Document:

Exhibit 4.9

 

ALLIANT TECHSYSTEMS INC.

 

AND

 

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

 

as Trustee

 

Subordinated Debt Securities

 

INDENTURE

 

Dated as of               
    , 200    

 

 

CROSS REFERENCE SHEET *

 

Provisions of
Sections 310 through 318(a) inclusive of the Trust Indenture Act of
1939, as amended, and the Indenture dated as of                    ,
200     between Alliant Techsystems Inc. and The Bank of
New York Trust Company, N.A., as Trustee.

 

	
  Section

  of

  Trust Indenture Act

  	
   

  	
  Section

  of

  Indenture

  
	
  310(a)(1)

  	
   

  	
  6.10

  
	
  310(a)(2)

  	
   

  	
  6.10

  
	
  310(a)(3)

  	
   

  	
  N/A

  
	
  310(a)(4)

  	
   

  	
  N/A

  
	
  310(a)(5)

  	
   

  	
  6.10

  
	
  310(b)

  	
   

  	
  6.10

  
	
  310(c)

  	
   

  	
  N/A

  
	
  311(a)

  	
   

  	
  6.11

  
	
  311(b)

  	
   

  	
  6.11

  
	
  311(c)

  	
   

  	
  N/A

  
	
  312(a)

  	
   

  	
  4.01

  
	
  312(b)

  	
   

  	
  4.02(b)

  
	
  312(c)

  	
   

  	
  4.02(c)

  
	
  313(a)

  	
   

  	
  6.06

  
	
  313(b)

  	
   

  	
  6.06

  
	
  313(c)

  	
   

  	
  6.06

  
	
  313(d)

  	
   

  	
  6.06

  
	
  314(a)

  	
   

  	
  3.04 and 4.03

  
	
  314(b)

  	
   

  	
  N/A

  
	
  314(c)(1)

  	
   

  	
  2.04 and 14.05

  
	
  314(c)(2)

  	
   

  	
  2.04 and 14.05

  
	
  314(c)(3)

  	
   

  	
  N/A

  
	
  314(d)

  	
   

  	
  N/A

  
	
  314(e)

  	
   

  	
  14.05

  
	
  315(a)

  	
   

  	
  6.01(b)

  
	
  315(b)

  	
   

  	
  6.05

  
	
  315(c)

  	
   

  	
  6.01(a)

  
	
  315(d)

  	
   

  	
  6.01(c)

  
	
  315(e)

  	
   

  	
  5.10

  
	
  316(a)(1)(A)

  	
   

  	
  5.08

  
	
  316(a)(1)(B)

  	
   

  	
  5.09

  
	
  316(a)(2)

  	
   

  	
  N/A

  
	
  316(b)

  	
   

  	
  5.06

  
	
  316(c)

  	
   

  	
  2.07

  
	
  317(a)(1)

  	
   

  	
  5.02

  
	
  317(a)(2)

  	
   

  	
  5.02

  
	
  317(b)

  	
   

  	
  3.02 and 3.03

  
	
  318(a)

  	
   

  	
  14.07

  

 

*  This cross reference sheet
shall not, for any purpose, be deemed to be a part of the Indenture.

 

Attention should
also be directed to Section 318(c) of the Trust Indenture Act of
1939, as

 

 

amended, which provides
that the provisions of Sections 310 through 317 of such Act are a part of
and govern every qualified indenture, whether or not physically contained
therein.

 

 

TABLE OF CONTENTS

 

	
  ARTICLE 1.    DEFINITIONS

  	
  1

  
	
   SECTION 1.01.

  	
  Certain Terms Defined

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2.    SECURITIES

  	
  5

  
	
   SECTION 2.01.

  	
  Forms Generally

  	
  5

  
	
   SECTION 2.02.

  	
  Form of Trustee’s Certificate of
  Authentication

  	
  6

  
	
   SECTION 2.03.

  	
  Amount Unlimited; Issuable in Series

  	
  6

  
	
   SECTION 2.04.

  	
  Authentication and Delivery of Securities

  	
  8

  
	
   SECTION 2.05.

  	
  Execution of Securities

  	
  9

  
	
   SECTION 2.06.

  	
  Certificate of Authentication

  	
  9

  
	
   SECTION 2.07.

  	
  Denomination and Date of Securities; Payments of
  Interest

  	
  9

  
	
   SECTION 2.08.

  	
  Registration, Registration of Transfer and Exchange

  	
  11

  
	
   SECTION 2.09.

  	
  Mutilated, Defaced, Destroyed, Lost and Stolen
  Securities

  	
  11

  
	
   SECTION 2.10.

  	
  Cancellation of Securities

  	
  12

  
	
   SECTION 2.11.

  	
  Temporary Securities

  	
  13

  
	
   SECTION 2.12.

  	
  Securities in Global Form

  	
  13

  
	
   SECTION 2.13.

  	
  CUSIP Numbers

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3.    COVENANTS OF THE COMPANY

  	
  14

  
	
  SECTION 3.01.

  	
  Payment of Principal and Interest

  	
  14

  
	
  SECTION 3.02.

  	
  Offices for Payment, Etc.

  	
  14

  
	
  SECTION 3.03.

  	
  Paying Agents

  	
  14

  
	
  SECTION 3.04.

  	
  Officers’ Certificate

  	
  15

  
	
  SECTION 3.05.

  	
  Calculation of Original Issue Discount

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4.    HOLDERS’ LISTS AND REPORTS BY
  THE COMPANY

  	
  15

  
	
  SECTION 4.01.

  	
  Company to Furnish Trustee Information as to Names
  and Addresses of Holders

  	
  15

  
	
  SECTION 4.02.

  	
  Preservation and Disclosure of Holders’ Lists

  	
  16

  
	
  SECTION 4.03.

  	
  Reports by the Company

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5.    REMEDIES OF THE TRUSTEE AND
  HOLDERS ON EVENT OF DEFAULT

  	
  17

  
	
   SECTION 5.01.

  	
  Event of Default Defined; Acceleration of Maturity;
  Waiver of Default

  	
  17

  
	
   SECTION 5.02.

  	
  Collection of Indebtedness by Trustee; Trustee
  May Prove Debt

  	
  19

  
	
   SECTION 5.03.

  	
  Application of Proceeds

  	
  21

  
	
   SECTION 5.04.

  	
  Restoration of Rights on Abandonment of Proceedings

  	
  22

  
	
   SECTION 5.05.

  	
  Limitations on Suits by Holders

  	
  22

  
	
   SECTION 5.06.

  	
  Unconditional Right of Holders to Institute Certain
  Suits

  	
  22

  
	
   SECTION 5.07.

  	
  Powers and Remedies Cumulative; Delay or Omission
  Not Waiver of Default

  	
  22

  
	
   SECTION 5.08.

  	
  Control by Holders

  	
  23

  
	
   SECTION 5.09.

  	
  Waiver of Past Defaults

  	
  23

  
	
   SECTION 5.10.

  	
  Right of Court to Require Filing of Undertaking to
  Pay Costs

  	
  23

  
	
   SECTION 5.11.

  	
  Suits for Enforcement

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6.    CONCERNING THE TRUSTEE

  	
  24

  
	
   SECTION 6.01.

  	
  Duties of Trustee

  	
  24

  
	
   SECTION 6.02.

  	
  Rights of Trustee

  	
  25

  
	
   SECTION 6.03.

  	
  Individual Rights of Trustee

  	
  26

  

 

i

 

	
   SECTION 6.04.

  	
  Trustee’s Disclaimer

  	
  26

  
	
   SECTION 6.05.

  	
  Notice of Defaults

  	
  27

  
	
   SECTION 6.06.

  	
  Reports by Trustee to Holders

  	
  27

  
	
   SECTION 6.07.

  	
  Compensation and Indemnity

  	
  27

  
	
   SECTION 6.08.

  	
  Replacement of Trustee

  	
  28

  
	
   SECTION 6.09.

  	
  Successor Trustee by Merger

  	
  29

  
	
   SECTION 6.10.

  	
  Eligibility; Disqualification

  	
  29

  
	
   SECTION 6.11.

  	
  Preferential Collection of Claims Against Company

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7.    CONCERNING THE HOLDERS

  	
  29

  
	
   SECTION 7.01.

  	
  Evidence of Action Taken by Holders

  	
  29

  
	
   SECTION 7.02.

  	
  Proof of Execution of Instruments

  	
  29

  
	
   SECTION 7.03.

  	
  Holders to Be Treated as Owners

  	
  29

  
	
   SECTION 7.04.

  	
  Securities Owned by Company Deemed Not Outstanding

  	
  30

  
	
   SECTION 7.05.

  	
  Right of Revocation of Action Taken

  	
  30

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8.    SUPPLEMENTAL INDENTURES

  	
  30

  
	
   SECTION 8.01.

  	
  Supplemental Indentures Without Consent of Holders

  	
  30

  
	
   SECTION 8.02.

  	
  Supplemental Indentures with Consent of Holders

  	
  31

  
	
   SECTION 8.03.

  	
  Effect of Supplemental Indenture

  	
  32

  
	
   SECTION 8.04.

  	
  Documents to Be Given to Trustee

  	
  32

  
	
   SECTION 8.05.

  	
  Notation on Securities in Respect of Supplemental
  Indentures

  	
  33

  
	
   SECTION 8.06.

  	
  Subordination Unimpaired

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9.    CONSOLIDATION, MERGER, SALE OR
  CONVEYANCE

  	
  33

  
	
   SECTION 9.01.

  	
  Company May Consolidate, Etc. on Certain Terms

  	
  33

  
	
   SECTION 9.02.

  	
  Successor Corporation Substituted

  	
  34

  
	
   SECTION 9.03.

  	
  Opinion of Counsel to Trustee

  	
  34

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10.    SATISFACTION AND DISCHARGE OF
  INDENTURE; DEFEASANCE; UNCLAIMED FUNDS

  	
  34

  
	
   SECTION 10.01.

  	
  Satisfaction and Discharge of Indenture; Defeasance

  	
  34

  
	
   SECTION 10.02.

  	
  Application by Trustee of Funds Deposited for
  Payment of Securities

  	
  37

  
	
   SECTION 10.03.

  	
  Repayment of Funds Held by Paying Agent

  	
  37

  
	
   SECTION 10.04.

  	
  Return of Unclaimed Funds Held by Trustee and
  Paying Agent

  	
  38

  
	
   SECTION 10.05.

  	
  Reinstatement of Company’s Obligations

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11.    REDEMPTION OF SECURITIES AND
  SINKING FUNDS

  	
   

  
	
   SECTION 11.01.

  	
  Applicability of Article

  	
   

  
	
   SECTION 11.02.

  	
  Notice of Redemption; Partial Redemptions

  	
   

  
	
   SECTION 11.03.

  	
  Payment of Securities Called for Redemption

  	
   

  
	
   SECTION 11.04.

  	
  Exclusion of Certain Securities from Eligibility
  for Selection for Redemption

  	
   

  
	
   SECTION 11.05.

  	
  Mandatory and Optional Sinking Funds

  	
   

  
	
   SECTION 11.06.

  	
  Repayment at the Option of the Holders

  	
   

  
	
   SECTION 11.07.

  	
  Conversion Arrangement on Call for Redemption

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12.    CONVERSION OF SECURITIES

  	
   

  
	
  SECTION 12.01.

  	
  Applicability of Article

  	
   

  
	
  SECTION 12.02.

  	
  Right of Holders to Convert Securities into Common
  Shares

  	
   

  
	
  SECTION 12.03.

  	
  Issuance of Common Shares on Conversions

  	
   

  
	
  SECTION 12.04.

  	
  No Payment or Adjustment for Interest or Dividends

  	
   

  

 

ii

 

	
  SECTION 12.05.

  	
  Adjustment of Conversion Price

  	
   

  
	
  SECTION 12.06.

  	
  No Fractional Shares to Be Issued

  	
   

  
	
  SECTION 12.07.

  	
  Preservation of Conversion Rights upon
  Consolidation, Merger, Sale or Conveyance

  	
   

  
	
  SECTION 12.08.

  	
  Notice to Holders of the Securities of a
  Series Prior to Taking Certain Types of Action

  	
   

  
	
  SECTION 12.09.

  	
  Covenant to Reserve Shares for Issuance on
  Conversion of Securities

  	
   

  
	
  SECTION 12.10.

  	
  Compliance with Governmental Requirements

  	
   

  
	
  SECTION 12.11.

  	
  Payment of Taxes upon Certificates for Shares
  Issued upon Conversion

  	
   

  
	
  SECTION 12.12.

  	
  Trustee’s Duties with Respect to Conversion
  Provisions

  	
   

  
	
  SECTION 12.13.

  	
  Conversion of Securities into Preferred Shares or
  Other Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13.    SUBORDINATION OF SECURITIES

  	
   

  
	
  SECTION 13.01.

  	
  Agreement to Subordinate

  	
   

  
	
  SECTION 13.02.

  	
  Default on Senior Debt

  	
   

  
	
  SECTION 13.03.

  	
  Liquidation, Dissolution, Bankruptcy

  	
   

  
	
  SECTION 13.04.

  	
  Subrogation of Securities

  	
   

  
	
  SECTION 13.05.

  	
  Authorization by Holders

  	
   

  
	
  SECTION 13.06.

  	
  Notice to Trustee

  	
   

  
	
  SECTION 13.07

  	
  Trustee’s Relation to Senior Debt

  	
   

  
	
  SECTION 13.08

  	
  No Impairment to Subordination

  	
   

  
	
  SECTION 13.09

  	
  Article Applicable to Paying Agents

  	
   

  
	
  SECTION 13.10

  	
  Trust Moneys Not Subordinated

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE 14.    MISCELLANEOUS PROVISIONS

  	
   

  
	
   SECTION 14.01.

  	
  Incorporators, Shareholders, Officers and Directors
  of Company Exempt from Individual Liability

  	
   

  
	
   SECTION 14.02.

  	
  Provisions of Indenture for the Sole Benefit of
  Parties and Holders

  	
   

  
	
   SECTION 14.03.

  	
  Successors and Assigns of Company Bound by
  Indenture

  	
   

  
	
   SECTION 14.04.

  	
  Notices and Demands on Company, Trustee and Holders

  	
   

  
	
   SECTION 14.05.

  	
  Officers’ Certificates and Opinions of Counsel;
  Statements to Be Contained Therein

  	
   

  
	
   SECTION 14.06.

  	
  Payments Due on Saturdays, Sundays and Holidays

  	
   

  
	
   SECTION 14.07.

  	
  Conflict of Any Provision of Indenture with Trust
  Indenture Act of 1939

  	
   

  
	
   SECTION 14.08.

  	
  New York Law to Govern

  	
   

  
	
   SECTION 14.09.

  	
  Counterparts

  	
   

  
	
   SECTION 14.10.

  	
  Effect of Headings; Gender

  	
   

  
	
   SECTION 14.11

  	
  Waiver of Jury Trial

  	
   

  
	
   SECTION 14.12

  	
  Force Majeure

  	
   

  

 

iii

 

INDENTURE

 

This INDENTURE
(this “Indenture”), dated as
of                 
    , 200    , is by and between
ALLIANT TECHSYSTEMS INC., a Delaware corporation (the “Company”), and THE BANK OF NEW YORK TRUST
COMPANY, N.A., a national banking association, as trustee (the “Trustee”).

 

RECITALS

 

A.            The Company has duly authorized the
issue from time to time of its subordinated debentures, notes or other
evidences of indebtedness (the “Securities”)
to be issued in one or more Series.

 

B.            All things necessary to make this
Indenture a valid, legally binding indenture and agreement according to its
terms have been done.

 

NOW, THEREFORE, in
consideration of the premises and the purchase of the Securities by the Holders
thereof, it is mutually agreed for the equal and ratable benefit of the Holders
from time to time of the Securities or of Series thereof as follows.

 

ARTICLE 1

DEFINITIONS

 

SECTION 1.01.  Certain Terms Defined.  Unless
otherwise specified as contemplated by Section 2.03 for the Securities of
any Series, the following terms (except as otherwise expressly provided or
unless the context otherwise clearly requires) for all purposes of this
Indenture and of any indenture supplemental hereto shall have the respective
meanings specified in this Section 1.01. 
All other terms (except as herein otherwise expressly provided or unless
the context otherwise clearly requires) used in this Indenture that are defined
in the Trust Indenture Act or the definitions of which in the Securities Act
are referred to in the Trust Indenture Act, including terms defined therein by
reference to the Securities Act, shall have the meanings assigned to such terms
in the Trust Indenture Act and the Securities Act as in force at the date of
this Indenture.  All accounting terms
used herein and not expressly defined shall have the meanings assigned to such
terms in accordance with GAAP.  The words
“herein”, “hereof” and “hereunder” and other words of similar import refer to this
Indenture as a whole, as supplemented and amended from time to time, and not to
any particular Article, Section or other subdivision.  The terms defined in this Article 1 have
the meanings assigned to them in this Article 1 and include the plural as
well as the singular.

 

“Board of Directors” means either the Board
of Directors of the Company or any duly authorized committee of that Board or
any duly authorized committee created by that Board.

 

“Business Day”, except as may otherwise be
provided in the form of Securities of any particular Series, with respect to
any Place of Payment or place of publication means any day, other than a
Saturday, Sunday or day on which banking institutions are authorized or
required by law or regulation to close in that Place of Payment or place of
publication.

 

 

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

 

“Common Shares” means the shares of common
stock, par value $0.01 per share, of the Company as they exist on the date of
this Indenture, or any other shares of capital stock of the Company into which
such shares shall be reclassified or changed.

 

“Company” means the Person identified as the
“Company” in the first paragraph hereof until a successor corporation shall
have become such pursuant to the applicable provisions hereof, and thereafter “Company”
shall mean such successor corporation.

 

“Corporate Trust Office” means the principal
corporate trust office of the Trustee at which at any particular time its
corporate trust business shall be administered, which office at the date of
execution of this Indenture is located at 2 North LaSalle Street, Suite 1020
Chicago, IL 60602 Attn: Corporate Trust Administration.

 

“covenant defeasance option” has the meaning
specified in Section 10.01(b).

 

“defaulted interest” has the meaning
specified in Section 2.07.

 

“Depository”, with respect to Securities of
any Series for which the Company shall determine that such Securities will
be issued as a Depository Security, means The Depository Trust Company or
another clearing agency or any successor registered under the Securities
Exchange Act or other applicable statute or regulation, which, in each case, shall
be designated by the Company pursuant to Sections 2.03 and 2.12.

 

“Depository Security”, with respect to any Series of
Securities, means a Security executed by the Company and authenticated and
delivered by the Trustee to the Depository or pursuant to the Depository’s
instruction, all in accordance with this Indenture and pursuant to a resolution
of the Board of Directors or an indenture supplemental hereto as contemplated
by Section 2.03, which shall be registered as to principal and interest in
the name of the Depository or its nominee and shall represent, and shall be
denominated in an amount equal to the aggregate principal amount of, all of the
Outstanding Securities of such Series.

 

“Event of Default” has the meaning specified
in Section 5.01.

 

2

 

“GAAP” means such accounting principles as
are generally accepted at the time of any computation hereunder.

 

“Holder”, “Holder
of Securities”, “Registered Holder”,
or other similar terms mean the Person in whose name at the time a particular
Security is registered in the Security register.

 

“Indenture” means this instrument as
originally executed or as it may from time to time be amended or supplemented
as herein provided, as so amended or supplemented or both, and shall include
the forms and terms of particular Series of Securities established as
contemplated by Section 2.03.

 

“legal defeasance option” has the meaning
specified in Section 10.01(b).

 

“Officers’ Certificate” means a certificate
signed on behalf of the Company by the chairman of the Board of Directors or
the president or any vice president and by the treasurer, the controller, any
assistant treasurer, the secretary or any assistant secretary of the Company
and delivered to the Trustee.  Each such
certificate shall include the statements provided for in Section 14.05.

 

“Opinion of Counsel” means a written opinion
of legal counsel who may be an employee of or counsel to the Company.  Each Opinion of Counsel shall include the
statements provided for in Section 14.05, if and to the extent required
hereby.

 

“original issue date” of any Security means
the date set forth as such on such Security.

 

“Original Issue Discount Security” means any
Security that provides for an amount less than the principal amount thereof to
be due and payable upon a declaration of acceleration of the maturity thereof
pursuant to Section 5.01.

 

“Outstanding”, when used with reference to
Securities of any Series as of any particular time, subject to the
provisions of Section 7.04, means all Securities of that Series authenticated
and delivered under this Indenture, except:

 

(a)           Securities theretofore cancelled by
the Trustee or delivered to the Trustee for cancellation;

 

(b)           Securities, or portions thereof, for
the payment or redemption of which the necessary funds in the required currency
shall have been deposited in trust with the Trustee or with any Paying Agent
other than the Company, or shall have been set aside, segregated and held in
trust by the Company for the holders of such Securities if the Company shall
act as its own Paying Agent, provided that if such securities, or portions
thereof, are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as herein provided, or provision satisfactory
to the Trustee shall have been made for giving such notice;

 

(c)           Securities in substitution for which
other Securities shall have been authenticated and delivered pursuant to the
terms of Section 2.09, except with respect to any such Security as to
which proof satisfactory to the Trustee and the Company is

 

3

 

presented that such Security is held by a person in
whose hands such Security is a legal, valid and binding obligation of the
Company;

 

(d)           Securities converted into Common
Shares or Preferred Shares in accordance with or as contemplated by this
Indenture; and

 

(e)           Securities with respect to which the
Company has effected defeasance as provided in Article 10.

 

“Paying Agent” means any Person, which may
include the Company, authorized by the Company to pay the principal of or
interest, if any, on any Security of any Series on behalf of the Company.

 

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

 

“Place of Payment”, when used with respect
to the Securities of any Series, means the place or places where the principal
of and interest, if any, on the Securities of that Series are payable as
specified pursuant to Section 3.02.

 

“Preferred Shares” means any shares of
capital stock issued by the Company that are entitled to a preference or
priority over the Common Shares upon any distribution of the Company’s assets,
whether by dividend or upon liquidation.

 

“principal” whenever used with reference to
the Securities or any Security or any portion thereof shall be deemed to
include “and premium, if any.”

 

“Responsible Officer”, when used with
respect to the Trustee, means any officer within the corporate trust department
of the Trustee including any vice president, assistant vice president, senior
trust officer, trust officer or any other officer or assistant officer of the
Trustee customarily performing functions similar to those performed by the
individuals who at the time shall be such officers, respectively, or to whom
any corporate trust matter is referred at the Corporate Trust Office because of
his or her knowledge of and familiarity with the particular subject, and who
shall have direct responsibility for the administration of this Indenture.

 

“Securities Act” means the Securities Act of
1933, as amended, as in force at the date as of which this Indenture was
originally executed.

 

“Securities Exchange Act” means the
Securities Exchange Act of 1934, as amended, as in force at the date as of
which this Indenture was originally executed.

 

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

 

“Senior Debt” means (i) the principal
of and premium, if any, and unpaid interest on indebtedness for money borrowed,
(ii) purchase money and similar obligations, (iii) obligations under
capital leases or leases of property or assets made as part of any sale and
leaseback

 

4

 

transaction, (iv) guarantees, assumptions or purchase commitments
relating to, or other transactions as a result of which the Company is
responsible for the payment of, such indebtedness of others, (v) renewals,
extensions and refunding of any such indebtedness, (vi) interest or
obligations in respect of any such indebtedness accruing after the commencement
of any insolvency or bankruptcy proceedings and (vii) obligations
associated with derivative products such as interest rate and currency exchange
contracts, foreign exchange contracts, commodity contracts, and similar
arrangements, unless, in each case, the instrument by which the Company
incurred, assumed or guaranteed the indebtedness or obligations described in
clauses (i) through (vii) hereof expressly provides that such
indebtedness or obligation is not senior in right of payment to the Securities.

 

“Series” or “Series of Securities” means all Securities of a similar
tenor authorized by a particular resolution of the Board of Directors or in one
or more indentures supplemental hereto.

 

“Subsidiary” means:  (i) a corporation in which the Company
and/or one or more Subsidiaries of the Company directly or indirectly owns, at
the date of determination, a majority of the capital stock with voting power
under ordinary circumstances to elect directors; (ii) a partnership,
limited liability company, joint venture or similar entity in which the Company
and/or one or more Subsidiaries of the Company directly or indirectly holds, at
the date of determination, a majority interest in the equity capital or profits
or other similar interests of such entity; or (iii) any other unincorporated
Person in which the Company and/or one or more Subsidiaries of the Company
directly or indirectly owns at the date of determination (x) at least a
majority ownership interest or (y) the power to elect or direct the
election of a majority of the directors or other governing body of such Person.

 

“Trust Indenture Act of 1939”, except as
otherwise provided in Sections 8.01 and 8.02, means the Trust Indenture Act of
1939, as amended, as in force at the date as of which this Indenture was
originally executed.

 

“Trustee” means the Person identified as the
“Trustee” in the first paragraph hereof until a successor Trustee shall have
become such pursuant to the applicable provisions hereof, and thereafter “Trustee”
shall mean each Person who is then a Trustee hereunder.  If at any time there is more than one such
Person, “Trustee” as used with respect to the Securities of any Series means
the Trustee with respect to Securities of that Series.

 

“United States of America” means the United
States of America, including the states and the District of Columbia, its
territories, possessions, the Commonwealth of Puerto Rico and other areas
subject to its jurisdiction.

 

“U.S. Government Obligations” means direct
obligations (or certificates representing an ownership interest in such
obligations) of the United States of America (including any agency or
instrumentality thereof) for the payment of which the full faith and credit of
the United States of America is pledged and which are not callable or
redeemable at the issuer’s option.

 

“vice president” when used with respect to
the Company or the Trustee, means any vice president, whether or not designated
by a number or a word or words added before or after the title of “vice
president.”

 

5

 

ARTICLE 2

SECURITIES

 

SECTION 2.01.  Forms Generally.  The
Securities of each Series shall be substantially in such form, including
temporary or definitive global form, as shall be established by or pursuant to
a resolution of the Board of Directors or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have imprinted or otherwise reproduced thereon such legend
or legends, not inconsistent with the provisions of this Indenture, as may be
required to comply with any law or with any rules or regulations, or with
any rules of any securities exchange or to conform to general usage, all
as may be determined by the officers executing such Securities as evidenced by
their execution of the Securities.

 

The definitive
Securities may be printed or reproduced in any other manner, all as determined
by the officers executing such Securities as evidenced by their execution of
such Securities.

 

SECTION 2.02.  Form of Trustee’s Certificate of
Authentication.  The Trustee’s certificate of
authentication on all Securities shall be in substantially the following form:

 

This is one of the
Securities of the Series designated herein and referred to in the
within-mentioned Indenture.

 

 

	
   

  	
                                                     ,
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  — or —

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
                                                     ,
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  , as 

  
	
   

  	
  Authentication Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  	
   

  

 

SECTION 2.03.  Amount Unlimited; Issuable in Series.  The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.

 

The Securities may
be issued in one or more Series.  There
shall be established in or pursuant to a resolution of the Board of Directors
and set forth in an Officers’ Certificate, or

 

6

 

established in one or
more indentures supplemental hereto, prior to the issuance of Securities of any
Series:

 

(a)           the title of the Securities of the Series (including
CUSIP numbers), which shall distinguish the Securities of the Series from
all other Securities issued by the Company;

 

(b)           any limit upon the aggregate
principal amount of the Securities of the Series that may be authenticated
and delivered under this Indenture, except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for or in lieu of,
other Securities of the Series pursuant to Section 2.08, 2.09, 2.11,
8.05 or 11.03;

 

(c)           the price at which the Securities of
the Series will be issued;

 

(d)           if other than 100% of their principal
amount, the portion of the principal amount payable upon the maturity of the
Securities of the Series;

 

(e)           the date or dates on which the
principal of the Securities of the Series is payable or the method of
determination thereof;

 

(f)            the rate or rates, which may be
fixed or variable, or the method or methods of determination thereof, at which
the Securities of the Series shall bear interest (including any interest
rates applicable to overdue payments), if any, the date or dates from which
such interest shall accrue, the interest payment dates on which such interest
shall be payable, the record dates for the determination of Holders to whom
interest is payable and the dates on which any other amounts, if any, will be
payable;;

 

(g)           the place or places where the
principal of, premium and other amounts, if any, and interest, if any, on
Securities of the Series shall be payable if other than as provided in Section 3.02;

 

(h)           the price or prices at which, the
period or periods within which and the terms and conditions upon which
Securities of the Series may be redeemed, in whole or in part, at the
option of the Company;

 

(i)            the obligation, if any, of the
Company to redeem, purchase or repay Securities of the Series whether
pursuant to any sinking fund or analogous provisions or pursuant to other
provisions set forth therein or at the option of a Holder thereof and the price
or prices at which and the period or periods within which and the terms and
conditions upon which Securities of the Series shall be redeemed,
purchased or repaid, in whole or in part;

 

(j)            the denominations in which
Securities of the Series shall be issuable;

 

(k)           the form of the Securities, including
such legends as required by law or as the Company deems necessary or
appropriate and the form of any temporary global security that may be issued;

 

7

 

(l)            whether, and under what
circumstances, the Securities of any Series shall be convertible into
other securities of the Company and, if so, the terms and conditions upon which
such conversion will be effected, including the initial conversion price or
rate, the conversion period and other provisions in addition to or in lieu of
those described herein;

 

(m)          whether there are any authentication
agents, Paying Agents, transfer agents or registrars with respect to the
Securities of such Series;

 

(n)           whether the Securities of such Series are
to be issuable in whole or in part by one or more global notes registered in
the name of a Depository or its nominee;

 

(o)           the ranking of the Securities of such
Series as senior debt securities or subordinated debt securities;

 

(p)           if other than U.S. dollars, the
currency or currencies (including composite currencies or currency units) in
which the Securities of any Series may be purchased and in which payments on
the the Securities of such Series will be made (which currencies may be
different for payments of principal, premium or other amounts, if any, and/or
interest, if any);

 

(q)           if the Securities of any Series will
be secured by any collateral, a description of the collateral and the terms and
conditions of the security and realization provisions;

 

(r)            the provisions relating to any
guarantee of the Securities of any Series, including the ranking thereof;

 

(s)           the ability, if any, to defer
payments of principal, interest, or other amounts; and

 

(t)            any other specific terms or
conditions of the Securities of any Series, including any additional Events of
Default or covenants provided for with respect to the Securities of such
Series, and any terms that may be required by or advisable under applicable
laws or regulations.

