Document:

Exhibit 10.5

 

 

 

 

THE
ALLSTATE CORPORATION

 

 

 

EQUITY
INCENTIVE PLAN

 

As
Amended and Restated Effective as of September 10, 2006

 

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
  1.

  	
   

  	
  Purpose

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Scope of the Plan

  	
  3

  
	
   

  	
   

  	
  (a)

  	
  Number of Shares Available For Delivery Under the
  Plan.

  	
  3

  
	
   

  	
   

  	
  (b)

  	
  Effect of Expiration or Termination

  	
  3

  
	
   

  	
   

  	
  (c)

  	
  Treasury Stock

  	
  3

  
	
   

  	
   

  	
  (d)

  	
  Committee Discretion to Cancel Options

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Administration

  	
  4

  
	
   

  	
   

  	
  (a)

  	
  Committee Administration

  	
  4

  
	
   

  	
   

  	
  (b)

  	
  Board Reservation and Delegation

  	
  4

  
	
   

  	
   

  	
  (c)

  	
  Committee Authority

  	
  4

  
	
   

  	
   

  	
  (d)

  	
  Committee Determinations Final

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Eligibility

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Conditions to Grants

  	
  6

  
	
   

  	
   

  	
  (a)

  	
  General Conditions

  	
  6

  
	
   

  	
   

  	
  (b)

  	
  Grant of Options and Option Price

  	
  6

  
	
   

  	
   

  	
  (c)

  	
  Grant of Incentive Stock Options

  	
  6

  
	
   

  	
   

  	
  (d)

  	
  Grant of Reload Options

  	
  8

  
	
   

  	
   

  	
  (e)

  	
  Grant of Shares of Restricted Stock

  	
  8

  
	
   

  	
   

  	
  (f)

  	
  Grant of Unrestricted Stock

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Limitations on Transferability

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Exercise

  	
  11

  
	
   

  	
   

  	
  (a)

  	
  Exercise
  of Options

  	
  11

  
	
   

  	
   

  	
  (b)

  	
  Special Rules for Section 16 Grantees

  	
  13

  
	
   

  	
   

  	
  (c)

  	
  Permissible Shares Issued

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Loans and Guarantees

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  Notification under Section 83(b)

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  Mandatory Withholding Taxes

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Elective Share Withholding

  	
  14

  
							

 

 

 

	
  13.

  	
   

  	
  Termination of Employment

  	
  15

  
	
   

  	
   

  	
  (a)

  	
  Restricted Stock

  	
  15

  
	
   

  	
   

  	
  (b)

  	
  Other Awards

  	
  15

  
	
   

  	
   

  	
  (c)

  	
  Maximum Extension

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Equity Incentive Plans of Foreign Subsidiaries

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  Substituted Awards

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  Securities Law Matters

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  No Funding Required

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  No Employment Rights

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  Rights as a Stockholder

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  Nature of Payments

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
   

  	
  Non-Uniform Determinations

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
   

  	
  Adjustments

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
   

  	
  Amendment of the Plan

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
   

  	
  Termination
  of the Plan

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  25.

  	
   

  	
  No
  Illegal Transactions

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  26.

  	
   

  	
  Controlling
  Law

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  27.

  	
   

  	
  Severability

  	
  19

  
						

 

 ii

 

 

The Plan.   The
Company established The Allstate Corporation Equity Incentive Plan (as set
forth herein and from time to time amended, the “Plan”), effective June 2,
1993.  Amendments to the Plan were
approved by the Company’s stockholders on May 19, 1994 and on May 23, 1995. The
Board of Directors further amended the Plan on May 21, 1996, November 12, 1996
and August 14, 1997.  On May 19, 1998,
the Plan was amended and restated effective as of July 2, 1998.  The Plan was further amended and restated
effective as of November 10, 1998.  The
Plan was further amended and restated by the Board at a meeting held on
September 10, 2006.

1.              Purpose.   The primary
purpose of the Plan is to provide a means by which key employees of the Company
and its Subsidiaries can acquire and maintain
stock ownership, thereby strengthening their commitment to the success of the
Company and its Subsidiaries and their desire to remain employed by the Company
and its Subsidiaries.  The Plan also is
intended to attract and retain key employees and to provide such employees with
additional incentive and reward opportunities designed to encourage them to
enhance the profitable growth of the Company and its Subsidiaries.

2.             Definitions.   As used
in the Plan, terms defined parenthetically immediately after their use shall
have the respective meanings provided by
such definitions and the terms set forth below shall have the following
meanings (such meanings to be equally applicable to both the singular and
plural forms of the terms defined):

(a)           “Award” means options, shares of
restricted Stock, or shares of unrestricted Stock granted under the Plan.

(b)           “Award Agreement” means the written
agreement by which an Award is evidenced.

(c)           “Board” means the board of directors
of the Company.

(d)           “Committee” means the committee of
the Board appointed pursuant to Article 4.

(e)           “Company” means The Allstate
Corporation, a Delaware corporation.

(f)            “Disability” means, as relates to
the exercise of an incentive stock option after Termination of Employment, a
permanent and total disability within the meaning of Section 22(e)(3) of
the Internal Revenue Code, and for all other purposes, a mental or physical
condition which, in the opinion of the Committee, renders a Grantee unable or
incompetent to carry out the job responsibilities which such Grantee held or
the duties to which such Grantee was assigned at the time the disability was
incurred, and which is expected to be permanent or for an indefinite duration.

(g)           “Effective Date” means the date
described in the first paragraph of the Plan.

 1
 

 

 

(h)           “Fair Market Value” of the Stock
means, as of any applicable date (other than on the Effective Date) the mean
between the high and low prices of the Stock as reported on the New York Stock
Exchange Composite Tape, or if no such reported sale of the Stock shall have
occurred on such date, on the next preceding date on which there was such a
reported sale, provided, however, that if the Stock is acquired
and sold in a simultaneous sale pursuant to the provisions of Article 8(a)(iv),
Fair Market Value means the price received upon such sale.  Solely as of the effective date of the IPO,
Fair Market Value of the Stock means the price to the public pursuant to the
form of final prospectus used in connection with the IPO, as indicated on the
cover page of such prospectus or otherwise.

(i)            “Grant Date” means the date of grant
of an Award determined in accordance with Article 6.

(j)            “Grantee” means an individual who
has been granted an Award.

(k)           “Internal Revenue Code” means the
Internal Revenue Code of 1986, as amended, and regulations and rulings
thereunder.  References to a particular
section of the Internal Revenue Code shall include references to successor
provisions.

(l)            “IPO” means such term as defined in
the first paragraph of the Plan.

(m)          “Minimum Consideration” means the $.01
par value per share or such larger amount determined pursuant to resolution of
the Board to be capital within the meaning of Section 154 of the Delaware
General Corporation Law.

(n)           “1934 Act” means the Securities
Exchange Act of 1934, as amended.

(o)           “Option Price” means the per share
purchase price of (i) Stock subject to an option or (ii) restricted
Stock subject to an option.

(p)           [deleted]

(q)           “Plan” has the meaning set forth in
the introductory paragraph.

(r)            “Reload Option” has the meaning
specified in Article 6(d).

(s)           “Retirement” means a Termination of
Employment occurring on or after an individual attains age 65, or a Termination
of Employment approved by the Company as an early retirement; provided that in
the case of a Section 16 Grantee, such early retirement must be approved by the
Committee.

 2
 

 

 

(t)            “SEC” means the Securities and
Exchange Commission.

(u)           “Section 16 Grantee” means a person
subject to potential liability with respect to equity securities of the Company
under Section 16(b) of the 1934 Act.

(v)  “Stock” means common stock of the Company,
par value $.01 per share.

(x)  “Subsidiary” means a corporation as defined
in Section 424(f) of the Internal Revenue Code, with the Company being
treated as the employer corporation for purposes of this definition.

(y)  “10% Owner” means a person who owns stock
(including stock treated as owned under Section 424(d) of the Internal Revenue Code)
possessing more than 10% of the Voting Power of the Company.

(z)  “Termination of Employment” occurs the first
day on which an individual is for any reason no longer employed by the Company
or any of its Subsidiaries, or with respect to an individual who is an employee
of a Subsidiary, the first day on which the Company no longer owns voting
securities possessing at least 50% of the Voting Power of such Subsidiary.

(aa)  “Voting Power” means the combined voting
power of the then-outstanding voting securities entitled to vote generally in
the election of directors.

3.              Scope of the Plan.

(a)           Number of Shares Available For
Delivery Under the Plan.   A maximum of 36,000,000 shares of Stock may be awarded under the
Plan.  Awards may be made from authorized
but unissued shares of Stock or from Treasury Stock.  No more than an aggregate of 3,400,000 shares
of the aforesaid 36,000,000 shares of Stock may be granted under Article 6(e)
and (f).  No more than 1,600,000 shares
of Stock may be granted as stock options to any employee during the duration of
the Plan.

(b)           Effect of Expiration or
Termination.   If and to the extent an Award , other than an Award granted
under Article 6(e) or
(f),shall expire or terminate for any reason without having been exercised in
full (including, without limitation, a cancellation and regrant of an option
pursuant to Article 4(c)(vii)), or shall be forfeited, without, in either case,
the Grantee having enjoyed any of the benefits of stock ownership, the shares
of Stock associated with such Award shall become available for other
Awards.  Except in the case of a Reload
Option granted to a Section 16 Grantee, the grant of a Reload Option shall not
reduce the number of shares of Stock available for other Awards.

(c)           Treasury Stock.   The
Committee shall have the authority to cause the Company to purchase from time
to time shares of Stock
to be held as treasury shares and used for or in 

 3
 

 

 

connection with Awards.

(d)           Committee Discretion to Cancel
Options.   The Committee may, in its discretion, elect at any time,
should it determine it
is in the best interest of the Company’s stockholders to cancel any options
granted hereunder, to cancel all or any of the options granted hereunder and
pay the holders of any such options an amount (payable in such proportion as
the Committee may determine in cash or in Stock (valued at the Fair Market
Value of a share of Stock on the date of cancellation of such option)) equal to
the number of shares of Stock subject to such cancelled option, multiplied by
the amount (if any) by which the Fair Market Value of Stock on the date of
cancellation of the option exceeds the Option Price; provided that if the Committee
should determine that not making payment of such amount to the holders of such
option upon the cancellation would be in the best interests of stockholders of
the Company (ignoring in such determination the cost of such payment and
considering only other matters), the Committee may void options granted
hereunder and declare that no payment shall be made to the holders of such
options.

4.              Administration.

(a)           Committee Administration.   Subject
to Article 4(b), the Plan shall be administered by the Committee, which shall consist of not less
than two persons appointed by the Board, who are directors of the Company and
not employees of the Company or any of its Subsidiaries.  Membership on the Committee shall be subject
to such limitations (including, if appropriate, a change in the minimum number
of members of the Committee) as the Board deems appropriate to permit
transactions pursuant to the Plan to be exempt from potential liability under
Section 16(b) of the 1934 Act and to comply with Section 162 (m) of the
Internal Revenue Code.

(b)           Board Reservation and Delegation.   The
Board may, in its discretion, reserve to itself or delegate to another committee of the Board any
or all of the authority and responsibility of the Committee with respect to
Awards to Grantees who are not Section 16 Grantees at the time any such delegated
authority or responsibility is exercised. 
Such other committee may consist of one or more directors who may, but
need not be, officers or employees of the Company or of any of its
Subsidiaries.  To the extent that the
Board has reserved to itself or delegated the authority and responsibility of
the Committee to such other committee, all references to the Committee in the
Plan shall be to such other committee.

(c)           Committee Authority.   The
Committee shall have full and final authority, in its sole and absolute
discretion, but subject
to the express provisions of the Plan, as follows:

(i)          to grant Awards,

(ii)         to determine (A) when Awards may
be granted, and (B) whether or not specific Awards shall be identified
with other specific Awards, and if so, whether they shall be exercisable
cumulatively with, or alternatively to, such other specific Awards,

 4
 

 

 

(iii)        to interpret the Plan and to make all
determinations necessary or advisable for the administration of the Plan,

(iv)        to prescribe, amend, and rescind rules
and regulations relating to the Plan, including, without limitation, rules with
respect to the exercisability and nonforfeitability of Awards upon the
Termination of Employment of a Grantee,

(v)         to determine the terms and provisions
of the Award Agreements, which need not be identical and, with the consent of
the Grantee, to modify any such Award Agreement at any time,

(vi)        to cancel options in accordance with the
provision of Section 3(d),

(vii)       except as provided in Section 4(c)(vi)
hereof, to cancel, with the consent of the Grantee, outstanding Awards, and to
grant new Awards in substitution thereof,

(viii)      to accelerate the exercisability of, and
to accelerate or waive any or all of the restrictions and conditions applicable
to, any Award,

(ix)        to authorize foreign Subsidiaries to
adopt plans as provided in Article 14,

(x)         to make such adjustments or
modifications to Awards to Grantees working outside the United States as are
necessary and advisable to fulfill the purposes of the Plan,

(xi)        to authorize any action of or make any
determination by the Company as the Committee shall deem necessary or advisable
for carrying out the purposes of the Plan,

(xii         to make appropriate adjustments to,
cancel or continue Awards in accordance with Article 22, and

(xiii)      to impose such additional conditions,
restrictions, and limitations upon the grant, exercise or retention of Awards
as the Committee may, before or concurrently with the grant thereof, deem
appropriate, including, without limitation, requiring simultaneous exercise of
related identified Awards, and limiting the percentage of Awards which may from
time to time be exercised by a Grantee.

(d)           Committee Determinations Final.   The
determination of the Committee on all matters relating to the Plan or any Award Agreement shall
be conclusive and final.  No member of
the Committee shall be liable for any action or determination made in good
faith with respect to the Plan or any Award.

5.              Eligibility.   Awards
may be granted to any employee of the Company or any of its 

 5
 

 

 

Subsidiaries. 
In selecting the individuals to whom Awards may be granted, as well as
in determining the number of shares of Stock subject to, and the other terms
and conditions applicable to, each Award, the Committee shall take into
consideration such factors as it deems relevant in promoting the purposes of
the Plan.

6.              Conditions to Grants.

(a)           General Conditions.

(i)            The Grant Date of an Award shall be
the date on which the Committee grants the Award or such later date as
specified in advance by the Committee.

(ii)           The term of each Award (subject to
Articles 6(c) and 6(d) with respect to incentive stock options and Reload
Options, respectively) shall be a period of not more than 12 years from
the Grant Date, and shall be subject to earlier termination as herein provided.

(iii)          A Grantee may, if otherwise eligible,
be granted additional Awards in any combination.

(iv)          The Committee may grant Awards with
terms and conditions which differ among the Grantees thereof.  To the extent not set forth in the Plan, the
terms and conditions of each Award shall be set forth in an Award Agreement.

(b)           Grant of Options and Option Price.   The
Committee may, in its discretion, grant options (which may be options to acquire
unrestricted Stock or restricted Stock) to any employee eligible under Article
5 to receive Awards.  No later than the
Grant Date of any option, the Committee shall determine the Option Price;
provided that the Option Price shall, except as provided in subsection (c)
below and in Article 15, not be less than 100% of the Fair Market Value of the
Stock on the Grant Date.

(c)           Grant of Incentive Stock Options.   At
the time of the grant of any option, the Committee may designate that such option shall be made
subject to additional restrictions to permit it to qualify as an “incentive
stock option” under the requirements of Section 422 of the Internal
Revenue Code.  Any option designated as
an incentive stock option:

(i)            shall have an Option Price of
(A) not less than 100% of the Fair Market Value of the Stock on the
Grant Date or (B) in the case of a 10% Owner, not less than 110% of the
Fair Market Value of the Stock on the Grant Date;

(ii)           shall have a term of not more than 10
years (five years, in the case of a 10% Owner) from the Grant Date, and shall
be subject to earlier termination as provided herein or in the applicable Award
Agreement;

 6
 

 

 

(iii)          shall not have an aggregate Fair
Market Value (determined for each incentive stock option at its Grant Date) of
Stock with respect to which incentive stock options are exercisable for the
first time by such Grantee during any calendar year (under the Plan and any
other employee stock option plan of the Grantee’s employer or any parent or
subsidiary thereof (“Other Plans”)), determined in accordance with the
provisions of Section 422 of the Internal Revenue Code, which exceeds $100,000
(the “$100,000 Limit”);

(iv)          shall, if the aggregate Fair Market
Value of Stock (determined on the Grant Date) with respect to all incentive
stock options previously granted under the Plan and any Other Plans (“Prior
Grants”) and any incentive stock options under such grant (the “Current Grant”)
which are exercisable for the first time during any calendar year would exceed
the $100,000 Limit, be exercisable as follows:

(A)          the portion of the Current Grant
exercisable for the first time by the Grantee during any calendar year which
would be, when added to any portions of any Prior Grants exercisable for the
first time by the Grantee during such calendar year with respect to stock which
would have an aggregate Fair Market Value (determined as of the respective
Grant Date for such options) in excess of the $100,000 Limit shall,
notwithstanding the terms of the Current Grant, be exercisable for the first
time by the Grantee in the first subsequent calendar year or years in which it
could be exercisable for the first time by the Grantee when added to all Prior
Grants without exceeding the $100,000 Limit; and

(B)           if, viewed as of the date of the
Current Grant, any portion of a Current Grant could not be exercised under the
provisions of the immediately preceding sentence during any calendar year
commencing with the calendar year in which it is first exercisable through and
including the last calendar year in which it may by its terms be exercised,
such portion of the Current Grant shall not be an incentive stock option, but
shall be exercisable as a separate option at such date or dates as are provided
in the Current Grant;

(v)           shall be granted within 10 years
from the earlier of the date the Plan is adopted or the date the Plan is
approved by the stockholders of the Company; and

(vi)          shall require the Grantee to notify
the Committee of any disposition of any Stock issued pursuant to the exercise
of the incentive stock option under the circumstances described in
Section 421(b) of the Internal Revenue Code (relating to certain
disqualifying dispositions), within 10 days of such disposition.

Notwithstanding
the foregoing and Article 4(c)(v), the Committee may take any action with
respect to any option, including but not limited to an incentive stock option,
without the consent of the Grantee, in order to prevent such option from being
treated as an incentive stock option.

 7
 

 

 

(d)           Grant of Reload Options.   The
Committee may provide in an Award Agreement that a Grantee who exercises all or any
portion of an option for shares of Stock which have a Fair Market Value equal
to not less than 100% of the Option Price for such options (“Exercised Options”)
and who paid the Option Price with shares of Stock shall be granted, subject to
Article 3, an additional option (“Reload Option”) for a number of shares
of stock equal to the sum (“Reload Number”) of the number of shares of Stock
tendered or withheld in payment of the Option Price for the Exercised Options
plus, if so provided by the Committee, the number of shares of Stock, if any,
retained by the Company in connection with the exercise of the Exercised
Options to satisfy any federal, state or local tax withholding requirements.

Reload Options
shall be subject to the following terms and conditions:

(i)            the Grant Date for each Reload
Option shall be the date of exercise of the Exercised Option to which it
relates;

(ii)           subject to Article 6(d)(iii) below,
the Reload Option may be exercised at any time during the unexpired term of the
Exercised Option (subject to earlier termination thereof as provided in the
Plan and in the applicable Award Agreement); and

(iii)          the terms of the Reload Option shall
be the same as the terms of the Exercised Option to which it relates, except
that (A) the Option Price shall be the Fair Market Value of the Stock on
the Grant Date of the Reload Option and (B) no Reload Option may be
exercised within one year from the Grant Date thereof.

(e)           Grant of Shares of Restricted
Stock.

(i)            The Committee may, in its
discretion, grant shares of restricted Stock to any employee eligible under
Article 5 to receive Awards.

(ii)           Before the grant of any shares of
restricted Stock, the Committee shall determine, in its discretion:

(A)          whether the certificates for such
shares shall be delivered to the Grantee or held (together with a stock power
executed in blank by the Grantee) in escrow by the Secretary of the Company
until such shares become nonforfeitable or are forfeited,

(B)           the per share purchase price of such
shares, which may be zero provided, however, that

(1)           the per share purchase price of all
such shares (other than treasury shares) shall not be less than the Minimum
Consideration for each 

 8
 

 

 

such share; and

(2)           if such shares are to be granted to a
Section 16 Grantee, the per share purchase price of any such shares shall
also be at least 50% of the Fair Market Value of the Stock on the Grant Date
unless such shares are granted for no monetary consideration (in which case
treasury shares are to be delivered) or with a purchase price per share equal
to the Minimum Consideration for the Stock, and

(C)           the restrictions applicable to such
grant;

(iii)          Payment of the purchase price (if
greater than zero) for shares of restricted Stock shall be made in full by the
Grantee before the delivery of such shares and, in any event, no later than 10
days after the Grant Date for such shares. 
Such payment may, at the election of the Grantee, be made in any one or
any combination of the following:

(A)          cash,

(B)           Stock valued at its Fair Market Value
on the date of payment or, if the date of payment is not a business day, the
next succeeding business day, or

(C)           with the approval of the Committee,
shares of restricted Stock, each valued at the Fair Market Value of a share of
Stock on the date of payment or, if the date of payment is not a business day,
the next succeeding business day

provided, however,
that, in the case of payment in Stock or restricted Stock,

(1)           the use of Stock or restricted Stock
in payment of such purchase price by a Section 16 Grantee is subject to
(i) the availability of an exemption of such use of stock from potential
liability under Section 16(b) of the 1934 Act, or (ii) the inapplicability of
such Section;

(2)           in the discretion of the Committee
and to the extent permitted by law, payment may also be made in accordance with
Article 9; and

(3)           if the purchase price for restricted
Stock (“New Restricted Stock”) is paid with shares of restricted Stock (“Old
Restricted Stock”), the restrictions applicable to the New Restricted Stock
shall be the same as if the Grantee had paid for the New Restricted Stock in
cash unless, in the judgment of the Committee, the Old Restricted Stock was
subject to a greater risk of forfeiture, in which case a number of shares of
New Restricted Stock equal to the number of shares of Old Restricted Stock 

 9
 

 

 

tendered in
payment for New Restricted Stock may in the discretion of the Committee be
subject to the same restrictions as the Old Restricted Stock, determined
immediately before such payment.

(iv)          The Committee may, but need not,
provide that all or any portion of a Grantee’s Award of restricted Stock shall
be forfeited

(A)          except as otherwise specified in the
Award Agreement, upon the Grantee’s Termination of Employment within a
specified time period after the Grant Date, or

(B)           if the Company or the Grantee does
not achieve specified performance goals within a specified time period after
the Grant Date and before the Grantee’s Termination of Employment, or

(C)           upon failure to satisfy such other
restrictions as the Committee may specify in the Award Agreement.

(v)           If a share of restricted Stock is
forfeited, then

(A)          the Grantee shall be deemed to have
resold such share of restricted Stock to the Company at the lesser of
(1) the purchase price paid by the Grantee (such purchase price shall be
deemed to be zero dollars ($0) if no purchase price was paid) or (2) the
Fair Market Value of a share of Stock on the date of such forfeiture;

(B)           the Company shall pay to the Grantee
the amount determined under clause (A) of this sentence as soon as is
administratively practical; and

(C)           such share of restricted Stock shall
cease to be outstanding, and shall no longer confer on the Grantee thereof any
rights as a stockholder of the Company, from and after the date of the Company’s
tender of the payment specified in clause (B) of this sentence, whether or
not such tender is accepted by the Grantee.

(vi)          Any share of restricted Stock shall
bear an appropriate legend specifying that such share is non-transferable
and subject to the restrictions set forth in the Plan.  If any shares of restricted Stock become nonforfeitable,
the Company shall cause certificates for such shares to be issued or reissued
without such legend and delivered to the Grantee or, at the request of the
Grantee, shall cause such shares to be credited to a brokerage account
specified by the Grantee.

(f)            Grant of Unrestricted Stock.   The
Committee may, in its discretion, grant shares of unrestricted Stock to any employee eligible under
Article 5 to receive Awards.

 10
 

 

 

7.             Limitations
on Transferability.   Except as otherwise provided in the terms of a
specific grant, each Award (other
than unrestricted Stock) granted hereunder shall by its terms not be assignable
or transferable other than by will or the laws of descent and distribution and
may be exercised, during the Grantee’s lifetime, only by the Grantee.  Each share of restricted Stock shall be non-transferable
until such share becomes nonforfeitable. Notwithstanding the foregoing,
the Committee shall have the authority, in its discretion, to grant (or to
sanction by way of amendment of an existing grant) nonqualified stock options
the vested portions of which may be transferred by the Grantee during his
lifetime to (a) any member of his immediate family,  (b) to a trust established for the exclusive
benefit of himself or one or more members of his immediate family, or (c) to a
partnership, the partners of which are limited to the Grantee and members of
his immediate family.  A transfer of a
stock option pursuant to this section 7 may only be effected by the Company at
the written request of a Grantee and shall become effective only when recorded
in the Company’s record of outstanding stock options.  In the event a stock option is transferred as
contemplated in this section 7 any Reload Options associated with such
transferred stock option shall terminate, and such transferred stock option may
not be subsequently transferred by the transferee except by will or the laws of
descent and distribution.  Otherwise, a
transferred stock option shall continue to be governed by and subject to the
terms and limitations of the Plan and the relevant grant, and the transferee
shall be entitled to the same rights as the Grantee, as if no transfer had
taken place.  As used in this section 7, “immediate
family” shall mean, with respect to any person, his/her spouse, any child,
stepchild or grandchild, and shall include relationships arising from legal
adoption.

8.              Exercise.

(a)           Exercise of Options.   Subject
to Articles 4(c)(vii), 14 and 17, and such terms and conditions as the Committee may impose, each
option shall be exercisable in one or more installments commencing not earlier
than the first anniversary of the Grant Date of such option.  Options shall not be exercisable for twelve
months following a hardship distribution that is subject to Treasury Regulation
1.401(k)-1(d)(2)(iv)(B)(4), except to the extent permitted
thereunder.  Options shall not be
exercisable for less than 25 shares of Stock unless the exercise represents the
entire remaining balance of a grant or grants. 
Each option shall be exercised by delivery to the Company of written
notice of intent to purchase a specific number of shares of Stock or restricted
Stock subject to the option.  The Option
Price of any shares of Stock or restricted Stock as to which an option shall be
exercised shall be paid in full at the time of the exercise.  Payment may, at the election of the Grantee,
be made in any one or any combination of the following forms:

(i)            check in such form as may be
satisfactory to the Committee,

(ii)           Stock valued at its Fair Market Value
on the date of exercise or, if the date of exercise is not a business day, the
next succeeding business day,

 11
 

 

 

(iii)          with the approval of the Committee,
shares of restricted Stock, each valued at the Fair Market Value of a share of
Stock on the date of exercise or, if the date of exercise is not a business
day, the next succeeding business day,

(iv)          through simultaneous sale through a
broker of shares of unrestricted Stock acquired on exercise, as permitted under
Regulation T of the Federal Reserve Board, or

 (v)          by
authorizing the Company in his or her written notice of exercise to withhold
from issuance a number of shares of Stock issuable upon exercise of such option
which, when multiplied by the Fair Market Value of Common Stock on the date of
exercise (or, if the date of exercise is not a business day, the next
succeeding business day), is equal to the aggregate Option Price payable with respect
to the option so exercised.

In the event a
Grantee elects to pay the Option Price payable with respect to an option pursuant
to clause (ii) above, (A) only a whole number of share(s) of Stock
(and not fractional shares of Stock) may be tendered in payment, (B) such
Grantee must present evidence acceptable to the Company that he or she has
owned any such shares of Stock tendered in payment of the Option Price (and
that such shares of Stock tendered have not been subject to any substantial
risk of forfeiture) for at least six months prior to the date of exercise, and (C) Stock
must be delivered to the Company. 
Delivery may, at the election of the Grantee, be made either by
(I) delivery of the certificate(s) for all such shares of Stock tendered
in payment of the Option Price, accompanied by duly executed instruments of
transfer in a form acceptable to the Company, or (II) direction to the
Grantee’s broker to transfer, by book entry, such shares of Stock from a
brokerage account of the Grantee to a brokerage account specified by the
Company.  When payment of the Option
Price is made by tender of Stock, the difference, if any, between the aggregate
Option Price payable with respect to the option being exercised and the Fair
Market Value of the share(s) of Stock tendered in payment (plus any applicable
taxes) shall be paid by check.  No
Grantee may tender shares of Stock having a Fair Market Value exceeding the
aggregate Option Price payable with respect to the Option being exercised

In the event a
Grantee elects to pay the Option Price payable with respect to an option pursuant
to clause (v) above, (A) only a whole number of share(s) of Stock
(and not fractional shares of Stock) may be withheld in payment and (B) such
Grantee must present evidence acceptable to the Company that he or she has
owned a number of shares of Stock at least equal to the number of shares of
Stock to be withheld in payment of the Option Price (and that such owned shares
of Stock have not been subject to any substantial risk of forfeiture) for at
least six months prior to the date of exercise. 
When payment of the Option Price is made by the withholding of shares of
Stock, the difference, if any, between the aggregate Option Price payable with
respect to the option being exercised and the Fair Market Value of the share(s)
of Stock withheld in payment (plus any applicable taxes) shall be paid by
check.  No Grantee may authorize the
withholding of shares of Stock having a Fair Market Value exceeding the
aggregate Option Price payable with respect to the option being exercised.  Any withheld shares of Stock shall no longer
be issuable under such option.

 12
 

 

 

If restricted
Stock (“Tendered Restricted Stock”) is used to pay the Option Price for Stock,
then a number of shares of Stock acquired on exercise of the option equal to
the number of shares of Tendered Restricted Stock shall be subject to the same
restrictions as the Tendered Restricted Stock, determined as of the date of
exercise of the option.  If the Option
Price for restricted Stock is paid with Tendered Restricted Stock, and if the
Committee determines that the restricted Stock acquired on exercise of the
option is subject to restrictions (“Greater Restrictions”) that cause it to
have a greater risk of forfeiture than the Tendered Restricted Stock, then
notwithstanding the preceding sentence, all the restricted Stock acquired on
exercise of the option shall be subject to such Greater Restrictions.

Shares of
unrestricted Stock acquired by a Grantee on exercise of an option shall be
delivered to the Grantee or, at the request of the Grantee, shall be credited
directly to a brokerage account specified by the Grantee.

(b)           Special Rules for Section 16
Grantees.   Subject to Article 15, no option shall be exercisable by a
Section 16 Grantee
during the first six months after its Grant Date, if such exercise (or the sale
of shares received upon exercise)  would
result in the loss of an exemption for a grant under Section 16(b) of the 1934
Act.

(c)           Permissible Shares Issued.   No
shares of Stock shall be issued hereunder upon option exercise except shares of Stock available under
Article 3(a).  Each
Grantee, by acceptance of an award, waives all rights to specific performance
or injunctive or other equitable relief and acknowledges that he has an
adequate remedy at law in the form of damages.

9.              Loans and Guarantees.   The
Committee may, in its discretion:

(a)           allow a Grantee to defer payment to
the Company of all or any portion of (i) the Option Price of an option,
(ii) the purchase price of a share of restricted Stock, or (iii) any
taxes associated with a benefit hereunder which is not a cash benefit at the
time such benefit is so taxable, or

(b)           cause the Company to guarantee a loan
from a third party to the Grantee, in an amount equal to all or any portion of
such Option Price, purchase price, or any related taxes.

Any such payment
deferral or guarantee by the Company pursuant to this Article 9 shall be,
on a secured or unsecured basis, for such periods, at such interest rates, and
on such other terms and conditions as the Committee may determine.  Notwithstanding the foregoing, a Grantee
shall not be entitled to defer the payment of such Option Price, purchase
price, or any related taxes unless the Grantee (i) enters into a binding
obligation to pay the deferred amount and (ii) except with respect to
treasury shares, pays upon exercise of an option or grant of shares of
restricted Stock, as the case may be, an amount equal to or greater than the
aggregate Minimum Consideration 

 13
 

 

 

therefor.  If the Committee has permitted a payment
deferral or caused the Company to guarantee a loan pursuant to this
Article 9, then the Committee may, in its discretion, require the
immediate payment of such deferred amount or the immediate release of such
guarantee upon the Grantee’s Termination of Employment or if the Grantee sells
or otherwise transfers the Grantee’s shares of Stock purchased pursuant to such
deferral or guarantee.

10.           Notification under Section 83(b).   The
Committee may, on the Grant Date or any later date, prohibit a Grantee from making the
election described below.  If the
Committee has not prohibited such Grantee from making such election, and the
Grantee shall, in connection with the exercise of any option, or the grant of
any share of restricted Stock, make the election permitted under Section 83(b)
of the Internal Revenue Code (i.e., an election to include in such Grantee’s
gross income in the year of transfer the amounts specified in Section 83(b) of
the Internal Revenue Code), such Grantee shall notify the Company of such
election within 10 days of filing notice of the election with the Internal
Revenue Service, in addition to any filing and notification required pursuant
to regulations issued under the authority of Section 83(b) of the Internal
Revenue Code.

11.                           Mandatory
Withholding Taxes.

(a)           Whenever under the Plan, cash or
shares of Stock are to be delivered upon exercise or payment of an Award or
upon a share of restricted Stock becoming nonforfeitable, or any other event
with respect to rights and benefits hereunder, the Company shall be entitled to
require as a condition of delivery (i) that the Grantee remit an amount
sufficient to satisfy all federal, state, and local withholding tax
requirements related thereto, (ii) the withholding of such sums from
compensation otherwise due to the Grantee or from any shares of Stock due to
the Grantee under the Plan or (iii) any combination of the foregoing.

(b)           If any disqualifying disposition
described in Article 6(c)(vi) is made with respect to shares of Stock acquired
under an incentive stock option granted pursuant to the Plan or any election
described in Article 10 is made, then the person making such disqualifying
disposition or election shall remit to the Company an amount sufficient to
satisfy all federal, state, and local withholding taxes thereby incurred;
provided that, in lieu of or in addition to the foregoing, the Company shall
have the right to withhold such sums from compensation otherwise due to the
Grantee or from any shares of Stock due to the Grantee under the Plan.

12.            Elective Share Withholding.

(a)           Subject to the prior approval of the
Committee and to Article 12(b), a Grantee may elect the withholding (“Share
Withholding”) by the Company of a portion of the shares of Stock otherwise
deliverable to such Grantee upon the exercise or payment of an Award or upon a
share of restricted Stock’s becoming nonforfeitable (each a “Taxable Event”)
having a Fair Market Value equal to

 14
 

 

 

(i)            the minimum amount necessary to
satisfy required federal, state, or local withholding tax liability
attributable to the Taxable Event; or

(ii)           with the Committee’s prior approval,
a greater amount, not to exceed the estimated total amount of such Grantee’s
tax liability with respect to the Taxable Event.

(b)           Each Share Withholding election by a
Grantee shall be subject to the following restrictions:

(i)            any Grantee’s election shall be
subject to the Committee’s right to revoke its approval of Share Withholding by
such Grantee at any time before the Grantee’s election if the Committee has
reserved the right to do so at the time of its approval;

(ii)           if the Grantee is a Section 16
Grantee, such Grantee’s election shall be subject to the disapproval of the
Committee at any time, whether or not the Committee has reserved the right to
do so; and

(iii)          the Grantee’s election must be made
before the date (the “Tax Date”) on which the amount of tax to be withheld is
determined.

13.            Termination of Employment.

(a)           Restricted Stock.   Except
as otherwise provided by the Committee on or after the Grant Date, a Grantee’s shares of restricted Stock
that are forfeitable shall be forfeited upon the Grantee’s Termination of
Employment.

(b)           Other Awards.   If a
Grantee has a Termination of Employment, then, unless otherwise provided in the
Grant Agreement, any
unexercised option to the extent exercisable on the date of the Grantee’s
Termination of Employment may be exercised by the Grantee, in whole or in part,
at any time within three months following such Termination of Employment,
except that

(i)            if the Grantee’s Termination of
Employment is on account of Disability, then any unexercised option to the
extent exercisable at the date of such Termination of Employment, may be
exercised, in whole or in part, by the Grantee at any time within two years
after the date of such Termination of Employment; and

(ii)           if the Grantee’s Termination of
Employment is on account of Retirement, then any unexercised option to the
extent exercisable at the date of such Termination of Employment, may be
exercised, in whole or in part, by the Grantee at any time within five years
after the date of such Termination of Employment; and

(iii)          if the Grantee’s Termination of
Employment is caused by the death of 

 15
 

 

 

the Grantee or if
the Grantee’s death occurs during the period following Termination of
Employment during which the option would be exercisable under the preceding
clause of Article 13(b) or under Article 13(b)(i) or (ii), then any unexercised
option to the extent exercisable on the date of the Grantee’s death, may be
exercised, in whole or in part, at any time within two years after the Grantee’s
death by the Grantee’s personal representative or by the person to whom the
option is transferred by will or the applicable laws of descent and
distribution.

(c)           Maximum Extension.   Notwithstanding
the foregoing, no Award shall be exercisable beyond the maximum term permitted under the
original Award Agreement unless the Committee explicitly extends such original
term, in which case such term shall not be extended beyond the maximum term
permitted by the Plan.

14.          Equity Incentive Plans of Foreign
Subsidiaries.   The Committee may authorize any foreign Subsidiary to adopt a plan for granting
Awards (“Foreign Equity Incentive Plan”). 
All awards granted under such Foreign Equity Incentive Plans shall be
treated as grants under the Plan.  Such
Foreign Equity Incentive Plans shall have such terms and provisions as the
Committee permits not inconsistent with the provisions of the Plan and which
may be more restrictive than those contained in the Plan.  Awards granted under such Foreign Equity
Incentive Plans shall be governed by the terms of the Plan except to the extent
that the provisions of the Foreign Equity Incentive Plans are more restrictive
than the terms of the Plan, in which case such terms of the Foreign Equity
Incentive Plans shall control.

15.          Substituted Awards.   The
Committee may grant substitute awards for any cancelled Award granted under this Plan or any plan of
any entity acquired by the Company or any of its Subsidiaries in accordance
with this Article 15.  If the
Committee cancels any Award (granted under this Plan, or any plan of any entity
acquired by the Company or any of its Subsidiaries), and a new Award is substituted
therefor, then the Committee may, in its discretion, determine the terms and
conditions of such new Award, and may provide that the Grant Date of the
cancelled Award shall be the date used to determine the earliest date or dates
for exercising the new substituted Award under Article 8 hereof so that
the Grantee may exercise the substituted Award at the same time as if the
Grantee had held the substituted Award since the Grant Date of the cancelled
Award.

16.            Securities Law Matters.

(a)           If the Committee deems necessary to
comply with the Securities Act of 1933, the Committee may require a written
investment intent representation by the Grantee and may require that a
restrictive legend be affixed to certificates for shares of Stock.

(b)           If based upon the opinion of counsel
for the Company, the Committee determines that the exercise or
nonforfeitability of, or delivery of benefits pursuant to, any Award could
violate any applicable provision of (i) federal or state securities law or
regulations or (ii) the 

 16
 

 

 

listing requirements of any national securities
exchange on which are listed any of the Company’s equity securities, then the
Committee may postpone any such exercise, nonforfeitability or delivery, as the
case may be, but the Company shall use its best efforts to cause such exercise,
nonforfeitability or delivery to comply with all such provisions at the
earliest practicable date.

