Document:

Exhibit 10.35

 

EMPLOYMENT
AGREEMENT

 

 

THIS
EMPLOYMENT AGREEMENT
(the “Agreement”) is made and entered into effective as of July 22, 2004,
by and between Maxim Pharmaceuticals, Inc., (the “Company”), and Richard A.
Mafrica (“Executive”).  The Company and
Executive are hereinafter collectively referred to as the “Parties,” and
individually referred to as a “Party.”

 

RECITALS

 

A.                                    The Company desires assurance of the
association and services of Executive in order to retain Executive’s
experience, skills, abilities, background and knowledge, and is willing to
engage Executive’s services on the terms and conditions set forth in this
Agreement.

 

B.                                    Executive desires to be in the employ of
the Company, and is willing to accept such employment on the terms and conditions
set forth in this Agreement.

 

AGREEMENT

 

In
consideration of the foregoing recitals and the mutual promises and covenants
herein contained, and for other good and valuable consideration, the Parties,
intending to be legally bound, agree as follows:

 

1.                                       EMPLOYMENT.

 

1.1                                 The Company hereby employs Executive, and Executive
hereby accepts continued employment by the Company, upon the terms and
conditions set forth in this Agreement, effective as of the date first set
forth above (“Commencement Date”).  This
Agreement shall continue in effect until terminated pursuant to Section 5
below.

 

1.2                                 Executive shall be the Vice-President, Commercial
Affairs of the Company (or a position of at least comparable status) and shall
serve in such other capacity or capacities as the Chief Executive Officer
and/or the Company’s Board of Directors (“Board”) may from time to time
prescribe.

 

1.3                                 Executive shall do and perform all services, acts or
things necessary or advisable to manage and conduct the business of the
Company, which are (i) consistent with the Bylaws of the Company and (ii)
subject to the direction and policies from time to time established by the
Board and/or the Chief Executive Officer.

 

1.4                                 Unless the Parties otherwise agree in writing, during
the term of this Agreement, Executive shall perform the services he is required
to perform pursuant to this Agreement at the Company’s offices, located at 8899
University Center Lane, Suite 400 or at any other place at which the Company
maintains an office; provided, however, that the Company may from time to time
require Executive to travel temporarily to other locations in connection with
the Company’s business.

 

 

2.                                       LOYAL AND CONSCIENTIOUS
PERFORMANCE; NONCOMPETITION.

 

2.1                                 During his employment by the Company, Executive shall
devote his full business energies, interest, abilities and productive time to
the proper and efficient performance of his duties under this Agreement.

 

2.2                                 During the term of this Agreement, Executive shall not
engage in competition with the Company, either directly or indirectly, in any
manner or capacity, as adviser, principal, agent, partner, officer, director,
employee, member of any association or otherwise, in any phase of the business
of developing, manufacturing and marketing of products which are in the same
field of use or which otherwise compete with the products or proposed products
of the Company.

 

2.3                                 Ownership by Executive, as a passive investment, of
less than one percent (1%) of the outstanding shares of capital stock of any
corporation with one or more classes of its capital stock listed on a national
securities exchange or publicly traded in the over-the-counter market shall not
constitute a breach of this paragraph.

 

3.                                       COMPENSATION OF EXECUTIVE.

 

3.1                                 While employed by the Company, as compensation for
proper and satisfactory performance of all duties to be performed hereunder,
the Company shall pay Executive an annual base salary of Two Hundred Eighty
Thousand Dollars, $280,000 per year (the “Base Salary”), payable in regular periodic
payments in accordance with Company policy. 
Such salary shall be prorated for any partial year of employment on the
basis of a 365-day fiscal year.  In
addition, Executive will be eligible for an incentive bonus of up to 25% of
base salary, based upon defined milestones.

 

3.2                                 Executive’s compensation may be changed from time to
time by mutual agreement of Executive and the Board.

 

3.3                                 All of Executive’s compensation shall be subject to
customary withholding taxes and any other employment taxes as are commonly
required to be collected or withheld by the Company.

 

3.4                                 Executive shall be entitled to vacation and illness
days consistent with the Company’s standard practice for its employees
generally.

 

3.5                                 Executive shall, at the discretion of the Board, be
entitled to participate in the benefits for which he is eligible under the
terms and conditions of the standard Company benefits which may be in effect
from time to time and provided by the Company.

 

4.                                       EXPENSE REIMBURSEMENT.

 

4.1                                 Executive shall be entitled to receive prompt
reimbursement of all reasonable business and travel expenses incurred by
Executive in connection with the business of the Company.  Such expenses must be properly accounted for
under the policies and procedures established by the Company.

 

5.                                       TERMINATION.

 

5.1                                 The Company may terminate Executive’s employment under
this Agreement “for cause” by delivery of written notice to Executive
specifying the cause or causes relied upon for such termination.  Any notice of termination delivered pursuant
to this Section 5.1 shall effect

 

2

 

termination as of the
date specified in such notice or, in the event no such date is specified, on
the last day of the month in which such notice is delivered or deemed delivered
as provided in Section 9 below.  If
Executive’s employment under this Agreement is terminated by the Company for
cause under this section, Executive shall be entitled to receive only accrued
Base Salary and other accrued benefits required by law, prorated to the date of
termination.  Executive will not be
entitled to severance pay, pay in lieu of notice or any other such
compensation.  Grounds for the Company to
terminate this Agreement “for cause” shall be limited to the occurrence of any
of the following events:

 

5.1.1                        Executive’s material breach of any
provision of this Agreement;

 

5.1.2                        Executive’s engaging or in any manner
participating in any activity which is competitive with or intentionally
injurious to the Company or which violates any provision of Section 7 of
this Agreement;

 

5.1.3                        Executive’s commission of any fraud
against the Company or use or appropriation for his personal use or benefit of
any funds or properties of the Company;

 

5.1.4                        Executive’s conviction of any crime involving
dishonesty or moral turpitude;

 

5.1.5                        Conduct by Executive which in good faith
and reasonable determination of the Board demonstrates gross unfitness to
serve.

 

Any notice of termination given pursuant to this Section 5.1
shall effect termination as of the date specified in such notice or, in the
event no such date is specified, on the last day of the month in which such
notice is delivered or deemed delivered as provided in Section 9 below.

 

5.2                                 The Company may terminate the Executive’s employment
at any time without cause upon delivery of written notice to the
Executive.  Any notice of termination
given pursuant to this Section 5.2 shall effect termination as of the date
specified in such notice or, in the event no such date is specified, on the last
day of the month in which such notice is delivered or deemed delivered as
provided in Section 9 below.  If
such termination shall occur under this Section 5.2, then in lieu of all
other remedies, and upon the Executive’s furnishing to the Company an effective
waiver and release of claims (in a form acceptable to the Company), Executive
shall be entitled to continuation of Base Salary and health benefits for a
period of six (6) months from said date of termination with such Base Salary
continuation to be at the rate set forth in Section 3.1 or, if greater, at
the rate of Executive’s then current salary in effect as of the date of
termination.

 

5.3                                 The parties may mutually agree at any time to
terminate this Agreement upon such terms and conditions as may be agreed upon
in writing.

 

5.4                                 This Agreement shall terminate without notice upon the
date of Executive’s death or the date when Executive becomes “completely
disabled” as that term is defined in Section 6.2.  In the event of termination due to death or complete
disability, Executive or his estate or personal representative, as the case may
be, shall be entitled to receive only accrued Base Salary and other accrued
benefits required by law, prorated to the date of Executive’s death or the date
when Executive becomes completely disabled.

 

5.5                                 Notwithstanding any provision to the contrary herein,
unless otherwise provided herein or unless otherwise provided by law, Executive
may at any time terminate his employment with the Company hereunder.  In such event, the Company shall not be
liable to Executive for the

 

3

 

payment of any amount
other than accrued Base Salary and other accrued benefits required by law,
prorated to the date of termination.  The
effective date of termination of Executive’s employment under this Section 5.5
shall be determined by the Board upon its receipt of notice of such
termination.  Executive will not be
entitled to severance pay, pay in lieu of notice or any other such
compensation.

 

6.                                       DEATH OR DISABILITY DURING TERM
OF EMPLOYMENT.

 

6.1                                 Upon termination of Executive’s employment pursuant to
Section 5.4, Executive or his estate or personal representative, as the
case may be, shall be entitled to receive Executive’s Base Salary and benefits
for a period of one month following the date of death or the date when
Executive becomes completely disabled.

