shares represented thereby. Except as set
forth above and subject to the final paragraph of Section 3.7, no payment or
adjustment shall be made upon any conversion on account of any interest accrued
on the Securities (or any part thereof) surrendered for conversion or on account
of any dividends on the Common Stock of the Company issued upon such conversion.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to or on the order of the Holder thereof, at the expense of the Company,
a new Security or Securities of the same series, of authorized denominations, in
aggregate principal amount equal to the unconverted portion of such Security.

SECTION 14.3 NO FRACTIONAL SHARES.

        No fractional share of Common Stock of the Company shall be issued upon
conversions of Securities of any series. If more than one Security shall be
surrendered for conversion at one time by the same Holder, the number of full
shares which shall be issuable upon conversion shall be computed on the basis of
the aggregate principal amount of the Securities (or specified portions thereof
to the extent permitted hereby) so surrendered. If, except for the provisions of
this Section 14.3, any Holder of a Security or Securities would be entitled to a
fractional share of Common Stock of the Company upon the conversion of such
Security or Securities, or specified portions thereof, the Company shall pay to
such Holder an amount in cash equal to the current market value of such
fractional share computed, (i) if such Common Stock is listed or admitted to
unlisted trading privileges on a national securities exchange or market, on the
basis of the last reported sale price regular way on such exchange or market on
the last trading day prior to the date of conversion upon which such a sale
shall have been effected, or (ii) if such Common Stock is not at the time so
listed or admitted to unlisted trading privileges on a national securities
exchange or market, on the basis of the average of the bid and asked prices of
such Common Stock in the over-the-counter market, on the last trading day prior
to the date of conversion, as reported by the National Quotation Bureau,
Incorporated or similar organization if the National Quotation Bureau,
Incorporated is no longer reporting such information, or if not so available,
the fair market price as determined by the Board of Directors. For purposes of
this Section, "trading day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday other than any day on which the Common Stock is not traded on the
Nasdaq National Market, or if the Common Stock is not traded on the Nasdaq
National Market, on the principal exchange or market on which the Common Stock
is traded or quoted.


                                      -67-
<PAGE>


SECTION 14.4 ADJUSTMENT OF CONVERSION PRICE.

        The conversion price of Securities of any series that is convertible
into Common Stock of the Company shall be adjusted for any stock dividends,
stock splits, reclassifications, combinations or similar transactions in
accordance with the terms of the supplemental indenture or Board Resolutions
setting forth the terms of the Securities of such series. Whenever the
conversion price is adjusted, the Company shall compute the adjusted conversion
price in accordance with terms of the applicable Board Resolution or
supplemental indenture and shall prepare an Officers' Certificate setting forth
the adjusted conversion price and showing in reasonable detail the facts upon
which such adjustment is based, and such certificate shall forthwith be filed at
each office or agency maintained for the purpose of conversion of Securities
pursuant to Section 10.2 and, if different, with the Trustee. The Company shall
forthwith cause a notice setting forth the adjusted conversion price to be
mailed, first class postage prepaid, to each Holder of Securities of such series
at its address appearing on the Security Register and to any conversion agent
other than the Trustee.

SECTION 14.5 NOTICE OF CERTAIN CORPORATE ACTIONS.

        In case:

                (1) the Company shall declare a dividend (or any other
        distribution) on its Common Stock payable otherwise than in cash out of
        its retained earnings (other than a dividend for which approval of any
        shareholders of the Company is required) that would require an
        adjustment pursuant to Section 14.4; or

                (2) the Company shall authorize the granting to all or
        substantially all of the holders of its Common Stock of rights, options
        or warrants to subscribe for or purchase any shares of capital stock of
        any class or of any other rights (other than any such grant for which
        approval of any shareholders of the Company is required); or

                (3) of any reclassification of the Common Stock of the Company
        (other than a subdivision or combination of its outstanding shares of
        Common Stock, or of any consolidation, merger or share exchange to which
        the Company is a party and for which approval of any shareholders of the
        Company is required), or of the sale of all or substantially all of the
        assets of the Company; or

                (4) of the voluntary or involuntary dissolution, liquidation or
        winding up of the Company;

then the Company shall cause to be filed with the Trustee, and shall cause to be
mailed to all Holders at their last addresses as they shall appear in the
Security Register, at least 20 days (or 10 days in any case specified in clause
(1) or (2) above) prior to the applicable record date hereinafter specified, a
notice stating (i) the date on which a record is to be taken for the purpose of
such dividend, distribution, rights, options or warrants, or, if a record is not
to be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution, rights, options or warrants are to be
determined, or (ii) the date on which such reclassification, consolidation,
merger,


                                      -68-
<PAGE>


share exchange, sale, 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, cash or other property deliverable upon such reclassification,
consolidation, merger, share exchange, sale, dissolution, liquidation or winding
up. If at any time the Trustee shall not be the conversion agent, a copy of such
notice shall also forthwith be filed by the Company with the Trustee.

SECTION 14.6 RESERVATION OF SHARES OF COMMON STOCK.

        The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Securities, the full number of shares of
Common Stock of the Company then issuable upon the conversion of all outstanding
Securities of any series that has conversion rights.

SECTION 14.7 PAYMENT OF CERTAIN TAXES UPON CONVERSION.

        Except as provided in the next sentence, the Company will pay any and
all taxes that may be payable in respect of the issue or delivery of shares of
its Common Stock on conversion of Securities pursuant hereto. The Company shall
not, however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of shares of its Common Stock in a
name other than that of the Holder of the Security or Securities to be
converted, and no such issue or delivery shall be made unless and until the
person requesting such issue has paid to the Company the amount of any such tax,
or has established, to the satisfaction of the Company, that such tax has been
paid.

SECTION 14.8 NONASSESSABILITY.

        The Company covenants that all shares of its Common Stock which may be
issued upon conversion of Securities will upon issue in accordance with the
terms hereof be duly and validly issued and fully paid and nonassessable.

SECTION 14.9 PROVISION IN CASE OF CONSOLIDATION, MERGER OR SALE OF ASSETS.

        In case of any consolidation or merger of the Company with or into any
other Person, any merger of another Person with or into the Company (other than
a merger which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the Company) or any
conveyance, sale, transfer or lease of all or substantially all of the assets of
the Company, the Person formed by such consolidation or resulting from such
merger or which acquires such assets, as the case may be, shall execute and
deliver to the Trustee a supplemental indenture providing that the Holder of
each Security of a series then Outstanding that is convertible into Common Stock
of the Company shall have the right thereafter (which right shall be the
exclusive conversion right thereafter available to said Holder), during the
period such Security shall be convertible, to convert such Security only into
the kind and amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, transfer or lease by a holder of the
number of shares of Common Stock of the Company into which such Security might
have


                                      -69-
<PAGE>


been converted immediately prior to such consolidation, merger, conveyance,
sale, transfer or lease, assuming such holder of Common Stock of the Company (i)
is not a Person with which the Company consolidated or merged with or into or
which merged into or with the Company or to which such conveyance, sale,
transfer or lease was made, as the case may be (a "Constituent Person"), or an
Affiliate of a Constituent Person and (ii) failed to exercise his rights of
election, if any, as to the kind or amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance, sale, transfer
or lease (provided that if the kind or amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance, sale, transfer,
or lease is not the same for each share of Common Stock of the Company held
immediately prior to such consolidation, merger, conveyance, sale, transfer or
lease by others than a Constituent Person or an Affiliate thereof and in respect
of which such rights of election shall not have been exercised ("Non-electing
Share"), then for the purpose of this Section 14.9 the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
conveyance, sale, transfer or lease by the holders of each Non-electing Share
shall be deemed to be the kind and amount so receivable per share by a plurality
of the Non-electing Shares). Such supplemental indenture shall provide for
adjustments which, for events subsequent to the effective date of such
supplemental indenture, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Article or in accordance with the terms of
the supplemental indenture or Board Resolutions setting forth the terms of such
adjustments. The above provisions of this Section 14.9 shall similarly apply to
successive consolidations, mergers, conveyances, sales, transfers or leases.
Notice of the execution of such a supplemental indenture shall be given by the
Company to the Holder of each Security of a series that is convertible into
Common Stock of the Company as provided in Section 1.6 promptly upon such
execution. Neither the Trustee nor any conversion agent, if any, shall be under
any responsibility to determine the correctness of any provisions contained in
any such supplemental indenture relating either to the kind or amount of shares
of stock or other securities or property or cash receivable by Holders of
Securities of a series convertible into Common Stock of the Company upon the
conversion of their Securities after any such consolidation, merger, conveyance,
transfer, sale or lease or to any such adjustment, but may accept as conclusive
evidence of the correctness of any such provisions, and shall be protected in
relying upon, an Opinion of Counsel with respect thereto, which the Company
shall cause to be furnished to the Trustee upon request.

SECTION 14.10 DUTIES OF TRUSTEE REGARDING CONVERSION.

        Neither the Trustee nor any conversion agent shall at any time be under
any duty or responsibility to any Holder of Securities of any series that is
convertible into Common Stock of the Company to determine whether any facts
exist which may require any adjustment of the conversion price, or with respect
to the nature or extent of any such adjustment when made, or with respect to the
method employed, whether herein or in any supplemental indenture, any
resolutions of the Board of Directors or written instrument executed by one or
more officers of the Company provided to be employed in making the same. Neither
the Trustee nor any conversion agent shall be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common Stock of the
Company, or of any securities or property, which may at any time be issued or
delivered upon the conversion of any Securities and neither the Trustee nor any
conversion agent makes any


                                      -70-
<PAGE>


representation with respect thereto. Subject to the provisions of Section 6.1,
neither the Trustee nor any conversion agent shall be responsible for any
failure of the Company to issue, transfer or deliver any shares of its Common
Stock or stock certificates or other securities or property upon the surrender
of any Security for the purpose of conversion or to comply with any of the
covenants of the Company contained in this Article 14 or in the applicable
supplemental indenture, resolutions of the Board of Directors or written
instrument executed by one or more duly authorized officers of the Company.

SECTION 14.11 REPAYMENT OF CERTAIN FUNDS UPON CONVERSION.

        Any funds which at any time shall have been deposited by the Company or
on its behalf with the Trustee or any other paying agent for the purpose of
paying the principal of, and premium, if any, and interest, if any, on any of
the Securities (including, but not limited to, funds deposited for the sinking
fund referred to in Article 12 hereof and funds deposited pursuant to Article 13
hereof) and which shall not be required for such purposes because of the
conversion of such Securities as provided in this Article 14 shall after such
conversion be repaid to the Company by the Trustee upon the Company's written
request.

            [The remainder of this page is intentionally left blank]


                                      -71-
<PAGE>


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

                                                 Harmonic Inc.


                                                 By:
                                                    ----------------------------

                                                 Title:
                                                       -------------------------


                                                 U.S. Bank National Association,
                                                 as Trustee


                                                 By:
                                                    ----------------------------

                                                 Title:
                                                       -------------------------

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>4
<FILENAME>f77840orex4-2.txt
<DESCRIPTION>EXHIBIT 4.2
<TEXT>
<PAGE>
                                                                     EXHIBIT 4.2

                                  HARMONIC INC.

                                       TO

                         U.S. BANK NATIONAL ASSOCIATION

                                   AS TRUSTEE

                                    INDENTURE

                          DATED AS OF __________, 200_










                          SUBORDINATED DEBT SECURITIES


<PAGE>


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                              PAGE
                                                                                              ----
<S>                                                                                           <C>
ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION................................1

        Section 1.1    Definitions...............................................................1
        Section 1.2    Compliance Certificates and Opinions.....................................10
        Section 1.3    Form of Documents Delivered to Trustee...................................11
        Section 1.4    Acts of Holders; Record Dates............................................11
        Section 1.5    Notices, etc. ...........................................................13
        Section 1.6    Notice to Holders; Waiver................................................13
        Section 1.7    Conflict with Trust Indenture Act........................................14
        Section 1.8    Effect of Headings and Table of Contents.................................14
        Section 1.9    Successors and Assigns...................................................14
        Section 1.10   Separability Clause......................................................14
        Section 1.11   Benefits of Indenture....................................................14
        Section 1.12   Governing Law............................................................15
        Section 1.13   Legal Holidays...........................................................15
        Section 1.14   Indenture and Securities Solely Corporate Obligations....................15
        Section 1.15   Indenture May be Executed in Counterparts................................15

ARTICLE 2 SECURITY FORMS........................................................................15

        Section 2.1    Forms Generally..........................................................15
        Section 2.2    Form of Face of Security.................................................16
        Section 2.3    Form of Reverse of Security..............................................18
        Section 2.4    Form of Legend for Global Securities.....................................22
        Section 2.5    Form of Trustee's Certificate of Authentication..........................23
        Section 2.6    Form of Conversion Notice................................................23

ARTICLE 3 THE SECURITIES........................................................................24

        Section 3.1    Amount Unlimited; Issuable in Series.....................................24
        Section 3.2    Denominations............................................................27
        Section 3.3    Execution, Authentication, Delivery and Dating...........................27
        Section 3.4    Temporary Securities.....................................................29
        Section 3.5    Registration; Registration of Transfer and Exchange......................29
        Section 3.6    Mutilated, Destroyed, Lost and Stolen Securities.........................31
        Section 3.7    Payment of Interest; Interest Rights Preserved...........................32
</TABLE>

                                       i

<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>
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<S>                                                                                           <C>
        Section 3.8    Persons Deemed Owners....................................................33
        Section 3.9    Cancellation.............................................................33
        Section 3.10   Computation of Interest..................................................34

ARTICLE 4 SATISFACTION AND DISCHARGE............................................................34

        Section 4.1    Satisfaction and Discharge of Indenture..................................34
        Section 4.2    Application of Trust Money...............................................35

ARTICLE 5 REMEDIES..............................................................................35

        Section 5.1    Events of Default........................................................35
        Section 5.2    Acceleration of Maturity; Rescission and Annulment.......................36
        Section 5.3    Collection of Indebtedness and Suits for Enforcement by Trustee..........37
        Section 5.4    Trustee May File Proofs of Claim.........................................38
        Section 5.5    Trustee May Enforce Claims Without Possession of Securities..............38
        Section 5.6    Application of Money Collected...........................................39
        Section 5.7    Limitation on Suits......................................................39
        Section 5.8    Unconditional Right of Holders to Receive Principal, Premium
                       and Interest and to Convert..............................................40
        Section 5.9    Restoration of Rights and Remedies.......................................40
        Section 5.10   Rights and Remedies Cumulative...........................................40
        Section 5.11   Delay or Omission Not Waiver.............................................40
        Section 5.12   Control by Holders.......................................................41
        Section 5.13   Waiver of Past Defaults..................................................41
        Section 5.14   Undertaking for Costs....................................................41
        Section 5.15   Waiver of Usury, Stay or Extension Laws..................................42

ARTICLE 6 THE TRUSTEE...........................................................................42

        Section 6.1    Certain Duties and Responsibilities......................................42
        Section 6.2    Notice of Defaults.......................................................42
        Section 6.3    Certain Rights of Trustee................................................42
        Section 6.4    Not Responsible for Recitals or Issuance of Securities...................43
        Section 6.5    May Hold Securities and Act as Trustee under Other Indentures............44
        Section 6.6    Money Held in Trust......................................................44
        Section 6.7    Compensation and Reimbursement...........................................44
        Section 6.8    Conflicting Interests....................................................45
        Section 6.9    Corporate Trustee Required; Eligibility..................................45
        Section 6.10   Resignation and Removal; Appointment of Successor........................45
        Section 6.11   Acceptance of Appointment by Successor...................................46
        Section 6.12   Merger, Conversion, Consolidation or Succession to Business..............47
        Section 6.13   Preferential Collection of Claims Against Company........................48
</TABLE>

                                       ii

<PAGE>

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                              PAGE
                                                                                              ----
<S>                                                                                           <C>
        Section 6.14   Appointment of Authenticating Agent......................................48

ARTICLE 7 HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY.....................................49

        Section 7.1    Company to Furnish Trustee Names and Addresses of Holders................49
        Section 7.2    Preservation of Information; Communications to Holders...................50
        Section 7.3    Reports by Trustee.......................................................50
        Section 7.4    Reports by Company.......................................................50

ARTICLE 8 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE..................................51

        Section 8.1    Company May Consolidate, etc., Only on Certain Terms.....................51
        Section 8.2    Successor Substituted....................................................51

ARTICLE 9 SUPPLEMENTAL INDENTURES...............................................................52

        Section 9.1    Supplemental Indentures Without Consent of Holders.......................52
        Section 9.2    Supplemental Indentures with Consent of Holders..........................53
        Section 9.3    Execution of Supplemental Indentures.....................................54
        Section 9.4    Effect of Supplemental Indentures........................................55
        Section 9.5    Conformity with Trust Indenture Act......................................55
        Section 9.6    Reference in Securities to Supplemental Indentures.......................55
        Section 9.7    Subordination Unimpaired.................................................55

ARTICLE 10 COVENANTS............................................................................55

        Section 10.1   Payment of Principal, Premium and Interest...............................55
        Section 10.2   Maintenance of Office or Agency..........................................55
        Section 10.3   Money for Securities Payments to Be Held in Trust........................56
        Section 10.4   Statement by Officers as to Default......................................57
        Section 10.5   Existence................................................................57
        Section 10.6   Maintenance of Properties................................................57
        Section 10.7   Payment of Taxes and Other Claims........................................58
        Section 10.8   Waiver of Certain Covenants..............................................58

ARTICLE 11 REDEMPTION OF SECURITIES.............................................................58

        Section 11.1   Applicability of Article.................................................58
        Section 11.2   Election to Redeem; Notice to Trustee....................................58
        Section 11.3   Selection by Trustee of Securities to Be Redeemed........................59
        Section 11.4   Notice of Redemption.....................................................60
        Section 11.5   Deposit of Redemption Price..............................................60
        Section 11.6   Securities Payable on Redemption Date....................................61
        Section 11.7   Securities Redeemed in Part..............................................61
</TABLE>

                                      iii

<PAGE>


                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                              PAGE
                                                                                              ----
<S>                                                                                           <C>
ARTICLE 12 SINKING FUNDS........................................................................61

        Section 12.1   Applicability of Article.................................................61
        Section 12.2   Satisfaction of Sinking Fund Payments with Securities....................62
        Section 12.3   Redemption of Securities for Sinking Fund................................62

ARTICLE 13 DEFEASANCE AND COVENANT DEFEASANCE...................................................62

        Section 13.1   Company's Option to Effect Defeasance or Covenant Defeasance.............62
        Section 13.2   Defeasance and Discharge.................................................63
        Section 13.3   Covenant Defeasance......................................................63
        Section 13.4   Conditions to Defeasance or Covenant Defeasance..........................64
        Section 13.5   Deposited Money, U.S. Government Obligations and Foreign
                       Government Obligations to be Held in Trust; Miscellaneous Provisions.....66
        Section 13.6   Reinstatement............................................................67

ARTICLE 14 CONVERSION OF SECURITIES.............................................................67

        Section 14.1   Applicability of Article.................................................67
        Section 14.2   Exercise of Conversion Privilege.........................................68
        Section 14.3   No Fractional Shares.....................................................69
        Section 14.4   Adjustment of Conversion Price...........................................69
        Section 14.5   Notice of Certain Corporate Actions......................................70
        Section 14.6   Reservation of Shares of Common Stock....................................71
        Section 14.7   Payment of Certain Taxes upon Conversion.................................71
        Section 14.8   Nonassessability.........................................................71
        Section 14.9   Provision in Case of Consolidation, Merger or Sale of Assets.............71
        Section 14.10  Duties of Trustee Regarding Conversion...................................72
        Section 14.11  Repayment of Certain Funds upon Conversion...............................73

ARTICLE 15 SUBORDINATION OF SECURITIES..........................................................73

        Section 15.1   Agreement of Subordination...............................................73
        Section 15.2   Payments to Holders......................................................73
        Section 15.3   Subrogation of Securities................................................76
        Section 15.4   Authorization to Effect Subordination....................................77
        Section 15.5   Notice to Trustee........................................................77
        Section 15.6   Trustee's Relation to Senior Debt........................................78
        Section 15.7   No Impairment of Subordination...........................................78
        Section 15.8   Certain Conversions/Exchanges Deemed Payment.............................79
        Section 15.9   Article Applicable to Paying Agents......................................79
        Section 15.10  Senior Debt Entitled to Rely.............................................79
        Section 15.11  Reliance on Judicial Order or Certificate of Liquidating Agent...........79
        Section 15.12  Trust Monies Not Subordinated............................................
</TABLE>

                                       iv


<PAGE>


                                  Harmonic Inc.