 

All Securities of
any one Series shall be substantially identical except as to denomination
and except as otherwise may be provided in or pursuant to such resolution of
the Board of Directors or in any such indenture supplemental hereto.  All Securities of any one Series need
not be issued at the same time, and unless otherwise provided, a Series may
be reopened for issuances of additional Securities of such Series.  Except as may otherwise be provided with
respect to the Securities of a Series pursuant to this Section 2.03,
the Securities shall be subordinated in right of payment to Senior Debt of the
Company as provided in Article 13.

 

SECTION 2.04.  Authentication and Delivery of
Securities.  At any time and from time to time after the
execution and delivery of this Indenture, the Company may deliver Securities of
any Series executed by the Company to the Trustee for authentication, and
the Trustee shall

 

8

 

thereupon authenticate
and make available for delivery such Securities to or upon the written order of
the Company, signed by both (a) the chairman of its Board of Directors, or
its president or any vice president, and (b) its treasurer or any
assistant treasurer or its secretary or any assistant secretary.  At the time of the first authentication of
Securities of a Series that provides for the issuance of Securities of
that Series from time to time, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be provided with and subject to Section 6.01 shall be fully
protected in relying upon:

 

(a)           a copy of any resolution or
resolutions of the Board of Directors relating to such Series, in each case
certified by the secretary or an assistant secretary of the Company;

 

(b)           a supplemental indenture, if any;

 

(c)           an Officers’ Certificate setting
forth the form and terms of the Securities of such Series as required
pursuant to Sections 2.01 and 2.03, respectively, and prepared in
accordance with Section 14.05; and

 

(d)           an Opinion of Counsel, prepared in
accordance with Section 14.05, which shall state:

 

(i)            that the form or forms and terms of
such Securities have been established by or pursuant to a resolution of the
Board of Directors or by a supplemental indenture as permitted by
Sections 2.01 and 2.03 in conformity with the provisions of this
Indenture; and

 

(ii)           that such Securities have been duly
authorized and, when authenticated and delivered by the Trustee and issued by
the Company in the manner and subject to any conditions specified in such
opinion of counsel, will constitute valid and binding obligations of the
Company, enforceable in accordance with their terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or other laws
relating to or affecting the enforcement of creditors’ rights generally and by
general equitable principles, regardless of whether such enforceability is
considered in a proceeding in equity or at law.

 

The Trustee shall
have the right to decline to authenticate and deliver any Securities under this
Section 2.04 if the issue of such Securities pursuant to this Indenture
will affect the Trustee’s own rights, duties or immunities under this Indenture
in a manner not reasonably acceptable to the Trustee.

 

SECTION 2.05.  Execution of Securities.  The
Securities shall be signed on behalf of the Company by both (a) the
chairman of its Board of Directors or its president or any vice president and (b) its
treasurer or any assistant treasurer or its secretary or any assistant
secretary, under its corporate seal. 
Such signatures may be the manual or facsimile signatures of such
officers.  The seal of the Company may be
in the form of a facsimile thereof and may be impressed, affixed, imprinted or
otherwise reproduced on the Securities. 
Typographical and other minor errors or

 

9

 

defects in any such
reproduction of the seal or any such signature shall not affect the validity or
enforceability of any Security that has been duly authenticated and delivered
by the Trustee.

 

In case any
officer of the Company who shall have signed any of the Securities shall cease
to be such officer before the Security so signed shall be authenticated and
delivered by the Trustee or disposed of by the Company, such Security
nevertheless may be authenticated and delivered or disposed of as though the
person who signed such Security had not ceased to be such officer of the
Company.  Any Security may be signed on
behalf of the Company by such individuals as, at the actual date of the
execution of such Security, shall be the proper officers of the Company,
although at the date of the execution and delivery of this Indenture any such
individual was not such an officer.

 

SECTION 2.06.  Certificate of Authentication.  Only
such Securities as shall bear thereon a certificate of authentication
substantially in the form set forth in Section 2.02 and executed by the
Trustee by the manual signature of one of its authorized signatories shall be
entitled to the benefits of this Indenture or be valid or obligatory for any
purpose.  Such certificate by the Trustee
upon any Security executed by the Company shall be conclusive evidence that the
Security so authenticated has been duly authenticated and delivered hereunder
and that the Holder is entitled to the benefits of this Indenture.

 

SECTION 2.07.  Denomination and Date of Securities;
Payments of Interest.  The Securities shall be issuable in
denominations as shall be specified as contemplated by Section 2.03.  In the absence of any such specification with
respect to the Securities of any Series, Securities shall be issuable in
denominations of $1,000 and any integral multiple thereof, and interest shall
be computed on the basis of a 360-day year of twelve 30-day months.  The Securities shall be numbered, lettered or
otherwise distinguished in such manner or in accordance with such plan as the
officers of the Company executing the same may determine with the approval of
the Trustee as evidenced by its execution and authentication thereof.

 

Each Security
shall be dated the date of its authentication.

 

Unless otherwise
provided as contemplated by Section 2.03, interest on any Security that is
payable, and is punctually paid or duly provided for, on any interest payment
date shall be paid to the person in whose name that Security (or one or more
predecessor securities) is registered at the close of business on the regular
record date for the payment of such interest.

 

The term “record date” as used with respect to any
interest payment date (except for a date for payment of defaulted interest)
means the date specified as such in the terms of the Securities of any
particular Series or, if no such date is so specified, the close of
business on the fifteenth day preceding such interest payment date, whether or
not such record date is a Business Day.

 

Any interest on
any Security of any Series that is payable but not punctually paid or duly
provided for (“defaulted interest”)
on any interest payment date shall forthwith cease to be payable to the
Registered Holder on the relevant record date by virtue of such Holder having
been a Holder on such record date.  Such
defaulted interest may be paid by the Company, at its election in each case, as
provided in clause (a) or clause (b) below:

 

10

 

(a)           The Company may elect to make payment
of any defaulted interest to the persons in whose names any such Securities (or
their respective predecessor Securities) are registered at the close of
business on a special record date for the payment of such defaulted interest,
which shall be fixed in the following manner. 
The Company shall notify the Trustee in writing of the amount of
defaulted interest proposed to be paid on each Security of such Series and
the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee funds equal to the aggregate amount proposed to be
paid in respect of such defaulted interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment.  Such funds when deposited shall
be held in trust for the benefit of the Persons entitled to such defaulted
interest as provided in this clause (a). 
Thereupon the Trustee shall fix a special record date for the payment of
such defaulted interest in respect of Securities of such Series, which shall be
not more than 15 nor less than ten days prior to the date of the proposed
payment and not less than ten days after the receipt by the Trustee of the
notice of the proposed payment.  The
Trustee promptly shall notify the Company of such special record date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such defaulted interest and the special record date thereof to be
mailed, first class postage prepaid, to each Registered Holder at his address
as it appears in the Security register, not less than ten days prior to such
special record date.  Notice of the
proposed payment of such defaulted interest and the special record date
therefor having been mailed as aforesaid, such defaulted interest in respect of
Securities of such Series shall be paid to the persons in whose names such
Securities (or their respective predecessor Securities) are registered on such
special record date and such defaulted interest shall no longer be payable
pursuant to the following clause (b).

 

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

 

Subject to the
foregoing provisions of this Section 2.07, each Security delivered under
this Indenture upon registration of transfer of or in exchange for or in lieu
of any other Security shall carry the rights to interest accrued and unpaid,
and to accrue, that were carried by such other Security.

 

SECTION 2.08.  Registration, Registration of Transfer
and Exchange.  The Company will cause to be kept at each
office or agency to be maintained for the purpose as provided in Section 3.02
a register or registers (the “Security
register”) in which, subject to such reasonable regulations as it
may prescribe, the Company will provide for the registration and the
registration of transfer of the Securities. 
The Trustee is hereby appointed Security registrar for purposes of
registering, and registering transfers of, the Securities.

 

Upon surrender for
registration of transfer of any Security of any Series at any such office
or agency to be maintained for the purpose as provided in Section 3.02,
the Company shall execute, and the Trustee shall authenticate and make
available for delivery in the name of the

 

11

 

transferee or
transferees, a new Security or Securities of the same Series and of like
tenor and containing the same terms (other than the principal amount thereof,
if more than one Security is executed, authenticated and delivered with respect
to any security so presented, in which case the aggregate principal amount of
the executed, authenticated and delivered Securities shall equal the principal
amount of the Security presented in respect thereof) and conditions.

 

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

 

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

 

No service charge
shall be made for any registration of transfer or exchange of Securities, but
the Company may require payment of an amount sufficient to cover any tax or
other governmental charge that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 2.11, 8.05 or 11.03 not involving any transfer (and
other than exchanges or transfers specified as contemplated by Section 7.03).

 

The Company shall
not be required (i) to issue, register the transfer of or exchange any
Security during a 15-day period prior to the day of mailing of the relevant
notice of redemption or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except, in the case of
any Security to be redeemed in part, the portion thereof not redeemed.

 

SECTION 2.09.  Mutilated, Defaced, Destroyed, Lost and
Stolen Securities.  Unless otherwise specified as
contemplated by Section 2.03 of any Series, in case any temporary or
definitive Security shall become mutilated or defaced or be destroyed, lost or
stolen, the Company shall execute, and upon the written request of any officer
of the Company, the Trustee shall authenticate and make available for delivery
a new Security of the same Series and of like tenor and principal amount
and with the same terms and conditions, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated or defaced Security
or in lieu of and substitution for the Security so destroyed, lost or
stolen.  In every case the applicant for
a substitute Security shall furnish to the Company and to the Trustee such security
or indemnity as may be required by them to indemnify and defend and to save
each of them harmless and, in every case of destruction, loss or theft,
evidence to their satisfaction of the destruction, loss or theft of such
Security and of the ownership thereof.

 

Upon the issuance
of any substitute Security, the Company may require the payment of an amount
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses, including the reasonable fees and
expenses of the Trustee, connected therewith. 
In case any Security which has matured or is about to mature or has been
called for redemption in full shall become mutilated or defaced or be
destroyed, lost or stolen, the Company, instead of issuing a substitute
Security, may pay or authorize the payment

 

12

 

of the same without
surrender thereof except in the case of a mutilated or defaced Security.  The applicant for such payment shall furnish
to the Company and to the Trustee such security or indemnity as any of them may
require to save each of them harmless. 
In every case of destruction, loss or theft, the applicant also shall
furnish to the Company and the Trustee evidence to their satisfaction of the destruction,
loss or theft of such Security and of the ownership thereof.

 

Every substitute
Security of any Series issued pursuant to the provisions of this Section 2.09
by virtue of the fact that any Security is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Security shall be at any time enforceable by
anyone and shall be entitled to all the benefits of and shall be subject to all
the limitations of rights set forth in this Indenture equally and
proportionately with any and all other Securities of such Series duly
authenticated and delivered hereunder. 
All Securities shall be held and owned upon the express condition that,
to the extent permitted by law, the foregoing provisions are exclusive with
respect to the replacement or payment of mutilated, defaced, destroyed, lost or
stolen Securities and shall preclude any and all other rights or remedies,
notwithstanding any law or statute to the contrary with respect to the
replacement or payment of negotiable instruments or other securities without
their surrender.

 

SECTION 2.10.  Cancellation of Securities.  All Securities surrendered for payment,
redemption, registration of transfer or exchange, or for credit against any
payment in respect of a sinking or analogous fund, if surrendered to the
Company or any agent of the Company or the Trustee shall be delivered to the
Trustee for cancellation or, if surrendered to the Trustee, shall be cancelled
by it; and no Securities shall be issued in lieu thereof except as expressly
permitted by the provisions of this Indenture. 
The Company at any time may deliver to the Trustee for cancellation any
Securities previously authenticated hereunder which the Company has not issued
and sold and all Securities so delivered shall be promptly cancelled by the
Trustee.  The Trustee shall return
cancelled Securities held by it to the Company. 
If the Company shall acquire any of the Securities, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless the same are delivered to the Trustee for
cancellation.

 

SECTION 2.11.  Temporary Securities.  Pending
the preparation of definitive Securities for any Series, the Company may execute
and the Trustee shall authenticate and make available for delivery temporary
Securities for such Series, which may be printed, typewritten or otherwise
reproduced, in each case in form reasonably acceptable to the Trustee.  Temporary Securities of any Series may
be issued in any authorized denomination and substantially in the form of the
definitive Securities of such Series but with such omissions, insertions
and variations as may be appropriate for temporary Securities, all as may be
determined by the Company with the reasonable concurrence of the Trustee.  Temporary Securities may contain such
reference to any provisions of this Indenture as may be appropriate.  Every temporary Security shall be executed by
the Company and be authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with like effect, as the definitive
Securities.  Without unreasonable delay
the Company shall execute and shall furnish definitive securities of such Series and
thereupon temporary Securities of such Series may be surrendered in
exchange therefor without charge at each office or agency to be maintained by
the Company for that purpose pursuant to Section 3.02, and the Trustee
shall authenticate and make available for

 

13

 

delivery in exchange for
such temporary Securities of such Series a like aggregate principal amount
of definitive Securities of the same Series of authorized
denominations.  Until so exchanged, the
temporary Securities of any Series shall be entitled to the same benefits
under this Indenture as definitive Securities of such Series.

 

SECTION 2.12.  Securities in Global Form.  If
Securities of a Series are issuable in global form, as specified as
contemplated by Section 2.03, then, notwithstanding the provisions of Section 2.03(j)
and Section 2.07, such Security shall represent such of the Outstanding
Securities of such Series as shall be specified therein and may 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 to reflect
exchanges.  Any endorsement of a Security
in global form to reflect the amount, or any increase or decrease in the
amount, of Outstanding Securities represented thereby may be made by the
Trustee in such manner and upon instructions given by such Person or Persons as
shall be specified therein or in the Company order to be delivered to the
Trustee pursuant to Section 2.04. 
Subject to the provisions of Section 2.04, the Trustee shall
deliver and redeliver any Security in definitive global form in the manner and
upon written instructions given by the Person or Persons specified therein or
in the applicable Company order.  If a
Company order pursuant to Section 2.04 has been, or simultaneously is,
delivered, any instructions by the Company with respect to endorsement or
delivery or redelivery of a Security in global form shall be in writing but
need not comply with Section 14.05 and need not be accompanied by an
Opinion of Counsel.

 

Unless otherwise
specified as contemplated by Section 2.03, payment of principal of and any
interest on any Security in definitive global form shall be made to the Person
or Persons specified therein.

 

Except as provided
in the preceding paragraph, the Company, the Trustee and any agent of the
Company and the Trustee shall treat a Person as the Holder of such principal
amount of outstanding Securities represented by a definitive global Security as
shall be specified in a written statement of the Holder of such definitive
global Security.

 

If The Depository
Trust Company is at any time unwilling or unable to continue as Depository or
if at any time The Depository Trust Company ceases to be a clearing agency
registered under the Securities Exchange Act if so required by applicable law
or regulation, and, in either case, a successor Depository is not appointed
within 90 days, certificated Securities will be issued in exchange for the
global Securities. In addition, the Company may determine, at any time and
subject to the procedures of The Depository Trust Company, not to have any
Securities represented by one or more global Securities, and, in such event,
shall issue individual Securities in certificated form in exchange for the
relevant global Securities. Beneficial interests in global Securities will also
be exchangeable for individual Securities in certificated form in the event of
a default or an Event of Default, upon prior written notice to the Trustee by
or on behalf of The Depository Trust Company or at the written request of the
owner of such beneficial interests, in each case, in accordance with the terms
hereof. In any of the foregoing circumstances, an owner of a beneficial
interest in a global Security shall be entitled to physical delivery of
individual Securities in certificated form of like tenor and rank, equal in
principal amount to such beneficial interest, and to have such Securities in
certificated form registered in its name.

 

SECTION 2.13.  CUSIP Numbers.  The
Company in issuing the Securities may use “CUSIP” numbers if then generally in
use and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption
as a convenience to Holders.  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.  No
such redemption shall be affected by any defect in or omission of such
numbers.  The Company promptly will
notify the Trustee of any change in the CUSIP numbers.

 

ARTICLE 3

COVENANTS OF THE COMPANY

 

SECTION 3.01.  Payment of Principal and Interest.  The
Company covenants and agrees for the benefit of each particular Series of
Securities that it will duly and punctually pay or cause

 

14

 

to be paid the principal
of, and interest on, each of the Securities of such Series in accordance
with the terms of the Securities of such Series and this Indenture.

 

SECTION 3.02.  Offices for Payment, Etc.  So
long as any of the Securities remain outstanding, the Company will maintain the
following for each Series:  an office or
agency where the Securities may be presented for payment or conversion; where
the Securities may be presented for registration of transfer and for exchange;
and where notices and demands to or upon the Company in respect of the Securities
or of this Indenture may be served.  The
Company will give to the Trustee written notice of the location of any such
office or agency and of any change of location thereof.  In case the Company shall fail to so
designate or maintain any such office or agency or shall fail to give such
notice of the location or of any change in the location thereof, presentations
and demands may be made and notices may be served at the Corporate Trust
Office.  Unless otherwise specified
pursuant to Section 2.03, the Trustee is hereby appointed Paying Agent.

 

SECTION 3.03.  Paying Agents.  Whenever
the Company shall appoint a Paying Agent other than the Trustee with respect to
the Securities of any Series, it will cause such Paying Agent to execute and
deliver to the Trustee an instrument in which such Agent shall agree with the
Trustee, subject to the provisions of this Section 3.03:

 

(a)           that it will hold all amounts
received by it as such Paying Agent for the payment of the principal of or
interest on the Securities of such Series in trust for the benefit of the
Holders of the Securities of such Series and, upon the occurrence of an
Event of Default and upon the written request of the Trustee, pay over all such
sums received by it to the Trustee; and

 

(b)           that it will give the Trustee notice
of any failure by the Company or by any other obligor on the Securities of such
Series to make any payment of the principal of or interest on the
Securities of such Series when the same shall be due and payable.

 

On or prior to
each due date of the principal of or interest on the Securities of such Series,
the Company will deposit with the Paying Agent sufficient funds to pay such
principal or interest so becoming due and, unless such Paying Agent is the
Trustee, notify the Trustee of any failure to take such action.

 

If the Company
shall act as its own Paying Agent with respect to the Securities of any Series,
on or before each due date of the principal of or interest on the Securities of
such Series it will set aside, segregate and hold in trust for the benefit
of the Holders of the Securities of such Series sufficient funds to pay
such principal or interest so becoming due. 
The Company will promptly notify the Trustee of any failure to take such
action.

 

At any time, for
the purpose of obtaining a satisfaction and discharge with respect to one or
more or all Series of Securities or for any other reason, the Company may
pay or cause to be paid to the Trustee all amounts held in trust for any such Series by
the Company or any Paying Agent, such amounts to be held by the Trustee in
trust pursuant to this Indenture.

 

The agreement to
hold amounts in trust as provided in this Section 3.03 is subject to the
provisions of Sections 10.03 and 10.04.

 

15

 

SECTION 3.04.  Officers’ Certificate.  The
Company shall deliver to the Trustee, within 120 days after the end of
each fiscal year, an Officers’ Certificate indicating whether the officers
signing such Officers’ Certificate on behalf of the Company know of any default
with respect to the Securities of any Series that occurred during the
previous year.  The Company shall also
deliver to the Trustee, within 30 days after the occurrence thereof,
written notice of any Event of Default with respect to the Securities of any
Series, the status and what action the Company is taking or proposes to take in
respect thereof.

 

SECTION 3.05.  Calculation of Original Issue Discount.  The
Company shall file with the Trustee, within 60 days after the end of each
calendar year, a written notice specifying the amount of original issue
discount, if any, including daily rates and accrual periods, accrued on each Series of
Outstanding Original Issue Discount Securities as of the end of such year.

 

ARTICLE 4

HOLDERS’ LISTS AND REPORTS BY THE COMPANY

 

SECTION 4.01.  Company to Furnish Trustee Information as
to Names and Addresses of Holders.  If specified as
contemplated by Section 2.03 for the Securities of any Series, the Company
will furnish or cause to be furnished to the Trustee a list in such form as the
Trustee reasonably may require of the names and addresses of the Holders of the
Securities of each Series:

 

(a)           semiannually, and not more than
15 days after each record date for the payment of interest on such
Securities, as of such record date; and

 

(b)           at such other times as the Trustee
reasonably may request in writing, within 30 days after receipt by the
Company of any such request, such list to be as of a date not more than
15 days prior to the time such information is furnished; provided that, if
the Trustee shall be the Security registrar for such Series, such list shall
not be required to be furnished.

 

SECTION 4.02.  Preservation and Disclosure of Holders’ Lists.

 

(a)           The Trustee shall preserve, in as
current a form as is reasonably practicable, all information as to the names
and addresses of the Holders of each Series of Securities contained in the
most recent list furnished to it as provided in Section 4.01 or maintained
by the Trustee in its capacity as Security registrar for such Series.  The Trustee may destroy any list furnished to
it as provided in Section 4.01 upon receipt of a new list so furnished.

 

(b)           In case three or more Holders of
Securities of any Series (“applicants”)
apply in writing to the Trustee and furnish to the Trustee reasonable proof
that each such applicant has owned a Security of such Series for a period
of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other Holders
of Securities of such Series or with Holders of all Securities with
respect to their rights under this Indenture or under such Securities and such
application is accompanied by a copy of the form of proxy or other
communication

 

16

 

which such applicants propose to transmit, then the
Trustee, within five Business Days after the receipt of such application, at
its election, either:

 

(i)            shall afford to such applicants
access to the information preserved at the time by the Trustee in accordance
with the provisions of Section 4.02(a); or

 

(ii)           shall inform such applicants as to
the approximate number of Holders of Securities of such Series or all
Securities, as the case may be, whose names and addresses appear in the
information preserved at the time by the Trustee, in accordance with the
provisions of Section 4.02(a), and as to the approximate cost of mailing
to such Holders the form of proxy or other communication, if any, specified in
such application.

 

If the
Trustee shall elect not to afford to such applicants access to such
information, the Trustee, upon the written request of such applicants, shall
mail to each Holder of such Series or all Securities, as the case may be,
whose name and address appear in the information preserved at the time by the
Trustee in accordance with the provisions of Section 4.02(a), a copy of
the form of proxy or other communication that is specified in such request,
with reasonable promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the reasonable expenses
of mailing, unless within five days after such tender, the Trustee shall mail
to such applicants and file with the Commission together with a copy of the
material to be mailed, a written statement to the effect that, in the opinion
of the Trustee, such mailing would be contrary to the best interests of the
Holders of Securities of such Series or all Securities, as the case may
be, or could be in violation of applicable law. 
Such written statement shall specify the basis of such opinion.  If the Commission, after opportunity for a
hearing upon the objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or if, after the
entry of such order sustaining one or more of such objections, the Commission
shall find, after notice and opportunity for hearing, that all the objections
so sustained have been met, and shall enter an order so declaring, the Trustee
shall mail copies of such material to all such Holders with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.

 

(c)           Each and every Holder of Securities,
by receiving and holding the same, agrees with the Company and the Trustee that
neither the Company nor the Trustee nor any agent of the Company or the Trustee
shall be held accountable by reason of the disclosure of any such information
as to the names and addresses of the Holders of Securities in accordance with
the provisions of Section 4.02(b), regardless of the source from which
such information was derived, and that the Trustee shall not be held accountable
by reason of mailing any material pursuant to a request made under such Section 4.02(b).

 

(d)           This section 4.02 shall not
apply to any Series unless so specified as contemplated by Section 2.03
for the Securities of such Series.

 

17

 

SECTION 4.03.  Reports
by the Company.  Unless otherwise specified as
contemplated by Section 2.03 for the Securities of any Series, whether or
not required by the Commission’s rules and regulations, the Company shall
file with the Commission within the time periods specified in the Commission’s rules and
regulations, and provide the Trustee and Holders and prospective Holders (upon
request) within 15 days after it files them with the Commission, copies of its
annual report and the information, documents and other reports that are
specified in Sections 13 and 15(d) of the Securities Exchange Act, provided that for purposes of this
covenant, such information, documents and other reports shall be deemed to have
been furnished to the Trustee and Holders if they are electronically available
via the Commission’s EDGAR System.  Even
if the Company is entitled under the Securities Exchange Act not to furnish
such information to the Commission, the Company shall nonetheless continue to
furnish information that would be required to be furnished by the Company by Section 13
or 15(d) of the Securities Exchange Act (excluding exhibits) to the
Trustee and the Holders of the Securities of any Series as if it were
subject to such periodic reporting requirements.  The Company shall also comply with the other
provisions of Section 314(a) of the Trust Indenture Act of 1939.

 

Delivery of such reports, information and documents to
the Trustee is for informational purposes only and the Trustee’s receipt of
such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Company’s compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers’ Certificates).

 

ARTICLE 5

REMEDIES OF THE TRUSTEE AND HOLDERS ON EVENT OF DEFAULT

 

SECTION 5.01.  Event of Default Defined; Acceleration of
Maturity; Waiver of Default.  “Event of Default”, with respect to Securities of any Series,
means, unless otherwise specified as contemplated by Section 2.03 for the
Securities of any Series, any one of the following events which shall have
occurred and be continuing (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body) unless it is either
inapplicable to a particular Series or it is specifically deleted or
modified in or pursuant to the supplemental indenture or resolution of the
Board of Directors establishing such Series of Securities or in the form
of Security for such Series:

 

(a)           default in the payment of any
installment of interest upon any of the Securities of such Series as and
when the same shall become due and payable, and continuance of such default for
a period of 30 days;

 

(b)           default in the payment of all or any
part of the principal of any of the Securities of such Series as and when
the same shall become due and payable, either at maturity, upon any redemption
or repurchase, by declaration or otherwise;

 

(c)           the Company (i) pursuant to or
within the meaning of any bankruptcy law commences a voluntary case, consents
to the entry of an order for relief against it in an involuntary case, consents
to the appointment of a custodian of it or for any substantial

 

18

 

part of its property, or makes a general assignment
for the benefit of its creditors or takes any comparable action under any
foreign laws relating to insolvency; or (ii) a court of competent
jurisdiction enters an order or decree under any bankruptcy law that is for
relief against the Company in an involuntary case, appoints a custodian of the
Company or for any substantial part of its property; or orders the winding up
or liquidation of the Company or any similar relief is granted under any
foreign laws and the order or decree remains unstayed and in effect for 60 days;
or

 

(d)           any other Event of Default (including
Events of Default replacing or supplementing the foregoing) provided with
respect to Securities of such Series in the supplemental indenture or
resolution of the Board of Directors establishing such Series.

 

If an Event of
Default occurs under clause (c) above with respect to the Company occurs, the
principal of and interest on all the Securities of such Series shall
become immediately due and payable without any declaration or other act on the
part of the Trustee or any Holders of any Series.

 

Unless otherwise
specified as contemplated by Section 2.03 for the Securities of any
Series, if an Event of Default (other than an Event of Default occurring as a
result of clause (c)) with respect to the Securities of any Series shall
have occurred and be continuing, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Securities of such Series then
Outstanding by notice to the Company may declare the principal amount of all
the Securities of such Series and accrued and unpaid interest thereon to
be due and payable immediately, and upon any such declaration the same shall
become and shall be immediately due and payable.  This provision, however, is subject to the
condition that if at any time after the principal of the Securities of such Series shall
have been so declared due and payable, and before any judgment or decree for
the payment of the amounts due shall have been obtained or entered as
hereinafter provided, the Company shall have paid or deposited with the Trustee
sufficient funds to pay all matured installments of interest, if any, upon all
the Securities of such Series and the principal of the Securities of such Series that
shall have become due other than by such acceleration (with interest upon such
principal and, to the extent that payment of such interest is enforceable under
applicable law, upon overdue installments of interest, at the rate borne by the
Securities of such Series to the date of such payment or deposit) and all
other defaults under this Indenture, other than the nonpayment of the principal
of Securities of such Series that shall have become due by such
acceleration, shall have been remedied, then and in every such case the Holders
of a majority in aggregate principal amount at maturity of the Securities of
such Series then Outstanding, by written notice to the Company and to the
Trustee for the Securities of such Series, may waive all defaults and rescind
and annul such declaration and its consequences; but no such waiver or
rescission and annulment shall extend to or shall affect any subsequent default
or shall impair any right consequent thereon.

 

Subject to the
provisions of Article 6, in case an Event of Default with respect to the
Securities of any Series shall occur and be continuing, the Trustee shall
not be under any obligation to exercise any of the trusts or powers vested in
it hereby at the request or direction of any Holder of such Series, unless such
Holder shall have offered to such Trustee security or indemnity reasonably
satisfactory to it.

 

19

 

Additional terms
and conditions with respect to the rights of Holders of the Securities of a
particular Series (including as to rights to rescind an acceleration of
the payment of principal and interest) and the rights and obligations of the
Trustee, in each case, in connection with a default or Event of Default, may be
specified as contemplated by Section 2.03 for the Securities of any
Series.

