Document:

Exhibit
4.2

BANC
OF AMERICA SECURITIES LLC

 

$300,000,000 AGGREGATE
PRINCIPAL AMOUNT

Alliant Techsystems Inc.

2.75% CONVERTIBLE SENIOR
SUBORDINATED NOTES

DUE 2011

Registration Rights
Agreement

dated September 12, 2006

 

 

REGISTRATION
RIGHTS AGREEMENT, dated as of  September
12, 2006, among Alliant Techsystems Inc., a Delaware corporation (together with
any successor entity, herein referred to as the “Company”), the Company’s subsidiaries signatory hereto
(together with any successor entity, herein referred to as the “Subsidiary Guarantors”) and Banc of America
Securities LLC, in its capacity as representative (the “Representative”)
of the several initial purchasers (the “Initial
Purchasers”) under the Purchase Agreement (as defined below).

Pursuant
to the Purchase Agreement, dated September 6, 2006, (the “Purchase Agreement”), among the Company,
the Subsidiary Guarantors and the Representative, the Initial Purchasers have
agreed to purchase from the Company $300,000,000 in aggregate principal amount
of the Company’s 2.75% Convertible Senior Subordinated Notes due 2011 (the “Notes”) to be jointly and severally
guaranteed on an unsecured, senior subordinated basis by the Subsidiary
Guarantors.  The Notes will be
convertible, on the terms, and subject to the conditions, set forth in the
Indenture (as defined herein), into fully paid, nonassessable shares of common
stock, par value $0.01 per share, of the Company together with the rights
evidenced by such Common Stock to the extent provided in the Rights Agreement
dated as of May 7, 2002 between the Company and LaSalle Bank National
Association, as rights agent (collectively, the “Common Stock”).  To
induce the Initial Purchasers to purchase the Notes, the Company and the
Subsidiary Guarantors have agreed to provide the registration rights set forth
in this Agreement pursuant to Section 5(h) of the Purchase Agreement.

The
parties hereby agree as follows:

1.     Definitions. Capitalized terms
used in this Agreement without definition shall have their respective meanings
set forth in the Purchase Agreement.  As used in this Agreement, the
following capitalized terms shall have the following meanings:

“Additional Amounts”:  As defined in Section 3(a) hereof.

“Additional Amounts Payment Date”:  Each March 15 and September 15.

“Affiliate” of
any specified person means any other person which, directly or indirectly, is
in control of, is controlled by, or is under common control with, such
specified person.  For purposes of this
definition, control of a person means the power, direct or indirect, to direct
or cause the direction of the management and policies of such person whether by
contract or otherwise; and the terms “controlling” and “controlled” have
meanings correlative to the foregoing.

 “Agreement”:  This Registration Rights Agreement.

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“Amendment Effectiveness Deadline Date” has the meaning set
forth in Section 2(f) hereof.

“Blue Sky Application”:  As defined in Section 6(a)(i) hereof.

“Business Day”:  The definition of “Business Day” in the
Indenture.

“Commission”:  Securities and Exchange Commission.

“Common Stock”:  As defined in the preamble hereto.

“Company”: 
As defined in the preamble hereto.

“Effectiveness Date”:  As defined in Section 2(a)(ii) hereof.

“Effectiveness Period”:  As defined in Section 2(a)(iii) hereof.

“Effectiveness Target Date”:  As defined in Section 2(a)(ii) hereof.

“Exchange Act”:  Securities Exchange Act of 1934, as amended.

“Free Writing Prospectus”:  a free writing prospectus, as defined in Rule
405 under the Securities Act.

“Holder”: 
A Person who owns, beneficially or otherwise, Transfer Restricted
Securities.

“Indemnified Holder”:  As defined in Section 6(a) hereof.

“Indenture”: 
The Indenture, dated as of September 12, 2006 among the Company, the
Subsidiary Guarantors and The Bank of New York Trust Company N.A., as trustee
(the “Trustee”), pursuant to which
the Notes are to be issued, as such Indenture is amended, modified or
supplemented from time to time in accordance with the terms thereof.

“Initial Purchasers”:  As defined in the preamble hereto.

“Issuer Free Writing Prospectus”:  An issuer free writing prospectus, as defined
in Rule 433 under the Securities Act.

“Majority of Holders”:  Holders holding over 50% of the aggregate
principal amount of Notes outstanding; provided that, for the purpose of this
definition, a holder of shares of Common Stock which constitute Transfer
Restricted Securities and issued upon conversion, redemption or repurchase of
the Notes shall be deemed to hold an aggregate principal amount of Notes (in
addition to the principal amount of Notes held by such holder) equal to the
quotient of (x) the number of such shares of Common Stock held by such holder

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and (y) the conversion rate in effect at the time of
such conversion, redemption or repurchase as determined in accordance with the
Indenture.

“NASD”: 
National Association of Securities Dealers, Inc.

“Notes”: 
As defined in the preamble hereto.

 “Notice and Questionnaire”:
A written notice executed by the respective Holder and delivered to the Company
containing substantially the information called for by the Selling
Securityholder Notice and Questionnaire attached as Annex A to the
Offering Memorandum of the Company issued September 6, 2006, relating to the
Notes.

“Notice Holder”: On any date, a Holder that has delivered a
Notice and Questionnaire to the Company on or prior to such date.

“Permitted Free Writing Prospectus”:  As defined in Section 9(a) hereof.

“Person”: 
An individual, partnership, corporation, company, unincorporated
organization, trust, joint venture or a government or agency or political
subdivision thereof.

“Purchase Agreement”:  As defined in the preamble hereto.

“Prospectus”:  The prospectus included in a Shelf
Registration Statement, as amended or supplemented by any prospectus supplement
and by all other amendments thereto, including post-effective amendments, and
all documents incorporated by reference into such prospectus.

“Record Holder”:  With respect to any Additional Amounts
Payment Date, each Person who is a Holder on the 15th day preceding the relevant Additional Amounts
Payment Date.  In the case of a Holder of
shares of Common Stock issued upon conversion of the Notes, “Record Holder”
shall mean each Person who is a Holder of shares of Common Stock which
constitute Transfer Restricted Securities on the 15th day preceding the relevant Additional Amounts
Payment Date.

“Registration Default”:  As defined in Section 3(a) hereof.

“Representative”:  As defined in the preamble hereto.

“Securities Act”:  Securities Act of 1933, as amended.

“Shelf Registration Statement”:  As defined in Section 2(a)(i) hereof.

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“Subsidiary Guarantees”: The unsecured,
senior subordinated guarantees of the Notes by the Subsidiary Guarantors.

“Subsidiary Guarantors”: As defined in the
preamble hereto.

“Suspension Notice”:  As defined in Section 4(c) hereof.

“Suspension Period”:  As defined in Section 4(b)(i) hereof.

“TIA”: 
Trust Indenture Act of 1939, as amended, and the rules and regulations
of the Commission thereunder, in each case, as in effect on the date the
Indenture is qualified under the TIA.

“Transfer Restricted Securities”:  Each Note (and the Subsidiary Guarantees
thereof) and each share of Common Stock issued upon conversion of Notes until
the earlier of:

(i)    the date on which the offer and sale of such
Note or such share of Common Stock issued upon conversion has been effectively
registered under the Securities Act and such Note or such share of Common Stock
have been disposed of in accordance with the Shelf Registration Statement;

(ii)   the date on which such Note or such share of
Common Stock issued upon conversion is transferred in compliance with Rule 144
under the Securities Act or may be sold or transferable pursuant to paragraph
(k) of Rule 144 under the Securities Act (or any other similar provision then
in force);

(iii)  the date on which such Note or such share of
Common Stock issued upon conversion ceases to be outstanding (whether as a
result of redemption, repurchase and cancellation, conversion or otherwise); or

(iv)  the date on which such Note or such share of
Common Stock has otherwise been transferred and a new Note or share of Common
Stock not subject to transfer restrictions under the Securities Act has been
delivered by or on behalf of the Company in accordance with the terms and
conditions of the Indenture.

“Underwritten Registration”:  A registration in which Notes of the Company
are sold to an underwriter for reoffering to the public.

Unless
the context otherwise requires, the singular includes the plural, and words in
the plural include the singular.

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2.     Shelf Registration.

(a)   The Company and the Subsidiary Guarantors
shall:

(i)    cause to be filed, or otherwise designate an
existing filing with the Commission as, a registration statement pursuant to Rule
415 under the Securities Act (the “Shelf
Registration Statement”), which Shelf Registration Statement shall
provide for resales of all Transfer Restricted Securities subject to the terms
and conditions hereof;

(ii)   use reasonable efforts to cause the Shelf
Registration Statement to become effective under the Securities Act, or
otherwise make available for use by Holders a previously filed effective Shelf
Registration Statement, not later than 180 days after the date hereof (the “Effectiveness Target Date”, and the date of
such effectiveness or availability, the “Effectiveness Date”);
and

(iii)  use reasonable efforts to keep the Shelf
Registration Statement continuously effective, supplemented and amended as
required by the Securities Act and by the provisions of Section 4(b) hereof to
the extent necessary to ensure that (A) it is available for resales by the
Holders of Transfer Restricted Securities entitled, subject to the terms and
conditions hereof, to the benefit of this Agreement and (B) conforms with the
requirements of this Agreement and the Securities Act and the rules and
regulations of the Commission promulgated thereunder as announced from time to
time, for a period (the “Effectiveness Period”)
of two years following the date hereof or until the earlier of:

(1)   the sale or transfer
pursuant to the Shelf Registration Statement of all of the Notes and shares of
Common Stock issuable upon conversion of the Notes; or

(2)   the date when the Holders of
Transfer Restricted Securities (other than Holders that are Affiliates of the
Company) are able to sell all such Transfer Restricted Securities immediately
without restriction pursuant to the volume limitation provisions of Rule 144
under the Securities Act.

(b)   At the time the Shelf Registration Statement
has become effective, each Holder that became a Notice Holder on or prior to
the date fifteen (15) Business Days prior to such time of effectiveness shall
be named as a selling securityholder in the Shelf Registration Statement and 

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the related Prospectus in
such a manner as to permit such Holder to deliver such Prospectus to purchasers
of Transfer Restricted Securities in accordance with applicable law.  None of the Company’s or any of the
Subsidiary Guarantors’ securityholders (other than the Holders of Transfer
Restricted Securities) shall have the right to include any of the Company’s or
any of the Subsidiary Guarantors’ securities in the Shelf Registration
Statement.

(c)   If the Shelf Registration Statement ceases to
be effective for any reason at any time during the Effectiveness Period (other
than because all Transfer Restricted Securities registered thereunder shall
have been resold pursuant thereto or shall have otherwise ceased to be Transfer
Restricted Securities), the Company and the Subsidiary Guarantors shall use
reasonable efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within ten (10) Business Days of
such cessation of effectiveness amend the Shelf Registration Statement in a manner
reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are Transfer
Restricted Securities.  If such a
subsequent Shelf Registration Statement is filed or designated (and is not
already effective), the Company and the Subsidiary Guarantors shall use
reasonable efforts to cause the Subsequent Shelf Registration Statement to
become effective as promptly as is practicable after such filing or designation
and to keep such Registration Statement (or subsequent Shelf Registration
Statement) continuously effective until the end of the Effectiveness Period.

(d)   The Company and the Subsidiary Guarantors shall
supplement and amend the Shelf Registration Statement if required by the rules,
regulations or instructions applicable to the registration form used by the
Company and the Subsidiary Guarantors for such Shelf Registration Statement, if
required by the Securities Act or as reasonably requested by the Representative
or by the Trustee on behalf of the Holders of the Transfer Restricted
Securities covered by such Shelf Registration Statement.

(e)        The Company shall cause the Shelf
Registration Statement and the related Prospectus and any amendment or
supplement thereto, as of the effective date of the Shelf Registration
Statement or such amendment or supplement, and any Issuer Free Writing
Prospectus, as of the date thereof, (i) to comply in all material respects with
the applicable requirements of the Securities Act, and (ii) not to contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein (in
the 

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case of the Prospectus
and any Issuer Free Writing Prospectus, in the light of the circumstances under
which they were made) not misleading.

(f)    Each Holder agrees that if such Holder
wishes to sell Transfer Restricted Securities pursuant to a Shelf Registration
Statement and related Prospectus, it will do so only in accordance with the
terms and conditions of this Agreement. 
Each Holder wishing to sell Transfer Restricted Securities pursuant to a
Shelf Registration Statement and related Prospectus from and after the
Effectiveness Date agrees to deliver a Notice and Questionnaire to the Company
at least three (3) Business Days prior to any intended distribution of Transfer
Restricted Securities under the Shelf Registration Statement.  From and after the Effectiveness Date,  the Company and the Subsidiary Guarantors
shall, as promptly as practicable after the date a Notice and Questionnaire is
delivered, and in any event upon the later of (x) fifteen (15) Business Days
after such date (but no earlier than fifteen (15) Business Days after
effectiveness) or (y) fifteen (15) Business Days after the expiration of any
Suspension Period in effect when the Notice and Questionnaire is delivered or
put into effect within fifteen (15) 
Business Days of such delivery date or, if the Company and the
Subsidiary Guarantors are required to file with the Commission a new Shelf
Registration Statement, within thirty (30) calendar days after the date a
Notice and Questionnaire is delivered:

(i)    if required by applicable law, file with the
Commission a post-effective amendment to the Shelf Registration Statement or an
additional Shelf Registration Statement or prepare and, if required by
applicable law, file 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 the Holder delivering such Notice and Questionnaire
is named as a selling securityholder in the Shelf Registration Statement and
the related Prospectus in such a manner as to permit such Holder to deliver
such Prospectus to purchasers of the Transfer Restricted Securities in
accordance with applicable law and, if the Company and the Subsidiary
Guarantors shall file a post-effective amendment to the Shelf Registration
Statement or such additional Shelf Registration Statement, as the case may be,
use reasonable efforts to cause such post-effective amendment or such
additional Shelf Registration Statement, as the case may be, to become
effective under the Securities Act as promptly as is practicable, but in any
event by the date (the “Amendment Effectiveness
Deadline Date”) that is sixty (60) days after the date such post
effective amendment or such additional Shelf Registration Statement is required
by this clause to be filed;

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(ii)   upon its request, provide such Holder copies
of any documents filed pursuant to Section 2(f)(i); and

(iii)  notify such Holder as promptly as practicable
after the effectiveness under the Securities Act of any post-effective
amendment filed pursuant to Section 2(f)(i);

provided that if such Notice and
Questionnaire is delivered during a Suspension Period, the Company shall so
inform the Holder delivering such Notice and Questionnaire and shall take the
actions set forth in clauses (i), (ii) and (iii) above upon expiration of the
Suspension Period in accordance with Section 4(b).  Notwithstanding anything contained herein to
the contrary, (i) neither the Company nor any of the Subsidiary Guarantors
shall be under any obligation to name any Holder that is not a Notice Holder as
a selling securityholder in any Registration Statement or related Prospectus
and (ii) the Amendment Effectiveness Deadline Date shall be extended by up to
fifteen (15) Business Days from the expiration of a Suspension Period (and neither
the Company nor any of the Subsidiary Guarantors shall incur any obligation to
pay Additional Amounts during such extension) if such Suspension Period shall
be in effect on the Amendment Effectiveness Deadline Date.

3.     Additional Amounts.

(a)   If:

(i)    the Shelf Registration Statement has not
become effective or a previously effective Shelf Registration Statement has not
been made available, prior to or on the Effectiveness Target Date;

(ii)   the Company or any of the Subsidiary
Guarantors has failed to perform its obligations set forth in Section 2(f)
within the time periods required therein;

(iii)  any post-effective amendment to a Shelf
Registration Statement or additional Shelf Registration Statement filed
pursuant to Section 2(f)(i) has not become effective under the Securities Act
on or prior to the Amendment Effectiveness Deadline Date;

(iv)  except as provided in Section 4(b)(i) hereof,
the Shelf Registration Statement is filed and has become effective but, during
the Effectiveness Period, shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded within ten (10)
Business Days by a post-effective amendment to the Shelf Registration
Statement, a supplement to the Prospectus or a report filed with the Commission
pursuant to 

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Section 13(a), 13(c), 14
or 15(d) of the Exchange Act that cures such failure and, in the case of a
post-effective amendment, is itself immediately declared effective; or

(v)   (A) 
prior to or on the 45th day, as the case may be, of any Suspension
Period, such suspension has not been terminated or (B) Suspension Periods
exceed an aggregate of 120 days in any 360 day period,

(each such event referred to in foregoing clauses (i)
through (vi), a “Registration Default”),
the Company and the Subsidiary Guarantors hereby, jointly and severally, agree
to pay interest (“Additional Amounts”)
with respect to the Transfer Restricted Securities as provided herein from and
including the day following the Registration Default to but excluding the earlier
of (1) the day on which the Registration Default has been cured and (2) the
date the Shelf Registration Statement is no longer required to be kept
effective as set out below:

(A)  in respect of the Notes, the Company and each
of the Subsidiary Guarantors jointly and severally agree to pay interest to
each holder of Notes, accruing at a rate (x) with respect to the first 90-day
period during which a Registration Default shall have occurred and be
continuing, equal to 0.25% per annum of the aggregate principal amount of the
Notes, and (y) with respect to the period commencing on the 91st day following
the day the Registration Default shall have occurred and be continuing, equal
to 0.50% per annum of the aggregate principal amount of the Notes; provided that in no event shall Additional
Amounts accrue at a rate per year exceeding 0.50% of the aggregate principal
amount of the Notes; provided, further, that in no event shall Additional Amounts be
payable in connection with a Registration Default relating to a failure to
register the Common Stock deliverable upon a conversion of the Notes; and

(B)   in respect of Common Stock, each Holder of
such Common Stock will not be entitled to any Additional Amounts.

For the avoidance of doubt, if the Company and the
Subsidiary Guarantors fail to register both the Notes and the Common Stock
deliverable upon conversion of the Notes, if any, Additional Amounts shall be
payable only in connection with the Registration Default relating to the
failure to register the Notes.

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Notwithstanding the provisions in this Section 3(a),
if any Additional Amounts are payable as a result of the Company’s and the
Subsidiary Guarantors’ failure to add the name of a Holder as an additional
selling securityholder in the Shelf Registration Statement and the related
Prospectus in such a manner as to permit such Holder to deliver such Prospectus
to purchasers of the Transfer Restricted Securities in accordance with
applicable law and if such failure shall have not resulted in a Registration
Default with respect to the other Holders, only such Holder shall be entitled
to receive such Additional Amounts.

(b)   All Additional Amounts accrued in accordance
with paragraph (A) above shall be paid in arrears to Record Holders by the
Company and the Subsidiary Guarantors on each Additional Amounts Payment
Date.  All Additional Amounts and
additional shares of Common Stock payable in accordance with paragraph (B)
above shall be paid and delivered on the settlement date relating to the
applicable Conversion Date.  Upon the
cure of all Registration Defaults relating to any particular Note or share of
Common Stock, the accrual of Additional Amounts with respect to such Note or
share of Common Stock will cease.