17.            No Funding Required.   Benefits
payable under the Plan to any person shall be paid directly by the Company.  The Company shall not be required to fund, or
otherwise segregate assets to be used for payment of, benefits under the Plan.

18.           No Employment Rights.   Neither
the establishment of the Plan, nor the granting of any Award shall be construed to (a) give
any Grantee the right to remain employed by the Company or any of its
Subsidiaries or to any benefits not specifically provided by the Plan or
(b) in any manner modify the right of the Company or any of its
Subsidiaries to modify, amend, or terminate any of its employee benefit plans.

19.            Rights as a Stockholder.   A
Grantee shall not, by reason of any Award (other than restricted Stock) have
any right as a
stockholder of the Company with respect to the shares of Stock which may be
deliverable upon exercise or payment of such Award until such shares have been
delivered to him.  Shares of restricted
Stock held by a Grantee or held in escrow by the Secretary of the Company shall
confer on the Grantee all rights of a stockholder of the Company, except as
otherwise provided in the Plan or the Award Agreement.  The Committee, in its discretion, at the time
of grant of restricted Stock, may permit or require the payment of cash
dividends thereon to be deferred and, if the Committee so determines,
reinvested in additional restricted Stock to the extent shares are available under
Article 3, or otherwise reinvested in Stock.  Stock dividends, deferred cash dividends and
dividends in the form of property other than cash, issued with respect to
restricted Stock shall, unless otherwise provided in the Award Agreement, be
treated as additional shares of restricted Stock that are subject to the same
restrictions and other terms as apply to the shares with respect to which such
dividends are issued.  The Committee may,
in its discretion, provide for crediting and payment of interest on deferred
cash dividends.

20.            Nature of Payments.   Any
and all grants, payments of cash, or deliveries of shares of Stock hereunder
shall constitute special
incentive payments to the Grantee and shall not be taken into account in
computing the amount of salary or compensation of the Grantee for the purposes
of determining any pension, retirement, death or other benefits under
(a) any pension, retirement, profit-sharing, bonus, life insurance
or other employee benefit plan of the Company or any of its Subsidiaries or
(b) any agreement between the Company or any Subsidiary, on the one hand,
and the Grantee, on the other hand, except as such plan or agreement shall
otherwise expressly provide.

21.            Non-Uniform Determinations.   Neither
the Committee’s nor the Board’s determinations under the Plan need be uniform and may be made
by the Committee or the Board selectively among persons who receive, or are
eligible to receive, Awards (whether or not such 

 17
 

 

 

persons are similarly situated).  Without limiting the generality of the
foregoing, the Committee shall be entitled, among other things, to make non-uniform
and selective determinations, to enter into non-uniform and selective
Award Agreements as to (a) the identity of the Grantees, (b) the
terms and provisions of Awards, and (c) the treatment, under
Article 13, of Terminations of Employment.

22.            Adjustments.    In the
event of any equity restructuring (within the meaning of Financial Accounting Standards No. 123 (revised
2004)) that causes the per share value of shares of Stock to change, such as a
stock dividend, stock split, spin off, rights offering, or recapitalization
through a large, nonrecurring cash dividend, the Committee shall cause there to
be made an equitable adjustment to (a) the number and kind of shares that may
be awarded under the Plan, (b) the number of shares or Awards that may be
granted to any individual under the Plan or that may be granted pursuant to any
Articles or types of Awards and (iii) the number and kind of shares subject to
and the exercise price (if applicable) of any then outstanding Awards.  In the event of any other change in corporate
capitalization, such as a merger, consolidation, any reorganization (whether or
not such reorganization comes within the definition of such term in Section 368
of the Internal Revenue Code) or any partial or complete liquidation of the
Company, the Committee may, in its sole discretion, cause there to be made such
equitable adjustment described in the foregoing sentence and/or the termination
of an Award.  In either case, any such
adjustment shall be conclusive and binding for all purposes of the Plan.

23.            Amendment of the Plan.   The
Board may from time to time in its discretion amend or modify the Plan without the approval of the
stockholders of the Company, except as such stockholder approval may be
required (a) to permit transactions in Stock pursuant to the Plan to be
exempt from potential liability under Section 16(b) of the 1934 Act, (b)
to permit the Company to deduct, in computing its income tax liability pursuant
to the provisions of the Internal Revenue Code, compensation resulting from
Awards, (c) to retain incentive stock option treatment under Section  422 of the Internal Revenue Code, or
(d) under the listing requirements of any securities exchange on which are
listed any of the Company’s equity securities.

24.            Termination of the Plan.   The
Plan shall terminate on the tenth (10th) anniversary of the Effective Date or
at such earlier time as
the Board may determine.  Any
termination, whether in whole or in part, shall not affect (a) any Award
then outstanding under the Plan, or (b) the Company’s ability to make
adjustments to or cancel or continue Awards in accordance with Article 22.

25.            No Illegal Transactions.   The
Plan and all Awards granted pursuant to it are subject to all laws and regulations of any
governmental authority which may be applicable thereto; and notwithstanding any
provision of the Plan or any Award, Grantees shall not be entitled to exercise
Awards or receive the benefits thereof and the Company shall not be obligated
to deliver any Stock or pay any benefits to a Grantee if such exercise,
delivery, receipt or payment of benefits would constitute a violation by the
Grantee or the Company of any provision of any such law or regulation.

 18
 

 

 

26.            Controlling Law.   The
law of the State of Delaware except its law with respect to choice of law,
shall be controlling in
all matters relating to or arising out of the Plan or any Award.

27.            Severability.   If all or
any part of the Plan is declared by any court or governmental authority to be
unlawful or invalid,
such unlawfulness or invalidity shall not serve to invalidate any portion of
the Plan not declared to be unlawful or invalid.  Any Article or part of an Article so declared
to be unlawful or invalid shall, if possible, be construed in a manner which
will give effect to the terms of such Article or part of an Article to the
fullest extent possible while remaining lawful and valid.

 

 19Exhibit 4.1

ALLIANT TECHSYSTEMS INC.,

as Issuer,

SUBSIDIARY GUARANTORS party hereto,

and

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

as Trustee

INDENTURE

Dated as of September 12, 2006

2.75%
Convertible Senior Subordinated Notes due 2011

 

 

TABLE OF CONTENTS

	
  ARTICLE 1

  	
   

  	
  PAGE

  
	
  Definitions

  	
   

  	
   

  
	
  Section 1.01.
  Definitions

  	
   

  	
  1

  
	
  Section 1.02.
  Other Definitions.

  	
   

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
   

  
	
  Issue,
  Description, Execution, Registration And Exchange Of Notes

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.01.
  Designation Amount and Issue of Notes

  	
   

  	
  12

  
	
  Section 2.02.
  Form of Notes

  	
   

  	
  12

  
	
  Section 2.03.
  Date and Denomination of Notes; Payments of Interest

  	
   

  	
  13

  
	
  Section 2.04.
  Execution of Notes

  	
   

  	
  14

  
	
  Section 2.05.
  Exchange and Registration of Transfer of Notes; Restrictions on Transfer

  	
   

  	
  15

  
	
  Section 2.06.
  Mutilated, Destroyed, Lost or Stolen Notes

  	
   

  	
  20

  
	
  Section 2.07.
  Temporary Notes

  	
   

  	
  21

  
	
  Section 2.08.
  Cancellation of Notes

  	
   

  	
  22

  
	
  Section 2.09.
  CUSIP Numbers

  	
   

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
   

  
	
  Repurchase Of
  Notes

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.01. Repurchase
  of Notes by the Company at Option of Holders upon a Fundamental Change

  	
   

  	
  22

  
	
  Section 3.02.
  Company’s Notification to the Trustee

  	
   

  	
  25

  
	
  Section 3.03.
  Conditions and Procedures for Repurchase at Option of Holders

  	
   

  	
  25

  
	
  Section 3.04.
  Final Maturity Notice

  	
   

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  	
   

  
	
  Particular
  Covenants Of The Company

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.01.
  Payment of Principal and Interest

  	
   

  	
  28

  
	
  Section 4.02.
  Maintenance of Office or Agency

  	
   

  	
  28

  
	
  Section 4.03.
  Appointments to Fill Vacancies in Trustee’s Office

  	
   

  	
  29

  
	
  Section 4.04.
  Provisions as to Paying Agent

  	
   

  	
  29

  
	
  Section 4.05.
  Existence

  	
   

  	
  30

  
	
  Section 4.06.
  Rule 144A Information Requirement

  	
   

  	
  30

  
	
  Section 4.07.
  Stay, Extension and Usury Laws

  	
   

  	
  30

  
	
  Section 4.08.
  Compliance Certificate

  	
   

  	
  31

  
	
  Section 4.09.
  Additional Amounts Notice

  	
   

  	
  31

  
	
  Section 4.10.
  Limitation on Senior Subordinated Indebtedness

  	
   

  	
  31

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
   

  
	
  Noteholders’
  Lists And Reports By The Company And The Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.01.
  Noteholders’ Lists

  	
   

  	
  31

  
	
  Section 5.02.
  Preservation and Disclosure of Lists

  	
   

  	
  32

  

 

 

	
  Section 5.03. Reports by
  Trustee

  	
   

  	
  32

  
	
  Section 5.04. Reports by Company

  	
   

  	
  32

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  	
   

  
	
  Remedies Of The Trustee
  And Noteholders On An Event Of Default

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.01. Events of Default

  	
   

  	
  33

  
	
  Section 6.02. Acceleration

  	
   

  	
  35

  
	
  Section 6.03. Payments of Notes on Default; Suit Therefor

  	
   

  	
  36

  
	
  Section 6.04. Other Remedies

  	
   

  	
  37

  
	
  Section 6.05. Waiver of Past Defaults

  	
   

  	
  37

  
	
  Section 6.06. Control by Majority

  	
   

  	
  38

  
	
  Section 6.07. Limitation on Suits

  	
   

  	
  38

  
	
  Section 6.08. Rights of Holders to Receive Payment

  	
   

  	
  39

  
	
  Section 6.09. Collection Suit by Trustee

  	
   

  	
  39

  
	
  Section 6.10. Trustee May File Proofs of Claim

  	
   

  	
  39

  
	
  Section 6.11. Priorities

  	
   

  	
  39

  
	
  Section 6.12. Undertaking for Costs

  	
   

  	
  40

  
	
  Section 6.13. Remedies Cumulative and Continuing

  	
   

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  	
   

  
	
  The Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.01. Duties of Trustee

  	
   

  	
  41

  
	
  Section 7.02. Rights of Trustee

  	
   

  	
  42

  
	
  Section 7.03. Individual Rights of Trustee

  	
   

  	
  43

  
	
  Section 7.04. Trustee’s Disclaimer

  	
   

  	
  43

  
	
  Section 7.05. Notice of Default

  	
   

  	
  44

  
	
  Section 7.06. Reports by Trustee to Holders

  	
   

  	
  44

  
	
  Section 7.07. Compensation and Indemnity

  	
   

  	
  44

  
	
  Section 7.08. Replacement of Trustee

  	
   

  	
  45

  
	
  Section 7.09. Successor Trustee by Merger

  	
   

  	
  46

  
	
  Section 7.10. Eligibility; Disqualification

  	
   

  	
  46

  
	
  Section 7.11. Preferential Collection of Claims Against Company

  	
   

  	
  46

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  	
   

  
	
  The Noteholders

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.01. Action by Noteholders

  	
   

  	
  47

  
	
  Section 8.02. Proof of Execution by Noteholders

  	
   

  	
  47

  
	
  Section 8.03. Who Are Deemed Absolute Owners

  	
   

  	
  47

  
	
  Section 8.04. Company-owned Notes Disregarded

  	
   

  	
  47

  
	
  Section 8.05. Revocation of Consents, Future Holders Bound

  	
   

  	
  48

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  	
   

  
	
  Meetings Of Noteholders

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 9.01. Purpose of Meetings

  	
   

  	
  48

  
	
  Section 9.02. Call of Meetings by Trustee

  	
   

  	
  48

  
	
  Section 9.03. Call of Meetings by Company or Noteholders

  	
   

  	
  49

  

 

 ii
 

 

	
  Section 9.04. Qualifications
  for Voting

  	
   

  	
  49

  
	
  Section 9.05. Regulations

  	
   

  	
  49

  
	
  Section 9.06. Voting

  	
   

  	
  50

  
	
  Section 9.07. No Delay of Rights by Meeting

  	
   

  	
  50

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  	
   

  
	
  Supplemental Indentures

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 10.01. Supplemental Indentures Without Consent of Noteholders

  	
   

  	
  50

  
	
  Section 10.02. Supplemental Indenture with Consent of Noteholders

  	
   

  	
  52

  
	
  Section 10.03. Effect of Supplemental Indenture

  	
   

  	
  53

  
	
  Section 10.04. Notation on Notes

  	
   

  	
  53

  
	
  Section 10.05. Evidence of Compliance of Supplemental Indenture to Be
  Furnished to Trustee

  	
   

  	
  53

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
   

  	
   

  
	
  Consolidation, Merger,
  Conveyance And Lease

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 11.01. When May Company Merge or Transfer Assets

  	
   

  	
  53

  
	
  Section 11.02. Successor to Be Substituted

  	
   

  	
  55

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
   

  	
   

  
	
  Satisfaction And
  Discharge Of Indenture

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 12.01. Discharge of Indenture

  	
   

  	
  55

  
	
  Section 12.02. Paying Agent to Repay Monies Held

  	
   

  	
  56

  
	
  Section 12.03. Return of Unclaimed Monies

  	
   

  	
  56

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
   

  	
   

  
	
  Immunity Of
  Incorporators, Stockholders, Officers And Directors

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 13.01. Indenture, Notes and Subsidiary Guarantees Solely
  Corporate Obligations

  	
   

  	
  56

  
	
   

  	
   

  	
   

  
	
  ARTICLE 14

  	
   

  	
   

  
	
  Conversion Of Notes

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 14.01. Right to Convert

  	
   

  	
  57

  
	
  Section 14.02. Exercise of Conversion Privilege; No Adjustment for Interest
  or Dividends

  	
   

  	
  61

  
	
  Section 14.03. Cash Payments in Lieu of Fractional Shares

  	
   

  	
  63

  
	
  Section 14.04. Conversion Rate

  	
   

  	
  63

  
	
  Section 14.05. Adjustment of Conversion Rate

  	
   

  	
  63

  
	
  Section 14.06. Effect of Reclassification, Consolidation, Merger or
  Sale

  	
   

  	
  69

  
	
  Section 14.07. Taxes on Shares Issued

  	
   

  	
  70

  
	
  Section 14.08. Reservation of Shares, Shares to Be Fully Paid;
  Compliance with Governmental Requirements; Listing of Common Stock

  	
   

  	
  70

  
	
  Section 14.09. Responsibility of Trustee

  	
   

  	
  71

  
	
  Section 14.10. Notice to Holders Prior to Certain Actions

  	
   

  	
  71

  
	
  Section 14.11. Stockholder Rights Plans

  	
   

  	
  72

  

 

 iii
 

 

	
  ARTICLE 15

  	
   

  	
   

  
	
  Subordination

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 15.01. Agreement to Subordinate

  	
   

  	
  72

  
	
  Section 15.02. Liquidation, Dissolution, Bankruptcy

  	
   

  	
  73

  
	
  Section 15.03. Default on Senior Indebtedness

  	
   

  	
  73

  
	
  Section 15.04. Acceleration of Payment of Notes

  	
   

  	
  74

  
	
  Section 15.05. When Distribution Must Be Paid Over

  	
   

  	
  74

  
	
  Section 15.06. Subrogation

  	
   

  	
  74

  
	
  Section 15.07. Relative Rights

  	
   

  	
  74

  
	
  Section 15.08. Subordination May Not Be Impaired by Company

  	
   

  	
  75

  
	
  Section 15.09. Rights of Trustee and Paying Agent

  	
   

  	
  75

  
	
  Section 15.10. Distribution or Notice to Representative

  	
   

  	
  75

  
	
  Section 15.11. Article 15 Not to Prevent Events of Default or Limit
  Right to Accelerate

  	
   

  	
  75

  
	
  Section 15.12. Trust Monies Not Subordinated

  	
   

  	
  75

  
	
  Section 15.13. Trustee Entitled to Rely

  	
   

  	
  75

  
	
  Section 15.14. Trustee to Effectuate Subordination

  	
   

  	
  76

  
	
  Section 15.15. Trustee Not Fiduciary for Holders of Senior
  Indebtedness

  	
   

  	
  76

  
	
  Section 15.16. Reliance by Noteholders of Senior Indebtedness on
  Subordination Provisions

  	
   

  	
  76

  
	
   

  	
   

  	
   

  
	
  ARTICLE 16

  	
   

  	
   

  
	
  Subsidiary Guarantees

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 16.01. Subsidiary Guarantors

  	
   

  	
  76

  
	
  Section 16.02. Subsidiary Guarantees

  	
   

  	
  77

  
	
  Section 16.03. Limitation on Liability

  	
   

  	
  79

  
	
  Section 16.04. Successors and Assigns

  	
   

  	
  80

  
	
  Section 16.05. No Waiver

  	
   

  	
  80

  
	
  Section 16.06. Modification

  	
   

  	
  80

  
	
  Section 16.07. Execution of Subsidiary Guarantee for Future
  Subsidiary Guarantors

  	
   

  	
  80

  
	
  Section 16.08. Non-Impairment

  	
   

  	
  80

  
	
   

  	
   

  	
   

  
	
  ARTICLE 17

  	
   

  	
   

  
	
  Subordination of the
  Subsidiary Guarantees

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 17.01. Agreement to Subordinate

  	
   

  	
  81

  
	
  Section 17.02. Liquidation, Dissolution, Bankruptcy

  	
   

  	
  81

  
	
  Section 17.03. Default on Designated Senior Indebtedness of a
  Subsidiary Guarantor

  	
   

  	
  81

  
	
  Section 17.04. Demand for Payment

  	
   

  	
  82

  
	
  Section 17.05. When Distribution Must Be Paid Over

  	
   

  	
  83

  
	
  Section 17.06. Subrogation

  	
   

  	
  83

  
	
  Section 17.07. Relative Rights

  	
   

  	
  83

  
	
  Section 17.08. Subordination May Not Be Impaired by a Subsidiary Note
  Guarantor

  	
   

  	
  83

  
	
  Section 17.09. Rights of Trustee and Paying Agent

  	
   

  	
  83

  
	
  Section 17.10. Distribution or Notice to Representative

  	
   

  	
  84

  
	
  Section 17.11. Article 18 Not to Prevent Events of Default or Limit
  Right to Accelerate

  	
   

  	
  84

  
	
  Section 17.12. Trustee Entitled to Rely

  	
   

  	
  84

  
	
  Section 17.13. Trustee to Effectuate Subordination

  	
   

  	
  84

  
	
  Section 17.14. Trustee Not Fiduciary for Holders of Senior
  Indebtedness of a Subsidiary Guarantor

  	
   

  	
  84

  

 

 iv
 

 

	
  Section 17.15. Reliance by
  Noteholders of Senior Indebtedness of a Subsidiary Guarantor on Subordination
  Provisions

  	
   

  	
  85

  
	
  Section 17.16. Trust Monies Not Subordinated

  	
   

  	
  85

  
	
   

  	
   

  	
   

  
	
  ARTICLE 18

  	
   

  	
   

  
	
  Miscellaneous
  Provisions

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 18.01. Provisions Binding on Company’s Successors

  	
   

  	
  85

  
	
  Section 18.02. Official Acts by Successor Corporation

  	
   

  	
  85

  
	
  Section 18.03. Addresses for Notices, Etc.

  	
   

  	
  85

  
	
  Section 18.04. Governing Law

  	
   

  	
  86

  
	
  Section 18.05. Evidence of Compliance with Conditions Precedent,
  Certificates to Trustee

  	
   

  	
  86

  
	
  Section 18.06. Legal Holidays

  	
   

  	
  86

  
	
  Section 18.07. Company Responsible for Making Calculations

  	
   

  	
  86

  
	
  Section 18.08. Trust Indenture Act

  	
   

  	
  87

  
	
  Section 18.09. No Security Interest Created

  	
   

  	
  87

  
	
  Section 18.10. Benefits of Indenture

  	
   

  	
  87

  
	
  Section 18.11. Table of Contents, Headings, Etc.

  	
   

  	
  87

  
	
  Section 18.12. Authenticating Agent

  	
   

  	
  87

  
	
  Section 18.13. Execution in Counterparts

  	
   

  	
  88

  
	
  Section 18.14. Severability

  	
   

  	
  88

  
	
   

  	
   

  	
   

  
	
  Exhibit A:

  	
  Form of Note

  	
   

  	
  A-1

  
	
  Exhibit B:

  	
  Form of Subsidiary
  Guarantee

  	
   

  	
  B-1

  
	
   

  	
   

  	
   

  
	
  Schedule I:

  	
  List of Subsidiary
  Guarantors

  	
   

  	
   

  
	
  Schedule II:

  	
  Number of Additional
  Shares

  	
   

  	
   

  

 

 v

 

INDENTURE

INDENTURE dated as of September 12, 2006, among Alliant Techsystems
Inc., a Delaware corporation (hereinafter called the “Company”), the Subsidiary Guarantors listed
on Schedule I hereto and The Bank of New York Trust Company, N.A., a national banking
association, as trustee hereunder (hereinafter called the “Trustee”).

WITNESSETH:

WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 2.75% Convertible Senior Subordinated Notes due
2011 (hereinafter called the “Notes”),
with the Subsidiary Guarantees (as defined herein) by the Subsidiary
Guarantors, in an aggregate principal amount of $300,000,000, provided that the
Company may issue additional Notes from time to time, and, to provide the terms
and conditions upon which the Notes are to be authenticated, issued and
delivered, the Company has duly authorized the execution and delivery of this
Indenture; and

WHEREAS, the Notes, the certificate of authentication to be borne by
the Notes, a form of assignment, a form of fundamental change repurchase
election and a form of conversion notice to be borne by the Notes are to be
substantially in the forms hereinafter provided for; and

WHEREAS, all acts and things necessary to make the Notes, when executed
by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, and the Subsidiary Guarantees, when executed
and delivered by the Subsidiary Guarantors, in each case in accordance with the
terms of this Indenture, the valid, binding and legal obligations of the
Company and the Subsidiary Guarantors, and to constitute this Indenture a valid
agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes and the
Subsidiary Guarantees have in all respects been duly authorized; and all acts
and things necessary to duly authorize the issuance, if any, of the Common
Stock of the Company issuable upon conversion of the Notes, and to duly reserve
for issuance such number of shares of Common Stock, have been done;

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

That in order to declare the terms and conditions upon which the Notes
are, and are to be, authenticated, issued and delivered, and the Subsidiary
Guarantees are, and are to be, executed and delivered, and in consideration of
the premises and of the purchase and acceptance of the Notes and the Subsidiary
Guarantees by the holders thereof, the Company and the Subsidiary Guarantors
covenant and agree with the Trustee for the equal and proportionate benefit of
the respective holders from time to time of the Notes (except as otherwise
provided below), as follows:

ARTICLE 1

DEFINITIONS

Section
1.01. 
Definitions.  The terms defined in this Section 1.01
(except as herein otherwise expressly provided) for all purposes of this
Indenture and of any indenture supplemental hereto shall have the respective
meanings specified in this Section 1.01. 
All other terms used in this Indenture that are defined in the Trust
Indenture Act or which are by reference therein defined in the Securities Act
(except as herein otherwise expressly provided or unless the context

 

 

otherwise
requires) shall have the meanings assigned to such terms in the Trust Indenture
Act and in the Securities Act as in force at the date of the execution of this
Indenture.  The words “herein”, “hereof”,
“hereunder” and words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other Subdivision.  The terms
defined in this Article include the plural as well as the singular.

“Additional Amounts” has
the meaning specified for “Additional Amounts” in Section 3(a) of the
Registration Rights Agreement.

“Affiliate” of any
specified Person means any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such specified
Person.  For the purposes of this
definition, “control”, when used
with respect to any specified Person means the power to direct or cause the
direction of the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise, and the terms “controlling”
and “controlled” have meanings
correlative to the foregoing.

“Applicable Conversion Rate”
means the Conversion Rate on any Trading Day.

“Bank Indebtedness” means
any and all amounts payable under or in respect of the Credit Agreement and any
refinancing indebtedness (including, without limitation, any renewals,
replacements, refundings, restatements, substitutions or any other refinancings
of any kind) with respect thereto that may be incurred from time to time
(whether before or after termination of the Credit Agreement) (including
increasing the amount available for borrowing thereunder and including
refinancings with the same or different lenders or agents), as amended,
modified or supplemented from time to time, including principal, premium, if
any, interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not a claim for post-filing interest is allowed in such proceedings), fees,
charges, expenses, reimbursement obligations, guarantees and all other amounts
payable thereunder or in respect thereof.

“Bankruptcy Custodian”
means any receiver, trustee, assignee, liquidator, custodian or similar
official under any Bankruptcy Law.

“Bankruptcy Law” means
Title 11, United States Code, or any similar Federal or state law for the
relief of debtors.

“Board of Directors” means
the Board of Directors of the Company or a committee of such Board duly
authorized to act for it hereunder.

“Business Day” means any
day, other than a Saturday or Sunday, that is neither a legal holiday nor a day
on which commercial banks are authorized or required by law, regulation or
executive order to close in The City of New York.

“capital stock” of any
Person means any and all shares (including ordinary shares of american
depositary shares), interests, participations or other equivalents however
designated of corporate stock or other equity participations, including
partnership interests, whether general or limited, of such Person and any
rights (other than debt securities convertible or exchangeable into an equity
interest), warrants or options to acquire an equity interest in such Person.

 2
 

 

 

“cash” means U.S. legal
tender.

“Code” means the Internal
Revenue Code of 1986, as amended.

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

“Common Stock” means any
stock of any class of the Company which has no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Company and which is not subject
to redemption by the Company.  Subject to
the provisions of Section 14.06, however, shares issuable on conversion of
Notes, if any, shall include only shares of the class designated as common
stock of the Company at the date of this Indenture (namely, the Common Stock,
par value $0.01 per share, of the Company) or shares of any class or classes resulting
from any reclassification or reclassifications thereof and which have no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which are not subject to redemption by the Company; provided that if at any
time there shall be more than one such resulting class, the shares of each such
class then so issuable on conversion shall be substantially in the proportion
which the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.

“Company” means the
corporation named as the “Company”
in the first paragraph of this Indenture, and, subject to the provisions of
Article 11 and Section 14.06, shall include its successors and assigns.

“Conversion Agent” means
the Trustee or such other office or agency designated by the Company where
Notes may be presented for conversion.

“Conversion Date” means
the date on which the holder of the Note has complied with all requirements
under this Indenture to convert such Note.

“Conversion Price” per
share of Common Stock as of any day means the result obtained by dividing
$1,000 by the Conversion Rate on such day.

“Conversion Rate” means
10.3617 shares of Common Stock per $1,000 principal amount of Notes, subject to
adjustment pursuant to Article 14.

“Conversion Reference Period”
means (a) for Notes that are converted during the period beginning on the 30th
day prior to the Stated Maturity, the thirty consecutive Trading Days beginning
on the third Trading Day following the Stated Maturity and (b) in all other
instances, the thirty consecutive Trading Days beginning on the third Trading
Day following the Conversion Date.

“Conversion Value” means,
per $1,000 principal amount of Notes, the amount equal to the average of the
products for each Trading Day of the Conversion Reference Period of (a) the
Applicable Conversion Rate for such day multiplied by (b) the average of the
Volume Weighted Average Price per share of the Common Stock on such day.

 3
 

 

 

“Corporate Trust Office”
or other similar term, means the designated office of the Trustee at which at
any particular time its corporate trust business as it relates to this
Indenture shall be administered, which office is, at the date as of which this
Indenture is dated, located at The Bank of New York Trust Company, N.A., 2
North LaSalle Street, Suite 1020, Chicago, Illinois 60602, Attention: Corporate
Trust Department.

“Credit Agreement” means
the Credit Agreement, dated as of March 31, 2004, among the Company; Bank of
America, N.A., as administrative agent; the lenders from time to time parties
thereto; the swing line lender as identified therein; Credit Lyonnais New York
Branch, as syndication agent; The Bank of New York, U.S. Bank National
Association, and National City Bank, as co-documentation agents; Banc of
America Securities LLC and Credit Lyonnais New York Branch, as joint lead
arrangers; and Banc of America Securities LLC as sole bookrunning manager, as
amended, restated, supplemented, waived, replaced, whether or not upon
termination, and whether with the original lenders or otherwise, refinanced,
restructured or otherwise modified from time to time.

“Current Market Price” per
share of Common Stock means, with respect to any date of determination, the
average of the Last Reported Sale Price for the 10 consecutive Trading Days
from and including the Ex-Dividend Date with respect to the issuance or
distribution requiring such computation. 
If another issuance or distribution to which Section 14.05 applies
occurs during the period applicable for calculating “Current Market Price” pursuant to this definition, “Current Market Price” shall be calculated
for such period in a manner determined by the Board of Directors to reflect the
impact of such issuance, distribution, subdivision or combination on the Last
Reported Sale Price of the Common Stock during such period.

“Custodian” means The Bank
of New York Trust Company, N.A., as custodian with respect to the Notes in
global form, or any successor entity thereto.

“Daily Share Amounts”
means, for each Trading Day of the Conversion Reference Period and each $1,000
principal amount of Notes surrendered for conversion, a number of shares of
Common Stock (but in no event less than zero) determined by the following
formula:

	
  (Volume Weighted Average
  Price per share of 

  	
   

  	
  x

  	
   

  	
  Conversion Rate in effect on 

  	
  –$1000

  
	
  Common Stock for
  such Trading Day

  	
   

  	
   

  	
   

  	
  the Trading Day)

  	
   

  	
   

  
	
  Volume Weighted
  Average Price per share of Common Stock for such Trading Day x 30

  
	
   

  

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

“Depositary” means, the
clearing agency registered under the Exchange Act that is designated to act as
the Depositary for the Global Notes.  The
Depository Trust Company shall be the initial Depositary, until a successor
shall have been appointed and become such pursuant to the applicable provisions
of this Indenture, and thereafter, “Depositary”
shall mean or include such successor.

“Designated Senior Indebtedness”
of the Company means (a) the Bank Indebtedness and (b) any other Senior
Indebtedness of the Company that, at the date of determination, has an
aggregate principal amount outstanding of, or under which, at the date of
determination, the

 4
 

 

 

holders
thereof are committed to lend up to, at least $25,000,000 and is specifically
designated by the Company in the instrument evidencing or governing such Senior
Indebtedness as “Designated Senior
Indebtedness” for purposes of this Indenture.  “Designated
Senior Indebtedness” of a Subsidiary Guarantor has a correlative
meaning.

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

“Ex-Dividend Date” means,
with respect to any issuance or distribution on shares of Common Stock, the
first date on which the shares of Common Stock trade regular way on the principal
securities market on which the shares of Common Stock are then traded without
the right to receive such issuance or distribution.

“Fundamental Change” means
the occurrence of any of the following:

(i)            any “person” (as such term is used
in Sections 13(d) of the Exchange Act) other than the Company, its subsidiaries
or the Company’s or its subsidiaries’ employee benefit plans, is or becomes the
“beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that for purposes of this clause (i) such person shall be deemed to have
“beneficial ownership” of all shares that any such person has the right to
acquire), directly or indirectly, of more than 50% of the total voting power of
the Voting Stock of the Company and (for the purposes of this clause (i), a
person shall be deemed to beneficially own any Voting Stock of an entity held
by any other entity (the “parent entity”), if such other person is the
beneficial owner (as defined in this clause (i)), directly or indirectly, of
more than 50% of the voting power of the Voting Stock of the parent entity);

(ii)           during any period of two consecutive
years, individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election by
such Board of Directors of the Company or whose nomination for election by the
stockholders of the Company was approved by a vote of a majority of the
directors of the Company then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Company then in office;

(iii)          the adoption of a plan relating to the
liquidation or dissolution of the Company; or

(iv)          the merger or consolidation of the
Company with or into another Person or the merger of another Person with or
into the Company, or the sale of all or substantially all the assets of the
Company to another Person, and, in the case of any such merger, consolidation
or sale, the securities of the Company that are outstanding immediately prior
to such transaction and which represent 100% of the aggregate voting power of
the Voting Stock of the Company are changed into or exchanged for cash,
securities or property, unless pursuant to such transaction such securities are
changed into or exchanged for, in addition to any other consideration,
securities of the surviving Person or transferee that represent, immediately
after such transaction, at least a majority of the aggregate voting power of
the Voting Stock of the surviving Person or transferee.

“Guarantee” means any
obligation, contingent or otherwise, of any Person directly or indirectly
guaranteeing any Indebtedness or other obligation of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or

 5
 

 

 

advance
or supply funds for the purchase or payment of) such Indebtedness or other
obligation of such other Person (whether arising by virtue of partnership
arrangements, or by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (b) entered into for purposes of assuring in any
other manner the obligee of such Indebtedness or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided, however, that the term “Guarantee” shall not include endorsements
for collection or deposit in the ordinary course of business.  The term “Guarantee”
used as a verb has a corresponding meaning. 
The term “Guarantor” shall mean any Person Guaranteeing any obligation.

“Incur” means issue,
assume, Guarantee, incur or otherwise become liable for; provided, however,
that any Indebtedness or capital stock of a Person existing at the time such
Person becomes a Subsidiary (whether by merger, consolidation, acquisition or
otherwise) shall be deemed to be Incurred by such Person at the time it becomes
a Subsidiary.  The term “Incurrence” when used as a noun shall have
a correlative meaning.  The accretion of
principal of a non-interest bearing or other discount security shall not be
deemed the Incurrence of Indebtedness.

“Indebtedness” means, with
respect to any Person on any date of determination, without duplication, the
principal or face amount of (i) all obligations for borrowed money, (ii) all
obligations evidenced by notes, notes or other similar instruments, (iii) all
obligations in respect of letters of credit or bankers acceptances or similar
instruments (or reimbursement obligations with respect thereto), (iv) all
obligations to pay the deferred purchase price of property or services, (v) all
obligations as lessee which are capitalized in accordance with generally
accepted accounting principles, and (vi) all Indebtedness of others guaranteed
by such Person or any of its Subsidiaries or for which such Person or any of
its Subsidiaries is legally responsible or liable (whether by agreement to
purchase indebtedness of, or to supply funds or to invest in, others).

“Indenture” means this
instrument as originally executed or, if amended or supplemented as herein
provided, as so amended or supplemented.

“Interest” means, when
used with reference to the Notes, any interest payable under the terms of the
Notes, including Additional Amounts, if any, payable under the terms of the
Registration Rights Agreement.

“Interest Payment Date”
means March 15 and September 15 of each year, commencing March 15, 2007.

“Interest Period” means
(i) with respect to the first interest period, the period from the first
Original Issuance Date of the Notes to and including March 14, 2007 and (ii)
thereafter, any six-month period from March 15 to and including September 14
and from September 15 to and including March 14, commencing on or after March
15, 2007 and ending before the Stated Maturity.

“Last Reported Sale Price”
of the Common Stock (or the Public Acquirer Common Stock or the capital stock
of, or similar equity interest in, a subsidiary or other business unit of the
Company, as applicable) on any date means the closing sale price per share (or
if no closing sale price is reported, the average of the bid and asked prices
or, if more than one in either case, the average of the average bid and the
average asked prices) on that date as reported in composite transactions for
the principal U.S. securities exchange on which the Common Stock (or the Public
Acquirer Common Stock or the capital stock of, or similar equity interest in, a
subsidiary or other business unit of the Company, as applicable) is traded or,
if the Common Stock (or the Public Acquirer

 6
 

 

 

Common
Stock or the capital stock of, or similar equity interest in, a subsidiary or
other business unit of the Company, as applicable) is not listed on a U.S.
national or regional securities exchange, as reported by the Nasdaq Global
Market.  If the Common Stock (or the
Public Acquirer Common Stock or the capital stock of, or similar equity
interest in, a subsidiary or other business unit of the Company, as applicable)
is not listed for trading on a U.S. national or regional securities exchange
and not reported by the Nasdaq Global Market on the relevant date, the “Last
Reported Sale Price” will be the last quoted bid price for the Common Stock (or
the Public Acquirer Common Stock or the capital stock of, or similar equity
interest in, a subsidiary or other business unit of the Company, as applicable)
in the over-the-counter market on the relevant date as reported by the National
Quotation Bureau Incorporated or similar organization.  If the Common Stock (or the Public Acquirer
Common Stock or the capital stock of, or similar equity interest in, a
subsidiary or other business unit of the Company, as applicable) is not so
quoted, the “Last Reported Sale Price” will be the average of the mid-point of
the last bid and asked prices for the Common Stock (or the Public Acquirer
Common Stock or the capital stock of, or similar equity interest in, a
subsidiary or other business unit of the Company, as applicable) on the
relevant date quoted by each of at least three nationally recognized
independent investment banking firms selected by the Company for this purpose.

“Market Disruption Event”
means the occurrence or existence for more than one half hour period in the
aggregate on any scheduled Trading Day for the Common Stock of any suspension
or limitation imposed on trading (by reason of movements in price exceeding
limits permitted by the New York Stock Exchange or otherwise) in the Common
Stock or in any options, contracts or future contracts relating to the Common
Stock, and such suspension or limitation occurs or exists at any time before
10:00 a.m. (New York City time) on such day.

“Note” or “Notes” means any Note or Notes, as the case
may be, authenticated and delivered under this Indenture, including any Global
Note.

“Noteholder” or “holder” as applied to any Note, or other
similar terms (but excluding the term “beneficial
holder”), means any Person in whose name at the time a particular
Note is registered on the Note Registrar’s books.

“Officers’ Certificate”,
when used with respect to the Company or a Subsidiary Guarantor, means a
certificate signed by any two of the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Financial Officer, the Chief Operating
Officer, any Vice President (whether or not designated by a number or numbers
or word or words added before or after the title “Vice President”), the
Treasurer or the Secretary of the Company or such Subsidiary Guarantor, as the
case may be; provided that the Officers’ Certificate delivered on the date
hereof pursuant to Section 18.05 may be signed by any one of the foregoing.

“Opinion of Counsel” means
an opinion in writing signed by legal counsel, who may be an employee of or
counsel to the Company.

“Original Issue Date”
means September 12, 2006.

“outstanding”, when used
with reference to Notes and subject to the provisions of Section 8.04, means,
as of any particular time, all Notes authenticated and delivered by the Trustee
under this Indenture, except:

(a)           Notes theretofore
canceled by the Trustee or delivered to the Trustee for cancellation;

 7
 

 

 

(b)           Notes, or portions
thereof, (i) for the repurchase of which monies in the necessary amount shall
have been deposited in trust with the Trustee or with any Paying Agent (other
than the Company) or (ii) which shall have been otherwise discharged in
accordance with Article 12;

(c)           Notes in lieu of
which, or in substitution for which, other Notes shall have been authenticated
and delivered pursuant to the terms of Section 2.06; and

(d)           Notes converted into
Common Stock pursuant to Article 14 and Notes deemed not outstanding pursuant
to Article 3.

