EXHIBIT 4.1


 


 




 





 


GRIFFON CORPORATION


 


 


4.0% Contingent Convertible
Subordinated Notes Due 2023


 


 


INDENTURE


 


 


American Stock Transfer & Trust Company,
as Trustee


 


 


Dated as of July 18, 2003




 


 





 

















 


CROSS-REFERENCE TABLE*


 


	
  Trust Indenture Act Section

  	
   

  	
  Indenture
  Section

  
	
   

  	
   

  	
   

  
	
  310(a)(1)

  	
   

  	
  7.10

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (a)(3)

  	
   

  	
  N.A.

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (a)(5)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  7.10

  
	
  (c)

  	
   

  	
  N.A.

  
	
  311(a)

  	
   

  	
  7.11

  
	
  (b)

  	
   

  	
  7.11

  
	
  (c)

  	
   

  	
  N.A.

  
	
  312(a)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  12.03

  
	
  (c)

  	
   

  	
  12.03

  
	
  313(a)

  	
   

  	
  7.06

  
	
  (b)

  	
   

  	
  7.06

  
	
  (b)

  	
   

  	
  7.06

  
	
  (c)

  	
   

  	
  N.A.

  
	
  (d)

  	
   

  	
  N.A.

  
	
  314(a)

  	
   

  	
  4.02, 4.03

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)(1)

  	
   

  	
  11.04

  
	
  (c)(2)

  	
   

  	
  11.04

  
	
  (c)(3)

  	
   

  	
  N.A.

  
	
  (d)

  	
   

  	
  N.A.

  
	
  (e)

  	
   

  	
  N.A.

  
	
  (f)

  	
   

  	
  N.A.

  
	
  315(a)

  	
   

  	
  7.01(b)

  
	
  (b)

  	
   

  	
  7.05

  
	
  (c)

  	
   

  	
  N.A.

  
	
  (d)

  	
   

  	
  7.01(c)

  
	
  (e)

  	
   

  	
  6.11

  
	
  316(a)(1)(A)

  	
   

  	
  6.05

  
	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)

  	
   

  	
  N.A.

  
	
  317(a)(1)

  	
   

  	
  N.A.

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  N.A.

  
	
  318(a)

  	
   

  	
  N.A.

  



 












N.A. means not applicable.


 


* This Cross-Reference Table is not part of the Indenture.


 


i

















 


TABLE OF CONTENTS


 


	
  ARTICLE
  1 DEFINITIONS AND INCORPORATION BY REFERENCE

  
	
   

  
	
  Section 1.01. Definitions

  
	
  Section 1.02. Other Definitions

  
	
  Section 1.03. Incorporation by Reference of Trust Indenture Act

  
	
  Section 1.04. Rules of Construction

  
	
  Section 1.05. Acts of Holders

  
	
   

  
	
  ARTICLE 2 THE SECURITIES

  
	
   

  
	
  Section 2.01. Form and Dating

  
	
  Section 2.02. Execution and Authentication

  
	
  Section 2.03. Registrar, Paying Agent and Conversion Agent

  
	
  Section 2.04. Paying Agent to Hold
  Money in Trust

  
	
  Section 2.05. Holder Lists

  
	
  Section 2.06. Transfer and Exchange

  
	
  Section 2.07. Replacement Securities

  
	
  Section 2.08. Outstanding Securities;
  Determinations of Holders’ Action

  
	
  Section 2.09. Temporary Securities

  
	
  Section 2.10. Cancellation

  
	
  Section 2.11. Persons Deemed Owners

  
	
  Section 2.12. Global Securities

  
	
  Section 2.13. CUSIP Numbers

  
	
   

  
	
  ARTICLE 3 REDEMPTION AND PURCHASES

  
	
   

  
	
  Section 3.01. Right To Redeem; Notices
  To Trustee

  
	
  Section 3.02. Selection of Securities
  to Be Redeemed

  
	
  Section 3.03. Notice of Redemption

  
	
  Section 3.04. Effect of Notice of
  Redemption

  
	
  Section 3.05. Deposit of Redemption Price

  
	
  Section 3.06. Securities Redeemed in Part

  
	
  Section 3.07. Sinking Fund

  
	
  Section 3.08. Purchase of Securities at Option of the Holder

  
	
  Section 3.09. Purchase of Securities
  at Option of the Holder upon Change in Control

  
	
  Section 3.10. Effect of Purchase
  Notice or Change in Control Purchase Notice

  
	
  Section 3.11. Deposit of Purchase
  Price or Change in Control Purchase Price

  
	
  Section 3.12. Securities Purchased in
  Part

  
	
  Section 3.13. Covenant to Comply with
  Securities Laws upon Purchase of Securities

  
	
  Section 3.14. Repayment to the Company

  
	
   

  
	
  ARTICLE 4 COVENANTS

  
	
   

  
	
  Section 4.01. Payment of Securities

  
	
  Section 4.02. SEC and Other Reports

  
	
  Section 4.03. Compliance Certificate

  



 


ii

















 


	
  Section 4.04. Further Instruments and
  Acts

  
	
  Section 4.05. Maintenance of Office or
  Agency

  
	
  Section 4.06. Delivery of Certain
  Information

  
	
  Section 4.07. Tax Treatment of
  Securities

  
	
  Section 4.08. Liquidated Damages

  
	
   

  
	
  ARTICLE 5 SUCCESSOR CORPORATION

  
	
   

  
	
  Section 5.01. When the Company
  May Merge or Transfer Assets

  
	
   

  
	
  ARTICLE 6 DEFAULTS AND REMEDIES

  
	
   

  
	
  Section 6.01. Events of Default

  
	
  Section 6.02. Acceleration

  
	
  Section 6.03. Other Remedies

  
	
  Section 6.04. Waiver of Past Defaults

  
	
  Section 6.05. Control by Majority

  
	
  Section 6.06. Limitation on Suits

  
	
  Section 6.07. Rights of Holders to
  Receive Payment

  
	
  Section 6.08. Collection Suit by
  Trustee

  
	
  Section 6.09. Trustee May File Proofs of Claim

  
	
  Section 6.10. Priorities

  
	
  Section 6.11. Suits

  
	
  Section 6.12. Waiver of Stay, Extension or Usury Laws

  
	
   

  
	
  ARTICLE 7 TRUSTEE

  
	
   

  
	
  Section 7.01. Duties of Trustee

  
	
  Section 7.02. Rights of Trustee

  
	
  Section 7.03. Individual Rights of Trustee

  
	
  Section 7.04. Trustee’s Disclaimer

  
	
  Section 7.05. Notice of Defaults

  
	
  Section 7.06. Reports by Trustee to
  Holders

  
	
  Section 7.07. Compensation and
  Indemnity

  
	
  Section 7.08. Replacement of Trustee

  
	
  Section 7.09. Successor Trustee by
  Merger Etc

  
	
  Section 7.10. Eligibility; Disqualification

  
	
  Section 7.11. Preferential Collection
  of Claims Against Company

  
	
   

  
	
  ARTICLE 8 DISCHARGE OF INDENTURE

  
	
   

  
	
  Section 8.01. Discharge of Liability
  on Securities

  
	
  Section 8.02. Repayment to the Company

  
	
   

  
	
  ARTICLE 9 AMENDMENTS

  
	
   

  
	
  Section 9.01. Without Consent of
  Holders

  
	
  Section 9.02. With Consent of Holders

  
	
  Section 9.03. Compliance with Trust
  Indenture Act

  
	
  Section 9.04. Revocation and Effect of
  Consents

  



 


iii

















 


	
  Section 9.05. Notation on or Exchange
  of Securities

  
	
  Section 9.06. Trustee to Sign
  Supplemental Indentures

  
	
  Section 9.07. Effect of Supplemental
  Indentures

  
	
   

  
	
  ARTICLE 10 CONVERSION OF THE SECURITIES

  
	
   

  
	
  Section 10.01. Conversion Privilege

  
	
  Section 10.02. Conversion Procedure

  
	
  Section 10.03. Adjustments Below Par
  Value

  
	
  Section 10.04. Taxes on Conversion

  
	
  Section 10.05. Company to Provide
  Stock

  
	
  Section 10.06. Adjustment of
  Conversion Price

  
	
  Section 10.07. No Adjustment

  
	
  Section 10.08. Equivalent Adjustments

  
	
  Section 10.09. Adjustment for Tax
  Purposes

  
	
  Section 10.10. Notice of Adjustment

  
	
  Section 10.11. Notice of Certain
  Transactions

  
	
  Section 10.12. Effect of
  Reclassification, Consolidation, Merger, Share Exchange or Sale on Conversion
  Privilege

  
	
  Section 10.13. Trustee’s Disclaimer

  
	
  Section 10.14. Voluntary Reduction

  
	
  Section 10.15. Simultaneous
  Adjustments

  
	
   

  
	
  ARTICLE 11 SUBORDINATION

  
	
   

  
	
  Section 11.01. Securities Subordinated
  to Senior Indebtedness

  
	
  Section 11.02. Payments to Holders

  
	
  Section 11.03. Subrogation of
  Securities

  
	
  Section 11.04. Authorization to Effect
  Subordination

  
	
  Section 11.05. Notice to Trustee

  
	
  Section 11.06. Trustee’s Relation to
  Senior Indebtedness

  
	
  Section 11.07. No Impairment of
  Subordination

  
	
  Section 11.08. Certain Conversions
  Deemed Payment

  
	
  Section 11.09. Article Applicable
  to Paying Agents

  
	
  Section 11.10. Senior Indebtedness
  Entitled to Rely

  
	
   

  
	
  ARTICLE 12 MISCELLANEOUS

  
	
   

  
	
  Section 12.01. Trust Indenture Act
  Controls

  
	
  Section 12.02. Notices

  
	
  Section 12.03. Communication by
  Holders with Other Holders

  
	
  Section 12.04. Certificate and Opinion
  as to Conditions Precedent

  
	
  Section 12.05. Statements Required in
  Certificate or Opinion

  
	
  Section 12.06. Separability Clause

  
	
  Section 12.07. Rules by Trustee,
  Paying Agent, Conversion Agent and Registrar

  
	
  Section 12.08. Legal Holidays

  
	
  Section 12.09. Governing Law

  
	
  Section 12.10. No Recourse Against
  Others

  
	
  Section 12.11. Successors

  



 


iv

















 


	
  Section 12.12. Multiple Originals

  



 


	
  Exhibit
  A-1

  	
  -

  	
  Form
  of Global Security

  
	
  Exhibit
  A-2

  	
  -

  	
  Form
  of Certificated Security

  
	
  Exhibit
  B

  	
  -

  	
  Transfer
  Certificate

  



 


v

















 


INDENTURE dated as of July 18, 2003 between Griffon Corporation, a
Delaware corporation (the “Company”), and American Stock Transfer &
Trust Company, a trust company organized under the laws of the State of New
York (the “Trustee”).


 


Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders (as defined below) of the
Company’s 4.0% Contingent Convertible Subordinated Notes Due 2023 (the “Securities”):


 


ARTICLE
1


 


DEFINITIONS AND INCORPORATION BY REFERENCE


 


Section 1.01.  Definitions.


 


“144A
Global Security” means a permanent Global Security in the form of the
Security attached hereto as Exhibit A-1 that is deposited with and registered
in the name of the Depositary, representing Securities sold in reliance on Rule
144A under the Securities Act.


 


“Affiliate” has the meaning provided in Rule 405 under the
Securities Act.


 


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


 


“Beneficial Owner” shall be determined in accordance with Rule
13d-3 and Rule 13d-5 promulgated by the SEC under the Exchange Act or any
successor provision, except that, for purposes of the definition of Change in
Control, a Person shall be deemed to have “Beneficial Ownership” of all shares
of Common Stock that the Person has the right to acquire, whether exercisable
immediately or only after the passage of time.


 


“Board of Directors” means either the board of directors of the
Company or any duly authorized committee of such board authorized to act for it
with respect to this Indenture.


 


“Board Resolution” means a copy of one or more resolutions,
certified by an Officer of the Company to have been duly adopted or consented
to by the applicable Board of Directors and to be in full force and effect, and
delivered to the Trustee.


 


“Business Day” means a day that in the City of New York is not a
day on which banking institutions are authorized or obligated by law or
regulation to close.


 


“Capitalized Lease Obligations” means, as to any Person, the
obligations of such Person under a lease that is required to be classified and
accounted for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.


 


1

















 


“Capital Stock” for any corporation means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) stock issued by that
corporation.


 


“Cash Conversion Price” means, in respect of each $1,000 of
principal amount of a Security, an amount in cash equal to the product of (i)
the average of the Closing Price of the Common Stock for each Trading Day in
the five Trading Day period immediately following (a) the date on which the
Company delivers timely notice of its election to deliver cash instead of
issuing shares of Common Stock in accordance with Section 10.02, if the
Company has not given notice of redemption with respect to such Security or (b)
the Conversion Date, if the Company has given notice of redemption with respect
to such Security, in either case multiplied by (ii) the number of shares of
Common Stock issuable upon conversion of such Security on such date and
appropriately adjusted to take into account the occurrence, during such five
Trading Day period, of any event requiring adjustment of the Conversion Price
under this Indenture.


 


“Cash Equivalents” means (i) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition thereof; (ii) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either Standard & Poor’s, a division of the
McGraw-Hill Companies, Inc. (“S&P”) or Moody’s Investors Service,
Inc. (“Moody’s”); (iii) commercial paper maturing no more than one year
from the date of acquisition thereof issued by any bank organized under the
laws of the United States of America or any state thereof or the District of
Columbia or any U.S. branch of a foreign bank having at the date of acquisition
thereof combined capital and surplus of not less than $250,000,000; (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clause (i) above entered into with any
bank meeting the qualifications specified in clause (iii) above; and (v) money
market funds which invest substantially all their assets in securities of the
types described in clauses (i) through (iv) above.


 


“Certificated Securities” means Securities that are in the form
of the Securities attached hereto as Exhibit A-2.


 


“Change
in Control” shall be deemed to have occurred at such time after the
original issuance of the Securities as:


 


(a)           any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or
substantially all of the assets of the Company, to any Person (including
any syndicate or group deemed to be a “person” under Section 13(d)(3) of
the Exchange Act);


 


2

















 


(b)           the approval by the holders of the
Capital Stock of the Company of any plan or proposal for the liquidation or
dissolution of the Company, whether or not otherwise in compliance with this
Indenture;


 


(c)           any Person
(including any syndicate or group deemed to be a “person” under
Section 13(d)(3) of the Exchange Act), other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any such
Subsidiary, is or becomes the Beneficial Owner, directly or indirectly, through
a purchase or other acquisition transaction or series of transactions (other
than a merger or consolidation involving the Company), of shares of Capital
Stock of the Company entitling such Person to exercise in excess of 30% of the
aggregate ordinary voting power of all shares of Voting Stock of the Company;
or


 


(d)           the first day on
which a majority of the members of the Board of Directors of the Company are
not Continuing Directors.


 


“Closing Price” with respect to any security on any day means
the closing sale price per security regular way on such day or, in case no such
sale is reported for such day, the average of the reported closing bid and
asked prices, regular way, in each case on the New York Stock Exchange, or, if
such security is not listed or admitted to trading on such Exchange, on the
principal national security exchange or quotation system on which such security
is quoted or listed or admitted to trading, or, if not quoted or listed or
admitted to trading on any national securities exchange or quotation system,
the average of the closing bid and asked prices of such security on the
over-the-counter market on the day in question as reported by the National
Quotation Bureau Incorporated, or a similar generally accepted reporting
service, or if not so available, the price furnished by any New York Stock
Exchange member firm selected from time to time by the Board of Directors for
that purpose, or a price determined in good faith by the Board of Directors or,
to the extent permitted by applicable law, a duly authorized committee thereof,
whose determination shall be conclusive.


 


“Common Stock” shall mean shares of the Company’s Common Stock,
$.25 par value per share, as they exist on the date of this Indenture or any
other shares of Capital Stock of the Company into which the Common Stock shall
be reclassified or changed.


 


“Company” means the party named as the “Company” in the first
paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor.  The foregoing sentence shall
likewise apply to any subsequent successor or successors.


 


“Company Order” means a written request or order signed in the
name of the Company by any two Officers.


 


“Contingent Interest” shall mean an amount of interest payable
at a rate equal to 0.50% per annum using a principal amount equal to the
average of the Security Trading Price for the five Trading Days ending on the
third Trading Day immediately preceding the first day for the applicable
Contingent Interest Period (the “Contingent Interest Average Trading Price”)
per $1,000 of Securities in respect of any Contingent Interest Period, if the
Contingent Interest Average Trading Price equals $1,200 or more.


 


3

















 


“Contingent Interest Period” shall mean any six-month interest
period from July 18 to, but excluding, January 18, and from
January 18 to, but excluding, July 18, with the initial six-month
period commencing on July 18, 2010.


 


“Continuing Directors” means, as of any date of determination,
any member of the Board of Directors who (a) was a member of the Board of
Directors as of the date hereof or (b) was nominated for election or elected to
the Board of Directors with approval of a majority of the Continuing Directors
who were members at the time of the new director’s nomination or election.


 


“Corporate Trust Office” means the office of the Trustee at
which at any time the trust created by this Indenture shall be administered,
which office at the date hereof is located at 59 Maiden Lane, New York, New
York 10038, Attention: Corporate Trust Department, or such other address as the
Trustee may designate from time to time by notice to the Holders and the
Company, or the principal corporate trust office of any successor Trustee (or
such other address as a successor Trustee may designate from time to time by
notice to the Holders and the Company).


 


“Credit Agreement” means the Loan Agreement, dated as of
October 25, 2001, among the Company, Telephonics Corporation, the lenders
party thereto and Fleet National Bank, as Administrative Agent and The Chase
Manhattan Bank, as Documentation Agent, together with the related documents
thereto (including, without limitation, any guarantee agreements and security
documents), in each case as such agreement may be amended (including any
amendment and restatement thereof), supplemented or otherwise modified from
time to time, including any agreement extending the maturity of, refinancing,
replacing or otherwise restructuring (including increasing the amount of
available borrowings thereunder or adding Subsidiaries of the Company as
additional borrowers or guarantors thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement and
whether by the same or any other agent, lender or group of lenders.


 


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


 


“Designated Senior Indebtedness” means (i) Indebtedness
under or in respect of the Credit Agreement and (ii) any particular Senior
Indebtedness of the Company in which the instrument creating or evidencing the
same or the assumption or guarantee thereof (or any related agreements or
documents to which the Company is a party) expressly provides that such Senior
Indebtedness shall be “Designated Senior Indebtedness” for purposes of this
Indenture (provided  that such instrument, agreement or other
document may place limitations and conditions on the right of such Senior
Indebtedness to exercise the rights of Designated Senior Indebtedness).


 


“Exchange Act” means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder, as in effect
from time to time.


 


“GAAP” means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards


 


4

















 


Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, which are in effect from time
to time.


 


“Global Securities” means Securities that are in the form of the
Securities attached hereto as Exhibit A-1, and, to the extent that such
Securities are required to bear the legend required by Section 2.06, such
Securities will be in the form of a 144A Global Security.


 


“Holder” or “Securityholder” means a Person in whose name
a Security is registered on the Registrar’s books.


 


“Indebtedness” means, with respect to any Person, without
duplication, (a) all indebtedness, obligations and other liabilities
(contingent or otherwise) of such Person (i) for borrowed money (including
obligations of such Person in respect of overdrafts, and any loans or advances
from banks, whether or not evidenced by notes or similar instruments) or (ii)
evidenced by credit or loan agreements, 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 accounts 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) of such Person (i) in respect of Capitalized Lease Obligations or
(ii) under any lease or related document (including a purchase agreement,
conditional sale or other title retention agreement) in connection with the
lease of real property or improvements thereon (or any personal property
included as part of any such lease) which provides that such Person is
contractually obligated to purchase or cause a third party to purchase the
leased property or pay an agreed-upon residual value of the leased property to
the lessor (whether or not such lease transaction is characterized as an
operating lease or a Capitalized Lease Obligation), (d) all obligations
(contingent or otherwise) of such Person with respect to any interest rate or
other swap, cap, floor or collar agreement, hedge agreement, forward contract,
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 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 kinds described in clauses (a) through
(d), and (f) any and all deferrals, renewals, extensions, refinancings and
refundings of, or amendments, modifications or supplements to, any
indebtedness, obligation or liability of the kinds described in clauses (a)
through (e); provided, however, that Indebtedness shall not
include obligations and liabilities of such Person (x) arising from the
honoring by a bank or other financial institution of a check, draft or similar
instrument inadvertently drawn against insufficient funds in the ordinary
course of business, provided such obligations are extinguished within two
Business Days of their incurrence, (y) resulting from the endorsement of
negotiable instruments for collection in the ordinary course of business and
consistent with past business practices or (z) stand-by letters of credit to
the extent collaterallized by cash or Cash Equivalents.


 


5

















 


“Indenture” means this Indenture, as amended or supplemented
from time to time in accordance with the terms hereof, including the provisions
of the TIA that are deemed to be a part hereof.


 


“Initial Purchasers” shall mean Deutsche Bank Securities Inc.,
J.P. Morgan Securities Inc., Jefferies & Company, Inc. and Legg Mason Wood
Walker Incorporated.


 


“Issue Date” of any Security means the date on which the
Security was originally issued or deemed issued as set forth on the face of the
Security.


 


“Liquidated Damages” has the meaning set forth in the
Registration Rights Agreement dated as of July 18, 2003 between the
Company and the Initial Purchasers.


 


“Market Price” means the average of the Closing Prices per share
of Common Stock for 20 consecutive Trading Days commencing 30 Trading Days
before the record date with respect to any distribution, issuance or other
event requiring such computation, appropriately adjusted (as determined in good
faith by the Board of Directors of the Company, whose determination shall be
conclusive) to take into account the occurrence, during the period commencing
on the first of such 20 consecutive Trading Days and ending on such record
date, of any event requiring adjustment of the Conversion Price under this Indenture.


 


“Non-Recourse Indebtedness” means any Indebtedness of the
Company or any of its Subsidiaries that is (i) (A) specifically advanced
to finance the acquisition of investment assets and (B) secured only by
the assets to which such Indebtedness relates without recourse to the Company
or any of its Subsidiaries, (ii) advanced to a Subsidiary of the Company
or group of Subsidiaries of the Company formed for the sole purpose of
acquiring or holding investment assets (A) against which a loan is
obtained that is made without recourse to, and with no cross-collateralization
against the assets of, the Company or any other Subsidiary of the Company, and
(B) upon complete or partial liquidation of which the loan must be
correspondingly completely or partially repaid, as the case may be, or
(iii) specifically advanced to finance the acquisition of real property
and secured by only the real property to which such Indebtedness relates
without recourse to the Company or any of its Subsidiaries.


 


“Obligations” means all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation under which any Indebtedness is
created, evidenced or secured, including in the case of the Securities,
Contingent Interest and Liquidated Damages, if any.


 


“Officer” means the Chairman and Chief Executive Officer, the
President, any Vice President (whether or not such is preceded by any modifier
such as “Executive, “Senior” or the like), the Chief Financial Officer, the
Treasurer, the Controller or the Secretary of such Person or any other officer
designated by the board of directors of such Person serving in a similar
capacity; provided, that the designation of any such Officer by the Board of Directors
of the Company shall be evidenced in a Board Resolution.