        Certain Sections of this Indenture relating to Sections 3.10 through
3.18, inclusive, of the Trust Indenture Act of 1939:

<TABLE>
<CAPTION>
<S>            <C>                                                                  <C>
Section 310   (a)(1).........................................................                 6.9
              (a)(2).........................................................                 6.9
              (a)(3).........................................................      Not Applicable
              (a)(4).........................................................      Not Applicable
              (b)............................................................           6.8, 6.10
Section 311   (a)............................................................                6.13
              (b)............................................................                6.13
Section 312   (a)............................................................            7.1, 7.2
              (b)............................................................                 7.2
              (c)............................................................                 7.2
Section 313   (a)............................................................                 7.3
              (b)............................................................                 7.3
              (c)............................................................                 7.3
              (d)............................................................                 7.3
Section 314   (a)............................................................                 7.4
              (a)(4).........................................................           1.1, 10.4
              (b)............................................................      Not Applicable
              (c)(1).........................................................                 1.2
              (c)(2).........................................................                 1.2
              (c)(3).........................................................      Not Applicable
              (d)............................................................      Not Applicable
              (e)............................................................                 1.2
Section 315   (a)............................................................                 6.1
              (b)............................................................                 6.2
              (c)............................................................                 6.1
              (d)............................................................                 6.1
              (e)............................................................                5.14
Section 316   (a)............................................................                 1.1
              (a)(1)(A)......................................................           5.2, 5.12
              (a)(1)(B)......................................................                5.13
              (a)(2).........................................................      Not Applicable
              (a)(2).........................................................      Not Applicable
              (b)............................................................                 5.8
              (c)............................................................                 1.4
Section 317   (a)(1).........................................................                 5.3
              (a)(2).........................................................                 5.4
              (b)............................................................                10.3
Section 318   (a)............................................................                 1.7
</TABLE>

NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
      part of the Indenture.



<PAGE>


        INDENTURE, dated as of __________, 200_, between Harmonic Inc., a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), having its principal executive office at 549
Baltic Way, Sunnyvale, California 94089, and U.S. Bank National Association, a
federally-chartered association, as Trustee (herein called the "Trustee").

                             RECITALS OF THE COMPANY

        The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
subordinated debentures, notes or other evidences of indebtedness (herein called
the "Securities"), to be issued in one or more series as provided in this
Indenture.

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

                   NOW, THEREFORE, THIS INDENTURE WITNESSETH:

        For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of series
thereof appertaining, as follows:

                                    ARTICLE 1

            DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

        SECTION 1.1   DEFINITIONS.

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

            (1) the terms defined in this Article have the meanings assigned to
        them in this Article and include the plural as well as the singular;

            (2) all other terms used herein which are defined in the Trust
        Indenture Act, either directly or by reference therein, have the
        meanings assigned to them therein;

            (3) all accounting terms not otherwise defined herein have the
        meanings assigned to them in accordance with generally accepted
        accounting principles in the United States of America, and, except as
        otherwise herein expressly provided, the term "generally accepted
        accounting principles" with respect to any computation required or
        permitted hereunder shall mean such accounting principles in the United
        States of America as are generally accepted at the date of such
        computation;

            (4) all references to "$" refer to lawful currency of the United
        States of America;

            (5) unless the context otherwise requires, any reference to an
        "Article" or a "Section" refers to an Article or a Section, as the case
        may be, of this Indenture; and


<PAGE>


            (6) the words "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.

        "Act," when used with respect to any Holder, has the meaning specified
in Section 1.4.

        "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person.

        "Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more series.

        "Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that board empowered to act for it with
respect to this Indenture.

        "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, and delivered to the Trustee.

        "Business Day," when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close.

        "Commission" means the Securities and Exchange Commission, 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.

        "Common Stock" includes any stock of any class of the Company which has
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding-up of the Company
and which is not subject to redemption by the Company; provided, however,
subject to the provisions of Section 14.9, shares issuable upon conversion of
Securities shall include only shares of the class designated as Common Stock of
the Company at the date of this Indenture or shares of any class or classes
resulting from any reclassification or reclassifications thereof and which have
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding-up of the Company
and which are not subject to redemption by the Company; provided, further, that
if at any time there shall be more than one such resulting class, the shares of
each such class then so issuable shall be substantially in the proportion which
the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.


                                      -2-
<PAGE>


        "Company" means the corporation named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.

        "Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its Chief Executive Officer, its President or a Vice
President, and by its principal financial officer, its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.

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

        "Corporate Trust Office" means the corporate trust office of the Trustee
at 180 East Fifth Street, St. Paul, Minnesota, 55101, Attention: Corporate Trust
Department, or such other office, designated by the Trustee by written notice to
the Company, at which at any particular time its corporate trust business shall
be administered.

        "corporation" means a corporation, association, company, joint-stock
company or business trust.

        "Covenant Defeasance" has the meaning specified in Section 13.3.

        "Defaulted Interest" has the meaning specified in Section 3.7.

        "Defeasance" has the meaning specified in Section 13.2.

        "Depositary" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities as contemplated by Section 3.1.

        "Designated Senior Debt" means the Company's obligations under any
particular Senior Debt in which the instrument creating or evidencing the same
or the assumption or guarantee thereof (or related agreements or documents to
which the Company is a party) expressly provides that such Senior Debt shall be
"Designated Senior Debt" for purposes of this Indenture (provided that such
instrument, agreement or other document may place limitations and conditions on
the right of such Senior Debt to exercise the rights of Designated Senior Debt).
If any payment made to any holder of any Designated Senior Debt or its
Representative with respect to such Designated Senior Debt is rescinded or must
otherwise be returned by such holder or Representative upon the insolvency,
bankruptcy or reorganization of the Company or otherwise, the reinstated
Indebtedness of the Company arising as a result of such rescission or return
shall constitute Designated Senior Debt effective as of the date of such
rescission or return.


                                      -3-
<PAGE>

        "euro" or "euros" means the currency adopted by those nations
participating in the third stage of the economic and monetary union provisions
of the Treaty on European Union, signed at Maastricht on February 7, 1992.

        "European Economic Area" means the member nations of the European
Economic Area pursuant to the Oporto Agreement on the European Economic Area
dated May 2, 1992, as amended.

        "European Union" means the member nations of the European Union
established by the Treaty of European Union, signed at Maastricht on February 2,
1992, which amended the Treaty of Rome establishing the European Community.

        "Event of Default" has the meaning specified in Section 5.1.

        "Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.

        "Expiration Date" has the meaning specified in Section 1.4.

        "Foreign Government Obligation" means with respect to Securities of any
series which are not denominated in the currency of the United States of America
(x) any security which is (i) a direct obligation of the government which issued
or caused to be issued the currency in which such security is denominated and
for the payment of which obligations its full faith and credit is pledged or,
with respect to Securities of any series which are denominated in euros, a
direct obligation of any member nation of the European Union for the payment of
which obligation the full faith and credit of the respective nation is pledged
so long as such nation has a credit rating at least equal to that of the highest
rated member nation of the European Economic Area, or (ii) an obligation of a
Person controlled or supervised by and acting as an agency or instrumentality of
a government specified in Clause (i) above the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the such
government, which, in either case (i) or (ii), is not callable or redeemable at
the option of the issuer thereof, and (y) any depositary receipt issued by a
bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with
respect to any Foreign Government Obligation which is specified in Clause (x)
above and held by such bank for the account of the holder of such depositary
receipt, or with respect to any specific payment of principal of or interest on
any Foreign Government Obligation which is so specified and held, provided 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 Foreign Government
Obligation or the specific payment of principal or interest evidenced by such
depositary receipt.

        "Global Security" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 2.4 (or such
legend as may be specified as contemplated by Section 3.1 for such Securities).

        "Holder" means a Person in whose name a Security is registered in the
Security Register.


                                      -4-
<PAGE>

        "Indebtedness" means, with respect to any Person, and without
duplication, (a) all indebtedness, obligations and other liabilities (contingent
or otherwise) of such Person for borrowed money (including obligations of such
Person in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances from
banks, whether or not evidenced by notes or similar instruments) or evidenced by
bonds, debentures, notes or similar instruments (whether or not the recourse of
the lender is to the whole of the assets of such person or to only a portion
thereof), other than any account payable or other accrued current liability or
obligation incurred in the ordinary course of business in connection with the
obtaining of materials or services; (b) all reimbursement obligations and other
liabilities (contingent or otherwise) of such Person with respect to letters of
credit, bank guarantees or bankers' acceptances; (c) all obligations and
liabilities (contingent or otherwise) in respect of leases of such Person
required, in conformity with generally accepted accounting principles, to be
accounted for as capitalized lease obligations on the balance sheet of such
Person and all obligations and other liabilities (contingent or otherwise) under
any lease or related document (including a purchase agreement) in connection
with the lease of real property which provides that such Person is contractually
obligated to purchase or cause a third party to purchase the leased property and
thereby guarantee a minimum residual value of the leased property to the lessor
and the obligations of such Person under such lease or related document to
purchase or to cause a third party to purchase such leased property; (d) all
obligations of such Person (contingent or otherwise) with respect to an interest
rate or other swap, cap or collar agreement or other similar instrument or
agreement or foreign currency hedge, exchange, purchase or similar instrument or
agreement; (e) all direct or indirect guaranties or similar agreements by such
Person in respect of, and obligations or liabilities (contingent or otherwise)
of such Person to purchase or otherwise acquire or otherwise assure a creditor
against loss in respect of, indebtedness, obligations or liabilities of another
person of the kind described in clauses (a) through (d) above; (f) any
indebtedness or other obligations described in clauses (a) through (e) above
secured by any mortgage, pledge, lien or other encumbrance existing on property
which is owned or held by such Person, regardless of whether the indebtedness or
other obligation secured thereby shall have been assumed by such Person; and (g)
any and all deferrals, renewals, extensions and refundings of, or amendments,
modifications or supplements to, any indebtedness, obligation or liability of
the kind described in clauses (a) through (f) above.

        "Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 3.1; provided,
however, that if at any time more than one Person is acting as Trustee under
this Indenture due to the appointment of one or more separate Trustees for any
one or more separate series of Securities, "Indenture" shall mean, with respect
to such series of Securities for which any such Person is Trustee, 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 pursuant
to the applicable provisions hereof and shall include the terms of particular
series of Securities for which such Person is Trustee established as
contemplated by Section 3.1, exclusive, however, of any




                                      -5-
<PAGE>

provisions or terms which relate solely to other series of Securities for which
such Person is not Trustee, regardless of when such terms or provisions were
adopted, and exclusive of any provisions or terms adopted by means of one or
more indentures supplemental hereto executed and delivered after such Person had
become such Trustee, but to which such person, as such Trustee, was not a party;
provided, further that in the event that this Indenture is supplemented or
amended by one or more indentures supplemental hereto which are only applicable
to certain series of Securities, the term "Indenture" for a particular series of
Securities shall only include the supplemental indentures applicable thereto.

        "interest," when used with respect to an Original Issue Discount
Security, which by its terms bears interest only after Maturity, means interest
payable after Maturity.

        "Interest Payment Date," when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.

        "Investment Company Act" means the Investment Company Act of 1940 and
any statute successor thereto, in each case as amended from time to time.

        "Maturity," when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, repurchase at the option of the Holder, upon
redemption or otherwise.

        "Notice of Default" means a written notice of the kind specified in
Section 5.1(4).

        "Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the Chief Executive Officer, the
President or a Vice President, and by the principal financial officer, the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of
the Company, and delivered to the Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 10.4 shall be the principal
executive, financial or accounting officer of the Company.

        "Opinion of Counsel" means a written opinion of counsel, who may be
counsel for, or an employee of, the Company, and who shall be reasonably
acceptable to the Trustee.

        "Original Issue Discount Security" means any Security that provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 5.2.

        "Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except

            (1) Securities theretofore canceled by the Trustee or delivered to
        the Trustee for cancellation;



                                      -6-
<PAGE>

            (2) Securities for whose payment or redemption money in the
        necessary amount has been theretofore deposited with the Trustee or any
        Paying Agent (other than the Company) in trust or set aside and
        segregated in trust by the Company (if the Company shall act as its own
        Paying Agent) for the Holders of such Securities; provided that, if such
        Securities are to be redeemed, notice of such redemption has been duly
        given pursuant to this Indenture or provision therefor satisfactory to
        the Trustee has been made;

            (3) Securities as to which Defeasance has been effected pursuant to
        Section 13.2; and

            (4) Securities which have been paid pursuant to Section 3.6 or in
        exchange for or in lieu of which other Securities have been
        authenticated and delivered pursuant to this Indenture, other than any
        such Securities in respect of which there shall have been presented to
        the Trustee proof satisfactory to it that such Securities are held by a
        bona fide purchaser in whose hands such Securities are valid obligations
        of the Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given, made or taken any
request, demand, authorization, direction, notice, consent, waiver or other
action hereunder as of any date, (A) the principal amount of an Original Issue
Discount Security which shall be deemed to be Outstanding shall be the amount of
the principal thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section 5.2, (B)
if, as of such date, the principal amount payable at the Stated Maturity of a
Security is not determinable, the principal amount of such Security which shall
be deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 3.1, (C) the principal amount of a Security denominated
in one or more non-U.S. dollar currencies or currency units which shall be
deemed to be Outstanding shall be the U.S. dollar equivalent, determined as of
such date in the manner provided as contemplated by Section 3.1, of the
principal amount of such Security (or, in the case of a Security described in
Clause (A) or (B) above, of the amount determined as provided in such Clause),
and (D) Securities owned by the Company or any other obligor upon the Securities
or any Affiliate of the Company or of such other obligor shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent, waiver or other action, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor.

        "Paying Agent" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.

        "Payment Blockage Notice" has the meaning specified in Section 15.2.



                                      -7-
<PAGE>

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

        "Place of Payment," when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 3.1.

        "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 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.

        "Record Date" means any Regular Record Date or Special Record Date.

        "Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.

        "Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.

        "Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 3.1.

        "Representative" means the (a) indenture trustee or other trustee, agent
or representative for any Senior Debt or (b) with respect to any Senior Debt
that does not have any such trustee, agent or other representative, (i) in the
case of such Senior Debt issued pursuant to an agreement providing for voting
arrangements as among the holders or owners of such Senior Debt, any holder or
owner of such Senior Debt acting with the consent of the required persons
necessary to bind such holders or owners of such Senior Debt and (ii) in the
case of all other such Senior Debt, the holder or owner of such Senior Debt.

        "Responsible Officer" means, when used with respect to the Trustee, an
officer of the Trustee in the Corporate Trust Office assigned and duly
authorized by the Trustee to administer its corporate trust matters.

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

        "Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.

        "Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.5.



                                      -8-
<PAGE>
        "Senior Debt" means the principal of, premium, if any, interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) and rent payable on or
in connection with, and all fees, costs, expenses and other amounts accrued or
due on or in connection with, Indebtedness of the Company, whether outstanding
on the date of this Indenture or thereafter created, incurred, assumed,
guaranteed or in effect guaranteed by the Company (including all deferrals,
renewals, extensions or refundings of, or amendments, modifications or
supplements to, the foregoing), unless in the case of any particular
Indebtedness the instrument creating or evidencing the same or the assumption or
guarantee thereof expressly provides that such Indebtedness shall not be senior
in right of payment to the Securities or expressly provides that such
Indebtedness is "pari passu" or " junior" to the Securities. Notwithstanding the
foregoing, the term Senior Debt shall not include any Indebtedness of the
Company to any subsidiary of the Company. If any payment made to any holder of
any Senior Debt or its Representative with respect to such Senior Debt is
rescinded or must otherwise be returned by such holder or Representative upon
the insolvency, bankruptcy or reorganization of the Company or otherwise, the
reinstated Indebtedness of the Company arising as a result of such rescission or
return shall constitute Senior Debt effective as of the date of such rescission
or return.

        "Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.

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

        "Subsidiary" means a Person of which at least a majority of the
outstanding voting stock having the power to elect a majority of the board of
directors of such Person (in the case of a corporation) is, or of which at least
a majority of the equity interests (in the case of a Person which is not a
corporation) are, at the time owned, directly or indirectly, by the Company or
by one or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.

         "Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.

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


                                      -9-
<PAGE>

        "U.S. Government Obligation" means (x) any security which is (i) a
direct obligation of the United States of America for the payment of which the
full faith and credit of the United States of America is pledged or (ii) an
obligation 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, which, in either case (i) or (ii), is not callable or
redeemable at the option of the issuer thereof, and (y) any depositary receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as
custodian with respect to any U.S. Government Obligation which is specified in
Clause (x) above and held by such bank for the account of the holder of such
depositary receipt, or with respect to any specific payment of principal of or
interest on any U.S. Government Obligation which is so specified and held,
provided 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 U.S.
Government Obligation or the specific payment of principal or interest evidenced
by such depositary receipt.

        "Vice President," when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."

SECTION 1.2 COMPLIANCE CERTIFICATES AND OPINIONS.

        Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth in
this Indenture.

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

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

            (2) 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;

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

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


                                      -10-
<PAGE>

SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.

        In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.

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

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

SECTION 1.4 ACTS OF HOLDERS; RECORD DATES.

        Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given, made or
taken by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. The
Trustee shall promptly deliver to the Company copies of all such instrument or
instruments delivered to the Trustee. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.

        The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him or her the execution thereof. Where such
execution is by a signer acting in a capacity other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority. The fact and date of the


                                      -11-
<PAGE>

execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner that the Trustee
deems sufficient.

        The ownership of Securities shall be proved by the Security Register.

        Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.

        The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, vote, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided that the
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date; provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities of such
series on such record date. Nothing in this paragraph shall be construed to
prevent the Company from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be canceled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of the relevant series on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Company, at its own expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Trustee in writing and to each Holder of Securities of the relevant series in
the manner set forth in Section 1.6.

        The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 5.2, (iii) any request to institute
proceedings referred to in Section 5.7(2) or (iv) any direction referred to in
Section 5.12, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set


                                      -12-
<PAGE>

shall automatically and with no action by any Person be canceled and of no
effect), and nothing in this paragraph shall be construed to render ineffective
any action taken by Holders of the requisite principal amount of Outstanding
Securities of the relevant series on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Trustee, at the
Company's expense, shall cause notice of such record date, the proposed action
by Holders and the applicable Expiration Date to be given to the Company in
writing and to each Holder of Securities of the relevant series in the manner
set forth in Section 1.6.

        With respect to any record date set pursuant to this Section, the party
hereto which sets such record dates may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; provided that no such change shall be effective unless notice of the
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities of the relevant series in the manner set forth in
Section 1.6, on or prior to the existing Expiration Date. If an Expiration Date
is not designated with respect to any record date set pursuant to this Section,
the party hereto which set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.

        Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard to
all or any part of the principal amount of such Security or by one or more duly
appointed agents each of which may do so pursuant to such appointment with
regard to all or any part of such principal amount.

SECTION 1.5 NOTICES, ETC., TO TRUSTEE AND COMPANY.

        Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,

            (1) the Trustee by any Holder or by the Company shall be sufficient
        for every purpose hereunder if made, given, furnished or filed in
        writing (or by facsimile transmissions, provided that oral confirmation
        of receipt shall have been received) to or with the Trustee at its
        Corporate Trust Office, Attention: Corporate Trust Department, or

            (2) the Company by the Trustee or by any Holder shall be sufficient
        for every purpose hereunder (unless otherwise herein expressly provided)
        if in writing and mailed, first-class postage prepaid, personally
        delivered or sent via overnight courier to the Company addressed to it
        at the address of its principal office specified in the first paragraph
        of this instrument or at any other address previously furnished in
        writing to the Trustee by the Company, Attention: Chief Financial
        Officer.

SECTION 1.6 NOTICE TO HOLDERS; WAIVER.

        Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class



                                      -13-
<PAGE>

postage prepaid or delivered by hand or overnight courier, to each Holder
affected by such event, at its address as it appears in the Security Register,
not later than the latest date (if any), and not earlier than the earliest date
(if any), prescribed for the giving of such notice. Neither the failure to mail
or deliver by hand or overnight courier any notice, nor any defect in any notice
so mailed or delivered by hand or overnight courier, to any particular Holder
shall affect the sufficiency of such notice with respect to other Holders. Where
this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.

        In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail, then
such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.

SECTION 1.7 CONFLICT WITH TRUST INDENTURE ACT.

        If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under the Trust Indenture Act to be
a part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act, which may be so modified or excluded, the latter provision shall
be deemed to apply to this Indenture as so modified or to be excluded, as the
case may be.

SECTION 1.8 EFFECT OF HEADINGS AND TABLE OF CONTENTS.

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

SECTION 1.9 SUCCESSORS AND ASSIGNS.

        All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.

SECTION 1.10 SEPARABILITY CLAUSE.

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

SECTION 1.11 BENEFITS OF INDENTURE.

        Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Debt and the Holders, any benefit or any legal
or equitable right, remedy or claim under this Indenture.


                                      -14-
<PAGE>

SECTION 1.12 GOVERNING LAW.

        THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO SUCH
STATE'S CONFLICTS OF LAWS PRINCIPLES.

SECTION 1.13 LEGAL HOLIDAYS.

        In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security or the last date on which a Holder has the right to
convert a Security at a particular conversion price shall not be a Business Day
at any Place of Payment, then (notwithstanding any other provision of this
Indenture or of the Securities (other than a provision of any Security which
specifically states that such provision shall apply in lieu of this Section))
payment of interest or principal (and premium, if any) or, if applicable to a
particular series of Securities, conversion need not be made at such Place of
Payment on such date, but may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date or Redemption Date, at the Stated Maturity or on such last day for
conversion, as the case may be.

SECTION 1.14 INDENTURE AND SECURITIES SOLELY CORPORATE OBLIGATIONS.

        No recourse for the payment of the principal of or premium, if any, or
interest on any Security, or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in this Indenture or in any supplemental indenture or in any
Security, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, employee, agent, officer, or
director or subsidiary, as such, past, present or future, of the Company or of
any successor corporation, either directly or through the Company or any
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 all such liability is hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and the issue of the Securities.

SECTION 1.15 INDENTURE MAY BE EXECUTED IN COUNTERPARTS.

        This instrument 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.

                                    ARTICLE 2

                                 SECURITY FORMS

SECTION 2.1 FORMS GENERALLY.

        The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more



                                      -15-
<PAGE>

indentures supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or Depositary
therefor or as may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their execution thereof. If the form
of Securities of any series is established by action taken pursuant to a Board
Resolution, 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 Company Order contemplated by Section
3.3 for the authentication and delivery of such Securities. Any such Board
Resolution or record of such action shall have attached thereto a true and
correct copy of the form of Security referred to therein approved by or pursuant
to such Board Resolution.

        The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.

SECTION 2.2 FORM OF FACE OF SECURITY.

        [INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE
REGULATIONS THEREUNDER.]

                                  HARMONIC INC.

      --------------------------------------------------------------------

NO. _____                                                           $___________

                                                              CUSIP: ___________

        Harmonic Inc., a corporation duly organized and existing under the laws
of Delaware (herein called the "Company," which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to _______________________________, or registered assigns, the
principal sum of ________________________________________ Dollars on
____________ [IF THE SECURITY IS TO BEAR INTEREST PRIOR TO MATURITY, INSERT --,
and to pay interest thereon from _________ or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, semi-annually
on ___________ and __________ in each year, commencing _______________, at the
rate of ____% per annum, until the principal hereof is paid or made available
for payment [IF APPLICABLE, INSERT --, provided that any principal and premium,
and any such installment of interest, which is overdue shall bear interest at
the rate of ___% per annum (to the extent that the payment of such interest
shall be legally enforceable), from the dates such amounts are due until they
are paid or made available for payment, and such interest shall be payable on
demand]. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record


                                      -16-
<PAGE>

Date for such interest, which shall be the ___________ or ___________ (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture].

        [IF THE SECURITY IS NOT TO BEAR INTEREST PRIOR TO MATURITY, INSERT --
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal and any overdue premium shall
bear interest at the rate of ___% per annum (to the extent that the payment of
such interest shall be legally enforceable), from the dates such amounts are due
until they are paid or made available for payment. Interest on any overdue
principal or premium shall be payable on demand. Any such interest on overdue
principal or premium which is not paid on demand shall bear interest at the rate
of ___% per annum (to the extent that the payment of such interest on interest
shall be legally enforceable), from the date of such demand until the amount so
demanded is paid or made available for payment. Interest on any overdue interest
shall be payable on demand.] Payment of the principal of (and premium, if any)
and [IF APPLICABLE, INSERT -- any such] interest on this Security will be made
at the office or agency of the Company maintained for that purpose in
_____________________, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts [IF APPLICABLE, INSERT --; provided, however, that at the option of the
Company payment of interest may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register].

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

        Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

        IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

Dated: __________________                          HARMONIC INC.

                                                   By: _________________________

                                                   Title: ______________________

ATTEST: _________________


                                      -17-
<PAGE>

SECTION 2.3 FORM OF REVERSE OF SECURITY.

        This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of ____________, 200_ (herein called the
"Indenture," which term shall have the meaning assigned to it in such
instrument), between the Company and U.S. Bank National Association, as Trustee
(herein called the "Trustee," which term includes any successor trustee under
the Indenture), and reference is hereby made to the Indenture and all indentures
supplemental thereto for a statement of the respective rights, limitations of
rights, duties and immunities thereunder of the Company, the Trustee, the
holders of Senior Debt and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. This
Security is one of the series designated on the face hereof [IF APPLICABLE,
INSERT --, limited in aggregate principal amount to $_________].

        [IF APPLICABLE, INSERT -- The Securities of this series are subject to
redemption upon not less than [IF APPLICABLE, INSERT -- 30] days' notice by
mail, [IF APPLICABLE, INSERT -- (1) on _____________ in any year commencing with
the year _____ and ending with the year _____ through operation of the sinking
fund for this series at a Redemption Price equal to 100% of the principal
amount, and (2)] at any time [IF APPLICABLE, INSERT -- on or after
_____________, 20__], as a whole or in part, at the election of the Company, at
the following Redemption Prices (expressed as percentages of the principal
amount): If redeemed [IF APPLICABLE, INSERT -- on or before ______________,
___%, and if redeemed] during the 12-month period beginning ________ of the
years indicated,

<TABLE>
<CAPTION>
          YEAR              REDEMPTION PRICE              YEAR             REDEMPTION PRICE
          ----              ----------------              ----             ----------------
<S>                         <C>                           <C>              <C>
</TABLE>

and thereafter at a Redemption Price equal to _____% of the principal amount,
together in the case of any such redemption [IF APPLICABLE, INSERT -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such Securities,
or one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.]

        [IF APPLICABLE, INSERT --The Securities of this series are subject to
redemption upon not less than [if applicable, insert -- 30] days' notice by
mail, (1) on _________ in any year commencing with the year _____ and ending
with the year _____ through operation of the sinking fund for this series at the
Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table below,
and (2) at any time [IF APPLICABLE, INSERT -- on or after __________], as a
whole or in part, at the election of the Company, at the Redemption Prices for
redemption otherwise than through operation of the sinking fund (expressed


                                      -18-
<PAGE>


as percentages of the principal amount) set forth in the table below: If
redeemed during the 12-month period beginning ________ of the years indicated,

<TABLE>
<CAPTION>
                                 REDEMPTION PRICE FOR            REDEMPTION PRICE FOR REDEMPTION
                                  REDEMPTION THROUGH                 OTHERWISE THAN THROUGH
            YEAR             OPERATION OF THE SINKING FUND        OPERATION OF THE SINKING FUND
            ----             -----------------------------       -------------------------------
<S>                          <C>                                 <C>
</TABLE>



and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]

        [IF APPLICABLE, INSERT -- Notwithstanding the foregoing, the Company may
not, prior to __________, redeem any Securities of this series as contemplated
by [IF APPLICABLE, INSERT -- Clause (2) of] the preceding paragraph as a part
of, or in anticipation of, any refunding operation by the application, directly
or indirectly, of moneys borrowed having an interest cost to the Company
(calculated in accordance with generally accepted financial practice) of less
than ___% per annum.]

        [IF APPLICABLE, INSERT -- The sinking fund for this series provides for
the redemption on ___________, in each year beginning with the year _____ and
ending with the year _____ of [IF APPLICABLE, INSERT -- not less than
$__________ ("mandatory sinking fund") and not more than] $___________ aggregate
principal amount of Securities of this series. Securities of this series
acquired or redeemed by the Company otherwise than through [IF APPLICABLE,
INSERT -- mandatory] sinking fund payments may be credited against subsequent
[IF APPLICABLE, INSERT -- mandatory] sinking fund payments otherwise required to
be made IF APPLICABLE, INSERT --, in the inverse order in which they become
due].]

        [IF THE SECURITY IS SUBJECT TO REDEMPTION OF ANY KIND, INSERT -- In the
event of redemption of this Security in part only, a new Security or Securities
of this series and of like tenor for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.]

        [IF APPLICABLE, INSERT -- The Indenture contains provisions for
defeasance at any time of [the entire indebtedness of this Security] [or]
[certain restrictive covenants and Events of Default with respect to this
Security] [, in each case] upon compliance with certain conditions set forth in
the Indenture.]

        [IF THE SECURITY IS CONVERTIBLE INTO COMMON STOCK OF THE COMPANY, INSERT
-- Subject to the provisions of the Indenture, the Holder of this Security is
entitled, at its option, at any time on or before [INSERT DATE] (except that, in
case this Security or any portion hereof shall be called for



                                      -19-
<PAGE>

redemption, such right shall terminate with respect to this Security or portion
hereof, as the case may be, so called for redemption at the close of business on
the first Business Day next preceding the date fixed for redemption as provided
in the Indenture unless the Company defaults in making the payment due upon
redemption), to convert the principal amount of this Security (or any portion
hereof which is $1,000 or an integral multiple thereof), into fully paid and
non-assessable shares (calculated as to each conversion to the nearest 1/100th
of a share) of the Common Stock of the Company, as said shares shall be
constituted at the date of conversion, at the conversion price of $_____________
principal amount of Securities for each share of Common Stock, or at the
adjusted conversion price in effect at the date of conversion determined as
provided in the Indenture, upon surrender of this Security, together with the
conversion notice hereon duly executed, to the Company at the designated office
or agency of the Company in ____________, accompanied (if so required by the
Company) by instruments of transfer, in form satisfactory to the Company and to
the Trustee, duly executed by the Holder or by its duly authorized attorney in
writing.

        Such surrender shall, if made during any period beginning at the close
of business on a Regular Record Date and ending at the opening of business on
the Interest Payment Date next following such Regular Record Date (unless this
Security or the portion being converted shall have been called for redemption on
a Redemption Date during the period beginning at the close of business on a
Regular Record Date and ending at the opening of business on the first Business
Day after the next succeeding Interest Payment Date, or if such Interest Payment
Date is not a Business Day, the second such Business Day), also be accompanied
by payment in funds acceptable to the Company of an amount equal to the interest
payable on such Interest Payment Date on the principal amount of this Security
then being converted. Subject to the aforesaid requirement for payment and, in
the case of a conversion after the Regular Record Date next preceding any
Interest Payment Date and on or before such Interest Payment Date, to the right
of the Holder of this Security (or any Predecessor Security) of record at such
Regular Record Date to receive an installment of interest (with certain
exceptions provided in the Indenture), no adjustment is to be made on conversion
for interest accrued hereon or for dividends on shares of Common Stock issued on
conversion. The Company is not required to issue fractional shares upon any such
conversion, but shall make adjustment therefor in cash on the basis of the
current market value of such fractional interest as provided in the Indenture.
The conversion price is subject to adjustment as provided in the Indenture. In
addition, the Indenture provides that in case of certain consolidations or
mergers to which the Company is a party or the sale of substantially all of the
assets of the Company, the Indenture shall be amended, without the consent of
any Holders of Securities, so that this Security, if then outstanding, will be
convertible thereafter, during the period this Security shall be convertible as
specified above, only into the kind and amount of securities, cash and other
property receivable upon the consolidation, merger or sale by a holder of the
number of shares of Common Stock into which this Security might have been
converted immediately prior to such consolidation, merger or sale (assuming such
holder of Common Stock failed to exercise any rights of election and received
per share the kind and amount received per share by a plurality of non-electing
shares). In the event of conversion of this Security in part only, a new
Security or Securities for the unconverted portion hereof shall be issued in the
name of the Holder hereof upon the cancellation hereof.]



                                      -20-
<PAGE>

        [IF THE SECURITY IS CONVERTIBLE INTO OTHER SECURITIES OF THE COMPANY,
SPECIFY THE CONVERSION FEATURES.]

        The indebtedness evidenced by this Security is, to the extent and in the
manner provided in the Indenture, subordinate and subject in right of payment to
the prior payment in full of all Senior Debt of the Company, and this Security
is issued subject to such provisions of the Indenture with respect thereto. Each
Holder of this Security, by accepting the same, (a) agrees to and shall be bound
by such provisions, (b) authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to effectuate the subordination
so provided and (c) appoints the Trustee his attorney-in-fact for any and all
such purposes.

        [IF THE SECURITY IS NOT AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT --
If an Event of Default with respect to Securities of this series shall occur and
be continuing, the principal of the Securities of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.]

        [IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- INSERT FORMULA FOR DETERMINING THE
AMOUNT. Upon payment (i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal, premium and interest (in each
case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and premium and interest, if any, on the Securities of this series
shall terminate.]

        The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of more than 50% in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.

        As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than a majority in principal
amount of the Securities of this series at the time Outstanding shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default as Trustee and offered the Trustee reasonable




                                      -21-
<PAGE>

indemnity, and the Trustee shall not have received from the Holders of a
majority in principal amount of Securities of this series at the time
Outstanding a direction inconsistent with such request, and shall have failed to
institute any such proceeding, for 60 days after receipt of such notice, request
and offer of indemnity. The foregoing shall not apply to any suit instituted by
the Holder of this Security for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the respective due dates
expressed herein.

        No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.

        As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or its
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.

        The Securities of this series are issuable only in registered form
without coupons in denominations of $_____ and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

        No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

        Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

        All terms used in this Security that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.

SECTION 2.4 FORM OF LEGEND FOR GLOBAL SECURITIES.

        Unless otherwise specified as contemplated by Section 3.1 for the
Securities evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:


                                      -22-
<PAGE>

        THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

SECTION 2.5 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.

        The Trustee's certificates of authentication shall be in substantially
the following form:

        This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.

                                                 U.S. Bank National Association,
                                                 as Trustee

                                                 By:
                                                     ---------------------------
                                                     Authorized Officer

SECTION 2.6 FORM OF CONVERSION NOTICE.

Conversion notices shall be in substantially the following form:
To Harmonic Inc.:

        The undersigned owner of this Security hereby irrevocably exercises the
option to convert this Security, or portion hereof (which is $1,000 or an
integral multiple thereof) below designated, into shares of Common Stock of the
Company in accordance with the terms of the Indenture referred to in this
Security, and directs that the shares issuable and deliverable upon the
conversion, together with any check in payment for fractional shares and any
Securities representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If this Notice is being delivered on a date after the close of
business on a Regular Record Date and prior to the opening of business on the
related Interest Payment Date (unless this Security or the portion thereof being
converted has been called for redemption on a Redemption Date during the period
beginning at the close of business on a Regular Record Date and ending at the
opening of business on the first Business Day after the next succeeding Interest
Payment Date, or if such Interest Payment Date is not a Business Day, the second
such Business Day), this Notice is accompanied by payment, in funds acceptable
to the Company, of an amount equal to the interest payable on such Interest
Payment Date of the principal of this Security to be converted. If shares are to
be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect hereto. Any amount required to
be paid by the undersigned on account of interest accompanies this Security.


                                      -23-
<PAGE>

        Principal Amount to be Converted
(in an integral multiple of $1,000, if less than all):

        U.S. $_____________.

Dated: _____________________
                                               Signature(s) must be guaranteed
                                               by an eligible guarantor
                                               institution (banks, stockbrokers,
                                               savings and loan associations and
                                               credit unions with membership in
                                               an approved signature guarantee
                                               medallion program) pursuant to
                                               Securities and Exchange
                                               Commission Rule 17Ad-15.

                                               ---------------------------------
                                               Signature Guaranty

        Fill in for registration of shares of Common Stock and Security if to be
issued otherwise than to the registered Holder.

--------------------------------------         ---------------------------------
(Name)                                         Social Security or Other Taxpayer
                                               Identification Number

-------------------------------------
Please print Name and Address
(including zip code)

[The above conversion notice is to be modified, as appropriate, for conversion
into other securities or property of the Company.]

                                    ARTICLE 3

                                 THE SECURITIES

SECTION 3.1 AMOUNT UNLIMITED; ISSUABLE IN SERIES.