 

6.2                                 The term “completely disabled” as used in this
Agreement shall mean the inability of Executive to perform the essential
functions of his position under this Agreement by reason of any incapacity,
physical or mental, which the Board of the Company, based upon medical advice
or an opinion provided by a licensed physician acceptable to the Board of the
Company and approved by the Executive, which approval shall not be unreasonably
withheld, determines to have incapacitated Executive from satisfactorily
performing any or all essential functions of his position for the Company
during the foreseeable future.  Based
upon such medical advice or opinion, the determination of the Board of the
Company shall be final and binding and the date such determination is made
shall be the date of such complete disability for purposes of this Agreement.

 

7.                                       CONFIDENTIAL INFORMATION;
NONSOLICITATION.

 

7.1                                 Executive recognizes that his employment with the
Company will involve contact with information of substantial value to the
Company, which is not generally known in the trade, and which gives the Company
an advantage over its competitors who do not know or use it, including but not
limited to, techniques, designs, drawings, processes, inventions, developments,
equipment, prototypes, sales and customer information, and business and
financial information relating to the business, products, practices and
techniques of the Company (hereinafter referred to as “Confidential Information”).  Executive will at all times regard and
preserve as confidential such Confidential Information obtained by Executive
from whatever source and will not, either during his employment with the
Company or thereafter, publish or disclose any part of such Confidential
Information in any manner at any time, or use the same except on behalf of the
Company, without the prior written consent of the Company.  As a condition of this Agreement, Executive
will sign and return a copy of the Company’s “Proprietary Information and
Inventions Agreement,” attached as Exhibit A.

 

7.2                                 While employed by the Company and for one (1) year
thereafter, the Executive agrees that in order to protect the Company’s confidential
and proprietary information from unauthorized use, that Executive will not,
either directly or through others, solicit or attempt to solicit any employee,
consultant or independent contractor of the Company to terminate his or her
relationship with the Company in order to become an employee, consultant or
independent contractor to or for any other person or business entity; or the
business of any customer, vendor or distributor of the Company which, at the
time of termination or one (1) year immediately prior thereto, was listed on
Company’s customer, vendor or distributor list.

 

4

 

8.                                       ASSIGNMENT AND BINDING EFFECT.

 

8.1                                 This Agreement shall be binding upon and inure to the
benefit of Executive and Executive’s heirs, executors, personal
representatives, assigns, administrators and legal representatives.  Because of the unique and personal nature of
Executive’s duties under this Agreement, neither this Agreement nor any rights
or obligations under this Agreement shall be assignable by Executive.  This Agreement shall be binding upon and
inure to the benefit of the Company and its successors, assigns and legal
representatives.

 

9.                                       NOTICES.

 

9.1                                 All notices or demands of any kind required or
permitted to be given by the Company or Executive under this Agreement shall be
given in writing and shall be personally delivered (and receipted for) or
mailed by certified mail, return receipt requested, postage prepaid, addressed
as follows:

 

	
  9.1.1

  	
  If to the Company:

  
	
   

  	
   

  
	
   

  	
  Larry Stambaugh

  
	
   

  	
  Maxim Pharmaceuticals, Inc.

  
	
   

  	
  8899 University Center Lane

  
	
   

  	
  Suite 400

  
	
   

  	
  San Diego, CA  92122

  
	
   

  	
   

  
	
  9.1.2

  	
  If to Executive:

  
	
   

  	
   

  
	
   

  	
  Richard A. Mafrica

  
	
   

  	
  Maxim Pharmaceuticals, Inc.

  
	
   

  	
  8899 University Center Lane

  
	
   

  	
  Suite 400

  
	
   

  	
  San Diego, CA  92122

  

 

Any such written notice
shall be deemed received when personally delivered or three (3) days after its
deposit in the United States mail as specified above.  Either Party may change its address for
notices by giving notice to the other Party in the manner specified in this
section.

 

10.                                 CHOICE OF LAW.

 

10.1                           This Agreement is made in San Diego, California.  This Agreement shall be construed and
interpreted in accordance with the laws of the State of California.

 

11.                                 INTEGRATION.

 

11.1                           This Agreement contains the complete, final and
exclusive agreement of the Parties relating to the subject matter of this
Agreement, and supersedes all prior oral and written employment agreements or
arrangements between the Parties.

 

12.                                 AMENDMENT.

 

12.1                           This Agreement cannot be amended or modified except by
a written agreement signed by Executive and the Company.

 

5

 

13.                                 WAIVER.

 

13.1                           No term, covenant or condition of this Agreement or
any breach thereof shall be deemed waived, except with the written consent of
the Party against whom the wavier is claimed, and any waiver or any such term,
covenant, condition or breach shall not be deemed to be a waiver of any
preceding or succeeding breach of the same or any other term, covenant,
condition or breach.

 

14.                                 SEVERABILITY.

 

14.1                           The finding by a court of competent jurisdiction of
the unenforceability, invalidity or illegality of any provision of this
Agreement shall not render any other provision of this Agreement unenforceable,
invalid or illegal.  Such court shall
have the authority to modify or replace the invalid or unenforceable term or
provision with a valid and enforceable term or provision which most accurately
represents the parties’ intention with respect to the invalid or unenforceable
term or provision.

 

15.                                 INTERPRETATION; CONSTRUCTION.

 

15.1                           The headings set forth in this Agreement are for
convenience of reference only and shall not be used in interpreting this
Agreement.  This Agreement has been
drafted by legal counsel representing the Company, but Executive has been
encouraged, and has consulted with, his own independent counsel and tax
advisors with respect to the terms of this Agreement.  The Parties acknowledge that each Party and
its counsel has reviewed and revised, or had an opportunity to review and
revise, this Agreement, and the normal rule of construction to the effect that
any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement.

 

16.                                 REPRESENTATIONS AND WARRANTIES.

 

16.1                           Executive represents and warrants that he is not
restricted or prohibited, contractually or otherwise, from entering into and
performing each of the terms and covenants contained in this Agreement, and
that his execution and performance of this Agreement will not violate or breach
any other agreements between Executive and any other person or entity.

 

17.                                 COUNTERPARTS.

 

17.1                           This Agreement may be executed in two counterparts,
each of which shall be deemed an original, all of which together shall
contribute one and the same instrument.

 

6

 

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

 

	
   

  	
  The Company:

  
	
   

  	
   

  
	
   

  	
  MAXIM
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  /s/ Larry G. Stambaugh

  
	
   

  	
  Larry G.
  Stambaugh

  
	
   

  	
  Chairman of the
  Board, President and Chief

  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Richard A.
  Mafrica

  
	
   

  	
  Richard A.
  Mafrica

  

 

7EXHIBIT
4.3

 

 

 

GRIFFON
CORPORATION

 

 

4.0%
Contingent Convertible Subordinated Notes Due 2023

(second
series)

 

 

INDENTURE

 

 

American
Stock Transfer & Trust Company, as Trustee

 

 

Dated
as of June 22, 2004

 

 

 

 

CROSS-REFERENCE
TABLE*

 

	
  Trust Indenture Act Section

  	
   

  	
  Indenture Section

  
	
   

  	
   

  	
   

  
	
  310(a)(1)

  	
   

  	
  7.10

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (a)(3)

  	
   

  	
  N.A.

  
	
  (a)(4)

  	
   

  	
  N.A.

  
	
  (a)(5)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  7.10

  
	
  (c)

  	
   

  	
  N.A.

  
	
  311(a)

  	
   

  	
  7.11

  
	
  (b)

  	
   

  	
  7.11

  
	
  (c)

  	
   

  	
  N.A.

  
	
  312(a)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  12.03

  
	
  (c)

  	
   

  	
  12.03

  
	
  313(a)

  	
   

  	
  7.06

  
	
  (b)

  	
   

  	
  7.06

  
	
  (b)

  	
   

  	
  7.06

  
	
  (c)

  	
   

  	
  N.A.

  
	
  (d)

  	
   

  	
  N.A.

  
	
  314(a)

  	
   

  	
  4.02, 4.03

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)(1)

  	
   

  	
  11.04

  
	
  (c)(2)

  	
   

  	
  11.04

  
	
  (c)(3)

  	
   

  	
  N.A.

  
	
  (d)

  	
   

  	
  N.A.

  
	
  (e)

  	
   

  	
  N.A.

  
	
  (f)

  	
   

  	
  N.A.