“Paying Agent” means the
Trustee or such other office or agency designated by the Company where Notes
may be presented for payment.

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

“Portal Market” means the
Private Offerings Resales and Trading through Automated Linkages Market
operated by the National Association of Securities Dealers, Inc. or any
successor thereto.

“Predecessor Note” of any
particular Note means every previous Note evidencing all or a portion of the
same debt as that evidenced by such particular Note, and, for the purposes of
this definition, any Note authenticated and delivered under Section 2.06 in lieu
of a lost, destroyed or stolen Note shall be deemed to evidence the same debt
as the lost, destroyed or stolen Note that it replaces.

“Registration Rights Agreement”
means the Registration Rights Agreement dated as of September 12, 2006, among
the Company, the Subsidiary Guarantors and the initial purchaser identified
therein, as amended from time to time in accordance with its terms.

“Regular Record Date”
means, with respect to each Interest Payment Date, the close of business on the
March 1 or September 1 next preceding such Interest Payment Date (whether or
not a Business Day).

“Representative” means the
trustee, agent or representative (if any) for an issue of Senior Indebtedness.

“Responsible Officer”
means, when used with respect to the Trustee, any officer within the corporate
trust department of the Trustee with direct responsibility for the
administration of this Indenture and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred because
of such person’s knowledge of any familiarity with the particular subject and
who shall have direct responsibility for the administration of this Indenture.

“Rule 144A” means Rule
144A as promulgated under the Securities Act.

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

 8
 

 

 

“Senior Indebtedness” of
the Company or any Subsidiary Guarantor means the principal of, premium (if
any) and accrued and unpaid interest on (including interest accruing on or
after the filing of any petition in bankruptcy or for reorganization of the
Company or any Subsidiary Guarantor, regardless of whether or not a claim for
post-filing interest is allowed in such proceedings) and fees and other amounts
(including expenses, reimbursement obligations under letters of credit and
indemnities) owing in respect of, Bank Indebtedness and all other Indebtedness
of the Company or any Subsidiary Guarantor, as applicable, whether outstanding
on the date of this Indenture or thereafter Incurred, unless in the instrument
creating or evidencing the same or pursuant to which the same is outstanding it
is provided that such obligations are not superior in right of payment to the
Notes or such Subsidiary Guarantor’s Subsidiary Guarantee, as applicable; provided,
however, that Senior Indebtedness of the Company or any Subsidiary
Guarantor shall not include (a) any obligation of the Company to any Subsidiary
of the Company or of such Subsidiary Guarantor to the Company or any other
Subsidiary of the Company, (b) any liability for Federal, state, local or other
taxes owed or owing by the Company or such Subsidiary Guarantor, (c) any
accounts payable or other liability to trade creditors arising in the ordinary
course of business (including Guarantees thereof or instruments evidencing such
liabilities) and any amounts owed for compensation to employees, (d) any
Indebtedness or obligation of the Company or such Subsidiary Guarantor, as
applicable, and any accrued and unpaid interest in respect thereof that by its
terms is subordinate or junior in any respect to any other Indebtedness or
obligation of the Company or such Subsidiary Guarantor, as applicable,
including any Senior Subordinated Indebtedness and any Subordinated Obligations
of the Company or such Subsidiary Guarantor, (e) any obligations with respect
to any capital stock, or (f) any obligations with respect to the Company’s
3.00% Convertible Senior Subordinated Notes due 2024, the Company’s 2.75% Convertible
Senior Subordinated Notes due 2024, the Company’s 63⁄4% Senior Subordinated Notes
due 2016 and any Subsidiary Guarantor’s guarantee thereof, or (g) any other
future or existing Senior Subordinated Indebtedness of the Company.

“Senior Subordinated Indebtedness”
of the Company means the Notes and any other Indebtedness of the Company that
specifically provides that such Indebtedness is to rank pari  passu
with the Notes in right of payment and is not subordinated by its terms in
right of payment to any Indebtedness or other obligation of the Company which
is not Senior Indebtedness.  Such term
includes the Company’s 2.75% Convertible Senior Subordinated Notes due 2024,
the Company’s 3.00% Convertible Senior Subordinated Notes due 2024, the Company’s
63⁄4% Senior Subordinated Notes due 2016 and the respective subsidiary guarantees
thereof.  “Senior Subordinated Indebtedness” of a Subsidiary Guarantor
has a correlative meaning.

“Significant Subsidiary”
means any Subsidiary Guarantor that would be a “Significant Subsidiary” of the
Company within the meaning of Rule 1-02 under Regulation S-X
promulgated by the Commission.

“Spin-off Market Price”
per share of Common Stock of the Company or the capital stock of, or similar
equity interests in, a Subsidiary or other business unit of the Company on any
day means the average of the daily Last Reported Sale Price for the 10
consecutive Trading Days commencing on and including the fifth Trading Day
after the Ex-Dividend Date with respect to the issuance or distribution requiring
such computation.

“Stated Maturity” means
September 15, 2011.

 9
 

 

 

“Stock Price” means the
price per share of Common Stock paid in connection with a corporate transaction
pursuant to which Additional Shares are issuable as set forth in Section 14.01(e)
hereof, which shall be equal to (i) if holders of Common Stock receive only
cash in such corporate transaction, the cash amount paid per share of Common
Stock and (ii) in all other cases, the average of the Last Reported Sale Prices
of Common Stock on the five Trading Days up to but not including the effective
date of such transaction.

“Stock Record Date” means,
with respect to any dividend, distribution or other transaction or event in
which the holders of Common Stock have the right to receive any cash,
securities or other property or in which the Common Stock (or other applicable
security) is exchanged for or converted into any combination of cash,
securities or other property, the date fixed for determination of stockholders
entitled to receive such cash, securities or other property (whether such date
is fixed by the Board of Directors or by statute, contract or otherwise).

“Subordinated Obligation”
means any Indebtedness of the Company (whether outstanding on the date of this
Indenture or thereafter Incurred) that is subordinate or junior in right of
payment to the Notes pursuant to a written agreement.  “Subordinated
Obligation” of a Subsidiary Guarantor has a correlative meaning.

“Subsidiary” of any Person
means any corporation, association or other business entity of which more than
50% of the total voting power of shares of capital stock or other equity
interest (including partnership interests) entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or indirectly,
by such Person or one or more of the other subsidiaries of that Person (or a
combination thereof).

“Subsidiary Guarantee”
means each Guarantee of the obligations with respect to the Notes issued by a
Subsidiary of the Company pursuant to the terms of this Indenture.

“Subsidiary Guarantor”
means any Subsidiary of the Company that has issued a Subsidiary Guarantee.

“Trading Day” means any
day on which (i) there is no Market Disruption Event and (ii) the New York
Stock Exchange or, if the Common Stock is not listed on the New York Stock
Exchange, the principal national securities exchange on which the Common Stock
is listed, is open for trading or, if the Common Stock is not so listed,
admitted for trading or quoted, any Business Day.  A Trading Day only includes those days that
have a scheduled closing time of 4:00 p.m. (New York City time) or the then
standard closing time for regular trading on the relevant exchange or trading
system.

“Trust Indenture Act”
means the Trust Indenture Act of 1939, as amended, as it was in force at the
date of this Indenture, except as provided in Sections 10.03 and 14.06;
provided that if the Trust Indenture Act of 1939 is amended after the date
hereof, the term “Trust Indenture Act”
shall mean, to the extent required by such amendment, the Trust Indenture Act
of 1939 as so amended.

“Trustee” means The Bank
of New York Trust Company, N.A., and its successors and any corporation
resulting from or surviving any consolidation or merger to which it or its
successors may be a party and any successor trustee at the time serving as
successor trustee hereunder.

 

 10

 

“Volume Weighted Average Price”
on any Trading Day means the price per share of the Common Stock as displayed
on Bloomberg (or any successor service) page ATK <equity> VAP in respect
of the period from 9:30 a.m. to 4:00 p.m. (New York City time), on such Trading
Day; or, if such price is not available, the market value per share of the
Common Stock on such day as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company.

“Voting Stock” of a Person
means all classes of capital stock or other interests (including partnership
interests) of such Person then outstanding and normally entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof.

Section 1.02.  Other Definitions.

	
  

  	
  Term

  	
   

  	
                  

  	
  Defined in Section

  
	
  “Additional Amounts Notice”

  	
   

  	
  4.09

  
	
  “Additional Shares”

  	
   

  	
  14.01(e)

  
	
  “Adjustment Event”

  	
   

  	
  14.05(l)

  
	
  “Agent Members”

  	
   

  	
  2.05(b)(v)

  
	
  “Blockage Notice”

  	
   

  	
  15.03

  
	
  “Cash Percentage”

  	
   

  	
  14.01(a)

  
	
  “Cash Percentage Notice”

  	
   

  	
  14.01(a)

  
	
  “Conversion Notice”

  	
   

  	
  14.02(a)

  
	
  “Defaulted Interest”

  	
   

  	
  2.03

  
	
  “Determination Date”

  	
   

  	
  14.05(l)

  
	
  “effective date”

  	
   

  	
  14.01(d)

  
	
  “Event of Default”

  	
   

  	
  6.01

  
	
  “Expiration Time”

  	
   

  	
  14.05(e)

  
	
  “Final Maturity Notice”

  	
   

  	
  3.04

  
	
  “Fundamental Change Offer”

  	
   

  	
  3.01(b)

  
	
  “Fundamental Change Repurchase Election”

  	
   

  	
  3.01(c)(i)

  
	
  “Fundamental Change Repurchase Date”

  	
   

  	
  3.01(a)

  
	
  “Fundamental Change Repurchase Price”

  	
   

  	
  3.01(a)

  
	
  “Global Note”

  	
   

  	
  2.02

  
	
  “Guarantee Blockage Notice”

  	
   

  	
  17.03

  
	
  “Guarantee Payment Blockage Period”

  	
   

  	
  17.03

  
	
  “Guaranteed Obligations”

  	
   

  	
  16.02

  
	
  “non-electing share”

  	
   

  	
  14.06

  
	
  “Note Register”

  	
   

  	
  2.05(a)

  
	
  “Note Registrar”

  	
   

  	
  2.05(a)

  
	
  “Payment Blockage Period”

  	
   

  	
  16.03

  
	
  “pay its Guarantee”

  	
   

  	
  17.03

  
	
  “pay the Notes”

  	
   

  	
  15.03

  
	
  “Public Acquirer Change of Control”

  	
   

  	
  14.01(f)

  
	
  “Public Acquirer Common Stock”

  	
   

  	
  14.01(f)

  
	
  “Purchased Shares”

  	
   

  	
  14.05(f)(i)

  
	
  “Remaining Shares”

  	
   

  	
  14.01(a)

  
	
  “Required Cash Amount”

  	
   

  	
  14.01(a)

  

 

 11
 

 

 

	
  “Restricted Securities”

  	
   

  	
  2.05(c)

  
	
  “Special Record Date”

  	
   

  	
  2.03

  
	
  “Successor Company”

  	
   

  	
  11.01(a)

  
	
  “Successor Guarantor”

  	
   

  	
  11.01(b)

  

 

ARTICLE 2

ISSUE, DESCRIPTION, EXECUTION,
REGISTRATION AND EXCHANGE OF NOTES

Section 2.01.  Designation Amount and Issue of
Notes.  The Notes shall be designated
as “2.75% Convertible Senior Subordinated
Notes due 2011”.  Notes not to
exceed the aggregate principal amount of $300,000,000 (except pursuant to
Sections 2.05, 2.06 and 3.01 hereof and provided the Company may issue
additional Notes from time to time) upon the execution of this Indenture,
may be executed by the Company and delivered to the Trustee for authentication,
and the Trustee shall thereupon authenticate and deliver said Notes to or upon
the written order of the Company, signed by its Chairman of the Board, its
Chief Executive Officer, its President, its Chief Financial Officer, its Chief
Operating Officer, any Vice President (whether or not designated by a number or
numbers or word or words added before or after the title “Vice President”), its
Treasurer, its Secretary or any Assistant Secretary, without any further action
by the Company hereunder.

Section 2.02.  Form of Notes.  The Notes and the Trustee’s certificate of
authentication to be borne by such Notes shall be substantially in the form set
forth in Exhibit A.  The terms and
provisions contained in the form of Note attached as Exhibit A hereto shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.

Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends, endorsements or changes as the
officers executing the same may approve (execution thereof to be conclusive
evidence of such approval) and as are not inconsistent with the provisions of
this Indenture, or as may be required by the Custodian, the Depositary or by
the National Association of Securities Dealers, Inc. in order for the Notes to
be tradable on The Portal Market or as may be required for the Notes to be
tradable on any other market developed for trading of securities pursuant to
Rule 144A 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
securities exchange or automated quotation system on which the Notes may be
listed, or to conform to usage, or to indicate any special limitations or
restrictions to which any particular Notes are subject.

So long as the Notes are eligible for book-entry settlement with the
Depositary, or unless otherwise required by law, or otherwise contemplated by
Section 2.05(b), all of the Notes will be represented by one or more Notes in
global form registered in the name of the Depositary or the nominee of the
Depositary (a “Global Note”).  The transfer and exchange of beneficial
interests in any such Global Note shall be effected through the Depositary in
accordance with this Indenture and the applicable procedures of the
Depositary.  Except as provided in
Section 2.05(b), beneficial holders of a Global Note shall not be entitled to
have certificates registered in their names, will not receive or be entitled to
receive physical delivery of certificates in definitive form and will not be
considered holders of such Global Note.

 12
 

 

 

Any Global Note shall represent such of the outstanding Notes as shall
be specified therein and shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be increased or reduced to reflect repurchases, conversions, transfers or
exchanges permitted hereby.  Any
endorsement of a Global Note to reflect the amount of any increase or decrease
in the amount of outstanding Notes represented thereby shall be made by the
Trustee or the Custodian, at the direction of the Trustee, in such manner and
upon instructions given by the holder of such Notes in accordance with this
Indenture.  Payment of principal of and
Interest on any Global Note shall be made to the holder of such Note.

Section 2.03.  Date and Denomination of Notes;
Payments of Interest.  The Notes
shall be issuable in registered form without coupons in denominations of $1,000
principal amount and integral multiples thereof.  Each Note shall be dated the date of its
authentication and shall bear interest from the date specified on the face of
the form of Note attached as Exhibit A hereto. 
Interest on the Notes shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.

The Person in whose name any Note (or its Predecessor Note) is
registered on the Note Register at the close of business on the Regular Record
Date with respect to an Interest Payment Date shall be entitled to receive the
Interest payable on such Interest Payment Date, except that the Interest
payable repurchase will be payable to the Person to whom principal is payable
pursuant to such repurchase (unless the Fundamental Change Repurchase Date is
an Interest Payment Date, in which case the semi-annual payment of interest
becoming due on such date shall be payable to the holders of such Notes
registered as such on the applicable Regular Record Date).  Notwithstanding the foregoing, if any Note
(or portion thereof) is converted during the period after a Regular Record Date
to, but excluding, the next succeeding Interest Payment Date, the Company shall
not be required to pay interest on such Interest Payment Date in respect of any
such Note (or portion thereof), except as provided in Section 14.02(d).  Interest shall be payable at the office of
the Company maintained by the Company for such purposes in the Borough of
Manhattan, City of New York, which shall initially be an office or agency of
the Trustee.  The Company shall pay
Interest (i) on any Notes in certificated form by check mailed to the address
of the Person entitled thereto as it appears in the Note Register (or upon
written notice from the registered holder thereof, by wire transfer in
immediately available funds, if such Person is entitled to Interest on Notes
with an aggregate principal amount in excess of $2,000,000) or (ii) on any
Global Note by wire transfer of immediately available funds to the account of
the Depositary or its nominee.

Any Interest on any Note which is payable, but is not punctually paid
or duly provided for, on any March 15 or September 15 (herein called “Defaulted Interest”) shall forthwith cease
to be payable to the Noteholder on the relevant Regular Record Date by virtue
of his having been such Noteholder, and such Defaulted Interest shall be paid
by the Company, at its election in each case, as provided in clause (1) or (2)
below:

(1)           The Company may
elect to make payment of any Defaulted Interest to the Persons in whose names
the Notes (or their respective Predecessor Notes) are registered at the close
of business on a “Special Record Date”
for the payment of such Defaulted Interest, which shall be the date fixed in
the following manner.  The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed to
be paid on each Note and the date of the proposed payment (which shall be not
less than 25 days after the receipt by the Trustee of such notice, unless 

 13
 

 

the
Trustee shall consent to an earlier date), and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate amount
to be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit on or prior to the date of the
proposed payment, such money when deposited to be held in trust for the benefit
of the Persons entitled to such Defaulted Interest as in this clause provided.  Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest that shall be not more
than 15 days and not less than ten days prior to the date of the proposed
payment, and not less than ten days after the receipt by the Trustee of the
notice of the proposed payment.  The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each holder at his address as it
appears in the Note Register, not less than ten days prior to such Special
Record Date.  Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor having
been so mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Notes (or their respective Predecessor Notes) are registered at the
close of business on such Special Record Date and shall no longer be payable
pursuant to the following clause (2) of this Section 2.03.

(2)           The Company may make
payment of any Defaulted Interest in any other lawful manner not inconsistent
with the requirements of any securities exchange or automated quotation system
on which the Notes may be listed or designated for issuance, and upon such
notice as may be required by such exchange or automated quotation system, if,
after notice given by the Company to the Trustee of the proposed payment
pursuant to this clause, such manner of payment shall be deemed practicable by
the Trustee.

Section 2.04.  Execution of Notes.  The Notes shall be signed in the name and on
behalf of the Company by the manual or facsimile signature of its President,
Chief Executive Officer, Chief Financial Officer, any Vice President (whether
or not designated by a number or numbers or word or words added before or after
the title “Vice President”), its Treasurer, its Secretary or any Assistant
Secretary.  Only such Notes as shall bear
thereon a certificate of authentication substantially in the form set forth on
the form of Note attached as Exhibit A hereto, manually executed by the Trustee
(or an authenticating agent appointed by the Trustee as provided by Section
18.12), shall be entitled to the benefits of this Indenture or be valid or
obligatory for any purpose.  Such
certificate by the Trustee (or such an authenticating agent) upon any Note
executed by the Company shall be conclusive evidence that the Note so
authenticated has been duly authenticated and delivered hereunder and that the
holder is entitled to the benefits of this Indenture.

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

Section 2.05.  Exchange and Registration of Transfer
of Notes; Restrictions on Transfer.  (a)  The Company shall cause to be kept at the
Corporate Trust Office a register (the register 

 14
 

 

maintained
in such office and in any other office or agency of the Company designated
pursuant to Section 4.02 being herein sometimes collectively referred to as the
“Note Register”) in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Notes and of transfers of Notes.  The Note Register shall be in written form or
in any form capable of being converted into written form within a reasonably
prompt period of time.  The Trustee is
hereby appointed “Note Registrar”
for the purpose of registering Notes and transfers of Notes as herein
provided.  The Company may appoint one or
more co-registrars in accordance with Section 4.02.

Upon surrender for registration of transfer of any Note to the Note
Registrar or any co-registrar, and satisfaction of the requirements for such
transfer set forth in this Section 2.05, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Notes of any authorized
denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by this Indenture.

Notes may be exchanged for other Notes of any authorized denominations
and of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency maintained by the Company pursuant to
Section 4.02.  Whenever any Notes are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Notes that the Noteholder making the exchange is
entitled to receive bearing registration numbers not contemporaneously
outstanding.

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

All Notes presented or surrendered for registration of transfer or for
exchange, repurchase or conversion shall (if so required by the Company or the
Note Registrar) be duly endorsed, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company, duly executed by
the Noteholder thereof or his attorney duly authorized in writing.

No service charge shall be made to any holder for any registration of,
transfer or exchange of Notes, but the Company may require payment by the
holder of a sum sufficient to cover any tax, assessment or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes.

Neither the Company nor the Trustee nor any Note Registrar shall be
required to exchange or register a transfer of (a) any Notes or portions
thereof surrendered for conversion pursuant to Article 14 or (b) any Notes or
portions thereof tendered for repurchase (and not withdrawn) pursuant to
Section 3.01.

(b)           The
following provisions shall apply only to Global Notes:

(i)            Each Global Note authenticated under
this Indenture shall be registered in the name of the Depositary or a nominee
thereof and delivered to such Depositary or a nominee thereof or Custodian
therefor, and each such Global Note shall constitute a single Note for all
purposes of this Indenture.

 15
 

 

 

(ii)           Notwithstanding any other provision
in this Indenture, no Global Note may be exchanged in whole or in part for
Notes registered, and no transfer of a Global Note in whole or in part may be
registered, in the name of any Person other than the Depositary or a nominee
thereof unless (A) the Depositary (i) has notified the Company that it is
unwilling or unable to continue as Depositary for such Global Note and a
successor depositary has not been appointed by the Company within ninety days
or (ii) has ceased to be a clearing agency registered under the Exchange Act,
(B) an Event of Default has occurred and is continuing, or (C) the Company, in
its sole discretion, notifies the Trustee in writing that it no longer wishes
to have all the Notes represented by Global Notes.  Any Global Note exchanged pursuant to clause
(A) or (B) above shall be so exchanged in whole and not in part and any Global
Note exchanged pursuant to clause (C) above may be exchanged in whole or from
time to time in part as directed by the Company.  Any Note issued in exchange for a Global Note
or any portion thereof shall be a Global Note; provided that any such Note so
issued that is registered in the name of a Person other than the Depositary or
a nominee thereof shall not be a Global Note.

(iii)          Securities issued in exchange for a
Global Note or any portion thereof pursuant to clause (ii) above shall be issued
in definitive, fully registered form, without interest coupons, shall have an
aggregate principal amount equal to that of such Global Note or portion thereof
to be so exchanged, shall be registered in such names and be in such authorized
denominations as the Depositary shall designate and shall bear any legends
required hereunder.  Any Global Notes to
be exchanged in whole shall be surrendered by the Depositary to the Trustee, as
Note Registrar.  With regard to any
Global Note to be exchanged in part, either such Global Note shall be so
surrendered for exchange or, if the Trustee is acting as Custodian for the
Depositary or its nominee with respect to such Global Note, the principal
amount thereof shall be reduced, by an amount equal to the portion thereof to
be so exchanged, by means of an appropriate adjustment made on the records of
the Trustee.  Upon any such surrender or
adjustment, the Trustee shall authenticate and make available for delivery the
Note issuable on such exchange to or upon the written order of the Depositary
or an authorized representative thereof, as appropriate.

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

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

 16
 

 

 

(vi)          At such time as all interests in a
Global Note have been retired, repurchased, converted, canceled or exchanged
for Notes in certificated form, such Global Note shall, upon receipt thereof,
be canceled by the Trustee in accordance with standing procedures and
instructions existing between the Depositary and the Custodian.  At any time prior to such cancellation, if
any interest in a Global Note is retired, repurchased, converted, canceled or
exchanged for Notes in certificated form, the principal amount of such Global
Note shall, in accordance with the standing procedures and instructions
existing between the Depositary and the Custodian, be appropriately reduced,
and an endorsement shall be made on such Global Note, by the Trustee or the
Custodian, at the direction of the Trustee, to reflect such reduction.

(c)           Every
Note that bears or is required under this Section 2.05(c) to bear the legend
set forth in this Section 2.05(c) (together with any Common Stock issued upon
conversion of the Notes and required to bear the legend set forth in Section
2.05(d), collectively, the “Restricted
Securities”) shall be subject to the restrictions on transfer set
forth in this Section 2.05(c) (including those set forth in the legend below)
unless such restrictions on transfer shall be waived by written consent of the
Company, and the holder of each such Restricted Security, by such holder’s
acceptance thereof, agrees to be bound by all such restrictions on
transfer.  As used in Section 2.05(c) and
2.05(d), the term “transfer”
encompasses any sale, pledge, loan, transfer or other disposition whatsoever of
any Restricted Security or any interest therein.

Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Note (and all securities issued in exchange
therefor or substitution thereof, other than Common Stock, if any, issued upon
conversion thereof, which shall bear the legend set forth in Section 2.05(d),
if applicable) shall bear a legend in substantially the following form, unless
such Note has been sold pursuant to a registration statement that has been
declared effective under the Securities Act (and which continues to be
effective at the time of such transfer) or pursuant to Rule 144 under the
Securities Act or any similar provision then in force, or unless otherwise
agreed by the Company in writing, with written notice thereof to the Trustee:

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION. 
NEITHER THIS SECURITY NOR ANY INTEREST 
OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH
REGISTRATION.  THE HOLDER OF THIS
SECURITY, BY ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT IT IS A “QUALIFIED
INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE
144A”)); (2) AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR
WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY OR ANY COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY, PRIOR
TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS SECURITY
UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),  ONLY (A) TO ALLIANT TECHSYSTEMS INC. (THE “ISSUER”),
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT 

 17
 

 

(AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF
SUCH TRANSFER), (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A, IN COMPLIANCE WITH RULE 144A TO A PERSON IT REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (D) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM;
AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.  THIS LEGEND WILL BE REMOVED UPON THE EARLIER
OF THE TRANSFER OF THIS SECURITY PURSUANT TO CLAUSE 2(B) ABOVE OR UPON ANY
TRANSFER OF THIS SECURITY UNDER RULE 144 UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION).

THE HOLDER OF THIS SECURITY IS ENTITLED TO THE
BENEFITS OF A REGISTRATION RIGHTS AGREEMENT DATED AS OF SEPTEMBER 12, 2006 AND,
BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH THE
PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.

Any Note (or security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance with
their terms or as to conditions for removal of the foregoing legend have been
satisfied may, upon surrender of such Note for exchange to the Note Registrar
in accordance with the provisions of this Section 2.05, be exchanged for a new
Note or Notes, of like tenor and aggregate principal amount, which shall not
bear the restrictive legend required by this Section 2.05(c).  If the Restricted Security surrendered for
exchange is represented by a Global Note bearing the legend set forth in this
Section 2.05(c), the principal amount of the legended Global Note shall be
reduced by the appropriate principal amount and the principal amount of a Global
Note without the legend set forth in this Section 2.05(c) shall be increased by
an equal principal amount.  If a Global
Note without the legend set forth in this Section 2.05(c) has not been
executed, authenticated and delivered, the Company shall execute and the
Trustee shall authenticate and deliver an unlegended Global Note to the
Depositary.

(d)           Until
the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision), any stock certificate
representing Common Stock issued upon conversion of any Note, if any, shall
bear a legend in substantially the following form, unless such Common Stock has
been sold pursuant to a registration statement that has been declared effective
under the Securities Act (and which continues to be effective at the time of
such transfer) or pursuant to Rule 144 under the Securities Act or any similar
provision then in force, or such Common Stock has been issued upon conversion
of Notes that have been transferred pursuant to a registration statement that
has been declared effective under the Securities Act or pursuant to Rule 144
under the Securities Act or any similar provision then in force, or unless
otherwise agreed by the Company in writing with written notice thereof to the
transfer agent:

 18
 

 

 

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES
LAWS OF ANY STATE OR OTHER JURISDICTION. 
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE
REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.  THE HOLDER OF THIS SECURITY, BY ITS
ACCEPTANCE HEREOF, (1) REPRESENTS THAT IT IS A “QUALIFIED INSTITUTIONAL BUYER”
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”)); (2) AGREES ON
ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED
SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THIS SECURITY UNDER
RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), ONLY (A) TO
ALLIANT TECHSYSTEMS INC. (THE “ISSUER”), (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER), (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, IN COMPLIANCE WITH
RULE 144A TO A PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER’S AND
THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/
OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM; AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. 
THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS
SECURITY PURSUANT TO CLAUSE 2(B) ABOVE OR UPON ANY TRANSFER OF THIS SECURITY
UNDER RULE 144 UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION).

THE HOLDER OF THIS SECURITY IS ENTITLED TO THE
BENEFITS OF A REGISTRATION RIGHTS AGREEMENT DATED AS OF SEPTEMBER 12, 2006 AND,
BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH THE
PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.

Any such Common Stock as to which such restrictions on transfer shall have
expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.05(d).

(e)           Any
Note or Common Stock issued upon the conversion of a Note that, prior to the
expiration of the holding period applicable to sales thereof under Rule 144(k)
under the Securities 

 19
 

 

Act (or any successor provision), is purchased or owned by the Company
or any Affiliate thereof may not be resold by the Company or such Affiliate
unless registered under the Securities Act or resold pursuant to an exemption
from the registration requirements of the Securities Act in a transaction which
results in such Notes or Common Stock, as the case may be, no longer being “restricted
securities” (as defined under Rule 144); or provided that such
restriction shall not apply if appropriate measures are taken that such Notes
or Common Stock are sold in such a manner that such other Notes and Common
Stock that constitute “restricted securities” (as defined under Rule 144) are
not commingled with Notes or Common Stock being sold.

The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Note (including any transfers between or among Agent Members or
beneficial holders of interests in any Global Note) other than to require delivery
of such certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the terms of this
Indenture, and to examine the same to determine substantial compliance as to
form with the express requirements hereof.

Section
2.06. 
Mutilated, Destroyed, Lost or Stolen Notes.  In case any Note shall become mutilated or be
destroyed, lost or stolen, the Company in its discretion may execute, and upon
its written request the Trustee or an authenticating agent appointed by the
Trustee shall authenticate and make available for delivery, a new Note, of like
tenor and principal amount, bearing a number not contemporaneously outstanding,
in exchange and substitution for the mutilated Note, or in lieu of and in
substitution for the Note so destroyed, lost or stolen.  In every case, the applicant for a
substituted Note shall furnish to the Company, to the Trustee and, if
applicable, to such authenticating agent such security or indemnity as may be
required by them to save each of them harmless for any loss, liability, cost or
expense caused by or connected with such substitution, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company, to
the Trustee and, if applicable, to such authenticating agent evidence to their
satisfaction of the destruction, loss or theft of such Note and of the
ownership thereof.

Following receipt by the Trustee or such authenticating agent, as the
case may be, of satisfactory security or indemnity and evidence, as described
in the preceding paragraph, the Trustee or such authenticating agent may
authenticate any such substituted Note and make available for delivery such
Note.  Upon the issuance of any substituted
Note, the Company may require the payment by the holder of a sum sufficient to
cover any tax, assessment or other governmental charge that may be imposed in
relation thereto and any other expenses connected therewith.  In case any Note which has matured or is
about to mature or has been tendered for repurchase upon a Fundamental Change
(and not withdrawn) or is to be converted into Common Stock shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing
a substitute Note, pay or authorize the payment of or convert or authorize the
conversion of the same (without surrender thereof except in the case of a
mutilated Note), as the case may be, if the applicant for such payment or
conversion shall furnish to the Company, to the Trustee and, if applicable, to such
authenticating agent such security or indemnity as may be required by them to
save each of them harmless from any loss, liability, cost or expense caused by
or in connection with such substitution, and, in every case of destruction,
loss or theft, the applicant shall also furnish to the Company, the Trustee
and, if applicable, any Paying Agent or Conversion Agent evidence to their
satisfaction of the destruction, loss or theft of such Note and of the
ownership thereof.

 20
 

 

Every substitute Note issued pursuant to the provisions of this Section
2.06 by virtue of the fact that any Note is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of (but shall be subject to all the limitations
set forth in) this Indenture equally and proportionately with any and all other
Notes duly issued hereunder.  To the
extent permitted by law, all Notes shall be held and owned upon the express
condition that the foregoing provisions are exclusive with respect to the
replacement or payment or conversion or repurchase of mutilated, destroyed,
lost or stolen Notes and shall preclude any and all other rights or remedies notwithstanding
any law or statute existing or hereafter enacted to the contrary with respect
to the replacement or payment or conversion or repurchase of negotiable
instruments or other securities without their surrender.

Section
2.07. 
Temporary Notes.  Pending the preparation of Notes in
certificated form, the Company may execute and the Trustee or any
authenticating agent appointed by the Trustee shall, upon the written request
of the Company, authenticate and deliver temporary Notes (printed or lithographed).  Temporary Notes shall be issuable in any
authorized denomination, and substantially in the form of the Notes in
certificated form, but with such omissions, insertions and variations as may be
appropriate for temporary Notes, all as may be determined by the Company.  Every such temporary Note shall be executed
by the Company and authenticated by the Trustee or such authenticating agent
upon the same conditions and in substantially the same manner, and with the
same effect, as the Notes in certificated form. 
Without unreasonable delay, the Company will execute and deliver to the
Trustee or such authenticating agent Notes in certificated form and thereupon
any or all temporary Notes may be surrendered in exchange therefor, at each
office or agency maintained by the Company pursuant to Section 4.02 and the
Trustee or such authenticating agent shall authenticate and make available for
delivery in exchange for such temporary Notes an equal aggregate principal
amount of Notes in certificated form. 
Such exchange shall be made by the Company at its own expense and
without any charge therefor.  Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits and subject to the same limitations under this Indenture as Notes in
certificated form authenticated and delivered hereunder.

Section
2.08. 
Cancellation of Notes.  All Notes surrendered for the purpose of
payment, repurchase, conversion, exchange or registration of transfer shall, if
surrendered to the Company or any Paying Agent or any Note Registrar or any
Conversion Agent, be surrendered to the Trustee and promptly canceled by it,
or, if surrendered to the Trustee, shall be promptly canceled by it, and no
Notes shall be issued in lieu thereof except as expressly permitted by any of
the provisions of this Indenture.  The
Trustee shall dispose of such canceled Notes in accordance with its customary
procedures.  If the Company shall acquire
any of the Notes, such acquisition shall not operate as a repurchase or
satisfaction of the indebtedness represented by such Notes unless and until the
same are delivered to the Trustee for cancellation.

Section
2.09. 
CUSIP Numbers.  The Company in issuing the Notes may use “CUSIP” numbers (if then generally in use),
and, if so, the Trustee shall use “CUSIP” numbers in notices as a convenience
to Noteholders; provided that any such notice may state that no representation
is made as to the correctness of such numbers either as printed on the Notes or
as contained in any notice and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such notice shall not be
affected by any defect in or omission of such numbers.  The Company will promptly notify the Trustee
of any change in the “CUSIP”
numbers.

 

 21

 

ARTICLE 3

REPURCHASE OF NOTES

Section
3.01. 
Repurchase of Notes by the Company at Option of
Holders upon a Fundamental Change.

(a)           If
a Fundamental Change shall occur at any time prior to Stated Maturity, each
holder shall have the right, at such holder’s option, to require the Company to
repurchase all of such holder’s Notes, or any portion thereof that is a
multiple of $1,000 principal amount, on the date specified in the Fundamental
Change Offer, which date shall be no earlier than 30 days nor later than 60
days after the date of the Fundamental Change Offer (subject to extension to
comply with applicable law) (the “Fundamental
Change Repurchase Date”).  The
Company shall repurchase such Notes in cash at a price (the “Fundamental Change Repurchase Price”) equal to 100% of the
principal amount thereof plus any accrued and unpaid Interest to but excluding
the Fundamental Change Repurchase Date; provided that if such Fundamental
Change Repurchase Date falls on an Interest Payment Date, then the Interest payable
on such Interest Payment Date shall be paid to the holders of record of the
Notes on the applicable record date instead of the holders surrendering the
Notes for repurchase on such date.  In
the event that at the time of a Fundamental Change that requires the Company to
repurchase the Notes, the terms of the Bank Indebtedness restrict or prohibit
the repurchase of Notes pursuant to this Section 3.01, then prior to the
mailing of the notice to holders provided for in Section 3.01(b) below but in
any event within 45 days following such Fundamental Change, the Company shall
(i) repay in full all Bank Indebtedness or, if doing so will allow the
repurchase of Notes, offer to repay in full all Bank Indebtedness and repay the
Bank Indebtedness of each lender who has accepted such offer or (ii) obtain the
requisite consent under the agreements governing the Bank Indebtedness to
permit the repurchase of the Notes as provided for in this Section 3.01.

Notwithstanding the provisions of the immediately preceding paragraph,
the Company shall not be required to repurchase any Notes of Holders upon a
Fundamental Change (and the Company shall not be required to give notice as
described in Section 3.01(b) below) if either:

(i)            the Last Reported Sale Price of the
Common Stock for any five Trading Days within the 10 consecutive Trading Days
ending immediately before the later of the Fundamental Change or the public
announcement thereof, equals or exceeds 105% of the Conversion Price of the
Notes immediately before the Fundamental Change or the public announcement
thereof; or

(ii)           at least 90% of the
consideration, excluding cash payments for fractional shares and cash payments
made in respect of dissenters’ appraisal rights, in the transaction or
transactions constituting the Fundamental Change consists of shares of capital
stock traded on a U.S. national securities exchange or quoted on the Nasdaq
Global Market or which will be so traded or quoted when issued or exchanged in
connection with a Fundamental Change (these securities being referred to as “publicly
traded securities”) and as a result of this transaction or transactions the
Notes become convertible into such publicly traded securities.

(b)           Except
as provided by Section 3.01(a), on or before the 45th day after the occurrence
of a Fundamental Change, the Company, or at its written request the Trustee in
the name of and at the expense of the Company (which request must be received
by the Trustee at least three Business Days prior to the date the Trustee is
requested to give notice as described below, 

 22
 

 

unless the Trustee shall agree to a shorter period), shall mail or
cause to be mailed, by first class mail, to all holders of record on such date
a notice (the “Fundamental Change Offer”)
of the occurrence of such Fundamental Change and of the repurchase right at the
option of the holders arising as a result thereof to each holder of Notes at
its last address as the same appears on the Note Register; provided that if the
Company shall give such notice, it shall also give written notice of the
Fundamental Change to the Trustee at such time as it is mailed to
Noteholders.  Such notice, if mailed in
the manner herein provided, shall be conclusively presumed to have been duly
given, whether or not the holder receives such notice.  Each Fundamental Change Offer shall state:

(i)            the Fundamental Change Repurchase
Price, excluding accrued and unpaid Interest, the applicable Conversion Rate at
the time of such notice (and any applicable adjustments to the Conversion Rate)
and, to the extent known at the time of such notice, the amount of Interest
that will be payable with respect to the Notes on the Fundamental Change
Repurchase Date;

(ii)           the events causing the Fundamental
Change and the date of the Fundamental Change;

(iii)          the Fundamental Change Repurchase
Date;

(iv)          the last date on which a holder may
exercise the repurchase right;

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

(vi)          that Notes as to which a Fundamental
Change Repurchase Election has been given by the holder may be converted only
if the election has been withdrawn by the holder in accordance with the terms
of this Indenture; provided that the Notes are otherwise convertible in
accordance with Section 14.01;

(vii)         that the holder shall have the right to
withdraw any Notes surrendered prior to the close of business on the Business
Day immediately preceding the Fundamental Change Repurchase Date (or any such
later time as may be required by applicable law);

(viii)        a description of the procedure which a
Noteholder must follow to exercise such repurchase right or to withdraw any
surrendered Notes;

(ix)           the CUSIP number or numbers of the
Notes (subject to Section 2.09 and if then generally in use); and

(x)            briefly, the conversion rights of
the Notes and whether, at the time of such notice, the Notes are eligible for
conversion.