 

SECTION 5.02.  Collection of Indebtedness by Trustee;
Trustee May Prove Debt.  If the Company shall fail to
pay any installment of interest on any of the Securities of any Series when
such interest shall have become due and payable, and such default shall have
continued for a period of 30 days or shall fail to pay the principal of
any of the Securities of any Series when the same shall have become due
and payable, whether upon maturity of the Securities of such Series or
upon any redemption or by declaration or otherwise, then upon demand of the
Trustee for the Securities of such Series, the Company will pay to the Trustee
for the Securities of such Series for the benefit of the Holders of the
Securities of such Series the whole amount that then shall have become due
and payable on all Securities of such Series for principal of or interest,
as the case may be (with interest to the date of such payment upon the overdue
principal and, to the extent that payment of such interest is enforceable under
applicable law, on overdue installments of interest at the same rate as the
rate of interest specified in the Securities of such Series) and such further
amount as shall be sufficient to cover the costs and expenses of collection,
including reasonable compensation to and expenses incurred by the Trustee and
each predecessor Trustee and their respective agents, attorneys and counsel.

 

Until such demand
is made by the Trustee, the Company may pay the principal of and interest on
the Securities of any Series to the persons entitled thereto, whether or
not the principal of and interest on the Securities of such Series are
overdue.

 

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

 

If (i) there
shall be pending proceedings relative to the Company or any other obligor upon
the Securities under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or other similar law, (ii) a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or its property or such other obligor or (iii) any
other comparable judicial proceedings relative to the Company or other obligor
under the Securities of any Series, or to the creditors or property of the
Company or such other obligor, shall be pending, and irrespective of whether
the principal of any Securities shall then be due and payable or whether the
Trustee shall have made any demand pursuant to the provisions of this Section 5.02,
the Trustee shall be entitled and empowered, by intervention in such
proceedings or otherwise:

 

20

 

(a)           to file and prove a claim or claims
for the whole amount of principal and interest owing and unpaid in respect of
the Securities of any Series 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 reasonable compensation to, and expenses incurred by,
the Trustee and each predecessor Trustee, and their respective agents,
attorneys and counsel) and of the Holders allowed in any judicial proceedings relative
to the Company or other obligor upon all Securities of any Series, or to the
creditors or property of the Company or such other obligor; and

 

(b)           to collect and receive any funds or
other property payable or deliverable on any such claims, and to distribute all
amounts received with respect to the claims of the Holders and of the Trustee
on their behalf; and any trustee, receiver, or liquidator, custodian or other
similar official is hereby authorized by each of the Holders to make payments
to the Trustee for the Securities of such Series, and, in the event that such
Trustee shall consent to the making of payments directly to the Holders, to pay
to such Trustee such amounts as shall be sufficient to cover reasonable
compensation to and expenses incurred by such Trustee, each predecessor Trustee
and their respective agents, attorneys and counsel and all other amounts due to
such Trustee or any predecessor Trustee pursuant to Section 6.07.

 

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 of any Series 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.

 

All rights of
action and of asserting claims under this Indenture or under any of the
Securities may be enforced by the Trustee for the Securities of such Series without
the possession of any of the Securities of such Series or the production
thereof at any trial or other proceedings relative thereto.  Any such action or proceedings instituted by
the Trustee shall be brought in its own name as trustee of an express trust.  Any recovery of judgment, subject to the
payment of the expenses, disbursements and compensation of the Trustee, each
predecessor Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Securities in respect of which such
action was taken.

 

In any proceedings
brought by the Trustee for the Securities of such Series, the Trustee shall be
held to represent all the Holders of the Securities in respect of which such
action was taken, and it shall not be necessary to make any Holders of such
Securities parties to any such proceedings.

 

SECTION 5.03.  Application of Proceeds.  Any
amounts collected by the Trustee for the Securities of such Series pursuant
to this Article 5 in respect of the Securities of any Series shall be
applied in the following order at the date or dates fixed by such Trustee and,
in case of the distribution of such amounts on account of principal or
interest, upon presentation of the several Securities in respect of which
amounts have been collected and stamping or otherwise noting thereon the
payment, or issuing Securities of such Series in reduced principal amounts
in

 

21

 

exchange for the
presented Securities of like Series if only partially paid, or upon
surrender thereof if fully paid:

 

FIRST:  To the payment of costs and expenses
applicable to such Series in respect of which amounts have been collected,
including reasonable compensation to and expenses incurred by the Trustee and
each predecessor Trustee and their respective agents and attorneys and all
other amounts due to the Trustee or any predecessor Trustee pursuant to Section 6.07;

 

SECOND:  To the payment of the amounts then due and
unpaid to the holders of Senior Debt, to the extent required by Article 13;

 

THIRD:  To the payment of the amounts then due and
unpaid for principal of and interest on the Securities of such Series (and
any debt pari passu to such Series of
Securities), in respect of which amounts have been collected, such payments to
be made ratably to the persons entitled thereto, without discrimination or
preference, according to the amounts then due and payable on such Securities
and any such debt for principal and interest; and

 

FOURTH:  To the payment of the remainder, if any, to
the Company.

 

SECTION 5.04.  Restoration of Rights on Abandonment of
Proceedings.  If the Trustee for the Securities of any Series shall
have proceeded to enforce any right under this Indenture and such proceedings
shall have been discontinued or abandoned for any reason, or shall have been
determined adversely to the Trustee, the Company and the Trustee, subject to
the determination in any such proceeding, shall be restored to their former
positions and rights hereunder, and all rights, remedies and powers of the
Company, the Trustee and the Holders shall continue as though no such
proceedings had been taken.

 

SECTION 5.05.  Limitations on Suits by Holders.  No
Holder of any Security of any Series shall have any right, by virtue or by
availing of any provision of this Indenture, to institute any action or
proceeding at law or in equity or in bankruptcy or otherwise with respect to
this Indenture, or for the appointment of a trustee, receiver, liquidator,
custodian or other similar official or for any other remedy hereunder, unless
such Holder previously shall have given to the Trustee written notice of an
Event of Default and of the continuance thereof and the Holders of not less
than 25% in aggregate principal amount of the Securities of such Series then
Outstanding shall have made written request upon the Trustee to institute such
action or proceedings in its own name as trustee hereunder and shall have
offered to the Trustee security or indemnity reasonably satisfactory to it as
it may require, against the costs, expenses and liabilities to be incurred
therein or thereby and the Trustee for 60 days after its receipt of such
notice, request and offer of security or indemnity shall have failed to
institute any such action or proceeding and no direction inconsistent with such
written request shall have been given to the Trustee during such 60-day period
by Holders of a majority in principal amount of the Securities of such Series then
Outstanding; it being understood and intended, and being expressly covenanted
by the Holder of every Security with every other Holder of a Security and the
Trustee, that no one or more Holders of Securities of any Series shall
have any right in any manner whatever, by virtue or by availing of any
provision of this Indenture, to affect, disturb or

 

22

 

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

 

SECTION 5.06.  Unconditional Right of Holders to
Institute Certain Suits. 
Notwithstanding any provision in this Indenture and any provision of any
Security of such Series, the right of any Holder of any Security to receive
payment of the principal of and (subject to Section 2.07) interest on such
Security at the respective rates, in the respective amount on or after the
respective due dates expressed in such Security of such Series, or to institute
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the consent of such Holder.

 

SECTION 5.07.  Powers and Remedies Cumulative; Delay or
Omission Not Waiver of Default.  Except as provided in
Sections 2.09 and 5.05, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy, to the extent permitted by
law, shall be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or
remedy hereunder shall not prevent the concurrent assertion or employment of
any other appropriate right or remedy.

 

No delay or
omission of the Trustee or of any Holder to exercise any right or power
accruing upon any Event of Default occurring and continuing as aforesaid shall
impair any such right or power or shall be construed to be a waiver of any such
Event of Default or an acquiescence therein. 
Subject to Section 5.05, every power and remedy given by this
Indenture or by law to the Trustee or to the Holders may be exercised from time
to time, and as often as shall be deemed expedient, by the Trustee or the
Holders.

 

SECTION 5.08.  Control by Holders.  The
Holders of a majority in aggregate principal amount of the Securities of each Series affected
at the time Outstanding shall have the right to direct the time, method, and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred by this Indenture on the Trustee with
respect to the Securities of such Series. 
The Trustee shall have the right to decline to follow any such direction
if (i) such direction shall conflict with law or the provisions of this
Indenture or any indenture supplemental hereto, (ii) the Trustee shall
determine that the action or proceedings so directed would involve the Trustee
in personal liability or (iii) the Trustee in good faith shall so
determine that the actions or forbearances specified in or pursuant to such
direction would be unduly prejudicial to the interests of Holders of the Securities
of all Series so affected not joining in the giving of said direction, it
being understood that the Trustee shall have no duty to ascertain whether or
not such actions or forbearances are unduly prejudicial to such Holders.

 

SECTION 5.09.  Waiver of Past Defaults.  The
Holders of a majority in aggregate principal amount of the Securities of such Series at
the time Outstanding, on behalf of the Holders of all the Securities of such
Series, may waive any past default hereunder or its consequences, except a
default in the payment of the principal of or interest on any of the Securities
of such Series.

 

23

 

Upon any such
waiver, such default shall cease to exist and be deemed to have been cured and
not to have occurred, and any Event of Default arising therefrom shall be
deemed to have been cured and not to have occurred for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other default
or Event of Default or impair any right consequent thereon.

 

SECTION 5.10.  Right of Court to Require Filing of
Undertaking to Pay Costs.  Any court in its discretion may
require, in any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit. 
Any such court in its discretion may assess reasonable costs, including
reasonable attorneys’ fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant.  The
provisions of this Section 5.10 shall not apply, however, to any suit
instituted by the Trustee, to any suit instituted by any Holder or group of
Holders of any Series holding in the aggregate more than 10% in aggregate
principal amount of the Securities of such Series or to any suit
instituted by any Holder for the enforcement of the payment of the principal of
or interest on any Security on or after the due date expressed in such
Security.

 

SECTION 5.11.  Suits for Enforcement.  If
an Event of Default has occurred, has not been waived and is continuing, the
Trustee in its discretion may proceed to protect and enforce the rights vested
in it by this Indenture by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any of such rights, either at
law or in equity or in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this Indenture or in aid
of the exercise of any power granted in this Indenture or to enforce any other
legal or equitable right vested in the Trustee by this Indenture or by law.

 

ARTICLE 6

CONCERNING THE TRUSTEE

 

SECTION 6.01.  Duties of Trustee.

 

(a)           If an Event of Default has occurred
and is continuing with respect to the Securities of any Series, 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 with respect to the Securities of any Series:

 

(i)            the Trustee need perform only those
duties that are specifically set forth in this Indenture and the Trustee shall
not be liable except for the performance of such duties and obligations as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and

 

24

 

(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 any certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Indenture.  However, in the 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.

 

(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 6.01;

 

(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 5.08.

 

(d)           Every provision of this Indenture
that in any way relates to the Trustee is subject to paragraphs (a), (b), (c) and
(e) of this Section 6.01.

 

(e)           No provision of this Indenture shall
require the Trustee to extend 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)            Amounts held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law.  The Trustee shall be under no
liability for interest on any amounts received by it hereunder except as
otherwise agreed in writing with the Company.

 

SECTION 6.02.  Rights of Trustee.

 

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

 

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

 

25

 

(c)           Subject to the provisions of Section 6.01(c),
the Trustee shall not be liable for any action it takes or omits to take in
good faith which it believes to be authorized or within its rights or powers.

 

(d)           Before the Trustee acts or refrains
from acting, the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon in accordance
with such advice or Opinion of Counsel.

 

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

 

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

 

(g)           Prior to the occurrence of an Event
of Default hereunder with respect to such Series of Securities and after
the curing or waiving of all Events of Default with respect to such Series of
Securities, the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, Officers’ Certificate or other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, appraisal, bond, debenture, note, coupon, security or other
paper or document unless requested in writing so to do by the Holders of not
less than a majority in aggregate principal amount of the Outstanding
Securities of each affected Series; provided that, if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation, in the opinion of the
Trustee, is not reasonably assured to the Trustee by the security afforded to
it by the terms of this Indenture, the Trustee may require reasonable indemnity
against such expenses or liabilities as a condition to proceeding.

 

(h)           The Trustee shall not be required to
give any bond or surety in respect of the performance of its powers and duties
hereunder.

 

(i)            The Trustee shall not be bound to
ascertain or inquire as to the performance or observance of any covenants,
conditions or agreements on the part of the Company, except as otherwise set
forth herein, but the Trustee may require of the Company full information and
advice as to the performance of the covenants, conditions and agreements
contained herein and shall be entitled in connection herewith to examine the
books, records and premises of the Company.

 

26

 

(j)            The permissive rights of the Trustee
to do things enumerated in this Indenture shall not be construed as a duty and
the Trustee shall not be answerable for other than its negligence or willful
default.

 

(k)           Except for (i) a default under Section 5.01(a) or
(b) or (ii) any other event of which the Trustee has actual knowledge
and which event, with the giving of notice or the passage of time or both,
would constitute an Event of Default under this Indenture with respect to such Series of
Securities, the Trustee shall not be deemed to have notice of any default or
event unless specifically notified in writing of such event by the Company or
the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of each affected Series.

 

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

 

(m)          The rights, privileges, protections,
immunities and benefits given to the Trustee, including, without limitation,
its right to be indemnified, are extended to, and shall be enforceable by, the
Trustee in each of its capacities hereunder, and each agent, custodian and
other Person employed to act hereunder.

 

SECTION 6.03.  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 or co-registrar
may do the same with like rights. 
However, the Trustee must comply with Sections 6.10 and 6.11.

 

SECTION 6.04.  Trustee’s Disclaimer.  The
Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities.  The Trustee
shall not be accountable for the Company’s use of the proceeds from the
Securities and shall not be responsible for any statement in any registration
statement for the Securities filed with the Commission under the Securities Act
(other than its Statement of Eligibility on Form T-1) or in the Indenture
(other than its eligibility under Section 6.10) or the Securities (other
than its certificate of authentication).

 

SECTION 6.05.  Notice of Defaults.  If
a default occurs and is continuing with respect to the Securities of any Series and
is known to the Trustee, the Trustee shall mail to each Holder of the Securities
of such Series notice of such default within the earlier of 90 days
after such default occurs or 30 days after such default is known to a
trust officer or written notice of such default is received by the
Trustee.  Except in the case of a default
in the payment of principal of, premium, if any, or interest on the Securities
of any Series, including payments pursuant to the redemption provisions of the
Securities of such Series, the Trustee may withhold notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
such notice is in the interests of Holders of such Series.

 

27

 

SECTION 6.06.  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 Holder of any Series and
each other Person specified in Section 313(c) of the Trust Indenture
Act a brief report dated as of such May 15 that complies with Section 313(a) of
the Trust Indenture Act to the extent required thereby.  The Trustee also shall comply with Section 313(b) of
the Trust Indenture Act.

 

The Trustee will
file a copy of each report, at the time of its mailing to Holders of any
Series, with the Commission and each securities exchange on which the
Securities of any Series are listed. 
The Company promptly will notify the Trustee whenever the Securities of
any Series become listed on any securities exchange and of any delisting
thereof.

 

SECTION 6.07.  Compensation and Indemnity.  The
Company:

 

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

 

(b)           will reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any provision of this Indenture,
including the reasonable compensation and expenses of its agents and counsel,
except to the extent any such compensation or expense shall be determined to
have been caused by its own negligence or willful misconduct; and

 

(c)           will fully indemnify the Trustee for,
and to hold it harmless against, any loss, liability, claim, damage or expense
arising out of or in connection with the acceptance or administration of this
trust or the performance of its duties hereunder, including the reasonable
costs and expenses of defending itself against or investigating any claim or
liability in connection with the exercise or performance of any of its powers
or duties hereunder, except to the extent that any such loss, liability or
expense shall be determined to have been caused by its own negligence or
willful misconduct.

 

As security for
the performance of the Company’s obligations under this Section 6.07, the
Trustee shall have a lien prior to the Securities on all funds or property held
or collected by the Trustee, except for those funds that are held in trust to
pay the principal of or interest, if any, on particular Securities.

 

“Trustee” for
purpose of this Section 6.07 includes any predecessor trustee; provided
that the negligence or bad faith of any Trustee shall not be attributable to
any other Trustee.

 

The Company’s
payment obligations pursuant to this Section 6.07 shall constitute
additional indebtedness hereunder and shall survive the discharge of this Indenture
and resignation or removal of the Trustee. 
When the Trustee incurs expenses after the occurrence of a default
specified in Sections 5.01(c), such expenses, including reasonable fees
and expenses of counsel, are intended to constitute expenses of administration
under bankruptcy law.

 

28

 

SECTION 6.08.  Replacement of Trustee.  The
Trustee may resign at any time with respect to Securities of one or more Series by
so notifying the Company.  No such resignation,
however, shall be effective until a successor Trustee has accepted its
appointment pursuant to this Section 6.08. 
The Holders of a majority in aggregate principal amount of the
Outstanding Securities of any Series may remove the Trustee with respect
to such Series by so notifying the Trustee and the Company.  The Company shall remove the Trustee if:

 

(a)           the Trustee fails to comply with Section 6.10;

 

(b)           the Trustee is adjudged bankrupt or
insolvent;

 

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

 

(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, with respect to the Securities of one or more Series, the Company shall
promptly appoint, by resolution of its Board of Directors, a successor Trustee
with respect to the Securities of such Series.

 

A successor
Trustee shall deliver a written acceptance of its appointment to the retiring
Trustee and to 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 with respect to the Securities of such Series.  The successor Trustee shall mail a notice of
its succession to Holders so affected. 
The retiring Trustee shall upon payment of its charges hereunder
promptly transfer all funds and property held by it as Trustee to the successor
Trustee, subject to the lien provided for in Section 6.07.

 

If a successor
Trustee does not take office within 30 days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Company or the Holders of a
majority in aggregate principal amount of the Outstanding Securities of each
affected Series may petition at the expense of the Company any court of
competent jurisdiction for the appointment of a successor Trustee.

 

If the Trustee
fails to comply with Section 6.10, any Holder may petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.

 

SECTION 6.09.  Successor Trustee by Merger.  If
the Trustee consolidates with, merges or converts into or transfers all or
substantially all its corporate trust business or assets to another
corporation, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.

 

SECTION 6.10.  Eligibility; Disqualification.  The
Trustee shall at all times satisfy the requirements of Section 310(a)(1) of
the Trust Indenture Act.  The Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition.  Neither the Company nor any person directly
or indirectly controlling, controlled by or under common control with the
Company shall serve as Trustee hereunder. 
The Trustee shall comply with Section 310(b) of the Trust
Indenture Act.

 

29

 

SECTION 6.11.  Preferential Collection of Claims Against
Company.  The Trustee shall comply with Section 311(a) of
the Trust Indenture Act, excluding any creditor relationship listed in Section 311(b) of
the Trust Indenture Act.  A Trustee who
has resigned or been removed shall be subject to Section 311(a) of
the Trust Indenture Act to the extent indicated therein.

 

ARTICLE 7

CONCERNING THE HOLDERS

 

SECTION 7.01.  Evidence of Action Taken by Holders.

 

(a)           Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture
to be given or taken by a specified percentage in principal amount of the
Holders of any or all Series may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such specified
percentage of Holders in person or by agent duly appointed in writing.  Except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee. 
Proof of execution of any instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and, subject to
Sections 6.01 and 6.02, conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Article 7.

 

(b)           The ownership of Securities shall be proved
by the Security register.

 

SECTION 7.02.  Proof of Execution of Instruments.  Subject
to Sections 6.01 and 6.02, the execution of any instrument by a Holder or
his agent or proxy may be proved in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee.

 

SECTION 7.03.  Holders to Be Treated as Owners.  The
Company, the Trustee and any agent of the Company or the Trustee may deem and
treat the person in whose name any Security shall be registered upon the
Security register for such Series as the absolute owner of such Security
(whether or not such Security shall be overdue and notwithstanding any notation
of ownership or other writing thereon) for the purpose of receiving payment of
or on account of the principal of and interest on such Security and for all
other purposes.  Neither the Company nor
the Trustee nor any agent of the Company or the Trustee shall be affected by any
notice to the contrary.  All payments
made to any such person, or upon his order, shall be valid and, to the extent
of the sum or sums so paid, effectual to satisfy and discharge the liability
for amounts payable upon any such Security.

 

SECTION 7.04.  Securities Owned by Company Deemed Not Outstanding.  In
determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all Series have concurred in any
direction, consent or waiver under this Indenture, Securities that are owned by
the Company or any other obligor on the Securities with respect to which such
determination is being made, or by any person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Company or any other obligor on the Securities with respect to which such
determination is being made, shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination.  For

 

30

 

the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, consent or waiver, only Securities that the Trustee knows are so
owned shall be so disregarded. 
Securities so owned that have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of the Trustee
the pledgee’s right so to act with respect to such Securities and that the
pledgee is not the Company or any other obligor upon the Securities or any
person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any other obligor on the
Securities.

 

SECTION 7.05.  Right of Revocation of Action Taken.  At
any time prior to the evidencing to the Trustee, as provided in Section 7.01,
of the taking of any action by the Holders of the percentage in aggregate
principal amount of the Securities of any Series specified in this
Indenture in connection with such action, any Holder of a Security the serial
number of which is shown by the evidence to be included among the serial
numbers of the Securities the Holders of which have consented to such action,
by filing written notice at the Corporate Trust Office and upon proof of
holding as provided in this Article 7, may revoke such action so far as
concerns such Security.  Except as
aforesaid any such action taken by the Holder of any Security shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of such Security and of any Securities issued in exchange or substitution
therefor, irrespective of whether or not any notation in regard thereto is made
upon any such Security.  Any action taken
by the Holders of the percentage in aggregate principal amount of the
Securities of any Series specified in this Indenture in connection with
such action shall be binding upon the Company, the Trustee and the Holders of
all the Securities affected by such action.  
This Section 7.05 shall apply unless otherwise specified as
contemplated by Section 2.03 for the Securities of any Series.

 

ARTICLE 8

SUPPLEMENTAL INDENTURES

 

SECTION 8.01.  Supplemental Indentures Without Consent
of Holders.  Unless otherwise specified as contemplated by
Section 2.03 for the Securities of any Series, the Company, when
authorized by a resolution of its Board of Directors, and the Trustee for the
Securities of any Series from time to time and at any time may enter into
an indenture or indentures supplemental hereto, which shall conform to the
provisions of the Trust Indenture Act as in force at the date of the execution
thereof, in form satisfactory to such Trustee, for one or more of the following
purposes:

 

(a)           to convey, transfer, assign, mortgage
or pledge any property or assets to the Trustee as security for the Securities
of one or more Series;

 

(b)           to evidence the succession of another
corporation to the Company, or successive successions, and the assumption by
the successor corporation of the covenants, agreements and obligations of the
Company pursuant to Article 9;

 

(c)           to add to the covenants of the
Company such further covenants, restrictions, conditions or provisions for the
protection of the Holders of Securities of any Series and, if such
additional covenants are to be for the benefit of less than all the Series of
Securities, stating that such covenants are being added solely for the benefit
of such Series, or to surrender any right or power conferred on the Company;

 

31

 

(d)           to cure any ambiguity or to correct
or supplement any provision contained herein or in any supplemental indenture
that may be defective or inconsistent with any other provision contained herein
or in any supplemental indenture, or to make such other provisions in regard to
matters or questions arising under this Indenture or under any supplemental
indenture as the Board of Directors may deem necessary or desirable and that
shall not materially and adversely affect the interests of the Holders of such Series of
Securities;

 

(e)           to establish the form or terms of
Securities of any Series as permitted by Sections 2.01 and 2.03; or

 

(f)            to evidence and provide for the
acceptance of appointment hereunder by a successor Trustee with respect to the
Securities of one or more Series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than the one Trustee,
pursuant to the requirements of Section 6.08.

 

The Trustee is
hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations that may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which affects the Trustee’s own rights, duties or immunities under this
Indenture or otherwise.

 

Any supplemental
indenture authorized by the provisions of this Section 8.01 may be
executed without the consent of the Holders of any of the Securities at the
time Outstanding, notwithstanding any of the provisions of Section 8.02.

 

SECTION 8.02.  Supplemental Indentures with Consent of
Holders.   Except as otherwise specified as contemplated
by Section 2.03 for the Securities of any Series, with the consent
(evidenced as provided in Article 7) of the Holders of not less than a
majority in aggregate principal amount of the Outstanding Securities of each Series affected
by such supplemental indenture, the Company, when authorized by a resolution of
its Board of Directors, and the Trustee for such Series of Securities,
from time to time and at any time, may enter into an indenture or indentures
supplemental hereto, which shall conform to the provisions of the Trust
Indenture Act as in force at the date of execution thereof, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying
in any manner the rights of the Holders of the Securities of each such
Series.  Except as otherwise specified as
contemplated by Section 2.03 for the Securities of any Series, no such
supplemental indenture, however, shall:

 

(a)           extend the final maturity date of any
Security, reduce the principal amount thereof, reduce the rate or extend the
time of payment of interest thereon, reduce any amount payable on redemption or
repurchase thereof, change the time at which the Securities of any Series may
be redeemed, impair or affect the right of any Holder to receive payment of
principal of, and interest on, any Security or to institute suit for payment
thereof or, if the Securities provide therefor, affect any right of repayment
at the

 

32

 

option of the Holder without the consent of each
affected Holder of Securities of such Series;

 

(b)           reduce the aforesaid percentage of
Securities of any Series, the consent of the Holders of which is required for
any such supplemental indenture, without the consent of each affected Holder of
Securities of such Series; or

 

(c)           reduce the amount of principal
payable upon acceleration of the maturity date of any Original Issue Discount
Security without the consent of each affected Holder of Securities of such
Series.

 

Upon the request
of the Company, accompanied by a copy of a resolution of the Board of Directors
certified by the secretary or an assistant secretary of the Company authorizing
the execution of any such supplemental indenture, and upon the filing with the
Trustee for such Series of Securities of evidence of the consent of the
Holders as aforesaid and other documents, if any, required by Section 7.01,
the Trustee for such Series of Securities shall join with the Company in
the execution of such supplemental indenture. 
If such supplemental indenture affects such Trustee’s own rights, duties
or immunities under this Indenture or otherwise, such Trustee in its discretion
may, but shall not be obligated to, enter into such supplemental indenture.

 

It shall not be
necessary for the consent of the Holders under this Section 8.02 to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such consent shall approve the substance thereof.

 

Promptly after the
execution by the Company and the Trustee of any supplemental indenture pursuant
to the provisions of this Section 8.02, the Company shall give notice in
the manner and to the extent provided in Section 14.04 to the Holders of
Securities of each Series affected thereby at their addresses as they
shall appear on the Security register, setting forth in general terms the
substance of such supplemental indenture. 
Any failure of the Company to mail such notice, or any defect therein,
shall not in any way impair or affect the validity of any such supplemental
indenture.

 

SECTION 8.03.  Effect of Supplemental Indenture.  Upon
the execution of any supplemental indenture pursuant to the provisions hereof,
this Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the Holders
of Securities of each Series affected thereby shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.  This Section 8.03 shall apply unless
otherwise specified as contemplated by Section 2.03 for the Securities of
any Series.

 

SECTION 8.04.  Documents to Be Given to Trustee.  The
Trustee, subject to the provisions of Sections 6.01 and 6.02, shall be
provided with an Officers’ Certificate and an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant to this Article 8
complies with the applicable provisions of this Indenture.

 

33

 

SECTION 8.05.  Notation on Securities in Respect of
Supplemental Indentures. 
Securities of any Series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this Article 8
may bear, upon the direction of the Company, a notation in form satisfactory to
the Trustee for the Securities of such Series as to any matter provided
for by such supplemental indenture.  If
the Company or the Trustee shall so determine, new Securities of any Series so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Company, authenticated by the
Trustee and delivered in exchange for the Outstanding Securities of such
Series.

 

SECTION 8.06.  Subordination Unimpaired.  Unless otherwise specified as contemplated by
Section 2.03 for the Securities of any Series, this Indenture may not be
amended to alter the subordination of any of the Outstanding Securities of any Series without
the written consent of each holder of Senior Debt then outstanding that would
be adversely affected thereby.

 

ARTICLE 9

CONSOLIDATION, MERGER, SALE OR CONVEYANCE

 

SECTION 9.01.  Company May Consolidate, Etc. on
Certain Terms.  Unless otherwise specified as contemplated
by Section 2.03 for the Securities of any Series, the Company may
consolidate with or merge with or into, or sell, convey or lease all or
substantially all of its assets to, any other corporation; provided that in any
such case:

 

(a)           either the Company shall be the
continuing corporation, or the successor corporation shall be organized and
validly existing under the laws of the United States of America or any State
thereof or the District of Columbia and shall expressly assume the due and
punctual payment of the principal of and interest on all the Securities
according to their tenor, and the due and punctual performance and observance
of all of the covenants and conditions of this Indenture to be performed or
observed by the Company by supplemental indenture satisfactory to the Trustee,
executed and delivered to the Trustee by such corporation, and

 

(b)           the Company or such successor
corporation, as the case may be, shall not be in material default immediately
after such consolidation, merger, sale, conveyance or lease in the performance
or observance of any such covenant or condition.