 


“Officers’ Certificate” means a written certificate containing
the information specified in Sections 12.04 and 12.05, signed in the name of
the Company by any two Officers,


 


6

















 


and delivered to the
Trustee.  An Officers’ Certificate given
pursuant to Section 4.03 shall be signed by the principal executive
officer, principal financial officer or the principal accounting officer of the
Company but need not contain the information specified in Sections 12.04 and
12.05.


 


“Opinion of Counsel” means a written opinion containing the
information specified in Section 12.04 and 12.05, from legal counsel who
is acceptable to the Trustee in its reasonable discretion.  The counsel may be an employee of, or
counsel to, the Company or the Trustee.


 


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


 


“Recourse Indebtedness” means all Indebtedness of the Company
and its Subsidiaries other than Non-Recourse Indebtedness.


 


“Redemption Date” or “Redemption Dates” shall mean the
date specified for redemption of the Securities in accordance with the terms of
the Securities and this Indenture.


 


“Redemption Price” or “Redemption Prices” shall have the
meaning set forth in paragraph 5 of the Securities.


 


“Responsible Officer” shall mean, when used with respect to the
Trustee, any officer within the corporate trust department of the Trustee,
including any vice president, assistant vice president, assistant secretary,
assistant treasurer, trust officer or any other officer of the Trustee who
customarily performs functions similar to those performed by the Persons who at
the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of such person’s knowledge of and familiarity with the
particular subject and who shall have direct responsibility for the
administration of this Indenture.


 


“Representative” means the indenture trustee or other trustee,
agent or representative in respect of any Designated Senior Indebtedness; provided, however, that if, and for so
long as, any Designated Senior Indebtedness lacks such a representative, then
the Representative for such Designated Senior Indebtedness shall at all times
constitute the holders of a majority in outstanding principal amount of such
Designated Senior Indebtedness in respect of any Designated Senior
Indebtedness.


 


“Restricted Security” means a Security required to bear the
restrictive legend set forth in the form of Security set forth in Exhibits A-1
and A-2 of this Indenture.


 


“Rule 144A” means Rule 144A under the Securities Act (or any
successor provision), as it may be amended from time to time.


 


“SEC” means the Securities and Exchange Commission.


 


7

















 


“Security” or “Securities” means any of the Company’s
4.0% Contingent Convertible Subordinated Notes Due 2023, as amended or
supplemented from time to time, issued under this Indenture.


 


“Security Trading Price” per $1,000 in principal amount of
Securities on any date of determination means the average of the secondary
market bid quotations per $1,000 in principal amount of Securities obtained by
the Conversion Agent for $5,000,000 in principal amount of Securities at
approximately 3:30 p.m., New York City time, on such determination date from
three independent nationally recognized securities dealers selected by the
Company; provided
that if at least three such bids cannot reasonably be obtained by the
Conversion Agent, but two such bids are obtained, then the average of the two
bids shall be used, and if only one such bid can reasonably be obtained by the
Conversion Agent, such one bid shall be used. 
If the Conversion Agent cannot reasonably obtain at least one bid for
$5,000,000 in principal amount of Securities from a nationally recognized
securities dealer or, in the reasonable judgment of the Company, the bid
quotations are not indicative of the secondary market value of the Securities,
then the Security Trading Price will be determined in good faith by the
calculation agent (which shall initially be the Trustee unless the Trustee
shall have appointed a calculation agent, which may be any investment bank with
a national or international reputation with experience in such matters,
including the Initial Purchasers or their successors) taking into account in
such determination such factors as it, in its sole discretion after
consultation with the Company, deems appropriate.


 


“Securities Act” means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder, as in effect from time to
time.


 


“Securityholder” or “Holder” means a Person in whose name
a Security is registered on the Registrar’s books.


 


“Senior Indebtedness” 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 allowed 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 secured or
unsecured, absolute or contingent, due or to become due, 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).  Senior indebtedness
does not include (i) any indebtedness or obligation whose terms expressly
provide that such indebtedness or obligation shall not be senior in right of
payment to the Securities or expressly provides that such indebtedness is equal
or pari passu in right of payment with or junior in right of payment to the
Securities; (ii) any indebtedness of the Company to any Subsidiary of the
Company and (iii) the Securities.


 


“Significant Subsidiary” has the meaning ascribed to such term
in Regulation S-X (17 CFR Part 210).


 


8

















 


“Stated Maturity”, when used with respect to any Security, means
the date specified in such Security as the fixed date on which an amount equal
to the principal amount of such Security is due and payable.


 


“Subsidiary” means, with respect to any Person, (i) any
corporation of which the outstanding Capital Stock having at least a majority
of the votes entitled to be cast in the election of directors under ordinary
circumstances (determined without regard to any classification of directors)
shall at the time be owned, directly or indirectly, by such Person,
(ii) any other Person (other than a partnership) of which at least a
majority of the voting interest under ordinary circumstances is at the time,
directly or indirectly, owned by such Person or (iii) any partnership (a) the
sole general partner or the managing general partner of which is such Person or
a Subsidiary of such Person or (b) the only general partners of which are
such Person or one or more Subsidiaries of such Person (or any combination
thereof).


 


“TIA” means the Trust Indenture Act of 1939 as in effect on the
date of this Indenture, provided, however, that in the event the TIA is amended
after such date, TIA means, to the extent required by any such amendment, the
TIA as so amended.


 


“Trading Day” means (x) if the applicable security is listed or
admitted for trading on the New York Stock Exchange, or another national
security exchange, a day on which the New York Stock Exchange or such other
national security exchange is open for business or (y) if the applicable
security is quoted on the Nasdaq National Market, a day on which trades may be
made thereon or (z) if the applicable security is not so listed, admitted for
trading or quoted, any day other than a Saturday or Sunday or a day on which
banking institutions in the State of New York are authorized or obligated by
law or executive order to close.


 


“Trustee” means the party named as the “Trustee” in the
first paragraph of this Indenture until a successor replaces it pursuant to the
applicable provisions of this Indenture and, thereafter, shall mean such
successor.  The foregoing sentence shall
likewise apply to any subsequent such successor or successors.


 


“U.S. Government Obligations” means direct obligations of, and
obligations guaranteed by, the United States of America for the payment of
which the full faith and credit of the United States of America is pledged.


 


“Voting Stock” of a Person means Capital Stock of such Person of
the class or classes pursuant to which the holders thereof have the general
voting power under ordinary circumstances (determined without regard to any
classification of directors) to elect at least a majority of the board of
directors, managers or trustees of such Person (irrespective of whether or not
at the time Capital Stock of any other class or classes shall have or might
have voting power by reason of the happening of any contingency).


 


9

















 


Section 1.02.  Other Definitions.


 


	
  Term

  	
   

  	
  Defined in

  Section:

  
	
   

  	
   

  	
   

  
	
  Acceleration Notice

  	
   

  	
  6.02(a)

  
	
  Act

  	
   

  	
  1.05(a)

  
	
  Agent Members

  	
   

  	
  2.12(e)(v)

  
	
  Change in Control Purchase Date

  	
   

  	
  3.09(a)

  
	
  Change in Control Purchase Price

  	
   

  	
  3.09(a)

  
	
  Company Change in Control Notice

  	
   

  	
  3.09(b)

  
	
  Company Notice

  	
   

  	
  3.08(b)

  
	
  Company Notice Date

  	
   

  	
  3.08(b)

  
	
  Conversion Agent

  	
   

  	
  2.03

  
	
  Conversion Date

  	
   

  	
  10.02

  
	
  Conversion Price

  	
   

  	
  10.06

  
	
  Depositary

  	
   

  	
  2.01(b)

  
	
  DTC

  	
   

  	
  2.01(b)

  
	
  Event of Default

  	
   

  	
  6.01

  
	
  Ex-Dividend Date

  	
   

  	
  10.01

  
	
  Expiration Time

  	
   

  	
  10.06(d)

  
	
  Legal Holiday

  	
   

  	
  12.08

  
	
  Legend

  	
   

  	
  2.06(f)

  
	
  Paying Agent

  	
   

  	
  2.03

  
	
  Payment Blockage Period

  	
   

  	
  11.02(a)

  
	
  Purchase Date

  	
   

  	
  3.08(a)

  
	
  Purchase Notice

  	
   

  	
  3.08(a)(i)

  
	
  Purchase Price

  	
   

  	
  3.08(a)

  
	
  Purchased Shares

  	
   

  	
  10.06(d)

  
	
  QIB

  	
   

  	
  2.01(b)

  
	
  Quarter

  	
   

  	
  10.01(a)

  
	
  Registrar

  	
   

  	
  2.03

  
	
  Rule 144A Information

  	
   

  	
  4.06

  



 


Section 1.03.  Incorporation by Reference of Trust
Indenture Act. Whenever this Indenture refers to a provision of the TIA,
the provision is incorporated by reference in and made a part of this
Indenture.  The following TIA terms used
in this Indenture have the following meanings:


 


“Commission” means the SEC.


 


“Indenture Securities” means the Securities.


 


“Indenture Security Holder” means a Securityholder.


 


“Indenture to be Qualified” means this Indenture.


 


10

















 


“Indenture Trustee” or “Institutional Trustee” means the
Trustee.


 


“Obligor” on the indenture securities means the Company.


 


All other TIA terms used in this Indenture that are defined by the TIA,
defined by a TIA reference to another statute or defined by an SEC rule have
the meanings assigned to them by such definitions.


 


Section 1.04.  Rules of Construction.  Unless the context otherwise requires:


 


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


 


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


 


(c)           “or” is not exclusive;


 


(d)           “including” means including, without
limitation; and


 


(e)           words in the singular include the
plural, and words in the plural include the singular.


 


Section 1.05.  Acts of Holders.


 


(a)           Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture
to be given 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.  Such
instrument or instruments (and the action embodied therein and evidenced thereby)
are herein sometimes referred to as the “Act” of 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 conclusive in favor
of the Trustee and the Company, if made in the manner provided in this Section.


 


(b)           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 such officer the
execution thereof.  Where such execution
is by a signer acting in a capacity other than such signer’s individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of such signer’s 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.


 


11

















 


(c)           The ownership of Securities shall be
proved by the register maintained by the Registrar.


 


(d)           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.


 


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


 


ARTICLE
2



THE SECURITIES


 


Section 2.01.  Form and Dating. 
(a)  Forms. The Securities
and the Trustee’s certificate of authentication shall be substantially in the
forms set forth on Exhibits A-1 and A-2, which are a part of this Indenture and
incorporated by reference herein.  The Securities
may have notations, legends or endorsements required by law, stock exchange
rule or usage; provided that any such notation, legend or endorsement required
by usage is in a form acceptable to the Company.  The Company shall provide any such notations, legends or
endorsements to the Trustee in writing. 
Each Security shall be dated the date of its authentication.


 


(b)           144A Global
Securities.  Securities offered and
sold to qualified institutional buyers as defined in Rule 144A (“QIBs”)
in reliance on Rule 144A shall be issued, initially only in the form of a
Global Security, which shall be deposited with the Trustee at its Corporate
Trust Office, as custodian for the Depositary and registered in the name of The
Depository Trust Company (“DTC”) or the nominee thereof (such
depositary, or any successor thereto, and any such nominee being hereinafter
referred to as the “Depositary”), duly executed by the Company and
authenticated by the Trustee as hereinafter provided.  The aggregate principal amount of the 144A Global Security may
from time to time be increased or decreased by adjustments made on the records
of the Trustee and the Depositary as hereinafter provided.


 


12

















 


(c)           Global Securities
in General.  Each Global Security
shall represent such of the outstanding Securities as shall be specified
therein and each shall provide that it shall represent the aggregate amount of
outstanding Securities from time to time endorsed thereon and that the
aggregate amount of outstanding Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges, redemptions
and conversions.


 


Any adjustment of the aggregate principal amount of a Global Security
to reflect the amount of any increase or decrease in the amount of outstanding
Securities represented thereby shall be made by the Trustee as required by
Section 2.12 hereof and shall be made on the records of the Trustee and
the Depositary.


 


(d)           Book-Entry
Provisions.  The Company shall
execute and the Trustee shall, in accordance with this Section 2.01(d),
authenticate and deliver initially one or more Global Securities that (a) shall
be registered in the name of the Depositary, (b) shall be delivered by the
Trustee to the Depositary or pursuant to the Depositary’s instructions and (c)
shall bear legends substantially to the following effect:


 


“UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO GRIFFON
CORPORATION (THE “COMPANY”) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN. 
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO
NOMINEES OF THE DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.”


 


(e)           Certificated
Securities.  Securities not issued
as interests in the Global Securities will be issued in certificated form
substantially in the form of Exhibit A-2 attached hereto.


 


13

















 


Section 2.02.  Execution and Authentication.  The Securities shall be executed on behalf
of the Company by the manual or facsimile signature of any Officer.


 


Securities bearing the manual or facsimile signatures of individuals
who were at the time of the execution of the Securities 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
authentication of such Securities.


 


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
duly executed by the Trustee by manual signature of an authorized signatory,
and such certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and delivered
hereunder.


 


The Trustee shall authenticate and deliver Securities for original
issue in an aggregate principal amount of up to $150,000,000 (which shall
include the Initial Purchasers’ option to purchase additional Securities in an
aggregate principal amount of up to $25,000,000) upon a Company Order without
any further action by the Company.  The
aggregate principal amount of Securities outstanding at any time may not exceed
the amount set forth in the foregoing sentence, except as provided in
Section 2.07.


 


The Securities shall be issued only in registered form without coupons
and only in denominations of $1,000 of principal amount and any integral
multiple thereof.


 


Section 2.03.  Registrar, Paying Agent and Conversion Agent.  The Company shall maintain an office or
agency where Securities may be presented for registration of transfer or for
exchange (“Registrar”), an office or agency where Securities may be
presented for purchase or payment (“Paying Agent”) and an office or
agency where Securities may be presented for conversion (“Conversion Agent”).  The Registrar shall keep a register of the
Securities and of their transfer and exchange. 
The Company may have one or more co-registrars, one or more additional
paying agents and one or more additional conversion agents.  The term Paying Agent includes any
additional paying agent, including any named pursuant to Section 4.05.  The term Conversion Agent includes any additional
conversion agent, including any named pursuant to Section 4.05.


 


The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar (other than the
Trustee).  Such agreement shall implement
the provisions of this Indenture that relate to such agent.  The Company shall notify the Trustee of the
name and address of any such agent.  If
the Company fails to maintain a Registrar, Paying Agent or Conversion Agent,
the Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 7.07. 
The Company or any Subsidiary or an Affiliate of either of them may act
as Paying Agent, Registrar, Conversion Agent or co-registrar.


 


The Company initially appoints the Trustee as Registrar, Conversion
Agent and Paying Agent in connection with the Securities.


 


14

















 


Section 2.04.  Paying Agent to Hold Money in Trust.  Except as otherwise provided herein, not
later 11:00 a.m. (New York City time) on the Business Day prior to each due
date of payments in respect of any Security, the Company shall deposit with the
Paying Agent a sum of money sufficient to make such payments when so becoming
due.  The Company shall require each Paying
Agent (other than the Trustee) to agree in writing that the Paying Agent shall
hold in trust for the benefit of Holders or the Trustee all money held by the
Paying Agent for the making of payments in respect of the Securities and shall
notify the Trustee of any Default by the Company in making any such
payment.  At any time during the
continuance of any such Default, the Paying Agent shall, upon the written
request of the Trustee, forthwith pay to the Trustee all moneys held in
trust.  If the Company, a Subsidiary or
an Affiliate of either of them acts as Paying Agent, it shall segregate the
money held by it as Paying Agent and hold it as a separate trust fund.  The Company at any time may require the
Paying Agent to pay all money held by it to the Trustee and to account for any
funds disbursed by it.  Upon doing so,
the Paying Agent shall have no further liability for such money or shares of
Common Stock, as the case may be.


 


Section 2.05.  Holder Lists. 
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders.  If the Trustee is not the
Registrar, the Company shall cause to be furnished to the Trustee at least
semiannually on January 10 and July 10 and at such other times as the
Trustee may request in writing a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Holders, which
list may be dated not more than 15 days prior to the time such information is furnished;
provided however, that the list of Holders provided on January 10 and
July 10 shall contain the list of Holders as of the immediately preceding
January 1 and July 1, respectively.


 


Section 2.06.  Transfer and Exchange.


 


(a)           Subject to Section 2.12 hereof,
upon surrender for registration of transfer of any Securities, together with a
written instrument of transfer satisfactory to the Registrar duly executed by
the Securityholder or such Securityholder’s attorney duly authorized in
writing, at the office or agency of the Company designated as Registrar or
co-registrar pursuant to Section 2.03, the Company shall execute and the
Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities of any authorized
denomination or denominations, of a like aggregate principal amount.  The Company shall not charge a service
charge for any registration of transfer or exchange, but the Company may
require payment of a sum sufficient to pay all taxes, assessments or other
governmental charges that may be imposed in connection with the transfer or
exchange of the Securities from the Securityholder requesting such transfer or
exchange.


 


At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
principal amount, upon surrender of the Securities to be exchanged, together
with a written instrument of transfer satisfactory to the Registrar duly
executed by the Securityholder or such Securityholder’s attorney duly
authorized in writing, at such office or agency.  Whenever any Securities are so


 


15

















 


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.


 


The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of Securities selected for redemption (except,
in the case of Securities to be redeemed in part, the portion thereof not to be
redeemed) or any Securities in respect of which a Purchase Notice or Change in
Control Purchase Notice has been given and not withdrawn by the Holder thereof
in accordance with the terms of this Indenture (except, in the case of
Securities to be purchased in part, the portion thereof not to be purchased) or
any Securities for a period of 15 days before the mailing of a notice of
redemption of Securities to be redeemed.


 


(b)           Notwithstanding any provision to the
contrary herein, so long as a Global Security remains outstanding and is held
by or on behalf of the Depositary, transfers of a Global Security, in whole or
in part, shall be made only in accordance with Section 2.12 and this Section 2.06(b).  Transfers of a Global Security shall be
limited to transfers of such Global Security in whole, or in part, to nominees
of the Depositary or to a successor of the Depositary or such successor’s
nominee.


 


(c)           Successive registrations and
registrations of transfers and exchanges as aforesaid may be made from time to
time as desired, and each such registration shall be noted on the register for
the Securities.


 


(d)           Any Registrar appointed pursuant to
Section 2.03 hereof shall provide to the Trustee such information as the
Trustee may reasonably require in connection with the delivery by such
Registrar of Securities upon transfer or exchange of Securities.


 


(e)           No Registrar shall be required to
make registrations of transfer or exchange of Securities during any periods
designated in the text of the Securities or in this Indenture as periods during
which such registration of transfers and exchanges need not be made.


 


(f)            If Securities are issued upon the
transfer, exchange or replacement of Securities subject to restrictions on
transfer and bearing the legends set forth on the forms of Securities attached
hereto as Exhibits A-1 and A-2 setting forth such restrictions (collectively,
the “Legend”), or if a request is made to remove the Legend on a
Security, the Securities so issued shall bear the Legend, or the Legend shall
not be removed, as the case may be, unless there is delivered to the Company
and the Registrar such satisfactory evidence, which shall include an Opinion of
Counsel, as may be reasonably required by the Company and the Registrar, that
neither the Legend nor the restrictions on transfer set forth therein are
required to ensure that transfers thereof comply with the provisions of Rule
144A or Rule 144 under the Securities Act or that such Securities are not
“restricted” within the meaning of Rule 144 under the Securities Act.  Upon (i) provision of such satisfactory
evidence, or (ii) notification by the Company to the Trustee and registrar of
the sale of such Security pursuant to a registration statement that is
effective at the time of such sale, the Trustee, at the written direction of
the Company, shall authenticate and deliver a Security that does not bear the
Legend.  If the Legend is removed from
the face of a Security and the Security is subsequently held by an Affiliate of
the Company, the Legend shall be reinstated.


 


16

















 


Section 2.07.  Replacement Securities.  If any mutilated Security is surrendered to
the Trustee, or the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Security, and there is
delivered to the Company and the Trustee such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Company or the Trustee that such Security has been acquired by a
protected purchaser (within the meaning of Section 8-303 of the Uniform
Commercial Code), the Company shall execute, and upon the Company’s written
request the Trustee shall authenticate and deliver, in exchange for any such
mutilated Security or in lieu of any such destroyed, lost or stolen Security, a
new Security of like tenor and principal amount, 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, or is about to be purchased by
the Company pursuant to Article 3 hereof, the Company in its discretion
may, instead of issuing a new Security, pay or purchase such Security, as the
case may be.


 


Upon the issuance of any new Securities 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 issued pursuant to this Section in lieu of any
mutilated, 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 benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.


 


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


 


Section 2.08.  Outstanding Securities; Determinations
of Holders’ Action.  Securities
outstanding at any time are all the Securities authenticated by the Trustee,
except for those cancelled by it, those paid pursuant to Section 2.07,
those delivered to it for cancellation pursuant to Section 2.10 and those
described in this Section 2.08 as not outstanding.  A Security does not cease to be outstanding
because the Company or an Affiliate thereof holds the Security; provided,
however, that in determining whether the Holders of the requisite principal
amount of Securities have given or concurred in any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or 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 or waiver, only Securities which a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded.  Subject to the foregoing, only Securities
outstanding at the time of such determination shall be considered in any such
determination (including, without limitation, determinations pursuant to
Articles 6 and 9).


 


17

















 


If a Security is replaced pursuant to Section 2.07, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a protected purchaser.


 


If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Purchase Date or a Change
in Control Purchase Date, or on Stated Maturity, money sufficient to pay
amounts owed with respect to Securities payable on that date, then immediately
after such Redemption Date, Purchase Date, Change in Control Purchase Date or
Stated Maturity, as the case may be, such Securities shall cease to be
outstanding and interest (including Contingent Interest and Liquidated Damages,
if any), on such Securities shall cease to accrue; 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.


 


If a Security is converted in accordance with Article 10, then
from and after the time of conversion on the Conversion Date, such Security
shall cease to be outstanding and interest (including Contingent Interest, if
any), shall cease to accrue on such Security.


 


Section 2.09.  Temporary Securities.  Pending the preparation of definitive
Securities, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities that 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 conclusively evidenced by their execution of such Securities.


 


If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay.  After the preparation of definitive Securities, the temporary
Securities shall be exchangeable for definitive Securities upon surrender of
the temporary Securities at the office or agency of the Company designated for
such purpose pursuant to Section 2.03, without charge to the Holder.  Upon surrender for cancellation of any one
or more temporary Securities, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations.  Until so exchanged, the temporary Securities shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities.


 


Section 2.10.  Cancellation. 
All Securities surrendered for payment, purchase by the Company pursuant
to Article 3, conversion, redemption or registration of transfer or
exchange (other than Securities converted pursuant to Section 10.02)
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee and shall be promptly cancelled by it. 
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder that the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly cancelled by the Trustee. 
The Company may not issue new Securities to replace Securities it has
paid or delivered to the Trustee for cancellation or that any Holder has
converted pursuant to Article 10. 
No Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this


 


18

















 


Section, except as expressly
permitted by this Indenture.  All
cancelled Securities held by the Trustee shall be disposed of by the Trustee in
accordance with the Trustee’s customary procedure.