  
	
  315(a)

  	
   

  	
  7.01(b)

  
	
  (b)

  	
   

  	
  7.05

  
	
  (c)

  	
   

  	
  N.A.

  
	
  (d)

  	
   

  	
  7.01(c)

  
	
  (e)

  	
   

  	
  6.11

  
	
  316(a)(1)(A)

  	
   

  	
  6.05

  
	
  (a)(1)(B)

  	
   

  	
  6.04

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  N.A.

  
	
  (c)

  	
   

  	
  N.A.

  
	
  317(a)(1)

  	
   

  	
  N.A.

  
	
  (a)(2)

  	
   

  	
  N.A.

  
	
  (b)

  	
   

  	
  N.A.

  
	
  318(a)

  	
   

  	
  N.A.

  

 

N.A. means not applicable.

 

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

 

i

 

TABLE
OF CONTENTS

 

	
  ARTICLE 1 DEFINITIONS
  AND INCORPORATION BY REFERENCE

  
	
   

  
	
  Section 1.01. Definitions

  
	
  Section 1.02. Other Definitions

  
	
  Section 1.03.
  Incorporation by Reference of Trust Indenture Act

  
	
  Section 1.04. Rules of Construction

  
	
  Section 1.05. Acts of Holders

  
	
   

  
	
  ARTICLE 2 THE
  SECURITIES

  
	
   

  
	
  Section 2.01. Form and Dating

  
	
  Section 2.02.
  Execution and Authentication

  
	
  Section 2.03.
  Registrar, Paying Agent and Conversion Agent

  
	
  Section 2.04.
  Paying Agent to Hold Money in Trust

  
	
  Section 2.05. Holder Lists

  
	
  Section 2.06. Transfer and
  Exchange

  
	
  Section 2.07. Replacement
  Securities

  
	
  Section 2.08.
  Outstanding Securities; Determinations of Holders’ Action

  
	
  Section 2.09. Temporary
  Securities

  
	
  Section 2.10. Cancellation

  
	
  Section 2.11. Persons
  Deemed Owners

  
	
  Section 2.12. Global Securities

  
	
  Section 2.13. CUSIP Numbers

  
	
   

  
	
  ARTICLE 3 REDEMPTION
  AND PURCHASES

  
	
   

  
	
  Section 3.01.
  Right To Redeem; Notices To Trustee

  
	
  Section 3.02.
  Selection of Securities to Be Redeemed

  
	
  Section 3.03. Notice of
  Redemption

  
	
  Section 3.04.
  Effect of Notice of Redemption

  
	
  Section 3.05. Deposit
  of Redemption Price

  
	
  Section 3.06.
  Securities Redeemed in Part

  
	
  Section 3.07. Sinking Fund

  
	
  Section 3.08.
  Purchase of Securities at Option of the Holder

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

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

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

  
	
  Section 3.12.
  Securities Purchased in Part

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

  
	
  Section 3.14. Repayment
  to the Company

  
	
   

  
	
  ARTICLE 4 COVENANTS

  
	
   

  
	
  Section 4.01. Payment of
  Securities

  
	
  Section 4.02. SEC and Other
  Reports

  
	
  Section 4.03. Compliance
  Certificate

  

 

ii

 

	
  Section 4.04. Further
  Instruments and Acts

  
	
  Section 4.05.
  Maintenance of Office or Agency

  
	
  Section 4.06.
  Delivery of Certain Information

  
	
  Section 4.07. Tax
  Treatment of Securities

  
	
  Section 4.08. Liquidated
  Damages

  
	
   

  
	
  ARTICLE 5 SUCCESSOR
  CORPORATION

  
	
   

  
	
  Section 5.01.
  When the Company May Merge or Transfer Assets

  
	
   

  
	
  ARTICLE 6 DEFAULTS AND
  REMEDIES

  
	
   

  
	
  Section 6.01. Events of Default

  
	
  Section 6.02. Acceleration

  
	
  Section 6.03. Other Remedies

  
	
  Section 6.04. Waiver of
  Past Defaults

  
	
  Section 6.05. Control by
  Majority

  
	
  Section 6.06. Limitation on
  Suits

  
	
  Section 6.07.
  Rights of Holders to Receive Payment

  
	
  Section 6.08.
  Collection Suit by Trustee

  
	
  Section 6.09.
  Trustee May File Proofs of Claim

  
	
  Section 6.10. Priorities

  
	
  Section 6.11.
  Suits

  
	
  Section 6.12. Waiver of Stay,
  Extension or Usury Laws

  
	
   

  
	
  ARTICLE 7 TRUSTEE

  
	
   

  
	
  Section 7.01. Duties of Trustee

  
	
  Section 7.02. Rights of Trustee

  
	
  Section 7.03.
  Individual Rights of Trustee

  
	
  Section 7.04. Trustee’s
  Disclaimer

  
	
  Section 7.05. Notice of
  Defaults

  
	
  Section 7.06.
  Reports by Trustee to Holders

  
	
  Section 7.07.
  Compensation and Indemnity

  
	
  Section 7.08. Replacement
  of Trustee

  
	
  Section 7.09.
  Successor Trustee by Merger Etc

  
	
  Section 7.10.
  Eligibility; Disqualification

  
	
  Section 7.11.
  Preferential Collection of Claims Against Company

  
	
   

  
	
  ARTICLE 8 DISCHARGE OF
  INDENTURE

  
	
   

  
	
  Section 8.01.
  Discharge of Liability on Securities

  
	
  Section 8.02.
  Repayment to the Company

  
	
   

  
	
  ARTICLE 9 AMENDMENTS

  
	
   

  
	
  Section 9.01. Without
  Consent of Holders

  
	
  Section 9.02. With Consent
  of Holders

  
	
  Section 9.03.
  Compliance with Trust Indenture Act

  
	
  Section 9.04.
  Revocation and Effect of Consents

  

 

iii

 

	
  Section 9.05.
  Notation on or Exchange of Securities

  
	
  Section 9.06.
  Trustee to Sign Supplemental Indentures

  
	
  Section 9.07.
  Effect of Supplemental Indentures

  
	
   

  
	
  ARTICLE 10 CONVERSION
  OF THE SECURITIES

  
	
   

  
	
  Section 10.01. Conversion
  Privilege

  
	
  Section 10.02. Conversion
  Procedure

  
	
  Section 10.03.
  Adjustments Below Par Value

  
	
  Section 10.04. Taxes on
  Conversion

  
	
  Section 10.05. Company
  to Provide Stock

  
	
  Section 10.06.
  Adjustment of Conversion Price

  
	
  Section 10.07. No Adjustment

  
	
  Section 10.08. Equivalent
  Adjustments

  
	
  Section 10.09.
  Adjustment for Tax Purposes

  
	
  Section 10.10. Notice of
  Adjustment

  
	
  Section 10.11.
  Notice of Certain Transactions

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

  
	
  Section 10.13.
  Trustee’s Disclaimer

  
	
  Section 10.14. Voluntary
  Reduction

  
	
  Section 10.15.
  Simultaneous Adjustments

  
	
   

  
	
  ARTICLE 11
  SUBORDINATION

  
	
   

  
	
  Section 11.01.
  Securities Subordinated to Senior Indebtedness

  
	
  Section 11.02. Payments to
  Holders

  
	
  Section 11.03.
  Subrogation of Securities

  
	
  Section 11.04.
  Authorization to Effect Subordination

  
	
  Section 11.05. Notice to Trustee

  
	
  Section 11.06.
  Trustee’s Relation to Senior Indebtedness

  
	
  Section 11.07. No
  Impairment of Subordination

  
	
  Section 11.08.
  Certain Conversions Deemed Payment

  
	
  Section 11.09.
  Article Applicable to Paying Agents

  
	
  Section 11.10.
  Senior Indebtedness Entitled to Rely

  
	
   

  
	
  ARTICLE 12
  MISCELLANEOUS

  
	
   

  
	
  Section 12.01. Trust
  Indenture Act Controls

  
	
  Section 12.02.
  Notices

  
	
  Section 12.03.
  Communication by Holders with Other Holders

  
	
  Section 12.04.
  Certificate and Opinion as to Conditions Precedent

  
	
  Section 12.05.
  Statements Required in Certificate or Opinion

  
	
  Section 12.06. Separability
  Clause

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

  
	
  Section 12.08. Legal Holidays

  
	
  Section 12.09. Governing Law

  
	
  Section 12.10. No
  Recourse Against Others

  
	
  Section 12.11. Successors

  

 

iv

 

	
  Section 12.12. Multiple
  Originals

  

 

	
  Exhibit A-1

  	
  —

  	
  Form of Global Security

  
	
  Exhibit A-2

  	
  —

  	
  Form of Certificated Security

  
	
  Exhibit B

  	
  —

  	
  Transfer Certificate

  

 

v

 

INDENTURE dated as of
June 22, 2004 between Griffon Corporation, a Delaware corporation (the “Company”),
and American Stock Transfer & Trust Company, a trust company organized
under the laws of the State of New York (the “Trustee”).