 

SECTION 9.02.  Successor Corporation Substituted.  In
case of any such consolidation, merger, sale, lease or conveyance, and
following such an assumption by the successor corporation, such successor
corporation shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein. 
Such successor corporation may cause to be signed, and may issue either
in its own name or in the name of the Company prior to such succession, any or
all of the Securities issuable hereunder that shall not have been signed by the
Company and delivered to the Trustee; and, upon the order of such successor
corporation instead of the Company and subject to all the terms, conditions and
limitations in this Indenture, the Trustee shall authenticate and shall make
available for delivery any Securities that shall have been signed and delivered
by the officers of the Company to the Trustee for authentication, and any
Securities which such successor corporation thereafter shall cause to be signed
and delivered

 

34

 

to the Trustee for that purpose. 
All of the Securities so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Securities had been issued at the date of the execution hereof.

 

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

 

In the event of
any such sale or conveyance (except in the case of a lease of all or
substantially all of the assets of the Company) the Company shall be discharged
from all obligations and covenants under this Indenture and the Securities and
may be liquidated and dissolved.

 

The provisions of
this Section 9.02 shall apply except as otherwise specified as
contemplated by Section 2.03 for the Securities of any Series.

 

SECTION 9.03.  Opinion of Counsel to Trustee.  The
Trustee, subject to the provisions of Sections 6.01 and 6.02, shall
receive an Opinion of Counsel, prepared in accordance with Section 14.05,
as conclusive evidence that any such consolidation, merger, sale, lease or
conveyance, and any such assumption complies with the applicable provisions of
this Indenture.

 

ARTICLE 10

SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE;

UNCLAIMED FUNDS

 

SECTION 10.01.  Satisfaction and Discharge of Indenture; Defeasance.  Unless otherwise specified as contemplated by
Section 2.03 for the Securities of any Series,

 

(a)           When (i) all outstanding
Securities of a Series (other than Securities of such Series replaced
or paid pursuant to Section 2.08) have been canceled or delivered to the
Trustee for cancellation or (ii) all outstanding Securities of such Series have
become due and payable, whether at maturity or as a result of the mailing of a
notice of redemption in connection with a redemption of a Series of
Securities, or will become due and payable within one year, and the Company
irrevocably deposits with the Trustee funds in an amount sufficient or U.S.
Government Obligations, the principal of and interest on which will be
sufficient, or a combination thereof sufficient, in the written opinion of a
nationally recognized firm of independent public accountants delivered to the
Trustee (which opinion shall only be required to be delivered if U.S.
Government Obligations have been so deposited), to pay the principal of and
interest and on the outstanding Securities when due at maturity or upon
redemption of, including interest thereon to maturity or such redemption date
(other than Securities of such Series replaced or paid pursuant to Section 2.08)
and if in either case the Company pays all other sums payable hereunder by the
Company, then this Indenture shall, subject to Section 10.01(c), cease to
be of further effect.  The Trustee shall
acknowledge satisfaction and discharge of this Indenture on demand of the
Company accompanied by an Officers’ Certificate and an Opinion of Counsel and
at the cost and expense of the Company.

 

35

 

(b)           Subject to Sections 10.01(c) and
10.02, the Company at any time may terminate (i) all of its obligations
under the Securities of such Series and this Indenture (“legal defeasance
option”) or (ii) its obligations under Sections 4.03 (“covenant
defeasance option”).  The Company may
exercise its legal defeasance option notwithstanding its prior exercise of its
covenant defeasance option for such Series.

 

If the Company
exercises its legal defeasance option with respect to Securities of a Series,
payment of the Securities of such Series may not be accelerated because of
an Event of Default.

 

Upon satisfaction
of the conditions set forth herein and upon request of the Company, the Trustee
shall acknowledge in writing the discharge of those obligations that the
Company terminates.

 

(c)           Notwithstanding clauses (a) and
(b) above, the Company’s obligations in Sections 2.04, 2.05, 2.06,
2.07, 2.08, 2.09, 2.10, and 6.07, and in this Article 10 shall survive
until the Securities of such Series have been paid in full.  Thereafter, the Company’s obligations in
Sections 6.07 and 10.05 and the Trustee’s obligations under Section 10.04
shall survive such satisfaction and discharge.

 

SECTION 10.02  Conditions to Defeasance.  Unless otherwise specified as contemplated by
Section 2.03 for the Securities of any Series, the Company may exercise
its legal defeasance option or its covenant defeasance option only if:

 

(i)            the Company irrevocably deposits in trust with the
Trustee money in an amount sufficient or U.S. Government Obligations, the
principal of and interest on which will be sufficient, or a combination thereof
sufficient, to pay the principal of, and premium (if any) and interest on the
Securities of such Series when due at maturity or redemption, as the case
may be, including interest thereon to maturity or such redemption date;

 

(ii)           in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (1) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling, or (2) since the date of this Indenture there has been a
change in the applicable Federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel shall confirm that, the Holders
of such Series will not recognize income, gain or loss for Federal income
tax purposes as a result of such deposit and defeasance and will be subject to
Federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such deposit and defeasance had not
occurred; and

 

(iii)          in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect that
the Holders of such Series will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit and defeasance and will
be subject to Federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such deposit and defeasance had
not occurred.

 

36

 

SECTION 10.03  Application of Trust Money.  The Trustee shall hold in trust money or U.S.
Government Obligations deposited with it pursuant to this Article 10.  It shall apply the deposited money and the
money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal of and interest on
the Securities of such Series.  Money and
securities so held in trust are not subject to Article 13.

 

SECTION 10.04  Repayment to Company.  The Trustee and the Paying Agent shall
promptly turn over to the Company upon request any money or U.S. Government
Obligations held by it as provided in this Article which, in the written
opinion of nationally recognized firm of independent public accountants
delivered to the Trustee (which opinion shall only be required to be delivered
if U.S. Government Obligations have been so deposited), are in excess of the
amount thereof which would then be required to be deposited to effect an
equivalent discharge or defeasance in accordance with this Article.

 

Subject to any
applicable abandoned property law, the Trustee and the Paying Agent shall pay
to the Company upon written request any money held by them for the payment of
principal or interest or that remains unclaimed for two years, and, thereafter,
Holders entitled to the money must look to the Company for payment as general
creditors, and the Trustee and the Paying Agent shall have no further liability
with respect to such monies.

 

SECTION 10.05  Indemnity for Government Obligations.  The Company shall pay and shall indemnify the
Trustee against any tax, fee or other charge imposed on or assessed against
deposited U.S. Government Obligations or the principal and interest received on
such U.S. Government Obligations.

 

SECTION 10.06  Reinstatement.  If the Trustee or Paying Agent is unable to
apply any money or U.S. Government Obligations in accordance with this Article 10
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company’s obligations under this Indenture and the
Securities of such Series shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 10 until such time as the
Trustee or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 10; provided, however,
that, if the Company has made any payment of principal of or interest on, any
Securities of such Series because of the reinstatement of its obligations,
the Company shall be subrogated to the rights of the Holders of such Securities
to receive such payment from the money or U.S. Government Obligations held by
the Trustee or Paying Agent.  This Section 10.06
shall not apply to any Series unless specified as contemplated by Section 2.03
for the Securities of such Series.

 

ARTICLE 11

REDEMPTION OF SECURITIES AND SINKING FUNDS

 

SECTION 11.01.  Applicability of Article.  The
provisions of this Article 11 shall be applicable to the Securities of any
Series which are redeemable before their maturity or to any sinking fund
for the retirement of Securities of a Series except as otherwise specified
as contemplated by Section 2.03 for Securities of such Series.

 

37

 

SECTION 11.02.  Notice of Redemption; Partial
Redemptions.

 

This Section 11.02
shall apply unless otherwise specified as contemplated by Section 2.03 for
the Securities of any Series.

 

Notice of
redemption to the Holders of Securities of any Series required to be
redeemed or to be redeemed as a whole or in part at the option of the Company
shall be given by giving notice of such redemption as provided in Section 14.04,
at least 30 days and not more than 60 days prior to the date fixed for
redemption to such Holders of Securities of such Series.  Failure to give notice by mail, or any defect
in the notice to the Holder of any Security of a Series designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security of such Series.

 

The notice of
redemption to each such Holder shall specify the date fixed for redemption, the
“CUSIP” number or numbers for such Securities, the redemption price, the Place
of Payment or Places of Payment, that payment will be made upon presentation
and surrender of such Securities, that such redemption is pursuant to the
mandatory or optional sinking fund, or both, if such be the case, that interest
accrued to the date fixed for redemption will be paid as specified in such
notice, that on and after said date interest thereon or on the portions thereof
to be redeemed will cease to accrue and, if applicable, that a Holder of
Securities who desires to convert Securities for redemption must satisfy the
requirements for conversion contained in such Securities, the then existing
conversion price or rate and the date and time when the option to convert shall
expire.  If less than all of the
Securities of any Series are to be redeemed, the notice of redemption
shall specify the numbers of the Securities of such Series to be
redeemed.  In case any Security of a Series is
to be redeemed in part, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Security, a new Security or
Securities of such Series in principal amount equal to the unredeemed
portion thereof will be issued.

 

The notice of
redemption of Securities of any Series to be redeemed at the option of the
Company shall be given by the Company or, at the Company’s request, by the
Trustee in the name and at the expense of the Company.  If such notice is to be given by the Trustee,
the Company shall provide notice of such redemption to the Trustee at least
45 days prior to the date fixed for redemption (unless a shorter notice shall
be satisfactory to the Trustee).  If such
notice is given by the Company, the Company shall provide a copy of such notice
given to the Holders of such redemption to the Trustee at least three Business
Days prior to the date such notice is given to such Holders, but in any event
at least 15 days prior to the date fixed for redemption (unless a shorter
notice shall be satisfactory to the Trustee).

 

Unless otherwise
specified pursuant to Section 2.03, not later than the redemption date
specified in the notice of redemption given as provided in this Section 11.02,
the Company will have on deposit with the Trustee or with one or more Paying
Agents (or, if the Company is acting as its own Paying Agent, set aside,
segregate and hold in trust as provided in Section 3.03) funds available
on such date (or other forms of property, if permitted by the terms of the
Securities of such Series) sufficient to redeem on the redemption date all the
Securities of such Series so called for redemption at the appropriate
redemption price, together with accrued interest to the date fixed for
redemption.  If less than all the
Outstanding Securities of a Series

 

38

 

are to be redeemed, the Company will deliver to the Trustee at least
45 days prior to the date fixed for redemption an Officers’ Certificate
stating the aggregate principal amount of Securities to be redeemed (unless a
shorter notice shall be satisfactory to the Trustee).

 

If less than all
the Securities of a Series are to be redeemed, the Trustee shall select
Securities of such Series to be redeemed on a pro rata basis, by lot or by
such other method as the Trustee in its sole discretion shall deem to be fair
and appropriate, and the Trustee shall promptly notify the Company in writing
of the Securities of such Series selected for redemption and, in the case
of any Securities of such Series selected for partial redemption, the
principal amount thereof to be redeemed. 
However, if less than all the Securities of any Series with
differing issue dates, interest rates and stated maturities are to be redeemed,
the Company in its sole discretion shall select the particular securities to be
redeemed and shall notify the Trustee in writing thereof at least 45 days
prior to the relevant redemption date (unless a shorter notice shall be
satisfactory to the Trustee).  Securities
may be redeemed in part in multiples equal to the minimum authorized
denomination for Securities of such Series or any multiple thereof.  For all purposes of this Indenture, unless
the context otherwise requires, all provisions relating to the redemption of
Securities of any Series shall relate, in the case of any Security
redeemed or to be redeemed only in part, to the portion of the principal amount
of such Security which has been or is to be redeemed.

 

This Section 11.02
shall apply unless otherwise specified as contemplated by Section 2.03 for
the Securities of any Series.

 

SECTION 11.03.  Payment of Securities Called for
Redemption.  If notice of redemption has been given as
above provided, the Securities or portions of Securities specified in such
notice shall become due and payable on the date and at the place stated in such
notice at the applicable redemption price, together with interest accrued to
the date fixed for redemption, and on and after said date (unless the Company
shall default in the payment of such Securities at the redemption price,
together with interest accrued to said date) interest on the Securities or
portions of Securities so called for redemption shall cease to accrue.  Except as provided in Sections 6.01 and
10.04, such Securities shall cease from and after the date fixed for redemption
to be entitled to any benefit or security under this Indenture, and the Holders
thereof shall have no right in respect of such Securities except the right to
receive the redemption price thereof and unpaid interest to the date fixed for
redemption.  On presentation and
surrender of such Securities at a Place of Payment specified in said notice,
said Securities or the specified portions thereof shall be paid and redeemed by
the Company at the applicable redemption price, together with interest accrued
thereon to the date fixed for redemption. 
If for any Securities the date fixed for redemption is a regular interest
payment date, payment of interest becoming due on such date shall be payable to
the Holders of such Securities registered as such on the relevant record date
subject to the terms and provisions of Section 2.07.

 

If any Security
called for redemption shall not be so paid upon surrender thereof for
redemption, the principal shall, until paid or duly provided for, bear interest
from the date fixed for redemption at the rate of interest borne by the
Security.

 

Upon presentation
of any Security redeemed in part only, the Company shall execute and the
Trustee shall authenticate and make available for delivery to or on the order
of the Holder

 

39

 

thereof, at the expense
of the Company, a new Security or Securities, of authorized denominations, in
principal amount equal to the unredeemed portion of the Security so presented.

 

This Section 11.03
shall apply unless otherwise specified as contemplated by Section 2.03 for
the Securities of any Series.

 

SECTION 11.04.  Exclusion of Certain Securities from Eligibility
for Selection for Redemption.  Securities shall be
excluded from eligibility for selection for redemption if they are identified
by registration and certificate number in a written statement signed by an
authorized officer of the Company and delivered to the Trustee at least
30 days prior to the last date on which notice of redemption may be given
as being owned of record and beneficially by, and not pledged or hypothecated
by, either (a) the Company or (b) an entity specifically identified
in such written statement as directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company.  This Section 11.04 shall apply unless
otherwise specified as contemplated by Section 2.03 for the Securities of
any Series.

 

SECTION 11.05.  Mandatory and Optional Sinking Funds.  The
minimum amount of any sinking fund payment provided for by the terms of
Securities of any Series is referred to as a “mandatory sinking fund payment”, and any payment in excess of
such minimum amount provided for by the terms of Securities of any Series is
referred to as an “optional sinking fund
payment”.  The date on which a
sinking fund payment is to be made is referred to as the “sinking fund payment date”.

 

In lieu of
providing funds for all or any part of any mandatory sinking fund payment with
respect to any Series of Securities, the Company at its option:

 

(a)           may deliver to the Trustee securities
of such Series theretofore purchased or otherwise acquired (except upon
redemption pursuant to the mandatory sinking fund) by the Company or receive
credit for Securities of such Series (not previously so credited)
theretofore purchased or otherwise acquired (except as aforesaid) by the
Company and delivered to the Trustee for cancellation pursuant to Section 2.10;

 

(b)           may receive credit for optional
sinking fund payments (not previously so credited) made pursuant to this Section 11.05;
or

 

(c)           may receive credit for Securities of
such Series (not previously so credited) redeemed by the Company through
any optional redemption provision contained in the terms of such Series.

 

Securities so delivered or credited shall be received or credited by
the Trustee at the sinking fund redemption price specified in such Securities.

 

40

 

On or before the
45th day next preceding each sinking fund payment date for any Series of
Securities, the Company will deliver to the Trustee a written statement (which
need not contain the statements required by Section 14.05) signed by an
authorized officer of the Company which will:

 

(a)           specify the portion of the mandatory
sinking fund payment to be satisfied by delivery of funds, except as otherwise
specified pursuant to Section 2.03 for the Securities of such Series, and
the portion to be satisfied by delivery or credit of Securities of such Series;

 

(b)           state that none of the Securities of
such Series for which credit is sought has theretofore been so credited;

 

(c)           state that no defaults in the payment
of interest or Events of Default with respect to such Series have occurred
(which have not been waived or cured) and are continuing;

 

(d)           state whether or not the Company
intends to exercise its right to make an optional sinking fund payment with
respect to such Series and, if so, specifying the amount of such optional
sinking fund payment which the Company intends to pay on or before the next
succeeding sinking fund payment date; and

 

(e)           specify such sinking fund payment
date.

 

Any Securities of
such Series to be credited and required to be delivered to the Trustee in
order for the Company to be entitled to credit therefor that have not
previously been delivered to the Trustee shall be delivered for cancellation
pursuant to Section 2.10 to the Trustee with such written statement.  Such written statement shall be
irrevocable.  Upon its receipt by the
Trustee, the Company shall become unconditionally obligated to make all the
payments, if any, therein referred to on or before the next succeeding sinking
fund payment date.  Failure of the
Company, on or before any such 45th day, to deliver such written statement and
Securities specified in this paragraph, if any, shall not constitute a default
but shall constitute, on and as of such date, the irrevocable election of the
Company (i) that the mandatory sinking fund payment for such Series due
on the next succeeding sinking fund payment date shall be paid entirely in
funds without the option to deliver or credit Securities of such Series in
respect thereof and (ii) that the Company will make no optional sinking
fund payment with respect to such Series as provided in this Section 11.05.

 

If the sinking
fund payment or payments (mandatory or optional or both) to be made in funds on
the next succeeding sinking fund payment date plus any unused balance of any
preceding sinking fund payments made in funds shall exceed $100,000 (or a
lesser amount if the Company shall so request) with respect to the Securities
of any particular Series, such funds shall be applied on the next succeeding
sinking fund payment date to the redemption of Securities of such Series at
the sinking fund redemption price together with accrued interest to the date
fixed for redemption.  If such amount
shall be $100,000 or less and the Company makes no such request, then it shall
be carried over until an amount in excess of $100,000 is available.  The Trustee shall select, in the manner
provided in Section 11.02 and giving effect to any exclusions

 

41

 

required pursuant to Section 11.04,
for redemption on such sinking fund payment date a sufficient principal amount
of Securities of such Series to absorb, as nearly as may be possible, such
funds and shall inform the Company of the serial numbers of the Securities of
such Series (or portions thereof) so selected.  The Trustee, in the name and at the expense
of the Company, shall cause notice of redemption of the Securities of such Series to
be given in substantially the manner provided in Section 11.02 for the
redemption of Securities of such Series. 
The amount of any sinking fund payments not so applied or allocated to
the redemption of Securities of such Series shall be added to the next
sinking fund payment for such Series and, together with such payment,
shall be applied in accordance with the provisions of this Section 11.05.  Any and all sinking fund amounts held on the
stated maturity date of the Securities of any particular Series (or
earlier, if such maturity is accelerated) that are not held for the payment or
redemption of particular Securities of such Series shall be applied,
together with other amounts, if necessary, sufficient for the purpose, to the
payment of the principal of, and interest on, the Securities of such Series at
maturity.

 

Unless otherwise
specified pursuant to Section 2.03, not later than the sinking fund
payment date, the Company shall have paid to the Trustee or shall otherwise
provide funds available on such date for the payment of all principal and
interest accrued to the date fixed for redemption on Securities to be redeemed
on such sinking fund payment date.

 

The Trustee shall
not redeem or cause to be redeemed any Securities of a Series with sinking
fund amounts or mail or publish any notice of redemption of Securities for such
Series by operation of the sinking fund during the continuance of a
default in payment of interest on such Securities or of any Event of Default
except that, where the mailing or publication of notice of redemption of any
Securities previously shall have been made, the Trustee shall redeem or cause
to be redeemed such Securities; provided that it shall have received from the
Company amounts sufficient for such redemption. 
Except as aforesaid, any amounts in the sinking fund for such Series at
the time when any such default or Event of Default shall occur, and any amounts
thereafter paid into the sinking fund, during the continuance of such default
or Event of Default, shall be deemed to have been collected under Article 5
and held for the payment of all such Securities.  In case such Event of Default shall have been
waived as provided in Section 5.09 or the default cured on or before the
sixtieth day preceding the sinking fund payment date in any year, such amounts
thereafter shall be applied on the next succeeding sinking fund payment date in
accordance with this Section 11.05 to the redemption of such Securities.

 

SECTION 11.06.  Repayment at the Option of the Holders.  Securities
of any Series that are repayable at the option of the Holders before their
stated maturity shall be repaid in accordance with the terms of the Securities
of such Series.

 

The repayment of
any principal amount of Securities pursuant to such option of the Holder to
require repayment of Securities before their stated maturity, for purposes of Section 10.01,
shall not operate as a payment, redemption or satisfaction of the indebtedness
represented by such Securities unless and until the Company, at its option,
shall deliver or surrender the same to the Trustee with a direction that such
Securities be cancelled.

 

42

 

SECTION 11.07.  Conversion Arrangement on Call for
Redemption.  In connection with any redemption of
Securities, the Company may arrange for the purchase and conversion of any
Securities called for redemption by an agreement with one or more investment
bankers or other purchasers to purchase such Securities by paying to the
Trustee or the Paying Agent in trust for the Holders of Securities, on or
before 10:00 a.m. New York time on the redemption date, an amount not less
than the redemption price, together with interest, if any, accrued to the
redemption date of such Securities, in immediately available funds.  Notwithstanding anything to the contrary
contained in this Article 11, the obligation of the Company to pay the
redemption price of such Securities, including all accrued interest, if any,
shall be deemed to be satisfied and discharged to the extent such amount is so
paid by such purchasers.  If such an agreement
is entered into, any Securities not duly surrendered for conversion by the
Holders thereof, at the option of the Company, may be deemed, to the fullest
extent permitted by law, acquired by such purchasers from such Holders and
surrendered by such purchasers for conversion, all as of immediately prior to
the close of business on the last day on which such Securities called for
redemption may be converted in accordance with this Indenture and the terms of
such Securities, subject to payment to the Trustee or Paying Agent of the
above-described amount.  The Trustee or
the Paying Agent shall hold and pay to the Holders whose Securities are
selected for redemption any such amount paid to it in the same manner as it
would pay funds deposited with it by the Company for the redemption of Securities.  Without the Trustee’s and the Paying Agent’s
prior written consent, no arrangement between the Company and such purchasers
for the purchase and conversion of any Securities shall increase or otherwise
affect any of the powers, duties, responsibilities or obligations of the
Trustee and the Paying Agent as set forth in this Indenture.  The Company agrees to indemnify the Trustee
and the Paying Agent from, and hold them harmless against, any loss, liability
or expense arising out of or in connection with any such arrangement for the
purchase and conversion of any Securities between the Company and such
purchasers, including the reasonable costs and expenses incurred by the Trustee
and the Paying Agent in the defense of any claim or liability arising out of or
in connection with the exercise or performance of any of their powers, duties,
responsibilities or obligations under this Indenture.

 

ARTICLE 12

CONVERSION OF SECURITIES

 

SECTION 12.01.  Applicability of Article.  Securities
of any Series that are convertible into Common Shares at the option of the
Holder of such Securities shall be convertible in accordance with their terms
and, unless otherwise specified as contemplated by Section 2.03 for the
Securities of any Series, in accordance with this Article 12.  Each reference in this Article 12 to “a
Security” or “the Securities” refers to the Securities of the particular Series that
is convertible into Common Shares.  If
more than one Series of Securities with conversion privileges are
Outstanding at any time, the provisions of this Article 12 shall be
applied separately to each such Series.

 

SECTION 12.02.  Right of Holders to Convert Securities
into Common Shares.  Subject to the provisions of Section 11.07
and this Article 12, at the option of the Holder thereof, any Security of
any Series that is convertible into Common Shares, or any portion of the
principal amount thereof which is $1,000 or any integral multiple of $1,000,
may be converted into duly authorized, validly issued, fully paid and
nonassessable Common Shares at any time during the period specified in the
Securities of such Series, or in case such Security or portion thereof shall

 

43

 

have been called for
redemption, then in respect of such Security or portion thereof until (unless
the Company shall default in payment due upon the redemption thereof) the close
of business on the redemption date (except that in the case of repayment at the
option of the Holder, if specified in the terms of the relevant Security, such
right shall terminate upon the Company’s receipt of written notice of the
exercise of such option), as specified in such Security, at the conversion
price or conversion rate for each $1,000 principal amount of Securities (such
initial conversion rate reflecting an initial conversion price specified in
such Security) in effect on the conversion date, or, in case an adjustment in
the conversion price has taken place pursuant to the provisions of this Article 12,
then at the applicable conversion price as so adjusted, upon surrender of the
Security or Securities, the principal amount of which is so to be converted, to
the Company at any time during usual business hours at the office or agency to
be maintained by it in accordance with the provisions of Section 3.02,
accompanied by a written notice of election to convert as provided in Section 12.03.  If the Holder requests that the Common Shares
be registered in a name other than that of the Holder, such notice also shall
be accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company and/or the Trustee, as applicable, duly executed by
the Holder thereof or his attorney duly authorized in writing.  All Securities surrendered for conversion
shall, if surrendered to the Company or any conversion agent, be delivered to
the Trustee for cancellation and cancelled by it, or shall, if surrendered to
the Trustee, be cancelled by it, as provided in Section 2.10.

 

The initial
conversion price or conversion rate in respect of a Series of Securities
shall be as specified in the Securities of such Series.  The conversion price or conversion rate will
be subject to adjustment on the terms set forth in Section 12.05 or such
other or different terms, if any, as may be specified by Section 2.03 for
Securities of such Series.  Provisions of
this Indenture that apply to conversion of all of a Security also apply to
conversion of any portion of such Security.

 

SECTION 12.03.  Issuance of Common Shares on Conversions.  As
promptly as practicable after the surrender, as herein provided, of any
Security or Securities for conversion into Common Shares, the Company shall
deliver or cause to be delivered at the office or agency to be maintained by it
in accordance with the provisions of Section 3.02 to or upon the written
order of the Holder of the Security or Securities so surrendered a certificate
or certificates representing the number of duly authorized, validly issued,
fully paid and nonassessable Common Shares into which such Security or
Securities may be converted in accordance with the terms thereof and the
provisions of this Article 12. 
Prior to delivery of such certificate or certificates, the Company shall
require written notice at its said office or agency from the Holder of the
Security or Securities so surrendered stating that the Holder irrevocably
elects to convert such Security or Securities, or, if less than the entire
principal amount thereof is to be converted, stating the portion thereof to be
converted.  Such notice shall also state
the name or names (with address and social security or other taxpayer
identification number) in which said certificate or certificates are to be
issued.  Such conversion shall be deemed
to have been made at the time that such Security or Securities shall have been
surrendered for conversion and such notice shall have been received by the
Company or the Trustee and such conversion shall be at the conversion price in
effect at such time.  The rights of the
Holder of such Security or Securities as a Holder shall cease at such time, and
the Person or Persons entitled to receive the Common Shares upon conversion of
such Security or Securities shall be treated for all purposes as having become
either record holder or holders of such Common Shares at such time.  In the case of any Security

 

44

 

of any Series that
is converted in part only, upon such conversion the Company shall execute and,
upon the Company’s request and at the Company’s expense, the Trustee or an
authenticating agent shall authenticate and deliver to the Holder thereof, as
requested by such Holder, a new Security or Securities of such Series of
authorized denominations in aggregate principal amount equal to the unconverted
portion of such Security.

 

If the last day on
which such Security may be converted is not a Business Day in a place where the
conversion agent for that Security is located, such Security may be surrendered
to that conversion agent on the next succeeding day that is a Business Day.

 

The Company shall
not be required to deliver certificates for Common Shares upon conversion while
its stock transfer books are closed for a meeting of shareholders or for the
payment of dividends or for any other purpose, but certificates for Common
Shares shall be delivered as soon as the stock transfer books shall again be
opened.

 

SECTION 12.04.  No Payment or Adjustment for Interest or
Dividends.  Unless otherwise specified as contemplated by Section 2.03
for Securities of such Series, Securities surrendered for conversion into
Common Shares during the period from the close of business on any regular
record date or special record date next preceding any interest payment date to
the opening of business on such interest payment date (except Securities called
for redemption on a redemption date within such period) when surrendered for
conversion must be accompanied by payment (by certified or official bank check
to the order of the Company payable in clearing house funds at the location where
the Securities are surrendered) of an amount equal to the interest thereon
which the Holder is entitled to receive on such interest payment date.  Payment of interest shall be made, on such
interest payment date or such other payment date (as set forth in Section 2.07),
as the case may be, to the Holder of the Securities as of such regular record
date or special record date, as applicable. 
Except where Securities surrendered for conversion must be accompanied
by payment as described above, no interest on converted Securities will be
payable by the Company on any interest payment date subsequent to the date of
conversion.  No other payment or
adjustment for interest or dividends is to be made upon conversion.  Notwithstanding the foregoing, upon
conversion of any Original Issue Discount Security, the fixed number of Common
Shares into which such Security is convertible delivered by the Company to the
Holder thereof shall be applied, first, to the portion attributable to the
accrued original issue discount relating to the period from the date of
issuance to the date of conversion of such Security, and, second, to the
portion attributable to the balance of the principal amount of such Security.

 

SECTION 12.05.  Adjustment of Conversion Price.  Unless
otherwise specified as contemplated by Section 2.03 for Securities of such
Series, the conversion price for Securities convertible into Common Shares
shall be adjusted from time to time as follows:

 

(a)           If the Company shall (x) pay a
dividend or make a distribution on Common Shares in Common Shares,
(y) subdivide the outstanding Common Shares into a greater number of
shares or (z) combine the outstanding Common Shares into a smaller number
of shares, the conversion price for the Securities of such Series shall be
adjusted so that the Holder of any such Security thereafter surrendered for
conversion shall be entitled to receive the number of Common Shares that such
Holder would have owned or

 

45

 

have been entitled to receive after the happening of
any of the events described above had such Security been converted immediately
prior to the record date in the case of a dividend or the effective date in the
case of subdivision or combination.  An
adjustment made pursuant to this Section 12.05(a) shall become
effective immediately after the record date in the case of a dividend, except
as provided in Section 12.05(h), and shall become effective immediately
after the effective date in the case of a subdivision or combination.