        The aggregate principal amount of Securities that may be authenticated
and delivered under this Indenture is unlimited. The Securities may be issued in
one or more series. There shall be established in or pursuant to a Board
Resolution and, subject to Section 3.3, set forth, or determined in the manner
provided, in an Officers' Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series,

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


                                      -24-
<PAGE>

            (2) any limit upon the aggregate principal amount of the Securities
        of the series which may be authenticated and delivered under this
        Indenture (except for Securities authenticated and delivered upon
        registration of transfer of, or in exchange for, or in lieu of, other
        Securities of the series pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.7
        and except for any Securities which, pursuant to Section 3.3, are deemed
        never to have been authenticated and delivered hereunder);

            (3) the Person to whom any interest on a Security of the series
        shall be payable, if other than the Person in whose name that Security
        (or one or more Predecessor Securities) is registered at the close of
        business on the Regular Record Date for such interest;

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

            (5) the rate or rates (which may be fixed or variable) at which any
        Securities of the series shall bear interest, if any, the date or dates
        from which any such interest shall accrue, the Interest Payment Dates on
        which any such interest shall be payable and the Regular Record Date for
        any such interest payable on any Interest Payment Date (or the method
        for determining the dates and rates);

            (6) the place or places where the principal of and any premium and
        interest on any Securities of the series shall be payable;

            (7) the period or periods within which, the price or prices at which
        and the terms and conditions upon which any Securities of the series may
        be redeemed, in whole or in part, at the option of the Company and, if
        other than by a Board Resolution, the manner in which any election by
        the Company to redeem the Securities shall be evidenced;

            (8) the obligation, if any, of the Company to redeem or purchase any
        Securities of the series pursuant to any sinking fund or analogous
        provisions or at the option of the Holder thereof and the period or
        periods within which, the price or prices at which and the terms and
        conditions upon which any Securities of the series shall be redeemed or
        purchased, in whole or in part, pursuant to such obligation;

            (9) if other than denominations of $1,000 and any integral multiple
        thereof, the denominations in which any Securities of the series shall
        be issuable;

            (10) if the amount of principal of or any premium or interest on any
        Securities of the series may be determined with reference to an index or
        pursuant to a formula, the manner in which such amounts shall be
        determined;

            (11) if other than the currency of the United States of America, the
        currency, currencies or currency units in which the principal of or any
        premium or interest on any Securities of the series shall be payable and
        the manner of determining the equivalent thereof in the currency of the
        United States of America for any purpose, including for purposes of the
        definition of "Outstanding" in Section 1.1;


                                      -25-
<PAGE>

            (12) if the principal of or any premium or interest on any
        Securities of the series is to be payable, at the election of the
        Company or the Holder thereof, in one or more currencies or currency
        units other than that or those in which such Securities are stated to be
        payable, the currency, currencies or currency units in which the
        principal of or any premium or interest on such Securities as to which
        such election is made shall be payable, the periods within which and the
        terms and conditions upon which such election is to be made and the
        amount so payable (or the manner in which such amount shall be
        determined);

            (13) if other than the entire principal amount thereof, the portion
        of the principal amount of any Securities of the series which shall be
        payable upon declaration of acceleration of the Maturity thereof
        pursuant to Section 5.2;

            (14) if the principal amount payable at the Stated Maturity of any
        Securities of the series will not be determinable as of any one or more
        dates prior to the Stated Maturity, the amount which shall be deemed to
        be the principal amount of such Securities as of any such date for any
        purpose thereunder or hereunder, including the principal amount thereof
        which shall be due and payable upon any Maturity other than the Stated
        Maturity or which shall be deemed to be Outstanding as of any date prior
        to the Stated Maturity (or, in any such case, the manner in which such
        amount deemed to be the principal amount shall be determined);

            (15) if applicable, that the Securities of the series, in whole or
        any specified part, shall be defeasible pursuant to Section 13.2 or
        Section 13.3 or both such Sections, or any other defeasance provisions
        applicable to any Securities of the series, and, if other than by a
        Board Resolution, the manner in which any election by the Company to
        defease such Securities shall be evidenced;

            (16) if applicable, the terms of any right to convert or exchange
        Securities of the series into shares of Common Stock of the Company or
        other securities or property;

            (17) if applicable, that any Securities of the series shall be
        issuable in whole or in part in the form of one or more Global
        Securities and, in such case, the respective Depositaries for such
        Global Securities, the form of any legend or legends which shall be
        borne by any such Global Security in addition to or in lieu of that set
        forth in Section 2.4 and any circumstances in addition to or in lieu of
        those set forth in Clause (2) of the last paragraph of Section 3.5 in
        which any such Global Security may be exchanged in whole or in part for
        Securities registered, and any transfer of such Global Security in whole
        or in part may be registered, in the name or names of Persons other than
        the Depositary for such Global Security or a nominee thereof;

            (18) any addition to or change in the Events of Default which
        applies to any Securities of the series and any change in the right of
        the Trustee or the requisite Holders of such Securities to declare the
        principal amount thereof due and payable pursuant to Section 5.2;


                                      -26-
<PAGE>

            (19) any addition to or change in the covenants set forth in Article
        10 which applies to Securities of the series;

            (20) any Authenticating Agents, Paying Agents, Security Registrars
        or such other agents necessary in connection with the issuance of the
        Securities of such series, including, without limitation, exchange rate
        agents and calculation agents;

            (21) if applicable, the terms of any security that will be provided
        for a series of Securities, including provisions regarding the
        circumstances under which collateral may be released or substituted;

            (22) if applicable, the terms of any guaranties for the Securities
        and any circumstances under which there may be additional obligors on
        the Securities;

            (23) any addition to or change in or modification to the
        subordinated provisions of this Indenture relating to the Securities of
        that series (including the provisions of Article 15), or different
        subordination provisions, including a different definition of "Senior
        Debt" or "Designated Senior Debt," will apply to Securities of the
        series; and

            (24) any other terms of the series (which terms shall not be
        inconsistent with the provisions of this Indenture, except as permitted
        by Section 9.1(5)).

        All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to the
Board Resolution referred to above and (subject to Section 3.3) set forth, or
determined in the manner provided, in the Officers' Certificate referred to
above or in any such indenture supplemental hereto.

        If any of the terms of the series are established by action taken
pursuant to a Board Resolution, 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 Officers'
Certificate setting forth the terms of the series.

        The Securities shall be subordinated in right of payment to Senior Debt
as provided in Article 15.

SECTION 3.2 DENOMINATIONS.

        The Securities of each series shall be issuable only in registered form
without coupons and only in such denominations as shall be specified as
contemplated by Section 3.1. In the absence of any such specified denomination
with respect to the Securities of any series, the Securities of such series
shall be issuable in denominations of $1,000 and any integral multiple thereof.

SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.

        The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its Chief Executive
Officer, its principal financial officer, its President or one of its Vice
Presidents, attested by its Treasurer, its Secretary or one of its Assistant
Treasurers or Assistant Secretaries. The signature of any of these officers on
the Securities may be manual or facsimile.


                                      -27-
<PAGE>

        Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.

        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 Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and deliver such Securities. If the
form or terms of the Securities of the series have been established by or
pursuant to one or more Board Resolutions as permitted by Sections 2.1 and 3.1,
in authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 6.1) shall be fully protected in
relying upon, a copy of such Board Resolution, the Officers' Certificate setting
forth the terms of the series and an Opinion of Counsel, with such Opinion of
Counsel stating,

            (1) if the form of such Securities has been established by or
        pursuant to Board Resolution as permitted by Section 2.1, that such form
        has been established in conformity with the provisions of this
        Indenture;

            (2) if the terms of such Securities have been established by or
        pursuant to Board Resolution as permitted by Section 3.1, that such
        terms have been established in conformity with the provisions of this
        Indenture; and

            (3) that such Securities, when authenticated and delivered by the
        Trustee and issued by the Company in the manner and subject to any
        conditions specified in such Opinion of Counsel, will constitute valid
        and legally binding obligations of the Company enforceable in accordance
        with their terms, subject to bankruptcy, insolvency, fraudulent
        transfer, reorganization, moratorium and similar laws of general
        applicability relating to or affecting creditors' rights and to general
        equity principles.

        If such form or terms have been so established, 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
which is not reasonably acceptable to the Trustee.

        Notwithstanding the provisions of Section 3.1 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.

        Each Security shall be dated the date of its authentication.

                                      -28-
<PAGE>

        No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 3.9, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.

        Neither the Company nor the Trustee shall have any responsibility for
any defect in the CUSIP number that appears on any Security, check, advice of
payment or redemption notice, and any such document may contain a statement to
the effect that CUSIP numbers have been assigned by an independent service for
convenience of reference and that neither the Company nor the Trustee shall be
liable for any inaccuracy in such numbers.

SECTION 3.4 TEMPORARY SECURITIES.

        Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.

        If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series at the
office or agency of the Company in a Place of Payment for that series, without
charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities of any series, the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor one or more definitive
Securities of the same series, of any authorized denominations and of like tenor
and aggregate principal amount. Until so exchanged, the temporary Securities of
any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series and tenor.

SECTION 3.5 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE.

        The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.


                                      -29-
<PAGE>

        Upon surrender for registration of transfer of any Security of a series
at the office or agency of the Company in a Place of Payment for that series,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Securities
of the same series, of any authorized denominations and of like tenor and
aggregate principal amount.

        At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and of
like tenor and aggregate principal amount, upon surrender of the Securities to
be exchanged at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities that the Holder making the exchange is
entitled to receive. All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.

        Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or its attorney duly authorized in writing.

        No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4, 9.6 or 11.7 not involving any transfer.

        If the Securities of any series (or of any series and specified tenor)
are to be redeemed in part, the Company shall not be required (A) to issue,
register the transfer of or exchange any Securities of that series (or of that
series and specified tenor, as the case may be) during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of any such Securities selected for redemption under Section 11.3 and
ending at the close of business on the day of such mailing, or (B) to register
the transfer of or exchange any Security so selected for redemption in whole or
in part, except the unredeemed portion of any Security being redeemed in part.

        The provisions of Clauses (1), (2), (3) and (4) below shall apply only
to Global Securities:

            (1) Each Global Security authenticated under this Indenture shall be
        registered in the name of the Depositary designated for such Global
        Security or a nominee thereof and delivered to such Depositary or a
        nominee thereof or custodian therefor, and each such Global Security
        shall constitute a single Security for all purposes of this Indenture.

            (2) Notwithstanding any other provision in this Indenture, no Global
        Security may be exchanged in whole or in part for Securities registered,
        and no transfer of a Global Security in whole or in part may be
        registered, in the name of any Person other than the Depositary for such
        Global Security or a nominee thereof unless (A) such Depositary (i) has
        notified the Company that it is unwilling or unable to continue as
        Depositary for such Global



                                      -30-
<PAGE>

        Security or (ii) has ceased to be a clearing agency registered under the
        Exchange Act, (B) there shall have occurred and be continuing an Event
        of Default with respect to such Global Security or (C) there shall exist
        such circumstances, if any, in addition to or in lieu of the foregoing
        as have been specified for this purpose as contemplated by Section 3.1.

            (3) Subject to Clause (2) above, any exchange of a Global Security
        for other Securities may be made in whole or in part, and all Securities
        issued in exchange for a Global Security or any portion thereof shall be
        registered in such names as the Depositary for such Global Security
        shall direct.

            (4) Every Security authenticated and delivered upon registration of
        transfer of, or in exchange for or in lieu of, a Global Security or any
        portion thereof, whether pursuant to this Section, Section 3.4, 3.6, 9.6
        or 11.7 or otherwise, shall be authenticated and delivered in the form
        of, and shall be, a Global Security, unless such Security is registered
        in the name of a Person other than the Depositary for such Global
        Security or a nominee thereof.

SECTION 3.6 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.

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

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

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

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

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


                                      -31-
<PAGE>


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

SECTION 3.7 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.

        Except as otherwise provided as contemplated by Section 3.1 with respect
to any series of Securities, interest on any Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.

        Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:

            (1) The Company may elect to make payment of any Defaulted Interest
        to the Persons in whose names the Securities of such series (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 Security of such series 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 be not more than
        15 days and not 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 given
        to each Holder of Securities of such series in the manner set forth in
        Section 1.6, 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 so mailed, such Defaulted
        Interest shall be paid to the Persons in whose names the Securities of
        such series (or their respective Predecessor Securities) are registered
        at the close of business on such Special Record Date and shall no longer
        be payable pursuant to the following Clause (2).

            (2) The Company may make payment of any Defaulted Interest on the
        Securities of any series 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



                                      -32-
<PAGE>


        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.

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

        Subject to the provisions of Section 14.2, in the case of any Security
(or any part thereof) which is converted after any Regular Record Date and on or
prior to the next succeeding Interest Payment Date (other than any Security the
principal of (or premium, if any, on) which shall become due and payable,
whether at Stated Maturity or by declaration of acceleration or otherwise prior
to such Interest Payment Date), interest whose Stated Maturity is on such
Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion and such interest (whether or not punctually
paid or duly provided for) shall be paid to the Person in whose name that
Security (or any one or more Predecessor Securities) is registered at the close
of business on such Regular Record Date. Except as otherwise expressly provided
in the immediately preceding sentence or in Section 14.2, in the case of any
Security (or any part thereof) which is converted, interest whose Stated
Maturity is after the date of conversion of such Security (or such part thereof)
shall not be payable.

SECTION 3.8 PERSONS DEEMED OWNERS.

        Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of principal of and any premium and
(subject to Section 3.7) any interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.

SECTION 3.9 CANCELLATION.

        All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to the
Trustee for cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities so delivered shall be promptly
canceled by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Securities held by the
Trustee shall be disposed of in accordance with its customary procedures.


                                      -33-
<PAGE>

SECTION 3.10 COMPUTATION OF INTEREST.

        Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.

                                    ARTICLE 4

                           SATISFACTION AND DISCHARGE

SECTION 4.1 SATISFACTION AND DISCHARGE OF INDENTURE.

        This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when

            (1) either

                  (A) all Securities theretofore authenticated and delivered
            (other than (i) Securities which have been destroyed, lost or stolen
            and which have been replaced or paid as provided in Section 3.6 and
            (ii) Securities for whose payment money has theretofore been
            deposited in trust or segregated and held in trust by the Trustee or
            the Company and thereafter repaid to the Company or discharged from
            such trust, as provided in Section 10.3) have been delivered to the
            Trustee for cancellation; or

                  (B) all such Securities not theretofore delivered to the
            Trustee for cancellation

                             (i) have become due and payable, or

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

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

            and the Company, in the case of (i), (ii) or (iii) above, has
            deposited or caused to be deposited with the Trustee as trust funds
            in trust for the purpose money in an amount sufficient to pay and
            discharge the entire indebtedness on such Securities not theretofore
            delivered to the Trustee for cancellation, for principal and any
            premium and interest to the date of such deposit (in the case of
            Securities which have become due and payable) or to the Stated
            Maturity or Redemption Date, as the case may be;


                                      -34-
<PAGE>

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

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

        Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Trustee to any Authenticating Agent under Section 6.14 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive.

SECTION 4.2 APPLICATION OF TRUST MONEY.

        Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee.

                                    ARTICLE 5

                                    REMEDIES

SECTION 5.1 EVENTS OF DEFAULT.

        "Event of Default," wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be occasioned by the provisions of Article
15 or be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body), unless in the Board Resolution,
supplemental indenture or Officers' Certificate establishing such series, it is
provided that such series shall not have the benefit of said Event of Default:

            (1) default in the payment of any interest upon any Security of that
        series when it becomes due and payable, and continuance of such default
        for a period of 30 days; or

            (2) default in the payment of the principal of or any premium on any
        Security of that series at its Maturity; or

            (3) default in the deposit of any sinking fund payment, when and as
        due by the terms of a Security of that series; or


                                      -35-
<PAGE>
            (4) default in the performance, or breach, of any covenant or
        warranty of the Company in this Indenture (other than a covenant or
        warranty a default in whose performance or whose breach is elsewhere in
        this Section specifically dealt with or which has expressly been
        included in this Indenture solely for the benefit of series of
        Securities other than that series), and continuance of such default or
        breach for a period of 90 days after there has been given, by registered
        or certified mail, to the Company by the Trustee or to the Company and
        the Trustee by the Holders of at least 25% in principal amount of the
        Outstanding Securities of that series a written notice specifying such
        default or breach and requiring it to be remedied and stating that such
        notice is a "Notice of Default" hereunder; or

            (5) the entry by a court having jurisdiction in the premises of (A)
        a decree or order for relief in respect of the Company in an involuntary
        case or proceeding under any applicable Federal or State bankruptcy,
        insolvency, reorganization or other similar law or (B) a decree or order
        adjudging the Company a bankrupt or insolvent, or approving as properly
        filed a petition seeking reorganization, arrangement, adjustment or
        composition of or in respect of the Company under any applicable Federal
        or State law, or appointing a custodian, receiver, liquidator, assignee,
        trustee, sequestrator or other similar official of the Company or of any
        substantial part of its property, or ordering the winding up or
        liquidation of its affairs, and the continuance of any such decree or
        order for relief or any such other decree or order unstayed and in
        effect for a period of 90 consecutive days; or

            (6) the commencement by the Company of a voluntary case or
        proceeding under any applicable Federal or State bankruptcy, insolvency,
        reorganization or other similar law or of any other case or proceeding
        to be adjudicated a bankrupt or insolvent, or the consent by it to the
        entry of a decree or order for relief in respect of the Company in an
        involuntary case or proceeding under any applicable Federal or State
        bankruptcy, insolvency, reorganization or other similar law or to the
        commencement of any bankruptcy or insolvency case or proceeding against
        it, or the filing by it of a petition or answer or consent seeking
        reorganization or relief under any applicable Federal or State law, or
        the consent by it to the filing of such petition or to the appointment
        of or taking possession by a custodian, receiver, liquidator, assignee,
        trustee, sequestrator or other similar official of the Company or of any
        substantial part of its property, or the making by it of an assignment
        for the benefit of creditors, or the admission by it in writing of its
        inability to pay its debts generally as they become due, or the taking
        of corporate action by the Company in furtherance of any such action; or

            (7) any other Event of Default provided with respect to Securities
        of that series in the Board Resolution, supplemental indenture or
        Officers' Certificate establishing that series.

SECTION 5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.

        Unless the Board Resolution, supplemental indenture or Officers'
Certificate establishing such series provides otherwise, if an Event of Default
(other than an Event of Default specified in Section 5.1(5) or 5.1(6)) with
respect to Securities of any series at the time Outstanding occurs and is
continuing, then in every such case the Trustee or the Holders of not less than
25% in principal


                                      -36-
<PAGE>
amount of the Outstanding Securities of that series may declare the principal
amount of all the Securities of that series (or, if any Securities of that
series are Original Issue Discount Securities, such portion of the principal
amount of such Securities as may be specified by the terms thereof) and premium,
if any, together with accrued and unpaid interest, if any, thereon, to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by the Holders), and upon any such declaration such principal
amount (or specified amount) and premium, if any, together with accrued and
unpaid interest, if any, thereon, shall become immediately due and payable. If
an Event of Default specified in Section 5.1(5) or 5.1(6) with respect to
Securities of any series at the time Outstanding occurs, the principal amount of
all the Securities of that series (or, if any Securities of that series are
Original Issue Discount Securities, such portion of the principal amount of such
Securities as may be specified by the terms thereof) and premium, if any,
together with accrued and unpaid interest, if any, thereon, shall automatically,
and without any declaration or other action on the part of the Trustee or any
Holder, become immediately due and payable. Any payments by the Company on the
Securities following any such acceleration will be subject to the subordination
provisions of Article 15 to the extent provided therein.

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

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

                  (A) all overdue interest on all Securities of that series,

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

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

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

            (2) all Events of Default with respect to Securities of that series,
        other than the non-payment of the principal of Securities of that series
        that have become due solely by such declaration of acceleration, have
        been cured or waived as provided in Section 5.13. No such rescission
        shall affect any subsequent default or impair any right consequent
        thereon.

SECTION 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.

        The Company covenants that if


                                      -37-
<PAGE>

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

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

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

SECTION 5.4 TRUSTEE MAY FILE PROOFS OF CLAIM.

        In case of any judicial proceeding relative to the Company (or any other
obligor upon the Securities), its property or its creditors, the Trustee shall
be entitled and empowered, by intervention in such proceeding or otherwise, to
take any and all actions authorized under the Trust Indenture Act in order to
have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.7. No provision of this Indenture shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding; provided, however, that the Trustee may, on behalf of the Holders,
vote for the election of a trustee in bankruptcy or similar official and be a
member of a creditors' or other similar committee.

SECTION 5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.

        All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought


                                      -38-
<PAGE>


in its own name as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.

SECTION 5.6 APPLICATION OF MONEY COLLECTED.