All
obligations of the Company and the Subsidiary Guarantors set forth in this
Section 3 that are outstanding with respect to any Transfer Restricted Security
at the time such security ceases to be a Transfer Restricted Security shall
survive until such time as all such obligations with respect to such Transfer
Restricted Security shall have been satisfied in full.

The
Additional Amounts set forth above shall be the exclusive monetary remedy
available to the Holders of Transfer Restricted Securities for each
Registration Default.

4.     Registration Procedures.

(a)   In connection with the Shelf Registration
Statement, the Company and the Subsidiary Guarantors shall comply with all the
provisions of Section 4(b) hereof and shall use reasonable efforts to effect
such registration to permit the sale of the Transfer Restricted Securities, and
pursuant thereto, shall as expeditiously as possible prepare and file with the
Commission a Shelf Registration Statement relating to the registration on any
appropriate form under the Securities Act, or otherwise make available for use
by Holders a previously filed Shelf Registration Statement.

(b)   In connection with the Shelf Registration
Statement and any Prospectus required by this Agreement to permit the sale or
resale of

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Transfer Restricted
Securities, the Company and the Subsidiary Guarantors shall:

(i)    Subject to any notice by the Company or any
of the Subsidiary Guarantors in accordance with this Section 4(b) of the
existence of any fact or event of the kind described in Section 4(b)(iii)(D),
use reasonable efforts to keep the Shelf Registration Statement continuously
effective during the Effectiveness Period; upon the occurrence of any event
that would cause the Shelf Registration Statement or the Prospectus contained
therein (A) to 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 or (B) not to be effective and usable for
resale of Transfer Restricted Securities during the Effectiveness Period, the
Company and the Subsidiary Guarantors shall file promptly a post-effective
amendment to the Shelf Registration Statement, an amendment or supplement to
the Prospectus or a report filed with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act, in the case of clause (A), correcting
any such misstatement or omission, and, in the case of either clause (A) or
(B), use reasonable efforts to cause such amendment to become effective and the
Shelf Registration Statement and the related Prospectus to become usable for
their intended purposes as soon as practicable thereafter.  Notwithstanding the foregoing, the Company
may suspend the effectiveness of the Shelf Registration Statement by written
notice to the Holders for a period not to exceed an aggregate of 45 days in any
90-day period (each such period, a “Suspension
Period”) if:

(x)   an event occurs and is continuing as a
result of which the Shelf Registration Statement, the Prospectus, any amendment
or supplement thereto, or any document incorporated by reference therein would,
in the Company’s judgment, 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

(y)   the Company determines in good faith that
the disclosure of such event at such time would be seriously detrimental to the
Company and its subsidiaries;

provided
that, the Suspension Periods shall not exceed an aggregate of 120 days in any
360-day period. The Company shall not be required to specify in the written
notice to the Holders the nature of the event giving rise to the Suspension
Period.  Each Holder agrees, by
acquisition of a Transfer

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Restricted Security, to
hold any communication by the Company and the Subsidiary Guarantors in response
to a notice of proposed sale in confidence. 
No Additional Amounts shall be payable or accrue during any Suspension
Period permitted under this Section 4(b)(i).

(ii)   Prepare and file with the Commission such
amendments and post-effective amendments to the Shelf Registration Statement as
may be necessary to keep the Shelf Registration Statement effective during the
Effectiveness Period; cause the Prospectus to be supplemented by any required
Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
under the Securities Act, and to comply fully with the applicable provisions of
Rules 424 and 430A under the Securities Act in a timely manner; and comply with
the provisions of the Securities Act with respect to the disposition of all
Notes or shares of Common Stock covered by the Shelf Registration Statement
during the applicable period in accordance with the intended method or methods
of distribution by the sellers thereof set forth in the Shelf Registration
Statement or supplement to the Prospectus.

(iii)  Advise the selling Holders promptly and, if
requested by such selling Holders, to confirm such advice in writing, except as
provided in clause (D) below:

(A)  when the Prospectus or any Prospectus
supplement or post-effective amendment or any Issuer Free Writing Prospectus
has been filed, and, with respect to the Shelf Registration Statement or any
post-effective amendment thereto, when the same has become effective,

(B)   of any request by the Commission for
amendments or supplements to the Shelf Registration Statement,  the Prospectus or any Issuer Free Writing
Prospectus or for additional information relating thereto,

(C)   of the issuance by the Commission of any stop
order suspending the effectiveness of the Shelf Registration Statement, the
Prospectus under the Securities Act or of any notice that would prevent its
use, or of the suspension by any state securities commission of the
qualification of the Transfer Restricted Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of the preceding
purposes,

 

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(D)  of the existence of any fact or the happening
of any event, during the Effectiveness Period, that makes any statement of a
material fact made in the Shelf Registration Statement, the Prospectus, any
amendment or supplement thereto, or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes in
the Shelf Registration Statement or the Prospectus in order to make the
statements therein (in the case of a Prospectus, in the light of the
circumstances under which they were made) not misleading, or

(E)   when any Issuer Free Writing Prospectus
includes information that may conflict with the information contained in the
Registration Statement.

If at any time the
Commission shall issue any stop order suspending the effectiveness of the Shelf
Registration Statement, or any notice that would prevent its use, or any state
securities commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws, the Company and
the Subsidiary Guarantors shall use reasonable efforts to obtain the withdrawal
or lifting of such order at the earliest possible time, including, if
necessary, by filing an amendment to the Shelf Registration Statement or a new
Shelf Registration and using reasonable efforts to have such amendment or a new
Shelf Registration Statement declared effective, and will provide to each
Holder who is named in the Shelf Registration Statement prompt notice of the
withdrawal of any such order or the filing or effectiveness of any such
amendment or new registration statement.

(iv)      Make available at reasonable times for
inspection by one or more representatives of the selling Holders, designated in
writing by a Majority of Holders whose Transfer Restricted Securities are
included in the Shelf Registration Statement, and any attorney or accountant
retained by such selling Holders and any underwriter participating in any
disposition pursuant to the Shelf Registration Statement, all financial and
other records, pertinent corporate documents and properties of the Company and
the Subsidiary Guarantors as shall be reasonably necessary to enable them to
conduct a reasonable investigation within the meaning of Section 11 of the
Securities Act, and cause the Company’s and the Subsidiary Guarantors’
respective officers, directors, managers and employees to supply all
information reasonably requested by any such representative or representatives
of the selling Holders, attorney or accountant in connection therewith, in each
case as 

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customary for comparable
due diligence examinations; provided,
however, that neither the Company nor any Subsidiary Guarantor shall
have any obligation to deliver information to any selling Holder or
representative pursuant to this Section 4(b)(iv) unless such selling Holder or
representative shall have executed and delivered a confidentiality agreement in
a form acceptable to the Company relating to such information.

(v)       If requested by any selling Holders,
promptly incorporate in the Shelf Registration Statement or Prospectus within
the applicable time period set forth in Section 2(e), pursuant to a supplement
or post-effective amendment if necessary, such information as such selling
Holders may reasonably request to have included therein, including, without
limitation, information relating to the “Plan of Distribution” of the Transfer
Restricted Securities.

(vi)      Furnish to each selling Holder upon their
request, without charge, at least one copy of the Shelf Registration Statement,
as first filed with the Commission, and of each amendment thereto (and any
documents incorporated by reference therein or exhibits thereto (or exhibits
incorporated in such exhibits by reference) as such Person may reasonably
request).

(vii)     Deliver to each selling Holder, without
charge, as many copies of the Prospectus (including each preliminary
Prospectus) and any amendment or supplement thereto, and any Issuer Free
Writing Prospectus, as such Persons reasonably may request; subject to any
notice by the Company or any Subsidiary Guarantor in accordance with this
Section 4(b) of the existence of any fact or event of the kind described in
Section 4(b)(iii)(B) through (E), the Company and the Subsidiary Guarantors
hereby consent to the use of the Prospectus and any amendment or supplement
thereto, and any Issuer Free Writing Prospectus, by each of the selling Holders
in connection with the offering and the sale of the Transfer Restricted Securities
covered by the Prospectus or any amendment or supplement thereto.

(viii)    Before any public offering of Transfer
Restricted Securities, cooperate with the selling Holders and their counsel in
connection with the registration and qualification of the Transfer Restricted
Securities under the securities or Blue Sky laws of such jurisdictions in the
United States as the selling Holders may reasonably request and do any and all
other acts or things necessary or advisable to enable the disposition in such

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jurisdictions of the
Transfer Restricted Securities covered by the Shelf Registration Statement; provided, however, that neither the
Company nor any Subsidiary Guarantors shall be required (A) to register or
qualify as a foreign corporation or a dealer of securities where it is not now
so qualified or to take any action that would subject it to the service of
process in any jurisdiction where it is not now so subject or (B) to subject
itself to general or unlimited service of process or to taxation in any such
jurisdiction if they are not now so subject.

(ix)       Cooperate with the selling Holders to
facilitate the timely preparation and delivery of certificates representing
Transfer Restricted Securities to be sold and not bearing any restrictive
legends (unless required by applicable securities laws); and enable such
Transfer Restricted Securities to be in such denominations and registered in
such names as the Holders may request at least two Business Days before any
sale of Transfer Restricted Securities.

(x)        Use reasonable efforts to cause the
Transfer Restricted Securities covered by the Shelf Registration Statement to
be registered with or approved by such other U.S. governmental agencies or
authorities as may be necessary to enable the seller or sellers thereof to
consummate the disposition of such Transfer Restricted Securities.

(xi)       Subject to Section 4(b)(i) hereof, if any
fact or event contemplated by Section 4(b)(iii)(B) through (D) hereof shall
exist or have occurred, use reasonable efforts to prepare a supplement or
post-effective amendment to the Shelf Registration Statement, related
Prospectus (including by means of an Issuer Free Writing Prospectus), relevant
Issuer Free Writing Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter delivered
to the purchasers of Transfer Restricted Securities, none of the Registration
Statement, none of the Registration Statement, the Prospectus or any Issuer
Free Writing Prospectus will contain an untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus and any such Issuer
Free Writing Prospectus, in the light of the circumstances in which they are
made) not misleading.

(xii)      Obtain CUSIP numbers for all Transfer
Restricted Securities not later than the effective date of the Shelf
Registration

 15
 

 

Statement and provide the
Trustee under the Indenture with certificates for the Notes that are in a form
eligible for deposit with The Depository Trust Company.

(xiii)     Cooperate and assist in any filings
required to be made with the NASD and in the performance of any due diligence
investigation by any underwriter that is required to be retained in accordance
with the rules and regulations of the NASD.

(xiv)    Otherwise use reasonable efforts to comply
with all applicable rules and regulations of the Commission and all reporting
requirements under the rules and regulations of the Exchange Act.

(xv)     Cause the Indenture to be qualified under
the TIA not later than the effective date of the Shelf Registration Statement
required by this Agreement, and, in connection therewith, cooperate with the
Trustee and the holders of Notes to effect such changes to the Indenture as may
be required for such Indenture to be so qualified in accordance with the terms
of the TIA; and execute and use reasonable efforts to cause the Trustee
thereunder to execute all documents that may be required to effect such changes
and all other forms and documents required to be filed with the Commission to
enable such Indenture to be so qualified in a timely manner.

(xvi)    Cause all Common Stock covered by the Shelf
Registration Statement to be listed or quoted, as the case may be, on each
securities exchange or automated quotation system on which Common Stock is then
listed or quoted.

(xvii)   Provide to each Holder upon written request
each document filed with the Commission pursuant to the requirements of Section
13 and Section 15 of the Exchange Act after the effective date of the Shelf
Registration Statement, unless such document is available through the
Commission’s EDGAR system.

(c)   Each Holder agrees by acquisition of a
Transfer Restricted Security that, upon receipt of any notice (a “Suspension Notice”) from the Company of the
existence of any fact of the kind described in Section 4(b)(iii)(B) through (E)
hereof, such Holder will forthwith discontinue disposition of Transfer
Restricted Securities pursuant to the Shelf Registration Statement and use the
Prospectus and any related Issuer Free Writing Prospectus until:

 16
 

 

 

(i)    such Holder has received copies of the
supplemented or amended Prospectus or applicable Issuer Free Writing Prospectus
contemplated by Section 4(b)(xi) hereof; or

(ii)   such Holder is advised in
writing by the Company that the use of the Prospectus and any applicable Issuer
Free Writing Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated by reference in the Prospectus
unless such filings are made pursuant to the requirements of Section 13 and
Section 15 of the Exchange Act and such filings are available through the
Commission’s EDGAR system.

If so directed by the Company, each Holder will
deliver to the Company (at the Company’s expense) all copies, other than
permanent file copies then in such Holder’s possession, of the Prospectus
covering such Transfer Restricted Securities and any Issuer Free Writing
Prospectus that was current at the time of receipt of such notice of
suspension.

(d)   Each Holder agrees, by acquisition of a
Transfer Restricted Security, that no Holder shall be entitled to sell any of
such Transfer Restricted Securities pursuant to a Registration Statement or to
receive a Prospectus relating thereto, unless such Holder has furnished the
Company with a completed Notice and Questionnaire as required pursuant to
Section 2(e) hereof (including the information required to be included in such
Notice and Questionnaire) and the information set forth in the next
sentence.  Each Notice Holder agrees
promptly to furnish to the Company all information required to be disclosed in
order to make the information previously furnished to the Company by such
Notice Holder not misleading and any other information regarding such Notice
Holder and the distribution of such Transfer Restricted Securities as the
Company may from time to time reasonably request in writing.  Any sale of any Transfer Restricted
Securities by any Holder shall constitute a representation and warranty by such
Holder that the information relating to such Holder and its plan of
distribution is as set forth in the Prospectus delivered by such Holder in
connection with such disposition, that such Prospectus does not as of the time
of such sale contain any untrue statement of a material fact relating to or
provided by such Holder to its plan of distribution and that such Prospectus
does not as of the time of such sale omit to state any material fact relating
to or provided by such Holder or its plan of distribution necessary to make the
statements in such Prospectus, in the light of the circumstances under which
they were made not misleading.

 17
 

 

5.     Registration Expenses.

All
expenses incident to the Company’s and the Subsidiary Guarantors’ performance of
or compliance with this Agreement shall be borne by the Company and the
Subsidiary Guarantors regardless of whether a Shelf Registration Statement
becomes effective, including, without limitation:

(i)    all registration and filing fees and
expenses (including filings made with the NASD);

(ii)   all fees and expenses of compliance with
federal securities and state Blue Sky or securities laws;

(iii)  all expenses of printing (including printing
of Prospectuses, Issuer Free Writing Prospectuses and certificates for the
Common Stock to be issued upon conversion of the Notes) and the Company’s and
the Subsidiary Guarantors’ expenses for messenger and delivery services and
telephone;

(iv)  all fees and disbursements of counsel to the
Company and the Subsidiary Guarantors;

(v)   all application and filing fees in connection
with listing (or authorizing for quotation) the Common Stock on a national
securities exchange or automated quotation system pursuant to the requirements
hereof; and

(vi)  all fees and disbursements of independent
certified public accountants of the Company and the Subsidiary Guarantors.

The
Company and the Subsidiary Guarantors shall bear their internal expenses
(including, without limitation, all salaries and expenses of their officers and
employees performing legal, accounting or other duties), the expenses of any
annual audit and the fees and expenses of any Person, including special
experts, retained by the Company and the Subsidiary Guarantors.

6.     Indemnification and Contribution.

(a)   The Company and the Subsidiary Guarantors,
jointly and severally, agree to indemnify and hold harmless each Holder of
Transfer Restricted Securities covered by the Shelf Registration Statement
(including in such capacity, the Initial Purchasers), its directors, officers,
and employees and each person, if any, who controls any such Holder within the
meaning of the Securities Act or the Exchange Act (each, an “Indemnified Holder”), against any loss,
claim, damage, liability or expense, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability,
expense or action relating to resales of the Transfer Restricted Securities),
to which such Indemnified

 18
 

 

Holder may become
subject, insofar as any such loss, claim, damage, liability, expense or action
arises out of, or is based upon:

(i)    any untrue statement or alleged untrue
statement of a material fact contained in the Shelf Registration Statement as
originally filed or in any amendment thereof, in any Prospectus, or in any
amendment or supplement thereto, or

(ii)   any untrue statement or alleged untrue
statement of a material fact contained in any Issuer Free Writing Prospectus,
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact, in
each case, necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading,

and agrees to reimburse each Indemnified Holder
promptly upon demand for any legal or other expenses reasonably incurred by
such Indemnified Holder in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that
the Company and the Subsidiary Guarantors shall not be liable in any such case
to the extent that any such loss, claim, damage, liability or expense arises
out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with
written information furnished to the Company and the Subsidiary Guarantors by
or on behalf of such Holder (or its related Indemnified Holder) specifically
for use therein; provided further, however,
that with respect to any such untrue statement in or omission from any amended
or supplemented Prospectus (excluding the correcting amendment or supplement),
the indemnity agreement contained in this Section 6(a) shall not inure to the
benefit of any person indemnified under this Section 6(a) from whom the person
asserting any such loss, claim, damage, liability or action received Notes or
Common Stock to the extent that such loss, claim, damage, liability or action
of or with respect to such indemnified person results from the fact that both
(A) a copy of the Prospectus (together with any correcting amendments or
supplements) was not sent or given to such asserting person at or prior to the
written confirmation of the sale of such Notes or Common Stock to such person
and (B) the untrue statement in or omission from any Prospectus was corrected
in an amendment or supplement thereto and the Prospectus (as amended or
supplemented) does not contain any other untrue statement or omission or
alleged untrue statement or omission of a material fact, unless, in the case of
either paragraph (A) or (B) above, such failure to deliver the final Prospectus
was a result of noncompliance by the Company with Section 4(b)(vi) or (vii)
hereof.   The foregoing indemnity
agreement is in addition to any liability which the Company or the Subsidiary
Guarantors may otherwise have.

