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Exhibit 4.1  

  
 

    RIGHTS AGREEMENT
  
    DATED AS OF MAY 7, 2002,
  
    BY AND BETWEEN
  
    ALLIANT TECHSYSTEMS INC.
  
    AND
  
    LASALLE BANK NATIONAL
ASSOCIATION,
  AS RIGHTS AGENT    
  

 
 

TABLE OF CONTENTS    
  

	 	 	 	 	 
	1.	 	Certain Definitions	 	1
	2.	 	Appointment of Rights Agent	 	3
	3.	 	Issue of Right Certificates	 	4
	4.	 	Form of Right Certificates	 	5
	5.	 	Countersignature and Registration	 	5
	6.	 	Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates	 	6
	7.	 	Exercise of Rights; Purchase Price; Expiration Date of Rights	 	6
	8.	 	Cancellation and Destruction of Right Certificates	 	7
	9.	 	Company Covenants Concerning Securities and Rights	 	7
	10.	 	Record Date	 	9
	11.	 	Adjustment of Purchase Price, Number and Kind of Securities or Number of Rights	 	10
	12.	 	Certificate of Adjusted Purchase Price or Number of Securities	 	17
	13.	 	Consolidation, Merger or Sale or Transfer of Assets or Earning Power	 	17
	14.	 	Fractional Rights and Fractional Securities	 	19
	15.	 	Rights of Action	 	20
	16.	 	Agreement of Rights Holders	 	21
	17.	 	Right Certificate Holder Not Deemed a Stockholder	 	21
	18.	 	Concerning the Rights Agent	 	21
	19.	 	Merger or Consolidation or Change of Name of Rights Agent	 	22
	20.	 	Duties of Rights Agent	 	22
	21.	 	Change of Rights Agent	 	23
	22.	 	Issuance of New Right Certificates	 	24
	23.	 	Redemption	 	24
	24.	 	Exchange	 	25
	25.	 	Notice of Certain Events	 	26
	26.	 	Notices	 	26
	27.	 	Supplements and Amendments	 	27
	28.	 	Successors; Certain Covenants	 	28
	29.	 	Benefits of This Agreement	 	28
	30.	 	Governing Law	 	28
	31.	 	Severability	 	28
	32.	 	Descriptive Headings, Etc	 	28
	33.	 	Determinations and Actions by the Board	 	28
	34.	 	Counterparts	 	28
	Exhibit A	 	A-1
	Exhibit B	 	B-1
	Exhibit C	 	C-1

 
 

RIGHTS AGREEMENT    
  

        This RIGHTS AGREEMENT, dated as of May 7, 2002 (this "Agreement"), is made and entered into by and between
Alliant Techsystems Inc., a Delaware corporation (the "Company"), and LaSalle Bank National Association, as Rights Agent (the
"Rights Agent"). 

 
 

RECITALS    
  

        WHEREAS, on May 7, 2002, the Board of Directors of the Company authorized and declared a dividend distribution of one right (a
"Right") for each share of Common Stock, par value $0.01 per share, of the Company (a "Common Share")
outstanding as of the Close of Business (as hereinafter defined) on May 28, 2002 (the "Record Date"), each Right initially representing the right
to purchase one one-hundredth of a Preferred Share (as hereinafter defined), on the terms and subject to the conditions herein set forth, and further authorized and directed the issuance
of one Right (subject to adjustment as provided herein) with respect to each Common Share issued or delivered by the Company (whether originally issued or delivered from the Company's treasury) after
the Record Date but prior to the earlier of the Distribution Date (as hereinafter defined) and the Expiration Date (as hereinafter defined) or as provided in Section 22. 

        NOW,
THEREFORE, in consideration of the mutual agreements herein set forth, the parties hereto hereby agree as follows: 

        Certain Definitions.    For purposes of this Agreement, the following terms have the meanings indicated: 

        "Acquiring Person" means any Person (other than the Company or any Related Person) who or which, together with all Affiliates and
Associates of such Person, is the Beneficial Owner of 15% or more of the then-outstanding Common Shares; provided, however, that a Person
will not be deemed to have become an Acquiring Person solely as a result of a reduction in the number of Common Shares outstanding unless and until such time as (i) such Person or any Affiliate
or Associate of such Person thereafter becomes the Beneficial Owner of additional Common Shares representing 1% or more of the then-outstanding Common Shares, other than as a result of a
stock dividend, stock split or similar transaction effected by the Company in which all holders of Common Shares are treated equally, or (ii) any other Person who is the Beneficial Owner of
Common Shares representing 1% or more of the then-outstanding Common Shares thereafter becomes an Affiliate or Associate of such Person. Notwithstanding the foregoing, if the Board of the
Company determines in good faith that a Person
who would otherwise be an "Acquiring Person" as defined pursuant to the foregoing provisions of this Section 1(a), has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such Person would no longer be an "Acquiring Person" as defined pursuant to the foregoing provisions of this Section 1(a), then such
Person shall not be deemed to be an "Acquiring Person" for any purposes of this Agreement. 

        "Affiliate" and "Associate" will have the respective meanings ascribed to such terms in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as in effect on the date of this Agreement, provided however,
that a Person will not be deemed to be the Affiliate or Associate of another Person solely because either or both Persons are or were Directors of the Company. 

        A
Person will be deemed the "Beneficial Owner" of, and to "Beneficially Own," any
securities: 

the
beneficial ownership of which such Person or any of such Person's Affiliates or Associates, directly or indirectly, has the right to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing), or upon the exercise of conversion rights, exchange rights, warrants, options or other
rights (in each case, other than upon exercise or exchange of the Rights); provided, however, that a Person will not be deemed the Beneficial Owner of,
or to Beneficially Own, securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person's Affiliates or Associates until such tendered securities
are accepted for purchase or exchange; or 

 

which
such Person or any of such Person's Affiliates or Associates, directly or indirectly, has or shares the right to vote or dispose of, including pursuant to any agreement, arrangement or
understanding (whether or not in writing); or 

of
which any other Person is the Beneficial Owner, if such Person or any of such Person's Affiliates or Associates has any agreement, arrangement or understanding (whether or not in writing) with such
other Person (or any of such other Person's Affiliates or Associates) with respect to acquiring, holding, voting or disposing of any securities of the Company; 

provided, however, that a Person will not be deemed the Beneficial Owner of, or to Beneficially Own, any security (A) if such Person has the
right to vote such security pursuant to an agreement, arrangement or understanding (whether or not in writing) which (1) arises solely from a revocable proxy given to such Person in response to
a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations of the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor report), or (B) if such beneficial ownership arises solely as a result of such Person's status as a "clearing agency,"
as defined in Section 3(a)(23) of the Exchange Act; provided further, however, that nothing in this paragraph (c) will cause a Person
engaged in business as an underwriter of securities to be the Beneficial Owner of, or to Beneficially Own, any securities acquired through such Person's participation in good faith in an underwriting
syndicate until the expiration of 40 calendar days after the date of such acquisition, or such later date as the Directors of the Company may determine in any specific case. 

        "Business Day" means any day other than a Saturday, Sunday or a day on which banking institutions in the State of New York (or such other
state in which the principal office of the Rights Agent is located) are authorized or obligated by law or executive order to close. 

        "Close of Business" on any given date means 5:00 p.m., Eastern time, on such date; provided,
however, that if such date is not a Business Day it means 5:00 p.m., Eastern time, on the next succeeding Business Day. 

        "Common Shares" when used with reference to the Company means the shares of Common Stock, par value $0.01 per share, of the Company;  provided, however, that if
the Company is the continuing or surviving corporation in a transaction described in Section 13(a)(ii), "Common
Shares" when used with reference to the Company means shares of the capital stock or units of the equity interests with the greatest aggregate voting power of the Company. "Common Shares" when used
with reference to any corporation or other legal entity other than the Company, including an Issuer, means shares of the capital stock or units of the equity interests with the greatest aggregate
voting power of such corporation or other legal entity. 

        "Company" means Alliant Techsystems Inc., a Delaware corporation. 

        "Distribution Date" means the earlier of: (i) the Close of Business on the tenth calendar day following the Share Acquisition Date,
or (ii) the Close of Business on the tenth Business Day (or, unless the Distribution Date shall have previously occurred, such later date as may be specified by the Board of Directors of the
Company) after the commencement of a tender or exchange offer by any Person (other than the Company or any Related Person), if upon the consummation thereof such Person would be the Beneficial Owner
of 15% or more of the then-outstanding Common Shares. 

        "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

        "Expiration Date" means the earliest of (i) the Close of Business on the Final Expiration Date, (ii) the time at which the
Rights are redeemed as provided in Section 23, and (iii) the time at which all exercisable Rights are exchanged as provided in Section 24. 

        "Final Expiration Date" means the tenth anniversary of the Record Date. 

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        "Flip-in Event" means any event described in clauses (A), (B) or (C) of Section 11(a)(ii). 

        "Flip-over Event" means any event described in clauses (i), (ii) or (iii) of Section 13(a). 

        "Issuer" has the meaning set forth in Section 13(b). 

        "Nasdaq" means The Nasdaq Stock Market. 

        "Person" means any individual, firm, corporation or other legal entity, and includes any successor (by merger or otherwise) of such
entity. 

        "Preferred Shares" means shares of Series A Junior Participating Preferred Stock, par value $0.01 per share, of the Company having
the rights and preferences set forth in the form of Certificate of Designation of Series A Junior Participating Preferred Stock attached as  Exhibit A. 

        "Purchase Price" means initially $400.00 per one one-hundredth of a Preferred Share, subject to adjustment from time to time
as provided in this Agreement. 

        "Record Date" has the meaning set forth in the Recitals to this Agreement. 

        "Redemption Price" means $.01 per Right, subject to adjustment by resolution of the Board of Directors of the Company to reflect any stock
split, stock dividend or similar transaction occurring after the Record Date. 

        "Related Person" means (i) any Subsidiary of the Company or (ii) any employee benefit or stock ownership plan of the Company
or of any Subsidiary of the Company or any entity holding Common Shares for or pursuant to the terms of any such plan. 

        "Right" has the meaning set forth in the Recitals to this Agreement. 

        "Right Certificates" means certificates evidencing the Rights, in substantially the form attached as  Exhibit B. 

        "Rights Agent" means LaSalle Bank National Association, unless and until a successor Rights Agent has become such pursuant to the terms of
this Agreement, and thereafter, "Rights Agent" means such successor Rights Agent. 

        "Securities Act" means the Securities Act of 1933, as amended. 

        "Share Acquisition Date" means the first date of public announcement by the Company (by press release, filing made with the Securities and
Exchange Commission or otherwise) that an Acquiring Person has become such. 

        "Subsidiary" when used with reference to any Person means any corporation or other legal entity of which a majority of the voting power of
the voting equity securities or equity interests is owned, directly or indirectly, by such Person; provided, however, that for purposes of
Section 13(b), "Subsidiary" when used with reference to any Person means any corporation or other legal entity of which at least 20% of the voting power of the voting equity securities or
equity interests is owned, directly or indirectly, by such Person. 

        "Trading Day" means any day on which the principal national securities exchange on which the Common Shares are listed or admitted to
trading is open for the transaction of business or, if the Common Shares are not listed or admitted to trading on any national securities exchange, a Business Day. 

        "Triggering Event" means any Flip-in Event or Flip-over Event. 

        Appointment of Rights Agent.    The Company hereby appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3, will also be, prior to the Distribution Date, the holders of the Common Shares) in accordance with the terms and conditions 

3

 

hereof, and the Rights Agent hereby accepts such appointment and hereby certifies that it complies with the requirements of the New York Stock Exchange governing transfer agents and registrars. The
Company may from time to time act as Co-Rights Agent or appoint such Co-Rights Agents as it may deem necessary or desirable. Any actions which may be taken by the Rights Agent
pursuant to the terms of this Agreement may be taken by any such Co-Rights Agent. To the extent that any Co-Rights Agent takes any action pursuant to this Agreement, such
Co-Rights Agent will be entitled to all of the rights and protections of, and subject to all of the applicable duties and obligations imposed upon, the Rights Agent pursuant to the terms
of this Agreement. 

        Issue of Right Certificates.    a) Until the Distribution Date, i) the Rights will be evidenced by the
certificates representing Common Shares registered in the names of the record holders thereof (which certificates representing Common Shares will also be deemed to be Right Certificates),
ii) the Rights will be transferable only in connection with the transfer of the underlying Common Shares, and iii) the surrender for transfer of any certificates evidencing Common Shares
in respect of which Rights have been issued will also constitute the transfer of the Rights associated with the Common Shares evidenced by such certificates. On or as promptly as practicable after the
Record Date, the Company will send by first class, postage prepaid mail, to each record holder of Common Shares as of the Close of Business on the Record Date, at the address of such holder shown on
the records of the Company as of such date, a copy of a Summary of Rights to Purchase Preferred Stock in substantially the form attached as  Exhibit C. 

        Rights
will be issued by the Company in respect of all Common Shares (other than Common Shares issued upon the exercise or exchange of any Right) issued or delivered by the Company
(whether originally issued or delivered from the Company's treasury) after the Record Date but prior to the earlier of the Distribution Date and the Expiration Date. Certificates evidencing such
Common Shares will have stamped on, impressed on, printed on, written on, or otherwise affixed to them the following legend or such similar legend as the Company may deem appropriate and as is not
inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any
stock exchange or transaction reporting system on which the Common Shares may from time to time be listed or quoted, or to conform to usage: 

This
Certificate also evidences and entitles the holder hereof to certain Rights as set forth in a Rights Agreement between Alliant Techsystems Inc. and LaSalle Bank National Association, dated
as of May 7, 2002 (the "Rights Agreement"), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the
principal executive offices of Alliant Techsystems Inc..The Rights are not exercisable prior to the occurrence of certain events specified in the
Rights Agreement. Under certain circumstances, as set forth in the Rights Agreement, such Rights may be redeemed, may be exchanged, may expire, may be amended, or may be evidenced by separate
certificates and no longer be evidenced by this Certificate. Alliant Techsystems Inc. will mail to the holder of this Certificate a copy of the
Rights Agreement, as in effect on the date of mailing, without charge promptly after receipt of a written request therefor. Under certain circumstances as set forth in the Rights Agreement, Rights
that are or were beneficially owned by an Acquiring Person or any Affiliate or Associate of an Acquiring Person (as such terms are defined in the Rights Agreement) may become null and void. 

        Any
Right Certificate issued pursuant to this Section 3 that represents Rights beneficially owned by an Acquiring Person or any Associate or Affiliate thereof and any Right
Certificate issued at any time upon the transfer of any Rights to an Acquiring Person or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate and any
Right Certificate issued pursuant to Section 6 or 11 hereof upon transfer, exchange, replacement or adjustment of any other Right Certificate referred to in this sentence, shall be subject to
and contain the following legend or such 

4

 

similar legend as the Company may deem appropriate and as is not inconsistent with the provisions of this Agreement, or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to conform to usage: 

The
Rights represented by this Right Certificate are or were beneficially owned by a Person who was an Acquiring Person or an Affiliate or an Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). This Right Certificate and the Rights represented hereby may become null and void in the circumstances specified in Section 11(a)(ii) or
Section 13 of the Rights Agreement. 

        As
promptly as practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent will countersign and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send), by first class, insured, postage prepaid mail, to each record holder of Common Shares as of the Close of Business on the Distribution Date, at the address of
such holder shown on the records of the Company, a Right Certificate evidencing one Right for each Common Share so held, subject to adjustment as provided herein. As of and after the Distribution
Date, the Rights will be evidenced solely by such Right Certificates. 

        In
the event that the Company purchases or otherwise acquires any Common Shares after the Record Date but prior to the Distribution Date, any Rights associated with such Common Shares
will be deemed canceled and retired so that the Company will not be entitled to exercise any Rights associated with the Common Shares so purchased or acquired. 

        Form of Right Certificates.    The Right Certificates (and the form of election to purchase and the form of assignment to be
printed on the reverse thereof) will be substantially in the form attached as Exhibit B with such changes and marks of identification or
designation, and such legends, summaries or endorsements printed thereon, as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, or as may be required
to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange or transaction reporting system on which the Rights may from
time to time be listed or quoted, or to
conform to usage. Subject to the provisions of Section 22, the Right Certificates, whenever issued, on their face will entitle the holders thereof to purchase such number of one
one-hundredths of a Preferred Share as are set forth therein at the Purchase Price set forth therein, but the Purchase Price, the number and kind of securities issuable upon exercise of
each Right and the number of Rights outstanding will be subject to adjustment as provided herein. 

        Countersignature and Registration.    b) The Right Certificates will be executed on behalf of the Company by its Chairman
of the Board, its President or any Vice President, either manually or by facsimile signature, and will have affixed thereto the Company's seal or a facsimile thereof which will be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature. The Right Certificates will be manually countersigned by the Rights Agent and will not be valid for any
purpose unless so countersigned. In case any officer of the Company who signed any of the Right Certificates ceases to be such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent, and issued and delivered by the Company with the same force and effect as though
the person who signed such Right Certificates had not ceased to be such officer of the Company; and any Right Certificate may be signed on behalf of the Company by any person who, at the actual date
of the execution of such Right Certificate, is a proper officer of the Company to sign such Right Certificate, although at the date of the execution of this Rights Agreement any such person was not
such officer. 

        Following
the Distribution Date, the Rights Agent will keep or cause to be kept, at the principal office of the Rights Agent designated for such purpose and at such other offices as may
be required to 

5

 

comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange or any transaction reporting system on which the Rights may
from time to time be listed or quoted, books for registration and transfer of the Right Certificates issued hereunder. Such books will show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates and the date of each of the Right Certificates. 

        Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.    c) Subject to the provisions of Sections 7(d) and 14, at any time after the Close of Business on the Distribution Date and prior to the
Expiration Date, any Right Certificate or Right Certificates representing exercisable Rights may be transferred, split up, combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one one-hundredths of a Preferred Share (or other securities, as the case may be) as the Right Certificate or Right
Certificates surrendered then entitled such holder (or former holder in the case of a transfer) to purchase. Any registered holder desiring to transfer, split up, combine or exchange any such Right
Certificate or Rights Certificates must make such request in a writing delivered to the Rights Agent and must surrender the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the principal office of the Rights Agent designated for such purpose. Thereupon or as promptly as practicable thereafter, subject to the provisions of Sections 7(d) and 14,
the Company will prepare, execute and deliver to the Rights Agent, and the Rights Agent will countersign and deliver, a Right Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up, combination or exchange of Right Certificates. 

        Upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them, and, if requested by the Company, reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the Company will prepare, execute and deliver a new Right Certificate of like tenor
to the Rights Agent and the Rights Agent will countersign and deliver such new Right Certificate to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated. 