No failure of the Company to give the foregoing notices and no defect
therein shall limit the Noteholders’ repurchase rights or affect the validity
of the proceedings for the repurchase of the Notes pursuant to this Section
3.01.

(c)           Notes
shall be repurchased pursuant to this Section 3.01 at the option of the holder
upon:

 23
 

 

 

(i)            delivery to the Trustee (or other
Paying Agent appointed by the Company) by a holder of a duly completed notice
(a “Fundamental Change
Repurchase Election”) in the form set forth on the reverse of the
Note at any time prior to the close of business on the Business Day immediately
preceding the Fundamental Change Repurchase Date stating:

(A)  if certificated, the certificate numbers of
the Notes which the holder shall deliver to be repurchased;

(B)   the portion of the principal amount of the
Notes that the holder shall deliver to be repurchased, which portion must be
$1,000 or an integral multiple thereof, and

(C)   that such Notes shall be repurchased as of
the Fundamental Change Repurchase Date pursuant to the terms and conditions
specified in the Notes and in the Indenture; and

(ii)           physical delivery or book-entry
transfer of the Notes to the Trustee (or other Paying Agent appointed by the
Company) simultaneously with or at any time after delivery of the Fundamental
Change Repurchase Election (together with all necessary endorsements) at the
Corporate Trust Office of the Trustee (or other Paying Agent appointed by the
Company) in the Borough of Manhattan, such delivery or transfer being a
condition to receipt by the holder of the Fundamental Change Repurchase Price
therefor; provided that such Fundamental Change Repurchase Price shall be so
paid pursuant to this Section 3.01 only if the Notes so delivered or
transferred to the Trustee (or other Paying Agent appointed by the Company)
shall conform in all respects to the description thereof in the related
Fundamental Change Repurchase Election. 
All questions as to the validity, eligibility (including time of
receipt) and acceptance of any Note for repurchase shall be determined by the
Company, whose determination shall be final and binding absent manifest error.

(d)           Notwithstanding
the foregoing provisions of this Section, the Company shall not be required to
make a Fundamental Change Offer upon a Fundamental Change if a third party
makes the Fundamental Change Offer in the manner, at the times and otherwise in
compliance with the requirements set forth in Section 3.01(b) applicable to a
Fundamental Change Offer made by the Company and purchases all Notes validly
tendered and not withdrawn under such Fundamental Change Offer.

Section
3.02. 
Company’s Notification to the Trustee.  At least three Business Days before the date
of any Fundamental Change Repurchase Notice, the Company shall deliver an
Officers’ Certificate to the Trustee specifying:

(i)            the information required to be
included in the Fundamental Change Repurchase Notice; and

(ii)           whether the Company desires the
Trustee to give the Fundamental Change Repurchase Notice required.

 24
 

 

 

Section
3.03. 
Conditions and Procedures for Repurchase at Option
of Holders.

(a)           The
Company shall repurchase in cash from the holder thereof, pursuant to Section
3.01, a portion of a Note, if the principal amount of such portion is $1,000 or
a whole multiple of $1,000.  Provisions
of this Indenture that apply to the repurchase of all of a Note also apply to
the repurchase of such portion of such Note. 
Upon presentation of any Note repurchased in part only, the Company
shall execute and the Trustee shall authenticate and make available for
delivery to the holder thereof, at the expense of the Company, a new Note or
Notes, of any authorized denomination, in aggregate principal amount equal to
the portion of the Notes presented not repurchased.

(b)           On
or prior to a Fundamental Change Repurchase Date, the Company will deposit with
the Trustee or with one or more Paying Agents (or, if the Company is acting as
its own Paying Agent, set aside, segregate and hold in trust as provided in
Section 4.04) an amount of cash sufficient to repurchase on the Fundamental
Change Repurchase Date all the Notes or portions thereof to be repurchased on
such date at the Fundamental Change Repurchase Price; provided that if such
deposit is made on the Fundamental Change Repurchase Date it must be received
by the Trustee or Paying Agent, as the case may be, by 10:00 a.m., New York
City time, on such date.

If the Trustee or other Paying Agent appointed by the Company, or the
Company or an Affiliate of the Company, if it or such Affiliate is acting as
the Paying Agent, holds cash sufficient to pay the aggregate Fundamental Change
Repurchase Price of all the Notes or portions thereof that are to be
repurchased as of the Fundamental Change Repurchase Date, on the Business Day
following the Fundamental Change Repurchase Date (i) such Notes will cease to
be outstanding, (ii) Interest on such Notes will cease to accrue and (iii) all
other rights of the holders of such Notes will terminate, whether or not
book-entry transfer of the Notes has been made or the Notes have been delivered
to the Trustee or Paying Agent, other than the right to receive the Fundamental
Change Repurchase Price upon delivery of the Notes.

(c)           Upon
receipt by the Trustee (or other Paying Agent appointed by the Company) of a
Fundamental Change Repurchase Election, the holder of the Note in respect of
which such Fundamental Change Repurchase Election was given shall (unless such
notice is validly withdrawn) thereafter be entitled to receive solely the
Fundamental Change Repurchase Price with respect to such Note.  Such Fundamental Change Repurchase Price
shall be paid to such holder, subject to receipt of funds and/or Notes by the
Trustee (or other Paying Agent appointed by the Company), promptly (but in no
event more than five Business Days) following the later of (x) the Fundamental
Change Repurchase Date with respect to such Note (provided the holder has
satisfied the conditions in Section 3.01(c), as applicable) and (y) the time of
delivery of such Note to the Trustee (or other Paying Agent appointed by the
Company) by the holder thereof in the manner required by Section 3.01(c), as
applicable.  Notes in respect of which a
Fundamental Change Repurchase Election has been given by the holder thereof may
not be converted pursuant to Article 14 hereof on or after the date of the
delivery of such Fundamental Change Repurchase Election unless such notice has
first been validly withdrawn.

(d)           Notwithstanding
anything herein to the contrary, any holder delivering to the office of the
Trustee (or other Paying Agent appointed by the Company) a Fundamental Change
Repurchase Election shall have the right to withdraw such election at any time
prior to the close of business on the Business Day preceding the Fundamental
Change Repurchase Date (or any such 

 25
 

 

later time as may be required by applicable law) by delivery of a
written notice of withdrawal to the Trustee (or other Paying Agent appointed by
the Company) specifying:

(i)            the certificate number, if any, of
the Note in respect of which such notice of withdrawal is being submitted, or
the appropriate Depositary information if the Note in respect of which such
notice of withdrawal is being submitted is represented by a Global Note,

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

(iii)          the principal amount, if any, of such
Note which remains subject to the original Fundamental Change Repurchase
Election and which has been or will be delivered for repurchase by the Company.

The Trustee (or other Paying Agent appointed by the Company) shall
promptly notify the Company of the receipt by it of any Fundamental Change
Repurchase Election or written notice of withdrawal thereof.

(e)           The
Company will comply with the provisions of Rule 13e-4 and any other tender
offer rules under the Exchange Act to the extent then applicable in connection
with the repurchase rights of the holders of Notes in the event of a
Fundamental Change.  If then required by
applicable law, the Company will file a Schedule TO or any other schedule
required in connection with such repurchase.

(f)            There
shall be no repurchase of any Notes pursuant to Section 3.01 if there has
occurred at any time prior to, and is continuing on, the Fundamental Change
Repurchase Date an Event of Default (other than an Event of Default that is
cured by the payment of the Fundamental Change Repurchase Price with respect to
such Notes).  The Paying Agent will
promptly return to the respective holders thereof any Notes (x) with respect to
which a Fundamental Change Repurchase Election has been withdrawn in compliance
with this Indenture, or (y) held by it during the continuance of an Event of
Default (other than a default in the payment of the Fundamental Change
Repurchase Price with respect to such Notes) in which case, upon such return,
the Fundamental Change Repurchase Election with respect thereto shall be deemed
to have been withdrawn.

(g)           The
Trustee (or other Paying Agent appointed by the Company) shall return to the
Company any cash that remains unclaimed as provided in Section 12.03, together
with interest, if any, thereon, held by them for the payment of the Fundamental
Change Repurchase Price; provided that
to the extent that the aggregate amount of cash deposited by the Company
pursuant to Section 3.03(b) exceeds the aggregate Fundamental Change Repurchase
Price of the Notes or portions thereof which the Company is obligated to
purchase as of the Fundamental Change Repurchase Date then, unless otherwise
agreed in writing with the Company, promptly after the Business Day following
the Fundamental Change Repurchase Date, the Trustee shall return any such
excess to the Company together with interest, if any, thereon.

(h)           In
the case of a reclassification, change, consolidation, merger, combination,
sale or conveyance to which Section 14.06 applies, in which the Common Stock of
the Company is changed or exchanged as a result into the right to receive
stock, securities or other property or 

 26
 

 

assets (including cash), which includes shares of Common Stock of the
Company or shares of common stock of another Person that are, or upon issuance
will be, traded on a United States national securities exchange or approved for
trading on an established automated over-the-counter trading market in the
United States and such shares constitute at the time such change or exchange
becomes effective in excess of 50% of the aggregate fair market value of such
stock, securities or other property or assets (including cash) (as determined
by the Company, which determination shall be conclusive and binding), then the
Person formed by such consolidation or resulting from such merger or which
acquires such assets, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture (accompanied by an Opinion of Counsel that
such supplemental indenture complies with the Trust Indenture Act as in force
at the date of execution of such supplemental indenture) modifying the
provisions of this Indenture relating to the right of holders of the Notes to
cause the Company to repurchase the Notes following a Fundamental Change,
including without limitation the applicable provisions of this Article 3 and
the definition of Fundamental Change, as appropriate, as determined in good
faith by the Company (which determination shall be conclusive and binding), to
make such provisions apply to such other Person if different from the Company
(in lieu of the Company).

Section
3.04. 
Final Maturity Notice.  On the Final Notice Date, the Company, or at
its written request the Trustee in the name of and at the expense of the
Company (which request must received at least five Business Days prior to the
Final Notice Date (unless the Trustee shall agree to a shorter notice period)
shall mail or cause to be mailed, by first class mail, to all holders of record
on such Final Notice Date a notice (the “Final
Maturity Notice”) of the final maturity of the Notes to each holder
of the Notes at its last address as the same appears on the Note Register,
provided that if the Company shall give such notice, it shall also give written
notice of the final maturity of the Notes to the Trustee at the same time it is
mailed to Noteholders.  Such notice, if
mailed in the manner herein provided, shall be conclusively presumed to have
been duly given, whether or not the holder receives such notice.  Such notice shall state:

(i)            the final maturity date of the
Notes;

(ii)           the CUSIP number or numbers of the
Notes (subject to Section 2.09 and if then generally in use);

(iii)          briefly, the conversion rights of the
Notes and whether, at the time of such notice, the Notes are eligible for
conversion; and

(iv)          if the Notes are eligible for
conversion, any other information required by Article 14.

ARTICLE 4

PARTICULAR COVENANTS OF THE COMPANY

Section
4.01. 
Payment of Principal and Interest.  The Company covenants and agrees that it will
duly and punctually pay or cause to be paid the principal of (including any
Fundamental Change Repurchase Price pursuant to Article 3) and Interest on each
of the Notes at the places, at the respective times and in the manner provided
herein and in the Notes.

Section
4.02. 
Maintenance of Office or Agency.  The Company will maintain an office or agency
in the Borough of Manhattan, The City of New York, where the Notes may be
surrendered 

 27
 

 

for
registration of transfer or exchange or for presentation for payment or for
conversion or repurchase and where notices and demands to or upon the Company
and the Subsidiary Guarantors in respect of the Notes and this Indenture may be
served.  The office of The Bank of New
York Trust Company, N.A., located at 101 Barclay Street, New York, New York
10286 (Attention: Corporate Trust Administration), shall initially be such office
or agency for all of the aforesaid purposes. 
The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency not
designated or appointed by the Trustee. 
If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office.

The Company may also from time to time designate co-registrars and one
or more offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such
designations.  The Company will give
prompt written notice of any such designation or rescission and of any change
in the location of any such other office or agency.

The Company hereby initially designates the Trustee as Paying Agent,
Note Registrar, Custodian and Conversion Agent, and each of the Corporate Trust
Office and the office of agency of the Trustee in the Borough of Manhattan
shall be considered as one such office or agency of the Company for each of the
aforesaid purposes.

So long as the Trustee is the Note Registrar, the Trustee agrees to
mail, or cause to be mailed, the notices set forth in Section 7.08.  If co-registrars have been appointed in
accordance with this Section, the Trustee shall mail such notices only to the
Company and the holders of Notes it can identify from its records.

Section
4.03. 
Appointments to Fill Vacancies in Trustee’s Office.  The Company, whenever necessary to avoid or
fill a vacancy in the office of Trustee, will appoint, in the manner provided
in Section 7.08, a Trustee, so that there shall at all times be a Trustee
hereunder.

Section
4.04. 
Provisions as to Paying Agent.  (a)  If the Company shall appoint a Paying Agent
other than the Trustee, or if the Trustee shall appoint such a Paying Agent,
the Company will cause such Paying Agent to execute and deliver to the Trustee
an instrument in which such Paying Agent shall agree with the Trustee, subject
to the provisions of this Section 4.04:

(1)           that it will hold all sums held by it
as such agent for the payment of the principal of or Interest on the Notes
(whether such sums have been paid to it by the Company or by any other obligor
on the Notes) in trust for the benefit of the holders of the Notes;

(2)           that it will give the Trustee notice
of any failure by the Company (or by any other obligor on the Notes) to make
any payment of the principal of or Interest on the Notes when the same shall be
due and payable; and

(3)           that at any time during the
continuance of an Event of Default, upon request of the Trustee, it will
forthwith pay to the Trustee all sums so held in trust.

The Company shall, on or before each due date of the principal of or
Interest on the Notes, deposit with the Paying Agent a sum (in funds which are
immediately available on the due date for 

 28
 

 

such
payment) sufficient to pay such principal or Interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of any
failure to take such action; provided that if such deposit is made on the due
date, such deposit shall be received by the Paying Agent by 10:00 a.m., New
York City time, on such date.

(b)           If
the Company shall act as its own Paying Agent, it will, on or before each due
date of the principal of or Interest on the Notes, set aside, segregate and
hold in trust for the benefit of the holders of the Notes a sum sufficient to
pay such principal or Interest so becoming due and will promptly notify the
Trustee of any failure to take such action and of any failure by the Company
(or any other obligor under the Notes) to make any payment of the principal of
or Interest on the Notes when the same shall become due and payable.

(c)           Anything
in this Section 4.04 to the contrary notwithstanding, the Company may, at any
time, for the purpose of obtaining a satisfaction and discharge of this
Indenture, or for any other reason, pay or cause to be paid to the Trustee all
sums held in trust by the Company or any Paying Agent hereunder as required by
this Section 4.04, such sums to be held by the Trustee upon the trusts herein
contained and upon such payment by the Company or any Paying Agent to the Trustee,
the Company or such Paying Agent shall be released from all further liability
with respect to such sums.

(d)           Anything
in this Section 4.04 to the contrary notwithstanding, the agreement to hold
sums in trust as provided in this Section 4.04 is subject to Sections 12.02 and
12.03.

The Trustee shall not be responsible for the actions of any other
Paying Agents (including the Company if acting as its own Paying Agent) and
shall have no control of any funds held by such other Paying Agents.

Section
4.05. 
Existence.  Subject to Article 11, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided that the
Company shall not be required to preserve any such right if the Company shall
determine that the preservation thereof is no longer desirable in the conduct
of the business of the Company and that the loss thereof is not disadvantageous
in any material respect to the Noteholders.

Section
4.06. 
Rule 144A Information Requirement.  Within the period prior to the expiration of
the holding period applicable to sales thereof under Rule 144(k) under the
Securities Act (or any successor provision), the Company covenants and agrees
that it shall, during any period in which it is not subject to Section 13 or
15(d) under the Exchange Act, make available to any holder or beneficial holder
of Notes or any Common Stock issued upon conversion thereof which continue to
be Restricted Securities in connection with any sale thereof and any
prospective purchaser of Notes or such Common Stock designated by such holder
or beneficial holder, the information required pursuant to Rule 144A(d)(4)
under the Securities Act upon the request of any holder or beneficial holder of
the Notes or such Common Stock and it will take such further action as any
holder or beneficial holder of such Notes or such Common Stock may reasonably
request, all to the extent required from time to time to enable such holder or
beneficial holder to sell its Notes or Common Stock without registration under
the Securities Act within the limitation of the exemption provided by Rule
144A, as such Rule may be amended from time to time.  Upon the request of any holder or any beneficial
holder of the Notes or such Common Stock, the Company 

 29
 

 

will
deliver to such holder a written statement as to whether it has complied with
such requirements.

Section
4.07. 
Stay, Extension and Usury Laws.  The Company covenants (to the extent that it
may lawfully do so) that it shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law or other law which would prohibit or forgive the Company
from paying all or any portion of the principal of or Interest on the Notes as
contemplated herein, wherever enacted, now or at any time hereafter in force,
or which may affect the covenants or the performance of this Indenture and the
Company (to the extent it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law, and covenants that it will not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.

Section
4.08. 
Compliance Certificate.  The Company shall deliver to the Trustee,
within 120 days after the end of each fiscal year of the Company, a certificate
signed by either the principal executive officer, principal financial officer
or principal accounting officer of the Company, stating whether or not to the
best knowledge of the signer thereof the Company is in default in the
performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Company shall be in default, specifying all
such defaults and the nature and the status thereof of which the signer may
have knowledge.

The Company will deliver to the Trustee, promptly upon becoming aware
of (i) any default in the performance or observance of any covenant, agreement
or condition contained in this Indenture, or (ii) any Event of Default, an
Officers’ Certificate specifying with particularity such default or Event of
Default and further stating what action the Company has taken, is taking or
proposes to take with respect thereto.

Any notice required to be given under this Section 4.08 shall be
delivered to a Responsible Officer of the Trustee at its Corporate Trust
Office.

Section
4.09. 
Additional Amounts Notice.  In the event that the Company is required to
pay Additional Amounts to holders of Notes pursuant to the Registration Rights
Agreement, the Company will provide written notice (“Additional Amounts Notice”) to the Trustee of its obligation
to pay Additional Amounts no later than 15 days prior to the proposed payment
date for the Additional Amounts, and the Additional Amounts Notice shall set
forth the amount of Additional Amounts to be paid by the Company on such
payment date.  The Trustee shall not at
any time be under any duty or responsibility to any holder of Notes to
determine the Additional Amounts, or with respect to the nature, extent or
calculation of the amount of Additional Amounts when made, or with respect to
the method employed in such calculation of the Additional Amounts.

Section
4.10. 
Limitation on Senior Subordinated Indebtedness.  The Company will not Incur any Indebtedness
that is subordinate in right of payment to any Senior Indebtedness of the
Company unless such Indebtedness is pari  passu with, or
subordinated in right of payment to, the Notes. 
The Company will not permit or cause any Subsidiary Guarantor to, and no
Subsidiary Guarantor will, Incur any Indebtedness that is subordinate in right
of payment to any Senior 

 30
 

 

Indebtedness
of such Subsidiary Guarantor unless such Indebtedness is pari  passu
with, or subordinated in right of payment to, the Subsidiary Guarantee of such
Subsidiary Guarantor.

ARTICLE 5

NOTEHOLDERS’ LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE

Section
5.01. 
Noteholders’ Lists.  The Company covenants and agrees that it will
furnish or cause to be furnished to the Trustee, semiannually, not more than 15
days after each March 15 and September 15 in each year beginning with March 15,
2007, and at such other times as the Trustee may request in writing, within 30
days after receipt by the Company of any such request (or such lesser time as
the Trustee may reasonably request in order to enable it to timely provide any
notice to be provided by it hereunder), a list in such form as the Trustee may
reasonably require of the names and addresses of the holders of Notes as of a
date not more than 15 days (or such other date as the Trustee may reasonably
request in order to so provide any such notices) prior to the time such
information is furnished, except that no such list need be furnished by the
Company to the Trustee so long as the Trustee is acting as the sole Note
Registrar.

Section
5.02. 
Preservation and Disclosure of Lists.  (a)  The Trustee shall preserve, in as current a
form as is reasonably practicable, all information as to the names and
addresses of the holders of Notes contained in the most recent list furnished
to it as provided in Section 5.01 or maintained by the Trustee in its capacity
as Note Registrar or co-registrar in respect of the Notes, if so acting.  The Trustee may destroy any list furnished to
it as provided in Section 5.01 upon receipt of a new list so furnished.

(b)           The
rights of Noteholders to communicate with other holders of Notes with respect
to their rights under this Indenture or under the Notes, and the corresponding
rights and duties of the Trustee, shall be as provided by the Trust Indenture
Act.

(c)           Every
Noteholder, by receiving and holding the same, agrees with the Company and the
Trustee that neither the Company nor the Trustee nor any agent of either of
them shall be held accountable by reason of any disclosure of information as to
names and addresses of holders of Notes made pursuant to the Trust Indenture
Act.

Section
5.03. 
Reports by Trustee.  (a)  Within 60 days after June 15 of each year
commencing with the year 2007, the Trustee shall transmit to holders of Notes
such reports dated as of June 15 of the year in which such reports are made
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto.  In the event that no
events have occurred under the applicable sections of the Trust Indenture Act,
the Trustee shall be under no duty or obligation to provide such reports.

(b)           A
copy of such report shall, at the time of such transmission to holders of
Notes, be filed by the Trustee with each stock exchange and automated quotation
system upon which the Notes are listed and with the Company.  The Company will promptly notify the Trustee
in writing when the Notes are listed on any stock exchange or automated
quotation system or delisted therefrom.

Section
5.04. 
Reports by Company.  The Company shall file with the Trustee (and
the Commission if at any time after the Indenture becomes qualified under the
Trust Indenture Act), 

 31
 

 

and
transmit to holders of Notes, such information, documents and other reports and
such summaries thereof, as may be required pursuant to the Trust Indenture Act
at the times and in the manner provided pursuant to such Act, whether or not
the Notes are governed by such Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within
15 days after the same is so required to be filed with the Commission.  Such reports shall be deemed to have been
furnished to the Trustee if they are electronically available via the
Commission’s EDGAR system.  Delivery of
such reports, information and documents to the Trustee is for informational
purposes only and the Trustee’s receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Company’s compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely
exclusively on an Officers’ Certificates).

ARTICLE 6

REMEDIES OF THE TRUSTEE AND NOTEHOLDERS
ON AN EVENT OF DEFAULT

Section
6.01. 
Events of Default.  In case one or more of the following events
(each, an “Event of Default”)
(whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body) shall have occurred and be continuing:

(a)           default
in the payment of any installment of Interest upon any of the Notes as and when
the same shall become due and payable, whether or not such payment shall be
prohibited by Article 15, and continuance of such default for a period of 30
days; or

(b)           default
in the payment of the principal of any of the Notes as and when the same shall
become due and payable either at maturity or in connection with any repurchase,
in each case pursuant to Article 3, by acceleration or otherwise, whether or
not such payment shall be prohibited by Article 15; or

(c)           the
Company or any Subsidiary Guarantor fails to comply with Section 11.01; or

(d)           the
Company fails to comply with Section 16.01 and such failure continues for 30
days after the date on which written notice of such failure, requiring the
Company to remedy the same, shall have been given to the Company by the
Trustee, or to the Company and a Responsible Officer of the Trustee by the
holders of at least 25% in aggregate principal amount of the Notes at the time
outstanding determined in accordance with Section 8.04; or

(e)           default
in the Company’s obligation to convert the Notes into cash and (if applicable)
Common Stock upon the exercise of a holder’s rights pursuant to Article 14; or

(f)            default
in the Company’s obligation to repurchase the Notes at the option of a holder
upon a Fundamental Change pursuant to Section 3.01; or

(g)           failure
to provide notice of the occurrence of a Fundamental Change on a timely basis
as required by Section 3.01; or

 

 32

 

(h)           failure
on the part of the Company or any Subsidiary Guarantor duly to observe or
perform any other of the covenants or agreements on the part of the Company or
such Subsidiary Guarantor in the Notes or in this Indenture (other than a
covenant or agreement a default in whose performance or whose breach is
elsewhere in this Section 6.01 specifically dealt with) continued for a period
of 60 days after the date on which written notice of such failure, requiring
the Company to remedy the same, shall have been given to the Company by the
Trustee, or to the Company and a Responsible Officer of the Trustee by the
holders of at least 25% in aggregate principal amount of the Notes at the time
outstanding determined in accordance with Section 8.04; or

(i)            default
by the Company or any of its Subsidiaries in the payment of the principal or
interest on any mortgage, agreement or other instrument under which there may
be outstanding, or by which there may be secured or evidenced, any of the
indebtedness of the Company or any of its Subsidiaries for money borrowed in
excess of $35,000,000 or its foreign currency equivalent in the aggregate,
whether such indebtedness now exists or shall hereafter be created, resulting
in such indebtedness becoming or being declared due and payable, and such
acceleration shall not have been rescinded or annulled within 10 days after the
date on which written notice of such failure has been received by the Company
or such Subsidiary, as applicable, requiring the Company to remedy the same, shall
have been given to the Company by the Trustee, or to the Company and a
Responsible Officer of the Trustee by the holders of at least 25% in aggregate
principal amount of the Notes at the time outstanding determined in accordance
with Section 8.04; or

(j)            the
Company or any Significant Subsidiary pursuant to or within the meaning of any
Bankruptcy Law:

(i)            commences a voluntary case;

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

(iii)                               consents
to the appointment of a Custodian of it or for any substantial part of its
property;

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

(v)                                 or
takes any comparable action under any foreign laws relating to insolvency; or

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

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

(ii)                                  appoints
a Bankruptcy Custodian of the Company or any Significant Subsidiary or for any
substantial part of its property;

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

 33
 

 

(iv)                              or
any similar relief is granted under any foreign laws and the order or decree
remains unstayed and in effect for 60 days; or

(l)           
any judgment or decree for the payment of money in excess of $35,000,000 or its
foreign currency equivalent (in excess of the amount for which liability for
payment has been acknowledged by a solvent third party insurer) against the
Company or any Subsidiary Guarantor and either (i) an enforcement proceeding
has been commenced by any creditor upon such judgment or decree or (ii) there
is a period of 90 days following the entry of such judgment or decree during
which such judgment or decree is not discharged, waived or the execution
thereof stayed; or

(m)          any
Subsidiary Guarantee of a Subsidiary Guarantor holding more than 5% of the
Company’s consolidated assets or generating more than 5% of the Company’s
consolidated sales or net income as of and for the twelve months ended on the
end of the most recent fiscal quarter for which financial statements are
publicly available ceases to be in full force and effect (except as
contemplated by the terms thereof) or any such Subsidiary Guarantor or Person
acting by or on behalf of any such Subsidiary Guarantor denies or disaffirms
such Subsidiary Guarantor’s obligations under this Indenture or any Subsidiary
Guarantee and such Default continues for 10 days after the date on which
written notice of such Default, requiring the Company to remedy the same, has
been given to the Company by the Trustee, or to the Company and a Responsible
Officer of the Trustee by the holders of at least 25% in aggregate principal
amount of the Notes at the time outstanding determined in accordance with
Section 8.04.

The Company shall deliver
to the Trustee, within 30 days after the occurrence thereof, written notice in
the form of an Officers’ Certificate of any event which is, or with the giving
of notice or the lapse of time or both would become, an Event of Default, its
status and what action the Company is taking or proposes to take with respect
thereto.

                Section 6.02.  Acceleration.  If an Event of Default (other than an Event
of Default specified in Section 6.01(j) or (k) with respect to the Company)
occurs and is continuing, the Trustee by notice to the Company and the Trustee,
or the holders of at least 25% in principal amount of the outstanding Notes
then outstanding hereunder determined in accordance with Section 8.04 by notice
to the Company, may declare the principal of and accrued but unpaid Interest on
all the Notes to be due and payable. 
Upon such a declaration, such principal and interest shall be due and
payable immediately; provided, however, that if any Designated
Senior Indebtedness is outstanding at such time, the Company may not pay the
Notes until 5 Business Days after such holders or the Representatives of such
Designated Senior Indebtedness receive notice of such acceleration and,
thereafter, may pay the Notes only if the provisions of Article 14 otherwise
permit payment at that time.  If an Event
of Default specified in Section 6.01(j) or (k) with respect to the Company
occurs, the principal of and Interest on all the Notes shall ipso facto become
and be immediately due and payable without any declaration or other act on the
part of the Trustee or any holders.  This
provision, however, is subject to the conditions that if, at any time after the
principal of the Notes shall have been so declared due and payable, and before
any judgment or decree for the payment of the monies due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
Interest upon all Notes and the principal of any and all Notes which shall have
become due otherwise than by acceleration (with interest on overdue
installments of Interest (to the extent that payment of such interest is
enforceable under applicable law) and on 

 34
 

 

such principal at the rate borne by the Notes, to the
date of such payment or deposit) and amounts due to the Trustee pursuant to
Section 7.07, and if any and all defaults under this Indenture, other than the
nonpayment of principal of and accrued Interest on Notes which shall have become
due by acceleration, shall have been cured or waived pursuant to Section 6.05,
then and in every such case the holders of a majority in aggregate principal
amount of the Notes then outstanding, by written notice to the Company and to
the Trustee, may waive all defaults or Events of Default and rescind and annul
such declaration and its consequences; but no such waiver or rescission and
annulment shall extend to or shall affect any subsequent default or Event of
Default, or shall impair any right consequent thereon.

In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such
case the Company, the holders of Notes, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Notes, and the Trustee shall
continue as though no such proceeding had been taken.

Section
6.03. 
Payments of Notes on Default; Suit Therefor.  The Company covenants that (a) in case
default shall be made in the payment of any installment of Interest upon any of
the Notes as and when the same shall become due and payable, and such default
shall have continued for a period of 30 days, or (b) in case default shall be
made in the payment of the principal of any of the Notes as and when the same
shall have become due and payable, whether at maturity of the Notes or in
connection with any repurchase, acceleration, declaration or otherwise, then,
upon demand of the Trustee, the Company will pay to the Trustee, for the
benefit of the holders of the Notes, the whole amount that then shall have
become due and payable on all such Notes for principal or Interest, as the case
may be, with interest upon the overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) upon the overdue
installments of Interest at the rate borne by the Notes, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including reasonable compensation to the Trustee, its
agents, attorneys and counsel, and all other amounts due the Trustee under
Section 7.07.  Until such demand by the
Trustee, the Company may pay the principal of and Interest on the Notes to the
registered holders, whether or not the Notes are overdue.

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

In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes under Title
11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative
to the Company or such other obligor upon the Notes, or 

 35
 

 

to
the creditors or property of the Company or such other obligor, the Trustee,
irrespective of whether the principal of the Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand pursuant to the provisions of
this Section 6.03, shall be entitled and empowered, by intervention in such
proceedings or otherwise, to file and prove a claim or claims for the whole
amount of principal and Interest owing and unpaid in respect of the Notes, and,
in case of any judicial proceedings, to file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee and of the Noteholders allowed in such judicial
proceedings relative to the Company or any other obligor on the Notes, its or their
creditors, or its or their property, and to collect and receive any monies or
other property payable or deliverable on any such claims, and to distribute the
same after the deduction of any amounts due the Trustee under Section 7.07, and
to take any other action with respect to such claims, including participating
as a member of any official committee of creditors, as it reasonably deems
necessary or advisable, and, unless prohibited by law or applicable
regulations, and any receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, custodian or similar official is hereby authorized
by each of the Noteholders to make such payments to the Trustee, and, in the
event that the Trustee shall consent to the making of such payments directly to
the Noteholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including counsel fees and
expenses incurred by it up to the date of such distribution.  To the extent that such payment of reasonable
compensation, expenses, advances and disbursements out of the estate in any
such proceedings shall be denied for any reason, payment of the same shall be
secured by a lien on, and shall be paid out of, any and all distributions,
dividends, monies, securities and other property which the holders of the Notes
may be entitled to receive in such proceedings, whether in liquidation or under
any plan of reorganization or arrangement or otherwise.

All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession
of any of the Notes, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the holders of the Notes.

In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the
holders of the Notes, and it shall not be necessary to make any holders of the
Notes parties to any such proceedings.

Section
6.04. 
Other Remedies.  If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or Interest on the Notes or to enforce the performance of any
provision of the Notes, the Subsidiary Guarantees or this Indenture.  The Trustee may maintain a proceeding even if
it does not possess any of the Notes or Subsidiary Guarantees or does not
produce any of them in the proceeding.  A
delay or omission by the Trustee or any holder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default.  No remedy is exclusive of any other
remedy.  All available remedies are
cumulative.

 36
 

 

Section
6.05. 
Waiver of Past Defaults.  The holders of a majority in principal amount
of the Notes then outstanding determined in accordance with Section 8.04 by
notice to the Trustee may waive an existing Default and its consequences except
(i) a default in the payment of Interest on, or the principal of, the Notes,
(ii) a failure by the Company to convert any Notes into cash and (if
applicable) Common Stock, (iii) a default in the payment of the Fundamental
Change Repurchase Price pursuant to Section 3.01 or (iv) a default in respect
of a covenant or provisions hereof which under Article 10 cannot be modified or
amended without the consent of the holders of each or all Notes then
outstanding or affected thereby.  Upon
any such waiver, the Company, the Trustee and the holders of the Notes shall be
restored to their former positions and rights hereunder; but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.  Whenever any
default or Event of Default hereunder shall have been waived as permitted by
this Section 6.05, said default or Event of Default shall for all purposes of
the Notes (and the Subsidiary Guarantees, if applicable) and this Indenture be
deemed to have been cured and to be not continuing; but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.

Section
6.06. 
Control by Majority.  The holders of a majority in aggregate
principal amount of the Notes at the time outstanding determined in accordance
with Section 8.04 may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of exercising any trust
or power conferred on the Trustee. 
However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture or, subject to Section 7.01, that the Trustee determines
is unduly prejudicial to the rights of other holders or would involve the
Trustee in personal liability; provided, however, that the
Trustee may take any other action deemed proper by the Trustee that is not
inconsistent with such direction.  Prior
to taking any action hereunder, the Trustee shall be entitled to
indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.

Section
6.07. 
Limitation on Suits.  (a)  Except to enforce the right to receive
payment of principal, premium (if any) or interest when due, no holder may
pursue any remedy with respect to this Indenture, the Notes or the Subsidiary
Guarantees unless:

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

(ii)           the holders of at least 25% in
aggregate principal amount of the Notes then outstanding make a written request
to the Trustee to pursue the remedy;

(iii)          such holder or holders offer to the
Trustee security or indemnity reasonably satisfactory to it against any loss,
liability or expense;

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

(v)           the holders of a majority in
principal amount of the Notes then outstanding do not give the Trustee a
direction inconsistent with the request during such 60-day period.

(b)           A
holder may not use this Indenture to prejudice the rights of another holder or
to obtain a preference or priority over another holder.

 37
 

 

(c)           The
obligations of the Company under this Indenture are not intended to provide
creditors’ rights for amounts in excess of par plus accrued and unpaid interest
and liquidated damages, if any.

Section 6.08.  Rights of Holders to Receive
Payment.  Notwithstanding any other
provision of this Indenture and any provision of any Note, the right of any
holder of any Note to receive payment of the principal of (including any
Fundamental Change Repurchase Price pursuant to Article 3) and accrued Interest
on such Note on or after the respective due dates expressed in such Note, or to
institute suit for the enforcement of any such payment on or after such
respective dates against the Company, shall not be impaired or affected without
the consent of such holder.

Anything in this Indenture
or the Notes to the contrary notwithstanding, the holder of any Note, without
the consent of either the Trustee or the holder of any other Note, in its own
behalf and for its own benefit, may enforce, and may institute and maintain any
proceeding suitable to enforce, its rights of conversion as provided herein.

Section
6.09. 
Collection Suit by Trustee.  If an Event of Default specified in Section
6.01(a) or (b) occurs and is continuing, the Trustee may recover judgment in
its own name and as trustee of an express trust against the Company or any
other obligor on the Notes or the Subsidiary Guarantees for the whole amount
then due and owing (together with Interest on overdue principal and (to the
extent lawful) on any unpaid Interest at the rate provided for in the Notes)
and the amounts provided for in Section 7.07.

Section
6.10. 
Trustee May File Proofs of Claim.  The Trustee may file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee and the holders allowed in any judicial proceedings
relative to the Company, any Subsidiary or Subsidiary Guarantor, their
creditors or their property and, unless prohibited by law or applicable
regulations, may vote on behalf of the holders in any election of a trustee in
bankruptcy or other Person performing similar functions, and any Bankruptcy
Custodian in any such judicial proceeding is hereby authorized by each holder
to make payments to the Trustee and, in the event that the Trustee shall consent
to the making of such payments directly to the holders, to pay to the Trustee
any amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.07.

Section
6.11. 
Priorities.  Any monies collected by the Trustee pursuant
to this Article 6 shall be applied in the order following, for the distribution
of such monies, upon presentation of the several Notes, and stamping thereon
the payment, if only partially paid, and upon surrender thereof, if fully paid:

FIRST:  To the payment of all
amounts due the Trustee under Section 7.07;

SECOND:  to holders of Senior
Indebtedness of the Company to the extent required by Article 15 and to holders
of Senior Indebtedness of the Subsidiary Guarantors to the extent required by
Article 17;

THIRD:  In case the principal of
the outstanding Notes shall not have become due and be unpaid, to the payment
of Interest on the Notes in default in the order of the maturity of the
installments of such Interest, with interest (to the extent that such interest
has been collected by the 

 38
 

 

Trustee)
upon the overdue installments of Interest at the rate borne by the Notes, such
payments to be made ratably to the Persons entitled thereto;

FOURTH:  In case the principal of
the outstanding Notes shall have become due, by declaration or otherwise, and
be unpaid, to the payment of the whole amount then owing and unpaid upon the
Notes for principal and Interest, with interest on the overdue principal and
(to the extent that such interest has been collected by the Trustee) upon
overdue installments of Interest at the rate borne by the Notes, and in case
such monies shall be insufficient to pay in full the whole amounts so due and unpaid
upon the Notes, then to the payment of such principal and Interest without
preference or priority of principal over Interest, or of Interest over
principal, or of any installment of Interest over any other installment of
Interest, or of any Note over any other Note, ratably to the aggregate of such
principal and accrued and unpaid Interest; and

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

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

Section
6.12. 
Undertaking for Costs.  All parties to this Indenture agree, and each
holder of any Note by its acceptance thereof shall be deemed to have agreed,
that any court may, in its discretion, require, in any suit for the enforcement
of any right or remedy under this Indenture, or in any suit against the Trustee
for any action taken or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys’ fees and expenses, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by such
party litigant; provided that the provisions of this Section 6.12 (to the
extent permitted by law) shall not apply to any suit instituted by the Trustee,
to any suit instituted by any Noteholder pursuant to Section 6.08, or by a
group of Noteholders holding in the aggregate more than 25% in principal amount
of the Notes at the time outstanding determined in accordance with Section 8.04,
or to any suit instituted by any Noteholder for the enforcement of the payment
of the principal of or Interest on any Note on or after the due date expressed
in such Note or to any suit for the enforcement of the right to convert any
Note in accordance with the provisions of Article 14.