 

(b)           If the Company shall issue rights or
warrants to all holders of Common Shares entitling them (for a period expiring
within 45 days after the record date mentioned below) to subscribe for or
purchase Common Shares at a price per share less than the current market price
per share of Common Shares (as defined for purposes of this Section 12.05(b) in
Section 12.05(e)), at the record date for the determination of
shareholders entitled to receive such rights or warrants, the conversion price
in effect immediately prior thereto shall be adjusted so that the same 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 Common Shares outstanding on such record date plus the
number of Common Shares which the aggregate offering price of the total number
of Common Shares so offered would purchase at such current market price, and
the denominator of which shall be the number of Common Shares outstanding on
such record date plus the number of additional Common Shares receivable upon
exercise of such rights or warrants. 
Such adjustment shall be made successively whenever any such rights or
warrants are issued, and shall become effective immediately, except as provided
in Section 12.05(h), after such record date.  In determining whether any rights or warrants
entitle the Holders of the Securities of such Series to subscribe for or
purchase Common Shares at less than such current market price, and in determining
the aggregate offering price of such Common Shares, there shall be taken into
account any consideration received by the Company for such rights or warrants
plus the exercise price thereof, the value of such consideration or exercise
price, as the case may be, if other than cash, to be determined by the Board of
Directors.

 

(c)           If the Company shall distribute to
all holders of Common Shares any shares of capital stock of the Company (other
than Common Shares) or evidences of its indebtedness or assets (excluding cash
dividends or distributions paid from retained earnings of the Company) or
rights or warrants to subscribe for or purchase any of its securities
(excluding those rights or warrants referred to in Section 12.05(b)) (any
of the foregoing being herein in this Section 12.05(c) called the “Special Securities”), the conversion price
shall be adjusted as provided in the next sentence unless the Company elects to
reserve such Special Securities for distribution to the Holders of Securities
of such Series upon the conversion so that any such Holder converting such
Securities will receive upon such conversion, in addition to the Common Shares
to which such Holder is entitled, the amount and kind of Special Securities
which such Holder would have received if such Holder had, immediately prior to
the record date for the distribution of the Special Securities, converted
Securities into Common Shares.  The
conversion price, as adjusted, 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 current market price per share (as
defined for purposes of this Section 12.05(c) in

 

46

 

Section 12.05(e)) of Common Shares on the record
date mentioned above less the then fair market value (as determined by the
Board of Directors, whose determination shall, if made in good faith, be
conclusive) of the portion of the Special Securities so distributed applicable to
one Common Share, and the denominator of which shall be the current market
price per Common Shares (as defined in Section 12.05(e)).  In the event the then fair market value (as
so determined) of the portion of the Special Securities so distributed applicable
to one Common Share is equal to or greater than the current market price per
Common Share (as defined in Section 12.05(e)) on the record date mentioned
above, in lieu of the foregoing adjustment, adequate provision shall be made so
that each Holder of Securities of such Series shall have the right to
receive the amount and kind of Special Securities such holder would have
received had he converted such Securities immediately prior to the record date
for the distribution of the Special Securities. 
Such adjustment shall become effective immediately, except as provided
in Section 12.05(h), after the record date for the determination of
shareholders entitled to receive such distribution.

 

(d)           If, pursuant to Section 12.05(b) or
12.05(c), the conversion price shall have been adjusted because the Company has
declared a dividend, or made a distribution, on the outstanding Common Shares
in the form of any right or warrant to purchase securities of the Company, or
the Company has issued any such right or warrant, then, upon the expiration of
any such unexercised right or unexercised warrant, the conversion price shall
forthwith be adjusted to equal the conversion price that would have applied had
such right or warrant never been declared, distributed or issued.

 

(e)           For the purpose of any computation
under Section 12.05(b), the current market price per Common Share on any
date shall be deemed to be the average of the reported last sales prices for
the 30 consecutive Trading Days (as defined below) commencing 45 Trading
Days before the date in question.  For
the purpose of any computation under Section 12.05(c), the current market
price per Common Share on any date shall be deemed to be the average of the
reported last sales prices for the ten consecutive Trading Days before the date
in question.  The reported last sales
price for each day (whether for purposes of Section 12.05(b) or
12.05(c)) shall be the reported last sales price, regular way, or, in case no
sale takes place on such day, the average of the reported closing bid and asked
prices, regular way, in either case as reported on the New York Stock Exchange
Composite Tape or, if the Common Shares are not listed or admitted to trading
on the New York Stock Exchange, on the principal national securities exchange
on which the Common Shares are listed or admitted to trading or, if not listed
or admitted to trading on any national securities exchange, on the Nasdaq
National Market or, if the Common Shares are not quoted on the Nasdaq National
Market, the average of the closing bid and asked prices on such day in the
over-the-counter market as furnished by any New York Stock Exchange member firm
regularly making a market in the Common Shares selected for such purpose by the
Board of Directors or, if no such quotations are available, the fair market
value of the Common Shares as determined by a New York Stock Exchange member
firm regularly making a market in the Common Shares selected for such purpose
by the Board of Directors.  As used
herein, the term “Trading Day” with
respect to the Common Shares means (x) if the Common Shares are listed or
admitted for trading on the New York Stock Exchange or another national
securities exchange, a day on which the New York Stock Exchange or such other
national

 

47

 

securities exchange is open for business, (y) if
the Common Shares are quoted on the Nasdaq National Market, a day on which
trades may be made on the Nasdaq National Market or (z) otherwise, 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.

 

(f)            No adjustment in the conversion
price shall be required unless such adjustment would require an increase or
decrease of at least 1% in such price. 
Any adjustments that by reason of this Section 12.05(f) are
not required to be made, however, shall be carried forward and taken into
account in any subsequent adjustment. 
Any adjustment required to be made in accordance with the provisions of
this Article 12 shall be made not later than such time as may be required
in order to preserve the tax free nature of a distribution to the holders of
Common Shares.  All calculations under
this Article 12 shall be made to the nearest cent or to the nearest
one-one hundredth of a share, as the case may be, with one-half cent and
one-two hundredth of a share, respectively, being rounded upward.  The Company shall be entitled to make such
reductions in the conversion price, in addition to those required by this Section 12.05,
as it in its discretion shall determine to be advisable in order that any stock
dividend, subdivision of shares, distribution of rights or warrants to purchase
stock or securities or distribution of other assets (other than cash dividends)
made by the Company to its shareholders shall not be taxable.

 

(g)           Whenever the conversion price is
adjusted, the Company shall file with the Trustee, at the Corporate Trust
Office of the Trustee, and with the office or agency maintained by the Company
for the conversion of Securities of such Series pursuant to Section 3.02,
an Officers’ Certificate, setting forth the conversion price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment, which certificate shall be conclusive evidence of the correctness
of such adjustment.  Neither the Trustee
nor any conversion agent shall be under any duty or responsibility with respect
to any such certificate or any facts or computations set forth therein, except
to exhibit said certificate from time to time to any Holder of a Security of
such Series desiring to inspect the same. 
The Company shall promptly cause a notice setting forth the adjusted
conversion price to be mailed to the Holders of Securities of such Series, as
their names and addresses appear upon the Security register.

 

(h)           In any case in which this Section 12.05
provides that an adjustment shall become effective immediately after a record
date for an event, the Company may defer until the occurrence of such event
(y) issuing to the Holder of any Security of such Series converted
after such record date and before the occurrence of such event the additional
Common Shares issuable upon such conversion by reason of the adjustment
required by such event over and above the Common Shares issuable upon such
conversion before giving effect to such adjustment and (z) paying to such
holder any amount in cash in lieu of any fractional Common Shares pursuant to Section 12.06.

 

SECTION 12.06.  No Fractional Shares to Be Issued.  No
fractional Common Shares shall be issued upon any conversion of
Securities.  If more than one Security of
any Series shall be surrendered for conversion at one time by the same
Holder, the number of full Common

 

48

 

Shares which shall be
issuable upon conversion thereof shall be computed on the basis of the
aggregate principal amount of the Securities of such Series (or specified
portions thereof to the extent permitted hereby) so surrendered.  Instead of a fraction of a Common Share which
would otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall pay a cash adjustment (computed
to the nearest cent, with one-half cent being rounded upward) in respect of
such fraction of a share in an amount equal to the same fractional interest of
the reported last sales price (as defined in Section 12.05(e)) of the
Common Shares on the Trading Day (as defined in Section 12.05(e)) next preceding
the day of conversion.

 

SECTION 12.07.  Preservation of Conversion Rights upon
Consolidation, Merger, Sale or Conveyance.  In case of any
consolidation of the Company with, or merger of the Company into, any other
corporation (other than a consolidation or merger in which the Company is the
surviving corporation), or in the case of any sale or transfer of all or
substantially all of the assets of the Company, the corporation formed by such
consolidation or the corporation into which the Company shall have been merged
or the corporation which shall have acquired such assets, as the case may be,
shall execute and deliver to the Trustee a supplemental indenture in accordance
with the provisions of Articles 8 and 9 as they relate to supplemental indentures,
providing that the Holder of each Outstanding Security that was convertible
into Common Shares shall have the right thereafter to convert such Security
into the kind and amount of shares of stock and other securities and property,
including cash, receivable upon such consolidation, merger, sale or transfer by
a holder of the number of Common Shares into which such Securities might have
been converted immediately prior to such consolidation, merger, sale or
transfer.  Such supplemental indenture
shall provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article 12.  Neither the Trustee nor any conversion agent
shall have any liability or responsibility for determining the correctness of
any provision contained in any such supplemental indenture relating either to
the kind or amount of shares of stock or other securities or property
receivable by Holders of the Securities upon the conversion of their Securities
after any such consolidation, merger, sale or transfer, or to any adjustment to
be made with respect thereto and, subject to the provisions of Section 313
of the Trust Indenture Act, may accept as conclusive evidence of the
correctness of any such provisions, and shall be protected in relying upon, an
Officers’ Certificate with respect thereto and an Opinion of Counsel with
respect to legal matters related thereto. 
If in the case of any such consolidation, merger, sale or transfer, the
stock or other securities and property receivable by a Holder of the Securities
includes stock or other securities and property of a corporation other than the
successor or purchasing corporation, 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 shall reasonably consider necessary.  The above provisions of this Section 12.07
shall similarly apply to successive consolidations, mergers, sales or transfers.

 

SECTION 12.08.  Notice to Holders of the Securities of a Series Prior
to Taking Certain Types of Action.  With respect to the
Securities of any Series, in case:

 

(a)           the Company shall authorize the
issuance to all holders of Common Shares of rights or warrants to subscribe for
or purchase shares of its capital stock or of any other right;

 

49

 

(b)           the Company shall authorize the
distribution to all holders of Common Shares of evidences of indebtedness or
assets (except for cash dividends or distributions paid from retained earnings
of the Company);

 

(c)           of any subdivision or combination of
Common Shares or of any consolidation or merger to which the Company is a party
and for which approval by the shareholders 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 at the office
or agency maintained for the purpose of conversion of Securities of such Series pursuant
to Section 3.02, and shall cause to be mailed to the Holders of Securities
of such Series at their last addresses as they shall appear on the
Security register, at least ten days prior to the applicable record date
hereinafter specified, a notice stating (i) the date as of which the
holders of Common Shares to be entitled to receive any such rights, warrants or
distribution are to be determined, or (ii) the date on which any such
subdivision, combination, consolidation, merger, sale, transfer, dissolution,
liquidation, winding up or other action is expected to become effective, and
the date as of which it is expected that holders of record of Common Shares
shall be entitled to exchange their Common Shares for securities or other
property, if any, deliverable upon such subdivision, combination,
consolidation, merger, sale, transfer, dissolution, liquidation, winding up or
other action.  The failure to give the
notice required by this Section 12.08 or any defect therein shall not
affect the legality or validity of any distribution, right, warrant,
subdivision, combination, consolidation, merger, sale, transfer, dissolution,
liquidation, winding up or other action, or the vote upon any of the foregoing.

 

SECTION 12.09.  Covenant to Reserve Shares for Issuance
on Conversion of Securities.  The Company at all times
will reserve and keep available out of each class of its authorized Common Shares,
free from preemptive rights, solely for the purpose of issue upon conversion of
Securities of any Series as herein provided, such number of Common Shares
as shall then be issuable upon the conversion of all Outstanding Securities of
such Series.  The Company covenants that
all Common Shares which shall be so issuable, when issued or delivered, shall
be duly and validly issued Common Shares into which Securities of such Series are
convertible, and shall be fully paid and nonassessable, free of all liens and
charges and not subject to preemptive rights and that, upon conversion, the
appropriate capital stock accounts of the Company will be duly credited.

 

SECTION 12.10.  Compliance with Governmental
Requirements.  If any Common Shares required to be reserved for
purposes of conversion of Securities hereunder require registration or listing
with or approval of any governmental authority under any Federal or State law,
pursuant to the Securities Act or the Securities Exchange Act or any national
or regional securities exchange on which the Common Shares are listed at the
time of delivery of any Common Shares, the Company will use its best efforts to
cause such shares to be duly registered, listed or approved, as the case may
be, before such shares may be issued upon conversion.

 

50

 

SECTION 12.11.  Payment of Taxes upon Certificates for
Shares Issued upon Conversion.  The issuance of
certificates for Common Shares upon the conversion of Securities shall be made
without charge to the converting Holders for any tax (including documentary and
stamp taxes) in respect of the issuance and delivery of such certificates, and
such certificates shall be issued in the respective names of, or in such names
as may be directed by, the Holders of the Securities converted.  The Company, however, shall not be required
to pay any tax that may be payable in respect of any transfer involved in the
issuance and delivery of any such certificate in a name other than that of the
Holder of the Security converted, and the Company shall not be required to
issue or deliver such certificate unless or until the Person or Persons
requesting the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the Company that such
tax has been paid.

 

SECTION 12.12.  Trustee’s Duties with Respect to
Conversion Provisions.  The Trustee and any conversion
agent shall have no duty to any Holder to determine whether any facts exist
that may require any adjustment of the conversion rate, or with respect to the
nature or extent of any such adjustment when made, or with respect to the
method employed, in making the same. 
Neither the Trustee nor any conversion agent shall be accountable with
respect to the registration under securities laws, listing, validity or value
(or the kind or amount) of any Common Shares, or of any other securities or
property, that at any time may be issued or delivered upon the conversion of
any Security, and neither the Trustee nor any conversion agent makes any
representation with respect thereto. 
Neither the Trustee nor any conversion agent shall be responsible for
any failure of the Company to make any payment or to issue, transfer or deliver
any Common Shares or stock certificates or other securities or property upon
the surrender of any Security for the purpose of conversion.  The Trustee and any conversion agent, subject
to the provisions of Section 313 of the Trust Indenture Act, shall not be
responsible for any failure of the Company to comply with any of the covenants
contained in this Article 12.

 

SECTION 12.13.  Conversion of Securities into Preferred
Shares or Other Securities. 
Notwithstanding anything to the contrary in this Article 12, the
Company may issue Securities that are convertible into Preferred Shares or
other securities of the Company, including Preferred Shares convertible into
Common Shares, in which case all terms and conditions relating to the
conversion of Securities into Preferred Shares or other securities, including
any terms similar to those provided in Sections 12.01 through 12.12, shall
be as provided in or pursuant to an appropriate resolution of the Board of
Directors or in any indenture supplemental hereto or as otherwise contemplated
by Section 2.03.

 

ARTICLE 13

SUBORDINATION OF SECURITIES

 

SECTION 13.01.  AGREEMENT TO SUBORDINATE.  The Company covenants and agrees, and each
Holder of Securities issued hereunder by his acceptance thereof likewise
covenants and agrees, that all Securities shall be issued subject to the
provisions of this Article 13; and each person holding any Security,
whether upon original issue or upon transfer, assignment or exchange thereof
accepts and agrees to be bound by such provisions.

 

The payment by the
Company of the principal of, premium, if any and interest on all Securities
issued hereunder shall, to the extent and in the manner hereinafter set forth,
be

 

51

 

subordinated and junior
in right of payment in full in cash or cash equivalents to all Senior Debt,
whether outstanding at the date of this Indenture or thereafter incurred.

 

No provision of
this Article 13 shall prevent the occurrence of any Default or Event of
Default hereunder.

 

Notwithstanding
anything in this Article 13 to the contrary, this Article 13 shall
apply to all Series of Securities, except to the extent otherwise
specified as contemplated by Section 2.03 for the Securities of any
Series.

 

SECTION 13.02.  DEFAULT ON SENIOR DEBT.  In the event and during the continuation of
any default by the Company in the payment of principal, premium, interest or
any other payment due on any Senior Debt, or in the event that the maturity of
any Senior Debt has been accelerated because of a default, then, in either case,
no payment shall be made by the Company with respect to the principal
(including redemption payments) of or premium, if any, or interest on the
Securities until such default shall have been cured or waived in writing or
shall have ceased to exist or such Senior Debt shall have been discharged or
paid in full.

 

In the event that,
notwithstanding the foregoing, any payment shall be received by the Trustee or
any Holder when such payment is prohibited by the preceding paragraphs of this Section 13.02,
such payment shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of Senior Debt or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Debt may have been issued, as their respective
interests may appear.

 

SECTION 13.03.  LIQUIDATION; DISSOLUTION; BANKRUPTCY.  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 liquidation, dissolution, winding
up, receivership, reorganization, assignment for the benefit of creditors,
marshaling of assets and liabilities or any bankruptcy, insolvency or similar
proceedings of the Company, all amounts due or to become due upon all Senior
Debt shall first be paid in full, in cash or cash equivalents, or payment
thereof provided for in accordance with its terms, before any payment is made
on account of the principal of, premium, if any, or interest on the indebtedness
evidenced by the Securities, and upon any such liquidation, dissolution,
winding up, receivership, reorganization, assignment, marshaling or proceeding,
any payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the Holders or the Trustee
under this Indenture would be entitled except for the provisions of this Article 13,
shall 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 or by the Trustee under this Indenture if received by them or
it, directly to the holders of Senior Debt (pro rata to such holders on the
basis of the respective amounts of Senior Debt held by such holders) or their
respective representatives, or to the trustee or trustees under any indenture
pursuant to which any instruments evidencing any of such Senior Debt may have
been issued, as their respective interests may appear, to the extent necessary
to pay all Senior Debt in full (including, without limitation, except to the
extent, if any, prohibited by mandatory provisions of law, post-petition
interest, in any such proceedings), after giving effect to any concurrent
payment or distribution to

 

52

 

or for the holders of
Senior Debt, before any payment or distribution is made to the holders of the
indebtedness evidenced by the Securities or to the Trustee under this
Indenture.

 

In the event that,
notwithstanding the foregoing, any payment or distribution of assets of the
Company of any kind or character, whether in cash, property or securities,
prohibited by the foregoing, shall be received by the Trustee under this
Indenture or the holders of the Securities before all Senior Debt is paid in
full or provision is made for such payment in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of such Senior Debt or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing any of such Senior Debt may have been issued,
as their respective interests may appear, for application to the payment of all
Senior Debt remaining unpaid until all such Senior Debt shall have been paid in
full in accordance with its terms, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Debt.

 

For purposes of
this Article 13, 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
arrangement, reorganization or readjustment, the payment of which is
subordinated (at least to the extent provided in this Article 13 with
respect to the Securities) to the payment of all Senior Debt which may at the
time be outstanding. The consolidation of the Company with, or the merger of
the Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided in Article 9 shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section if
such other Person shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article 9.  Nothing in Section 13.02 or this Section 13.03
shall apply to claims of, or payments to, the Trustee under or pursuant to Article 6,
except as provided therein. This Section shall be subject to the further
provisions of Section 13.06.

 

SECTION 13.04.  SUBROGATION OF SECURITIES.  Subject to the payment in full of all Senior
Debt, the rights of the holders of the Securities shall be subrogated to the
rights of the holders of Senior Debt to receive payments or distributions of
cash, property or securities of the Company applicable to the Senior Debt until
the principal of, premium, if any, and interest on the Securities shall be paid
in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Debt of any cash, property or
securities to which the holders of the Securities or the Trustee on their
behalf would be entitled except for the provisions of this Article 13 and
no payment ever pursuant to the provisions of this Article 13 to the
holders of Senior Debt by holders of the Securities or the Trustee on their
behalf shall, as between the Company, its creditors other than holders of
Senior Debt and the holders of the Securities, be deemed to be a payment by the
Company to or on account of the Senior Debt; and no payments or distributions
of cash, property or securities to or for the benefit of the Holders pursuant
to the subrogation provisions of this Article 13, which would otherwise
have been paid to the holders of Senior Debt shall be deemed to be a payment by
the Company to or for the account of the Securities. It is understood that the
provisions of this Article 13 are and are intended solely for the purpose
of defining the relative rights of the holders of the Securities, on the one
hand, and the holders of the Senior Debt, on the other hand.

 

53

 

Nothing contained
in this Article 13 or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as between the Company, its creditors other than
the holders of Senior Debt, and the holders of the Securities, the obligation
of the Company, which is absolute and unconditional, to pay to the holders of
the Securities the principal, premium, if any, and interest on the Securities
as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the holders of
the Securities and creditors of the Company other than the holders of the
Senior Debt, nor shall anything herein or therein prevent the Holder of any
Security or the Trustee on his behalf from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article 13 of the holders of Senior Debt in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy.

 

Upon any payment
or distribution of assets of the Company referred to in this Article 13,
the Trustee, subject to the provisions of Article Six, 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 liquidation, dissolution, winding
up, receivership, reorganization, assignment or marshaling proceedings are
pending, or a certificate of the receiver, trustee in bankruptcy, liquidating
trustee, agent or other person making such payment or distribution, delivered
to the Trustee or to the holders of the Securities, for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Debt and other indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Article 13.

 

SECTION 13.05.  AUTHORIZATION BY HOLDERS.  Each Holder of a Security by his acceptance
thereof authorizes and directs the Trustee in his behalf to take such action as
may be necessary or appropriate to effectuate the subordination provided in
this Article 13 and appoints the Trustee his attorney-in-fact for any and
all such purposes.

 

SECTION 13.06.  NOTICE TO TRUSTEE.  The Company shall give prompt written notice
to the Trustee and to any paying agent of any fact known to the Company which
would prohibit the making of any payment of moneys to or by the Trustee or any
paying agent in respect of the Securities pursuant to the provisions of this Article 13.
Regardless of anything to the contrary contained in this Article 13 or
elsewhere in this Indenture, the Trustee shall not be charged with knowledge of
the existence of any Senior Debt or of any default or event of default with
respect to any Senior Debt or of any other facts which would prohibit the
making of any payment of moneys to or by the Trustee, unless and until the Trustee
shall have received notice in writing at its principal Corporate Trust Office
to that effect signed by an officer of the Company, or by a holder or agent of
a holder of Senior Debt who shall have been certified by the Company or
otherwise established to the reasonable satisfaction of the Trustee to be such
holder or agent, or by the trustee under any indenture pursuant to which Senior
Debt shall be outstanding, and, prior to the receipt of any such written
notice, the Trustee shall, subject to the provisions of Article 6, be
entitled to assume that no such facts exist; provided,
however, that if on a date at least three Business Days prior to the
date upon which by the terms hereof any such moneys shall become payable for
any purpose (including, without limitation, the payment of the principal of, or
interest on any Security) the Trustee shall not have received with respect to
such moneys the notice provided for in this Section 13.06, then,
regardless of anything herein to the contrary, the Trustee shall have full
power and authority to receive such moneys and to apply the

 

54

 

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.

 

The Trustee shall
be entitled to conclusively rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Senior Debt (or a trustee on
behalf of such holder) to establish that such notice has been given by a holder
of Senior Debt or a trustee on behalf of any such holder. 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 Debt to participate in any
payment or distribution pursuant to this Article 13, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Debt held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under this Article 13,
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 13.07.  TRUSTEE’S RELATION TO SENIOR DEBT.  The Trustee and any agent of the Company or
the Trustee shall be entitled to all the rights set forth in this Article 13
with respect to any Senior Debt which may at any time be held by it in its
individual or any other capacity to the same extent as any other holder of
Senior Debt and nothing in this Indenture shall deprive the Trustee or any such
agent, of any of its rights as such holder. Nothing in this Article 13
shall apply to claims of, or payments to, the Trustee under or pursuant to Article Six.

 

With respect to
the holders of Senior Debt, the Trustee undertakes to perform or to observe
only such of its covenants and obligations as are specifically set forth in
this Article 13, and no implied covenants or obligations with respect to
the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt and, subject to the provisions of Article 6, the
Trustee shall not be liable to any holder of Senior Debt if it shall pay over
or deliver to holders of Securities, the Company or any other person moneys or
assets to which any holder of Senior Debt shall be entitled by virtue of this Article 13
or otherwise.

 

SECTION 13.08.  NO IMPAIRMENT TO SUBORDINATION.  No right of any present or future holder of
any Senior Debt to enforce subordination as herein provided shall at any time
in any way be prejudiced or impaired by any act or failure to act on the part
of the Company or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by the Company 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.

 

Without in any way
limiting the generality of the foregoing paragraph, the holders of Senior Debt
may, at any time and from time to time, without the consent of or notice to the
Trustee or the Holders, without incurring responsibility to the Holders and
without impairing or releasing the subordination provided in this Article 13
or the obligations hereunder of the holders of the Securities to the holders of
such Senior Debt, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, such Senior Debt, or otherwise amend or supplement in any manner such
Senior Debt or any instrument evidencing the same or any agreement under which
such Senior Debt is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged

 

55

 

or otherwise securing
such Senior Debt; (iii) release any Person liable in any manner for the
collection of such Senior Debt; and (iv) exercise or refrain from
exercising any rights against the Company, as the case may be, and any other
Person.

 

SECTION 13.09.  ARTICLE APPLICABLE TO PAYING
AGENTS.  In case 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 13 shall
in such case (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 13 in
addition to or in place of the Trustee.

 

SECTION 1310.  TRUST MONEYS NOT SUBORDINATED.  Notwithstanding anything contained herein to
the contrary, payments from cash or the proceeds of U.S. Government Obligations
held in trust under Article 10 of this Indenture by the Trustee for the
payment of principal of and interest on the Securities shall not be
subordinated to the prior payment of any Senior Debt or subject to the
restrictions set forth in this Article 13, and none of the Holders shall
be obligated to pay over any such amount to the Company or any holder of Senior
Debt or any other creditor of the Company.

 

ARTICLE 14

MISCELLANEOUS PROVISIONS

 

SECTION 14.01.  Incorporators, Shareholders, Officers and
Directors of Company Exempt from Individual Liability.  No
recourse under or upon any obligation, covenant or agreement contained in this
Indenture or in any Security shall be had against any incorporator as such or
against any past, present or future shareholder, employee, officer or director
of the Company or of any successor, either directly or through the Company or
any successor, under any rule of law, statute or constitutional provision
or by the enforcement of any assessment or by any legal or equitable proceeding
or otherwise, all such liability being expressly waived and released by the
acceptance of the Securities by the Holders thereof and as part of the consideration
for the issue of the Securities.  This Section 14.01
shall apply unless otherwise specified as contemplated by Section 2.03 for
the Securities of any Series.

 

SECTION 14.02.  Provisions of Indenture for the Sole
Benefit of Parties and Holders.  Nothing in this Indenture
or in the Securities, expressed or implied, shall give or be construed to give
to any Person, firm or corporation, other than the parties hereto, any Paying
Agent and their successors hereunder and the Holders of the Securities any legal
or equitable right, remedy or claim under this Indenture or under any covenant
or provision herein contained, all such covenants and provisions being for the
sole benefit of the parties hereto and their successors and of the Holders of
the Securities.

 

SECTION 14.03.  Successors and Assigns of Company Bound
by Indenture.  All the covenants, stipulations, promises
and agreements in this Indenture contained by or on behalf of the Company shall
bind its successors and assigns, whether so expressed or not.

 

56

 

SECTION 14.04.  Notices and Demands on Company, Trustee
and Holders.  Any notice or demand that by any provision
of this Indenture is required or permitted to be given or served by the Trustee
or by the Holders of Securities to or on the Company may be given or served by
being deposited postage prepaid, first-class mail (except as otherwise
specifically provided herein) addressed (until another address of the Company
is filed by the Company with the Trustee) to Alliant Techsystems Inc., 5050
Lincoln Drive, Edina, Minnesota, 55436-1097, Attention:
Corporate Secretary.  Any notice,
direction, request or demand by the Company or any Holder to or upon the
Trustee shall be deemed to have been sufficiently given or made, for all
purposes, if given or made at the Corporate Trust Office.

 

Where this
Indenture provides for notice to Holders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed by first-class mail, postage prepaid to such Holders as their names
and addresses appear in the Security register within the time prescribed.  Where this Indenture provides for notice in
any manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice.  Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.  In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed to any particular Holder shall affect the sufficiency
of such notice with respect to other Holders, and any notice which is mailed in
the manner herein provided shall be conclusively presumed to have been duly
given.

 

In case, by reason
of the suspension of or irregularities in regular mail service, it shall be
impracticable to mail notice to the Company and Holders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be reasonably acceptable to the Trustee
shall be deemed to be a sufficient giving of such notice.

 

SECTION 14.05.  Officers’ Certificates and Opinions of
Counsel; Statements to Be Contained Therein.  Upon any
application or demand by the Company to the Trustee to take any action under
any of the provisions of this Indenture, the Company shall furnish to the
Trustee an Officers’ Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or demand as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or demand, no additional certificate or
opinion need be furnished.