        Exercise of Rights; Purchase Price; Expiration Date of Rights.    d) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein) in whole or in part at any time after the Distribution Date and prior to the Expiration Date, upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof duly executed, to the Rights Agent at the office or offices of the Rights Agent designated for such purpose, together
with payment in cash, in lawful money of the United States of America by certified check or bank draft payable to the order of the Company, equal to the sum of (i) the exercise price for the
total number of securities as to which such surrendered Rights are exercised and (ii) an amount equal to any applicable transfer tax required to be paid by the holder of such Right Certificate
in accordance with the provisions of Section 9(d). 

        Upon
receipt of a Right Certificate representing exercisable Rights with the form of election to purchase duly executed, accompanied by payment as described above, the Rights Agent will
promptly (i) requisition from any transfer agent of the Preferred Shares (or make available, if the Rights Agent is the transfer agent) certificates representing the number of one
one-hundredths of a Preferred Share to be purchased (and the Company hereby irrevocably authorizes and directs its transfer agent to comply with all such requests), or, if the Company
elects to deposit Preferred Shares issuable upon exercise of the Rights hereunder with a depositary agent, requisition from the depositary agent depositary receipts representing such number of one
one-hundredths of a Preferred Share as are to be 

6

 

purchased (and the Company hereby irrevocably authorizes and directs such depositary agent to comply with all such requests), (ii) after receipt of such certificates (or depositary receipts,
as the case may be), cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may be designated by such holder,
(iii) when appropriate, requisition from the Company or any transfer agent therefor (or make available, if the Rights Agent is the transfer agent) certificates representing the number of
equivalent common shares to be issued in lieu of the issuance of Common Shares in accordance with the provisions of Section 11(a)(iii), (iv) when appropriate, after receipt of such
certificates, cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may be designated by such holder,
(v) when appropriate, requisition from the Company the amount of cash to be paid in lieu of the issuance of fractional shares in accordance with the provisions of Section 14 or in lieu
of the issuance of Common Shares in accordance with the provisions of Section 11(a)(iii), (vi) when appropriate, after receipt, deliver such cash to or upon the order of the registered
holder of such Right Certificate, and (vii) when appropriate, deliver any due bill or other instrument provided to the Rights
Agent by the Company for delivery to the registered holder of such Right Certificate as provided by Section 11(l). 

        In
case the registered holder of any Right Certificate exercises less than all the Rights evidenced thereby, the Company will prepare, execute and deliver a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised and the Rights Agent will countersign and deliver such new Right Certificate to the registered holder of such Right Certificate or to
his duly authorized assigns, subject to the provisions of Section 14. 

        Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the Company will be obligated to undertake any action with respect to any purported transfer,
split up, combination or exchange of any Right Certificate pursuant to Section 6 or exercise of a Right Certificate as set forth in this Section 7 unless the registered holder of such
Right Certificate has (i) completed and signed the certificate following the form of assignment or the form of election to purchase, as applicable, set forth on the reverse side of the Right
Certificate surrendered for such transfer, split up, combination, exchange or exercise and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company may reasonably request. 

        Cancellation and Destruction of Right Certificates.    All Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange will, if surrendered to the Company or to any of its stock transfer agents, be delivered to the Rights Agent for cancellation or in canceled form, or, if surrendered
to the Rights Agent, will be canceled by it, and no Right Certificates will be issued in lieu thereof except as expressly permitted by the provisions of this Agreement. The Company will deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent will so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent will deliver all canceled Right Certificates to the Company, or will, at the written request of the Company, destroy such canceled Right Certificates, and in such case will deliver a
certificate of destruction thereof to the Company. 

        Company Covenants Concerning Securities and Rights.    The Company covenants and agrees that: 

        It
will cause to be reserved and kept available out of its authorized and unissued Preferred Shares or any Preferred Shares held in its treasury, a number of Preferred Shares that will
be sufficient to permit the exercise in full of all outstanding Rights in accordance with Section 7. 

        So
long as the Preferred Shares (and, following the occurrence of a Triggering Event, Common Shares and/or other securities) issuable upon the exercise of the Rights may be listed on a
national securities exchange, or quoted on Nasdaq, it will endeavor to cause, from and after such time as the Rights become exercisable, all securities reserved for issuance upon the exercise of 

7

 

Rights to be listed on such exchange, or quoted on Nasdaq, upon official notice of issuance upon such exercise. 

        It
will take all such action as may be necessary to ensure that all Preferred Shares (and, following the occurrence of a Triggering Event, Common Shares and/or other securities)
delivered upon exercise of Rights, at the time of delivery of the certificates for such securities, will be (subject to payment of the Purchase Price) duly authorized, validly issued, fully paid and
nonassessable securities. 

        It
will pay when due and payable any and all federal and state transfer taxes and charges that may be payable in respect of the issuance or delivery of the Right Certificates and of any
certificates representing securities issued upon the exercise of Rights; provided, however, that the Company will not be required to pay any transfer
tax or charge which may be payable in respect of any transfer or delivery of Right Certificates to a person other than, or the issuance or delivery of certificates or depositary receipts representing
securities issued upon the exercise of Rights in a name other than that of, the registered holder of the Right Certificate evidencing Rights surrendered for exercise, or to issue or deliver any
certificates or depositary receipts representing securities issued upon the exercise of any Rights until any such tax or charge has been paid (any such tax or charge being payable by the holder of
such Right Certificate at the time of surrender) or until it has been established to the Company's reasonable satisfaction that no such tax is due. 

        It
will use its best efforts (i) to file on an appropriate form, as soon as practicable following the later of the Share Acquisition Date and the Distribution Date, a registration
statement under the Securities Act with respect to the securities issuable upon exercise of the Rights, (ii) to cause such registration statement to become effective as soon as practicable
after such filing, and (iii) to cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Securities Act) until the earlier of
(A) the date as of which the Rights are no longer exercisable for such securities and (B) the Expiration Date. The Company will also take such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the various states in connection with the exercisability of the Rights. The Company may temporarily suspend, for a period of time after the
date set forth in clause (i) of the first sentence of this Section 9(e), the exercisability of the Rights in order to prepare and file such registration statement and to permit it to
become effective. Upon any such suspension, the Company will issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement
at such time as the suspension is no longer in effect. In addition, if the Company determines that a registration statement should be filed under the Securities Act or any state securities laws
following the Distribution Date, the Company may temporarily suspend the exercisability of the Rights in each relevant jurisdiction until such time as a registration statement has been declared
effective and, upon any such suspension, the Company will issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. Notwithstanding anything in this Agreement to the contrary, the Rights will not be exercisable in any jurisdiction if the requisite registration or
qualification in such jurisdiction has not been effected or the exercise of the Rights is not permitted under applicable law. 

        Notwithstanding
anything in this Agreement to the contrary, after the later of the Share Acquisition Date and the Distribution Date it will not take (or permit any Subsidiary to take)
any action if at the time such action is taken it is reasonably foreseeable that such action will eliminate or otherwise diminish the benefits intended to be afforded by the Rights. 

        In
the event that the Company is obligated to issue other securities of the Company and/or pay cash pursuant to Section 11, 13, 14 or 24 it will make all arrangements necessary so
that such 

8

 

other securities and/or cash are available for distribution by the Rights Agent, if and when appropriate. 

        Record Date.    Each Person in whose name any certificate representing Preferred Shares (or Common Shares and/or other
securities, as the case may be) is issued upon the exercise of Rights will for all purposes be deemed to have become the holder of record of the Preferred Shares (or Common Shares and/or other
securities, as the case may be) represented thereby on, and such certificate will be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and all applicable transfer taxes) was made; provided, however, that if the date of such surrender and payment is a date upon which the
transfer books of the Company for the Preferred Shares (or Common Shares and/or other securities, as the case may be) are closed, such Person will be deemed to have become the record holder of such
securities on, and such certificate will be dated, the next succeeding Business Day on which the transfer books of the Company for the Preferred Shares (or Common Shares and/or other securities, as
the case may be) are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate will not be entitled to any rights of a holder of any security for which the Rights
are or may become exercisable, including, without limitation, the right to vote, to receive dividends or other distributions, or to exercise any preemptive rights, and will not be entitled to receive
any notice of any proceedings of the Company, except as provided herein. 

9

           Adjustment of Purchase Price, Number and Kind of Securities or Number of Rights.    The Purchase Price,
the number and kind of
securities issuable upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11. 

          i)  In
the event that the Company at any time after the Record Date (1)declares a dividend on the Preferred Shares payable in Preferred Shares, (2)subdivides the outstanding
Preferred Shares, (3)combines the outstanding Preferred Shares into a smaller number of Preferred Shares, or (4)issues any shares of its capital stock in a reclassification of the Preferred Shares
(including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this
Section 11(a), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification and/or the number
and/or kind of shares of capital stock issuable on such date upon exercise of a Right, will be proportionately adjusted so that the holder of any Right exercised after such time is entitled to receive
upon payment of the Purchase Price then in effect the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the
transfer books of the Company for the Preferred Shares were open, the holder of such Right would have owned upon such exercise (and, in the case of a reclassification, would have retained after giving
effect to such reclassification) and would have been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock issuable upon
exercise of one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) or Section 13, the adjustment
provided for in this Section 11(a)(i) will be in addition to, and will be made prior to, any adjustment required pursuant to Section 11(a)(ii) or Section 13. 

        Subject
to the provisions of Section 24, if: 

        any
Person becomes an Acquiring Person; or 

any
Acquiring Person or any Affiliate or Associate of any Acquiring Person, directly or indirectly, (1) merges into the Company or otherwise combines with the Company and the Company is the
continuing or surviving corporation of such merger or combination (other than in a transaction subject to Section 13), (2) merges or otherwise combines with any Subsidiary of the
Company, (3) in one or more transactions (otherwise than in connection with the exercise, exchange or conversion of securities exercisable or exchangeable for or convertible into shares of any
class of capital stock of the Company or any of its Subsidiaries) transfers cash, securities or any other property to the Company or any of its
Subsidiaries in exchange (in whole or in part) for shares of any class of capital stock of the Company or any of its Subsidiaries or for securities exercisable or exchangeable for or convertible into
shares of any class of capital stock of the Company or any of its Subsidiaries, or otherwise obtains from the Company or any of its Subsidiaries, with or without consideration, any additional shares
of any class of capital stock of the Company or any of its Subsidiaries or securities exercisable or exchangeable for or convertible into shares of any class of capital stock of the Company or any of
its Subsidiaries (otherwise than as part of a pro rata distribution to all holders of shares of any class of capital stock of the Company, or any of its Subsidiaries), (4) sells, purchases,
leases, exchanges, mortgages, pledges, transfers or otherwise disposes (in one or more transactions) to, from, with or of, as the case may be, the Company or any of its Subsidiaries (otherwise than in
a transaction subject to Section 13), any property, including securities, on terms and conditions less favorable to the Company than the Company would be able to obtain in an arm's-length
transaction with an unaffiliated third party, (5) receives any compensation from the Company or any of its Subsidiaries other than compensation as a director or a regular full-time
employee, in either case at rates consistent with the Company's (or its Subsidiaries') past practices, or (6) receives the benefit, directly or indirectly (except 

10

 

proportionately as a stockholder), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Company or any of its
Subsidiaries; or 

during
such time as there is an Acquiring Person, there is any reclassification of securities of the Company (including any reverse stock split), or any recapitalization of the Company, or any merger
or consolidation of the Company with any of its Subsidiaries, or any other transaction or series of transactions involving the Company or any of its Subsidiaries (whether or not with or into or
otherwise involving an Acquiring Person), other than a transaction subject to Section 13, which has the effect, directly or indirectly, of increasing by more than 1% the proportionate share of
the outstanding shares of any class of equity securities of the Company or any of its Subsidiaries, or of securities exercisable or exchangeable for or convertible into equity securities of the
Company or any of its Subsidiaries, of which an Acquiring Person, or any Affiliate or Associate of any Acquiring Person, is the Beneficial Owner; 

then,
and in each such case, from and after the latest of the Distribution Date, the Share Acquisition Date and the date of the occurrence of such Flip-in Event, proper provision will be
made so that each holder of a Right, except as provided below, will thereafter have the right to receive, upon exercise thereof in accordance with the terms of this Agreement at an exercise price per
Right equal to the product of the then-current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right was exercisable immediately
prior to the date of the occurrence of such Flip-in Event (or, if any other Flip-in Event shall have previously occurred, the product of the then-current Purchase
Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the date of the first occurrence of a Flip-in
Event), in lieu of Preferred Shares, such number of Common Shares as equals the result obtained by (x) multiplying the then-current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the date of the occurrence of such Flip-in Event (or, if any other
Flip-in Event shall have previously occurred, multiplying the then-current Purchase Price by the number of one one-hundredths of a Preferred Share for which a Right
was exercisable immediately prior to the date of the first occurrence of a Flip-in Event), and dividing that product by (y) 50% of the current per share market price of the Common
Shares (determined pursuant to Section 11(d)) on the date of the occurrence of such Flip-in Event. Notwithstanding anything in this
Agreement to the contrary, from and after the first occurrence of a Flip-in Event, any Rights that are Beneficially Owned by (A) any Acquiring Person (or any Affiliate or Associate
of any Acquiring Person), (B) a transferee of any Acquiring Person (or any such Affiliate or Associate) who becomes a transferee after the occurrence of a Flip-in Event, or
(C) a transferee of any Acquiring Person (or any such Affiliate or Associate) who became a transferee prior to or concurrently with the occurrence of a Flip-in Event pursuant to
either (1) a transfer from an Acquiring Person to holders of its equity securities or to any Person with whom it has any continuing agreement, arrangement or understanding regarding the
transferred Rights or (2) a transfer which the Directors of the Company have determined is part of a plan, arrangement or understanding which has the purpose or effect of avoiding the
provisions of this Section 11(a)(ii), and subsequent transferees of any of such Persons, will be void without any further action and any holder of such Rights will thereafter have no rights
whatsoever with respect to such Rights under any provision of this Agreement. The Company will use all reasonable efforts to ensure that the provisions of this Section 11(a)(ii) are
complied with, but will have no liability to any holder of Right Certificates or any other Person as a result of its failure to make any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder. Upon the occurrence of a Flip-in Event, no Right Certificate that represents Rights that are or have become void pursuant to the provisions
of this Section 11(a)(ii) will thereafter be issued pursuant to Section 3 or Section 6, and any Right Certificate delivered to the Rights Agent that represents Rights that
are or have become void 

11

 

pursuant to the provisions of this Section 11(a)(ii) will be canceled. Upon the occurrence of a Flip-over Event, any Rights that shall not have been previously exercised
pursuant to this Section 11(a)(ii) shall thereafter be exercisable only pursuant to Section 13 and not pursuant to this Section 11(a)(ii). 

        Upon
the occurrence of a Flip-in Event, if there are not sufficient Common Shares authorized but unissued or issued but not outstanding to permit the issuance of all the
Common Shares issuable in accordance with Section 11(a)(ii) upon the exercise of a Right, the Board of Directors of the Company will use its best efforts promptly to authorize and,
subject to the provisions of Section 9(e), make available for issuance additional Common Shares or other equity securities of the Company having equivalent voting rights and an equivalent value
(as determined in good faith by the Board of Directors of the Company) to the Common Shares (for purposes of this Section 11(a)(iii), "equivalent common
shares"). In the event that equivalent common shares are so authorized, upon the exercise of a Right in accordance with the provisions of Section 7, the registered
holder will be entitled to receive (5)Common Shares, to the extent any are available, and (6)a number of equivalent common shares, which the Board of Directors of the Company has determined in good
faith to have a value equivalent to the excess of (x) the aggregate current per share market value on the date of the occurrence of the most recent Flip-in Event of all the Common
Shares issuable in accordance with Section 11(a)(ii) upon the exercise of a Right (the "Exercise Value") over (y) the aggregate
current per share market value on the date of the occurrence of the most recent Flip-in Event of any Common Shares available for issuance upon the exercise of such Right;  provided, however, that if at
any time after 90 calendar days after the latest of the Share Acquisition Date, the Distribution Date and the date of the
occurrence of the most recent Flip-in Event, there are not sufficient Common Shares and/or equivalent common shares available for issuance upon the exercise of a Right, then the Company
will be obligated to deliver, upon the surrender of such Right and without requiring payment of the Purchase Price, Common Shares (to the extent available), equivalent common shares (to the extent
available) and then cash (to the extent permitted by applicable law and any agreements or instruments to which the Company is a party in effect immediately prior to the Share Acquisition Date), which
securities and cash have an aggregate value equal to the excess of (1) the Exercise Value over (2) the product of the then-current Purchase Price multiplied by the number of
one one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to the date of the occurrence of the most recent Flip-in Event (or, if any
other Flip-in Event shall have previously occurred, the product of the then-current Purchase Price multiplied by the number of one one-hundredths of a Preferred
Share for which a Right would have been exercisable immediately prior to the date of the occurrence of such Flip-in Event if no other Flip-in Event had previously occurred). To
the extent that any legal or contractual restrictions prevent the Company from paying the full amount of cash payable in accordance with the foregoing sentence, the Company will pay to holders of the
Rights as to which such payments are being made all amounts which are not then restricted on a pro rata basis and will continue to make payments on a pro rata basis as promptly as funds become
available until the full amount due to each such Rights holder has been paid. 

        In
the event that the Company fixes a record date for the issuance of rights, options or warrants to all holders of Preferred Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or purchase Preferred Shares (or securities having equivalent rights, privileges and preferences as the Preferred Shares (for purposes of this
Section 11(b), "equivalent preferred shares")) or securities convertible into Preferred Shares or equivalent preferred shares at a price per
Preferred Share or equivalent preferred share (or having a conversion price per share, if a security convertible into Preferred Shares or equivalent preferred shares) less than the current per share
market price of the Preferred Shares (determined pursuant to Section 11(d)) on such record date, the Purchase Price to be in effect after such record date will be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which is the number of Preferred Shares outstanding on such record date plus the number of Preferred
Shares 

12

 

which the aggregate offering price of the total number of Preferred Shares and/or equivalent preferred shares so to be offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current per share market price and the denominator of which is the number of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible);  provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares
of capital stock issuable upon exercise of one Right. In case such subscription price may be paid in a consideration part or all of which is in a form other than cash, the value of such consideration
will be as determined in good faith by the Board of Directors of the Company, whose determination will be described in a statement filed with the Rights Agent. Preferred Shares owned by or held for
the account of the Company will not be deemed outstanding for the purpose of any such computation. Such adjustment will be made successively whenever such a record date is fixed, and in the event that
such rights, options or warrants are not so issued, the Purchase Price will be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. 