 19
 

 

 

(b)   Each Holder, severally and not jointly,
agrees to indemnify and hold harmless the Company and the Subsidiary
Guarantors, their respective directors, officers and employees and each person,
if any, who controls the Company or any Subsidiary Guarantor within the meaning
of the Securities Act or the Exchange Act (i) to the same extent as the
foregoing indemnity from the Company and the Subsidiary Guarantors to each such
Holder, but only with reference to written information relating to such Holder
furnished to the Company and the Subsidiary Guarantors by or on behalf of such
Holder specifically for inclusion in the documents referred to in the foregoing
indemnity and (ii) against any loss, claim, damage, liability, expense or
action, joint or several, including, but not limited to, any loss, claim,
damage, liability, expense or action relating to resales of the Transfer
Restricted Securities, to which such person may become subject, insofar as any
such loss, claim, damage, liability, expense or action arises out of, or is
based upon any Free Writing Prospectus used by such holder without the prior
written consent of the Issuer, and in connection  with any underwritten offering, the
underwriters, provided that the indemnification obligation in this clause (ii)
shall be several, not joint and several, among the Holders who used such Free
Writing Prospectus.  This indemnity agreement
set forth in this Section shall be in addition to any liabilities which any
such Holder may otherwise have.  In no
event shall any Holder, its directors, officers or any person who controls such
Holder be liable or responsible for any amount in excess of the amount by which
the total amount received by such Holder with respect to its sale of Transfer
Restricted Securities pursuant to a Shelf Registration Statement exceeds (i)
the amount paid by such Holder for such Transfer Restricted Securities and (ii)
the amount of any damages that such Holder, its directors, officers or any
person who controls such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.

(c)   Promptly after receipt by an indemnified
party under this Section 6 of notice of any claim or the commencement of any
action, the indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party under this Section 6, notify the
indemnifying party in writing of the claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 6 except to the extent it has been materially
prejudiced by such failure and, provided,
further, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have to an indemnified party
otherwise than under this Section 6.  If
any such claim or action shall be brought against an indemnified party, and it
shall notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly with
any other similarly notified 

 20
 

 

 

indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party.  After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that the Holders shall
have the right to employ a single counsel to represent jointly the Holders and
their officers, employees and controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be sought
by the Holders against the Company or any Subsidiary Guarantor under this
Section 6 if the Holders seeking indemnification shall have been advised by
legal counsel that there may be one or more legal defenses available to such
Holders and their respective officers, employees and controlling persons that
are different from or additional to those available to the Company or such
Subsidiary Guarantor, and in that event, the fees and expenses of such separate
counsel shall be paid by the Company or such Subsidiary Guarantor.  No indemnifying party shall:

(i)    without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld) settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action),
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or

(ii)   be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be
a final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against
any loss of liability by reason of such settlement or judgment.

(d)   The indemnifying party under this Section
shall not be liable for any settlement of any proceeding effected without its
written consent, which shall not be withheld unreasonably, but if settled with
such consent or if there is a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party against any loss,
claim, damage, liability or expense by reason of such settlement or judgment.

 21
 

 

 

Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by Section 6(c) hereof, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement.  No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement,
compromise or consent to the entry of judgment in any pending or threatened
action, suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity was or could have been sought hereunder
by such indemnified party, unless such settlement, compromise or consent (x)
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such action, suit or proceeding and
(y) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.

(e)   If the indemnification provided for in this
Section 6 shall for any reason be unavailable or insufficient to hold harmless
an indemnified party under Section 6(a) or 6(b) in respect of any loss, claim,
damage or liability (or action in respect thereof) referred to therein, each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability (or action in respect thereof):

(i)    in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Subsidiary
Guarantors from the offering and sale of the Transfer Restricted Securities on
the one hand and a Holder with respect to the sale by such Holder of the
Transfer Restricted Securities on the other, or

(ii)   if the allocation provided by Section
(6)(e)(i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in Section
6(e)(i) but also the relative fault of the Company and the Subsidiary
Guarantors on the one hand and the Holders on the other in connection with the
statements or omissions or alleged statements or alleged omissions that
resulted in such loss, claim, damage or liability (or action in respect thereof),
as well as any other relevant equitable considerations.

 

 22

 

 

The relative benefits received by the Company and the
Subsidiary Guarantors on the one hand and a Holder on the other with respect to
such offering and such sale shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Notes purchased under the Purchase
Agreement (before deducting expenses) received by the Company, on the one hand,
bear to the total proceeds received by such Holder with respect to its sale of
Transfer Restricted Securities on the other. 
The relative fault of the parties shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company and the Subsidiary Guarantors on the one hand or the
Holders on the other, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement or
omission.  The Company, each Subsidiary
Guarantor and each Holder agree that it would not be just and equitable if the
amount of contribution pursuant to this Section 6(e) were determined by pro rata allocation or by any other method
of allocation that does not take into account the equitable considerations
referred to in the first sentence of this paragraph (e).

The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section 6 shall be deemed to include, for purposes of this Section 6, any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending or preparing to defend any such action or
claim.

Notwithstanding
the provisions of this Section 6, no Holder shall be required to contribute any
amount in excess of the amount by which the total price at which the Transfer
Restricted Securities purchased by it were resold exceeds the amount of any
damages which such Holder has otherwise been required to pay by reason of any untrue
or alleged untrue statement or omission or alleged omission.  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
Holders’ obligations to contribute as provided in this Section 6(e) are several
and not joint.

(f)    The provisions of this Section 6 shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any Holder, the Company or any Subsidiary Guarantor or any of the
officers, directors or controlling persons referred to in Section 6 hereof, and
will survive the sale by a Holder of Transfer Restricted Securities.

7.     Rule 144A and Rule 144.  The Company and the Subsidiary
Guarantors agree with each Holder, for so long as any Transfer Restricted
Securities remain outstanding and during any period in which the Company (i) is
not subject to Section 13 or 15(d) of the Exchange Act, to make available, upon
request of any Holder, to such Holder or beneficial owner of Transfer
Restricted Securities in connection with any sale thereof and any prospective
purchaser of such Transfer Restricted 

 23
 

 

Securities designated by such Holder or beneficial
owner, the information required by Rule 144A(d)(4) under the Securities Act in
order to permit resales of such Transfer Restricted Securities pursuant to Rule
144A, and (ii) is subject to Section 13 or 15 (d) of the Exchange Act, to make
all filings required thereby in a timely manner in order to permit resales of
such Transfer Restricted Securities pursuant to Rule 144.

8.     No Participation In Underwritten
Registrations.  No Holder may
participate in any Underwritten Registration hereunder.

9.     Miscellaneous.

(a)   Free
Writing Prospectuses.  Each
Holder represents that it has not prepared or had prepared on its behalf or
used or referred to, and agrees that it will not prepare or have prepared on
its behalf or use or refer to, any Free Writing Prospectus, and has not
distributed and will not distribute any written materials in connection with
the offer or sale of the Transfer Restricted Securities without the prior
express written consent of the Company and, in connection with any underwritten
offering, the underwriters.  Any such
Free Writing Prospectus consented to by the Company and, if applicable, the
underwriters, as the case may be, is hereinafter referred to as a “Permitted Free Writing Prospectus.”  The Company represents and agrees that it has
treated and will treat, as the case may be, each Permitted Free Writing
Prospectus as an Issuer Free Writing Prospectus, including in respect of timely
filing with the Commission, legending and recordkeeping.

(b)   Remedies.  The Company and each Subsidiary Guarantor
acknowledge and agree that any failure by the Company or any Subsidiary
Guarantor to comply with its obligations under Section 2 hereof may result in
material irreparable injury to the Initial Purchasers or the Holders for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely, and that, in the event of any such
failure, the Initial Purchasers or any Holder may obtain such relief as may be
required to specifically enforce the Company’s and the Subsidiary Guarantors’
obligations under Section 2 hereof.  The
Company and each Subsidiary Guarantor further agree to waive the defense in any
action for specific performance that a remedy at law would be adequate.

(c)   Actions
Affecting Transfer Restricted Securities.  Neither the Company nor any Subsidiary
Guarantor shall, directly or indirectly, take any action with respect to the
Transfer Restricted Securities as a class that would adversely affect the
ability of the Holders of Transfer Restricted

 24
 

 

 

Securities to include such
Transfer Restricted Securities in a registration undertaken pursuant to this
Agreement.

(d)   No
Inconsistent Agreements.  The
Company and the Subsidiary Guarantors have not, as of the date hereof, entered
into, nor shall any of them, on or after the date hereof, enter into, any
agreement with respect to their securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof.  In addition, the
Company and the Subsidiary Guarantors shall not grant to any of their
securityholders (other than the Holders of Transfer Restricted Securities in
such capacity) the right to include any of their securities in the Shelf
Registration Statement provided for in this Agreement other than the Transfer
Restricted Securities.

(e)   Amendments
and Waivers.  This Agreement
may not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given, unless the Company has
obtained the written consent of a Majority of Holders; provided, however,
that with respect to any matter that directly or indirectly adversely affects
the rights of the Initial Purchasers hereunder, the Company shall obtain the
written consent of the Representative against which such amendment,
qualification, supplement, waiver or consent is to be effective.  Notwithstanding the foregoing (except the
foregoing proviso), a waiver or consent to depart from the provisions hereof,
with respect to a matter, which relates exclusively to the rights of Holders
whose securities are being sold pursuant to a Shelf Registration Statement and
does not directly or indirectly adversely affect the rights of other Holders,
may be given by the Majority Holders, determined on the basis of Notes being
sold rather than registered under such Shelf Registration Statement.

(f)    Notices.  All notices and other communications provided
for or permitted hereunder shall be made in writing by hand delivery, first
class mail (registered or certified, return receipt requested), telex,
facsimile transmission, or air courier guaranteeing overnight delivery:

(i)    if to a Holder, at the address set forth on
the records of the registrar under the Indenture or the transfer agent of the
Common Stock, as the case may be; and

(ii)   if to the Company or any Subsidiary
Guarantor, initially at its address set forth in the Purchase Agreement.

 25
 

 

 

All
such notices and communications shall be deemed to have been duly given: at the
time delivered by hand, if personally delivered; three Business Days after
being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if transmitted by facsimile; at the time acknowledged by a return
receipt, if sent by electronic mail; and on the next Business Day, if timely
delivered to an air courier guaranteeing overnight delivery.

Any
party hereto may change the address for receipt of communications by giving
written notice to the others.

(g)   Successors
and Assigns.  This Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties, including without limitation and without the need for an
express assignment, subsequent Holders of Transfer Restricted Securities.  The Company and the Subsidiary Guarantors
hereby agree to extend the benefit of this Agreement to any Holder and any such
Holder may specifically enforce the provisions of this Agreement as if an
original party hereto.

(h)   Counterparts.  This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

(i)    Notes
Held by the Company or Its Affiliates.  Whenever the consent or approval of Holders
of a specified percentage of Transfer Restricted Securities is required
hereunder, Transfer Restricted Securities held by the Company or its Affiliates
(other than subsequent Holders if such subsequent Holders are deemed to be
Affiliates solely by reason of their holding of such Notes) shall not be
counted in determining whether such consent or approval was given by the
Holders of such required percentage.

(j)    Headings.
The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.

(k)   Governing
Law.  This Agreement shall be
governed by and construed in accordance with the law of the State of New York.

(l)    Severability.  If  any
one or more of the provisions contained herein, or the application thereof in
any circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be affected or impaired
thereby, it being

 26
 

 

 

intended that all of the
rights and privileges of the parties shall be enforceable to the fullest extent
permitted by law.

(m)  Entire
Agreement.  This Agreement is
intended by the parties as a final expression of their agreement and intended
to be a complete and exclusive statement of the agreement and understanding of
the parties hereto in respect of the subject matter contained herein.  There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein with
respect to the registration rights granted by the Company and the Subsidiary
Guarantors with respect to the Transfer Restricted Securities.  This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.

[SIGNATURE PAGE FOLLOWS]

 

 27

 

IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.

	
  

  	
  ALLIANT TECHSYSTEMS INC.

  
	
   

  	
  By

  	
  Keith D. Ross

  
	
   

  	
   

  	
  Name: Keith D. Ross

  
	
   

  	
   

  	
  Title: Senior Vice President, General

  
	
   

  	
  Counsel and Secretary

  

 

 

 

	
  

  	
  AMMUNITION
  ACCESSORIES INC.

  
	
   

  	
  ATK THIOKOL INC.

  
	
   

  	
  ATK COMMERCIAL
  AMMUNITION COMPANY INC.

  
	
   

  	
  ATK COMMERCIAL
  AMMUNITION HOLDINGS COMPANY INC.

  
	
   

  	
  ATK SPACE
  SYSTEMS INC.

  
	
   

  	
  FEDERAL
  CARTRIDGE COMPANY

  
	
   

  	
  MICRO CRAFT INC.

  
	
   

  	
  MISSION RESEARCH
  CORPORATION

  
	
   

  	
  By

  	
  Keith D. Ross

  
	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  	
  Name: Keith D. Ross

  

 

 

 

	
  

  	
  BANC OF AMERICA SECURITIES LLC

  
	
   

  	
  BNY CAPITAL MARKETS, INC.

  
	
   

  	
  CALYON SECURITIES (USA) INC.

  
	
   

  	
  MITSUBISHI UFJ SECURITIES INTERNATIONAL PLC

  
	
   

  	
  NATCITY INVESTMENTS, INC.

  
	
   

  	
  U.S. BANCORP INVESTMENTS, INC.

  
	
   

  	
  By:

  	
  BANC
  OF AMERICA SECURITIES LLC

  
	
   

  	
  By:

  	
  /s/
  Derek Dillon

  
	
   

  	
   

  	
  Name: Derek Dillon

  
	
   

  	
   

  	
  Title: Managing DirectorEXHIBIT
10.1

BANC
OF AMERICA SECURITIES LLC

 

$270,000,000
AGGREGATE PRINCIPAL AMOUNT

Alliant
Techsystems Inc.

2.75%
CONVERTIBLE SENIOR SUBORDINATED NOTES

DUE
2011

Purchase Agreement

dated September 6, 2006

 

Purchase
Agreement

September 6, 2006

BANC OF AMERICA SECURITIES
LLC

As Representative of the Several Initial Purchasers

c/o
BANC OF AMERICA SECURITIES LLC
9 West 57th Street

New York, New York 10019

Ladies and Gentlemen:

Alliant Techsystems Inc., a Delaware
corporation (the “Company”),
proposes to issue and sell to the several initial purchasers named in Schedule
A (the “Initial Purchasers”)
$270,000,000 aggregate principal amount of its 2.75% Convertible Senior
Subordinated Notes due 2011 (the “Firm Notes”).  In addition, the Company has granted to the
Initial Purchasers an option to purchase up to an additional $30,000,000
aggregate principal amount of its 2.75% Convertible Senior Subordinated Notes
due 2011 (the “Optional Notes”
and, together with the Firm Notes, the “Notes”).  The Notes will be jointly and severally
guaranteed (the “Subsidiary Guarantees”)
on an unsecured senior subordinated basis by the subsidiary guarantors listed
on Schedule B hereto (collectively, the “Subsidiary Guarantors” and, together with the Company, the “Issuers”). 
The Firm Notes, together with the Subsidiary Guarantees, are
collectively referred to herein as the “Firm
Securities,” the Option Notes, together with the Subsidiary
Guarantees endorsed thereon, are collectively referred to herein as the “Option Securities” and the Firm Securities,
together with the Option Securities, are collectively referred to herein as the
“Securities.”  Banc of America Securities LLC (“BAS”) has agreed to act as the representative of the several
Initial Purchasers (in such capacity, the “Representative”)
in connection with the offering and sale of the Securities.

The Securities will be convertible
into cash and/or fully paid, non-assessable shares of common stock, par value
$0.01 per share, of the Company (the “Common
Stock”) together with the rights (the “Rights”) related to such Common Stock to the extent provided
in the Rights Agreement, dated as of May 7, 2002 (the “Rights Agreement”), between the Company and
LaSalle Bank National Association, as rights agent.  The Securities will be convertible initially
at a conversion rate of 10.3617 shares per $1,000 principal amount of the
Securities, on the terms, and subject to the conditions, set forth in the Indenture
(as defined below).  As used herein, “Conversion Shares” means the shares of
Common Stock and accompanying Rights into which the Securities are
convertible.  The Securities will be
issued pursuant to an indenture, to be dated as of the First Closing Date (as
defined in Section 2) (the “Indenture”),
among the Issuers and The Bank of New York Trust Company, N.A., a national
banking association, as trustee (the “Trustee”).

 1
 

 

The Securities will be offered and
sold to the Initial Purchasers without being registered under the Securities
Act of 1933, as amended, and the rules and regulations of the Securities and
Exchange Commission (the “Commission”)
thereunder (the “Securities Act”),
in reliance upon an exemption therefrom.

Holders of the Securities
(including the Initial Purchasers and their direct and indirect transferees)
will be entitled to the benefits of a Registration Rights Agreement, to be
dated as of the First Closing Date (the “Registration
Rights Agreement”), among the Issuers and the Initial Purchasers,
pursuant to which the Issuers will agree to file with the Commission a shelf
registration statement pursuant to Rule 415 under the Securities Act (the “Registration Statement”) covering the
resale of the Securities and the Conversion Shares, and to use commercially
reasonable efforts to cause the Registration Statement to be declared
effective.

The Issuers understand that the
Initial Purchasers propose to make an offering of the Securities on the terms
and in the manner set forth herein and in the Disclosure Package (as defined
below), the Preliminary Offering Memorandum (as defined below) and the Final
Offering Memorandum (as defined below) and agree that the Initial Purchasers
may resell, subject to the conditions set forth herein, all or a portion of the
Securities to purchasers at any time after the date of this Agreement.  The Securities are to be offered and sold to
or through the Initial Purchasers without being registered with the Commission
under the Securities Act in reliance upon exemptions therefrom.  The terms of the Securities and the Indenture
will require that investors that acquire Securities expressly agree that
Securities (and any Conversion Shares) may only be resold or otherwise
transferred, after the date hereof, if such Securities (or Conversion Shares)
are registered for sale under the Securities Act or if an exemption from the
registration requirements of the Securities Act is available (including the
exemption afforded by Rule 144A (“Rule 144A”)
thereunder).

The Company has prepared an
offering memorandum, dated the date hereof, setting forth information
concerning the Issuers, the Securities, the Registration Rights Agreement and
the Common Stock, in form and substance reasonably satisfactory to the Initial
Purchasers.  As used in this Agreement, “Offering Memorandum” means, collectively, the Preliminary
Offering Memorandum dated as of September 6, 2006 (the “Preliminary
Offering Memorandum”) and the offering memorandum dated the date
hereof (the “Final Offering Memorandum”), each
as then amended or supplemented by the Company. 
As used herein, each of the terms “Disclosure Package”,
“Offering Memorandum”, “Preliminary Offering Memorandum” and “Final
Offering Memorandum” shall include in each case the documents
incorporated or deemed to be incorporated by reference therein.

Each of the Issuers hereby, jointly
and severally, confirms its agreements with the Initial Purchasers as follows:

Section 1.   Representations
and Warranties of the Issuers.