 

Each certificate
or opinion provided for in this Indenture and delivered to the Trustee with
respect to compliance with a condition or covenant provided for in this
Indenture shall include:

 

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

 

57

 

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

 

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

 

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

 

Any certificate,
statement 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 that the certificate or opinion or
representations with respect to the matters upon which his certificate,
statement or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should know that the same are erroneous.  Any certificate, statement or opinion of
counsel may be based, insofar as it relates to factual matters or information
with respect to which is in the possession of the Company, upon the
certificate, statement or opinion of or representations by an officer or
officers of the Company, unless such counsel knows that the certificate,
statement or opinion or representations with respect to the matters upon which
his certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are erroneous.

 

Any certificate,
statement or opinion of an officer of the Company or of counsel may be based,
insofar as it relates to accounting matters, upon a certificate or opinion of
or representations by an accountant or firm of accountants in the employ of the
Company, unless such officer or counsel, as the case may be, knows that the
certificate or opinion or representations with respect to the accounting
matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know that
the same are erroneous.

 

SECTION 14.06.  Payments Due on Saturdays, Sundays and
Holidays.  Unless otherwise specified in a Security, if
the date of maturity of interest on or principal of the Securities of any Series or
the date fixed for redemption, repurchase or repayment of any such Security
shall not be a Business Day, payment of interest or principal need not be made
on such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the date of maturity or the date fixed for
redemption, and no interest shall accrue for the period after such date.

 

SECTION 14.07.  Conflict of any Provision of Indenture
with Trust Indenture Act.  If and to the extent that any
provision of this Indenture limits, qualifies or conflicts with another
provision included in this Indenture which is required by the Trust Indenture
Act, such required provision shall control. 
If any provision of this Indenture modifies or excludes any provision of
the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.

 

58

 

SECTION 14.08.  New York Law to Govern.  This
Indenture and each Security will be governed by and construed in accordance
with the laws of the State of New York.

 

SECTION 14.09.  Counterparts.  This
Indenture may be executed in any number of counterparts, each of which shall be
an original; but such counterparts shall together constitute but one and the
same instrument.

 

SECTION 14.10.  Effect of Headings; Gender.  The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.  The use of the masculine, feminine or neuter
gender herein shall not limit in any way the applicability of any term or
provision hereof.

 

SECTION 14.11  Waiver of
Jury Trial.

 

EACH OF THE
COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE
TRANSACTION CONTEMPLATED HEREBY.

 

SECTION 14.12  Force
Majeure.

 

In no event shall
the Trustee be responsible or liable for any failure or delay in the
performance of its obligations hereunder arising out of or caused by, directly
or indirectly, forces beyond its control, including, without limitation,
strikes, work stoppages, accidents, acts of war or terrorism, civil or military
disturbances, nuclear or natural catastrophes or acts of God, and
interruptions, loss or malfunctions of utilities, communications or computer
(software and hardware) services; it being understood that the Trustee shall
use reasonable efforts which are consistent with accepted practices in the
banking industry to resume performance as soon as practicable under the
circumstances.

 

[the remainder of this page is
intentionally left blank]

 

59

 

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

 

	
   

  	
  ALLIANT TECHSYSTEMS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE BANK OF NEW YORK TRUST

  COMPANY, N.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

60Exhibit 4.1

 

SECURITIES PURCHASE AGREEMENT

 

Advanced Life Sciences Holdings, Inc.

1440 Davey Road

Woodridge, IL 60517

 

Ladies & Gentlemen:

 

The undersigned,                              
(the “Investor”), hereby confirms its agreement with you as follows:

1.                                       This Securities Purchase Agreement (the “Agreement”)
is made as of February 24, 2006 by and among Advanced Life Sciences Holdings,
Inc., a Delaware corporation (the “Company”), and the Investor.

2.                                       The Company and the Investor agree that
the Investor will purchase from the Company and the Company will issue and sell
to the Investor                     shares
of common stock of the Company, $0.01 par value per share (the “Common Stock”),
in the aggregate and warrants, in the form of Exhibit B attached hereto, to
purchase up to                  
shares of Common Stock in the aggregate at an exercise price of $3.81 per
share, in each case, pursuant to the Terms and Conditions for Purchase of the
Shares and the Warrants attached hereto as Annex I and incorporated herein
by reference as if fully set forth herein (the “Terms and Conditions”).  Such                
shares of Common Stock to be purchased by the Investor pursuant to this
Agreement are referred to herein as the “Shares,” and such warrants to be issued
to the Investor pursuant to this Agreement to purchase up to               
shares of Common Stock are referred to herein as the “Warrants.”   Each Investor will purchase the number of
the Shares and the number of the Warrants as set forth below their respective
names on the signature pages hereto for the purchase price set forth
thereon.  This Securities Purchase
Agreement, together with the investor questionnaire, exhibits and Terms and
Conditions, which are incorporated herein by reference as if fully set forth
herein, may hereinafter be referred to as the “Agreement”.  Unless otherwise requested by the Investor,
the certificates representing the Shares and the Warrants purchased by the
Investor will be registered in the Investor’s name and address as set forth
below.

Please confirm
that the foregoing correctly sets forth the agreement between us by signing in
the space provided below for that purpose. 
By executing this Agreement, the Investors acknowledge that the Company
may use the information in paragraph 2 above and the name and address
information below in preparation of the Registration Statement (as defined in
Annex I).  This Agreement may be executed
in separate counterparts, each of which shall be deemed to be an original and
all of which taken together shall constitute one and the same instrument.

AGREED AND ACCEPTED:

	
  Advanced Life Sciences Holdings, Inc.

  	
   

  	
  Investor:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
					

 

	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Print Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tax ID No.:

  	
   

  
	
   

  	
   

  	
  Contact name:

  	
   

  
	
   

  	
   

  	
  Telephone:

  	
   

  
	
   

  	
   

  	
  Name in which shares should be registered (if
  different):

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Number of Shares:

  	
   

  
	
   

  	
   

  	
  Number of Warrants:

  	
   

  
	
   

  	
   

  	
  Purchase Price Per Unit: $3.53

  	
   

  
											

 

 

 

ANNEX I

 

TERMS AND
CONDITIONS FOR PURCHASE OF SHARES AND WARRANTS

 

 

1.                                       Authorization and Sale of the Shares and
the Warrants.  Subject to these Terms and Conditions, the
Company has authorized the issuance and sale to the Investor pursuant hereto of
the Shares and the Warrants.

 

2.                                       Agreement to Sell and Purchase the Shares
and the Warrants; Subscription Date.

 

2.1                                       At the Closing (as defined in
Section 3), the Company will sell to the Investor, and the Investor will
purchase from the Company, upon the terms and conditions hereinafter set forth,
the Shares and the Warrants as set forth in Paragraph 2 of the Securities
Purchase Agreement to which these Terms and Conditions are attached at the
purchase price set forth thereon, and each Investor will purchase such number
of the Shares and the Warrants as set forth below their respective names on the
signature pages to the Securities Purchase Agreement.

 

2.2                                       The Company shall have sold securities to
third party purchasers, who are not acting in concert with the Investors, for
an aggregate minimum of $20 million and a maximum of $37 million, pursuant to
the same form of Securities Purchase Agreement, including these Terms and
Conditions (the “Contemporaneous Offering”).

 

2.3                                       The obligations of the Investor under the
Agreement (as defined below) are several and not joint with the obligations of
any third party purchaser of the Company’s securities, and the Investor shall
not be responsible in any way for the performance of the obligations of any
such third party purchaser.  Each
of the Investor and the Company agree and acknowledge that (i) the decision of
the Investor to purchase the Shares and the Warrants pursuant to the Agreement
has been made by the Investor independently of any such third party purchaser and (ii) no such third party purchaser has acted as agent
for the Investor in connection with the Investor making its investment
hereunder and that no such third party
purchaser will be acting as agent of the Investor in connection with
monitoring its investment hereunder.  Nothing contained in the Agreement, and no action
taken by the Investor hereto, shall be deemed to constitute the Investor and
any such third party purchaser as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Investor and any such third party purchaser are in any way acting in concert
or as a group with respect to any matter, including the obligations or the
transactions contemplated by the Agreement; provided, that such obligations or
the transactions contemplated hereby may be modified, amended or waived in
accordance with Section 9 below. The Investor shall be entitled to
independently protect and enforce its rights, including, without limitation,
the rights arising out of the Agreement (provided, that such rights may be
modified, amended or waived in accordance with Section 9 below), and it shall
not be necessary for any such third
party purchaser to be joined as an additional party in any proceeding for such
purpose.  To the extent that any
such third party purchaser purchases
the same or similar securities as the Investor hereunder or on the same or
similar terms and conditions or pursuant to the same or similar documents, all
such matters are solely in the control of the Company, not the action or
decision of the Investor, and would be solely for the convenience of the Company
and not because it was required or requested to do so by the Investor or any
such third party purchaser. The
Securities Purchase Agreement (including these attached Terms and Conditions)
is hereinafter sometimes collectively referred to as the “Agreement.”

 

3.                                       Delivery of the Shares and the Warrants
at Closing.  It is expected that the completion of the
purchase and sale of the Shares and the Warrants (the “Closing”) shall occur on
or about March 2, 2006 (the “Closing Date”), at the Chicago offices of the
Company’s counsel.  At the Closing, the
Company shall deliver to the Investor (a) one or more stock certificates
representing the Investor’s number of the Shares and (b) one or more warrant
certificates representing the Investor’s number of the Warrants, in each case
as is set forth in Paragraph 2 of the Securities Purchase Agreement, each such
certificate to be registered in the name of the Investor or, if so indicated on
the signature page of the Securities Purchase Agreement, in the name of a
nominee designated by the Investor.

 

The Company’s
obligation to issue the number of the Shares and the number of the Warrants to
the Investor as set forth on the signature page to the Securities Purchase
Agreement shall be subject to the following conditions, any one or more of
which may be waived by the Company: (a) receipt by the Company of a certified
or official bank check or wire transfer of funds in the full amount of the
purchase price for such Shares and such Warrants being purchased by such
Investor; (b) completion of the Contemporaneous Offering; and (c) the accuracy
in all material respect of the representations and warranties made by such
Investor when made and the fulfillment in all material respects of those
undertakings of such Investor to be fulfilled prior to the Closing.

 

 

The Investor’s obligation
to purchase the number of the Shares and the number of the Warrants being
purchased by such Investor hereunder shall be subject to the following
conditions, any one or more of which may be waived by such Investor: (a) the
representations and warranties of the Company set forth herein shall be true
and correct as of the Closing Date (except for representations and warranties
that speak as of a specific date, which representations and warranties shall be
true and correct as of such date) in all material respects and the fulfillment
in all material respects of those undertakings of the Company in the Agreement
to be fulfilled on or prior to the Closing Date, and the Investor shall have
received a certificate to that effect from the Company’s Chief Executive
Officer or Chief Financial Officer, (b) such Investor shall have received such
documents as such Investor shall reasonably have requested, including, a
standard opinion of the Company’s counsel including as to the matters set forth
in Section 4.2 and as to exemption from the registration requirements of the
Securities Act of 1933, as amended (the “Securities Act”), of the sale of the
Shares and the Warrant Shares (as defined below), (c) completion of the Contemporaneous
Offering and (d) the Company shall have filed a Notification Form: Listing of
Additional Shares with respect to the Shares and the Warrant Shares with the
Nasdaq National Market.

 

4.                                       Representations, Warranties and Covenants
of the Company.  The Company hereby represents and warrants
to, and covenants with, the Investor, as follows:

 

4.1                                       Organization. 
The Company is duly organized and validly existing in good standing
under the laws of the State of Delaware. 
The Company has full power and authority to own or lease its properties
and to conduct its business as presently conducted and as described in the
documents filed by the Company under the Securities Act (such documents, the “Securities
Act Documents”) and the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder (the “Exchange Act”), since the
end of its most recently completed fiscal year through the date hereof (the “Exchange
Act Documents,” and together with the Securities Act Documents, the “SEC
Documents”) and is registered or qualified to do business and in good standing
in each jurisdiction in which the nature of the business conducted by it or the
location of the properties owned or leased by it requires such qualification
and where the failure to be so qualified would have a material adverse effect
upon the condition (financial or otherwise), operations (including results
thereof), business or properties of the Company (a “Material Adverse Effect”),
and no proceeding has been instituted in any such jurisdiction, revoking,
limiting or curtailing, or seeking to revoke, limit or curtail, such power and
authority or qualification.  Other than
Advanced Life Sciences, Inc., the Company has no subsidiaries (as defined in
Rule 405 of the Securities Act).

 

4.2                                       Due Authorization and Valid Issuance. 
The Company has all requisite corporate power and authority to execute,
deliver and perform its obligations under the Agreement, and the Agreement has
been duly authorized and validly executed and delivered by the Company and
constitutes the legal, valid and binding agreement of the Company enforceable
against the Company in accordance with its terms, except as rights to indemnity
and contribution may be limited by state or federal securities laws or the public
policy underlying such laws, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ and contracting parties’ rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at
law).  The Shares and the Warrants being
purchased by the Investor hereunder, and the shares of common stock of the
Company to be issued to the Investors upon an exercise of all or part of the
Warrants (the “Warrant Shares”), will, upon issuance and payment therefor
pursuant to the terms hereof, be duly authorized, validly issued, fully-paid
and nonassessable.

 

4.3                                       Non-Contravention. 
The execution and delivery of the Agreement, the issuance and sale of
the Shares and the Warrants under the Agreement, the issuance of the Warrant
Shares upon exercise of the Warrants, the fulfillment of the terms of the
Agreement and the consummation of the transactions contemplated hereby will not
(A) conflict with or constitute a violation of, or default (with the
passage of time or otherwise) under, (i) any bond, debenture, note or
other evidence of indebtedness, lease, contract, indenture, mortgage, deed of
trust, loan agreement, joint venture or other agreement or instrument to which
the Company is a party or by which it or its properties are bound,
(ii) the charter, by-laws or other organizational documents of the
Company, or (iii) any law, administrative regulation, ordinance or order
of any court or governmental agency, arbitration panel or authority applicable
to the Company or its properties, except in the case of clauses (i) and
(iii) for any such conflicts, violations or defaults that are not reasonably
likely to have a Material Adverse Effect or (B) result in the creation or
imposition of any lien, encumbrance, claim, security interest or restriction
whatsoever upon any of the properties or assets of the Company or an
acceleration of indebtedness pursuant to any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of indebtedness or
any indenture, mortgage, deed of trust or any other agreement or instrument to
which the Company is a party or by which it is bound or to which any of the
material property or assets of the Company is subject, except for such liens,
encumbrances, claims, security interests or restrictions upon any of the
properties or assets of the Company or accelerations of indebtedness that are
not reasonably likely to have a Material Adverse Effect.  No consent, approval, authorization or other
order of, or registration, qualification or filing with, any regulatory body,
administrative agency, or other governmental body or any other 

 

person is required
for the execution and delivery of the Agreement, the valid issuance and sale of
the Shares and the Warrants to be sold pursuant to the Agreement, or the valid
issuance of the Warrant Shares upon exercise of the Warrants, other than such as
have been made or obtained, and except for any post-closing securities filings
or notifications required to be made under federal or state securities laws.

 

4.4                                       Capitalization. 
The capitalization of the Company as of September 30, 2005 is as set
forth in the most recent applicable SEC Documents, increased as set forth in
the next sentence.  The Company has not
issued any capital stock since that date other than pursuant to (i) employee
benefit plans disclosed in the SEC Documents, or (ii) outstanding warrants,
options or other securities disclosed in the SEC Documents.  The outstanding shares of capital stock of
the Company have been duly and validly issued and are fully paid and
nonassessable, have been issued in compliance with all federal and state securities
laws, and were not issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. 
Except as set forth in or contemplated by the SEC Documents, and other
than options issued to officers, directors and employees of the Company under
its employee benefit plans, the Warrants and any warrants issued pursuant to
the Contemporaneous Offering, there are no outstanding rights (including,
without limitation, preemptive rights), warrants or options to acquire, or instruments
convertible into or exchangeable for, any unissued shares of capital stock or
other equity interest in the Company, or any contract, commitment, agreement,
understanding or arrangement of any kind to which the Company is a party or of
which the Company has knowledge and relating to the issuance or sale of any
capital stock of the Company, any such convertible or exchangeable securities
or any such rights, warrants or options. 
Without limiting the foregoing, no preemptive right, co-sale right,
right of first refusal or other similar right exists with respect to the
Shares, the Warrants or the Warrant Shares or the issuance and sale
thereof.  No further approval or
authorization of any stockholder or the Board of Directors of the Company or
others is required for the issuance and sale of the Shares and the Warrants or
the issuance of the Warrant Shares upon exercise of the Warrants. Except as
disclosed in the SEC Documents, there are no stockholders agreements, voting
agreements or other similar agreements with respect to the Common Stock to
which the Company is a party or, to the knowledge of the Company, between or
among any of the Company’s stockholders. The issuance and sale of the Shares
and the Warrants, and the issuance of the Warrant Shares upon exercise of the
Warrants, will not result in a right of any current holder of Company
securities to adjust the exercise, conversion, exchange or reset price under
such securities.  Subject to the filing
of the notification with the Nasdaq National Market, the issuance and sale of
the Shares under the Agreement does not contravene the rules and regulations of
the Nasdaq National Market, and, in furtherance of the foregoing sentence, no
approval of the stockholders of the Company thereunder is required for the
Company to issue and deliver to the Investors the maximum number of the Shares
and the Warrants, or the issuance of the Warrant Shares upon exercise of the
Warrants, contemplated by the Agreement.

 

4.5                                       Legal Proceedings; Disagreements with
Advisors.  There is no material legal or governmental
investigation, action, suit or proceeding pending or, to the knowledge of the
Company, threatened to which the Company is or may be a party or of which the
business or property of the Company is subject that is not disclosed in the SEC
Documents.  There are no material
disagreements presently existing, or reasonably anticipated by the Company to
arise, between the accountants formerly or presently employed by the Company.

 

4.6                                       No Violations. 
The Company is not (i) in violation of its charter, bylaws or any other
organizational documents; (ii) in violation of any federal, state or local law,
administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or authority applicable to the Company, which
violation, individually or in the aggregate, would be reasonably likely to have
a Material Adverse Effect; or (iii) in default (and there exists no condition
which, with the passage of time or otherwise, would constitute a default) in the
performance of any bond, debenture, note or any other evidence of indebtedness
in any indenture, mortgage, deed of trust or any other agreement or instrument
to which the Company is a party or by which the Company is bound or by which
the properties of the Company are bound, which would be reasonably likely to
have a Material Adverse Effect.

 

4.7                                       Governmental Permits, Etc. 
With the exception of the matters which are dealt with separately in
Sections 4.1, 4.12, 4.13, and 4.14, the Company has all necessary
franchises, licenses, certificates and other authorizations from any foreign,
federal, state or local government or governmental agency, department, or body
that are currently necessary for the operation of the business of the Company
as currently conducted and as described in the SEC Documents, except where the
failure to currently possess would not have a Material Adverse Effect.

 

4.8                                       Intellectual Property. 
Except as specifically disclosed in the SEC Documents (i)  the
Company owns or possesses sufficient rights to use all patents, patent rights,
trademarks, copyrights, licenses, inventions, trade secrets, trade names and
know-how (including trade secrets and other unpatented and/or unpatentable
property or confidential information, systems, processes or procedures)
(collectively, “Intellectual Property”) described or referred to in the SEC
Documents as owned or possessed by it or that are necessary for the conduct of
its business as now conducted as described in the SEC Documents except 

 

where the failure
to currently own or possess would not have a Material Adverse Effect, (ii) the
Company is not infringing, and has not received any notice of, and has no
knowledge of, any asserted infringement by the Company of any rights of a third
party with respect to any Intellectual Property that, individually or in the
aggregate, would have a Material Adverse Effect and (iii) the Company  has not received any notice of, and has no
knowledge of, infringement by a third party with respect to any Intellectual
Property rights of the Company that, individually or in the aggregate, would
have a Material Adverse Effect.  Further,
except as described in the SEC Documents or exhibits thereto, or as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, no third party, including any academic or governmental
organization, possesses rights to the Intellectual Property which, if
exercised, could enable such third party to develop products competitive with
the business of the Company as currently being conducted.

 

4.9                                       Financial Statements; Obligations to
Related Parties.  (a) The financial statements of the Company
and the related notes contained in the SEC Documents present fairly, in
accordance with generally accepted accounting principles, the financial
position of the Company as of the dates indicated, and the results of its
operations and cash flows for the periods therein specified consistent with the
books and records of the Company except that the unaudited interim financial statements
were or are subject to normal and recurring year-end adjustments which are not
expected to be material in amount.  Such
financial statements (including the related notes) have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods therein specified, except as may be
disclosed in the notes to such financial
statements, or in the case of unaudited statements, as may be permitted by the
Securities and Exchange Commission (the “SEC”) on Form 10-Q under the
Exchange Act and except as disclosed in the SEC Documents.  The other financial information contained in
the SEC Documents has been prepared on a basis consistent with the financial
statements of the Company.  As of their
respective dates, the financial statements of the Company included in the SEC
Documents complied as to form in all material respects with applicable
accounting requirements and published rules and regulations of the SEC with
respect thereto.

 

(b)                                 Except
as set forth in any SEC Documents, there are no obligations of the Company to
officers, directors, stockholders or employees of the Company other than (i)
for payment of salary for services rendered and for bonus payments; (ii)
reimbursements for reasonable expenses incurred on behalf of the Company; (iii)
for other standard employee benefits made generally available to all employees
(including stock option agreements outstanding under any stock option plan
approved by the Board of Directors of the Company); and (iv) obligations listed
in the Company’s financial statements.

 

4.10                                 No Material Adverse Change. 
Except as disclosed in the SEC Documents, since September 30, 2005,
there has not been (i) any material adverse change in the financial
condition or earnings of the Company, (ii) any material adverse event
affecting the Company, (iii) any obligation, direct or contingent, that is
material to the Company, incurred by the Company, except obligations incurred
in the ordinary course of business, (iv) any dividend or distribution of
any kind declared, paid or made on the capital stock of the Company or
(v) any loss or damage (whether or not insured) to the physical property
of the Company which has been sustained, in each case, which has a Material
Adverse Effect.

 

4.11                                 Disclosure. The representations and warranties of the Company
contained in this Section 4 as of the date hereof and as of the Closing
Date, do not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.  Except with respect to the material terms and conditions of the
transaction contemplated by the Agreement, the anticipated use of the proceeds
therefrom, each of which shall be publicly disclosed by the Company pursuant to
Section 16 hereof, the Company confirms that neither it nor any person acting
on its behalf has provided the Investors with any information that the Company
believes constitutes material, non-public information.  The Company understands and confirms that the
Investors will rely on the foregoing representations in effecting transactions
in the securities of the Company.

 

4.12                                 Nasdaq Compliance. 
The Company’s Common Stock is registered pursuant to Section 12(g)
of the Exchange Act and is listed on the Nasdaq National Market (“Nasdaq”), and
the Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
de-listing the Common Stock from Nasdaq, nor has the Company received any
notification that the SEC or Nasdaq is contemplating terminating such
registration or listing.

 

4.13                                 Reporting Status. 
The Company has filed in a timely manner all documents that the Company
was required to file under the Exchange Act since August 5, 2005.  The following documents complied in all
material respects with the SEC’s requirements as of their respective filing
dates, and the information contained therein as of the date thereof did not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein in
light of the circumstances under which they were made not misleading:

 

(a)                                        the Quarterly Report on Form 10-Q for the
quarter ended September 30, 2005, filed by the Company with the SEC on November
10, 2005;

 

(c)                                        the Prospectus filed by the Company with
the SEC pursuant to Rule 424(b)(4) on August 5, 2005; and

 

(d)                                       all other documents, if any, filed by the
Company with the SEC during the
period from the date of filing the Prospectus filed by the Company with the SEC
pursuant to Rule 424(b)(4) on August 5, 2005 to the date of the Agreement
pursuant to the reporting requirements of the Exchange Act.

 

4.14                                 Listing.  The Company
shall use reasonable commercial efforts to comply with all requirements of
Nasdaq with respect to the listing of the Shares and the Warrant Shares on
Nasdaq.  The Company shall comply with
all requirements of the SEC with respect to the issuance of the Shares, the
Warrants and the Warrant Shares.

 

4.15                                 No Manipulation of Stock. 
The Company has not taken and will not, in violation of applicable law,
take, any action designed to or that might reasonably be expected to cause or
result in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of any of the Shares, the Warrants or the Warrant
Shares.

 

4.16                                 Company not an “Investment Company”. 
The Company has been advised of the rules and requirements under the
Investment Company Act of 1940, as amended (the “Investment Company Act”).  The Company is not, and immediately after
receipt of payment for the Shares and the Warrants will not be, an “investment
company” or, to the knowledge of the Company, an entity “controlled” by an “investment
company” within the meaning of the Investment Company Act and shall conduct its
business in a manner so that it will not become subject to the Investment
Company Act.

 

4.17                                 Foreign Corrupt Practices. 
Neither the Company, nor to the knowledge of the Company, any agent or
other person acting on behalf of the Company, has (i) directly or indirectly,
used any corrupt funds for unlawful contributions, gifts, entertainment or
other unlawful expenses related to foreign or domestic political activity, (ii)
made any unlawful payment to foreign or domestic government officials or
employees or to any foreign or domestic political parties or campaigns from
corporate funds, (iii) failed to disclose fully any contribution made by the
Company (or made by any person acting on its behalf of which the Company is
aware) which is in violation of law or (iv) violated in any material respect
any provision of the Foreign Corrupt Practices Act of 1977, as amended.

 

4.18                           Accountants. 
To the Company’s knowledge, Deloitte & Touche LLP, who the Company
expects will consent to the inclusion (or incorporation by reference, as the
case may be) of its report to be issued with respect to the financial
statements to be filed with the Company’s annual report on Form 10-K for the
year ended December 31, 2005 into the Registration Statement (as defined below)
and the prospectus which forms a part thereof, are and, during the periods that
will be covered by their reports, were independent accountants as required by
the Securities Act.

4.19                                 Contracts.  The contracts
described in the SEC Documents that are material to the Company are in full
force and effect on the date hereof, and neither the Company nor, to the
Company’s knowledge, any other party to such contracts is in breach of or
default, or received a notice of termination under any of such contracts which
would have a Material Adverse Effect. 
The Company has filed with the SEC all contracts and agreements required
to be filed by the Exchange Act.

4.20                                 Taxes.  The Company
has filed (or has obtained an extension of time within which to file) all
necessary federal, state and foreign income and franchise tax returns and has
paid all taxes shown as due on such tax returns, except where the failure to so
file or the failure to so pay would not have a Material Adverse Effect.  The Company is not aware of any tax
deficiency that has been or might be asserted or threatened against it that would
have a Material Adverse Effect.

 

4.21                                 Private Offering. 
Assuming the correctness of the representations and warranties of the
Investor set forth in Section 5 hereof and assuming that Lazard Capital
Markets LLC has not offered or sold any of the Shares or Warrants by any form
of general solicitation or advertising, the offer and sale of the Shares and
the Warrants and the issuance of the Warrant Shares upon exercise of the
Warrants is exempt from registration under the Securities Act.  The Company has not distributed and will not
distribute prior to the Closing Date any offering material in connection with
the transaction contemplated by the Agreement and sale of the Shares and the
Warrants other than the documents of which the Agreement is a part or the SEC
Documents.  The Company has not in the
past nor will it hereafter take any action independent of the placement agent
to sell, offer for sale or solicit offers to buy any securities of the Company
which would bring the offer, issuance or sale of the Shares and the Warrants as
contemplated by the Agreement within the provisions of Section 5 of the
Securities Act, unless such offer, issuance or sale was or shall be within the
exemptions of Section 4 of the Securities Act.  Neither the Company nor any person
acting on behalf of the 

 

Company (other
than Lazard Capital Markets LLC) has offered or sold any of the Shares or the
Warrants by any form of general solicitation or general advertising.  The Company has offered the Shares and the
Warrants for sale only to the Investors and certain other “accredited investors”
within the meaning of Rule 501 under the Securities Act.

 

4.22                                 Disclosure Controls and Procedures. 
The Company is in material compliance with all provisions of the
Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing
Date.  The Company maintains a system of
internal control over financial reporting (as such term is defined in the
Exchange Act) sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.  The Company’s certifying officers are
responsible for establishing and maintaining disclosure controls and procedures
(as defined in the Exchange Act) for the Company and they have (a) designed
such disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under their supervision, to ensure that material
information relating to the Company is made known to the certifying officers by
others within those entities, particularly during the periods in which the
Company’s filings under the Exchange Act have been prepared; (b) evaluated the
effectiveness of the Company’s disclosure controls and procedures and presented
in the Company’s filings under the Exchange Act their conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the
periods covered by such filings under the Exchange Act  based on such evaluation; and (c) since the
last evaluation date referred to in (b) above, there has been no change in the
Company’s internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting (as such term is defined in the Exchange Act)
or, to the Company’s knowledge, in other factors that could significantly
affect the Company’s internal control over financial reporting.

 

4.23                                 Transactions With
Affiliates.  There are no
business relationships or related-party transactions involving the Company or
any other person required to be described in the SEC Documents that have not
been described as required.

 

4.24                           No Registration Rights. 
Upon the filing of the Registration Statement (as defined below), no
person will have the right, which right has not been waived, to require the
Company to register any securities for sale under the Securities Act by reason
of the filing of the Registration Statement with the SEC or the issuance and
sale of the Shares or the Warrant Shares.

 

4.25                           Company Acknowledgement of Investor
Representation.  The Company acknowledges and agrees that
Investor does not make or has not made any representations or warranties with
respect to the transactions contemplated hereby other than those specifically
set forth in Sections 5 and 16(a) of the Agreement, or in the Investor
Questionnaire.