        In
the event that the Company fixes a record date for the making of a distribution to all holders of Preferred Shares (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular periodic cash dividend), assets, stock (other than a
dividend payable in Preferred Shares) or subscription rights, options or warrants (excluding those referred to in Section 11(b)), the Purchase Price to be in effect after such record date will
be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which is the current per share market price of the Preferred Shares (as
determined pursuant to Section 11(d)) on such record date or, if earlier, the date on which Preferred Shares begin to trade on an ex-dividend or when issued basis for such
distribution, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination will be described in a statement filed with the Rights Agent) of the portion of the evidences of indebtedness, cash, assets or stock so to be
distributed or of such subscription rights, options or warrants applicable to one Preferred Share, and the denominator of which is such current per share market price of the Preferred Shares;  provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares
of capital stock issuable upon exercise of one Right. Such adjustments will be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the
Purchase Price will again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. 

          ii)  For
the purpose of any computation hereunder, the "current per share market price" of Common Shares on any date will be
deemed to be the average of the daily closing prices per share of such Common Shares for the 30 consecutive Trading Days immediately prior to such date; provided,
however, that in the event that the current per share market price of the Common Shares is determined during a period following the announcement by the issuer of such Common
Shares of (1)a dividend or distribution on such Common Shares payable in such Common Shares or securities convertible into such Common Shares (other than the Rights) or (2)any subdivision, combination
or reclassification of such Common Shares, and prior to the expiration of 30 Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such case, the current per share market price will be appropriately adjusted to take into account ex-dividend trading or to
reflect the current per share market price per Common Share equivalent. The closing price for each day will be the last sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the Common Shares are not listed or admitted to trading on 

13

 

the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Common
Shares are listed or admitted to trading or, if the Common Shares are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by Nasdaq or such other system then in use, or, if on any such date the Common Shares are not
quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Shares selected by the Board of Directors of
the Company. If the Common Shares are not publicly held or not so listed or traded, or are not the subject of available bid and asked quotes, "current per share market price" will mean the fair value
per share as determined in good faith by the Board of Directors of the Company, whose determination will be described in a statement filed with the Rights Agent. 

        For
the purpose of any computation hereunder, the "current per share market price" of the Preferred Shares will be determined in the same
manner as set forth above for Common Shares in Section 11(d)(i), other than the last sentence thereof. If the current per share market price of the Preferred Shares cannot be determined in the
manner provided above, the "current per share market price" of the Preferred Shares will be conclusively deemed to be an amount equal to the current per share market price of the Common Shares
multiplied by one hundred (as such number may be appropriately adjusted to reflect events such as stock splits, stock dividends, recapitalizations or similar transactions relating to the Common Shares
occurring after the date of this Agreement). If neither the
Common Shares nor the Preferred Shares are publicly held or so listed or traded, or the subject of available bid and asked quotes, "current per share market price" of the Preferred Shares will mean
the fair value per share as determined in good faith by the Board of Directors of the Company, whose determination will be described in a statement filed with the Rights Agent. For all purposes of
this Agreement, the current per share market price of one one-hundredth of a Preferred Share will be equal to the current per share market price of one Preferred Share divided by one
hundred. 

        Except
as set forth below, no adjustment in the Purchase Price will be required unless such adjustment would require an increase or decrease of at least 1% in such price;  provided, however, that any
adjustments which by reason of this Section 11(e) are not required to be made will be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11 will be made to the nearest cent or to the nearest one one-millionth of a Preferred Share or one
ten-thousandth of a Common Share or other security, as the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11
will be made no later than the earlier of (i) three years from the date of the transaction which requires such adjustment and (ii) the Expiration Date. 

        If
as a result of an adjustment made pursuant to Section 11(a), the holder of any Right thereafter exercised becomes entitled to receive any securities of the Company other than
Preferred Shares, thereafter the number and/or kind of such other securities so receivable upon exercise of any Right (and/or the Purchase Price in respect thereof) will 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 the Preferred Shares (and the Purchase Price in respect thereof) contained in this
Section 11, and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares (and the Purchase Price in respect thereof) will apply on like terms to any such other
securities (and the Purchase Price in respect thereof). 

        All
Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder will evidence the right to purchase, at the adjusted Purchase Price, the
number of one one-hundredths of a Preferred Share issuable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein. 

14

 

        Unless
the Company has exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price pursuant to Section 11(b) or Section 11(c),
each Right outstanding immediately prior to the making of such adjustment will thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one one-hundredths
of a Preferred Share (calculated to the nearest one one-millionth of a Preferred Share) obtained by (i) multiplying (x) the number of one one-hundredths of a
Preferred Share issuable upon exercise of a Right immediately prior to such adjustment of the Purchase Price by (y) the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price. 

15

   
        The Company may elect, on or after the date of any adjustment of the Purchase Price, to adjust the number of Rights in substitution for any adjustment in the number of one
one-hundredths of a Preferred Share issuable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of the number of Rights will be exercisable for the number
of one one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of
Rights will become that number of Rights (calculated to the nearest one ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company will make a public announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. Such record date may be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Right Certificates have been issued, will be at least 10 calendar days later than the date of the public announcement. If Right Certificates have been issued, upon each adjustment of the number
of Rights pursuant to this Section 11(i), the Company will, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to the provisions of Section 14, the additional Rights to which such holders are entitled as a result of such adjustment, or, at the option of the Company, will cause to be
distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior to the date of adjustment, and upon surrender thereof if required by the
Company, new Right Certificates evidencing all the Rights to which such holders are entitled after such adjustment. Right Certificates so to be distributed will be issued, executed, and countersigned
in the manner provided for herein (and may bear, at the option of the Company, the adjusted Purchase Price) and will be registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement. 

        Without
respect to any adjustment or change in the Purchase Price and/or the number and/or kind of securities issuable upon the exercise of the Rights, the Right Certificates theretofore
and thereafter issued may continue to express the Purchase Price and the number and kind of securities which were expressed in the initial Right Certificate issued hereunder. 

        Before
taking any action that would cause an adjustment reducing the Purchase Price below one one-hundredth of the then par value, if any, of the Preferred Shares or below
the then par value, if any, of any other securities of the Company issuable upon exercise of the Rights, the Company will take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and nonassessable Preferred Shares or such other securities, as the case may be, at such adjusted Purchase Price. 

        In
any case in which this Section 11 otherwise requires that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect
to defer until the occurrence of such event the issuance to the holder of any Right exercised after such record date the number of Preferred Shares or other securities of the Company, if any, issuable
upon such exercise over and above the number of Preferred Shares or other securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company delivers to such holder a due bill or other appropriate instrument evidencing such holder's right to
receive such additional Preferred Shares or other securities upon the occurrence of the event requiring such adjustment. 

        Notwithstanding
anything in this Agreement to the contrary, the Company will be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that in its good faith judgment the Board of Directors of the Company determines to be advisable in order that any (i) consolidation or
subdivision of the Preferred Shares, (ii) issuance wholly for cash of Preferred Shares at less than the current per share market price therefor, (iii) issuance wholly for cash of
Preferred Shares or securities which by their terms are 

16

 

convertible into or exchangeable for Preferred Shares, (iv) stock dividends, or (v) issuance of rights, options or warrants referred to in this Section 11, hereafter made by the
Company to holders of its Preferred Shares is not taxable to such stockholders. 

        Notwithstanding
anything in this Agreement to the contrary, in the event that the Company at any time after the Record Date prior to the Distribution Date (i) pays a dividend on
the outstanding Common Shares payable in Common Shares, (ii) subdivides the outstanding Common Shares, (iii) combines the outstanding Common Shares into a smaller number of shares, or
(iv) issues any shares of its capital stock in a reclassification of the outstanding Common Shares (including any such reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), the number of Rights associated with each Common Share then outstanding, or issued or delivered thereafter but prior to the Distribution Date, will
be proportionately adjusted so that the number of Rights thereafter associated with each Common Share following any such event equals the result obtained by multiplying the number of Rights associated
with each Common Share immediately prior to such event by a fraction the numerator of which is the total number of Common Shares outstanding immediately prior to the occurrence of the event and the
denominator of which is the total number of Common Shares outstanding immediately following the occurrence of such event. The adjustments provided for in this Section 11(n) will be made
successively whenever such a dividend is paid or such a subdivision, combination or reclassification is effected. 

        Certificate of Adjusted Purchase Price or Number of Securities. Whenever an adjustment is made as provided in Section 11 or
Section 13, the Company will promptly (a) prepare a certificate setting forth such adjustment and a brief statement of the facts accounting for such adjustment, (b) file with the
Rights Agent and with each transfer agent for the Preferred Shares and the Common Shares a copy of such certificate, and (c) if such adjustment is made after the Distribution Date, mail a brief
summary of such adjustment to each holder of a Right Certificate in accordance with Section 26. 

        Consolidation, Merger or Sale or Transfer of Assets or Earning Power. e) In the event that: 

at
any time after a Person has become an Acquiring Person, the Company consolidates with, or merges with or into, any other Person and the Company is not the continuing or surviving corporation of
such consolidation or merger; or 

at
any time after a Person has become an Acquiring Person, any Person consolidates with the Company, or merges with or into the Company, and the Company is the continuing or surviving corporation of
such merger or consolidation and, in connection with such merger or consolidation, all or part of the Common Shares is changed into or exchanged for stock or other securities of any other Person or
cash or any other property; or 

at
any time after a Person has become an Acquiring Person, the Company, directly or indirectly, sells or otherwise transfers (or one or more of its Subsidiaries sells or otherwise transfers), in one
or more transactions, assets or earning power (including without limitation securities creating any obligation on the part of the Company and/or any of its Subsidiaries) representing in the aggregate
more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any Person or Persons other than the Company or one or more of its wholly owned Subsidiaries; 

then,
and in each such case, proper provision will be made so that from and after the latest of the Share Acquisition Date, the Distribution Date and the date of the occurrence of such
Flip-over Event (A) each holder of a Right thereafter has the right to receive, upon the exercise thereof in accordance with the terms of this Agreement at an exercise price per
Right equal to the product of the then-current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right was exercisable immediately
prior to the Share Acquisition Date, such number of duly authorized, validly issued, fully paid, nonassessable and freely tradeable Common 

17

 

Shares of the Issuer, free and clear of any liens, encumbrances and other adverse claims and not subject to any rights of call or first refusal, as equals the result obtained by
(x) multiplying the then-current Purchase Price by the number of one one-hundredths of a Preferred Share for which a Right is exercisable immediately prior to the Share
Acquisition Date and dividing that product by (y) 50% of the current per share market price of the Common Shares of the Issuer (determined pursuant to Section 11(d)), on the date of the
occurrence of such Flip-over Event; (B) the Issuer will thereafter be liable for, and will assume, by virtue of the occurrence of such Flip-over Event, all the
obligations and duties of the Company pursuant to this Agreement; (C) the term "Company" will thereafter be deemed to refer to the Issuer; and
(D) the Issuer will take such steps (including without limitation the reservation of a sufficient number of its Common Shares to permit the exercise of all outstanding Rights) in connection
with such consummation as may be necessary to assure that the provisions hereof are thereafter applicable, as nearly as reasonably may be possible, in relation to its Common Shares thereafter
deliverable upon the exercise of the Rights. 

        For
purposes of this Section 13, "Issuer" means (i) in the case of any Flip-over Event described in Sections
13(a)(i) or (ii) above, the Person that is the continuing, surviving, resulting or acquiring Person (including the Company as the continuing or surviving corporation of a transaction
described in Section 13(a)(ii) above), and (ii) in the case of any Flip-over Event described in Section 13(a)(iii) above, the Person that is the party
receiving the greatest portion of the assets or earning power (including without limitation securities creating any obligation on the part of the Company and/or any of its Subsidiaries) transferred
pursuant to such transaction or transactions; provided, however, that, in any such case, (A) if (1) no class of equity security of such
Person is, at the time of such merger, consolidation or transaction and has been continuously over the preceding 12-month period, registered pursuant to Section 12 of the Exchange
Act, and (2) such Person is a Subsidiary, directly or indirectly, of another Person, a class of equity security of which is and has been so registered, the term "Issuer" means such other
Person; and (B) in case such Person is a Subsidiary, directly or indirectly, of more than one Person, a class of equity security of two or more of which are and have been so registered, the
term "Issuer" means whichever of such Persons is the issuer of the equity security having the greatest aggregate market value. Notwithstanding the foregoing, if the Issuer in any of the
Flip-over Events listed above is not a corporation or other legal entity having outstanding equity securities, then, and in each such case, (x) if the Issuer is directly or
indirectly wholly owned by a corporation or other legal entity having outstanding equity securities, then all references to Common Shares of the Issuer will be deemed to be references to the Common
Shares of the corporation or other legal entity having outstanding equity securities which ultimately controls the Issuer, and (y) if there is no such corporation or other legal entity having
outstanding equity securities, (I) proper provision will be made so that the Issuer creates or otherwise makes available for purposes of the exercise of the Rights in accordance with the terms
of this Agreement, a kind or kinds of security or securities having a fair market value at least equal to the economic value of the Common Shares which each holder of a Right would have been entitled
to receive if the Issuer had been a corporation or other legal entity having outstanding equity securities; and (II) all other provisions of this Agreement will apply to the issuer of such
securities as if such securities were Common Shares. 

        The
Company will not consummate any Flip-over Event if, (i) at the time of or immediately after such Flip-over Event, there are or would be any rights,
warrants, instruments or securities outstanding or any agreements or arrangements in effect which would eliminate or substantially diminish the benefits intended to be afforded by the Rights,
(ii) prior to, simultaneously with or immediately after such Flip-over Event, the stockholders of the Person who constitutes, or would constitute, the Issuer for purposes of
Section 13(a) shall have received a distribution of Rights previously owned by such Person or any of its Affiliates or Associates, or (iii) the form or nature of the organization of the
Issuer would preclude or limit the exercisability of the Rights. In addition, the Company will not consummate any Flip-over Event unless the Issuer has a sufficient number of authorized
Common Shares (or other 

18

 

securities as contemplated in Section 13(b) above) which have not been issued or reserved for issuance to permit the exercise in full of the Rights in accordance with this Section 13
and unless prior to such consummation the Company and the Issuer have executed and delivered to the Rights Agent a supplemental agreement providing for the terms set forth in subsections
(a) and (b) of this Section 13 and further providing that as promptly as practicable after the consummation of any Flip-over Event, the Issuer will: 

prepare
and file a registration statement under the Securities Act with respect to the Rights and the securities issuable upon exercise of the Rights on an appropriate form, and use its best
efforts to cause such registration statement to (1) become effective as soon as practicable after such filing and (2) remain
effective (with a prospectus at all times meeting the requirements of the Securities Act) until the Expiration Date; 

take
all such action as may be appropriate under, or to ensure compliance with, the securities or "blue sky" laws of the various states in connection with the exercisability of the Rights; and 

deliver
to holders of the Rights historical financial statements for the Issuer and each of its Affiliates which comply in all respects with the requirements for registration on Form 10 under
the Exchange Act. 

        The
provisions of this Section 13 will similarly apply to successive mergers or consolidations or sales or other transfers. In the event that a Flip-over Event occurs
at any time after the occurrence of a Flip-in Event, except for Rights that have become void pursuant to Section 11(a)(ii), Rights that shall not have been previously exercised will
cease to be exercisable in the manner provided in Section 11(a)(ii) and will thereafter be exercisable in the manner provided in Section 13(a). 

        Fractional Rights and Fractional Securities. f) The Company will not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional Rights, the Company will pay as promptly as practicable to the registered holders of the Right Certificates with regard
to which such fractional Rights otherwise would be issuable, an amount in cash equal to the same fraction of the current market value of one Right. For the purposes of this Section 14(a), the
current market value of one Right is the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights otherwise would have been issuable. The closing
price for any day is the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Rights are not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Rights
are listed or admitted to trading or, if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by Nasdaq or such other system then in use, or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights selected by the Board of Directors of the Company. If the Rights
are not publicly held or are not so listed or traded, or are not the subject of available bid and asked quotes, the current market value of one Right will mean the fair value thereof as determined in
good faith by the Board of Directors of the Company, whose determination will be described in a statement filed with the Rights Agent. 

        The
Company will not be required to issue fractions of Preferred Shares (other than fractions which are integral multiples of one one-hundredth of a Preferred Share) upon
exercise of the Rights or to distribute certificates which evidence fractional Preferred Shares (other than fractions which are integral multiples of one one-hundredth of a Preferred
Share). Fractions of Preferred Shares in integral multiples of one one-hundredth of a Preferred Share may, at the election of the Company, be 

19

 

evidenced by depositary receipts pursuant to an appropriate agreement between the Company and a depositary selected by it, provided that such agreement provides that the holders of such depositary
receipts have all the rights, privileges and preferences to which they are entitled as beneficial owners of the Preferred Shares represented by such depositary receipts. In lieu of fractional
Preferred Shares that are not integral multiples of one one-hundredth of a Preferred Share, the Company may pay to any Person to whom or which such fractional Preferred Shares would
otherwise be issuable an amount in cash equal to the same fraction of the current market value of one Preferred Share. For purposes of this Section 14(b), the current market value of one
Preferred Share is the closing price of the Preferred Shares (as determined in the same manner as set forth for Common Shares in the second sentence of Section 11(d)(i)) for the Trading Day
immediately prior to the date of such exercise; provided, however, that if the closing price of the Preferred Shares cannot be so determined, the
closing price of the Preferred Shares for such Trading Day will be conclusively deemed to be an amount equal to the closing price of the Common Shares (determined pursuant to the second sentence of
Section 11(d)(i)) for such Trading Day multiplied by one hundred (as such number may be appropriately adjusted to reflect events such as stock splits, stock dividends, recapitalizations or
similar transactions relating to the Common Shares occurring after the date of this Agreement); provided further, however, that if neither the Common
Shares nor the Preferred Shares are publicly held or listed or admitted to trading on any national securities exchange, or the subject of available bid and asked quotes, the current market value of
one Preferred Share will mean the fair value thereof as determined in good faith by the Board of Directors of the Company, whose determination will be described in a statement filed with the Rights
Agent. 

        Following
the occurrence of a Triggering Event, the Company will not be required to issue fractions of Common Shares or other securities issuable upon exercise or exchange of the Rights
or to distribute certificates which evidence any such fractional securities. In lieu of issuing any such fractional securities, the Company may pay to any Person to whom or which such fractional
securities would otherwise be issuable an amount in cash equal to the same fraction of the current market value of one such security. For purposes of this Section 14(c), the current market
value of one Common Share or other security issuable upon the exercise or exchange of Rights is the closing price thereof (as determined in the same manner as set forth for Common Shares in the second
sentence of Section 11(d)(i)) for the Trading Day immediately prior to the date of such exercise or exchange; provided, however, that if neither
the Common Shares nor any such other securities are publicly held or listed or admitted to trading on any national securities exchange, or the subject of available bid and asked quotes, the current
market value of one Common Share or such other security will mean the fair value thereof as determined in good faith by the Board of Directors of the Company, whose determination will mean the fair
value thereof as will be described in a statement filed with the Rights Agent. 