 


Section 2.11.  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 the
principal amount of the Security or the payment of any Redemption Price,
Purchase Price or Change in Control Purchase Price in respect thereof, and
accrued but unpaid interest (including Contingent Interest and Liquidated
Damages, if any) thereon, for the purpose of conversion 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 2.12.  Global Securities.


 


(a)           A Global Security may not be
transferred, in whole or in part, to any Person other than the Depositary or a
nominee or any successor thereof, and no such transfer to any such other Person
may be registered; provided that the foregoing shall not prohibit any transfer
of a Security that is issued in exchange for a Global Security but is not
itself a Global Security.  No transfer
of a Security to any Person shall be effective under this Indenture or the
Securities unless and until such Security has been registered in the name of
such Person.  Notwithstanding any other
provisions of this Indenture or the Securities, transfers of a Global Security,
in whole or in part, shall be made only in accordance with Section 2.06
and this Section 2.12.


 


(b)           Subject to the succeeding paragraph,
every Security shall be subject to the restrictions on transfer provided in the
Legend including the delivery of an Opinion of Counsel, if so provided.  Whenever any Restricted Security is
presented or surrendered for registration of transfer or for exchange for a
Security registered in a name other than that of the Holder, such Security must
be accompanied by a certificate in substantially the form set forth in Exhibit
B, dated the date of such surrender and signed by the Holder of such Security,
as to compliance with such restrictions on transfer.  The Registrar shall not be required to accept for such registration
of transfer or exchange any Security not so accompanied by a properly completed
certificate.


 


(c)           The restrictions imposed by the
Legend upon the transferability of any Security shall cease and terminate when
such Security has been sold pursuant to an effective registration statement
under the Securities Act or transferred in compliance with Rule 144 under the
Securities Act (or any successor provision thereto) or, if earlier, upon the
expiration of the holding period applicable to sales thereof under Rule 144(k)
under the Securities Act (or any successor provision).  Any Security as to which such restrictions
on transfer shall have expired in accordance with their terms or shall have
terminated may, upon a surrender of such Security for exchange to the Registrar
in accordance with the provisions of this Section 2.12 (accompanied, in
the event that such restrictions on transfer have terminated by reason of a
transfer in compliance with Rule 144 or any successor provision, by an Opinion
of Counsel having


 


19

















 


substantial experience in
practice under the Securities Act and otherwise reasonably acceptable to the
Company and the Registrar, addressed to the Company and in form acceptable to
the Company, to the effect that the transfer of such Security has been made in
compliance with Rule 144 or such successor provision), be exchanged for a new
Security, of like tenor and aggregate principal amount, which shall not bear
the restrictive Legend.  The Company
shall inform the Trustee of the effective date of any registration statement
registering the Securities under the Securities Act.  The Trustee shall not be liable for any action taken or omitted
to be taken by it in good faith in accordance with the aforementioned Opinion
of Counsel or registration statement.


 


(d)           As used in the preceding clause (b)
and (c) of this Section 2.12, the term “transfer” encompasses any
sale, pledge, transfer, hypothecation or other disposition of any Security.


 


(e)           The provisions of clauses (i), (ii),
(iii) and (iv) below shall apply only to Global Securities:


 


(i)            Notwithstanding any
other provisions of this Indenture or the Securities, a Global Security shall
not be exchanged in whole or in part for a Security registered in the name of
any Person other than the Depositary or one or more nominees thereof; provided
that a Global Security may be exchanged for Securities registered in the names
of any Person designated by the Depositary in the event that (x) the Depositary
has notified the Company that it is unwilling or unable to continue as
Depositary for such Global Security or such Depositary has ceased to be a
“clearing agency” registered under the Exchange Act, and a successor Depositary
is not appointed by the Company within 90 days, (y) the Company has provided
the Depositary with written notice that it has decided to discontinue use of
the system of book-entry transfer through the Depositary or any successor
Depositary or (z) an Event of Default has occurred and is continuing with
respect to the Securities.  Any Global
Security exchanged pursuant to clauses (x) or (y) above shall be so exchanged
in whole and not in part, and any Global Security exchanged pursuant to clause
(z) above may be exchanged in whole or from time to time in part as directed by
the Depositary.  Any Security issued in
exchange for a Global Security or any portion thereof shall be a Global
Security; provided that any such Security so issued that is registered in the
name of a Person other than the Depositary or a nominee thereof shall not be a
Global Security.


 


(ii)           Securities issued
in exchange for a Global Security or any portion thereof shall be issued in
definitive, fully registered form, without interest coupons, shall have an
aggregate principal amount equal to that of such Global Security or portion
thereof to be so exchanged, shall be registered in such names and be in such
authorized denominations as the Depositary shall designate and shall bear the
applicable legends provided for herein. 
Any Global Security to be exchanged in whole shall be surrendered by the
Depositary to the Trustee, as Registrar. 
With regard to any Global Security to be exchanged in part, either such
Global Security shall be so surrendered for exchange or, if the Trustee is
acting as


 


20

















 


custodian for
the Depositary or its nominee with respect to such Global Security, the
principal amount thereof shall be reduced, by an amount equal to the portion
thereof to be so exchanged, by means of an appropriate adjustment made on the
records of the Trustee.  Upon any such
surrender or adjustment, the Trustee shall authenticate and deliver the
Security issuable on such exchange to or upon the order of the Depositary or an
authorized representative thereof.


 


(iii)          Subject to the
provisions of clause (v) below, the registered Holder may grant proxies and
otherwise authorize any Person, including Agent Members (as defined below) and
Persons that may hold interests through Agent Members, to take any action which
a holder is entitled to take under this Indenture or the Securities.


 


(iv)          In the event of the
occurrence of any of the events specified in clause (i) above, the Company will
promptly make available to the Trustee a reasonable supply of Certificated
Securities in definitive, fully registered form, without interest coupons.


 


(v)           Neither any members
of, or participants in, the Depositary (collectively, the “Agent Members”)
nor any other Persons on whose behalf Agent Members may act shall have any
rights under this Indenture with respect to any Global Security registered in
the name of the Depositary or any nominee thereof, or under any such Global
Security, and the Depositary or such nominee, as the case may be, may be
treated by the Company, the Trustee and any agent of the Company or the Trustee
as the absolute owner and holder of such Global Security for all purposes
whatsoever.  Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent
of the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depositary or such nominee, as
the case may be, or impair, as between the Depositary, its Agent Members and
any other Person on whose behalf an Agent Member may act, the operation of
customary practices of such Persons governing the exercise of the rights of a
holder of any Security.


 


(vi)          With respect to any
Global Security, the Company, the Registrar and the Trustee shall be entitled
to treat the Person in whose name such Global Security is registered as the
absolute owner of such Security for all purposes of this Indenture, and neither
the Company, the Registrar nor the Trustee shall have any responsibility or
obligation to any Agent Members or other beneficial owners of the Securities
represented by such Global Security. 
Without limiting the immediately preceding sentence, neither the
Company, the Registrar nor the Trustee shall have any responsibility or obligation
with respect to (a) the accuracy of the records of any Depositary or any other
Person with respect to any ownership interest in any Global Security, (b) the
delivery to any Person, other than a Holder, of any notice with respect to the
Securities represented by a Global Security, including any notice of redemption
or refunding, (c) the selection of the particular Securities or portions
thereof to be redeemed or refunded in the event of


 


21

















 


a partial
redemption or refunding of part of the Securities Outstanding or (d) the
payment to any Person, other than a Holder, of any amount with respect to the
principal of, redemption premium, if any, purchase price or interest (including
Contingent Interest and Liquidated Damages) with respect to any Global
Security.


 


Section 2.13.  CUSIP Numbers. 
The Company may issue the Securities with one or more “CUSIP” numbers
(if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers
in notices of redemption as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers.  The Company will promptly notify the Trustee
of any change in the CUSIP numbers.


 


ARTICLE
3



REDEMPTION AND PURCHASES


 


Section 3.01.  Right To Redeem; Notices To Trustee.


 


(a)           Optional Redemption.  The Company, at its option, may redeem the
Securities in accordance with the provisions of paragraphs 5 and 7 of the
Securities and at the Redemption Price specified in paragraph 5 of the Securities,
together with accrued but unpaid interest (including Contingent Interest and
Liquidated Damages, if any), thereon up to but not including the Redemption
Date; provided that if the Redemption Date is on or after an interest record
date, but on or prior to the related interest payment date, interest will be
payable to the Holders in whose names the Securities are registered at the
close of business on the relevant record date for payment of such interest.


 


(b)           Notice to Trustee.  If the Company elects to redeem Securities
pursuant to this Section 3.01, it shall notify the Trustee in writing of
the Redemption Date, the principal amount of Securities to be redeemed and the
Redemption Price.  The Company shall give
the notice to the Trustee provided for in this Section 3.01(b) by a
Company Order at least 30 days but not more than 60 days before the Redemption
Date (unless a shorter notice shall be satisfactory to the Trustee).


 


Section 3.02.  Selection of Securities to Be Redeemed.  If less than all the Securities are to be
redeemed, subject to the procedures of the Depositary in the case of Global
Securities to be so redeemed, the Trustee shall select the Securities to be
redeemed by any method that the Trustee deems fair and appropriate.  The Trustee may select for redemption
portions of the principal amount of Securities that have denominations of
$1,000 and integral multiples thereof.


 


Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption.  The Trustee shall notify the Company
promptly of the Securities or portions of Securities to be redeemed.


 


22

















 


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 possible) to be the portion selected for redemption.  Securities that have been converted during a
selection of Securities to be redeemed may be treated by the Trustee as
outstanding for the purpose of such selection.


 


Section 3.03.  Notice of Redemption.  At least 30 days but not more than 60 days
before a Redemption Date, the Company shall mail a notice of redemption by
first-class mail, postage prepaid, to each Holder of Securities to be redeemed.


 


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


 


(a)           the Redemption Date;


 


(b)           the Redemption Price and, to the
extent known at the time of such notice the amount of interest (including
Contingent Interest and Liquidated Damages, if any), payable on the Redemption
Date;


 


(c)           the current Conversion Price;


 


(d)           the name and address of the Paying
Agent and Conversion Agent;


 


(e)           that Securities called for redemption
may be converted at any time before the close of business on the second
Business Day immediately preceding the Redemption Date;


 


(f)            that Holders who want to convert
Securities must satisfy the requirements set forth in paragraph 8 of the
Securities;


 


(g)           that Securities called for redemption
must be surrendered to the Paying Agent to collect the Redemption Price
therefor, together with accrued but unpaid interest (including Contingent
Interest and Liquidated Damages, if any);


 


(h)           if fewer than all the outstanding
Securities are to be redeemed, the certificate numbers, if any, and principal
amounts of the particular Securities to be redeemed;


 


(i)            that, unless the Company defaults in
making such payment, interest (including Contingent Interest and Liquidated
Damages, if any), on Securities called for redemption will cease to accrue on
and after the Redemption Date and the Securities will cease to be convertible;
and


 


(j)            the CUSIP number of the Securities.


 


At the Company’s request, the Trustee shall give the notice of
redemption in the Company’s name and at the Company’s expense; provided that
the Company makes such request prior to the date by which such notice of
redemption must be given to Holders in accordance with this Section 3.03
and the Company provides the Trustee with all information required for such
notice of redemption.


 


23

















 


Section 3.04.  Effect of Notice of Redemption.  Once notice of redemption is given,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price together with accrued but unpaid interest
(including Contingent Interest and Liquidated Damages, if any), thereon stated
in the notice, except for Securities which are converted in accordance with the
terms of this Indenture.  Upon surrender
to the Paying Agent, such Securities shall be paid at the Redemption Price
stated in the notice, together with accrued but unpaid interest (including
Contingent Interest and Liquidated Damages, if any), thereon, up to but not
including the Redemption Date.


 


Section 3.05.  Deposit of Redemption Price.  Prior to 11:00 a.m. (New York City time) on
the Redemption Date, the Company shall deposit with the Paying Agent (or if the
Company or a Subsidiary or an Affiliate of either of them is the Paying Agent,
shall segregate and hold in trust) money sufficient to pay the aggregate
Redemption Price of all Securities to be redeemed on that date, together with
accrued but unpaid interest (including Contingent Interest and Liquidated
Damages, if any), thereon, up to but not including the Redemption Date other
than Securities or portions of Securities called for redemption that on or
prior thereto have been delivered by the Company to the Trustee for
cancellation or have been converted. 
The Paying Agent shall as promptly as practicable return to the Company
any money not required for that purpose because of conversion of Securities
pursuant to Article 10.  If such
money is then held by the Company in trust and is not required for such purpose
it shall be discharged from such trust.


 


Section 3.06.  Securities Redeemed in Part.  Upon surrender of a Security that is
redeemed in part, the Company shall execute and the Trustee shall authenticate
and deliver to the Holder, without service charge, a new Security or
Securities, 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 amount of the Security surrendered.


 


Section 3.07.  Sinking Fund. 
There shall be no sinking fund provided for the Securities.


 


Section 3.08.  Purchase of
Securities at Option of the Holder.


 


(a)           General. 
Securities shall be purchased by the Company in accordance with the provisions
of paragraph 6 of the Securities on July 18, 2010, July 18, 2013 and
July 18, 2018 (each, a “Purchase Date”) at a purchase price in cash
per Security equal to 100% of the aggregate principal amount of the Security
(the “Purchase Price”),
together with accrued but unpaid interest (including Contingent Interest and
Liquidated Damages, if any), thereon, up to but not including the Purchase
Date.


 


Purchases of Securities hereunder shall be made, at the option of the
Holder thereof, upon:


 


(i)            delivery to the
Company and the Paying Agent by the Holder of a written notice of purchase (a “Purchase
Notice”) at any time from the opening of business on the date that is 30
Business Days prior to the Purchase Date until the close of business on the
Business Day prior to such Purchase Date stating:


 


24

















 


(A)          the certificate
number of the Security which the Holder will deliver to be purchased;


 


(B)           the portion of the
principal amount of the Security which the Holder will deliver to be purchased,
which portion must be in principal amounts of $1,000 or an integral multiple
thereof; and


 


(C)           that such Security
shall be purchased as of the Purchase Date pursuant to the terms and conditions
specified in paragraph 6 of the Securities and in this Indenture.


 


(ii)           delivery or
book-entry transfer of such Security to the Paying Agent prior to, on or after
the Purchase Date (together with all necessary endorsements) at the offices of
the Paying Agent, such delivery being a condition to receipt by the Holder of
the Purchase Price therefor, together with accrued but unpaid interest
(including Contingent Interest and Liquidated Damages, if any); provided,
however, that such Purchase Price, together with accrued but unpaid
interest (including Contingent Interest and Liquidated Damages, if any), shall
be so paid pursuant to this Section 3.08 only if the Security so delivered
to the Paying Agent shall conform in all respects to the description thereof in
the related Purchase Notice, as determined by the Company in its sole
discretion.


 


The Company shall purchase from the Holder thereof, pursuant to this
Section 3.08, a portion of a Security if the principal amount of such
portion is $1,000 or an integral multiple of $1,000.  Provisions of this Indenture that apply to the purchase of all of
a Security also apply to the purchase of such portion of such Security.


 


Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.08 shall be consummated by the delivery of the
consideration to be received by the Holder promptly following the later of the
Purchase Date and the time of delivery or book-entry transfer of the Security.


 


Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Purchase Notice contemplated by this
Section 3.08(a) shall have the right to withdraw such Purchase Notice at
any time prior to the close of business on the Purchase Date by delivery of a
written notice of withdrawal to the Paying Agent at the principal office of the
Paying Agent in accordance with Section 3.10.


 


The Paying Agent shall promptly notify the Company of the receipt by it
of any Purchase Notice or written notice of withdrawal thereof.


 


(b)           Company Notice.  In connection with any purchase of Securities
pursuant to Section 3.08 or 3.09, the Company shall give written notice of
the Purchase Date or Change in Control Purchase Date, as applicable, to the
Holders (the “Company Notice”). 
The Company Notice shall be sent by first-class mail to the Trustee and
to each Holder not less than 30 Business Days prior to any Purchase Date (the “Company
Notice Date”) or not more than 30


 


25

















 


days after the occurrence of a
Change in Control, as the case may be. 
Each Company Notice shall include a form of Purchase Notice to be
completed by a Holder and shall state:


 


(i)            the Purchase Price,
Change in Control Purchase Price, Conversion Price and, to the extent known at
the time of such notice, the amount of Contingent Interest and Liquidated
Damages, if any, that will be payable with respect to the Securities on the
Purchase Date;


 


(ii)           the name and
address of the Paying Agent and the Conversion Agent;


 


(iii)          that Securities as
to which a Purchase Notice or Change in Control Purchase Notice has been given
may be converted only if the applicable Purchase Notice or Change in Control
Purchase Notice has been withdrawn in accordance with the terms of this
Indenture;


 


(iv)          that Securities must
be surrendered to the Paying Agent to collect payment of the Purchase Price or
Change in Control Purchase Price and accrued but unpaid interest and Contingent
Interest and Liquidated Damages, if any;


 


(v)           that the Purchase
Price or Change in Control Purchase Price for any Securities as to which a
Purchase Notice or Change in Control Purchase Notice has been given and not
withdrawn, together with any accrued Contingent Interest and Liquidated Damages
payable with respect thereto, shall be paid promptly following the later of the
Purchase Date or Change in Control Purchase Date and the time of surrender of
such Securities as described in (iv);


 


(vi)          the procedures the
Holder must follow under Section 3.08 or Section 3.09, as the case
may be;


 


(vii)         briefly, the
conversion rights of the Securities;


 


(viii)        that, unless the
Company defaults in making payment of such Purchase Price or Change in Control
Purchase Price, interest (including Contingent Interest and Liquidated Damages,
if any), on Securities covered by any Purchase Notice or Change in Control
Purchase Notice will cease to accrue on and after the Purchase Date or Change
in Control Purchase Date;


 


(ix)           the CUSIP or ISIN
number of the Securities; and


 


(x)            the procedures for
withdrawing a Purchase Notice or Change in Control Purchase Notice (as
specified in Section 3.10).


 


At the Company’s request and at the Company’s expense, the Trustee
shall give the Company Notice in the Company’s name; provided, however, that,
in all cases, the text of the Company Notice shall be prepared by the Company.


 


26

















 


Section 3.09.  Purchase of Securities
at Option of the Holder upon Change in Control.


 


(a)           If at any time that Securities
remain outstanding there shall have occurred a Change in Control, Securities
shall be repurchased by the Company, at the option of the Holder thereof, at a
purchase price in cash (the “Change in Control Purchase Price”) equal to
the principal amount plus accrued but unpaid interest (including Contingent
Interest and Liquidated Damages, if any), thereon, up to but not including the date (the “Change in
Control Purchase Date”) fixed by the Company that is not less than 30 days
nor more than 45 days after the date the Company Notice is given, subject to
satisfaction by or on behalf of the Holder of the requirements set forth in
Section 3.09(c); provided that if
the Change in Control Purchase Date is on or after an interest record date but
on or prior to the related interest payment date, interest and Liquidated
Damages, if any, will be payable to the Holders in whose names the Securities
are registered at the close of business on the relevant record date.


 


(b)           The Company, or at
its request (which must be received by the Trustee at least three Business Days
(or such lesser period as agreed to by the Trustee) prior to the date the
Trustee is requested to give such notice as described below) the Trustee in the
name of and at the expense of the Company, shall mail to all Holders of record
of the Securities a notice (a “Company Change in Control Notice”) of the
occurrence of a Change in Control and of the repurchase right arising as a
result thereof, including the information required by Section 3.08(b)
hereof, not more than 30 days after the occurrence of such Change in Control.  The Company shall promptly furnish to the
Trustee a copy of such notice.


 


(c)           For a Security to be
so repurchased at the option of the Holder, the Paying Agent must receive such
Security with the form entitled “Option to Elect Repurchase Upon a Change in
Control” (a “Change in Control Purchase Notice”) on the reverse thereof
duly completed, together with such Security duly endorsed for transfer, on or
before the Change in Control Purchase Date. 
All questions as to the validity, eligibility (including time of receipt)
and acceptance of any Security for redemption shall be determined by the
Company, whose determination shall be final and binding.


 


The Company shall purchase from the Holder thereof, pursuant to this
Section 3.09, a portion of a Security if the principal amount of such
portion is $1,000 or an integral multiple of $1,000.  Provisions of this Indenture that apply to the purchase of all of
a Security also apply to the purchase of such portion of such Security.


 


Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.09 shall be consummated by the delivery of the
consideration to be received by the Holder promptly following the later of the
Change in Control Purchase Date and the time of delivery of the Security to the
Paying Agent in accordance with this Section 3.09.


 


Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Change in Control Purchase Notice contemplated by this
Section 3.09(c) shall have the right to withdraw such Change in Control
Purchase Notice at any time prior to the close of business on the Change in
Control Purchase Date by delivery of a written notice of withdrawal to the
Paying Agent in accordance with Section 3.10.


 


The Paying Agent shall promptly notify the Company of the receipt by it
of any Change in Control Purchase Notice or written withdrawal thereof.


 


27

















 


Notwithstanding anything herein to the contrary, the Company’s
obligations pursuant to this Section 3.09 shall be satisfied if a third
party makes an offer to repurchase outstanding Securities after a Change in
Control in the manner and at the times and otherwise in compliance in all
material respects with the requirements of this Section 3.09 and purchases
all Securities properly tendered and not withdrawn pursuant to the requirements
of this Section 3.09.


 


Section 3.10.  Effect of Purchase Notice
or Change in Control Purchase Notice. 
Upon receipt by the Paying Agent of the Purchase Notice or Change in
Control Purchase Notice specified in Section 3.08 or Section 3.09(c),
as applicable, the Holder of the Security in respect of which such Purchase
Notice or Change in Control Purchase Notice, as the case may be, was given
shall (unless such Purchase Notice or Change in Control Purchase Notice is
withdrawn as specified in the following two paragraphs) thereafter be entitled
to receive solely the Purchase Price or Change in Control Purchase Price,
together with accrued but unpaid interest (including Contingent Interest and
Liquidated Damages, if any), thereon, to but not including the Purchase Date or Change in
Control Purchase Date, as the case may be, with respect to such Security.  Such Purchase Price or Change in Control
Purchase Price, together with accrued but unpaid interest (including Contingent
Interest and Liquidated Damages, if any),
thereon, to but not including the Purchase Date or Change in Control
Purchase Date, as the case may be, shall be paid to such Holder, subject to
receipt of funds by the Paying Agent, promptly following the later of (x) the
Purchase Date or the Change in Control Purchase Date, as the case may be, with
respect to such Security (provided that the conditions in Section 3.08 or
Section 3.09, as applicable, have been satisfied) and (y) the time of
delivery or book-entry transfer of such Security to the Paying Agent by the
Holder thereof in the manner required by Section 3.08 or
Section 3.09(c), as applicable. 
Securities in respect of which a Purchase Notice or Change in Control
Purchase Notice, as the case may be, has been given by the Holder thereof may
not be converted pursuant to Article 10 hereof on or after the date of the
delivery of such Purchase Notice or Change in Control Purchase Notice, as the
case may be, unless such Purchase Notice or Change in Control Purchase Notice,
as the case may be, has first been validly withdrawn as specified in the
following two paragraphs.