Each of the Issuers hereby, jointly
and severally, represents, warrants and covenants to the Initial Purchasers as
follows:

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(a)           The Company hereby confirms that it has
authorized the use of the Disclosure Package, the Preliminary Offering
Memorandum and the Final Offering Memorandum in connection with the offer and
sale of the Securities by the Initial Purchasers.  Each document, if any, filed or to be filed
pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and incorporated by reference in the
Disclosure Package or the Final Offering Memorandum complied or will comply
when it is filed in all material respects with the Exchange Act and the rules
and regulations of the Commission thereunder. 
The Preliminary Offering Memorandum, at the date thereof, did not
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.  At the date of this Agreement, the First
Closing Date and the Second Closing Date, the Final Offering Memorandum did not
and will not (and any amendment or supplement thereto, at the date thereof, at
the First Closing Date and at the Second Closing Date, will not) contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided
that the Company and the Subsidiary Guarantors make no representation or
warranty as to information contained in or omitted from the Preliminary
Offering Memorandum or the Final Offering Memorandum or amendments or
supplements thereto in reliance upon and in conformity with written information
furnished to the Company by or on behalf of any Initial Purchaser specifically for
use therein as set forth on Schedule C hereto.

(b)           The term “Disclosure
Package” shall mean (i) the Preliminary Offering Memorandum, as
amended or supplemented at the Applicable Time, (ii) the Final Term Sheet (as
defined herein) and (iii) any other writings that the parties expressly agree
in writing to treat as part of the Disclosure Package (“Issuer
Written Information”).  The
Disclosure Package as of 6:00
p.m. (Eastern time) on the date hereof (the “Applicable
Time”) did not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.  The preceding sentence does
not apply to statements in or omissions from the Disclosure Package in reliance
upon and in conformity with written information furnished to the Company by or
on behalf of any Initial Purchaser specifically for use therein as set forth on
Schedule C hereto.

(c)           Each
of the Preliminary Offering Memorandum and the Final Offering Memorandum, as of
its respective date, contains all of the information that, if then requested by
a prospective purchaser of the Securities, would be required to be provided to
such prospective purchaser pursuant to Rule 144A(d)(4) under the Securities
Act.

(d)           Assuming
the accuracy of the representations and warranties of the Initial Purchasers
contained in Section 2 and its compliance with the agreements set forth
therein, the issuance and sale of the Securities to the Initial Purchasers, the
offer, resale and delivery of the Securities by the Initial Purchasers and the
conversion of the Securities into Conversion Shares, in each case in the manner
contemplated by this Agreement, the Indenture, the Disclosure Package and the
Offering Memorandum, do not require registration under the Securities Act and
the Indenture does not need to be qualified under the Trust Indenture Act of
1939, as amended (the “Trust Indenture Act”).

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(e)           Since
the respective dates as of which information is given in the Disclosure Package
and the Final Offering Memorandum (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement), (i) there has been no
material adverse change or any development that could reasonably be expected to
result in a material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs, management or business prospects of the
Company and its subsidiaries taken as a whole, whether or not arising in the
ordinary course of business (any such change is called a “Material Adverse Change”), (ii) none of the
Company or any of the Subsidiary Guarantors has incurred any material liability
or obligation, direct or contingent, other than in the ordinary course of
business, (iii) none of the Company or any of the Subsidiary Guarantors has
entered into any material transaction other than in the ordinary course of
business and (iv) there has not been any material change in the capital stock
or long-term debt of the Company or any of the Subsidiary Guarantors, or any
dividend or distribution of any kind declared, paid or made by the Company or
any of the Subsidiary Guarantors on any class of their respective capital
stock.

(f)            The
Company and each of the Subsidiary Guarantors have been duly incorporated,
formed or organized and are validly existing as corporations or limited
liability companies in good standing under the laws of their respective
jurisdictions of incorporation, formation or organization, and have the
requisite corporate or limited liability company power and authority necessary,
as applicable, to own or hold their respective properties and to conduct their
respective businesses as described in the Disclosure Package and the Final
Offering Memorandum, except where the failure to so qualify or have such power
or authority would not, singularly or in the aggregate, result in a Material
Adverse Change.

(g)           The
authorized, issued and outstanding capital stock of the Company is as set forth
in the Disclosure Package and the Final Offering Memorandum under the heading “Capitalization”
(other than for subsequent issuances, if any, pursuant to employee benefits
plans described in the Disclosure Package and the Final Offering Memorandum, as
the case may be).  The Common Stock (including
the Conversion Shares) conforms in all material respects to the description
thereof contained in the Disclosure Package and the Final Offering
Memorandum.  All of the issued and
outstanding shares of Common Stock have been duly authorized and validly
issued, are fully paid and nonassessable and have been issued in compliance
with federal and state securities laws. 
None of the outstanding shares of Common Stock were issued in violation
of any preemptive rights, rights of first refusal or other similar rights to
subscribe for or purchase securities of the Company.  The description of the Company’s stock
option, stock bonus and other stock plans or arrangements, and the options or
other rights granted thereunder, set forth in the Disclosure Package and the
Final Offering Memorandum accurately and fairly presents and summarizes such
plans, arrangements, options and rights.

(h)           All
of the outstanding shares of capital stock or membership interests of each
Subsidiary Guarantor of the Company have been duly and validly authorized and
issued, are fully paid and nonassessable and are owned directly or indirectly
by the Company, free and clear of any lien, charge, encumbrance, security
interest, restriction upon voting or transfer or any other claim of any third
party, other than liens created pursuant to or permitted by the Company’s
senior credit facility (the “Senior Credit
Facility”) pursuant to the Credit Agreement, dated as of March 31,
2004, as amended, among the Company, Bank of America, N.A., as Administrative
Agent, the Lenders from time to time parties thereto; the Swing Line 

 4
 

 

Lender as identified therein,
Credit Lyonnais New York Branch, as Syndication Agent, The Bank of New York,
U.S. Bank National Association, and National City Bank, as Co-Documentation
Agents; Banc of America Securities LLC and Credit Lyonnais New York Branch, as
Joint Lead Arrangers, and Banc of America Securities LLC as Sole Bookrunning
Manager.

(i)            The
Company and each of the Subsidiary Guarantors have the requisite corporate or
limited liability company power and authority, as applicable, to execute and
deliver this Agreement, the Indenture, the Registration Rights Agreement and
the Securities (in the case of the Company only) (collectively, the “Transaction Documents”) and to perform
their respective obligations hereunder and thereunder.

(j)            This
Agreement has been duly authorized, executed and delivered by the Company and
each of the Subsidiary Guarantors.

(k)           The
Registration Rights Agreement has been duly authorized by the Company and each
of the Subsidiary Guarantors and, when duly executed and delivered in
accordance with its terms by each of the parties thereto, will constitute a
valid and binding agreement of the Company and each of the Subsidiary
Guarantors enforceable against the Company and each of the Subsidiary
Guarantors in accordance with its terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws affecting
creditors’ rights generally and by general equitable principles (whether
considered in a proceeding in equity or at law) and except to the extent that
the indemnification provisions thereof may be unenforceable.

(l)            The
Indenture has been duly authorized by the Company and each of the Subsidiary
Guarantors and, when duly executed and delivered in accordance with its terms
by each of the parties thereto, will constitute a valid and binding agreement
of the Company and each of the Subsidiary Guarantors enforceable against the
Company and each of the Subsidiary Guarantors in accordance with its terms,
except to the extent that such enforceability may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws affecting creditors’ rights generally and by general
equitable principles (whether considered in a proceeding in equity or at
law).  On the First Closing Date, the
Indenture will conform in all material respects to the requirements of the
Trust Indenture Act and the rules and regulations of the Commission applicable
to an indenture which is qualified thereunder.

(m)          The
Securities have been duly authorized by the Company and, when duly executed,
authenticated, issued and delivered as provided in the Indenture and paid for
as provided herein, will constitute legally valid and binding obligations of
the Company, as issuer, and each of the Subsidiary Guarantors, as guarantors,
entitled to the benefits of the Indenture and enforceable against the Company
as issuer, and each of the Subsidiary Guarantors, as guarantors, in accordance
with their terms, except to the extent that such enforceability may be limited
by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws affecting creditors’ rights generally and by general
equitable principles (whether considered in a proceeding in equity or at law).

 5
 

 

(n)           (i)
The shares of Common Stock initially issuable upon conversion of the Securities
have been duly authorized and reserved and, when issued upon conversion of the
Securities in accordance with the terms of the Securities, will be validly
issued, fully paid and non-assessable, and the issuance of such shares will not
be subject to any preemptive or similar rights and (ii) the Rights, if any,
issuable upon conversion of the Securities have been duly authorized and, when
and if issued upon conversion in accordance with the terms of the Indenture and
the Rights Agreement, will have been validly issued.

(o)           Each
Transaction Document conforms in all material respects to the description
thereof contained in the Disclosure Package and the Final Offering Memorandum.

(p)           The
execution, delivery and performance by the Company and each of the Subsidiary
Guarantors of each of the Transaction Documents to which each is a party, the
issuance, sale and delivery of the Securities and compliance by the Company and
each of the Subsidiary Guarantors with the terms thereof and the consummation
of the transactions contemplated by the Transaction Documents will not (i)
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
the Company or any of the Subsidiary Guarantors pursuant to any material
indenture, mortgage, deed of trust, loan agreement or other material agreement
or instrument to which the Company or any of the Subsidiary Guarantors is a
party or by which the Company or any of the Subsidiary Guarantors is bound or
to which any of the property or assets of the Company or any of the Subsidiary
Guarantors is subject (each, a “Material
Contract”), (ii) result in any violation of the provisions of the
charter or by-laws of the Company or any of its subsidiaries or (iii) result in
any violation of any statute or any judgment, order, decree, rule or regulation
of any court or arbitrator or governmental agency or body having jurisdiction
over the Company or any of the Subsidiary Guarantors or any of their properties
or assets, except with respect to clauses (i) and (iii), any such conflict,
breach, violation, default, lien, charge or encumbrance that, singularly or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Change; and no consent, approval, authorization or order of, or filing or
registration with, any such court or arbitrator or governmental agency or body
under any such statute, judgment, order, decree, rule or regulation is required
for the execution, delivery and performance by the Company and each of the
Subsidiary Guarantors of each of the Transaction Documents to which each is a
party, the issuance, authentication, sale and delivery of the Securities and
compliance by the Company and each of the Subsidiary Guarantors with the terms
thereof and the consummation of the transactions contemplated by the
Transaction Documents, except for such consents, approvals, authorizations,
filings, registrations or qualifications (A) which shall have been obtained or
made prior to the First Closing Date and (B) as may be required to be obtained
or made under applicable state securities laws or obtained or made under the
Securities Act in connection with the registration of the Securities and the
qualification of the Indenture under the Trust Indenture Act as contemplated in
the Registration Rights Agreement.

(q)           Deloitte
& Touche LLP are independent public accountants with respect to the Company
and its subsidiaries within the meaning of Rule 101 of the Code of Professional
Conduct of the American Institute of Certified Public Accountants (“AICPA”) and its interpretations and rulings
thereunder.  The historical financial
statements (including the related notes) incorporated by reference in the
Disclosure Package and the Final Offering Memorandum 

 6
 

 

comply in all material respects
with the requirements applicable to a registration statement on Form S-3 under
the Securities Act; such financial statements have been prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods covered thereby and fairly present the financial position of the
entities purported to be covered thereby at the respective dates indicated and
the results of their operations and their cash flows for the respective periods
indicated; and the financial information contained in the Disclosure Package
and the Final Offering Memorandum under the headings “Capitalization” and “Selected
Historical Financial Information” fully present the information purported to be
shown thereby.  The other historical
financial and statistical information and data included in the Disclosure
Package and the Final Offering Memorandum are, in all material respects, fairly
presented.  The Company’s ratios of
earnings to fixed charges contained in the Disclosure Package and the Final
Offering Memorandum under the heading “Ratio of Earnings to Fixed Charges” have
been calculated in compliance with Item 503(d) of Regulation S-K under the
Securities Act.

(r)            Except
as otherwise disclosed in the Disclosure Package and the Final Offering
Memorandum, there are no legal or governmental proceedings pending to which the
Company or any of its subsidiaries is a party or of which any property or
assets of the Company or any of its subsidiaries is the subject which, (i)
singularly or in the aggregate, if determined adversely to the Company or any
of its subsidiaries, could reasonably be expected to result in a Material
Adverse Change; and to the best knowledge of the Company, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others.

(s)           No
action, suit or proceeding is pending against or, to the best knowledge of the
Company and each of the Subsidiary Guarantors, threatened against or affecting
the Company or any of its subsidiaries before any court or arbitrator or any
governmental agency, body or official, domestic or foreign, which could
restrain or prohibit the issuance of the Securities; and the Company has complied
with any and all requests by any securities authority in any jurisdiction for
additional information to be included in the Disclosure Package and the Final
Offering Memorandum to the extent the Company has been notified by the Initial
Purchasers of the requirements of any applicable state securities or blue sky
laws.

(t)            Neither
the Company nor any of the Subsidiary Guarantors is (i) in violation of its
charter or by-laws or other organizational documents, as applicable, (ii) in
default, and no event has occurred which, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any Material Contract or (iii) in
violation of any law, ordinance, governmental rule, regulation or court decree
to which it or its property or assets may be subject, except, with respect to
clauses (ii) and (iii), for such default or violation which could reasonably be
expected to result in a Material Adverse Change.

(u)           The
Company and each of the Subsidiary Guarantors possess all material licenses,
certificates, authorizations and permits issued by, and have made all
declarations and filings with, the appropriate federal, state or foreign
regulatory agencies or bodies which are necessary for the ownership of their
respective properties or the conduct of their respective businesses as
described in the Disclosure Package and the Final Offering Memorandum, except
where the failure to possess or make the same could not reasonably be expected
to, singularly or in the aggregate, result in a Material Adverse Change, and
neither the Company nor any of the 

 7
 

 

Subsidiary Guarantors has received
notification of any revocation or modification of any such license,
certificate, authorization or permit or has any reason to believe that any such
license, certificate, authorization or permit will not be renewed in the
ordinary course.

(v)           The
Company and each of the Subsidiary Guarantors have filed all Federal, state,
local and foreign income and franchise tax returns (other than filings being
contested in good faith or that could not reasonably be expected to result in a
Material Adverse Change) required to be filed through the date hereof and have
paid all taxes (other than those being contested in good faith) due thereon,
and no tax deficiency has been determined adversely to the Company or any of
the Subsidiary Guarantors which has had (nor does the Company or any of the
Subsidiary Guarantors have any knowledge of) any tax deficiency which, if
determined adversely to the Company or any of its subsidiaries, could result in
a Material Adverse Change.

(w)          Neither
the Company nor any of the Subsidiary Guarantors is an “investment company”
within the meaning of the Investment Company Act of 1940, as amended (the “Investment Company Act”), and the rules and
regulations of the Commission thereunder.

(x)            The
Company and each of its subsidiaries maintain a system of internal accounting
controls 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 generally accepted accounting
principles 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.

(y)           The
Company and each of its subsidiaries have insurance covering their respective
properties, operations, personnel and businesses, which insurance is in such
amounts and insures against such risks as is usually carried by owners of
similar businesses and properties in the same general area in which the Company
and its subsidiaries operate.  Neither
the Company nor any of its subsidiaries has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not result in a Material Adverse
Change.

(z)            The
Company and each of its subsidiaries own or possess adequate rights to use all
material patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service mark registrations, copyrights, licenses and
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures) (“Intellectual Property”) necessary for the
conduct of their respective businesses; and the conduct of their respective
businesses will not conflict in any material respect with, and the Company and
its subsidiaries have not received any notice of any claim of conflict with,
any such rights of others which, if valid, could reasonably be expected to
result in a Material Adverse Change.

(aa)         The Company and each of its subsidiaries have good and
marketable title in fee simple to, or have valid rights to lease or otherwise
use, all items of real and personal property 

 8
 

 

which are material to the business
of the Company and its subsidiaries, in each case free and clear of all liens,
encumbrances, claims and defects and imperfections of title except such as (i)
arise under the Senior Credit Facility, (ii) do not materially interfere with
the use made and proposed to be made of such property by the Company and its
subsidiaries or (iii) could not reasonably be expected to result in a Material
Adverse Change.

(bb)         No labor disturbance by or dispute with the employees of the
Company or any of its subsidiaries exists or, to the best knowledge of the
Company, is contemplated or threatened that could reasonably be expected to
result in a Material Adverse Change.

(cc)         No “prohibited transaction” (as defined in Section 406 of
the Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder (“ERISA”), or Section 4975 of the Internal
Revenue Code of 1986, as amended from time to time (the “Code”)) or “accumulated funding deficiency”
(as defined in Section 302 of ERISA) or any of the events set forth in Section
4043(b) of ERISA (other than events with respect to which the 30-day notice
requirement under Section 4043 of ERISA has been waived) has occurred with
respect to any employee benefit plan of the Company or any of its subsidiaries
which could reasonably be expected to result a Material Adverse Change; each
such employee benefit plan is in compliance in all material respects with
applicable law, including ERISA and the Code; the Company and each of its
subsidiaries have not incurred and do not expect to incur liability under Title
IV of ERISA with respect to the termination of, or withdrawal from, any pension
plan for which the Company or any of its subsidiaries would have any liability;
and each such pension plan that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which could reasonably be
expected to cause the loss of such qualification.

(dd)         Other than as described in the Disclosure Package and the
Final Offering Memorandum, there has been no storage, generation, refinement,
transportation, handling, treatment, disposal, discharge, emission or other
release of any kind of toxic or other wastes or other hazardous substances by,
due to or caused by the Company or any of its subsidiaries (or, to the best
knowledge of the Company, any other entity (including any predecessor) for
whose acts or omissions the Company or any of its subsidiaries is or could
reasonably be expected to be liable) upon any of the property now or previously
owned or leased by the Company or any of its subsidiaries (the “Property”), or upon any other property, in
violation of any statute or any ordinance, rule, regulation, order, judgment,
decree or permit or which would, under any statute or any ordinance, rule
(including rule of common law), regulation, order, judgment, decree or permit,
give rise to any liability, except for any violation or liability that could
not reasonably be expected to result, singularly or in the aggregate with all
such violations and liabilities, a Material Adverse Change; and there has been
no spill, leak, injection, escape, dumping, disposal, discharge, emission or
other release of any kind onto the Property or into the environment surrounding
the Property of any toxic or other wastes or other hazardous substances with
respect to which the Company or any of the Subsidiary Guarantors has knowledge,
except for any such spill, leak, injection, escape, dumping, disposal,
discharge, emission or other release of any kind which could not reasonably be
expected to result, singularly or in the aggregate with all such discharges and
other releases, a Material Adverse Change.

 9
 

 

(ee)         Other than as described in the Disclosure Package and the
Final Offering Memorandum, the Company and its subsidiaries (i) are in
compliance with any and all applicable foreign, Federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or contaminants
(“Environmental Laws”), (ii)
possess all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses, and (iii)
are in compliance with all terms and conditions of any such permit, license or
approval and have not received notice of any actual or potential liability
under Environmental Laws (including actual or potential liability relating to
the investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants) except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singularly or in the
aggregate, result in a Material Adverse Change.