 

5.                                       Representations, Warranties and Covenants
of the Investor.

 

5.1                                       The Investor represents and warrants to,
and covenants with, the Company that: (i) the Investor is an “accredited
investor” as defined in Regulation D under the Securities Act and the Investor
is also knowledgeable, sophisticated and experienced in making, and is
qualified to make decisions with respect to investments in shares presenting an
investment decision like that involved in the purchase of the number of the
Shares and the number of the Warrants, in each case, set forth on the Investor’s
signature page to this Agreement, including investments in securities issued by
the Company and investments in comparable companies, and has requested,
received, reviewed and considered all information it deemed relevant in making
an informed decision to purchase the Shares and the Warrants; (ii) the
Investor is acquiring the Shares and the Warrants in the ordinary course of its
business and for its own account for investment only and with no present
intention of distributing any of the Shares or the Warrant Shares (other than
pursuant to the Registration Statement) or any arrangement or understanding
with any other persons regarding the distribution of the Shares or the Warrant
Shares; (iii) the Investor will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) any of the Shares or the
Warrant Shares except in compliance with the Securities Act, applicable state
securities laws and the respective rules and regulations promulgated
thereunder; (iv) the Investor has answered all questions on the Investor
Questionnaire attached hereto for use in preparation of the Registration
Statement and the answers thereto are true, correct and complete as of the date
hereof and will be true, correct and complete as of the Closing Date and the
Filing Date; (v) the Investor will notify the Company immediately of any
change in any of such information until such time as such Investor has sold all
of the Shares and the Warrant Shares owned by it or until the Company is no
longer required to keep the Registration Statement effective (other than
changes in the number of Shares or Warrant Shares); and (vi) the Investor has,
in connection with its decision to purchase the number of the Shares and the
Warrants relied only upon the SEC Documents and the representations and
warranties of the Company contained herein. 
The Investor understands that its acquisition of the Shares and the
Warrants has not been registered under the Securities 

 

Act or registered
or qualified under any state securities law in reliance on specific exemptions
therefrom, which exemptions may depend upon, among other things, the bona fide
nature of the Investor’s investment intent as expressed herein.  Subject
to compliance with the Securities Act, applicable securities laws and the
respective rules and regulations promulgated thereunder, nothing contained
herein shall be deemed a representation or warranty by the Investor to hold the
Shares, the Warrants or the Warrant Shares for any period of time.

 

5.2                                       The Investor acknowledges, represents and
agrees that no action has been or will be taken in any jurisdiction outside the
United States by the Company that would permit an offering of the Shares, the
Warrants or the Warrant Shares or possession or distribution of offering
materials in connection with the issue of the Shares, the Warrants or the
Warrant Shares in any jurisdiction outside the United States where legal action
by the Company for that purpose is required. 
Any Investor outside the United States will comply with all applicable
laws and regulations in each foreign jurisdiction in which it purchases,
offers, sells or delivers the Shares, the Warrants or the Warrant Shares or has
in its possession or distributes any offering material, in all cases at its own
expense.

 

5.3                                       The Investor hereby covenants with the
Company not to make any sale of the Shares, the Warrants and the Warrant Shares
without complying with the provisions of the Agreement and without causing the
prospectus delivery requirement under the Securities Act to be satisfied
(whether by delivery (including deemed delivery) of the Prospectus or pursuant
to and in compliance with an exemption from such requirement), and each Investor
acknowledges that the certificates evidencing the Shares, the Warrants and the
Warrant Shares will be imprinted with a legend that prohibits their transfer
except in accordance therewith.  The
Investor acknowledges that there may occasionally be times when the Company
determines that it must suspend the use of the Prospectus forming a part of the
Registration Statement, as set forth in Section 7.2(c).

 

5.4                                       The Investor further represents and
warrants to, and covenants with, the Company that (i) the Investor has
full right, power, authority and capacity to enter into the Agreement and to
consummate the transactions contemplated hereby and has taken all necessary
action to authorize the execution, delivery and performance of the Agreement,
and (ii) the Agreement constitutes a valid and binding obligation of the
Investor enforceable against such Investor in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally, except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law) and except as the indemnification
agreements of the Investors herein may be legally unenforceable.

 

5.5                                       During the last thirty (30) days prior to
the date hereof, neither such Investor nor any Affiliate of such Investor which
(x) had knowledge of the transactions contemplated hereby, (y) has or shares
discretion relating to such Investor’s investments or trading or information
concerning such Investor’s investments, including in respect of the Shares and
Warrants, or (z) is subject to such Investor’s review or input concerning such
Affiliate’s investments or trading (collectively, “Trading Affiliates”) has,
directly or indirectly, effected or agreed to effect any short sale, whether or
not against the box, established any “put equivalent position” (as defined in
Rule 16a-1(h) under the 1934 Act) with respect to the Common Stock, borrowed or
pre borrowed any shares of Common Stock, granted any other right (including,
without limitation, any put or call option) with respect to the Common Stock or
with respect to any security that includes, relates to or derived any
significant part of its value from the Common Stock or otherwise sought to
hedge its position in the Company’s securities (each, a “Prohibited Transaction”).  Prior to the earliest to occur of (i) the
termination of this Agreement, (ii) the effective date of the Registration
Statement or (iii) the Required Effective Date, such Investor shall not, and
shall cause its Trading Affiliates not to, (A) engage, directly or indirectly,
in a Prohibited Transaction, or (B) effect any sale, assignment, pledge,
hypothecation, put, call, transfer or other disposition of any Shares and
Warrants.

 

5.6                                       The Investor understands that nothing in
the SEC Documents, the Agreement or any other materials presented to the
Investor in connection with the purchase and sale of the Shares and the
Warrants or the issuance of the Warrant Shares constitutes legal, tax or
investment advice.  The Investor has
consulted such legal, tax and investment advisors as it, in its sole
discretion, has deemed necessary or appropriate in connection with its purchase
of the Shares and the Warrants.

 

6.                                       Survival of Representations, Warranties
and Agreements.  Notwithstanding any investigation made by any
party to the Agreement, all covenants, agreements, representations and warranties
made by the Company and the Investor herein shall survive the execution of the
Agreement, the delivery to the Investor of the Shares and the Warrants being
purchased and the payment therefore; provided, that the representations
and warranties contained herein shall expire on the one-year anniversary of the
Closing Date.

 

 

7.                                       Registration of the Shares and the
Warrant Shares; Compliance with the Securities Act.

 

7.1                                       Registration Procedures and Other Matters. 
The Company shall:

 

(a)                            subject to receipt of necessary
information from the Investors after prompt request from the Company to the
Investors to provide such information, prepare and file with the SEC, within 30
days after the Closing Date (the “Filing Date”), a registration statement on
Form S-1 (the “Registration Statement”) to enable the resale of the Shares and
the Warrant Shares by the Investors from time to time in compliance with the
Securities Act;

 

(b)                           subject to receipt of necessary
information from the Investor after prompt request from the Company to the
Investors to provide such information, use its best efforts to cause the
Registration Statement to become effective on or prior to the sixtieth (60th) day after
the Closing Date (the “Required Effective Date”).  However, so long as the Company filed the
Registration Statement by the Filing Date, if the Registration Statement
receives SEC review, then the Required Effective Date will be the one hundred
twentieth (120th) calendar day after the Closing Date;

 

(c)                            use its best efforts to prepare and file
with the SEC such amendments and supplements to the Registration Statement in
compliance with applicable laws, and the prospectus used in connection
therewith (the “Prospectus”) as may be necessary to keep the Registration
Statement current, effective and free from any material misstatement or
omission to state a material fact for a period not exceeding, with respect to
the Shares purchased by the Investor and the Warrant Shares issued pursuant to
the Warrants, the earlier of (i) the second anniversary of the Closing
Date, (ii) the date on which the Investor may sell all of the Shares and
the Warrant Shares then held by the Investor without restriction by the volume
limitations of Rule 144(e) of the Securities Act, or (iii) such time
as all of the Shares purchased by the Investor in the transaction contemplated
by the Agreement and the Warrant Shares issued to the Investor pursuant to the
Warrants have been sold pursuant to a registration statement;

 

(d)                           furnish to the Investor with respect to the
Shares and the Warrant Shares registered under the Registration Statement such
number of copies of the Registration Statement, Prospectuses and preliminary
Prospectuses in conformity with
the requirements of the Securities Act and such other documents as the Investor
may reasonably request, in order to facilitate the public sale or other
disposition of all or any of the Shares and the Warrant Shares by the Investor;

 

(e)                            file documents required of the Company
for blue sky clearance in states specified in writing by the Investors and use
its commercially reasonable efforts to maintain such blue sky qualifications
during the period the Company is required to maintain the effectiveness of the
Registration Statement pursuant to Section 7.1(c); provided, however,
that the Company shall not be required to qualify to do business or consent to
service of process in any jurisdiction in which it is not now so qualified or
has not so consented;

 

(f)                              bear all expenses in connection with the
procedures in paragraph (a) through (e), (h) and the last paragraph of this
Section 7.1 and the registration of the Shares and the Warrant Shares
pursuant to the Registration Statement (other than underwriting discounts or
commissions, brokers’ fees and similar selling expenses and any other fees or
expenses incurred by the Investors, including attorneys’ fees);

 

(g)                           advise the Investor, promptly after it
shall receive notice or obtain knowledge of the issuance of any stop order by
the SEC delaying or suspending the effectiveness of the Registration Statement
or of the initiation or threat of any proceeding for that purpose; and it will
promptly use its commercially reasonable efforts to prevent the issuance of any
stop order or to obtain its withdrawal as promptly as possible moment if such
stop order should be issued;

 

(h)                           include in the Registration Statement a “Plan
of Distribution” section substantially in the form attached hereto as Exhibit
A; and

 

(i)                               upon becoming eligible to use Form S-3,
convert the Registration Statement from a Form S-1 to a Form S-3 as promptly as
practicable.

 

Notwithstanding
anything to the contrary herein, the Registration Statement shall cover only
the Shares and the Warrant Shares, but the parties acknowledge that the Company
may choose to include, at its option and solely for its convenience, the Shares
and the Warrant Shares on a registration statement with other similar
securities, but only if to do so would not adversely affect the Investor.  In no event at any time before the
Registration Statement becomes effective with respect to the Shares and the
Warrant Shares shall the Company publicly announce or file any other
registration statement, other than registrations on Form S-8,

 

without the prior
written consent of a majority in interest of the Investor and the third-party
purchasers in the Contemporaneous Offering.

 

The Company
understands that the Investor disclaims being an underwriter, but any Investor
being deemed an underwriter by the SEC shall not relieve the Company of any
obligations it has hereunder; provided, however that if the
Company receives notification from the SEC that an Investor is deemed an
underwriter, then the period by which the Company is obligated to submit an
acceleration request to the SEC shall be extended to the earlier of
(i) the 90th day after such SEC notification or (ii) 150 days after
the initial filing of the Registration Statement with the SEC.

 

Within three business
days of the effectiveness date of the Registration Statement, the Company shall
give notice to the Investor of such effectiveness and use its commercially
reasonable efforts to cause its counsel to issue an appropriate opinion or
opinions to the transfer agent substantially to the effect that the shares are
subject to an effective registration statement and can be reissued free of
restrictive legend in accordance with provisions of Section 7.6.

 

7.2                                       Transfer of the Shares and the Warrant
Shares After Registration; Suspension.

 

(a)                            The Investor agrees that it will not
effect any disposition of the Shares or the Warrant Shares or its right to
purchase the Shares or the Warrant Shares that would constitute a sale within
the meaning of the Securities Act except as contemplated in the Registration
Statement referred to in Section 7.1 and as described below or as
otherwise permitted by law, and that it will promptly notify the Company of any
changes in the information set forth in the Registration Statement regarding
such Investor or its plan of distribution (other than changes in the number of
Shares or Warrant Shares). In connection with any transfer of the Shares or the
Warrant Shares other than pursuant to an effective registration statement, to
the Company or to an affiliate of the Investor (who is an accredited investor
and executes a customary representation letter), the Company may require the
transferor thereof to provide to the Company an opinion of counsel which
opinion shall be reasonably satisfactory to the Company, to the effect that
such transfer does not require registration of such transferred Shares or
Warrant Shares under the Securities Act.

 

(b)                           Except in the event that paragraph (c)
below applies, the Company shall (i) if deemed necessary by the Company,
prepare and file from time to time with the SEC a post-effective amendment to
the Registration Statement or a supplement to the related Prospectus or a
supplement or amendment to any document incorporated therein by reference or
file any other required document so that such Registration Statement will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and so that, as thereafter delivered to purchasers of the Shares or
the Warrant Shares being sold thereunder, such Prospectus will not contain an
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; (ii) provide
the Investor copies of any documents filed pursuant to Section 7.2(b)(i)
as they reasonably request; and (iii) inform the Investor that the Company
has complied with its obligations in Section 7.2(b)(i) (or that, if the
Company has filed a post-effective amendment to the Registration Statement
which has not yet been declared effective, the Company will notify the Investor
to that effect, will use its best efforts to secure the effectiveness of such
post-effective amendment as promptly as possible and will promptly notify each
Investor pursuant to Section 7.2(b)(i) hereof when the amendment has
become effective).

 

(c)                            Subject to paragraph (d) below, in the
event (i) of any request by the SEC or any other federal or state
governmental authority during the period of effectiveness of the Registration
Statement for amendments or supplements to a Registration Statement or related
Prospectus or for additional information; (ii) of the issuance by the SEC
or any other federal or state governmental authority of any stop order
suspending the effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose; (iii) of the receipt by the Company of
any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Shares for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose; or (iv) of
any event or circumstance which, upon the good faith judgment of the Company’s
Board of Directors based on the advice of its counsel, necessitates the making
of any changes in the Registration Statement or Prospectus, or any document
incorporated or deemed to be incorporated therein by reference, so that, in the
case of the Registration Statement, it will not contain any untrue statement of
a material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and that in
the case of the Prospectus, it will not contain any untrue statement of a
material fact or any omission to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; then the Company
shall deliver a certificate in writing to the Investor (the “Suspension Notice”)
to the effect of the foregoing and, upon receipt of such Suspension Notice,
such Investor will refrain from selling any of the Shares or the Warrant Shares
pursuant to the Registration Statement (a “Suspension”) until the Investor’s
receipt of copies of a supplemented or amended Prospectus prepared and filed by
the Company, or until it is advised in writing by the Company that the current
Prospectus may be used, and has received copies of any additional or 

 

supplemental
filings that are incorporated or deemed incorporated by reference in any such
Prospectus.  In the event of any
Suspension, the Company will use its best efforts to cause the use of the
Prospectus so suspended to be resumed as soon as reasonably practicable within
20 business days after the delivery of a Suspension Notice to the Investor.

 

(d)                           Notwithstanding the foregoing paragraphs
of this Section 7.2, the Investor shall not be prohibited from selling any
of the Shares or the Warrant Shares under the Registration Statement as a
result of Suspensions on more than two occasions of not more than 30 days each
in any twelve month period, unless, in the good faith judgment of the Company’s
Board of Directors based on the advice of its counsel, the sale of the Shares
or the Warrant Shares under the Registration Statement in reliance on this
paragraph 7.2(d) would be reasonably likely to cause a violation of the
Securities Act or the Exchange Act and result in liability to the Company.

 

(e)                            Provided that a Suspension is not then in
effect, the Investor may sell any of the Shares and the Warrant Shares under
the Registration Statement; provided, that it complies with the
prospectus delivery requirements under the Securities Act.  Upon receipt of a request therefor, the
Company has agreed to provide an adequate number of current Prospectuses to the
Investors and to supply copies to any other parties requiring such Prospectuses
pursuant to the Securities Act.

 

7.3                                       Indemnification. 
For the purpose of this Section 7.3:

 

(i)                                           the term “Selling Stockholder” means the
Investor and any affiliate of such Investor;

 

(ii)                                        the term “Registration Statement” shall
include the Prospectus in the form first filed with the SEC pursuant to
Rule 424(b) of the Securities Act or filed as part of the Registration
Statement at the time of effectiveness if no Rule 424(b) filing is
required, and any exhibit, supplement or amendment included in or relating to
the Registration Statement referred to in Section 7.1; and

 

(iii)                                     the term “untrue statement” for purposes
of Section 7.3(d) hereof shall include any untrue statement or alleged untrue
statement, or any omission or alleged omission to state in the Registration
Statement a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

 

(a)                            The Company agrees to indemnify and hold
harmless each Selling Stockholder from and against any losses, claims, damages
or liabilities to which such Selling Stockholder may become subject (under the
Securities Act or otherwise) insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon (i) any breach of any of the representations or warranties of
the Company contained herein or failure to comply with any of the covenants and
agreements of the Company contained herein, (ii) any untrue statement of a
material fact contained in the Registration Statement as amended at the time of
effectiveness or any omission of a material fact required to be stated therein
or necessary to make the statements therein not misleading, or (iii) any
failure by the Company to fulfill any undertaking included in the Registration
Statement as amended at the time of effectiveness, and the Company will
reimburse such Selling Stockholder for any reasonable legal or other expenses
reasonably incurred in investigating, defending or preparing to defend any such
action, proceeding or claim, or preparing to defend any such action, proceeding
or claim; provided, however, that the Company shall not be liable
to a Selling Stockholder to the extent that such loss, claim, damage or
liability arises out of, or is based upon, an untrue statement made in such
Registration Statement or any omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of such Selling Stockholder specifically for use in preparation of
the Registration Statement, or the failure of such Selling Stockholder to
comply with its covenants and agreements contained in Section 7.2 hereof
respecting sale of the Shares or the Warrant Shares or any statement or
omission in any Prospectus that is corrected in any subsequent Prospectus that
was delivered to the Selling Stockholder prior to the pertinent sale or sales
by the Selling Stockholder.  The Company
shall reimburse each Selling Stockholder for the amounts provided for herein on
demand as such expenses are incurred as reasonably documented by the Selling
Stockholder.

 

(b)                           The Investor agrees to indemnify and hold
harmless the Company (and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act, each officer of the
Company who signs the Registration Statement and each director of the Company)
from and against any losses, claims, damages or liabilities to which the
Company (or any such officer, director or controlling person) may become
subject (under the Securities Act or otherwise), insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of, or are based upon, (i) any failure to comply with the covenants
and agreements contained in Section 7.2 hereof respecting sale of the
Shares, (ii) any untrue statement of a material fact contained in the
Registration Statement or any omission of a material fact required to be stated
therein 

 

or necessary to
make the statements therein not misleading if such untrue statement or omission
was made in reliance upon and in conformity with written information furnished
by or on behalf of such Investor specifically for use in preparation of the
Registration Statement or (iii) any breach of the representations and
warranties of the Investor contained in Section 5 hereof, and the Investor will
reimburse the Company (or such officer, director or controlling person), as the
case may be, for any legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action, proceeding or
claim; provided, that an
Investor’s obligation to indemnify the Company shall be limited to the net
amount received by the Investor from the sale of the Shares or Warrant Shares
by the Investor.

 

(c)                            Promptly after receipt by any indemnified
person of a notice of a claim or the beginning of any action in respect of
which indemnity is to be sought against an indemnifying person pursuant to this
Section 7.3, such indemnified person shall notify the indemnifying person
in writing of such claim or of the commencement of such action, but the
omission to so notify the indemnifying person will not relieve it from any
liability which it may have to any indemnified person under this
Section 7.3 (except to the extent that such omission materially and
adversely affects the indemnifying person’s ability to defend such action) or
from any liability otherwise than under this Section 7.3.  Subject to the provisions hereinafter stated,
in case any such action shall be brought against an indemnified person, the
indemnifying person shall be entitled to participate therein, and, to the
extent that it shall elect by written notice delivered to the indemnified
person promptly after receiving the aforesaid notice from such indemnified
person, shall be entitled to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified person.  After notice from the indemnifying person to
such indemnified person of its election to assume the defense thereof, such
indemnifying person shall not be liable to such indemnified person for any
legal expenses subsequently incurred by such indemnified person in connection
with the defense thereof; provided, however, that if there exists
or shall exist a conflict of interest that would make it inappropriate, in the
opinion of counsel to the indemnified person, for the same counsel to represent
both the indemnified person and such indemnifying person or any affiliate or
associate thereof, the indemnified person shall be entitled to retain its own
counsel at the expense of such indemnifying person; provided, however,
that no indemnifying person shall be responsible for the fees and expenses of
more than one separate counsel (together with appropriate local counsel) for
all indemnified parties hereunder and similarly situated indemnified parties
under the Securities Purchase Agreements with the third-party purchasers in
connection with the Contemporaneous Offering. 
In no event shall any indemnifying person be liable in respect of any
amounts paid in settlement of any action unless the indemnifying person shall
have approved the terms of such settlement; provided, that such consent
shall not be unreasonably withheld.  No
indemnifying person shall, without the prior written consent of the indemnified
person, effect any settlement of any pending or threatened proceeding in
respect of which any indemnified person is or could have been a party and
indemnification could have been sought hereunder by such indemnified person,
unless such settlement includes an unconditional release of such indemnified
person from all liability on claims that are the subject matter of such
proceeding.

 

(d)                           If the indemnification provided for in
this Section 7.3 is unavailable to or insufficient to hold harmless an
indemnified person under subsection (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to therein, then each indemnifying person shall contribute to the
amount paid or payable by such indemnified person as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the Company on
the one hand and an Investor, as well as any other Selling Stockholders under
such registration statement on the other in connection with the statements or
omissions or other matters which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations.  The relative
fault shall be determined by reference to, among other things, in the case of
an untrue statement, whether the untrue statement relates to information
supplied by the Company on the one hand or an Investor or other Selling
Stockholder on the other and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement.  The Company and the Investors agree that it
would not be just and equitable if contribution pursuant to this subsection (d)
were determined by pro rata allocation (even if the Investor and other Selling
Stockholders were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to above in this subsection (d).  The amount paid or payable by an indemnified
person as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
person in connection with investigating or defending any such action or
claim.  Notwithstanding the provisions of
this subsection (d), no Investor shall be required to contribute any amount in
excess of the amount by which the net amount received by such Investor from the
sale of the Shares or the Warrant Shares to which such loss relates exceeds the
amount of any damages which such Investor has otherwise been required to pay by
reason of such untrue statement.  No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.  The Investor’s obligations in this subsection
to contribute shall be in proportion to its sale of the Shares or the Warrant
Shares to which such loss relates and shall not be joint with any other Selling
Stockholders.

 

 

(e)                            The parties to the Agreement hereby
acknowledge that they are sophisticated business persons who were represented
by counsel during the negotiations regarding the provisions hereof including,
without limitation, the provisions of this Section 7.3, and are fully
informed regarding said provisions.  They
further acknowledge that the provisions of this Section 7.3 fairly
allocate the risks in light of the ability of the parties to investigate the
Company and its business in order to assure that adequate disclosure is made in
the Registration Statement as required by the Securities Act and the Exchange
Act.  The parties are advised that
federal or state public policy as interpreted by the courts in certain
jurisdictions may be contrary to certain of the provisions of this
Section 7.3, and the parties hereto hereby expressly waive and relinquish
any right or ability to assert such public policy as a defense to a claim under
this Section 7.3 and further agree not to attempt to assert any such
defense.

 

7.4                                       Termination of Conditions and Obligations. 
The conditions precedent imposed by Section 5 or this
Section 7 upon the transferability of the Shares and the Warrant Shares
shall cease and terminate as to any particular number of the Shares or the Warrant
Shares when such shares shall have been effectively registered under the
Securities Act and sold or otherwise disposed of in accordance with the
intended method of disposition set forth in the Registration Statement covering
such shares or at such time as an opinion of counsel reasonably satisfactory to
the Company shall have been rendered to the effect that such conditions are not
necessary in order to comply with the Securities Act.

 

7.5                                       Information Available. 
So long as the Registration Statement is effective covering the resale
of any of the Shares or the Warrant Shares owned by the Investor, the Company
will furnish to the Investor:

 

(a)                            as soon as practicable after it is
available, one copy of (i) its Annual Report to Stockholders (which Annual
Report shall contain financial statements audited in accordance with generally
accepted accounting principles by a national firm of certified public
accountants), (ii) its Annual Report on Form 10-K and (iii) its
Quarterly Reports on Form 10-Q (the foregoing, in each case, excluding
exhibits);

 

(b)                           upon the reasonable request of the
Investor, all exhibits excluded by the parenthetical to subparagraph
(a) of this Section 7.5 as filed with the SEC and all other
information that is made available to shareholders; and

 

(c)                            upon the reasonable request of the
Investor, an adequate number of copies of the Prospectuses to supply to any
other party requiring such Prospectuses.

 

7.6                                 Legend; Restrictions on Transfer. 
(a) The certificates for the Shares and the Warrants (and any securities
issued in respect of or exchange for the Shares or the Warrants, including,
without limitation, the Warrant Shares) shall be subject to a legend or legends
restricting transfer under the Securities Act and referring to restrictions on
transfer herein, such legend to be substantially as follows:

THE SECURITIES
REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE BEEN ISSUED AND SOLD IN
RELIANCE UPON EXEMPTIONS FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933
(THE “1933 ACT”) AND APPROPRIATE EXEMPTIONS FROM REGISTRATION UNDER THE
SECURITIES LAWS OF OTHER APPLICABLE JURISDICTIONS. THE SECURITIES MAY NOT BE
OFFERED FOR SALE, SOLD OR TRANSFERRED OTHER THAN PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER
THE 1933 ACT AND THE APPLICABLE SECURITIES LAWS OF ANY OTHER JURISDICTION.  THE ISSUER SHALL BE ENTITLED TO REQUIRE AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT WITH RESPECT TO COMPLIANCE OF
THE PROPOSED SALE OR TRANSFER WITH THE REGISTRATION REQUIREMENTS OF THE 1933
ACT OR EXEMPTION THEREFROM.

 

                                                The Investor expressly agrees that any
sale by such Investor of the Shares or the Warrant Shares pursuant to the
Registration Statement shall be sold in a manner described under the caption “Plan
of Distribution” in such Registration Statement and the Investor will deliver a
copy of the Prospectus contained in the Registration Statement to the purchaser
or purchasers (including through deemed delivery) in connection with such sale,
in each case in compliance with the requirements of the Securities Act and
Exchange Act applicable to such sale. 
The Investor further agrees that the Shares or the Warrant Shares shall
only be sold while the Registration Statement is effective, unless another
exemption from registration is available. 
On the basis of compliance by the Investor with the foregoing covenants,
upon effectiveness of the Registration Statement, the Company shall as soon as
practicable (but not later than three business days after surrender of the
legended certificates to the Company and notice of such surrender has been
provided pursuant to Section 8 below) cause certificates evidencing the Shares,
the Warrants and the 

 

 

Warrant Shares previously issued to be replaced with certificates which
do not bear the restrictive legends specified above in this Section 7.6, and
all of the Shares, the Warrants and the Warrant Shares subsequently issued
shall not bear the restrictive legend specified above in this Section 7.6; provided,
that such Investor shall notify the Company promptly upon completion of the
sale of all of the Shares and the Warrant Shares owned by it.  The Investor acknowledges that the removal of
the restrictive legends from certificates representing the Shares, the Warrants
and the Warrant Shares as provided in this Section 7.6 is predicated upon the
Company’s reliance on the Investor’s compliance with its covenants in this
Section 7.6.

 

                                                                                                7.7                                 Damages. The Company and the Investor agree that
the Investor will suffer damages if the Company fails to fulfill its
obligations pursuant to Section 7.1 and 7.2 hereof and that it would not be
possible to ascertain the extent of such damages with precision.  Accordingly, the Company hereby agrees to pay
partial damages (“Liquidated Damages”) to the Investors under the following
circumstances:  (a) if the Registration
Statement is not filed by the Company on or prior to 30 days after the Closing
Date (such an event, a “Filing Default”); (b) if the Registration Statement is
not declared effective by the SEC on or prior to 60 days or, 120 days in the
event that the Registration Statement receives SEC review, after the Closing
Date (such an event, an “Effectiveness Default”); or (c) if the Registration
Statement (after its effectiveness date) ceases to be effective and available
to the Investors for any continuous period that exceeds 30 days or for one or
more periods that exceed in the aggregate 60 days in any 12-month period (such
an event, a “Suspension Default” and together with a Filing Default and an Effectiveness
Default, a “Registration Default”).  In
the event of a Registration Default, the Company shall as Liquidated Damages
pay, as set forth below, to each Investor, for each 30-day period of a
Registration Default, an amount in cash equal to 1% of the aggregate purchase
price paid by such Investor for the Shares purchased pursuant to this Agreement
and held at the time of the Registration Default; provided, that in no
event shall the aggregate amount of cash to be paid as Liquidated Damages
pursuant to this Section 7.7 exceed 10% of the aggregate purchase price paid by
the Investor.  The Company shall pay the
Liquidated Damages as follows:  (i) in
connection with a Filing Default, on the 31st day after the Closing Date, and each 30th day
thereafter until the Registration Statement is filed with the SEC; (ii) in
connection with an Effectiveness Default, on the 61st day after the Closing Date (or, in the event
that the Registration Statement receives SEC review, the 121st day after the Closing Date), and each 30th day
thereafter until the Registration Statement is declared effective by the SEC;
or (iii) in connection with a Suspension Default, on either (x) the 31st consecutive day of any Suspension or (y) the
61st day (in the
aggregate) of any Suspensions in any 12-month period, and each 30th day thereafter until the Suspension is
terminated in accordance with Section 7.2. 
Notwithstanding the foregoing, all periods shall be tolled during delays
directly caused by the action or inaction of any Investor, and the Company
shall have no liability to any Investor in respect of any such delay.  The Liquidated Damages payable herein shall
apply on a pro rata basis for any portion of a 30-day period of a Registration
Default.