 


A Purchase Notice or Change in Control Purchase Notice, as the case may
be, may be withdrawn by means of a written notice of withdrawal delivered to
the office of the Paying Agent in accordance with the Purchase Notice or Change
in Control Purchase Notice, as the case may be, at any time prior to the close
of business on the Purchase Date or prior to the close of business on the
Change in Control Purchase Date, as the case may be, specifying:


 


(i)            the
certificate number, if any, of the Security in respect of which such notice of
withdrawal is being submitted;


 


(ii)           the
principal amount of the Security with respect to which such notice of
withdrawal is being submitted; and


 


(iii)          the
principal amount, if any, of such Security which remains subject to the
original Purchase Notice or Change in Control Purchase Notice, as the case may
be, and which has been or will be delivered for purchase by the Company.


 


28

















 


There shall be no purchase of any Securities pursuant to
Section 3.08 or Section 3.09 or redemption pursuant to
Section 3.01 if there has occurred prior to, on or after, as the case may
be, the giving, by the Holders of such Securities, of the required Purchase
Notice (or Change in Control Purchase Notice, as the case may be) and is
continuing an Event of Default (other than a default in the payment of the
Purchase Price or Change in Control Purchase Price, as the case may be).  The Paying Agent will promptly return to the
respective Holders thereof any Securities (x) with respect to which a Purchase
Notice or Change in Control Purchase Notice, as the case may be, has been
withdrawn in compliance with this Indenture, or (y) held by it during the
continuance of an Event of Default (other than a default in the payment of the
Purchase Price or Change in Control Purchase Price, as the case may be) in
which case, upon such return, the Purchase Notice or Change in Control Purchase
Notice with respect thereto shall be deemed to have been withdrawn.


 


Section 3.11.  Deposit of Purchase Price
or Change in Control Purchase Price. 
Prior to 11:00 a.m.  (New York
City time) on the Business Day prior to the Purchase Date or the Change in
Control Purchase Date, as the case may be, the Company shall deposit with the
Trustee or with the Paying Agent (or, if the Company or a Subsidiary or an
Affiliate of either of them is acting as the Paying Agent, shall segregate and
hold in trust as provided in Section 2.04) an amount of money (in
immediately available funds if deposited on such Business Day) sufficient to
pay the aggregate Purchase Price or Change in Control Purchase Price, as the
case may be, together with accrued but unpaid interest (including Contingent
Interest and Liquidated Damages, if any) thereon, to but not including the
Purchase Date or Change in Control Purchase Date, as the case may be, of all
the Securities or portions thereof which are to be purchased as of the Purchase
Date or Change in Control Purchase Date, as the case may be.


 


Section 3.12.  Securities Purchased in
Part.  Any Certificated Security
that is to be purchased only in part shall be surrendered at the office of the
Paying Agent (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 such Holder’s 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 any authorized denomination as
requested by such Holder in aggregate principal amount equal to, and in
exchange for, the portion of the principal amount of the Security so
surrendered which is not purchased.


 


Section 3.13.  Covenant to Comply with
Securities Laws upon Purchase of Securities.  When complying with the provisions of Sections 3.08 or 3.09
hereof (provided that such offer or purchase constitutes an “issuer tender
offer” for purposes of Rule 13e-4 (which term, as used herein, includes any
successor provision thereto) under the Exchange Act at the time of such offer
or purchase), the Company shall (i) comply in all material respects with Rule
13e-4 and Rule 14e-1 under the Exchange Act, (ii) file the related
Schedule TO (or any successor schedule, form or report) under the Exchange
Act, and (iii) otherwise comply in all material respects with all Federal and
state securities laws so as to permit the rights and obligations under Sections
3.08 or 3.09 to be exercised in the time and in the manner specified in
Sections 3.08 or 3.09.


 


29

















 


Section 3.14.  Repayment to the Company.  The Trustee and the Paying Agent shall
return to the Company any cash that remains unclaimed as provided in paragraph
11 of the Securities, together with interest or dividends, if any, thereon
(subject to the provisions of Section 7.01(f)), held by them for the
payment of the Purchase Price or Change in Control Purchase Price, as the case
may be, and accrued but unpaid interest (including Contingent Interest and
Liquidated Damages, if any); provided, however, that to the
extent that the aggregate amount of cash deposited by the Company pursuant to
Section 3.11 exceeds the aggregate Purchase Price or Change in Control
Purchase Price, as the case may be, of the Securities or portions thereof which
the Company is obligated to purchase as of the Purchase Date or Change in
Control Purchase Date, as the case may be, and accrued but unpaid interest
thereon (including Contingent Interest and Liquidated Damages, if any), then,
unless otherwise agreed in writing with the Company, promptly after the
Business Day following the Purchase Date or Change in Control Purchase Date, as
the case may be, the Trustee shall return any such excess to the Company
together with interest or dividends, if any, thereon (subject to the provisions
of Section 7.01(f)).


 


ARTICLE
4



COVENANTS


 


Section 4.01.  Payment of Securities.  The Company shall promptly make all payments
in respect of the Securities on the dates and in the manner provided in the
Securities or pursuant to this Indenture. 
Any amounts to be given to the Trustee or Paying Agent, as the case may
be, shall be deposited with the Trustee or Paying Agent, as the case may be, by
11:00 a.m.  (New York City time), on the
dates required pursuant to Section 2.04 hereof.  Interest installments, Liquidated Damages, principal amount,
Redemption Price, Purchase Price, Change in Control Purchase Price and
interest, if any, due on overdue amounts shall be considered paid on the
applicable date due if at 11:00 a.m. 
(New York City time) on such date (or, in the case of a Purchase Price
or Change in Control Purchase Price, on the Business Day prior to the
applicable Purchase Date or Change in Control Purchase Date, as the case may
be) the Trustee or the Paying Agent, as the case may be, holds, in accordance
with this Indenture, money sufficient to pay all such amounts then due.


 


The Company shall, to the extent permitted by law, pay interest on
overdue amounts at the rate per annum set forth in paragraph 1 of the
Securities, compounded semiannually, which interest shall accrue from the date
such overdue amount was originally due to the date payment of such amount,
including interest thereon, has been made or duly provided for.  All such interest shall be payable on
demand.  The accrual of such interest on
overdue amounts shall be in addition to the continued accrual of interest on
the Securities.


 


Section 4.02. 
SEC and Other Reports.  The Company shall file with the Trustee,
within 15 days after it files such annual and quarterly reports, information,
documents and other reports with the SEC, copies of its annual report and of
the information, documents and other reports (or copies of such portions of any
of the foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d)
of the Exchange Act.  In the event the
Company is at any time no longer subject to the


 


30

















 


reporting requirements of
Section 13 or 15(d) of the Exchange Act, it shall continue to provide the
Trustee with reports containing substantially the same information as would
have been required to be filed with the SEC had the Company continued to have
been subject to such reporting requirements. 
In such event, such reports shall be provided to the Trustee at the
times the Company would have been required to provide reports had it continued
to have been subject to such reporting requirements.  In addition, the Company shall comply with the other provisions
of TIA Section 314(a).


 


Section 4.03. 
Compliance Certificate.  The Company shall deliver to the Trustee
within 120 days after the end of each fiscal year of the Company (beginning
with the fiscal year ending on September 30, 2003) 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.


 


Section 4.04. 
Further Instruments and
Acts.  Upon request of the Trustee,
the Company will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.


 


Section 4.05.  Maintenance of Office
or Agency.  The Company will
maintain in the Borough of Manhattan, The City of New York, an office or agency
of the Trustee, Registrar, Paying Agent and Conversion Agent where Securities
may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer, exchange, purchase, redemption or
conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served.  The Trustee’s office located at American Stock Transfer &
Trust Company, 59 Maiden Lane, New York, New York, 10038 shall initially be
such office or agency for all of the aforesaid purposes.  The Company shall give prompt written notice
to the Trustee of the location, and of any change in the location, of any such
office or agency (other than a change in the location of the office or agency
of the Trustee).  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 address of the
Trustee set forth in Section 12.02. 
The Company may also from time to time designate one or more other
offices or agencies where the Securities 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 the
Borough of Manhattan, the City of New York, for such purposes.


 


Section 4.06. 
Delivery of Certain
Information.  At any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act, upon
the request of a Holder or any Beneficial Owner of Securities or holder or
Beneficial Owner of Common Stock delivered upon conversion thereof, the Company
will promptly furnish or cause to be furnished Rule 144A Information (as
defined below) to such Holder or any Beneficial Owner of Securities or holder
or Beneficial Owner of Common Stock, or to a prospective purchaser of any such
security


 


31

















 


designated by any such holder,
as the case may be, to the extent required to permit compliance by such Holder
or holder with Rule 144A under the Securities Act in connection with the resale
of any such security.  “Rule 144A
Information” shall be such information as is specified pursuant to Rule
144A(d)(4) under the Securities Act or any successor provisions.  Whether a Person is a Beneficial Owner shall
be determined by the Company to the Company’s reasonable satisfaction.


 


Section 4.07. 
Tax Treatment of Securities.  The Company and the Holders, by purchasing
the Securities, agree that (i) the Securities are contingent payment debt
instruments as defined in Treasury Regulations Section 1.1275-4(b), (ii)
each Holder shall be bound by the Company’s application of the Treasury
Regulations to the Securities, including the Company’s determination that the
rate at which interest will be deemed to accrue on the Securities for United States
federal income tax purposes will be 8.50% compounded semi-annually, which is
the rate comparable to the rate at which the Company would borrow on a
noncontingent, nonconvertible basis with terms and conditions otherwise
comparable to the Securities, (iii) each Holder shall use the projected payment
schedule with respect to the Securities determined by the Company, as required
by Treasury Regulations Section 1.1275-4(b)(4)(iv), to determine its
interest accruals and adjustments as provided in Treasury Regulations
Section 1.1275-4(b), and (iv) the Company and each Holder will not take
any position on a tax return inconsistent with (i), (ii), or (iii), unless
required by applicable law.


 


Section 4.08. 
Liquidated Damages.  If at any time Liquidated Damages become
payable by the Company pursuant to the Registration Rights Agreement, the
Company shall promptly deliver to the Trustee a certificate to that effect and
stating (i) the amount of such Liquidated Damages that are payable and (ii) the
date on which such damages are payable pursuant to the terms of the
Registration Rights Agreement.  Unless
and until a Responsible Officer of the Trustee receives such a certificate, the
Trustee may assume without inquiry that no Liquidated Damages are payable.  If the Company has paid Liquidated Damages
directly to the Persons entitled to them, the Company shall deliver to the
Trustee a certificate setting forth the particulars of such payment.


 


ARTICLE
5



SUCCESSOR CORPORATION


 


Section 5.01. 
When the Company
May Merge or Transfer Assets. 
The Company shall not consolidate with or merge with or into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, unless:


 


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


 


32

















 


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


 


(ii)           immediately
after giving effect to such transaction, no Default shall have occurred and be continuing; and


 


(iii)          the
Company shall have 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 5 and that all conditions
precedent herein provided for relating to such transaction have been satisfied.


 


For purposes of the foregoing, the transfer (by lease, assignment, sale
or otherwise) of the properties and assets of one or more Subsidiaries (other
than to the Company or another Subsidiary), which, if such assets were owned by
the Company would constitute all or substantially all of the properties and
assets of the Company shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.  The successor Person formed by such
consolidation or into which the Company is merged or the successor Person to which
such conveyance, transfer or lease is made shall succeed to, and (except in the
case of a lease) be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor had
been named as the Company herein; and thereafter, except in the case of a lease
and except for obligations the Company may have under a supplemental indenture
pursuant to Section 9.06, the Company shall be discharged from all
obligations and covenants under this Indenture and the Securities.  Subject to Section 9.06, the Company,
the Trustee and the successor Person shall enter into a supplemental indenture
to evidence the succession and substitution of such successor Person and such
discharge and release of the Company, as applicable.


 


ARTICLE
6



DEFAULTS AND REMEDIES


 


Section 6.01.  Events of Default.  Subject to the provisions set forth below in
this Section 6.01, each of the following events is an “Event of Default”:


 


(a)           the failure to pay
interest (including Contingent Interest and Liquidated Damages, if any) on any
Securities when the same becomes due and payable and the default continues for
a period of 30 days, whether or not such failure shall be due to compliance
with Article 11 of this Indenture or agreements with respect to any other
Indebtedness or any other reason;


 


(b)           the failure to pay
the principal of any Securities, when such principal becomes due and payable,
at maturity, upon acceleration, upon redemption or otherwise (including the
failure to make an offer to repurchase the Securities upon a Change in


 


33

















 


Control or make a payment to
purchase Securities tendered pursuant to a Purchase Notice or Change in Control
Purchase Notice), whether or not such failure shall be due to compliance with
Article 11 of this Indenture or agreements with respect to any other
Indebtedness or any other reason;


 


(c)           the failure to
provide a Company Change in Control Notice in accordance with the terms of
Section 3.09(b) hereof;


 


(d)           a default in the
observance or performance of any other covenant or agreement contained in this
Indenture which default continues for a period of 30 days after the Company
receives written notice specifying the default (and demanding that such default
be remedied) from the Trustee or the Holders of at least 25% of the outstanding
principal amount of the Securities (except in the case of a default with
respect to Section 5.01, which will constitute an Event of Default with
such notice requirement but without such passage of time requirement);


 


(e)           the failure to pay
at final maturity (giving effect to any applicable grace periods and any
extensions thereof) the principal amount of any Recourse Indebtedness of the
Company or any Subsidiary of the Company, or the acceleration of the final
stated maturity of any such Recourse Indebtedness if the aggregate principal
amount of such Recourse Indebtedness, together with the principal amount of any
other such Recourse Indebtedness in default for failure to pay principal at
final maturity or which has been accelerated, aggregates $25.0 million or more
at any time;


 


(f)            one or more
judgments in an aggregate amount in excess of $25.0 million shall have been
rendered against the Company or any of its Subsidiaries and remain
undischarged, unpaid or unstayed for a period of 60 days after such judgment or
judgments become final and nonappealable;


 


(g)           The Company or any
of its Significant Subsidiaries pursuant to or under or within the meaning of
any Bankruptcy Law:


 


(i)            commences
a voluntary case or proceeding;


 


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


 


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


 


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


 


(v)           shall
generally not pay its debts when such debts become due or shall admit in
writing its inability to pay its debts generally; or


 


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


 


(i)            is
for relief against the Company or any Significant Subsidiary of the Company in
an involuntary case or proceeding;


 


34

















 


(ii)           appoints
a custodian of the Company or any Significant Subsidiary of the Company for all
or substantially all of its properties; or


 


(iii)          orders
the liquidation of the Company or any Significant Subsidiary of Company;


 


and in each case the order or
decree remains unstayed and in effect for 60 consecutive days.


 


The Events of Default described in clauses (e), (f), (g) and (h) above
with respect to a Subsidiary shall not apply if such Person was not a
Subsidiary at the time such event or condition occurred unless, in the case of
clause (e) or (f) above, the Company or another Subsidiary thereof assumes or
otherwise becomes liable for the liability referred to therein or the
liabilities generally of such Person.


 


Section 6.02.  Acceleration.


 


(a)           If an Event of
Default (other than an Event of Default specified in clause (g) or (h) of
Section 6.01) shall occur and be continuing, the Trustee may, and at the
request of the Holders of at least 25% in principal amount of outstanding
Securities shall, declare the principal of and accrued interest (including
Contingent Interest and Liquidated Damages, if any), on all the Securities to
be due and payable by notice in writing to the Company (the “Acceleration
Notice”).  Such notice shall specify
the respective Event of Default and that it is a “notice of acceleration.”  Upon the giving of such notice, the
principal of and accrued but unpaid interest (including Contingent Interest and
Liquidated Damages, if any) on all Securities (i) shall become immediately
due and payable or (ii) if there are any amounts outstanding under the
Credit Agreement, shall become immediately due and payable upon the first to
occur of an acceleration under the Credit Agreement or five Business Days after
receipt by the Company and the Representative under the Credit Agreement of
such Acceleration Notice but only if such Event of Default is then
continuing.  If an Event of Default
specified in clause (g) or (h) of Section 6.01 occurs and is
continuing with respect to Company, then all unpaid Obligations on all of the
outstanding Securities shall ipso facto become and be immediately due
and payable without any declaration or other act on the part of the Trustee or
any Holder.


 


(b)           At any time after a
declaration of acceleration with respect to the Securities as described in the
preceding paragraph, the Holders of a majority in aggregate principal amount of
the Securities may rescind and cancel such declaration and its consequences
(i) if the rescission would not conflict with any judgment or decree,
(ii) if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of such
acceleration, (iii) if interest on overdue installments of interest (to
the extent the payment of such interest is lawful) and on overdue principal,
which has become due otherwise than by such declaration of acceleration, has
been paid, (iv) if the Company has paid the Trustee its reasonable
compensation and reimbursed the Trustee for its expenses, disbursements and
advances and (v) in the event of the cure or waiver of an Event of Default
of the type described in clause (e) of Section 6.01, the Trustee shall
have received an Officers’ Certificate and an Opinion of Counsel that such
Event of Default has been cured or waived. 
No such rescission shall affect any subsequent Default or impair any
right consequent thereto.


 


35

















 


Section 6.03. 
Other Remedies.  If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of the principal amount of all the Securities plus accrued but unpaid interest
(including Contingent Interest and Liquidated Damages, if any), thereon, or to enforce the performance
of any provision of the Securities or this Indenture.


 


The Trustee may maintain a proceeding even if the Trustee does not
possess any of the Securities or does not produce any of the Securities in the
proceeding.  A delay or omission by the
Trustee or any Securityholder in exercising any right or remedy accruing upon
an Event of Default shall not impair the right or remedy or constitute a waiver
of, or acquiescence in, the Event of Default. 
No remedy is exclusive of any other remedy.  All available remedies are cumulative to the extent permitted by
law.


 


Section 6.04. 
Waiver of Past Defaults.  The Holders of a majority in aggregate
principal amount of the Securities at the time outstanding, by notice in
writing to the Trustee (and without notice to any other Securityholder), may
waive an existing Default and its consequences, except (i) an Event of Default
described in Section 6.01(a) or 6.01(b), (ii) a Default in respect of a
provision that under Section 9.02 cannot be amended without the consent of
each Holder affected or (iii) a Default which constitutes a failure to convert
any Security in accordance with the terms of Article 10.  When a Default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or other Default or
impair any consequent right.  This
Section 6.04 shall be in lieu of Section 316(a)(1)(B) of the TIA and
such Section 316(a)(1)(B) is hereby expressly excluded from this
Indenture, as permitted by the TIA.


 


Section 6.05.  Control by Majority.  The Holders of a majority in aggregate
principal amount of the Securities at the time outstanding may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee.  However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture or that the Trustee
determines in good faith is unduly prejudicial to the rights of other Holders
or would involve the Trustee in personal liability unless the Trustee is
offered indemnity satisfactory to it. 
This Section 6.05 shall be in lieu of Section 316(a)(1)(A) of
the TIA and such Section 316(a)(1)(A) is hereby expressly excluded from
this Indenture, as permitted by the TIA.


 


Section 6.06.  Limitation on Suits.  A Holder may not pursue
any remedy with respect to this Indenture or the Securities unless:


 


(a)           the Holder gives to the
Trustee written notice stating that an Event of Default is continuing;


 


(b)           the Holders of at
least 25% in aggregate principal amount of the Securities at the time
outstanding make a written request to the Trustee to pursue the remedy;


 


(c)           such Holder or
Holders offer to the Trustee security or indemnity satisfactory to the Trustee
against any loss, liability or expense;


 


36

















 


(d)           the Trustee does not comply
with the request within 60 days after receipt of such notice, request and offer
of security or indemnity; and


 


(e)           the Holders of a majority in
aggregate principal amount of the Securities at the time outstanding do not
give the Trustee a direction inconsistent with the request during such 60-day period.


 


A Securityholder may not use this Indenture to prejudice the rights of
any other Securityholder or to obtain a preference or priority over any other
Securityholder.


 


Section 6.07. 
Rights of Holders to
Receive Payment.  Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of interest installments (including Contingent Interest and Liquidated
Damages, if any), the principal amount, Redemption Price, Purchase Price,
Change in Control Purchase Price or interest, if any, due on overdue amounts in
respect of the Securities held by such Holder, on or after the respective due
dates expressed in the Securities, and to convert the Securities in accordance
with Article 10, or to bring suit for the enforcement of any such payment
on or after such respective dates or the right to convert, shall not be
impaired or affected adversely without the consent of such Holder.


 


Section 6.08.  Collection Suit by Trustee.  If an Event of Default described in
Section 6.01(a) or 6.01(b) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount owing with respect to the Securities and the
amounts provided for in Section 7.07.


 


Section 6.09. 
Trustee May File Proofs of Claim.  In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company or any other
obligor upon the Securities or the property of the Company or of such other
obligor or their creditors, the Trustee (irrespective of whether any amounts in
respect of the Securities shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of any such amount) shall be
entitled and empowered, by intervention in such proceeding or otherwise,


 


(a)           to file and prove a claim for
any accrued but unpaid amounts
due in respect of the Securities, and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel or any other amounts due
the Trustee under Section 7.07) and of the Holders allowed in such
judicial proceeding, and


 


(b)           to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same;


 


and any custodian, receiver,
assignee, trustee, liquidator, sequestrator or 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 the Trustee any amount due it
for the reasonable compensation, expenses,


 


37

















 


disbursements and advances of
the Trustee, its agents and counsel, and any other amounts due the Trustee
under Section 7.07.


 


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


 


Section 6.10.  Priorities.  If the Trustee collects any money pursuant
to this Article 6, it shall pay out the money in the following order:


 


FIRST:  to the Trustee for
amounts due under Section 7.07;


 


SECOND:  to Holders for amounts
due and unpaid on the Securities and for any accrued but unpaid interest amounts due in respect of the Securities,
ratably, without preference or priority of any kind, according to such amounts
due and payable on the Securities ; and


 


THIRD:  the balance, if any, to
the Company.


 


The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 6.10. 
At least 15 days before such record date, the Trustee shall mail to each
Securityholder and the Company a notice that states the record date, the
payment date and the amount to be paid.


 


Section 6.11.  Suits. 
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant (other than the Trustee) in the suit of an undertaking to pay the
costs of the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys’ fees and expenses, against any party litigant
in the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. 
This Section 6.11 does not apply to a suit by the Trustee, a suit
by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10%
in aggregate principal amount of the Securities at the time outstanding.  This Section 6.11 shall be in lieu of
Section 315(e) of the TIA and such Section 315(e) is hereby expressly
excluded from this Indenture, as permitted by the TIA.


 


Section 6.12.  Waiver of Stay, Extension or Usury
Laws.  The Company covenants (to the
fullest 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 stay or extension law or any usury or other law wherever
enacted, now or at any time hereafter in force, which would prohibit or forgive
the Company from paying all or any portion of any amounts due in respect of the
Securities, as contemplated herein, or which may affect the covenants or the
performance of this Indenture; and the Company (to the fullest 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.