Section
6.13. 
Remedies Cumulative and Continuing.  Except as provided in Section 2.06, all
powers and remedies given by this Article 6 to the Trustee or to the
Noteholders shall, to the extent permitted by law, be deemed cumulative and not
exclusive of any thereof or of any other powers and remedies available to the
Trustee or the holders of the Notes, by judicial proceedings or otherwise, to
enforce the performance or observance of the covenants and agreements contained
in this Indenture, and no delay or omission of the Trustee or of any holder of
any of the Notes to exercise any right or power accruing upon any default or
Event of Default occurring and continuing as aforesaid shall impair any such
right or power, or shall be construed to be a waiver of any such default or any
acquiescence therein, and, subject to the provisions of Sections 6.06 and 6.07,
every power and remedy given by this Article 6 or by law to the Trustee or to
the Noteholders may be exercised from time to time, and as often as shall be
deemed expedient, by the Trustee or by the Noteholders.

 39
 

 

ARTICLE 7

THE TRUSTEE

Section 7.01.  Duties of Trustee(a). 
(a)  If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person’s own affairs.

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

(i)            the Trustee undertakes to perform
such duties and only such duties as are specifically set forth in this
Indenture and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and

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

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

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

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

(iii)          the Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 6.06; and

(iv)          no provision of this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur
financial liability in the performance of any of its duties hereunder or in the
exercise of any of its rights or powers, if it shall have reasonable grounds to
believe that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.

(d)           The
Trustee shall not be liable in respect of any payment (as to the correctness of
amount, entitlement to receive or any other matters relating to payment) or
notice effected by the Company or any Paying Agent or any records maintained by
any co-registrar with respect to the Notes.

(e)           If
any party fails to deliver a notice relating to an event the fact of which,
pursuant to this Indenture, requires notice to be sent to the Trustee, the
Trustee may conclusively rely on its failure to receive such notice as reason
to act as if no such event occurred.

 40
 

 

(f)            The
Trustee shall not be deemed to have knowledge or notice of any Default or Event
of Default hereunder unless a Responsible Officer of the Trustee shall have
received at the Corporate Trust Office written notice of such default or Event
of Default from the Company or the holders of at least 10% in aggregate
principal amount of the Notes and such notice refers to such default or Event
of Default, the Notes and the Indenture.

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

(h)           The
Trustee shall not be liable for interest on any money received by it except as
the Trustee may agree in writing with the Company.

(i)            Subject
to the provisions of Section 12.03, all monies received by the Trustee shall,
until used or applied as herein provided, be held in trust for the purposes for
which they were received.  Money held by
the Trustee in trust hereunder need not be segregated from other funds except
to the extent required by law.  The
Trustee shall be under no liability for interest on any money received by it
hereunder except as may be agreed in writing from time to time by the Company
and the Trustee.

(j)            Every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section and to the provisions of the Trust Indenture Act.

Except as otherwise provided in this Section 7.01, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking
or omitting any action hereunder, such matter (unless other evidence in respect
thereof be herein specifically prescribed) may, in the absence of bad faith or
wilful misconduct on the part of the Trustee, be deemed to be conclusively
proved and established by an Officers’ Certificate delivered to the Trustee.

Section
7.02. 
Rights of Trustee.  (a)  The Trustee may conclusively rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person.  The Trustee need not
investigate any fact or matter stated in the document.

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

(c)           The
Trustee may act through agents and shall not be responsible for the misconduct
or negligence of any agent appointed with due care.

(d)           The
Trustee shall not be liable for any action it takes or omits to take in good
faith which it believes to be authorized or within its rights or powers; provided,
however, that the Trustee’s conduct does not constitute wilful
misconduct or negligence.

(e)           The
Trustee may consult with counsel of its selection, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture, the Notes and
the Subsidiary Guarantees shall be full and complete authorization and
protection from liability in respect of any 

 41
 

 

action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.

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

(g)           The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond, debenture, note or other paper
or document unless requested in writing to do so by the holders of not less
than a majority in principal amount of the Notes at the time outstanding
determined as provided in Section 8.04, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, to the extent necessary to determine the relevant facts,
personally or by agent or attorney; provided that, except to carry out
its obligations under this Indenture, the Trustee shall not disclose any
information obtained as a result of such examination without the written
consent of the Company.

(h)           The
rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to,
and shall be enforceable by, the Trustee in each of its capacities hereunder,
and each duly authorized agent, custodian and other Person employed by the
Trustee to act hereunder and acting within the limits of such person’s actual
authority.

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

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

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

Section
7.04. 
Trustee’s Disclaimer.  The recitals contained herein and in the
Notes (except in the Trustee’s certificate of authentication) shall be taken as
the statements of the Company, and the Trustee assumes no responsibility for
the correctness of the same.  The Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture, any 

 42
 

 

Subsidiary
Guarantee or the Notes, it shall not be accountable for the Company’s use of
the proceeds from the Notes, and it shall not be responsible for any statement
of the Company or any Subsidiary Guarantor in this Indenture or in any document
issued in connection with the sale of the Notes or in the Notes or Subsidiary
Guarantees other than the Trustee’s certificate of authentication.  The Trustee shall not be charged with
knowledge of any Default or Event of Default under Sections 6.01(c), (d), (e),
(f), (g), (h), (i), (j) or (m) or of the identity of any Significant Subsidiary
unless either (a) a Responsible Officer of the Trustee shall have actual
knowledge thereof or (b) the Trustee shall have received notice thereof in
accordance with Section 18.03 hereof from the Company, any Subsidiary Guarantor
or any holder.

Section
7.05. 
Notice of Default.  If a Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to each Noteholder, as the
names and addresses of such holders appear upon the Note Register, notice of
the Default within the earlier of 90 days after it occurs or 30 days after it
is actually known to a Responsible Officer or written notice of it is received
by the Trustee, unless such Defaults shall have been cured or waived before the
giving of such notice; provided that except in the case of Default in the payment
of the principal of or Interest on any of the Notes, the Trustee shall be
protected in withholding such notice if and so long as a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interests of the Noteholders.

Section
7.06. 
Reports by Trustee to Holders.  As promptly as practicable after each June 15
beginning with June 15, 2007, and in any event prior to July 15 in each year,
the Trustee shall mail to each Noteholder a brief report dated as of such July
15 that complies with Section 313(a) of the Trust Indenture Act if and to the
extent required thereby.  The Trustee
shall also comply with Section 313(b) of the Trust Indenture Act.

A copy of each report at the time of its mailing to holders shall be
filed with the Commission and each stock exchange (if any) on which the Notes
are listed.  The Company agrees to notify
promptly the Trustee whenever the Notes become listed on any stock exchange and
of any delisting thereof.

Section
7.07. 
Compensation and Indemnity.  Each of the Company and the Subsidiary
Guarantors, jointly and severally, covenants and agrees to pay to the Trustee
from time to time such compensation as shall be agreed in writing between the
Company and the Trustee for its services. 
The Trustee’s compensation shall not be limited by any law on
compensation of a trustee of an express trust. 
The Company shall promptly reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services in accordance with
the terms agreed by the Company and the Trustee.  Such expenses shall include the reasonable compensation
and expenses, disbursements and advances of the Trustee’s agents, counsel,
accountants and experts.  Each of the
Company and the Subsidiary Guarantors, jointly and severally, covenants to
indemnify the Trustee against any and all loss, liability, damage, claim or
expense (including reasonable attorneys’ fees and expenses) incurred by or in
connection with the acceptance or administration of this trust and the
performance of its duties hereunder.  The
Trustee shall notify the Company of any claim for which it may seek indemnity
promptly upon the Trustee actually receiving written notice thereof; provided,
however, that any failure so to notify the Company shall not relieve the
Company or any Subsidiary Guarantor of its indemnity obligations hereunder if
not materially prejudicial to the Company. 
The Company shall defend the claim and the indemnified party shall
provide 

 43
 

 

reasonable
cooperation at the Company’s expense in the defense.  Such indemnified parties may have one
separate counsel and the Company and the Subsidiary Guarantors, as applicable
shall pay the fees and expenses of such counsel; provided, however,
that the Company shall not be required to pay such fees and expenses if it
assumes such indemnified parties’ defense and, in such indemnified parties’
reasonable judgment, there is no conflict of interest between the Company and
the Subsidiary Guarantors, as applicable, and such parties in connection with
such defense.  The Company need not
reimburse any expense or indemnify against any loss, liability or expense
incurred by an indemnified party through such party’s own wilful misconduct,
negligence or bad faith.

To secure the Company’s payment obligations in this Section, the
Trustee shall have a lien prior to the Notes on all money or property held or
collected by the Trustee other than money or property held in trust to pay
principal of and Interest on particular Notes.

The Company’s payment
obligations pursuant to this Section shall survive the satisfaction or
discharge of this Indenture, any rejection or termination of this Indenture
under any bankruptcy law or the resignation or removal of the Trustee.  Without prejudice to any other rights
available to the Trustee under applicable law, when the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.01(j) or (k) with
respect to the Company, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.

Section
7.08.  Replacement of Trustee.  (a)  The Trustee may resign at any time by so
notifying the Company.  The holders of a
majority in principal amount of the Notes at the time outstanding may remove
the Trustee by so notifying the Trustee and may appoint a successor
Trustee.  The Company shall remove the
Trustee if:

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

(ii)           the Trustee is adjudged bankrupt or
insolvent;

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

(iv)          the Trustee otherwise becomes
incapable of acting.

If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.

(b)           If
the Trustee resigns, is removed by the Company or by the holders of a majority
in principal amount of the Notes at the time outstanding and such holders do
not reasonably promptly appoint a successor Trustee, or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.

(c)           A
successor Trustee shall deliver a written acceptance of its appointment to the
retiring Trustee and to the Company. 
Thereupon the resignation or removal of the retiring Trustee shall
become effective, and the successor Trustee shall have all the rights, powers
and duties of the Trustee under this Indenture. 
The successor Trustee shall mail a notice of its succession to holders.  

 44
 

 

The retiring Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, subject to the lien provided for in Section
7.07.

(d)           If
a successor Trustee does not take office within 60 days after the retiring
Trustee resigns or is removed, the retiring Trustee or the holders of 25% in
principal amount of the Notes at the time outstanding may petition, at the
expense of the Company, any court of competent jurisdiction for the appointment
of a successor Trustee.

(e)           If
the Trustee fails to comply with Section 7.10, unless the Trustee’s duty to
resign is stayed as provided in Section 310(b) of the Trust Indenture Act, any
holder who has been a bona fide holder of a Note for at least six months may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.

(f)            Notwithstanding
the replacement of the Trustee pursuant to this Section, the Company’s
obligations under Section 7.07 shall continue for the benefit of the retiring
Trustee.

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

In case at the time such
successor or successors by merger, conversion or consolidation to the Trustee
shall succeed to the trusts created by this Indenture any of the Notes shall
have been authenticated but not delivered, any such successor to the Trustee
may adopt the certificate of authentication of any predecessor trustee, and
deliver such Notes so authenticated; and in case at that time any of the Notes
shall not have been authenticated, any successor to the Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Trustee shall have.

Section
7.10. 
Eligibility; Disqualification.  The Trustee shall at all times satisfy the
requirements of Section 310(a) of the Trust Indenture Act.  The Trustee shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published
annual report of condition.  The Trustee
shall comply with Section 310(b) of the Trust Indenture Act, subject to its
right to apply for a stay of its duty to resign under the penultimate paragraph
of Section 310(b) of the Trust Indenture Act; provided, however,
that there shall be excluded from the operation of Section 310(b)(1) of the
Trust Indenture Act any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company
are outstanding if the requirements for such exclusion set forth in Section
310(b)(1) of the Trust Indenture Act are met.

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

 

 45

 

ARTICLE 8

THE NOTEHOLDERS

Section
8.01. 
Action by Noteholders.  Whenever in this Indenture it is provided that
the holders of a specified percentage in aggregate principal amount of the
Notes may take any action (including the making of any demand or request, the
giving of any notice, consent or waiver or the taking of any other action), the
fact that at the time of taking any such action, the holders of such specified
percentage have joined therein may be evidenced (a) by any instrument or any
number of instruments of similar tenor executed by Noteholders in person or by
agent or proxy appointed in writing, or (b) by the record of the holders of
Notes voting in favor thereof at any meeting of Noteholders duly called and
held in accordance with the provisions of Article 9, or (c) by a combination of
such instrument or instruments and any such record of such a meeting of
Noteholders.  Whenever the Company or the
Trustee solicits the taking of any action by the holders of the Notes, the
Company or the Trustee may fix in advance of such solicitation, a date as the
record date for determining holders entitled to take such action.  The record date shall he not more than 15
days prior to the date of commencement of the solicitation of such action.

Section
8.02. 
Proof of Execution by Noteholders.  Subject to the provisions of Section 7.01,
7.02 and 9.05, proof of the execution of any instrument by a Noteholder or its
agent or proxy shall be sufficient if made in accordance with such reasonable
rules and regulations as may be prescribed by the Trustee or in such manner as
shall be satisfactory to the Trustee. 
The holding of Notes shall be proved by the registry of such Notes or by
a certificate of the Note Registrar.

The record of any Noteholders’ meeting shall be proved in the manner
provided in Section 9.06.

Section
8.03. 
Who Are Deemed Absolute Owners.  The Company, the Trustee, any Paying Agent,
any Conversion Agent and any Note Registrar may deem the Person in whose name
such Note shall be registered upon the Note Register to be, and may treat it
as, the absolute owner of such Note (whether or not such Note shall be overdue
and notwithstanding any notation of ownership or other writing thereon made by
any Person other than the Company or any Note Registrar) for the purpose of
receiving payment of or on account of the principal of and Interest on such
Note, for conversion of such Note and for all other purposes; and neither the
Company nor the Trustee nor any Paying Agent nor any Conversion Agent nor any
Note Registrar shall be affected by any notice to the contrary.  All such payments so made to any holder for
the time being, or upon his order, shall be valid, and, to the extent of the
sum or sums so paid, effectual to satisfy and discharge the liability for
monies payable upon any such Note.

Section
8.04. 
Company-owned Notes Disregarded.  In determining whether the holders of the
requisite aggregate principal amount of Notes have concurred in any direction,
consent, waiver or other action under this Indenture, Notes which are owned by
the Company or any other obligor on the Notes or any Affiliate of the Company
or any other obligor on the Notes shall be disregarded and deemed not to be
outstanding for the purpose of any such determination; provided that for the purposes
of determining whether the Trustee shall be protected in relying on any such
direction, consent, waiver or other action, only Notes which a Responsible
Officer knows are so owned shall be so disregarded.  Notes so owned which have been pledged in good
faith may be regarded as outstanding for the purposes of this Section 8.04 if
the pledgee shall establish to the satisfaction of the Trustee the pledgee’s
right to vote such Notes and that the pledgee is not the 

 46
 

 

Company,
any other obligor on the Notes or any Affiliate of the Company or any such
other obligor.  In the case of a dispute
as to such right, any decision by the Trustee taken upon the advice of counsel
shall be full protection to the Trustee. 
Upon request of the Trustee, the Company shall furnish to the Trustee
promptly an Officers’ Certificate listing and identifying all Notes, if any,
known by the Company to be owned or held by or for the account of any of the
above described Persons, and, subject to Section 7.01, the Trustee shall be
entitled to accept such Officers’ Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Notes listed therein are
outstanding for the purpose of any such determination.

Section
8.05. 
Revocation of Consents, Future Holders Bound. 
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 8.01, of the taking of any action by the holders of the
percentage in aggregate principal amount of the Notes specified in this
Indenture in connection with such action, any holder of a Note which is shown
by the evidence to be included in the Notes the holders of which have consented
to such action may, by filing written notice with the Trustee at its Corporate
Trust Office and upon proof of holding as provided in Section 8.02, revoke such
action so far as concerns such Note. 
Except as aforesaid, any such action taken by the holder of any Note
shall be conclusive and binding upon such holder and upon all future holders
and owners of such Note and of any Notes issued in exchange or substitution
therefor, irrespective of whether any notation in regard thereto is made upon
such Note or any Note issued in exchange or substitution therefor.

ARTICLE 9

MEETINGS OF NOTEHOLDERS

Section
9.01. 
Purpose of Meetings.  A meeting of Noteholders may be called at any
time and from time to time pursuant to the provisions of this Article 9 for any
of the following purposes:

(1)           to give any notice to the Company or
to the Trustee or to give any directions to the Trustee permitted under this
Indenture, or to consent to the waiving of any default or Event of Default
hereunder and its consequences, or to take any other action authorized to be
taken by Noteholders pursuant to any of the provisions of Article 6;

(2)           to remove the Trustee and nominate a
successor trustee pursuant to the provisions of Article 7;

(3)           to consent to the execution of an
indenture or indentures supplemental hereto pursuant to the provisions of
Section 10.02; or

(4)           to take any other action authorized
to be taken by or on behalf of the holders of any specified aggregate principal
amount of the Notes under any other provision of this Indenture or under
applicable law.

Section
9.02.  Call of Meetings by
Trustee.  The Trustee may at any time
call a meeting of Noteholders to take any action specified in Section 9.01, to
be held at such time and at such place as the Trustee shall determine.  Notice of every meeting of the Noteholders,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting and the establishment of any record
date pursuant to Section 8.01, shall be mailed to holders of Notes at their
addresses as they shall appear on the Note Register.  Such notice shall also be mailed 

 47
 

 

to
the Company.  Such notices shall be
mailed not less than 20 nor more than 90 days prior to the date fixed for the
meeting.

Any meeting of Noteholders shall be valid without notice if the holders
of all Notes then outstanding are present in person or by proxy or if notice is
waived before or after the meeting by the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.

Section
9.03.  Call of Meetings by Company or
Noteholders.  In case at
any time the Company, pursuant to a resolution of its Board of Directors, or
the holders of at least 10% in aggregate principal amount of the Notes then
outstanding, shall have requested the Trustee to call a meeting of Noteholders,
by written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed the notice of such
meeting within 20 days after receipt of such request, then the Company or such
Noteholders may determine the time and the place for such meeting and may call
such meeting to take any action authorized in Section 9.01, by mailing notice
thereof as provided in Section 9.02.

Section
9.04.  Qualifications for Voting.  To be entitled to vote at any meeting of
Noteholders a person shall (a) be a holder of one or more Notes on the record
date pertaining to such meeting or (b) be a person appointed by an instrument
in writing as proxy by a holder of one or more Notes on the record date
pertaining to such meeting.  The only
persons who shall be entitled to be present or to speak at any meeting of
Noteholders shall be the persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.

Section
9.05.  Regulations.  Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.

The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 9.03, in which case the
Company or the Noteholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. 
A permanent chairman and a permanent secretary of the meeting shall be
elected by vote pf the holders of a majority in principal amount of the Notes
represented at the meeting and entitled to vote at the meeting.

Subject to the provisions of Section 8.04, at any meeting each
Noteholder or proxyholder shall be entitled to one vote for each $1,000
principal amount of Notes held or represented by him; provided that no vote
shall be cast or counted at any meeting in respect of any Note challenged as
not outstanding and ruled by the chairman of the meeting to be not
outstanding.  The chairman of the meeting
shall have no right to vote other than by virtue of Notes held by him or
instruments in writing as aforesaid duly designating him as the proxy to vote
on behalf of other Noteholders.  Any
meeting of Noteholders duly called pursuant to the provisions of Section 9.02
or 9.03 may be adjourned from time to time by the holders of a majority of the
aggregate principal amount of 

 48
 

 

Notes
represented at the meeting, whether or not constituting a quorum, and the
meeting may be held as so adjourned without further notice.

Section
9.06. 
Voting.  The vote upon any resolution submitted to any
meeting of Noteholders shall be by written ballot on which shall be subscribed
the signatures of the holders of Notes or of their representatives by proxy and
the outstanding principal amount of the Notes held or represented by them.  The permanent chairman of the meeting shall
appoint two inspectors of votes who shall count all votes cast at the meeting
for or against any resolution and who shall make and file with the secretary of
the meeting their verified written reports in duplicate of all votes cast at
the meeting.  A record in duplicate of
the proceedings of each meeting of Noteholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the
original reports of the inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more persons having knowledge of the facts setting
forth a copy of the notice of the meeting and showing that said notice was
mailed as provided in Section 9.02.  The
record shall show the principal amount of the Notes voting in favor of or
against any resolution.  The record shall
be signed and verified by the affidavits of the permanent chairman and
secretary of the meeting and one of the duplicates shall be delivered to the
Company and the other to the Trustee to be preserved by the Trustee, the latter
to have attached thereto the ballots voted at the meeting.

Any record so signed and verified shall be conclusive evidence of the
matters therein stated.

Section
9.07. 
No Delay of Rights by Meeting.  Nothing contained in this Article 9 shall be
deemed or construed to authorize or permit, by reason of any call of a meeting
of Noteholders or any rights expressly or impliedly conferred hereunder to make
such call, any hindrance or delay in the exercise of any right or rights
conferred upon or reserved to the Trustee or to the Noteholders under any of
the provisions of this Indenture or of the Notes.

ARTICLE 10

SUPPLEMENTAL INDENTURES

Section 10.01.  Supplemental Indentures Without
Consent of Noteholders.  The Company and the Subsidiary
Guarantors, when authorized by the resolutions of the Board of Directors, and
the Trustee may, from time to time, and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:

(a)           make
provision with respect to the conversion rights of the holders of Notes
pursuant to the requirements of Section 14.01(e) or Section 14.06 or the
repurchase obligations of the Company pursuant to the requirements of Section 3.03(h);

(b)           to
convey, transfer, assign, mortgage or pledge to the Trustee as security for the
Notes, any property or assets or to add guarantees with respect to the Notes;

(c)           surrender
any of the Company’s rights or powers under the Indenture;

(d)           to
evidence the succession of another Person to the Company or any Subsidiary
Guarantor, as applicable, or successive successions, and the assumption by the
successor Person of the covenants, agreements and obligations of the Company or
such Subsidiary Guarantor pursuant to Article 11;

 49
 

 

(e)           to
provide for uncertificated Notes in addition to or in place of certificated
Notes; provided, however, that the uncertificated Notes are
issued in registered form for purposes of Section 163(f) of the Code or in a
manner such that the uncertificated Notes are described in Section 163(f)(2)(B)
of the Code;

(f)            to
make any change in Article 15 or Article 17 that would limit or terminate the
benefits available to any holder of Senior Indebtedness of the Company or a
Subsidiary Guarantor (or Representatives thereof) under Article 15 or Article
17, respectively;

(g)           to
add to the covenants of the Company such further covenants, restrictions or
conditions for the benefit of the holders of Notes, and to make the occurrence,
or the occurrence and continuance, of a default in any such additional
covenants, restrictions or conditions a default or an Event of Default
permitting the enforcement of all or any of the several remedies provided in
this Indenture as herein set forth; provided that in respect of any such
additional covenant, restriction or condition, such supplemental indenture may
provide for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other defaults) or may provide
for an immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default;

(h)           to
provide for the issuance under this Indenture of Notes in coupon form
(including Notes registrable as to principal only) and to provide for
exchangeability of such Notes with the Notes issued hereunder in fully
registered form and to make all appropriate changes for such purpose;

(i)            to
cure any ambiguity or to correct or supplement any provision contained herein
or in any supplemental indenture that may be defective or inconsistent with any
other provisions contained herein or in any supplemental indenture, or to make
such other provision in regard to matters or questions arising under this
Indenture that shall not materially adversely affect the interests of the
holders of the Notes;

(j)            to
evidence and provide for the acceptance of appointment hereunder by a successor
Trustee with respect to the Notes and add to or change the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts under this Indenture by more than one Trustee pursuant to the
requirements of this Indenture;

(k)           to
modify, eliminate or add to the provisions of this Indenture to such extent as
shall be necessary to effect the qualifications of this Indenture under the
Trust Indenture Act, or under any similar federal statute hereafter enacted;

(l)            to
provide for the issuance of additional Notes; or

(m)          make
other changes to the Indenture or forms or terms of the Notes, provided no such
change individually or in the aggregate with all other such changes has or will
have a material adverse effect on the interests of the Noteholders.

Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and 

 50
 

 

stipulations
that may be therein contained and to accept the conveyance, transfer and
assignment of any property thereunder, but the Trustee shall not be obligated
to, but may in its discretion, enter into any supplemental indenture that
affects the Trustee’s own rights, duties or immunities under this Indenture or
otherwise.

Any supplemental indenture authorized by the provisions of this Section
10.01 may be executed by the Company and the Trustee without the consent of the
holders of any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 10.02.

Notwithstanding any other provision of the Indenture or the Notes, the
Registration Rights Agreement and the obligation to pay Additional Amounts
thereunder may be amended, modified or waived in accordance with the provisions
of the Registration Rights Agreement.

Section
10.02. 
Supplemental Indenture with Consent of Noteholders.  With the consent (evidenced as provided in
Article 8) of the holders of at least a majority in aggregate principal amount
of the Notes at the time outstanding, the Company, when authorized by the
resolutions of the Board of Directors, and the Trustee may, from time to time
and at any time, enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or any supplemental
indenture or of modifying in any manner the rights of the holders of the Notes;
provided that no such supplemental indenture shall (i) reduce the principal
amount of or change the Stated Maturity of any Note, (ii) reduce the rate or
extend the time of payment of Interest on any Note, (iii) reduce any amount
payable on repurchase of any Note (including upon the occurrence of a
Fundamental Change) or change the time at which or the circumstances under
which the Notes may or shall be repurchased (subject to the immediately
succeeding sentence), (iv) impair the right of any Noteholder to institute suit
for the payment on any Note, (v) make the principal or Interest of any Note
payable in any coin or currency other than that provided in the Notes, (vi)
impair the right to convert the Notes subject to the terms set forth herein,
(vii) reduce the amount of cash, number of shares of Common Stock or other
property receivable upon conversion, (viii) modify any of the provisions of
this Section 10.02 or Section 6.05, except to increase any such percentage or
to provide that certain other provisions of this Indenture cannot be modified
or waived without the consent of the holder of each Note so affected, (ix)
change any obligation of the Company to maintain an office or agency in the
places and for the purposes set forth in Section 4.02, (x) reduce the quorum or
voting requirements set forth in Article 9, (xi) make any change in Article 15
or Article 17 that adversely affects the rights of any Noteholder under Article
15 or Article 17, (xii) modify the Subsidiary Guarantees in any manner adverse
to the Noteholders or (xiii) reduce the aforesaid percentage of Notes, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of all Notes then outstanding.

Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee’s
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.

 51
 

 

It shall not be necessary for the consent of the Noteholders under this
Section 10.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.

Section
10.03. 
Effect of Supplemental Indenture.  Any supplemental indenture executed pursuant
to the provisions of this Article 10 shall comply with the Trust Indenture Act,
as then in effect, provided that this Section 10.03 shall not require such
supplemental indenture or the Trustee to be qualified under the Trust Indenture
Act prior to the time such qualification is in fact required under the terms of
the Trust Indenture Act or the Indenture has been qualified under the Trust
Indenture Act, nor shall it constitute any admission or acknowledgment by any
party to such supplemental indenture that any such qualification is required
prior to the time such qualification is in fact required under the terms of the
Trust Indenture Act or the Indenture has been qualified under the Trust
Indenture Act.  Upon the execution of any
supplemental indenture pursuant to the provisions of Article 10, this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Notes shall
thereafter be determined, exercised and enforced hereunder, subject in all
respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.

Section
10.04.  Notation on Notes.  Notes authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article 10 may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. 
If the Company or the Trustee shall so determine, new Notes so modified
as to conform, in the opinion of the Trustee and the Board of Directors, to any
modification of this Indenture contained in any such supplemental indenture
may, at the Company’s expense, be prepared and executed by the Company,
authenticated by the Trustee (or an authenticating agent duly appointed by the
Trustee pursuant to Section 18.12) and delivered in exchange for the Notes then
outstanding, upon surrender of such Notes then outstanding.

Section
10.05. 
Evidence of Compliance of Supplemental Indenture to
Be Furnished to Trustee. 
Prior to entering into any supplemental indenture, the Trustee shall be
provided with an Officers’ Certificate and an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant hereto complies with
the requirements of this Article 10 and is otherwise authorized or permitted by
this Indenture.

ARTICLE 11

CONSOLIDATION, MERGER, CONVEYANCE AND
LEASE

Section
11.01.  When May Company Merge or
Transfer Assets.  (a)  The Company shall not consolidate with or
merge with or into, or convey, transfer or lease all or substantially all its
assets to, any Person, unless:

(A)  the resulting, surviving or transferee Person
(the “Successor Company”)
shall be a corporation, limited partnership or limited liability company
organized and existing under the laws of the United States of America, any
State thereof or the District of Columbia and the Successor Company (if not the

 52
 

 

Company) shall
expressly assume, by a supplemental indenture hereto, executed and delivered to
the Trustee, in form reasonably satisfactory to the Trustee, all the
obligations of the Company under the Notes and this Indenture, provided that in
the case where the successor entity is not a corporation, a co-obligor on the
Notes is a corporation;

(B)   immediately after giving effect to such
transaction (and treating any Indebtedness which becomes an obligation of the
Successor Company or any Subsidiary Guarantor as a result of such transaction
as having been Incurred by the Successor Company or such Subsidiary Guarantor
at the time of such transaction), no Default shall have occurred and be
continuing; and

(C)   the Company shall have delivered to the
Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture.

The Successor Company shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture, but the
predecessor Company in the case of a conveyance, transfer or lease of all or
substantially all its assets shall not be released from the obligation to pay
the principal of and interest on the Notes.

(b)           The
Company shall not permit any Subsidiary Guarantor to consolidate with or merge
with or into any Person unless:  (i) the
resulting, surviving or transferee Person (the “Successor Guarantor”) will be a corporation, limited
partnership or limited liability company organized and existing under the laws
of the United States of America, any State thereof or the District of Columbia,
and such Person (if not such Subsidiary Guarantor) shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, in form
reasonably satisfactory to the Trustee, all the obligations of such Subsidiary
Guarantor under its Subsidiary Note Guarantee; (ii) immediately after giving
effect to such transaction (and treating any Indebtedness which becomes an
obligation of the Successor Guarantor or another Subsidiary Guarantor as a
result of such transaction as having been Incurred by such Person or such
Subsidiary Guarantor at the time of such transaction), no Default shall have
occurred and be continuing; and (iii) the Company shall have delivered to the
Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and such supplemental indenture (if any)
comply with this Indenture.

The Successor Guarantor will succeed to, and be substituted for, and
may exercise every right and power of, such Subsidiary Guarantor under this
Indenture, and the predecessor Subsidiary Guarantor (except in the case of
conveyance, transfer or lease of all or substantially all its assets) will be
released from the obligation to pay the principal of, interest on, and any
payment due on conversion of, the Notes.

(c)           Notwithstanding
the foregoing, (i) any Subsidiary Guarantor may consolidate with, merge into or
transfer all or part of its properties and assets to the Company or any
Subsidiary Guarantor and (ii) the Company may merge with an Affiliate
incorporated solely for the purpose of reincorporating the Company in another
jurisdiction to realize tax or other benefits.

 53
 

 

Section
11.02.  Successor to Be Substituted.  In case of any such consolidation, merger,
conveyance, transfer or lease and upon the assumption by the successor Person,
by supplemental indenture, executed and delivered to the Trustee and
satisfactory in form to the Trustee, of the due and punctual payment of the
principal of and Interest on all of the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be
performed by the Company, such successor Person shall succeed to and be
substituted for the Company, with the same effect as if it had been named
herein as the party of this first part. 
Such successor Person thereupon may cause to be signed, and may issue
either in its own name or in the name of Alliant Techsystems Inc. any or all of
the Notes, issuable hereunder that theretofore shall not have been signed by
the Company and delivered to the Trustee; and, upon the order of such successor
Person instead of the Company and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver,
or cause to be authenticated and delivered, any Notes that previously shall
have been signed and delivered by the officers of the Company to the Trustee
for authentication, and any Notes that such successor Person thereafter shall
cause to be signed and delivered to the Trustee for that purpose.  All the Notes so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Notes theretofore
or thereafter issued in accordance with the terms of this Indenture as though
all of such Notes had been issued at the date of the execution hereof.  In the event of any such consolidation,
merger, conveyance, transfer or lease, the Person named as the “Company” in the first paragraph of this
Indenture or any successor that shall thereafter have become such in the manner
prescribed in this Article 11 may be dissolved, wound up and liquidated at any
time thereafter and such Person shall be released from its liabilities as
obligor and maker of the Notes and from its obligations under this Indenture.

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

ARTICLE 12

SATISFACTION AND DISCHARGE OF INDENTURE

Section
12.01.  Discharge of Indenture.  When (a) the Company shall deliver to the
Trustee for cancellation all Notes theretofore authenticated (other than any
Notes that have been destroyed, lost or stolen and in lieu of or in
substitution for which other Notes shall have been authenticated and delivered)
and not theretofore canceled, or (b) all the Notes not theretofore canceled or
delivered to the Trustee for cancellation shall have become due and payable and
the Company shall deposit with the Trustee, in trust, cash or, if expressly
permitted by the terms of the Notes or the Indenture, Common Stock, in each
case sufficient to pay all amounts due and owing on Notes (other than any Notes
that shall have been mutilated, destroyed, lost or stolen and in lieu of or in
substitution for which other Notes shall have been authenticated and delivered)
not theretofore canceled or delivered to the Trustee for cancellation,
accompanied by a verification report, as to the sufficiency of the deposited
amount, from an independent certified accountant or other financial
professional satisfactory to the Trustee, and if in either case the Company
shall also pay or cause to be paid all other sums payable hereunder by the
Company, then this Indenture shall cease to be of further effect (except as to
(i) remaining rights of registration of transfer, substitution and exchange and
conversion of Notes, (ii) rights hereunder of Noteholders to receive payments
of principal of and Interest on the Notes and the other rights, duties and
obligations of Noteholders, as beneficiaries hereof with respect to the
amounts, if any, so deposited with the Trustee and (iii) the 

 54
 

 

rights,
obligations and immunities of the Trustee hereunder), and the Trustee, on
written demand of the Company accompanied by an Officers’ Certificate and an
Opinion of Counsel as required by Section 18.05 and at the cost and expense of
the Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture; the Company, however, hereby agrees to reimburse
the Trustee for any costs or expenses thereafter reasonably and properly
incurred by the Trustee and to compensate the Trustee for any services
thereafter reasonably and properly rendered by the Trustee in connection with
this Indenture or the Notes.  The Trustee
shall hold in trust money or Common Stock deposited with it pursuant to this
Article 12.  It shall apply the deposited
money and Common Stock through the Paying Agent and in accordance with this
Indenture to the payment of principal of and Interest on the Notes.  Money and Common Stock so held in trust are
not subject to Article 15 or 17.

Section
12.02. 
Paying Agent to Repay Monies Held.  Upon the satisfaction and discharge of this
Indenture, all monies then held by any Paying Agent of the Notes (other than
the Trustee) shall, upon written request of the Company, be repaid to it or
paid to the Trustee, and thereupon such Paying Agent shall be released from all
further liability with respect to such monies.

Section
12.03. 
Return of Unclaimed Monies.  Subject to the requirements of applicable
law, any monies deposited with or paid to the Trustee for payment of the
principal of or Interest on Notes and not applied but remaining unclaimed by
the holders of Notes for two years after the date upon which the principal of
or Interest on such Notes, as the case may be, shall have become due and
payable, shall be repaid to the Company by the Trustee on demand and all
liability of the Trustee shall thereupon cease with respect to such monies; and
the holder of any of the Notes shall thereafter look only to the Company for
any payment that such holder may be entitled to collect unless an applicable
abandoned property law designates another Person.

ARTICLE 13

IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS

Section
13.01.  Indenture, Notes and Subsidiary
Guarantees Solely Corporate Obligations.  No recourse for the payment of the principal
of or Interest on any Note, or for any claim based thereon or otherwise in
respect thereof, including any claim based upon a Subsidiary Guarantee, and no
recourse under or upon any obligation, covenant or agreement of the Company in
this Indenture or in any supplemental indenture or in any Note or Guarantee, or
because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, employee, agent, officer, director or
subsidiary, as such, past, present or future, of the Company or the Subsidiary
Guarantors or of any successor corporation, either directly or through the
Company or the Subsidiary Guarantors or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly understood that all
such liability is hereby expressly waived and released as a condition of, and
as a consideration for, the execution of this Indenture and the issue of the
Notes and the Subsidiary Guarantees.

ARTICLE 14

CONVERSION OF NOTES

Section 14.01.  Right to
Convert.  (a)  Subject to and upon compliance with the
provisions of this Indenture, at any time on or prior to the close of business
on the Business Day immediately 

 55
 

 

preceding
the Stated Maturity, the holder of any Note shall have the right, at such
holder’s option, to convert the principal amount of the Note, or any portion of
such principal amount which is a multiple of $1,000, upon the occurrence of any
of the events in Section 14.01(b) or (c), into:

(i)            cash in an amount equal to the lesser of (A) $1,000 and
(B) the Conversion Value (the “Required Cash
Amount”), and

(ii)           if the Conversion Value is greater than $1,000, a number
of shares of Common Stock (the “Remaining
Shares”), equal to the sum of the Daily Share Amounts for each of
the thirty consecutive Trading Days in the Conversion Reference Period, subject
to the right of the Company to deliver cash in lieu of all or a portion of such
Remaining Shares as described below.

By the close of business on the Trading Day prior to the first Trading
Day of the applicable Conversion Reference Period, the Company may specify a
percentage of the Daily Share Amount that will be settled in cash (the “Cash Percentage”) and will notify the
Noteholder of such Cash Percentage through written notice to the Trustee (the “Cash Percentage Notice”).  If the Company elects to specify a Cash
Percentage, (x) the amount of cash that the Company will deliver in respect of
each Trading Day in the applicable Conversion Reference Period, in addition to
the Required Cash Amount, will equal the product of: (i) the Cash Percentage,
(ii) the Daily Share Amount for such Trading Day, and (iii) the Volume Weighted
Average Price of the Common Stock for such Trading Day (provided that after the consummation of a
Fundamental Change in which the consideration is comprised entirely of cash,
the amount used in this clause (iii) will be the cash price per share received
by holders of Common Stock in such Fundamental Change) and (y) the number of
shares of Common Stock deliverable in respect of each Trading Day in the
applicable Conversion Reference Period (in lieu of the full Daily Share Amount
for such Trading Day pursuant to clause (b) above) will be a percentage of the
Daily Share Amount equal to 100% minus the Cash Percentage.