 

8.                                       Notices.  All notices,
requests, consents and other communications hereunder shall be in writing,
shall be mailed (A) if within the United States by first-class registered
or certified airmail, or nationally recognized overnight express courier,
postage prepaid, or by facsimile or electronic mail, or (B) if delivered
from outside the United States, by International Federal Express (or other
recognized international express courier) or facsimile, and shall be deemed
given (i) if delivered by first-class registered or certified mail, three
business days after so mailed, (ii) if delivered by nationally recognized
overnight carrier (and next day delivery was specified), one business day after
so mailed, (iii) if delivered by International Federal Express (or other
recognized international express courier), two business days after so mailed,
or (iv) if delivered by facsimile or electronic mail, upon electronic
confirmation of receipt and shall be delivered as addressed as follows:

 

	
   

  	
  (a)

  	
  if to the Company, to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Advanced Life Sciences Holdings, Inc.

  
	
   

  	
   

  	
  1440 Davey Road

  
	
   

  	
   

  	
  Woodridge, IL 60517

  
	
   

  	
   

  	
  Attn: Patrick Flavin, Chief Legal Counsel

  
	
   

  	
   

  	
  Phone: (630) 739-6744, ext. 214

  
	
   

  	
   

  	
  Fax: (630) 739-6754

  
					

 

 

	
   

  	
  (b)

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Winston
  & Strawn LLP

  
	
   

  	
   

  	
  35
  West Wacker Drive

  
	
   

  	
   

  	
  Chicago,
  IL 60601

  
	
   

  	
   

  	
  Attention:
  R. Cabell Morris, Esq.

  
	
   

  	
   

  	
  Phone:
  (312) 558-5609

  
	
   

  	
   

  	
  Fax:
  (312) 558-5700

  
					

 

 

 

	
   

  	
  (c)

  	
  if to the Investor, at its address on the signature
  page hereto, or at such other address or addresses as may have been furnished
  to the Company in writing.

  

 

 

Notwithstanding anything in the Agreement to the contrary, (a) the
Company may deliver any documents, information or notices required to be
delivered to an Investor under the Agreement by email, in any recognized
electronic format, including Portable Document Format (PDF) or Microsoft Word
document format, and (b) with respect to any documents, exhibits, filings,
furnishings or other submissions (other than any Registration Statement,
Prospectus, or Preliminary Prospectus pursuant to Section 7 hereof) publicly
available on the SEC’s EDGAR system (each, an “EDGAR Filing”), such EDGAR
Filing shall be deemed furnished by the Company to such Investor, in each case
as of the date first publicly available on the EDGAR system.

 

9.                                       Changes.  The Agreement
may be modified, amended or waived only pursuant to a written instrument signed
by the Company and (a) a majority in interest of the Investor and the third
party purchasers in the Contemporaneous Offering; provided, that such
modification, amendment or waiver is made with respect to all Securities
Purchase Agreements relating thereto and does not adversely affect the Investor
without adversely affecting the Investor and such third party Investors in a
similar manner or (b) the Investor.

 

10.                                 Headings.  The headings
of the various sections of the Agreement have been inserted for convenience of
reference only and shall not be deemed to be part of the Agreement.

 

11.                                 Severability. 
In case any provision contained in the Agreement should be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby.

 

12.                                 Governing Law. 
The Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, without giving effect to the principles of
conflicts of law.

 

13.                                 Counterparts. 
The Agreement may be executed in two or more counterparts, each of which
shall constitute an original, but all of which, when taken together, shall
constitute but one instrument, and shall become effective when one or more
counterparts have been signed by each party hereto and delivered to the other
parties.

 

14.                                 Entire Agreement. 
The Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior understandings or agreements concerning the
purchase and sale of the Shares and the Warrants and the resale registration of
the Shares and the Warrant Shares.

 

15.                                 Rule 144.  For three
years from the Closing Date, the Company covenants that it will timely file the
reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted by the SEC thereunder (or, if the
Company is not required to file such reports, it will, upon the request of any
Investor holding any of the Shares purchased hereunder or the Warrant Shares
issued pursuant to the Warrants that is made after the first anniversary of the
Closing Date, make publicly available such information as necessary to permit
sales pursuant to Rule 144 under the Securities Act), and it will take such
further action as any such Investor may reasonably request, all to the extent
required from time to time to enable such Investor to sell such Shares or
Warrant Shares without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 under the Securities Act,
as such Rule may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the SEC. 
Upon the request of an Investor, the Company will deliver to such holder
a written statement as to whether it has complied with such information and
requirements.

 

16.                                 Confidential Information.

 

                                                (a)                                        The Investor represents to the Company
that, at all times during the Company’s offering of the Shares and the
Warrants, such Investor has maintained in confidence all non-public information
regarding the Company received by such Investor from the Company or its agents,
including without limitation, the existence of the transaction contemplated
herein, and covenants that it will continue to maintain in confidence such
information until such information (a) becomes generally publicly available
other than through a violation of this provision by such Investor or its agents
or (b) is required to be disclosed in legal proceedings (such as by
deposition, interrogatory, request for documents, subpoena, civil investigation
demand, filing with any governmental authority or similar process); provided,
however, that before making any use or disclosure in reliance on this
subparagraph (b) the Investor shall give the Company at least fifteen (15) days
prior written notice (or such shorter period as required by law) specifying the
circumstances giving rise thereto and will furnish only that portion of the non-public
information 

 

 

which is legally
required and will exercise its best efforts to obtain reliable assurance that
confidential treatment will be accorded any non-public information so
furnished.

 

                                                (b)                                       The Company shall
on the Closing Date, or on the following business day of the Closing Date,
issue a press release disclosing the material terms of the transactions
contemplated hereby (including at least the number of the Shares and the
Warrants sold and proceeds therefrom). 
The Company shall not publicly disclose the name of the Investor, or
include the name of the Investor in such press release or any filing with the
SEC or any regulatory agency or Nasdaq (other than the filing of the Agreement
with the SEC pursuant to the Exchange Act or the filing of the Registration
Statement in accordance with the provisions of Section 7 of the Agreement),
without the prior written consent of such Investor, except to the extent such
disclosure is required by law or Nasdaq regulations.

 

17.                                 No Third-Party
Beneficiaries.  Except as may
otherwise be expressly set forth herein, the Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

 

18.                               Expenses.  The parties
shall pay their own legal and other expenses in connection with the
preparation, negotiation and execution of the Agreement and the consummation of
the transactions contemplated herein. 
For clarification purposes and without implication that the contrary
would otherwise be true, the transactions contemplated by the Agreement only
include the transaction between the Company and the Investor and do not include
any other transaction between the Company and any other third party purchaser
of the Company’s securities.

 

19.                                 Termination. 
The Investors may terminate the Agreement without any obligation or
liability thereunder or otherwise if the Closing does not occur within seven
(7) business days after the execution of the Agreement.

 

 

ADVANCED LIFE SCIENCES HOLDINGS,
INC.

 

INVESTOR
QUESTIONNAIRE

 

(ALL
INFORMATION WILL BE TREATED CONFIDENTIALLY)

 

	
  To:

  	
   

  	
  Advanced Life Sciences Holdings, Inc.

  
	
   

  	
   

  	
  1440 Davey Road

  
	
   

  	
   

  	
  Woodridge, IL 60517

  

 

 

This Investor
Questionnaire (“Questionnaire”) must be completed by each potential investor in
connection with the offer and sale of the Shares and the Warrants.  The Warrants and the Shares are collectively
referred to herein as the “Securities”. 
The Securities are being offered and sold by Advanced Life Sciences
Holdings, Inc. (the “Corporation”) without registration under the Securities
Act of 1933, as amended (the “Act”), and the securities laws of certain states,
in reliance on the exemptions contained in Section 4(2) of the Act and on
Regulation D promulgated thereunder and in reliance on similar exemptions under
applicable state laws.  The Corporation
must determine that a potential investor meets certain suitability requirements
before offering or selling Securities to such investor.  The purpose of this Questionnaire is to
assure the Corporation that each investor will meet the applicable suitability
requirements.  The information supplied
by you will be used in determining whether you meet such criteria, and reliance
upon the private offering exemption from registration is based in part on the
information herein supplied.  The
information provided herein may be used by the Corporation in connection with
the filing of a Registration Statement for the resale of the Shares and the Warrant
Shares.

 

This Questionnaire
does not constitute an offer to sell or a solicitation of an offer to buy any
security.  Your answers will be kept
strictly confidential.  However, by
signing this Questionnaire you will be authorizing the Corporation to provide a
completed copy of this Questionnaire to such parties as the Corporation deems
appropriate in order to ensure that the offer and sale of the Securities will
not result in a violation of the Act or the securities laws of any state and
that you otherwise satisfy the suitability standards applicable to purchasers
of the Securities.  All potential
investors must answer all applicable questions and complete, date and sign this
Questionnaire.  Please print or type your
responses and attach additional sheets of paper if necessary to complete your
answers to any item.  Capitalized terms
used but not defined herein have the meaning given thereto in the Securities
Purchase Agreement to which this Questionnaire is attached (the “Securities
Purchase Agreement”).

 

A.                                   BACKGROUND INFORMATION

 

	
  Name:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Business Address:

  
	
   

  	
   

  	
  (Number and Street)

  	
   

  	
   

  
	
   

  
	
  (City)

  	
   

  	
  (State)

  	
   

  	
  (Zip Code)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone
  Number: (     )

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Residence Address:

  
	
   

  	
   

  	
  (Number and Street)

  	
   

  	
   

  
	
   

  
	
  (City)

  	
   

  	
  (State)

  	
   

  	
  (Zip Code)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone Number: (     )

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  If an individual:

  	
   

  	
   

  	
   

  	
   

  
	
  Age:

  	
   

  	
   

  	
  Citizenship:

  	
   

  	
   

  	
  Where registered to vote:

  	
   

  
													

 

 

	
  If a corporation, partnership, limited liability
  company, trust or other entity:

  	
   

  	
   

  
	
  Type of entity:

  	
   

  
	
  State of
  formation:

  	
   

  	
   

  	
  Date of formation:

  	
   

  
	
   

  	
   

  	
   

  
	
  Social Security or Taxpayer Identification No.

  	
   

  
									

 

 

 

	
  Send all correspondence to (check one): 

  	
   

  	
  Residence Address

  	
   

  	
   

  	
  Business Address

  
	
   

  	
   

  	
   

  
	
  Email address of contact person: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Current ownership of securities of the Corporation:

  
	
                      shares
  of common stock, par value $0.001 per share (the “Common Stock”)

  	
   

  	
   

  
	
  options or warrants to
  purchase                         shares
  of Common Stock

  	
   

  	
   

  
												

 

Please identify
the number of shares of Common Stock or warrants to purchase Common Stock that
you or your organization will beneficially own immediately after Closing,
identifying the Securities purchased by you or your organization pursuant to
the Securities Purchase Agreement and those shares of Common Stock or warrants
to purchase Common Stock purchased by you or your organization through other
transactions:

 

	
  Securities purchased pursuant to the Securities
  Purchase Agreement:

  	
   

  	
  Shares

  
	
  and

  	
   

  	
  Warrants

  	
   

  	
   

  
					

 

	
  Shares purchased by your or your organization
  through other transactions:

  	
   

  

 

	
  Warrants purchased by your or your organization
  through other transactions:

  	
   

  

 

	
  Total: 

  	
   

  	
  shares and 

  	
   

  	
  warrants

  

 

BENEFICIAL
OWNERSHIP INFORMATION: Please describe the beneficial ownership of the shares
and/or warrants owned by you or your organization.  If the Investor is a partnership, limited liability
company or similar entity, please identify the individual or individuals
with ultimate voting and dispositive power over such shares and/or warrants,
typically the investment manager or investment advisor with primary
responsibility for this investment.  This
information is available from your compliance officer or general counsel. THE
CORPORATION WILL NOT BE ABLE TO REGISTER YOUR SECURITIES WITHOUT THIS IMPORTANT
INFORMATION.

 

Exception:  This information need not be provided if the
Investor is a publicly traded company.

	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  

 

 

Have you or your
organization had any position, office or other material relationship within the
past three years with the Corporation or its affiliates? 

	
   

  
	
  o
  Yes                                    o No

  
	
   

  
	
  If yes, please indicate the nature of any such
  relationships below:

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  

 

If you, any of
your associates, or any member of your immediate family had or will have any
direct or indirect material interest in any transaction or series of
transactions to which the Corporation or any of its subsidiaries was a party at
any time since January 1, 2001, or in any currently proposed transactions or
series of transactions in which the company or any of its subsidiaries will be
a party, in which the amount involved exceeds $60,000, please specify (a) the
names of the parties to the transaction(s) and their relationship to you, (b)
the nature of the interest in the transaction, (c) the amount involved in the
transaction, and (d) the amount of the interest in the transaction.  If the answer is “none”, please so
state.  

 

	
   

  

 

 

	
   

  
	
   

  
	
   

  
	
   

  

 

Are you (i) an
NASD Member (see definition), (ii) a Controlling (see definition) shareholder
of an NASD Member, (iii) a Person Associated with a Member of the NASD (see
definition), or (iv) an Underwriter or a Related Person (see definition) with
respect to the proposed offering; or (b) do you own any shares or other
securities of any NASD Member not purchased in the open market; or (c) have you
made any outstanding subordinated loans to any NASD Member?  IN RESPONDING TO THIS
QUESTION, INDICATE WHETHER OR NOT YOU ARE A BROKER DEALER OR IF YOU ARE
AFFILIATED WITH A BROKER DEALER, AND IF SO, STATE THE NATURE OF YOUR
AFFILIATION.   

	
   

  
	
  o
  Yes                                    o No

  
	
   

  
	
  If “yes,” please describe below

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  

 

NASD Member. The term “NASD member” means either any broker or dealer admitted to
membership in the National Association of Securities Dealers, Inc. (“NASD”). (NASD Manual, By-laws Article I,
Definitions)

 

Control. The term “control” (including the terms “controlling,” “controlled by”
and “under common control with”)
means the possession, direct or indirect, of the power, either individually or
with others, to direct or cause the direction of the management and policies of
a person, whether through the ownership of voting securities, by contract, or
otherwise. (Rule 405 under the Securities Act of 1933, as amended)

 

Person Associated
with a Member of the NASD. The term “person associated with a
member of the NASD” means every sole proprietor, partner, officer,
director, branch manager or executive representative of any NASD Member, or any
natural person occupying a similar status or performing similar functions, or
any natural person engaged in the investment banking or securities business who
is directly or indirectly controlling or controlled by a NASD Member, whether
or not such person is registered or exempt from registration with the NASD
pursuant to its bylaws. (NASD Manual, By-laws Article I, Definitions)

 

Underwriter or a Related
Person. The term “underwriter or a related person” means,
with respect to a proposed offering, underwriters, underwriters’ counsel,
financial consultants and advisors, finders, members of the selling or
distribution group and any and all other persons associated with or related to
any of such persons. (NASD Interpretation)

 

B.                                     STATUS AS ACCREDITED INVESTOR

 

The
undersigned is an “accredited investor” as such term is defined in Regulation D
under the Act, as at the time of the sale of the Securities the undersigned
falls within one or more of the following categories (Please initial one or
more, as applicable):1

 

           (1)                                                       a bank as defined in Section 3(a)(2)
of the Act, or a savings and loan association or other institution as defined
in Section 3(a)(5)(A) of the Act whether acting in its individual or
fiduciary capacity; a broker or dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934; an insurance company as defined in
Section 2(13) of the Act; an investment company registered under the
Investment Corporation Act of 1940 or a business development company as defined
in

 

1               As
used in this Questionnaire, the term “net worth” means the excess of total
assets over total liabilities.  In
computing net worth for the purpose of subsection (4), the principal residence
of the investor must be valued at cost, including cost of improvements, or at
recently appraised value by an institutional lender making a secured loan, net
of encumbrances.  In determining income,
the investor should add to the investor’s adjusted gross income any amounts
attributable to tax exempt income received, losses claimed as a limited partner
in any limited partnership, deductions claimed for depiction, contributions to
an IRA or KEOGH retirement plan, alimony payments, and any amount by which
income from long-term capital gains has been reduced in arriving at adjusted
gross income.

 

 

Section 2(a)(48)
of that Act; a Small Business Investment Corporation licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; a plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions for the benefit of its employees, if such plan has total
assets in excess of $5,000,000; an employee benefit plan within the meaning of
the Employee Retirement Income Security Act of 1974 if the investment decision
is made by a plan fiduciary, as defined in Section 3(21) of such Act,
which is either a bank, savings and loan association, insurance company, or
registered investment adviser, or if the employee benefit plan has total assets
in excess of $5,000,000 or, if a self-directed plan, with the investment
decisions made solely by persons that are accredited investors;

 

           (2)                                                       a private business development company as
defined in Section 202(a)(22) of the Investment Adviser Act of 1940;

 

           (3)                                                       an organization described in
Section 501(c)(3) of the Internal Revenue Code of 1986, as amended,
corporation, Massachusetts or similar business trust, or partnership, not
formed for the specific purpose of acquiring the Securities offered, with total
assets in excess of $5,000,000;

 

           (4)                                                       a natural person whose individual net worth,
or joint net worth with that person’s spouse, at the time of such person’s
purchase of the Securities exceeds $1,000,000;

 

           (5)                                                       a natural person who had an individual
income in excess of $200,000 in each of the two most recent years or joint
income with that person’s spouse in excess of $300,000 in each of those years
and has a reasonable expectation of reaching the same income level in the
current year;

 

           (6)                                                       a trust, with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring the Securities
offered, whose purchase is directed by a sophisticated person as described in
Rule 506(b)(2)(ii) of Regulation D; and

 

           (7)                                                       an entity in which all of the equity
owners are accredited investors (as defined above) (If the answer is yes, all
shareholders, partners or other equity owners must complete an Individual
Questionnaire).

 

C.                                     REPRESENTATIONS

 

The undersigned
hereby represents and warrants to the Corporation as follows:

 

1.                                       Any purchase of the Securities would be
solely for the account of the undersigned and not for the account of any other
person or with a view to any resale, fractionalization, division, or
distribution thereof.

 

2.                                       The information contained herein is
complete and accurate and may be relied upon by the Corporation, and the
undersigned will notify the Corporation immediately of any material change in
any of such information occurring prior to the closing, if any, with respect to
the purchase of Securities by the undersigned or any co-purchaser.

 

3.                                       There are no suits, pending litigation,
or claims against the undersigned that could materially affect the net worth of
the undersigned as reported in this Questionnaire.

 

4.                                       The undersigned acknowledges that there
may occasionally be times when the Corporation determines that it must suspend
the use of the Prospectus forming a part of the Registration Statement (as such
terms are defined in the Securities Purchase Agreement), as set forth in
Section 7.2(c) of the Securities Purchase Agreement.  The undersigned is aware that, in such event,
the Securities will not be subject to ready liquidation, and that any
Securities purchased by the undersigned would have to be held during such
suspension.  The overall commitment of
the undersigned to investments which are not readily marketable is not
excessive in view of the undersigned’s net worth and financial circumstances,
and any purchase of the Securities will not cause such commitment to become
excessive.  The undersigned is able to
bear the economic risk of an investment in the Securities.

 

5.                                       The undersigned is aware of its
obligations under applicable federal and state securities laws with respect to
use and disclosure of non-public information regarding the Corporation.

 

6.                                       The
undersigned has carefully considered the potential risks relating to the
Corporation and a purchase of the Securities, and fully understands that the
Securities are speculative investments which involve a high degree of risk of
loss of the 

 

 

undersigned’s entire
investment.  Among others, the
undersigned has carefully considered each of the risks identified in the SEC
Documents.

 

7.                                       The
undersigned understands that the Securities that it is acquiring are
characterized as “restricted securities” under the federal securities laws
inasmuch as they are being acquired in a transaction not involving a public
offering, and that under such laws and applicable regulations such securities
may be resold without registration under the Act, only in certain limited
circumstances. In this connection, the undersigned represents that it is
familiar with SEC Rule 144, as presently in effect, and understands the resale
limitations imposed thereby and by the Act.

8.                                     It
us understood that the certificates evidencing the Securities shall bear a
legend, reading substantially as follows:

                                                THE
SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE BEEN ISSUED
AND SOLD IN RELIANCE UPON EXEMPTIONS FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933 (THE “1933 ACT”) AND APPROPRIATE EXEMPTIONS FROM REGISTRATION UNDER THE
SECURITIES LAWS OF OTHER APPLICABLE JURISDICTIONS. THE SECURITIES MAY NOT BE
OFFERED FOR SALE, SOLD OR TRANSFERRED OTHER THAN PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER
THE 1933 ACT AND THE APPLICABLE SECURITIES LAWS OF ANY OTHER JURISDICTION. THE
ISSUER SHALL BE ENTITLED TO REQUIRE AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO IT WITH RESPECT TO COMPLIANCE OF THE PROPOSED SALE OR TRANSFER
WITH THE REGISTRATION REQUIREMENTS OF THE 1933 ACT OR EXEMPTION THEREFROM.

 

9.                                       It
is understood that the Corporation anticipates filing the Registration
Statement within 30 days of the Closing Date. 
If at any time any of the information set forth in the undersigned’s
responses to this Questionnaire has changed due to passage of time, or any
development occurs which requires a change in any of the answers, or has for
any other reason become incorrect, the undersigned agrees to immediately
furnish to the individual to whom a copy of this Questionnaire is to be sent,
as indicated and at the address shown on the first page hereof, any necessary
or appropriate correcting information. 
Otherwise, the Corporation is to understand that the above information
continues to be, to the best of the undersigned’s knowledge, information and
belief, complete and correct.

10.                               It
is understood that the information furnished herein will be used by the
Corporation in the preparation of its Registration Statement on Form S-1.

IN WITNESS
WHEREOF, the undersigned has executed this Questionnaire this _____ day of
February, 2006, and declares under oath that it is truthful and correct.

 

	
   

  	
   

  
	
   

  	
  Print Name

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
  Title

  	
   

  
	
   

  	
   

  	
  (required for any
  purchaser that is a corporation, partnership, trust or other entity)

  
						

 

 

 

 

[Company
Letterhead]

 

 

           ,
2006

 

 

 

 

 

 

 

 

Re:                               Advanced Life Sciences Holdings, Inc.;
Registration Statement on Form S-1

 

Dear Selling
Shareholder:

 

Enclosed please
find five (5) copies of a prospectus dated                      ,
2006 (the “Prospectus”) for your use in reselling your shares of common
stock, $0.01 par value (the “Shares”), of Advanced Life Sciences
Holdings, Inc.  (the “Company”),
under the Company’s Registration Statement on Form S-1 (Registration No. 333-                     )
(the “Registration Statement”), which has been declared effective by the
Securities and Exchange Commission.  As a selling shareholder under the Registration Statement, you have an
obligation to deliver (including through deemed delivery) a copy of the
Prospectus to each purchaser of your Shares.

 

The Company is
obligated to notify you in the event that it suspends trading under the
Registration Statement in accordance with the terms of the Securities Purchase
Agreement between the Company and you. 
During the period that the Registration Statement remains effective and
trading thereunder has not been suspended, you will be permitted to sell your
Shares that are included in the Prospectus under the Registration Statement.

 

Please note that
you are under no obligation to sell your Shares during the registration
period.  However, if you do decide to
sell, you must comply with the requirements described in this letter or
otherwise applicable to such sale.  Your
failure to do so may result in liability under the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended.  Please remember that all sales of your Shares
must be carried out in the manner set forth under the caption “Plan of
Distribution” in the Prospectus if you sell under the Registration
Statement.  The Company may require an
opinion of counsel reasonably satisfactory to the Company if you choose another
method of sale.  You should
consult with your own legal advisor(s) on an ongoing basis to ensure your
compliance with the relevant securities laws and regulations.

 

In order
to maintain the accuracy of the Prospectus, you must notify the undersigned in
accordance with the provisions of your Securities Purchase Agreement upon the
sale, gift or other transfer of any Shares by you, including the number of
Shares being transferred, and in the event of any other change in the
information regarding you which is contained in the Prospectus.  For example, you must notify the undersigned
if you enter into any arrangement with a broker-dealer for the sale of shares
through a block trade, special offering, exchange distribution or secondary
distribution or a purchase by a broker-dealer. 
Depending on the circumstances, such transactions may require the filing
of a supplement to the prospectus in order to update the information set forth
under the caption “Plan of Distribution” in the Prospectus.

 

Should you need any additional copies of the
Prospectus, or if you have any questions concerning the foregoing, please write
to me at Advanced Life Sciences Holdings, Inc., 1440 Davey Road, Woodridge,
Illinois 60517.

 

Sincerely,

 

 

 

Chief Legal
Counsel

 

 

Exhibit A

 

PLAN OF
DISTRIBUTION

 

The
selling stockholders, which as used herein include donees, pledgees,
transferees or other successors-in-interest selling shares of our common stock
received after the date of this prospectus from a selling stockholder as a
gift, pledge, partnership distribution or other transfer, may, from time to
time, sell, transfer or otherwise dispose of any or all of their shares of
common stock or interests in shares of common stock on any stock exchange,
market or trading facility on which the shares are traded or in private
transactions. These dispositions may be at fixed prices, at prevailing market
prices at the time of sale, at prices related to the prevailing market price,
at varying prices determined at the time of sale, or at negotiated prices.

The
selling stockholders may use any one or more of the following methods when
disposing of shares or interests therein: 

	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  on the Nasdaq National Market (or any other exchange
  on which the shares may be listed);

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  on the over-the-counter market;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  ordinary brokerage transactions and transactions in
  which the broker-dealer solicits purchasers;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  block trades in which the broker-dealer will attempt
  to sell the shares as agent, but may position and resell a portion of the
  block as principal to facilitate the transaction;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  purchases by a broker-dealer as principal and resale
  by the broker-dealer for its account;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  an exchange distribution in accordance with the
  rules of the applicable exchange;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  privately negotiated transactions;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  short sales;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  through the writing or settlement of options or
  other hedging transactions, whether through an options exchange or otherwise;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  broker-dealers may agree with the selling
  stockholders to sell a specified number of such shares at a stipulated price
  per share;

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  a combination of any such methods of sale; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  any other method permitted pursuant to applicable
  law.

  

The
selling stockholders may, from time to time, pledge or grant a security
interest in some or all of the shares of common stock owned by them and, if
they default in the performance of their secured obligations, the pledgees or
secured parties may offer and sell the shares of common stock, from time to
time, under this prospectus, or under an amendment to this prospectus under
Rule 424(b) or under any applicable provision of the Securities Act
amending the list of selling stockholders to include the pledgee, transferee or
other successors in interest as selling stockholders under this prospectus. The
selling stockholders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledgees or other successors in
interest will be the selling beneficial owners for purposes of this prospectus.
To the extent required, this prospectus may be amended or supplemented from
time to time to describe a specific plan of distribution.

In connection with the sale of our common stock or interests therein,
the selling stockholders may enter into hedging transactions with
broker-dealers or other financial institutions, which may, in turn, engage in
short sales of the common stock in the course of hedging the positions they
assume. The selling stockholders may also sell shares of our common stock short
and deliver these securities to close out their short positions, or loan or pledge
the common stock to broker-dealers that in turn may sell these securities. The
selling stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker- dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).

 

 

The
aggregate proceeds to the selling stockholders from the sale of the common
stock offered by them will be the purchase price of the common stock less
discounts or commissions, if any. Each of the selling stockholders reserves the
right to accept and, together with their agents from time to time, to reject,
in whole or in part, any proposed purchase of common stock to be made directly
or through agents. We will not receive any of the proceeds from this offering.

The
selling stockholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act,
provided that they meet the criteria and conform to the requirements of that
rule.

The
selling stockholders and any underwriters, broker-dealers or agents that
participate in the sale of the common stock or interests therein may be “underwriters”
within the meaning of Section 2(11) of the Securities Act. Any discounts,
commissions, concessions or profit they earn on any resale of the shares may be
underwriting discounts and commissions under the Securities Act. Selling
stockholders who are “underwriters” within the meaning of Section 2(11) of
the Securities Act will be subject to the prospectus delivery requirements of the
Securities Act. The selling stockholders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against certain
liabilities, including liabilities arising under the Securities Act.

We have
borne and will bear substantially all of the costs, expenses and fees in
connection with the registration of the shares, other than any commissions,
discounts or other fees payable to broker-dealers in connection with any sale
of shares, which will be borne by the selling stockholder selling such shares
of common stock. We have agreed to indemnify the selling stockholders against
certain liabilities, including liabilities under the Securities Act and state
securities laws, relating to the registration of the shares offered by this
prospectus.

In order
to comply with the securities laws of some states, if applicable, the common
stock may be sold in these jurisdictions only through registered or licensed
brokers or dealers. In addition, in some states the common stock may not be sold
unless it has been registered or qualified for sale or an exemption from
registration or qualification requirements is available and is complied with.

The
selling stockholders may, to the extent applicable, be subject to the
anti-manipulation rules of Regulation M, which may limit the timing of
purchases and sales of shares of our common stock by such selling stockholders.

We will
make copies of this prospectus (as it may be supplemented or amended from time
to time) available to the selling stockholders for the purpose of satisfying
the prospectus delivery requirements of the Securities Act.

We have
agreed with each selling stockholder to keep the registration statement, of
which this prospectus constitutes a part, effective with respect to its shares until
the earlier of (1) the second anniversary of our issuance of shares and
warrants to such selling stockholder, (2) the date on which all shares
purchased from us by such selling stockholder may be sold pursuant to
Rule 144 of the Securities Act without volume limitations and
(3) such time as all of such selling stockholder’s shares covered by this
prospectus have been disposed of pursuant to and in accordance with the
registration statement.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00098-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00098-of-00352.parquet"}]]