 


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ARTICLE
7



TRUSTEE


 


Section 7.01.  Duties of Trustee.


 


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


 


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


 


(i)            the
Trustee need perform only those duties that are specifically set forth in this
Indenture and no others; and


 


(ii)           in
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture, but in case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of this
Indenture, but need not confirm or investigate the accuracy of mathematical
calculations or other facts stated therein.


 


This Section 7.01(b) shall be in lieu of Section 315(a) of
the TIA and such Section 315(a) is hereby expressly excluded from this
Indenture, as permitted by the TIA.


 


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


 


(i)            this
paragraph (c) does not limit the effect of paragraph (b) of this Section 7.01;


 


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


 


(iii)          the
Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it pursuant to Section 6.05.


 


Section 7.01(c)(i), (ii)
and (iii) shall be in lieu of Sections 315(d)(1), 315(d)(2) and 315(d)(3) of
the TIA and such Sections 315(d)(1), 315(d)(2) and 315(d)(3) are hereby
expressly excluded from this Indenture, as permitted by the TIA.


 


39

















 


(d)           Every provision of
this Indenture that in any way relates to the Trustee is subject to
Section 7.01(a), (b), (c), (e) and (f).


 


(e)           The Trustee may
refuse to perform any duty or exercise any right or power or expend or risk its
own funds or otherwise incur any financial liability unless it receives
indemnity satisfactory to it against any loss, liability or expense.


 


(f)            Money held by the
Trustee in trust hereunder need not be segregated from other funds except to
the extent required by law.  The Trustee
(acting in any capacity hereunder) shall be under no liability for interest on any
money received by it hereunder unless otherwise agreed in writing with the
Company.


 


Section 7.02.  Rights of Trustee.  Subject to its duties and responsibilities
under the TIA,


 


(a)           the Trustee may conclusively
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 reasonably believed by it to be genuine and to have been signed or
presented by the proper party or parties;


 


(b)           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) may obtain
and, in the absence of bad faith or negligence on its part, conclusively rely
upon an Officers’ Certificate and/or an Opinion of Counsel;


 


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


 


(d)           the Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it in good faith which it
reasonably believes to be authorized or within its rights or powers conferred under
this Indenture;


 


(e)           the Trustee may consult with
counsel selected by it and any advice or opinion of such counsel shall be full
and complete authorization and protection in respect of any action taken or suffered or omitted by it hereunder in good faith
and in accordance with such advice or opinion of such counsel;


 


(f)            the Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Indenture at the request, order or direction of any of the Holders, pursuant to
the provisions of this Indenture,
unless such Holders shall have offered to the Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities which may be
incurred therein or thereby;


 


40

















 


(g)           any request or
direction of the Company mentioned herein shall be sufficiently evidenced by a
Company Order and any resolution of the Board of Directors shall be
sufficiently evidenced by a Board Resolution;


 


(h)           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, during normal business hours, to
examine the books, records and premises of the Company, personally or by agent
or attorney at the sole cost of
the Company and shall incur no liability or additional liability of any kind by
reason of such inquiry or investigation;


 


(i)            the Trustee shall
not be deemed to have notice of any Default or Event of Default unless a
Responsible Officer of the Trustee has actual knowledge thereof or unless
written notice of any event which is in fact such a Default is received by the
Trustee at the Corporate Trust Office of the Trustee, and such notice
references the Securities and this Indenture;


 


(j)            the rights,
privileges, protections, immunities and benefits given to the Trustee,
including its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder (including
Paying Agent, Registrar and Conversion Agent), and to all other Persons
employed to act hereunder, including the Trustee’s officers, employees, agents
and custodians;


 


(k)           the Trustee may
request that the Company deliver an Officers’ Certificate setting forth the
names of individuals and/or titles of officers authorized at such time to take
specified actions pursuant to this Indenture, which Officers’ Certificate may
be signed by any person authorized to sign an Officers’ Certificate, including
any person specified as so authorized in any such certificate previously
delivered and not superseded;


 


(l)            Neither the Trustee
nor any of its officers, directors, employees or agents shall be liable for any
action taken or omitted under this Indenture or in connection therewith except
to the extent caused by the Trustee’s gross negligence, bad faith or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, no longer subject to appeal or review.  Anything in this Indenture to the contrary notwithstanding, in no
event shall the Trustee be liable for special, indirect or consequential loss
or damage of any kind whatsoever (including but not limited to lost profits),
even if the Trustee has been advised of the likelihood of such loss or damage
and regardless of the form of action;


 


(m)          The Trustee is not
required to give any bond or surety with respect to the performance of its
duties or the exercise of its powers under this Indenture; and


 


(n)           Notwithstanding
anything else herein contained, whenever any provision of this Indenture
indicates that any confirmation of a condition or event is qualified by the
words “to the knowledge of” or “known to” the Trustee or other words of similar
meaning, said words


 


41

















 


shall mean and refer to the
current awareness of one or more Responsible Officers who are located at the
Corporate Trust Office.


 


Section 7.03.  Individual Rights of
Trustee.  The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. 
Any Paying Agent, Registrar, Conversion Agent or co-registrar may do the
same with like rights.  However, the
Trustee must comply with Sections 7.10 and 7.11.


 


Section 7.04.  Trustee’s Disclaimer.  The Trustee makes no representation as to
the validity or adequacy of this Indenture or the Securities, shall not be
accountable for the Company’s use or application of the proceeds from the
Securities, and shall not be responsible for any statement in any registration
statement for the Securities under the Securities Act or in any offering
document for the Securities, the Indenture or the Securities (other than its
certificate of authentication), or the determination as to which beneficial
owners are entitled to receive any notices hereunder.


 


Section 7.05.  Notice of Defaults.  If a Default occurs and if it is known to
the Trustee, the Trustee shall give to each Securityholder notice of all
current Defaults known to it within 90 days after any such Default occurs or,
if later, within 15 days after it is known to the Trustee, unless such Default
shall have been cured or waived before the giving of such notice.  Notwithstanding the preceding sentence,
except in the case of a Default described in Sections 6.01(a) and 6.01(b), the
Trustee may withhold the notice if and so long as the board of directors, the
executive committee or a trust committee of directors and/or officers of the
Trustee in good faith determines that withholding the notice is in the
interests of Holders.  The second
sentence of this Section 7.05 shall be in lieu of the proviso to
Section 315(b) of the TIA and such proviso is hereby expressly excluded from this Indenture,
as permitted by the TIA.


 


Section 7.06.  Reports by Trustee to
Holders.  Within 60 days after each
May 15 beginning with the May 15 following the date of this
Indenture, the Trustee shall mail to each Securityholder a brief report dated
as of such May 15 that complies with TIA Section 313(a), if required
by such Section 313(a), but only to the extent any such report is required
to be given pursuant to said TIA Section 313(a), or any successor
provision of the TIA.  The Trustee also
shall comply with TIA Section 313(b).


 


A copy of each report at the time of its mailing to Holders shall be
filed with the SEC and each securities exchange, if any, on which the
Securities are listed.  The Company agrees to notify the Trustee promptly whenever
the securities become listed on any Securities exchange and of any delisting
thereof.


 


Section 7.07.  Compensation and Indemnity.  The Company agrees:


 


(a)           to pay to the Trustee from
time to time, and the Trustee shall be entitled to, such compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited (to
the extent permitted by law) by
any provision of law in regard to the compensation of a trustee of an express
trust);


 


42

















 


(b)           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 or any
documents executed in connection
herewith (including the reasonable compensation and the expenses, advances and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence, bad faith or willful
misconduct; and


 


(c)           to indemnify the Trustee or
any predecessor Trustee and their respective agents, officers, directors and
employees for, and to hold them harmless against, any loss, damage, claim,
liability, cost or expense (including attorneys’ fees and expenses and taxes
(other than taxes based upon, measured by or determined by the income of the Trustee)) incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and expenses of
defending itself against any claim (whether asserted by the Company or any
Holder or any other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder.


 


To secure the Company’s payment obligations in this Section 7.07,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee, except that held in trust to pay interest
installments (including Contingent Interest and Liquidated Damages, if any),
the principal amount, Redemption Price, Purchase Price, Change in Control
Purchase Price or interest, if any, due on overdue amounts, as the case may be,
in respect of any particular Securities.


 


The Company’s payment obligations pursuant to this Section 7.07
shall survive the discharge of this Indenture or the earlier termination or
resignation of the Trustee.  When the
Trustee incurs expenses after the occurrence of a Default specified in
Section 6.01(f) or Section 6.01(g), the expenses, including the
reasonable charges and expenses of its counsel, are intended to constitute
expenses of administration under any bankruptcy law.


 


Any amounts due and owing the Trustee hereunder (whether in nature of
fees, expenses, indemnification payments or reimbursement for advances) which
have not been paid by or on behalf of the Company within 15 days following
written notice thereof given to the Company in accordance with the provisions
of Section 12.02, shall bear interest at an interest rate equal to the
Trustee’s announced prime rate in effect from time to time, plus four percent
(4.0%) per annum.


 


Section 7.08. 
Replacement of Trustee.  The Trustee may resign by so notifying the
Company; provided, however, that no such resignation shall be effective until a
successor Trustee has accepted its appointment pursuant to this
Section 7.08.  The Holders of a majority
in aggregate principal amount of
the Securities at the time outstanding may remove the Trustee by so notifying
the Trustee and the Company.  The
Company shall remove the Trustee if:


 


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


 


(b)           the Trustee is
adjudged bankrupt or insolvent;


 


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


 


43

















 


(d)           the Trustee
otherwise becomes incapable of acting.


 


If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint, by
resolution of its Board of Directors, a successor Trustee.


 


A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company satisfactory in form and
substance to the retiring Trustee and the Company.  Thereupon the resignation or removal of the retiring Trustee
shall become effective, and the successor Trustee shall have all the rights,
powers and duties of the Trustee under this Indenture; provided, however,
notwithstanding the foregoing, the effectiveness of any such resignation or
removal shall be conditioned on receipt by the retiring Trustee of all amounts
due and owing under Section 7.07 hereof. 
The successor Trustee shall mail a notice of its succession to
Holders.  The retiring Trustee shall
promptly transfer all property held by it as Trustee to the successor Trustee,
subject to the lien provided for in Section 7.07.


 


If a successor Trustee does not take office within 30 days after the
retiring Trustee gives its notice of resignation or is removed, the retiring
Trustee, the Company or the Holders of a majority in aggregate principal amount
of the Securities at the time outstanding may petition any court of competent
jurisdiction at the expense of the Company for the appointment of a successor
Trustee.


 


If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.


 


Section 7.09.  Successor Trustee by Merger
Etc.  If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets (including the administration of the trust
created by this Indenture) to, another Person, the resulting, surviving or
Person corporation without any further act shall be the successor Trustee.


 


Section 7.10.  Eligibility; Disqualification.  The Trustee shall at all times satisfy the
requirements of TIA Section 310(a)(1). 
The Trustee (or its parent holding company) shall have a combined
capital and surplus of at least $10,000,000 as set forth in its most recent
filed annual report of condition. 
Nothing herein contained shall prevent the Trustee from filing with the SEC
the application referred to in the penultimate paragraph of TIA
Section 310(b).  The Trustee shall
comply with TIA Section 310(b); provided, however, that there shall be
excluded from the operation of TIA Section 310(b)(1) any indenture or
indentures under which other securities or certificates of interest or
participation in other securities of the Company are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are
met.


 


Section 7.11.  Preferential Collection
of Claims Against Company.  The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b).  A Trustee who has resigned or been removed shall be subject to
TIA Section 311(a) to the extent indicated therein.


 


44

















 


ARTICLE
8



DISCHARGE OF INDENTURE


 


Section 8.01.  Discharge of Liability
on Securities.  When (i) the Company
delivers to the Trustee all outstanding Securities (other than Securities
replaced pursuant to Section 2.07) for cancellation or (ii) all
outstanding Securities have become due and payable and the Company deposits
with the Trustee cash sufficient to pay all amounts due and owing on all
outstanding Securities (other than Securities replaced pursuant to
Section 2.07), and if in either case the Company pays all other sums
payable hereunder by the Company, then this Indenture shall, subject to
Section 7.07, cease to be of further effect.  The Trustee shall join in the execution of a document prepared by
the Company acknowledging satisfaction and discharge of this Indenture on
demand at the cost and expense of the Company and accompanied by an Officers’
Certificate and Opinion of Counsel.


 


Section 8.02.  Repayment to the Company.  The Trustee and the Paying Agent shall
return to the Company upon written request any money held by them for the
payment of any amount and any shares of Common Stock with respect to the
Securities that remain unclaimed for two years, subject to applicable unclaimed
property law.  After return to the
Company, as applicable, Holders entitled to the money or shares of Common Stock
must look to the Company for payment as general creditors unless an applicable
abandoned property law designates another person and the Trustee and the Paying
Agent shall have no further liability to the Holders with respect to such money
or shares of Common Stock for that period commencing after the return thereof.


 


ARTICLE
9



AMENDMENTS


 


Section 9.01.  Without Consent of Holders.  The Company and the Trustee may amend or
supplement this Indenture or the Securities without notice to or consent of any
Securityholder:


 


(a)           to comply with
Article 5 or Section 10.12;


 


(b)           to cure any
ambiguity, omission, defect or inconsistency, or to make any other change that
does not adversely affect the rights of any Securityholder;


 


(c)           to make provisions with
respect to the conversion right of the Holders pursuant to the requirements of
Section 10.12 and Section 10.01;


 


(d)           to evidence and
provide for the acceptance of appointment hereunder by a successor Trustee with
respect to the Securities; or


 


(e)           to comply with the
provisions of the TIA, or with any requirement of the SEC arising as a result
of the qualification of this Indenture under the TIA.


 


45

















 


Section 9.02.  With Consent of Holders.  


 


The Company and the Trustee may amend or supplement this Indenture or
the Securities without notice to any Securityholder but with the written
consent of the Holders of a majority in aggregate principal amount of the
Securities then outstanding.  The
Holders of a majority in aggregate principal amount of the Securities then
outstanding may waive compliance by the Company with restrictive provisions of
this Indenture other than as set forth in this Section 9.02 below, and
waive any past Default under this Indenture and its consequences, except a
Default in the payment of amounts due in respect of any Security or in respect
of a provision which under this Indenture cannot be modified or amended without
the consent of the Holder of each outstanding Security affected.


 


Subject to Section 9.04, without the written consent of each
Securityholder affected, however, an amendment, supplement or waiver, including
a waiver pursuant to Section 6.04, may not:


 


(a)           change the Stated Maturity of
the principal of, or any payment date of any installment of interest (including
Contingent Interest or Liquidated Damages, if any), if any, on, any Security;


 


(b)           reduce the principal amount of, or
the rate of interest (including Contingent Interest or Liquidated Damages, if
any), on, any Security, whether upon acceleration, redemption or otherwise, or
alter the manner of calculation of interest or the rate of accrual thereof on
any Security;


 


(c)           change the currency for payment of
principal of, or interest (including Contingent Interest or Liquidated Damages,
if any), or adversely affect the price or ratio at which Common Stock may be
substituted for currency in connection with any payments made;


 


(d)           impair the right to institute suit
for the enforcement of any payment of any amount with respect to any Security
when due;


 


(e)           adversely affect the conversion
rights provided in Article 10;


 


(f)            modify the provisions of this
Indenture requiring the Company to make an offer to repurchase Securities upon
a Change in Control pursuant to Section 3.09 after a Change in Control or
to repurchase the Securities at the option of the Holders pursuant to
Section 3.08 in any case;


 


(g)           reduce the percentage of principal
amount of the outstanding Securities necessary to modify or amend this
Indenture or to consent to any waiver provided for in this Indenture;


 


(h)           waive a Default in the payment of any
amount with respect to any Security when due (except as provided in
Section 6.02); or


 


(i)            make any changes in
Section 6.04, Section 6.07 or this Section 9.02.


 


46

















 


It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.


 


After an amendment under this Section 9.02 becomes effective, the
Company shall mail to each Holder a notice briefly describing the
amendment.  Failure to mail the notice
or a defect in the notice shall not effect the validity of the amendment.


 


Section 9.03.  Compliance with Trust
Indenture Act.  Every supplemental
indenture executed pursuant to this Article shall comply with the TIA.


 


Section 9.04.  Revocation and Effect of
Consents.  Until an amendment,
waiver or other action by Holders becomes effective, a consent thereto by a
Holder of a Security hereunder is a continuing consent by the Holder and every
subsequent Holder of that Security or portion of the Security that evidences
the same obligation as the consenting Holder’s Security, even if notation of
the consent, waiver or action is not made on the Security.  However, unless otherwise agreed in writing
by such Holder or a predecessor Holder any such Holder or subsequent Holder may
revoke the consent, waiver or action as to such Holder’s Security or portion of
the Security if the Trustee receives the notice of revocation before the date
the amendment, waiver or action becomes effective.  After an amendment, waiver or action becomes effective, it shall
bind every Securityholder.


 


Section 9.05.  Notation on or Exchange of
Securities.  Securities
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article 9 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 so modified as to conform, in the
opinion of the Trustee and the Board of Directors of 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.


 


Section 9.06.  Trustee to Sign Supplemental
Indentures.  The Trustee shall sign
any supplemental indenture authorized pursuant to this Article 9 if the
amendment contained therein does not, in the sole determination of the Trustee,
adversely affect the rights, duties, powers, privileges, benefits, indemnities,
liabilities or immunities of the Trustee. 
If it does, the Trustee may, but need not, sign such supplemental
indenture.  In signing such supplemental
indenture the Trustee shall be entitled to receive, and (subject to the
provisions of Section 7.01) shall be fully protected in relying upon, an
Officers’ Certificate and an Opinion of Counsel stating that such amendment is
authorized or permitted by this Indenture.


 


Section 9.07.  Effect of Supplemental
Indentures.  Upon the execution of
any supplemental indenture under this Article 9, 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.


 


47

















 


ARTICLE
10



CONVERSION OF THE SECURITIES


 


Section 10.01.  Conversion Privilege.  Subject to the provisions of this
Article 10, a Holder of a Security may convert such Security into Common
Stock, at the Conversion Price then in effect, if any of the following
conditions is satisfied:


 


(a)           during any calendar
quarter (the “Quarter”) commencing after the Issue Date, if the Closing
Price per share of Common Stock for at least 20 Trading Days in the period of
30 consecutive Trading Days ending on the last Trading Day of the Quarter
immediately preceding such Quarter (appropriately adjusted to take into account
the occurrence, during such 20 Trading Day period, of any event requiring
adjustment of the Conversion Price under this Indenture) is more than 120% of
the Conversion Price on such 30th Trading Day;


 


(b)           the Security has
been called for redemption by the Company pursuant to Section 3.01 and the
redemption has not yet occurred;


 


(c)           the conversion of
such Security occurs during the five Trading Day period immediately after a
period of five consecutive Trading Days in which the Security Trading Price for
each Trading Day in such period was less than 95% of the product of the Closing
Price per share of Common Stock on such Trading Day multiplied by the number of
shares of Common Stock issuable (assuming satisfaction of conditions to
conversion) upon conversion of $1,000 in principal amount of the Securities;


 


(d)           (i) an issuance of
rights, warrants or options referred to in Section 10.06(b) occurs or (ii)
a distribution referred to in Section 10.06(c) occurs where the fair
market value of such distribution per share of Common Stock (as determined by
the Board of Directors of the Company, which determination shall be conclusive
evidence of such fair market value) exceeds 10% of the Closing Price per share
of Common Stock on the Trading Day immediately preceding the date of
declaration of such distribution; or


 


(e)           (i) the Company is
party to a consolidation, merger, share exchange, sale of all or substantially
all of its assets or other similar transaction pursuant to which the Common
Stock is subject to conversion into shares of stock (other than Common Stock),
other securities or property (including cash) subject to Section 10.12 and
(ii) the conversion of such Security occurs at any time from and after the date
that is 15 days prior to the date of the anticipated effective time of such
transaction until and including the date that is 15 days after the actual
effective date of such transaction; provided, however, that if such conversion
occurs after the effective date of such transaction, the Holder will receive on
conversion the consideration determined in accordance with Section 10.12.


 


In the case of the foregoing clause (c), the Trustee (or other
Conversion Agent appointed by the Company) shall have no obligation to
determine the Security Trading Price unless the Company has requested such a
determination; and the Company shall have no obligation to make such request
unless a Holder provides it with reasonable evidence that the Security Trading
Price per $1,000 principal amount of such series of Securities would be less


 


48

















 


than 95% of the product of the
Closing Price per share of Common Stock on such Trading Date multiplied by the
number of shares of Common Stock issuable (assuming satisfaction of conditions
to conversion) upon conversion of $1,000 in principal amount of the
Securities.  If such evidence is
provided, the Company shall instruct the Trustee (or other Conversion Agent) to
determine the Securities Trading Price of the Securities beginning on the next
Trading Day and on each successive Trading Day until the Securities Trading
Price per $1,000 principal amount of such Securities is greater than or equal
to 95% of the product of the Closing Price per share of Common Stock on such
Trading Date multiplied by the number of shares of Common Stock issuable (assuming
satisfaction of conditions to conversion) upon conversion of $1,000 in
principal amount of the Securities; provided that the Trustee shall be under no
duty or obligation to make the calculations described in the foregoing clause
(c) or to determine whether the Securities are convertible pursuant to such
section.  The Company shall make the
calculations described in the foregoing clause (c), using the Securities
Trading Price provided by the Trustee.


 


The Trustee shall be entitled at its sole discretion to consult with
the Company and to request the assistance of and rely upon the Company in
connection with the Trustee’s duties and obligations pursuant to the foregoing
clause (c) (including without limitation the calculation or determination of the
Securities Trading Price), and the Company agrees, if requested by the Trustee,
to cooperate with, and provide assistance to, the Trustee in carrying out its
duties under the foregoing clause (c); provided, however, that nothing herein
shall be construed to relieve the Trustee of its duties pursuant to the
foregoing clause (c).


 


In the case of the foregoing clauses (d)(i) and (ii), the Company shall
cause a notice of such issuance or distribution to be filed with the Trustee
and the Conversion Agent and to be mailed to each Holder of Securities at its
address appearing on the list provided for in Section 2.05, at least 20
days prior to the Ex-Dividend Date for such issuance or distribution.  Once the Company has given such notice,
Holders may surrender their Securities for conversion at any time thereafter
until the earlier of the close of business on the Business Day prior to the
Ex-Dividend Date or the Company’s announcement that such issuance or
distribution will not take place.  This
provision shall not apply if the Holder of a Security otherwise participates in
the distribution without conversion.


 


The “Ex-Dividend Date” for any such issuance or distribution
means the date immediately prior to the commencement of “ex-dividend” trading
for such issuance or distribution on The New York Stock Exchange or such other
national securities exchange or The Nasdaq Stock Market or similar system of
automated dissemination of quotations of securities prices on which the Common
Stock is then listed or quoted.


 


The number of shares of Common Stock issuable upon conversion of a
Security shall be determined by dividing the principal amount of the Security
or portion thereof surrendered for conversion by the Conversion Price in effect
on the Conversion Date.  The initial Conversion
Price is set forth in paragraph 8 of the Securities and is subject to
adjustment as provided in this Article 10.  If any Securities are properly presented for conversion, the
Company, at its option, instead of delivering the shares of Common Stock
issuable upon conversion of such Securities, may pay the Holder the Cash
Conversion Price.