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

        FIRST: To the payment of all amounts due the Trustee under Section 6.7;

        SECOND: Subject to Article 15, to the payment of the amounts then due
and unpaid for principal of and any premium, if any, and interest on the
Securities in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal and any premium, if
any, and interest, respectively; and

        THIRD: The balance, if any, to the Company or any other Person or
Persons entitled thereto.

SECTION 5.7 LIMITATION ON SUITS.

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

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

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

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

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

            (5) no direction inconsistent with such written request has been
        given to the Trustee during such 60-day period by the Holders of a
        majority in principal amount of the Outstanding Securities of that
        series; it being understood and intended that no one or more of such
        Holders shall have any right in any manner whatever by virtue of, or by
        availing of, any

                                      -39-
<PAGE>

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

SECTION 5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
            INTEREST AND TO CONVERT.

        Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of and any premium and (subject to Section 3.7)
interest on such Security on the respective Stated Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date), to convert
such Securities in accordance with Article 14 to the extent that such right to
convert is applicable to such Security, and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder.

SECTION 5.9 RESTORATION OF RIGHTS AND REMEDIES.

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

SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE.

        Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 3.6, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.

SECTION 5.11 DELAY OR OMISSION NOT WAIVER.

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


                                      -40-
<PAGE>

SECTION 5.12 CONTROL BY HOLDERS.

        The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that

            (1) such direction shall not be in conflict with any rule of law or
        with this Indenture and the Trustee shall not have determined that the
        action so directed would be unjustly prejudicial to Holders of
        Securities of that series, or any other series, not taking part in such
        direction; and

            (2) the Trustee may take any other action deemed proper by the
        Trustee that is not inconsistent with such direction or this Indenture.

SECTION 5.13 WAIVER OF PAST DEFAULTS.

        The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except

            (1) a default in the payment of the principal of or any premium or
        interest on any Security of such series as and when the same shall
        become due and payable by the terms thereof, otherwise than by
        acceleration (unless such default has been cured and a sum sufficient to
        pay all matured installments of interest, principal and premium, if any,
        has been deposited with the Trustee), or

            (2) to the extent such right is applicable to such Security, a
        failure by the Company on request to convert any Security into Common
        Stock; or

            (3) in respect of a covenant or provision hereof which under Article
        9 cannot be modified or amended without the consent of the Holder of
        each Outstanding Security of such series affected.

        Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.

SECTION 5.14 UNDERTAKING FOR COSTS.

        In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment in any suit instituted by the Company or in any suit for the
enforcement of the right to convert any Security in accordance with Article 14.


                                      -41-
<PAGE>

SECTION 5.15 WAIVER OF USURY, STAY OR EXTENSION LAWS.

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

                                    ARTICLE 6

                                   THE TRUSTEE

SECTION 6.1 CERTAIN DUTIES AND RESPONSIBILITIES.

        The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.

SECTION 6.2 NOTICE OF DEFAULTS.

        If a default occurs hereunder with respect to Securities of any series,
the Trustee shall give the Holders of Securities of such series notice of such
default as and to the extent provided by the Trust Indenture Act; provided,
however, that except in the case of a default in the payment of principal of (or
premium, if any) or interest on any Securities of such series or in the payment
of any sinking fund installment or any conversion right applicable to Securities
of such series, the Trustee shall be protected in withholding such notice if and
so long as a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determine that the withholding of such notice is in the
interests of the holders of Securities of such series; provided, further,
however, that in the case of any default of the character specified in Section
5.1(4) with respect to Securities of such series, no such notice to Holders
shall be given until at least 60 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event that is, or after
notice or lapse of time or both would become, an Event of Default with respect
to Securities of such series.

        Except with respect to Section 10.1, the Trustee shall have no duty to
inquire as to the performance of the Company with respect to the covenants
contained in Article 10. In addition, the Trustee shall not be deemed to have
knowledge of an Event of Default except (i) any Default or Event of Default
occurring pursuant to Sections 5.1(1) 5.1(2) and 5.(3) (defaults in payments on
the Securities) or (ii) any Default or Event of Default of which the Trustee
shall have received written notification or obtained actual knowledge.

        Delivery of reports, information and documents to the Trustee under
Section 7.4 is for informational purposes only 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 hereunder (as to which the
Trustee is entitled to rely conclusively on Officers' Certificates).

SECTION 6.3 CERTAIN RIGHTS OF TRUSTEE.

        Subject to the provisions of Section 6.1:


                                      -42-
<PAGE>
            (1) in the absence of bad faith on the part of the Trustee, the
        Trustee may rely and shall be protected in acting or refraining from
        acting upon any resolution, certificate, statement, instrument, opinion,
        report, notice, request, direction, consent, order, bond, debenture,
        note, other evidence of indebtedness or other paper or document believed
        by it to be genuine and to have been signed or presented by the proper
        party or parties;

            (2) any request or direction of the Company mentioned herein shall
        be sufficiently evidenced by a Company Request or Company Order, and any
        resolution of the Board of Directors shall be sufficiently evidenced by
        a Board Resolution;

            (3) whenever in the administration of this Indenture the Trustee
        shall deem it desirable that a matter be proved or established prior to
        taking, suffering or omitting any action hereunder, the Trustee (unless
        other evidence be herein specifically prescribed) is entitled to and
        may, in the absence of bad faith on its part, rely upon an Officers'
        Certificate;

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

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

            (6) 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, direction, consent, order,
        bond, debenture, note, other evidence of indebtedness or other paper or
        document, but the Trustee, in its discretion, may make such further
        inquiry or investigation into such facts or matters as it may see fit,
        and, if the Trustee shall determine to make such further inquiry or
        investigation, it shall be entitled to examine the books, records and
        premises of the Company, personally or by agent or attorney; and

            (7) 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.

SECTION 6.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.

        The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity, sufficiency or priority of this Indenture or of the Securities.
Neither


                                      -43-
<PAGE>


the Trustee nor any Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds thereof.

SECTION 6.5 MAY HOLD SECURITIES AND ACT AS TRUSTEE UNDER OTHER INDENTURES.

        The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
6.8 and 6.13, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.

        Subject to the limitations imposed by the Trust Indenture Act, nothing
in this Indenture shall prohibit the Trustee from becoming and acting as trustee
under other indentures under which other securities, or certificates of interest
of participation in other securities, of the Company are outstanding in the same
manner as if it were not Trustee hereunder.

SECTION 6.6 MONEY HELD IN TRUST.

        Money held by the Trustee in trust hereunder 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 money received by it hereunder except as otherwise
agreed with the Company.

SECTION 6.7 COMPENSATION AND REIMBURSEMENT.

        The Company agrees:

            (1) to pay to the Trustee from time to time reasonable compensation
        for all services rendered by it hereunder (which compensation shall not
        be limited by any provision of law in regard to the compensation of a
        trustee of an express trust);

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

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

        When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.1(5) or Section 5.1(6) hereof occurs, the
expenses and the compensation for the services (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of administration
under any applicable bankruptcy, insolvency, reorganization or similar law.


                                      -44-
<PAGE>


SECTION 6.8 CONFLICTING INTERESTS.

        If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture. To the extent
permitted by the Trust Indenture Act, the Trustee shall not be deemed to have a
conflicting interest by virtue of being a trustee under this Indenture with
respect to Securities of more than one series.

SECTION 6.9 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.

        There shall at all times be one (and only one) Trustee hereunder with
respect to the Securities of each series, which may be Trustee hereunder for
Securities of one or more other series. Each Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has (or if the
Trustee is a member of a bank holding company system, its bank holding company
has) a combined capital and surplus of at least $50,000,000. If any such Person
or bank holding company publishes reports of condition at least annually,
pursuant to law or to the requirements of its supervising or examining
authority, then for the purposes of this Section and to the extent permitted by
the Trust Indenture Act, the combined capital and surplus of such Person or bank
holding company shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time the
Trustee with respect to the Securities of any series shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.

SECTION 6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.

        No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.11. The Trustee may resign at any time with
respect to the Securities of one or more series by giving written notice thereof
to the Company. If the instrument of acceptance by a successor Trustee required
by Section 6.11 shall not have been delivered to the Trustee within 30 days
after the giving 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 the Securities of such series.

        The Trustee may be removed at any time with respect to the Securities of
any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.

        If at any time:

            (1) the Trustee shall fail to comply with Section 6.8 after written
        request therefor by the Company or by any Holder who has been a bona
        fide Holder of a Security for at least six months, or


                                      -45-
<PAGE>


            (2) the Trustee shall cease to be eligible under Section 6.9 and
        shall fail to resign after written request therefor by the Company or by
        any such Holder, or

            (3) the Trustee shall become incapable of acting or shall be
        adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
        property shall be appointed 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, (A)
        the Company by a Board Resolution may remove the Trustee with respect to
        all Securities, or (B) subject to Section 5.14, any Holder who has been
        a bona fide Holder of a Security for at least six months may, on behalf
        of himself and all others similarly situated, petition any court of
        competent jurisdiction for the removal of the Trustee with respect to
        all Securities and the appointment of a successor Trustee or Trustees.

        If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with respect to
the Securities of any particular series) and shall comply with the applicable
requirements of Section 6.11. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 6.11, become the
successor Trustee with respect to the Securities of such series and to that
extent supersede the successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of any series shall have been so
appointed by the Company or the Holders and accepted appointment in the manner
required by Section 6.11, the retiring Trustee may petition, or any Holder who
has been a bona fide Holder of a Security of such series for at least six months
may petition, on behalf of himself and all others similarly situated, any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.

        The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series to all Holders
of Securities of such series in the manner provided in Section 1.6. Each notice
shall include the name of the successor Trustee with respect to the Securities
of such series and the address of its Corporate Trust Office.

SECTION 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.

        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


                                      -46-
<PAGE>

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.

        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 (1) 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, (2) if the retiring Trustee
is not retiring with respect to all Securities, 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 (3) 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 and 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 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 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 all 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.

        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 the
first or second preceding paragraph, as the case may be.

        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.

SECTION 6.12 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 all or substantially all the corporate trust business
of the Trustee (including the administration of the trust created by this
Indenture), shall be


                                      -47-
<PAGE>
the successor of the Trustee hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
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. In the event that any Securities shall
not have been authenticated by such predecessor Trustee, any such successor
Trustee may authenticate and deliver such Securities in either its own name or
that of a predecessor Trustee, with the full force and effect which this
Indenture provides for the certificate of authentication of the Trustee.

SECTION 6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

        If and when the Trustee shall be or become a creditor of the Company (or
any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).

SECTION 6.14 APPOINTMENT OF AUTHENTICATING AGENT.

        The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer or partial redemption thereof
or pursuant to Section 3.6, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having (or if the Authenticating Agent is a member of a bank holding
company system, its bank holding company has) a combined capital and surplus of
not less than $50,000,000 and subject to supervision or examination by Federal
or State authority. If such Authenticating Agent publishes reports of condition
at least annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.

        Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.


                                      -48-
<PAGE>

        An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.6 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.

        The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 6.7.

        If an appointment with respect to one or more series is made pursuant to
this Section 6.12, the Securities of such series may have endorsed thereon, in
lieu of the Trustee's certificate of authentication, an alternative certificate
of authentication in the following form:

        This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.

                                           U.S. BANK NATIONAL ASSOCIATION

                                           By:
                                               ---------------------------------
                                               As Authenticating Agent

                                           By:
                                               ---------------------------------
                                               Authorized Officer

                                    ARTICLE 7

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

SECTION 7.1 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.

        The Company will furnish or cause to be furnished to the Trustee

            (1) semi-annually, not later than 15 days after the Regular Record
        Date for each respective series of Securities, a list, in such form as
        the Trustee may reasonably require, of the names and addresses of the
        Holders of Securities of each series as of such Regular Record Date, as
        the case may be, or if there is no Regular Record Date for such series
        of securities, semi-annually, and


                                      -49-
<PAGE>

            (2) 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 that no such list need be furnished by the Company to the Trustee so
long as the Trustee is acting as Security Registrar.

SECTION 7.2 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.

        The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.

        The rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and privileges of the Trustee, shall be as provided by the Trust
Indenture Act. Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.

SECTION 7.3 REPORTS BY TRUSTEE.

        The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.

        Reports so required to be transmitted at stated intervals of not more
than 12 months shall be transmitted no later than July 15 in each calendar year,
commencing with the first July 15 after the first issuance of Securities
pursuant to this Indenture.

        A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.

SECTION 7.4 REPORTS BY COMPANY.

        The Company shall file with the Trustee and the Commission, and transmit
to Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to the Trust Indenture Act; provided that any
such information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.


                                      -50-
<PAGE>

                                    ARTICLE 8

              CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

SECTION 8.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.

        The Company shall not consolidate with or merge into any other Person
(in a transaction in which the Company is not the surviving corporation) or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, unless:

            (1) in case the Company shall consolidate with or merge into another
        Person (in a transaction in which the Company is not the surviving
        corporation) or convey, transfer or lease its properties and assets
        substantially as an entirety to any Person, the Person formed by such
        consolidation or into which the Company is merged or the Person which
        acquires by conveyance or transfer, or which leases, the properties and
        assets of the Company substantially as an entirety shall be a
        corporation, limited liability company, partnership or trust, shall be
        organized and validly existing under the laws of the United States of
        America, any State thereof or the District of Columbia and shall
        expressly assume, by an indenture supplemental hereto, executed and
        delivered to the Trustee, in form satisfactory to the Trustee, the due
        and punctual payment of the principal of and any premium and interest on
        all the Securities and the performance or observance of every covenant
        of this Indenture on the part of the Company to be performed or observed
        and the conversion rights shall be provided for in accordance with
        Article 14, if applicable, or as otherwise specified pursuant to Section
        3.1, by supplemental indenture satisfactory in form to the Trustee,
        executed and delivered to the Trustee, by the Person (if other than the
        Company) formed by such consolidation or into which the Company shall
        have been merged or by the Person which shall have acquired the
        Company's assets;

            (2) immediately after giving effect to such transaction and treating
        any indebtedness which becomes an obligation of the Company or any
        Subsidiary as a result of such transaction as having been incurred by
        the Company or such Subsidiary at the time of such transaction, no Event
        of Default, and no event which, after notice or lapse of time or both,
        would become an Event of Default, shall have happened and be continuing;
        and

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

SECTION 8.2 SUCCESSOR SUBSTITUTED.

        Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 8.1, the successor Person formed by such consolidation or



                                      -51-
<PAGE>

into which the Company is merged or to which such conveyance, transfer or lease
is made shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except in
the case of a lease, the predecessor Person shall be relieved of all obligations
and covenants under this Indenture and the Securities.

                                    ARTICLE 9

                             SUPPLEMENTAL INDENTURES

SECTION 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.

        Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:

            (1) to evidence the succession of another Person to the Company, or
        successive successions, and the assumption by any such successor of the
        covenants of the Company herein and in the Securities in compliance with
        Article 8; or

            (2) to add to the covenants of the Company for the benefit of the
        Holders of all or any series of Securities (and if such covenants are to
        be for the benefit of less than all series of Securities, stating that
        such covenants are expressly being included solely for the benefit of
        such series) or to surrender any right or power herein conferred upon
        the Company; or

            (3) to add any additional Events of Default for the benefit of the
        Holders of all or any series of Securities (and if such additional
        Events of Default are to be for the benefit of less than all series of
        Securities, stating that such additional Events of Default are expressly
        being included solely for the benefit of such series); or

            (4) to add to or change any of the provisions of this Indenture to
        such extent as shall be necessary to permit or facilitate the issuance
        of Securities in bearer form, registrable or not registrable as to
        principal, and with or without interest coupons, or to permit or
        facilitate the issuance of Securities in uncertificated form; or

            (5) to add to, change or eliminate any of the provisions of this
        Indenture in respect of one or more series of Securities, provided that
        any such addition, change or elimination (A) shall neither (i) apply to
        any Security of any series created prior to the execution of such
        supplemental indenture and entitled to the benefit of such provision nor
        (ii) modify the rights of the Holder of any such Security with respect
        to such provision or (B) shall become effective only when there is no
        such Security Outstanding; or

            (6) to secure the Securities, including provisions regarding the
        circumstances under which collateral may be released or substituted; or

            (7) to add or provide for a guaranty of the securities or additional
        obligors on the securities; or


                                      -52-
<PAGE>


            (8) to establish the form or terms of Securities of any series as
        permitted by Sections 2.1 and 3.1; or

            (9) to evidence and provide for the acceptance of appointment
        hereunder by a successor Trustee with respect to the Securities of one
        or more series and to add to or change any of the provisions of this
        Indenture as shall be necessary to provide for or facilitate the
        administration of the trusts hereunder by more than one Trustee,
        pursuant to the requirements of Section 6.11; or

            (10) to cure any ambiguity, to correct or supplement any provision
        herein which may be defective or inconsistent with any other provision
        herein, or to make any other provisions with respect to matters or
        questions arising under this Indenture, provided that such action
        pursuant to this Clause (10) shall not adversely affect the interests of
        the Holders of Securities of any series in any material respect; or

            (11) to supplement any of the provisions of the Indenture to such
        extent as shall be necessary to permit or facilitate the defeasance and
        discharge of any series of Securities pursuant to Articles 4 and 13,
        provided that any such action shall not adversely affect the interests
        of the Holders of Securities of such series or any other series of
        Securities in any material respect.

SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.

        With the consent of the Holders of a majority in principal amount of the
Outstanding Securities of each series affected by such supplemental indenture,
by Act of said Holders delivered to the Company and the Trustee, the Company,
when authorized by a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities of such series under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,

            (1) change the Stated Maturity of the principal of, or any
        installment of principal of or interest on, any Security, or reduce the
        principal amount thereof or the rate of interest thereon or any premium
        payable upon the redemption thereof, or reduce the amount of the
        principal of an Original Issue Discount Security or any other Security
        which would be due and payable upon a declaration of acceleration of the
        Maturity thereof pursuant to Section 5.2, or change the coin or currency
        in which, any Security or any premium or interest thereon is payable, or
        impair the right to institute suit for the enforcement of any such
        payment on or after the Stated Maturity thereof (or, in the case of
        redemption, on or after the Redemption Date), or modify the provisions
        of this Indenture




                                      -53-
<PAGE>

        with respect to the subordination of such series of Securities in a
        manner adverse to the Holders of Securities of such series, or, in the
        case of Securities of any series that are convertible into Securities or
        other securities of the Company, adversely affect the right of Holders
        to convert any of the Securities of such series other than as provided
        in or pursuant to this Indenture, or

            (2) reduce the percentage in principal amount of the Outstanding
        Securities of any series, the consent of whose Holders is required for
        any such supplemental indenture, or the consent of whose Holders is
        required for any waiver (of compliance with certain provisions of this
        Indenture or certain defaults hereunder and their consequences) provided
        for in this Indenture, or

            (3) modify any of the provisions of this Section, Section 5.13 or
        Section 10.8, except to increase any such percentage or to provide that
        certain other provisions of this Indenture cannot be modified or waived
        without the consent of the Holder of each Outstanding Security affected
        thereby; provided, however, that this clause shall not be deemed to
        require the consent of any Holder with respect to changes in the
        references to "the Trustee" and concomitant changes in this Section and
        Section 10.8, or the deletion of this proviso, in accordance with the
        requirements of Sections 6.11 and 9.1(8), or

            (4) if applicable, make any change that adversely affects the right
        to convert any security as provided in Article 14 or pursuant to Section
        3.1 (except as permitted by Section 9.1(9)) or decrease the conversion
        rate or increase the conversion price of any such security.

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

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

SECTION 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES.

        In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Sections 6.1 and 6.3) shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.


                                      -54-
<PAGE>

SECTION 9.4 EFFECT OF SUPPLEMENTAL INDENTURES.

        Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.

SECTION 9.5 CONFORMITY WITH TRUST INDENTURE ACT.

        Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.

SECTION 9.6 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.

        Securities of any series authenticated and delivered after the execution
of any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.

SECTION 9.7 SUBORDINATION UNIMPAIRED.

        No provision in any supplemental indenture that affects the superior
position of the holders of Senior Debt shall be effective against holders of
Senior Debt.

                                   ARTICLE 10

                                    COVENANTS

SECTION 10.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.

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

SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY.

        The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange, where Securities of that series may be
surrendered for conversion and where notices and demands to or upon the Company
in respect of the Securities of that series and this Indenture may be served.
The Company will give prompt written notice to the Trustee of the location, and
any change in the location, of such



                                      -55-
<PAGE>

office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands. Unless otherwise provided in a supplemental indenture or
pursuant to Section 3.1 hereof, the Place of Payment for any series of
Securities shall be the Corporate Trust Office of the Trustee.

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

SECTION 10.3 MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.

        If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of or any premium or interest on any of the Securities of that series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.

        Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, on or prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.

        The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will (1) comply with the provisions of
the Trust Indenture Act applicable to it as a Paying Agent and (2) during the
continuance of any default by the Company (or any other obligor upon the
Securities of that series) in the making of any payment in respect of the
Securities of that series, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent for payment in
respect of the Securities of that series.

        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
by Company Order 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 trusts as those upon which such sums were held by the Company or
such


                                      -56-
<PAGE>

Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.

        Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or any premium or
interest on any Security of any series and remaining unclaimed for a period
ending on the earlier of the date that is ten Business Days prior to the date
such money would escheat to the State or two years after such principal, premium
or interest has become due and payable shall be paid to the Company on Company
Request, or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in each Place of Payment, notice that
such money remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.

SECTION 10.4 STATEMENT BY OFFICERS AS TO DEFAULT.

        The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge. The fiscal year of the Company currently ends on
December 31; and the Company will give the Trustee prompt written notice of any
change of its fiscal year.

SECTION 10.5 EXISTENCE.

        Subject to Article 8, the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence.

SECTION 10.6 MAINTENANCE OF PROPERTIES.

        The Company will cause all properties used or useful in the conduct of
its business to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as, and to the extent, in the judgment of the Company may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section shall prevent the Company from discontinuing the operation or
maintenance of any of such properties if such discontinuance is, in the


                                      -57-
<PAGE>

judgment of the Company, desirable in the conduct of its business and not
disadvantageous in any material respect to the Holders.

SECTION 10.7 PAYMENT OF TAXES AND OTHER CLAIMS.

        The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or upon the income,
profits or property of the Company, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim (i) whose amount, applicability or validity is being
contested in good faith by appropriate proceedings or (ii) if the failure to pay
or discharge would not have a material adverse effect on the assets, business,
operations, properties or condition (financial or otherwise) of the Company and
its subsidiaries, taken as a whole.

SECTION 10.8 WAIVER OF CERTAIN COVENANTS.

        Except as otherwise specified as contemplated by Section 3.1 for
Securities of such series, the Company may, with respect to the Securities of
any series, omit in any particular instance to comply with any term, provision
or condition set forth in any covenant provided pursuant to Section 3.1(19),
9.1(2), 9.1(7), 10.6 or 10.7 for the benefit of the Holders of such series if
before the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Securities of such series shall, by Act of
such Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect.

                                   ARTICLE 11

                            REDEMPTION OF SECURITIES

SECTION 11.1 APPLICABILITY OF ARTICLE.

        Securities of any series that are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 3.1 for such Securities) in
accordance with this Article.

SECTION 11.2 ELECTION TO REDEEM; NOTICE TO TRUSTEE.

        The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution or in another manner specified as contemplated by Section
3.1 for such Securities. In case of any redemption at the election of the
Company of less than all the Securities of any series (including any such
redemption affecting only a single Security), the Company shall, at least 45
days prior to the Redemption Date fixed by the Company (unless a shorter notice
shall be satisfactory to


                                      -58-
<PAGE>

the Trustee), notify the Trustee of such Redemption Date, of the principal
amount of Securities of such series to be redeemed and, if applicable, of the
tenor of the Securities to be redeemed. 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 Officers' Certificate evidencing
compliance with such restriction.

SECTION 11.3 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.

        If less than all the Securities of any series are to be redeemed (unless
all the Securities of such series and of a specified tenor are to be redeemed or
unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 45 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series
not previously called for redemption, by lot, or in the Trustee's discretion, on
a pro-rata basis, provided that the unredeemed portion of the principal amount
of any Security shall be in an authorized denomination (which shall not be less
than the minimum authorized denomination) for such Security. If less than all
the Securities of such series and of a specified tenor are to be redeemed
(unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 45 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series
and specified tenor not previously called for redemption in accordance with the
preceding sentence.

        If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed (so
far as may be) to be the portion selected for redemption. Securities that have
been converted during a selection of Securities to be redeemed shall be treated
by the Trustee as Outstanding for the purpose of such selection.

        The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in case of any Securities
selected for partial redemption as aforesaid, the principal amount thereof to be
redeemed.

        The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.

        For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.

                                      -59-
<PAGE>

SECTION 11.4 NOTICE OF REDEMPTION.

        Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not fewer than 30 nor more than 60 days prior to the Redemption
Date, unless a shorter period is specified in the Securities to be redeemed, to
each Holder of Securities to be redeemed, at its address appearing in the
Security Register.

        All notices of redemption shall state:

            (1) the Redemption Date,

            (2) the Redemption Price (including accrued interest, if any),

            (3) if less than all the Outstanding Securities of any series
        consisting of more than a single Security are to be redeemed, the
        identification (and, in the case of partial redemption of any such
        Securities, the principal amounts) of the particular Securities to be
        redeemed and, if less than all the Outstanding Securities of any series
        consisting of a single Security are to be redeemed, the principal amount
        of the particular Security to be redeemed,

            (4) in case any Security is to be redeemed in part only, that on and
        after the Redemption Date, upon surrender of such Security, the Holder
        of such Security will receive, without charge, a new Security or
        Securities of authorized denominations for the principal amount thereof
        remaining unredeemed,

            (5) that on the Redemption Date the Redemption Price will become due
        and payable upon each such Security to be redeemed and, if applicable,
        that interest thereon will cease to accrue on and after said date,

            (6) the place or places where each such Security is to be
        surrendered for payment of the Redemption Price,

            (7) if applicable, the conversion price, the date on which the right
        to convert the principal of the Securities or the portions thereof to be
        redeemed will terminate, and the place or places where such Securities
        may be surrendered for conversion,

            (8) that the redemption is for a sinking fund, if such is the case,
        and

            (9) the CUSIP number or numbers and/or common codes of the Security
        being redeemed.

        Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.

SECTION 11.5 DEPOSIT OF REDEMPTION PRICE.

        On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 10.3) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.


                                      -60-
<PAGE>


        If any Security called for redemption is converted, any money deposited
with the Trustee or with a Paying Agent or so segregated and held in trust for
the redemption of such Security shall (subject to the right of any Holder of
such Security to receive interest as provided in the last paragraph of Section
3.7) be paid to the Company on Company Request, or if then held by the Company,
shall be discharged from such trust.

SECTION 11.6 SECURITIES PAYABLE ON REDEMPTION DATE.

        Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 3.1, installments of interest whose Stated Maturity is
on or prior to the Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 3.7.

        If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.

        SECTION 11.7 SECURITIES REDEEMED IN PART.

        Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or its attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder of such Security without service
charge, a new Security or Securities of the same series and of like tenor, of
any authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.

                                   ARTICLE 12

                                  SINKING FUNDS

SECTION 12.1 APPLICABILITY OF ARTICLE.

        The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of any series except as otherwise specified as
contemplated by Section 3.1 for such Securities.


                                      -61-
<PAGE>

        The minimum amount of any sinking fund payment provided for by the terms
of any Securities 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
such Securities is herein referred to as an "optional sinking fund payment." If
provided for by the terms of any Securities, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 12.2. Each sinking
fund payment shall be applied to the redemption of Securities as provided for by
the terms of such Securities.

SECTION 12.2 SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.

        The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption) and (2) may apply as a credit
Securities of a series which 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 any Securities of such series required to be made
pursuant to the terms of such Securities as and to the extent provided for by
the terms of such Securities; provided that the Securities to be so credited
have not been previously so credited. The Securities to be so credited shall be
received and credited for such purpose by the Trustee at the Redemption Price,
as specified in the Securities so to be redeemed, for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly.

SECTION 12.3 REDEMPTION OF SECURITIES FOR SINKING FUND.

        Not fewer than 60 days prior to each sinking fund payment date for any
Securities, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing sinking fund payment for such
Securities pursuant to the terms of such Securities, the portion thereof, if
any, which is to be satisfied by payment of cash and the portion thereof, if
any, which is to be satisfied by delivering and crediting Securities pursuant to
Section 12.2 and will also deliver to the Trustee any Securities to be so
delivered. Not fewer than 30 days prior to 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 11.3 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 11.4. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 11.6 and 11.7.

                                   ARTICLE 13

                       DEFEASANCE AND COVENANT DEFEASANCE

SECTION 13.1 COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.

        The Company may elect, at its option at any time, to have Section 13.2
or Section 13.3 applied to any Securities or any series of Securities, as the
case may be, designated pursuant to Section 3.1 as being defeasible pursuant to
such Section 13.2 or 13.3, in accordance with any


                                      -62-
<PAGE>

applicable requirements provided pursuant to Section 3.1 and upon compliance
with the conditions set forth below in this Article. Any such election shall be
evidenced by a Board Resolution or in another manner specified as contemplated
by Section 3.1 for such Securities.

SECTION 13.2 DEFEASANCE AND DISCHARGE.

        Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be, the
Company shall be deemed to have been discharged from its obligations, and the
provisions of Article 15 shall cease to be effective, with respect to such
Securities as provided in this Section on and after the date the conditions set
forth in Section 13.4 are satisfied (hereinafter called "Defeasance"). For this
purpose, such Defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by such Securities and to have
satisfied all its other obligations under such Securities and this Indenture
insofar as such Securities are concerned (and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging the same), subject to
the following which shall survive until otherwise terminated or discharged
hereunder:

            (1) the rights of Holders of such Securities to receive, solely from
        the trust fund described in Section 13.4 and as more fully set forth in
        such Section, payments in respect of the principal of and any premium
        and interest on such Securities when payments are due,

            (2) the Company's obligations with respect to such Securities under
        Sections 3.4, 3.5, 3.6, 10.2 and 10.3, and, if applicable, Article 14,

            (3) the rights, powers, trusts, duties and immunities of the Trustee
        hereunder, and

            (4) this Article.

        Subject to compliance with this Article, the Company may exercise its
option (if any) to have this Section applied to any Securities notwithstanding
the prior exercise of its option (if any) to have Section 13.3 applied to such
Securities.

SECTION 13.3 COVENANT DEFEASANCE.

        Upon the Company's exercise of its option (if any) to have this Section
applied to any Securities or any series of Securities, as the case may be,

            (1) the Company shall be released from its obligations under
        Sections 10.6 and 10.7 and any covenants provided pursuant to Sections
        3.1(19), 9.1(2) or 9.1(7) for the benefit of the Holders of such
        Securities,

            (2) the occurrence of any event specified in Sections 5.1(4) (with
        respect to any of Sections 10.6 and 10.7 and any such covenants provided
        pursuant to Section 3.1(19), 9.1(2) or 9.1(7)) and the occurrence of any
        Event of Default specified pursuant to Section 3.1, shall be deemed not
        to be or result in an Event of Default, and


                                      -63-
<PAGE>

            (3) the provisions of Article 15 shall cease to be effective,

in each case with respect to such Securities or series of Securities as provided
in this Section on and after the date the conditions set forth in Section 13.4
are satisfied (hereinafter called "Covenant Defeasance"). For this purpose, such
Covenant Defeasance means that, with respect to such Securities, the Company may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such specified Section (to the extent
so specified in the case of Section 5.1(4) and the occurrence of any Event of
Default specified pursuant to Section 3.1) or Article 15, whether directly or
indirectly by reason of any reference elsewhere herein to any such Section or
Article or by reason of any reference in any such Section or Article to any
other provision herein or in any other document, but the remainder of this
Indenture and such Securities shall be unaffected thereby.

SECTION 13.4 CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.

        The following shall be the conditions to the application of Section 13.2
or Section 13.3 to any Securities or any series of Securities, as the case may
be:

            (1) The Company shall irrevocably have deposited or caused to be
        deposited with the Trustee (or another trustee which satisfies the
        requirements contemplated by Section 6.9 and agrees to comply with the
        provisions of this Article applicable to it) as trust funds in trust for
        the purpose of making the following payments, specifically pledged as
        security for, and dedicated solely to, the benefits of the Holders of
        such Securities,

                (A) in the case of Securities of a series denominated in
            currency of the United States of America,

                        (i) cash in currency of the United States of America in
                    an amount, or

                        (ii) U.S. Government Obligations which through the
                    scheduled payment of principal and interest in respect
                    thereof in accordance with their terms will provide, not
                    later than one day before the due date of any payment, an
                    amount in cash, or

                        (iii) a combination thereof, or

                (B) in the case of Securities of a series denominated in
            currency other than that of the United States of America,

                        (i) cash in the currency in which such series of
                    Securities is denominated in an amount, or

                        (ii) Foreign Government Obligations which through the
                    scheduled payment of principal and interest in respect
                    thereof in accordance with their


                                      -64-
<PAGE>

                    terms will provide, not later than one day before the due
                    date of any payment, an amount in cash, or

                        (iii) a combination thereof,

        in each case 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 and discharge, and which shall
        be applied by the Trustee (or any such other qualifying trustee) to pay
        and discharge, the principal of and any premium and interest on such
        Securities on the respective Stated Maturities, in accordance with the
        terms of this Indenture and such Securities.

            (2) In the event of an election to have Section 13.2 apply to any
        Securities or any series of Securities, as the case may be, the Company
        shall have delivered to the Trustee an Opinion of Counsel stating that

                (A) the Company has received from, or there has been published
            by, the Internal Revenue Service a ruling or

                (B) since the date of this instrument, there has been a change
            in the applicable Federal income tax law,

        in either case (A) or (B) to the effect that, and based thereon such
        opinion shall confirm that, the Holders of such Securities will not
        recognize gain or loss for Federal income tax purposes as a result of
        the deposit, Defeasance and discharge to be effected with respect to
        such Securities and will be subject to Federal income tax on the same
        amount, in the same manner and at the same times as would be the case if
        such deposit, Defeasance and discharge were not to occur.

            (3) In the event of an election to have Section 13.3 apply to any
        Securities or any series of Securities, as the case may be, the Company
        shall have delivered to the Trustee an Opinion of Counsel to the effect
        that the Holders of such Securities will not recognize gain or loss for
        Federal income tax purposes as a result of the deposit and Covenant
        Defeasance to be effected with respect to such Securities and will be
        subject to Federal income tax on the same amount, in the same manner and
        at the same times as would be the case if such deposit and Covenant
        Defeasance were not to occur.

            (4) The Company shall have delivered to the Trustee an Officers'
        Certificate to the effect that neither such Securities nor any other
        Securities of the same series, if then listed on any securities
        exchange, will be delisted as a result of such deposit.

            (5) No event which is, or after notice or lapse of time or both
        would become, an Event of Default with respect to such Securities or any
        other Securities shall have occurred and be continuing at the time of
        such deposit or, with regard to any such event specified in Sections
        5.1(5) and (6), at any time on or prior to the 90th day after the date
        of such deposit

                                      -65-
<PAGE>

        (it being understood that this condition shall not be deemed satisfied
        until after such 90th day).

            (6) Such Defeasance or Covenant Defeasance shall not cause the
        Trustee to have a conflicting interest within the meaning of the Trust
        Indenture Act (assuming all Securities are in default within the meaning
        of such Act).

            (7) Such Defeasance or Covenant Defeasance shall not result in a
        breach or violation of, or constitute a default under, this Indenture or
        any other agreement or instrument to which the Company is a party or by
        which it is bound.

            (8) Such Defeasance or Covenant Defeasance shall not result in the
        trust arising from such deposit constituting an investment company
        within the meaning of the Investment Company Act unless such trust shall
        be registered under such Act or exempt from registration thereunder.

            (9) At the time of such deposit,

                (A) no default in the payment of any principal of or premium or
            interest on any Senior Debt shall have occurred and be continuing,

                (B) no event of default with respect to any Senior Debt shall
            have resulted in such Senior Debt becoming, and continuing to be,
            due and payable prior to the date on which it would otherwise have
            become due and payable (unless payment of such Senior Debt has been
            made or duly provided for), and

                (C) no other event of default with respect to any Senior Debt
            shall have occurred and be continuing permitting (after notice or
            lapse of time or both) the holders of such Senior Debt (or a trustee
            on behalf of such holders) to declare such Senior Debt due and
            payable prior to the date on which it would otherwise have become
            due and payable.

            (10) The Company shall have delivered to the Trustee an Officers'
        Certificate and an Opinion of Counsel, each stating that all conditions
        precedent with respect to such Defeasance or Covenant Defeasance have
        been complied with.

SECTION 13.5 DEPOSITED MONEY, U.S. GOVERNMENT OBLIGATIONS AND FOREIGN GOVERNMENT
OBLIGATIONS TO BE HELD IN TRUST; MISCELLANEOUS PROVISIONS.

        Subject to the provisions of the last paragraph of Section 10.3, all
money, U.S. Government Obligations and Foreign Government Obligations (including
the proceeds thereof) deposited with the Trustee or other qualifying trustee
(solely for purposes of this Section and Section 13.6, the Trustee and any such
other trustee are referred to collectively as the "Trustee") pursuant to Section
13.4 in respect of any Securities shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly



                                      -66-
<PAGE>

or through any such Paying Agent (including the Company acting as its own Paying
Agent) as the Trustee may determine, to the Holders of such Securities, of all
sums due and to become due thereon in respect of principal and any premium and
interest, but money so held in trust need not be segregated from other funds
except to the extent required by law. Money, U.S. Government Obligations and
Foreign Government Obligations so held in trust shall not be subject to the
provisions of Article 15.

        The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations or
Foreign Government Obligations deposited pursuant to Section 13.4 or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of Outstanding
Securities.

        Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money, U.S. Government Obligations or Foreign Government Obligations held by it
as provided in Section 13.4 with respect to any Securities which, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect the
Defeasance or Covenant Defeasance, as the case may be, with respect to such
Securities.

SECTION 13.6 REINSTATEMENT.

        If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article with respect to any Securities by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the obligations under this
Indenture and such Securities from which the Company has been discharged or
released pursuant to Section 13.2 or 13.3 shall be revived and reinstated as
though no deposit had occurred pursuant to this Article with respect to such
Securities, until such time as the Trustee or Paying Agent is permitted to apply
all money held in trust pursuant to Section 13.5 with respect to such Securities
in accordance with this Article; provided, however, that if the Company makes
any payment of principal of or any premium or interest on any such Security
following such reinstatement of its obligations, the Company shall be subrogated
to the rights (if any) of the Holders of such Securities to receive such payment
from the money so held in trust.

                                   ARTICLE 14

                            CONVERSION OF SECURITIES

SECTION 14.1 APPLICABILITY OF ARTICLE.

        The provisions of this Article shall be applicable to the Securities of
any series which are convertible into shares of Common Stock of the Company, and
the issuance of such shares of Common Stock upon the conversion of such
Securities, except as otherwise specified as contemplated by Section 3.1 for the
Securities of such series.