        Rights of Action.    All rights of action in respect of this Agreement, excepting the rights of action given to the Rights Agent
under Section 18, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common Shares); and any
registered holder of any Right Certificate (or, prior to the Distribution Date, of the Common Shares), without the consent of the Rights Agent or of the holder of any other Right Certificate (or,
prior to the Distribution Date, of the holder of any Common Shares), may in his own behalf and for his own benefit enforce, and may institute and maintain any suit, action or proceeding against the
Company to enforce, or otherwise act in respect of, his right to exercise the Rights evidenced by such Right Certificate in the manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and will be entitled to specific performance of the obligations under this Agreement, and
injunctive relief against actual or threatened violations of the obligations of any Person subject to this Agreement. 

20

           Agreement of Rights Holders.    Every holder of a Right by accepting the same consents and agrees with
the Company and the
Rights Agent and with every other holder of a Right that: 

        Prior
to the Distribution Date, the Rights are transferable only in connection with the transfer of the Common Shares; 

After
the Distribution Date, the Right Certificates are transferable only on the registry books of the Rights Agent if surrendered at the principal office of the Rights Agent designated for such
purpose, duly endorsed or accompanied by a proper instrument of transfer; 

The
Company and the Rights Agent may deem and treat the person in whose name the Right Certificate (or, prior to the Distribution Date, the associated Common Share certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificate or the associated Common Share certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent will be affected by any notice to the contrary; 

Such
holder expressly waives any right to receive any fractional Rights and any fractional securities upon exercise or exchange of a Right, except as otherwise provided in Section 14. 

        Notwithstanding
anything in this Agreement to the contrary, neither the Company nor the Rights Agent will have any liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by
a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; provided, however, that the Company will use its best efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible. 

        Right Certificate Holder Not Deemed a Stockholder.    No holder, as such, of any Right Certificate will be entitled to vote,
receive dividends, or be deemed for any purpose the holder of Preferred Shares or any other securities of the Company which may at any time be issuable upon the exercise of the Rights
represented thereby, nor will anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of Directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders (except as provided in Section 25), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced
by such Right Certificate shall have been exercised in accordance with the provisions of this Agreement or exchanged pursuant to the provisions of Section 24. 

        Concerning the Rights Agent.    g) The Company will pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company will also indemnify the Rights Agent for, and hold it harmless against, any loss, liability, suit, action, proceeding or
expense, incurred without gross negligence, bad faith, or willful misconduct on the part of the Rights Agent, for anything done or omitted to be done by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and expenses of defending against any claim of liability arising therefrom, directly or indirectly. 

        The
Rights Agent will be protected and will incur no liability for or in respect of any action taken, suffered, or omitted by it in connection with its administration of this Agreement
in reliance upon any Right Certificate or certificate evidencing Preferred Shares or Common Shares or other securities of 

21

 

the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement or other paper or document believed by it to
be genuine and to be signed, executed, and, where necessary, verified or acknowledged, by the proper Person or Persons. 

        Merger or Consolidation or Change of Name of Rights Agent.    h) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or any corporation resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent is a
party, or any corporation succeeding to the corporate trust business of the Rights Agent or any successor Rights Agent, will be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such corporation would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21. If at the time such successor Rights Agent succeeds to the agency created by this Agreement any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so countersigned; and if at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor
Rights Agent; and in all such cases such Right Certificates will have the full force provided in the Right Certificates and in this Agreement. 

        If
at any time the name of the Rights Agent changes and at such time any of the Right Certificates have been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so countersigned; and if at that time any of the Right Certificates have not been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its changed name; and in all such cases such Right Certificates will have the full force provided in the Right Certificates and in this
Agreement. 

        Duties of Rights Agent.    The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following
terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, will be bound: 

The
Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the opinion of such counsel will be full and complete authorization and protection to the Rights Agent
as to any action taken or omitted by it in good faith and in accordance with such opinion. 

Whenever
in the performance of its duties under this Agreement the Rights Agent deems it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the President, any Vice President, the Secretary or the Treasurer of the Company and delivered to the Rights Agent, and such certificate
will be full authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate. 

        The
Rights Agent will be liable hereunder only for its own gross negligence, bad faith or willful misconduct. 

The
Rights Agent will not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Right Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals are and will be deemed to have been made by the Company only. 

22

 

The
Rights Agent will not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution and delivery hereof by the Rights
Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof); nor will it be responsible for any breach by the Company of any covenant contained in
this Agreement or in any Right Certificate; nor will it be responsible for any adjustment required under the provisions of Sections 11 or 13 (including any adjustment which results in Rights becoming
void) or responsible
for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such adjustment); nor will it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares
of stock or other securities to be issued pursuant to this Agreement or any Right Certificate or as to whether any shares of stock or other securities will, when issued, be duly authorized, validly
issued, fully paid and nonassessable. 

The
Company will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement. 

The
Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any one of the Chairman of the Board, the President, any Vice
President, the Secretary or the Treasurer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it will not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any such officer. 

The
Rights Agent and any stockholder, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily interested
in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this Agreement.
Nothing herein will preclude the Rights Agent from acting in any other capacity for the Company or for any other Person. 

The
Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent
will not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection and continued employment thereof. The Rights Agent will not be under any duty or responsibility to ensure compliance with any
applicable federal or state securities laws in connection with the issuance, transfer or exchange of Right Certificates. 

If,
with respect to any Right Certificate surrendered to the Rights Agent for exercise, transfer, split up, combination or exchange, either (i) the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not been completed or indicates an affirmative response to clause 1 or 2 thereof, or (ii) any other actual or
suspected irregularity exists, the Rights Agent will not take any further action with respect to such requested exercise, transfer, split up, combination or exchange without first consulting with the
Company, and will thereafter take further action with respect thereto only in accordance with the Company's written instructions. 

        Change of Rights Agent.    The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 calendar days' notice in writing mailed to the Company and to each transfer agent of the Preferred Shares or the Common Shares by registered or certified mail, and to the
holders of the Right Certificates by first class mail. The Company may 

23

 

remove the Rights Agent or any successor Rights Agent upon 30 calendar days' notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of
the Preferred Shares and the Common Shares by registered or certified mail, and to the holders of the Right Certificates by first class mail. If the Rights Agent resigns or is removed or otherwise
becomes incapable of acting, the Company will appoint a successor to the Rights Agent. If the Company fails to make such appointment within a period of 30 calendar days after giving notice of such
removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (who will, with such notice,
submit his Right Certificate for inspection by the Company), then the registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, will be a corporation or other legal entity organized and doing business under the laws of the United States or
of the State of New York (or of any other state of the United States so long as such corporation is authorized to do business as a banking institution in the State of New York), in good standing,
having a principal office in the State of New York, which is authorized under such laws to exercise corporate trust or stock transfer powers and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50 million. After appointment, the successor Rights Agent will be vested
with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent will deliver and transfer to
the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company will file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Preferred Shares or the Common Shares, and mail a notice
thereof in writing to the registered holders of the Right Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, will not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be. 

        Issuance of New Right Certificates.    Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary,
the Company may, at its option, issue new Right Certificates evidencing Rights in such form as may be approved by its Board of Directors to reflect any adjustment or change in the Purchase Price per
share and the number or kind of securities issuable upon exercise of the Rights made in accordance with the provisions of this Agreement. In addition, in connection with the issuance or sale by the
Company of Common Shares following the Distribution Date and prior to the Expiration Date, the Company (a) will, with respect to Common Shares so issued or sold pursuant to the exercise,
exchange or conversion of securities (other than Rights) issued prior to the Distribution Date which are exercisable or exchangeable for, or convertible into Common Shares, and (b) may, in any
other case, if deemed necessary, appropriate or desirable by the Board of Directors of the Company, issue Right Certificates representing an equivalent number of Rights as would have been issued in
respect of such Common Shares if they had been issued or sold prior to the Distribution Date, as appropriately adjusted as provided herein as if they had been so issued or sold; provided, however,
that (i) no such Right Certificate will be issued if, and to the extent that, in its good faith judgment the Board of Directors of the Company determines that the issuance of such Right
Certificate could have a material adverse tax consequence to the Company or to the Person to whom or which such Right Certificate
otherwise would be issued and (ii) no such Right Certificate will be issued if, and to the extent that, appropriate adjustment otherwise has been made in lieu of the issuance thereof. 

        Redemption.    i) Prior to the Expiration Date, the Board of Directors of the Company may, at its option, redeem all but
not less than all of the then-outstanding Rights at the Redemption Price at any time prior to the Close of Business on the later of (i) the Distribution Date and (ii) Share
Acquisition Date. Any such redemption will be effective immediately upon the action of the Board of Directors of 

24

 

the Company ordering the same, unless such action of the Board of Directors of the Company expressly provides that such redemption will be effective at a subsequent time or upon the occurrence or
nonoccurrence of one or more specified events (in which case such redemption will be effective in accordance with the provisions of such action of the Board of Directors of the Company). 

        Immediately
upon the effectiveness of the redemption of the Rights as provided in Section 23(a), and without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights will be to receive the Redemption Price, without interest thereon. Promptly after the effectiveness of the redemption of
the Rights as provided in Section 23(a), the Company will publicly announce such redemption and, within 10 calendar days thereafter, will give notice of such redemption to the holders of the
then-outstanding Rights by mailing such notice to all such holders at their last addresses as they appear upon the registry books of the Company; provided,
however, that the failure to give, or any defect in, any such notice will not affect the validity of the redemption of the Rights. Any notice that is mailed in the manner
herein provided will be deemed given, whether or not the holder receives the notice. The notice of redemption mailed to the holders of Rights will state the method by which the payment of the
Redemption Price will be made. The Company may, at its option, pay the Redemption Price in cash, Common Shares (based upon the current per share market price of the Common Shares (determined pursuant
to Section 11(d)) at the time of redemption), or any other form of consideration deemed appropriate by the Board of Directors of the Company (based upon the fair market value of such other
consideration, determined by the Board of Directors of the Company in good faith) or any combination thereof. The Company may, at its option, combine the payment of the Redemption Price with any other
payment being made concurrently to holders of Common Shares and, to the extent that any such other payment is discretionary, may reduce the amount thereof on account of the concurrent payment of the
Redemption Price. If legal or contractual restrictions prevent the Company from paying the Redemption Price (in the form of consideration deemed appropriate by the Board of Directors) at the time of
redemption, the Company will pay the Redemption Price, without interest, promptly after such time as the Company ceases to be so prevented from paying the Redemption Price. 

        Exchange.    j) The Board of Directors of the Company may, at its option, at any time after the later of the Share
Acquisition Date and the Distribution Date, exchange all or part of the then-outstanding and exercisable Rights (which will not include Rights that have become void pursuant to the
provisions of Section 11(a)(ii)) for Common Shares at an exchange ratio of one Common Share per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the Record Date (such exchange ratio being hereinafter referred to as the "Exchange Ratio"). Any such exchange will be effective
immediately upon the action of the Board of Directors of the Company ordering the same, unless such action of the Board of Directors of the Company expressly provides that such exchange will be
effective at a subsequent time or upon the occurrence or nonoccurrence of one
or more specified events (in which case such exchange will be effective in accordance with the provisions of such action of the Board of Directors of the Company). Notwithstanding the foregoing, the
Board of Directors of the Company will not be empowered to effect such exchange at any time after any Person (other than the Company or any Related Person), who or which, together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of 50% or more of the then-outstanding Common Shares. 

        Immediately
upon the effectiveness of the exchange of any Rights as provided in Section 24(a), and without any further action and without any notice, the right to exercise such
Rights will terminate and the only right with respect to such Rights thereafter of the holder of such Rights will be to receive that number of Common Shares equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. Promptly after the effectiveness of the exchange of any Rights as provided in Section 24(a), the Company will publicly announce such exchange and,
within 10 calendar days thereafter, will give notice of such exchange to all of the holders of such Rights at their last addresses 

25

 

as they appear upon the registry books of the Rights Agent; provided, however, that the failure to give, or any defect in, such notice will not affect
the validity of such exchange. Any notice that is mailed in the manner herein provided will be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Shares for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange will be
effected pro rata based on the number of Rights (other than Rights which have become void pursuant to the provisions of Section 11(a)(ii)) held by each holder of Rights. 

        In
any exchange pursuant to this Section 24, the Company, at its option, may substitute for any Common Share exchangeable for a Right (i) equivalent common shares (as such
term is used in Section 11(a)(iii)), (ii) cash, (iii) debt securities of the Company, (iv) other assets, or (v) any combination of the foregoing, in any event having
an aggregate value, as determined in good faith by the Board of Directors of the Company (whose determination will be described in a statement filed with the Rights Agent), equal to the current market
value of one Common Share (determined pursuant to Section 11(d)) on the Trading Day immediately preceding the date of the effectiveness of the exchange pursuant to this Section 24. 

        Notice of Certain Events.    k) If, after the Distribution Date, the Company proposes (i) to pay any dividend
payable in stock of any class to the holders of Preferred Shares or to make any other distribution to the holders of Preferred Shares (other than a regular periodic cash dividend), (ii) to
offer to the holders of Preferred Shares rights, options or warrants to subscribe for or to purchase any additional Preferred Shares or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of its Preferred Shares (other than a reclassification involving only the subdivision of outstanding Preferred Shares), (iv) to effect any
consolidation or merger into or with, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of
assets or earning power (including, without limitation, securities creating any obligation on the part of the Company and/or any of its Subsidiaries) representing more than 50% of the assets and
earning power of the Company and its Subsidiaries, taken as a whole, to any other Person or Persons other than the Company or one or more of its wholly owned Subsidiaries, (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to declare or pay any
dividend on the Common Shares payable in Common Shares or to effect a subdivision, combination or reclassification of the Common Shares then, in each such case, the Company will give to each holder of
a Right Certificate, to the extent feasible and in accordance with Section 26, a notice of such proposed action, which specifies the record date for the purposes of such stock dividend,
distribution or offering of rights, options or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution or winding up is to take place and
the date of participation therein by the holders of the Common Shares and/or Preferred Shares, if any such date is to be fixed, and such notice will be so given, in the case of any action covered by
clause (i) or (ii) above, at least 10 calendar days prior to the record date for determining holders of the Preferred Shares for purposes of such action, and, in the case of any such
other action, at least 10 calendar days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the Common Shares and/or Preferred Shares,
whichever is the earlier. 

        In
case any Triggering Event occurs, then, in any such case, the Company will as soon as practicable thereafter give to the Rights Agent and each holder of a Right Certificate, in
accordance with Section 26, a notice of the occurrence of such event, which specifies the event and the consequences of the event to holders of Rights. 

        Notices.    l) Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder
of any Right Certificate to or on the Company will be sufficiently given or 

26

 

made if sent by first class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows: 

	 	 	 
	Alliant Techsystems Inc.

5050 Lincoln Drive

Edina, Minnesota 55436-1097

Attention: General Counsel	 	 

        Subject
to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Right Certificate to
or on the Rights Agent will be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company) as follows: 

	 	 	 
	LaSalle Bank National Association

135 S. LaSalle Street

Chicago, Illinois 60603

Attention: Mark F. Rimkus	 	 

        Notices
or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate (or, if prior the Distribution Date, to the
holder of any certificate evidencing Common Shares) will be sufficiently given or made if sent by first class mail, postage prepaid, addressed to such holder at the address of such holder as shown on
the registry books of the Company. 

        Supplements and Amendments.    Prior to the time at which the Rights cease to be redeemable pursuant to Section 23, and
subject to the last sentence of this Section 27, the Company may in its sole and absolute discretion, and the Rights Agent will if the Company so directs, supplement or amend any provision of
this Agreement in any respect without the approval of any holders of Rights or Common Shares. From and after the time at which the Rights cease to be redeemable pursuant to Section 23, and
subject to the last sentence of this Section 27, the Company may, and the Rights Agent will if the Company so directs, supplement or amend this Agreement without the approval of any holders of
Rights or Common Shares in order (i) to cure any ambiguity, (ii) to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions
herein, (iii) to shorten or lengthen any time period hereunder, or (iv) to supplement or amend the provisions hereunder in any manner which the Company may deem desirable; provided that
no such supplement or amendment shall adversely affect the interests of the holders of Rights as such (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person), and no such
supplement or amendment shall cause the Rights again to become redeemable or cause this Agreement again to become supplementable or amendable otherwise than in accordance with the provisions of this
sentence. Without limiting the generality or effect of the foregoing, this Agreement may be supplemented or amended to provide for such voting powers for the Rights and such procedures for the
exercise thereof, if any, as the Board of Directors of the Company may determine to be appropriate. Upon the delivery of a certificate from an officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent will execute such supplement or amendment; provided, however, that the failure or refusal of the
Rights Agent to execute such supplement or amendment will not affect the validity of any supplement or amendment adopted by the Board of Directors of the Company, any of which will be effective in
accordance with the terms thereof. Notwithstanding anything in this Agreement to the contrary, no supplement or amendment may be made which decreases the stated Redemption Price to an amount less than
$.01 per Right. 

27

 

        Successors; Certain Covenants.    All the covenants and provisions of this Agreement by or for the benefit of the Company or the
Rights Agent will be binding on and inure to the benefit of their respective successors and assigns hereunder. 

        Benefits of This Agreement.    Nothing in this Agreement will be construed to give to any Person other than the Company, the
Rights Agent, and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares) any legal or equitable right, remedy or claim under this Agreement. This
Agreement will be for the sole and exclusive benefit of the Company, the Rights Agent, and the registered holders of the Right Certificates (or prior to the Distribution Date, the Common Shares). 

        Governing Law.    This Agreement, each Right and each Right Certificate issued hereunder will be deemed to be a contract made
under the internal substantive laws of the State of Delaware and for all purposes will be governed by and construed in accordance with the internal substantive laws of such State applicable to
contracts to be made and performed entirely within such State. 

        Severability.    If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement will remain in full force and effect and will in no way be
affected, impaired or invalidated; provided, however, that nothing contained in this Section 31 will affect the ability of the Company under the provisions of Section 27 to supplement or
amend this Agreement to replace such invalid, void or unenforceable term, provision, covenant or restriction with a legal, valid and enforceable term, provision, covenant or restriction. 

        Descriptive Headings, Etc.    Descriptive headings of the several Sections of this Agreement are inserted for convenience only
and will not control or affect the meaning or construction of any of the provisions hereof. Unless otherwise expressly provided, references herein to Articles, Sections and Exhibits are to Articles,
Sections and Exhibits of or to this Agreement. 