(ff)           In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the course of
which it identifies, evaluates and estimates associated costs and liabilities
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws, or
any permit, license of approval, any related constraints on operating
activities and any potential liabilities to third parties); except as described
in the Disclosure Package and the Final Offering Memorandum, on the basis of
such review, the Company has reasonably concluded that its estimate of such
associated costs and liabilities would not, singularly or in the aggregate,
result in a Material Adverse Change.

(gg)         Neither the Company nor, to the best knowledge of the
Company and each of the Subsidiary Guarantors, any director, officer, agent,
employee or other person associated with and acting on behalf of, or otherwise
acting on behalf of, the Company or any of its subsidiaries has (i) used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity, (ii) made any direct or
indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds, (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977 or (iv) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment.

(hh)         On and immediately after the First Closing Date, the Company
(after giving effect to the issuance of the Securities and to other
transactions related thereto as described in the Disclosure Package and the
Final Offering Memorandum) will be Solvent. 
As used in this paragraph, the term “Solvent”
means, with respect to a particular date, that on such date (i) the present fair
value of the assets of the Company, at a fair valuation, will exceed its debts
and liabilities, subordinated, contingent or otherwise, (ii) the present fair
saleable value of the property of the Company will be greater than the amount
that will be required to pay the probable liability of its debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured, (iii) the Company will be able to pay
its debts and liabilities, subordinated, contingent or otherwise, as such debts
and liabilities become absolute and matured and (iv) the Company will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the First Closing Date.  In
computing the amount of such contingent 

 10
 

 

liabilities at any time, it is
intended that such liabilities will be computed at the amount that, in the
light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.

(ii)           Except as disclosed in the Disclosure Package and the
Final Offering Memorandum, there are no outstanding subscriptions, rights,
warrants, calls or options to acquire, or instruments convertible into or
exchangeable for, or agreements or understandings with respect to the sale or
issuance of, any shares of capital stock of or other equity or other ownership
interest in the Company or any of its subsidiaries (other than issuances under
plans discussed in the Disclosure Package and the Final Offering Memorandum).

(jj)           Except as may be imposed by applicable law, no subsidiary
of the Company is currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such subsidiary’s
capital stock, from repaying to the Company any loans or advances to such
subsidiary from the Company or from transferring any of such subsidiary’s
property or assets to the Company or any other subsidiary of the Company,
except as described in the Disclosure Package and the Final Offering
Memorandum.

(kk)         Neither the consummation of the transactions contemplated
herein nor the sale, issuance, execution or delivery of the Securities will
violate Regulation T, U or X of the Federal Reserve Board.

(ll)           Neither the Company nor any of its affiliates has,
directly or through any agent (other than the Initial Purchasers, as to which
no representation is made), sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, any security (as such term is defined in
the Securities Act), which is or will be integrated with the sale of the
Securities or the Conversion Shares in a manner that would require registration
of the Securities or the Conversion Shares under the Securities Act.

(mm)       None of the Company or any of its affiliates or any other
person acting on its or their behalf (other than the Initial Purchasers, as to
which no representation is made) has engaged, in connection with the offering
of the Securities or the Conversion Shares, in any form of general solicitation
or general advertising within the meaning of Rule 502(c) under the Securities
Act.

(nn)         There are no securities of the Company of the same class (as
defined in Rule 144A(d) under the Securities Act) as the Securities registered
under the Exchange Act, or listed on a national securities exchange or quoted
in a U.S. automated interdealer quotation system.

(oo)         The Subsidiary Guarantors are the only significant
subsidiaries of the Company as defined by Rule 1-02 of Regulation S-X under the
Exchange Act.

(pp)         No forward-looking statement (within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act) contained in the
Disclosure Package or the Final Offering Memorandum has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good faith.

 11

 

 

(qq)         None of the Company or any of its subsidiaries does business
with the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Florida Statutes Section 517.075.

(rr)           The documents incorporated by reference in the Disclosure
Package and the Final Offering Memorandum, when they were filed with the
Commission conformed in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder, and
none of such documents when filed contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Disclosure Package and
the Final Offering Memorandum, when such documents are filed with the
Commission will conform in all material respects to the requirements of the
Exchange Act and the rules and regulations of the Commission thereunder and
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.

(ss)         There is and has
been no failure on the part of the Company and any of the Company’s directors
or officers, in their capacities as such, to comply with any applicable
provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith (the “Sarbanes-Oxley Act”),
including Section 402 related to loans and Sections 302 and 906 related to
certifications.

(tt)           Except as
disclosed in the Disclosure Package and the Final Offering Memorandum, since
the end of the Company’s most recent audited fiscal year, there has been (i) no
material weakness in the Company’s internal control over financial reporting
(whether or not remediated) and (ii) 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.

(uu)         Except as described in the Disclosure
Package and the Final Offering Memorandum, with respect to the stock options
(the “Stock Options”) granted pursuant to the
stock-based compensation plans of the Company and its subsidiaries (the “Company Stock Plans”), (i) each Stock Option designated by
the Company at the time of grant as an “incentive stock option” under Section
422 of the Code so qualifies, (ii) each grant of a Stock Option was duly
authorized no later than the date on which the grant of such Stock Option was
by its terms to be effective (the “Grant Date”) by
all necessary corporate action, including, as applicable, approval by the board
of directors of the Company (or a duly constituted and authorized committee thereof)
and any required stockholder approval by the necessary number of votes or
written consents, (iii) each such grant was made in accordance with the
material terms of the Company Stock Plans, the Exchange Act and all other
applicable laws and regulatory rules or requirements, including the rules of
the New York Stock Exchange (the “NYSE”) and any
other exchange on which Company securities are traded and (iv) each such grant
was or has now been properly accounted for in accordance with GAAP in the
financial statements (including the related notes) of the Company and disclosed
in the Company’s filings with the Commission in accordance with the Exchange
Act and all other applicable laws, except in each case for any failure,
violation or default that would not, individually or in the aggregate, have a
Material Adverse Effect.

 12
 

 

Any certificate signed by an
officer of the Company and delivered to the Representative or to counsel for
the Initial Purchasers shall be deemed to be a representation and warranty by
the Company to each Initial Purchaser as to the matters set forth therein.

The Company acknowledges that the
Initial Purchasers and, for purposes of the opinions to be delivered pursuant
to Section 5 hereof, counsel to the Company and counsel to the Initial Purchasers,
will rely upon the accuracy and truthfulness of the foregoing representations
and hereby consents to such reliance.

Section 2. 
Purchase, Sale and Delivery of the Securities.

(a) 
The Firm Securities.  The Issuers agree to issue and sell to the
several Initial Purchasers the Firm Securities upon the terms but subject to
the conditions herein set forth on the basis of the representations and
warranties herein contained.  On the
basis of the representations, warranties and agreements herein contained, and
upon the terms but subject to the conditions herein set forth, the Initial
Purchasers agree to purchase from the Issuers the entire principal amount of
Firm Securities at a purchase price of 98% of the aggregate principal amount
thereof.

(b)  The First Closing Date.  Delivery
of the Firm Securities to be purchased by the Initial Purchasers and payment
therefor shall be made at the offices of Shearman & Sterling LLP, 599
Lexington Avenue, New York, NY 10022 (or such other place as may be agreed to by
the Company and the Representative) at 9:00 a.m. New York time, on September 12, 2006 or such other time and date not later
than 9:00 a.m. New York time, on September 12, 2006 as the Representative shall designate
by notice to the Company (the time and date of such closing are called the “First
Closing Date”).

(c)  The Optional Securities; the
Second Closing Date.  In addition, on the basis of the
representations, warranties and agreements herein contained, and upon the terms
but subject to the conditions herein set forth, the Issuers hereby grant an
option to the several Initial Purchasers to purchase up to $30,000,000 aggregate principal amount of Optional
Securities from the Issuers at the same price as the purchase price to be paid
by the Initial Purchasers for the Firm Securities.  The option granted hereunder may be exercised
at any time (but not more than once) upon notice by the Representative to the
Company, which notice may be given at any time within 30 days from the
date hereof.  Such notice shall set forth
(i) the amount (which shall be an integral multiple of $1,000 in aggregate
principal amount) of Optional Securities as to which the Initial Purchasers are
exercising the option, (ii) the names and denominations in which the
Optional Securities are to be registered and (iii) the time, date and
place at which such Option Securities will be delivered (which time and date
may be simultaneous with, but not earlier than, the First Closing Date; and in
such case the term “First Closing Date” shall refer to
the time and date of delivery of the Firm Securities and the Optional
Securities).  Such time and date of
delivery, if subsequent to the First Closing Date, is called the “Second
Closing Date” and shall be determined by the Representative.  Such date may be the same as the First
Closing Date but not earlier than the First Closing Date or later than 10
business days after the date of such notice. 
If any Optional Securities are to be purchased, each Initial Purchaser
agrees, severally and not jointly, to purchase the principal amount of Optional
Securities (subject to such adjustments to eliminate fractional amounts as the
Representative may determine) that bears the same proportion to the total
principal amount of Optional Securities to be purchased as the principal 

 13
 

 

amount
of Firm Securities set forth on Schedule A opposite the name of
such Initial Purchaser bears to the total principal amount of Firm
Securities.  The Representative may
cancel the option at any time prior to its expiration by giving written notice
of such cancellation to the Company.

(d)  Payment for the Securities.  Payment for the Securities shall be made at
the First Closing Date (and, if applicable, at the Second Closing Date) by wire
transfer of immediately available funds to the order of the Company.

It is understood that the Representative has been authorized,
for its own account and the accounts of the several Initial Purchasers, to
accept delivery of and receipt for, and make payment of the purchase price for,
the Firm Securities and any Optional Securities the Initial Purchasers have
agreed to purchase.  BAS, individually
and not as the Representative of the Initial Purchasers, may (but shall not be
obligated to) make payment for any Securities to be purchased by any Initial Purchaser
whose funds shall not have been received by the Representative by the First
Closing Date or the Second Closing Date, as the case may be, for the account of
such Initial Purchaser, but any such payment shall not relieve such Initial
Purchaser from any of its obligations under this Agreement.

(e)  Delivery of the Securities.  The Issuers shall deliver, or cause to be
delivered, to the Representative for the accounts of the several Initial
Purchasers the Firm Securities at the First Closing Date, against the
irrevocable release of a wire transfer of immediately available funds for the
amount of the purchase price therefor. 
The Issuers shall also deliver, or cause to be delivered, to the
Representative for the accounts of the several Initial Purchasers, the Optional
Securities the Initial Purchasers have agreed to purchase at the First Closing
Date or the Second Closing Date, as the case may be, against the irrevocable
release of a wire transfer of immediately available funds for the amount of the
purchase price therefor.  The Securities
shall be registered in such names and denominations as the Representative shall
have requested at least two full business days prior to the First Closing Date
(or the Second Closing Date, as the case may be) and shall be made available
for inspection on the business day preceding the First Closing Date (or the
Second Closing Date, as the case may be) at a location in New York City as the
Representative may designate.  Time shall
be of the essence, and delivery at the time and place specified in this
Agreement is a further condition to the obligations of the Initial Purchasers.

Section 3.  Additional Covenants
of the Issuers.

Each of the Issuers, jointly and
severally, further covenants and agrees with the Initial Purchasers as follows:

(a)   Representative’s Review of Proposed
Amendments and Supplements.  During
such period beginning on the date hereof and ending on the date which is the
earlier of nine months after the date hereof or the completion of the resale of
the Securities by the Initial Purchasers (as notified by the Initial Purchasers
to the Company), prior to amending or supplementing the Disclosure Package or
the Final Offering Memorandum, the Company shall furnish to the Representative
for review a copy of each such proposed amendment or supplement, and the
Company shall not print, use or distribute such proposed amendment or
supplement to which the Representative reasonably objects.

 14
 

 

(b)   Amendments and Supplements to the Final
Offering Memorandum and Other Securities Act Matters.  If, at any
time prior to the earlier of nine months after the date hereof or the
completion of the resale of the Securities by the Initial Purchasers (as
notified by the Initial Purchasers to the Company), any event shall occur or
condition exist as a result of which it is necessary to amend or supplement the
Disclosure Package or the Final Offering Memorandum in order that the
Disclosure Package or the Final Offering Memorandum will not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
existing at the time it is delivered to a purchaser, not misleading, or if in
the opinion of the Representative or counsel for the Initial Purchasers it is
otherwise necessary to amend or supplement the Disclosure Package or the Final
Offering Memorandum to comply with law, the Company shall promptly notify the
Initial Purchasers and prepare, subject to Section 3(a) hereof, such amendment
or supplement as may be necessary to correct such untrue statement or omission.

(c)   Copies of Disclosure Package and Offering
Memorandum.  The Company agrees to furnish the
Representative, without charge, until the earlier of nine months after the date
hereof or the completion of the resale of the Securities by the Initial
Purchasers (as notified by the Initial Purchasers to the Company) as many
copies of the materials contained in the Disclosure Package and the Final
Offering Memorandum and any amendments and supplements thereto as the
Representative may reasonably request.

(d)   Blue Sky Compliance.  The Issuers shall cooperate with
the Representative and counsel for the Initial Purchasers, as the Initial
Purchasers may reasonably request from time to time, to qualify or register the
Securities for sale under (or obtain exemptions from the application of) the
state securities or blue sky laws or Canadian provincial securities laws or
other foreign laws of those jurisdictions designated by the Representative and
consented to by the Company, shall comply in all material respects with such
laws and shall continue such qualifications, registrations and exemptions in
effect so long as required for the distribution of the Securities.  None of the Issuers shall be required to
qualify as a foreign corporation or to take any action that would subject it to
general service of process in any such jurisdiction where it is not presently
qualified or where it would be subject to taxation as a foreign corporation.  The Company will advise the Representative
promptly of the suspension of the qualification or registration of (or any such
exemption relating to) the Securities for offering, sale or trading in any
jurisdiction or any initiation or threat of any proceeding for any such purpose,
and in the event of the issuance of any order suspending such qualification,
registration or exemption, the Issuers shall use their best efforts to obtain
the withdrawal thereof at the earliest possible moment.

(e)   Rule 144A Information.  For so long as any of the Securities are “restricted
securities” within the meaning of Rule 144(a)(3) under the Securities Act, the
Company shall provide to any holder of the Securities or to any prospective
purchaser of the Securities designated by any holder, upon request of such
holder or prospective purchaser, information required to be provided by Rule
144A(d)(4) of the Securities Act if, at the time of such request, the Company
is not subject to the reporting requirements under Section 13 or 15(d) of the
Exchange Act.

(f)    Compliance
with Securities Law.  The Company will comply with all applicable securities and other laws,
rules and regulations, including, without limitation, the Sarbanes-

 15
 

 

Oxley Act, and use its best efforts to cause the Company’s directors
and officers, in their capacities as such, to comply with such laws, rules and
regulations, including, without limitation, the provisions of the
Sarbanes-Oxley Act.

(g)   Legends.  Each of the Securities will bear, to the
extent applicable, the legend contained in “Transfer Restrictions” in the
Disclosure Package and the Final Offering Memorandum for the time period and
upon the other terms stated therein.

(h)   Written Information Concerning the Offering.  Without the prior written consent of the
Representative, the Company will not give to any prospective purchaser of the
Securities or any other person not in its employ any written information
concerning the offering of the Securities other than the Disclosure Package,
the Final Offering Memorandum or any other offering materials prepared by or
with the prior consent of the Representative.

(i)    No General Solicitation.  Except following the
effectiveness of the Registration Statement (as defined in the Registration
Rights Agreement), each of the Issuers will not, and will cause its
subsidiaries not to, solicit any offer to buy or offer to sell the Securities
by means of any form of general solicitation or general advertising (as those
terms are used in Regulation D under the Securities Act) or in any manner
involving a public offering within the meaning of Section 4(2) of the
Securities Act.

(j)    No Integration.  Each of the Issuers will not, and will cause
its subsidiaries not to, sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any “security” (as defined in the Securities
Act) in a transaction that could be integrated with the sale of the Securities
in a manner that would require the registration under the Securities Act of the
Securities.

(k)   Rule 144 Tolling.  During the period of two years after the last
Closing Date, each of the Issuers will not, and will not permit any of its “affiliates”
(as defined in Rule 144 under the Securities Act) to, resell any of the
Securities which constitute “restricted securities” under Rule 144 under the
Securities Act that have been reacquired by any of them.

(l)    Use of Proceeds.  The Company shall apply the net proceeds from
the sale of the Securities sold by it in the manner described under the caption
“Use of Proceeds” in the Disclosure Package and the Final Offering Memorandum.

(m)  Transfer Agent.  The Company shall engage and maintain, at its
expense, a registrar and transfer agent for the Common Stock.

(n)   Agreement Not to Offer or Sell Additional Securities.  During the period
commencing on the date hereof and ending on the 90th day following the date of
the Final Offering Memorandum, the Company will not, without the prior written
consent of BAS (which consent may be withheld at the sole discretion of BAS),
directly or indirectly, sell, offer, contract or grant any option to sell,
pledge, transfer or establish an open “put equivalent position” within the
meaning of Rule 16a-1(h) under the Exchange Act, or otherwise dispose of or
transfer, or announce the offering of, or file any registration statement under
the Securities Act in respect of, any shares of Common Stock, options or
warrants to acquire shares of the Common Stock or securities exchangeable or
exercisable for or convertible into shares of Common Stock (other 

 16
 

 

than as
contemplated by this Agreement with respect to the Securities); provided, however,
that (i) the Company may issue and sell the Securities under this Agreement,
(ii) the Company may issue the Conversion Shares upon conversion of the
Securities (and shares of Common Stock upon the conversion of the 2.75%
convertible senior subordinated notes due 2024 and the 3.00% convertible senior
subordinated notes due 2024 and make any required related filings under the
Securities Act with respect to such shares) and (iii) the Company may issue
shares of its Common Stock or options to purchase its Common Stock, or Common
Stock upon exercise of options, pursuant to any stock option, stock bonus or
other stock plan or arrangement described in the Disclosure Package and the
Final Offering Memorandum, but only if the holders of such shares, options, or
shares issued upon exercise of such options, to the extent they are listed on Schedule
D, agree in writing not to sell, offer, dispose of or otherwise transfer
any such shares or options during their lock-up period without the prior
written consent of BAS (which consent may be withheld at the sole discretion of
BAS).

(o)   Investment
Limitation.  The Company shall not invest or otherwise use
the proceeds received by the Company from its sale of the Securities in such a
manner as would require the Company or any of its subsidiaries to register as
an investment company under the Investment Company Act.

(p)   No
Manipulation of Price.  None of the Issuers will take, directly or
indirectly, any action designed to cause or result in, or that has constituted
or might reasonably be expected to constitute, the stabilization or
manipulation of the price of any securities of the Company.