 

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

 

ARTICLE
1

 

DEFINITIONS
AND INCORPORATION BY REFERENCE

 

Section 1.01. 
Definitions.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

1

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“SEC” means the
Securities and Exchange Commission.

 

7

 

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

 

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

 

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

 

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

 

“Senior Indebtedness”
means the principal of, premium, if any, interest (including all interest
accruing subsequent to the commencement of any bankruptcy or similar
proceeding, whether or not a claim for post-petition interest is allowed as a claim
in any such proceeding) and rent payable on or in connection with, and all
fees, costs, expenses and other amounts accrued or due on or in connection
with, Indebtedness of the Company, whether secured or unsecured, absolute or
contingent, due or to become due, outstanding on the date of this Indenture or
thereafter created, incurred, assumed, guaranteed or in effect guaranteed by
the Company (including all deferrals, renewals, extensions or refundings of, or
amendments, modifications or supplements to, the foregoing).  Senior
indebtedness does not include (i) any indebtedness or obligation whose terms
expressly provide that such indebtedness or obligation shall not be senior in
right of payment to the Securities or expressly provides that such indebtedness
is equal or pari passu in right of payment with or junior in right of payment
to the Securities; (ii) any indebtedness of the Company to any Subsidiary of
the Company and (iii) the Securities.

 

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

 

8

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

9

 

Section 1.02. 
Other Definitions.

 

	
  Term

  	
   

  	
  Defined in

  Section:

  
	
   

  	
   

  	
   

  
	
  Acceleration Notice

  	
   

  	
  6.02(a)

  
	
  Act

  	
   

  	
  1.05(a)

  
	
  Agent Members

  	
   

  	
  2.12(e)(v)

  
	
  Change in Control
  Purchase Date

  	
   

  	
  3.09(a)

  
	
  Change in Control
  Purchase Price

  	
   

  	
  3.09(a)

  
	
  Company Change in
  Control Notice

  	
   

  	
  3.09(b)

  
	
  Company Notice

  	
   

  	
  3.08(b)

  
	
  Company Notice Date

  	
   

  	
  3.08(b)

  
	
  Conversion Agent

  	
   

  	
  2.03

  
	
  Conversion Date

  	
   

  	
  10.02

  
	
  Conversion Price

  	
   

  	
  10.06

  
	
  Depositary

  	
   

  	
  2.01(b)

  
	
  DTC

  	
   

  	
  2.01(b)

  
	
  Event of Default

  	
   

  	
  6.01

  
	
  Ex-Dividend Date

  	
   

  	
  10.01

  
	
  Expiration Time

  	
   

  	
  10.06(d)

  
	
  Legal Holiday

  	
   

  	
  12.08

  
	
  Legend

  	
   

  	
  2.06(f)

  
	
  Paying Agent

  	
   

  	
  2.03

  
	
  Payment Blockage Period

  	
   

  	
  11.02(a)

  
	
  Purchase Date

  	
   

  	
  3.08(a)

  
	
  Purchase Notice

  	
   

  	
  3.08(a)(i)

  
	
  Purchase Price

  	
   

  	
  3.08(a)

  
	
  Purchased Shares

  	
   

  	
  10.06(d)

  
	
  QIB

  	
   

  	
  2.01(b)

  
	
  Quarter

  	
   

  	
  10.01(a)

  
	
  Registrar

  	
   

  	
  2.03

  
	
  Rule 144A Information

  	
   

  	
  4.06

  

 

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

 

“Commission” means
the SEC.

 

“Indenture Securities”
means the Securities.

 

“Indenture Security
Holder” means a Securityholder.

 

“Indenture to be
Qualified” means this Indenture.

 

10

 

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

 

“Obligor” on the
indenture securities means the Company.

 

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

 

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

 

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

 

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

 

(c)           “or” is not exclusive;

 

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

 

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

 

Section 1.05. 
Acts of Holders.

 

(a)           Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture
to be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly
required, to the Company.  Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
“Act” of Holders signing such instrument or instruments.  Proof of
execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and conclusive in favor
of the Trustee and the Company, if made in the manner provided in this Section.

 

(b)           The fact and date of the execution by
any Person of any such instrument or writing may be proved by the affidavit of
a witness of such execution or by a certificate of a notary public or other
officer authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to such officer the
execution thereof.  Where such execution is by a signer acting in a
capacity other than such signer’s individual capacity, such certificate or
affidavit shall also constitute sufficient proof of such signer’s authority.

 

The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.

 

11

 

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

 

(d)           Any request, demand, authorization,
direction, notice, consent, waiver or other Act of the Holder of any Security
shall bind every future Holder of the same Security and the holder of every
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.

 

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

 

ARTICLE
2

THE SECURITIES

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

13

 

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

 

Securities bearing the
manual or facsimile signatures of individuals who were at the time of the
execution of the Securities the proper Officers of the Company shall bind the
Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities
or did not hold such offices at the date of authentication of such Securities.

 

No Security shall be
entitled to any benefit under this Indenture or be valid or obligatory for any
purpose unless there appears on such Security a certificate of authentication
substantially in the form provided for herein duly executed by the Trustee by
manual signature of an authorized signatory, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder.

 

The Trustee shall
authenticate and deliver Securities for original issue in an aggregate
principal amount of up to $130,000,000 upon a Company Order without any further
action by the Company.  The aggregate principal amount of Securities
outstanding at any time may not exceed the amount set forth in the foregoing
sentence, except as provided in Section 2.07.

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

Section 2.06. 
Transfer and Exchange.

 

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

 

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

 

15

 

surrendered for exchange, the Company shall execute,
and the Trustee shall authenticate and deliver, the Securities that the Holder
making the exchange is entitled to receive.

 

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

 

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

 

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

 

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

 

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

 

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

 

16

 

Section 2.07. 
Replacement Securities.  If
any mutilated Security is surrendered to the Trustee, or the Company and the
Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Security, and there is delivered to the Company and the Trustee
such security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice to the Company or the Trustee that
such Security has been acquired by a protected purchaser (within the meaning of
Section 8-303 of the Uniform Commercial Code), the Company shall execute,
and upon the Company’s written request the Trustee shall authenticate and
deliver, in exchange for any such mutilated Security or in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and principal
amount, bearing a number not contemporaneously outstanding.

 

In case any such
mutilated, destroyed, lost or stolen Security has become or is about to become
due and payable, or is about to be purchased by the Company pursuant to
Article 3 hereof, the Company in its discretion may, instead of issuing a
new Security, pay or purchase such Security, as the case may be.

 

Upon the issuance of any
new Securities under this Section, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith.

 

Every new Security issued
pursuant to this Section in lieu of any mutilated, destroyed, lost or
stolen Security shall constitute an original additional contractual obligation
of the Company, whether or not the destroyed, lost or stolen Security shall be
at any time enforceable by anyone, and shall be entitled to all benefits of
this Indenture equally and proportionately with any and all other Securities
duly issued hereunder.

 

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

 

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

 

17

 

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

 

If the Paying Agent
holds, in accordance with this Indenture, on a Redemption Date, or on the
Business Day following a Purchase Date or a Change in Control Purchase Date, or
on Stated Maturity, money sufficient to pay amounts owed with respect to
Securities payable on that date, then immediately after such Redemption Date,
Purchase Date, Change in Control Purchase Date or Stated Maturity, as the case
may be, such Securities shall cease to be outstanding and interest (including
Contingent Interest and Liquidated Damages, if any), on such Securities shall
cease to accrue; provided that if such Securities are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made.

 

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

 

Section 2.09. 
Temporary Securities.  Pending the
preparation of definitive Securities, the Company may execute, and upon Company
Order the Trustee shall authenticate and deliver, temporary Securities that are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the Officers
executing such Securities may determine, as conclusively evidenced by their
execution of such Securities.