        Determinations and Actions by the Board.    For all purposes of this Agreement, any calculation of the number of Common Shares
outstanding at any particular time, including for purposes of determining the particular percentage of such outstanding Common Shares of which any Person is the Beneficial Owner, will be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act. The Board of Directors of the Company will have the
exclusive power and authority to administer this Agreement and to exercise all rights and powers specifically granted to the Board of Directors of the Company or to the Company, or as may be necessary
or advisable in the administration of this Agreement, including without limitation the right and power to (i) interpret the provisions of this Agreement and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement (including any determination as to whether particular Rights shall have become void). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below, any omission with respect to any of the foregoing) which are done or made by the Board of Directors of the
Company in good faith will (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights and all
other parties and (y) not subject the Board of Directors of the Company to any liability to any Person, including without limitation the Rights Agent and the holders of the Rights. 

        Counterparts.    This Agreement may be executed in any number of counterparts and each of such counterparts will for all
purposes be deemed to be an original, and all such counterparts will together constitute but one and the same instrument. 

28

 

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

	 	 	ALLIANT TECHSYSTEMS INC.
	

 	
 	

By:	
 	

/s/  ANN D. DAVIDSON      
 Name: Ann D. Davidson

Title: Vice President and General Counsel
	

 	
 	
LASALLE BANK NATIONAL ASSOCIATION
	

 	
 	

By:	
 	

/s/  MARK F. RIMKUS      
 Name: Mark F. Rimkus

Title: Assistant Vice President

29

  

EXHIBIT A  

  
 

    FORM OF
  CERTIFICATE OF DESIGNATION, PREFERENCES AND
  RIGHTS OF SERIES A JUNIOR PARTICIPATING
  PREFERRED STOCK
  
    of
  
    ALLIANT TECHSYSTEMS INC.    
  

        Pursuant to Section 151 of the General Corporation Law of the State of Delaware 

        We,
Dean M. Fjelstul, Vice President, and Charles H. Gauck, Secretary, of Alliant Techsystems Inc., a corporation organized and existing under the General Corporation Law of the
State of Delaware, in accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY: 

        That
pursuant to the authority conferred upon the Board of Directors by the Restated Certificate of Incorporation of the said Corporation, the said Board of Directors on
September 24, 1990, adopted the following resolution creating a series of 200,000 shares of Preferred Stock designated as Series A Junior Participating Preferred Stock: 

        RESOLVED,
that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of its Restated Certificate of Incorporation (the
"Restated Certificate of Incorporation"), a series of Series A Junior Participating Preferred Stock of the Corporation be, and hereby is created, and that the designation and amount thereof and
the voting powers, preferences and relative, participating, optional and other special rights of the shares of such series, and the qualifications, limitations or restrictions thereof are as follows: 

        Section 1.    Designation and Amount.    The shares of such series shall be designated as "Series A
Junior Participating Preferred Stock" and the number of shares constituting such series shall be 200,000. 

        Section 2.    Dividends and Distributions.    

        (A)  Subject
to the prior and superior rights of the holders of any shares of any series of Preferred Stock ranking prior and superior to the shares of Series A Junior
Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior Participating Preferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the fifteenth day of March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date") commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Junior
Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other
than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock, par value $.01 per share,
of the Corporation (the "Common Stock") since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Junior Participating Preferred Stock. In the event the Corporation shall at any time after September 28, 1990 (the "Rights Declaration Date")
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to which holders of shares of Series A Junior Participating Preferred 

A-1

 

Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 

        (B)  The
Corporation shall declare a dividend or distribution on the Series A Junior Participating Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series A Junior Participating Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date. 

        (C)  Dividends
shall begin to accrue and be cumulative on outstanding shares of Series A Junior Participating Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Series A Junior Participating Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Junior
Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A
Junior Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the
payment thereof. 

        Section 3.    Voting Rights.    The holders of shares of Series A Junior Participating Preferred Stock
shall have the following voting rights: 

        (A)  Subject
to the provision for adjustment hereinafter set forth, each share of Series A Junior Participating Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each
such case the number of votes per share to which holders of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event. 

        (B)  Except
as otherwise provided herein or by law, the holders of shares of Series A Junior Participating Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation. 

        (C)  (i)
If at any time dividends on any Series A Junior Participating Preferred Stock shall be in arrears in an amount equal to six (6) quarterly dividends
thereon, the occurrence of such contingency shall mark the beginning of a period (herein called a "default period") which shall extend until such time when all accrued and unpaid dividends for all
previous quarterly dividend periods and for the current quarterly dividend period on all shares of Series A Junior Participating Preferred Stock then outstanding shall have been declared and
paid or set apart for payment. During each default period, all 

A-2

 

holders of Preferred Stock (including holders of the Series A Junior Participating Preferred Stock) with dividends in arrears in an amount equal to six (6) quarterly dividends thereon,
voting as a class, irrespective of series, shall have the right to elect two (2) Directors. 

        (ii)  During
any default period, such voting right of the holders of Series A Junior Participating preferred Stock may be exercised initially at a special meeting
called pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of stockholders, and thereafter at annual meetings of stockholders, provided that neither such voting
right nor the right of the holders of any other series of
Preferred Stock, if any, to increase, in certain cases, the authorized number of Directors shall be exercised unless the holders of ten percent (10%) in number of shares of Preferred Stock outstanding
shall be present in person or by proxy. The absence of a quorum of the holders of Common Stock shall not affect the exercise by the holders of Preferred Stock of such voting right. At any meeting at
which the holders of Preferred Stock shall exercise such voting right initially during an existing default period, they shall have the right, voting as a class, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to two (2) Directors or, if such right is exercised at an annual meeting, to elect two (2) Directors. If the number
which may be so elected at any special meeting does not amount to the required number, the holders of the Preferred Stock shall have the right to make such increase in the number of Directors as shall
be necessary to permit the election by them of the required number. After the holders of the Preferred Stock shall have exercised their right to elect Directors in any default period and during the
continuance of such period, the number of Directors shall not be increased or decreased except by vote of the holders of Preferred Stock as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series A Junior Participating Preferred Stock. 

        (iii)  Unless
the holders of Preferred Stock shall, during an existing default period, have previously exercised their right to elect Directors, the Board of Directors may
order, or any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock outstanding, irrespective of series, may request, the
calling of a special meeting of the holders of Preferred Stock, which meeting shall thereupon be called by the Chairman of the Board of Directors, President, a Vice President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at which holders of Preferred Stock are entitled to vote pursuant to this paragraph (C) (iii) shall be given to each holder
of record of Preferred Stock by mailing a copy of such notice to him or her at his or her last address as the same appears on the books of the Corporation. Such meeting shall be called for a time not
earlier then 20 days and not later than 60 days after such order or request, or in default of the calling of such meeting within 60 days after such order or request, such meeting
may be called on similar notice by any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock outstanding. Notwithstanding
the provisions of this paragraph (C) (iii), no such special meeting shall be called during the period within 60 days immediately preceding the date fixed for the next annual meeting of
the stockholders. 

        (iv)  In
any default period, the holders of Common Stock, and other classes of stock of the Corporation if applicable, shall continue to be entitled to elect the whole number
of Directors until the holders of Preferred Stock shall have exercised their right to elect two (2) Directors voting as a class, after the exercise of which right (x) the Directors so
elected by the holders of Preferred Stock shall continue in office until their successors shall have been elected by such holders or until the expiration of the default period, and (y) any
vacancy in the Board of Directors may (except as provided in paragraph (C) (ii) of this Section 3) be filled by vote of a majority of the remaining Directors theretofore elected
by the holders of the class of stock which elected the Director whose office shall have become vacant. References in this paragraph (C) to Directors elected by the holders of a particular class
of stock shall include Directors elected by such Directors to fill vacancies as provided in clause (y) of the foregoing sentence. 

A-3

 

        (v)  Immediately
upon the expiration of a default period, (x) the right of the holders of Preferred Stock as a class to elect Directors shall cease, (y) the
term of any Directors elected by the holders of Preferred Stock as a class shall terminate, and (z) the number of Directors shall be such number as may be provided for in the Restated
Certificate of Incorporation or By-Laws irrespective of any increase made pursuant to the provisions of paragraph (C) (ii) of this Section 3 (such number being
subject, however, to change thereafter in any manner provided by law or in the Restated Certificate of Incorporation or By-Laws). Any vacancies in the Board of Directors effected by the
provisions of clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining Directors. 

        (D)  Except
as set forth herein, holders of Series A Junior Participating Preferred Stock shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action. 

        Section 4.    Certain Restrictions.    

        (A)  Whenever
quarterly dividends or other dividends or distributions payable on the Series A Junior Participating Preferred Stock as provided in Section 2 are
in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Junior Participating Preferred Stock outstanding shall have
been paid in full, the Corporation shall not: 

          (i)  declare
or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock; 

        (ii)  declare
or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Junior Participating Preferred Stock, except dividends paid ratably on the Series A Junior Participating Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; 

        (iii)  redeem
or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding
up) with the Series A Junior Participating Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for
shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Junior Participating Preferred Stock; 

        (iv)  purchase
or otherwise acquire for consideration any shares of Series A Junior Participating Preferred Stock, or any shares of stock ranking on a parity with the
Series A Junior Participating Preferred Stock,
except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes. 

        (B)  The
Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the
Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner, 

        Section 5.    Reacquired Shares.    Any shares of Series A Junior Participating Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of 

A-4

 

Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein. 

        Section 6.    Liquidation, Dissolution or Winding Up    

        (A)  Upon
any voluntary liquidation, dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior
Participating Preferred Stock shall have received $100 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment
(the "Series A Liquidation Preference"). Following the payment of the full amount of the Series A Liquidation Preference, no additional distributions shall be made to the holders of
shares of Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the "Common Adjustment") equal to
the quotient obtained by dividing (i) the Series A Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in subparagraph C below to reflect such events as
stock splits, stock dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii), the "Adjustment Number"). Following the payment of the full amount of the
Series A Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series A Junior Participating Preferred Stock and Common Stock, respectively, holders of
Series A Junior Participating Preferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of
the Adjustment Number to 1 with respect to such Preferred Stock and Common Stock, on a per share basis, respectively. 

        (B)  In
the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation
preferences of all other series of preferred stock, if
any, which rank on a parity with the Series A Junior Participating Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to
their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock. 

        (C)  In
the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 

        Section 7.    Consolidation, Merger, etc.    In case the Corporation shall enter into any consolidation,
merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the
shares of Series A Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set
forth) equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed
or exchanged. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect
to the exchange or change of shares of Series A Junior Participating Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately 

A-5

 

after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 

        Section 8.    No Redemption.    The shares of Series A Junior Participating Preferred Stock shall not be
redeemable. 

        Section 9.    Ranking.    The Series A Junior Participating Preferred Stock shall rank junior to all
other series of the Corporation's Preferred Stock as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provide otherwise. 

        Section 10.    Amendment.    The Restated Certificate of Incorporation of the Corporation shall not be further
amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A Junior Participating Preferred Stock so as to effect them adversely
without the
affirmative vote of the holders of a majority or more of the outstanding shares of Series A Junior Participating Preferred Stock, voting separately as a class. 

        Section 11.    Fractional Shares.    Series A Junior Participating Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such holders fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit
of all other rights of stockholders of Series A Junior Participating Preferred Stock. 

        IN
WITNESS WHEREOF, we have executed and subscribed this Certificate and do affirm the foregoing as true under the penalties of perjury this 28th day of September 1990. 

	 	 	 
	 	 	
 Vice President
	

Attest:	
 	

 
	

 Secretary	
 	

 

A-6

  

EXHIBIT B  

  
 

    FORM OF RIGHT CERTIFICATE    
  

	 	 	 
	Certificate No. R-                        	 	                        Rights

NOT
EXERCISABLE AFTER MAY 28, 2012 OR EARLIER IF REDEEMED, EXCHANGED OR AMENDED. THE RIGHTS ARE SUBJECT TO REDEMPTION, EXCHANGE AND AMENDMENT AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN
THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS THAT ARE OR WERE BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR A TRANSFEREE THEREOF MAY BECOME NULL AND VOID. 

 
 

Right Certificate
  
    ALLIANT TECHSYSTEMS INC.    
  

        This certifies that                        , or registered assigns,
 is the registered owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions, and conditions of the Rights Agreement, dated as of May 7, 2002 (the "Rights Agreement"), between
Alliant Techsystems Inc., a Delaware corporation (the "Company"), and LaSalle Bank National Association (the "Rights
Agent"), to
purchase from the Company at any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M. (Eastern time) on the Expiration Date (as such term is
defined in the Rights Agreement) at the principal office or offices of the Rights Agent designated for such purpose, one one-hundredth of a fully paid nonassessable share of
Series A Junior Participating Preferred Stock, par value $.01 per share (the "Preferred Shares"), of the Company, at a purchase price of $400.00
per one one-hundredth of a Preferred Share (the "Purchase Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase and related Certificate duly executed. If this Right Certificate is exercised in part, the holder will be entitled to receive upon surrender hereof another Right Certificate or
Right Certificates for the number of whole Rights not exercised. The number of Rights evidenced by this Right Certificate (and the number of one one-hundredths of a Preferred Share which
may be purchased upon exercise thereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of the date of the Rights Agreement, based on the Preferred Shares
as constituted at such date. 

        As
provided in the Rights Agreement, the Purchase Price and/or the number and/or kind of securities issuable upon the exercise of the Rights evidenced by this Right Certificate are
subject to adjustment upon the occurrence of certain events. 

        This
Right Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities of the Rights
Agent, the Company and the holders of the Right Certificates, which limitations of rights include the temporary suspension of the exercisability of the Rights under the circumstances specified in the
Rights Agreement. Copies of the Rights Agreement are on file at the above-mentioned office of the Rights Agent and can be obtained from the Company without charge upon written request therefor. Terms
used herein with initial capital letters and not defined herein are used herein with the meanings ascribed thereto in the Rights Agreement. 

B-1

 

        Pursuant
to the Rights Agreement, from and after the occurrence of a Flip-in Event, any Rights that are Beneficially Owned by (i) any Acquiring Person (or any
Affiliate or Associate of any Acquiring Person), (ii) a transferee of any Acquiring Person (or any such Affiliate or Associate) who becomes a transferee after the occurrence of a
Flip-in Event, or (iii) a transferee of any Acquiring Person (or any such Affiliate or Associate) who became a transferee prior to or concurrently with the Flip-in Event
pursuant to either (a) a transfer from an Acquiring Person to holders of its equity securities or to any Person with whom it has any continuing agreement, arrangement or understanding regarding
the transferred Rights or (b) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has the purpose or effect of avoiding
certain provisions of the Rights Agreement, and subsequent transferees of any of such Persons, will be void without any further action and any holder of such Rights will thereafter have no rights
whatsoever with respect to such Rights under any provision of the Rights Agreement. From and after the occurrence of a Flip-in Event, no Right Certificate will be issued that represents
Rights that are or have become void pursuant to the provisions of the Rights Agreement, and any Right Certificate delivered to the Rights
Agent that represents Rights that are or have become void pursuant to the provisions of the Rights Agreement will be canceled. 

        This
Right Certificate, with or without other Right Certificates, may be transferred, split up, combined or exchanged for another Right Certificate or Right Certificates entitling the
holder to purchase a like number of one one-hundredths of a Preferred Share (or other securities, as the case may be) as the Right Certificate or Right Certificates surrendered entitled
such holder (or former holder in the case of a transfer) to purchase, upon presentation and surrender hereof at the principal office of the Rights Agent designated for such purpose, with the Form of
Assignment (if appropriate) and the related Certificate duly executed. 

        Subject
to the provisions of the Rights Agreement, the Rights evidenced by this Certificate may be redeemed by the Company at its option at a redemption price of $.01 per Right or may be
exchanged in whole or in part. The Rights Agreement may be supplemented and amended by the Company, as provided therein. 

        The
Company is not required to issue fractions of Preferred Shares (other than fractions which are integral multiples of one one-hundredth of a Preferred Share, which may, at
the option of the Company, be evidenced by depositary receipts) or other securities issuable upon the exercise of any Right or Rights evidenced hereby. In lieu of issuing such fractional Preferred
Shares or other securities, the Company may make a cash payment, as provided in the Rights Agreement. 

        No
holder of this Right Certificate, as such, will be entitled to vote or receive dividends or be deemed for any purpose the holder of the Preferred Shares or of any other securities of
the Company which may at any time be issuable upon the exercise of the Right or Rights represented hereby, nor will anything contained herein or in the Rights Agreement be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate have been exercised in accordance with the provisions of the Rights Agreement. 

        This
Right Certificate will not be valid or obligatory for any purpose until it has been countersigned by the Rights Agent. 

B-2

 

        WITNESS
the facsimile signature of the proper officers of the Company and its corporate seal. Dated as of            ,            .

	 	 	 	 	 	 	 
	ATTEST:	 	ALLIANT TECHSYSTEMS INC.
	

 	
 	

 	
 	

By:	
 	

 
	 	 	
	 	 	 	

	 	 	 	 	 	 	Name:

Title:
	

Countersigned:	
 	

 	
 	

 
	

LASALLE BANK NATIONAL ASSOCIATION	
 	

 	
 	

 
	By:	 	 	 	 	 	 
	 	 	
	 	 	 	 
	 	 	Authorized Signature	 	 	 	 

B-3

  

Form of Reverse Side of Right Certificate  

  
 

    FORM OF ASSIGNMENT    
  

        (To be executed by the registered holder if such

holder desires to transfer the Right Certificate) 

        FOR
VALUE RECEIVED,
                                        
hereby sells, assigns and transfers unto 

(Please print name and address of transferee) 

this
Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint
                                        
Attorney, to transfer the
within Right Certificate on the books of the within-named Company, with full power of substitution. 

Dated:
                        ,         

	 	 	 
	 	 	
 Signature

Signature
Guaranteed:                                       
  

B-4

 
 
 

CERTIFICATE    
  

        The undersigned hereby certifies by checking the appropriate boxes that: 

        (1)  the
Rights evidenced by this Right Certificate [    ] are  [    ] are not being sold, assigned, transferred, split up,
combined or exchanged by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of any such Person (as such terms are defined in the Rights Agreement); 

        (2)  after
due inquiry and to the best knowledge of the undersigned, it [    ] did  [    ] did not acquire the Rights evidenced
by this Right Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person. 