(q)   Inclusion
Conversion Shares.  The Company will use its best efforts to have
the Conversion Shares approved by the NYSE
for inclusion prior to the effectiveness of the Registration Statement.

(r)    Available
Conversion Shares.  The
Company will reserve and keep available at all times, free of pre-emptive
rights, the full number of Conversion Shares.

(s)   Conversion
Price.  Between the date hereof and the First Closing Date or the Second
Closing Date, as the case may be, the Company will not do or authorize any act
or thing that would result in an adjustment of the conversion price.

(t)    Final
Term Sheet.  The Company will prepare a
final term sheet, containing solely a description of the Securities and the
offering thereof, in the form approved by the Representative and attached as Schedule
E hereto (the “Final Term Sheet”).

Section 4.  Payment of Expenses.

The Issuers agree to pay all costs,
fees and expenses incurred in connection with the performance of their
obligations hereunder and in connection with the transactions contemplated
hereby, including without limitation (i) all expenses incident to the
issuance and delivery of the Securities (including all printing and engraving
costs), (ii) all fees and expenses of the Trustee under the Indenture,
(iii) all necessary issue, transfer and other stamp taxes in connection with
the issuance and sale of the Securities to the Initial Purchasers,
(iv) all fees and expenses of the Issuers’ respective counsel, independent
public or certified public accountants and other advisors, (v) all costs and expenses incurred in
connection with the preparation, printing, 

 17
 

 

shipping
and distribution of the Disclosure Package, including the Preliminary Offering
Memorandum, and the Final Offering Memorandum, all amendments and supplements
thereto and this Agreement, (vi) all filing fees, reasonable attorneys’ fees and expenses incurred by the Issuers or the Initial
Purchasers in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the
Securities for offer and sale under the state securities or blue sky laws, and,
if requested by the Representative, preparing and printing a “Blue Sky Survey”
or memorandum, and any supplements thereto, advising the Initial Purchasers of
such qualifications, registrations and exemptions, (vii)  the expenses of
the Issuers and the Initial Purchasers in connection with the marketing and
offering of the Securities, (viii) the fees and expenses associated with
including the Conversion Shares on the New York Stock Exchange and
(ix) all expenses and fees in connection with admitting the Securities for
trading in the PORTAL Market.  Except as
provided in this Section 4, Section 7, Section 8, Section 9,
Section 10 and Section 11 hereof, the Initial Purchasers shall pay their
own expenses, including the fees and disbursements of their counsel.

Section 5.  Conditions of the
Obligations of the Initial Purchasers.

The obligations of the Initial
Purchasers to purchase and pay for the Securities as provided herein on the
First Closing Date and, with respect to the Optional Securities, the Second
Closing Date, shall be subject to the accuracy of the representations and
warranties on the part of the Issuers set forth in Section 1 hereof as of
the date hereof and as of the First Closing Date as though then made and, with
respect to the Optional Securities, as of the Second Closing Date as though
then made, to the timely performance by each of the Issuers of its covenants
and other obligations hereunder, and to each of the following additional
conditions:

(a)   Accountants’ Comfort Letter. 
On the date hereof, the Representative shall have received from Deloitte
& Touche LLP, independent public accountants for the Company, a letter
dated the date hereof addressed to the Initial Purchasers, in form and
substance satisfactory to the Representative, containing statements and
information of the type ordinarily included in accountants’ “comfort letters”
to Initial Purchasers, delivered according to Statement of Auditing Standards
No. 72 (or any successor bulletin), with respect to the audited and unaudited
financial statements and certain financial information contained in the
Preliminary Offering Memorandum and the Final Offering Memorandum (and the
Representative shall have received additional conformed copies of such
accountants’ letter for each of the several Initial Purchasers).

(b)   No Material Adverse Change or Rating Agency Change.  For the period from and after the date of
this Agreement and prior to the First Closing Date and, with respect to the
Optional Securities, the Second Closing Date:

(i)            in the judgment of the
Representative there shall not have occurred any Material Adverse Change; and

(ii)           there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any securities of the Company or any of
its subsidiaries by any “nationally recognized 

 18
 

 

statistical
rating organization” as such term is defined for purposes of
Rule 436(g)(2) under the Securities Act.

(c)   Opinion of Counsel for the Company.  On each of the First Closing Date and the
Second Closing Date the Representative shall have received the favorable
opinion of (i) Gibson, Dunn & Crutcher LLP, counsel for the Company, dated
as of such Closing Date, the form of which is attached as Exhibit A-1
(and the Representative shall have received additional conformed copies of such
counsel’s legal opinion for each of the several Initial Purchasers) and (ii)
Bass, Berry & Sims PLC, special Tennessee counsel for the Company, dated as
of such Closing Date, the form of which is attached as Exhibit A-2 (and
the Representative shall have received additional conformed copies of such
counsel’s legal opinion for each of the several Initial Purchasers).

(d)   Opinion of General Counsel of the Company.  On each of the First Closing Date and the
Second Closing Date the Representative shall have received the favorable
opinion of Keith D. Ross, Esq., as Senior Vice President, General Counsel and
Secretary of the Company, dated as of such Closing Date, the form of which is
attached as Exhibit B (and the Representative shall have received
additional conformed copies of such counsel’s legal opinion for each of the
several Initial Purchasers).

(e)   Opinion of
Counsel for the Initial Purchasers. 
On each of the First Closing Date and the Second Closing Date the
Representative shall have received the favorable opinion of Shearman &
Sterling LLP, counsel for the Initial Purchasers, dated as of such Closing
Date, in form and substance satisfactory to the Representative (and the
Representative shall have received additional conformed copies of such counsel’s
legal opinion for each of the several Initial Purchasers).

(f)    Officers’ Certificate. 
On each of the First Closing Date and the Second Closing Date the
Representative shall have received a written certificate executed by the
Chairman of the Board, Chief Executive Officer or President of the Company and
the Chief Financial Officer or Chief Accounting Officer of the Company, on
behalf of all the Issuers, dated as of such Closing Date, to the effect set
forth in subsection (b)(ii) of this Section 5, and further to the
effect that:

(i)            for the period from and
after the date of this Agreement and prior to such Closing Date, there has not
occurred any Material Adverse Change;

(ii)           the representations,
warranties and covenants of the Issuers set forth in Section 1 of this
Agreement are true and correct with the same force and effect as though
expressly made on and as of such Closing Date; and

(iii)            the Issuers have complied in all
material respects with all the agreements hereunder and satisfied all the
conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date.

(g)   Bring-down Comfort Letter. 
On each of the First Closing Date and the Second Closing Date the
Representative shall have received from Deloitte & Touche LLP, independent
public accountants for the Company, a letter dated such date, in form and
substance satisfactory to the Representative, to the effect that they reaffirm
the statements made in the letter furnished 

 19
 

 

by them pursuant to
subsection (a) of this Section 5, except that the specified date
referred to therein for the carrying out of procedures shall be no more than
three business days prior to the First Closing Date or Second Closing Date, as
the case may be (and the Representative shall have received additional
conformed copies of such accountants’ letter for each of the several Initial
Purchasers).

(h)   Registration Rights Agreement.  The Issuers and the Initial Purchasers shall
have executed and delivered the Registration Rights Agreement (in form and
substance satisfactory to the Initial Purchasers), and the Registration Rights
Agreement shall be in full force and effect.

(i)    Lock-Up Agreement from Directors and Executive Officers of the Company.  On or prior to the date hereof, the Company
shall have furnished to the Representative an agreement in the form of Exhibit C
hereto from each of its directors and executive officers listed on Schedule D,
and such agreement shall be in full force and effect on each of the First
Closing Date and the Second Closing Date.

(j)    PORTAL Designation.  The Securities shall
have been designated PORTAL-eligible securities in accordance with the rules
and regulations of the NASD.

(k)   Additional Documents. 
On or before each of the First Closing Date and the Second Closing Date,
the Representative and counsel for the Initial Purchasers shall have received
such information, documents and opinions as they may reasonably require for the
purposes of enabling them to pass upon the issuance and sale of the Securities
as contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or
agreements, herein contained.

If any condition specified in this
Section 5 is not satisfied when and as required to be satisfied, this Agreement
may be terminated by the Representative by notice to the Company at any time on
or prior to the First Closing Date and, with respect to the Optional
Securities, at any time prior to the Second Closing Date, which termination
shall be without liability on the part of any party to any other party, except
that Section 4, Section 7, Section 8 and Section 9 shall at all
times be effective and shall survive such termination.

Section 6.  Representations,
Warranties and Agreements of Initial Purchasers.

Each of the Initial Purchasers
represents and warrants that it is a “qualified institutional buyer,” as
defined in Rule 144A of the Securities Act, or an accredited investor within
the meaning of Rule 501(a)(1) under the Securities Act.  Each of the Initial Purchasers agrees with
the Issuers that:

(a)   The
Securities and the Conversion Shares have not been and will not be registered
under the Securities Act in connection with the initial offering of the
Securities.

(b)   The Initial
Purchasers are purchasing the Securities pursuant to a private sale exemption
from registration under the Securities Act.

(c)   The
Securities have not been and will not be offered or sold by such Initial
Purchaser or its affiliates acting on its behalf except in accordance with Rule
144A.

 20
 

 

(d)   The Initial
Purchasers will not offer or sell the Securities in the United States by means
of any form of general solicitation or general advertising within the meaning
of Rule 502(c) of Regulation D under the Securities Act, including (i) any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar medium or broadcast over television or radio, or
(ii) any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising in the United States.

(e)   The Initial
Purchasers have not offered or sold, and will not offer or sell, any Securities
except to persons whom they reasonably believe to be “qualified institutional
buyers,” as defined in Rule 144A.

Section 7.  Reimbursement of
Initial Purchasers’ Expenses.

If this Agreement is terminated by
the Representative pursuant to Section 5 or Section 10, or if the
sale to the Initial Purchasers of the Securities on the First Closing Date is
not consummated because of any refusal, inability or failure on the part of any
of the Issuers to perform any agreement herein or to comply with any provision
hereof, the Issuers agree to reimburse the Representative upon demand for all
out-of-pocket expenses that shall have been reasonably incurred by the
Representative and the Initial Purchasers in connection with the proposed
purchase and the offering and sale of the Securities, including but not limited
to fees and disbursements of counsel, printing expenses, travel expenses,
postage, facsimile and telephone charges.

Section 8.  Indemnification.

(a)   Indemnification of the Initial
Purchasers.  The Issuers jointly and severally agree to
indemnify and hold harmless each Initial Purchaser, its officers and employees,
and each person, if any, who controls any Initial Purchaser within the meaning
of the Securities Act and the Exchange Act against any loss, claim, damage,
liability or expense, as incurred, to which such Initial Purchaser or such
controlling person may become subject, under the Securities Act, the Exchange
Act or other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of the Company), insofar as such loss, claim,
damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Offering Memorandum,
the Final Offering Memorandum, the Final Term Sheet, any Issuer Written
Information or any other written information used by or on behalf of the
Company in connection with the offer or sale of the Securities (or any
amendment or supplement to the foregoing), or the omission or alleged omission
therefrom of a material fact, in the light of the circumstances under which
they were made, in each case, necessary to make the statements therein not
misleading; and to reimburse each Initial Purchaser and each such controlling
person for any and all expenses (including the fees and disbursements of
counsel chosen by BAS) as such expenses are reasonably incurred by such Initial
Purchaser or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided,
however, that the foregoing
indemnity agreement shall not apply to any loss, claim, damage, liability or
expense to the extent, but only to the extent, arising out of or based upon any
untrue statement or alleged untrue statement or omission or alleged 

 21
 

 

omission made in reliance upon and
in conformity with written information furnished to the Company by the
Representative expressly for use in the Preliminary Offering Memorandum, the
Final Offering Memorandum, the Final Term Sheet, any Issuer Written Information
or any other written information used by or on behalf of the Company in
connection with the offer or sale of the Securities (or any amendment or
supplement to the foregoing). The indemnity agreement set forth in this
Section 8(a) shall be in addition to any liabilities that the Issuers may
otherwise have.

(b)   Indemnification of the Issuers, their Directors and Officers.  Each Initial Purchaser agrees to indemnify
and hold harmless each of the Issuers, each of its directors, each of its officers
and each person, if any, who controls such Issuer within the meaning of the
Securities Act or the Exchange Act, against any loss, claim, damage, liability
or expense, as incurred, to which such Issuer, or any such director, officer or
controlling person may become subject, under the Securities Act, the Exchange
Act, or other federal or state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of such Initial Purchaser), insofar as such
loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue or alleged untrue
statement of a material fact contained in the Preliminary Offering Memorandum,
the Final Offering Memorandum, the Final Term Sheet, any Issuer Written
Information or any other written information used by or on behalf of the
Company in connection with the offer or sale of the Securities (or any
amendment or supplement to the foregoing), or arises out of or is based upon
the omission or alleged omission to state therein a material fact necessary to
make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in the Preliminary Offering Memorandum,
the Final Offering Memorandum, the Final Term Sheet, any Issuer Written
Information or any other written information used by or on behalf of the Company
in connection with the offer or sale of the Securities (or any amendment or
supplement to the foregoing), in reliance upon and in conformity with written
information furnished to the Company by the Representative expressly for use
therein; and to reimburse such Issuer, or any such director, officer or
controlling person for any legal and other expense reasonably incurred by such
Issuer, or any such director, officer or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss,
claim, damage, liability, expense or action. 
Each of the Issuers hereby acknowledges that the only information that
the Initial Purchasers have furnished to the Company expressly for use in the
Preliminary Offering Memorandum, the Final Offering Memorandum, the Final Term
Sheet, any Issuer Written Information or any other written information used by
or on behalf of the Company in connection with the offer or sale of the
Securities (or any amendment or supplement to the foregoing) are the statements
set forth in Schedule C; and the Initial Purchasers confirm that such
statements are correct.  The indemnity
agreement set forth in this Section 8(b) shall be in addition to any
liabilities that each Initial Purchaser may otherwise have.

(c)   Notifications and Other Indemnification Procedures.  Promptly after receipt by an indemnified
party under this Section 8 of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof may be made against
an indemnifying party under this Section 8, notify the indemnifying party
in writing of the commencement thereof, but the omission so to notify the
indemnifying party (i) will not relieve it from any liability which it may have
to any indemnified party under paragraph (a) or (b) above unless and to the
extent it 

 22
 

 

did not otherwise learn of such
action and such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above.  In case any such action is brought against
any indemnified party and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it shall elect, jointly with all other
indemnifying parties similarly notified, by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided,
however, if the defendants in any
such action include both the indemnified party and the indemnifying party and
the indemnified party shall have reasonably concluded that a conflict may arise
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf
of such indemnified party or parties. 
Upon receipt of notice from the indemnifying party to such indemnified
party of such indemnifying party’s election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party shall
have employed separate counsel in accordance with the proviso to the next
preceding sentence (it being understood, however, that the indemnifying party
shall not be liable for the expenses of more than one separate counsel
(together with local counsel), reasonably approved by the indemnifying party
(BAS in the case of Section 8(b) and Section 9), representing the
indemnified parties who are parties to such action) or (ii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party.

(d)   Settlements.  The
indemnifying party under this Section 8 shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there is a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment.  Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by Section 8(c) hereof, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more
than 30 days after receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement.  No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent (x) includes an unconditional release of such indemnified 

 23
 

 

party from all liability on claims
that are the subject matter of such action, suit or proceeding and (y) does not
include a statement as to or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party.

Section 9.  Contribution.

If the indemnification provided for
in Section 8 is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party in respect of any losses,
claims, damages, liabilities or expenses referred to therein, then each indemnifying
party shall contribute to the aggregate amount paid or payable by such
indemnified party, as incurred, as a result of any losses, claims, damages,
liabilities or expenses referred to therein (i) in such proportion as is
appropriate to reflect the relative benefits received by the Issuers, on the
one hand, and the Initial Purchasers, on the other hand, from the offering of
the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Issuers, on the
one hand, and the Initial Purchasers, on the other hand, in connection with the
statements or omissions or inaccuracies in the representations and warranties
herein which resulted in such losses, claims, damages, liabilities or expenses,
as well as any other relevant equitable considerations.  The relative benefits received by the
Issuers, on the one hand, and the Initial Purchasers, on the other hand, in
connection with the offering of the Securities pursuant to this Agreement shall
be deemed to be in the same respective proportions as the total net proceeds
from the offering of the Securities pursuant to this Agreement (before
deducting expenses) received by the Company, and the total discount received by
the Initial Purchasers bear to the aggregate initial offering price of the
Securities.  The relative fault of the
Issuers, on the one hand, and the Initial Purchasers, on the other hand, shall
be determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact or any such inaccurate or alleged inaccurate
representation or warranty relates to information supplied by the Company, on
the one hand, or the Initial Purchasers, on the other hand, and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

The amount paid or payable by a
party as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include, subject to the limitations set
forth in Section 8(c), any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim.  The provisions set forth in
Section 8(c) with respect to notice of commencement of any action shall
apply if a claim for contribution is to be made under this Section 9; provided, however, that no additional notice shall be
required with respect to any action for which notice has been given under
Section 8(c) for purposes of indemnification.

The Issuers and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 9 were determined by pro rata allocation or by
any other method of allocation which does not take account of the equitable
considerations referred to in this Section 9.

 

 24

 

Notwithstanding the provisions of
this Section 9, no Initial Purchaser shall be required to contribute any
amount in excess of the amount by which the total price at which the Securities
purchased by it and distributed to investors were offered to investors exceeds
the amount of any damages which such Initial Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission.  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.  For purposes of this Section 9, each
officer and employee of an Initial Purchaser and each person, if any, who
controls an Initial Purchaser within the meaning of the Securities Act and the
Exchange Act shall have the same rights to contribution as such Initial
Purchaser, and each director and officer of each of the Issuers, and each
person, if any, who controls such Issuer within the meaning of the Securities
Act and the Exchange Act shall have the same rights to contribution as such
Issuer.

Section 10.  Default of One or
More of the Several Initial Purchasers.