                                      -67-
<PAGE>

SECTION 14.2 EXERCISE OF CONVERSION PRIVILEGE.

        In order to exercise a conversion privilege, the Holder of a Security of
a series with such a privilege shall surrender such Security to the Company at
the office or agency maintained for that purpose pursuant to Section 10.2,
accompanied by a duly executed conversion notice to the Company substantially in
the form set forth in Section 2.6 stating that the Holder elects to convert such
Security or a specified portion thereof. Such notice shall also state, if
different from the name and address of such Holder, the name or names (with
address) in which the certificate or certificates for shares of Common Stock,
which shall be issuable on such conversion, shall be issued. Securities
surrendered for conversion shall (if so required by the Company or the Trustee)
be duly endorsed by or accompanied by instruments of transfer in forms
satisfactory to the Company and the Trustee duly executed by the Holder or its
attorney duly authorized in writing; and Securities so surrendered for
conversion (in whole or in part) during the period from the close of business on
any Regular Record Date to the opening of business on the next succeeding
Interest Payment Date (excluding Securities or portions thereof called for
redemption during the period beginning at the close of business on a Regular
Record Date and ending at the opening of business on the first Business Day
after the next succeeding Interest Payment Date, or if such Interest Payment
Date is not a Business Day, the second such Business Day) shall also be
accompanied by payment in funds acceptable to the Company of an amount equal to
the interest payable on such Interest Payment Date on the principal amount of
such Security then being converted, and such interest shall be payable to such
Holder notwithstanding the conversion of such Security, subject to the
provisions of Section 3.7 relating to the payment of Defaulted Interest by the
Company. As promptly as practicable after the receipt of such notice and of any
payment required pursuant to a Board Resolution and, subject to Section 3.3, set
forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto setting forth the
terms of such series of Security, and the surrender of such Security in
accordance with such reasonable regulations as the Company may prescribe, the
Company shall issue and shall deliver, at the office or agency at which such
Security is surrendered, to such Holder or on its written order, a certificate
or certificates for the number of full shares of Common Stock issuable upon the
conversion of such Security (or specified portion thereof), in accordance with
the provisions of such Board Resolution, Officers' Certificate or supplemental
indenture, and cash as provided therein in respect of any fractional share of
such Common Stock otherwise issuable upon such conversion. Such conversion shall
be deemed to have been effected immediately prior to the close of business on
the date on which such notice and such payment, if required, shall have been
received in proper order for conversion by the Company and such Security shall
have been surrendered as aforesaid (unless such Holder shall have so surrendered
such Security and shall have instructed the Company to effect the conversion on
a particular date following such surrender and such Holder shall be entitled to
convert such Security on such date, in which case such conversion shall be
deemed to be effected immediately prior to the close of business on such date)
and at such time the rights of the Holder of such Security as such Security
Holder shall cease and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock of the Company shall be
issuable upon such conversion shall be deemed to have become the Holder or
Holders of record of the shares represented thereby. Except as set forth above
and subject to the final paragraph of Section 3.7, no payment or adjustment
shall be made upon any conversion on account of any interest


                                      -68-
<PAGE>

accrued on the Securities (or any part thereof) surrendered for conversion or on
account of any dividends on the Common Stock of the Company issued upon such
conversion.

        In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to or on the order of the Holder thereof, at the expense of the Company,
a new Security or Securities of the same series, of authorized denominations, in
aggregate principal amount equal to the unconverted portion of such Security.

SECTION 14.3 NO FRACTIONAL SHARES.

        No fractional share of Common Stock of the Company shall be issued upon
conversions of Securities of any series. If more than one Security shall be
surrendered for conversion at one time by the same Holder, the number of full
shares which shall be issuable upon conversion shall be computed on the basis of
the aggregate principal amount of the Securities (or specified portions thereof
to the extent permitted hereby) so surrendered. If, except for the provisions of
this Section 14.3, any Holder of a Security or Securities would be entitled to a
fractional share of Common Stock of the Company upon the conversion of such
Security or Securities, or specified portions thereof, the Company shall pay to
such Holder an amount in cash equal to the current market value of such
fractional share computed, (i) if such Common Stock is listed or admitted to
unlisted trading privileges on a national securities exchange or market, on the
basis of the last reported sale price regular way on such exchange or market on
the last trading day prior to the date of conversion upon which such a sale
shall have been effected, or (ii) if such Common Stock is not at the time so
listed or admitted to unlisted trading privileges on a national securities
exchange or market, on the basis of the average of the bid and asked prices of
such Common Stock in the over-the-counter market, on the last trading day prior
to the date of conversion, as reported by the National Quotation Bureau,
Incorporated or similar organization if the National Quotation Bureau,
Incorporated is no longer reporting such information, or if not so available,
the fair market price as determined by the Board of Directors. For purposes of
this Section, "trading day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday other than any day on which the Common Stock is not traded on the
Nasdaq National Market, or if the Common Stock is not traded on the Nasdaq
National Market, on the principal exchange or market on which the Common Stock
is traded or quoted.

SECTION 14.4 ADJUSTMENT OF CONVERSION PRICE.

        The conversion price of Securities of any series that is convertible
into Common Stock of the Company shall be adjusted for any stock dividends,
stock splits, reclassifications, combinations or similar transactions in
accordance with the terms of the supplemental indenture or Board Resolutions
setting forth the terms of the Securities of such series.

        Whenever the conversion price is adjusted, the Company shall compute the
adjusted conversion price in accordance with terms of the applicable Board
Resolution or supplemental indenture and shall prepare an Officers' Certificate
setting forth the adjusted conversion price and showing in reasonable detail the
facts upon which such adjustment is based, and such certificate


                                      -69-
<PAGE>

shall forthwith be filed at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 10.2 and, if different, with the
Trustee. The Company shall forthwith cause a notice setting forth the adjusted
conversion price to be mailed, first class postage prepaid, to each Holder of
Securities of such series at its address appearing on the Security Register and
to any conversion agent other than the Trustee.

SECTION 14.5 NOTICE OF CERTAIN CORPORATE ACTIONS.

        In case:

            (1) the Company shall declare a dividend (or any other distribution)
        on its Common Stock payable otherwise than in cash out of its retained
        earnings (other than a dividend for which approval of any shareholders
        of the Company is required) that would require an adjustment pursuant to
        Section 14.4; or

            (2) the Company shall authorize the granting to all or substantially
        all of the holders of its Common Stock of rights, options or warrants to
        subscribe for or purchase any shares of capital stock of any class or of
        any other rights (other than any such grant for which approval of any
        shareholders of the Company is required); or

            (3) of any reclassification of the Common Stock of the Company
        (other than a subdivision or combination of its outstanding shares of
        Common Stock, or of any consolidation, merger or share exchange to which
        the Company is a party and for which approval of any shareholders of the
        Company is required), or of the sale of all or substantially all of the
        assets of the Company; or

            (4) of the voluntary or involuntary dissolution, liquidation or
        winding up of the Company; then the Company shall cause to be filed with
        the Trustee, and shall cause to be mailed to all Holders at their last
        addresses as they shall appear in the Security Register, at least 20
        days (or 10 days in any case specified in Clause (1) or (2) above) prior
        to the applicable record date hereinafter specified, a notice stating
        (i) the date on which a record is to be taken for the purpose of such
        dividend, distribution, rights, options or warrants, or, if a record is
        not to be taken, the date as of which the holders of Common Stock of
        record to be entitled to such dividend, distribution, rights, options or
        warrants are to be determined, or (ii) the date on which such
        reclassification, consolidation, merger, share exchange, sale,
        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, cash or other property deliverable upon such
        reclassification, consolidation, merger, share exchange, sale,
        dissolution, liquidation or winding up. If at any time the Trustee shall
        not be the conversion agent, a copy of such notice shall also forthwith
        be filed by the Company with the Trustee.


                                      -70-
<PAGE>

SECTION 14.6 RESERVATION OF SHARES OF COMMON STOCK.

        The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Securities, the full number of shares of
Common Stock of the Company then issuable upon the conversion of all outstanding
Securities of any series that has conversion rights.

SECTION 14.7 PAYMENT OF CERTAIN TAXES UPON CONVERSION.

        Except as provided in the next sentence, the Company will pay any and
all taxes that may be payable in respect of the issue or delivery of shares of
its Common Stock on conversion of Securities pursuant hereto. The Company shall
not, however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of shares of its Common Stock in a
name other than that of the Holder of the Security or Securities to be
converted, and no such issue or delivery shall be made unless and until the
person requesting such issue has paid to the Company the amount of any such tax,
or has established, to the satisfaction of the Company, that such tax has been
paid.

SECTION 14.8 NONASSESSABILITY.

        The Company covenants that all shares of its Common Stock that may be
issued upon conversion of Securities will upon issue in accordance with the
terms hereof be duly and validly issued and fully paid and nonassessable.

SECTION 14.9 PROVISION IN CASE OF CONSOLIDATION, MERGER OR SALE OF ASSETS.

        In case of any consolidation or merger of the Company with or into any
other Person, any merger of another Person with or into the Company (other than
a merger which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the Company) or any
conveyance, sale, transfer or lease of all or substantially all of the assets of
the Company, the Person formed by such consolidation or resulting from such
merger or which acquires such assets, as the case may be, shall execute and
deliver to the Trustee a supplemental indenture providing that the Holder of
each Security of a series then Outstanding that is convertible into Common Stock
of the Company shall have the right thereafter (which right shall be the
exclusive conversion right thereafter available to said Holder), during the
period such Security shall be convertible, to convert such Security only into
the kind and amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, transfer or lease by a holder of the
number of shares of Common Stock of the Company into which such Security might
have been converted immediately prior to such consolidation, merger, conveyance,
sale, transfer or lease, assuming such holder of Common Stock of the Company (i)
is not a Person with which the Company consolidated or merged with or into or
which merged into or with the Company or to which such conveyance, sale,
transfer or lease was made, as the case may be (a "Constituent Person"), or an
Affiliate of a Constituent Person and (ii) failed to exercise his rights of
election, if any, as to the kind or amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance, sale, transfer
or lease (provided that if the kind or amount of


                                      -71-
<PAGE>

securities, cash and other property receivable upon such consolidation, merger,
conveyance, sale, transfer, or lease is not the same for each share of Common
Stock of the Company held immediately prior to such consolidation, merger,
conveyance, sale, transfer or lease by others than a Constituent Person or an
Affiliate thereof and in respect of which such rights of election shall not have
been exercised ("Non-electing Share"), then for the purpose of this Section 14.9
the kind and amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, transfer or lease by the holders of
each Non-electing Share shall be deemed to be the kind and amount so receivable
per share by a plurality of the Non-electing Shares). Such supplemental
indenture shall provide for adjustments which, for events subsequent to the
effective date of such supplemental indenture, shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Article or in
accordance with the terms of the supplemental indenture or Board Resolutions
setting forth the terms of such adjustments. The above provisions of this
Section 14.9 shall similarly apply to successive consolidations, mergers,
conveyances, sales, transfers or leases. Notice of the execution of such a
supplemental indenture shall be given by the Company to the Holder of each
Security of a series that is convertible into Common Stock of the Company as
provided in Section 1.6 promptly upon such execution.

        Neither the Trustee nor any conversion agent, if any, shall be under any
responsibility to determine the correctness of any provisions contained in any
such supplemental indenture relating either to the kind or amount of shares of
stock or other securities or property or cash receivable by Holders of
Securities of a series convertible into Common Stock of the Company upon the
conversion of their Securities after any such consolidation, merger, conveyance,
transfer, sale or lease or to any such adjustment, but may accept as conclusive
evidence of the correctness of any such provisions, and shall be protected in
relying upon, an Opinion of Counsel with respect thereto, which the Company
shall cause to be furnished to the Trustee upon request.

SECTION 14.10 DUTIES OF TRUSTEE REGARDING CONVERSION.

        Neither the Trustee nor any conversion agent shall at any time be under
any duty or responsibility to any Holder of Securities of any series that is
convertible into Common Stock of the Company to determine whether any facts
exist which may require any adjustment of the conversion price, or with respect
to the nature or extent of any such adjustment when made, or with respect to the
method employed, whether herein or in any supplemental indenture, any
resolutions of the Board of Directors or written instrument executed by one or
more officers of the Company provided to be employed in making the same. Neither
the Trustee nor any conversion agent shall be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common Stock of the
Company, or of any securities or property, which may at any time be issued or
delivered upon the conversion of any Securities and neither the Trustee nor any
conversion agent makes any representation with respect thereto. Subject to the
provisions of Section 6.1, neither the Trustee nor any conversion agent shall be
responsible for any failure of the Company to issue, transfer or deliver any
shares of its Common Stock or stock certificates or other securities or property
upon the surrender of any Security for the purpose of conversion or to comply
with any of the covenants of the Company contained in this Article 14 or in the
applicable supplemental indenture, resolutions of



                                      -72-
<PAGE>

the Board of Directors or written instrument executed by one or more duly
authorized officers of the Company.

SECTION 14.11 REPAYMENT OF CERTAIN FUNDS UPON CONVERSION.

        Any funds which at any time shall have been deposited by the Company or
on its behalf with the Trustee or any other paying agent for the purpose of
paying the principal of, and premium, if any, and interest, if any, on any of
the Securities (including, but not limited to, funds deposited for the sinking
fund referred to in Article 12 hereof and funds deposited pursuant to Article 13
hereof) and which shall not be required for such purposes because of the
conversion of such Securities as provided in this Article 14 shall after such
conversion be repaid to the Company by the Trustee upon the Company's written
request.

                                   ARTICLE 15

                           SUBORDINATION OF SECURITIES

SECTION 15.1 AGREEMENT OF SUBORDINATION.

        Except as otherwise provided in a supplemental indenture or pursuant to
Section 3.1, the Company covenants and agrees, and each Holder of Securities
issued hereunder by its acceptance thereof likewise covenants and agrees, that
all Securities shall be issued subject to the provisions of this Article 15; and
each Person holding any Security, whether upon original issue or upon transfer,
assignment or exchange thereof, accepts and agrees to be bound by such
provisions.

        The payment of the principal of, premium, if any, and interest on all
Securities (including, but not limited to, the redemption price with respect to
the Securities called for redemption in accordance with Article 11 as provided
in the Indenture) issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and subject in right of payment to the
prior payment in full of all Senior Debt, whether outstanding at the date of
this Indenture or thereafter incurred.

        No provision of this Article 15 shall prevent the occurrence of any
default or Event of Default hereunder.

SECTION 15.2 PAYMENTS TO HOLDERS.

        No payment shall be made with respect to the principal of, or premium,
if any, or interest on the Securities (including, but not limited to, the
redemption price with respect to the Securities to be called for redemption in
accordance with Article 11 as provided in the Indenture), except payments and
distributions made by the Trustee as permitted by the first or second paragraph
of Section 15.5, if:

                             (i) a default in the payment of principal, premium,
                      if any, interest, rent or other obligations due on any
                      Senior Debt occurs and is continuing (or,


                                      -73-
<PAGE>

                      in the case of Senior Debt for which there is a period of
                      grace, in the event of such a default that continues
                      beyond the period of grace, if any, specified in the
                      instrument or lease evidencing such Senior Debt) (a
                      "Payment Default"), unless and until such default shall
                      have been cured or waived or shall have ceased to exist;
                      or

                             (ii) a default, other than a Payment Default, on
                      any Designated Senior Debt occurs and is continuing that
                      then permits holders of such Designated Senior Debt to
                      accelerate its maturity and the Trustee receives a notice
                      of the default (a "Payment Blockage Notice") from a holder
                      of Designated Senior Debt, a Representative of Designated
                      Senior Debt or the Company (a "Non-Payment Default").

        If the Trustee receives any Payment Blockage Notice pursuant to clause
(ii) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section unless and until at least 365 days shall have elapsed
since the initial effectiveness of the immediately prior Payment Blockage
Notice. No Non-Payment Default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice.

        The Company may and shall resume payments on and distributions in
respect of the Securities upon the earlier of:

            (1) in the case of any Payment Default, the date upon which the
        Payment Default is cured or waived or ceases to exist, or

            (2) in the case of a Non-Payment Default, the earlier of (a) the
        date upon which such Non-Payment Default is cured, waived or ceases to
        exist or (b) 179 days after the date on which the applicable Payment
        Blockage Notice is received by the Trustee,

unless this Article 15 otherwise prohibits the payment or distribution at such
time.

        Upon any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to creditors upon any
dissolution or winding-up or liquidation or reorganization of the Company,
whether voluntary or involuntary or in bankruptcy, insolvency, reorganization,
liquidation, receivership or other proceedings, or upon an assignment for the
benefit of creditors or any marshalling of the assets and liabilities of the
Company, or otherwise, all amounts due or to become due upon all Senior Debt
shall first be paid in full in cash or other payment satisfactory to the holders
of such Senior Debt, or payment thereof in accordance with its terms provided
for in cash or other payment satisfactory to the holders of such Senior Debt,
before any payment is made on account of the principal of, premium, if any, or
interest on the Securities (except payments made pursuant to Article 4 from
monies deposited with the Trustee pursuant thereto prior to commencement of
proceedings for such dissolution, winding-up, liquidation, reorganization,
assignment for the benefit of creditors or the marshalling of assets and
liabilities of the Company); and upon any such dissolution, winding-up,
liquidation, reorganization, assignment for the benefit of creditors or
marshalling of assets and liabilities of the Company or bankruptcy, insolvency,
receivership or other proceeding, any payment by the Company, or distribution of
assets



                                      -74-
<PAGE>

of the Company of any kind or character, whether in cash, property or
securities, to which the Holders of the Securities or the Trustee would be
entitled, except for the provision of this Article 15, shall (except as
aforesaid) be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the Holders of the Securities or by the Trustee under this Indenture if
received by them or it, directly to the holders of Senior Debt (pro rata to such
holders on the basis of the respective amounts of Senior Debt held by such
holders, or as otherwise required by law or a court order) or their
Representative or Representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Debt may have
been issued, as their respective interests may appear, to the extent necessary
to pay all Senior Debt in full, in cash or other payment satisfactory to the
holders of such Senior Debt, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt, before any payment or
distribution or provision therefor is made to the Holders of the Securities or
to the Trustee.

        For purposes of this Article 15, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article 15 with respect
to the Securities to the payment of all Senior Debt which may at the time be
outstanding; provided that (i) the Senior Debt is assumed by the new
corporation, if any, resulting from any reorganization or readjustment, and (ii)
the rights of the holders of Senior Debt (other than leases which are not
assumed by the Company or the new corporation, as the case may be) are not,
without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article 8 shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 15.2
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article 8.

        In the event of the acceleration of the Securities because of an Event
of Default, no payment or distribution shall be made to the Trustee or any
Holder of Securities in respect of the principal of, premium, if any, or
interest on the Securities (including, but not limited to, the redemption price
with respect to the Securities called for redemption in accordance with Article
11 as provided in the Indenture), except payments and distributions made by the
Trustee as permitted by the first or second paragraph of Section 15.5, until all
Senior Debt has been paid in full in cash or other payment satisfactory to the
holders of Senior Debt or such acceleration is rescinded in accordance with the
terms of this Indenture. If payment of the Securities is accelerated because of
an Event of Default, the Company shall promptly notify holders of Senior Debt of
the acceleration.