Dated:
                        ,         

	 	 	 
	 	 	
 Signature

B-5

  

 
 

FORM OF ELECTION TO PURCHASE    
  

        (To be executed if holder desires to

exercise the Right Certificate) 

To
Alliant Techsystems Inc.: 

        The
undersigned hereby irrevocably elects to exercise                          Rights represented by this Right Certificate to
purchase the one
one-hundredths of a Preferred Share or other securities issuable upon the exercise of such Rights and requests that certificates for such securities be issued in the name of and delivered
to: 

	 	 	 
	Please insert social security

or other identifying number:	 	 
	 	 	

	

 (Please print name and address)
	

	

If such number of Rights is not all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights will be registered in the name of and delivered to:
	Please insert social security

or other identifying number:	 	 
	 	 	

	

 (Please print name and address)
	

Dated:                         ,         

	 	 	 
	 	 	
 Signature

Signature
Guaranteed:                                       
  

B-6

 
 
 

CERTIFICATE    
  

        The undersigned hereby certifies by checking the appropriate boxes that: 

        (1)  the
Rights evidenced by this Right Certificate [    ] are  [    ] are not being exercised by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined pursuant to the Rights Agreement); 

        (2)  after
due inquiry and to the best knowledge of the undersigned, it [    ] did  [    ] did not acquire the Rights evidenced
by this Right Certificate from any Person who is, was, or became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person. 

Dated:
                        ,         

	 	 	 
	 	 	
 Signature

 
 

NOTICE    
  

        Signatures on the foregoing Form of Assignment and Form of Election to Purchase and in the related Certificates must correspond to the
name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever.

        Signatures must be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an
approved medallion signature program) pursuant to Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended.

B-7

  

EXHIBIT C  

  
 

    SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK    
  

        On May 7, 2002, the Board of Directors of Alliant Techsystems Inc. adopted a rights plan and declared a dividend of one preferred share purchase
right for each outstanding share of Alliant Techsystems Inc.'s Common Stock, par value $0.01 per share. The dividend is payable on May 28, 2002 to our stockholders of record on that
date. The terms of the rights and the rights plan are set forth in a Rights Agreement, dated as of May 7, 2002, by and between Alliant Techsystems Inc. and LaSalle Bank National
Association, as rights agent. 

        Our
Board adopted the rights plan to protect our stockholders from coercive takeover practices or takeover bids that are inconsistent with their best interests. In general terms, the
rights plan imposes a significant penalty upon any person or group that acquires 15% or more of our outstanding common stock without the prior approval of our Board. A person or group that acquires a
percentage of our common stock in excess of that threshold is called an "acquiring person." Any rights held by an acquiring person are void and may not be exercised. 

        This
summary of rights provides a general description of the rights plan. Because it is only a summary, this description should be read together with the entire rights plan, which we
incorporate in this summary by reference. We have filed the rights plan with the Securities and Exchange Commission as an exhibit to our registration statement on Form 8-A. Upon
written request, we will provide a copy of the rights plan free of charge to any stockholder. 

        The Rights.    Our Board of Directors authorized the issuance of one right per each outstanding share of our common stock on
May 28, 2002. If the rights become exercisable, each right would allow its holder to purchase from us one one-hundredth of a share of our Series A Junior Participating
Preferred Stock for a purchase price of $400.00. Each fractional share of preferred stock would give the stockholder approximately the same dividend, voting and liquidation rights as does one share of
our common stock. Prior to exercise, however, a right does not give its holder any dividend, voting or liquidation rights. 

        Exercisability.    The rights will not be exercisable until the earlier of: 

	•
	10 days
after a public announcement by Alliant Techsystems Inc. that a person or group has become an acquiring person; and

	•
	10
business days (or a later date determined by our Board) after a person or group begins a tender or exchange offer that, if completed, would result in that
person or group becoming an acquiring person. 

        We
refer to the date that the rights become exercisable as the "distribution date." Until the distribution date, our common stock
certificates will also evidence the rights and will contain a notation to that effect. Any transfer of shares of common stock prior to the distribution date will constitute a transfer of the
associated rights. After the distribution date, the rights will separate from the common stock and be evidenced by rights certificates, which we will mail to all holders of rights that have not become
void. 

        Flip-in Event.    After the distribution date, if a person or group already is or becomes an
acquiring person, all holders of rights, except the acquiring person, may exercise their rights upon payment of the purchase price to purchase shares of our common stock (or other securities or assets
as determined by the Board) with a market value of two times the purchase price. 

        Flip-over Event.    After the distribution date, if a flip-in event has already
occurred and Alliant Techsystems Inc. is acquired in a merger or similar transaction, all holders of rights except the 

C-1

 

acquiring person may exercise their rights upon payment of the purchase price, to purchase shares of the acquiring corporation with a market value of two times the purchase price of the rights. 

        Rights
may be exercised to purchase our preferred shares only after the distribution date occurs and prior to the occurrence of a flip-in event as described above. A
distribution date resulting from the commencement of a tender offer or exchange offer described in the second bullet point above could precede the occurrence of a flip-in event, in which
case the rights could be exercised to purchase our preferred shares. A distribution date resulting from any occurrence described in the first bullet point above would necessarily follow the occurrence
of a flip-in event, in which case the rights could be exercised to purchase shares of common stock or other securities as described above. 

        Expiration.    The rights will expire on May 28, 2012 unless earlier redeemed or exchanged. 

        Redemption.    Our Board may redeem all (but not less than all) of the rights for a redemption price of $0.01 per right at any
time before the later of the distribution date and the date of the first public
announcement or disclosure by Alliant Techsystems Inc. that a person or group has become an acquiring person. Once the rights are redeemed, the right to exercise rights will terminate, and the
only right of the holders of rights will be to receive the redemption price. The redemption price will be adjusted if we declare a stock split or issue a stock dividend on our common stock. 

        Exchange.    After the later of the distribution date and the date of the first public announcement by Alliant
Techsystems Inc. that a person or group has become an acquiring person, but before an acquiring person owns 50% or more of our outstanding common stock, our Board may exchange each right (other
than rights that have become void) for one share of common stock or an equivalent security. 

        Anti-Dilution Provisions.    Our Board may adjust the purchase price of the preferred shares, the number of
preferred shares issuable and the number of outstanding rights to prevent dilution that may occur as a result of certain events, including among others, a stock dividend, a stock split or a
reclassification of the preferred shares or our common stock. No adjustments to the purchase price of less than 1% will be made. 

        Amendments.    Before the time rights cease to be redeemable, our Board may amend or supplement the rights plan without the
consent of the holders of the rights, except that no amendment may decrease the redemption price below 0.01 per right. At any time thereafter, our Board may amend or supplement the rights plan only to
cure an ambiguity, to alter time period provisions, to correct inconsistent provisions or to make any additional changes to the rights plan, but only to the extent that those changes do not impair or
adversely affect any rights holder and do not result in the rights again becoming redeemable. 

* * *  

C-2

QuickLinks

RIGHTS AGREEMENT DATED AS OF MAY 7, 2002, BY AND BETWEEN ALLIANT TECHSYSTEMS INC. AND LASALLE BANK NATIONAL ASSOCIATION, AS RIGHTS AGENT

TABLE OF CONTENTS

RIGHTS AGREEMENT

RECITALS

FORM OF CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK of ALLIANT TECHSYSTEMS INC.

FORM OF RIGHT CERTIFICATE

Right Certificate ALLIANT TECHSYSTEMS INC.

FORM OF ASSIGNMENT

CERTIFICATE

FORM OF ELECTION TO PURCHASE

CERTIFICATE

NOTICE

SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK<Page>
                                                                     EXHIBIT 4.8

                             P & F INDUSTRIES, INC.

                                   EXHIBIT 4.8

                          AMENDMENT NO. 5 AND WAIVERTO
                                CREDIT AGREEMENT

THIS AMENDMENT NO. 5 AND WAIVER TO CREDIT AGREEMENT, is entered into as of May
3, 2002 (the "Amendment and Waiver"), by and among P&F INDUSTRIES, INC., a
Delaware corporation ("P&F"), FLORIDA PNEUMATIC MANUFACTURING CORPORATION, a
Florida corporation ("Florida Pneumatic"), EMBASSY INDUSTRIES, INC., a New York
corporation ("Embassy") and GREEN MANUFACTURING, INC., a Delaware corporation
("Green") (P&F, Florida Pneumatic, Embassy and Green, the "Co-Borrowers"), and
CITIBANK, N.A. (successor-in-interest to European American Bank), a New York
banking corporation (the "Bank").

                                   BACKGROUND
The Co-Borrowers and the Bank are parties to a Credit Agreement, dated as of
July 23, 1998 (as same has been amended by Amendments Nos. 1, 2, 3 and 4
thereto, the "Credit Agreement"), pursuant to which the Bank provides the
Co-Borrowers with certain financial accommodations.
P&F has informed the Bank that it has entered into a Stock Purchase Agreement,
dated as of the date hereof, with Mark C. Weldon and Nationwide Industries, Inc.
(the "Stock Purchase Agreement") pursuant to which P&F will acquire the shares
of stock of Nationwide Industries, Inc., a Florida corporation. The Co-Borrowers
have requested that the Bank amend and waive certain provisions of the Credit
Agreement and the Bank is willing to do so on the terms and conditions
hereinafter set forth. Capitalized terms used herein and not defined herein
shall have the meanings given to them in the Credit Agreement. Accordingly, in
consideration of the premises and of the mutual covenants and agreements
hereinafter set forth, the parties hereto agree as follows:

AMENDMENTS TO CREDIT AGREEMENT

SECTION 1.1 OF THE CREDIT AGREEMENT IS HEREBY AMENDED TO ADD THE FOLLOWING
DEFINITIONS IN THEIR APPROPRIATE ALPHABETICAL ORDER:
"Amendment No. 5 Effective Date" shall mean May 3, 2002.
"Countrywide" shall mean Countrywide Hardware, Inc., a Delaware corporation.
"Nationwide" shall mean Nationwide Industries, Inc., a Florida corporation.
"Term Loan Commitment Maturity Date" shall mean July 26, 2002. Such term shall
be deemed to extend the Maturity Date from the original expiration of July 26,
2000, through July 26, 2002.

                                        1
<Page>

SECTION 7.12(b) OF THE CREDIT AGREEMENT IS HEREBY AMENDED IN ITS ENTIRETY TO
PROVIDE AS FOLLOWS:
          "(b) MINIMUM CAPITAL BASE. Maintain a Consolidated Capital Base at all
          times, of at least $17,000,000."

SECTION 7.12(d) OF THE CREDIT AGREEMENT IS HEREBY AMENDED IN ITS ENTIRETY TO
PROVIDE AS FOLLOWS:
          "(d) CONSOLIDATED CAPITAL EXPENDITURES. Permit Consolidated Capital
          Expenditures to exceed $3,000,000 for any fiscal year, provided, that
          up to $1,500,000 of an unexpended amount in any fiscal year may be
          carried forward for use in the immediately following fiscal year only.
          Notwithstanding anything to the contrary, for the purpose of
          determining compliance with this financial covenant only, the purchase
          of the premises located at 10333 Windhorst Road, Tampa, Florida 33619
          (the "Florida Premises") shall not be deemed a Capital Expenditure."

SCHEDULE II TO THE CREDIT AGREEMENT IS HEREBY AMENDED AND RESTATED IN ITS
ENTIRETY TO PROVIDE AS SET FORTH ON SCHEDULE II ATTACHED HERETO.

WAIVERS

THE BANK WAIVES COMPLIANCE WITH THE PROVISIONS OF SECTION 5.3(b) OF THE CREDIT
AGREEMENT TO THE EXTENT NECESSARY TO PERMIT P&F TO ENTER INTO THE STOCK PURCHASE
AGREEMENT, THE EMPLOYMENT AGREEMENT, AND THE OTHER DOCUMENTS AND AGREEMENTS
EXECUTED IN CONNECTION THEREWITH.

THE BANK WAIVES COMPLIANCE WITH THE PROVISIONS OF SECTION 7.01 AND SECTION 7.02
OF THE CREDIT AGREEMENT SOLELY TO THE EXTENT NECESSARY TO PERMIT COUNTRYWIDE TO
ENTER INTO A MORTGAGE LOAN, IN AN AMOUNT UP TO $2,200,000, WITH FIRST UNION
NATIONAL BANK PURSUANT TO THE TERMS OF A MORTGAGE ON TERMS AND CONDITIONS
SATISFACTORY TO THE BANK AND TO GRANT A MORTGAGE AND LIEN ON THE FLORIDA
PREMISES, ALONG WITH THE FIXTURES THEREON AND PROCEEDS THEREOF (THE "ASSETS"),
IN FAVOR OF FIRST UNION NATIONAL BANK TO SECURE THE PAYMENT OF AMOUNTS BORROWED
FROM FIRST UNION; PROVIDED, HOWEVER, THAT SUCH LIEN EXTENDS ONLY TO THE ASSETS
AND PROVIDED, FURTHER THAT, FIRST UNION NATIONAL BANK SHALL HAVE EXECUTED A
MORTGAGEE WAIVER, SUBSTANTIALLY IN THE FORM

                                        2
<Page>

OF EXHIBIT 2 ATTACHED HERETO.

CONDITIONS OF EFFECTIVENESS

THIS AMENDMENT AND WAIVER SHALL BECOME EFFECTIVE AS OF THE AMENDMENT NO. 5
EFFECTIVE DATE, UPON SATISFACTION OF THE FOLLOWING CONDITIONS PRECEDENT:
The Bank shall have received each of the following, in form and substance
satisfactory to the Bank and its counsel: this Amendment and Waiver, duly
executed by each Co-Borrower; the Term Loan Note, substantially in the form
attached hereto as EXHIBIT 1, duly executed by each Co-Borrower in favor of the
Bank;
the Reaffirmation Agreement, substantially in the form attached hereto as
EXHIBIT 3, duly executed by each Co-Borrower; a certificate of the Secretary of
each of Countrywide and Nationwide, dated as of the Amendment No. 5 Effective
Date, and certifying: (A) that neither its Certificate of Incorporation nor
By-laws has been amended since the date of their certification; (B) that
attached thereto is a true and a complete copy of resolutions adopted by the
Board of Directors of such Guarantor authorizing the execution, delivery and
performance of this Amendment and Waiver and each other Loan Document to which
such Guarantor is a party; and (C) the incumbency and specimen signature of each
officer of such Guarantor executing each Loan Document to which it is a party
and any certificates or instruments furnished pursuant hereto, and a
certification by another officer of such Guarantor as to the incumbency and
signature of the Secretary, and together with certified copies of the
Certificate of Incorporation and By-laws of such Guarantor; a certificate of
good standing for each of Countrywide and Nationwide from the Secretary of the
States of Delaware and Florida, respectively, dated as of a recent date; a
certificate of the Secretary of each of the Co-Borrowers, dated as of the
Amendment No. 5 Effective Date, certifying (A) the names and true signatures of
the officers of such Co-Borrower authorized to sign this Amendment and Waiver,
the other Loan Documents and any other documents to be delivered by such entity
under this Amendment and Waiver, (B) that attached thereto is a true and a
complete copy of resolutions adopted by the Board of Directors authorizing the
execution, delivery and performance of this Amendment and Waiver and each other
Loan Document to which it is a party and (C) that neither its Certificate of
Incorporation nor By-laws have been amended since, with respect to P&F, Florida
Pneumatic and Embassy, the Closing Date and, with respect to Green, the
Amendment No. 2 Effective Date; Intentionally Deleted.

                                        3
<Page>

a Guaranty, substantially in the form of EXHIBIT 4 attached hereto, and a
Security Agreement, substantially in the form of EXHIBIT 5 attached hereto, duly
executed by each of Countrywide and Nationwide, together with UCC-1 financing
statements in a form acceptable to the Bank for such jurisdictions as the Bank
determines are necessary to perfect the liens created by the Security Agreement;
an amendment to the Pledge Agreement, substantially in the form of EXHIBIT 6
attached hereto, duly executed by P&F, with respect to the pledge of the shares
of Countrywide held by P&F, along with share certificates evidencing such shares
and stock powers executed in blank;
a Pledge Agreement, substantially in the form of EXHIBIT 7 attached hereto, duly
executed by Countrywide, with respect to the shares of Nationwide held by
Countrywide, along with share certificates evidencing such shares and stock
powers executed in blank;
receipt of a copy of the duly executed Stock Purchase Agreement and all
documents and instruments executed in connection therewith, including but not
limited to the Escrow Agreement, and the Employment Agreement;
a favorable opinion of counsel for Countrywide and Nationwide dated as of the
Amendment No. 5 Effective Date, as required pursuant to Section 6.10 of the
Credit Agreement;
a certificates of insurance from an independent insurance broker confirming the
insurance required to be maintained pursuant to Section 6.01 of the Credit
Agreement, with respect to Countrywide and Nationwide to be delivered ten (10)
days from the date hereof;
such other documents, instruments, agreements, approvals, opinions and evidence
as the Bank may reasonably require. All conditions precedent set forth in the
Stock Purchase Agreement shall have been satisfied and the transactions
thereunder shall occur simultaneously with the consummation of the transactions
contemplated by this Amendment and Waiver. The indebtedness of Nationwide to
First Union National Bank shall have been paid in full simultaneously with the
consummation of the transactions contemplated by this Amendment and Waiver and
all existing documentation with respect to said indebtedness shall have been
terminated.
The stock to be acquired pursuant to the Stock Purchase Agreement shall be free
and clear of all Liens, except those Liens permitted pursuant to Section 7.01 of
the Credit Agreement.

REPRESENTATIONS AND WARRANTIES; EFFECT ON CREDIT AGREEMENT

EACH CO-BORROWER HEREBY REPRESENTS AND WARRANTS AS FOLLOWS:

                                        4
<Page>

This Amendment and Waiver and the Credit Agreement, as amended hereby,
constitute legal, valid and binding obligations of the Co-Borrowers and are
enforceable against the Co-Borrowers in accordance with their respective terms.
Upon the effectiveness of this Amendment and Waiver, the Co-Borrowers hereby
reaffirm all covenants, representations and warranties made in the Credit
Agreement to the extent that the same are not amended hereby and each
Co-Borrower agrees that all such covenants, representations and warranties shall
be deemed to have been remade as of the Amendment No. 5 Effective Date. No
Default or Event of Default has occurred and is continuing or would exist after
giving effect to this Amendment and Waiver. No Co-Borrower has any defense,
counterclaim or offset with respect to the Credit Agreement.

EFFECT ON CREDIT AGREEMENT.
Upon the effectiveness of this Amendment and Waiver, each reference in the
Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or words
of like import shall mean and be a reference to the Credit Agreement as amended
hereby.
Except as specifically amended herein, the Credit Agreement, and all other
documents, instruments and agreements executed and/or delivered in connection
therewith, shall remain in full force and effect, and are hereby ratified and
confirmed.
Except as expressly provided herein, the execution, delivery and effectiveness
of this Amendment and Waiver shall not operate as a waiver of any right, power
or remedy of the Bank, nor constitute a waiver of any provision of the Credit
Agreement, or any other documents, instruments or agreements executed and/or
delivered under or in connection therewith.
Upon consummation of the transactions contemplated hereby and by the Stock
Purchase Agreement, the acquisition of Nationwide shall be deemed a "Permitted
Acquisition" for purposes of the Agreement.