If the Company does not specify a Cash Percentage by the close of
business on the Trading Day immediately preceding the start of the applicable
Conversion Reference Period, the Company shall settle 100% of the Daily Share
Amount for each Trading Day in the applicable Conversion Reference Period with
shares of Common Stock; provided, however, that the Company will pay cash in
lieu of fractional shares otherwise issuable upon conversion of such Note,
pursuant to Section 14.03 hereof.  The
Company may, at its option, revoke any Cash Percentage Notice through written
notice to the Trustee by the close of business on the Trading Day immediately
preceding the start of the applicable Conversion Reference Period.

In the event of a stock
split, combination, dividend or any other event resulting in an adjustment to
the Conversion Rate pursuant to Section 14.05, during the applicable Conversion
Reference Period, appropriate adjustment to the equation for calculating
Conversion Value and Remaining Shares shall be made, as determined by the Board
of Directors.

(b)           The
Notes shall be convertible only during the following periods upon the
occurrence of one of the following events:

(i)            during any fiscal quarter of the
Company after the quarter ended December 31, 2006 (and only during such fiscal
quarter) if the Last Reported Sale Price for the 

 56
 

 

Common Stock
for at least 20 Trading Days during the period of 30 consecutive Trading Days
ending on the last Trading Day of the previous fiscal quarter equals or exceeds
130% of the Conversion Price on such last Trading Day;

(ii)           at any time on or after August 15,
2011 until the close of business on the Business Day immediately preceding the
Stated Maturity; or

(iii)          as provided in Section (c) of this
Section 14.01.

The Company or its designated agent shall determine on a daily basis
during the time period specified in Section 14.01(b)(i) whether the Notes shall
be convertible as a result of the occurrence of an event specified in clause
(i) above and, if the Notes shall be so convertible, the Company shall promptly
deliver to the Trustee (or other Conversion Agent appointed by the Company)
written notice thereof.  Whenever the
Notes shall become convertible pursuant to this Section 14.01, the Company or,
at the Company’s request, the Trustee in the name and at the expense of the
Company, shall notify the holders of the event triggering such convertibility
in the manner provided in Section 18.03, and the Company shall also publicly
announce such information by publication on the Company’s Web site or through
such other public medium as it may use at such time.  Any notice so given shall be conclusively
presumed to have been duly given, whether or not the holder receives such
notice.

The Trustee shall be entitled at its sole discretion to consult with
the Company and to request the assistance of the Company in connection with the
Trustee’s duties and obligations pursuant to Section 14.01 hereof, and the
Company agrees, if requested by the Trustee, to cooperate with, and provide
assistance to, the Trustee in carrying out its duties under this Section 14.01;
provided, however, that nothing herein shall be construed to
relieve the Trustee of its duties pursuant to Section 14.01 hereof.

(c)           In
addition, if:

(i)            (A) the Company distributes to all
holders of its Common Stock rights or warrants entitling them (for a period
expiring within 60 days of the date of the distribution) to subscribe for or
purchase shares of Common Stock at a price per share less than the Last
Reported Sale Price on the Trading Day immediately preceding the declaration
date of the distribution, or (B) the Company distributes to all holders of
Common Stock assets (including cash), debt securities or rights to purchase
securities of the Company, which distribution has a per share value as
determined by the Company’s Board of Directors and set forth in a Board
Resolution exceeding 10% of the Last Reported Sale Price of the Common Stock on
the Trading Day immediately preceding the declaration date for such
distribution, then, in either case, the Notes may be surrendered for conversion
at any time on and after the date that the Company gives notice to the holders
of such distribution, which shall be not less than 20 Business Days prior to
the Ex-Dividend Date for such distribution, until the earlier of the close of
business on the Business Day immediately preceding, but not including, the
Ex-Dividend Date or the date the Company publicly announces that such distribution
will not take place; provided that no holder of a Note will have the ability to
convert and no adjustment to the Conversion Price will be made if the holder
will otherwise participate in such distribution without conversion; or

 

 57

 

 

(ii)           the Company consolidates with or
merges with or into another Person or is a party to a binding share exchange or
conveys, transfers, sells, leases or otherwise disposes of all or substantially
all of its properties and assets in each case pursuant to which the Common
Stock is converted into cash or property other than securities, or if a
transaction described in clause (iv) of the definition of Fundamental Change
occurs on or prior to the Stated Maturity and results in an increase in the
Conversion Rate of the Notes as described in Section 14.01(e), then the Notes
may be surrendered for conversion at any time from and after the date 15 days
prior to the anticipated effective date of the transaction and ending on and
including the date 15 days after the anticipated effective date of the
transaction (or, if such transaction also results in holders having the right
to require the Company to repurchase Notes, until the Fundamental Change
Repurchase Date).

The Board of Directors
shall determine the anticipated effective date of the transaction, and such
determination shall be conclusive and binding on the holders and shall be
publicly announced by the Company by publication on its Web site or through
such other public medium as it may use at that time not later than two Business
Days prior to such 15th day before the anticipated effective date.

(d)           A
Note in respect of which a holder is electing to exercise its option to require
repurchase upon a Fundamental Change pursuant to Section 3.01 may be converted
only if such holder withdraws its election in accordance with Section
3.03(d).  A holder of Notes is not
entitled to any rights of a holder of Common Stock until such holder has
converted his Notes to Common Stock, and only to the extent such Notes are
deemed to have been converted to Common Stock under this Article 14.

(e)           If
and only to the extent a holder elects to convert Notes in connection with a
Fundamental Change pursuant to clause (iv) of the definition thereof that
occurs prior to the Stated Maturity pursuant to which 10% or more of the
consideration for the Common Stock (other than cash payments for fractional
shares and cash payments made in respect of dissenters’ appraisal rights) in
such Fundamental Change transaction consists of cash or securities (or other
property) that are not traded or scheduled to be traded immediately following
such transaction on a U.S. national securities exchange or the Nasdaq Global
Market, such holder will be entitled to receive, in addition to a number of
shares of Common Stock equal to the Conversion Rate per $1,000 principal amount
of Notes, an additional number of shares of Common Stock (the “Additional Shares”) as described below; provided that
if the Stock Price paid in connection with such transaction is greater than
$160.00 or less than $77.83 (subject in each case to adjustment as described
below), no Additional Shares shall be issued. 
No Additional Shares shall be issuable under this Section 14.01(e)
unless the holder elects to convert the Notes in connection with such
Fundamental Change transaction.

The number of Additional Shares issuable in connection with the
conversion of Notes as described in the immediately preceding paragraph will be
determined by reference to the table attached as Schedule II hereto, based on
the effective date of such Fundamental Change transaction and the Stock Price
paid in connection with such transaction; provided that if the Stock
Price is between two Stock Price amounts in the table or such effective date is
between two Effective Dates in the table, the number of Additional Shares will
be determined by the Company by a straight-line interpolation between the
number of Additional Shares set forth for the higher and lower Stock Price
amounts and the two effective dates, as applicable, based on a 365-day year.

 58
 

 

The
“effective date” with respect to a
Fundamental Change transaction means the date that a Fundamental Change becomes
effective.

The Stock Prices set forth in the first row of the table in Schedule II
hereto will be adjusted as of any date on which the Conversion Rate of the
Notes is adjusted pursuant to Section 14.05. 
The adjusted Stock Prices will equal the Stock Prices applicable
immediately prior to such adjustment, multiplied by a fraction, the numerator
of which is the Conversion Rate immediately prior to the adjustment giving rise
to the Conversion Rate adjustment and the denominator of which is the
Conversion Rate as so adjusted.  The
number of Additional Shares will be adjusted in the same manner as the
Conversion Rate as set forth in Section 14.05.

Notwithstanding the foregoing, in no event will the total number of
shares of Common Stock issuable upon conversion exceed 12.8485 per $1,000
principal amount of Notes, subject to adjustments in the same manner as the
Conversion Rate as set forth in Section 14.05.

(f)            Notwithstanding
the provisions of Section 14.01(e), in the case of a Public Acquirer Change of
Control, the Company may, in lieu of increasing the Conversion Rate by
Additional Shares as described in Section 14.01(e), elect to adjust the
Conversion Rate and the related conversion obligation such that from and after
the effective date of such Public Acquirer Change of Control, holders of Notes
will be entitled to convert their Notes (subject to the satisfaction of the
conditions to conversion set forth in Sections 14.01(b) and (c) above) into a
number of shares of Public Acquirer Common Stock by adjusting the Conversion
Rate in effect immediately before the Public Acquirer Change of Control by a
fraction:

(i)            the numerator of which will be (i) in the case of a share
exchange, consolidation, merger or binding share exchange, pursuant to which
the Common Stock is converted into cash, securities or other property, the
average value of all cash and any other consideration (as determined by the
Board of Directors) paid or payable per share of Common Stock or (ii) in the
case of any other Public Acquirer Change of Control, the average of the Last
Reported Sale Price of the Common Stock for the five consecutive Trading Days prior
to but excluding the effective date of such Public Acquirer Change of Control,
and

(ii)           the denominator of which will be the average of the Last
Reported Sale Prices of the Public Acquirer Common Stock for the five
consecutive Trading Days commencing on the trading day next succeeding the
effective date of such public acquirer change of control.

“Public Acquirer Change of Control”
means an event constituting a Fundamental Change that would otherwise obligate
the Company to increase the Conversion Rate as described in Section 14.01(e)
and the acquirer (or any entity that is a directly or indirectly wholly-owned
subsidiary of the acquirer) has a class of common stock traded on a U.S.
national securities exchange or quoted on the Nasdaq Global Market or which
will be so traded or quoted when issued or exchanged in connection with such
Fundamental Change (the “Public Acquirer
Common Stock”).

Upon a Public Acquirer Change of Control, if the Company so elects,
holders may convert their Notes (subject to the satisfaction of the conditions
to conversion set forth in Sections 14.01(b)

 59
 

 

 

and
(c) above) at the adjusted Conversion Rate described in the second preceding
paragraph but will not be entitled to the increased Conversion Rate described
in Section 14.01(e).  The Company shall
notify holders of its election in its notice to holders pursuant to Section
14.01(c)(ii) above.

If the Company elects to adjust the Conversion Rate and the related
conversion obligation as described in this Section 14.01(f), the Company, or
the acquiring or surviving Person, as the case may be, shall execute with the
Trustee a supplemental indenture (which shall comply with the Trust Indenture
Act as in force at the date of execution of such supplemental indenture)
providing for such adjustment to the Conversion Rate and the conversion
obligation.  Such supplemental indenture
shall provide for adjustments that shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article 14.  The Company shall cause notice of the
execution of such supplemental indenture to be mailed to each holder of Notes,
at its address appearing on the Note Register provided for in Section 2.05 of
this Indenture, within 20 days after execution thereof.  Failure to deliver such notice shall not
affect the legality or validity of such supplemental indenture.

Section
14.02. 
Exercise of Conversion Privilege; No Adjustment
for Interest or Dividends.  (a)  In order to
exercise the conversion privilege with respect to any Note in certificated
form, the Conversion Agent must receive at its office or agency maintained for
that purpose such Note with the original or facsimile of the form entitled “Form
of Conversion Notice” on the reverse thereof (the “Conversion Notice”), duly completed and manually signed,
together with such Notes duly endorsed for transfer, accompanied by the funds,
if any, required by Section 14.02(e). 
Such notice shall also state the name or names (with address or
addresses) of persons to whom the Required Cash Amount shall be paid and of
persons in whose name any certificate or certificates for any Remaining Shares
which may be issuable on such conversion shall be issued (including cash in
lieu of fractional shares), and shall be accompanied by the amount of any
transfer or similar taxes which are payable in connection with such conversion,
if required pursuant to Section 14.07. 
The Conversion Agent shall provide copies of the Form of Conversion
Notice to holders of Notes upon request.

In order to exercise the conversion privilege with respect to any
interest in a Global Note, the beneficial holder must complete, or cause to be
completed, the appropriate instruction form for conversion pursuant to the
Depositary’s book-entry conversion program, deliver, or cause to be delivered,
by book-entry delivery an interest in such Global Note, furnish appropriate
endorsements and transfer documents if required by the Company or the Trustee
or Conversion Agent, and pay the funds, if any, required by this Section 14.02
and any transfer taxes or similar taxes which are payable in connection with
such conversion if required pursuant to Section 14.07.

(b)           As
promptly as practicable after satisfaction of the requirements for conversion
set forth above, but in no event later than the fifth Business Day following
the end of the Conversion Reference Period applicable to the Notes being
converted, subject to compliance with any restrictions on transfer if shares
issuable on conversion, if any, are to be issued in a name other than that of
the Noteholder (as if such transfer were a transfer of the Note or Notes (or
portion thereof) so converted), the Company shall cause the Conversion Agent to
issue and shall deliver to such Noteholder a check or cash in respect of the
Required Cash Amount (and in respect of any fractional interest in respect of
any Remaining Shares, if any, arising upon such conversion, calculated by the
Company as provided in Section 14.03) and a certificate or certificates for the
number of full Remaining Shares, if any, issuable upon the conversion of such
Note or portion

 60
 

 

 

thereof as determined by the Company in accordance with the provisions
of this Article 14.  In case any Note of
a denomination greater than $1,000 shall be surrendered for partial conversion,
and subject to Section 2.05, the Company shall execute and the Trustee shall
authenticate and deliver to the holder of the Note so surrendered, without
charge to him, a new Note or Notes in authorized denominations in an aggregate
principal amount equal to the unconverted portion of the surrendered Note.

(c)           Each
conversion shall be deemed to have been effected as to any such Note (or
portion thereof) on the date on which the requirements set forth above in this
Section 14.02 have been satisfied as to such Note (or portion thereof), and the
Person in whose name any certificate or certificates for shares of Common Stock
shall be issuable upon such conversion shall be deemed to have become the
holder of record of the shares represented thereby on and after the last
Trading Day of the Conversion Reference Period applicable to the Notes being
converted provided, however, that
no surrender of a Note on any date when the stock transfer books of the Company
shall be closed shall be effective to constitute the person or persons entitled
to receive the Remaining Shares upon such conversion as the record holder or
holders of such shares of Common Stock on such date, but such surrender shall
be effective to constitute the person or persons entitled to receive such
shares of Common Stock as the record holder or holders thereof for all purposes
at the close of business on the next succeeding day on which such stock
transfer books are open. Upon conversion of a Note, such person shall no longer
be a holder of such Note.

(d)           Any
Note or portion thereof surrendered for conversion during the period from the
close of business on any Regular Record Date to the close of business on the
Business Day preceding the following Interest Payment Date shall be accompanied
by payment, in immediately available funds or other funds acceptable to the
Company, of an amount equal to the Interest otherwise payable on such Interest
Payment Date on the principal amount being converted; provided that no such
payment need be made (1) in connection with any conversion following the
Regular Record Date immediately preceding the Stated Maturity, (2) if the
Company has specified a Fundamental Change Repurchase Date that is after a
Regular Record Date and prior to the next Interest Payment Date or (3) to the
extent of any overdue Interest, if any overdue Interest exists at the time of
conversion with respect to such Note. 
Except as provided above in this Section 14.02, no payment or other
adjustment shall be made for Interest accrued on any Note converted or for
dividends on any shares issued upon the conversion of such Note as provided in
this Article 14.

(e)           Upon
the conversion of an interest in a Global Note, the Trustee (or other
Conversion Agent appointed by the Company), or the Custodian at the direction
of the Trustee (or other Conversion Agent appointed by the Company), shall make
a notation on such Global Note as to the reduction in the principal amount
represented thereby.  The Company shall
notify the Trustee in writing of any conversions of Notes effected through any
Conversion Agent other than the Trustee.

(f)            Upon
the conversion of a Note, that portion of the accrued but unpaid Interest with
respect to the converted Note shall not be cancelled, extinguished or
forfeited, but rather shall be deemed to be paid in full to the holder thereof
through delivery of the Required Cash Amount and any Remaining Shares (together
with the cash payment, if any in lieu of fractional shares) in exchange for the
Note being converted pursuant to the provisions hereof; and the fair market
value of such Required Cash Amount and any Remaining Shares (together with any
such cash payment in lieu of fractional shares) shall be treated as issued, to
the extent thereof, first in exchange for and

 61
 

 

 

in satisfaction of the Company’s obligation to pay the principal amount
of the converted Note and the accrued but unpaid Interest, and the balance, if
any, of such fair market value of such Required Cash Amount and any Remaining
Shares (and any such cash) shall be treated as issued in exchange for and in
satisfaction of the right to convert the Note being converted pursuant to the
provisions hereof.

Section
14.03. 
Cash Payments in Lieu of Fractional Shares.  No fractional shares of Common Stock or scrip
certificates representing fractional shares shall be issued upon conversion of
Notes.  Instead, the Company will deliver
cash in lieu of a fractional share based on the arithmetic average of the
Volume Weighted Average Price of Common Stock for each of the thirty
consecutive Trading Days of the Conversion Reference Period, rounded to the
nearest whole cent.  If more than one
Note shall be surrendered for conversion at one time by the same holder, the
Required Cash Amount and the Remaining Shares, if any (together with the cash
payment, if any, in lieu of fractional shares) shall be computed on the basis
of the aggregate principal amount of the Notes (or specified portions thereof
to the extent permitted hereby) so surrendered.

Section
14.04. 
Conversion Rate.  The initial Conversion Rate shall be 10.3617
shares of Common Stock per $1,000 principal amount of Notes, subject to
adjustment pursuant to this Article 14.

Section
14.05. 
Adjustment of Conversion Rate.  The Conversion Rate shall be adjusted from
time to time by the Company as follows:

(a)           In
case the Company shall pay a dividend or make a distribution to all holders of
the outstanding Common Stock in shares of Common Stock, the Conversion Rate, as
in effect at the opening of business on the day following the date fixed for
the determination of stockholders entitled to receive such dividend or other
distribution, shall be increased by dividing such Conversion Rate by a
fraction,

(i)            the numerator of which shall be the
number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination, and

(ii)           the denominator of which shall be the
sum of such number of shares and the total number of shares constituting such
dividend or other distribution,

such increase to become effective immediately after
the opening of business on the Business Day following the date fixed for such
determination.  The Company will not pay
any dividend or make any distribution on shares of Common Stock held in
treasury by the Company.  If any dividend
or distribution of the type described in this Section 14.05(a) is declared but
not so paid or made, the Conversion Rate shall again be adjusted to the
Conversion Rate that would then be in effect if such dividend or distribution
had not been declared.

(b)           In
case the Company shall (other than pursuant to a dividend reinvestment plan or
share purchase plan) issue rights, options or warrants to all holders of its
Common Stock entitling them, for a period expiring within 60 days after the
date of issuance of such rights, options or warrants, to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price per share of the Common Stock on the date of issuance of such
rights, options or warrants, the Conversion Rate in effect at the opening of
business on the day following

 62
 

 

 

the date fixed for such determination shall be
increased by dividing such Conversion Rate by a fraction,

(i)            the numerator of which shall be the
number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common Stock
that the aggregate offering price of the total number of shares of Common Stock
so offered for subscription or purchase would purchase at such Current Market
Price, and

(ii)           the denominator of which shall be the
number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common Stock so
offered for subscription or purchase at such below Current Market Price.

Such adjustment shall be successively made whenever
any such rights, options or warrants are issued and shall become effective
immediately after the opening of business on the Business Day following the
date fixed for such determination.  The
Company shall not issue any such rights, options or warrants in respect of
shares of Common Stock held in treasury by the Company.  To the extent that shares of Common Stock are
not delivered after the expiration of such rights or warrants, the Conversion
Rate shall be readjusted to the Conversion Rate that would then be in effect
had the adjustments made upon the issuance of such rights, options or warrants
been made on the basis of delivery of only the number of shares of Common Stock
actually delivered.  If such rights,
options or warrants are not so issued, the Conversion Rate shall again be
adjusted to be the Conversion Rate that would then be in effect if such date
fixed for the determination of stockholders entitled to receive such rights,
options or warrants had not been fixed.

In determining whether any rights, options or warrants
entitle the holders to subscribe for or purchase shares of Common Stock at less
than such Current Market Price, and in determining the aggregate offering price
of such shares of Common Stock, there shall be taken into account any
consideration received by the Company for such rights, options or warrants and
any amount payable on exercise or conversion thereof, the value of such
consideration, if other than cash, to be determined by the Board of Directors.

(c)           In
case outstanding shares of Common Stock shall be subdivided or split into a
greater number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such subdivision or
split becomes effective shall be proportionately increased, and, conversely, in
case outstanding shares of Common Stock shall be combined into a smaller number
of shares of Common Stock, the Conversion Rate in effect at the opening of
business on the day following the day upon which such combination becomes
effective shall be proportionately reduced, such increase or reduction, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision, split or combination
becomes effective.

(d)           In
case the Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock evidences of its indebtedness, shares of capital stock,
securities, cash or other property (but excluding any rights, dividend or
distribution referred to in Section 14.05(a) and any options or warrants
referred to in Section 14.05(b)), the Conversion Rate shall be adjusted by

 63
 

 

 

dividing the Conversion Rate in effect immediately prior to the close
of business on the date fixed for the determination of stockholders entitled to
receive such distribution by a fraction,

(i)            the numerator of which shall be the
Current Market Price per share of the Common Stock on the date fixed for such
determination, and

(ii)           the denominator of which shall be
such Current Market Price per share of the Common Stock plus (i) with respect
to distributions paid exclusively in cash, the amount per share of such
distribution, (ii) with respect to all other distributions, the then fair
market value per share (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution) on such
date of the portion of the evidences of indebtedness, shares of capital stock,
securities, or other property so distributed, or (iii) with respect to
distributions of which cash is a portion (but not all) of such distribution,
the amount per share of the distribution payable in cash plus the then fair
market value per share (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution) of the
remaining portion of such distribution that is payable other than in cash.

such adjustment to become effective immediately prior
to the opening of business on the Business Day following the date fixed for the
determination of stockholders entitled to receive such distribution; provided,
however, that in the event that the Company makes a distribution to all
holders of its Common Stock consisting of capital stock of, or similar equity
interest in, a subsidiary or other business unit of the Company, the Conversion
Rate shall be adjusted by dividing the Conversion Rate in effect immediately
prior to the close of business on the date fixed for the determination of
stockholders entitled to receive such distribution by a fraction of which the
numerator shall be the Spin-off Market Price per share of the Common Stock on
the date fixed for such determination and the denominator shall be the Spin-off
Market Price per share of the Common Stock on the date fixed for such
determination plus the value per share of Common Stock of such distribution
based on the Spin-off Market Price per share or similar equity interest of the
subsidiary or other business unit of the Company on such date, such adjustment
to become effective 10 Trading Days after the effective date of such
distribution of capital stock of, or similar equity interest in, a subsidiary
or other business unit of the Company. 
In any case in which this Section 14.05(d) is applicable, Section
14.05(a) and (b) shall not be applicable. 
If such dividend or distribution is not so paid or made, the Conversion
Rate shall again be adjusted to be the Conversion Rate that would then be in
effect if such dividend or distribution had not been declared.

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

 64
 

 

 

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

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

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

(f)            The
reclassification of Common Stock into securities other than Common Stock (other
than any reclassification upon an event to which Section 14.06 applies) shall
be deemed to involve (a) a distribution of such securities other than Common
Stock to all holders of Common Stock (and the effective date of such
reclassification shall be deemed to be “the date fixed for the determination of
stockholders entitled to receive such distribution” and the “date fixed for
such determination” within the meaning of Section 14.05(d)), and (b) a
subdivision, split or combination, as the case may be, of the number of shares
of Common Stock outstanding immediately prior to such reclassification into the
number of shares of Common Stock outstanding immediately thereafter (and the
effective date of such reclassification shall be deemed to be “the day upon
which such subdivision or split becomes effective” or “the day upon which such
combination becomes effective,” as the case may be, and “the day upon which
such subdivision, split or combination becomes effective” within the meaning of
Section 14.05(c)).

(g)           Notwithstanding
the foregoing provisions of Section 14.05, no adjustment shall be made
thereunder, nor shall an adjustment be made to the ability of a holder of a
Note to convert, for any distribution described therein if the holder will
otherwise participate in the distribution without conversion of such holder’s
Notes, provided that the Company shall have determined that the holder shall
not be adversely affected by participating in such distribution compared with
the adjustment that would have been made under Section 14.05 but for this
Section 14.05(g).

(h)           The
Company may make such increases in the Conversion Rate, in addition to those
required by clauses (a) through (g) of this Section 14.05 as the Board of
Directors considers to be advisable to avoid or diminish any income tax to
holders of Common Stock or rights to purchase Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes.

 

 65

 

 

To the extent permitted by applicable law, the Company in its sole
discretion may increase from time to time the Conversion Rate by any amount for
any period of time if the period is at least 20 days, the increase is
irrevocable during the period and the Board of Directors shall have made a
determination that such increase would be in the best interests of the Company,
which determination shall be conclusive. 
Whenever the Conversion Rate is increased pursuant to the preceding
sentence, the Company shall mail to holders of record of the Notes a notice of
the increase at least 15 days prior to the date the increased Conversion Rate
takes effect, and such notice shall state the increased Conversion Rate and the
period during which it will be in effect.

(i)            No
adjustment to the Conversion Rate need be made:

(i)            upon the issuance of any shares of
Common Stock pursuant to any present or future plan providing for the
reinvestment of dividends or interest payable on securities of the Company and
the investment of additional optional amounts in shares of Common Stock under
any plan;

(ii)           upon the issuance of any shares of
Common Stock or options or rights to purchase those shares pursuant to any
present or future employee, director or consultant benefit plan or program of
or assumed by the Company or any of its Subsidiaries;

(iii)          upon the issuance of any shares of
Common Stock pursuant to any option, warrant, right, or exercisable,
exchangeable or convertible security not described in (ii) above and
outstanding as of the date the Notes were first issued;

(iv)          for a change in the par value of the
Common Stock;

(v)           for accrued and unpaid interest, if
any; or

(vi)          upon a reclassification of Common
Stock or any consolidation, merger, binding share exchange or transfer of all
or substantially all of the assets of the Company and its Subsidiaries, taken
as a whole, in each case pursuant to which the Common Stock is converted into
cash, securities or other property.

To the extent the Notes become convertible into cash,
assets or property (other than capital stock of the Company or securities to
which Section 14.06 applies), no adjustment shall be made thereafter as to the
cash, assets or property.  Interest shall
not accrue on such cash, assets or property.

(j)            No
adjustment in the Conversion Rate shall be required unless such adjustment
would require an increase or decrease of at least 1% in such rate; provided that any adjustments that by reason of
this Section 14.05(j) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment.  In addition, the Company will make any carry
forward adjustments not otherwise effected upon conversion of the Notes, upon
required purchases of the Notes in connection with a Fundamental Change and
five Business Days prior to the Stated Maturity.  All calculations under this Article 14 shall
be made by the Company and shall be made to the nearest cent or to the nearest
one-ten thousandth (1/10,000) of a share, as the case may be.

(k)           Whenever
the Conversion Rate is adjusted as herein provided, the Company shall promptly
file with the Trustee and any Conversion Agent other than the Trustee an
Officers’

 66
 

 

 

Certificate setting forth the Conversion Rate after such adjustment and
setting forth a brief statement of the facts requiring such adjustment.  Unless and until a Responsible Officer of the
Trustee shall have received such Officers’ Certificate, the Trustee shall not
be deemed to have knowledge of any adjustment of the Conversion Rate and may
assume that the last Conversion Rate of which it has knowledge is still in
effect.  Promptly after delivery of such
certificate, the Company shall prepare a notice of such adjustment of the
Conversion Rate setting forth the adjusted Conversion Rate and the date on
which each adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Rate to the holder of each Note at his last
address appearing on the Note Register provided for in Section 2.05 of this
Indenture, within 20 days after execution thereof.  Failure to deliver such notice shall not
affect the legality or validity of any such adjustment.

(l)            In
any case in which this Section 14.05 provides that an adjustment shall become
effective immediately after (1) a record date or Stock Record Date for an
event, (2) the date fixed for the determination of stockholders entitled to
receive a dividend or distribution pursuant to Section 14.04(a), (3) a date
fixed for the determination of stockholders entitled to receive rights or
warrants pursuant to Section 14.04(b) or (4) the Expiration Time for any tender
or exchange offer pursuant to Section 14.04(e), (each a “Determination Date”), the Company may elect to defer until
the occurrence of the applicable Adjustment Event (as hereinafter defined) (x)
issuing to the holder of any Note converted after such Determination Date and
before the occurrence of such Adjustment Event, the additional shares of Common
Stock or other securities issuable upon such conversion by reason of the
adjustment required by such Adjustment Event over and above the Common Stock
issuable upon such conversion before giving effect to such adjustment and (y)
paying to such holder any amount in cash in lieu of any fraction pursuant to
Section 14.03.  For purposes of this
Section 14.05(l), the term “Adjustment Event”
shall mean:

(i)            in any case referred to in clause
(1) hereof, the occurrence of such event,

(ii)           in any case referred to in clause (2)
hereof, the date any such dividend or distribution is paid or made,

(iii)          in any case referred to in clause (3)
hereof, the date of expiration of such rights or warrants, and

(iv)          in any case referred to in clause (4)
hereof, the date a sale or exchange of Common Stock pursuant to such tender or
exchange offer is consummated and becomes irrevocable.

(m)          For
purposes of this Section 14.05, the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of the Company
but shall include shares issuable in respect of scrip certificates issued in
lieu of fractions of shares of Common Stock. 
The Company will not pay any dividend or make any distribution on shares
of Common Stock held in the treasury of the Company.

Section
14.06. 
Effect of Reclassification, Consolidation, Merger
or Sale.  If any of the following events
occur, namely (i) any reclassification or change of the outstanding shares of
Common Stock (other than a subdivision or combination to which Section 14.05(c)
applies), (ii) any consolidation, merger or combination of the Company with another
Person as a result of which

 67
 

 

 

holders
of Common Stock shall be entitled to receive stock, other securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, or (iii) any sale or conveyance of all or substantially all of
the properties and assets of the Company to any other Person as a result of
which holders of Common Stock shall be entitled to receive stock, other
securities or other property or assets (including cash) with respect to or in
exchange for such Common Stock, then the Company or the successor or purchasing
Person, as the case may be, shall execute with the Trustee a supplemental
indenture (which shall comply with the Trust Indenture Act as in force at the
date of execution of such supplemental indenture) providing that each Note
shall be convertible into the kind and amount of shares of stock, other
securities or other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or
conveyance by a holder of a number of shares of Common Stock (including, in the
case of a conversion pursuant to Section 14.01(e), any Additional Shares
issuable upon such conversion) issuable upon conversion of such Notes
(assuming, for such purposes, that the Notes are converted solely into shares
of Common Stock and that a sufficient number of authorized shares of Common
Stock are available to convert all such Notes) immediately prior to such
reclassification, change, consolidation, merger, combination, sale or
conveyance assuming such holder of Common Stock did not exercise his rights of
election, if any, as to the kind or amount of stock, other securities or other
property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance (provided that, if the kind or amount of stock,
other securities or other property or assets (including cash) receivable upon
such reclassification, change, consolidation, merger, combination, sale or
conveyance is not the same for each share of Common Stock in respect of which
such rights of election shall not have been exercised (“non-electing share”), then for the purposes
of this Section 14.06 the kind and amount of stock, other securities or other
property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance for each
non-electing share shall be comprised of the weighted average of the types and
amounts of consideration so receivable per share by the holders of Common Stock
who have exercised their right of election). 
Such supplemental indenture shall provide for adjustments that shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Article 14.

The Company shall cause
notice of the execution of such supplemental indenture to be mailed to each
holder of Notes, at its address appearing on the Note Register provided for in
Section 2.05 of this Indenture, within 20 days after execution thereof.  Failure to deliver such notice shall not
affect the legality or validity of such supplemental indenture.

Notwithstanding the provisions of this Section, if the Company elects
to adjust the Conversion Rate and the related conversion obligation as
described in Section 14.01(f), the provisions of Section 14.01(f) shall apply
instead of the provisions of this Section.

The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.

If this Section 14.06 applies to any event or occurrence, Section 14.05
shall not apply.

Section
14.07. 
Taxes on Shares Issued.  The issue of stock certificates, if any, on
conversions of Notes shall be made without charge to the converting Noteholder
for any documentary, stamp or similar issue or transfer tax in respect of the
issue thereof.  The Company shall not,
however, be required to pay any such tax which may be payable in respect of any
transfer

 68
 

 

 

involved
in the issue and delivery of stock in any name other than that of the holder of
any Note converted, and the Company shall not be required to issue or deliver
any such stock certificate unless and until the Person or Persons requesting
the issue thereof shall have paid to the Company the amount of such tax or
shall have established to the satisfaction of the Company that such tax has
been paid.

Section
14.08. 
Reservation of Shares, Shares to Be Fully Paid;
Compliance with Governmental Requirements; Listing of Common Stock.  The Company shall provide, free from
preemptive rights, out of its authorized but unissued shares or shares held in
treasury, sufficient shares of Common Stock to provide for the number of
Remaining Shares due upon conversion of the Notes from time to time as such Notes
are presented for conversion (assuming, for purposes of this sentence, that the
Company elects to deliver solely shares of Common Stock in respect of its
obligation to deliver the Remaining Shares).

Before taking any action which would cause an adjustment increasing the
Conversion Rate to an amount that would cause the Conversion Price to be
reduced below the then par value, if any, of any shares of Common Stock
issuable upon conversion of the Notes, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Rate.

The Company covenants that all shares of Common Stock that may be
issued upon conversion of Notes will upon issue be fully paid and nonassessable
by the Company and free from all taxes, liens and charges with respect to the
issue thereof.

The Company covenants that, if any shares of Common Stock to be
provided for the purpose of conversion of Notes hereunder require registration
with or approval of any governmental authority under any federal or state law
before such shares may be validly issued upon conversion, the Company will in
good faith and as expeditiously as possible, to the extent then permitted by
the rules and interpretations of the Commission (or any successor thereto),
endeavor to secure such registration or approval, as the case may be.

The Company further covenants that, if at any time the Common Stock
shall be listed on the New York Stock Exchange or any other national securities
exchange or automated quotation system, the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Stock shall be so listed on such exchange or automated
quotation system, any Common Stock issuable upon conversion of the Note;
provided that if the rules of
such exchange or automated quotation system permit the Company to defer the
listing of such Common Stock until the first conversion of the Notes into
Common Stock in accordance with the provisions of this Indenture, the Company
covenants to list any Common Stock issuable upon conversion of the Notes in
accordance with the requirements of such exchange or automated quotation system
at such time.

Section
14.09. 
Responsibility of Trustee.  The Trustee and any other Conversion Agent
shall not at any time be under any duty or responsibility to any holder of
Notes to determine the Conversion Rate or whether any facts exist which may
require any adjustment of the Conversion Rate, or with respect to the nature or
extent or calculation of any such adjustment when made, or with respect to the
method employed, or herein or in any supplemental indenture provided to be
employed, in making the same.  The
Trustee and any other Conversion Agent shall not be

 69
 

 

 

accountable
with respect to the validity or value (or the kind or amount) of any shares of
Common Stock, or of any securities or property, which may at any time be issued
or delivered upon the conversion of any Note; and the Trustee and any other
Conversion Agent make no representations with respect thereto.  Neither the Trustee nor any Conversion Agent
shall be responsible for any failure of the Company to issue, transfer or
deliver any shares of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any Note for the purpose of conversion
or to comply with any of the duties, responsibilities or covenants of the
Company contained in this Article 14. 
Without limiting the generality of the foregoing, neither the Trustee
nor any Conversion Agent shall be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture entered
into pursuant to Section 14.06 relating either to the kind or amount of shares
of stock or securities or property (including cash) receivable by Noteholders
upon the conversion of their Notes after any event referred to in such Section
14.06 or to any adjustment to be made with respect thereto, but, subject to the
provisions of Section 7.01, may accept as conclusive evidence of the
correctness of any such provisions, and shall be protected in relying upon, the
Officers’ Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.

Section
14.10. 
Notice to Holders Prior to Certain Actions.  In case:

(a)           the
Company shall declare a dividend (or any other distribution) on its Common
Stock that would require an adjustment in the Conversion Rate pursuant to
Section 14.05; or

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

(c)           of
any reclassification or reorganization of the Common Stock of the Company
(other than a subdivision or combination of its outstanding Common Stock, or a
change in par value, or from par value to no par value, or from no par value to
par value), or of any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company is required, or of
the sale or transfer of all or substantially all of the assets of the Company;
or

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

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

 70
 

 

 

notice, or any defect therein, shall not affect the
legality or validity of such dividend, distribution, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up.

Section
14.11. 
Stockholder Rights Plans.  If the rights provided for in the existing or
any future rights plan adopted by the Company have separated from the shares of
Common Stock in accordance with the provisions of the applicable stockholder
rights agreement so that the holders of the Notes would not be entitled to
receive any rights in respect of Common Stock issuable upon conversion of the
Notes, the Conversion Rate will be adjusted as if the Company distributed to
all holders of Common Stock shares of the Company’s capital stock, evidences of
indebtedness or assets (including securities but excluding rights or warrants
to purchase Common Stock issued to all holders of Common Stock, Common Stock
issued as a dividend or distribution on Common Stock and cash distributions),
subject to readjustment in the event of the expiration, termination or
redemption of the rights.  In lieu of any
such adjustment, the Company may amend such applicable stockholder rights
agreement to provide that upon conversion of the Notes the holders will
receive, in addition to any Common Stock issuable upon such conversion, the
rights which would have attached to such Common Stock if the rights had not
become separated from the Common Stock under such applicable stockholder rights
agreement.

ARTICLE 15

SUBORDINATION

Section
15.01. 
Agreement to Subordinate.  The Company agrees, and each Noteholder by
accepting a Note agrees, that the Indebtedness evidenced by the Notes is
subordinated in right of payment, to the extent and in the manner provided in
this Article 15, to the prior payment in full of all Senior Indebtedness of the
Company and that the subordination is for the benefit of and enforceable by the
holders of such Senior Indebtedness.  The
Notes shall in all respects rank pari  passu with all other Senior
Subordinated Indebtedness of the Company and only Indebtedness of the Company
that is Senior Indebtedness of the Company shall rank senior to the Notes in
accordance with the provisions set forth herein.  Notwithstanding any provision in this Article
15, but without limiting the immediately preceding sentence, the Notes will not
be subordinated in right of payment to the payment of any amount of unsecured
Senior Indebtedness that equals or exceeds a “substantial amount of unsecured
indebtedness,” as defined in Treasury Regulation § 1.279-3(c)(2), whether
outstanding on the date of this Indenture or which may be subsequently Incurred.  For purposes of this Article 15, the
Indebtedness evidenced by the Notes shall be deemed to include any Additional
Amounts.  All provisions of this Article
15 shall be subject to Section 15.12.

Section
15.02.  Liquidation, Dissolution,
Bankruptcy.  Upon any payment
or distribution of the assets of the Company to creditors upon a total or
partial liquidation or a total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property:

(1)           holders of Senior Indebtedness of the
Company shall be entitled to receive payment in full in cash of such Senior
Indebtedness before Noteholders shall be entitled to receive any payment of
principal of or Interest on the Notes; and

(2)           until the Senior Indebtedness of the
Company is paid in full in cash, any payment or distribution to which
Noteholders would be entitled but for this Article 16 shall

 71
 

 

 

be made to holders of such Senior
Indebtedness as their interests may appear, except that Noteholders may receive
any debt securities that are subordinated to such Senior Indebtedness to at
least the same extent as the Notes.