 

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

 

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

 

18

 

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

 

Section 2.11.   Persons Deemed Owners.  Prior to due
presentment of a Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in
whose name such Security is registered as the owner of such Security for the
purpose of receiving payment of the principal amount of the Security or the
payment of any Redemption Price, Purchase Price or Change in Control Purchase
Price in respect thereof, and accrued but unpaid interest (including Contingent
Interest and Liquidated Damages, if any) thereon, for the purpose of conversion
and for all other purposes whatsoever, whether or not such Security be overdue,
and neither the Company, the Trustee nor any agent of the Company or the
Trustee shall be affected by notice to the contrary.

 

Section 2.12. 
Global Securities.

 

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

 

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

 

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

 

19

 

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

 

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

 

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

 

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

 

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

 

20

 

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

 

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

 

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

 

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

 

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

 

21

 

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

 

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

 

ARTICLE
3

REDEMPTION AND PURCHASES

 

Section 3.01. 
Right To Redeem; Notices To Trustee.

 

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

 

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

 

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

 

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

 

22

 

If any Security selected
for partial redemption is converted in part before termination of the
conversion right with respect to the portion of the Security so selected, the
converted portion of such Security shall be deemed (so far as possible) to be
the portion selected for redemption.  Securities that have been converted
during a selection of Securities to be redeemed may be treated by the Trustee
as outstanding for the purpose of such selection.

 

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

 

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

 

(a)           the Redemption Date;

 

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

 

(c)           the current Conversion Price;

 

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

 

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

 

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

 

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

 

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

 

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

 

(j)             the CUSIP number of the Securities.

 

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

 

23

 

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

 

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

 

Section 3.06. 
Securities Redeemed in Part. 
Upon surrender of a Security that is redeemed in part, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder, without
service charge, a new Security or Securities, of any authorized denomination as
requested by such Holder in aggregate principal amount equal to, and in
exchange for, the unredeemed portion of the principal amount of the Security
surrendered.

 

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

 

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

 

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

 

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

 

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

 

24

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

25

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

26

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

27

 

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

 

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

 

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

 

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

 

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

 

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

 

28

 

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

 

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

 

Section 3.12.   Securities Purchased in Part. 
Any Certificated Security that is to be purchased only in part shall be
surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer in
form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder’s attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Security, without service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder in aggregate principal
amount equal to, and in exchange for, the portion of the principal amount of
the Security so surrendered which is not purchased.

 

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

 

29

 

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

 

ARTICLE
4

COVENANTS

 

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

 

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

 

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

 

30

 

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

 

Section 4.03.   Compliance Certificate.  The
Company shall deliver to the Trustee within 120 days after the end of each
fiscal year of the Company (beginning with the fiscal year ending on
September 30, 2004) an Officers’ Certificate, stating whether or not to
the best knowledge of the signers thereof the Company is in default in the
performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and if the Company shall be in default, specifying all such
Defaults and the nature and status thereof of which they may have knowledge.

 

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

 

Section 4.05.   Maintenance of Office or Agency. 
The Company will maintain in the Borough of Manhattan, The City of New York, an
office or agency of the Trustee, Registrar, Paying Agent and Conversion Agent
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer, exchange, purchase, redemption
or conversion and where notices and demands to or upon the Company in respect
of the Securities and this Indenture may be served.  The Trustee’s office
located at American Stock Transfer & Trust Company, 59 Maiden Lane, New
York, New York, 10038 shall initially be such office or agency for all of the
aforesaid purposes.  The Company shall give prompt written notice to the
Trustee of the location, and of any change in the location, of any such office
or agency (other than a change in the location of the office or agency of the
Trustee).  If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the address of the Trustee set forth in Section 12.02.  The
Company may also from time to time designate one or more other offices or
agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York, for such purposes.

 

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

 

31

 

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

 

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

 

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

 

ARTICLE
5

SUCCESSOR CORPORATION

 

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

 

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

 

32

 

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

 

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

 

(iii)          the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that such consolidation, merger, conveyance,
transfer or lease and, if a supplemental indenture is required in connection
with such transaction, such supplemental indenture, comply with this
Article 5 and that all conditions precedent herein provided for relating
to such transaction have been satisfied.

 

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

 

ARTICLE
6

DEFAULTS AND REMEDIES

 

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

 

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

 

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

 

33

 

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

 

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

 

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

 

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

 

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

 

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

 

(i)           
commences a voluntary case or proceeding;

 

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

 

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

 

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

 

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

 

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

 

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

 

34

 

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

 

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

 

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

 

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

 

Section 6.02. 
Acceleration.

 

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

 

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

 

35

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

36

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or similar official in any such judicial proceeding is
hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay the Trustee any amount due it for the
reasonable compensation, expenses,

 

37

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 6.12. 
Waiver of Stay, Extension or Usury Laws. 
The Company covenants (to the fullest extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury or other law wherever enacted, now or at any time hereafter in force,
which would prohibit or forgive the Company from paying all or any portion of
any amounts due in respect of the Securities, as contemplated herein, or which
may affect the covenants or the performance of this Indenture; and the Company
(to the fullest extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.

 

38

 

ARTICLE
7

TRUSTEE

 

Section 7.01. 
Duties of Trustee.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

39

 

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

 

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

 

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

 

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

 

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

 

(b)           whenever in the administration of
this Indenture the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may obtain
and, in the absence of bad faith or negligence on its part, conclusively rely
upon an Officers’ Certificate and/or an Opinion of Counsel;

 

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

 

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

 

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

 

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

 

40

 

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

 

(h)           the Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such further inquiry
or investigation, it shall be entitled, during normal business hours, to examine
the books, records and premises of the Company, personally or by agent or
attorney at the sole cost of the Company and shall incur no liability or
additional liability of any kind by reason of such inquiry or investigation;

 

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

 

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

 

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

 

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

 

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

 

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

 

41

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 7.07. 
Compensation and Indemnity. 
The Company agrees:

 

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

 

42

 

(b)           to reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any provision of this Indenture or any
documents executed in connection herewith (including the reasonable
compensation and the expenses, advances and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence, bad faith or willful misconduct; and

 

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

 

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

 

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

 

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

 

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

 

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

 

(b)           the Trustee is adjudged bankrupt or
insolvent;

 

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

 

43

 

(d)           the Trustee otherwise becomes
incapable of acting.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

44

 

ARTICLE
8

DISCHARGE OF INDENTURE

 

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

 

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

 

ARTICLE
9

AMENDMENTS

 

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

 

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

 

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

 

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

 

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

 

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

 

45

 

Section 9.02. 
With Consent of Holders.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

46

 

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

 

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

 

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

 

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

 

Section 9.05. 
Notation on or Exchange of
Securities.  Securities authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article 9 may,
and shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture.  If
the Company shall so determine, new Securities so modified as to conform, in
the opinion of the Trustee and the Board of Directors of the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for outstanding
Securities.

 

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

 

Section 9.07.   Effect of Supplemental Indentures. 
Upon the execution of any supplemental indenture under this Article 9,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes, and every
Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.

 

47

 

ARTICLE
10

CONVERSION OF THE SECURITIES

 

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

 

(a)           during any calendar quarter (the “Quarter”)
commencing after the Issue Date, if the Closing Price per share of Common Stock
for at least 20 Trading Days in the period of 30 consecutive Trading Days
ending on the last Trading Day of the Quarter immediately preceding such
Quarter (appropriately adjusted to take into account the occurrence, during
such 20 Trading Day period, of any event requiring adjustment of the Conversion
Price under this Indenture) is more than 150% of the Conversion Price on such
30th Trading Day;

 

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

 

(c)           the conversion of such Security
occurs during the five Trading Day period immediately after a period of five
consecutive Trading Days in which the Security Trading Price for each Trading
Day in such period was less than 95% of the product of the Closing Price per
share of Common Stock on such Trading Day multiplied by the number of shares of
Common Stock issuable (assuming satisfaction of conditions to conversion) upon
conversion of $1,000 in principal amount of the Securities; provided, that,
with respect to any such conversion, if the Closing Price of the Common Stock
as of such date of conversion is greater than the Effective Conversion Price
but less than 150% of the Effective Conversion Price, then Holders shall
receive in such conversion (a “Principal Value Conversion”), in lieu of Common
Stock based on the Conversion Rate, a number of Shares of Common Stock equal to
the principal amount of such Holder’s Security plus accrued but unpaid interest
(including Contingent Interest), if any, as of the conversion date, divided by
the Principal Value Conversion Share Price. 
The Principal Value Conversion Share Price shall be equal to the greater
of (i) the Effective Conversion Price on the conversion date and (ii) the
Closing Price of Common Stock on the conversion date. The Company shall deliver
such Common Stock no later than the third Business Day following the
determination of the Principal Value Conversion Share Price. The “Effective
Conversion Price” as of any date of determination shall be equal to $1,000
divided by the Conversion Rate as of the eighth Trading Day prior to the date
of determination”;