MISCELLANEOUS

THIS AMENDMENT AND WAIVER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.

SECTION HEADINGS IN THIS AMENDMENT AND WAIVER ARE INCLUDED HEREIN FOR
CONVENIENCE OF REFERENCE ONLY AND SHALL NOT CONSTITUTE A PART OF THIS AMENDMENT
AND WAIVER FOR ANY OTHER PURPOSE.

THIS AMENDMENT AND WAIVER MAY BE EXECUTED IN ONE OR MORE COUNTERPARTS, EACH OF
WHICH SHALL CONSTITUTE AN

                                        5
<Page>

ORIGINAL, AND ALL OF WHICH, TAKEN TOGETHER, SHALL BE DEEMED TO CONSTITUTE ONE
AND THE SAME AGREEMENT.
                          [NEXT PAGE IS SIGNATURE PAGE]

                                        6
<Page>

IN WITNESS WHEREOF, the Co-Borrowers and the Bank have caused this Amendment and
Waiver to be duly executed by their duly authorized officers as of the day and
year first above written. P&F INDUSTRIES, INC.

                                       By:
                                         Name: Joseph A. Molino. Jr.
                                         Title: Vice President
FLORIDA PNEUMATIC MANUFACTURING
CORPORATION

                                       By:
                                         Name: Joseph A. Molino. Jr.
                                         Title: Vice President
EMBASSY INDUSTRIES, INC.
                                       By:
                                         Name: Joseph A. Molino. Jr.
                                         Title: Vice President
GREEN MANUFACTURING, INC.
                                       By:
                                         Name: Joseph A. Molino. Jr.
                                         Title: Vice President
CITIBANK, N.A.
                                       By:
                                         Name: Richard Romano
                                         Title: Group Vice President

                                        7
<Page>

                                   SCHEDULE II
P&F INDUSTRIES

     Amada America, Inc. Equipment - #98074253
                         Equipment - #98074252
FLORIDA PNEUMATIC MANUFACTURING CORPORATION

Liens under the Mortgage and Security Agreement by and between Barnett Bank of
Palm Beach County and Florida Pneumatic Manufacturing Corporation, dated
February 25, 1998, as amended and supplemented.
EMBASSY INDUSTRIES, INC.

Liens under the Security Agreement by and between Embassy Industries, Inc. and
Met Life Capital Financial Corporation, dated as of April 11, 1996, in
connection with the Mortgage by and between Embassy Industries, Inc. and Met
Life Capital Financial Corporation, dated April 11, 1996, as amended and
supplemented.
NATIONWIDE INDUSTRIES, INC.

AT&T Capital   Leasing Services, Inc.    Equipment - #
980000283614
Norwest Financial Leasing                Equipment --#
99000033403
Dell Financial Services                  Equipment - #
200000220124
Schlegel Systems, Inc.                   Equipment --#
200200251781

                                        8
<Page>

                                    EXHIBIT 1

                                    TERM NOTE
$11,500,000                                                          May 3, 2002
FOR VALUE RECEIVED, P&F INDUSTRIES, INC., A DELAWARE CORPORATION ("P&F"),
FLORIDA PNEUMATIC MANUFACTURING CORPORATION, a Florida corporation ("Florida
Pneumatic"), EMBASSY INDUSTRIES, INC., a New York corporation ("Embassy") and
GREEN MANUFACTURING, INC., a Delaware corporation ("Green", and collectively
with P&F, Florida Pneumatic and Embassy, the "Co-Borrowers"), promise to pay to
the order of CITIBANK, N.A. (successor-in-interest to European American Bank)
(the "Bank") on or before May 3, 2009, (the "Maturity Date"), the principal
amount of ELEVEN MILLION FIVE HUNDRED THOUSAND AND 00/100 ($11,500,000) DOLLARS
in twenty four (24) consecutive quarterly installments of $479,166.67 each,
commencing June 1, 2003 and continuing on the first day of each June, September,
December, and March thereafter of each year, with a final installment, on the
Maturity Date, in an amount equal to the remaining principal amount outstanding
on the Maturity Date.
The Co-Borrowers also promise to pay interest on the unpaid principal amount
hereof from the date hereof until paid in full at the rates and at the times
which shall be determined in accordance with the provisions of the Credit
Agreement referred to below.
This Note is a "Term Note" issued pursuant to and entitled to the benefits of
the Credit Agreement dated as of July 23, 1998, among the Bank and the
Co-Borrowers (as the same has been and may be further amended, modified or
supplemented from time to time, the "Credit Agreement"), to which reference is
hereby made for a more complete statement of the terms and conditions under
which the Loans evidenced hereby was made and is to be repaid. Capitalized terms
used herein without definition shall have the meanings set forth in the Credit
Agreement.
The Bank shall record the date, Type and amount of each payment or prepayment of
principal of the Loans on the grid schedule annexed to this Note; PROVIDED,
HOWEVER, that the failure of the Bank to set forth the Loans, payments and other
information on the attached grid schedule shall not in any manner affect the
obligation of the Co-Borrowers to repay the Loans made by the Bank in accordance
with the terms of this Note.
This Note is subject to prepayment as provided in Section 3.03 of the Agreement.
Upon the occurrence of an Event of Default the unpaid balance of the principal
amount of this Note, together with all accrued but unpaid interest thereon, may
become, or may be declared to be, due and payable in the manner, upon the
conditions and with the effect provided in the Credit Agreement.
All payments of principal and interest in respect of this Note shall be made in
lawful money of the United States of America in same day funds at the office of
the Bank located at the Bank's Payment Office or at such other place as shall be
designated in writing for such purpose in accordance with the terms of the

                                        9
<Page>

Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note or the
Credit Agreement shall alter or impair the obligation of the Co-Borrowers, which
is absolute and unconditional, to pay the principal of and interest on this Note
at the place, at the respective times, and in the currency herein prescribed.
Each Co-Borrower and each endorser of this Note waive diligence, presentment,
demand, protest and notice of any kind in connection with this Note.
THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW.
IN WITNESS WHEREOF, each Co-Borrower has caused this Note to be executed and
delivered by its duly authorized officer, as of the day and year and at the
place first above written.
P&F INDUSTRIES, INC.                          FLORIDA PNEUMATIC MANUFACTURING
                                              CORPORATION

By:                                           By:
   -------------------------------               -------------------------------
      Name:  Joseph A. Molino, Jr.                  Name:  Joseph A. MOLINO, Jr.
      Title: Vice President                         Title: Vice President

EMBASSY INDUSTRIES, INC.                      GREEN MANUFACTURING, INC.

By:                                           By:
   -------------------------------               -------------------------------
      Name:  Joseph A. Molino, Jr.                  Name:  Joseph A. Molino, Jr.
      Title: Vice President                         Title: Vice President

                                       10
<Page>

                                SCHEDULE OF LOANS

<Table>
<Caption>
                                                                 Amount of
                                     Principal                   Principal
Date of         Type of   Interest   Amount of      Maturity     Paid or
Loan            Loan      Rate       Loan           of Loan      Unpaid
--------        --------  --------   ---------      ---------    ---------
<S>             <C>       <C>        <C>            <C>          <C>

</Table>

                                       11
<Page>

                                    EXHIBIT 2

                            FIRST UNION NATIONAL BANK
                                  ("Mortgagee")

                                                                    May __, 2002
CITIBANK, N.A.
730 Veterans Memorial Highway
Hauppauge, New York 11788

Gentlemen:

We, First Union National Bank (the "Mortgagee"), have been granted a security
interest in certain items of personal property of Countrywide Hardware, Inc.
(the "Mortgagor") pursuant to a Mortgage, dated May __, 2002, between the
Mortgagee and the Mortgagor, together with the notes secured thereby and all
other ancillary documents delivered in connection therewith (collectively, the
"Mortgage Documents"). We have been advised that Citibank, N.A. (the "Bank") has
a security interest in all personal property of the Mortgagor described on
EXHIBIT A attached hereto (the "Collateral") and requires the Collateral as
collateral security for all obligations of the Mortgagor to the Bank, now owing
or hereafter incurred, in the above described capacities (the "Indebtedness").
We hereby agree that the Collateral may be stored, utilized and/or installed at
the Mortgagor's premises located at 10333 Windhorst Road, Tampa, Florida (the
"Premises") and shall not be deemed a fixture or part of the real estate but
shall at all times be considered personal property. If the Mortgagee has
obtained possession of the Premises as the result of the Mortgagor's default,
the Mortgagee shall give prompt written notice to the Bank, following which the
Bank shall have up to 45 days (the "Period") during which it shall have
reasonable access to the Premises for purposes of inventorying, maintaining,
selling and/or removing the Collateral in accordance with and to the extent
permitted by law. The Bank shall be liable for the reasonable costs of repairing
any damage caused to the Premises in the exercise of its rights under this
paragraph, but the Bank shall not be responsible for any pre-existing damage to
the Premises or any diminution in value of the Premises caused by the absence of
the Collateral actually removed. During the Period, the Mortgagor will not
interfere with any sale of the Collateral, by public auction or otherwise,
conducted by or on behalf of the Bank on the Premises, and the Mortgagee shall
cooperate in any such sale.
This agreement shall inure to the benefit of the Bank and its successors and
assigns and shall be binding on the undersigned and its successors and assigns.

                                       12
<Page>

The Agreement will be effective only if accepted by you as herein below provided
and returned to us.
Very truly yours,

FIRST UNION NATIONAL BANK
By:
   --------------------------------
      Name:
      Title:
AGREED TO AND ACCEPTED

COUNTRYWIDE HARDWARE, INC.

By:
   --------------------------------
   Name: Joseph A. Molino, Jr.
   Title:   Vice President

CITIBANK, N.A.
By:
   --------------------------------
   Name: Richard Romano
   Title: Group Vice President

                                       13
<Page>

                                    EXHIBIT A
ALL ASSETS

All personal property of the Mortgagor, now owned and hereafter acquired, of
every kind and description wherever located, including, without limitation, all
(i) Accounts; (ii) Chattel paper, including Electronic Chattel Paper; (iii)
Goods, including all Inventory and Equipment and any accessions thereto; (iv)
Instruments, including Promissory Note; (v) Documents; (vi) General Intangibles,
including Payment Intangibles and Software; and (vii) to the extent not listed
above as original collateral, proceeds and products of the foregoing (as such
capitalized terms are defined in the Uniform Commercial Code as in effect in the
State of New York).

                                       14
<Page>

                                   EXHIBIT 3

                             REAFFIRMATION AGREEMENT

                                                                     May 3, 2002
CITIBANK, N.A.
730 Veterans Memorial Highway
Hauppauge, New York 11788

Gentlemen:

Reference is hereby made to (a) those certain Security Agreements, dated as of
July 23, 1998 and September 16, 1998, by and between Citibank, N.A.
(successor-in-interest to European American Bank) (the "Bank") and each of P&F
Industries, Inc. ("P&F"), Florida Pneumatic Manufacturing Corporation ("Florida
Pneumatic"), Embassy Industries, Inc. ("Embassy") and Green Manufacturing, Inc.
("Green", with P&F, Florida Pneumatic and Embassy, collectively, the
"Co-Borrowers"), and (b) the Credit Agreement, dated as of July 23, 1998 (as the
same has been amended by Amendments Nos. 1, 2,3 and 4 thereto, the "Credit
Agreement"), by and the Bank and the Co-Borrowers. Capitalized terms not
otherwise defined herein shall have the meanings given to them in the Security
Agreements.
In connection with the foregoing and as a condition precedent to the
effectiveness of the Amendment No. 5 and Waiver to Credit Agreement, dated as of
the date hereof (the "Amendment and Waiver") by and among the Bank and the
Co-Borrowers, each Co-Borrower hereby acknowledges and confirms that (a) all
terms and provisions contained in their respective Security Agreement are and
shall remain, in full force and effect in accordance with their respective
terms, and are hereby ratified and confirmed and (b) the liens heretofore
granted, pledged and/or assigned to the Bank as security for the Co-Borrowers'
obligations under their respective Security Agreements and the Credit Agreement
shall not be impaired, limited or affected in any manner whatsoever by reason of
the Amendment and Waiver.
Except as expressly provided herein, the execution, delivery and effectiveness
of this letter shall not operate as a waiver of any right, power or remedy of
the Bank, nor constitute a waiver of any provision of the Credit Agreement, any
Security Agreement or any Loan Documents.
If you are in agreement with the foregoing, kindly execute this agreement in the
space provided for below.

                                       15
<Page>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.

P&F INDUSTRIES, INC.
FLORIDA PNEUMATIC MANUFACTURING
  CORPORATION
EMBASSY INDUSTRIES, INC.
GREEN MANUFACTURING, INC.

                                              By:
                                                  ------------------------------
                                                  Name: Joseph A. Molino, Jr.
                                                  Title: The Vice President of
                                                  each of the foregoing
                                                  corporations
ACKNOWLEDGED AND AGREED
CITIBANK, N.A.

By:
   -----------------------------
   Name: Richard Romano
   Title:   Group Vice President

                                       16
<Page>

                                    EXHIBIT 4
                                FORM OF GUARANTY
                                 [see attached]

                                       17
<Page>

                                    EXHIBIT 5

                           FORM OF SECURITY AGREEMENT

                                 [see attached]

                                       18
<Page>

                                    EXHIBIT 6
                      REAFFIRMATION AND AMENDMENT NO. 2 TO
                            COMPANY PLEDGE AGREEMENT

                                                                     May 3, 2002
CITIBANK, N.A., as Administrative Agent
730 Veterans Memorial Highway
Hauppauge, New York 11788

Gentlemen:

Reference is hereby made to that certain (a) Pledge Agreement, dated as of July
23, 1998, by and between P&F Industries, Inc. (the "Pledgor") and Citibank, N.A.
(successor-in-interest to European American Bank) (the "Pledgee") (as same has
been and may be further amended, restated, supplemented, or modified, from time
to time, the "Pledge Agreement") and (b) the Credit Agreement, dated as of July
23, 1998 (as the same has been amended by Amendments Nos. 1, 2, 3 and 4 thereto,
the "Credit Agreement"), by and among the Bank and the Co-Borrowers. Capitalized
terms not otherwise defined herein shall have the meanings given to them in the
Credit Agreement.
In connection with the foregoing and as a condition precedent to the
effectiveness of the Amendment No. 5 and Waiver to Credit Agreement, dated as of
the date hereof (the "Amendment and Waiver") by and among the Bank and the
Co-Borrowers, the Pledgor hereby:
1.   acknowledges and confirms that (a) as security for the Obligations, the
Pledgor hereby delivers, pledges and assigns to the Pledgee and creates in the
Pledgee a first security interest in the shares of stock of Countrywide
Hardware, Inc., a Delaware corporation ("Countrywide"), which it owns, as same
is represented by the stock certificate listed on Schedule A hereto (the
"Countrywide Stock"), (b) the term "Pledged Shares" shall be deemed to include
the Countrywide Stock and (c) except as specifically amended herein, all terms
and provisions contained in the Pledge Agreement are, and shall remain, in full
force and effect in accordance with their respective terms and shall be deemed
to apply to the Countrywide Stock, as same may apply to the other Pledged
Shares, and are hereby ratified and confirmed;
2.   acknowledges and agrees that the Pledgor is the beneficial owner of that
percentage of the issued and outstanding capital stock of Countrywide, as listed
on Schedule A annexed hereto;
3.   acknowledges and agrees that Schedule A to the Pledge Agreement is hereby
amended in its entirety and replaced with Schedule A attached hereto.
Except as expressly provided herein, the execution, delivery and effectiveness
of this agreement shall not operate as a waiver of any right, power or remedy of
the Pledgee, nor constitute a waiver of any provision of the Pledge Agreement,
the Credit Agreement, or any other Loan Document.
If you are in agreement with the foregoing, kindly executed this agreement in
the space provided for below.

                                       19
<Page>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written.

P&F INDUSTRIES, INC.
By:
   --------------------------------
      Name: Joseph A. Molino, Jr.
      Title:   Vice President
ACKNOWLEDGED AND AGREED

CITIBANK, N.A.

By:
    --------------------------------
      Name: Richard Romano
      Title: Group Vice President

                                       20
<Page>

                                   SCHEDULE A

<Table>
<Caption>
                            Number of            Percentage     Par
Issuer                       Shares      Class   Ownership     Value
--------------------------  ---------  --------  ---------    -------
<S>                             <C>     <C>            <C>    <C>
Florida Pneumatic               1,000   Common         100%   $  1.00
Manufacturing Corporation
Embassy Industries, Inc.        1,000   Common         100%   $  1.00
Green Manufacturing, Inc.       1,000   Common         100%   $   .01
Countrywide Hardware, Inc.        100   Common         100%   $   .01
</Table>

                                       21
<Page>

                                    EXHIBIT 7

                                PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of May 3, 2002, by and between COUNTRYWIDE HARDWARE,
INC., a Delaware corporation having an office at 10333 Windhorst Road, Tampa,
Florida 33619 "Pledgor") and CITIBANK, N.A. (successor-in-interest to European
American Bank), a New York banking corporation having an office at 730 Veterans
Memorial Highway, Hauppauge, New York 11788 (the "Pledgee").