If, on the First Closing Date or
the Second Closing Date, as the case may be, any one or more of the several
Initial Purchasers shall fail or refuse to purchase Securities that it or they
have agreed to purchase hereunder on such date, and the aggregate principal
amount of Securities which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase does not exceed 10% of the
aggregate principal amount of the Securities to be purchased on such date, the
other Initial Purchasers shall be obligated, severally, in the proportions that
the principal amount of Firm Securities set forth opposite their respective
names on Schedule A bears to the aggregate principal amount of Firm
Securities set forth opposite the names of all such non-defaulting Initial
Purchasers, or in such other proportions as may be specified by the
Representative with the consent of the non-defaulting Initial Purchasers, to
purchase the Securities which such defaulting Initial Purchaser or Initial
Purchasers agreed but failed or refused to purchase on such date. If, on the
First Closing Date or the Second Closing Date, as the case may be, any one or
more of the Initial Purchasers shall fail or refuse to purchase Securities and
the aggregate principal amount of Securities with respect to which such default
occurs exceeds 10% of the aggregate principal amount of Securities to be
purchased on such date, and arrangements satisfactory to the Representative and
the Company for the purchase of such Securities are not made within 48 hours
after such default, this Agreement shall terminate without liability of any
party (other than a defaulting Initial Purchaser) to any other party except
that the provisions of Section 4, Section 7, Section 8 and Section 9
shall at all times be effective and shall survive such termination.  In any such case either the Representative or
the Company shall have the right to postpone the First Closing Date or the
Second Closing Date, as the case may be, but in no event for longer than seven
days in order that the required changes, if any, to the Offering Memorandum or
any other documents or arrangements may be effected.

As used in this Agreement, the term
“Initial Purchaser” shall be deemed to include any person substituted for a
defaulting Initial Purchaser under this Section 10.  Any action taken under this Section 10
shall not relieve any defaulting Initial Purchaser from liability in respect of
any default of such Initial Purchaser under this Agreement.

 25
 

 

Section 11.  Termination of this
Agreement.

On or prior to the First Closing
Date this Agreement may be terminated by the Representative by notice given to
the Company if at any time (i) trading or quotation in any of the Company’s
securities shall have been suspended or limited by the Commission or by the
NYSE, or trading in securities generally on either the Nasdaq Stock Market or
the New York Stock Exchange shall have been suspended or limited, or minimum or
maximum prices shall have been generally established on any of such stock
exchanges by the Commission or the NASD; (ii) a general banking moratorium
shall have been declared by any federal, New York, Delaware or California
authority; (iii) there shall have occurred any outbreak or escalation of
national or international hostilities or any crisis or calamity, or any change
in the United States or international financial markets, or any substantial
change or development involving a prospective substantial change in United
States’ or international political, financial or economic conditions, as in the
judgment of the Representative is material and adverse and makes it
impracticable to market the Securities in the manner and on the terms described
in the Disclosure Package and the Final Offering Memorandum or to enforce
contracts for the sale of securities; or (iv) in the judgment of the Representative
there shall have occurred any Material Adverse Change.  Any termination pursuant to this
Section 11 shall be without liability on the part of (a) any Issuer
to any Initial Purchaser, except that the Issuers shall be obligated to
reimburse the expenses of the Representative and the Initial Purchasers
pursuant to Sections 4 and 7 hereof, (b) any Initial Purchaser to any
Issuer, or (c) of any party hereto to any other party except that the
provisions of Section 8 and Section 9 shall at all times be effective
and shall survive such termination.

Section 12.  Representations and
Indemnities to Survive Delivery.

The respective indemnities,
contribution, agreements, representations, warranties and other statements of
each of the Issuers, of its officers and of the several Initial Purchasers set
forth in or made pursuant to this Agreement shall remain operative and in full
force and effect, regardless of (i) any investigation, or statement as to the
result hereof, made by or on behalf of any Initial Purchaser or any Issuer or
any of its or their partners, officers or directors or any controlling person,
as the case may be, (ii) acceptance of the Securities and payment for them
hereunder.  The provisions of Sections 7,
8, 9 and 12 hereof shall survive the termination of this Agreement.

Section 13.  Notices.

All communications hereunder shall
be in writing and shall be mailed, hand delivered or telecopied and confirmed
to the parties hereto as follows:

If to the Representative:

Banc of America Securities LLC

9 West 57th Street 

New York, New York 10019

Facsimile:  212-933-2217

Attention:  Syndicate Department

with a copy to:

Banc of America Securities LLC

9 West 57th Street 

 26
 

 

New York, New York 10019

Facsimile:  212-847-5124

Attention:  Eric Hambleton

If to the Issuers:

Alliant Techsystems Inc. 

5050 Lincoln Drive

Edina, Minnesota 55436

Facsimile:  952-351-3048

Attention:  Keith D. Ross

Any party hereto may change the address for receipt of
communications by giving written notice to the others.

Section 14.  Successors.

This Agreement will inure to the
benefit of and be binding upon the parties hereto and to the benefit of the
employees, officers and directors and controlling persons referred to in
Section 8 and Section 9, and in each case their respective successors,
and no other person will have any right or obligation hereunder.  The term “successors”
shall not include any purchaser of the Securities as such from any of the
Initial Purchasers merely by reason of such purchase.

Section 15.  Partial
Unenforceability.

The invalidity or unenforceability
of any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision
hereof.  If any Section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable.

Section 16.  No Advisory or
Fiduciary Responsibility.

Each
of the Issuers acknowledges and agrees that: (i) the purchase and sale of the
Securities pursuant to this Agreement, including the determination of the
offering price of the Securities and any related discounts and commissions, is
an arm’s-length commercial transaction between the Issuers, on the one hand,
and the several Initial Purchasers, on the other hand, and the Issuers are
capable of evaluating and understanding and understand and accept the terms,
risks and conditions of the transactions contemplated by this Agreement; (ii)
in connection with each transaction contemplated hereby and the process leading
to such transaction each Initial Purchaser is and has been acting solely as a
principal and is not the agent or fiduciary of the Issuers or their respective
affiliates, stockholders, creditors or employees or any other party; (iii) no
Initial Purchaser has assumed or will assume an advisory or fiduciary
responsibility in favor of the Issuers with respect to any of the transactions
contemplated hereby or the process leading thereto (irrespective of whether
such Initial Purchaser has advised or is currently advising the Issuers on
other matters) or any other obligation to the Issuers except the obligations
expressly set forth in this Agreement; (iv) the several Initial Purchasers and
their respective affiliates may be engaged in a broad range of transactions
that involve interests that differ from those of the 

 27
 

 

Issuers and that the several
Initial Purchasers have no obligation to disclose any of such interests by
virtue of any fiduciary or advisory relationship; and (v) the Initial
Purchasers have not provided any legal, accounting, regulatory or tax advice
with respect to the offering contemplated hereby and the Issuers have consulted
their own legal, accounting, regulatory and tax advisors to the extent they
deemed appropriate.

This Agreement supersedes all prior
agreements and understandings (whether written or oral) between the Issuers and
the several Initial Purchasers, or any of them, with respect to the subject
matter hereof.  The Issuers hereby waive
and release, to the fullest extent permitted by law, any claims that the
Issuers may have against the several Initial Purchasers with respect to any
breach or alleged breach of fiduciary duty.

Section 17.  Governing Law
Provisions.

This Agreement shall be governed by
and construed in accordance with the laws of the State of New York.

Section 18.  General Provisions.

This Agreement constitutes the
entire agreement of the parties to this Agreement and supersedes all prior
written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof.  This Agreement may be executed in two or more
counterparts, each one of which shall be an original, with the same effect as
if the signatures thereto and hereto were upon the same instrument.  This Agreement may not be amended or modified
unless in writing by all of the parties hereto. 
The Table of Contents and the Section headings herein are for the
convenience of the parties only and shall not affect the construction or
interpretation of this Agreement.

Each of the parties hereto
acknowledges that it is a sophisticated business person who was adequately
represented by counsel during negotiations regarding the provisions hereof,
including, without limitation, the indemnification provisions of Section 8
and the contribution provisions of Section 9, and is fully informed
regarding said provisions.  Each of the
parties hereto further acknowledges that the provisions of Sections 8
and 9 hereto fairly allocate the risks in light of the ability of the
parties to investigate each of the Issuers, its affairs and its business in
order to assure that adequate disclosure has been made in the Offering
Memorandum (and any amendments and supplements thereto), as required by the
Securities Act and the Exchange Act.

[SIGNATURE
PAGE FOLLOWS]

 

 28

 

If the foregoing is in accordance
with your understanding of our agreement, kindly sign and return to the Company
the enclosed copies hereof, whereupon this instrument, along with all
counterparts hereof, shall become a binding agreement in accordance with its
terms.

	
  

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  ALLIANT TECHSYSTEMS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Keith D. Ross

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Keith D. Ross

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President, General Counsel and Secretary

  
						

 

 

 

	
  

  	
  AMMUNITION ACCESSORIES INC.

  
	
   

  	
  ATK THIOKOL INC.

  
	
   

  	
  ATK COMMERCIAL AMMUNITION COMPANY 

       INC.

  
	
   

  	
  ATK COMMERCIAL AMMUNITION HOLDINGS

       COMPANY INC.

  
	
   

  	
  ATK SPACE SYSTEMS INC.

  
	
   

  	
  FEDERAL CARTRIDGE COMPANY

  
	
   

  	
  MICRO CRAFT INC.

  
	
   

  	
  MISSION RESEARCH CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Keith D. Ross

  
	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  	
  Name: Keith D. Ross

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

The foregoing Purchase Agreement is hereby confirmed and
accepted by the Representative as of the date first above written.

	
  BANC OF AMERICA SECURITIES LLC

  	
   

  	
   

  
	
  BNY CAPITAL MARKETS, INC.

  	
   

  	
   

  
	
  CALYON SECURITIES (USA) INC.

  	
   

  	
   

  
	
  MITSUBISHI UFJ SECURITIES INTERNATIONAL PLC

  	
   

  	
   

  
	
  NATCITY INVESTMENTS, INC.

  	
   

  	
   

  
	
  U.S. BANCORP INVESTMENTS, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: BANC OF
  AMERICA SECURITIES LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Derek Dillon

  	
   

  
	
   

  	
  Name: 

  	
  Derek Dillon

  
	
   

  	
  Title: 

  	
  Managing Director

  
						

 

 

SCHEDULE A

	
  Initial Purchasers

  	
   

  	
  Aggregate

  Principal

  Amount of Firm

  Securities to be

  Purchased

  	
   

  
	
  Banc of America
  Securities LLC

  	
   

  	
  $

  	
  216,000,000

  	
   

  
	
  BNY Capital Markets,
  Inc.

  	
   

  	
  11,250,000

  	
   

  
	
  Calyon Securities (USA)
  Inc.

  	
   

  	
  18,000,000

  	
   

  
	
  Mitsubishi UFJ
  Securities International plc

  	
   

  	
  6,750,000

  	
   

  
	
  NatCity Investments,
  Inc.

  	
   

  	
  6,750,000

  	
   

  
	
  U.S. Bancorp
  Investments, Inc.

  	
   

  	
  11,250,000

  	
   

  
	
  Total

  	
   

  	
  $

  	
  270,000,000

  	
   

  

 

  
  

 

SCHEDULE
B

Subsidiary Guarantors 

	
  Subsidiaries

  	
   

  	
  State of

  Incorporation or

  Organization

  	
   

  
	
  ATK Commercial Ammunition Holdings Company
  Inc.

  	
   

  	
  Delaware

  	
   

  
	
  ATK Commercial Ammunition Company Inc.

  	
   

  	
  Delaware

  	
   

  
	
  Federal Cartridge Company

  	
   

  	
  Minnesota

  	
   

  
	
  Ammunition Accessories Inc.

  	
   

  	
  Delaware

  	
   

  
	
  ATK Thiokol Inc.

  	
   

  	
  Delaware

  	
   

  
	
  Micro Craft Inc.

  	
   

  	
  Tennessee

  	
   

  
	
  Mission Research Corporation

  	
   

  	
  Delaware

  	
   

  
	
  ATK Space Systems Inc.

  	
   

  	
  Delaware

  	
   

  

 

 

SCHEDULE C

The third
paragraph under the heading “Plan of Distribution” of the Offering Memorandum,
concerning the terms of the offering by the Initial Purchasers.

The
first two sentences and sixth sentence of the twelfth paragraph under the
heading “Plan of Distribution” of the Offering Memorandum, concerning the
over-allotment and stabilizing transactions by the Initial Purchasers.

The
thirteenth paragraph under the heading “Plan of Distribution” of the Offering
Memorandum, concerning electronic distribution of the Offering Memorandum by
the Initial Purchasers.

 

SCHEDULE D

Persons subject to “Lock-Up” Agreements pursuant to
Section 5(i):

1.             Daniel
J. Murphy

2.             Dianne
Deering Anton

3.             John
J. Cronin

4.             Mark
W. DeYoung

5.             Ronald
D. Dittemore

6.             Michael
B. Dolby

7.             John
E. Gordon

8.             Blake
E. Larson

9.             Robert
J. McReavy

10.           Mark
L. Mele

11.           Paula
J. Patineau

12.           John
S. Picek

13.           Keith
D. Ross

14.           Brian
V. See

15.           John
L. Shroyer

16.           Thomas
R. Wilson

17.           William
G. Van Dyke

18.           Michael
T. Smith

19.           Gilbert
F. Decker

20.           Frances
D. Cook

21.           Ronald
R. Fogelman

22.           Roman
Martinez IV

23.           Cynthia
L. Lesher

24.           Douglas
L. Maine

 

SCHEDULE E

Form of Final Term Sheet

	
  Issuer:

  	
   

  
	
  Title of securities:

  	
   

  
	
  Issue price:

  	
   

  
	
  Aggregate principal amount
  offered:

  	
   

  
	
  Net proceeds:

  	
   

  
	
  Maturity:

  	
   

  
	
  Annual interest rate:

  	
   

  
	
  Interest payment dates:

  	
   

  
	
  Call dates:

  	
   

  
	
  Put dates:

  	
   

  
	
  Conversion price:

  	
   

  
	
  Conversion rate:

  	
   

  
	
  Use of Proceeds:

  	
   

  
	
  Settlement:

  	
   

  
	
  U.S. federal income tax
  considerations:

  	
   

  
	
  Plan of distribution:

  	
   

  
	
  Adjustment to conversion rate upon a change of control:

  	
   

  
	
  Rating:

  	
   

  
	
  Make-whole table:

  	
   

  
	
  Other material terms:

  	
   

  

 

This communication is intended
for the sole use of the person to whom it is provided by the sender.

These securities have not been
registered under the Securities Act of 1933, as amended, and may only be sold
to qualified institutional buyers pursuant to Rule 144A or pursuant to another
applicable exemption from registration.

The information in this term
sheet supplements the Company’s Preliminary Offering Memorandum, dated                        (the “Preliminary
Offering Memorandum”) and supersedes the information in the Preliminary Offering
Memorandum to the extent inconsistent with the information in the Preliminary
Offering Memorandum.  This term sheet is
qualified in its entirety by reference to the Preliminary Offering Memorandum.  Terms used herein but not defined herein
shall have the respective meanings as set forth in the Preliminary Offering
Memorandum.

A securities rating is not a
recommendation to buy, sell or hold securities and may be subject to revision
or withdrawal at any time.

ANY DISCLAIMERS
OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION
AND SHOULD BE DISREGARDED.  SUCH
DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT OF THIS
COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER EMAIL SYSTEM.

 

EXHIBIT A-1

[FORM
OF OPINION OF COUNSEL FOR THE COMPANY TO BE DELIVERED

PURSUANT TO SECTION 5(c) OF THE PURCHASE AGREEMENT]

References to the Disclosure
Package, the Preliminary Offering Memorandum and the Final Offering Memorandum
in this Exhibit A-1 include any supplements thereto at the First
Closing Date or Second Closing Date, as the case may be.

(i)            The Company is a validly existing corporation in good
standing under the laws of the State of Delaware.

(ii)           Each Subsidiary Guarantor listed on Annex I (an “ATK
Guarantor”) is a validly existing corporation in good standing under the laws
of the jurisdiction set forth opposite its name on Annex I {Delaware}.

(iii)          The Company has the corporate power and authority to execute
and deliver the Purchase Agreement, Registration Rights Agreement, the
Indenture and the Notes and to perform its obligations thereunder.

(iv)          Each ATK Guarantor has the corporate power and authority to
execute and deliver the Purchase Agreement, the Registration Rights Agreement,
the Indenture and the Guarantee and to perform its obligations thereunder.

(v)           The execution, delivery and performance by the Company and
the ATK Guarantors of the Purchase Agreement have been duly authorized by all
necessary corporate action.

(vi)          The execution, delivery and performance by the Company and
the ATK Guarantors of the Registration Rights Agreement have been duly
authorized by all necessary corporate action. 
The Registration Rights Agreement constitutes a valid and binding
agreement of the Company and, to the extent such matters depend on the laws of
the State of Delaware or the State of New York, each of the Subsidiary
Guarantors, enforceable against the Company and each of the Subsidiary
Guarantors in accordance with its terms.

(vii)         The execution, delivery and performance by the Company and
the ATK Guarantors of the Indenture have been duly authorized by all necessary
corporate action.  The Indenture
constitutes a valid and binding agreement of the Company and, to the extent
such matters depend on the laws of the State of Delaware or the State of New
York, each of the Subsidiary Guarantors, enforceable against the Company and
each of the Subsidiary Guarantors in accordance with its terms.

(viii)        The execution, delivery and performance of the Notes by the
Company have been duly authorized by all necessary corporate action.  The Notes are in the form contemplated by the
Indenture, and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for in full by the
Initial Purchasers in accordance with the terms of the Purchase Agreement, will
be legal, valid and binding obligations of the Company enforceable against the
Company in accordance with their terms.

 A-1
 

 

(ix)           The execution, delivery and performance by the ATK Guarantors
of the Guarantees have been duly authorized by all necessary corporate
action.  When the Notes have been
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for in full by the Initial Purchasers in accordance
with the terms of the Purchase Agreement, the Subsidiary Guarantees will be
legal, valid and binding obligations of each of the Subsidiary Guarantors,
enforceable against each of the Subsidiary Guarantors in accordance with its terms.

(x)            (A) The shares of Common Stock initially issuable upon
conversion of the Notes have been duly authorized and reserved and, when issued
upon conversion of the Notes in accordance with the terms of the Notes, will be
validly issued, fully paid and non-assessable and (B) the rights (the “Rights”)
evidenced by such Common Stock to the extent provided in the Rights Agreement,
dated as of May 7, 2002 (the “Rights Agreement”), between the Company
and LaSalle Bank National Association, as rights agent, have been duly
authorized and when and if issued upon conversion of the Notes in accordance
with the terms of the Indenture and the Rights Agreement will have been validly
issued.

(xi)           The issuance of the shares of Common Stock upon conversion of
the Notes is not subject to any preemptive rights under the Restated
Certificate of Incorporation, as amended, of the Company or the General
Corporation Law of the State of Delaware.