 


49

















 


A Holder may convert a portion of a Security equal to $1,000 or any
integral multiple thereof.  Provisions
of this Indenture that apply to conversion of all of a Security also apply to
conversion of a portion of a Security.


 


If a Security is called for redemption pursuant to Article 3, the
right to convert such Security shall terminate at the close of business on the
second Business Day before the redemption date for such Security (unless the
Company shall default in making the redemption payment then due, in which case
the conversion right shall terminate on the date such Default is cured and such
Security is redeemed).  A Security in
respect of which a Holder has delivered a Purchase Notice pursuant to
Section 3.08 or a Change in Control Purchase Notice pursuant to
Section 3.09 exercising the option of such Holder to require the Company
to repurchase such Security may be converted only if such Purchase Notice or
Change in Control Purchase Notice, as the case may be, is withdrawn by a
written notice of withdrawal delivered to the Paying Agent prior to the close
of business on the Purchase Date or prior to the close of business on the
Change in Control Purchase Date, as the case may be, in accordance with
Section 3.10.


 


A Holder of Securities is not entitled to any rights of a holder of
Common Stock until such Holder has converted its Securities into Common Stock
and, upon such conversion, only to the extent such Securities are deemed to
have been converted into Common Stock pursuant to this Article 10.


 


Section 10.02.  Conversion Procedure.  To convert a Security, a Holder must satisfy
the requirements in paragraph 8 of the Securities and (i) complete and manually
sign the conversion notice on the back of the Security and deliver such notice
to the Conversion Agent, (ii) surrender the Security to the Conversion Agent,
(iii) furnish appropriate endorsements and transfer documents if required by
the Registrar or the Conversion Agent, (iv) pay any transfer or other tax, if
required by Section 10.04 and (v) if the Security is held in book-entry
form, complete and deliver to the Depositary appropriate instructions pursuant
to the Depositary’s book-entry conversion programs.  The date on which the Holder satisfies all of the foregoing
requirements is the “Conversion Date”. 
As soon as practicable after the Conversion Date and in any event within
five Business Days, the Company shall deliver to the Holder through the
Conversion Agent either (i) a certificate for or (ii) a book-entry notation of
the number of whole shares of Common Stock issuable upon the conversion and
cash in lieu of any fractional shares pursuant to Section 10.05.


 


The Person in whose name the Security is registered shall be deemed to
be a stockholder of record on the Conversion Date; provided, however,
that no surrender of a Security on any date when the stock transfer books of
the Company shall be closed shall be effective to constitute the Person or
Persons entitled to receive the shares of Common Stock upon such conversion as
the record holder or holders of such shares of Common Stock on such date, but such surrender shall be
effective to constitute the Person or Persons entitled to receive such shares
of Common Stock as the record holder or holders thereof for all purposes at the
close of business on the next succeeding day on which such stock transfer books
are open (subject to the provisions of the next paragraph of this
Section 10.02); provided, further, that such conversion shall be at the
Conversion Price in effect on the date that such Security shall have been


 


50

















 


surrendered for conversion, as if the stock
transfer books of the Company had not been closed.  Upon conversion of a Security, such Person shall no longer be a
Holder of such Security.


 


If the Company elects to pay cash instead of issuing shares with regard
to a Security properly presented for conversion, the Company shall notify the
Holder and the Trustee of such election no later than the second Business Day
after the Conversion Date of the Security. 
If the Holder does not withdraw such election to convert, the Company
shall pay the Cash Conversion Price in respect of the Security converted in
cash not later than the tenth Business Day after the Conversion Date.


 


No payment or adjustment will be made for accrued interest (including
Contingent Interest or Liquidated Damages, if any), on a converted Security or
for dividends or distributions on shares of Common Stock issued upon conversion
of a Security (provided that the shares of Common Stock received upon
conversion of Securities shall continue to accrue Liquidated Damages, as
applicable, in accordance with the Registration Rights Agreement and shall be
entitled to receive, at the next interest payment date, any accrued but unpaid
Liquidated Damages with respect to the converted Securities), but if any Holder
surrenders a Security for conversion between the record date for the payment of
an installment of interest and the next interest payment date, then,
notwithstanding such conversion, the interest (including Contingent Interest or
Liquidated Damages, if any), payable on such interest payment date shall be
paid to the Holder of such Security on such interest payment date.  In such event, such Security, when
surrendered for conversion, must be accompanied by delivery of a check payable
to the Conversion Agent in an amount equal to the interest (including
Contingent Interest or Liquidated Damages, if any), payable on such interest
payment date on the portion so converted. 
If such payment does not accompany such Security, the Security shall not
be converted; provided, however, that no such check shall be required if such
Security has been called for redemption on a redemption date within the period
between and including such record date and such interest payment date, or if
such Security is surrendered for conversion on the interest payment date.  If the Company defaults in the payment of
interest (including Contingent Interest or Liquidated Damages, if any), payable
on the interest payment date, the Conversion Agent shall repay such funds to
the Holder.


 


No fractional shares of Common Stock shall be issued upon conversion of
Securities.  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 any fractional share of Common Stock
would be issuable upon the conversion of any Security or Securities, the
Company shall make a payment in lieu thereof in cash based on the current
market price of a share of Common Stock. 
For these purposes, the current market price of a share of Common Stock
shall be the Closing Price per share of Common Stock on the first Business Day
immediately preceding the day on which the Securities (or specified portions
thereof) are deemed to have been converted.


 


Upon surrender of a Security that is converted in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder, a
new Security equal in principal amount to the unconverted portion of the
Security surrendered.


 


51

















 


Section 10.03.  Adjustments Below Par
Value.  Before taking any action
which would cause an adjustment decreasing the Conversion Price so that the
shares of Common Stock issuable upon conversion of the Securities would be
issued for less than the par value of such Common Stock, the Company will take
all corporate action which may be necessary in order that the Company may validly
and legally issue fully paid and nonassessable shares of such Common Stock at
such adjusted Conversion Price.


 


Section 10.04.  Taxes on Conversion.  If a Holder converts a Security, the Company
shall pay any documentary, stamp or similar issue or transfer tax due on the
issue of shares of Common Stock upon such conversion.  However, the Holder shall pay any such tax which is due because
the Holder requests the shares to be issued in a name other than the Holder’s
name.  The Conversion Agent may refuse
to deliver the certificates representing the Common Stock being issued in a
name other than the Holder’s name until the Conversion Agent receives a sum
sufficient to pay any tax which will be due because the shares are to be issued
in a name other than the Holder’s name. 
Nothing herein shall preclude any tax withholding required by law or
regulations.


 


Section 10.05.  Company to Provide Stock.


 


The Company shall, prior to issuance of any Securities hereunder, and
from time to time as may be necessary, reserve, out of its authorized but
unissued Common Stock a sufficient number of shares of Common Stock to permit
the conversion of all outstanding Securities into shares of Common Stock.  The shares of Common Stock or other
securities issued upon conversion of Securities bearing a Legend as provided in
Section 2.06(f) shall bear a legend substantially in the following form:


 


“THIS SECURITY (OR ITS PREDECESSOR) WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS
SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. 
EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF
THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.


 


THE HOLDER OF THIS SECURITY AGREES FOR THE
BENEFIT OF THE COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A


 


52

















 


UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (III) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I)
THROUGH (III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM THE HOLDER OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.”


 


The Company covenants that all shares of Common Stock delivered upon
conversion of the Securities shall be newly issued shares or treasury shares,
shall be duly authorized, validly issued, fully paid and non-assessable and
shall be free from preemptive rights and free of any lien or adverse claim.


 


The Company will endeavor promptly to comply with all federal and state
securities laws regulating the offer and delivery of shares of Common Stock upon
conversion of Securities, if any, and will list or cause to have quoted such
shares of Common Stock on each national securities exchange or in the
over-the-counter market or such other market on which the Common Stock is then
listed or quoted.


 


Section 10.06.  Adjustment of Conversion Price.  The conversion price (the “Conversion
Price”) initially shall be that price set forth in paragraph 8 of the form
of Security attached hereto as Exhibit A-1, but shall be adjusted from
time to time by the Company as follows:


 


(a)           In case the Company
shall (i) pay a dividend or other distribution in shares of Common Stock to all
holders of Common Stock, (ii) subdivide its outstanding Common Stock into a
greater number of shares, (iii) combine its outstanding Common Stock into a
smaller number of shares or (iv) reclassify its outstanding Common Stock, the
Conversion Price in effect immediately prior thereto shall be adjusted so that
the Holder of any Security thereafter surrendered for conversion shall be
entitled to receive the number of shares of Capital Stock which it would have
owned or have been entitled to receive had such Security been converted
immediately prior to the happening of such event.  An adjustment made pursuant to this subsection (a) shall
become effective immediately after the record date in the case of a dividend or
distribution and shall become effective immediately after the effective date in
the case of subdivision, combination or reclassification.


 


(b)           In case the Company
shall issue to all holders of its Common Stock, rights, warrants or options
entitling such holders (for a period commencing no earlier than the record date
described below and expiring not more than 60 days after such record date) to
subscribe for or purchase shares of Common Stock (or securities convertible
into Common


 


53

















 


Stock) at a price per share
less than the Market Price at the record date for the determination of
stockholders entitled to receive such rights, warrants or options, the
Conversion Price in effect immediately prior thereto shall be adjusted so that
the Conversion Price shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of shares of Common Stock
outstanding on such record date, plus the number of shares which the aggregate
subscription or purchase price for the total number of shares of Common Stock
offered by the rights, warrants or options so issued (or the aggregate
conversion price of the convertible securities offered by such rights, warrants
or options) would purchase at such Market Price, and the denominator of which
shall be the number of shares of Common Stock outstanding on such record date
plus the number of additional shares of Common Stock offered by such rights,
warrants or options (or into which the convertible securities so offered by
such rights, warrants or options are convertible).  Such adjustment shall be made successively whenever any such
rights, warrants or options are issued, and shall become effective immediately
after such record date.  If at the end
of the period during which such rights, warrants or options are exercisable not
all rights, warrants or options shall have been exercised, the adjusted
Conversion Price shall be immediately readjusted to what it would have been
upon application of the foregoing adjustment substituting the number of
additional shares of Common Stock actually issued (or the number of shares of
Common Stock issuable upon conversion of convertible securities actually
issued) for the total number of shares of Common Stock offered (or the
convertible securities offered).


 


(c)           In case the Company
shall distribute to all holders of its Common Stock any shares of Capital Stock
of the Company (other than Common Stock) or evidences of its indebtedness,
other securities or other assets, or shall distribute to all holders of its
Common Stock, rights, warrants or options to subscribe for or purchase any of its
securities (excluding (i) rights, options and warrants referred to in
Section 10.06(b) above; (ii) those dividends, distributions, subdivisions
and combinations referred to in Section 10.06(a) above; and (iii)
dividends and distributions paid in cash), then in each such case the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the date of such distribution by a fraction, the numerator of which shall be
the Market Price on the record date mentioned below less the fair market value
on such record date (as determined by the Board of Directors of the Company,
whose determination shall be conclusive evidence of such fair market value) of
the portion of the Capital Stock or evidences of indebtedness, securities or
assets so distributed or of such rights, warrants or options, in each case as
applicable, to one share of Common Stock, and the denominator of which shall be
the Market Price on such record date; provided that no adjustment to the
Conversion Price or the ability of a Holder of a Security to convert will be
made pursuant to this Section 10.06(c) if the Company provides that
Holders of Securities will participate in such cash dividend or distribution on
an as-converted basis without conversion and provided further, that if
the numerator of the foregoing fraction is less than $1.00 (including a
negative amount), then in lieu of the foregoing adjustment, adequate provision
shall be made so that each Holder shall have the right to receive upon
conversion, in addition to the Common Stock issuable upon such conversion, the
distribution such Holder would have received had such Holder converted its
Security immediately prior to the record date for such distribution.  Such adjustment shall become effective
immediately after the record date for the determination of stockholders
entitled to receive such distribution.


 


54

















 


(d)           In case a tender or
exchange offer made by the Company or any Subsidiary of the Company for all or
any portion of the Common Stock shall expire and such tender or exchange offer
(as amended as of the expiration thereof) shall require the payment to common
stockholders of consideration per share of Common Stock having a fair market
value (as determined by the Board of Directors, whose determination shall be
conclusive and described in a resolution of the Board of Directors) that as of
the last time (the “Expiration Time”) tenders or exchanges may be made
pursuant to such tender or exchange offer (as it may be amended) exceeds the
Closing Price of a share of Common Stock on the Trading Day next succeeding the
Expiration Time, the Conversion Price shall be decreased so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the Expiration Time by a fraction,


 


(i)            the
numerator of which shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) at the Expiration Time multiplied
by the Closing Price of a share of Common Stock on the Trading Day next
succeeding the Expiration Time, and


 


(ii)           the
denominator of which shall be the sum of (x) the fair market value (determined
as aforesaid) of the aggregate consideration payable to stockholders based on
the acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of all shares validly tendered or exchanged and not withdrawn
as of the Expiration Time (the shares deemed so accepted up to any such
maximum, being referred to as the “Purchased Shares”) and (y) the
product of the number of shares of Common Stock outstanding (less any Purchased
Shares) at the Expiration Time and the Closing Price of a share of Common Stock
on the Trading Day next succeeding the Expiration Time,


 


such adjustment to become
effective immediately prior to the opening of business on the day following the
Expiration Time.  If the Company is
obligated to purchase shares pursuant to any such tender or exchange offer, but
the Company is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price shall again
be adjusted to be the Conversion Price that would then be in effect if such
tender or exchange offer had not been made.


 


(e)           In case the Company
shall declare a cash dividend or distribution to all or substantially all of
the holders of Common Stock, the Conversion Price shall be decreased so that
the Conversion Price shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the record date for such
dividend or distribution by a fraction,


 


(i)            the
numerator of which shall be the average of the Closing Prices of the Common
Stock price for the three consecutive trading days ending on the date
immediately preceding the record date for such dividend or distribution (the “Pre-Dividend
Sale Price”), minus the full amount of such cash dividend or distribution
applicable to one share of Common Stock, and


 


(ii)           the
denominator of which shall be the Pre-Dividend Sale Price,


 


55

















 


such adjustment to become
effective immediately after the record date for such dividend or distribution; provided
that no adjustment to the Conversion Price or the ability of a Holder of a
Security to convert will be made pursuant to this Section 10.06(e) if the
Company provides that Holders of Securities will participate in such cash
dividend or distribution on an as-converted basis without conversion and provided
further, that if the numerator of the foregoing fraction is less
than $1.00 (including a negative amount), then in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder shall have the
right to receive upon conversion, in addition to the Common Stock issuable upon
such conversion, the amount of cash such Holder would have received had such
Holder converted its Security immediately prior to the record date for such
dividend or distribution.  If such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price that would then be in effect if
such dividend or distribution had not been declared.


 


(f)                                    Reserved.


 


(g)                                 If
the rights provided for in the Company’s Rights Agreement dated as of
May 9, 1996 (the “Stockholder Rights Plan”) have separated from the
Company’s Common Stock in accordance with the provisions of the Stockholder
Rights Plan so that the Holders of the Securities would not be entitled to receive
any rights in respect of Common Stock issuable upon conversion of the
Securities, the Conversion Price will be adjusted as provided in paragraph (c)
above, subject to readjustment in the event of the expiration, termination or
redemption of the rights.  In lieu of
any such adjustment, the Company may amend the Stockholder Rights Plan to
provide that upon conversion of the Securities the Holders will receive, in
addition to Common Stock issuable upon such conversion, the rights which would
have attached to such shares of Common Stock if the rights had not become
separated from the Common Stock under the Company’s Stockholder Rights
Plan.  To the extent that the Company
adopts any future rights plan, upon conversion of the Securities into Common
Stock, Securityholders will receive, in addition to Common Stock, the rights
under the future rights plan whether or not the rights have separated from the
Common Stock at the time of conversion and no adjustment to the Conversion
Price will be made in connection with any distribution of rights thereunder.


 


(h)                                 In
case of a tender or exchange offer made by a Person other than the Company or
any Subsidiary for an amount that increases the offeror’s ownership of Common
Stock to more than twenty-five percent (25%) of the Common Stock outstanding
and shall involve the payment by such Person of consideration per share of
Common Stock having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive, and described in a resolution
of the Board of Directors) as of the Expiration Time tenders or exchanges may
be made pursuant to such tender or exchange offer (as it may be amended) that
exceeds the Closing Price of a share of Common Stock on the Trading Day next
succeeding the Expiration Time, and in which, as of the Expiration Time the
Board of Directors is not recommending rejection of the offer, the Conversion
Price shall be decreased so that the same shall equal the rate determined by
multiplying the Conversion Price in effect immediately prior to the Expiration
Time by a fraction,


 


(i)                                     the numerator of
which shall be the number of shares of Common Stock outstanding (including any
tendered or exchanged shares) at the Expiration 


 


56

















 


Time multiplied by the Closing Price of a share of Common Stock on the
Trading Day next succeeding the Expiration Time, and


 


(ii)                                  the denominator of
which shall be the sum of (x) the fair market value (determined as aforesaid)
of the aggregate consideration payable to stockholders based on the acceptance
(up to any maximum specified in the terms of the tender or exchange offer) of
al shares validly tendered or exchanged and not withdrawn as of the Expiration
Time (the shares so accepted up to any such maximum, being referred to as the
“Purchase Shares”) and (y) the product of the number of shares of Common Stock
outstanding (less any Purchased Shares) at the Expiration Time and the Closing
Price of a share of Common Stock on the Trading Day next succeeding the
Expiration Time,


 


such adjustment to become
effective immediately prior to the opening of business on the day following the
Expiration Time.  If such Person is
obligated to purchase shares pursuant to any such tender or exchange offer, but
such Person is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price shall again
be adjusted to be the Conversion Price that would then be in effect if such
tender or exchange offer had not been made. 
Notwithstanding the foregoing, the adjustment described in this
Section 10.06(h) shall not be made if, as of the Expiration Time, the
offering documents with respect to such offer disclose a plan or intention to
cause the Company to engage in any transaction described in Article 5.


 


In any case in which this Section 10.06 shall require that an
adjustment be made immediately following a record date established for purposes
of Section 10.06, the Company may elect to defer (but only until five Business
Days following the filing by the Company with the Trustee of the certificate
described in Section 10.06) issuing to the holder of any Security
converted after such record date the shares of Common Stock and other Capital
Stock of the Company issuable upon such conversion over and above the shares of
Common Stock and
other Capital Stock of the Company issuable upon such conversion only on the
basis of the Conversion Price prior to adjustment; and, in lieu of the shares
the issuance of which is so deferred, the Company shall issue or cause its
transfer agents to issue due bills or other appropriate evidence of the right
to receive such shares.


 


Section 10.07.
 No
Adjustment.  No adjustment in the
Conversion Price shall be required unless the adjustment would require an
increase or decrease of at least 1% in the Conversion Price as last adjusted;
provided, however, that any adjustments which by reason of this
Section 10.07 are not required to be made shall be carried forward and
taken into account in any subsequent adjustment.  All calculations under this Article 10 shall be made to the
nearest cent or to the nearest one-hundredth of a share, as the case may be.


 


No adjustment need be made for a transaction referred to in
Section 10.06 if Holders are to participate in the transaction on a basis
and with notice that the Board of Directors determines to be fair and
appropriate in light of the basis and notice on which holders of Common Stock
participate in the transaction.  Such
participation by Holders may include 


 


57

















 


participation upon conversion;
provided that an adjustment shall be made at such time as the Holders are no
longer entitled to participate.


 


No adjustment need be made for rights to purchase Common Stock or
issuances of Common Stock pursuant to a Company plan for reinvestment of
dividends or interest.


 


No adjustment need be made for a change in the par value or a change to
no par value of the Common Stock.


 


To the extent that the Securities become convertible into cash, no
adjustment need be made thereafter as to the cash.  Interest will not accrue on the cash.


 


Section 10.08.  Equivalent Adjustments.  If, as a result of an adjustment made
pursuant to Section 10.06 above, the holder of any Security thereafter
surrendered for conversion shall become entitled to receive any shares of
Capital Stock of the Company other than shares of its Common Stock, thereafter
the Conversion Price of such other shares so receivable upon conversion of any
Securities shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
Common Stock contained in this Article 10.


 


Section 10.09.  Adjustment
for Tax Purposes.  The Company shall
be entitled to make such reductions in the Conversion Price, in addition to
those required by Section 10.06, as it in its discretion shall determine
to be advisable in order that any stock dividends, subdivision of shares,
distribution of rights to purchase stock or securities, or a distribution or
securities convertible into or
exchangeable for stock hereafter made by the Company to its stockholders shall
not be taxable.


 


Section 10.10.  Notice of Adjustment.  Whenever the Conversion Price is adjusted,
or Holders become entitled to other securities or due bills, the Company shall
promptly mail to Holders a notice of the adjustment and file with the Trustee
an Officers’ Certificate briefly stating the facts requiring the adjustment and
the manner of computing it.  The
certificate shall be conclusive evidence of the correctness of such adjustment
and the Trustee may conclusively assume that, unless and until such certificate
is received by it, no such adjustment is required.


 


Section 10.11.
 Notice of
Certain Transactions.  In case:


 


(a)                                  the
Company shall declare a dividend (or any other distribution) on its Common
Stock; or


 


(b)                                 the
Company shall authorize the granting to the holders of its Common Stock of
rights, warrants or options to subscribe for or purchase any share of any class
or any other rights, warrants or options; or


 


(c)                                  of
any reclassification of the Common Stock of the Company (other than a
subdivision or combination of its outstanding Common Stock, or a change in par
value, or from par value to no par value, or from no par value to par value),
or of any consolidation, merger, or 


 


58

















 


share exchange to which the Company is a
party and for which approval of any stockholders of the Company is required, or
of the sale or transfer of all or substantially all of the assets of the
Company; or


 


(d)                                 of
the voluntary or involuntary dissolution, liquidation or winding-up of the
Company;


 


the Company shall cause to be
filed with the Trustee and the Conversion Agent and to be mailed to each Holder
of Securities at its address appearing on the list provided for in
Section 2.05, as promptly as possible but in any event at least ten days
prior to the applicable date hereinafter specified, a notice stating (x) the
date on which a record is to be taken for the purpose of such dividend,
distribution or rights, warrants or options, 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 or rights are to be determined, or (y)
the date on which such reclassification, consolidation, merger, share exchange,
sale, transfer, dissolution, liquidation or winding-up is expected to become
effective or occur, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reclassification,
consolidation, merger, share exchange, sale, transfer, dissolution, liquidation
or winding-up.  Failure to give such
notice, or any defect therein, shall not affect the legality or validity of
such dividend, distribution, reclassification, consolidation, merger, sale,
share exchange, transfer, dissolution, liquidation or winding-up.


 


Section 10.12.  Effect of
Reclassification, Consolidation, Merger, Share Exchange or Sale on Conversion
Privilege.