                                    RECITALS
          P&F Industries, Inc., Florida Pneumatic Manufacturing Corporation,
Embassy Industries, Inc. and Green Manufacturing, Inc. (each, a "Co-Borrower"
and collectively, the "Co-Borrowers") and the Pledgee are parties to a Credit
Agreement, dated as of July 23, 1998, (as same has been and may be further
amended, modified or supplemented from time to time, the "Credit Agreement")
pursuant to which, the Co-Borrowers have and will continue to receive loans and
other financial accommodations from the Pledgee and will incur Obligations (as
defined in the Credit Agreement).
          Pursuant to a Guaranty dated the date hereof, the Pledgor has
guaranteed the payment by the Company of all its Obligations (the obligations of
the Pledgor under such Guaranty are hereinafter referred to as the "Guaranty
Obligations").
          The Pledgor is the beneficial owner of that percentage of the issued
and outstanding capital stock of each respective corporation listed on Schedule
A annexed hereto (collectively, the "Pledged Companies") as indicated on such
Schedule A.
          In order to induce the Pledgee to continue to extend credit to the
Co-Borrowers on and after the date hereof as provided in the Credit Agreement,
the Pledgor wishes to grant to the Pledgee security and assurance in order to
secure the payment and performance of all its Guaranty Obligations, and to that
effect to pledge to the Pledgee all of the issued and outstanding capital stock
of the Pledged Companies that is owned by the Pledgor, represented by the stock
certificates listed opposite the name of such Pledgor on such Schedule A
(collectively, the "Pledged Shares").
Accordingly, the parties hereto agree as follows:
SECURITY INTEREST. As security for the Guaranty Obligations, including any and
all renewals or extensions thereof, the Pledgor hereby delivers, pledges and
assigns to the Pledgee and creates in the Pledgee a first security interest in
all of the Pledgor's right, title and interest in and to all of the Pledged
Shares, together with all rights and privileges of Pledgor with respect thereto,
all proceeds, income and profits thereof and all property received with respect
to the Pledged Shares in addition thereto, in exchange thereof or in
substitution therefor (collectively, the "Collateral").
STOCK DIVIDENDS, OPTIONS, OR OTHER ADJUSTMENTS. The Pledgee shall receive, as
Collateral, any and all additional shares of stock or any other property of any
kind distributable on or by reason of the Collateral pledged hereunder, whether
in the form

                                       22
<Page>

of or by way of stock dividends, warrants, partial liquidation, conversion,
prepayments or redemptions (in whole or in part), liquidation, or otherwise with
the exceptions of cash dividends or other cash distributions to the extent
permitted under Section 7(a). If any additional shares of capital stock,
instruments, or other property against which a security interest can only be
perfected by possession by the Pledgee, which are distributable on or by reason
of the Collateral pledged hereunder, shall come into the possession or control
of the Pledgor, the Pledgor shall hold or control in trust and forthwith
transfer and deliver the same to the Pledgee subject to the provisions hereof.
DELIVERY OF SHARE CERTIFICATES; STOCK POWERS. All instruments and stock
certificates representing the Collateral are being delivered to the Pledgee, for
the benefit of the Pledgee, simultaneously herewith, together with stock powers
duly executed in blank by Pledgor. Pledgor shall promptly deliver to Pledgee, or
cause the corporation or other entity issuing the Collateral to deliver directly
to Pledgee, share certificates or other documents representing Collateral
acquired or received after the date of this Agreement with a stock power duly
executed by such Pledgor. If at any time the Pledgee notifies Pledgor that
additional stock powers endorsed in blank with respect to the Collateral are
required, Pledgor shall promptly execute in blank and deliver such stock powers
as the Pledgee may request.
POWER OF ATTORNEY. Pledgor hereby constitutes and irrevocably appoints the
Pledgee, with full power of substitution and revocation by the Pledgee, as
Pledgor's true and lawful attorney-in-fact, to the full extent permitted by law,
at any time or times when an Event of Default has occurred and is continuing to
affix to certificates and documents representing the Collateral the stock power
delivered with respect thereto, to transfer or cause the transfer of the
Collateral, or any part thereof on the books of the corporation or other entity
issuing the same, to the name of the Pledgee or the Pledgee's nominee and
thereafter exercise as to such Collateral all the rights, power and remedies of
an owner. The power of attorney granted pursuant to this Agreement and all
authority hereby conferred are granted and conferred solely to protect the
Pledgee's interest in the Collateral and shall not impose any duty upon the
Pledgee to exercise any power. This power of attorney shall be irrevocable as
one coupled with an interest.
INDUCING REPRESENTATIONS OF THE PLEDGOR. Pledgor makes the following
representations and warranties to the Pledgee, each and all of which shall
survive the execution and delivery of this Agreement:
The information concerning the Pledged Companies and Pledgor's beneficial
ownership of capital stock thereof that is contained in Schedule A is correct in
all respects;
Pledgor is the sole legal and beneficial owner of, and has good and indefeasible
title to, the Pledged Shares pledged by Pledgor, free and clear of all pledges,
liens, security interests and other encumbrances and restrictions on the
transfer and assignment thereof, other than the security interest created by
this Agreement and has the unqualified right and authority to

                                       23
<Page>

execute this Agreement and to pledge the Collateral to the Pledgee as provided
for herein;
There are no outstanding options, warrants or other agreements to which the
Pledged Companies or the Pledgor is a party with respect to the Pledged Shares
pledged by Pledgor;
The Pledged Shares pledged by the Pledgor have been validly issued and are fully
paid and non-assessable; the holder or holders thereof are not and will not be
subject to any personal liability as such holder under any applicable law; and
are not subject to any charter, by-law, statutory, contractual or other
restrictions governing their issuance, transfer, ownership or control except
transfer of the Pledged Shares may be restricted by applicable securities laws;
Any consent, approval or authorization of or designation or filing with any
authority on the part of Pledgor which is required in connection with the pledge
and security interest granted under this Agreement has been obtained or
effected; The execution and delivery of this Agreement by Pledgor, and the
performance by Pledgor of its obligations hereunder, will not result in a
violation of any mortgage, indenture, contract, instrument, judgment, decree,
order, statute, rule or regulation to which Pledgor is subject; and
Pledgor has delivered to the Pledgee all instruments and stock certificates, if
any, representing the Pledged Shares, duly endorsed in blank or accompanied by
an assignment or assignments sufficient to transfer title thereto.
OBLIGATIONS OF PLEDGOR. Pledgor makes the following representations, warranties
and covenants to the Pledgee, each and all of which shall survive the execution
and delivery of this Agreement:
Pledgor will not, without the prior written consent of the Pledgee (which
consent shall be in the Pledgee's sole discretion), sell, transfer or convey any
interest in, or suffer or permit any lien or encumbrance to be created upon or
with respect to, any of the Collateral (other than as created under this
Agreement) during the term of the pledge established hereby. Pledgor will, at
its own expense, at any time and from time to time at the Pledgee's request, do,
make, procure, execute and deliver all acts, things, writings, assurances and
other documents as may be required by the Pledgee to further enhance, preserve,
establish, demonstrate or enforce the Pledgee's rights, interests and remedies
created by, provided in or emanating from this Agreement.
RIGHTS OF PLEDGOR. So long as no Event of Default has occurred and is
continuing, and so long as the Pledgee has not transferred the Collateral to its
own name under Section 8 hereof: Pledgor shall be entitled to receive any cash
dividends and other cash distributions paid on the Collateral, in each case, to
the extent permitted pursuant to the Credit Agreement; and Pledgor shall be
entitled to vote or consent or grant waivers or ratifications with respect to
the Collateral in any manner not inconsistent with this Agreement, the Credit
Agreement or any other Loan Document. Pledgor hereby grants to the Pledgee an
irrevocable proxy to vote the Collateral, which proxy shall be

                                       24
<Page>

effective immediately upon the occurrence of an Event of Default or registration
of the Collateral in the name of the Pledgee pursuant to Section 8 hereof. Upon
request of the Pledgee, Pledgor agrees to deliver to the Pledgee such further
evidence of such irrevocable proxy or such further irrevocable proxy to vote the
Collateral during the continuance of an Event of Default as the Pledgee may
reasonably request.
RIGHTS OF THE PLEDGEE. At any time when an Event of Default has occurred and is
continuing, the Pledgee may in its sole discretion:
Cause the Collateral to be transferred to its name or to the name of its nominee
or nominees and thereafter exercise as to such Collateral all of the rights,
powers and remedies of an owner; Collect by legal proceedings or otherwise all
dividends, interest, principal payments, capital distributions and other sums
now or hereafter payable on account of said Collateral, and hold the same as
part of the Collateral, or apply the same to any of the Guaranty Obligations in
such manner and order as the Pledgee may decide in its sole discretion;
Enter into any extension, subordination, reorganization, deposit, merger, or
consolidation agreement, or any other agreement relating to or affecting the
Collateral, and in connection therewith deposit or surrender control of such
collateral thereunder, and accept other property in exchange therefor and hold
and apply such property or money so received in accordance with the provisions
hereof; and
Discharge any taxes, liens, security interests or other encumbrances levied or
placed on the Collateral or pay for the maintenance and preservation of the
Collateral; the amount of such payments, plus any and all reasonable fees, costs
and expenses of the Pledgee (including attorneys' fees and disbursements), in
connection therewith, shall be added to the Guaranty Obligations of the Pledgor
secured hereby.
EVENT OF DEFAULT; REMEDIES. Upon the occurrence and continuance of an Event of
Default:
In addition to all the rights and remedies of a secured party under applicable
law, the Pledgee shall have the right, and without demand of performance or
other demand, advertisement or notice of any kind, except as specified below, to
or upon Pledgor or any other person (all and each of which demands,
advertisements and/or notices are hereby expressly waived to the extent
permitted by law), to proceed forthwith to collect, receive, appropriate and
realize upon the Collateral, or any part thereof and to proceed forthwith to
sell, assign, give an option or options to purchase, contract to sell, or
otherwise dispose of and deliver the Collateral or any part thereof in one or
more parcels at public or private sale or sales at any stock exchange, broker's
board or at any of the Pledgee's offices or elsewhere at such prices and on such
terms (including, without limitation, a requirement that any purchaser of all or
any part of the Collateral shall be required to purchase any securities
constituting the Collateral solely for investment and without any intention to
make a distribution thereof) as the Pledgee in its sole and absolute discretion
deems appropriate without any

                                       25
<Page>

liability for any loss due to decrease in the market value of the Collateral
during the period held. Such notification to the Pledgor shall be deemed
reasonable and properly given if mailed, postage prepaid, at least five (5) days
before any such disposition, to the address indicated in Section 13(d) below.
Any disposition of the Collateral or any part thereof may be for cash or on
credit or for future delivery without assumption of any credit risk, with the
right to the Pledgee to purchase all or any part of the Collateral so sold at
any such sale or sales, public or private, free of any equity or right of
redemption in Pledgor, which right or equity is, to the extent permitted by
applicable law, hereby expressly waived or released by Pledgor. All of the
Pledgee's rights and remedies, including but not limited to the foregoing, shall
be cumulative and not exclusive and shall be enforceable alternatively,
successively or concurrently as the Pledgee may deem expedient.
The Pledgee may elect to obtain, at the Pledgor's expense the advice of any
independent investment banking firm with respect to the method and manner of
sale or other disposition of any of the Collateral, the price reasonably
obtainable therefor, the consideration of cash and/or credit terms, or any other
details concerning such sale or disposition. The Pledgee, in its sole
discretion, may elect to sell on such credit terms which it deems reasonable.
The sale of any of the Collateral on credit terms shall not relieve the Pledgor
of its liability under any Loan Document until its Guaranty Obligations have
been paid in full. All payments received by the Pledgee in respect of a sale of
Collateral shall be applied to the Guaranty Obligations in the manner provided
in Section 10 of this Agreement, as and when such payments are received.
Pledgor recognizes that the Pledgee may be unable to effect a public sale of all
or a part of the Collateral by reason of certain prohibitions contained in any
applicable securities law, but may be compelled to resort to one or more private
sales to a restricted group of purchasers who will be obliged to agree, among
other things, to acquire the Collateral for their own account, for investment
and not with a view for the distribution or resale thereof. Pledgor agrees that
private sales so made may be at prices and on other terms less favorable to the
seller than if the Collateral were sold at public sale, and that the Pledgee has
no obligation to delay the sale of any Collateral for the period of time
necessary to permit the registration of the Collateral for public sale under the
Securities Act of 1933, as amended. Pledgor agrees that a private sale or sales
made under the foregoing circumstances shall be deemed to have been made in a
commercially reasonable manner.
If any consent, approval or authorization of any state, municipal or other
governmental department, agency or authority should be necessary to effectuate
any sale or other disposition of the Collateral, or any partial disposition of
the Collateral, the Pledgor will execute all such applications and other
instruments as may be required in connection with securing any such consent,
approval or authorization, and will otherwise use its best efforts to secure
such sale or other disposition of the

                                       26
<Page>

Collateral as the Pledgee may reasonably deem necessary pursuant to the terms of
this Agreement, provided, that nothing herein shall require the Pledgor to
effect a registration under the Securities Act of 1933, as amended, except as
may be provided to the contrary in Paragraph 6(b) or 8 hereof.
Upon any sale or other disposition, the Pledgee shall have the right to deliver,
assign and transfer to the purchaser thereof the Collateral so sold or disposed
of. Each purchaser at any such sale or other disposition (including the Pledgee)
shall hold the Collateral free from any claim or right of the Pledgor of
whatever kind, including any equity or right of redemption of Pledgor. Pledgor
specifically waives, to the extent permitted by applicable laws, all rights of
redemption, stay or appraisal which it had or may have under any rule of law or
statute now existing or hereafter adopted.
The Pledgee shall not be obligated to make any sale or other disposition, unless
the terms thereof shall be satisfactory to it. The Pledgee may, subject to
applicable laws, without notice or publication, adjourn any private or public
sale, and hold such sale at any time or place to which the same may be so
adjourned.
  In case of any sale of all or any part of the Collateral, on credit or future
delivery, the Collateral so sold may be retained by the Pledgee until the
selling price is paid by the purchaser thereof, but the Pledgee shall incur no
liability in the case of the failure of such purchaser to take up and pay for
the property so sold and, in case of any such failure, such property may again
be sold as herein provided.
DISPOSITION OF PROCEEDS.
The proceeds of any sale or disposition of all or any part of the Collateral
shall be applied by the Pledgee in the following order:
to the payment in full of the costs and expenses of such sale or sales,
collections, and the protection, declaration and enforcement of any security
interest granted hereunder including the reasonable compensation of the
Pledgee's agents and attorneys';
to the payment of the Guaranty Obligations; and
to the payment to Pledgor of any surplus then remaining from such proceeds,
subject to the rights of any holder of a lien on the Collateral of which the
Pledgee has actual notice.
In the event that the proceeds of any sale or other disposition of Collateral
are insufficient to cover the principal of, and premium, if any, and interest
on, the Guaranty Obligations secured thereby plus costs and expenses of the sale
or other disposition, the Pledgor shall remain liable for any deficiency.
TERMINATION. This Agreement shall continue in full force and effect until all of
the Guaranty Obligations shall have been indefeasibly paid in full and
satisfied, and the Credit Agreement shall have been terminated. Subject to any
sale or other disposition by the Pledgee of the Collateral or any part thereof
pursuant to this Agreement, the Collateral shall be returned to Pledgor upon
full payment, satisfaction and termination of all of the Guaranty Obligations.
EXPENSES OF THE PLEDGEE. All expenses (including reasonable fees

                                       27
<Page>

and disbursements of counsel) incurred by the Pledgee in connection with the
perfection and continuation of the security interest granted hereunder and any
actual or attempted sale, exchange of, or any enforcement, collection,
compromise or settlement respecting the Collateral, or any other action taken by
the Pledgee hereunder whether directly or as attorney-in-fact pursuant to a
power of attorney or other authorization herein conferred, for the purpose of
satisfaction of the liability of the Pledgor for failure to pay the Guaranty
Obligations or as additional amounts owing by Pledgor to cover the Pledgee's
costs of acting against the Collateral, shall be deemed a Guaranty Obligation of
the Pledgor for all purposes of this Agreement and the Pledgee may apply the
Collateral to payment of or reimbursement of itself for such liability.
GENERAL PROVISIONS.
All capitalized terms used in this Pledge Agreement and not defined herein shall
have the respective meanings assigned to them in the Credit Agreement.
The Pledgee or its designee is hereby appointed the attorney-in-fact of Pledgor
for the purpose of carrying out the provisions of this Agreement and taking any
action and executing any instrument which the Pledgee reasonably may deem
necessary and advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable as one coupled with an interest.
The Pledgee and its assigns shall have no obligation in respect of the
Collateral, except to use reasonable care in holding the Collateral and to hold
and dispose of the same in accordance with the terms of this Agreement.
All notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing, and unless otherwise expressly provided herein,
shall be conclusively deemed to have been received by a party hereto and to be
effective on the day on which delivered to such party at the address set forth
below, or, in the case of telecopy notice, when acknowledged as received, or if
sent by registered or certified mail, on the third Business Day after the day on
which mailed in the United States, addressed to such party at said address:
if to the Pledgor, at
                         Countrywide Hardware, Inc.
                         300 Smith Street
                         Farmingdale, New York 11735
                         Attention: Mr. Joseph A. Molino, Jr.
                         Telecopy: (516) 694-1836
if to the Pledgee, at
                         Citibank, N.A.
                         730 Veterans Memorial Highway
                         Hauppauge, New York 11788
                         Attention: Relationship Manager, P&F
                         Industries, Inc.
                         Telecopy: (631) 360-7112
                         - and -
                    as to each such party at such other address as such party
                         shall have designated to the other in a written notice
                         complying

                                       28
<Page>

                         as to delivery with the provisions of this Section 13.
No failure on the part of the Pledgee to exercise, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise by the Pledgee of any right, power or
remedy hereunder preclude any other or future exercise thereof, or the exercise
of any other right, power or remedy. The remedies herein provided are cumulative
and are not exclusive of any remedies provided by law or any other agreement.
The representations, covenants and agreements of the Pledgor herein contained
shall survive the date hereof. Neither this Agreement nor the provisions hereof
can be changed, waived or terminated orally. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, heirs, legal representatives and assigns.
APPLICABLE LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. THIS AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICT OR CHOICE OF LAWS. THE
PLEDGOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK AND ANY COURT IN THE STATE
OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO
OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY,
AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PLEDGOR HEREBY WAIVES AND
AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH
SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN
AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS
IMPROPER, OR THAT THIS AGREEMENT OR ANY DOCUMENT OR ANY INSTRUMENT REFERRED TO
HEREIN OR THE SUBJECT MATTER HEREOF OR THEREOF MAY NOT BE LITIGATED IN OR BY
SUCH COURTS. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PLEDGOR AGREES NOT
TO (I) SEEK AND HEREBY WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY
SUCH COURT BY ANY COURT OF ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED
UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT AND (II) ASSERT ANY COUNTERCLAIM
IN ANY SUCH SUIT, ACTION OR PROCEEDING. THE PLEDGOR AGREES THAT SERVICE OF
PROCESS MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR
NOTICES SET FORTH IN THIS AGREEMENT OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW
YORK. THE PLEDGOR IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date first above written. COUNTRYWIDE HARDWARE, INC.

By:
   --------------------------------
      Name: Joseph A. Molino, Jr.
      Title: Vice President

                                       29
<Page>

CITIBANK, N.A.

By:
   --------------------------------
      Name: Richard Romano
      Title: Group Vice President
                                   SCHEDULE A

<Table>
<Caption>
                               Number           Percenage      Par
           Issuer            of Shares   Class  Ownership     Value
---------------------------  ---------  ------  ---------    ------
<S>                             <C>     <C>           <C>    <C>
Nationwide Industries, Inc.     100     Common        100%   $ 1.00

</Table>

                                       30

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