 

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

 

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

 

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

 

48

 

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

 

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

 

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

 

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

 

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

 

49

 

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

 

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

 

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

 

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

 

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

 

50

 

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

 

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

 

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

 

No fractional shares of
Common Stock shall be issued upon conversion of Securities.  If more than
one Security shall be surrendered for conversion at one time by the same
holder, the number of full shares which shall be issuable upon conversion shall
be computed on the basis of the aggregate principal amount of the Securities
(or specified portions thereof to the extent permitted hereby) so
surrendered.  If any fractional share of Common Stock would be issuable
upon the conversion of any Security or Securities, the Company shall make a
payment in lieu thereof in cash based on the current market price of a share of
Common Stock.  For these purposes, the current market price of a share of
Common Stock shall be the Closing Price per share of Common Stock on the first
Business Day immediately preceding the day on which the Securities (or
specified portions thereof) are deemed to have been converted.

 

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

 

51

 

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

 

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

 

Section 10.05. 
Company to Provide Stock.

 

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

 

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

 

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

 

52

 

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

 

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

 

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

 

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

 

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

 

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

 

53

 

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

 

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

 

54

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

55

 

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

 

(f)              Reserved.

 

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

 

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

 

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

 

56

 

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

 

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

 

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

 

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

 

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

 

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

 

57

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 10.11.
 Notice of Certain Transactions. 
In case:

 

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

 

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

 

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

 

58

 

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

 

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

 

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

 

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

 

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

 

59

 

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

 

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

 

Section 10.13. 
Trustee’s Disclaimer.

 

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

 

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

 

Section 10.14. 
Voluntary Reduction.

 

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

 

60

 

Section 10.15.
 Simultaneous Adjustments.

 

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

 

ARTICLE 11

SUBORDINATION

 

Section 11.01. 
Securities Subordinated to
Senior Indebtedness.

 

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

 

Section 11.02. 
Payments to Holders.

 

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

 

(i)            a default in the Obligations due on any Designated
Senior Indebtedness occurs and is continuing (or, in the case of Designated
Senior Indebtedness for which there is a period of grace, in the event of such
a default that continues beyond the period of grace, if any, specified in the
instrument or lease evidencing such Designated Senior Indebtedness); or

 

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

 

61

 

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

 

Subject to the provisions
of Section 11.05, if the Trustee receives any Payment Blockage Notice
pursuant to clause (ii) above, no subsequent Payment Blockage Notice shall
be effective for purposes of this Section unless and until at least 365
consecutive days shall have elapsed since the effectiveness of the immediately
prior Payment Blockage Notice and all scheduled payments on the Securities that
have come due have been paid in full in cash.  No nonpayment default that
existed or was continuing on the date of delivery of any Payment Blockage
Notice to the Trustee (unless such default was waived, cured or otherwise
ceased to exist for a period of at least 60 consecutive days prior to the date
of such subsequent Payment Blockage Notice and thereafter subsequently
reoccurred) shall be, or be made, the basis for a subsequent Payment Blockage
Notice.

 

The Company may and shall
resume payments on and distributions in respect of the Securities:

 

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

 

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

 

Upon any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any dissolution or
winding-up or liquidation or reorganization of the Company (whether voluntary
or involuntary) or in bankruptcy, insolvency, receivership or similar proceedings,
all amounts due or to become due upon all Senior Indebtedness shall first be
paid in full in cash, or other payments satisfactory to the holders of Senior
Indebtedness before any payment is made on account of the principal of,
premium, if any, or interest (including Contingent Interest and Liquidated
Damages, if any) on the Securities (except payments made pursuant to
Article 8 from monies deposited with the Trustee pursuant thereto prior to
commencement of proceedings for such dissolution, winding-up, liquidation or
reorganization); and upon any such dissolution or winding-up or liquidation or
reorganization of the Company or bankruptcy, insolvency, receivership or other
proceeding, any payment by the Company, or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to which the
Holders of the Securities or the Trustee would be entitled, except for the
provision of this Article 11, shall (except as aforesaid) be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, or by the Holders of the
Securities or by the Trustee under this Indenture if received by them or it,
directly to the holders of Senior Indebtedness (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders, or
as otherwise required by law or a court order) or their Representative or

 

62

 

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

 

For purposes of this
Article 11, the words “cash, property or securities” shall not be deemed
to include shares of stock of the Company as reorganized or readjusted, or
securities of the Company or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is subordinated at least
to the extent provided in this Article 11 with respect to the Securities
to the payment of all Senior Indebtedness which may at the time be outstanding;
provided  that (i) the Senior Indebtedness is assumed by the
new corporation, if any, resulting from any reorganization or readjustment, and
(ii) the rights of the holders of Senior Indebtedness (other than leases
which are not assumed by the Company or the new corporation, as the case may
be) are not, without the consent of such holders, altered by such
reorganization or readjustment.  The consolidation of the Company with, or
the merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance, transfer or lease of its
property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided for in Article 5 shall
not be deemed a dissolution, winding-up, liquidation or reorganization for the
purposes of this Section 11.02 if such other corporation shall, as a part
of such consolidation, merger, conveyance, transfer or lease, comply with the
conditions stated in Article 5.

 

In the event of the
acceleration of the Securities because of an Event of Default, no payment or
distribution shall be made to the Trustee or any Holder of Securities in
respect of the principal of, premium, if any, or interest (including Contingent
Interest and Liquidated Damages, if any) on the Securities by the Company
(including, but not limited to, the Change in Control Purchase Price with
respect to the Securities subject to purchase in accordance with Article 3
as provided in this Indenture), except payments and distributions made by the
Trustee as permitted by Section 11.05, until all Senior Indebtedness has
been paid in full in cash or other payment satisfactory to the holders of
Senior Indebtedness or such acceleration is rescinded in accordance with the
terms of this Indenture.  If payment of the Securities is accelerated
because of an Event of Default, the Company shall promptly notify holders of
Senior Indebtedness of such acceleration.

 

In the event that,
notwithstanding the foregoing provisions, any payment or distribution of assets
of the Company of any kind or character, whether in cash, property or
securities (including, without limitation, by way of setoff or otherwise),
prohibited by the foregoing, shall be received by the Trustee or the Holders of
the Securities before all Senior Indebtedness is paid in full, in cash or other
payment satisfactory to the holders of Senior Indebtedness, or provision is
made for such payment thereof in accordance with its terms in cash or other
payment satisfactory to the holders of Senior Indebtedness, such payment or
distribution shall be held in trust for the benefit of and shall be paid over
or delivered to the holders of Senior Indebtedness or their Representative or
Representatives, as their respective interests may appear, as calculated by the
Company, for application to the payment of all Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full, in cash
or other

 

63

 

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

 

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

 

Section 11.03.   Subrogation of Securities.

 

Subject to the payment in
full, in cash or other payment satisfactory to the holders of Senior
Indebtedness, of all Senior Indebtedness, the rights of the Holders of the
Securities shall be subrogated to the extent of the payments or distributions
made to the holders of such Senior Indebtedness pursuant to the provisions of
this Article 11 (equally and ratably with the holders of all Indebtedness
of the Company which by its express terms is subordinated to other indebtedness
of the Company to substantially the same extent as the Securities are
subordinated and is entitled to like rights of subrogation) to the rights of the
holders of Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company applicable to the Senior Indebtedness
until the Obligations on the Securities shall be paid in full in cash or other
payment satisfactory to the holders of the Securities; and, for the purposes of
such subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled except for the provisions of this
Article 11, and no payment over pursuant to the provisions of this
Article 11, to or for the benefit of the holders of Senior Indebtedness by
Holders of the Securities or the Trustee, shall, as between the Company, its
creditors other than holders of Senior Indebtedness, and the Holders of the
Securities, be deemed to be a payment by the Company to or on account of the
Senior Indebtedness; and no payments or distributions of cash, property or
securities to or for the benefit of the Holders of the Securities pursuant to
the subrogation provisions of this Article 11, which would otherwise have
been paid to the holders of Senior Indebtedness shall, as between the Company
and its creditors other than Holders of the Securities, be deemed to be a
payment by the Company to, or for, the account of the Securities.  It is
understood that the provisions of this Article 11 are and are intended
solely for the purposes of defining the relative rights of the Holders of the
Securities, on the one hand, and the holders of the Senior Indebtedness, on the
other hand.