Section
15.03. 
Default on Senior Indebtedness.  The Company may not pay the principal of,
premium (if any) or Interest on the Notes or make any deposit pursuant to
Article 12 and may not otherwise purchase, repurchase or otherwise acquire or
retire for value any Notes (collectively, “pay
the Notes”) if (a) any Designated Senior Indebtedness of the Company
is not paid when due or (b) any other default on such Designated Senior
Indebtedness occurs and the maturity of such Designated Senior Indebtedness is
accelerated in accordance with its terms unless, in either case, (i) the
default has been cured or waived and any such acceleration has been rescinded
or (ii) such Designated Senior Indebtedness has been paid in full in cash; provided,
however, that the Company may pay the Notes without regard to the
foregoing if the Company and the Trustee receive written notice approving such
payment from the Representative of the Designated Senior Indebtedness with
respect to which either of the events set forth in clause (a) or (b) of this
sentence has occurred and is continuing. 
During the continuance of any default (other than a default described in
clause (a) or (b) of the preceding sentence) with respect to any Designated
Senior Indebtedness of the Company pursuant to which the maturity thereof may
be accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, the Company may not pay the Notes for a period (a “Payment Blockage Period”) commencing upon
the receipt by the Trustee (with a copy to the Company) of written notice (a “Blockage Notice”) of such default from the
Representative of such Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period and ending 179 days thereafter (or earlier if
such Payment Blockage Period is terminated (a) by written notice to the Trustee
and the Company from the Person or Persons who gave such Blockage Notice, (b)
by repayment in full of such Designated Senior Indebtedness or (c) because the
default giving rise to such Blockage Notice is no longer continuing).  Notwithstanding the provisions described in
the immediately preceding sentence (but subject to the provisions contained in
the first sentence of this Section and the next sentence), unless the holders of
such Designated Senior Indebtedness or the Representative of such holders shall
have accelerated the maturity of such Designated Senior Indebtedness, the
Company may resume payments on the Notes after the end of such Payment Blockage
Period, including any missed payments. 
Not more than one Blockage Notice may be given in any consecutive 360-day
period, irrespective of the number of defaults with respect to Designated
Senior Indebtedness during such period; provided, however, that
if any Blockage Notice within such 360-day period is given by or on
behalf of any holders of Designated Senior Indebtedness other than the Bank
Indebtedness, the Representative of the Bank Indebtedness may give another
Blockage Notice within such period; provided  further, however,
that in no event may the total number of days during which any Payment Blockage
Period or Periods is in effect exceed 179 days in the aggregate during any 360
consecutive day period.  For purposes of
this Section, no default or event of default that existed or was continuing on
the date of the commencement of any Payment Blockage Period with respect to the
Designated Senior Indebtedness initiating such Payment Blockage Period shall
be, or be made, the basis of the commencement of a subsequent Payment Blockage
Period by the Representative of such Designated Senior Indebtedness, whether or
not within a period of 360 consecutive days, unless such default or event of
default shall have been cured or waived for a period of not less than 90
consecutive days.

 72
 

 

 

Section
15.04. 
Acceleration of Payment of Notes.  If payment of the Notes is accelerated
because of an Event of Default, the Company or the Trustee (provided, that the
Trustee shall have received written notice from the Company, on which notice
the Trustee shall be entitled to conclusively rely) shall promptly notify the
holders of the Designated Senior Indebtedness of the Company (or their
Representative) of the acceleration.  If
any Designated Senior Indebtedness of the Company is outstanding, the Company
may not pay the Notes until five Business Days after such holders or the
Representative of such Designated Senior Indebtedness receive notice of such
acceleration and, thereafter, may pay the Notes only if this Article 15
otherwise permits payment at that time.

Section
15.05. 
When Distribution Must Be Paid Over.  If a distribution is made to the Trustee or
to the Noteholders that because of this Article 15 should not have been made to
them, the Trustee or the Noteholders who receive the distribution shall hold it
in trust for holders of Senior Indebtedness of the Company and pay it over to
them as their interests may appear.

Section
15.06. 
Subrogation.  After all Senior Indebtedness of the Company
is paid in full and until the Notes are paid in full, Noteholders shall be
subrogated to the rights of holders of such Senior Indebtedness to receive
distributions applicable to Senior Indebtedness.  A distribution made under this Article 15 to
holders of such Senior Indebtedness which otherwise would have been made to
Noteholders is not, as between the Company and Noteholders, a payment by the
Company on such Senior Indebtedness.

Section 15.07.  Relative Rights.  This Article 15 defines the relative rights
of Noteholders and holders of Senior Indebtedness of the Company.  Nothing in this Indenture shall:

(1)           impair, as between the Company and
Noteholders, the obligation of the Company, which is absolute and
unconditional, to pay principal of and interest and liquidated damages, if any,
on the Notes in accordance with their terms; or

(2)           prevent the Trustee or any Noteholder
from exercising its available remedies upon a Default, subject to the rights of
holders of Senior Indebtedness of the Company to receive distributions
otherwise payable to Noteholders.

Section
15.08. 
Subordination May Not Be Impaired by Company.  No right of any holder of Senior Indebtedness
of the Company to enforce the subordination of the Indebtedness evidenced by
the Notes shall be impaired by any act or failure to act by the Company, the
Trustee or any Noteholders or by its or their failure to comply with this
Indenture.

Section
15.09. 
Rights of Trustee and Paying Agent.  Notwithstanding Section 15.03, the Trustee or
Paying Agent may continue to make payments on the Notes and shall not be
charged with knowledge of the existence of facts that would prohibit the making
of any such payments unless, not less than two Business Days prior to the date
of such payment, a Trust Officer of the Trustee receives written notice that
payments may not be made under this Article 15. 
The Company, the Note Registrar, the Paying Agent, a Representative or a
holder of Senior Indebtedness of the Company may give the notice; provided,
however, that, if an issue of Senior Indebtedness of the Company has a
Representative, only the Representative may give the notice.

The Trustee in its individual or any other capacity may hold Senior
Indebtedness of the Company with the same rights it would have if it were not
Trustee.  The Note Registrar and the

 73
 

 

 

Paying
Agent may do the same with like rights. 
The Trustee shall be entitled to all the rights set forth in this
Article 15 with respect to any Senior Indebtedness of the Company which may at
any time be held by it, to the same extent as any other holder of such Senior
Indebtedness; and nothing in Article 7 shall deprive the Trustee of any of its
rights as such holder.  Nothing in this
Article 15 shall apply to claims of, or payments to, the Trustee under or
pursuant to Section 7.07 or any other Section of this Indenture.

Section
15.10. 
Distribution or Notice to Representative.  Whenever a distribution is to be made or a
notice given to holders of Senior Indebtedness of the Company, the distribution
may be made and the notice given to their Representative (if any).

Section
15.11. 
Article 15 Not to Prevent Events of Default or
Limit Right to Accelerate.  The
failure to make a payment pursuant to the Notes by reason of any provision in
this Article 15 shall not be construed as preventing the occurrence of a
Default.  Nothing in this Article 15
shall have any effect on the right of the Noteholders or the Trustee to
accelerate the maturity of the Notes.

Section
15.12. 
Trust Monies Not Subordinated.  Notwithstanding anything contained herein to
the contrary, payments from money held in trust under Article 12 by the Trustee
for the payment of principal of and Interest on the Notes shall not be
subordinated to the prior payment of any Senior Indebtedness of the Company or
subject to the restrictions set forth in this Article 16, and none of the
Noteholders shall be obligated to pay over any such amount to the Company or
any holder of Senior Indebtedness of the Company or any other creditor of the
Company.

Section
15.13. 
Trustee Entitled to Rely.  Upon any payment or distribution pursuant to
this Article 15, the Trustee and the Noteholders shall be entitled to
conclusively rely (a) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section
15.02 are pending, (b) upon a certificate of the liquidating trustee or agent
or other Person making such payment or distribution to the Trustee or to the
Noteholders or (c) upon the Representatives for the holders of Senior
Indebtedness of the Company for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of such
Senior Indebtedness and other Indebtedness of the Company, the amount thereof
or payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article 15.  In the event that the Trustee determines, in
good faith, that evidence is required with respect to the right of any Person
as a holder of Senior Indebtedness of the Company to participate in any payment
or distribution pursuant to this Article 15, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of such Senior Indebtedness held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and
other facts pertinent to the rights of such Person under this Article 15, and,
if such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.  The provisions of Sections
7.01 and 7.02 shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article 15.

Section
15.14. 
Trustee to Effectuate Subordination.  Each Noteholder by accepting a Note
authorizes and directs the Trustee on his behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination between
the Noteholders and the

 74
 

 

 

holders
of Senior Indebtedness of the Company as provided in this Article 15 and
appoints the Trustee as attorney-in-fact for any and all such purposes.

Section
15.15. 
Trustee Not Fiduciary for Holders of Senior
Indebtedness.  The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness of the Company and shall not be liable to any such holders if it
shall mistakenly pay over or distribute to Noteholders or the Company or any
other Person, money or assets to which any holders of Senior Indebtedness of
the Company shall be entitled by virtue of this Article 15 or otherwise.

Section
15.16. 
Reliance by Noteholders of Senior Indebtedness on
Subordination Provisions.  Each
Noteholder by accepting a Note acknowledges and agrees that the foregoing
subordination provisions are, and are intended to be, an inducement and a consideration
to each holder of any Senior Indebtedness of the Company, whether such Senior
Indebtedness was created or acquired before or after the issuance of the Notes,
to acquire and continue to hold, or to continue to hold, such Senior
Indebtedness and such holder of such Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Senior Indebtedness.

ARTICLE 16

SUBSIDIARY GUARANTEES

Section 16.01.  Subsidiary Guarantors.  Each Subsidiary of the Company listed on
Schedule I hereto shall initially be a Subsidiary Guarantor.  If any other Subsidiary of the Company shall
become a subsidiary guarantor under the Company’s Senior Subordinated
Indebtedness, the Company shall cause such Subsidiary concurrently to become a
Subsidiary Guarantor.  If any Subsidiary
of the Company is released from its Guarantee of the Company’s Senior
Subordinated Indebtedness, then such Subsidiary shall cease to be a Subsidiary
Guarantor hereunder.  Upon the payment in
full of the Company’s Senior Subordinated Indebtedness when due at maturity,
upon repurchase or otherwise, except as described below, the Subsidiary
Guarantors shall cease to be Subsidiary Guarantors hereunder.

In addition, if at any time any indebtedness for borrowed money
constituting Senior Subordinated Indebtedness or a Subordinated Obligation
shall be Guaranteed by any Subsidiary of the Company and such Subsidiary is not
a Subsidiary Guarantor of the Notes, the Company shall cause such Subsidiary
(including any Subsidiary that had previously been such Subsidiary Guarantor
and was subsequently released from all obligations under this Article 16) to
become a Subsidiary Guarantor hereunder and concurrently to Guarantee the Notes
as Senior Subordinated Indebtedness of such Subsidiary.  If (a) any such Subsidiary which shall become
a Subsidiary Guarantor of the Notes pursuant to the immediately preceding
sentence is released from its Guarantee of such Senior Subordinated
Indebtedness or Subordinated Obligation, as the case may be, or (b) if such
Senior Subordinated Indebtedness or Subordinated Obligation, as the case may
be, is no longer outstanding, then such Subsidiary shall cease to be a
Subsidiary Guarantor hereunder.  For the
avoidance of doubt, a Subsidiary Guarantor may be released from its Guarantee
of the Notes so long as contemporaneously therewith, it is also released as a
Subsidiary Guarantor from all of the Company’s then outstanding Senior
Subordinated Indebtedness or Subordinated Obligation.  In furtherance of the foregoing, a Subsidiary
Guarantor may be released from its Guarantee of the Notes if such release
allows the Subsidiary Guarantor to be released from its Guarantee of all of the
Company’s then outstanding Senior Subordinated Indebtedness or

 75
 

 

 

Subordinated
Obligation and such Subsidiary Guarantor is subsequently released from its
Guarantee of such outstanding Senior Subordinated Indebtedness or Subordinated
Obligation.

If a Subsidiary Guarantor is no longer a Subsidiary Guarantor
hereunder, the Company shall deliver to the Trustee an Officers’ Certificate
certifying to that effect as of the date of such Officers’ Certificate; then
automatically, without the requirement of any further action by the Company,
such Subsidiary or the Trustee, the Subsidiary Guarantee of such Subsidiary
shall terminate and be of no further force or effect and such Subsidiary
Guarantor shall be deemed to be released from all obligations under this
Article 16.

A Subsidiary Guarantee by a Subsidiary Guarantor shall be signed in the
name and on behalf of such Subsidiary Guarantor by the manual or facsimile
signature of its President, any Vice President (whether or not designated by
number or numbers or word or words added before or after the title “Vice
President”), its Treasurer, its Secretary or any Assistant Secretary.

A Subsidiary Guarantee bearing the manual signatures of individuals who
were at any time the proper officers of a Subsidiary Guarantor shall bind such
Subsidiary Guarantor, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the execution and delivery of the
Subsidiary Guarantee or did not hold such offices at the date of such
Subsidiary Guarantee.

Section
16.02.  Subsidiary
Guarantees.  (a)  Each
Subsidiary Guarantor hereby jointly and severally irrevocably and
unconditionally guarantees, as a primary obligor and not merely as a surety, to
each Noteholder and to the Trustee and its successors and assigns (i) the full
and punctual payment when due, whether at Stated Maturity, by acceleration, by
repurchase or otherwise, of all obligations of the Company under this Indenture
(including obligations to the Trustee) and the Notes, whether for payment of
principal of, Interest on, and any cash payment due on conversion of, in
respect of the Notes and all other monetary obligations of the Company under
this Indenture and the Notes and (ii) the full and punctual performance within
applicable grace periods of all other obligations of the Company whether for
fees, expenses, indemnification or otherwise under this Indenture and the Notes
(all the foregoing being hereinafter collectively called the “Guaranteed Obligations”).  Each Subsidiary Guarantor further agrees that
the Guaranteed Obligations may be extended or renewed, in whole or in part,
without notice or further assent from each such Subsidiary Guarantor, and that
each such Subsidiary Guarantor shall remain bound under this Article 16
notwithstanding any extension or renewal of any Guaranteed Obligation.

(b)           Each
Subsidiary Guarantor waives presentation to, demand of payment from and protest
to the Company of any of the Guaranteed Obligations and also waives notice of
protest for nonpayment.  Each Subsidiary
Guarantor waives notice of any default under the Notes or the Guaranteed
Obligations.  The obligations of each
Subsidiary Guarantor hereunder shall not be affected by (i) the failure of any
Noteholder or the Trustee to assert any claim or demand or to enforce any right
or remedy against the Company or any other Person under this Indenture, the
Notes or any other agreement or otherwise; (ii) any extension or renewal of any
thereof; (iii) any rescission, waiver, amendment or modification of any of the
terms or provisions of this Indenture, the Notes or any other agreement; (iv)
the release of any security held by any Noteholder or the Trustee for the
Guaranteed Obligations or any of them; (v) the failure of any Noteholder or
Trustee

 76
 

 

 

to exercise any right or remedy against any other guarantor of the
Guaranteed Obligations; or (vi) any change in the ownership of such Subsidiary
Guarantor.

(c)           Each
Subsidiary Guarantor hereby waives any right to which it may be entitled to
have its obligations hereunder divided among the Subsidiary Guarantors, such
that such Subsidiary Guarantor’s obligations would be less than the full amount
claimed.  Each Subsidiary Guarantor
hereby waives any right to which it may be entitled to have the assets of the
Company first be used and depleted as payment of the Company’s or such
Subsidiary Guarantor’s obligations hereunder prior to any amounts being claimed
from or paid by such Subsidiary Guarantor hereunder.  Each Subsidiary Guarantor hereby waives any
right to which it may be entitled to require that the Company be sued prior to
an action being initiated against such Subsidiary Guarantor.

(d)           Each
Subsidiary Guarantor further agrees that its Subsidiary Guarantee herein
constitutes a guarantee of payment, performance and compliance when due (and
not a guarantee of collection) and waives any right to require that any resort
be had by any Noteholder or the Trustee to any security held for payment of the
Guaranteed Obligations.

(e)           The
Subsidiary Guarantee of each Subsidiary Guarantor is, to the extent and in the
manner set forth in Article 17, subordinated and subject in right of payment to
the prior payment in full of the principal of and premium, if any, and interest
on all Senior Indebtedness of the relevant Subsidiary Guarantor and is made
subject to such provisions of this Indenture.

(f)            Except
as expressly set forth in Sections 16.03 and 16.07, the obligations of each
Subsidiary Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject
to any defense of setoff, counterclaim, recoupment or termination whatsoever or
by reason of the invalidity, illegality or unenforceability of the Guaranteed
Obligations or otherwise.  Without
limiting the generality of the foregoing, the obligations of each Subsidiary
Guarantor herein shall not be discharged or impaired or otherwise affected by
the failure of any Noteholder or the Trustee to assert any claim or demand or
to enforce any remedy under this Indenture, the Notes or any other agreement,
by any waiver or modification of any thereof, by any default, failure or delay,
wilful or otherwise, in the performance of the obligations, or by any other act
or thing or omission or delay to do any other act or thing which may or might
in any manner or to any extent vary the risk of any Subsidiary Guarantor or
would otherwise operate as a discharge of any Subsidiary Guarantor as a matter
of law or equity.

(g)           Except
as otherwise provided herein, each Subsidiary Guarantor agrees that its
Subsidiary Guarantee shall remain in full force and effect until payment in
full of all the Guaranteed Obligations. 
Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee
herein shall continue to be effective or be reinstated, as the case may be, if
at any time payment, or any part thereof, of principal of or Interest on any
Guaranteed Obligation is rescinded or must otherwise be restored by any
Noteholder or the Trustee upon the bankruptcy or reorganization of the Company
or otherwise.

(h)           In
furtherance of the foregoing and not in limitation of any other right which any
Noteholder or the Trustee has at law or in equity against any Subsidiary
Guarantor by virtue hereof, upon the failure of the Company to pay the
principal of or Interest on any Guaranteed Obligation

 77
 

 

 

when and as the same shall become due, whether at maturity, by
acceleration, by repurchase or otherwise, or to perform or comply with any
other Guaranteed Obligation, each Subsidiary Guarantor hereby promises to and
shall, upon receipt of written demand by the Trustee, forthwith pay, or cause
to be paid, in cash, to the Noteholders or the Trustee an amount equal to the
sum of (i) the unpaid principal amount of such Guaranteed Obligations, (ii)
accrued and unpaid Interest on such Guaranteed Obligations (but only to the
extent not prohibited by law) and (iii) all other monetary obligations of the
Company to the Noteholders and the Trustee.

(i)            Each
Subsidiary Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Noteholders in respect of any Guaranteed
Obligations guaranteed hereby until payment in full of all Guaranteed
Obligations and all obligations to which the Guaranteed Obligations are
subordinated as provided in Article 17. 
Each Subsidiary Guarantor further agrees that, as between it, on the one
hand, and the Noteholders and the Trustee, on the other hand, (i) the maturity
of the Guaranteed Obligations guaranteed hereby may be accelerated as provided
in Article 6 for the purposes of any Subsidiary Guarantee herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Guaranteed Obligations guaranteed hereby, and
(ii) in the event of any declaration of acceleration of such Guaranteed
Obligations as provided in Article 6, such Guaranteed Obligations (whether or
not due and payable) shall forthwith become due and payable by such Subsidiary
Guarantor for the purposes of this Section 16.02.

(j)            Upon
request of the Trustee, each Subsidiary Guarantor shall execute and deliver
such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purpose of this
Indenture.

Section
16.03.  Limitation
on Liability.  Any term or
provision of this Indenture to the contrary notwithstanding, the maximum
aggregate amount of the Guaranteed Obligations guaranteed hereunder by any
Subsidiary Guarantor shall not exceed the maximum amount that can be hereby
guaranteed without rendering this Indenture, as it relates to such Subsidiary
Guarantor, voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer or similar laws affecting the rights of creditors
generally.

Section
16.04. 
Successors and Assigns.  This Article 16 shall be binding upon each
Subsidiary Guarantor and its successors and assigns and shall inure to the
benefit of the successors and assigns of the Trustee and the Noteholders and,
in the event of any transfer or assignment of rights by any Noteholder or the
Trustee, the rights and privileges conferred upon that party in this Indenture
and in the Notes shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions of this Indenture.

Section 16.05.  No Waiver. 
Neither a failure nor a delay on the part of either the Trustee or the
Noteholders in exercising any right, power or privilege under this Article 16
shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise of any right, power or
privilege.  The rights, remedies and
benefits of the Trustee and the Noteholders herein expressly specified are
cumulative and not exclusive of any other rights, remedies or benefits which
either may have under this Article 16 at law, in equity, by statute or
otherwise.

 78

 

 

Section 16.06.  Modification.  No modification, amendment or waiver of any
provision of this Article 16, nor the consent to any departure by any
Subsidiary Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Trustee, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given.  No notice to or demand on any
Subsidiary Guarantor in any case shall entitle such Subsidiary Guarantor to any
other or further notice or demand in the same, similar or other circumstances.

Section
16.07. 
Execution of Subsidiary Guarantee for Future
Subsidiary Guarantors.  Each
Subsidiary which is required to become a Subsidiary Guarantor pursuant to
Section 16.01 shall promptly execute and deliver to the Trustee a Subsidiary
Guarantee in the form of Exhibit B hereto pursuant to which such Subsidiary
shall become a Subsidiary Guarantor under this Article 16 and shall guarantee
the Guaranteed Obligations.  Concurrently
with the execution and delivery of such Subsidiary Guarantee, the Company shall
deliver to the Trustee an Opinion of Counsel and an Officers’ Certificate to
the effect that such Subsidiary Guarantee has been duly authorized, executed
and delivered by such Subsidiary and that, subject to the application of
bankruptcy, insolvency, moratorium, fraudulent conveyance or transfer and other
similar laws relating to creditors’ rights generally and to the principles of
equity, whether considered in a proceeding at law or in equity, the Subsidiary
Guarantee of such Subsidiary Guarantor is a valid and binding obligation of
such Subsidiary Guarantor, enforceable against such Subsidiary Guarantor in
accordance with its terms and or to such other matters as the Trustee may reasonably
request.

Section
16.08. 
Non-Impairment.  The failure to endorse a Subsidiary Guarantee
on any Note shall not affect or impair the validity thereof.

ARTICLE 17

SUBORDINATION OF THE SUBSIDIARY
GUARANTEES

Section
17.01. 
Agreement to Subordinate.  Each Subsidiary Guarantor agrees, and each
Noteholder by accepting a Note agrees, that the obligations of a Subsidiary
Guarantor hereunder are subordinated in right of payment, to the extent and in
the manner provided in this Article 17, to the prior payment in full of all
Senior Indebtedness of such Subsidiary Guarantor and that the subordination is
for the benefit of and enforceable by the holders of such Senior Indebtedness
of such Subsidiary Guarantor.  The
obligations hereunder with respect to a Subsidiary Guarantor shall in all
respects rank pari  passu with all other Senior Subordinated
Indebtedness of such Subsidiary Guarantor and shall rank senior to all existing
and future Subordinated Obligations of such Subsidiary Guarantor; and only
Indebtedness of such Subsidiary Guarantor that is Senior Indebtedness of such
Subsidiary Guarantor shall rank senior to the obligations of such Subsidiary
Guarantor under its Subsidiary Guarantee in accordance with the provisions set
forth herein.  Notwithstanding any provision
in this Article 17, but without limiting the immediately preceding sentence,
the Subsidiary Guarantees will not be subordinated in right of payment to the
payment of any amount of unsecured Senior Indebtedness that equals or exceeds a
“substantial amount of unsecured indebtedness,” as defined in Treasury
Regulation § 1.279-3(c)(2), whether outstanding on the date of this Indenture
or which may be subsequently Incurred.

Section
17.02.  Liquidation,
Dissolution, Bankruptcy.  Upon
any payment or distribution of the assets of a Subsidiary Guarantor to
creditors upon a total or partial liquidation or a total or

 79
 

 

 

partial
dissolution of such Subsidiary Guarantor or in a bankruptcy, reorganization,
insolvency, receivership or similar proceeding relating to such Subsidiary
Guarantor or its property:

(1)           holders of Senior Indebtedness of
such Subsidiary Guarantor shall be entitled to receive payment in full in cash
of such Senior Indebtedness before Noteholders shall be entitled to receive any
payment pursuant to any Guaranteed Obligations from such Subsidiary Guarantor;
and

(2)           until the Senior Indebtedness of such
Subsidiary Guarantor is paid in full, any payment or distribution to which
Noteholders would be entitled but for this Article 17 shall be made to holders
of such Senior Indebtedness as their respective interests may appear, except
that Noteholders may receive any debt securities that are subordinated to such
Senior Indebtedness to at least the same extent as the Subsidiary Guarantees.

Section
17.03. 
Default on Designated Senior Indebtedness of a
Subsidiary Guarantor.  A
Subsidiary Guarantor may not make any payment pursuant to any of the Guaranteed
Obligations or purchase, repurchase, or otherwise acquire or retire for value
any Notes (collectively, “pay its Guarantee”)
if (a) any Designated Senior Indebtedness of such Subsidiary Guarantor is not
paid when due or (b) any other default on Designated Senior Indebtedness of
such Subsidiary Guarantor occurs and the maturity of such Designated Senior
Indebtedness is accelerated in accordance with its terms unless, in either
case, (i) the default has been cured or waived and any such acceleration has
been rescinded or (ii) such Designated Senior Indebtedness has been paid in
full; provided, however, that such Subsidiary Guarantor may pay
its Guarantee without regard to the foregoing if such Subsidiary Guarantor and
the Trustee receive written notice approving such payment from the
Representative of the holders of the Designated Senior Indebtedness with respect
to which either of the events in clause (a) or (b) of this sentence has
occurred and is continuing.  During the
continuance of any default (other than a default described in clause (a) or (b)
of the preceding sentence) with respect to any Designated Senior Indebtedness
of a Subsidiary Guarantor pursuant to which the maturity thereof may be
accelerated immediately without further notice (except such notice as may be
required to effect such acceleration) or the expiration of any applicable grace
periods, such Subsidiary Guarantor may not pay its Guarantee for a period (a “Guarantee Payment Blockage Period”)
commencing upon the receipt by the Trustee (with a copy to such Subsidiary
Guarantor and the Company) of written notice (a “Guarantee Blockage Notice”) of such default from the
Representative of the holders of the Designated Senior Indebtedness of such
Subsidiary Guarantor specifying an election to effect a Guarantee Payment
Blockage Period and ending 179 days thereafter (or earlier if such Guarantee
Payment Blockage Period is terminated (a) by written notice to the Trustee
(with a copy to such Subsidiary Guarantor and the Company) from the Person or
Persons who gave such Guarantee Blockage Notice, (b) because such Designated
Senior Indebtedness has been repaid in full or (c) because the default giving
rise to such Guarantee Blockage Notice is no longer continuing).  Notwithstanding the provisions described in
the immediately preceding sentence (but subject to the provisions contained in
the first sentence of this Section 17.03 and the next sentence), unless the
holders of such Designated Senior Indebtedness or the Representative of such
holders shall have accelerated the maturity of such Designated Senior
Indebtedness, such Subsidiary Guarantor may resume to paying its Subsidiary
Guarantee after such Guarantee Payment Blockage Period, including any missed
payments.  Not more than one Guarantee
Blockage Notice may be given with respect to a Subsidiary Guarantor in any consecutive
360-day period, irrespective of the number of defaults with respect to
Designated Senior Indebtedness of such Subsidiary Guarantor during such period;

 80
 

 

 

provided, however,
that if any Guarantee Blockage Notice within such 360-day period is given
by or on behalf of any holders of Designated Senior Indebtedness of such
Subsidiary Guarantor other than the Bank Indebtedness, the Representative of
the Bank Indebtedness may give another Guarantee Blockage Notice within such
period; provided  further, however, that in no event may
the total number of days during which any Guarantee Payment Blockage Period or
Periods is in effect exceed 179 days in the aggregate during any 360
consecutive day period.  For purposes of
this Section 17.03, no default or event of default that existed or was
continuing on the date of the commencement of any Guarantee Payment Blockage
Period with respect to the Designated Senior Indebtedness initiating such
Guarantee Payment Blockage Period shall be, or be made, the basis of the
commencement of a subsequent Guarantee Payment Blockage Period by the
Representative of such Designated Senior Indebtedness, whether or not within a
period of 360 consecutive days, unless such default or event of default shall
have been cured or waived for a period of not less than 90 consecutive days.

Section
17.04. 
Demand for Payment.  If payment of the Notes is accelerated
because of an Event of Default and a demand for payment is made on a Subsidiary
Guarantor pursuant to Article 16, the Trustee (provided that the Trustee
shall have received written notice from the Company or such Subsidiary
Guarantor, on which notice the Trustee shall be entitled to conclusively rely)
shall promptly notify the holders of the Designated Senior Indebtedness of such
Subsidiary Guarantor (or the Representative of such holders) of such
demand.  If any Designated Senior
Indebtedness of such Subsidiary Guarantor is outstanding, such Subsidiary
Guarantor may not pay its Guarantee until five Business Days after such holders
or the Representative of the holders of the Designated Senior Indebtedness of
such Subsidiary Guarantor receive notice of such demand and, thereafter, may
pay its Guarantee only if this Article 18 otherwise permits payment at that
time.

Section
17.05. 
When Distribution Must Be Paid Over.  If a payment or distribution is made to the
Trustee or the Noteholders that because of this Article 17 should not have been
made to them, the Trustee or the Noteholders who receive the payment or
distribution shall hold such payment or distribution in trust for holders of
the Senior Indebtedness of the relevant Subsidiary Guarantor and pay it over to
them as their respective interests may appear.

Section
17.06. 
Subrogation.  After all Senior Indebtedness of a Subsidiary
Guarantor is paid in full  and until the
Notes are paid in full in cash, Noteholders shall be subrogated to the rights
of holders of Senior Indebtedness of such Subsidiary Guarantor to receive
distributions applicable to Designated Senior Indebtedness of such Subsidiary
Guarantor.  A distribution made under
this Article 17 to holders of Senior Indebtedness of such Subsidiary Guarantor
which otherwise would have been made to Noteholders is not, as between such
Subsidiary Guarantor and Noteholders, a payment by such Subsidiary Guarantor on
Senior Indebtedness of such Subsidiary Guarantor.

Section
17.07. 
Relative Rights.  This Article 17 defines the relative rights
of Noteholders and holders of Senior Indebtedness of a Subsidiary
Guarantor.  Nothing in this Indenture
shall:

(1)           impair, as between a Subsidiary
Guarantor and Noteholders, the obligation of a Subsidiary Guarantor which is
absolute and unconditional, to make payments with respect to the Guaranteed
Obligations to the extent set forth in Article 16; or

 81
 

 

 

(2)           prevent the Trustee or any Noteholder
from exercising its available remedies upon a default by a Subsidiary Guarantor
under its obligations with respect to the Guaranteed Obligations, subject to
the rights of holders of Senior Indebtedness of such Subsidiary Guarantor to
receive distributions otherwise payable to Noteholders.

Section
17.08. 
Subordination May Not Be Impaired by a Subsidiary
Note Guarantor.  No right of
any holder of Senior Indebtedness of a Subsidiary Guarantor to enforce the
subordination of the obligations of such Subsidiary Guarantor hereunder shall
be impaired by any act or failure to act by such Subsidiary Guarantor, the
Trustee or any Noteholder or by its or their failure to comply with this
Indenture.

Section
17.09. 
Rights of Trustee and Paying Agent.  Notwithstanding Section 17.03, the Trustee or
the Paying Agent may continue to make payments on the Notes and shall not be
charged with knowledge of the existence of facts that would prohibit the making
of any such payments unless, not less than two Business Days prior to the date
of such payment, a Trust Officer of the Trustee receives written notice that
payments may not be made under this Article 17. 
A Subsidiary Guarantor, the Registrar, the Paying Agent, a
Representative or a holder of Senior Indebtedness of a Subsidiary Guarantor may
give the notice; provided, however, that if an issue of Senior
Indebtedness of a Subsidiary Guarantor has a Representative, only the
Representative may give the notice.

The Trustee in its individual or any other capacity may hold Senior Indebtedness
of a Subsidiary Guarantor with the same rights it would have if it were not
Trustee.  The Note Registrar and the
Paying Agent may do the same with like rights. 
The Trustee shall be entitled to all the rights set forth in this
Article 17 with respect to any Senior Indebtedness of a Subsidiary Guarantor
which may at any time be held by it, to the same extent as any other holder of
Senior Indebtedness of such Subsidiary Guarantor; and nothing in Article 7
shall deprive the Trustee of any of its rights as such holder.  Nothing in this Article 17 shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 7.07 or any
other Section of this Indenture.

Section
17.10. 
Distribution or Notice to Representative.  Whenever a distribution is to be made or a
notice given to holders of Senior Indebtedness of a Subsidiary Guarantor, the
distribution may be made and the notice given to their Representative (if any).

Section
17.11. 
Article 18 Not to Prevent Events of Default or
Limit Right to Accelerate.  The failure of a Subsidiary Guarantor to make
a payment on any of its obligations by reason of any provision in this Article
17 shall not be construed as preventing the occurrence of a default by such
Subsidiary Guarantor under such obligations. 
Nothing in this Article 17 shall have any effect on the right of the
Noteholders or the Trustee to make a demand for payment on a Subsidiary
Guarantor pursuant to Article 16.

Section
17.12. 
Trustee Entitled to Rely.  Upon any payment or distribution pursuant to
this Article 17, the Trustee and the Noteholders shall be entitled to
conclusively rely (a) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section
17.02 are pending, (b) upon a certificate of the liquidating trustee or agent
or other Person making such payment or distribution to the Trustee or to the
Noteholders or (c) upon the Representatives for the holders of Senior
Indebtedness of a Subsidiary Guarantor for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
the

 82
 

 

 

Senior
Indebtedness of a Subsidiary Guarantor and other Indebtedness of a Subsidiary
Guarantor, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
17.  In the event that the Trustee
determines, in good faith, that evidence is required with respect to the right
of any Person as a holder of Senior Indebtedness of a Subsidiary Guarantor to
participate in any payment or distribution pursuant to this Article 17, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Indebtedness of such
Subsidiary Guarantor held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and other facts
pertinent to the rights of such Person under this Article 17, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.  The provisions of Sections 7.01
and 7.02 shall be applicable to all actions or omissions of actions by the
Trustee pursuant to this Article 17.

Section
17.13. 
Trustee to Effectuate Subordination.  Each Noteholder by accepting a Note
authorizes and directs the Trustee on his or her behalf to take such action as
may be necessary or appropriate to acknowledge or effectuate the subordination
between the Noteholders and the holders of Senior Indebtedness of each of the
Subsidiary Guarantors as provided in this Article 18 and appoints the Trustee
as attorney-in-fact for any and all such purposes.

Section
17.14. 
Trustee Not Fiduciary for Holders of Senior
Indebtedness of a Subsidiary Guarantor.  The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of a Subsidiary Guarantor
and shall not be liable to any such holders if it shall mistakenly pay over or
distribute to Noteholders or the relevant Subsidiary Guarantor or any other
Person, money or assets to which any holders of Senior Indebtedness of such
Subsidiary Guarantor shall be entitled by virtue of this Article 17 or
otherwise.

Section
17.15. 
Reliance by Noteholders of Senior Indebtedness of a
Subsidiary Guarantor on Subordination Provisions.  Each Noteholder by accepting a Note
acknowledges and agrees that the foregoing subordination provisions are, and
are intended to be, an inducement and a consideration to each holder of any
Senior Indebtedness of a Subsidiary Guarantor, whether such Senior Indebtedness
was created or acquired before or after the issuance of the Notes, to acquire
and continue to hold, or to continue to hold, such Senior Indebtedness and such
holder of Senior Indebtedness shall be deemed conclusively to have relied on
such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Indebtedness.

Section
17.16. 
Trust Monies Not Subordinated.  Notwithstanding anything contained herein to
the contrary, payments from money held in trust under Article 12 by the Trustee
for the payment of principal of, and Interest on, the Notes shall not be
subordinated to the prior payment of any Senior Indebtedness of any Subsidiary
Guarantor or subject to the restrictions set forth in this Article 17, and none
of the Noteholders shall be obligated to pay over any such amount to a
Subsidiary Guarantor or any holder of Senior Indebtedness of Subsidiary
Guarantor or any other creditor of a Subsidiary Guarantor.

 83
 

 

 

ARTICLE 18

MISCELLANEOUS PROVISIONS

Section
18.01. 
Provisions Binding on Company’s Successors.  All the covenants, stipulations, promises and
agreements by the Company contained in this Indenture shall bind its successors
and assigns whether so expressed or not.

Section
18.02. 
Official Acts by Successor Corporation.  Any act or proceeding by any provision of
this Indenture authorized or required to be done or performed by any board,
committee or officer of the Company shall and may be done and performed with
like force and effect by the like board, committee or officer of any Person
that shall at the time be the lawful sole successor of the Company.

Section 18.03.  Addresses
for Notices, Etc.  Any notice or demand which by any provision
of this Indenture is required or permitted to be given or served by the Trustee
or by the holders of Notes on the Company shall be deemed to have been
sufficiently given or made, for all purposes, if given or served by being deposited
postage prepaid by registered or certified mail in a post office letter box or
sent by telecopier transmission addressed as follows:  to Alliant Techsystems Inc., 5050 Lincoln
Drive, Edina, Minnesota 55436, Telecopier No.: 
(952) 351-3000, Attention:  Chief
Financial Officer.  Any notice,
direction, request or demand hereunder to or upon the Trustee shall be deemed
to have been sufficiently given or made, for all purposes, if given or served
by being deposited, postage prepaid, by registered or certified mail in a post
office letter box or sent by telecopier transmission addressed to The Bank of
New York Trust Company, N.A., 2 North LaSalle Street, Suite 1020, Chicago,
Illinois 60602, Attention: Corporate Trust Department.

The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.

Any notice or communication mailed to a Noteholder shall be mailed to
him by first class mail, postage prepaid, at his address as it appears on the
Note Register and shall be sufficiently given to him if so mailed within the
time prescribed.

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

Section
18.04. 
Governing Law.  This Indenture and each Note shall be deemed
to be a contract made under the laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of the State of New
York.

Section
18.05. 
Evidence of Compliance with Conditions Precedent,
Certificates to Trustee.  Upon
any application or demand by the Company to the Trustee to take any action
under any of the provisions of this Indenture, the Company shall furnish to the
Trustee an Officers’ Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with, and an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with (it being
understood that no Opinion of Counsel shall be required pursuant to this
Section 18.05 in connection with the initial issuance of the Notes).

 84
 

 

 

Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture shall include:  (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.