        In the event that, notwithstanding the foregoing provisions, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities (including, without limitation, by way of setoff or
otherwise), prohibited by the foregoing, shall be received by the Trustee or the
Holders of the Securities before all Senior Debt is paid in full in cash or
other


                                      -75-
<PAGE>

payment satisfactory to the holders of such Senior Debt, or provision is made
for such payment thereof in accordance with its terms in cash or other payment
satisfactory to the holders of such Senior Debt, such payment or distribution
shall be held in trust for the benefit of and shall be paid over or delivered to
the holders of Senior Debt or their Representative or Representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any Senior Debt may have been issued, as their respective interests
may appear, as calculated by the Company, for application to the payment of all
Senior Debt remaining unpaid to the extent necessary to pay all Senior Debt in
full in cash or other payment satisfactory to the holders of such Senior Debt,
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior Debt.

        Nothing in this Section 15.2 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.7. This Section 15.2 shall be subject
to the further provisions of Section 15.5.

SECTION 15.3 SUBROGATION OF SECURITIES.

        Subject to the payment in full of all Senior Debt, the rights of the
Holders of the Securities shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Debt pursuant to the provisions
of this Article 15 (equally and ratably with the holders of all indebtedness of
the Company which by its express terms is subordinated to other indebtedness of
the Company to substantially the same extent as the Securities are subordinated
and is entitled to like rights of subrogation) to the rights of the holders of
Senior Debt to receive payments or distributions of cash, property or securities
of the Company applicable to the Senior Debt until the principal, premium, if
any, and interest on the Securities shall be paid in full; and, for the purposes
of such subrogation, no payments or distributions to the holders of the Senior
Debt of any cash, property or securities to which the Holders of the Securities
or the Trustee would be entitled except for the provisions of this Article 15,
and no payment over pursuant to the provisions of this Article 15, to or for the
benefit of the holders of Senior Debt by Holders of the Securities or the
Trustee, shall, as between the Company, its creditors other than holders of
Senior Debt, and the Holders of the Securities, be deemed to be a payment by the
Company to or on account of the Senior Debt; and no payments or distributions of
cash, property or securities to or for the benefit of the Holders of the
Securities pursuant to the subrogation provisions of this Article 15, which
would otherwise have been paid to the holders of Senior Debt shall be deemed to
be a payment by the Company to or for the account of the Securities. It is
understood that the provisions of this Article 15 are and are intended solely
for the purposes of defining the relative rights of the Holders of the
Securities, on the one hand, and the holders of the Senior Debt, on the other
hand.

        Nothing contained in this Article 15 or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Debt, and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal of (and premium, if any)
and interest on the Securities as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of the Securities and creditors of the Company other than
the holders of the Senior Debt, nor shall anything herein or therein prevent the
Trustee or the Holder of any Security from exercising all remedies otherwise


                                      -76-
<PAGE>

permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article 15 of the holders of Senior Debt in respect
of cash, property or securities of the Company received upon the exercise of any
such remedy.

        Upon any payment or distribution of assets of the Company referred to in
this Article 15, the Trustee, subject to the provisions of Section 6.1, and the
Holders of the Securities shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such bankruptcy,
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidating trustee,
agent or other person making such payment or distribution, delivered to the
Trustee or to the Holders of the Securities, for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of the Senior
Debt and other indebtedness of the Company, the amount thereof or payable
thereon and all other facts pertinent thereto or to this Article 15.

SECTION 15.4 AUTHORIZATION TO EFFECT SUBORDINATION.

        Each Holder of a Security by the holder's acceptance thereof authorizes
and directs the Trustee on the holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 15 and appoints the Trustee to act as the holder's attorney-in-fact for
any and all such purposes. If the Trustee does not file a proper proof of claim
or proof of debt in the form required in any proceeding referred to in Section
5.4 hereof at least 30 days before the expiration of the time to file such
claim, the holders of any Senior Debt or their representatives are hereby
authorized to file an appropriate claim for and on behalf of the Holders of the
Securities.

SECTION 15.5 NOTICE TO TRUSTEE.

        The Company shall give prompt written notice in the form of an Officers'
Certificate to a Responsible Officer of the Trustee and to any Paying Agent of
any fact known to the Company which would prohibit the making of any payment of
monies to or by the Trustee or any Paying Agent in respect of the Securities
pursuant to the provisions of this Article 15. Notwithstanding the provisions of
this Article 15 or any other provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts which would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article 15, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof at
the Corporate Trust Office from the Company (in the form of an Officers'
Certificate) or a Representative or a holder or holders of Senior Debt or from
any trustee therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 6.1, shall be entitled in all
respects to assume that no such facts exist; provided that if on a date not
fewer than two Business Days prior to the date upon which by the terms hereof
any such monies may become payable for any purpose (including, without
limitation, the payment of the principal of, or premium, if any, or interest on
any Security) the Trustee shall not have received, with respect to such monies,
the notice provided for in this Section 15.5, then, anything herein contained to
the contrary notwithstanding, the Trustee shall have full power and authority to
receive such monies and to apply


                                      -77-
<PAGE>

the same to the purpose for which they were received, and shall not be affected
by any notice to the contrary which may be received by it on or after such prior
date.

        Notwithstanding anything in this Article 15 to the contrary, nothing
shall prevent any payment by the Trustee to the Holders of monies deposited with
it pursuant to Section 4.1, and any such payment shall not be subject to the
provisions of Section 15.1 or 15.2.

        The Trustee, subject to the provisions of Section 6.1, shall be entitled
to rely on the delivery to it of a written notice by a Representative or a
person representing himself to be a holder of Senior Debt (or a trustee on
behalf of such holder) to establish that such notice has been given by a
Representative or a holder of Senior Debt or a trustee on behalf of any such
holder or holders. The Trustee shall not be required to make any payment or
distribution to or on behalf of a holder of Senior Debt pursuant to this Article
15 unless it has received satisfactory evidence as to the amount of Senior Debt
held by such person, the extent to which such person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such person under this Article 15.

SECTION 15.6 TRUSTEE'S RELATION TO SENIOR DEBT.

        The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article 15 in respect of any Senior Debt at any time
held by it, to the same extent as any other holder of Senior Debt, and nothing
in this Indenture shall deprive the Trustee of any of its rights as such holder.

        With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 15, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt and, subject to the provisions of
Section 6.1, the Trustee shall not be liable to any holder of Senior Debt (i)
for any failure to make any payments or distributions to such holders or (ii) if
it shall pay over or deliver to Holders of Securities, the Company or any other
Person money or assets to which any holder of Senior Debt shall be entitled by
virtue of this Article 15 or otherwise.

SECTION 15.7 NO IMPAIRMENT OF SUBORDINATION.

        No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company, the Trustee or any Holder of Securities with the terms, provisions
and covenants of this Indenture, regardless of any knowledge thereof which any
such holder may have or otherwise be charged with.

                                      -78-
<PAGE>

SECTION 15.8 CERTAIN CONVERSIONS/EXCHANGES DEEMED PAYMENT.

        For the purposes of this Article 15 only, (1) the issuance and delivery
of junior securities upon conversion or exchange of Securities in accordance
with Article 14 or otherwise (except upon conversion of the Securities in
accordance with their terms) shall not be deemed to constitute a payment or
distribution on account of the principal of (or premium, if any) or interest on
Securities or on account of the purchase or other acquisition of Securities, and
(2) the payment, issuance or delivery of cash (except in satisfaction of
fractional shares pursuant to Section 14.3), property or securities (other than
junior securities) upon conversion or exchange of a Security shall be deemed to
constitute payment on account of the principal of such Security. For the
purposes of this Section 15.8, the term "junior securities" means (a) shares of
any stock of any class of the Company, or (b) securities of the Company which
are subordinated in right of payment to all Senior Debt which may be outstanding
at the time of issuance or delivery of such securities to substantially the same
extent as, or to a greater extent than, the Securities are so subordinated as
provided in this Article. Nothing contained in this Article 15 or elsewhere in
this Indenture or in the Securities is intended to or shall impair, as among the
Company, its creditors other than holders of Senior Debt and the Holders of
Securities, the right, which is absolute and unconditional, of the Holder of any
Security to convert such Security in accordance with Article 14.

SECTION 15.9 ARTICLE APPLICABLE TO PAYING AGENTS.

        If at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article shall (unless the context otherwise requires) be construed
as extending to and including such Paying Agent within its meaning as fully for
all intents and purposes as if such Paying Agent were named in this Article in
addition to or in place of the Trustee; provided, however, that the first
paragraph of Section 15.5 shall not apply to the Company or any Affiliate of the
Company if the Company or such Affiliate acts as Paying Agent.

        The Trustee shall not be responsible for the actions or inactions of any
other Paying Agents (including the Company if acting as its own Paying Agent)
and shall have no control of any funds held by such other Paying Agents.

SECTION 15.10 SENIOR DEBT ENTITLED TO RELY.

        The holders of Senior Debt (including, without limitation, Designated
Senior Debt) shall have the right to rely upon this Article 15, and no amendment
or modification of the provisions contained herein shall diminish the rights of
such holders unless such holders shall have agreed in writing thereto.

SECTION 15.11 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.

        Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee and the Holders shall be entitled to rely upon any
order or decree entered by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation, reorganization, assignment for the benefit
of creditors or marshalling of assets and liabilities of the Company or
bankruptcy, insolvency, receivership or other like proceeding is pending, or a
certificate of



                                      -79-
<PAGE>

the trustee in bankruptcy, liquidating trustee, custodian, receiver, assignee
for the benefit of creditors, agent or other person making such payment or
distribution, delivered to the Trustee or to the Holders, for the purpose of
ascertaining the persons entitled to participate in such payment or
distribution, the holders of Senior Debt and other indebtedness of the Company,
the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article.


        15.12 Trust Monies Not Subordinated.

        Notwithstanding anything contained herein to the contrary, payments
from money, U.S. Government Obligations and/or Foreign Government Obligations
held in trust under Article 4 or Article 13 by the Trustee for the payment of
the principal of, premium, if any, and interest on the Securities shall not be
subordinated to the prior payment in full of any Senior Debt of the Company or
subject to the restrictions set forth in this Article 15, and none of the
Holders shall be obligated to pay over any such amount to the Company or any
holder of Senior Debt of the Company or any other creditor of the Company.


            [The remainder of this page is intentionally left blank]

                                      -80-
<PAGE>



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

                                       HARMONIC INC.



                                       By: _____________________________________

                                       Title: __________________________________



                                       U.S. BANK NATIONAL ASSOCIATION



                                       By: _____________________________________

                                       Title: __________________________________


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12.1
<SEQUENCE>5
<FILENAME>f77840orex12-1.txt
<DESCRIPTION>EXHIBIT 12.1
<TEXT>
<PAGE>
                                                                    Exhibit 12.1

                                  HARMONIC INC.

        COMPUTATION OF RATIO OF EARNINGS AVAILABLE TO COVER FIXED CHARGES

                    (IN THOUSANDS, EXCEPT FOR RATIO AMOUNTS)

<TABLE>
<CAPTION>
                                                FISCAL YEAR ENDED DECEMBER 31,
                             ---------------------------------------------------------------------
                                 1997          1998           1999          2000           2001
                             -----------   -----------    -----------   -----------    -----------
<S>                          <C>           <C>            <C>           <C>            <C>
Pre-tax income (loss) ....   $     5,188   $   (21,453)   $    31,573   $(1,672,579)   $  (167,213)
Total fixed charges ......           482           630            630         2,026          3,700
                             -----------   -----------    -----------   -----------    -----------
Total earnings (losses)
  before fixed charges ...   $     5,670   $   (20,823)   $    32,203   $(1,670,553)   $  (163,513)
                             ===========   ===========    ===========   ===========    ===========

Interest expense .........            --            80             60            28            125
Interest attributable to
  rentals (a) ............           482           550            570         1,998          3,575
                             -----------   -----------    -----------   -----------    -----------

Total fixed charges ......   $       482   $       630    $       630   $     2,026    $     3,700
                             ===========   ===========    ===========   ===========    ===========

Ratio of earnings to fixed
  charges (b) ............          12:1            --           51:1            --             --
</TABLE>

(a)   Interest attributable to rentals includes one-third rental expense.

(b)   Due to Harmonic's losses in 1998, 2000, and 2001, the ratio coverage was
      less than 1:1. Additional earnings of $21.5 million, $1.7 billion, and
      $167.2 million would have been required in each of these periods,
      respectively, to achieve a coverage of 1:1.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>6
<FILENAME>f77840orex23-1.txt
<DESCRIPTION>EXHIBIT 23.1
<TEXT>
<PAGE>
                                                                    EXHIBIT 23.1


                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated January 25, 2002 relating to the
financial statements and financial statement schedule, which appears in Harmonic
Inc.'s Annual Report on Form 10-K for the year ended December 31, 2001. We also
consent to the reference to us under the heading "Experts" in such Registration
Statement.



/s/ PricewaterhouseCoopers, LLP

San Jose, California
March 14, 2002




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>7
<FILENAME>f77840orex23-2.txt
<DESCRIPTION>EXHIBIT 23.2
<TEXT>
<PAGE>
                                                                    EXHIBIT 23.2


INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in this Registration Statement of
Harmonic Inc. on Form S-3 of our report dated April 28, 2000 (May 3, 2000 as to
Note 1), on the consolidated statements of net investment of the DiviCom
Business, (an operating unit of C-Cube Microsystems Inc.), as of December 31,
1998 and December 31, 1999, and the related consolidated income statements,
statements of changes in net investment and cash flows for each of the three
years in the period ended December 31, 1999, appearing in the Current Report on
Form 8-K of Harmonic Inc. dated on or about March 14, 2002. We also consent to
the reference to us under the heading "Experts" in such Form S-3.


/s/ Deloitte & Touche LLP
San Jose, California
March 14, 2002


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-25.1
<SEQUENCE>8
<FILENAME>f77840orex25-1.txt
<DESCRIPTION>EXHIBIT 25.1
<TEXT>
<PAGE>

                                                                    EXHIBIT 25.1

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                           --------------------------

                                    FORM T-1

                         STATEMENT OF ELIGIBILITY UNDER
                      THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE
               Check if an Application to Determine Eligibility of
                   a Trustee Pursuant to Section 305(b)(2)____

             -------------------------------------------------------

                         U.S. BANK NATIONAL ASSOCIATION
               (Exact name of Trustee as specified in its charter)

                                   31-0841368
                       I.R.S. Employer Identification No.


180 EAST FIFTH STREET
ST. PAUL, MN                                                  55101
(Address of principal executive offices)                   (Zip Code)


                                 Julie Eddington
                         U.S. Bank National Association
                              180 East Fifth Street
                               St. Paul, MN 55101
            (Name, address and telephone number of agent for service)

                                  HARMONIC INC.
                     (Issuer with respect to the Securities)

                                  HARMONIC INC.
             (Exact name of Registrant as specified in its charter)

DELAWARE                                               77-0201147
(State or other jurisdiction of           (I.R.S. Employer Identification No.)
incorporation or organization)


549 Baltic Way
Sunnyvale, CA                                            94089
(Address of Principal Executive Offices)               (Zip Code)

                                 DEBT SECURITIES
                       (TITLE OF THE INDENTURE SECURITIES)

================================================================================

<PAGE>

                                    FORM T-1

ITEM 1.   GENERAL INFORMATION. Furnish the following information as to the
          Trustee.

          a)   Name and address of each examining or supervising authority to
               which it is subject.
                      Comptroller of the Currency
                      Washington, D.C.

          b)   Whether it is authorized to exercise corporate trust powers.
                      Yes

ITEM 2.   AFFILIATIONS WITH OBLIGOR. If the obligor is an affiliate of the
          Trustee, describe each such affiliation.
                None

ITEMS 3-15     Items 3-15 are not applicable because to the best of the
               Trustee's knowledge the obligor is not in default under any
               Indenture for which the Trustee acts as Trustee.

ITEM 16.  LIST OF EXHIBITS: List below all exhibits filed as a part of this
          statement of eligibility and qualification.

          1.   A copy of the Articles of Association of the Trustee.*

          2.   A copy of the certificate of authority of the Trustee to commence
               business.*

          3.   A copy of the certificate of authority of the Trustee to exercise
               corporate trust powers.*

          4.   A copy of the existing bylaws of the Trustee.*

          5.   A copy of each Indenture referred to in Item 4. Not applicable.

          6.   The consent of the Trustee required by Section 321(b) of the
               Trust Indenture Act of 1939, attached as Exhibit 6.

          7.   Report of Condition of the Trustee as of December 31, 2001,
               published pursuant to law or the requirements of its supervising
               or examining authority, attached as Exhibit 7.

      * Incorporated by reference to Registration Number 333-67188.


                                       2
<PAGE>

                                      NOTE

        The answers to this statement insofar as such answers relate to what
persons have been underwriters for any securities of the obligors within three
years prior to the date of filing this statement, or what persons are owners of
10% or more of the voting securities of the obligors, or affiliates, are based
upon information furnished to the Trustee by the obligors. While the Trustee has
no reason to doubt the accuracy of any such information, it cannot accept any
responsibility therefor.

                                    SIGNATURE

Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
Trustee, U.S. BANK NATIONAL ASSOCIATION, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of St.
Paul, State of Minnesota on the 6th day of March, 2002.

                                            U.S. BANK NATIONAL ASSOCIATION

                                            By: /s/ Julie Eddington
                                                --------------------------------
                                                Julie Eddington
                                                Assistant Vice President

By: /s/ Joel Geist
    ----------------------------
    Joel Geist
    Vice President


                                       3
<PAGE>

                                    EXHIBIT 6

                                     CONSENT

In accordance with Section 321(b) of the Trust Indenture Act of 1939, the
undersigned, U.S. BANK NATIONAL ASSOCIATION hereby consents that reports of
examination of the undersigned by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.

Dated:  March 6, 2002


                                            U.S. BANK NATIONAL ASSOCIATION


                                            By: /s/ Julie Eddington
                                                --------------------------------
                                                Julie Eddington
                                                Assistant Vice President

By: /s/ Joel Geist
    --------------------------------
    Joel Geist
    Vice President


                                       4
<PAGE>

                                    EXHIBIT 7
                         U.S. BANK NATIONAL ASSOCIATION
                        STATEMENT OF FINANCIAL CONDITION
                                AS OF 12/31/2001
                                    ($000'S)

<TABLE>
<CAPTION>
                                                          12/31/2002
                                                          ----------
<S>                                                       <C>

ASSETS

    Cash and Due From Depository Institutions            $  9,775,116
    Federal Reserve Stock                                           0
    Securities                                             26,316,516
    Federal Funds                                           1,261,731
    Loans & Lease Financing Receivables                   109,012,892
    Fixed Assets                                            1,414,464
    Intangible Assets                                       8,158,687
    Other Assets                                            6,637,699
                                                         ------------
        TOTAL ASSETS                                     $162,577,105

LIABILITIES

    Deposits                                             $104,077,584
    Fed Funds                                               4,365,180
    Treasury Demand Notes                                           0
    Trading Liabilities                                       313,719
    Other Borrowed Money                                   25,030,765
    Acceptances                                               201,492
    Subordinated Notes and Debentures                       5,348,437
    Other Liabilities                                       3,894,231
                                                         ------------
    TOTAL LIABILITIES                                    $143,231,408

EQUITY

    Minority Interest in Subsidiaries                    $    981,870
    Common and Preferred Stock                                 18,200
    Surplus                                                12,068,893
    Undivided Profits                                       6,276,734
                                                         ------------
        TOTAL EQUITY CAPITAL                              $19,345,697

TOTAL LIABILITIES AND EQUITY CAPITAL                     $162,577,105
</TABLE>

--------------------

To the best of the undersigned's determination, as of this date the above
financial information is true and correct.

U.S. Bank National Association

By: /s/ Julie Eddington
    ------------------------------
    Assistant Vice President


                                       5

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