 

Nothing contained in this
Article 11 or elsewhere in this Indenture or in the Securities is intended
to or shall impair, as among the Company, its creditors other than the holders of
Senior Indebtedness, and the Holders of the Securities, the obligation of the
Company, which is absolute and unconditional, to pay to the Holders of the
Securities the Obligations on the Securities as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the Holders of the Securities and creditors of
the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article 11
of the holders of Senior Indebtedness in respect of cash, property or securities
of the Company received upon the exercise of any such remedy.

 

64

 

Upon any payment or
distribution of assets of the Company referred to in this Article 11, the
Trustee, and the Holders of the Securities shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
bankruptcy, dissolution, winding-up, liquidation or reorganization proceedings
are pending, or a certificate of the receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders of the Securities, for the purpose
of ascertaining the Persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon and all other facts pertinent thereto or to
this Article 11.

 

Section 11.04. 
Authorization to Effect
Subordination.

 

Each Holder of a Security
by the Holder’s acceptance thereof authorizes and directs the Trustee on the
Holder’s behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article 11 and appoints
the Trustee to act as the Holder’s attorney-in-fact for any and all such
purposes.  If the Trustee does not file a proper proof of claim or proof
of debt in the form required in any proceeding referred to in
Section 11.03 hereof at least 30 days before the expiration of the time to
file such claim, the holders of any Senior Indebtedness or their representatives
are hereby authorized to file an appropriate claim for and on behalf of the
Holders of the Securities.

 

Section 11.05. 
Notice to Trustee.

 

The Company shall give
prompt written notice in the form of an Officers’ Certificate to a Responsible Officer
of the Trustee and to any Paying Agent of any fact known to the Company which
would prohibit the making of any payment of monies to or by the Trustee or any
Paying Agent in respect of the Securities pursuant to the provisions of this
Article 11.  Notwithstanding the provisions of this Article 11
or any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment of monies to or by the Trustee in respect of the Securities pursuant to
the provisions of this Article 11, unless and until a Responsible Officer
of the Trustee shall have received written notice thereof at the Corporate
Trust Office from the Company (in the form of an Officers’ Certificate) or a
Representative or a Holder or Holders of Senior Indebtedness or from any
trustee thereof; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 7.01, shall be entitled in
all respects to assume that no such facts exist; provided  that if
on a date not less than three Business Days prior to the date upon which by the
terms hereof any such monies may become payable for any purpose (including,
without limitation, the payment of the principal of, or premium, if any, or
interest (including Contingent Interest and Liquidated Damages, if any) on any
Security) the Trustee shall not have received, with respect to such monies, the
notice provided for in this Section 11.05, then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such monies and to apply the same to the purpose for which
they were received, and shall not be affected by any notice to the contrary
which may be received by it on or after such prior date.  Notwithstanding
anything in this Article 11 to the contrary, nothing shall prevent any
payment by the Trustee to the Holders of monies deposited with it pursuant to
Article 8, and any such payment shall not be subject to the provisions of
Article 11.

 

65

 

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

 

Section 11.06. 
Trustee’s Relation to Senior
Indebtedness.

 

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

 

With respect to the
holders of Senior Indebtedness, the Trustee undertakes to perform or to observe
only such of its covenants and obligations as are specifically set forth in
this Article 11, and no implied covenants or obligations with respect to
the holders of Senior Indebtedness shall be read into this Indenture against
the Trustee.  The Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness and, the Trustee shall not be liable to any
holder of Senior Indebtedness or any Representative if it shall pay over or
deliver to Holders of Securities, the Company or any other Person money or
assets to which any holder of Senior Indebtedness or such Representative shall
be entitled by virtue of this Article 11 or otherwise.

 

Section 11.07.
 No Impairment of Subordination.

 

No right of any present
or future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with.

 

Section 11.08. 
Certain Conversions Deemed Payment.

 

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

 

66

 

(except in satisfaction of fractional shares pursuant
to Section 10.02), property or securities (other than junior securities)
upon conversion of a Security shall be deemed to constitute payment on account
of the principal of such Security.  For the purposes of this
Section 11.08, the term “junior securities” means (a) shares of any
stock of any class of the Company, or (b) securities of the Company which
are subordinated in right of payment to all Senior Indebtedness which may be
outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article.  Nothing contained in
this Article 11 or elsewhere in this Indenture or in the Securities is
intended to or shall impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders, the right, which is absolute
and unconditional, of the Holder of any Security to convert such Security in
accordance with Article 10.

 

Section 11.09. 
Article Applicable to Paying
Agents.

 

If at any time any Paying
Agent other than the Trustee shall have been appointed by the Company and be
then acting hereunder, the term “Trustee” as used in this Article shall
(unless the context otherwise requires) be construed as extending to and
including such Paying Agent within its meaning as fully for all intents and
purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee; provided, however, that the first
paragraph of Section 11.05 shall not apply to the Company or any Affiliate
of the Company if it or such Affiliate acts as Paying Agent.

 

Section 11.10.
 Senior Indebtedness Entitled
to Rely.

 

The holders of Senior
Indebtedness (including, without limitation, Designated Senior Indebtedness)
shall have the right to rely upon this Article 11, and no amendment or
modification of the provisions contained herein shall diminish the rights of
such holders unless such holders shall have agreed in writing thereto.

 

ARTICLE 12

MISCELLANEOUS

 

Section 12.01. 
Trust Indenture Act Controls.

 

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

 

Section 12.02. 
Notices.

 

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

 

67

 

if to the Company, to:

 

Griffon Corporation

100 Jericho Quadrangle

Jericho, New York  11753

Attention: Secretary

Facsimile No.:  (516) 822-4824

 

if to the Trustee, to:

 

American Stock Transfer & Trust Company

59 Maiden Lane

New York, NY 10038

Attn: Corporate Trust Department

Facsimile No.: (718) 331-1852

 

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

 

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

 

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

 

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

 

Section 12.03.   Communication by Holders with Other
Holders.

 

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

 

Section 12.04. 
Certificate and Opinion as to
Conditions Precedent.

 

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

 

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

 

68

 

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

 

In any case where several
matters are required to be certified by, or covered by an opinion of, any
specified Person, it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be so certified or
covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such eligible and
qualified Persons as to other matters, and any such Person may certify or give
an opinion as to such matters in one or several documents.

 

Any certificate or
opinion of an officer of the Company may be based, insofar as it relates to
legal matters, upon a certificate or opinion of, or representations by,
counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his or her certificate or opinion is based are
erroneous.  Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating the
information on which counsel is relying unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.

 

Where any Person is
required to make, give or execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments under this Indenture,
they may, but need not, be consolidated and form one instrument.

 

Section 12.05. 
Statements Required in
Certificate or Opinion.

 

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

 

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

 

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

 

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

 

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

 

69

 

Section 12.06.   Separability Clause.

 

In case any provision in
this Indenture or in the Securities shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.

 

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

 

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

 

Section 12.08. 
Legal Holidays.

 

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

 

Section 12.09.
 Governing Law.

 

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

 

Section 12.10.   No Recourse Against Others.

 

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

 

Section 12.11. 
Successors.

 

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

 

Section 12.12. 
Multiple Originals.