 


If any of the following shall occur, namely:  (i) any reclassification or change of outstanding shares of
Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination); (ii) any consolidation, combination, merger or share exchange to
which the Company is a party other than a merger in which the Company is the
continuing corporation and which does not result in any reclassification of, or
change (other than a change in name, or par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination) in, outstanding shares of Common Stock; or (iii) any sale or
conveyance of all or substantially all of the assets of the Company, then the
Company, or such successor or purchasing corporation, as the case may be,
shall, as a condition precedent to such reclassification, change,
consolidation, merger, share exchange, sale or conveyance, execute and deliver
to the Trustee a supplemental indenture providing that the Holder of each
Security then outstanding shall have the right to convert such Security into
the kind and amount of shares of Capital Stock and other securities and
property (including cash) receivable upon such reclassification, change,
consolidation, merger, share exchange, sale or conveyance by a holder of the
number of shares of Common Stock deliverable upon conversion of such Security
immediately prior to such reclassification, change, consolidation, merger,
share exchange, sale or conveyance. 
Such supplemental indenture shall provide for adjustments of the Conversion
Price which shall be as nearly equivalent as may be practicable to the
adjustments of the Conversion Price provided for in this Article 10.  If, in the case of any such consolidation,
merger, share exchange, sale or conveyance, the stock or other securities and
property (including cash) receivable thereupon by a holder of 


 


59

















 


Common Stock includes shares of
Capital Stock or other securities and property of a corporation other than the
successor or purchasing corporation, as the case may be, in such consolidation,
merger, share exchange, sale or conveyance, then such supplemental indenture
shall also be executed by such other corporation and shall contain such
additional provisions to protect the interests of the Holders of the Securities
as the Board of Directors of the Company shall reasonably consider necessary by
reason of the foregoing.  The provision
of this Section 10.12 shall similarly apply to successive consolidations,
mergers, share exchanges, sales or conveyances.  Notwithstanding the foregoing, a distribution by the Company to
all or substantially all holders of its Common Stock for which an adjustment to
the Conversion Price or provision for conversion of the Securities may be made
pursuant to Section 10.06 shall not be deemed to be a sale or conveyance
of all or substantially all of the assets of the Company for purposes of this
Section 10.12.


 


In the event the Company shall execute a supplemental indenture
pursuant to this Section 10.12, the Company shall promptly file with the
Trustee an Opinion of Counsel stating that such supplemental indenture is
authorized or permitted by this Indenture and an Officers’ Certificate briefly
stating the reasons therefor, the kind or amount of shares of stock or
securities or property (including cash) receivable by Holders of the Securities
upon the conversion of their Securities after any such reclassification,
change, consolidation, merger, share exchange, sale or conveyance, any
adjustment to be made with respect thereto and that all conditions precedent
have been complied with.


 


Section 10.13.  Trustee’s
Disclaimer.


 


The Trustee has no duty to determine when an adjustment under this
Article 10 should be made, how it should be made or what such adjustment
should be made, but may accept as conclusive evidence of the correctness of any
such adjustment, and shall be protected in relying upon, the Officers’
Certificate with respect thereto which the Company is obligated to file with
the Trustee pursuant to Section 10.10. 
The Trustee shall not be accountable for and makes no representation as
to the validity or value of any securities or assets issued upon conversion of
Securities, and the Trustee shall not be responsible for the Company’s failure
to comply with any provisions of this Article 10.  Each Conversion Agent (other than the Company
or an Affiliate of the Company) shall have the same protection under this
Section 10.13 as the Trustee.


 


The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 10.12, but may accept as conclusive evidence of the
correctness thereof, and shall be protected in relying upon, the Officers’
Certificate with respect thereto which the Company is obligated to file with
the Trustee pursuant to Section 10.12.


 


Section 10.14.  Voluntary
Reduction.


 


The Company from time to time may reduce the Conversion Price by any
amount for any period of time if the period is at least 20 Trading Days or such
longer period as may be required by law and if the reduction is irrevocable
during the period; provided that in no event may the Conversion Price be less
than the par value of a share of Common Stock.


 


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Section 10.15.
 Simultaneous
Adjustments.


 


In the event that this Article 10 requires adjustments to the
Conversion Price under more than one of Sections 10.06(a) and (c), and the
record dates for the distributions giving rise to such adjustments shall occur
on the same date, then such adjustments shall be made by applying, first, the
provisions of Section 10.06(c), as applicable, and, second, the provisions
of Section 10.06(a).  If more than
one event requiring adjustment pursuant to Section 10.06 shall occur
before completing the determination of the Conversion Price for the first event
requiring such adjustment, then the Board of Directors (whose determination
shall, if made in good faith, be conclusive) shall make such adjustments to the
Conversion Price (and the calculation thereof) after giving effect to all such
events as shall preserve for Holders the Conversion Price protection provided
in Section 10.06.


 


ARTICLE 11



SUBORDINATION


 


Section 11.01.  Securities Subordinated to Senior
Indebtedness.


 


The Company covenants and agrees, and each Holder of the Securities, by
its acceptance thereof, likewise covenants and agrees, that all Securities
shall be issued subject to the provisions of this Article 11; and each
Person holding any Security, whether upon original issue or upon transfer,
assignment or exchange thereof, accepts and agrees that the payment of all
Obligations on the Securities by the Company shall, to the extent and in the
manner herein set forth, be subordinated and junior in right of payment to the
prior payment in full in cash or Cash Equivalents of all Obligations on Senior
Indebtedness, including, without limitation, the Company’s Obligations under
the Credit Agreement; that the subordination is for the benefit of, and shall
be enforceable directly by, the holders of Senior Indebtedness or their
Representative, and that each holder of Senior Indebtedness or their
Representative whether now outstanding or hereafter created, incurred, assumed
or guaranteed shall be deemed to have acquired Senior Indebtedness in reliance
upon the covenants and provisions contained in this Indenture and the
Securities.


 


Section 11.02.  Payments to Holders.


 


No payment shall be made with respect to the Obligations on the
Securities (including, but not limited to, the Change in Control Purchase Price
with respect to the Securities subject to purchase in accordance with
Article 3 as provided in this Indenture), except payments and
distributions made by the Trustee as permitted by the first or second paragraph
of Section 11.05, if:


 


(i)                                     a default in the
Obligations due on any Designated Senior Indebtedness occurs and is continuing
(or, in the case of Designated Senior Indebtedness 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 Designated Senior
Indebtedness); or


 


(ii)                                  a default, other than
a payment default, on any Designated Senior Indebtedness occurs and is
continuing that then permits holders of such 


 


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Designated Senior Indebtedness to accelerate its maturity and the
Trustee receives a notice of the default (a “Payment Blockage Notice”)
from a Representative or holder of Designated Senior Indebtedness or the Company.


 


Subject to the provisions of Section 11.05, 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 consecutive days shall have elapsed
since the effectiveness of the immediately prior Payment Blockage Notice and
all scheduled payments on the Securities that have come due have been paid in
full in cash.  No nonpayment default
that existed or was continuing on the date of delivery of any Payment Blockage
Notice to the Trustee (unless such default was waived, cured or otherwise
ceased to exist for a period of at least 60 consecutive days prior to the date
of such subsequent Payment Blockage Notice and thereafter subsequently
reoccurred) 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:


 


(a)  in the case of a default
referred to in clause (i) above, upon the date upon which the default is
cured or waived or ceases to exist, or


 


(b)  in the case of a default
referred to in clause (ii) above, upon the earlier of (1) the date on
which such default is cured or waived or ceases to exist or (2) 179 days after
the date on which the applicable Payment Blockage Notice is received, if the
maturity of such Designated Senior Indebtedness has not been accelerated,
unless this Article 11 otherwise prohibits the payment or distribution at
the time of such payment or distribution.


 


Upon any payment by the Company, 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,
receivership or similar proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash, or other payments
satisfactory to the holders of Senior Indebtedness before any payment is made
on account of the principal of, premium, if any, or interest (including
Contingent Interest and Liquidated Damages, if any) on the Securities (except
payments made pursuant to Article 8 from monies deposited with the Trustee
pursuant thereto prior to commencement of proceedings for such dissolution,
winding-up, liquidation or reorganization); and upon any such dissolution or
winding-up or liquidation or reorganization of the Company or bankruptcy,
insolvency, receivership or other proceeding, any payment by the Company, or
distribution of assets 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 11,
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
Indebtedness (pro rata to such holders on the basis of the respective amounts
of Senior Indebtedness held by such holders, or as otherwise required by law or
a court order) or their Representative or 


 


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Representatives, as their
respective interests may appear, to the extent necessary to pay all Senior
Indebtedness in full in cash, or other payment satisfactory to the holders of Senior
Indebtedness, after giving effect to any concurrent payment or distribution to
or for the holders of Senior Indebtedness, before any payment or distribution
is made to the Holders of the Securities or to the Trustee.


 


For purposes of this Article 11, 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 11 with respect to the Securities to the payment of all Senior
Indebtedness which may at the time be outstanding; provided  that
(i) the Senior Indebtedness is assumed by the new corporation, if any,
resulting from any reorganization or readjustment, and (ii) the rights of
the holders of Senior Indebtedness (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, transfer or lease of its
property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided for in Article 5 shall
not be deemed a dissolution, winding-up, liquidation or reorganization for the
purposes of this Section 11.02 if such other corporation shall, as a part
of such consolidation, merger, conveyance, transfer or lease, comply with the
conditions stated in Article 5.


 


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 (including Contingent Interest and Liquidated Damages, if any) on the
Securities by the Company (including, but not limited to, the Change in Control
Purchase Price with respect to the Securities subject to purchase in accordance
with Article 3 as provided in this Indenture), except payments and
distributions made by the Trustee as permitted by Section 11.05, until all
Senior Indebtedness has been paid in full in cash or other payment satisfactory
to the holders of Senior Indebtedness 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 Indebtedness of such
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 Indebtedness is paid
in full, in cash or other payment satisfactory to the holders of Senior
Indebtedness, or provision is made for such payment thereof in accordance with
its terms in cash or other payment satisfactory to the holders of Senior
Indebtedness, 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
Indebtedness or their Representative or Representatives, as their respective
interests may appear, as calculated by the Company, for application to the
payment of all Senior Indebtedness remaining unpaid to the extent necessary to
pay all Senior Indebtedness in full, in cash or other 


 


63

















 


payment satisfactory to the
holders of Senior Indebtedness, after giving effect to any concurrent payment
or distribution to or for the holders of such Senior Indebtedness.


 


Nothing in this Section 11.02 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 7.07.  This Section 11.02 shall be subject to
the further provisions of Section 11.05.


 


Section 11.03.  Subrogation of Securities.


 


Subject to the payment in full, in cash or other payment satisfactory
to the holders of Senior Indebtedness, of all Senior Indebtedness, 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 Indebtedness
pursuant to the provisions of this Article 11 (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 Indebtedness to receive payments or
distributions of cash, property or securities of the Company applicable to the
Senior Indebtedness until the Obligations on the Securities shall be paid in
full in cash or other payment satisfactory to the holders of the Securities;
and, for the purposes of such subrogation, no payments or distributions to the
holders of the Senior Indebtedness 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 11, and no payment over pursuant to the
provisions of this Article 11, to or for the benefit of the holders of
Senior Indebtedness by Holders of the Securities or the Trustee, shall, as
between the Company, its creditors other than holders of Senior Indebtedness,
and the Holders of the Securities, be deemed to be a payment by the Company to
or on account of the Senior Indebtedness; 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 11,
which would otherwise have been paid to the holders of Senior Indebtedness
shall, as between the Company and its creditors other than Holders of the
Securities, 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 11 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 Indebtedness, on the other hand.


 


Nothing contained in this Article 11 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 Indebtedness, 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 Obligations 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 Indebtedness, nor shall anything herein or therein prevent the
Trustee or the Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article 11 of the holders of Senior
Indebtedness in respect of cash, property or securities of the Company received
upon the exercise of any such remedy.


 


64

















 


Upon any payment or distribution of assets of the Company referred to
in this Article 11, the Trustee, 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 Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon and all
other facts pertinent thereto or to this Article 11.


 


Section 11.04.  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 11 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 11.03
hereof at least 30 days before the expiration of the time to file such claim,
the holders of any Senior Indebtedness or their representatives are hereby authorized
to file an appropriate claim for and on behalf of the Holders of the
Securities.


 


Section 11.05.  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 11.  Notwithstanding the provisions of this
Article 11 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 11, 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 Indebtedness
or from any trustee thereof; and before the receipt of any such written notice,
the Trustee, subject to the provisions of Section 7.01, shall be entitled
in all respects to assume that no such facts exist; provided  that
if on a date not less than three 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 (including Contingent Interest and Liquidated Damages, if any) on any
Security) the Trustee shall not have received, with respect to such monies, the
notice provided for in this Section 11.05, then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such monies and to apply 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 11 to the contrary, nothing shall prevent any payment by the
Trustee to the Holders of monies deposited with it pursuant to Article 8,
and any such payment shall not be subject to the provisions of Article 11.


 


65

















 


The Trustee, subject to the provisions of Section 7.01, 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 Indebtedness (or a trustee
on behalf of such holder) to establish that such notice has been given by a
Representative or a holder of Senior Indebtedness or a trustee on behalf of any
such holder or holders.  In the event
that the Trustee determines in good faith that further evidence is required
with respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article 11,
the Trustee may request such Person to furnish evidence to the reasonable satisfaction
of the Trustee as to the amount of Senior Indebtedness 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 11, and if such evidence is not furnished the Trustee may
defer any payment to such Person pending judicial determination as to the right
of such Person to receive such payment.


 


Section 11.06.  Trustee’s Relation to Senior Indebtedness.


 


The Trustee in its individual capacity shall be entitled to all of the
rights set forth in this Article 11 in respect of any Senior Indebtedness
at any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in Section 7.11 or elsewhere in this Indenture
shall deprive the Trustee of any of its rights as such holder.


 


With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 11, and no implied covenants
or obligations with respect to the holders of Senior Indebtedness 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 Indebtedness and, the Trustee shall not be liable to any holder of
Senior Indebtedness or any Representative 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 Indebtedness or such Representative shall be entitled by
virtue of this Article 11 or otherwise.


 


Section 11.07.
 No
Impairment of Subordination.


 


No right of any present or future holder of any Senior Indebtedness 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 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.


 


Section 11.08.  Certain Conversions Deemed Payment.


 


For the purposes of this Article 11 only, (1) the issuance
and delivery of junior securities upon conversion of Securities in accordance
with Article 10 shall not be deemed to constitute a payment or
distribution on account of the principal of (or premium, if any) or interest
(including Contingent Interest and Liquidated Damages, if any) on Securities or
on account of the purchase or other acquisition of Securities, and (2) the
payment, issuance or delivery of cash 


 


66

















 


(except in satisfaction of
fractional shares pursuant to Section 10.02), property or securities
(other than junior securities) upon conversion of a Security shall be deemed to
constitute payment on account of the principal of such Security.  For the purposes of this Section 11.08,
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 Indebtedness 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 11 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 Indebtedness and the Holders, the right, which is
absolute and unconditional, of the Holder of any Security to convert such
Security in accordance with Article 10.


 


Section 11.09.  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 11.05 shall not apply to the Company
or any Affiliate of the Company if it or such Affiliate acts as Paying Agent.


 


Section 11.10.
 Senior
Indebtedness Entitled to Rely.


 


The holders of Senior Indebtedness (including, without limitation,
Designated Senior Indebtedness) shall have the right to rely upon this Article 11,
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.


 


ARTICLE 12



MISCELLANEOUS


 


Section 12.01.  Trust Indenture Act Controls.


 


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


 


Section 12.02.  Notices.


 


Any request, demand, authorization, notice, waiver, consent or
communication shall be in writing and delivered in person or mailed by
first-class mail, postage prepaid, addressed as follows, or transmitted by
facsimile transmission (confirmed orally) to the following facsimile numbers:


 


67

















 


if to the Company, to:


 


Griffon Corporation

100 Jericho Quadrangle

Jericho, New York  11753
Attention:
Secretary

Facsimile No.:  (516) 822-4824


 


if to the Trustee, to:


 


American Stock Transfer & Trust Company

59 Maiden Lane


New York, NY 10038

Attn: Corporate Trust Department
Facsimile No.:
(718) 331-1852


 


The Company or the Trustee by notice given to the other in the manner
provided above may designate additional or different addresses for subsequent
notices or communications.


 


Any notice or communication given to a Holder shall be mailed to the
Holder, by first-class mail, postage prepaid, at the Holder’s address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.


 


Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders.  If a notice or communication is mailed in
the manner provided above, it is duly given, whether or not received by the
addressee.


 


If the Company mails a notice or communication to the Holders, it shall
mail a copy to the Trustee and each Registrar, Paying Agent, Conversion Agent
or co-registrar.


 


Section 12.03.  Communication by Holders with Other
Holders.


 


Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the
Securities.  The Company, the Trustee,
the Registrar, the Paying Agent, the Conversion Agent and anyone else shall
have the protection of TIA Section 312(c).


 


Section 12.04.  Certificate and Opinion as to Conditions
Precedent.


 


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


 


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


 


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


 


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 eligible and qualified 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 the information on which counsel is
relying 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 12.05.  Statements Required in Certificate or
Opinion.


 


Each Officers’ Certificate or Opinion of Counsel with respect to
compliance with a covenant or condition provided for in this Indenture shall
include:


 


(a)                                  a
statement that each person making such Officers’ Certificate or Opinion of
Counsel has read such covenant or condition;


 


(b)                                 a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such Officers’ Certificate
or Opinion of Counsel are based;


 


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


 


(d)                                 a
statement that, in the opinion of such person, such covenant or condition has
been complied with.


 


69

















 


Section 12.06.  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 12.07.  Rules by Trustee, Paying Agent,
Conversion Agent and Registrar.


 


The Trustee may make reasonable rules for action by or a meeting of
Holders.  The Registrar, the Conversion
Agent and the Paying Agent may make reasonable rules for their functions.


 


Section 12.08.  Legal Holidays.


 


A “Legal Holiday” is any day other than a Business Day.  If any specified date (including a date for
giving notice) is a Legal Holiday, the action shall be taken on the next
succeeding day that is not a Legal Holiday, and, if the action to be taken on
such date is a payment in respect of the Securities, no interest (including
Contingent Interest or Liquidated Damages, if any), shall accrue for the
intervening period.


 


Section 12.09.
 Governing
Law.


 


THIS INDENTURE AND EACH NOTE SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.


 


Section 12.10.  No Recourse Against Others.


 


A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or for any claim based on, in respect of or by reason of such
obligations or their creation.  By
accepting a Security, each Securityholder shall waive and release all such
liability.  The waiver and release shall
be part of the consideration for the issue of the Securities.


 


Section 12.11.  Successors.


 


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


 


Section 12.12.  Multiple Originals.


 


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


 


70

















 


IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this Indenture on behalf of the respective parties hereto as of the
date first above written.


 


 


	
   

  	
  GRIFFON
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Edward I. Kramer

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Edward
  I. Kramer

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President, Administration and

  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AMERICAN
  STOCK TRANSFER & TRUST

  COMPANY, as Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Herbert J. Lemmer

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Herbert
  J. Lemmer

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
					



 


71

















 


EXHIBIT A-1


 


{FORM OF FACE OF GLOBAL SECURITY}


 


[INCLUDE THE FOLLOWING LEGEND ON RESTRICTED SECURITIES:


 


THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS SECURITY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM.  EACH
PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.  THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY SUBSEQUENT PURCHASER OF THIS SECURITY FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.


 


THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON
SATISFACTION OF THE CONDITIONS SPECIFIED IN THE INDENTURE.]


 


THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR UNITED STATES
FEDERAL INCOME TAX PURPOSES.  FOR
PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THE ISSUE
PRICE OF EACH SECURITY IS $1,000 PER $1,000 OF PRINCIPAL AMOUNT, THE ISSUE DATE
IS JULY 18, 2003 AND THE COMPARABLE YIELD IS 8.50% PER ANNUM.  HOLDERS OF THIS SECURITY MAY OBTAIN
INFORMATION REGARDING THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, YIELD TO MATURITY
AND THE PROJECTED PAYMENT SCHEDULE FOR THIS SECURITY BY SUBMITTING A WRITTEN
REQUEST FOR SUCH INFORMATION TO: 
GRIFFON CORPORATION, 100 JERICHO QUADRANGLE, JERICHO, NEW YORK  11753, ATTN.: SECRETARY, SUCH INFORMATION TO BE MADE AVAILABLE, BEGINNING NO
LATER THAN 10 DAYS AFTER THE ISSUE DATE, PROMPTLY UPON REQUEST.


 


UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO GRIFFON CORPORATION (THE “COMPANY”) OR ITS
AGENT FOR REGISTRATION OF 


 


A-1-1

















 


TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.


 


TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO
NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.


 


A-1-2

















 


GRIFFON CORPORATION


 


4.0%
Contingent Convertible Subordinated Notes Due 2023


 


	
  No.:

  	
   

  	
  CUSIP:

  
	
   

  	
   

  	
   

  
	
  Issue
  Date:

  	
   

  	
  Principal
  Amount:

  



 


GRIFFON CORPORATION, a Delaware corporation, promises to pay to Cede
& Co. or registered assigns, the principal amount as set forth on
Schedule I hereto, on July 18, 2023, subject 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.  This Security is convertible as
specified on the other side of this Security.


 


Interest Payment Dates: 
January 18 and July 18, commencing January 18, 2004.


 


Record Dates:  January 1
and July 1, commencing January 1, 2004.


 


 


	
  Dated:

  	
  GRIFFON CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


A-1-3

















 


TRUSTEE’S CERTIFICATE OF
AUTHENTICATION


 


American Stock Transfer &
Trust Company, as Trustee, certifies that this is one of the Securities
referred to in the within-mentioned Indenture.


 


	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  
	
   

  	
   

  
	
  Dated:

  



 


A-1-4

















 


{FORM OF REVERSE SIDE OF NOTE}



GRIFFON CORPORATION


4.0%
Contingent Convertible Subordinated Notes Due 2023


 


(1)                                  Interest.


 


This Security shall accrue interest at an initial rate of 4.0% per annum.  The Company promises to pay interest on the
Securities in cash semiannually on each January 18 and July 18,
commencing January 18, 2004, to Holders of record on the immediately
preceding January 1 and July 1, respectively.  Interest on the Securities will accrue from
the most recent date to which interest has been paid, or if no interest has
been paid, from the Issue Date, until the principal amount is paid or duly made
available for payment.  The Company will
pay interest on any overdue principal amount at the interest rate borne by the
Securities at the time such interest on the overdue principal amount accrues,
compounded semiannually, and it shall pay interest on overdue installments of
interest and Liquidated Damages, if any (without regard to any applicable grace
period), at the same interest rate, compounded semiannually.  Interest (including Contingent Interest and
Liquidated Damages, if any) on the Securities will be computed on the basis of
a 360-day year comprised of twelve 30-day months.