(xii)          The execution and delivery by the Company and the Subsidiary
Guarantors of the Purchase Agreement, the Registration Rights Agreement, the
Indenture, and the Guarantees and the issuance by the Company and the
Subsidiary Guarantors of the Notes to the Initial Purchasers do not and will
not violate, and do not and will not require any filing with or approval of any
governmental authority or regulatory body of the State of Delaware, the State
of New York or the United States of America under, any law or regulation of the
State of New York or the United States of America applicable to the Company or
the Subsidiary Guarantors that, in our experience, is generally applicable to
transactions in the nature of those contemplated by the Purchase Agreement or
the Delaware General Corporation Law, the Limited Liability Company Act of the
State of Delaware or the New York Business Corporation Law, except for such
filings or approvals as already have been made or obtained under the Securities
Act of 1933, as amended (the “Securities Act”) and the Trust Indenture
Act of 1939, as amended.  Other than the
last clause of the preceding sentence, such counsel is expressing no opinion in
this paragraph regarding federal or state securities laws.

(xiii)         Insofar as the statements in the Disclosure Package and the
Final Offering Memorandum under the heading “Description of Notes” and “Important
United States Federal Income Tax Considerations,” purport to describe specific
provisions of the documents described therein, such statements present in all
material respects an accurate summary of such provisions.

(xiv)        Neither the Company nor any of the Subsidiary Guarantors is
an “investment company” that is required to be registered under the Investment
Company Act of 1940 (the “Investment Company Act”).  For the purposes of this paragraph (x), the
term “investment company” has the meanings ascribed to such term in the
Investment Company Act.

 A-2
 

 

(xv)         The issuance to and resale by the Initial Purchasers of the
Securities in accordance with the provisions of the Purchase Agreement do not
and will not result in a violation of Regulation T, U or X of the Board of
Governors of the Federal Reserve System, assuming the Initial Purchasers resell
the Securities on the date hereof.

(xvi)        No registration of the Securities or the shares of Common
Stock of the Company and accompanying Rights into which the Securities are
convertible (the “Conversion Shares”) under the Securities Act, or
qualification of the Indenture under the Trust Indenture Act, is required in
connection with the offer and sale of the Securities on the date hereof by the
Company, the offer, resale and delivery of the Securities by the Initial
Purchasers as contemplated by the Purchase Agreement and the conversion of the
Securities into the Conversion Shares, in each case in the manner contemplated
by the Purchase Agreement, the Indenture, the Disclosure Package and the Final
Offering Memorandum, it being understood that we express no opinion as to any
subsequent resale of the Securities or the Conversion Shares.

For purposes of the opinions
regarding the legality, validity, binding nature and enforceability of the
Indenture, the Purchase Agreement, the Registration Rights Agreement and the
Guarantee against any Subsidiary Guarantor (other than the ATK Guarantors)
counsel may assume that (i) such Subsidiary Guarantor is a validly existing
corporation in good standing under the laws of the jurisdiction of its
incorporation, (ii) such Subsidiary Guarantor has the corporate power and
authority to execute and deliver the Indenture, the Purchase Agreement, the
Registration Rights Agreement and the Guarantee and to perform its obligations
thereunder, (iii) the execution, delivery and performance by such Subsidiary
Guarantor of the Indenture, the Purchase Agreement, the Registration Rights
Agreement and the Guarantee have been duly authorized by all necessary
corporate action and (iv) the Indenture, the Purchase Agreement, the
Registration Rights Agreement and the Guarantee have been duly executed and
delivered by such Subsidiary Guarantor.

In the course of the preparation by
the Company of the Disclosure Package and the Final Offering Memorandum, such
counsel shall also state that (A) they have participated in various discussions
and meetings with officers, directors and employees of the Company,
representatives of Deloitte & Touche LLP, the independent public
accountants of the Company, and the Initial Purchasers and counsel for the
Initial Purchasers concerning the information included in or incorporated by
reference into the Disclosure Package, including the Preliminary Offering Memorandum,
and the Final Offering Memorandum, and any supplements or amendments thereto,
the documents incorporated by reference into the Disclosure Package and the
Final Offering Memorandum (the “Exchange Act
Documents”) having previously been prepared and filed by the Company
without such counsel’s participation; (B) the limitations inherent in the role
of outside counsel are such that such counsel cannot and has not independently
verified, and are not passing upon, and do not assume responsibility for, the
accuracy, completeness or fairness of the information contained in the
Disclosure Package and the Final Offering Memorandum except to the extent set
forth in paragraph (viii) above or the Exchange Act Documents; and (C) based
upon such counsel’s examination of the Disclosure Package and the Final
Offering Memorandum and such counsel’s participation, inquiries and
investigations set forth above, however, no facts have come to such counsel’s
attention that cause such counsel to believe that (i) the Disclosure Package,
as of the Applicable Time, contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the 

 A-3
 

 

statements therein, in the light of
the circumstances under which they were made, not misleading or (ii) either the
Final Offering Memorandum or any amendments thereto, as of its date or at the
First Closing Date or the Second Closing Date, as the case may be, contained
any untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no belief as to the financial statements and
other information of an accounting or financial nature included in or
incorporated by reference into the Disclosure Package, the Final Offering
Memorandum or any amendments or supplements thereto).

In rendering such opinion, such counsel may rely as to
matters of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and the Subsidiary Guarantors and public
officials which are furnished to the Initial Purchasers.

 A-4

 

EXHIBIT A-2

[FORM
OF OPINION OF SPECIAL TENNESSEE COUNSEL FOR THE COMPANY

TO BE DELIVERED PURSUANT TO SECTION 5(e) OF THE PURCHASE AGREEMENT]

References to the Disclosure
Package, the Preliminary Offering Memorandum and the Final Offering Memorandum
in this Exhibit A-2 include any supplements thereto at the First
Closing Date or Second Closing Date, as the case may be.

(i)            Micro
Craft Inc. (the “TN Guarantor”) is a validly existing corporation in
good standing under the laws of the State of Tennessee with the requisite
corporate power and authority to own its properties and to conduct its business
as described in the Disclosure Package and the Final Offering Memorandum.

(ii)           The TN
Guarantor has the corporate power and authority to execute and deliver the Purchase
Agreement, the Indenture, the Registration Rights Agreement and the Guarantee
and to perform its obligations thereunder.

(iii)          The
execution, delivery and performance by the TN Guarantor of the Purchase
Agreement have been duly authorized by all necessary corporate action.  The Purchase Agreement has been duly executed
and delivered by the TN Guarantor.

(iv)          The
execution, delivery and performance by the TN Guarantor of the Indenture have
been duly authorized by all necessary corporate action.  The Indenture has been duly executed and
delivered by the TN Guarantor.

(v)           The
execution, delivery and performance by the TN Guarantor of the Registration
Rights Agreement have been duly authorized by all necessary corporate
action.  The Registration Rights Agreement
has been duly executed and delivered by the TN Guarantor.

(vi)          The
execution, delivery and performance by the TN Guarantor of the Guarantee have
been duly authorized by all necessary corporate action.

 A-1

 

EXHIBIT B

[FORM
OF OPINION OF COUNSEL FOR THE COMPANY TO BE DELIVERED PURSUANT TO SECTION 5(d)
OF THE PURCHASE AGREEMENT]

References to the Disclosure
Package, the Preliminary Offering Memorandum and the Final Offering Memorandum
in this Exhibit B include any supplements thereto at the First
Closing Date or Second Closing Date, as the case may be.

(i)            The Company is validly existing as a
corporation in good standing under the laws of the State of Delaware with the
requisite corporate power and authority to own its properties and to conduct
its business as described in the Disclosure Package and the Final Offering
Memorandum.

(ii)           The Company has the corporate power
and authority to execute and deliver the Purchase Agreement, the Indenture, the
Registration Rights Agreement and the Notes and to perform its obligations
thereunder.

(iii)          The Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing would
not, individually or in the aggregate, result in a Material Adverse Change.

(iv)          Federal Cartridge Company (the “MN
Guarantor”) is a validly existing corporation in good standing under the laws
of the State of Minnesota with the requisite corporate power and authority to
own its properties and to conduct its business as described in the Disclosure
Package and the Final Offering Memorandum.

(v)           The MN Guarantor has the corporate
power and authority to execute and deliver the Purchase Agreement, the
Indenture, the Registration Rights Agreement and the Guarantee and to perform
its obligations thereunder.

(vi)          The execution, delivery and
performance by the MN Guarantor of the Purchase Agreement have been duly
authorized by all necessary corporate action. 
The Purchase Agreement has been duly executed and delivered by the MN
Guarantor.

(vii)         The execution, delivery and performance
by the MN Guarantor of the Indenture have been duly authorized by all necessary
corporate action.  The Indenture has been
duly executed and delivered by the MN Guarantor.

(viii)        The execution, delivery and performance
by the MN Guarantor of the Registration Rights Agreement have been duly
authorized by all necessary corporate action. 
The Registration Rights Agreement has been duly executed and delivered
by the MN Guarantor.

(ix)           The execution,
delivery and performance by the MN Guarantor of the Guarantee have been duly
authorized by all necessary corporate action.

 B-1
 

 

(x)            The Company has
an authorized capitalization as set forth in the Disclosure Package and the
Final Offering Memorandum, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued, are fully paid and
nonassessable and all of the issued shares of capital stock or membership
interests of each subsidiary of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable.

(xi)           The
descriptions (A) in the Disclosure Package and the Final Offering Memorandum
under the headings or sub-headings, as the case may be, “Risk Factors — Risks
Related to Our Business — We are subject to procurement and other related laws
and regulations, non-compliance with which may expose us to adverse
consequences” and “— We are subject to environmental rules and regulations,
non-compliance with which may expose our company to adverse consequences”; (B)
incorporated by reference in the Disclosure Package and the Final Offering
Memorandum from (i) the Company’s Annual Report on Form 10-K for its fiscal
year ended March 31, 2006 under Item 3 — Legal Proceedings of Part I thereof,
and Item 7 — Management’s Discussion and Analysis of Financial Condition and
Results of Operations of Part II thereof under the heading “Contingencies” and
(ii) the Company’s Current Report on Form 8-K dated August 23, 2006 under
Exhibit 99.1 — Item 7. Management’s Discussion and Analysis of Financial
Condition and Results of Operations under the heading “Contingencies,”; and (C)
incorporated by reference in the Disclosure Package and the Final Offering
Memorandum from the Company’s Quarterly Report on Form 10-Q for its fiscal
quarter ended July 2, 2006 under Item 2 — Management’s Discussion and Analysis
of Financial Condition and Results of Operations of Part I thereof under the
heading “Contingencies,” to the extent that they constitute summaries of
matters of law or regulation or legal conclusions, have been reviewed by me and
fairly summarize the matters described therein in all material respects.

(xii)          Insofar as the
statements in the Disclosure Package and the Final Offering Memorandum under
the heading “Description of Capital Stock,” purport to describe specific
provisions of the documents described therein, such statements present in all
material respects an accurate summary of such provisions.

(xiii)         To the best of
my knowledge, there are no current or pending legal or governmental actions,
suits or proceedings which would be required to be described in the Disclosure
Package or the Final Offering Memorandum if the Disclosure Package or the Final
Offering Memorandum were a prospectus included in a registration statement on
Form S-1 which are not described as so required.

(xiv)        Each of the
Company and the Subsidiary Guarantors has the requisite corporate or limited
liability company power and authority, as applicable, to execute and deliver
each of the Transaction Documents to which it is a party and to perform its
obligations thereunder.

(xv)         Each of the
Purchase Agreement, the Registration Rights Agreement, the Subsidiary
Guarantee, and the Indenture has been duly authorized, executed and delivered
by each of the Subsidiary Guarantors.

(xvi)        The execution,
delivery and performance by the Company and each of the Subsidiary Guarantors
of each of the Transaction Documents to which it is a party, the issuance, 

 B-2
 

 

sale
and delivery of the Securities and compliance by the Company and each of the
Subsidiary Guarantors with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents will not (i) conflict
with or result in a breach or violation of any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any
of the Subsidiary Guarantors pursuant to, any material indenture, mortgage,
deed of trust or loan agreement or other material agreement or instrument to
which the Company or any of the Subsidiary Guarantors is a party or by which
the Company or any of the Subsidiary Guarantors is bound or to which any of the
property or assets of the Company or any of the Subsidiary Guarantors is subject
(each a “Material Contract”), except as described in the Disclosure
Package and the Final Offering Memorandum under the heading “Risk Factors —
Risks Related to the Notes — Our senior credit facilities limit our ability to
pay cash to holders in certain situations,” or as would not reasonably be
expected to result in a Material Adverse Change; (ii) result in any violation
of the provisions of the charter, Bylaws or other organizational documents of
the Company or any of the Subsidiary Guarantors or any statute or any judgment,
order, decree, rule or regulation of any court or arbitrator or governmental
agency or body having jurisdiction over the Company or any of the Subsidiary
Guarantors or any of their properties or assets except any such conflict,
breach, violation, default, lien, charge or encumbrance that, singularly or in
the aggregate, would not reasonably be expected to result in a Material Adverse
Change  No consent, approval,
authorization or order of, or filing or registration with, any court or
arbitrator or governmental agency or body under any statute, judgment, order,
decree, rule or regulation is required for the execution, delivery and
performance by the Company and each of the Subsidiary Guarantors of each of the
Transaction Documents to which each is a party, the issuance, authentication,
sale and delivery of the Securities and compliance by the Company and each of
the Subsidiary Guarantors with the terms thereof and the consummation of the
transactions contemplated by the Transaction Documents, except for such
consents, approvals, authorizations, filings or registrations (A) which have
been obtained or made prior to the First Closing Date and (B) as may be
required to be obtained or made under applicable state securities laws or obtained
or made under the Securities Act in connection with the registration of the
Securities and the qualification of the Indenture under the Trust Indenture Act
as contemplated in the Registration Rights Agreement.

(xvii)       To the best of
my knowledge and other than as set forth in the Disclosure Package and the
Final Offering Memorandum, the Company and each of the Subsidiary Guarantors
own or possess adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark registrations,
service mark registrations, copyrights and licenses necessary for the conduct
of their respective businesses and the Company and the Subsidiary Guarantors
have no reason to believe that the conduct of their respective businesses will conflict
with, and have not received any notice of any claim of conflict with, any such
rights of others.

(xviii)      There are no
legal or governmental proceedings pending to which the Company or any of the
Subsidiary Guarantors is a party or of which any property or assets of the
Company or any of the Subsidiary Guarantors is the subject which (A) singularly
or in the aggregate, if determined adversely to the Company or any of its
subsidiaries, would reasonably be expected to result in a Material Adverse Change
or (B) questions the validity or enforceability of any of the Transaction
Documents or any action taken or to be taken pursuant thereto; and to the best
of my 

 B-3
 

 

knowledge,
no such proceedings are threatened or contemplated by governmental authorities
or threatened by others.

(xix)         To the best
knowledge of such counsel, neither the Company nor any of the Subsidiary
Guarantors is (A) in violation of its charter or bylaws or other organizational
document, as applicable, (B) in default in any material respect, and no event
has occurred which, with notice or lapse of time or both, would constitute such
a default, in the due performance or observance of any term, covenant or
conditions contained in any Material Contract or (C) in violation in any
material respect of any law, ordinance, governmental rule, regulation or court
decree to which it or its property or assets may be subject, except with
respect to clauses (B) or (C), for such defaults or violations as would not,
individually or in the aggregate, reasonably expect to result in a Material
Adverse Change.

(xx)          (A) The shares of
Common Stock initially issuable upon conversion of the Securities have been
duly authorized and reserved and, when issued upon conversion of the Securities
in accordance with the terms of the Securities, will be validly issued, fully
paid and non-assessable and (B) the rights (the “Rights”) evidenced by
such Common Stock to the extent provided in the Rights Agreement, dated as of
May 7, 2002 (the “Rights Agreement”), between the Company and LaSalle
Bank National Association, as rights agent, have been duly authorized and when
and if issued upon conversion of the Securities in accordance with the terms of
the Indenture and the Rights Agreement will have been validly issued.

(xxi)         To the best of my
knowledge, the issuance of the shares of Common Stock upon conversion of the
Securities is not subject to any preemptive or similar rights of any
securityholder of the Company.

(xxii)        Each document filed
pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”),
and incorporated by reference in the Disclosure Package and the Final Offering
Memorandum, complied when filed in all material respects as to form with the
Exchange Act and the rules and regulations of the Commission thereunder.

 B-4

 

EXHIBIT C

September 6, 2006

Banc of
America Securities LLC

As Representative of the several Initial Purchasers

c/o Banc of America Securities LLC

9 West 57th Street

New York, New York 10019

RE:          Alliant
Techsystems Inc. (the “Company”)

Ladies and Gentlemen:

The undersigned is an owner of record or beneficially
of certain shares of Common Stock of the Company (“Common Stock”) or securities convertible into or exchangeable
or exercisable for Common Stock.  The
Company proposes to carry out a private placement of Convertible Senior
Subordinated Notes (the “Offering”)
for which you will act as the representative of the Initial Purchasers.  The undersigned recognizes that the Offering
will be of benefit to the undersigned and will benefit the Company by, among
other things, raising additional capital for its operations.  The undersigned acknowledges that you are
relying on the representations and agreements of the undersigned contained in
this letter in carrying out the Offering and in entering into purchase arrangements
with the Company and subsidiary guarantors of the Notes with respect to the
Offering.

In consideration of the foregoing, the undersigned
hereby agrees that the undersigned will not, (and will cause any spouse or
immediate family member of the spouse or the undersigned living in the
undersigned’s household not to), without the prior written consent of Banc of
America Securities LLC (which consent may be withheld in its sole discretion),
directly or indirectly, sell, offer, contract or grant any option to sell
(including without limitation any short sale), pledge, transfer, establish an
open “put equivalent position” within the meaning of Rule 16a-1(h) under the
Securities Exchange Act of 1934, as amended, or otherwise dispose of any shares
of Common Stock, any options or warrants to acquire shares of Common Stock, or
securities exchangeable or exercisable for or convertible into shares of Common
Stock (other than pursuant to the exercise or exchange thereof for shares of
common stock) currently or hereafter owned either of record or beneficially (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) by
the undersigned (or such spouse or family member), or publicly announce an
intention to do any of the foregoing, for a period commencing on the date
hereof and continuing through the close of trading on the date 60 days after
the date of the Final Offering Memorandum. 
The undersigned also agrees and consents to the entry of stop transfer
instructions with the Company’s transfer agent and registrar against the
transfer of shares of Common Stock or securities convertible into or
exchangeable or exercisable for Common Stock held by the undersigned except in
compliance with the foregoing restrictions.

 C-1
 

 

With respect to the Offering only, the undersigned
waives any registration rights relating to registration under the Securities
Act of any Common Stock owned either of record or beneficially by the
undersigned, including any rights to receive notice of the Offering.

This agreement is irrevocable and will be binding on the
undersigned and the respective successors, heirs, personal representatives, and
assigns of the undersigned.

	
  

  	
   

  
	
  Printed Name of Holder

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
  Printed Name of Person Signing

  	
   

  
	
  (and indicate capacity of person signing if signing as trustee, or on
  behalf of an entity)

  	
   

  
			

 

 C-2

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