 

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

 

70

 

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

 

 

	
   

  	
  GRIFFON CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Edward I. Kramer

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Edward I. Kramer

  
	
   

  	
   

  	
  Title:

  	
  Vice President,
  Administration and

  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  AMERICAN STOCK TRANSFER
  & TRUST

  COMPANY, as Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Herbert J. Lemmer

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Herbert J. Lemmer

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

71

 

EXHIBIT A-1

 

{FORM OF FACE OF
GLOBAL SECURITY}

 

[INCLUDE THE FOLLOWING
LEGEND ON RESTRICTED SECURITIES:

 

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

 

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

 

THIS SECURITY WAS ISSUED
WITH ORIGINAL ISSUE DISCOUNT FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES.  FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE
CODE, THE ISSUE PRICE OF EACH SECURITY IS $1,000 PER $1,000 OF PRINCIPAL
AMOUNT, THE ISSUE DATE IS JUNE 21, 2004 AND THE COMPARABLE YIELD IS 8.50% PER
ANNUM.  HOLDERS OF THIS SECURITY MAY OBTAIN INFORMATION REGARDING THE
AMOUNT OF ORIGINAL ISSUE DISCOUNT, YIELD TO MATURITY AND THE PROJECTED PAYMENT
SCHEDULE FOR THIS SECURITY BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION
TO:  GRIFFON CORPORATION, 100 JERICHO QUADRANGLE, JERICHO, NEW YORK 
11753, ATTN.: SECRETARY, SUCH INFORMATION TO BE MADE AVAILABLE, BEGINNING NO
LATER THAN 10 DAYS AFTER THE ISSUE DATE, PROMPTLY UPON REQUEST.

 

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

 

A-1-1

 

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

 

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

 

A-1-2

 

GRIFFON
CORPORATION

 

4.0% Contingent
Convertible Subordinated Notes Due 2023

 

	
  No.:

  	
   

  	
  CUSIP:

  
	
   

  	
   

  	
   

  
	
  Issue Date:

  	
   

  	
  Principal Amount:

  

 

GRIFFON CORPORATION, a
Delaware corporation, promises to pay to Cede & Co. or registered assigns,
the principal amount as set forth on Schedule I hereto, on July 18,
2023, subject to the further provisions of this Security set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.  This Security is convertible as
specified on the other side of this Security.

 

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

 

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

 

 

	
  Dated:

  	
  GRIFFON CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

A-1-3

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  
	
   

  	
   

  
	
  Dated:

  

 

A-1-4

 

{FORM OF REVERSE
SIDE OF NOTE}

GRIFFON CORPORATION

4.0% Contingent Convertible Subordinated Notes Due 2023

 

(1)           Interest.

 

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

 

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

 

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

 

(2)           Method of Payment.

 

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

 

A-1-5

 

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

 

(3)           Paying Agent, Conversion Agent and
Registrar.

 

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

 

(4)             Indenture.

 

The Company issued the
Securities under an Indenture dated as of June 21, 2004 (the “Indenture”),
between the Company and the Trustee.  The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939, as in effect from time to time (the “TIA”). 
Capitalized terms used herein and not defined herein have the meanings ascribed
thereto in the Indenture.  The Securities are subject to all such terms,
and Holders are referred to the Indenture and the TIA for a statement of those
terms.

 

The Securities are
general unsecured obligations of the Company limited to up to $130,000,000
aggregate principal amount.  The Indenture does not limit other
indebtedness of the Company, secured or unsecured.

 

(5)           Redemption at the Option of the
Company.

 

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

 

A-1-6

 

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

 

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

 

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

 

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

 

(7)           Notice of Redemption.

 

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

 

A-1-7

 

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

 

(8)           Conversion.

 

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

 

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

 

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

 

A-1-8

 

(9)           Denominations; Transfer; Exchange.

 

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

 

(10)         Persons Deemed Owners.

 

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

 

(11)         Unclaimed Money or Securities.

 

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

 

(12)         Amendment; Waiver.

 

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

 

A-1-9

 

(13)         Defaults and Remedies.

 

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

 

(14)         Trustee Dealings with the Company.

 

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

 

(15)         No Recourse Against Others.

 

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

 

(16)         Ranking.

 

The Securities shall be
direct, unsecured subordinated obligations of the Company shall rank pari passu
with the Company's 4% Contingent Convertible Subordinated Notes due 2023 and
shall and be subject to the provisions regarding subordination contained in
Article 11 of the Indenture.  The Securities are not guaranteed.

 

(17)         Subordination.

 

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

 

A-1-10

 

(18)         Authentication.

 

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

 

(19)         Abbreviations.

 

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

 

(20)         Governing Law.

 

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

 

(21)         CUSIP Numbers.

 

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

 

A-1-11

 

	
  ASSIGNMENT FORM

  	
   

  	
  CONVERSION
  NOTICE

  
	
   

  	
   

  	
   

  
	
  To assign this
  Security, fill in the form below

  	
   

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

  
	
   

  	
   

  	
   

  
	
  I or we assign and
  transfer this Security to

  	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

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

  	
   

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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
  Your Signature:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature Guaranteed

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Participant in a
  Recognized Signature 

  Guarantee Medallion Program

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
								

 

A-1-12

 

FORM OF PURCHASE
NOTICE

 

To:  Griffon Corporation

 

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

 

	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature(s)

  
	
   

  	
   

  
	
  Fill in for
  registration of Securities

  not purchased if to be issued other

  than to and in the name of registered holder:

  
	
   

  
	
   

  
	
  (Name)

  
	
   

  
	
   

  
	
  (Street Address)

  
	
   

  
	
   

  
	
  (City, state and zip
  code)

  
	
   

  
	
  Please print name and
  address

  
	
   

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

  
	
   

  
	
  date of requested
  purchase:  July 18, 20   

  
	
   

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

  
	
   

  	
   

  	
   

  	
   

  

 

A-1-13

 

FORM OF OPTION TO
ELECT REPURCHASE UPON A CHANGE IN CONTROL

 

To:  Griffon Corporation

 

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

 

	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature(s)

  
	
   

  	
   

  
	
   

  	
   

  
	
  Fill in for
  registration of Securities not

  repurchased if to be issued other than

  to and in the name of registered holder:

  
	
   

  
	
   

  	
   

  
	
  (Name)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Street Address)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (City, state and zip
  code)

  	
   

  
	
   

  	
   

  
	
  Please print name and address

  	
   

  
	
   

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

  

 

A-1-14

 

SCHEDULE I

 

GRIFFON
CORPORATION

4.0% Contingent Convertible Subordinated Notes Due 2023

 

	
  Date

  	
   

  	
  Principal Amount

  	
   

  	
  Notation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-1-15

 

EXHIBIT A-2

 

{Form of
Certificated Security}

 

[INCLUDE THE FOLLOWING
LEGEND ON RESTRICTED SECURITIES:

 

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

 

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

 

THIS SECURITY WAS ISSUED
WITH ORIGINAL ISSUE DISCOUNT FOR U.S.  FEDERAL INCOME TAX PURPOSES. 
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE, THE ISSUE
PRICE OF EACH SECURITY IS $1,000 PER $1,000 OF PRINCIPAL AMOUNT, THE ISSUE DATE
IS JUNE 21, 2004 AND THE COMPARABLE YIELD IS 8.50% PER ANNUM.  HOLDERS OF
THIS SECURITY MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF ORIGINAL
ISSUE DISCOUNT, YIELD TO MATURITY AND THE PROJECTED PAYMENT SCHEDULE FOR THIS
SECURITY BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO:  GRIFFON
CORPORATION, 100 JERICHO QUADRANGLE, JERICHO, NEW YORK  11753, ATTN.:
SECRETARY, SUCH INFORMATION TO BE MADE AVAILABLE, BEGINNING NO LATER THAN 10
DAYS AFTER THE ISSUE DATE, PROMPTLY UPON REQUEST.

 

A-2-1

 

GRIFFON
CORPORATION

 

4.0% Contingent
Convertible Subordinated Notes Due 2023

 

	
  No.:

  	
   

  	
  CUSIP:

  
	
   

  	
   

  	
   

  
	
  Issue Date:

  	
   

  	
  Principal Amount:

  

 

GRIFFON CORPORATION, a
Delaware corporation, promises to pay to                  or registered assigns, the
principal amount of                , on
July 18, 2023, subject to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.  This Security is
convertible as specified on the other side of this Security.

 

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

 

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

 

 

	
  Dated:

  	
  GRIFFON CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

A-2-2

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  
	
   

  	
   

  
	
  Dated:

  

 

A-2-3

 

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

 

A-2-4

 

EXHIBIT B

 

Transfer
Certificate

 

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

 

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

 

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

 

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

 

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

 

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

 

 

	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
  Signature(s)

  
	
   

  	
   

  	
   

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

  
	
   

  	
   

  	
   

  
	
  Signature Guaranteed

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Participant in a
  Recognized Signature

  	
   

  	
   

  
	
  Guarantee Medallion
  Program

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Authorized
  Signatory

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

B-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00075-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00075-of-00352.parquet"}]]