 


The Company shall pay additional interest (“Contingent Interest”)
to the Holders during any six-month period (a “Contingent Interest Period”)
from July 18 to,
but excluding, January 18 and
from January 18 to, but
excluding, July 18, with the initial six-month period commencing
July 18, 2010, if the
average of the Security Trading Price for the five Trading Days ending on the
third Trading Day immediately preceding the first day of the applicable
Contingent Interest Period (the “Contingent Interest Average Trading Price”)
equals $1,200 or more.  The amount of
Contingent Interest payable per $1,000 principal amount of Securities in
respect of any Contingent Interest Period shall equal 0.50% per annum on the
Contingent Interest Average Trading Price. 
The Company will pay Contingent Interest, if any, in the same manner as
it will pay interest as described above.


 


Upon determination that Holders will be entitled to receive Contingent
Interest for a Contingent Interest Period, on or prior to the first day of such
Contingent Interest Period, the Company shall issue a press release.


 


(2)                                  Method of Payment.


 


The Company will pay interest (including Contingent Interest and
Liquidated Damages, if any), on this Security to the Person who is the
registered Holder of this Security at the close of business on January 1
or July 1, as the case may be, immediately preceding the related interest
payment date.  Subject to the terms and
conditions of the Indenture, the Company will make payments in respect of the
Redemption Price, Purchase Price, Change in Control Purchase Price and the
principal amount at Stated Maturity, as the case may be, to the Holder who
surrenders a Security to a Paying Agent to collect such payments in respect of
the Security.  The Company will pay cash
amounts in money of the United States that at the time of payment is legal
tender for payment of public and private debts.  However, the Company may pay interest 


 


A-1-5

















 


(including Contingent Interest
and Liquidated Damages, if any), the Redemption Price, Purchase Price, Change
in Control Purchase Price and the principal amount at Stated Maturity, as the
case may be, by check or wire payable in such money; provided, however,
that a Holder holding Securities with an aggregate principal amount in excess
of $1,000,000 may request payment by wire transfer in immediately available
funds to an account in North America at the election of such Holder.  The Company may mail an interest check to
the Holder’s registered address.  Notwithstanding
the foregoing, so long as this Security is registered in the name of a
Depositary or its nominee, all payments hereon shall be made by wire transfer
of immediately available funds to the account of the Depositary or its nominee.


 


(3)                                  Paying Agent,
Conversion Agent and Registrar.


 


Initially, American Stock Transfer & Trust Company (the “Trustee”)
will act as Paying Agent, Conversion Agent and Registrar.  The Company may appoint and change any
Paying Agent, Conversion Agent or Registrar without notice, other than notice
to the Trustee; provided that the Company will maintain at least one Paying
Agent having an office or agency in the State of New York, City of New York,
Borough of Manhattan, which shall initially be an office or agency of the Trustee.  The Company or any of its Subsidiaries or
any of their Affiliates may act as Paying Agent, Conversion Agent or Registrar.


 


(4)                                  Indenture.


 


The Company issued the Securities under an Indenture dated as of
July 18, 2003 (the “Indenture”), between the Company and the
Trustee.  The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as in effect from time to time
(the “TIA”).  Capitalized terms
used herein and not defined herein have the meanings ascribed thereto in the
Indenture.  The Securities are subject
to all such terms, and Holders are referred to the Indenture and the TIA for a
statement of those terms.


 


The Securities are general unsecured obligations of the Company limited
to up to $150,000,000 aggregate principal amount (which shall include the
Initial Purchasers’ option to purchase $25,000,000 of additional
Securities).  The Indenture does not
limit other indebtedness of the Company, secured or unsecured.


 


(5)                                  Redemption at the
Option of the Company.


 


No sinking fund is provided for the Securities.  Beginning on July 26, 2010 and during the periods
thereafter to maturity, the Securities are redeemable as a whole, or from time
to time in part, in any integral multiple of $1,000, at any time at the option
of the Company at a Redemption Price equal to 100% of the principal amount,
together with accrued but unpaid interest, thereon (including Contingent
Interest and Liquidated Damages, if any), up to but not including the
Redemption Date; provided that, if the Redemption Date is on or after an
interest record date but on or prior to the related interest payment date,
interest will be payable to the Holders in whose names the Securities are
registered at the close of business on the relevant record date.


 


A-1-6

















 


(6)                                  Purchase By the
Company at the Option of the Holder; Purchase at the Option of the Holder Upon
a Change in Control.


 


Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, all or any portion
of the Securities held by such Holder, in any integral multiple of $1,000, on
July 18, 2010,
July 18, 2013 and July 18, 2018 (each, a “Purchase Date”) at a purchase price per Security equal
to 100% of the aggregate principal amount of the Security (the “Purchase
Price”), together with accrued but unpaid interest (including Contingent
Interest and Liquidated Damages, if any), thereon, up to but not including the
Purchase Date upon delivery of a Purchase Notice containing the information set
forth in the Indenture, together with the Securities subject thereto, at any
time from the opening of business on the date that is 30 Business Days prior to
such Purchase Date until the close of business on the Business Day prior to
such Purchase Date, and upon delivery of the Securities to the Paying Agent by
the Holder as set forth in the Indenture.


 


At the option of the Holder and subject to the terms and conditions of
the Indenture, the Company shall become obligated to purchase the Securities
held by such Holder after the occurrence of a Change in Control of the Company
for a Change in Control Purchase Price equal to 100% of the principal amount
thereof plus accrued but unpaid interest (including Contingent Interest and
Liquidated Damages, if any), thereon, up to but not including the Change in
Control Purchase Date which Change in Control Purchase Price shall be paid in
cash  (provided that, if the Change in Control
Purchase Date is on or after an interest record date but on or prior to the
related interest payment date, accrued but unpaid interest will be payable to
the Holders in whose names the Securities are registered at the close of
business on the relevant record date).  Holders
have the right to withdraw any Purchase Notice or Change in Control Purchase
Notice, as the case may be, by delivering to the Paying Agent a written notice
of withdrawal in accordance with the provisions of the Indenture.


 


If cash sufficient to pay the Purchase Price or Change in Control
Purchase Price, as the case may be, and accrued but unpaid interest (including
Contingent Interest and Liquidated Damages, if any), on all Securities or
portions thereof to be purchased as of the Purchase Date or the Change in
Control Purchase Date, as the case may be, is deposited with the Paying Agent
on the Business Day prior to the Purchase Date or the Change in Control
Purchase Date, interest (including Contingent Interest and Liquidated Damages,
if any), shall cease to accrue on such Securities (or portions thereof) as of
such Purchase Date or Change in Control Purchase Date, and the Holder thereof
shall have no other rights as such other than the right to receive the Purchase
Price or Change in Control Purchase Price, as the case may be, and interest
(including Contingent Interest and Liquidated Damages, if any), upon surrender
of such Security.


 


(7)                                  Notice of
Redemption.


 


Notice of redemption pursuant to paragraph 5 of this Security will be
mailed at least 30 days but not more than 60 days before the Redemption Date to
each Holder of Securities to be redeemed at the Holder’s registered
address.  If money sufficient to pay the
Redemption Price of all Securities (or portions thereof) to be redeemed on the
Redemption Date is deposited with the Paying Agent prior to or on the
Redemption Date, immediately after such Redemption 


 


A-1-7

















 


Date, interest (including
Contingent Interest and Liquidated Damages, if any) cease to accrue on such
Securities or portions thereof. 
Securities in denominations larger than $1,000 of principal amount may
be redeemed in part but only in integral multiples of $1,000 of principal
amount.


 


(8)                                  Conversion.


 


Subject to the provisions of Article 10 of the Indenture, a Holder
of a Security may convert such Security into shares of Common Stock of the
Company if any of the conditions specified in paragraphs (a) through (e) of
Section 10.01 of the Indenture is satisfied; provided, however,
that if such Security is called for redemption, the conversion right will
terminate at the close of business on the second Business Day immediately
preceding the Redemption Date of such Security (unless the Company shall
default in making the redemption payment when due, in which case the conversion
right shall terminate at the close of business on the date such Default is
cured and such Security is redeemed). 
The initial conversion price is $24.13 per share, subject to adjustment
under certain circumstances as described in the Indenture (the “Conversion
Price”).  The number of shares
issuable upon conversion of a Security is determined by dividing the principal
amount of Securities converted by the Conversion Price in effect on the
Conversion Date. In the event of a conversion of a Security, the Company has
the option to deliver the Cash Conversion Price to the Holder of the Security
surrendered for such conversion as provided in Section 10.02 of the
Indenture.  Upon conversion, no
adjustment for interest (including Contingent Interest and Liquidated Damages,
if any), or dividends will be made.  No
fractional shares will be issued upon conversion; in lieu thereof, an amount
will be paid in cash based upon the current market price (as defined in the
Indenture) of the Common Stock on the last Trading Day prior to the date of
conversion.


 


To convert a Security, a Holder must (a) complete and sign the
conversion notice set forth below and deliver such notice to the Conversion
Agent, (b) surrender the Security to the Conversion Agent, (c) furnish
appropriate endorsements and transfer documents if required by the Registrar or
the Conversion Agent, (d) pay any transfer or similar tax, if required and (e)
if the Security is held in book-entry form, complete and deliver to the
Depositary appropriate instructions pursuant to the Depositary’s book-entry
conversion programs.  If a Holder
surrenders a Security for conversion between the record date for the payment of
an installment of interest and the related interest payment date, the Security
must be accompanied by payment of an amount equal to the interest (including
Contingent Interest and Liquidated Damages, if any), payable on such interest
payment date on the principal amount of the Security or portion thereof then
converted; provided, however, that no such payment shall be
required if such Security has been called for redemption on a Redemption Date
within the period between and including such record date and such interest
payment date, or if such Security is surrendered for conversion on the interest
payment date.  A Holder may convert a
portion of a Security equal to $1,000 or any integral multiple thereof.


 


A Security in respect of which a Holder has delivered a Purchase Notice
or a Change of Control Purchase Notice exercising the option of such Holder to
require the Company to repurchase such Security as provided in
Section 3.08 or Section 3.09, respectively, of the Indenture may be
converted only if such notice of exercise is withdrawn in accordance with the
terms of the Indenture.


 


A-1-8

















 


(9)                                  Denominations;
Transfer; Exchange.


 


The Securities are in fully registered form, without coupons, in
denominations of $1,000 of principal amount and integral multiples of
$1,000.  A Holder may transfer or
exchange Securities in accordance with the Indenture.  The Registrar may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture.  The
Registrar need not transfer or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or any Securities in respect of which a Purchase
Notice or a Change in Control Purchase Notice has been given and not withdrawn
(except, in the case of a Security to be purchased in part, the portion of the
Security not to be purchased) or any Securities for a period of 15 days before the
mailing of a notice of redemption of Securities to be redeemed.


 


(10)                            Persons Deemed Owners.


 


The registered Holder of this Security may be treated as the owner of
this Security for all purposes.


 


(11)                            Unclaimed Money or
Securities.


 


The Trustee and the Paying Agent shall return to the Company upon
written request any money or securities held by them for the payment of any
amount with respect to the Securities that remains unclaimed for two years,
subject to applicable unclaimed property law. 
After return to the Company, Holders entitled to the money or securities
must look to the Company, for payment as general creditors unless an applicable
abandoned property law designates another person.


 


(12)                            Amendment; Waiver.


 


Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
at the time outstanding and (ii) certain Defaults may be waived with the written
consent of the Holders of a majority in aggregate principal amount of the
Securities at the time outstanding. 
Subject to certain exceptions set forth in the Indenture, without the
consent of any Securityholder, the Company and the Trustee may amend the
Indenture or the Securities (i) to cure any ambiguity, omission, defect or
inconsistency, or make any other change that does not adversely affect the
rights of any Holder, (ii) to comply with Article 5 or Section 10.12
of the Indenture, (iii) to make provisions with respect to the conversion right
of Holders pursuant to the requirements of Section 10.12 and
Section 10.01 of the Indenture, (iv) to evidence and provide for the
acceptance of appointment under the Indenture by a successor Trustee, or (v) to
comply with the provisions of the TIA or any requirement of the SEC in
connection with the qualification of the Indenture under the TIA.


 


A-1-9

















 


(13)                            Defaults and Remedies.


 


Except as set forth in the Indenture, if an Event of Default occurs and
is continuing, the Trustee or the Holders of not less than 25% in principal
amount of Securities then outstanding may declare all the Securities to be due
and payable in the manner, at the time and with the effect provided in the
Indenture.  Holders of Securities may
not enforce the Indenture or the Securities except as provided in the
Indenture.  The Trustee is not obligated
to enforce the Indenture or the Securities unless it has received indemnity
reasonably satisfactory to it.  The
Indenture permits, subject to certain limitations therein provided, Holders of
a majority in aggregate principal amount of the Securities then outstanding to
direct the Trustee in its exercise of any trust or power.  The Trustee may withhold from Holders of
Securities notice of any continuing Default or Event of Default (except a
Default in payment of principal, premium, if any, or interest when due, for any
reason, or a Default in compliance with Article 5 of the Indenture) if it
determines in good faith that withholding notice is in the interest of Holders.


 


(14)                            Trustee Dealings with
the Company.


 


Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.


 


(15)                            No Recourse Against
Others.


 


A director, officer, employee or shareholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. 
By accepting a Security, each Securityholder waives and releases all
such liability.  The waiver and release
are part of the consideration for the issue of the Securities.


 


(16)                            Ranking.


 


The Securities shall be direct, unsecured subordinated obligations of
the Company and shall and be subject to the provisions regarding subordination
contained in Article 11 of the Indenture. 
The Securities are not guaranteed.


 


(17)                            Subordination.


 


The Securities are subordinated in right of payment, in the manner and
to the extent set forth in the Indenture, to the prior payment in full in cash
or Cash Equivalents of all Obligations on Senior Indebtedness of the Company,
whether outstanding on the date of the Indenture or thereafter created,
incurred, assumed or guaranteed.  Each
Holder by its acceptance hereof agrees to be bound by such provisions and
authorizes and expressly directs the Trustee, on its behalf, to take such
action as may be necessary or appropriate to effectuate the subordination
provided for in the Indenture and appoints the Trustee its attorney-in-fact for
such purposes.


 


A-1-10

















 


(18)                            Authentication.


 


This Security shall not be valid until an authorized signatory of the
Trustee manually signs the Trustee’s Certificate of Authentication on the other
side of this Security.


 


(19)                            Abbreviations.


 


Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (“Tenants In Common”), TEN ENT (“Tenants By
The Entireties”), JT TEN (“Joint Tenants With Right Of Survivorship And Not
As Tenants In Common”), CUST (“Custodian”) and U/G/M/A (“Uniform
Gift To Minors Act”).


 


(20)                            Governing Law.


 


THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
SECURITY.


 


(21)                            CUSIP Numbers.


 


Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities.  No representation is made as to the accuracy
of such numbers as printed on the Securities and reliance may be placed only on
the other identification numbers printed hereon.


 


A-1-11

















 


	
  ASSIGNMENT FORM

  	
   

  	
  CONVERSION NOTICE

  
	
   

  	
   

  	
   

  
	
  To
  assign this Security, fill in the form below

  	
   

  	
  To
  convert this Security into Common Stock of the Company, check the box  o

  
	
   

  	
   

  	
   

  
	
  I
  or we assign and transfer this Security to

  	
   

  	
  To
  convert only part of this Security, state the principal amount to be
  converted (which must be $1,000 or an integral multiple of $1,000):

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Insert assignee’s soc.  sec.  or tax ID no.)

  	
   

  	
   

  
	
   

  	
   

  	
  If
  you want the stock certificate made out in another person’s name fill in the
  form below:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Print
  or type assignee’s name, address and zip code)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  and
  irrevocably appoint
                          
  agent to transfer this Security on the books of the Company.  The agent may substitute another to act
  for him.

  	
   

  	
  (Insert
  the other person’s soc.  sec.  tax ID no.)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Print
  or type other person’s name, address 
  and zip code)

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
  Your
  Signature:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Sign
  exactly as your name appears on the other side of this Security)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature Guaranteed

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Participant in a Recognized Signature 

  Guarantee Medallion Program

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
   

  	
   

  
							



 


A-1-12

















 


FORM OF PURCHASE
NOTICE


 


To:  Griffon Corporation


 


The undersigned registered holder of this Security requests and
instructs the Company to purchase this Security, or the portion hereof (which
is $1,000 principal amount or a multiple thereof) designated below, on the
July 18 specified below, in accordance with the terms and conditions specified
in paragraph 6 of this Security and the Indenture referred to in this Security
and directs that the check in payment for this Security or the portion thereof
and any Securities representing the portion of principal amount hereof not to
be so purchased, be issued and delivered to the registered holder hereof unless
a different name has been indicated below. 
If any portion of this Security not purchased is to be issued in the
name of a Person other than the undersigned, the undersigned shall pay all
transfer taxes payable with respect thereto.


 


	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature(s)

  
	
   

  	
   

  
	
  Fill in for registration of
  Securities

  not purchased if to be issued other

  than to and in the name of registered holder:

  
	
   

  
	
   

  
	
  (Name)

  
	
   

  
	
   

  
	
  (Street Address)

  
	
   

  
	
   

  
	
  (City, state and zip code)

  
	
   

  
	
  Please print name and
  address

  
	
   

  
	
  principal amount to be
  purchased (if less than all): 
  $   ,000

  
	
   

  
	
  date of requested purchase: 
  July 18, 20   

  
	
   

  	
  (specify either July 18, 2010, 2013 or 2018)

  
				



 


A-1-13

















 


FORM OF OPTION TO
ELECT REPURCHASE UPON A CHANGE IN CONTROL


 


To:  Griffon Corporation


 


The
undersigned registered holder of this Security hereby acknowledges receipt of a
notice from Griffon Corporation (the “Company”) as to the occurrence of a
Change In Control with respect to the Company and requests and instructs the
Company to repurchase this Security, or the portion hereof (which is $1,000
principal amount or a multiple thereof) designated below, in accordance with
the terms of the Indenture referred to in this Security and directs that the
check in payment for this Security or the portion thereof and any Securities
representing any unrepurchased principal amount hereof, be issued and delivered
to the registered holder hereof unless a different name has been indicated
below. If any portion of this Security not repurchased is to be issued in the
name of a Person other than the undersigned, the undersigned shall pay all
transfer taxes payable with respect thereto.


 


	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature(s)

  
	
   

  	
   

  
	
   

  	
   

  
	
  Fill in for registration of
  Securities not

  repurchased if to be issued other than

  to and in the name of registered holder:

  
	
   

  
	
   

  	
   

  
	
  (Name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Street Address)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (City, state and zip code)

  	
   

  
	
   

  	
   

  
	
  Please print name and
  address

  	
   

  
	
   

  
	
  principal amount to be
  purchased (if less than all): 
  $    ,000

  



 


A-1-14

















 


SCHEDULE I


 


GRIFFON CORPORATION
4.0%
Contingent Convertible Subordinated Notes Due 2023


 


	
  Date

  	
   

  	
  Principal
  Amount

  	
   

  	
  Notation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


A-1-15

















 


EXHIBIT
A-2


 


{Form of Certificated Security}


 


[INCLUDE THE FOLLOWING LEGEND ON RESTRICTED SECURITIES:


 


THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND THIS SECURITY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
AN APPLICABLE EXEMPTION THEREFROM.  EACH
PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.  THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.


 


THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON
SATISFACTION OF THE CONDITIONS SPECIFIED IN THE INDENTURE.


 


THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR U.S.  FEDERAL INCOME TAX PURPOSES.  FOR PURPOSES OF SECTIONS 1273 AND 1275 OF
THE INTERNAL REVENUE CODE, THE ISSUE PRICE OF EACH SECURITY IS $1,000 PER
$1,000 OF PRINCIPAL AMOUNT, THE ISSUE DATE IS JULY 18, 2003 AND THE
COMPARABLE YIELD IS 8.50%
PER ANNUM.  HOLDERS OF THIS SECURITY
MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF ORIGINAL ISSUE DISCOUNT,
YIELD TO MATURITY AND THE PROJECTED PAYMENT SCHEDULE FOR THIS SECURITY BY
SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO:  GRIFFON CORPORATION, 100 JERICHO QUADRANGLE, JERICHO, NEW YORK  11753, ATTN.: SECRETARY, SUCH INFORMATION TO BE MADE AVAILABLE, BEGINNING NO
LATER THAN 10 DAYS AFTER THE ISSUE DATE, PROMPTLY UPON REQUEST.


 


A-2-1

















 


GRIFFON CORPORATION


 


4.0%
Contingent Convertible Subordinated Notes Due 2023


 


	
  No.:

  	
   

  	
  CUSIP:

  
	
   

  	
   

  	
   

  
	
  Issue
  Date:

  	
   

  	
  Principal
  Amount:

  



 


GRIFFON CORPORATION, a Delaware corporation,
promises to pay
to                                                                      or
registered assigns, the principal amount
of                                            ,
on July 18,
2023, subject 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. 
This Security is convertible as specified on the other side of this
Security.


 


Interest Payment Dates: 
January 18 and July 18, commencing January 18, 2004


 


Record Dates:  January 1
and July 1, commencing January 1, 2004


 


 


	
  Dated:

  	
  GRIFFON CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


A-2-2

















 


TRUSTEE’S CERTIFICATE OF
AUTHENTICATION


 


American Stock Transfer &
Trust Company, as Trustee, certifies that this is one of the Securities
referred to in the within-mentioned Indenture.


 


	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  
	
   

  	
   

  
	
  Dated:

  



 


A-2-3

















 


{FORM OF REVERSE SIDE IS IDENTICAL TO EXHIBIT A-1}


 


A-2-4

















 


EXHIBIT B


 


Transfer Certificate


 


In connection with any transfer of any of the Securities within the
period prior to the expiration of the holding period applicable to the sales
thereof under Rule 144(k) under the Securities Act of 1933, as amended (the “Securities
Act”) (or any successor provision), the undersigned registered owner of
this Security hereby certifies with respect to
$                 
principal amount of the above-captioned Securities presented or surrendered on
the date hereof (the “Surrendered Securities”) for registration of
transfer, or for exchange or conversion where the securities deliverable upon such
exchange or conversion are to be registered in a name other than that of the
undersigned registered owner (each such transaction being a “transfer”), that
such transfer complies with the restrictive legend set forth on the face of the
Surrendered Securities for the reason checked below:


 


o                                    A
transfer of the Surrendered Securities is made to the Company or any
subsidiaries; or


 


o                                    The
transfer of the Surrendered Securities complies with Rule 144A under the
U.S.  Securities Act of 1933, as amended
(the “Securities Act”); or


 


o                                    The
transfer of the Surrendered Securities is pursuant to an effective registration
statement under the Securities Act; or


 


o                                    The
transfer of the Surrendered Securities is pursuant to another available
exemption from the registration requirement of the Securities Act.


 


The
undersigned confirms that, to the undersigned’s knowledge, such Securities are
not being transferred to an “affiliate” of the Company as defined in Rule 144
under the Securities Act (an “Affiliate”).


 


 


	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
  Signature(s)

  
	
   

  	
   

  	
   

  
	
  (If the registered owner is a corporation,
  partnership or fiduciary, the title of the Person signing on behalf of such
  registered owner must be stated.)

  
	
   

  	
   

  	
   

  
	
  Signature Guaranteed

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Participant in a Recognized Signature

  	
   

  	
   

  
	
  Guarantee Medallion Program

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Authorized Signatory

  	
   

  	
   

  
						



 


B-1