Section
18.06. 
Legal Holidays.  In any case in which the date of maturity of
Interest on or principal of the Notes or any Fundamental Change Repurchase Date
with respect to any Note will not be a Business Day, then payment of such
Interest on or principal of the Notes need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as if
made on the date of maturity or the Fundamental Change Repurchase Date, as the
case may be, and no interest shall accrue for the period from and after such
date.

Section
18.07. 
Company Responsible for Making Calculations.  The Company will be responsible for making
all calculations called for under the Notes. 
These calculations include, but are not limited to, determination of the
Current Market Price, Last Reported Sale Price and Spin-off Market Price, the
amount of accrued Interest payable on the Notes and the Conversion Rate of the
Notes.  The Company will make these
calculations in good faith and, absent manifest error, these calculations will
be final and binding on the Noteholders. 
Promptly after the calculation thereof, the Company will provide to each
of the Trustee and the Conversion Agent an Officers’ Certificate setting forth
a schedule of its calculations, and each of the Trustee and the Conversion
Agent is entitled to conclusively rely upon the accuracy of such calculations
without independent verification.  The
Trustee will forward the Company’s calculations to any Noteholder upon the
request of such Noteholder.

Section
18.08. 
Trust Indenture Act.  This Indenture is hereby made subject to, and
shall be governed by, the provisions of the Trust Indenture Act required to be
part of and to govern indentures qualified under the Trust Indenture Act;
provided that unless otherwise required by law, notwithstanding the foregoing,
this Indenture and the Notes issued hereunder shall not be subject to the
provisions of subsections (a)(1), (a)(2), and (a)(3) of Section 314 of the
Trust Indenture Act as now in effect or as hereafter amended or modified;
provided further that this
Section 16.08 shall not require this Indenture or the Trustee to be qualified
under the Trust Indenture Act prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act, nor shall it constitute
any admission or acknowledgment by any party to the Indenture that any such
qualification is required prior to the time such qualification is in fact required
under the terms of the Trust Indenture Act. 
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in an indenture qualified
under the Trust Indenture Act, such required provision shall control.

Section
18.09. 
No Security Interest Created.  Except as provided in Section 7.07, nothing
in this Indenture or in the Notes, expressed or implied, shall be construed to
constitute a security interest under the Uniform Commercial Code or similar
legislation, as now or hereafter enacted and in effect, in any jurisdiction in
which property of the Company or its subsidiaries is located.

 85
 

 

 

Section
18.10. 
Benefits of Indenture.  Nothing in this Indenture or in the Notes,
express or implied, shall give to any Person, other than the parties hereto,
any Paying Agent, any authenticating agent, any Note Registrar and their
successors hereunder and the holders of Notes any benefit or any legal or
equitable right, remedy or claim under this Indenture.

Section
18.11. 
Table of Contents, Headings, Etc.  The table of contents and the titles and
headings of the Articles and Sections of this Indenture have been inserted for
convenience of reference only, are not to be considered a part hereof, and
shall in no way modify or restrict any of the terms or provisions hereof.

Section
18.12. 
Authenticating Agent.  The Trustee may appoint an authenticating
agent that shall be authorized to act on its behalf, and subject to its
direction, in the authentication and delivery of Notes in connection with the
original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.04, 2.05, 2.06, 2.07 and 3.03, as fully to all
intents and purposes as though the authenticating agent had been expressly authorized
by this Indenture and those Sections to authenticate and deliver Notes.  For all purposes of this Indenture, the
authentication and delivery of Notes by the authenticating agent shall be
deemed to be authentication and delivery of such Notes “by the Trustee” and a
certificate of authentication executed on behalf of the Trustee by an
authenticating agent shall be deemed to satisfy any requirement hereunder or in
the Notes for the Trustee’s certificate of authentication.  Such authenticating agent shall at all times
be a Person eligible to serve as trustee hereunder pursuant to Section 7.10.

Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 15.12, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.

Any authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company.  The Trustee may at any time terminate the
agency of any authenticating agent by giving written notice of termination to
such authenticating agent and to the Company. 
Upon receiving such a notice of resignation or upon such a termination,
or in case at any time any authenticating agent shall cease to be eligible
under this Section, the Trustee shall either promptly appoint a successor
authenticating agent or itself assume the duties and obligations of the former
authenticating agent under this Indenture and, upon such appointment of a
successor authenticating agent, if made, shall give written notice of such
appointment of a successor authenticating agent to the Company and shall mail
notice of such appointment of a successor authenticating agent to all holders
of Notes as the names and addresses of such holders appear on the Note
Register.

The Company agrees to pay to the authenticating agent from time to time
such reasonable compensation for its services as shall be agreed upon in
writing between the Company and the authenticating agent.

 86
 

 

 

The provisions of Sections 7.02, 7.03, 7.04 and 8.03 and this Section
18.12 shall be applicable to any authenticating agent.

Section
18.13. 
Execution in Counterparts.  This Indenture may be executed in any number
of counterparts, each of which shall be an original, but such counterparts
shall together constitute but one and the same instrument.

Section
18.14.  Severability.  In case any provision in this Indenture or in
the Notes shall be invalid, illegal or unenforceable, then (to the extent
permitted by law) the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

The Bank of New York Trust Company, N.A. hereby
accepts the trusts in this Indenture declared and provided, upon the terms and
conditions herein above set forth.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

 87

 

 

IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed.

	
  

  	
  ALLIANT TECHSYSTEMS INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   
  Keith D. Ross

  
	
   

  	
   

  	
  Name: Keith D. Ross

  
	
   

  	
   

  	
  Title: Senior Vice
  President, General Counsel and Secretary

  

 

 

 

	
   

  	
   

  	
  AMMUNITION ACCESSORIES INC.

  
	
   

  	
   

  	
  ATK THIOKOL INC.

  	
   

  
	
   

  	
   

  	
  ATK COMMERCIAL AMMUNITION COMPANY
  INC.

  
	
   

  	
   

  	
  ATK COMMERCIAL AMMUNITION HOLDINGS
  

  
	
   

  	
   

  	
  COMPANY INC.

  
	
   

  	
   

  	
  ATK SPACE SYSTEMS INC.

  	
   

  
	
   

  	
   

  	
  FEDERAL CARTRIDGE COMPANY

  
	
   

  	
   

  	
  MICRO CRAFT INC.

  	
   

  
	
   

  	
   

  	
  MISSION RESEARCH CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   
  Keith D. Ross

  	
   

  
	
   

  	
   

  	
  Name: Keith D. Ross

  	
   

  
	
   

  	
   

  	
  Title: Authorized Signatory

  	
   

  

 

 

 

	
  

  	
   

  	
  THE BANK OF NEW YORK TRUST
  COMPANY,

  N.A., as Trustee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   
  D.G. Donovan

  	
   

  
	
   

  	
   

  	
  Name: D.G. Donovan

  	
   

  
	
   

  	
   

  	
  Title: Vice President

  	
   

  

 

 

EXHIBIT
A

[FORM OF NOTE]

[Include only for Global Notes:]

[UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55
WATER STREET, NEW YORK, NEW YORK) (THE “DEPOSITARY”,
WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITORY FOR THE CERTIFICATES) TO ALLIANT
TECHSYSTEMS INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO.  OR IN SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT HEREIN IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]

[Include only for Notes that are
Restricted Securities]

[THIS SECURITY HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF
ANY STATE OR OTHER JURISDICTION.  NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, SUCH REGISTRATION.  THE
HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT IT IS A “QUALIFIED
INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”)); (2) AGREES ON ITS OWN BEHALF
AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY OR ANY COMMON STOCK ISSUABLE
UPON CONVERSION OF SUCH SECURITY, PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THIS SECURITY UNDER RULE 144(k) UNDER THE SECURITIES ACT
(OR ANY SUCCESSOR PROVISION), ONLY (A) TO ALLIANT TECHSYSTEMS INC. (THE “ISSUER”), (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER), (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, IN COMPLIANCE WITH
RULE 144A TO A PERSON IT REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER’S AND
THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR 

 A-1
 

 

TRANSFER PURSUANT TO CLAUSE (D) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM; AND (3) AGREES THAT IT WILL DELIVER
TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND.  THIS LEGEND
WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS SECURITY PURSUANT TO
CLAUSE 2(B) ABOVE OR UPON ANY TRANSFER OF THIS SECURITY UNDER RULE 144 UNDER
THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION).]

THE HOLDER OF THIS SECURITY IS
ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS AGREEMENT DATED AS OF
SEPTEMBER 12, 2006 AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY AND TO
COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.

 A-2
 

 

ALLIANT TECHSYSTEMS INC.

2.75% CONVERTIBLE SENIOR
SUBORDINATED NOTE DUE 2011

	
  

  	
   

  	
  CUSIP:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  No. 1

  	
   

  	
  $

  	
   

  

 

Alliant Techsystems Inc., a corporation duly
organized and validly existing under the laws of the State of Delaware (herein
called the “Company”, which term
includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received hereby promises to pay to CEDE & CO. or
its registered assigns, [the principal sum of ___________ DOLLARS] [the
principal sum of ________________ DOLLARS or such lesser amount as set forth on
Schedule I hereto](1) on September 15, 2011 at the office or agency of the
Company maintained for that purpose in accordance with the terms of the
Indenture, in such coin or currency of the United States of America as at the
time of payment shall be legal tender for the payment of public and private
debts, and to pay interest, semiannually on March 15 and September 15 of each
year, commencing March 15, 2007, on said principal sum at said office or
agency, in like coin or currency, at the rate per annum of 2.75%, from the
March 15 or September 15, as the case may be, next preceding the date of this
Note to which interest has been paid or duly provided for, unless the date
hereof is a date to which interest has been paid or duly provided for, in which
case from the date of this Note, or unless no interest has been paid or duly
provided for on the Notes, in which case from September 12, 2006 until payment of said principal sum has been made or
duly provided for.  Notwithstanding the
foregoing, if the date hereof is after any March 1 or September 1, as the case
may be, and before the following March 15 or September 15, this Note shall bear
interest from such March 1 or September 1; provided that if the Company shall
default in the payment of interest due on such March 15 or September 15, then
this Note shall bear interest from the next preceding March 1 or September 1 to
which interest has been paid or duly provided for; and provided further that if no interest has been paid
or duly provided for on this Note, then this Note shall bear interest from
September 12, 2006.  Except as otherwise provided in the
Indenture, the interest payable on the Note pursuant to the Indenture on any
March 15 or September 15 will be paid to the Person entitled thereto as it
appears in the Note Register at the close of business on the Regular Record
Date, which shall be the March 1 or September 1 (whether or not a Business Day)
next preceding such March 15 or September 15, as provided in the Indenture;
provided that any such interest not punctually paid or duly provided for shall
be payable as provided in the Indenture. 
The Company shall pay interest (i) on any Notes in certificated form by
check mailed to the address of the Person entitled thereto as it appears in the
Note Register (or, upon written notice from the registered holder hereof, by
wire transfer in immediately available funds, if such Person is entitled to
interest on Notes with an aggregate principal amount in excess of $2,000,000)
or (ii) on any Global Note by wire transfer of immediately available funds to
the account of the Depositary or its nominee.

(1)           For Global Notes
only.

 A-3
 

 

The Company promises to pay interest on overdue
principal and (to the extent that payment of such interest is enforceable under
applicable law) Interest at the rate of 2.75% per annum, compounded
semi-annually.

Reference is made to the further provisions of this
Note set forth on the reverse hereof, including, without limitation, provisions
giving the holder of this Note the right to convert this Note into cash and, if
applicable, Common Stock of the Company on the terms and subject to the
limitations referred to on the reverse hereof and as more fully specified in
the Indenture.  Such further provisions
of the Indenture shall for all purposes have the same effect as though fully
set forth at this place.

This Note shall be deemed to be a contract made under
the laws of the State of New York, and for all purposes shall be construed in
accordance with and governed by the laws of the State of New York.

This Note shall not be valid or become obligatory for
any purpose until the certificate of authentication hereon shall have been
manually signed by the Trustee or a duly authorized authenticating agent under
the Indenture.

 A-4
 

 

IN WITNESS WHEREOF, the Company has caused this Note
to be duly executed.

	
   

  	
   

  	
  ALLIANT TECHSYSTEMS INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  

 

[Date of authentication]

TRUSTEE’S CERTIFICATE OF
AUTHENTICATION

This is one of the Notes described
in the within-named Indenture.

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

	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  , or

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  As Authenticating Agent

  	
   

  	
   

  
	
   

  	
   

  	
  (if different from Trustee)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  	
   

  

 

 A-5
 

 

FORM OF REVERSE OF NOTE

ALLIANT TECHSYSTEMS INC.

2.75% CONVERTIBLE SENIOR SUBORDINATED NOTE
DUE 2011

This Note is one of a duly authorized issue of Notes
of the Company, designated as its 2.75% Convertible Senior Subordinated Notes
due 2011 (herein called the “Notes”),
limited in aggregate principal amount to $300,000,000, issued and to be issued
under and pursuant to an Indenture dated as of September 12, 2006 (herein
called the “Indenture”), among the
Company, the Subsidiary Guarantors and The Bank of New York Trust Company,
N.A., as trustee (herein called the “Trustee”),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company, the Subsidiary
Guarantors and the holders of the Notes.

In case an Event of Default shall have occurred and
be continuing, the principal of and accrued Interest on all Notes may be
declared by either the Trustee or the holders of not less than 25% in aggregate
principal amount of the Notes then outstanding, and upon said declaration shall
become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.

The Indenture contains provisions permitting the
Company and the Trustee, with the consent of the holders of at least a majority
in aggregate principal amount of the Notes at the time outstanding, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of the Notes;
provided that no such supplemental indenture shall (i) reduce the principal
amount of or change the Stated Maturity of any Note, (ii) reduce the rate or
extend the time of payment of Interest on this Note, (iii) reduce any amount
payable on repurchase of this Note (including upon the occurrence of a
Fundamental Change) or change the time at which or the circumstances under
which this Note may or shall be repurchased (subject to the immediately succeeding
sentence), (iv) impair the right of any Noteholder to institute suit for the
payment on this Note, (v) make the principal or Interest of this Note payable
in any coin or currency other than that provided in this Note, (vi) impair the
right to convert this Note into cash and, if applicable, Common Stock subject
to the terms set forth in the Indenture, (vii) reduce the amount of cash, the
number of shares of Common Stock or other property receivable upon conversion,
(viii) modify any of the provisions of Section 10.02 or Section 6.05 of the
Indenture, except to increase any such percentage or to provide that certain
other provisions of the Indenture cannot be modified or waived without the
consent of the holder of each Note so affected, (ix) change any obligation of
the Company to maintain an office or agency in the places and for the purposes
set forth in Section 4.02 of the Indenture, (x) reduce the quorum or voting
requirements set forth in Article 9 of the Indenture, (xi) make any change in
Article 15 or Article 17 of the Indenture that adversely affects the rights of
any Noteholder under Article 15 or Article 17 of the Indenture, (xii) modify
the Subsidiary Guarantees in any manner adverse to the Noteholders or (xiii)
reduce the aforesaid percentage of Notes, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holders
of all Notes then outstanding.  Subject
to the provisions of the Indenture, the holders of a majority in aggregate
principal amount of the Notes at the time outstanding may on behalf of the
holders of all of the Notes waive any past 

 A-6
 

 

default or Event of Default under the Indenture and its
consequences except (A) a default in the payment of Interest on or the
principal of any of the Notes, (B) a failure by the Company to convert any
Notes into cash and, if applicable, Common Stock of the Company, (C) a default
in the payment of the Fundamental Change Repurchase Price pursuant to Article 3
of the Indenture, or (D) a default in respect of a covenant or provisions of
the Indenture which under Article 10 of the Indenture cannot be modified or
amended without the consent of the holders of each or all Notes then
outstanding or affected thereby.  Any
such consent or waiver by the holder of this Note (unless revoked as provided
in the Indenture) shall be conclusive and binding upon such holder and upon all
future holders and owners of this Note and any Notes which may be issued in
exchange or substitution hereof, irrespective of whether or not any notation
thereof is made upon this Note or such other Notes.

No reference herein to the Indenture and no provision
of this Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
Interest on this Note at the place, at the respective times, at the rate and in
the coin or currency herein prescribed.

Interest on the Notes shall be computed on the basis
of a 360-day year of twelve 30-day months.

The Notes are issuable in fully registered form,
without coupons, in denominations of $1,000 principal amount and any multiple
of $1,000.  At the office or agency of
the Company referred to on the face hereof, and in the manner and subject to
the limitations provided in the Indenture, without payment of any service
charge but with payment of a sum sufficient to cover any tax, assessment or
other governmental charge that may be imposed in connection with any
registration or exchange of Notes, Notes may be exchanged for a like aggregate
principal amount of Notes of any other authorized denominations.

If a Fundamental Change occurs at any time prior to
maturity of the Notes, this Note will be redeemable in cash on a Fundamental
Change Repurchase Date, specified by the Company, which shall be no earlier
than 30 days nor later than 60 days after the date of the Fundamental Change
Offer, at the option of the holder of this Note at a Fundamental Change
Repurchase Price equal to 100% of the principal amount thereof, together with
accrued Interest to (but excluding) the Fundamental Change Repurchase Date;
provided that if such Fundamental Change Repurchase Date falls after a record
date and on or prior to the corresponding Interest Payment Date, the Interest
payable on such Interest Payment Date shall be paid to the holder of record of
this Note on the preceding March 1 or September 1, respectively.  The Notes will be redeemable in multiples of
$1,000 principal amount.  In the event
that at the time of such Fundamental Change the terms of the Bank Indebtedness
restrict or prohibit the repurchase of Notes upon a Fundamental Change, then
prior to the mailing of the notice to holders provided for below but in any
event within 45 days following any Fundamental Change, the Company shall (i)
repay in full all Bank Indebtedness or, if doing so will allow the repurchase
of Notes, offer to repay in full all Bank Indebtedness and repay the Bank
Indebtedness of each lender who has accepted such offer or (ii) obtain the
requisite consent under the agreements governing the Bank Indebtedness to
permit the repurchase of the Notes as provided for in Section 3.01 of the
Indenture.  The Company shall mail to all
holders of record of the Notes a notice of the occurrence of a Fundamental
Change and of the repurchase right arising as a result thereof on or before the
45th day after the occurrence of such Fundamental 

 A-7
 

 

Change.  For a Note to
be so repurchased at the option of the holder, the Company must receive at the
office or agency of the Company maintained for that purpose in accordance with
the terms of the Indenture, such Note with the form entitled “Form of
Fundamental Change Repurchase Election” on the reverse thereof duly completed,
together with such Note, duly endorsed for transfer, before the close of business
on the Business Day immediately preceding the Fundamental Change Repurchase
Date.  Notwithstanding the foregoing
provisions of this paragraph, the Company shall not be required to make a
Fundamental Change Offer upon a Fundamental Change if a third party makes the
Fundamental Change Offer in the manner, at the times and otherwise in
compliance with the requirements set forth in Section 3.01(b) of the Indenture
applicable to a Fundamental Change Offer made by the Company and purchases all
Notes validly tendered and not withdrawn under such Fundamental Change Offer.

Holders have the right to withdraw any Fundamental
Change Repurchase Election by delivering to the Trustee (or other Paying Agent
appointed by the Company) a written notice of withdrawal up to the close of
business on the Business Day immediately preceding the Fundamental Change
Repurchase Date, all as provided in the Indenture.

If cash sufficient to pay the Fundamental Change
Repurchase Price with respect to all Notes or portions thereof to be
repurchased as of any Fundamental Change Repurchase Date is deposited with the
Trustee (or other Paying Agent appointed by the Company), then on the Business
Day following such Fundamental Change Repurchase Date, Interest will cease to
accrue on such Notes (or portions thereof), and the holder thereof shall have
no other rights as such other than the right to receive the Fundamental Change
Repurchase Price upon surrender of such Note.

Subject to the occurrence of certain events and in
compliance with the provisions of the Indenture, on or prior to the close of
business on the Business Day immediately preceding the Stated Maturity of the
Notes, the holder hereof has the right, at its option, to convert each $1,000
principal amount of the Notes into cash and, to the extent the Conversion Value
of such Note is greater than $1,000, cash, shares of Common Stock or a
combination thereof, at the option of the Company, as described in the
Indenture, upon surrender of this Note with the form entitled “Form of Conversion
Notice” on the reverse hereof duly completed, to the Conversion Agent, and,
unless any shares issuable on conversion are to be issued in the same name as
this Note, duly endorsed by, or accompanied by instruments of transfer in form
satisfactory to the Company duly executed by, the holder or by his duly
authorized attorney.  The Company will
notify the holder thereof of any event triggering the right to convert the
Notes as specified above in accordance with the Indenture.

If the Company (i) is a party to a consolidation,
merger, statutory share exchange or combination, (ii) reclassifies the Common
Stock, or (iii) sells or conveys its properties and assets substantially as an
entirety to any Person, the right to convert a Note into cash and, if applicable,
shares of Common Stock may be changed into a right to convert it into
securities, cash or other assets of the Company or such other Person, in each
case in accordance with the Indenture.

No adjustment in respect of Interest on any Note
converted or dividends on any shares issued upon conversion of such Note will
be made upon any conversion except as set forth in the next sentence.  If this Note (or portion hereof) is
surrendered for conversion during the period from the close of business on any
record date for the payment of Interest to the close of business on the
Business Day preceding the following Interest Payment Date, this Note (or
portion hereof being 

 A-8
 

 

converted) must be accompanied by payment, in immediately
available funds or other funds acceptable to the Company, of an amount equal to
the Interest otherwise payable on such Interest Payment Date on the principal
amount being converted; provided that no such payment shall be required
(1) in connection with any conversion following the Regular Record Date
immediately preceding the Stated Maturity, (2) if the Company has
specified a Fundamental Change Repurchase Date that is after a record date and
prior to the next Interest Payment Date or (2) to the extent of any
overdue Interest, if any overdue Interest exists at the time of conversion with
respect to such Note.

No fractional shares will be issued upon any
conversion, but an adjustment and payment in cash will be made, as provided in
the Indenture, in respect of any fraction of a share which would otherwise be
issuable upon the surrender of any Note or Notes for conversion.

A Note in respect of which a holder is exercising its
right to require repurchase upon a Fundamental Change may be converted only if
such holder withdraws its election to exercise such right in accordance with
the terms of the Indenture.

To the extent provided in the Indenture, the Notes
are subordinated to Senior Indebtedness, as defined in the Indenture, and pari
passu with all other Senior Subordinated Indebtedness, as defined in the
Indenture, of the Company.  To the extent
provided in the Indenture, Senior Indebtedness must be paid before the Notes
may be paid.  The Company agrees, and
each Noteholder by accepting a Note agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give it effect and
appoints the Trustee as attorney-in-fact for such purpose.

Upon due presentment for registration of transfer of
this Note at the office or agency of the Company maintained for that purpose in
accordance with the terms of the Indenture, a new Note or Notes of authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange thereof, subject to the limitations provided in the
Indenture, without charge except for any tax, assessment or other governmental
charge imposed in connection therewith.

The Company, the Trustee, any authenticating agent,
any Paying Agent, any Conversion Agent and any Note Registrar may deem and
treat the registered holder hereof as the absolute owner of this Note (whether
or not this Note shall be overdue and notwithstanding any notation of ownership
or other writing hereon made by anyone other than the Company or any Note
Registrar) for the purpose of receiving payment hereof, or on account hereof,
for the conversion hereof and for all other purposes, and neither the Company
nor the Trustee nor any other authenticating agent nor any Paying Agent nor
other Conversion Agent nor any Note Registrar shall be affected by any notice
to the contrary.  All payments made to or
upon the order of such registered holder shall, to the extent of the sum or
sums paid, satisfy and discharge liability for monies payable on this Note.

No recourse for the payment of the principal of,
premium, if any, or Interest on this Note, or for any claim based hereon or
otherwise in respect hereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in the Indenture or any supplemental
indenture or in any Note, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
employee, agent, officer or director or subsidiary, as such, past, present or
future, of the Company or of any successor corporation, either directly or
through 

 A-9
 

 

the Company or any successor corporation, whether by virtue
of any constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.

Terms used in this Note and defined in the Indenture
are used herein as therein defined.

 A-10
 

 

ABBREVIATIONS

The following abbreviations, when used in the
inscription of the face of this Note, shall be construed as though they were
written out in full according to applicable laws or regulations.

	
  TEN COM -

  	
   

  	
  as tenants in common

  	
   

  	
  UNIF GIFT MIN ACT -___ Custodian ___

  
	
  TEN ENT -

  	
   

  	
  as tenant by the entireties

  	
   

  	
  (Cust)      (Minor)

  
	
  JT TEN -

  	
   

  	
  as joint tenants with right of survivorship

  	
   

  	
  under Uniform Gifts to Minors Act

  
	
   

  	
   

  	
  and not as tenants in common

  	
   

  	
  _______________________________

  
	
   

  	
   

  	
   

  	
   

  	
  (State)

  

 

Additional abbreviations may also be
used though not in the above list.

 

 A-11

 

FORM OF

CONVERSION
NOTICE

TO:                            ALLIANT TECHSYSTEMS INC.

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

The undersigned registered owner of this Note hereby
irrevocably exercises the option to convert this Note, or the portion thereof
(which is $1,000 or a multiple thereof) below designated, into cash and, if
applicable, shares of Common Stock of Alliant Techsystems Inc. in accordance
with the terms of the Indenture referred to in this Note, and directs that a
check in payment for the required cash amount due upon conversion, together
with any shares issuable and deliverable upon such conversion, together with
any check in payment for fractional shares and any Notes representing any
unconverted principal amount hereof, be issued and delivered to the registered
holder hereof unless a different name has been indicated below.  Capitalized terms used herein but not defined
shall have the meanings ascribed to such terms in the Indenture.  If cash or shares or any portion of this Note
not converted are to be issued in the name of a person other than the
undersigned, the undersigned will provide the appropriate information below and
pay all transfer taxes payable with respect thereto.  Any amount required to be paid by the
undersigned on account of Interest, if any, accompanies this Note.

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature(s)

  

 

 A-12
 

 

 

	
  

  	
  Signature(s) must be guaranteed by an “eligible guarantor
  institution” meeting the requirements of the Note Registrar, which
  requirements include membership or participation in the Security Transfer
  Agent Medallion Program (“STAMP”) or such other “signature guarantee
  program” as may be determined by the Note Registrar in addition
  to, or in substitution for, STAMP, all in accordance with the Securities
  Exchange Act of 1934, as amended.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature Guarantee

  

 

Fill in the registration of shares of Common Stock if
to be issued, and Notes if to be delivered, other than to and in the name of
the registered holder:

	
  

  	
   

  	
   

  
	
  (Name)

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Street Address)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (City, State and Zip Code)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Please print name and address

  	
   

  
	
   

  	
   

  
	
  Principal amount to be converted

  (if less than all):

  	
   

  
	
   

  	
   

  
	
  $

  	
   

  	
   

  
	
   

  	
   

  
	
  Social Security or Other Taxpayer

  Identification Number:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 A-13
 

 

FORM OF

FUNDAMENTAL CHANGE REPURCHASE ELECTION

TO:                            ALLIANT TECHSYSTEMS INC.

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

The undersigned registered owner of this Note hereby
irrevocably acknowledges receipt of a notice from Alliant Techsystems Inc. (the
“Company”) as to the occurrence of
a Fundamental Change with respect to the Company and requests and instructs the
Company to repurchase the entire principal amount of this Note, or the portion
thereof (which is $1,000 or a multiple thereof) below designated, in accordance
with the terms of the Indenture referred to in this Note at the price of 100%
of such entire principal amount or portion thereof, together with accrued
Interest to, but excluding, the Fundamental Change Repurchase Date, to the registered
holder hereof.  Capitalized terms used
herein but not defined shall have the meanings ascribed to such terms in the
Indenture.

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature(s)

  

 

 A-14
 

 

NOTICE:  The above signatures of the holder(s) hereof
must correspond with the name as written upon the face of the Note in every
particular without alteration or enlargement or any change whatever.

Note Certificate Number (if
applicable):

Principal amount to be repurchased
(if less than all):

Social Security or Other Taxpayer
Identification Number:

 A-15
 

 

ASSIGNMENT

For value received                   
hereby sell(s) assign(s) and transfer(s) unto                   
(Please insert social security or other Taxpayer Identification Number of
assignee) the within Note, and hereby irrevocably constitutes and appoints
attorney to transfer said Note on the books of the Company, with full power of
substitution in the premises.

In connection with any transfer of the Note prior to
the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision) (other than any
transfer pursuant to a registration statement that has been declared effective
under the Securities Act or is a subsequent transfer of a Note so transferred),
the undersigned confirms that such Note is being transferred:

To Alliant Techsystems Inc. or a subsidiary thereof;
or

To a “qualified
institutional buyer” in compliance with Rule 144A under the
Securities Act of 1933, as amended; or

Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended; or

Pursuant to a Registration Statement which has been
declared effective under the Securities Act of 1933, as amended, and which
continues to be effective at the time of transfer;

and unless the Note has been
transferred to Alliant Techsystems Inc. or a subsidiary thereof, the
undersigned confirms that such Note is not being transferred to an “affiliate”
of the Company as defined in Rule 144 under the Securities Act of 1933, as
amended.

Unless one of the boxes is checked,
the Trustee will refuse to register any of the Notes evidenced by this
certificate in the name of any person other than the registered holder thereof.

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature(s)

  

 

 A-16
 

 

 

	
  

  	
  Signature(s) must be guaranteed by
  an “eligible guarantor institution”
  meeting the requirements of the Note Registrar, which requirements include
  membership or participation in the Security Transfer Agent Medallion Program
  (“STAMP”) or such other “signature guarantee program” as may be
  determined by the Note Registrar in addition to, or in substitution for,
  STAMP, all in accordance with the Securities Exchange Act of 1934, as
  amended.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature Guarantee

  

 

NOTICE:  The signature on the Conversion Notice, the
Fundamental Change Repurchase Election or the Assignment must correspond with
the name as written upon the face of the Note in every particular without
alteration or enlargement or any change whatever.

 A-17
 

 

Schedule I

[Include
Schedule I only for a Global Note]

ALLIANT TECHSYSTEMS INC.

2.75% Convertible Senior Subordinated Note due 2011

No.                   

	
  Date

  	
   

  	
  Principal Amount

  	
   

  	
  Notation Explaining Principal

  Amount Recorded

  	
   

  	
  Authorized Signature

  of trustee or Custodian

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
                 

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 A-18

 

EXHIBIT B

[FORM
OF SUBSIDIARY GUARANTEE]

SUBSIDIARY
GUARANTEE

For value received, the undersigned Subsidiary
Guarantor (as defined in the Indenture dated as of September 12, 2006 (the “Indenture”) among Alliant Techsystems Inc.
(the “Company”), the Subsidiary
Guarantors party thereto and The Bank of New York Trust Company, N.A., in
connection with the issuance of $300,000,000 aggregate principal amount of the
Company’s 2.75% Convertible Senior Subordinated Notes due 2011 (the “Notes”); the term “Subsidiary Guarantor” as used herein shall
include any successor person thereto under the Indenture), upon the terms and
subject to the conditions set forth in the Indenture, hereby irrevocably and
unconditionally guarantees, as a primary obligor and not merely as a surety, to
each Noteholder and to the Trustee and its successors and assigns (i) the full
and punctual payment when due, whether at Stated Maturity, by acceleration, by
repurchase or otherwise, of all obligations of the Company under the Indenture
(including obligations to the Trustee) and the Notes, whether for payment of
principal of, Interest on, in respect of the Notes and all other monetary
obligations of the Company under the Indenture and the Notes and (ii) the full
and punctual performance within applicable grace periods of all other
obligations of the Company whether for fees, expenses, indemnification or
otherwise under the Indenture and the Notes (all the foregoing being
hereinafter collectively called the “Guaranteed
Obligations”) in accordance with the terms of the Indenture.  The undersigned Subsidiary Guarantor further
agrees that the Guaranteed Obligations may be extended or renewed, in whole or
in part, without notice or further assent from the undersigned Subsidiary
Guarantor, and that the undersigned Subsidiary Guarantor shall remain bound
under Article 16 of the Indenture and hereunder notwithstanding any extension
or renewal of any Guaranteed Obligation.

The obligations of the undersigned Subsidiary
Guarantor to the holders of the Notes and to the Trustee pursuant to this
Subsidiary Guarantee and in the Indenture are expressly set forth in the
Indenture and reference is hereby made to the Indenture for the precise terms
of the Subsidiary Guarantee and all of the other provisions of the Indenture to
which this Subsidiary Guarantee relates.

No stockholder, officer, director, employee or
incorporator, as such, past, present or future, of the Subsidiary Guarantor
shall have any liability under the Subsidiary Guarantee by reason of his or its
status as such stockholder, officer, director, employee or incorporator.

The Subsidiary Guarantee shall not be valid or
obligatory for any purpose until the certificate of authentication on the Notes
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized signatories.

The undersigned Subsidiary Guarantor agrees, and each
Noteholder by accepting a Note agrees, that the obligations of the undersigned
Subsidiary Guarantor are subordinated in right of payment, to the extent and in
the manner provided in Article 17 of the Indenture, to the prior payment in
full of all Senior Indebtedness of the undersigned Subsidiary Guarantor and
that the subordination is for the benefit of and enforceable by the holders of
such Senior Indebtedness of 

 B-1
 

 

the undersigned Subsidiary Guarantor.  The obligations under the Indenture and
hereunder with respect to the undersigned Subsidiary Guarantor shall in all
respects rank pari  passu with all other Senior Subordinated
Indebtedness of the undersigned Subsidiary Guarantor and shall rank senior to
all existing and future Subordinated Obligations of the undersigned Subsidiary
Guarantor; and only Indebtedness of the undersigned Subsidiary Guarantor that
is Senior Indebtedness of the undersigned Subsidiary Guarantor shall rank
senior to the obligations of the undersigned Subsidiary Guarantor under this
Subsidiary Guarantee in accordance with the provisions set forth in the
Indenture.  The undersigned Subsidiary
Guarantor authorizes, and each Noteholder by accepting this Subsidiary
Guarantee authorizes, the Trustee to give effect to the subordination
provisions hereunder and contained in the Indenture and appoints the Trustee as
attorney-in-fact for such purpose.

Notwithstanding any other provision of this
Subsidiary Guarantee, the undersigned Subsidiary Guarantor shall be released
from this Subsidiary Guarantee if it ceases to be a Subsidiary Guarantor in
accordance with the provisions of Section 16.01 of the Indenture.

All terms used in this Subsidiary Guarantee shall
have the meanings assigned to them in the Indenture.

This Subsidiary Guarantee shall not be valid or
obligatory for any purpose until delivered to the Trustee.

This Subsidiary Guarantee shall be deemed to be a
contract made under the laws of the State of New York, and for all purposes
shall be construed in accordance with and governed by the laws of the State of
New York.

 B-2
 

 

IN WITNESS WHEREOF, the Subsidiary Guarantor has
caused this Subsidiary Guarantee to be duly executed.

	
  

  	
  [                  ]

  
	
   

  	
  As Subsidiary Guarantor

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  [Officer]

  	
   

  

 

 B-3

 

SCHEDULE I

Subsidiary
Guarantors

	
  Subsidiaries

  	
   

  	
  State of

  Incorporation

  or Organization

  	
   

  
	
  ATK
  Commercial Ammunition Holdings Company Inc.

  	
   

  	
  Delaware

  	
   

  
	
  ATK Commercial Ammunition Company Inc.

  	
   

  	
  Delaware

  	
   

  
	
  Federal Cartridge Company

  	
   

  	
  Minnesota

  	
   

  
	
  Ammunition Accessories Inc.

  	
   

  	
  Delaware

  	
   

  
	
  ATK Thiokol Inc.

  	
   

  	
  Delaware

  	
   

  
	
  Micro Craft Inc.

  	
   

  	
  Tennessee

  	
   

  
	
  Mission Research Corporation

  	
   

  	
  Delaware

  	
   

  
	
  ATK Space Systems Inc.

  	
   

  	
  Delaware

  	
   

  

 

 

SCHEDULE II

The following table sets forth the Stock Prices and the
number of Additional Shares to be issuable per $1,000 principal amount of
Notes:

	
   

  	
   

  	
  Stock Price

  	
   

  
	
  Effective Date

  	
   

  	
  $77.83

  	
   

  	
  $80.00

  	
   

  	
  $85.00

  	
   

  	
  $90.00

  	
   

  	
  $96.51

  	
   

  	
  $100.00

  	
   

  	
  $105.00

  	
   

  	
  $110.00

  	
   

  	
  $120.00

  	
   

  	
  $130.00

  	
   

  	
  $140.00

  	
   

  	
  $150.00

  	
   

  	
  $160.00

  	
   

  
	
  6-Sep-06

  	
   

  	
  2.48

  	
   

  	
  2.33

  	
   

  	
  2.01

  	
   

  	
  1.76

  	
   

  	
  1.49

  	
   

  	
  1.37

  	
   

  	
  1.23

  	
   

  	
  1.10

  	
   

  	
  0.92

  	
   

  	
  0.78

  	
   

  	
  0.67

  	
   

  	
  0.59

  	
   

  	
  0.53

  	
   

  
	
  6-Sep-07

  	
   

  	
  2.39

  	
   

  	
  2.23

  	
   

  	
  1.89

  	
   

  	
  1.62

  	
   

  	
  1.34

  	
   

  	
  1.22

  	
   

  	
  1.08

  	
   

  	
  0.96

  	
   

  	
  0.77

  	
   

  	
  0.64

  	
   

  	
  0.55

  	
   

  	
  0.48

  	
   

  	
  0.43

  	
   

  
	
  6-Sep-08

  	
   

  	
  2.31

  	
   

  	
  2.13

  	
   

  	
  1.76

  	
   

  	
  1.47

  	
   

  	
  1.18

  	
   

  	
  1.05

  	
   

  	
  0.90

  	
   

  	
  0.78

  	
   

  	
  0.61

  	
   

  	
  0.49

  	
   

  	
  0.41

  	
   

  	
  0.36

  	
   

  	
  0.32

  	
   

  
	
  6-Sep-09

  	
   

  	
  2.25

  	
   

  	
  2.04

  	
   

  	
  1.62

  	
   

  	
  1.29

  	
   

  	
  0.97

  	
   

  	
  0.84

  	
   

  	
  0.69

  	
   

  	
  0.57

  	
   

  	
  0.41

  	
   

  	
  0.32

  	
   

  	
  0.26

  	
   

  	
  0.22

  	
   

  	
  0.19

  	
   

  
	
  6-Sep-10

  	
   

  	
  2.23

  	
   

  	
  1.96

  	
   

  	
  1.45

  	
   

  	
  1.06

  	
   

  	
  0.69

  	
   

  	
  0.55

  	
   

  	
  0.40

  	
   

  	
  0.29

  	
   

  	
  0.17

  	
   

  	
  0.11

  	
   

  	
  0.09

  	
   

  	
  0.07

  	
   

  	
  0.06

  	
   

  
	
  6-Sep-11

  	
   

  	
  2.21

  	
   

  	
  1.94

  	
   

  	
  1.40

  	
   

  	
  0.75

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

  	
   

  	
  0.00

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}]]